Justia Civil Procedure Opinion Summaries

Yelp Inc., operator of a website for consumer reviews, petitioned for a writ of mandate to overturn an order compelling its production of documents that may reveal the identity of an anonymous reviewer on its site. Yelp also appealed from a separate order imposing $4,962.59 in monetary sanctions against it for failing to comply with the subpoena requiring production of the documents. Gregory Montagna filed a lawsuit against Sandra Jo Nunis and several Doe defendants alleging a single cause of action for trade libel. Montagna, an accountant, prepared a tax return for Nunis in 2015, initially quoting Nunis a “minimum” fee of $200 for the preparation of her return, based on her representation that her income was comprised exclusively of wages reported on a W-2 form, and she would require only a simple return. However, both Nunis’ income and the resulting tax return were allegedly more complicated than she had represented. As a consequence, Montagna charged Nunis $400 for preparation of the return, rather than the $200 fee he initially quoted. Nunis allegedly paid Montagna only $200, and refused to pay him more even after receiving “a collection letter” for the balance. And in November 2015, Nunis allegedly went online to the Yelp website under an alias and posted a negative review of Montagna. Yelp argued the trial court's orders had to be reversed because: (1) the trial court erroneously concluded Yelp lacked standing to assert the First Amendment rights of its anonymous reviewer as grounds for resisting the subpoena; and (2) the court further erred by concluding Montagna made a prima facie showing the posted review contained defamatory statements. The Court of Appeal agreed the trial court erred in ruling Yelp lacked standing to assert the First Amendment rights of its anonymous reviewer, but found no error in its determination Montagna made a prima facie showing the challenged review was defamatory. The Court concluded the latter finding was sufficient to support the trial court’s order compelling Yelp to produce the subpoenaed documents in the circumstances of this case. Consequently, the Court denied the petition for writ of mandate. "However, given the dynamic nature of this area of law - the primary cases we rely upon were decided after the trial court issued its ruling - we also conclude Yelp’s opposition to Montagna’s motion to compel was substantially justified." Thus the Court reversed the order imposing sanctions against Yelp. View "Yelp Inc. v. Superior Court" on Justia Law

In 2012, Respondent Allister Boustred, a Colorado resident, purchased a replacement main rotor holder for his radio-controlled helicopter from a retailer in Fort Collins, Colorado. The main rotor holder was allegedly manufactured by Petitioner Align Corporation Limited (“Align”), a Taiwanese corporation, and distributed by Respondent Horizon Hobby, Inc. (“Horizon”), a Delaware-based corporation. Align had no physical presence in the United States, but it contracted with U.S.-based distributors to sell its products to retailers who, in turn, sell them to consumers. Boustred installed the main rotor holder to his helicopter and was injured in Colorado when the blades held by the main rotor holder released and struck him in the eye. He filed claims of strict liability and negligence against both Align and Horizon in Colorado. The issue this case presented for the Colorado Supreme Court's review centered on the stream of commerce doctrine and the prerequisites for a state to exercise specific personal jurisdiction over a non-resident defendant. The Colorado Supreme Court concluded that World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980), set out the controlling stream of commerce doctrine, which established that a forum state could assert jurisdiction where a plaintiff showed a defendant placed goods into the stream of commerce with the expectation that the goods will be purchased in the forum state. Applying this doctrine, the Court concluded Boustred made a sufficient showing to withstand a motion to dismiss. View "Align Corporation, Ltd. v. Boustred" on Justia Law

Candy Parkhurst ("Parkhurst"), personal representative of the estate of her husband, Andrew P. Parkhurst ("Andrew"), deceased, file suit to compel Carter C. Norvell and Parkhurst & Norvell, an accounting firm Norvell had operated as a partnership with Andrew ("the partnership"), to arbitrate a dispute regarding the dissolution of the partnership. Pursuant to an arbitration provision in a dissolution agreement Norvell and Andrew had executed before Andrew's death, the trial court ultimately ordered arbitration and stayed further proceedings until arbitration was complete. Subsequently, however, Parkhurst moved the trial court to lift the stay and to enter a partial summary judgment resolving certain aspects of the dispute in her favor. After the trial court lifted the stay and scheduled a hearing on Parkhurst's motion, Norvell and the partnership appealed, arguing that the trial court was effectively failing to enforce the terms of a valid arbitration agreement in violation of the Federal Arbitration Act. The Alabama Supreme Court determined there was no evidence in the record indicating that Norvell made such an agreement and he, in fact, denied doing so. In the absence of any evidence that would establish such an agreement, as well as any other evidence that would conclusively establish that Norvell clearly and unequivocally expressed an intent to waive his right to have the arbitrator resolve this dispute. As such, Parkhurst failed to meet her burden of showing that the arbitration provision in the dissolution agreement should not have been enforced. Accordingly, the trial court erred by lifting the arbitral stay in order to consider Parkhurst's motion for a partial summary judgment, and its judgment doing so was reversed and remanded. View "Norvell v. Parkhurst" on Justia Law

This appeal arose from an order modifying an existing interlocutory injunction. In December 2016, appellee Peach Trader Inc., d/b/a A City Discount and A City Discount, Inc. (“Peach Trader”), filed a complaint against appellants Jeffery and Sharon Jones, a married couple, alleging that Mr. Jones used his position as an employee to embezzle or misappropriate over $1 million from Peach Trader and take advantage of business opportunities for personal gain to the detriment of his employer. Along with its complaint, Peach Trader sought a temporary restraining order against the Joneses, and the order was granted. The Joneses then filed a motion to dissolve the order. The trial court later entered an order granting an interlocutory injunction against the Joneses that prohibited them from selling, transferring, altering, encumbering, or otherwise disposing of any assets within their custody, control, or possession. The Joneses did not attempt to appeal the order. Six months later, in July, the Joneses filed a second motion to dissolve the interlocutory injunction. During a hearing on several outstanding issues, Peach Trader’s counsel consented to certain accounts being removed from the purview of the interlocutory injunction. In line with an agreement between the parties, the trial court entered an order denying the Joneses’ motion to dissolve the interlocutory injunction but granting the motion to modify the injunction by removing the restrictions on at least one of the Joneses’ accounts. The Joneses timely filed an application for discretionary appeal with the Georgia Supreme Court seeking review of the trial court’s orders dismissing their notices of appeal. The Supreme Court vacated the trial court’s order dismissing appellant’s initial notice of appeal because Georgia law vests appellate courts with the sole authority to determine if a decision or judgment is appealable. “But that is not the end of the matter. Because an order modifying an interlocutory injunction is not subject to direct appeal under OCGA 5-6-34 (a) (4), we dismiss the appeal.” View "Jones v. Peach Trader, Inc." on Justia Law

First Western Capital Management (“FWCM”), and its parent company First Western Financial, Inc. (collectively, “First Western”), sought a preliminary injunction against former employee Kenneth Malamed for misappropriating trade secrets. In 2008, FWCM acquired Financial Management Advisors, LLC (“FMA”), an investment firm Malamed founded in 1985 primarily to serve high net worth individuals and entities such as trusts and foundations. After selling FMA, Malamed worked for FWCM from 2008 until FWCM terminated him on September 1, 2016. In early 2016, a committee of FWCM directors began discussing the possibility of selling FWCM to another company. Although Malamed was not involved in these discussions, he learned about the potential sale and, in a meeting with other FWCM officers, expressed his displeasure with the buyer under consideration. Following the meeting, Malamed emailed his assistant asking her to print three copies of his client book, which contained the names and contact information for approximately 5,000 FWCM contacts. Of these contacts, 331 were current FWCM clients and roughly half of those had been clients of FMA before First Western acquired it. The printout also contained spreadsheets that included, among other information, client names, the total market value of their holdings under management, and the fees being charged by FWCM. On September 1, 2016, shortly after Malamed’s employment contract expired, First Western fired him. That same day, First Western served him with a complaint it had filed in federal court a month earlier, alleging misappropriation of trade secrets under the federal Defend Trade Secrets Act of 2016 (“DTSA”), and the Colorado Uniform Trade Secrets Act (“CUTSA”), breach of employment contract, and breach of fiduciary duty. First Western moved for a temporary restraining order and a preliminary injunction to prevent Malamed from soliciting FWCM’s clients. The district court excused First Western from demonstrating irreparable harm (one of the four elements a party seeking injunctive relief is typically required to prove) and granted the injunction. As applied here, the Tenth Circuit determined that if First Western could not show irreparable harm, it cannot obtain injunctive relief. The district court should not have entered the preliminary injunction here. View "First Western Capital v. Malamed" on Justia Law

The Santa Cruz Operation, Inc. (Santa Cruz) entered into a business arrangement with International Business Machines Corp. (IBM) to develop a new operating system that would run on a more advanced processor manufactured by Intel Corporation (Intel). The parties signed an agreement memorializing this relationship, calling it “Project Monterey.” Another technology company, The SCO Group, Inc. (SCO), then acquired Santa Cruz’s intellectual property assets and filed this lawsuit for IBM’s alleged misconduct during and immediately after Project Monterey. SCO accused IBM of stealing and improperly using source code developed as part of the Project to strengthen its own operating system, thereby committing the tort of unfair competition by means of misappropriation. The district court awarded summary judgment to IBM on this claim based on the independent tort doctrine, which barred a separate tort action where there was no violation of a duty independent of a party’s contractual obligations. SCO also accused IBM of disclosing Santa Cruz’s proprietary materials to the computer programming community for inclusion in its Linux open-source operating system. In a separate order, finding insufficient evidence of actionable interference by IBM, the district court granted summary judgment in favor of IBM on these tortious interference claims. Finally, after the deadline for amended pleadings in this case, SCO sought leave to add a new claim for copyright infringement based on the allegedly stolen source code from Project Monterey. SCO claimed it had only discovered the essential facts to support this claim in IBM’s most recent discovery disclosures. The district court rejected SCO’s proposed amendment for failure to show good cause. SCO appealed. After review, the Tenth Circuit reversed the district court’s order awarding IBM summary judgment on the misappropriation claim, and affirmed as to all other issues. View "SCO Group v. IBM" on Justia Law

A Cayman Islands investment fund and two of its Delaware subsidiaries (collectively “Gramercy”) sued a bank organized under Delaware law with offices in Illinois and Bulgaria (Bulgarian-American Enterprise Fund, or “Bulgarian-American”) and an Irish bank headquartered in Dublin (Allied Irish Banks, P.L.C., or “Allied”) over claims they admitted arose under Bulgarian law and had no connection to activity that took place in Delaware. Delaware was the second forum in which Gramercy sought to press its Bulgarian claims. The first forum was Illinois, where: (i) after extensive discovery and briefing on the issue of forum non conveniens, the Circuit Court of Cook County in Chicago granted a motion to dismiss; (ii) the Illinois Appellate Court unanimously affirmed the Circuit Court’s dismissal; and (iii) the Illinois Supreme Court denied Gramercy’s petition for leave to appeal. Rather than going to Bulgaria and suing in the forum whose laws governed its claims and where its investment in Bulgarian-American took place, Gramercy sued in Delaware. Bulgarian-American and Allied filed a motion to dismiss, arguing Bulgaria was the appropriate forum for the litigation. In granting Bulgarian-American and Allied’s motion and holding that Gramercy’s suit did not merit the overwhelming hardship standard afforded to first-filed actions under Cryo-Maid, the Delaware Court of Chancery was forced to address confusing arguments about this Court’s forum non conveniens precedent, in particular, the relationship among the Delaware Supreme Court’s longstanding decisions in “CryoMaid” and “McWane,” and a more recent decision, “Lisa, S.A. v. Mayorga.” Ultimately, the Delaware Supreme Court determined the Court of Chancery correctly held that because the Delaware action was not first filed, and that to obtain dismissal on forum non conveniens grounds, Bulgarian-American and Allied did not need to show overwhelming hardship. But, because the Illinois case was no longer pending, and was not dismissed on the merits like the first-filed action in Lisa, McWane was no longer the proper focus for the Court of Chancery’s analysis. The Illinois action had relevance in the forum non conveniens analysis because it meant that analysis would not be tilted in Gramercy’s favor under the overwhelming hardship standard. But, because the Illinois action was not dismissed on its merits, but instead for forum non conveniens, it should not have shifted the Court’s focus from Cryo-Maid to McWane. Between Cryo-Maid’s overwhelming hardship standard and McWane’s discretionary standard lies an intermediate analysis that applies to situations like Gramercy’s: a straightforward assessment of the CryoMaid factors, where dismissal is appropriate if those factors weigh in favor of that outcome. View "Gramercy Emerging Markets Fund, et al. v. Allied Irish Banks, P.L.C., et al." on Justia Law

Tawas, Michigan hosts an annual festival called “Perchville.” Its Chamber of Commerce obtained federal trademark registration for the term “Perchville,” in 2003. Trading Post allegedly was selling merchandise depicting the term “Perchville.” The Chamber filed suit against Agnello, a Trading Post employee, and obtained an ex parte injunctive order prohibiting sales of t-shirts with the mark, which stated: “this order shall be binding upon the parties to this action, their officers, agents, servants, employees, and attorneys and on those persons in active concert or participation with them who receive actual notice of this order by personal service [or] otherwise.” Agnello appeared at a hearing without an attorney, indicated that he had spoken to Trading Post's partial owner about the lawsuit, but repeatedly stated that he was confused. Agnello consented to a permanent injunction. The judge stated that the order would be binding on anyone acting in concert with Agnello. Trading Post filed suit, challenging the Chamber’s trademark of “Perchville.” The district court found the challenge barred by res judicata because a final determination on the merits occurred in the state court. The Sixth Circuit reversed. There may be circumstances when an employee’s interests are so aligned with his employer as to be in privity for purposes of res judicata, that was not true here. Agnello was an hourly employee given a few days’ notice of an injunction. View "AuSable River Trading Post, LLC v. Dovetail Solutions, Inc." on Justia Law

In 2012, Khalil Laleh brought a forcible entry and detainer action against his brother, Ali Laleh. The litigation later grew so unwieldy that the trial court appointed Gary Johnson as an accounting expert (and later as a special master) to resolve the feuding brothers’ complex accounting claims. The Laleh brothers signed an engagement agreement with Gary C. Johnson and Associates, LLC, setting forth the scope of Johnson’s services and payment. Johnson commenced work, but before he completed his accounting reports for the trial court, the brothers settled their case and the court dismissed the suit. Johnson later informed the trial court that Khalil and Ali refused to pay both his outstanding fees and his costs incurred post-settlement in attempting to collect the outstanding fees. Following a hearing, the trial court issued an order ruling that Johnson’s fees were reasonable, and that he was entitled to the post-settlement costs he incurred in trying to collect his outstanding fees. In reaching the latter conclusion, the trial court relied on language in the engagement agreement stating that the Lalehs “are jointly and severally responsible for the timely and complete payment of all fees and expenses” to Johnson. The Colorado Supreme Court concluded that a separate provision of the engagement agreement authorized the award of the disputed post-settlement collection costs. View "Laleh v. Johnson" on Justia Law

Aspen American Insurance sued, claiming that the roof of a Michigan warehouse owned by Interstate had collapsed, causing the destruction of goods owned by Aspen’s insured, Eastern Fish. The complaint alleged that Interstate “maintain[s] a facility in or near Chicago.” Interstate acknowledged that it owns a warehouse in Joliet, Illinois. Interstate, an Indiana corporation, unsuccessfully moved to dismiss the complaint for lack of personal jurisdiction. The appellate court affirmed. The Illinois Supreme Court reversed. Aspen did not show that Interstate’s contacts with Illinois render it at home in that state under subsection (c) of the long-arm statute, 735 ILCS 5/2-209. While a foreign corporation must register with the Secretary of State and appoint an agent to accept service of process in order to conduct business in Illinois, absent any language to the contrary, the fact that a foreign corporation has registered to do business does not mean that the corporation has waived due process limitations on the exercise of personal jurisdiction, including with respect to cases that are completely unrelated to the corporation’s activities in Illinois. View "Aspen American Insurance Co. v. Interstate Warehouseing, Inc." on Justia Law