Justia Civil Procedure Opinion Summaries

The case revolves around Justin Keener, who operated under the name JMJ Financial. Keener's business model involved purchasing convertible notes from microcap issuers, converting those notes into common stock, and selling that stock in the public market at a profit. This practice, known as "toxic" or "death spiral" financing, can harm microcap companies and existing investors by causing the stock price to drop significantly. Keener made over $7.7 million in profits from this practice. However, he never registered as a dealer with the Securities and Exchange Commission (SEC).The SEC filed a civil enforcement action against Keener, alleging that he operated as an unregistered dealer in violation of the Securities Exchange Act of 1934. The United States District Court for the Southern District of Florida granted summary judgment for the SEC, enjoining Keener from future securities transactions as an unregistered dealer and ordering him to disgorge the profits from his convertible-note business.In the United States Court of Appeals for the Eleventh Circuit, Keener appealed the district court's decision. He argued that he did not violate the Securities Exchange Act because he never effectuated securities orders for customers. He also claimed that the SEC violated his rights to due process and equal protection.The Court of Appeals affirmed the district court's decision. It held that Keener operated as an unregistered dealer in violation of the Securities Exchange Act. The court rejected Keener's argument that he could not have been a dealer because he never effectuated securities orders for customers. It also dismissed Keener's claims that the SEC violated his rights to due process and equal protection. The court upheld the district court's imposition of a permanent injunction and its order for Keener to disgorge his profits. View "Securities and Exchange Commission v. Keener" on Justia Law

The plaintiff, Deutsche Bank AG, sought to recover damages from the defendants, Alexander Vik and his daughter, Caroline Vik, for their alleged interference with a business expectancy. The plaintiff was attempting to collect an approximately $243 million foreign judgment from a company, Sebastian Holdings, Inc. (SHI), which the plaintiff claimed was controlled by Alexander. The plaintiff alleged that the defendants had attempted to interfere with a Norwegian court’s order requiring the sale of SHI’s shares in a Norwegian software company, Confirmit, to partially satisfy the foreign judgment. The defendants filed a motion to dismiss the action for lack of subject matter jurisdiction, arguing that the plaintiff’s claims were barred by the litigation privilege because they were based on communications made and actions taken in prior judicial proceedings. The trial court denied the motion to dismiss, and the defendants appealed to the Appellate Court, which reversed the trial court’s decision and remanded with direction to dismiss the plaintiff’s complaint in its entirety.The Supreme Court of Connecticut reversed the Appellate Court’s judgment and remanded with direction to affirm the trial court’s denial of the defendants’ motion to dismiss. The Supreme Court held that the defendants could not prevail on their claim that the plaintiff’s appeal was rendered moot by virtue of the court’s decision in a previous case. The court also held that the Appellate Court incorrectly determined that the plaintiff’s claims against the defendants were barred by the litigation privilege. The court concluded that many of the tactics Alexander allegedly used to disrupt, delay, and otherwise interfere with the sale of Confirmit, including stacking Confirmit’s board of directors with family members and associates, submitting a disingenuous bid to acquire Confirmit, coordinating with his father to have the plaintiff’s execution lien deregistered, and forging and backdating the document purporting to grant Caroline a right of first refusal, occurred outside of the context of any judicial proceeding and, therefore, were not covered by the litigation privilege. View "Deutsche Bank AG v. Vik" on Justia Law

The case involves NGL Energy Partners LP and NGL Energy Holdings LLC (collectively, "NGL") and LCT Capital, LLC ("LCT"). NGL, entities in the energy sector, engaged LCT, a financial advisory services provider, for services related to NGL's 2014 acquisition of TransMontaigne Inc. However, the parties failed to agree on payment terms, leading LCT to file a lawsuit in 2015. The Superior Court held a jury trial in July 2018, which resulted in a $36 million verdict in LCT's favor.NGL appealed the Superior Court's decision, challenging the $36 million final judgment and a set of evidentiary rulings. LCT cross-appealed, contesting the Superior Court's methodology for computing post-judgment interest. NGL argued that the Superior Court erred by admitting evidence and arguments about the value/benefit supposedly gained by NGL in the Transaction, asserting that such evidence is prejudicial and irrelevant to a quantum meruit claim. NGL also argued that the Superior Court erred by admitting evidence of benefit-of-the-bargain or expectancy damages when assessing the quantum meruit value of LCT’s services.The Supreme Court of the State of Delaware affirmed the Superior Court’s evidentiary rulings and rejected NGL's contention that the Superior Court incorrectly allowed LCT to recover benefit-of-the bargain/expectancy damages. However, the Supreme Court disagreed with the Superior Court’s post-judgment interest determination. The Supreme Court held that prejudgment interest is part of the judgment upon which post-judgment interest accrues under Section 2301(a). Therefore, the Supreme Court reversed the Superior Court as to this issue and remanded the case to the Superior Court for entry of judgment consistent with its opinion. View "NGL Energy Partners LP v. LCT Capital, LLC" on Justia Law

The case revolves around the University Hospital's decision to award a contract for the design, construction, and operation of an on-site pharmacy to a bidder other than Sumukha LLC. Sumukha challenged the decision, but the hospital's hearing officer denied the protest. Sumukha then appealed to the Appellate Division. While the appeal was pending, Sumukha filed a second protest challenging the decision to change the pharmacy's planned location. When the hospital failed to respond, Sumukha filed a second appeal in the Appellate Division.The Appellate Division dismissed the appeal from Sumukha’s first protest, concluding that University Hospital’s determination was not directly appealable to the Appellate Division. It later dismissed Sumukha’s second appeal. Both dismissals were without prejudice to Sumukha’s right to file an action in the Law Division. The Court granted certification and consolidated the appeals.The Supreme Court of New Jersey found no evidence in University Hospital’s enabling statute that the Legislature intended the Hospital to be a “state administrative agency” under Rule 2:2-3(a)(2). The court held that University Hospital’s decisions and actions may not be directly appealed to the Appellate Division. The court affirmed the dismissal of the appeals, without prejudice to Sumukha’s right to file actions in the Law Division. View "In re Protest of Contract for Retail Pharmacy Design, Construction, Start-Up and Operation, Request for Proposal No. UH-P20-006" on Justia Law

The case involves New England Auto Max, Inc., and others (the defendants), who are involved in a civil action where they unsuccessfully moved to dismiss the action for exceeding the $50,000 limit. The defendants then petitioned the Supreme Judicial Court for extraordinary relief, which was denied on the grounds that the defendants had an alternate avenue of appellate relief. The defendants appealed this decision.The case was initially heard in the District Court, where the defendants' motion to dismiss the action for exceeding the $50,000 limit was denied. The defendants then petitioned the Supreme Judicial Court for extraordinary relief, which was denied by a single justice on the grounds that the defendants had an alternate avenue of appellate relief. The defendants appealed this decision to the Supreme Judicial Court.The Supreme Judicial Court held that the single justice did not err or abuse his discretion in denying relief to the defendants. However, the court decided to exercise its discretion to address the question of law presented by the defendants. The court held that the defendants had a right to an interlocutory appeal to the Appellate Division of the District Court on the question of law they presented before the court. The court also concluded that the District Court judge erred in holding that the court could not look beyond a plaintiff's initial statement of damages in assessing whether there is a reasonable likelihood that recovery by the plaintiff will exceed $50,000. The case was remanded to the county court for entry of an order vacating the denial of the defendants' motion to dismiss and remanding to the District Court for further proceedings consistent with the court's opinion. View "New England Auto Max, Inc. v. Hanley" on Justia Law

An elderly woman, Janice Geerdes, and her long-time friend, Albert Gomez Cruz, had a partnership raising hogs on a piece of land. Initially, Janice deeded half of her interest in the land to Albert. Over a decade later, she deeded the rest of her interest in the land to Albert, receiving nothing in return. About six months later, Janice’s adult daughters were appointed her conservator and guardian. The conservator challenged the validity of the quitclaim deed based on undue influence and lack of capacity.The district court set aside the deed, finding that there was undue influence through a confidential relationship and that Janice lacked the necessary capacity to deed her interest in the land. The court of appeals affirmed the decision on the basis of lack of capacity.The Supreme Court of Iowa, however, disagreed with the lower courts. The Supreme Court found that the conservator did not establish by clear, convincing, and satisfactory evidence that there was undue influence or that Janice lacked capacity at the time of the gift. The court found that the lower courts gave too much weight to the perceived improvidence of the transaction and too little weight to the testimony of the third-party accountant who witnessed the transaction. Therefore, the Supreme Court vacated the decision of the court of appeals, reversed the district court judgment, and remanded for further proceedings. View "Conservatorship of Janice Geerdes v. Cruz" on Justia Law

The case involves Leah Lorch, who filed a peremptory challenge against Judge Timothy B. Taylor, who was newly assigned to preside over her trial. Lorch's challenge was denied by Judge Taylor, who ruled that the challenge was untimely under the master calendar rule. This rule requires a party to file a challenge to the judge supervising the master calendar not later than the time the cause is assigned for trial. After the denial of the challenge, Judge Taylor proceeded with a two-day jury trial, which resulted in a defense verdict and judgment in favor of the defendant, Kia Motors America, Inc. Lorch then filed a petition within the statutory 10-day period, arguing that her challenge was timely because it was filed before the trial started.The trial court denied Lorch's peremptory challenge, ruling that it was untimely under the master calendar rule. The court also refused to stay the trial, and Judge Taylor immediately began a two-day jury trial, which resulted in a defense verdict and judgment in favor of Kia Motors America, Inc. Lorch then filed a petition within the statutory 10-day period, arguing that her challenge was timely because it was filed before the trial started.The Court of Appeal, Fourth Appellate District Division One, held that Lorch's section 170.6 challenge was timely filed before the commencement of the trial and rejected Kia's laches argument. The court also concluded that the Superior Court of San Diego County's local rule, which purports to provide any superior court judge with the power to act as a master calendar department for purposes of assigning cases for trial, is inconsistent with section 170.6 and case law interpreting the statute. The court granted the petition with directions to vacate the void orders and judgment entered by Judge Taylor after denying the peremptory challenge. View "Lorch v. Superior Court" on Justia Law

The case involves Creative Games Studio LLC and Ricardo Bach Cater, who sued Daniel Alves for alleged breach of contract, breach of the implied covenant of good faith and fair dealing, constructive fraud, and deceit. The plaintiffs, who are co-founders of Creative Games Studio, a company that develops board games for online sale, accused Alves of collaborating with a competitor and using the company's funds and intellectual property for the competitor's benefit. Alves, a Brazilian citizen, was also a co-founder of the company. The plaintiffs filed the lawsuit in Montana, where the company is based.The District Court of the Thirteenth Judicial District, Yellowstone County, dismissed the case due to lack of personal jurisdiction over Alves. The court determined that exercising jurisdiction over Alves would not comply with constitutional requirements. Alves had moved to dismiss the complaint under M. R. Civ. P. 12(b)(2) for lack of personal jurisdiction or under the doctrine of forum non-conveniens.The Supreme Court of the State of Montana affirmed the lower court's decision. The court found that Alves did not consent to jurisdiction and that subjecting him to the jurisdiction of Montana courts would not comply with due process. The court noted that Alves' only connection to Montana was the fact that one of the plaintiffs resided there and established the company in the state. The court concluded that the plaintiffs failed to show that Alves either availed himself of the privileges of Montana law or that their claims arose out of Alves's actions in Montana. View "Creative Games v Alves" on Justia Law

The case involves a dispute over the antitrust implications of a settlement agreement between Forest Laboratories, a brand manufacturer of the high-blood pressure drug Bystolic, and seven manufacturers of generic versions of Bystolic. The settlement agreement was reached after Forest Laboratories initiated patent-infringement litigation against the generic manufacturers. As part of the settlement, Forest Laboratories entered into separate business transactions with each generic manufacturer, paying them for goods and services.The plaintiffs, purchasers of Bystolic and its generic equivalents, filed a lawsuit against Forest Laboratories and the generic manufacturers, alleging that the payments constituted unlawful “reverse” settlement payments intended to delay the market entry of generic Bystolic. The plaintiffs' claims were dismissed twice by the United States District Court for the Southern District of New York for failure to state a claim.The United States Court of Appeals for the Second Circuit affirmed the district court's decision. The court found that the plaintiffs failed to plausibly allege that any of Forest’s payments were unjustified or unexplained, instead of constituting fair value for goods and services obtained as a result of arms-length dealings. The court also held that the district court’s application of the pleading law was appropriate. The court concluded that the plaintiffs did not plausibly allege that Forest’s payments were a pretext for nefarious anticompetitive motives rather than payments that constituted fair value for goods and services obtained as a result of arms-length dealings. View "In re Bystolic Antitrust Litigation" on Justia Law

KOKO Development, LLC, a real estate developer, contracted with Phillips & Jordan, Inc., DW Excavating, Inc., and Thomas Dean & Hoskins, Inc. (TD&H) to develop a 180-acre tract of land in North Dakota. However, the project faced numerous issues, leading KOKO to sue the defendants for breach of contract and negligence. KOKO did not disclose any expert witnesses before the trial, leading the district court to rule that none of its witnesses could give expert testimony. Consequently, the district court granted the defendants' motion for summary judgment, finding that without expert witnesses, KOKO could not establish its claims.The district court's decision was based on the complexity of the issues involved in the case, which required expert testimony. The court found that KOKO's negligence and breach of contract claims required complex infrastructure and engineering analysis, which was beyond the common knowledge or lay comprehension. KOKO appealed the decision, arguing that the district court erred in finding that it did not properly disclose witnesses providing expert testimony and that expert testimony was necessary for the case.The United States Court of Appeals for the Eighth Circuit affirmed the district court's decision. The appellate court found that KOKO did not identify the witnesses that would provide expert testimony and did not meet the requirements of Rule 26(a)(2). The court also agreed with the district court that the negligence and breach of contract claims required expert testimony due to the complexity of the issues in the case. The court concluded that the district court did not abuse its discretion by excluding the three witnesses' expert testimony and requiring expert testimony for the negligence and breach of contract claims. View "KOKO Development, LLC v. Phillips & Jordan, Inc." on Justia Law