Justia Civil Procedure Opinion Summaries

Prevent, a group of European companies that specializes in turning around distressed automotive parts suppliers, organized an effort to halt supplies of their parts to obtain better terms from Volkswagen, based in Germany. Volkswagen responded by not doing business with the affiliated companies. Begun in 2016, this litigation initially involved claims of unfair business practices and anticompetitive behavior under German and European law and was handled by German courts. Volkswagen prevailed in most of the suits.In 2019 two members of Prevent, Eastern, based in the Netherlands, and Prevent's American subsidiary sued Volkswagen and its American subsidiary in Michigan, alleging that the carmaker unfairly prevented them from acquiring distressed automotive-parts manufacturers. The district court dismissed the complaint, citing forum non conveniens. The Sixth Circuit affirmed. Germany is an adequate forum to hear this case. It appears that a Germany-based antitrust lawsuit would reach more conduct and more injuries than an American suit. German and Portuguese are the languages of the relevant documents. Local interest in the dispute, the location of the injury, the fullness of the court’s docket, preference for trying cases in the place of the governing law, hesitance to apply foreign law, and desire to avoid conflict-of-law problems, predict an American court’s potential “administrative and legal problems” with trying the case. View "Prevent USA Corp. v. Volkswagen AG" on Justia Law

Lakeside, a Michigan corporation, fabricates stone countertops in Michigan. Cambria a Minnesota LLC, is a nationwide manufacturer of countertop products. Lakeside buys “solid surface products” from manufacturers like Cambria. In 2011, the two companies executed a Business Partner Agreement (BPA) including a Credit Agreement, a Security Agreement, Order Terms and Conditions, Lifetime Limited Warranty, and a Business Operating Requirements Manual Acknowledgment Form. The BPA’s choice-of-law provision and forum-selection clause, in a single paragraph, state: This agreement shall be governed by and construed in accordance with the laws of the State of Minnesota. Any proceeding involving this Agreement and/or any claims or disputes relating to the agreements and transactions between the parties shall be in the ... State of Minnesota. Pursuant to the BPA, Lakeside opened a fabrication facility in 2017. Discussions about Lakeside becoming Cambria’s sole Michigan fabricator led to Lakeside terminating the relationship.Lakeside filed suit in the Western District of Michigan, alleging breach of contract, violations of the Michigan Franchise Investment Law (MFIL), UCC violations, and promissory estoppel. The Sixth Circuit reversed the dismissal of the suit, finding the forum-selection clause unenforceable. MFIL’s prohibition on forum-selection clauses is a strong Michigan public policy and enforcing the forum-selection clause here would clearly contravene that policy. The MFIL claim is not Lakeside’s only claim, and the choice-of-law provision may be applied, as appropriate, to claims within its scope. View "Lakeside Surfaces, Inc. v. Cambria Co., LLC" on Justia Law

In 2019, Mallet learned that Bundy was its newest competitor in the sale of baking release agents, the lubricants that allow baked goods to readily separate from the containers in which they are made. Bundy was well-known for other commercial baking products when it launched a new subsidiary, Synova, to sell baking release agents. Synova hired two Mallet employees, both of whom had substantial access to Mallet’s proprietary information. That information from Mallet helped Synova rapidly develop, market, and sell release agents to Mallet’s customers.Mallet sued, asserting the misappropriation of its trade secrets. The district court issued a preliminary injunction. restraining Bundy, Synova, and those employees from competing with Mallet. The Third Circuit vacated and remanded for further consideration of what, if any, equitable relief is warranted and what sum Mallet should be required to post in a bond as “security … proper to pay the costs and damages sustained by any party found to have been wrongfully enjoined or restrained.” A preliminary injunction predicated on trade secret misappropriation must adequately identify the allegedly misappropriated trade secrets. If the district court decides that preliminary injunctive relief is warranted, the injunction must be sufficiently specific in its terms and narrowly tailored in its scope. View "Mallet & Co., Inc. v. Lacayo" on Justia Law

Rami Khalaf (“taxpayer”) was in the business of buying products for customers in the United Arab Emirates, primarily all-terrain vehicles (ATVs). He sought to claim certain business deductions on his 2013 income tax return. As relevant here, those included travel expenses that taxpayer had incurred on trips to the Emirates, and the cost of a dune buggy that taxpayer had purchased for use as a demonstration model. The Department of Revenue rejected those deductions. The Tax Court agreed with the department on those points, holding that the travel expenses were not deductible, because they were not sufficiently documented, and that the dune buggy was not deductible because it counted as inventory. Taxpayer appealed, but finding no reversible error, the Oregon Supreme Court affirmed the Tax Court's judgment. View "Khalaf v. Dept. of Rev." on Justia Law

Plaintiff-appellant Cheryl Thurston was blind and used screen reader software to access the Internet and read website content. Defendant-respondent Omni Hotels Management Corporation (Omni) operated hotels and resorts. In November 2016, Thurston initiated this action against Omni, alleging that its website was not fully accessible by the blind and the visually impaired, in violation of the Unruh Civil Rights Act. By way of a special verdict, the jury rejected Thurston’s claim and found that she never intended to make a hotel reservation or ascertain Omni’s prices and accommodations for the purpose of making a hotel reservation. On appeal, Thurston contended the trial court erred as a matter of law: (1) by instructing the jury that her claim required a finding that she intended to make a hotel reservation; and (2) by including the word “purpose” in the special verdict form, which caused the jury to make a “factual finding as to [her] motivation for using or attempting to use [Omni’s] Website.” Finding no reversible error, the Court of Appeal affirmed the trial court. View "Thurston v. Omni Hotels Management Corporation" on Justia Law

The issue presented from this interlocutory appeal of a Court of Chancery order holding that Appellees/Cross-Appellants, former stockholders of TerraForm Power, Inc. (“TerraForm”), had direct standing to challenge TerraForm’s 2018 private placement of common stock to Appellant/Cross-Appellees Brookfield Asset Management, Inc. and its affiliates, a controlling stockholder, for allegedly inadequate consideration. The trial court held that Plaintiffs did not state direct claims under Tooley v. Donaldson, Lufkin & Jennette, Inc., but did state direct claims predicated on a factual paradigm “strikingly similar” to that of Gentile v. Rossette, and that Gentile was controlling here. Appellants contended Gentile was inconsistent with Tooley, and that the Delaware Supreme Court’s decision in Gentile created confusion in the law and therefore ought to be overruled. Having engaged in a "full and fair presentation and searching inquiry has been made of the justifications for such judicial action," the Supreme Court overruled Gentile. Accordingly, the Court of Chancery's decision was reversed, but not because the Court of Chancery erred, but rather, because the Vice Chancellor correctly applied the law as it existed, recognizing that the claims were exclusively derivative under Tooley, and that he was bound by Gentile. View "Brookfield Asset Management, Inc., v. Rosson" on Justia Law

George Russell, doing business as Carl's Country, appealed a circuit court order dismissing his declaratory-judgment action, pursuant to Rule 12(b)(6), Ala. R. Civ. P., because the action did not state a justiciable controversy. Carl's Country was a bar operated under a Class 1 lounge liquor license in Autauga County, issued by the Alabama Alcoholic Beverage Control Board (ABC Board). The bar was located in Autauga County, outside the corporate limits of the City of Prattville ("the City") but within the City's police jurisdiction. At the time of Russell's declaratory-judgment action, there was no no law or ordinance in effect authorizing the sale of draft beer in Autauga County. In 2013, the State legislature enacted a statute pertaining to the City's authority to regulate the sale and distribution of draft beer. In turn, the City enacted an ordinance allowing for on-premises consumption of draft beer sold by licensees of the ABC Board within the City's corporate limits and police jurisdiction. In May 2020, after the enactment of Ordinance, the sheriff of Autauga County ordered Russell to cease and desist selling draft beer at his bar; Russell did not comply. The ABC Board also contacted Russell's draft-beer distributors and ordered them to cease delivering draft beer to the bar. Thereafter, an attorney for the Autauga County Commission, an attorney for the ABC Board, and the "City of Prattville- Police Committee" discussed whether the City could enact an ordinance authorizing the City to regulate the sale and distribution of draft beer within its police jurisdiction in Autauga County. It was determined that the City did not have the authority to regulate the sale and distribution of draft beer in the portions of Autauga County outside the City's corporate limits because such authority was reserved for the local governing body of Autauga County, i.e., the County Commission, and not the City. Russell, acting pro se, filed suit seeking a declaration the City had the authority to enact an ordinance extending the sale of draft beer to its police jurisdiction and, specifically, a judgment declaring the legality of draft-beer sales at his bar. The Alabama Supreme Court affirmed, finding that Russell did not claim the ordinance at issue was either invalid or unreasonable. There was, therefore, no bona fide justiciable controversy to be settled between Russell and the defendants. View "Russell d/b/a Carl's Country v. Sedinger, et al." on Justia Law

In 2017, a third-party entity acquired Authentix Acquisition Company, Inc. (“Authentix”). The cash from the merger was distributed to the stockholders pursuant to a waterfall provision. The Authentix common stockholders received little to no consideration. A group of common stockholders filed a petition for appraisal to the Court of Chancery under Section 262 of the Delaware General Corporation Law (“DGCL”). Authentix moved to dismiss the petition, arguing that the petitioners had waived their appraisal rights under a stockholders agreement that bound the corporation and all of its stockholders. The Court of Chancery granted the motion to dismiss, holding that the petitioners had agreed to a clear provision requiring that they “refrain” from exercising their appraisal rights with respect to the merger. The court awarded the petitioners equitable interest on the merger consideration and declined to award Authentix pre-judgment interest under a fee-shifting provision. All parties appealed the Court of Chancery’s decisions. Pointing to Delaware’s "strong policy favoring private ordering," Authentix argued stockholders were free to set the terms that will govern their corporation so long as such alteration was not prohibited by statute or otherwise contrary to Delaware law. Authentix contended a waiver of the right to seek appraisal was not prohibited by the DGCL, and was not otherwise contrary to Delaware Law. "As a matter of public policy, there are certain fundamental features of a corporation that are essential to that entity’s identity and cannot be waived." Nonetheless, the Delaware Supreme Court determined the individual right of a stockholder to seek a judicial appraisal was not among those fundamental features that could not be waived. Accordingly, the Court held that Section 262 did not prohibit sophisticated and informed stockholders, who were represented by counsel and had bargaining power, from voluntarily agreeing to waive their appraisal rights in exchange for valuable consideration. Further, the Court found the Court of Chancery did not abuse its discretion by awarding the petitioners equitable interest on the merger consideration; nor did the court abuse its discretion by declining to award Authentix pre-judgment interest under a fee-shifting provision. Accordingly, the Court of Chancery’s judgment was affirmed. View "Manti Holdings, LLC et al. v. Authentix Acquisition Company, Inc." on Justia Law

Swenberg sued Dmarcian, Draegen, and Groeneweg, alleging claims related to his ownership interest in and employment with the company. Dmarcian was incorporated in Delaware and, in 2017, registered with the California Secretary of State as a foreign corporation with its “principal executive office” in Burlingame. Groeneweg, who resides in the Netherlands, is alleged to be a chief executive of, and have an ownership interest in, “a company whose true name is unknown to Swenberg, but which was a European affiliate entity of” Dmarcian (Dmarcian EU). The complaint alleges on information and belief that Groeneweg is presently a shareholder or beneficial owner of Dmarcian.The trial court granted Groeneweg’s motion to quash service for lack of personal jurisdiction. The court of appeal reversed. By publicly presenting himself as a leader of Dmarcian, having Dmarcian EU’s web address automatically route to Dmarcian’s Web site, administered in California, and receiving prospective customers directed to Dmarcian EU by a Dmarcian employee in California, Groeneweg “purposely availed himself " of forum benefits and purposefully derived benefit from his activities in the forum. There is no unfairness in requiring him to subject himself to the jurisdiction of California courts in litigation involving his relationship with that California company and its employees. View "Swenberg v. Dmarcian" on Justia Law

Sandra Penney appealed a circuit court judgment which concluded, among other things, that she, Michael Shay Penney (“Shay”) and Emily Penney had been partners in an implied partnership to operate a poultry-farming business in Marshall County, Alabama. The trial court found that a loan entered into by the parties in 2002 (one of many loans), the members shared in the profits and losses, and certain actions taken with regard to business property implied a general partnership. Sandra appealed the judgment, arguing the trial court erred in treating certain real property as partnership property, and when it calculated her contribution to the partnership. She also argued the judgment was inequitable and contrary to Alabama Partnership Law. Finding no reversible error however, the Alabama Supreme Court affirmed the trial court. View "Penney v. Penney et al." on Justia Law