Justia Business Law Opinion Summaries

Tracey Murray and the Estate of Robert Murray filed a lawsuit against Miracorp, Inc., NTTS, Inc., Lane Goebel, and Shane Goebel, alleging both legal and equitable claims based on conduct that took place before 2012. The Murrays claimed that they were shareholders in Miracorp and that the company and its officers had breached fiduciary duties, committed fraud, and unjustly enriched themselves at the Murrays' expense. The Murrays also alleged that Miracorp had converted their property and misappropriated trade secrets.The district court granted summary judgment in favor of Miracorp, ruling that the Murrays' claims were barred by the applicable statutes of limitations. The court found that the Murrays' injuries were reasonably ascertainable in 2011, and thus, the period for filing a lawsuit had expired. The Murrays appealed this decision.The Kansas Court of Appeals affirmed the district court's decision. The appellate court agreed that the Murrays' claims were time-barred because their injuries were reasonably ascertainable in 2011. The court held that the Murrays had waited too long to investigate and seek redress for their injuries.The Kansas Supreme Court affirmed the decisions of the lower courts. The court held that the Murrays had a duty to reasonably investigate their suspicions in 2011. The court found that the Murrays did nothing to investigate their suspicions until 2016, which was unreasonable. As a result, the court ruled that the Murrays' claims were barred by the statute of limitations. View "Murray v. Miracorp, Inc." on Justia Law

The United States Department of Justice (DOJ) initiated an investigation into potentially anti-competitive practices in the real estate industry by the National Association of Realtors (NAR). In November 2020, the DOJ and NAR reached a settlement, and the DOJ sent a letter to NAR stating that it had closed its investigation and that NAR was not required to respond to two outstanding investigative subpoenas. However, in July 2021, the DOJ withdrew the proposed consent judgment, reopened its investigation, and issued a new investigative subpoena. NAR petitioned the district court to set aside the subpoena, arguing that its issuance violated a promise made by the DOJ in the 2020 closing letter. The district court granted NAR’s petition, concluding that the new subpoena was barred by a validly executed settlement agreement.The United States Court of Appeals for the District of Columbia Circuit disagreed with the district court's decision. The court held that the plain language of the disputed 2020 letter permits the DOJ to reopen its investigation. The court noted that the closing of an investigation does not guarantee that the investigation would stay closed forever. The court also pointed out that NAR gained several benefits from the closing of the DOJ’s pending investigation in 2020, including relief from its obligation to respond to the two outstanding subpoenas. Therefore, the court reversed the judgment of the district court. View "National Association of Realtors v. United States" on Justia Law

A group of individuals, including D&T Partners LLC and ACET Global LLC, alleged that Baymark Partners Management LLC and others attempted to steal the assets and trade secrets of their e-commerce company through shell entities, corrupt lending practices, and a fraudulent bankruptcy. The plaintiffs claimed that Baymark had purchased D&T's assets and then defaulted on its payment obligations. According to the plaintiffs, Baymark replaced the company's management, caused the company to default on its loan payments, and transferred the company's assets to another entity, Windspeed Trading LLC. The plaintiffs alleged that this scheme violated the Racketeer Influenced and Corrupt Organizations Act (RICO).The case was initially heard in the United States District Court for the Northern District of Texas. The district court dismissed all of the plaintiffs' claims with prejudice, finding that the plaintiffs were unable to plead a pattern of racketeering activity, a necessary element of a RICO claim.The case was then taken to the United States Court of Appeals for the Fifth Circuit. The appellate court agreed with the district court, holding that while the complaint alleges coordinated theft, it does not constitute a "pattern" of racketeering conduct sufficient to state a RICO claim. This is because the alleged victims were limited in number, and the scope and nature of the scheme was finite and focused on a singular objective. Therefore, the appellate court affirmed the district court’s judgment. View "D&T Partners v. Baymark Partners" on Justia Law

The case involves Century Aluminum Company and its subsidiaries (Century), and Certain Underwriters at Lloyd's, London (Lloyd's). Century uses river barges to transport alumina ore and other materials for its aluminum smelting operations. In 2017, the Army Corps of Engineers closed key locks on the Ohio River, causing Century to seek alternative transportation. Century filed a claim with Lloyd's, its maritime cargo insurance policy provider, for the unanticipated shipping expenses. While Lloyd's paid $1 million under the policy's Extra Expense Clause, it denied coverage for the rest of the claim.The case was first heard by the United States District Court for the Western District of Kentucky. Century sought a declaration that its denied claims were covered by the insurance policy and requested damages for Lloyd's alleged breach of contract among other violations of Kentucky insurance law. Lloyd's sought summary judgment, arguing that the policy did not cover the claims. The district court sided with Lloyd's.The appeal was heard before the United States Court of Appeals for the Sixth Circuit. Century argued that the policy's All Risks Clause, Risks Covered Clause, Shipping Expenses Clause, and Sue and Labour Clause required Lloyd's to cover the additional shipping expenses. The court rejected these arguments, affirming the district court's ruling. The court held that under the All Risks Clause and Risks Covered Clause, Century's alumina did not suffer any physical loss or damage. As for the Shipping Expenses Clause, it covered the risk of a failed delivery, not an untimely one. Lastly, under the Sue and Labour Clause, Century was required to mitigate Lloyd's exposure under the policy, but it did not obligate Lloyd's to pay anything for reducing losses that fall outside the policy. View "Century Aluminum Co. v. Certain Underwriters at Lloyd's, London" on Justia Law

The case involves a dispute between Keisha Kemmet and Lindell Kemmet, who were married in September 2016 and separated in June 2021. The main issues in the case revolve around the distribution of marital property following their divorce. Keisha Kemmet argues that the district court's distribution of marital property was not equitable, the court's valuation of land was clearly erroneous, and the court's computations contain errors. Lindell Kemmet cross-appeals, arguing that the court's valuations of his remainder interest in his family's homestead, personal property items, and his dental practice were clearly erroneous. He also argues that the distribution of marital property is not equitable, the provision regarding health insurance is ambiguous, and the court abused its discretion by failing to allow for cross-examination of Keisha Kemmet’s expert witness.The district court had valued the parties' property and debts and made an equitable distribution. Both parties presented testimony regarding the valuation of the land and the dental practice. The district court issued its findings of fact, conclusions of law, and order for judgment and judgment. Both parties appealed.The Supreme Court of North Dakota found that the district court's valuation of the Kidder County property and the dental practice was not clearly erroneous. The court's valuations of these items were within the range of the evidence presented. However, the court's execution of the distribution created confusion and required clarification. The Supreme Court remanded the issue for proper accounting of the distribution of the marital estate. The court also found that the district court's finding of an equitable distribution of 40% to Keisha Kemmet in a short-term marriage was not clearly erroneous. The court's findings and distributions were supported by the record. The Supreme Court affirmed the judgment in all other respects, except for the court's findings regarding the valuation and distribution of the Kidder County property, which must be clarified and its distributions reconsidered. View "Kemmet v. Kemmet" on Justia Law

The case involves a group of appellants who allegedly purchased luxury vehicles with funds provided by Dilmurod Akramov, the owner of CBC and D&O Group. The appellants would then transfer the vehicle titles back to Akramov's D&O Group without receiving cash or equivalent in exchange. They would then claim a "trade-in credit" against the sales tax due on the purchase of a vehicle. The Arkansas Department of Finance and Administration (DFA) argued that these were not valid sales as required by Arkansas law and denied the sales-tax-refund claims.The appellants challenged the DFA's decision through the administrative review process, which affirmed the DFA's decision. The appellants then appealed to the Pulaski County Circuit Court for further review. The circuit court found that the appellants' attorney, Jason Stuart, was a necessary witness and therefore disqualified him from further representing the appellants. The court also held the appellants in contempt for failing to provide discovery per the court's order.The Supreme Court of Arkansas affirmed the circuit court's decision. The court held that the circuit court did not abuse its discretion in disqualifying Stuart. The court applied the three-prong test from Weigel v. Farmers Ins. Co., which requires that the attorney's testimony is material to the determination of the issues being litigated, the evidence is unobtainable elsewhere, and the testimony is or may be prejudicial to the testifying attorney’s client. The court found that all three prongs were satisfied in this case. The court also affirmed the circuit court's decision to strike the third amended and supplemental complaint filed by Stuart after his disqualification. View "STUART v. WALTHER" on Justia Law

The case involves a shareholder lawsuit challenging the fairness of IAC/InterActiveCorp’s separation from its controlled subsidiary, Match Group, Inc. The plaintiffs alleged that the transaction was unfair because IAC, a controlling shareholder of Match, received benefits in the transaction at the expense of the Match minority shareholders. The defendants claimed that business judgment review applied because they followed the MFW framework, which included approval by an independent and disinterested “separation committee” and a majority of uncoerced, fully informed, and unaffiliated Match shareholders. The Court of Chancery agreed and dismissed the complaint.On appeal, the Supreme Court of Delaware concluded that in a suit claiming that a controlling shareholder stood on both sides of a transaction with the controlled corporation and received a non-ratable benefit, entire fairness is the presumptive standard of review. The controlling shareholder can shift the burden of proof to the plaintiff by properly employing a special committee or an unaffiliated shareholder vote. But the use of just one of these procedural devices does not change the standard of review. If the controlling shareholder wants to secure the benefits of business judgment review, it must follow all MFW’s requirements. The court reversed the lower court's finding that the separation committee functioned as an independent negotiating body. The case was remanded for further proceedings. View "In re Match Group, Inc. Derivative Litigation" on Justia Law

Jonathan Weber Arrington, the defendant, was employed by Recon Roofing and Construction to handle their finances. He was found guilty of wire fraud, having embezzled a total of $315,835 from the company between August 2019 and March 2021. Arrington appealed his sentence and the related restitution order. He argued that the district court erred by assigning him the burden of proof regarding any offset to the restitution amount. The defendant also contended that the court didn't account for the value of payments he made towards the loss, and that the imposed sentence was unreasonably harsh.The United States Court of Appeals for the Eighth Circuit upheld the sentence but vacated the restitution order. The Appeals Court stated that the district court was correct in assigning Arrington the burden of proof for any offset to the amount of restitution. However, it was determined that the district court had erred in not reducing the restitution amount by the value of shares sold by the defendant back to the company. Therefore, the restitution amount was reduced by $50,000 to $265,835. The court found the prison sentence to be reasonable, considering the factors such as Arrington's position of trust within the company, the extent of the fraud, his attempt to cover it up, and his prior federal fraud conviction. View "United States v. Arrington" on Justia Law

FedEx Ground Package Systems, Inc. (FXG) filed a lawsuit against Route Consultant, Inc., alleging that the latter company had made nine false or misleading statements about FXG's business practices. FXG contended that these statements were intended to foster discontent between FXG and its contractors, thereby damaging FXG and benefiting Route Consultant. The suit was brought under both the Lanham Act's false advertising provision and the Tennessee Consumer Protection Act's statutory disparagement provision.The United States Court of Appeals for the Sixth Circuit confirmed the lower court's decision to dismiss the case. The court found that FXG had failed to plausibly allege that Route Consultant made a single false or misleading statement. The court emphasized that only statements of fact--not opinions, puffery, or rhetorical hyperbole--are actionable under the false advertising provision of the Lanham Act. Moreover, a plaintiff must plead and prove the literal falsity of the defendant's statement or demonstrate that the statement is misleading. FXG's complaint did not meet these standards.The court also held that FXG's claim under the Tennessee Consumer Protection Act failed for the same reasons as its Lanham Act claim. Thus, the court affirmed the district court's dismissal of FXG's lawsuit against Route Consultant. View "FedEx Ground Package Systems, Inc. v. Route Consultant, Inc." on Justia Law

In this case, the plaintiff, Joseph Gazal, donated over $1 million to purchase a car and a home for a destitute family. He was inspired to make this donation after hearing a homily delivered by defendant Carlos Echeverry, a deacon at his church. Gazal brought a lawsuit against Echeverry and his wife, Jessica Echeverry, as well as SOFESA, Inc., a nonprofit founded and led by Jessica Echeverry. Gazal claimed he was deceived into believing the car and house would be purchased for and titled to the destitute family, when in fact they were bought and titled to SOFESA.The defendants filed a special motion to strike the complaint under the anti-SLAPP (strategic lawsuit against public participation) statute, asserting that the homily and following conversations were protected speech. The trial court denied the motion, finding that the complaint did not rest on protected speech, but rather on private conduct and speech not directed at a wide public audience. Additionally, the court found that the causes of action arose from further communications that took place weeks after the homily.On appeal, the Court of Appeal of the State of California Second Appellate District Division Eight affirmed the trial court's decision. The court held that while the homily could be considered protected speech, the plaintiff's claims did not arise from the homily but rather from the alleged misconduct that occurred after its delivery. The court also found that the private discussions following the homily did not qualify for anti-SLAPP protection as they did not contribute to a public conversation on the issue of homelessness. Furthermore, the court denied a motion for sanctions filed by the plaintiff. View "Gazal v. Echeverry" on Justia Law