Justia Commercial Law Opinion Summaries

The case involves BioPoint, Inc., a life sciences consulting firm, which accused Catapult Staffing, LLC, and Andrew Dickhaut of misappropriating trade secrets, confidential business information, and engaging in unfair trade practices. BioPoint alleged that Catapult, with the help of Dickhaut and Leah Attis (a former BioPoint employee and Dickhaut's fiancée), used BioPoint's proprietary information to recruit candidates and secure business from BioPoint's clients, including Vedanta and Shire/Takeda.The U.S. District Court for the District of Massachusetts handled the initial proceedings. The jury found Catapult liable for misappropriating BioPoint's trade secrets concerning three candidates and two clients, and for tortious interference with BioPoint's business relationship with one candidate. The jury awarded BioPoint $312,000 in lost profits. The judge, in a subsequent bench trial, found Catapult liable for unjust enrichment and violations of the Massachusetts Consumer Protection Law (chapter 93A), awarding BioPoint $5,061,444 in damages, which included treble damages for willful and knowing conduct, as well as costs and attorneys' fees.The United States Court of Appeals for the First Circuit reviewed the case. The court largely affirmed the lower court's findings but reduced the judge's award by $157,068, as it found that BioPoint could not recover both lost profits and unjust enrichment for the same placement. The court also reversed the district court's imposition of joint-and-several liability on Andrew Dickhaut, ruling that he could not be held liable for profits he did not receive. The case was remanded for further proceedings to determine Dickhaut's individual liability. View "BioPoint, Inc. v. Dickhaut" on Justia Law

During the early stages of the COVID-19 pandemic, American Screening, LLC, a Louisiana company, promised buyers that it would ship personal protective equipment (PPE) more quickly than it actually did. The Federal Trade Commission (FTC) sued American Screening, alleging that its shipping policies and practices violated the FTC Act and the Mail, Internet, or Telephone Order Merchandise Rule (MITOR). The company's website contained a shipping policy that stated orders would be processed and shipped within 24-48 hours. However, in practice, it took about six weeks for PPE to be shipped after the customer had purchased it.The district court granted the FTC summary judgment and ordered American Screening to return almost $14.7 million to consumers and permanently enjoined it from advertising or selling PPE. American Screening challenged the district court's ordered remedies on appeal.The United States Court of Appeals for the Eighth Circuit affirmed the district court's decision. The court rejected American Screening's contention that the court should have considered whether each individual consumer had relied on American Screening's shipping representations and had sustained an injury as a result. The court also disagreed with American Screening's argument that the district court's equitable monetary relief went beyond what was necessary to redress consumers and so amounts to an award of exemplary or punitive damages. The court found that the relief was tailored to ensure that dissatisfied consumers are made whole while also ensuring that American Screening does not have to pay unharmed customers as punishment.Finally, the court rejected American Screening's challenge to the scope of the permanent injunction barring it from advertising or selling PPE. The court agreed with the district court that the egregiousness of American Screening's conduct weighed in favor of the injunction. The court also found that the injunction's effect on American Screening was more modest than its breadth might suggest. View "FTC v. American Screening, LLC" on Justia Law

The case involves RSD Leasing, Inc., a Vermont-based corporation that leases trucks to commercial operators. Between 2008 and 2014, RSD purchased forty trucks manufactured by Navistar International Corp. and Navistar, Inc. from a nonparty dealer. These trucks were equipped with an emission-control system known as an exhaust gas recirculation system. RSD alleged that the system caused the trucks to lose power, break down, and damage other engine components. RSD leased the trucks to other entities for four-to-six-year terms and intended to sell them at the end of the lease term. RSD filed a complaint against Navistar alleging violation of the Vermont Consumer Protection Act (VCPA), among other claims.In the U.S. District Court for the District of Vermont, Navistar moved for summary judgment on the VCPA claim, arguing that RSD is not a “consumer” under the VCPA and is therefore barred from recovery. The district court granted summary judgment on the VCPA claim, reasoning that RSD did not qualify as a consumer under the VCPA because it purchased the trucks for resale in the ordinary course of its business. RSD appealed to the Second Circuit, which certified the question of whether RSD qualified as a consumer under the VCPA to the Vermont Supreme Court.The Vermont Supreme Court concluded that RSD is not a consumer under the VCPA. The court found that RSD's intent at the time it purchased the trucks was to lease them out and, after each lease term expired, sell them. The court held that the trucks were purchased for resale in the ordinary course of RSD’s business. Therefore, RSD did not qualify as a consumer under the VCPA. The court answered the certified question from the Second Circuit in the negative. View "RSD Leasing, Inc. v. Navistar International Corporation and Navistar, Inc." on Justia Law

FedEx Ground Package Systems, Inc. (FXG) filed a lawsuit against Route Consultant, Inc., alleging that the latter company had made nine false or misleading statements about FXG's business practices. FXG contended that these statements were intended to foster discontent between FXG and its contractors, thereby damaging FXG and benefiting Route Consultant. The suit was brought under both the Lanham Act's false advertising provision and the Tennessee Consumer Protection Act's statutory disparagement provision.The United States Court of Appeals for the Sixth Circuit confirmed the lower court's decision to dismiss the case. The court found that FXG had failed to plausibly allege that Route Consultant made a single false or misleading statement. The court emphasized that only statements of fact--not opinions, puffery, or rhetorical hyperbole--are actionable under the false advertising provision of the Lanham Act. Moreover, a plaintiff must plead and prove the literal falsity of the defendant's statement or demonstrate that the statement is misleading. FXG's complaint did not meet these standards.The court also held that FXG's claim under the Tennessee Consumer Protection Act failed for the same reasons as its Lanham Act claim. Thus, the court affirmed the district court's dismissal of FXG's lawsuit against Route Consultant. View "FedEx Ground Package Systems, Inc. v. Route Consultant, Inc." on Justia Law

The Fourth Appellate District Division One of the California Court of Appeal affirmed, with a minor modification, a lower court's decision that Ashford University, LLC and Zovio, Inc. violated California's unfair competition law and false advertising law. Over a decade, the defendants made false and misleading statements to prospective students, committing 1,243,099 violations. The trial court imposed a penalty of $22,375,782, which the defendants challenged as excessive. The appeal court agreed with the defendants that the lower court inadvertently included violations outside the false advertising law's statute of limitations in the penalty calculation. The court reduced the penalty by $933,453. However, the court rejected the defendants' other arguments, including that the penalty should be further reduced because it did not bear a reasonable relationship to the harm proven at trial, violated extraterritoriality principles, and was excessive given the defendants' financial status. The court found the penalty was reasonably related to the harm caused, the defendants could pay the penalty, and the defendants' misconduct emanated from California, so principles of extraterritoriality were not violated. View "People v. Ashford University, LLC" on Justia Law

Since 1992, the Energy Star Program has set energy efficiency standards for categories of products and permitted approved products to bear the Energy Star logo. Three models of Whirlpool top-loading clothes washers were approved to display that logo and did so from 2009-2010. Under one method of measurement, those machines did not meet the Program’s energy- and water-efficiency standards; the washers did satisfy the Program’s standards under another measurement technique, which the Program previously endorsed. Program guidance from July 2010 disapproved of that method.Consumers in several states who had purchased those models commenced a putative class action against Whirlpool and retailers that sold those machines, alleging breach of express warranty and violations of state consumer protection statutes based on the allegedly wrongful display of the Energy Star logo. The district court certified a class action against Whirlpool but declined to certify a class against the retailers. At summary judgment, the court rejected all remaining claims.The Third Circuit affirmed, finding no genuine dispute of material fact. The plaintiffs did not demonstrate that the models were unfit for their intended purpose. A reasonable jury could not find that the retailer defendants were unjustly enriched from selling the washers. Without evidence of a false or misleading statement attributable to Whirlpool or the retailers, the state consumer protection claims failed. View "Dzielak v. Whirlpool Corp" 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

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

The Supreme Court affirmed the judgment of the circuit court concluding that Plaintiff lacked standing to enforce the "midnight deadline" rule set forth in section 4-302 of the Uniform Commercial Code (UCC), as adopted by Va. Code 8.4-302 and W. Va. Code 46-4-302, holding that there was no error.In her second amended complaint, Plaintiff alleged that MCNB Bank and Trust Company (MCNB) violated the midnight deadline rule adopted from the UCC and, therefore, MCNB was strictly liable for the payment of a check in the amount of $245,271.25. The circuit court granted summary judgment for MCNB, concluding that Plaintiff lacked standing to pursue her claim because she did not have any right to rely on the prompt payment of the check at issue. The Supreme Court affirmed, holding that the circuit court did not err when it granted MCNB’s motion for summary judgment based on Plaintiff's alleged lack of standing to enforce the midnight deadline rule. View "Stahl v. Stitt" on Justia Law

Melendez purchased a used 2015 Toyota from Southgate under a retail installment sales contract. Southgate assigned the contract to Westlake. Weeks later, Melendez sent a notice alleging Southgate violated the Consumer Legal Remedies Act (CLRA) and demanded rescission, restitution, and an injunction. Melendez later sued Southgate and Westlake, alleging violations of the CLRA, the Song-Beverly Consumer Warranty Act, Civil Code 1632 (requiring translation of contracts negotiated primarily in Spanish), the unfair competition law, fraud, and negligent misrepresentation. Westlake assigned the contract back to Southgate. Default was entered against Southgate. Westlake agreed to pay $6,204.68 ($2,500 down payment and $3,704.68 Melendez paid in monthly payments). Melendez would have no further obligations under the contract.The parties agreed Melendez could seek attorney fees, costs, expenses, and prejudgment interest. Westlake was entitled to assert all available defenses, “including the defense that no fees at all should be awarded against it as a Holder” The FTC’s “holder rule” makes the holder of a consumer credit contract subject to all claims the debtor could assert against the seller of the goods or services but caps the debtor’s recovery from the holder to the amount paid by the debtor under the contract. The trial court awarded attorney fees ($115,987.50), prejudgment interest ($2,956.62), and costs ($14,295.63) jointly and severally against Westlake, Southgate, and other defendants. The court of appeal affirmed. The limitation does not preclude the recovery of attorney fees, costs, nonstatutory costs, or prejudgment interest. View "Melendez v. Westlake Services, Inc." on Justia Law