Justia Commercial Law Opinion Summaries

The Supreme Court affirmed the order of the Business Court granting summary judgment in favor of Defendants, holding that the Business Court properly determined that North Carolina's economic loss rule requires negligence claims to be based upon the violation of an extra-contractual duty imposed by operation of law.At issue was whether a commercial property owner who contracts for the construction of a building may seek to recover in tort for its economic loss from a subcontracted manufacturer of building materials with whom the property owner does not have contractual privity. Applying the economic loss rule irrespective of the existence or lack of a contractual relationship between the property owner and the subcontracted manufacturer, the court dismissed Plaintiff's negligence claim with prejudice. The Supreme Court affirmed, holding that purely economic losses are not recoverable under tort law, particularly in the context of commercial transactions. View "Crescent University City Venture, LLC v. Trussway Manufacturing, Inc." on Justia Law

Oberdorf walked her dog with a retractable leash. Unexpectedly, the dog lunged. The D-ring on the collar broke and the leash recoiled and hit Oberdorf’s face and eyeglasses, leaving Oberdorf permanently blind in her left eye. Oberdorf bought the collar on Amazon.com. She sued Amazon.com, including claims for strict products liability and negligence. The district court found that, under Pennsylvania law, Amazon was not liable for Oberdorf’s injuries. A third-party vendor, not Amazon itself, had listed the collar on Amazon’s online marketplace and shipped the collar directly to Oberdorf. The court found that Amazon was not a “seller” under Pennsylvania law and that Oberdorf’s claims were barred by the Communications Decency Act (CDA) because she sought to hold Amazon liable for its role as the online publisher of third-party content. The Third Circuit vacated and remanded. Amazon is a “seller” under section 402A of the Second Restatement of Torts and thus subject to the Pennsylvania strict products liability law. Amazon’s involvement in transactions extends beyond a mere editorial function; it plays a large role in the actual sales process. Oberdorf’s claims against Amazon are not barred by section 230 of the CDA except as they rely upon a “failure to warn” theory of liability. The court affirmed the dismissal under the CDA of the failure to warn claims. View "Oberdorf v. Amazon.com Inc" on Justia Law

Fox used Amazon.com to order a hoverboard equipped with a battery pack. Although Fox claims she thought she was buying from Amazon, the hoverboard was owned and sold by a third-party that used Amazon marketplace, which handles communications with the buyer and processes payments. The board arrived in an Amazon-labeled box. The parties dispute whether Amazon provided storage and shipment. In November 2015, following news reports of hoverboard fires and explosions, Amazon began an investigation. On December 11, Amazon ceased all hoverboard sales worldwide. Approximately 250,000 hoverboards had been sold on its marketplace in the previous 30 days. Amazon anticipated more fires and explosions, scheduling employees to work on December 26, to monitor news reports and customer complaints. On December 12, Amazon sent a "non-alarmist" email to hoverboard purchasers. Fox does not recall receiving the email but testified that she would not have let the hoverboard remain in her home had she known all the facts. On January 9, Matthew Fox played with the hoverboard and left it on the first floor of the family’s two-story home. When a fire later broke out, caused by the hoverboard’s battery pack, two children were trapped on the second floor. Everyone escaped with various injuries; their home was destroyed.The Sixth Circuit affirmed the summary judgment rejection of allegations that Amazon sold the defective or unreasonably dangerous product (Tennessee Products Liability Act) and caused confusion about the source of that product (Tennessee Consumer Protection Act of 1977) but reversed a claim that Amazon breached a duty to warn about the defective or unreasonably dangerous nature of that product under Tennessee tort law. View "Fox v. Amazon.com, Inc." on Justia Law

The Supreme Court affirmed the district court’s order dismissing with prejudice Plaintiff’s complaint for failure to state a claim upon which relief could be granted. Plaintiff, which operated commercial grain warehouses and elevators and owned trading businesses through Nebraska, filed a complaint alleging that several defendants engaged in a pattern of behavior with the intent to deprive it of information, an opportunity to be heard, and due process of law. The district court concluded that Defendants were entitled to immunity under Nebraska’s Consumer Protection Act and the Noerr-Pennington doctrine and that Plaintiff’s claims of conspiracy and aiding and abetting required an underlying tort to be actionable. The Supreme Court affirmed, holding (1) Plaintiff failed to state a claim upon which relief could be granted because Defendants were entitled to immunity under the Noerr-Pennington doctrine and Plaintiff alleged only underlying statutory violations; and (2) any amendment to Plaintiff’s petition would be futile. View "Salem Grain Co. v. Consolidated Grain & Barge Co." on Justia Law

Respondents brought an action against Appellants, alleging breach of contract and fraud- and tort-based claims based on their purchase of two furniture stores from Appellants. The district court entered judgment for Respondents. The court allowed Respondents to rescind the agreement and awarded them damages. Although they appealed the judgment, Appellants did not obtain a stay of execution. Thus, despite the pending appeal, Respondents obtained a writ of execution on the judgment, allowing them to execute against one appellant's personal property. Respondents subsequently purchased Appellants' rights and interests in the district court action. Respondents moved to substitute as real parties in interest and dismiss the appeal on the basis that they acquired Appellants' claims and defenses at the sheriff's sale. The Supreme Court denied Respondents' motion, holding that Nevada's judgment execution statutes do not include the right to execute on a party's defenses to an action, as permitting a judgment creditor to execute on a judgment in such a way would cut of a debtor's defenses in a manner inconsistent with due process principles.View "Butwinick v. Hepner" on Justia Law

At issue in this case was whether, for purposes of Tex. Civ. Prac. & Rem. Code Ann. 16.068, an action for cargo damage against a common carrier, brought under the Carmack Amendment to the Interstate Commerce Act, relates back to an action for breach of an agreement to settle the cargo-damage claim. The answer depended on whether the cargo-damage claim was, in the words of section 16.068, "wholly based on a new, distinct, or different transaction or occurrence" than the breach-of-settlement claim. A divided court of appeals held that the cargo-damage claim did not relate back and was therefore barred by limitations. The Supreme Court reversed and rendered judgment for the plaintiff, holding that the cargo-damage claim and the breach-of-settlement claim both arose out of the same occurrence, and therefore, the cargo-damage claim was not barred by limitations.View "Lexington Ins. Co. v. Daybreak Express, Inc." on Justia Law

Defendant CTE Tech Corp. is a Taiwanese corporation that manufactures battery chargers. Defendant Invacare Corporation is an Ohio corporation that manufactures motorized wheelchairs. CTE agreed to supply Invacare with battery chargers built to Invacare's specifications, which Invacare then sold with its motorized wheelchairs in Oregon and the rest of the United States. Plaintiffs brought this action against CTE after their mother died in a fire allegedly caused by a defect in CTE's battery charger. CTE moved to dismiss plaintiffs' claims against it on the ground that Oregon lacks personal jurisdiction over it. CTE reasoned that due process would permit an Oregon court to exercise personal jurisdiction over it only if CTE had purposefully availed itself of the privilege of doing business here. In CTE's view, the fact that it sold its battery chargers to Invacare in Ohio, which sold them together with its wheelchairs in Oregon, was not sufficient to meet that standard. The trial court denied CTE's motion, and the Supreme Court denied CTE's petition for a writ of mandamus to direct the trial court to vacate its ruling. CTE then filed a petition for certiorari with the United States Supreme Court. After the Court issued its decision in "J. McIntyre Machinery, Ltd. v. Nicastro," (131 S Ct 2780 (2011)), the Court granted CTE's petition for certiorari, vacated our order, and remanded the case to the Oregon Court for further consideration. On remand, the Oregon Court issued an alternative writ of mandamus to the trial court directing it to vacate its order denying CTE's motion to dismiss or show cause for not doing so. The trial court declined to vacate its order, and the parties briefed the question whether, in light of Nicastro, Oregon courts may exercise personal jurisdiction over CTE. Upon review, the Oregon Supreme Court held that they may and accordingly dismissed the alternative writ.View "Willemsen v. Invacare Corporation" on Justia Law

Dentist purchased dental practice management software from Company to aid his patient data requirement. The contract between Dentist and Company limited Dentist's remedies for damages in tort caused by defects in the Company's software. Although Company warned Dentist to back up his patient data, Dentist's patient data was lost when installing the software. Dentist sued Company under several theories, and the district court granted Company's motion for summary judgment. Dentist appealed only the order granting summary judgment on his tort claims. The Supreme Court affirmed, concluding that the limitation of liabilities clause in the contract was enforceable, as provisions in software contracts allocating the risk of such a loss to the consumer are enforceable.View "Blaisdell v. Dentrix Cental Sys., Inc." on Justia Law

This case presented a battle between banks over the proceeds of the sale of cattle by a financially strapped borrower who had financial dealings with both banks. When Security Savings Bank (Security) obtained the proceeds of the sale, Peoples Trust and Savings Bank (Peoples) claimed a security interest in the proceeds and sued for conversion. The district court granted summary judgment in favor of Peoples. After Security appealed, Peoples commenced garnishment proceedings against Security to enforce its judgment, and Security paid the underlying judgment. The court of appeals then determined that Security had waived its right to appeal and dismissed the case. The Supreme Court affirmed, holding (1) a defendant faced with post-judgment garnishment does not waive a pending appeal by paying the judgment in order to avoid further enforcement proceedings; and (2) the district court correctly determined that Peoples had a security interest in the proceeds superior to Security's interest and that Peoples did not waive its superior position through its course of conduct.View "Peoples Trust & Savings Bank v. Sec. Savings Bank" on Justia Law

Salem Logistics entered into a loan agreement with Ark Royal Capital that required Salem to instruct its customers to send payments directly to an account maintained by Ark at Wachovia Bank. Salem subsequently agreed to provide freight bill auditing services to Variety Wholesalers. Salem requested that Variety send the amounts on the master invoices directly to the Wachovia account but did not inform Variety that the account was actually controlled by Ark. Variety later terminated its contract with Salem and filed suit for recovery of money it had forwarded to Salem that had not been paid to carriers. When Variety discovered the Wachovia account actually belonged to Ark, Variety added Ark as a defendant. The trial court entered summary judgment for Variety on its claim of conversion against Ark and for Ark on Variety's claim of constructive trust and ordered Ark to pay Variety $888,000. The court of appeals reversed and entered summary judgment for Ark on both issues. The Supreme Court reversed and remanded on both issues, holding (1) summary judgment was improper because there were genuine issues of material fact to be resolved; and (2) accordingly, the trial court also erred in its award of damages to Variety.View "Variety Wholesalers, Inc. v. Salem Logistics Traffic Servs." on Justia Law