Justia Commercial Law Opinion Summaries

Plaintiff, a seller seeking damages from a buyer that breached contracts to purchase goods, argued at trial that it was entitled to recover its market price damages. The trial court determined that plaintiff was entitled to the lesser of its market price damages or its resale price damages, and the court ultimately awarded plaintiff its resale price damages. The Court of Appeals reversed and remanded, because the it determined that plaintiff could recover its market price damages, even though it had resold some of the goods at issue. Upon review of the matter, the Supreme Court agreed that plaintiff was entitled to recover its market price damages, even if those damages exceeded plaintiff's resale price damages. View "Peace River Seed Co-Op v. Proseeds Marketing" on Justia Law

Williams Alaska Petroleum owned and operated a refinery, which ConocoPhillips Alaska supplied with crude oil. ConocoPhillips demanded that Williams tender a payment of $31 million as adequate assurances of Williams’s ability to perform if an ongoing administrative rate-making process resulted in a large retroactive increase in payments that Williams would owe ConocoPhillips under the Exchange Agreement. ConocoPhillips offered to credit Williams with a certain rate of interest on that principal payment against a future retroactive invoice. Williams transferred the principal of $31 million but demanded, among other terms, credit corresponding to a higher rate of interest. Williams stated that acceptance and retention of the funds would constitute acceptance of all of its terms. ConocoPhillips received and retained the funds, rejecting only one particular term in Williams’s latest offer but remaining silent as to which rate of interest would apply. Years later, after the conclusion of the regulatory process, ConocoPhillips invoiced Williams retroactively pursuant to their agreement. ConocoPhillips credited Williams for the $31 million principal already paid as well as $5 million in interest calculated using the lower of the two interest rates. Williams sued ConocoPhillips, arguing that a contract had been formed for the higher rate of interest and that it was therefore owed a credit for $10 million in interest on the $31 million principal. The superior court initially ruled for Williams, concluding that a contract for the higher rate of interest had formed under the Uniform Commercial Code when ConocoPhillips retained the $31 million while rejecting one offered term but voiced no objection to Williams’s specified interest term. On reconsideration, the superior court again ruled for Williams, this time determining that a contract for the higher rate of interest had formed based on the behavior of the parties after negotiation under the UCC, or, in the alternative, that Williams was entitled to a credit for a different, third rate of interest in quantum meruit. The superior court also ruled in favor of Williams on all issues related to attorney’s fees and court costs. ConocoPhillips and Williams both appealed. Upon review, the Supreme Court concluded that the superior court was right the first time and that the parties entered into a contract for the higher rate of interest under the UCC. View "ConocoPhillips Alaska, Inc. v. Williams Alaska Petroleum, Inc." on Justia Law

Appellant Farmers National Bank (FNB) appealed the district court's grant of declaratory judgment in favor of Green River Dairy, LLC, and four commodities dealers: Ernest Carter, Lewis Becker, Jack McCall, and Hull Farms (Sellers). FNB argued the district court misinterpreted I.C. 45-1802 (a statutory lien provision) and as a result, erred in granting Sellers a priority lien on collateral securing a loan previously made by FNB. Upon review, the Supreme Court agreed with FNB about the misinterpretation and vacated the district court's grant of declaratory judgment in favor of the Sellers. View "Farmers Nat'l Bank v. Green River Dairy" on Justia Law

Newman Park, LLC was formed for the sole purpose of developing a piece of property. In 2004, it took out a loan to purchase the property at issue in this suit. In 2008, without knowledge of the other owners in Newman Park, one member went to Columbia Community Bank and requested a loan for his 95%-owned company, Trinity. Trinity had nothing to do with Newman Park, but the Bank's loan to Trinity was secured by a second deed of trust on the Newman Park property. The issue before the Supreme Court in this case was whether the Bank, who was tricked into refinancing the property that the borrower lacked authority to pledge as security, could benefit from equitable subrogation when that Bank had no preexisting interest in the property. The property-owner/debtor argued that the Bank's lack of the preexisting interest barred it from equitable subrogation because of the "volunteer rule" which would characterize it as an intermeddler. The Court rejected the volunteer rule as a bar to equitable subrogation. The Court affirmed the appellate court which held that the defrauded Bank was entitled to be equitably subrogated as first priority lienholder.View "Columbia Cmty. Bank v. Newman Park, LLC" on Justia Law

Until 2001 Dean and Suiza competed to process and sell bottled milk to retailers. Suiza was the largest U.S. processor of milk and Dean was the second largest. Both purchased raw milk from other entities. DFA, a dairy farmer cooperative, was Suiza’s primary supplier and business partner. Dean obtained its raw milk predominantly from independent farmers. Dean and Suiza merged in 2001, becoming Dean Foods, hoping to obtain “distribution efficiencies and economies of scale,” for millions of dollars in cost savings. Certain agreements were negotiated, with input from the Department of Justice, which approved the proposed merger, subject to divestment of particular milk processing plants. Retailers of processed milk sued, charging violation of 15 U.S.C. 1, the Sherman Antitrust Act, by conspiring with a raw milk supplier-milk processor and the purchaser of the divested processing facilities to divide markets and restrict output. The district court granted summary judgment in favor of Dean Foods, finding insufficient proof of injury and failure to establish the relevant antitrust geographic market, primarily because plaintiff’s expert’s testimony was excluded. The Sixth Circuit reversed and remanded, holding that the expert should not have been excluded and that the conclusions regarding injury were based on flawed propositions. View "Food Lion, LLC v. Dean Foods Co." on Justia Law

Levi Strauss has stitched the back pocket of its jeans with the “Arcuate” design since 1873 and holds multiple trademarks on the design. In 2005, Abercrombie sought to register a “mirror image stitching design” for use on clothing, stating no limitations on the goods’ nature, type, channels of trade, or class of purchasers. Levi Strauss initiated an opposition to the parent application (concerning jackets and seeking Principal Registration). Levi Strauss petitioned to cancel Supplemental Registration of the child application covering other clothing. Abercrombie began selling “Ruehl jeans” with the design. Levi Strauss sued. The PTO stayed proceedings. Abercrombie claimed that its products were sold in different channels, at different prices. A jury found no infringement; the court rejected a claim of dilution by blurring. Levi Strauss did not appeal concerning infringement. The Ninth Circuit remanded, holding that dilution by blurring does not require identity or near identity of marks. Meanwhile, Abercrombie shut down the Ruehl brand, but sought to register its mirror-image design on “clothing, namely bottoms,” disclosing use of the design on denim shorts sold as “Gilley Hicks,” at different prices, and through different channels. Levi Strauss sought to amend to include the Gilley Hicks products. The district court declined and dismissed the dilution claim. The PTO opposition and cancellation proceedings were dismissed on the ground of issue preclusion. The Federal Circuit reversed, reasoning that the registrations at issue in the PTO cover a broader range of uses than were the subject of the litigation. View "Levi Strauss & Co. v. Abercrombie & Fitch Trading Co." on Justia Law

Immunosciences developed and sold medical tests and testing materials. In 2007, NeuroSciences wanted to expand its offerings. Immunosciences and NeuroScience decided to collaborate, but the relationship fell apart within two years. Immunosciences sued. In the first trial, a jury rejected a claim that NeuroScience did not pay what it had contracted to pay for medical testing materials, but the district judge ordered a new trial, concluding that the verdict was undermined by flawed special verdict questions. The jury in the second trial found for Immunosciences but awarded much less money than it was seeking. NeuroScience appealed, claiming that the court’s grant of a new trial was an abuse of discretion. Immunosciences argued that the court abused its discretion by allowing NeuroScience to argue in the new trial that the parties had orally modified their written contract and that NeuroScience breached a separate confidentiality agreement by continuing to use Immunosciences’ testing methods after the parties ended their business relationship. The jury in the first trial had awarded nearly $1.2 million on that claim, but the district court granted judgment as a matter of law for NeuroScience, explaining that Immunosciences had relied on an impermissible damages theory. The Seventh Circuit affirmed. View "Vojdani v. Pharmasan Labs, Inc." on Justia Law

Sasafrasnet, an authorized distributor of BP products, provided Joseph with notice of its intent to terminate his franchise based on three occasions when Sasafrasnet attempted to debit Joseph’s bank account to pay for fuel deliveries but payment was denied for insufficient funds. The district court denied Joseph a preliminary injunction, finding that Joseph failed to meet his burden for a preliminary injunction under the Petroleum Marketing Practices Act 15 U.S.C. 2805(b)(2)(A)(ii). After a remand, the district court found that two of Joseph’s NSFs should count as “failures” under the PMPA justifying termination, at least for purposes of showing that he was not entitled to preliminary injunctive relief. The Seventh Circuit affirmed. Joseph’s bank account was not adequately funded for the debit on two occasions because Joseph had decided to change banks, circumstances entirely within Joseph’s control. Given Joseph’s history of making late payments in substantial amounts because of insufficient funds (each was more than $22,000), the delinquent payments were not “technical” or “unimportant.” View "Joseph v. Sasafrasnet, LLC" on Justia Law

Med‐1 buys delinquent debts and purchased Suesz’s debt from Community Hospital. In 2012 it filed a collection suit in small claims court and received a judgment against Suesz for $1,280. Suesz lives one county over from Marion. Though he incurred the debt in Marion County, he did so in Lawrence Township, where Community is located, and not in Pike Township, the location of the small claims court. Suesz says that it is Med‐1’s practice to file claims in Pike Township regardless of the origins of the dispute and filed a purported class action under the Fair Debt Collection Practices Act venue provision requiring debt collectors to bring suit in the “judicial district” where the contract was signed or where the consumer resides, 15 U.S.C. 1692i(a)(2). The district court dismissed after finding Marion County Small Claims Courts were not judicial districts for the purposes of the FDCPA. The Seventh Circuit affirmed.View "Suesz v. Med-1 Solutions, LLC" on Justia Law

In 2009, to “preserve Delaware’s pre-eminence in offering cost-effective options for resolving disputes, particularly those involving commercial, corporate, and technology,” Delaware granted the Court of Chancery power to arbitrate business disputes. That Court then created an arbitration process as an alternative to trial for certain disputes, 10 DEL. CODE tit. 10, 349; Del. Ch. R. 96-98. To qualify for arbitration, at least one party must be a business entity formed or organized under Delaware law, and neither can be a consumer. Arbitration is limited to monetary disputes that involve an amount of at least one million dollars. The fee for filing is $12,000, and the arbitration costs $6,000 per day after the first day. Arbitration begins approximately 90 days after the petition is filed. The statute and rules bar public access. Arbitration petitions are confidential and are not included in the public docketing system. Attendance at proceedings is limited to parties and their representatives, and all materials and communications produced during the arbitration are protected from disclosure in judicial or administrative proceedings. The Coalition challenged the confidentiality provisions. The district court found that Delaware’s proceedings were essentially civil trials that must be open to the public, under the First Amendment. The Third Circuit affirmed. View "Delaware Coal. for Open Gov't v. Strine" on Justia Law