Justia Civil Procedure Opinion Summaries

NMEPT, a joint venture, was formed to sell environmental equipment in China. Nalco owned 55% of the venture, Chen 40%, and a third party 5%. When NMEPT encountered business problems, Nalco paid its creditor and sued Chen for his 40% share of the outlay. The district court awarded Nalco more than $2 million, rejecting Chen's counterclaim that Nalco’s subsidiary, NMI, had caused the joint venture to borrow $300,000 without Chen's approval, even though the agreement required all investors’ consent for borrowing. Chen also claimed that the creditor petitioned the joint venture into bankruptcy under Chinese law, on behalf of NMI, in an effort to avoid a clause requiring the investors’ unanimous consent for bankruptcy proceedings. Nalco wanted to wind up the unprofitable venture, but Chen preferred to keep it alive (if dormant) to protect its intellectual property. Chen did not appeal, but filed a new suit in China, against Mobotec. The Seventh Circuit affirmed an injunction, prohibiting Chen from pursuing the Chinese litigation. Rejecting an argument that Mobotec was not a party to and could not benefit from the Illinois judgment, the court stated: “That would be a questionable proposition even if Mobotec were a distinct entity, for federal courts no longer require mutuality in civil litigation.” The district court found that NMI and Mobotec are the same entity. View "Nalco Co. v. Chen" on Justia Law

New Mexico Rule of Evidence 11-410 NMRA stated that evidence of a nolo contendere plea made in settlement of a criminal proceedings was not admissible in civil proceedings against a defendant making such a plea. In this case, the issue presented for the New Mexico Supreme Court's consideration was whether evidence of a nolo plea was admissible in a civil case for misrepresentation where the plaintiffs sought to introduce a nineteen-year-old nolo plea of one defendant to support an argument that the defendant fraudulently failed to disclose his nolo plea during the formation of a joint business venture. The Court held that evidence of the nolo plea was inadmissible under both the express terms and the underlying purpose of Rule 11-410(A)(2), and the Court affirmed the district court’s grant of summary judgment on that basis. The Court reversed the Court of Appeals which held to the contrary. View "Kipnis v. Jusbasche" on Justia Law

PT Solutions Holdings, LLC ("PT Solutions"), petitioned for a writ of mandamus seeking an order directing the Barbour Circuit Court to vacate its order denying PT Solutions' motion to dismiss the underlying complaint filed by Laurie White based on an outbound forum selection clause and to grant the motion to dismiss. PT Solutions hired White as the clinic director of its Eufaula location. In September 2014, PT Solutions revised the employment agreements for its clinic directors. The letter agreement described a bonus structure, and included a noncompete clause. The agreement also contained a forum-selection clause, selecting Fulton County, Georgia as proper venue for disputes between the parties. White voluntarily resigned her position as clinic director of PT Solutions' Eufaula clinic and became clinic director for Eufaula Physical Therapy (EPT). She also recruited the office manager and two physical therapists who were working at PT Solutions' Eufaula clinic to come work at EPT. Because of White's actions on behalf of EPT, PT Solutions' counsel sent White a cease-and-desist letter in which he asserted that White had violated the noncompetition agreement. In response, White sued PT Solutions and fictitiously named defendants in the Alabama Circuit Court seeking a judgment declaring that the noncompetition agreement was unenforceable. After review, the Alabama Supreme Court found that White failed to clearly establish that enforcement of the forum-selection clause would be either unfair or unreasonable. PT Solutions demonstrated a clear legal right to have the action against it dismissed on the basis that venue in the Barbour Circuit Court was, by virtue of the forum-selection clause, improper. The circuit court exceeded its discretion in denying PT Solutions' motion to dismiss. Accordingly, the Supreme Court granted PT Solutions' petition and granted the writ. View "Ex parte PT Solutions Holdings, LLC." on Justia Law

Plaintiffs Medical Marijuana, Inc. (MMI) and HempMeds PX, LLC (HempMeds) (jointly "the plaintiffs") sued defendants ProjectCBD.com (Project CBD), Martin Lee, and Aaron Cantu. Project CBD appealed a trial court's order denying their special motion to strike1 counts 1 and 3 of the complaint against them, which asserted causes of action for libel and false light. Plaintiff MMI held investments in numerous industrial hemp businesses, including plaintiff HempMeds. HempMeds manufactures and sells RSHO, a product containing cannabidiol (CBD) derived from the industrial hemp plant. MMI also holds interests in KannaLife Sciences, Inc. Per the first amended complaint, Jason Cranford, another defendant, resigned from KannaLife's Board of Directors and then began competing with MMI and HempMeds by selling CBD products through his Colorado medical marijuana dispensary, Rifle Mountain, LLC (Rifle Mountain - also named as a defendant in the case). Project CBD was a California nonprofit organization that identifies itself as an organization dedicated to promoting and publicizing research regarding CBD and other components of the cannabis plant. Project CBD had samples of plaintiffs’ cannabis product tested, and released results on their Facebook page. Plaintiffs contended that those results and other statements made about their products were false. On appeal, the Project CBD defendants contended that the trial court incorrectly determined that plaintiffs demonstrated a probability of prevailing on counts 1 and 3 against defendants. The Project CBD defendants also claimed that the trial court erred in concluding that plaintiffs were not limited public figures, meaning that the plaintiffs would not have to demonstrate that the Project CBD defendants acted with actual malice in publishing an article about the plaintiffs, and/or that the court erred in concluding in the alternative that the plaintiffs demonstrated that the Project CBD defendants acted with actual malice in publishing the article. The Court of Appeal concluded that the trial court's ruling with respect to the Project CBD defendants' anti-SLAPP motion directed at counts 1 and 3 was correct, albeit on grounds different from those relied on by the trial court. The Court therefore affirmed the trial court's order and remanded the matter for further proceedings. View "Medical Marijuana, Inc. v. ProjectCBD.com" on Justia Law

Stephen Larson appealed when his case against Midland Hospital Supply, Inc. ("Midland"), Midland ProHealth, Inc. ("ProHealth") and Richard Larson was dismissed. Midland was a North Dakota corporation engaged in the wholesale, resale distribution and sale of medical supplies until dissolved in 2007. The Larson family owned all of the shares of the corporation. Richard Larson was the majority shareholder and the president of the company and his brother, Stephen Larson, and their two sisters were minority shareholders. The company had a buy-sell agreement requiring any shareholder desiring to sell, transfer or encumber their shares to first offer them to the other shareholders on a pro-rata basis. If the shareholders did not purchase the offered shares, the company could redeem them. If the company or shareholders did not purchase the shares, they could be sold to any party. In May 1999 Richard sent the minority shareholders a letter indicating the company wanted to purchase their shares by July 1999. The two sisters agreed to sell their shares. Stephen declined the offer. Richard personally purchased the sisters' shares, increasing his ownership interest in the company. In 1994 Richard Larson set up ProHealth, a retail company selling medical supplies, of which Richard was the president and sole shareholder. ProHealth purchased approximately half of its inventory from Midland. It had an outstanding accounts receivable with Midland by 2001. By the end of 2006 ProHealth owed Midland approximately $1,600,000. In August 2007, the full amount of the accounts receivable was paid. Interest on the receivable was paid in August 2008. Stephen sued for breach of fiduciary duty, conflict of interest, negligence, breach of shareholder buy-sell agreement, misappropriation, conspiracy, conversion, action for accounting and unjust enrichment. The summons and complaint were served in June 2013, and the action was filed in September 2014. The trial court held that Stephen's case against Midland and his brother was barred by statute of limitations. After review, the Supreme Court affirmed, concluding the statute of limitations barred Stephen's claims related to his ownership interest in Midland and the district court did not err finding he was paid for his interest in Midland. View "Larson v. Midland Hospital Supply, Inc." on Justia Law

MOVA technology can capture an actor’s facial performance for use in motion picture special effects and video games; it is secured by trademarks, copyrights, and patents, and is reflected in hardware, source code, and physical assets. VGHL claims that Perlman, the head of Rearden, declined to acquire the MOVA assets from OL2 and proposed OL2 sell to a Rearden employee, LaSalle. Perlman introduced LaSalle to Rearden’s corporate attorney who helped LaSalle establish his own company, MO2, and negotiated with OL2. Perlman later demanded that LaSalle convey the MOVA assets to Rearden and terminated LaSalle’s employment when LaSalle refused. MO2 sold the MOVA assets to SHST, which hired LaSalle, and began selling the technology. The Rearden parties claimed that SHST never obtained ownership and that LaSalle was simply hired to handle the acquisition on Rearden’s behalf. SHST sued, alleging that Rearden had made “false or misleading representations ... concerning the ownership of the MOVA Assets ... to mislead the public and actual and prospective users and licensees” and had falsely recorded assignments of the MOVA patents. During discovery, SHST moved to compel Rearden to produce documents exchanged between MO2 and Rearden’s corporate attorney. The district court granted the request, concluding that Rearden had not shown entitlement to assert attorney-client privilege on behalf of MO2 and that LaSalle waived privilege when he shared documents. The Federal Circuit denied a petition for mandamus. Rearden's arguments failed to carry the high burden required on mandamus to overturn the court’s discovery determination. View "In re: Rearden, LLC" on Justia Law

Vehicle Market Research, Inc. (VMR) sued Mitchell International, Inc. (Mitchell) to recover royalties Mitchell allegedly owed pursuant to a software licensing agreement. The jury returned a verdict for Mitchell, and VMR appealed. VMR argued: (1) the district court erred by allowing Mitchell, contrary to the law of the case doctrine, to cross-examine VMR’s sole shareholder on the value of VMR as he stated in his personal bankruptcy; and (2) the district court erred in omitting part of VMR’s proposed jury instruction on Rule 30(b)(6) witnesses. Finding no error, the Tenth Circuit affirmed. View "Vehicle Market Research v. Mitchell International" on Justia Law

Defendants Eric Schrier, Frank Frederick, and Angela Martinez had been employed in various capacities by plaintiff SG Homecare, Inc. before abruptly leaving to start a competing firm, defendant Verio Healthcare, Inc. SG Homecare filed the underlying complaint, alleging the individual defendants breached their contractual and fiduciary duties, and misappropriated trade secrets. Schrier and his wife cross-complained against SG Homecare and its owner, Thomas Randall Rowley (together, the “SG parties”), alleging wrongful termination and intentional infliction of emotional distress. Defendant Verio Healthcare and the individual defendants were represented by Donald Wagner of the firm Buchalter Nemer, PLC. Shortly after the cross-complaint was filed, the SG Parties moved to disqualify Buchalter Nemer. The motion was based on an assertion that shortly before the individual defendants’ departure from SG Homecare, Buchalter Nemer executed a retainer agreement with SG Homecare and was either currently representing SG Homecare, or, alternatively, the present litigation was substantially related to Buchalter Nemer’s prior representation of SG Homecare (requiring disqualification in either event). Adding to mix: Wagner, as a member of the California State Assembly, relied on statutory entitlement to a continuance and extension of time of the entire litigation. The trial court denied the motion for a stay without explanation. Defendants petitioned the Court of Appeals court for a writ of mandate to order the trial court to grant the stay. The Appeals court summarily denied the petition, but the California Supreme Court granted review and remanded back to the Appeals court with instructions to issue an order to show cause. The Court of Appeals issued that order and denied the writ, namely because it found that the trial court acted within its discretion in its finding that the stay would "defeat or abridge the other party's" right to relief. View "Verio Healthcare v. Superior Court" on Justia Law

Appellant Pandora Franchising, LLC was a foreign limited liability company. In its application for certificate of authority to transact business in Georgia, Pandora identified its principal place of business in Maryland. Appellee Kingdom Retail Group (“Kingdom”) filed suit against Pandora in Thomas County Superior Court, alleging Pandora wrongfully withheld its consent to Kingdom’s bid to acquire a number of Pandora franchises. Kingdom alleged venue was proper in Thomas County pursuant to OCGA 14-2-510 (b) (4) because the cause of action originated in Thomas County. Over Kingdom’s objection, the trial court granted Pandora’s request to remove the complaint to Gwinnett County where, Pandora claimed in its notice of removal, “it maintains its registered office as its principal place of business in Georgia.” The Court of Appeals granted Kingdom’s application for interlocutory review and reversed the grant of removal. The Georgia Supreme Court granted certiorari to determine whether the Court of Appeals correctly construed OCGA 14-2-510 (b) (4) to mean that, in a claim in which the basis for venue was the allegation that the cause of action originated in the county where the claim was filed, only a corporation with its worldwide principal place of business, or “nerve center” in Georgia had the right to remove the claim to the county in Georgia where that principal place of business was located. The Supreme Court affirmed the Court of Appeals’ decision and adopted the reasoning set forth in that court’s opinion. View "Pandora Franchising, LLC v. Kingdom Retail Group, LLLP" on Justia Law

This letter opinion addressed Third-Party Defendants’ motions to dismiss Third-Party Plaintiffs’ amended third-party complaint. The Third-Party Defendants advanced four bases on which the amended complaint should be dismissed, including lack of personal jurisdiction, failure to state a claim, failure to comply with Court of Chancery Rule 23.1, and an unreasonable delay in bringing the amended complaint. The Court of Chancery granted the Third-Party Defendants’ motions to dismiss, holding that the Third-Party Plaintiffs’ claims were time-barred because the Third-Party Plaintiffs failed to identify a tolling doctrine or extraordinary circumstances sufficient to avoid application of laches. View "CMS Inv. Holdings, LLC v. Castle" on Justia Law