Justia Business Law Opinion Summaries

These consolidated cases, on appeal from a judgment of the district court, present competing claims to a blocked electronic funds transfer. The parties are the United States, which blocked the transaction because terrorists initiated it. On the other side are victims of Iran-sponsored terrorism who have obtained multimillion-dollar judgments against the Iranian government.   After learning of the government’s forfeiture action, attorneys for two groups of victims of Iranian terrorism and their relatives, holding judgments against Iran, filed separate writs of attachment. Plaintiffs sought to attach the funds at Wells Fargo pursuant to two federal statutes. The first, 28 U.S.C. Section 1610(g) of the Foreign Sovereign Immunities Act (“FSIA”). The second is Section 201(a) of the Terrorism Risk Insurance Act of 2002 (“TRIA”).   The district court ruled that Iran lacked any property interest in the blocked funds held by Wells Fargo. The court, therefore, quashed Plaintiffs’ writs of attachment. The DC Circuit court reversed and remanded. The court explained that tracing resolves this case in Plaintiffs’ favor. The government admits that the $9.98 million blocked funds at Wells Fargo “are traceable to Taif” and thus to Iran. The premise of the government’s forfeiture action is that the funds are traceable to Iran. The district court, therefore, erred in concluding that Plaintiffs had failed to show that the blocked funds were, under Section 201(a) of the TRIA, the blocked assets of [a] terrorist party. View "Estate of Jeremy I. Levin v. Wells Fargo Bank, N.A." on Justia Law

This appeal involved a breach of contract claim arising out of an indemnitee’s refusal to repay money advanced pursuant to an LLC Agreement. Under the Agreement, a Person was entitled to indemnification if the Person acted in good faith and in a manner believed to be in or not opposed to the best interests of the Company. The indemnification payments were further conditioned on the Person’s written undertaking to repay all amounts advanced under the LLC Agreement if it was later determined that the Person did not satisfy the standard of conduct, and thus, was not entitled to indemnification. New Wood Resources operated a plywood and veneer manufacturing facility in Mississippi known as Winston Plywood & Veneer LLC (“WPV”). Dr. Richard Baldwin (“Baldwin”) served as a manager of New Wood starting in September of 2013, and served as a member of New Wood’s Board of Managers. Baldwin was asked to invest in New Wood, and to oversee the revitalization of a newly acquired plywood mill in Louisville, Mississippi. The WPV manufacturing facility in Louisville had been dormant for years and was in need of repair. New Wood began to make repairs so that it could operate a mill. However, prior to the WPV facility’s completion, the facility was destroyed by an EF-4 tornado. WPV received funding from FEMA, and Baldwin took the lead role on behalf of New Wood to restore the WPV facility and transform it into a functioning and profitable plywood manufacturing facility. In 2016, just before the WPV mill was set to begin operations, Baldwin was terminated from his position as the President and General Manager of WPV. The Delaware Court addressed the narrow issue of whether the LLC Agreement pertinent here contained an implied covenant of good faith that would require the determination of a Person’s entitlement to indemnification to be made in good faith. After review of the Agreement, the Court held that it did. It therefore reversed and remanded this case for further proceedings. View "Baldwin v. New Wood Resources LLC" on Justia Law

This litigation arose from a decision by the City of Chula Vista (the City) to reject applications by CV Amalgamated LLC, dba Caligrown (CVA) for licenses to operate retail cannabis stores in the City. In 2018, the City enacted an ordinance regulating commercial cannabis businesses (the Cannabis Ordinance). Among other things, the Cannabis Ordinance allowed for a maximum of eight storefront retail cannabis business licenses, with up to two licenses in each of the City’s four council districts (the Council Districts). CVA submitted applications for storefront retail cannabis business licenses in each of the City’s four Council Districts. CVA filed an appeal with the City Manager, in which it challenged the City’s rejections of its applications for licenses in Council Districts One, Three and Four. After a hearing, CVA's applications were again denied, and it initiated this litigation in September 2020. On January 29, 2021, the trial court issued an order denying CVA’s motion for a writ of mandate. The trial court made no factual findings and failed to explain why it concluded that CVA had failed to meet its burden. The Court of Appeal concluded the City failed to follow its ministerial and mandatory duty to follow its own procedures when it rejected CVA's applications in the initial assessments of the applications. The trial court's judgment was reversed with instructions to issue a writ of mandate directing the City to reassess CVA's applications in districts One, Three and Four. View "CV Amalgamated LLC v. City of Chula Vista" on Justia Law

The Securities and Exchange Commission (SEC) initiated an enforcement action against several entities and individuals. The district court granted the unopposed motion and appointed Appellee as receiver, authorizing him to “take custody, control, and possession of all Receivership Entity records, documents, and materials” and to “take any other action as necessary and appropriate for the preservation of the Receivership Entities’ property interests.” Defendants didn’t appeal the order appointing Appellee as receiver. The district court granted the motion. Defendants appealed, contending that they weren’t afforded an adequate opportunity to be heard before the receivership estate’s expansion. Appellee has moved to dismiss Defendants’ appeal for lack of jurisdiction.The Eleventh Circuit dismissed the appeal. The court found that neither Section 1292(a)(2) nor Section 1292(a)(1) grants the court jurisdiction to consider the appeal because the expansion order was neither an order appointing a receiver nor an order granting (or modifying) an injunction. The court explained that to the extent that the appointment of the receiver or the expansion of his duties could be viewed as an injunction at all, the district court possessed freestanding authority to enter it. Given that the district court had both statutory and residual equitable authority to establish and expand the receivership, it had no cause to invoke the All Writs Act to aid its jurisdiction. View "Securities & Exchange Commission v. L.M.E. 2017 Family Trust, et al." on Justia Law

The dispute that arose in this case concerned an easement that lead from the Glenn Highway over residential property to a parcel of land used as a jumping-off point for a Matanuska Glacier tourism business. After years of disagreement over issues related to road maintenance, traffic, safety, and trespass on the homeowner’s property by visitors to the glacier, the homeowner erected a sign stating “No Glacier Access” near the entrance to the road. The business owner filed suit, and the homeowner counterclaimed for defamation based on inflammatory allegations made in the complaint. The superior court largely ruled in favor of the business owner, holding that he had a right to use the easement for his glacier tourism business, that his road maintenance work was reasonably necessary and did not unreasonably damage the homeowner’s property despite minor increases in the width of the road, and that the “No Glacier Access” sign had unreasonably interfered with his use of the easement. The superior court also dismissed the defamation counterclaims and awarded attorney’s fees to the business owner. Finding no reversible error in the superior court’s judgment, the Alaska Supreme Court affirmed the superior court’s judgment in full. View "Wayson v. Stevenson" on Justia Law

Byram Café Group, LLC (BCG), moved for summary judgment against Eddie and Teresa Tucker in a premises-liability action arising from Eddie’s slip-and-fall accident. BCG sought judgment as a matter of law based on a lack of evidence supporting any of the elements of a slip-and-fall case. In response, the Tuckers argued that genuine issues of material fact existed as to dangerous conditions that may have caused Eddie’s fall. The circuit court denied BCG’s summary judgment motion. BCG sought interlocutory appeal, which the Mississippi Supreme Court granted. The issue the appeal presented was whether the Tuckers could survive a motion for summary judgment without producing evidence that a dangerous condition existed, that BCG caused the hypothetical dangerous condition, and that BCG knew or should have known about the dangerous condition. As a matter of law, the Supreme Court found the circuit court erred by denying BCG’s motion for summary judgment. Accordingly, the Court reversed and remanded the circuit court’s order. View "Byram Cafe Group, LLC v. Tucker" on Justia Law

Harrison Co., L.L.C. executed a credit agreement with A-Z Wholesalers, Inc. to supply A-Z with tobacco products and other goods. Barkat Ali personally guaranteed A-Z’s payment. A-Z fell behind $2.6 million on payments for the goods it received, so Harrison sued for breach of contract and breach of guaranty actions against A-Z and Ali. The district court granted summary judgment for Harrison.A-Z and Ali argue there is a genuine dispute of material fact as to whether the sales that Harrison is seeking payment for were, in reality, sales from Imperial following the merger of the two companies. The Fifth Circuit affirmed. The court wrote that Imperial and Harrison are—and always have been—separate entities with their own employees, customers, and warehouses. As the district court explained, A-Z and Ali do not allege, let alone present evidence, “that A-Z experienced any changes in ordering procedures, pricing, delivery schedules, type or brand of goods, inventory availability, or any other indicia that . . . [shows] it was no longer doing business with Harrison.” Therefore, the district court did not err in granting summary judgment. View "Harrison Company v. A-Z Whsle" on Justia Law

The 2008 financial crisis caused GM and Chrysler into bankruptcy. In Europe, Fiat faced similar troubles. Fiat CEO Marchionne forged a relationship with the United Auto Workers (UAW). Fiat negotiated a partial purchase of Chrysler. Chrysler and the UAW agreed to Marchionne’s request to jettison certain traditional union protections. The companies emerged from bankruptcy with the UAW large percentages of their equity.GM alleges that Marchionne subsequently implemented a bribery scheme to revive Chrysler and harm GM. Fiat acquired the UAW’s stake in Chrysler. The new entity, “FCA,” allegedly “began a long-running intentional scheme of improper payments" to UAW officials … to influence the collective bargaining process, providing Chrysler with labor peace and competitive advantages. GM rejected Marchionne's proposal for a merger in 2015; although bribed UAW executives pressed GM to agree. During subsequent collective bargaining, the UAW and FCA allegedly conspired “to force enormous costs on GM.”In 2017, the Justice Department criminally charged numerous FCA executives and UAW officials. Several entered guilty pleas. FCA pleaded guilty and agreed to a $30 million fine. The UAW agreed to a consent decree, requiring federal monitoring.GM sued FCA, Fiat, and individuals, asserting RICO claims, 18 U.S.C. 1962(b), (c), and (d). The district court dismissed. Assuming that FCA committed RICO violations, they were either indirect or too remote to have proximately caused GM’s alleged injuries. The Sixth Circuit affirmed, first rejecting an argument that the NLRB had exclusive jurisdiction. The court noted the existence of a more “immediate victim,” the FCA workers, “better situated to sue.” GM has not alleged that it would have received the same benefits as FCA absent the corruption. View "General Motors, LLC v. FCA US, LLC" on Justia Law

Hackers compromised customer-payment information at several Wendy’s franchisee restaurants. Shareholders took legal action against Wendy’s directors and officers on the corporation’s behalf to remedy any wrongdoing that might have allowed the breach to occur. Three shareholder derivative legal efforts ensued—two actions and one pre-suit demand—leading to a series of mediation sessions. Two derivative actions (filed by Graham and Caracci) were consolidated and resulted in a settlement, which the district court approved after appointing one of the settling shareholder’s attorneys as the lead counsel. Those decisions drew unsuccessful objections from Caracci, who had not participated in the latest settlement discussions. No other shareholder objected. Caracci appealed decisions made by the district court, which together had the effect of dramatically reducing Caracci’s entitlement to an attorney’s fees award.The Sixth Circuit affirmed. The court acted within the bounds of its wide discretion to manage shareholder litigation in its appointment of a lead counsel, its approval of the settlement, and its interlocutory orders on discovery and the mediation privilege. View "Graham v. Peltz" on Justia Law

The United States Federal District Court for the Western District of Washington certified a question of law to the Washington Supreme Court. Cox Construction was the general contractor of a remodeling project. Cox hired Baker & Son Construction, Inc. as a subcontractor. A Baker employee allegedly caused a two-by-four to fall from a railing and strike Ronnie Cox, owner of Cox Construction, who later died from his injury. Baker allegedly called an insurance agent to alert them of the incident. The agent told Baker that no action needed to be taken because at that time, no claim existed. A few months later, Baker received a wrongful death claim from an attorney representing Cox’s widow. Baker notified its insurer, Preferred Contractors Insurance Company (PCIC) of the claim. PCIC denied coverage, but agreed to defend Baker under a reservation of rights. The certified question to the Washington Supreme Court related to the “claims-made” nature of the policy and the timing of Baker’s tender of Ms. Cox’s claim. The Supreme Court replied to the certified question that in light of RCW 18.27, a contractor’s commercial general liability insurance policy that requires the loss to occur and be reported within the same policy year, and provides neither neither prospective nor retroactive coverage violates Washington’s public policy. View "Preferred Contractors Ins. Co. v. Baker & Son Constr., Inc." on Justia Law