Justia Business Law Opinion Summaries

This appeal centered on claims for securities fraud against Spirit AeroSystems, Inc., and four of its executives. Spirit produced components for jetliners, including Boeing’s 737 MAX. But Boeing stopped producing the 737 MAX, and Spirit’s sales tumbled. At about the same time, Spirit acknowledged an unexpected loss from inadequate accounting controls. After learning about Spirit’s downturn in sales and the inadequacies in accounting controls, some investors sued Spirit and four executives for securities fraud. The district court dismissed the suit, and the investors appealed. "For claims involving securities fraud, pleaders bear a stiff burden when alleging scienter." In the Tenth Circuit's view, the investors did not satisfy that burden, so it affirmed the dismissal. View "Meitav Dash Provident Funds and Pension Ltd., et al. v. Spirit AeroSystems Holdings, et al." on Justia Law

For decades, Johns Manville Corp. ("JM") was the sole domestic manufacturer and supplier of calcium silicate (or “calsil”), a substance used to make thermal pipe insulation. In March 2018, Chase Manufacturing, Inc. (doing business as Thermal Pipe Shields, Inc., or "TPS") challenged JM’s monopoly status by entering the calsil market with a superior and less expensive product. JM responded by threatening distributors that it would not sell to them if they bought TPS’s competing calsil. By August 2021, more than three years after TPS’s market entry, JM retained over 97% of the domestic calsil market. TPS sued under the Sherman Act, alleging that JM had unlawfully: (1) maintained its monopoly; and (2) tied the availability of its insulation products to distributors’ not buying TPS’s calsil. The district court granted summary judgment for JM. Though the Tenth Circuit affirmed some of the district court’s rulings, it held that the district court erred in finding no genuine issues of material fact on whether JM unlawfully maintained its monopoly after TPS’s market entry. The case was remanded for further proceedings. View "Chase Manufacturing v. Johns Manville Corporation" on Justia Law

The principal issue in these cases is whether two corporations, wholly owned by the late entertainer Michael Jackson, had a legal duty to protect plaintiffs from sexual abuse Jackson is alleged to have inflicted on them for many years while they were children. The corporations say they had no duty to protect plaintiffs from Jackson because of their corporate structure, that is, “because they had no ability to control Jackson—their sole owner—or his interactions with [plaintiffs]. Parties cannot be liable for neglecting to exercise powers they simply do not have.” The trial court sustained Defendants’ demurrer without leave to amend in Safechuck’s case and granted summary judgment to Defendants in Robson’s case. Both Plaintiffs appealed, and Robson also appealed a discovery sanctions order against his counsel   The Second Appellate District reversed. The court explained that following the guidance in Brown v. USA Taekwondo (2021) 11 Cal.5th 204 (Brown), it concludes that a corporation that facilitates the sexual abuse of children by one of its employees is not excused from an affirmative duty to protect those children merely because it is solely owned by the perpetrator of the abuse. The court explained that while there is no comparable case law to recite it would be perverse to find no duty based on the corporate defendant having only one shareholder. Thus the court reversed the judgments entered for the corporations. One of the plaintiffs also appealed a sanctions order and discovery rulings granting protective orders to nonparty witnesses. The court found no abuse of discretion in those rulings. View "Safechuck v. MJJ Productions, Inc." on Justia Law

Appellant informed the court that its case was moot and that it had been moot at the time of our decision. Appellee has since confirmed that had dissolved its limited liability company seven weeks before we decided the case, thereby eliminating any possibility of redress. The Eleventh Circuit, thus, granted Appellant’s motion to dismiss the appeal. The panel vacated its March 31, 2023 order staying the issuance of the mandate. View "Deborah Laufer v. Arpan LLC" on Justia Law

Two companies filed a lawsuit in federal court against two of their former employees, who had served in executive positions. The former executives responded by suing the companies in Florida state court. They later moved for summary judgment in the federal action. While that motion was pending, the companies moved for a voluntary dismissal without prejudice of their federal action, which the executives opposed. The district court granted the companies’ motion for voluntary dismissal, and it denied the executives’ request for attorney’s fees and costs incurred in defending the federal lawsuit to that point. On remand, the district court again granted the voluntary dismissal. The executives moved to alter or amend that judgment and be awarded fees and costs immediately, which the court denied. The executives appealed.   The Eleventh Circuit affirmed. The court explained that the district court sufficiently protected the executives from the prejudice of duplicative litigation by essentially inviting them to move for payment of their costs and fees if the companies ever refiled their federal lawsuit. The court adequately explained its reasoning for granting the dismissal without prejudice on that condition. In all aspects of the decision, the court acted within its discretion. View "Emergency Recovery, Inc., et al v. Bryan Hufnagle, et al" on Justia Law

This action represents Metabyte’s fourth attempt to hold Technicolor liable for Technicolor’s allegedly improper auction of a patent portfolio in 2009. After the French courts ruled they lacked jurisdiction in the criminal action, Metabyte brought an action in district court alleging a federal RICO claim and several state law causes of action. After the district court ruled that equitable tolling did not apply to its RICO claim as a matter of federal law, Metabyte dismissed the federal action and brought its state law claims in Los Angeles County Superior Court. The trial court granted Technicolor’s demurrer without leave to amend. Metabyte contends the trial court erred in finding equitable estoppel applies only where a plaintiff invokes remedies designed to lessen the extent of a plaintiff’s injuries or damages, with the result that Article 145 proceeding in France could not support equitable tolling because it did not provide such a remedy. Technicolor defends the trial court’s ruling but devotes more of its energies to its contentions that even if equitable tolling did apply, the order should be affirmed by applying the doctrines of issue preclusion and judicial estoppel.   The Second Appellate District affirmed the trial court’s ruling sustaining the demurrer on the alternate ground that Metabyte failed to adequately plead facts showing that its decision to proceed in France was objectively reasonable and subjectively in good faith. However, the court granted Metabyte leave to amend. Accordingly, the court reversed the judgment and remanded for further proceedings. View "Metabyte v. Technicolor S.A." on Justia Law

Menasha licensed Nulogy’s software, Nulogy Solution. Years later, Deloitte reviewed Menasha’s systems in hopes of better integrating Nulogy Solution into Menasha’s other software. Deloitte and Menasha asked Nulogy to share proprietary information. Nulogy alleges that the two used this information to reverse engineer an alternative to Nulogy Solution. In 2020, Nulogy filed suit in Ontario’s Superior Court of Justice, alleging breach of contract by Menasha and violations of trade secrets by Menasha and Deloitte. Deloitte objected to jurisdiction in Canada.Nulogy voluntarily dismissed its trade secret claims against both companies and refiled those claims in the Northern District of Illinois under the Defend Trade Secrets Act, 18 U.S.C. 1836(b). The breach of contract claims against Menasha remained pending in Canada. Menasha moved to dismiss the U.S. trade secrets litigation. Menasha’s contract with Nulogy contained a forum selection clause, identifying Ontario, Canada. Deloitte did not join that motion but filed its own motion to dismiss arguing failure to state a claim. The district court dismissed the claims against Menasha but reasoned that the forum non-conveniens doctrine required the dismissal of the entire complaint, including the claims against Deloitte.The Seventh Circuit affirmed the dismissal of Nulogy’s claims against Menasha but reversed the Deloitte dismissal. Deloitte has no contractual agreement with Nulogy identifying Canada as the proper forum and continues to insist that Canadian courts do not have jurisdiction. View "Nulogy Corp. v. Menasha Packaging Co., LLC" on Justia Law

Appellants were salespersons who sold solar lenses to investors on behalf of RaPower-3, LLC, International Automated Systems, Inc. (“IAS”), LTB1, LLC and their subsidiaries (collectively, the “Receivership Entities”). Appellants appealed the district court’s grant of summary judgment in favor of R. Wayne Klein, the Receiver who controlled the Receivership Entities. In an adjunct action, the government filed suit against Receivership Defendants Nelson Johnson and R. Gregory Shepard for allegedly operating a fraudulent and unlawful solar energy tax scheme in which they encouraged investors to take federal tax deductions for purchasing defunct solar technology. The district court enjoined the entities from continuing to promote the scheme, ordered disgorgement of their gross receipts, and appointed Klein as the Receiver with full control of their assets and business operations. The Receiver then filed suits against individuals and entities (including Appellants) that were paid commissions for selling the Receiver Defendants’ solar lenses to investors. The trial court granted summary judgment in favor of the Receiver on his claims. Appellants appealed, arguing the district court erred in granting summary judgment on the Receiver’s Uniform Voidable Transaction Act (“UTVA”) claim, as Appellants allegedly gave reasonably equivalent value for the commissions they received. They also claimed the court’s disgorgement order was improper. Finding no reversible error, however, the Tenth Circuit affirmed the district court’s judgment. View "Klein v. Roe" on Justia Law

Service hired Forwarders as its agent in 2010. The Agreement had a three-year term, a continuous one-year renewal option, and a mutual nonrenewal provision. A 2013 amendment stated that the Agreement would renew perpetually for consecutive one-year terms, unless Service, in its sole discretion, notifies Forwarders of its intention to terminate the Agreement 30 days before the annual expiration date. The amendment, however, left undisturbed the Agreement’s provision that Service shall not be deemed to be in default unless Forwarders has provided written notice of an alleged material breach and has given Service an opportunity to cure, after which Forwarders may terminate. “[T]ermination of this Agreement by [Forwarders] for any other reason shall be deemed a termination without cause.”Forwarders sought a declaratory judgment that the amended Agreement was terminable at will. Service conceded that the amended Agreement was of indefinite duration and that Illinois law presumes that such contracts are terminable at will but argued the presumption was rebutted because the Agreement provided that Forwarders could end the Agreement only if Service failed to timely cure a material breach after notification. The court granted judgment on the pleadings that the termination was lawful. The Seventh Circuit affirmed. The amended Agreement lacks a clear statement that the contract can only be terminated based upon the occurrence of certain conditions or events. Service has not rebutted the Illinois law presumption that this contract of indefinite duration is terminable at will. View "Beach Forwarders, Inc. v. Service By Air, Inc." on Justia Law

Plaintiff Zubair Kazi, through co-plaintiff KFC of Pueblo, Inc., owned the only Kentucky Fried Chicken restaurant in Pueblo, Colorado. In 2019 Defendant KFC US, LLC licensed a second Kentucky Fried Chicken restaurant in Pueblo. Kazi believed that KFC acted improperly in how it went about licensing this second restaurant and sued KFC for breach of contract, bad faith (breach of the implied covenant of good faith and fair dealing), promissory estoppel, and unjust enrichment. His lawsuit went to trial on his bad-faith claim only, and the jury found in his favor. KFC appealed. The Tenth Circuit held that Kazi’s claim for breach of the implied covenant of good faith and fair dealing was barred by Kentucky law because KFC’s alleged bad faith did not undermine any benefit or protection afforded to Kazi by his franchise agreement with KFC. The court therefore vacated the judgment and remanded for entry of judgment in favor of KFC and against Kazi and KFC of Pueblo, Inc. View "Kazi, et al. v. KFC US" on Justia Law