Justia Civil Procedure Opinion Summaries

Cromer, formerly a “managing loan officer” for Union Home Mortgage, agreed to several restrictive covenants, including that he would “not become employed in the same or similar capacity” with a competitive entity. Cromer left Union and started working for Homeside Financial as a “non-producing” branch manager. Union sought a preliminary injunction to enforce Cromer’s restrictive covenants, citing the 2016 Defend Trade Secrets Act, 18 U.S.C. 1836; the Ohio Uniform Trade Secrets Act; the non-compete, confidentiality, and nonsolicitation covenants; the contractual duty of loyalty; and the common law duty of loyalty. Against Homeside, Union alleged tortious interference with business relationships and with contracts.The district court issued an injunction—without any time limitation—prohibiting Cromer, and anyone acting in concert, from “competing with Union Home.” The Sixth Circuit vacated. The injunction failed to satisfy the specificity requirements of FRCP 65(d)(1), was overbroad, and was otherwise improperly granted under the standard for preliminary injunctions. The broad prohibition covers any form of competition, irrespective of Cromer’s employer, job title, or duties, and created an inherent risk that the scope of the injunction exceeds the Agreement that the parties signed. The district court also failed to consider whether the non-compete covenant is reasonable and thus enforceable. View "Union Home Mortgage Corp. v. Cromer" on Justia Law

The plaintiff, SwiftAir, entered into an agreement with the defendant, Southwest Airlines (“Southwest”). Under the agreement, SwiftAir would develop software for Southwest. In turn, Southwest would test the software to determine whether to license it. When Southwest decided not to license the software, SwiftAir filed various breach of contract and fraud claims against Southwest.The trial court granted summary judgment in Southwest’s favor, finding that the Airline Deregulation Act (“ADA”) preempted all but one of SwiftAir’s claims. The remaining claim was presented to a jury, which found in Southwest’s favor.The Second Appellate District affirmed. For a claim to be preempted by the ADA, 1.) the claim must derive from state law, and (2) the claim must relate to airline rates, routes, or services, either by expressly referring to them or by having a significant economic effect upon them. Here, the subject of the contract was providing passengers with inflight entertainment and wireless internet access, which are considered “services” under the ADA. Thus, Southwest did not need to prove that SwiftAir’s claims would have a significant economic effect on Southwest’s services. View "SwiftAir v. Southwest Airlines" on Justia Law

A winning candidate for a seat on the board of directors of an Alaska Native Corporation declined to sign the corporation’s confidentiality agreement and code of conduct. When the corporation denied him a seat on the board, he sought a declaratory judgment that these agreements were unlawful and an injunction that he be seated on the board. He argued that the scope of the confidentiality agreement was so broad, and the code of conduct so apt to be used to suppress dissenting directors, that they were inconsistent with directors’ fiduciary duties to the corporation. The Alaska Supreme Court determined he did not challenge the application of these agreements to any concrete factual situations, therefore, his claims were not ripe for adjudication. The Court therefore affirmed the judgment and the award of attorney’s fees against him. View "Borer v. Eyak Corporation" on Justia Law

Blizzard Entertainment, Inc. (Blizzard) appealed an order denying its motion to compel arbitration. B.D., a minor, played Blizzard’s online videogame “Overwatch,” and used “real money” to make in-game purchases of “Loot Boxes” - items that offer “randomized chances . . . to obtain desirable or helpful ‘loot’ in the game.” B.D. and his father (together, Plaintiffs) sued Blizzard, alleging the sale of loot boxes with randomized values constituted unlawful gambling, and, thus, violated the California Unfair Competition Law (UCL). Plaintiffs sought only prospective injunctive relief, plus attorney fees and costs. Blizzard moved to compel arbitration based on the dispute resolution policy incorporated into various iterations of the online license agreement that Blizzard presented to users when they signed up for, downloaded, and used Blizzard’s service. The trial court denied the motion, finding a “reasonably prudent user would not have inquiry notice of the agreement” to arbitrate because “there was no conspicuous notice of an arbitration” provision in any of the license agreements. The Court of Appeal disagreed: the operative version of Blizzard’s license agreement was presented to users in an online pop-up window that contained the entire agreement within a scrollable text box. View "B.D. v. Blizzard Entertainment" on Justia Law

The Supreme Court quashed the decision of the Third District Court of Appeal concluding that the circuit court had personal jurisdiction over Tribeca Asset Management, Inc., holding that the parties' agreement did not provide for arbitration in Florida.Tribeca and Ancla International, S.A. entered into a confidentiality agreement. Ancla later filed a petition to compel arbitration. The circuit court dismissed the petition for lack of personal jurisdiction, concluding that a provision in the parties' agreement did not contain a forum selection clause and merely contained a choice of law provision. The Third District reversed, concluding that the provision contained a forum selection clause. The Supreme Court reversed, holding that the agreement did not provide for arbitration in Florida. View "Tribeca Asset Management, Inc. v. Ancla International, S.A." on Justia Law

The Supreme Court affirmed the order of the district court dismissing Appellant's complaint against eighteen defendants relating to the installation of heating, ventilation, and air conditioning (HVAC) units at a property owned by Yellowstone Lodging, LLC, holding that Appellant did not meet the constitutional or prudential requirements of standing.Yellowstone, which owned and operated a hotel in West Yellowstone, hired and entered into contracts with several HVAC contractors to upgrade the HVAC system at the motel. Appellant, the sole member of Yellowstone, brought this complaint alleging thirty-nine claims related to the HVAC system, as well as claims of legal malpractice against the law firm and attorney Appellant originally engaged to pursue these claims on behalf of Yellowstone. The district court concluded that Appellant lacked standing to sue. The Supreme Court affirmed, holding that Appellant may not, through an assignment, bring Yellowstone's claims on his own behalf and without counsel. View "Sagorin v. Sunrise Heating & Cooling, LLC" on Justia Law

National Western Life Insurance Company (NWL) appealed after it was held liable for negligence and elder abuse arising from an NWL annuity sold to Barney Williams by Victor Pantaleoni. In 2016, Williams contacted Pantaleoni to revise a living trust after the death of Williams’ wife, but Pantaleoni sold him a $100,000 NWL annuity. When Williams returned the annuity to NWL during a 30-day “free look” period, Pantaleoni wrote a letter over Williams’ signature for NWL to reissue a new annuity. In 2017, when Williams cancelled the second annuity, NWL charged a $14,949.91 surrender penalty. The jury awarded Williams damages against NWL, including punitive damages totaling almost $3 million. In the Court of Appeal's prior opinion reversing the judgment, the Court concluded Pantaleoni was an independent agent who sold annuities for multiple insurance companies and had no authority to bind NWL. The Court determined that Pantaleoni was an agent for Williams, not NWL. The California Supreme Court vacated that decision and remanded, asking the appeals court to reconsider its finding that Pantaleoni did not have an agency relationship with National Western Life Insurance Company in light of Insurance Code sections 32, 101, 1662, 1704 and 1704.5 and O’Riordan v. Federal Kemper Life Assurance Company, 36 Cal.4th 281, 288 (2005). Upon remand, the Court of Appeal affirmed the judgment finding NWL liable for negligence and financial elder abuse. However, punitive damages assessed against NWL were reversed. The Court found no abuse of discretion in the trial court’s calculation of the attorney fee award, but remanded the case for the court to reconsider the award in light of the reversal of punitive damages. View "Williams v. Nat. W. Life Ins. Co." on Justia Law

Pappas sued Dr. Chang for malpractice. During mediation, they agreed that Chang would pay Pappas $100,000. Both parties and their counsel signed a settlement agreement, which provided that Pappas “will execute a release of all claims ... in a more comprehensive settlement agreement ... to include a provision for mutual confidentiality as to the facts ... the terms and amount of this agreement.” The parties unsuccessfully negotiated the “more comprehensive settlement agreement” and “provision for mutual confidentiality” for months. Pappas discharged her attorney and, representing herself, advised Chang’s attorney that she would only comply with a confidentiality provision if she received $525,000, then sued Chang for breach of contract.The trial court ruled against Pappas “because she has not signed a ‘more comprehensive settlement agreement’ and release which includes a provision for mutual confidentiality.” In consolidated appeals, the court of appeal affirmed, rejecting an argument that a confidentiality provision would be against public policy and violate the Business and Professions Code. The court also rejected Chang’s appeal of the trial court’s denial of her attorney fees as costs of proof at trial (Code Civ. Proc., 2033.420) based on its finding that Pappas’s denial of two requests for admission was based on a good faith belief she would prevail at trial and that the requests went to the ultimate issue. View "Pappas v. Chang" on Justia Law

In Section 9(e) of a settlement agreement between Cox Communications and Sprint Corporation (T-Mobile U.S., Inc.'s predecessor-in-interest, Cox agreed that, before it offered wireless mobile services to its customers, it would enter into a “definitive” exclusive provider agreement with Sprint “on terms to be mutually agreed upon between the parties for an initial period of 36 months[.]” Cox and Sprint never entered into such a partnership. After T-Mobile finalized a purchase of Sprint in April 2020, the combined entity bid for Cox’s business, but Cox decided to partner with Verizon. After hearing that it would not be Cox’s exclusive partner, T-Mobile accused Cox of breaching the Settlement Agreement. Cox sued T-Mobile in Delaware's Court of Chancery, seeking a declaration that Section 9(e) was either an unenforceable “agreement to agree” or a Type II preliminary agreement requiring Cox and T-Mobile to negotiate in good faith. According to Cox, it was free to partner with Verizon because these good-faith negotiations failed. Shortly before trial, Cox also suggested that whatever Section 9(e) means, T-Mobile could not enforce it because the Settlement Agreement was between Cox and Sprint, and Cox never consented to an assignment. T-Mobile filed a compulsory counterclaim for breach of contract. In support of this claim, T-Mobile offered that Section 9(e) meant that, although Cox was not obligated to provide wireless mobile services, if it wished to do so, it had to first enter into an exclusive provider agreement with T-Mobile as the conceded successor-in-interest to Sprint. For T-Mobile, the failure of the parties’ attempt to negotiate the definitive terms of the agreement meant that Cox could not enter the wireless mobile market at all. The Court of Chancery agreed with T-Mobile and permanently enjoined Cox from “partnering with any mobile network operator other than T-Mobile to provide Wireless Mobile Service before entering into an agreement with T-Mobile. The Delaware Supreme Court disagreed with the Court of Chancery, finding the Settlement Agreement was a Type II preliminary agreement that obligates the parties to negotiate open items in good faith. The judgment was reversed, the injunction vacated, and the matter remanded so that the Court of Chancery could determine whether Cox and T-Mobile discharged their obligations to negotiate in good faith. View "Cox Communications, Inc. v. T-Mobile US, Inc." on Justia Law

Based upon its belief that Walmart has failed to comply with the terms of an injunction, Cuker sought to initiate contempt proceedings against Walmart, requesting supplemental damages for Walmart's post-verdict use of its trade secrets.The Eighth Circuit affirmed and concluded that the district court did not err in denying the request to commence contempt proceedings because Cukor had failed to make a prima facie case showing a violation of, or refusal to follow, a court order. In this case, Cuker's claim that the district court did not consider its arguments or evidence is belied by the record. Upon review of the record and Cuker's arguments, the court stated that Cuker's challenges to the district court's order go to the weight the court gave its evidence, not a failure to consider the evidence. View "Wal-Mart Stores, Inc. v. Cuker Interactive, LLC" on Justia Law