Justia Business Law Opinion Summaries

In 2018, John Burns and Rajeev Arora, representing Moca Financial Inc., engaged in discussions with Manoj Baheti, represented by Yash Venture Holdings, LLC, about a potential investment. The alleged agreement was that Yash would provide $600,000 worth of software development in exchange for a 15% non-dilutable ownership interest in Moca. However, subsequent documents and communications indicated ongoing negotiations and changes in terms, including a reduction of Yash's proposed stake and a shift from software development to a cash investment. Yash eventually refused to sign the final documents, leading to the current litigation.The United States District Court for the Central District of Illinois dismissed most of Yash's claims, including breach of contract, fraud, and securities fraud, but allowed the equitable estoppel and copyright infringement claims to proceed. Yash later voluntarily dismissed the remaining claims, and the district court entered final judgment, prompting Yash to appeal.The United States Court of Appeals for the Seventh Circuit reviewed the case de novo. The court found that Yash did not adequately allege the existence of an enforceable contract, as there was no meeting of the minds on the material term of whether the ownership interest was non-dilutable. Consequently, the breach of contract claim failed. Similarly, the promissory estoppel claim failed due to the lack of an unambiguous promise. The fraud and securities fraud claims were also dismissed because they relied on the existence of a non-dilutable ownership interest, which was not sufficiently alleged. Lastly, the breach of fiduciary duty claims failed as there was no enforceable stock subscription agreement to establish a fiduciary duty. The Seventh Circuit affirmed the district court's judgment. View "Yash Venture Holdings, LLC v. Moca Financial, Inc." on Justia Law

Ronald Goldschmidt appealed the dismissal of his prohibition claim against Judge Alan Triggs and Magistrate Thomas Beridon of the Hamilton County Court of Common Pleas. Goldschmidt argued that Magistrate Beridon exceeded his authority by issuing a magistrate’s order instead of a magistrate’s decision regarding a charging order. This charging order was related to a civil action where Goldschmidt was found liable for over $1.5 million, and Elm Investment sought to collect on this judgment through Goldschmidt’s membership interests in several limited-liability companies.The First District Court of Appeals dismissed Goldschmidt’s claim, holding that the trial court had jurisdiction to issue the charging order and that any error in how it was issued was a matter of the exercise of jurisdiction, not a lack of it. The court also found that Goldschmidt had an adequate remedy in the ordinary course of law by filing a motion to set aside the magistrate’s order.The Supreme Court of Ohio reviewed the case de novo and affirmed the First District’s judgment. The court held that the issuance of the charging order as a magistrate’s order did not exceed the trial court’s subject-matter jurisdiction. It noted that procedural errors by a magistrate do not affect the trial court’s jurisdiction and render decisions voidable, not void. The court concluded that Goldschmidt had an adequate remedy in the ordinary course of law through a motion to set aside the magistrate’s order and an appeal from any subsequent ruling on such a motion. Therefore, the court affirmed the dismissal of Goldschmidt’s complaint for a writ of prohibition. View "State ex rel. Goldschmidt v. Triggs" on Justia Law

Tesla, Inc. and its affiliates challenged a Louisiana law that prohibits automobile manufacturers from selling directly to consumers and performing warranty services for cars they do not own. Tesla alleged that the law violated federal antitrust law, due process rights, and equal protection rights. The defendants included the Louisiana Motor Vehicle Commission, its commissioners, the Louisiana Automobile Dealers Association (LADA), and various dealerships.The United States District Court for the Eastern District of Louisiana dismissed Tesla's claims. The court found that the private defendants were immune from antitrust liability, Tesla had not plausibly pleaded a Sherman Act violation against the governmental defendants, there was insufficient probability of actual bias to support the due process claim, and the regulations passed rational-basis review for the equal protection claim.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court reversed the dismissal of Tesla's due process claim, finding that Tesla had plausibly alleged that the Commission's composition and actions created a possible bias against Tesla, violating due process. The court vacated and remanded the dismissal of the antitrust claim, noting that the due process ruling fundamentally altered the grounds for Tesla's alleged antitrust injury. The court affirmed the dismissal of the equal protection claim, holding that the regulations had a rational basis in preventing vertical integration and controlling the automobile retail market.In summary, the Fifth Circuit reversed the due process claim dismissal, vacated and remanded the antitrust claim dismissal, and affirmed the equal protection claim dismissal. The case was remanded for further proceedings consistent with the court's opinion. View "Tesla v. Louisiana Automobile Dealers" on Justia Law

In 2019, Ancor Holdings, L.P. (Ancor) and Landon Capital Partners, L.L.C. (Landon) entered into letters of intent to invest in and acquire a majority interest in ICON EV, L.L.C. (ICON). The deal fell through, and Landon and ICON entered into their own agreement. Ancor sued Landon and ICON for breach of contract and tortious interference, respectively. The trial court dismissed Ancor’s tortious interference claim against ICON as a matter of law and denied Ancor’s declaratory judgment claim. The jury found for Ancor on the breach of contract claim against Landon, awarding $2,112,542 in damages.The United States District Court for the Northern District of Texas initially handled the case. The trial court dismissed Ancor’s tortious interference claim against ICON and denied Ancor’s declaratory judgment claim. The jury found Landon breached the contract and awarded Ancor damages. Ancor appealed the dismissal of its claims, and Landon cross-appealed the jury’s verdict.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court reversed the trial court’s dismissal of Ancor’s declaratory judgment and tortious interference claims, remanding them for a jury trial. The appellate court affirmed the jury’s finding that Landon breached the contract but reversed the trial court’s judgment on the reimbursement amount, instructing it to determine 80% of all third-party costs incurred. The court held that Ancor was entitled to a jury trial on its declaratory judgment claim and that sufficient evidence supported the tortious interference claim against ICON. The court also found that the trial court did not err in submitting the breach of contract claim to the jury, nor did the jury err in its findings. View "Ancor Holdings, L.P. v. Landon Capital Partners, L.L.C." on Justia Law

The case involves EPD Investment Co., LLC (EPD) and its owner, Jerrold S. Pressman, who were found to have operated a Ponzi scheme. EPD was forced into Chapter 7 bankruptcy by its creditors, and the Trustee, Jason M. Rund, filed an adversary proceeding against Poshow Ann Kirkland and her husband, John Kirkland, seeking to avoid fraudulent transfers made by EPD to John. John had assigned his interest in EPD to the Bright Conscience Trust, for which Ann is the trustee.The United States District Court for the Central District of California bifurcated the trial, separating the claims against John and Ann. A jury trial was conducted for the claims against John, resulting in a verdict that EPD was a Ponzi scheme but that John received payments in good faith and for reasonably equivalent value. The bankruptcy court ruled that the jury's findings would be binding in the Trustee's claims against Ann. Ann appealed the judgment, particularly challenging the jury's finding that EPD was a Ponzi scheme.The United States Court of Appeals for the Ninth Circuit reviewed the case. The court held that Ann had standing to appeal due to her significant involvement in the case and her interest in the issues presented. The court rejected Ann's argument that the district court erred by not including a mens rea instruction requiring the jury to find that Pressman knew he was operating a Ponzi scheme that would eventually collapse. The court held that fraudulent intent could be inferred from the existence of a Ponzi scheme established through objective criteria. The court also rejected Ann's argument that the district court erred by instructing the jury that lenders are investors for purposes of a Ponzi scheme.The Ninth Circuit affirmed the district court's order affirming the judgment of the bankruptcy court and remanded the case for further proceedings. View "In re: EPD INVESTMENT COMPANY V. KIRKLAND" on Justia Law

United Parcel Service, Inc. (UPS) challenged the Postal Regulatory Commission's (Commission) handling of the United States Postal Service's (Postal Service) pricing of competitive products, arguing that the Postal Service underprices these products by not accounting for "peak-season" costs incurred during the holiday season. UPS claimed that these costs, driven by increased demand for package deliveries, should be attributed to competitive products rather than being treated as institutional costs.The Commission denied UPS's petition to initiate rulemaking proceedings and its subsequent motion for reconsideration. The Commission found that UPS's methodology for calculating peak-season costs was flawed and did not produce reliable estimates. It also concluded that the existing cost-attribution framework already accounted for the costs caused by competitive products during the peak season. The Commission explained that the Postal Service's costing models, which use an incremental-cost approach, appropriately attribute costs to competitive products and that the remaining costs are correctly treated as institutional costs.The United States Court of Appeals for the District of Columbia Circuit reviewed the case. The court upheld the Commission's decision, finding that the Commission's rejection of UPS's methodology was reasonable and well-explained. The court noted that the Commission had addressed UPS's concerns about the Postal Service's costing models and had initiated further proceedings to explore potential updates to the models. The court also rejected UPS's argument that the Commission failed to consider whether peak-season costs are institutional costs uniquely associated with competitive products, noting that this issue was not properly presented in this case.The court denied UPS's petition for review, affirming the Commission's orders. View "United Parcel Service, Inc. v. PRC" on Justia Law

Radiance Capital Receivables Twelve, LLC ("Radiance") appealed a judgment from the Henry Circuit Court in favor of Bondy's Ford, Inc. ("Bondy's"). Radiance had garnished the wages of David Sherrill, who worked for Bondy's. Bondy's stopped paying on the garnishment, claiming Sherrill had left its employment, but continued to pay for Sherrill's services through a company created by Sherrill's wife. Radiance argued that Bondy's should still comply with the garnishment by withdrawing funds owed for Sherrill's services.The Henry Circuit Court had initially entered a garnishment judgment in favor of SE Property Holdings, LLC, which was later substituted by Radiance. Bondy's reported Sherrill's employment termination in September 2019, two months after the required notice period. Radiance filed a motion for judgment against Bondy's, arguing that Sherrill continued to provide services to Bondy's through his wife's company, KDS Aero Services, LLC. Bondy's responded with a motion to dismiss, claiming Sherrill was an independent contractor. The trial court granted Bondy's motion to dismiss and denied Radiance's motion.The Supreme Court of Alabama reviewed the case de novo. The court found that genuine issues of material fact existed regarding whether Bondy's payments to KDS Aero Services were actually owed to Sherrill. The lack of a contract or invoices between Bondy's and KDS Aero Services, coupled with inconsistencies in Sherrill's representations about his employment and residence, suggested potential fraud or misuse of corporate form to hide funds. The court reversed the trial court's judgment and remanded the case for further proceedings, emphasizing that neither party had met the burden for summary judgment. View "Radiance Capital Receivables Twelve, LLC v. Bondy's Ford, Inc." on Justia Law

Michael R. Rattagan, an Argentinian lawyer, was retained by Uber Technologies, Inc. through its Dutch subsidiaries to assist with launching Uber's ridesharing platform in Argentina. Rattagan also agreed to act as the Dutch subsidiaries' legal representative in Argentina, a role that exposed him to personal liability under Argentinian law. Despite warnings about potential personal exposure, Uber allegedly concealed its plans to launch the platform in Buenos Aires, which led to significant legal and reputational harm to Rattagan when the launch was deemed illegal by local authorities.The United States District Court for the Northern District of California dismissed Rattagan’s third amended complaint without leave to amend, ruling that his fraudulent concealment claims were barred by the economic loss rule as interpreted in Robinson Helicopter v. Dana Corp. The court concluded that Robinson provided only a narrow exception to the economic loss rule, which did not apply to Rattagan’s claims of fraudulent concealment. The court also found that Rattagan’s negligence and implied covenant claims were time-barred.The Supreme Court of California, upon request from the Ninth Circuit, addressed whether a plaintiff may assert a tort claim for fraudulent concealment arising from or related to the performance of a contract under California law. The court held that a plaintiff may assert such a claim if the elements of the claim can be established independently of the parties’ contractual rights and obligations, and if the tortious conduct exposes the plaintiff to a risk of harm beyond the reasonable contemplation of the parties when they entered into the contract. The court clarified that the economic loss rule does not bar tort recovery for fraudulent concealment in these circumstances. View "Rattagan v. Uber Technologies, Inc." on Justia Law

The City of Los Angeles contracted with PricewaterhouseCoopers (PwC) to modernize the billing system for the Department of Water and Power (LADWP). The rollout in 2013 resulted in billing errors, leading the City to sue PwC in 2015, alleging fraudulent misrepresentation. Concurrently, a class action was filed against the City by Antwon Jones, represented by attorney Jack Landskroner, for overbilling. Discovery revealed that the City’s special counsel had orchestrated the class action to settle claims favorably for the City while planning to recover costs from PwC.The Los Angeles County Superior Court found the City engaged in extensive discovery abuse to conceal its misconduct, including withholding documents and providing false testimony. The court imposed $2.5 million in monetary sanctions against the City under the Civil Discovery Act, specifically sections 2023.010 and 2023.030, which allow sanctions for discovery misuse.The California Court of Appeal reversed the sanctions, interpreting the Civil Discovery Act as not granting general authority to impose sanctions for discovery misconduct beyond specific discovery methods. The appellate court held that sections 2023.010 and 2023.030 do not independently authorize sanctions but must be read in conjunction with other provisions of the Act.The Supreme Court of California reversed the Court of Appeal’s decision, holding that the trial court did have the authority to impose monetary sanctions under sections 2023.010 and 2023.030 for the City’s pattern of discovery abuse. The Supreme Court clarified that these sections provide general authority to sanction discovery misuse, including systemic abuses not covered by specific discovery method provisions. View "City of Los Angeles v. Pricewaterhousecoopers, LLP" on Justia Law

The case involves a dispute over the enforceability of a noncompetition provision in an operating agreement following the partial sale of a business interest. Robert and Stephen Samuelian co-founded Life Generations Healthcare, LLC, and later sold a portion of their interest in the company. The new operating agreement included a noncompetition clause that the Samuelians later challenged in arbitration. The arbitrator found the provision invalid per se under California Business and Professions Code section 16600, which generally voids contracts restraining lawful professions, trades, or businesses.The Superior Court of Orange County reviewed the arbitrator's decision de novo and confirmed the award, agreeing that the noncompetition provision was invalid per se. The court also found that the Samuelians did not owe fiduciary duties to the company as minority members in a manager-managed LLC. The company and individual defendants appealed, arguing that the arbitrator applied the wrong legal standard and that the reasonableness standard should apply instead.The California Court of Appeal, Fourth Appellate District, Division Three, reviewed the case and concluded that the arbitrator had indeed applied the wrong standard. The court held that noncompetition agreements arising from the partial sale of a business interest should be evaluated under the reasonableness standard, not the per se standard. The court reasoned that partial sales differ significantly from the sale of an entire business interest, as the seller remains an owner and may still have some control over the company. Therefore, such noncompetition provisions must be scrutinized for their procompetitive benefits.The Court of Appeal reversed the trial court's judgment confirming the arbitration award and directed the trial court to enter an order denying the Samuelians' petition to confirm the award and granting the company's motion to vacate the entire award, including the portion awarding attorney fees and costs. View "Samuelian v. Life Generations Healthcare, LLC" on Justia Law