Justia Civil Procedure Opinion Summaries

This case involves a dispute over a merger between Parametric Sound Corporation and VITB Holdings, Inc. (VITBH). A group of shareholders, who later formed PAMTP, LLC, opted out of a class action settlement related to the merger and filed a separate lawsuit. They alleged that the merger diluted their equity interests and that Kenneth Potashner, a member of Parametric's board, had breached his fiduciary duties by misleading shareholders about the financial outlook of the merger. The district court granted judgment to the defendants, finding that PAMTP had failed to plead a direct claim.The district court's decision was based on the Nevada Supreme Court's ruling in a previous related case, Parametric I, which held that the shareholders' claims should be dismissed for failure to plead a direct claim. However, the court granted the shareholders leave to replead certain claims that may have been direct under a Delaware case, Gentile v. Rossette. PAMTP's complaint in the present case was based on this guidance.The Nevada Supreme Court affirmed the district court's decision, finding that PAMTP had indeed failed to plead a direct claim. The court noted that the Delaware Supreme Court had since overruled Gentile, holding that most equity expropriation claims are exclusively derivative. The court also found that PAMTP had not satisfied the "direct harm test" adopted in Parametric I.The court also addressed the district court's award of costs and attorney fees to the defendants. It affirmed the award of costs but reversed the award of pre-complaint costs, finding that the district court had abused its discretion. The court also reversed the district court's denial of attorney fees to the defendants, finding that they were entitled to fees under Nevada Rule of Civil Procedure 68. The case was remanded for the district court to determine the amount of fees to which the defendants were entitled. View "In re Parametric Sound Corp." on Justia Law

The case involves the South Carolina Department of Parks, Recreation and Tourism (SCPRT) and Google LLC. The State of South Carolina, along with several other states, sued Google for violations of federal and state antitrust laws. Google subpoenaed SCPRT for discovery pertinent to its defense. SCPRT refused to comply, asserting Eleventh Amendment immunity and moved to quash the subpoena.The district court denied SCPRT's motion, holding that any Eleventh Amendment immunity that SCPRT may have otherwise been entitled to assert was waived when the State, through its attorney general, voluntarily joined the federal lawsuit against Google. SCPRT appealed this decision.The United States Court of Appeals for the Fourth Circuit affirmed the district court's decision. The court found that by joining the lawsuit against Google, the State voluntarily invoked the jurisdiction of a federal court, thereby effecting a waiver of its Eleventh Amendment immunity as to all matters arising in that suit. And because SCPRT’s immunity derives solely from that of the State, South Carolina’s waiver of Eleventh Amendment immunity equally effected a waiver of SCPRT’s immunity. The district court, therefore, properly denied SCPRT’s motion to quash. View "SC Dept of Parks, Recreation and Tourism v. Google LLC" on Justia Law

A class of individuals and businesses in Northern California, who paid health insurance premiums to certain health plans, sued Sutter Health, a healthcare system operator in the region. They alleged that Sutter abused its market power to charge supracompetitive rates to these health plans, which were then passed on to the class in the form of higher premiums. The case went to trial on claims under California’s Cartwright Act for tying and unreasonable course of conduct. The jury returned a verdict in favor of Sutter.The plaintiffs appealed, arguing that the district court erred by failing to instruct the jury to consider Sutter’s anticompetitive purpose and by excluding evidence of Sutter’s conduct before 2006. The United States Court of Appeals for the Ninth Circuit agreed with the plaintiffs. It held that the district court contravened California law by removing “purpose” from the jury instructions, and that the legal error was not harmless. The court also held that the district court abused its discretion under Federal Rule of Evidence 403 in excluding as minimally relevant all evidence of Sutter’s conduct before 2006. The court concluded that these errors were prejudicial and reversed the district court’s judgment, remanding the case for a new trial. View "SIDIBE V. SUTTER HEALTH" on Justia Law

AsymaDesign, LLC, a company that operated a virtual-reality ride in a shopping mall, entered into a lease with CBL & Associates Management, Inc. Following complaints about noise from the ride, CBL relocated it within the mall, as permitted by the lease. The new location proved unprofitable, leading AsymaDesign to stop paying rent, resulting in eviction and subsequent dissolution under the Illinois Limited Liability Company Act. Nearly four years later, George Asimah, the former owner of the LLC, filed a lawsuit against CBL under 42 U.S.C. §1981 and state contract law, alleging racial discrimination when CBL did not allow the LLC extra time to pay its rent.The district court dismissed the suit on the grounds that Asimah was not the real party in interest, as the lease was held by AsymaDesign, not Asimah personally. An amended complaint added AsymaDesign as an additional plaintiff, but this was also dismissed as untimely. The court ruled that although Illinois law allows a dissolved LLC a "reasonable time" to wind up its business, AsymaDesign had not begun to litigate until almost five years after its dissolution, exceeding the benchmark allowed by Illinois law.In the United States Court of Appeals for the Seventh Circuit, AsymaDesign filed a notice of appeal. However, the notice was signed only by George Asimah, who is not a lawyer and therefore cannot represent AsymaDesign or anyone other than himself. The court ruled that only a member of the court's bar (or a lawyer admitted pro hac vice) can represent another person or entity in litigation. AsymaDesign's sole argument was that anyone may represent an Illinois corporation in federal court, which the court dismissed as misguided. Consequently, the appeal was dismissed. View "Asimah v. CBL & Associates Management, Inc." on Justia Law

The case involves Tammy O’Connor and Michael Stewart (the Sellers) who sold their company, Red River Solutions, LLC, to Atherio, Inc., a company led by Jason Cory, Greg Furst, and Thomas Farb (the Executives). The agreement stipulated that the Sellers would receive nearly half of their compensation upfront, with the rest—around $3.5 million—coming in the form of ownership units and future payments. However, Atherio went bankrupt and the Sellers received none of the promised $3.5 million. The Sellers sued the Executives, alleging fraud under federal securities law, Delaware common law, and the Texas Securities Act.The district court granted summary judgment to the Executives on all claims. The Sellers appealed the decision, arguing that the district court erred in applying the summary-judgment standard to the federal securities law and Delaware common law claims.The United States Court of Appeals for the Fifth Circuit affirmed the district court's decision on the extracontractual and Texas Securities Act fraud claims, but reversed the summary judgment grants on the federal securities law and Delaware common law claims. The court found that there was a genuine dispute as to whether the Executives' misrepresentation of Farb's role as CFO was a substantial factor in the Sellers' loss. The case was remanded for further proceedings. View "Cory v. Stewart" on Justia Law

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