Justia Civil Procedure Opinion Summaries

The Second Circuit vacated the district court's dismissal of plaintiff's complaint, based on forum non conveniens grounds, alleging claims for damages under federal and state law in connection with a ʺgoing private mergerʺ by which certain controlling defendants purchased American Depositary Shares (ADSs) from Dangdang's minority shareholders.The court held that the district court abused its discretion by failing to consider the forum selection clause contained in the relevant documents and its impact on the forum non conveniens analysis. The court rejected defendants' claim that plaintiffs waived their reliance on the forum selection clause by failing to raise the issue in the district court. The court also held that remand to the district court was necessary for the district court to consider the scope and enforceability of the forum selection clause. View "Fasano v. Li" on Justia Law

The Supreme Court affirmed the judgment of the district court granting summary judgment for a judgment creditor and dismissed the petition filed by the judgment debtor and his wife to vacate a charging order to execute foreign judgments in Iowa district court against the judgment debtor's membership interests in an Iowa limited liability company (LLC), holding that there was no reason to reverse the judgment of the district court.The judgment debtor and his wife sought to vacate the charging order on the grounds that the creditor could not attach the debtor's interests in the Iowa LLC since the debtor and his wife owned them as a tenancy by the entireties in their domicile of Florida. The Supreme Court affirmed the district court's judgment in favor of the creditor, holding (1) the district court properly applied Iowa law because membership interests in an LLC are located in the state where the LLC is formed; (2) the district court correctly dismissed the petition to vacate the charging order since Iowa law does not recognize the ownership of property by a married couple as tenants in the entireties; and (3) the foreign judgments were properly registered, and the charging order was properly issued. View "Wells Fargo Equipment Finance Inc. v. Retterath" on Justia Law

A county court judge granted Lisa Evans’s motion for a directed verdict in Michael Malouf’s tort-based lawsuit over boat repairs promised and paid for but allegedly never made. The judge dismissed the case after finding Malouf failed to prove Lisa and her deceased husband, a boat mechanic, had been in a partnership when doing business as Lake Harbour Marine. But in granting Lisa a directed verdict, the court wrongly gave Lisa, not Malouf, favorable evidentiary inferences drawn from Malouf’s testimony and did not take Malouf’s testimony as true, as was required before a trial judge can take a case away from a jury. The Mississippi Supreme Court concluded the trial judge also incorrectly found that insufficient proof of a partnership between Lisa and her husband was dispositive of all of Malouf’s tort claims - even those that did not hinge on the existence of a partnership. The Court found that when Malouf’s testimony and evidence was taken as true and he was given all reasonable inferences, the evidence at least created a jury issue on whether Lisa, as her husband’s partner, was liable for his actions in the boat-repair shop. It was also error for the county court and appellate court to cite the supposed lack of a partnership as reason to dismiss Malouf’s claims against Lisa individually for her own alleged fraudulent or negligent misrepresentations. The Court therefore reversed the trial court and remanded for further proceedings. View "Malouf v. Evans" on Justia Law

Nicholas Olenik, a stockholder of nominal defendant Earthstone Energy, Inc., brought class and derivative claims against defendants challenging a business combination between Earthstone and Bold Energy III LLC. As alleged in the complaint, EnCap Investments L.P. controlled Earthstone and Bold and caused Earthstone stockholders to approve an unfair transaction based on a misleading proxy statement. Defendants moved to dismiss the complaint on several grounds, principal among them that the proxy statement disclosed fully and fairly all material facts about the transaction, and Earthstone conditioned its offer on the approval of a special committee and the vote of a majority of the minority stockholders. The Court of Chancery agreed with defendants and dismissed the case. Two grounds were central to the court’s ruling: (1) the proxy statement informed the stockholders of all material facts about the transaction; and (2) although the court recognized that EnCap, Earthstone, and Bold worked on the transaction for months before the Earthstone special committee extended an offer with the so-called MFW conditions, it found those lengthy interactions “never rose to the level of bargaining: they were entirely exploratory in nature.” Thus, in the court’s view, the MFW protections applied, and the transaction was subject to business judgment review resulting in dismissal. While this appeal was pending, the Delaware Supreme Court decided Flood v. Synutra International, Inc. Under Synutra, to invoke the MFW protections in a controller-led transaction, the controller must “self-disable before the start of substantive economic negotiations.” The controller and the board’s special committee must also “bargain under the pressures exerted on both of them by these protections.” The Court cautioned that the MFW protections will not result in dismissal when the “plaintiff has pled facts that support a reasonable inference that the two procedural protections were not put in place early and before substantive economic negotiations took place.” The Supreme Court determined the Court of Chancery held correctly that plaintiff failed to state a disclosure claim. But, the complaint should not have been dismissed in its entirety: applying Synutra and its guidance on the MFW timing issue, which the Court of Chancery did not have the benefit of at the time of its decision, plaintiff has pled facts supporting a reasonable inference that EnCap, Earthstone, and Bold engaged in substantive economic negotiations before the Earthstone special committee put in place the MFW conditions. The Supreme Court also found no merit to defendants’ alternative ground for affirmance based on EnCap’s supposed lack of control of Earthstone. The Court of Chancery’s decision was affirmed in part and reversed in part, and the case was remanded for further proceedings. View "Olenik v. Lodzinski, et al." on Justia Law

PetroChina Canada bought ten large heat-exchanger units from Kelvion’s Oklahoma plant for use in PetroChina’s oil and gas operations. Their contract included a mandatory forum-selection clause subjecting the parties to Canadian jurisdiction. After a dispute over unanticipated delivery costs that PetroChina refused to pay, Kelvion brought suit in Oklahoma. It asserted quantum meruit and unjust enrichment claims, arguing the forum-selection clause did not apply to its equitable claims. The district court disagreed, concluding the forum-selection clause applied, and dismissed the suit under the doctrine of forum non conveniens. Finding no error in judgment, the Tenth Circuit affirmed the district court’s dismissal for forum non conveniens. View "Kelvion, Inc. v. PetroChina Canada Ltd." on Justia Law

Kamal visited various J. Crew store, making credit card purchases. Each time, Kamal “received an electronically printed receipt,” which he retained, that “display[ed] the first six digits of [his] 6 credit card number as well as the last four digits.” The first six digits identify the issuing bank and card type. The receipts also identified his card issuer, Discover, by name. Kamal does not allege anyone (other than the cashier) saw his receipts. His identity was not stolen nor was his credit card number misappropriated. The Third Circuit affirmed the dismissal of Kamal’s purported class action under the Fair and Accurate Credit Transactions Act of 2003 (FACTA), which prohibits anyone who accepts credit or debit cards as payment from printing more than the last five digits of a customer’s credit card number on the receipt, 15 U.S.C. 1681c(g), for lack of Article III standing. Absent a sufficient degree of risk, J. Crew’s alleged violation of FACTA is “a bare procedural violation.” View "Kamal v. J. Crew Group, Inc." on Justia Law

A default judgment may not be entered for an amount in excess of the demand in the operative pleadings when the plaintiff seeks an accounting or valuation of a business. A comparison of whether a default judgment exceeds the amount of compensatory damages demanded in the operative pleadings are to be examined on an aggregate basis, rather than on a claim-by-claim or item-by-item basis.The Court of Appeal held, in this case, that the default judgment awarding compensatory damages of $2,806,532 exceeded the $987,500 in compensatory damages specified in the operative complaint. Therefore, the default judgment was void to the extent of the coverage. The court remanded for the trial court to determine whether to give plaintiff the option to accept a modified default judgment in this reduced amount or to amend her complaint to demand greater relief. View "Sass v. Cohen" on Justia Law

In the early stages of the underlying lawsuit, the trial court struck fifteen paragraphs from plaintiff's complaint pursuant to OCGA 9-11-12 (f), but the Court of Appeals reversed most of that order. The Georgia Supreme Court granted a writ of certiorari to address how a trial court should evaluate a party’s section 9-11-12 (f) motion to strike matter from a pleading on the ground that it is “scandalous.” Because the trial court in this case did not properly evaluate the defendants’ motion to strike, and because that court should have the opportunity to properly exercise its discretion regarding the motion, the Supreme Court vacated the Court of Appeals' judgment in part and remanded with direction to vacate the trial court order and remand the case to the trial court for further analysis. View "Chappius v. Ortho Sport & Spine Physicians Savannah, LLC" on Justia Law

International Paper Company and three of its employees (collectively, "IPC") petitioned the Alabama Supreme Court for a writ of mandamus to direct the Wilcox Circuit Court to vacate its order denying IPC's motion to dismiss the underlying third-party action against it without prejudice based on improper venue. In 2015, Caterpillar Financial Services Corporation ("Caterpillar") entered into various loan and guaranty agreements with JRD Contracting, Inc. ("JRD") for the purchase of certain equipment. That equipment was to serve as collateral for the loans between Caterpillar and JRD. According to Caterpillar, JRD failed to pay the amounts due under the loan agreements, and, in September 2015 and again in December 2015, Caterpillar notified JRD of its intention to accelerate the loans and to make demand for the return of the equipment. In the summer of 2016, a JRD subsidiary, JRD Land Contracting and Land Clearing, Inc. ("JRD C&L"), signed an agreement with International Paper in which JRD C&L agreed to dispose of International Paper's waste at its Pine Hill Mill for a period of five years. In 2016, Caterpillar sued JRD at the Wilcox Circuit Court alleging a claim of detinue and seeking damages for breach of contract and breach of the guarantees. After performing work for International Paper under a waste-services agreement for eight months, JRD C&L received written notice of International Paper's intent to terminate the waste-services agreement. The equipment Caterpillar sought was used for the JRD C&L contract; in the pending Wilcox Circuit Court action, JRD filed a third-party complaint against IPC and fictitiously named defendants seeking a declaration and damages for breach of contract, promissory estoppel, fraud, work and labor done, and indemnity. When International Paper terminated that agreement, JRD alleged, it could no longer afford to pay the loans from their lenders, including Caterpillar, although they had already defaulted on some of those loans. IPC moved to dismiss the third-party complaint based on improper venue. According to IPC, the waste-services agreement contained an outbound forum-selection clause that provided that the courts of Tennessee would have jurisdiction over any disputes arising out of or relating to that agreement. IPC also challenged whether JRD or Dailey had a right to bring the third-party action because, it argued, the third-party action had nothing to do with the transactions underlying Caterpillar's lawsuit. IPC argued that, generally, outbound forum-selection clauses were enforceable in Alabama and that the third-party plaintiffs did not establish that the enforcement of the clause would be unfair or unreasonable. According to IPC, because the third-party plaintiffs failed to meet their burden, the outbound forum-selection clause should have been enforced. The Alabama Supreme Court agreed with IPC and issued the writ. View "Ex parte International Paper Company." on Justia Law

In December 2016, the J.R. Simplot Company (Simplot) filed suit in Washington state relating to the dissolution of a business relationship between Simplot and two entities Simplot co-owned with Frank Tiegs (Tiegs). Dickinson Frozen Foods (DFF), also operated by Tiegs, was not named as a party in the Washington litigation; however, the complaint contained allegedly defamatory statements about DFF. In March 2017, DFF filed suit in Idaho district court alleging defamation per se against Simplot and its Food Group President Mark McKellar (McKellar), as well as the two law firms who represented Simplot in the Washington litigation: Yarmuth Wilsdon, PLLC (Yarmuth) and Thompson Coburn, LLP (Thompson). DFF also claimed breach of contract against Simplot, claiming Simplot had breached a non-disclosure agreement (NDA). Counsel for Yarmuth and Thompson made special appearances so that they could contest personal jurisdiction, and simultaneously moved for dismissal on that basis. Yarmuth, Thompson, McKellar, and Simplot also sought dismissal or partial summary judgment on the basis of the litigation privilege. The district court dismissed DFF’s claims for defamation per se against all defendants, determining the statements were protected by the litigation privilege. However, the district court declined to rule on Yarmuth and Thompson’s motions to dismiss for lack of jurisdiction in light of its rulings on the merits. Later, the district court granted Simplot’s motion for summary judgment on DFF’s breach of contract claim. DFF appealed. The Idaho Supreme Court determined it lacked personal jurisdiction over Yarmuth and Thompson; the Court affirmed the district court in all other respects. View "Dickinson Foods v. J.R.Simplot" on Justia Law