Justia Business Law Opinion Summaries

In this dispute, two renewable-energy generating companies, Tyngsboro Sports II Solar, LLC and 201 Oak Pembroke Solar LLC, appealed to the United States Court of Appeals for the First Circuit after their class-action lawsuit was dismissed by the District Court for the District of Massachusetts due to lack of subject-matter jurisdiction. The plaintiffs had a longstanding disagreement with defendants, utility companies National Grid USA Service Company, Inc. and Massachusetts Electric Company, over certain tax-related fees charged to them. The plaintiffs sought redress in federal court after unsuccessful petitions to state authorities.The plaintiffs argued that the district court had jurisdiction due to the case's connection to federal tax law, however, the appellate court disagreed, stating that the plaintiffs' complaint did not bring any claim that arose under federal law. The plaintiffs had brought forth four claims against National Grid, including a request for declaratory relief, a state-law claim for a breach of the covenant of good faith and fair dealing, a state-law claim for restitution and unjust enrichment, and a state-law claim for violating a statutory requirement that public utilities assess only just and reasonable charges.The appellate court affirmed the district court's dismissal of the case, finding that the plaintiffs could not establish federal-question jurisdiction simply by asserting a state-law claim to which there was a federal defense. The court noted that the state-law claims did not necessarily raise a federal issue, and to the extent that one did, the issue was not substantial. As such, the court concluded that the district court lacked jurisdiction over the claims. View "Tyngsboro Sports II Solar, LLC v. National Grid USA Service Co., Inc." on Justia Law

The United States Court of Appeals for the Eleventh Circuit reviewed the decision of the United States District Court for the Northern District of Georgia regarding a dispute over the enforceability of a restrictive covenant in Georgia. The plaintiff, Charles Baldwin, had worked for various franchisees of Express Oil Change, LLC, and was asked to sign a restrictive covenant as a condition of receiving a payment after the franchisees' stores were sold to Express. The covenant restricted Baldwin from engaging in certain competitive business activities for a specified duration and within a specified geographic area. After leaving Express, Baldwin sued, seeking a declaration that the covenant was unenforceable under the Georgia Restrictive Covenants Act (GRCA). The district court preliminarily enjoined the enforcement of the covenant, finding it unreasonable in terms of its geographic scope and duration. On appeal, the Eleventh Circuit found that the district court correctly concluded that the covenant's geographic scope was unreasonable under the GRCA, but that it applied the wrong presumption in concluding that the covenant's duration was unreasonable. The Eleventh Circuit affirmed in part, vacated in part, dismissed the appeal in part, and remanded the case to the district court for reconsideration of its preliminary injunction under the proper presumptions. View "Baldwin v. Express Oil Change, LLC" on Justia Law

In the United States Court of Appeals for the Eleventh Circuit, a group of Florida restaurants brought a lawsuit against Sysco Jacksonville, Inc., a food distribution company. The restaurants, which include A1A Burrito Works, Inc., A1A Burrito Works Taco Shop 2, Inc., and Juniper Beach Enterprises, Inc., alleged that Sysco violated the Florida Deceptive and Unfair Trade Practices Act (FDUTPA) and breached their contracts when Sysco regularly delivered underweight boxes of poultry. The district court dismissed the restaurants' claims, ruling that the Poultry Products Inspection Act (PPIA) preempted their state law claims because their claims sought to impose on Sysco labeling requirements that are "in addition to, or different than" the requirements prescribed by federal law.The Eleventh Circuit affirmed in part, reversed in part, and remanded the case for further proceedings. The court agreed with the district court that the restaurants failed to show that their FDUTPA claim was not preempted by the PPIA. However, the court disagreed with the district court's dismissal of the restaurants' breach of contract claim. The court found that this claim, which argued that the restaurants did not receive the amount of poultry they paid for in accordance with their contracts with Sysco, was not preempted because it merely sought to enforce the parties' private agreements regarding the cost and weight of poultry packages and did not amount to a state imposing a labeling requirement inconsistent with federal regulations. View "A1A Burrito Works, Inc., et al v. Sysco Jacksonville, Inc." on Justia Law

In this case, the Supreme Court of the State of Alaska upheld a lower court's decision that Williams Alaska Petroleum, Inc. and The Williams Companies, Inc. (collectively, "Williams") were strictly liable for the release of hazardous substances at a North Pole refinery they previously owned and operated. The substances, including sulfolane, a purifying solvent, had contaminated local groundwater. The court also upheld the ruling that Williams was responsible for paying damages to the State of Alaska and making contributions to the current owner, Flint Hills Resources, for its remediation costs.The court rejected Williams's claims that sulfolane was not a hazardous substance under state law. It also rejected the argument that the company's due process rights were violated because, it argued, it did not have fair notice that its conduct was prohibited. The court further denied Williams's argument that the imposition of retroactive liability for past releases constituted an unconstitutional taking of property.In addition, the court determined that Williams had retained liability for offsite sulfolane releases when it sold the refinery to Flint Hills. It also found that Flint Hills could seek statutory contribution from Williams for certain costs related to the contamination. However, the court remanded the grant of injunctive relief for more specificity as required by rule. Williams was ordered to pay damages for loss of access to groundwater due to sulfolane contamination, and for the costs of response, containment, removal, or remedial action incurred by the state. View "Williams Alaska Petroleum, Inc. v. State of Alaska" on Justia Law

In this case, the plaintiffs, who are shareholders of Facebook, Inc., brought a securities fraud action against the company and its executives, alleging that they made materially misleading statements and omissions about the risk of improper access to Facebook users' data, Facebook's internal investigation into the actions of Cambridge Analytica, and the control Facebook users have over their data. The United States Court of Appeals for the Ninth Circuit affirmed in part and reversed in part the decision of the District Court for the Northern District of California.The Circuit Court held that the shareholders adequately pleaded falsity as to the challenged risk statements in Facebook's 2016 Form 10-K. The court held that these statements were materially misleading because Facebook knew at the time of filing that the risk of improper third-party misuse of Facebook users' data was not hypothetical, but had already occurred.As to the statements regarding Facebook's investigation into Cambridge Analytica, the court affirmed the district court's decision, holding that the shareholders failed to plead scienter, or intent to defraud.Lastly, the court held that the shareholders adequately pleaded loss causation as to the statements assuring users that they controlled their data on the platform. The court found that the shareholders had adequately pleaded that the March 2018 revelation about Cambridge Analytica and the June 2018 revelation about Facebook's whitelisting policy were the first times Facebook investors were alerted that Facebook users did not have complete control over their own data, causing significant stock price drops.The case was remanded to the district court for further proceedings. View "AMALGAMATED BANK V. FACEBOOK, INC." on Justia Law

In the case brought before the Court of Chancery of the State of Delaware, Texas Pacific Land Corporation (the "Company") sued Horizon Kinetics LLC, Horizon Kinetics Asset Management LLC, SoftVest Advisors, LLC, and SoftVest, L.P. (collectively, the "Investor Group") over a dispute related to a stockholder vote. The Company alleged that the Investor Group breached a contractual obligation under a stockholders agreement to vote their shares in accordance with the board of directors' recommendation. The recommendation was for a charter amendment to increase the Company’s authorized shares. The Investor Group voted against the amendment, arguing they were not bound to follow the board’s recommendation due to exceptions in the agreement. They also claimed the doctrine of unclean hands barred the Company from enforcing the voting commitment, arguing the Company had disclosed inaccurate information when soliciting stockholder approval. The court found the Investor Group breached the voting commitment and their shares should be deemed to have voted in favor of the amendment. Consequently, the amendment was declared to have been approved. The court dismissed the Investor Group's unclean hands argument, citing their own misconduct in violating the agreement. View "Texas Pacific Land Corporation v. Horizon Kinetics LLC, et al." on Justia Law

This case revolves around the filed rate doctrine and its applicability in instances where rates approved by a municipal board are questioned. The plaintiffs, a group of customers, sued Recology, a waste management company, alleging that the company violated the Unfair Competition Law and other laws by bribing a city official to facilitate the approval of Recology’s application for increased refuse collection rates. The trial court ruled in favor of Recology, holding that the claims were barred by the filed rate doctrine. The Court of Appeal of the State of California First Appellate District Division Three reversed the decision, stating that the California version of the filed rate doctrine does not bar this action because the purposes underlying the doctrine – “nondiscrimination” and “nonjusticiability” strands – are not implicated by plaintiffs’ claims. The court also concluded that the judgment in the prior law enforcement action does not pose a res judicata bar to this putative class action. The court remanded the case for the trial court’s consideration of Recology’s remaining challenges in the first instance. View "Villarroel v. Recology" on Justia Law

In the case before the United States Court of Appeals for the Fourth Circuit, the defendant, Brent Brewbaker, appealed from his conviction of a per se antitrust violation under § 1 of the Sherman Act, as well as five counts of mail and wire fraud. Brewbaker had asked the district court to dismiss the Sherman Act count for failure to state an offense, but the court denied his motion. The court of appeals reversed Brewbaker’s Sherman Act conviction, finding that the indictment failed to state a per se antitrust offense as it purported to do. The court, however, affirmed his fraud convictions and remanded the case for resentencing.The legal basis for the case was Brewbaker's argument that the indictment should have been dismissed because it did not state a per se Sherman Act offense, a claim that the appellate court agreed with. The court explained that the indictment alleged a restraint that was both horizontal and vertical in nature, which does not fit neatly into either category as per existing case law. The court further noted that the Supreme Court had not yet clarified how to analyze an agreement between two parties with both vertical and horizontal aspects. The court concluded that the indictment did not allege a restraint that has been previously held to be per se illegal, nor one that economics showed would invariably lead to anticompetitive effects, and thus failed to state a per se violation of the Sherman Act.The court also rejected Brewbaker's claim that the jury instructions on the Sherman Act count "infected" the jury’s consideration of the fraud counts, noting that the fraud counts were not dependent on finding Brewbaker guilty under the Sherman Act. It further cited the presumption that juries follow instructions, and found no extraordinary situation to overcome this presumption. Therefore, the fraud convictions were affirmed. View "US v. Brent Brewbaker" on Justia Law

In this case, Eli Global, LLC, and Greg Lindberg appealed a summary judgment entered against them by the Mobile Circuit Court in Alabama. The dispute involved Eli Global's alleged failure to fulfill its obligations on a promissory note and Lindberg's alleged failure to fulfill his obligations on a guaranty of that promissory note. The promissory note and guaranty were part of an agreement to purchase a healthcare company. Eli Global and Lindberg also challenged the circuit court's award of attorney fees and expenses to the plaintiffs.The Supreme Court of Alabama affirmed the lower court's judgment finding Eli Global and Lindberg liable based on the promissory note and the guaranty, and its award of the principal amount plus interest due based on that liability. The court found that the promissory note was not a negotiable instrument under New York law, and even if it was, the plaintiffs were not required to prove who possessed the promissory note because Eli Global and Lindberg waived that argument in the lower court. In addition, the court found that one of the plaintiffs did not release his claims against Lindberg that were based on the guaranty.However, the court remanded the case back to the lower court to provide a more detailed explanation for the award of attorney fees and expenses. The court found that the lower court's order did not provide sufficient explanation on how it determined the award of attorney fees and expenses. The lower court was instructed to return its explanation to the Supreme Court within 42 days. View "Eli Global, LLC v. Cieutat" on Justia Law

The Supreme Court reversed the order of the district court concluding that the claims against Appellant did not fall within the categories of claims subject to Nevada's anti-SLAPP statutes without further analysis, holding that remand was required.In the underlying lawsuit, TMM, Inc. (TMMI) filed a third-party complaint against Appellant asserting claims for trade libel, misappropriation of trade secrets, conversion, injunctive relief, abuse of process, and alter ego liability. Appellant filed an anti-SLAPP special motion to dismiss, which the district court denied. The Supreme Court reversed and remanded the case for further proceedings, holding (1) the district court erred in finding that the subject claims did not fall within the categories of claims subject to the anti-SLAPP statute; (2) Appellant met his burden under the first prong of the anti-SLAPP analysis; and (3) the district court applied an incorrect standard in evaluating TMMI's claims under the second prong of the anti-SLAPP analysis. View "Panik v. TMM, Inc." on Justia Law