Justia Civil Procedure Opinion Summaries

D.A. Davidson & Co. initiated an interpleader action to resolve a dispute over funds held in an investment account for Whitefish Masonic Lodge 64. The Grand Lodge of Ancient Free and Accepted Masons of Montana revoked Whitefish Lodge's charter and claimed the funds. Donald Slaybaugh, a member of Whitefish Lodge, contested the revocation and the transfer of funds, arguing that the Grand Lodge did not follow proper procedures.The Eleventh Judicial District Court, Flathead County, granted summary judgment in favor of the Grand Lodge, dismissing Slaybaugh's cross claims. The court determined that Slaybaugh lacked standing to bring claims against the Grand Lodge on behalf of Whitefish Lodge or in his individual capacity. The court found that Whitefish Lodge, having had its charter revoked, no longer existed as a legal entity capable of bringing claims. Additionally, the court concluded that Slaybaugh did not have the authority to act on behalf of the Lodge, as he was not an elected officer and his previous authority to oversee the investment account had been revoked.The Supreme Court of the State of Montana affirmed the District Court's decision. The court held that Slaybaugh did not have standing to bring claims on behalf of Whitefish Lodge because the Lodge was dissolved and could not appear in litigation. The court also rejected Slaybaugh's argument that he had standing as a fiduciary or under a derivative action, noting that he did not meet the pleading requirements for a derivative action and that his fiduciary authority had been revoked. Finally, the court found no evidence to support claims of fraud or arbitrary action by the Grand Lodge in revoking the Lodge's charter. View "D.A. Davidson v. Slaybaugh" on Justia Law

Local Puerto Rico merchants brought unfair competition claims against major big-box retailers, alleging that during the COVID-19 pandemic, Costco Wholesale Corp. and Wal-Mart Puerto Rico, Inc. violated executive orders limiting sales to essential goods. The plaintiffs claimed that the defendants continued to sell non-essential items, capturing sales that would have otherwise gone to local retailers, and sought damages for lost sales during the 72-day period the orders were in effect.The case was initially filed as a putative class action in Puerto Rico's Court of First Instance. Costco removed the case to federal district court under the Class Action Fairness Act (CAFA). The district court denied Costco's motion to sever the claims against it and also denied the plaintiffs' motion to remand the case to state court. The district court dismissed most of the plaintiffs' claims but allowed the unfair competition claim to proceed. However, it later denied class certification and granted summary judgment for the defendants, concluding that the executive orders did not create an enforceable duty on the part of Costco and Wal-Mart.The United States Court of Appeals for the First Circuit reviewed the case on jurisdictional grounds. The court held that CAFA jurisdiction is not lost when a district court denies class certification. It also held that CAFA's "home state" exception did not apply because Costco, a non-local defendant, was a primary defendant. However, the court found that CAFA's "local controversy" exception applied because the conduct of Wal-Mart Puerto Rico, a local defendant, formed a significant basis for the claims. The court concluded that the district court did not abuse its discretion in denying Costco's motion to sever and determined that the entire case should be remanded to the Puerto Rico courts. The court reversed the district court's denial of the motion to remand, vacated the judgment on the merits for lack of jurisdiction, and instructed the district court to remand the case to the Puerto Rico courts. View "Kress Stores of Puerto Rico, Inc. v. Wal-Mart Puerto Rico, Inc." on Justia Law

In 2020, American Airlines and JetBlue Airways formed the Northeast Alliance (NEA), a joint venture to operate as a single airline for most routes in and out of Boston and New York City. The U.S. Department of Justice (DOJ), along with several states, sued to stop the NEA, claiming it violated the Sherman Act by unreasonably restraining competition. After a bench trial, the district court ruled in favor of the plaintiffs, finding that the NEA reduced competition and output without sufficient procompetitive benefits. American Airlines appealed the decision.The district court found that the NEA caused American and JetBlue to stop competing on overlapping routes, leading to decreased capacity and reduced consumer choices. The court also found that the NEA's schedule coordination and revenue-sharing provisions effectively merged the two airlines' operations in the Northeast, which resembled illegal market allocation. The court rejected the airlines' claims that the NEA increased capacity and provided significant consumer benefits, finding these claims unsupported by reliable evidence.The United States Court of Appeals for the First Circuit reviewed the case. The court affirmed the district court's decision, agreeing that the NEA had substantial anticompetitive effects. The appellate court found no clear error in the district court's factual findings and upheld its application of the rule of reason. The court concluded that the NEA's harms outweighed any procompetitive benefits, which could have been achieved through less restrictive means. The judgment of the district court was affirmed, and the NEA was enjoined from further implementation. View "US v. American Airlines Group Inc." on Justia Law

Major Brands, Inc., a Missouri-licensed liquor distributor, had been the exclusive distributor of Jägermeister in Missouri since the 1970s. In 2018, Mast-Jägermeister US, Inc. (MJUS) terminated this relationship and appointed Southern Glazers Wine and Spirits, LLC (Southern Glazers) as the new distributor. Major Brands sued MJUS and Southern Glazers, alleging wrongful termination under Missouri franchise law, conspiracy to violate Missouri franchise law, and tortious interference with the franchise relationship.The case was initially brought in state court but was removed to the United States District Court for the Eastern District of Missouri. After dismissing additional defendants, the case proceeded to a jury trial. The jury awarded Major Brands $11.75 million, finding in its favor on five counts, including violation of Missouri franchise law and tortious interference. The district court denied the defendants' motions for judgment as a matter of law or a new trial and awarded attorney’s fees to Major Brands.The United States Court of Appeals for the Eighth Circuit reviewed the case. The court found that the district court had prejudicially erred in instructing the jury on the essential element of a "community of interest" under Missouri franchise law. The appellate court held that the jury instructions failed to require consideration of whether Major Brands made substantial investments that were not recoverable upon termination, which is necessary to establish a community of interest. Consequently, the Eighth Circuit reversed the district court’s decision, vacated the jury’s verdict and the award of attorney’s fees, and remanded the case for a new trial. View "Major Brands, Inc. v. Mast-Jagermeister US, Inc." on Justia Law

In this case, Four Thirteen, LLC filed a complaint against three corporate entities and several individuals, including Joshua Wearmouth, Larry Stephens, Edmond X. Moriniere, Ronald G. Meyers, and David C. Norton. The complaint alleged that Wearmouth and Stephens solicited funds from Four Thirteen for a business venture involving Brazilian carbon credits, which turned out to be fraudulent. Four Thirteen claimed that the corporate entities did not own the carbon credits and that Wearmouth and Stephens made numerous misrepresentations. The complaint included claims of breach of contract, fraud, negligent misrepresentation, and other related allegations.The District Court of Laramie County reviewed the case and rejected the affidavits of non-involvement filed by Moriniere, Meyers, and Norton, who sought dismissal from the suit. The court found that there were factual issues regarding their involvement in the alleged fraud. Additionally, the district court imposed discovery sanctions and entered a default judgment against all defendants, including the individual appellants, for failing to comply with discovery orders.The Wyoming Supreme Court reviewed the case and affirmed the district court's decision regarding the affidavits of non-involvement. The Supreme Court determined that the district court correctly found that there were factual disputes about the involvement of Moriniere, Meyers, and Norton, which precluded their dismissal from the case.However, the Supreme Court reversed the district court's decision to impose discovery sanctions against the individual appellants. The Supreme Court found that the appellants were not given proper notice that they were subject to sanctions under Wyoming Rule of Civil Procedure 37(b) and that there was no evidence they violated any prior discovery order. The court held that the sanctions against the individual appellants were not justified and remanded the case for further proceedings consistent with its opinion. View "Stephensv. Four Thirteen, LLC" on Justia Law

The case involves an interlocutory appeal arising from a Securities and Exchange Commission (SEC) enforcement action against Michael Young and others, alleging a fraudulent investment scheme. The SEC claimed that the defendants raised over $125 million from investors by falsely representing the use of a profitable algorithmic trading strategy, misappropriating funds for personal gain, and misrepresenting the profitability of their trading scheme. The parties agreed to a preliminary injunction freezing the defendants' assets, with the defendants retaining the right to request relief from the freeze.The United States District Court for the District of Colorado denied the Youngs' motions to unfreeze assets on three occasions. In April 2020, the court denied their first motion. In November 2020, the court denied their second motion, and the Youngs appealed. The Tenth Circuit affirmed the district court's decision, holding that the Youngs had forfeited their arguments by not raising them properly in the lower court. In March 2023, the Youngs filed a third motion to unfreeze assets, which the district court also denied, citing the law of the case doctrine and improper reconsideration.The United States Court of Appeals for the Tenth Circuit reviewed the appeal and dismissed it for lack of jurisdiction. The court held that the March 2023 motion was a successive motion raising the same issues that could have been raised in the November 2020 motion. The court emphasized that there was no change in circumstances, evidence, or law since the prior motion that would warrant jurisdiction under 28 U.S.C. § 1292(a)(1). The court concluded that the Youngs failed to demonstrate a close nexus between any change and the issues raised on appeal, thus affirming the district court's denial of the motion to unfreeze assets. View "USSEC v. Mediatrix Capital" on Justia Law

Strategic Energy Concepts, LLC (Strategic) partnered with Otoka Energy, LLC (Otoka) to develop a biomass power plant in California. The plant faced significant operational and financial issues, accumulating $19 million in debt. State Street Bank & Trust Company (State Street) agreed to invest $25 million to help the project, with Strategic transferring its shares in the plant's holding company to Otoka for a conditional payment of $1.1 million, contingent on the availability of funds from State Street's investment. The plant failed to meet operational deadlines and eventually shut down, leading Strategic to receive no payment.The United States District Court for the District of Minnesota dismissed some of Strategic's claims and granted summary judgment on the remaining claims, including breach of contract, tortious interference, and unjust enrichment. Strategic's motions to reopen discovery and for reconsideration were denied, prompting Otoka to dismiss its counterclaims.The United States Court of Appeals for the Eighth Circuit reviewed the case de novo. The court affirmed the district court's summary judgment, finding no genuine issue of material fact. The court held that the conditions precedent for the $1.1 million payment were not met, as the funds from State Street were allocated to other obligations. Additionally, the court found no evidence of tortious interference by State Street, as it acted within its contractual rights and had justification for its actions. The unjust enrichment claim also failed, as there was no impropriety in State Street's conduct.The court also upheld the district court's denial of Strategic's motions to reopen discovery and for reconsideration, concluding that any new discovery would have been futile and that the summary judgment was based on facts existing at the time of the original decision. The judgment of the district court was affirmed. View "Strategic Energy Concepts, LLC v. Otoka Energy, LLC" on Justia Law

The case involves a dispute between longtime friends over a failed business venture, resulting in a $20 million judgment against Stanley N. Cohen for negligent misrepresentation. Cohen, a professor at Stanford University, and his colleague discovered a genetic mutation linked to Huntington’s disease and formed a company, Nuredis, with Moshe and Chris Alafi, who invested $20 million. The FDA rejected Nuredis’s request for human clinical trials for the drug HD106 due to its toxicity, leading to the abandonment of the drug. The Alafis sued Cohen and his colleague for failing to disclose the drug’s history of toxicity.The Santa Clara County Superior Court held a bench trial and found in favor of the plaintiffs on the negligent misrepresentation claim against Cohen, awarding $20 million in damages. The court did not address the other causes of action. Cohen appealed, arguing that the claim required an affirmative misrepresentation, that the plaintiffs did not rely on the alleged omission, and that they were aware of the drug’s history. He also contended that the trial court erred by not issuing a statement of decision upon his request.The California Court of Appeal, Sixth Appellate District, found that the trial court’s failure to issue the requested statement of decision was prejudicial error, as it prevented effective appellate review of the trial court’s factual and legal findings. Consequently, the appellate court did not address Cohen’s arguments on the merits and reversed and remanded the case for the trial court to issue the statement of decision. View "Alafi v. Cohen" on Justia Law

Boris Bergus and Agustin Florian, both doctors, were colleagues and later co-investors in a company managed by Florian's brother-in-law, Edgardo Jose Antonio Castro Baca. Bergus invested in the company in 2012 and 2014, purchasing stock. Years later, after their relationship deteriorated, Bergus sued Florian, alleging that Florian had omitted material information about the investments, violating the Massachusetts Uniform Securities Act (MUSA). The trial featured testimony from Bergus, Florian, and Baca. The district court precluded Florian from cross-examining Bergus about a 2013 state medical board finding that Bergus had misrepresented his medical credentials. The jury found in favor of Bergus regarding the 2012 investment but not the 2014 investment.The United States District Court for the District of Massachusetts ruled in favor of Bergus for the 2012 investment, awarding him $125,000 plus interest, totaling $202,506.85, and additional attorney's fees and costs, bringing the total judgment to $751,234.86. The court dismissed Florian's counterclaim for abuse of process, suggesting it be litigated in state court.On appeal, the United States Court of Appeals for the First Circuit reviewed several issues, including the district court's limitation on Florian's cross-examination of Bergus. The appellate court found that the district court abused its discretion by precluding cross-examination about Bergus's misrepresentations of his medical credentials, which were probative of his character for truthfulness. The court concluded that this error was not harmless, as the case hinged on the credibility of the witnesses.The First Circuit vacated the judgment regarding the 2012 investment and remanded for a new trial on that issue. The jury's verdict on the 2014 investment remained intact. The appellate court did not address Florian's other arguments due to the need for a new trial. View "Bergus v. Florian" on Justia Law

In November 2023, X Corp. filed a lawsuit against Media Matters, Inc., Eric Hananoki, and Angelo Carusone, alleging interference with X Corp.'s contracts, business disparagement, and interference with prospective economic advantage. X Corp. claimed that Media Matters manipulated images to portray X Corp. as a platform dominated by neo-Nazism and anti-Semitism, which alienated advertisers, publishers, and users. During discovery, X Corp. requested Media Matters to produce documents identifying its donors and communications with them. Media Matters resisted, citing First Amendment concerns.The United States District Court for the Northern District of Texas initially ordered Media Matters to log documents responsive to X Corp.'s requests as privileged. However, Media Matters did not comply, arguing that the requests overlapped with other discovery requests. The district court then granted X Corp.'s motion to compel production, ruling that Media Matters had waived any First Amendment privilege by not searching for or logging the documents. Media Matters appealed the order and sought a stay pending appeal.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court found that it had jurisdiction under the collateral order doctrine, as the discovery order involved important First Amendment issues that were separate from the merits of the case and would be effectively unreviewable on appeal. The court determined that Media Matters was likely to succeed on the merits of its appeal because the discovery requests were not proportional to the needs of the case and posed a significant burden on Media Matters and its donors. Consequently, the court granted Media Matters's motion for a stay pending appeal, staying the district court's order compelling production. View "X Corp v. Media Matters" on Justia Law