Justia Commercial Law Opinion Summaries

The landlord is a four-member LLC with a single asset--a building in downtown Napa. The tenant, Stone Brewing, a large beer brewing and retail corporation, operates a brewpub in the building. Stone Brewing did not pay rent for several months during the pandemic. The landlord sued for unlawful detainer. Stone argued it was excused from paying rent because COVID-19 regulations and business interruptions triggered a force majeure provision in its lease.The trial court granted the landlord summary judgment, finding that the force majeure provision only excused performance if the claiming party was unable to meet its obligations due to factors outside its control; the tenant admitted during discovery it had the financial resources to pay rent during the period of the COVID-19 regulations but simply refused to do so. The court of appeal affirmed. The force majeure provision does not apply where the tenant had the ability to meet its contractual obligations but chooses not to perform due to financial constraints. The plain meaning of the force majeure provision does not support an interpretation that ties a party’s obligation to pay rent to its profitability or revenue stream instead of a delay or interruption caused by the force majeure event itself. View "West Pueblo Partners, LLC v. Stone Brewing Co., LLC" on Justia Law

Acuity operates a website that connects people looking to buy or sell homes with a local real estate agent. Acuity’s services are free to home buyers and sellers but realtors pay a fee for referrals. The real-estate broker that employed Lewis, a real estate agent, signed up to receive Acuity’s referrals. The broker required its agents (including Lewis) to pay Acuity’s fee out of their commissions from home sales. Lewis sued, alleging that Acuity makes false claims to home buyers and sellers on its website and that this false advertising violates the Lanham Act, 15 U.S.C. 1125(a)(1)(B).The Sixth Circuit affirmed the dismissal of the suit. The Lanham Act provides a cause of action only for businesses that suffer commercial injuries (such as lost product sales) from the challenged false advertising. The Act does not provide a cause of action for customers who suffer consumer injuries (such as the cost of a defective product) from false advertising. Lewis alleges that type of consumer harm as his injury from Acuity’s allegedly false advertising: He seeks to recover the referral fee (that is, the price) he paid for Acuity’s services. View "Lewis v. Acuity Real Estate Services, LLC" on Justia Law

Liposomal bupivacaine is a nonopioid pain medication that Pacira manufactures under the name EXPAREL; it is a local anesthetic administered at the time of surgery to control post-surgical pain. As of 2020, EXPAREL sales represented nearly all of Pacira’s total revenue. Pacira complains that the defendants, the American Society of Anesthesiologists, its journal, its editor, and authors published statements in a variety of forms, conveying their view that EXPAREL is “not superior” to standard analgesics or provides “inferior” pain relief.The Third Circuit affirmed the dismissal of Pacira’s suit for trade libel. Opinion statements are generally nonactionable. A “fair and natural” reading of the statements at issue shows that these are nonactionable subjective expressions. Pacira’s allegations boil down to disagreements about the reliability of the methodology and data underlying the statements; “a scientific conclusion based on nonfraudulent data in an academic publication is not a ‘fact’ that can be proven false through litigation.” Pacira failed to identify any aspect of the Articles, a Continuing Medical Education program, or a Podcast that “bring their conclusions outside the protected realm of scientific opinion.” View "Pacira Biosciences Inc v. American Society of Anesthesiologists Inc" on Justia Law

In 2014, EMS entered into a payment processing agreement with Procom, a business owned by Gaal that sold historical tours. The Agreement was executed by Gaal, who signed a personal-guaranty provision. It contained terms relating to “chargebacks,” which occurred when a Procom customer’s transaction was declined or canceled after EMS had credited Procom’s account for the purchase; EMS repaid the money to the Procom customer, then charged Procom for that money plus a fee. In 2019, EMS and Procom executed a second agreement, which contained an explicit integration clause; the guaranty provision was not signed by Gaal but by another Procom employee. During the COVID-19 pandemic, many customers canceled purchases with Procom, resulting in $10 million in chargebacks. Procom is involved in Chapter 7 bankruptcy proceedings. EMS filed a creditor’s proof of claim and sued Gaal. The district court dismissed for failure to state a claim, finding that the 2019 Agreement superseded the 2014 agreement “in all material respects,” including replacing Gaal’s guaranty.The Sixth Circuit affirmed in part, upholding the district court’s consideration of the bankruptcy filing for purposes of determining when chargebacks occurred and its finding that the 2019 Agreement replaced the 2014 Agreement rather than merely supplementing it. The court reversed in part, holding that any chargeback related to transactions occurring before the execution of the 2019 Agreement arose under the 2014 Agreement. View "Electronic Merchant Systems LLC v. Gaal" on Justia Law

In 2006, Price approached Marcone about using e-commerce in the appliance parts industry. Price and Marcone entered into a non-disclosure agreement while evaluating the concept, but no partnership resulted. Price then created PartScription. Both companies sell appliance replacement parts online. In 2017, Price restarted talks with Marcone. In 2018, Marcone’s CEO proposed that PartScription and Marcone form a “50-50” partnership. Price accepted, and they shook hands on the idea. Price drafted a term sheet for the contemplated partnership. The first line sheet states “PartScription and Marcone (PSM) have agreed to form a partnership/joint venture to serve the independent hardware industry.” Negotiations continued. During a conference call, Marcone representatives purportedly “stated that they approved of the terms,” and offered one change regarding a joint bank account. Days later Price sent a follow-up email saying that his notes indicated “Marcone ha[d] approved the terms outlined in the draft PSM term sheet” and asking whether they needed to memorialize the agreement. No further memorialization took place. Marcone's representatives became unresponsive.In 2021, PartScription filed suit. The Seventh Circuit affirmed the dismissal of the suit. PartScription’s complaint fails to plausibly allege a valid contract; any amendment would be futile. The only documentation speaks of general goals— not obligations—and fails to identify definite and certain binding terms. View "KAP Holdings, LLC v. Mar-Cone Appliance Parts Co." on Justia Law

TURSS provided background and credit screening services to property management professionals and landlords through its online platforms and undertook to build an online platform to sell customizable electronic lease forms. TURSS sent Helix a letter of intent that the platform would be completed in 2009. The companies entered into a five-year marketing agreement that required TURSS to provide the platform and Helix to provide the product. TURSS would receive 35% of the revenue generated from sales and Helix would receive 65%. The agreement was not exclusive. Helix provided electronic forms and supporting materials to TURSS but the platform was still not completed in 2015.Helix sued TURSS for“willful and intentional” breach of contract, fraud, negligent misrepresentation, and promissory estoppel. The court ultimately granted TURSS summary judgment. The appellate court and Illinois Supreme Court reversed, finding that Helix failed to present proof of its damages with reasonable certainty. Helix did not present evidence of revenues of a similar product or a similar business in a similar market. Where a plaintiff seeks lost profits for a new company, "without a track record of profit, attempting to sell a new and untested product to a new market,” the specter of impermissible speculation arises. View "Ivey v. Transunion Rental Screening Solutions Inc." on Justia Law

Walworth, a former stockholder, sued Mu Sigma, a privately held data analytics company, and Rajaram, the company’s founder, CEO, and board chairman, alleging that after reaping the benefits of Walworth’s $1.5 million investment and reputational capital, the defendants embarked on a fraudulent scheme to oust Walworth of its substantial ownership interest in the company.The Cook County circuit court dismissed the complaint, citing the stock repurchase agreement (SRA), which included anti-reliance and general release provisions. The appellate court reversed, holding that the anti-reliance language was ambiguous. The Illinois Supreme Court reinstated the dismissal, stating that “the broad and comprehensive release agreed to by [Walworth], a sophisticated party represented by experienced counsel, unambiguously encompasses” the unjust enrichment and breach of contract claims. The bargained-for anti-reliance provisions reflected the understanding that there may be undisclosed information but that Walworth was satisfied by the information provided. Walworth had direct access to Rajaram to negotiate the arm’s-length transaction at issue and Rajaram was not acting as a fiduciary for Walworth. A corporation owes no fiduciary duty to its shareholder and Delaware law does not impose “an affirmative fiduciary duty of disclosure for individual transactions.” View "Walworth Investments-LG, LLC v. Mu Sigma, Inc." on Justia Law

Caudill's subsidiary develops nutritional supplements. Jarrow, a dietary-supplement company, solicited Ashurst, Caudill’s Director of Research, who had extensively researched the development of broccoli-seed derivatives at issue. Ashurst had signed Non-Disclosure, Non-Competition, and Secrecy Agreements, and annually signed Caudill’s employee handbook, which barred him from disclosing Caudill’s trade secrets or other confidential information. In April 2011, Ashurst, still a Caudill employee, emailed Jarrow confidential Caudill documents. Days later, Jarrow requested a file of the pertinent data. Ashurst sent a physical disc. On May 1, Ashurst began to work for Jarrow. Ashurst then submitted his resignation to Caudill. Ashurst’s Agreement with Jarrow indicated that Jarrow hired him to mimic his work for Caudill, Ashurst proposed that Jarrow adopt the process that Caudill used to manufacture the raw materials for its BroccoMax supplement. Jarrow brought an activated broccoli product into commercial production four months after hiring Ashurst. From 2012-2019, Jarrow earned $7.5 million in sales of their BroccoMax-type product.In a suit under the Kentucky Uniform Trade Secrets Act, the Sixth Circuit affirmed a judgment of $2,427,605 in damages awarded by the jury, $1,000,000 in exemplary damages, $3,254,303.50 in attorney fees, and $69,871.82 in costs against Jarrow. The court rejected arguments that Caudill failed to define one of its Trade Secrets adequately, failed to show that Jarrow acquired that Trade Secret; and did not introduce sufficient evidence attributing its damages to that misappropriation, as well as challenges to the awards of damages. View "Caudill Seed & Warehouse Co. Inc. v. Jarrow Formulas, Inc." on Justia Law

Stackpole (Purchaser) makes car parts. Precision (Seller) makes automotive subcomponents. In 2014, Seller gave Purchaser quotes on pumps, making “[a]cceptance of order” subject to APQP [Advanced Product Quality Planning Review]. Purchaser issued a “Letter of Intent” to buy 1.1 million 10R/10L shafts and 306,000 Nano shafts. Seller's employee signed the letter, which provided that Purchaser would issue purchase orders for actual shipments. The purchase orders contained six pages of supplemental terms, allowing Purchaer to “terminate . . . this contract, at any time and for any reason, by giving written notice,” and providing that purchase orders would “not become binding” until the additional provisions were “signed and returned.” Seller did not sign the purchase orders but shipped parts to Purchaser for two years. In 2017, Seller stated that it needed a price increase or it would have to halt production. Purchaser agreed to price increases “under duress and protest,” then sued for breach of contract. Seller counterclaimed, alleging that Purchaser had impermissibly withheld its approval to make the parts by an automatic rather than manual process.The district court awarded Purchaser summary judgment, finding the parties had formed a contract “for successive performances.” “indefinite in duration.” Michigan law makes such contracts presumptively terminable upon “reasonable notification” A jury awarded $1 million. The Sixth Circuit affirmed. The Letter of Intent constituted a contract, notwithstanding the failure to engage in APQP. No contextual factor suggests a right to terminate the Letter of Intent without notice. View "Stackpole International Engineered Products, Ltd.. v. Angstrom Automotive Group, LLC" on Justia Law

PSI helps customers bring products to market. P.B. contacted PSI for assistance with the design, manufacture, and distribution of a custom cosmetics bag (Orgo Bag). PSI submitted a purchase order to its Chinese manufacturers indicating that P.B. would purchase 100,000 Orgo Bags in the first year and purchase another 1.5 million bags annually thereafter. During the first 18 months, P.B. purchased only 38,296 Orgo Bags. PSI directed the Chinese manufacturer to mitigate its losses and liquidate any materials it had purchased for the Orgo. The failure of the Orgo cost PSI $506,129.44. In 2019, PSI sued P.B., Aldez, Copek, and Byrne, alleging breach of contract, promissory estoppel, fraud, silent fraud, negligent misrepresentation, innocent misrepresentation, and non-acceptance of conforming goods under the U.C.C. The court dismissed Copek, Byrne, and Aldez but permitted some claims against P.B. to continue.In 2021, PSI sued Aldez for breach of contract, promissory estoppel, and nonacceptance of conforming goods, arguing that in the 2019 suit, its claims were pleaded directly against Aldez, whereas in the 2021 suit, it sought to pierce P.B.’s corporate veil and hold Aldez vicariously liable. The district court dismissed, citing res judicata. The Sixth Circuit affirmed. The complaint does not allege any wrongdoing by Aldez and corporate veil piercing is not a cause of action under Michigan law; the 2021 suit’s complaint fails to state a claim. View "Product Solutions International, Inc. v. Aldez Containers, LLC" on Justia Law