Justia Commercial Law Opinion Summaries
Kent Literary Club of Wesleyan University v. Wesleyan University
The Supreme Court reversed the judgment of the trial court in favor of Plaintiffs on all counts in this commercial dispute, holding that the trial court failed properly to instruct the jury regarding the legal effects of the parties' contract in this case and the proper means of calculating damages.Plaintiffs brought this action alleging promissory estoppel, negligent misrepresentation, tortious interference with business expectancies, and violations of the Connecticut Unfair Trade Practices Act (CUTPA), Con. Gen. Stat. 42-110a et seq., and seeking damages, injunctive relief, and attorney fees and costs. The jury returned a verdict for Plaintiffs on all counts. The Supreme Court reversed, holding (1) there was sufficient evidence for the jury to find Defendants liable; but (2) the trial court abused its discretion in issuing the injunction at issue, and the injunction was unenforceable. View "Kent Literary Club of Wesleyan University v. Wesleyan University" on Justia Law
Bash v. Textron Financial Corp.
The Sixth Circuit affirmed the district court's decision rejecting the bankruptcy trustee's efforts seeking to avoid payments from Fair Finance to Textron as fraudulent transfers under Ohio's Uniform Fraudulent Transfer Act (OUFTA).The court concluded that the district court correctly rejected the trustee's bad-faith-invalidation argument at summary judgment. In this case, Textron's actions did not render its perfected interest ineffective against the holder of a judicial lien subsequently obtained in a hypothetical UCC priority contest. Therefore, Textron enjoyed a valid lien under OUFTA. The court explained that its conclusion is grounded in the nature of the UCC's priority test as well as critical distinctions between normal priority disputes and the OUFTA valid-lien test. The court also concluded that loan payments encumbered by the perfected 2002 security interest are not transfers under OUFTA and thus cannot be avoided as fraudulent transfers. The court disagreed with the trustee that the jury erred in determining that the 2004 changes did not amount to a novation and concluded that, to the extent there was an error in the jury instruction, it was harmless. The court rejected the trustee's additional argument to the contrary. View "Bash v. Textron Financial Corp." on Justia Law
Ayla, LLC v. Alya Skin Pty. Ltd.
Ayla, a San Francisco-based brand, is the registered owner of trademarks for use of the “AYLA” word mark in connection with on-site beauty services, online retail beauty products, cosmetics services, and cosmetics. Alya Skin, an Australian company, sells and ships skincare products worldwide. Ayla sued in the Northern District of California, asserting trademark infringement and false designation of origin under the Lanham Act, 15 U.S.C. 1114, 1125(a).Alya Skin asserted that it has no retail stores, offices, officers, directors, employees, bank accounts, or real property in the U.S., does not sell products in U.S. retail stores, solicit business from Americans, nor direct advertising toward California; less than 10% of its sales have been to the U.S. and less than 2% of its sales have been to California. Alya Skin uses an Idaho company to fulfill shipments outside of Australia and New Zealand. Alya Skin filed a U.S. trademark registration application in 2018, and represented to potential customers that its products are FDA-approved; it ships from, and allows returns to, Idaho Alya Skin’s website listed U.S. dollars as the default currency and advertises four-day delivery to the U.S.The Ninth Circuit reversed the dismissal of the suit. Jurisdiction under Fed.R.Civ.P. 4(k)(2) comports with due process. Alya Skin had minimum contacts with the U.S., and subjecting it to an action in that forum would not offend traditional notions of fair play and substantial justice. The company purposefully directed its activities toward the U.S. The Lanham Act and unfair competition claims arose out of or resulted from Alya Skin’s intentional forum-related activities. View "Ayla, LLC v. Alya Skin Pty. Ltd." on Justia Law
Anoush Cab, Inc. v. Uber Technologies, Inc.
The First Circuit affirmed the district court's final judgment against Plaintiffs on their claims that Uber Technologies competed unlawfully in the on-demand, ride-hail ground transportation in and around Boston, Massachusetts, holding that Uber did not compete unfairly in violation of statutory and common law prohibitions governing the commercial marketplace.Plaintiffs - owners of companies that dispatched, leased, and maintained taxicab vehicles and owned taxi medallions - brought this complaint alleging that, in violation of Boston regulations, Uber caused asset devaluation by competing unfairly under Mass. Gen. Laws ch. 93A, violating the common law for unfair competition, and aiding and abetting a conspiracy to engage in unfair competition. The district court issued judgment in favor of Defendants. The First Circuit affirmed, holding that Uber's conduct in the transportation market during a period of regulatory uncertainty did not violate the statutory or common law governing the commercial marketplace. View "Anoush Cab, Inc. v. Uber Technologies, Inc." on Justia Law
Agrifund, LLC v. Heartland Co-op
The Eighth Circuit affirmed the district court's order granting summary judgment to Agrifund on the conversion claim Agrifund brought against Heartland. The court concluded that Heartland failed to exercise reasonable commercial standards of fair dealing, and Heartland does not qualify as a holder in due course. In this case, it would have taken minimal effort for Heartland to confirm, whether with the borrowers or with Agrifund, that Agrifund had been fully recompensed before accepting the payment at issue.The court also concluded that the Subrogation Agreement did not bind Heartland to the terms of the Note; the 14% contractual interest rate does not apply to the damages award; and the district court properly awarded pre-judgment interest at the rate required by Iowa law and post-judgment interest at the federal rate. Finally, the court concluded that Heartland is not liable for attorney fees as set forth in the Note, and there is no abuse of discretion in the district court's decision to deny Agrifund's request for attorney fees. Accordingly, the court affirmed the district court's award of damages and attorney fees. View "Agrifund, LLC v. Heartland Co-op" on Justia Law
Milan Supply Chain Solutions, Inc. v. Navistar, Inc.
The Supreme Court held that the economic loss doctrine applies when a fraud claim seeks recovery of only economic losses and is premised solely on nondisclosures or misrepresentations about the quality of goods that are the subject of a contract between sophisticated commercial parties.Plaintiff sued Defendants alleging breach of express and implied warranties, breach of contract, negligent misrepresentation, fraud, and a Tennessee Consumer Protection Act (TCPA) claim. The trial court granted Defendants summary judgment on the breach of contract, breach of warranty, and negligent misrepresentation claims. After a trial, the jury returned a verdict for Plaintiff on the fraud and TCPA claims and awarded compensatory and punitive damages. The trial court entered judgment on the jury's verdicts and awarded Plaintiff attorney's fees. On appeal, the court of appeals ruled in favor of Defendants and against Plaintiff, concluding that the economic loss doctrine barred the fraud claim and that the claim under the TCPA was barred as a matter of law. The Supreme Court set aside Plaintiff's award of attorney's fees and costs based on the TCPA and otherwise affirmed, holding that because Plaintiff's TCPA claim failed as a matter of law, the award of attorney's fees and costs under the TCPA could not stand. View "Milan Supply Chain Solutions, Inc. v. Navistar, Inc." on Justia Law
Ingram Barge Co., LLC v. Zen-Noh Grain Corp.
Zen-Noh purchased grain shipments. Sellers were required to prepay barge freight and deliver the product to Zen-Noh’s terminal but were not required to use any specific delivery company. Ingram, a carrier, issued the sellers negotiable bills of lading, defining the relationships of the consignor (company arranging shipment), the consignee (to receive delivery), and the carrier. Printed on each bill was an agreement to "Terms” and a link to the Terms on Ingram’s website. Those Terms purport to bind any entity that has an ownership interest in the goods and included a forum selection provision selecting the Middle District of Tennessee.Ingram updated its Terms and alleges that it notified Zen-Noh through an email to CGB, which it believed was “closely connected with Zen-Noh,” often acting on Zen-Noh's behalf in dealings related to grain transportation. Weeks after the email, Zen-Noh sent Ingram an email complaining about invoices for which it did not believe it was liable. Ingram replied with a link to the Terms. Zen-Noh answered that it was “not party to the barge affreightment contract as received in your previous email.” The grains had been received by Zen-Noh, which has paid Ingram penalties related to delayed loading or unloading but has declined to pay Ingram's expenses involving ‘fleeting,’ ‘wharfage,’ and ‘shifting.’” Ingram filed suit in the Middle District of Tennessee. The Sixth Circuit affirmed the dismissal of the suit. Zen-Noh was neither a party to nor consented to Ingram’s contract and is not bound to the contract’s forum selection clause; the district court did not have jurisdiction over Zen-Noh. View "Ingram Barge Co., LLC v. Zen-Noh Grain Corp." on Justia Law
Hewlett-Packard Co. v. Oracle Corp.
In 2010, after decades of cooperation in selling their hardware and software, HP and Oracle had a disagreement over Oracle’s decision to hire HP’s former CEO. The companies negotiated a confidential settlement agreement, including a “reaffirmation clause,” stating each company’s commitment to their strategic relationship and support of their shared customer base. Six months later, Oracle announced it would discontinue software development on one of HP’s server platforms.The trial judge held that the reaffirmation clause requires Oracle to continue to offer its product suite on certain HP server platforms until HP discontinues their sale. A jury subsequently found that Oracle had breached both the express terms of the settlement agreement and the implied covenant of good faith and fair dealing; it awarded HP $3.014 billion in damages. The court denied HP’s request for prejudgment interest. The court of appeal affirmed. The reaffirmation clause requires Oracle to continue to offer its product suite on certain HP server platforms. The trial court did not err in submitting to the jury the breach of contract and implied covenant claims. The court rejected Oracle’s argument that the judgment must be reversed based on violations of its constitutional right to petition and because HP’s expert’s testimony on damages was impermissibly speculative under California law and should have been excluded. View "Hewlett-Packard Co. v. Oracle Corp." on Justia Law
KR Enterprises, Inc. v. Zerteck Inc
Evergreen manufactured RVs and sold 21 RVs to several affiliated Boat-N-RV dealers. After delivering those RVs, Evergreen went out of business. The invoices for the 21 RVs totaled $808,663. The dealers resold at least 20 of them to retail customers but did not pay Evergreen or its secured creditor. Evergreen’s lender, with a first-priority blanket security interest in all Evergreen assets, including accounts receivable, filed suit. The lender assigned its rights to Evergreen’s owner.The district court found that the lender’s successor had standing as a secured party and had proven that the dealers had breached the contracts. The court granted the dealers certain setoffs for warranty and rebate claims, and denied prejudgment interest on the net amounts the dealers owed. The Seventh Circuit affirmed. The parties did not intend to erase the security interest at the heart of the transaction and the assignment transferred a priority security interest in the RVs, making the successor the proper plaintiff. Holding the dealers liable for the purchase prices of the RVs but to allowing them setoffs for the rebates and warranty payments that Evergreen ow was the right solution for Evergreen’s failures to pay rebates and warranty obligations; the dealers were not entitled to setoffs for diminished value. View "KR Enterprises, Inc. v. Zerteck Inc" on Justia Law
Carhartt, Inc. v. Innovative Textiles, Inc.
In 2009, Carhartt contracted with Innovative to create a flame-resistant fleece fabric for use in its line of flame-resistant garments. The fabric that Innovative developed for Carhartt, “Style 2015," contained a modacrylic fiber, “Protex-C.” Innovative agreed that it would conduct flame-resistance testing on the Style 2015 fabric before shipping it to Carhartt, using the industry-standard test, ASTM D6413. Carhartt sent Innovative emails in 2008, 2010, 2011, 2012, and 2013 stating that Carhartt would do “regular, random testing on the product that is received.” Carhartt performed visual inspections but did not conduct flame-resistance testing until 2016. The Style 2015 fabric failed the D6413 test. Carhartt notified Innovative, which then conducted its own testing and concluded that Style 2015 fabrics dating back to 2014 did not pass flame-resistance testing. In 2013, Innovative stopped using Protex-C and began using a different modacrylic fiber without notice to Carhartt.The district court granted Innovative summary judgment on Carhartt’s negligence, fraud, misrepresentation, false advertising claims. breach of contract and warranty claims. The court reasoned that Carhartt did not notify Innovative of the suspected breach within a reasonable amount of time after Carhartt should have discovered the defect, as required by Michigan’s Uniform Commercial Code. The Sixth Circuit reversed. Reasonable minds could differ as to whether Carhartt should have discovered the breach sooner by performing regular, destructive fire-resistance testing on the fabric. View "Carhartt, Inc. v. Innovative Textiles, Inc." on Justia Law