Justia Business Law Opinion Summaries

Mayfield manufactures a football helmet accessory that purportedly reduces the severity of football helmet impact when it is installed on an existing football helmet. Mayfield sued the National Operating Committee on Standards for Athletic Equipment (NOCSAE), a nonprofit organization that develops and promotes safety standards for athletic equipment. It has a safety certification that can be applied to football helmets that meet NOCSAE’s standards. NOCSAE does not permit manufacturers of helmet accessories to seek certification separately from the helmet manufacturers.Mayfield alleged that NOCSAE and helmet manufacturers are restraining trade in the football helmet market, engaging in an overarching conspiracy to limit competition, and subjecting Mayfield to tortious interference of business relationships or expectations. The Sixth Circuit affirmed the dismissal of the suit. In its claims under the Sherman Act section 1, Mayfield cited scenarios, theories, and occurrences and asked the court to make "sweeping conclusions" about the motives and actions of the defendants. An “explicit agreement,” as required for Sherman Act liability, "should not demand this kind of intellectual leap." The defendants have shown that their desire to protect their reputations and sell safe products is a legitimate business interest. View "Hobart-Mayfield, Inc. v. National Operating Committee on Standards for Athletic Equipment" on Justia Law

The Supreme Court reversed the decision of the court of appeals affirming the judgment of the trial court for a pioneering cardiovascular surgeon in this dispute between the surgeon and the hospital where he formerly worked, holding that the evidence was not legally sufficient to support the jury's award.Plaintiff and his professional association sued Defendant for engaging in a retaliatory "whisper campaign" against him after he left Defendant for a new rival hospital, alleging illegal restraint of trade (anticompetition claims), tortious interference with prospective business relations, defamation, and business disparagement. The jury rejected Plaintiff's anticompetition claims but found that Defendant had defamed Plaintiff and disparaged his professional association. Defendant appealed, arguing that no evidence supported the jury's defamation and disparagement findings. The court of appeals affirmed based on its interpretation of the jury charge. The Supreme Court reversed and rendered a take-nothing judgment for Defendant, holding that no evidence supported the jury's award in this case. View "Memorial Hermann Health System v. Gomez" on Justia Law

Plaintiff Citibank, N.A, the Administrative Agent for the lenders on a $1.8 billion seven-year syndicated loan to Revlon Inc., appeals from the judgment of the district court in favor of Defendants, the Loan Managers for certain lenders, who received and refused to return  Citibank’s accidental, unintended early repayment of the loan. The district court, after a bench trial, relying on Banque Worms v. BankAmerica International, 570 N.E.2d 189 (N.Y. 1991), ruled that the rule of discharge for value provided a defense against Citibank’s suit for restitution.   The Second Circuit vacated the district court’s ruling. The court held because the Defendants had notice of the mistake and because the lenders were not entitled to repayment at the time, the rule of Banque Worms does not protect the Defendants. The court explained that the Court of Appeals’ specified requirement of entitlement to the money, combined with the cases it cited as precedents for the rule, and its continued espousal of New York’s general rule that mistaken payments should be returned, lead the court to conclude that, in New York, a creditor may not invoke the discharge-for-value rule unless the debt at issue is presently payable. Here, the debt on which Citibank mistakenly made a payment was not due for another three years. As a result, Defendants may not invoke the discharge-for-value rule as a shield against Citibank’s claims for restitution. View "In re: Citibank August 11, 2020" on Justia Law

This case concerns the application of two Minnesota statutes and a rule promulgated by the Minnesota Department of Agriculture (MDA) that establishes the liability of a parent company for the unmet contractual obligations of its subsidiary under certain kinds of agricultural contracts. At issue is whether the relevant laws apply to chicken production contracts between Defendants (collectively, the Growers), who are Minnesota chicken producers, and Simply Essentials, LLC (Simply Essentials), a chicken processor. If they apply, then Plaintiff Pitman Farms (Pitman Farms), a California corporation and Simply Essentials’ parent company is liable to the Growers for Simply Essentials’ breaches of contract.   The district court granted Pitman Farms’s summary-judgment motion and denied the Growers’ cross-motion based upon its conclusion that the Minnesota parent-liability authorities do not by their terms apply to the subject contracts because those authorities do not apply to parent companies of LLCs.   The Eighth Circuit reversed. The court explained that the Minnesota legislature’s lack of amendment subsequent to the advent of LLCs played a significant role in the district court’s conclusion. The court concluded that it does think that this fact suffices to exclude LLCs from the operation of the laws at issue in this case. Further, here, the legislative intent is clear: with respect to agricultural contracts, the Minnesota legislature intended parent companies to be liable for the breaches of their subsidiaries. Accordingly, the court held that the use of the phrase “corporation, partnership, or association” in the relevant statutes and Rule is intended to include LLCs for the purpose of parent company liability. View "Pitman Farms v. Kuehl Poultry, LLC" on Justia Law

In a dispute between members of a limited liability company (LLC), Plaintiff alleged that the LLC’s managing member engaged in self-dealing to the detriment of both Plaintiff and the company. After the managing member, represented by the LLC’s attorneys, cross-complained against Plaintiff, Plaintiff cross-complained against both the managing member and the attorneys for further self-dealing and breach of fiduciary duty, alleging they misappropriated funds from the LLC to finance the litigation. Cross-defendants specially moved to strike the complaint under the anti-SLAPP statute (Strategic Lawsuit Against Protected Activity; Code of Civil Procedure section 425) arguing the alleged conduct occurred as part of the litigation, which was protected activity.   The Second Appellate District affirmed the order imposing monetary sanctions. The court denied the other discovery orders deeming it a petition for extraordinary relief. The court affirmed the anti-SLAPP order striking Plaintiff’s cross-complaint. Further, the court directed the trial court to vacate its order awarding Defendant anti-SLAPP attorney fees and reconsider that order. The court explained that the trial court was in the best position to evaluate Plaintiff’s justifications for deficient responses, and as with the December 9, 2019 order, the court explained it cannot conclude that the trial court’s findings and decision on April 6, 2021, to impose additional monetary sanctions constituted a manifest abuse exceeding the bounds of reason. View "Manlin v. Milner" on Justia Law

ZF Micro Solutions, Inc., the successor of now deceased ZF Micro Devices, Inc., alleged TAT Capital Partners, Ltd., murdered its predecessor by inserting a board member who poisoned it. The trial court decided the claim for breach of TAT’s fiduciary duty as a director was equitable rather than legal and, after a court trial, entered judgment for TAT. ZF Micro Solutions argued this was error. The Court of Appeal agreed, holding that while examining the performance of a board member’s fiduciary duties would be required, resolution of this claim did not implicate the powers of equity, and it should have been tried as a matter at law. Judgment was reversed and the matter remanded for further proceedings. View "ZF Micro Solutions, Inc. v. TAT Capital Partners, Ltd." on Justia Law

A group of public servants who had contacted Navient for help repaying their loans (collectively, “Plaintiffs”) filed a putative class action lawsuit, alleging that Navient had not “lived up to its obligation to help vulnerable borrowers get on the best possible repayment plan and qualify for PSLF.”   Navient moved to dismiss the amended complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim, which the district court granted in part, dismissing all claims except “the claim brought under New York’s General Business Law Section 349”. The district court certified a class for settlement purposes under Federal Rule of Civil Procedure 23(b)(2) and approved the settlement as “fair, reasonable, adequate,” and “in the best interest of the Settlement Class as a whole.”   Two objectors now appeal that judgment, arguing that the district court erred in certifying the class, approving the settlement, and approving service awards of $15,000 to the named Plaintiffs. The Second Circuit affirmed concluding that the district court did not abuse its discretion in making any of these determinations. The court explained that here, the amended complaint plausibly alleged that the named Plaintiffs were likely to suffer future harm because they continued to rely on Navient for information about repaying their student loans. At least six of the named Plaintiffs continue to have a relationship with Navient. That is enough to confer standing on the entire class. Further, the court explained individual class members [in fact] retain their right to bring individual lawsuits,” and the settlement does not prevent absent class members from pursuing monetary claims. View "Hyland v. Navient Corporation" on Justia Law

Appellants (the “Bullion Traders”) are a collection of in-state and out-of-state precious metal traders or representatives thereof challenging the constitutionality of Minnesota Statutes Chapter 80G, which regulates bullion transactions. The Bullion Traders argue the statute violates the dormant Commerce Clause.   The Eighth Circuit reversed the district court’s partial grant of the Commissioner’s motion to dismiss and the district court’s partial denial of the Bullion Traders’ motion for summary judgment. On remand, the court left to the district court to decide in the first instance whether the extraterritorial provisions of Chapter 80G, as amended, are severable from the remainder of the statute.   The court explained that certain in-state obligations, such as a registration fee for traders doing business in Minnesota, even when calculated considering out-of-state transactions, do not control out-of-state commerce. However, Chapter 80G does not merely burden in-state dealers with a monetary obligation that considers both in-state and out-of-state transactions. Rather, it prohibits an in-state dealer who meets the $25,000 threshold from conducting any bullion transaction, including out-of-state transactions, without first registering with the Commissioner. View "Thomas Styczinski v. Grace Arnold" on Justia Law

In 2008, Tiversa, a cybersecurity company, informed LabMD, a medical testing business, that it had found LabMD’s confidential patient information circulating in cyberspace and that it could help LabMD respond to the data leak. LabMD’s own investigation revealed no leak. LabMD accused Tiversa of illegally accessing the patient information. Tiversa submitted a tip to the FTC, prompting an investigation. The FTC enforcement action and the reputational damage ruined LabMD. In 2014, a former Tiversa employee disclosed that the patient information did not spread from a leak but that Tiversa had accessed LabMD’s computer files and fabricated evidence of a leak.LabMD sued. In one suit, the district court dismissed claims of defamation and fraud after prohibiting the discovery or use of expert testimony. After finding that LabMD and its counsel breached those discovery limits, the court awarded fees and costs to the defendants, struck almost all of LabMD’s testimonial evidence, and revoked its counsel’s pro hac vice admission. When LabMD’s replacement counsel later tried to withdraw, the court denied that request. LabMD failed to pay the monetary sanctions; the Court held it in contempt. The second lawsuit, asserting similar fraud claims, was dismissed.The Third Circuit vacated in part. The prohibition on expert testimony was unwarranted; the court abused its discretion in imposing sanctions and erred in denying the motion to withdraw. LabMD’s other claims, in that case, were properly dismissed. In the second case, the court affirmed; LabMD did not challenge independently sufficient grounds for the decision. View "LabMD, Inc v. Tiversa Holding Corp" on Justia Law

PPG, a Pittsburgh company, developed a new kind of plastic for airplane windows, “Opticor™ A former PPG employee, Rukavina, agreed to share proprietary information concerning Opticor with TMG, a China-based manufacturer. TMG contacted the PPG subcontractor that made Opticor window molds, asking it to manufacture the same molds, attaching photographs and drawings from a proprietary report. The subcontractor alerted PPG, which notified the FBI, which executed warrants to search Rukavina’s email account and residence. Rukavina was charged with criminal theft of trade secrets.PPG filed a civil action against TMG, under RICO, 18 U.S.C. 1962(c)-(d) and Pennsylvania law. TMG did not respond to the complaint, nor did it answer requests for admissions. More than a year after TMG should have appeared the clerk entered a default. PPG asserted actual damages of $9,909,687.31. Four months later, TMG appeared and unsuccessfully moved to set aside the default. The court held that PPG had sufficiently established TMG’s liability and was entitled to treble damages, an injunction, and attorneys’ fees, costs, and expenses. The court found that $8,805,929 of the claimed actual damages were supported by sufficient evidence and entered judgment for $26,417,787.The Third Circuit affirmed. TMG effectively conceded the complaint’s allegations. Under the Uniform Trade Secrets Act, it can be appropriate to measure unjust enrichment from a misappropriated trade secret by looking at development costs that were avoided but would have been incurred if not for the misappropriation. The district court carefully analyzed such evidence; its methodology and conclusion are sound. View "PPG Industries Inc v. Jiangsu Tie Mao Glass Co Ltd" on Justia Law