Justia Civil Procedure Opinion Summaries

The petitioners here—two motorcycle dealerships who sought to enforce restrictive covenants against a former employee under Florida law— asked the Georgia Supreme Court to reconsider the application of a public-policy exception, citing recent changes in Georgia law that required a more flexible and permissive approach to enforcing restrictive covenants. When contracting parties choose the law of a jurisdiction other than Georgia to govern their contractual relations, Georgia courts generally honored that choice unless applying the foreign law would violate Georgia's public policy. Having taken a fresh look, the Supreme Court concluded that Georgia law remained "the touchstone for determining whether a given restrictive covenant is enforceable in our courts, even where the contract says another state’s law applies." After a careful review of Georgia decisional law and statutory history in this space, the Court found the Georgia legislature has codified this view, including with the recent enactment of the Georgia Restrictive Covenants Act. In this case, the trial court accepted the parties’ choice of Florida law to govern the employment contracts at issue without first determining whether the restrictive covenants in the contracts complied with the GRCA. The Court of Appeals reversed, and in doing so, correctly identified application of the GRCA as the first step in the analysis of whether the public-policy exception overrides the parties’ choice of foreign law. But because the Supreme Court set out a clear framework for that analysis in this opinion, it left it for the trial court to apply that framework in the first instance. The Court therefore vacated the decisions below for further review by the trial court. View "Motorsports of Conyers, LLC, et al. v. Burbach" on Justia Law

The underlying case against Defendants TeamHealth—a group of private equity-owned healthcare entities—was brought under the qui tam provisions of the False Claims Act. Two former TeamHealth employees (together, the “Relators”) alleged that TeamHealth routinely billed for nonexistent doctor examinations and critical care services. The matter was unsealed in 2018 after federal and state governments declined to intervene. The Relators moved forward with their case, which survived dismissal and proceeded through extensive discovery. Movant sought to permissively intervene in this closed matter to challenge the sealing of records. The district court denied Movant’s intervention on three independent grounds.   The Fifth Circuit reversed and remanded. The court explained that although courts are afforded great discretion in deciding intervention pursuant to Federal Rule of Civil Procedure 24(b), the district court’s reasoning was premised on several significant errors. The court explained it has permitted intervention by nonparties who seek only to challenge record-related restrictions. The court concluded that Movant’s claim shares a common question of law with the district court’s decisions related to sealing records: Whether there are compelling reasons for sealing that outweigh the public’s right of access. Thus, the court reversed the district court’s determination that Movant has failed to satisfy the requirements of Rule 24(b)(1).  The court explained that it firmly holds that Movant has satisfied standing and the requirements of Rule 24(b)(1), however, it reiterated the district court’s discretion in ultimately deciding Movant’s motion. View "USA v. Team Finance" on Justia Law

The Securities and Exchange Commission (“SEC”) sued Defendant as well as other individual Defendants and corporate entities for securities violations. Defendant appealed the district court’s order appointing a receiver over all corporations and entities controlled by him. A central dispute between the parties is what test the district court should have applied before imposing a receivership. Defendant argued the district court abused its discretion because it did not apply the standard or make the proper findings under the factors set forth in Netsphere (“Netsphere factors”). The SEC responded that Netsphere is inapplicable and the district court’s findings were sufficient under First Financial.   The Fifth Circuit vacated the district court’s order appointing a receiver. The court granted in part Defendant’s motion for a partial stay pending appeal. The court explained that, as Defendant points out, the district court’s order denying the stay discussed events and actions that took place after the receivership was already in place. Accordingly, the court vacated the appointment of the receiver and remanded so that the district court may consider whether to appoint a new receivership under the Netsphere factors. The court immediately suspended the receiver’s power to sell or dispose of property belonging to receivership entities, including the power to complete sales or disposals of property already approved by the district court. The court explained that the suspension does not apply to activities in furtherance of sales or dispositions of property that have already occurred or been approved by the district court. The court clarified that “activities in furtherance” do not include the completion of the sale of any property. View "SEC v. Barton" on Justia Law

In 2019, Matt Dorsey brought an action against his father, Tom Dorsey, seeking formal accounting, dissolution, and winding up of their joint dairy operation, Dorsey Organics, LLC. The district court appointed a Special Master; the Special Master subsequently recommended to the district court that it grant partial summary judgment to Tom on Counts Four (breach of contract) and Five (constructive fraud). Without receiving a definitive ruling from the district court on the recommendations regarding the motions for summary judgment, the case then proceeded to a four-day hearing presided over by the Special Master, which resulted in the Special Master making Proposed Findings of Fact and Conclusions of Law. The district court adopted, with almost no changes, the Special Master’s Proposed Findings of Fact and Conclusions of Law, which relied upon the accounting of Tom's expert and rejected the opinions of Matt's expert. The district court then entered a judgment incorporating, with few changes, the Special Master’s Proposed Findings of Fact and Conclusions of Law. The district court also denied Tom's request for attorney fees. Matt appealed, arguing: (1) the district court failed to properly review the evidence before accepting the findings of the Special Master; (2) questioned whether a court could override the terms of a contract even though the contract’s terms arguably produced an inequitable result; (3) Tom wrongfully dissociated from Dorsey Organics prior to its dissolution and the winding up of its affairs; and (4) challenged whether summary judgment was properly granted on Counts Four and Five of the Third Amended Complaint. The Idaho Supreme Court concluded the district court erred in failing to independently review the record before adopting the Special Master's Proposed Findings of Fact and Conclusions of Law. Accordingly, the Court vacated the district court's conclusions that relied on the Special Master's findings. The case was thus remanded for further proceedings. View "Dorsey v. Dorsey" on Justia Law

In April 2012, Plaintiff-Appellee Brandon Barrick filed a qui tam action against his then-employer, Defendant-Appellant Parker-Migliorini International LLC (PMI). Barrick alleged violations of the False Claims Act (FCA) and amended his complaint to include a claim that PMI unlawfully retaliated against him under the FCA. PMI was a meat exporting company based in Utah. While working for PMI, Barrick noticed two practices he believed were illegal. The first was the “Japan Triangle”: PMI exported beef to Costa Rica to a company which repackaged it, then sent it to Japan (Japan had been concerned about mad cow disease from U.S. beef). The second was the “LSW Channel”: PMI informed the U.S. Department of Agriculture (USDA) it was shipping beef to Moldova on a shipping certificate, but sent it to Hong Kong. Then, according to Barrick, PMI smuggled the beef into China (China was not then accepting U.S. beef). Barrick brought his concerns to Steve Johnson, PMI’s CFO, at least three times, telling Johnson that he was not comfortable with the practices. By October, the FBI raided PMI's office. Barrick was terminated from PMI in November 2012, as part of a company-wide reduction in force (RIF). PMI claimed the RIF was needed because in addition to the FBI raid, problems with exports and bank lines of credit put a financial strain on the company. Nine employees were terminated as part of the RIF. PMI claims it did not learn about Barrick’s cooperation with the FBI until October 2014, when the DOJ notified PMI of this qui tam action. A jury found that PMI retaliated against Barrick for his engagement in protected activity under the FCA when it terminated his employment. On appeal, PMI argued the district court improperly denied its motion for judgment as a matter of law (JMOL). In the alternative, PMI argued the Tenth Circuit court should order a new trial based on either the district court’s erroneous admission of evidence or an erroneous jury instruction. Finding no reversible error, the Tenth Circuit affirmed on all issues. View "Barrick v. Parker-Migliorini International" on Justia Law

Geringer Capital, Inc., Roger Geringer and Tricycle Entertainment, LLC (collectively Geringer parties) moved to preclude Jeffrey Konvitz, Blue Rider Finance, Inc.’s counsel of record, from testifying at trial in support of Blue Rider’s claim that the Geringer parties fraudulently induced Blue Rider to enter into a settlement agreement that did not accurately reflect the terms negotiated by the parties. The Geringer parties subsequently clarified that their motion should be considered, in the alternative, a motion to disqualify Konvitz. The court granted the motion and disqualified Konvitz, finding the integrity of the judicial process would be impaired if Konvitz served in dual roles. On appeal Blue Rider contends the court should have denied the motion due to the Geringer parties’ excessive delay in raising the issue.   The Second Appellate District reversed. The court concluded that Konvitz’s representation of Blue Rider at trial while also testifying on its behalf would “detract from the proper administration of justice,” the trial court quoted this general description of the basis for the advocate-witness rule, as well as comments explaining the parallel rule in the ABA Model Rules of Professional Conduct (ABA Model Rule 3.7) and in the ABA’s former Model Code of Professional Responsibility, all pointing to the conclusion that the roles of advocate and witness are inconsistent. The court then added its own observation that these dual roles create the risk of error and confusion, and “the trier of fact will constantly keep wondering whether the advocate-witness is acting under the appropriate role such that it will distract from the arguments and evidence presented.” View "Geringer v. Blue Rider Finance" on Justia Law

Ceska zbrojovka Defence SE (“CZ Czech”) was a firearms manufacturer based in the Czech Republic. To do business in the United States, it had several subsidiaries, including CZ USA, CZ Czech’s Kansas-based subsidiary. Vista Outdoor, Inc. was a Minnesota company that designed, manufactured, and marketed outdoor recreation and shooting products. In November 2018, Vista and CZ Czech entered into an expense reimbursement agreement covering CZ Czech’s potential acquisition of a Vista firearm brand. Under the contract, Vista was obligated to reimburse CZ Czech for certain reasonable expenses in connection with its evaluation and negotiation of the proposed transaction. Even though the sale was not consummated, Vista refused CZ Czech’s subsequent reimbursement demands. CZ USA, not CZ Czech, filed a federal diversity action in the District of Kansas against Vista for breach of contract. The "twist" was that there was no contract between CZ USA and Vista, nor was CZ USA a beneficiary of the contract. CZ Czech, soon realizing the mistake, attempted to amend the complaint under Rule 15 of the Federal Rules of Civil Procedure and substitute itself as the party-plaintiff. The district court declined, finding that the original complaint controlled and that CZ USA, as a non-party to the contract, lacked standing to sue, meaning the court lacked subject-matter jurisdiction over the dispute. To this, the Tenth Circuit concurred and affirmed: the district court lacked subject-matter jurisdiction and correctly dismissed the lawsuit. View "Ceska Zbrojovka Defence SE ("CZ") v. Vista Outdoor" on Justia Law

This appeal centered on claims for securities fraud against Spirit AeroSystems, Inc., and four of its executives. Spirit produced components for jetliners, including Boeing’s 737 MAX. But Boeing stopped producing the 737 MAX, and Spirit’s sales tumbled. At about the same time, Spirit acknowledged an unexpected loss from inadequate accounting controls. After learning about Spirit’s downturn in sales and the inadequacies in accounting controls, some investors sued Spirit and four executives for securities fraud. The district court dismissed the suit, and the investors appealed. "For claims involving securities fraud, pleaders bear a stiff burden when alleging scienter." In the Tenth Circuit's view, the investors did not satisfy that burden, so it affirmed the dismissal. View "Meitav Dash Provident Funds and Pension Ltd., et al. v. Spirit AeroSystems Holdings, et al." on Justia Law

For decades, Johns Manville Corp. ("JM") was the sole domestic manufacturer and supplier of calcium silicate (or “calsil”), a substance used to make thermal pipe insulation. In March 2018, Chase Manufacturing, Inc. (doing business as Thermal Pipe Shields, Inc., or "TPS") challenged JM’s monopoly status by entering the calsil market with a superior and less expensive product. JM responded by threatening distributors that it would not sell to them if they bought TPS’s competing calsil. By August 2021, more than three years after TPS’s market entry, JM retained over 97% of the domestic calsil market. TPS sued under the Sherman Act, alleging that JM had unlawfully: (1) maintained its monopoly; and (2) tied the availability of its insulation products to distributors’ not buying TPS’s calsil. The district court granted summary judgment for JM. Though the Tenth Circuit affirmed some of the district court’s rulings, it held that the district court erred in finding no genuine issues of material fact on whether JM unlawfully maintained its monopoly after TPS’s market entry. The case was remanded for further proceedings. View "Chase Manufacturing v. Johns Manville Corporation" on Justia Law

Appellant informed the court that its case was moot and that it had been moot at the time of our decision. Appellee has since confirmed that had dissolved its limited liability company seven weeks before we decided the case, thereby eliminating any possibility of redress. The Eleventh Circuit, thus, granted Appellant’s motion to dismiss the appeal. The panel vacated its March 31, 2023 order staying the issuance of the mandate. View "Deborah Laufer v. Arpan LLC" on Justia Law