Justia Commercial Law Opinion Summaries

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

In 2008, the U.S. Department of Commerce found that woven laminated sacks exported from China were being sold in the U.S. at less than fair market value and issued an antidumping duty order under 19 U.S.C. 1673. In 2009, Commerce initiated administrative review of that order for periods, during which AMS had imported sacks made from fabric sourced in China, undisputedly subject to the order; and sacks made from fabric imported into China from other countries. Commerce investigated, but did not initiate formal scope inquiry. AMS argued that a ruling obtained from U.S. Customs and Border Protection provided that the sacks produced from non-Chinese fabric were deemed to be from the country of origin of the fabric, not subject to the order and declared a non-Chinese origin for sacks made with non-Chinese fabric. Commerce concluded that China was the country of origin of sacks made with non-Chinese fabric under a substantial transformation analysis, then issued a “clarification” of its instructions to Customs to “suspend liquidation of all [laminated woven sacks] from [China], regardless of the origin of the woven fabric,… on or after January 31, 2008.” The Trade Court sustained application of a country-wide rate; the Federal Circuit affirmed. Following a second administrative review, the trade court held that Commerce violated its own regulations by instructing Customs to retroactively suspend liquidation of entries of the sacks made with non-Chinese fabric The Federal Circuit affirmed. View "AMS Assocs, Inc. v. United States" on Justia Law

Cross Match claimed that Suprema and Mentalix violated 19 U.S.C. 1337(a)(1)(B)(i) by importing articles that infringe or are used to infringe its patents. The International Trade Commission entered a limited exclusion order barring importation of certain optical scanning devices, finding that Mentalix directly infringed a method claim by using its own software with imported Suprema scanners and found that Suprema induced that infringement and that certain of Suprema’s imported optical scanners directly infringe other claims of the 993 patent. The Commission found no infringement of the 562 patent. The Commission held that Suprema and Mentalix failed to prove that the 993 patent was invalid as obvious over two prior art patents. The Federal Circuit vacated and remanded for revision of the order to bar only a subset of the scanners. An exclusion order based on a section 1337(a)(1)(B)(i) violation may not be predicated on a theory of induced infringement under 35 U.S.C. 271(b) where direct infringement does not occur until after importation of the articles the exclusion order would bar. View "Suprema, inc. v. Int'l Trade Comm'n" on Justia Law

With respect to Bestpak’s importation of narrow woven ribbons with woven selvedge from China, he U.S. Department of Commerce calculated a separate rate margin using a simple average of a de minimis and an adverse facts available margin, yielding a rate of 123.83%. The Court of International Trade upheld the decision. The Federal Circuit vacated and remanded, finding that substantial evidence did not support the rate. View "Yangzhou Bestpak Gifts & Crafts Co., Ltd. v. United States" on Justia Law

Hartney, a fuel oil retailer with a home office in Forest View, in Cook County, accepted purchase orders in the Village of Mark, in Putnam County, through a business with which it contracted. No Hartney employees were involved there. By so structuring sales, Hartney avoided liability for retail occupation taxes of Cook County, Forest View, and the Regional Transportation Authority. Hartney’s interpretation of the law was consistent with regulations published at the time. However, The Illinois Department of Revenue determined, through audit, that Hartney’s sales were attributable to the company’s Forest View office, rather than the Mark location reported by the company, and issued a notice of tax liability. Hartney paid penalties of $23,111,939 under protest and filed suit. The court agreed that the bright-line test for the situs of sale is where purchase orders are accepted. The appellate court affirmed. The Illinois Supreme Court, court disagreed. The court found the “Jurisdictional Questions” regulations of the Administrative Code inconsistent with the statutes and case law. The legislature has not adopted a single-factor test for the situs of retail activity. The court’s own precedent calls for fact-intensive inquiry where there is a composite of many activities, and the legislature, by consistently employing the “business of selling” language, has effectively invoked that precedent. The Department of Revenue must abate Hartney’s penalties and tax liability for the relevant period because Hartney’s actions were consistent with its regulations in effect at the time.View "Hartney Fuel Oil Co. v. Village of Forest View" on Justia Law

Apex, a manufacturer of electronics, and Sears entered into an agreement in 2003. In 2004, Sears implemented a program to create a return reserve on Apex’s account. The return reserve was an internal accounting mechanism used to place a negative dollar deduction on Apex’s account; Sears would hold back payment to Apex until the amount showing owed by Sears exceeded the amount of the reserve. In 2009 Apex filed suit, alleging that Sears breached the contract by refusing to pay $8,185,302 owed for goods delivered. The district court granted Sears summary judgment, finding that the action was barred by the four-year statute of limitations in Section 2–725 of the Uniform Commercial Code. The Seventh Circuit affirmed. Apex was on notice that Sears was not going to pay the deductions after each invoice and even marked these “wrongful” deductions in its own Invoice Report. For more than four years, Apex sat on its right to sue. View "Apex Digital, Inc. v. Sears, Roebuck & Co." on Justia Law

In Chapter 11 liquidation of KB Toys Inc. and affiliated entities, the Residual Trustee of the KBTI Trust sought to disallow certain trade claims that ASM (a company in the business of purchasing bankruptcy claims) obtained from creditors. Under 11 U.S.C. 502(d) a claim can be disallowed if a claimant receives property that is avoidable or recoverable by the bankruptcy estate. The Bankruptcy Court disallowed the claims, concluding that a claims purchaser holding a trade claim is subject to the same 502(d) challenge as the original claimant. ASM was on “constructive notice” of potential preference actions, could have discovered the potential for disallowance with “very little due diligence,” and was not entitled to protection as a “good faith” purchaser. The district court and Third Circuit affirmed, holding that a trade claim that is subject to disallowance under502(d) in the hands of the original claimant is similarly disallowable in the hands of a subsequent transferee. View "In re: KB Toys Inc." on Justia Law

Rahman filed a securities class action against KB, an importer of infant furniture and products, and individuals, alleging violation of Section 10(b) of the Securities Exchange Act and SEC Rule 10b-5 and (2) and Section 20(a) of the Exchange Act. The complaint alleged that defendants misled investors by artificially inflating KB’s stock price by issuing deceptive public financial reports and press releases dealing with compliance with customs laws and overall financial performance. A second amended complaint specified failure to disclose product recalls, safety violations, and illegal staffing practices. The district court dismissed for failure to satisfy the heightened scienter pleading standard required by the Private Securities Litigation Reform Act, 15 U.S.C. 78u-4(b)(2). The Third Circuit affirmed. View "Rahman v. Kid Brands, Inc." on Justia Law

Kraft sued Cracker Barrel Old Country Store for trademark infringement, Lanham Act, 15 U.S.C. 1051, and obtained a preliminary injunction against the sale of food products to grocery stores under the name Cracker Barrel, which is a registered trademark of Kraft. Kraft has been selling cheese in grocery stores under that name for more than 50 years. Kraft did not challenge CBOCS’s right to sell the products under the name Cracker Barrel in CBOCS’s restaurants, in its “country stores” that adjoin the restaurants, or by mail order or online. The Seventh Circuit affirmed, noting the similarity of the logos, the products, and of the channels of distribution. View "Kraft Foods Grp. Brands LLC v. Cracker Barrel Old Country Store, Inc." on Justia Law

In 2005, James Wiese attended an auction held by Alabama Powersport Auction, LLC (APA) and purchased a "Yerf Dog Go-Cart," for his two minor sons. The go-cart was on consignment to APA from FF Acquisition; however, Wiese was not aware that FF Acquisition had manufactured the go-cart. Soon after purchasing the go-cart, Wiese discovered that the engine would not operate for more than a few minutes at a time. After several failed attempts to repair the go-cart, Wiese stored the go-cart in his garage for almost two years. In 2007, Wiese repaired the go-cart. Matthew Wiese was riding the go-cart and had an accident in which he hit his head on the ground causing a brain injury that resulted in his death in 2010. The elder Wiese brought contract claims against APA stemming from his purchase of the go-cart and for his son's death. APA appealed the circuit court's denial of its motion for summary judgment. Upon review of the matter, the Supreme Court concluded that based on the common-law principles of agency, an auctioneer selling consigned goods on behalf of an undisclosed principal may be held liable as a merchant-seller for a breach of the implied warranty of merchantability under 7-2-314, Ala. Code 1975. As a result,the Court affirmed the circuit court's judgment denying APA's summary-judgment motion as to Wiese's breach-of-the-implied-warranty-of-merchantability claim. View "Alabama Powersport Auction, LLC v. Wiese" on Justia Law