Justia Commercial Law Opinion Summaries

The Supreme Court reversed the rulings of the circuit court denying Bridgecrest Acceptance Corporation's motions to dismiss or stay the counterclaims against it and to compel the matters to arbitration pursuant to an arbitration agreement, holding that the arbitration agreement was legally valid, conscionable, and not precluded by collateral estoppel.In two separate cases, Bridgecrest sought a deficiency judgment against consumers who had defaulted on car payments. The consumers brought counterclaims, raising putative class claims for unlawful and deceptive business practices. Bridgecrest moved to stay or dismiss the consumers' counterclaims and compel arbitration pursuant to the arbitration agreements signed by the consumers when buying their vehicles. The circuit court overruled the motions in both cases. The Supreme Court reversed, holding that the circuit court erred in refusing to compel arbitration. View "Bridgecrest Acceptance Corp. v. Donaldson" on Justia Law

Turo, an Internet-based platform, allows vehicle owners to list, and customers to rent, specific passenger vehicles, processes reservations and payments and retains a percentage of the proceeds of each rental transaction. Turo provides a liability insurance policy through a third-party insurer. Turo competes with traditional on-airport and off-airport rental car companies and has used phrases like “rent” and “rental car” in its advertisements.The government sued Turo under the Unfair Competition Law (Bus. & Prof. Code 17200) for operating a rental car business at SFO without the required permit, engaging in prohibited curbside transactions at SFO, and using airport roadways and offering services on airport property without permission. Turo sought a declaratory judgment that it is not a rental car company and alleged that SFO had unlawfully demanded that Turo obtain an off-airport rental car company permit, and pay fees that SFO is authorized to charge only “rental car companies” under Government Code 50474.1(a).The court of appeal held that Turo is not a rental car company. That term is not defined in the Government Code but is defined in nearly identical language in three separate California statutes to mean a person or entity in the business of renting passenger vehicles to the public. A rental car company has control over the vehicles in its fleet in a way Turo does not View "Turo v. Superior Court of the City and County of San Francisco" on Justia Law

The Supreme Court held that the application the Fair Practices of Equipment Manufacturers, Distributors, Wholesalers, and Dealers Act, Tex. Bus. & Com. Code 57.001-.402, in this case did not violate the constitutional prohibition against retroactive laws in Tex. Const. art. I, 16.In the 1990s, Fire Protection Service, Inc. (FPS), orally agreed to be an authorized dealer and servicer of the life rafts manufactured by Survitec Survival Products, Inc. Nearly six years after the promulgation of the Act, which prohibits a supplier from terminating a dealer agreement without good cause, Survitec notified FPS that it was terminating their relationship. FPS sued for a violation of the Act. The district court entered judgment for Survitec. On appeal, the Fifth Circuit certified a question to the Supreme Court. The Supreme Court answered that the application of the Act to the parties' agreement does not violate the retroactivity clause in article I, section 16. View "Fire Protection Service, Inc. v. Survitec Survival Products, Inc." on Justia Law

NOCO manufactures and sells battery chargers and related products. Although it sells these products itself, NOCO also authorizes resellers if they sign an agreement. NOCO discovered that OJC was selling NOCO’s products on Amazon without authorization. NOCO complained to Amazon that OJC was selling NOCO’s products in violation of Amazon’s policy. Around the same time, another company (Emson) also complained to Amazon about OJC. Amazon asked OJC for proof that it was complying with its policy concerning intellectual property rights. OJC did not provide adequate documents. Amazon temporarily deactivated OJC’s account.OJC claimed that NOCO submitted false complaints, and sued for defamation, tortious interference with a business relationship, and violation of the Ohio Deceptive Trade Practices Act. The Sixth Circuit affirmed the summary judgment rejection of OJC’s claims. To succeed on those claims, OJC must establish that NOCO was the proximate cause of its injury. It cannot do this because three intervening causes broke the causal chain, relieving NOCO of any liability: Emson’s complaint, Amazon’s independent investigation and decision, and OJC’s opportunity to prevent the harm to itself. View "NOCO Co. v. OJ Commerce, LLC" on Justia Law

The Court of Appeals answered a certified question of law by holding that Md. Code Comm. Law (CL) 12-1018(b) requires a credit grantor that is found to have knowingly violated Credit Grantor Closed End Credit Provisions (CLEC), CL 12-1001 et seq., to forfeit three times the amount of interest, fees, and charged collected in violation of the subtitle.This case concerned a borrower who purchased a motor vehicle and financed it by closed end credit pursuant to an agreement governed by CLEC. The federal district court issued a certified question of law regarding the calculation of damages under CL 12-1018(b). The Court of Appeals held that, based upon prior caselaw regarding CLEC, a plain language analysis of CL 12-1018(b), and a review of the pertinent legislative history, CL 12-1018(b) requires a credit grantor who has knowingly violated the CLEC to forfeit three times the amount of interest, fees, and charges collected in violation of CL 12-1018(b). View "Lyles v. Santander Consumer USA Inc." on Justia Law

The Supreme Court granted a writ of prohibition sought by Thornhill Motor Care, Inc. to prevent the Circuit Court of Mingo County from enforcing its order denying Petitioner's motion to dismiss based on improper venue, holding that Thornhill established that it was entitled to the writ.Moore Chrysler, Inc. brought this action against Thornhill in Mingo County, alleging violations of W. Va. Code 17A-6A-1 to -18 and seeking declaratory and injunctive relief. Thornhill moved to dismiss the complaint pursuant to W. Va. R. Civ. P. 12(b)(3) on the basis of improper venue, asserting that the proper venue for this lawsuit was in Logan County pursuant to the general venue statute, W. Va. Code 56-1-1. The circuit court denied the motion, basing its ruling on a specific venue statute, W. Va. Code 17A-6A-12(3), which governs declaratory judgment actions brought by new motor vehicle dealers against manufacturers or distributors. Thornhill then sought the writ of prohibition at issue. The Supreme Court granted the writ, holding that the circuit court committed clear legal error in applying section 17A-6A-12(3) rather than section 56-1-1. View "Thornhill Motor Car, Inc. v. Honorable Miki Thompson" on Justia Law

In this commercial dispute, the Supreme Court affirmed the final judgment of the superior court in favor of Defendants based on Plaintiffs' failure to comply with orders to provide discovery, holding that there was no error.The parties in this case executed a contract providing that Defendants would sell finished fiberglass products manufactured by Plaintiffs. Plaintiffs later filed a complaint alleging that Defendants had failed to pay upon delivery of goods and that Defendants conspired to deprive Plaintiffs of profits and sales commission. The trial justice eventually granted Defendants' motion for entry of final judgment, referencing Plaintiffs' failure timely to respond to discovery requests and their failure to comply with superior court orders. The Supreme Court affirmed, holding that the trial justice did not abuse his discretion when he dismissed Plaintiffs' complaint and entered judgment in favor of Defendants. View "EdgengG (Private), Ltd. v. Fiberglass Fabricators, Inc." on Justia Law

Davenport, convicted of first-degree murder following a jury trial where he sat shackled at a table with a “privacy screen,” argued that his conviction should be set aside because the Due Process Clause generally forbids such shackling absent “a special need.” On remand, the trial court conducted a hearing; jurors testified that the shackles had not affected their verdict. The federal district court found habeas relief unwarranted under the Antiterrorism and Effective Death Penalty Act (AEDPA), 28 U.S.C. 2254(d). The Sixth Circuit reversed without analyzing the case under AEDPA.The Supreme Court reversed. When a state court has ruled on the merits of a prisoner’s claim, a federal court cannot grant habeas relief without applying both the Supreme Court's "Brecht" test and AEDPA. Brecht held that the harmless-error rule for direct appeals was inappropriate for federal habeas review of final state-court judgments. A state prisoner must show that a state court's error had a “substantial and injurious effect or influence” on the trial’s outcome, AEDPA instructs that if a state court has adjudicated the petitioner’s claim on the merits, a federal court “shall not” grant habeas relief “unless” the state court’s decision was “contrary to” or an “unreasonable application of” clearly established federal law, as determined by the Supreme Court, or based on an “unreasonable determination of the facts” presented in the state-court proceeding.The Court rejected Davenport’s argument that the AEDPA inquiry represents a logical subset of the Brecht test, so the Sixth Circuit necessarily found that he satisfied AEDPA. AEDPA asks whether every fair-minded jurist would agree that an error was prejudicial, Brecht asks only whether a federal habeas court itself harbors grave doubt about the verdict. The legal materials a court may consult when answering each test also differ. Even assuming that Davenport’s claim can survive Brecht, he cannot satisfy AEDPA. Nothing in Supreme Court precedent is inconsistent with the Michigan Court of Appeals’ reliance on post-trial testimony from actual jurors. View "Brown v. Davenport" on Justia Law

Following the merger of Centene Corporation ("Centene") and Health Net, Inc. ("Health Net)," certain shareholders of Centene (collectively, Plaintiffs) brought five claims on behalf of the corporation against certain of its former and then-current directors and officers and nominal defendant Centene (collectively, Defendants). Plaintiffs did not make a pre-suit demand on Centene's Board of Directors (the Board). The district court dismissed their complaint with prejudice, finding that the plaintiffs failed to plead particularized facts demonstrating that a demand would have been futile.The Eighth Circuit found that the plaintiffs failed to plead facts showing the relevant documents contained a material misrepresentation. Further, the court did not consider the second or third claims because the plaintiffs made no argument contesting the district court's finding that a majority of the Board faces a substantial likelihood of liability. Next, the circuit court held that the plaintiffs' futility argument was patently insufficient. Finally, the circuit court found that at least half of the Board does not face a substantial likelihood of liability under the plaintiffs' insider trading claim. As such, the circuit court found the same as to plaintiffs' unjust enrichment claim pertaining to alleged insider trading. The circuit court affirmed the district court's decisions. View "Carpenters' Pension Fund of IL v. Michael Neidorff" on Justia Law

The Supreme Court reversed the judgment of the court of appeals affirming the decision of the trial court granting summary judgment in favor of Roy Elizondo and dismissing this action brought by Cadence Bank, N.A. for breach of a deposit agreement, breach of warranty under the Uniform Commercial Code (UCC), and common-law torts, holding that the lower courts erred.In response to a stranger's email for legal assistance, Elizondo, an attorney, deposited a cashier's check in his bank account then wired most of the funds to an overseas account. The check was dishonored, and the bank charged the transfer back to Elizondo, as allowed by the UCC and the parties' deposit agreement. When Elizondo refused to pay the overdrawn funds Cadence brought this action. The trial court granted summary judgment for Elizondo, and the court of appeals affirmed. The Supreme Court reversed, holding that the wire-transfer form failed to create the contractual duty urged by Elizondo. View "Cadence Bank, N.A. v. Elizondo" on Justia Law