Justia Commercial Law Opinion SummariesArticles Posted in U.S. 6th Circuit Court of Appeals
Static Control Components, Inc v. Lexmark Int’l, Inc.
Lexmark manufactures printers and toner cartridges. Remanufacturers acquire used Lexmark cartridges, refill them, and sell them at a lower cost. Lexmark developed microchips for the cartridges and the printers so that Lexmark printers will reject cartridges not containing a matching microchip and patented certain aspects of the cartridges. SC began replicating the microchips and selling them to remanufacturers along with other parts for repair and resale of Lexmark toner cartridges. Lexmark sued SC for copyright violations related to its source code in making the duplicate microchips and obtained a preliminary injunction. SC counterclaimed under federal and state antitrust and false-advertising laws. While that suit was pending, SC redesigned its microchips and sued Lexmark for declaratory judgment to establish that the redesigned microchips did not infringe any copyright. Lexmark counterclaimed again for copyright violations and added patent counterclaims. The suits were consolidated. The Sixth Circuit vacated the injunction and rejected Lexmark’s copyright theories. On remand, the court dismissed all SC counterclaims. A jury held that SC did not induce patent infringement and advised that Lexmark misused its patents. The Sixth Circuit affirmed dismissal of federal antitrust claims, but reversed dismissal of SC’s claims under the Lanham Act and certain state law claims. View "Static Control Components, Inc v. Lexmark Int'l, Inc." on Justia Law
Beverage Distrib., Inc. v. Miller Brewing Co.
Plaintiffs are wholesalers of beer and wine; each acted as the exclusive distributor of Miller and/or Coors brands within a defined territory under written franchise agreements. In 2007, Miller and Coors entered a Joint Venture agreement, contemplating creation of MillerCoors, restructured their respective businesses and assets, and assigned distribution agreements to the Joint Venture. MillerCoors notified the plaintiffs that it intended to terminate their distribution rights as a successor manufacturer under Ohio Rev. Code 1333.85(D). The district court found that MillerCoors is not a “successor manufacturer” under Ohio law because it is controlled by Miller and Coors, and that the Act, therefore, prohibits MillerCoors from terminating the distributorships. The Sixth Circuit affirmed. Miller and Coors exercise control over MillerCoors through their equal voting power, veto power, the appointment of directors, all of whom are present officers or employees of the joint venture partners, and who owe their fiduciary duty only to Miller or Coors, their influence over the executive team, and their funding of MillerCoors. Even under the manufacturers’ proposed definition of “control,” the evidence shows that Miller and Coors together retain the power to “direct, superintend, restrict, govern, [and] oversee” MillerCoors. View "Beverage Distrib., Inc. v. Miller Brewing Co." on Justia Law
Petroleum Enhancer, L.L.C. v. Woodward
Polar Holding was sole shareholder of PMC, a company engaged in the petroleum-additive business. PMC was in default on a loan for which it had pledged valuable intellectual property as collateral, and Polar Holding was in the midst of an internal dispute between members of its board of directors regarding business strategy for PMC. One of the directors, Socia, formed a competing company, Petroleum, for the purpose of acquiring PMC’s promissory note and collateral from the holder of PMC’s loan. Petroleum brought suit against Woodward, an escrow agent in possession of PMC’s collateral, alleging that PMC was in default on the payment of its promissory note. Polar Holding and PMC intervened and filed counterclaims against Petroleum and a third-party complaint against additional parties, including Socia. Polar Holding and PMC allleged breach of fiduciary duty, civil conspiracy, and tortious interference. After PMC filed for bankruptcy, its claims became the property of the bankruptcy trustee. Polar Holding’s claims were later dismissed. The Sixth Circuit affirmed dismissal of a tortious interference claim as addressed by the district court, but reversed dismissal of a breach-of-fiduciary-duty claim against Socia and a civil-conspiracy claim against individual third-party defendants. View "Petroleum Enhancer, L.L.C. v. Woodward" on Justia Law
Dominic’s Rest. of Dayton, Inc. v. Mantia
In 1957, Dominic opened an Italian restaurant, “Dominic’s.” It closed in 2007, but daughter-in-law, Anne, continues to market “Dominic’s Foods of Dayton.” In 2007, Christie, a granddaughter, contracted to operate a restaurant with Powers and Lee, a former Dominic’s chef. In pre-opening publicity, they promised to bring back original Dominic’s recipes. They named the business “Dominic’s Restaurant, Inc.” and registered with the Ohio Secretary of State. Anne brought claims of trademark infringement, trademark dilution, unfair practices, unfair competition, tortious interference with contract, conversion, misappropriation of business property, breach of contract, fraudulent and/or negligent misrepresentation, and breach of implied covenant of good faith and fair dealing. The district court concluded that defendants had engaged in infringing behavior before and after entry of a TRO. Powers and Lee later closed the restaurant and withdrew registration of the name, but motions continued, arising out of efforts to open under another name. The district court eventually granted default judgment against defendants, rejecting a claim that proceedings were automatically stayed by Powers’ bankruptcy filing. The Sixth Circuit affirmed. The stay does not protect a debtor’s tortious use of his property and, while the stay would bar assessment of damages, it would not bar injunctive relief. View "Dominic's Rest. of Dayton, Inc. v. Mantia" on Justia Law
United States v. Huntington Nat’l Bank
Principals of Cybercos defrauded lending institutions out of more than $100 million in loan. In 2002, Huntington granted Cyberco a multi-million-dollar line of credit, and Cyberco granted Huntington a continuing security interest and lien in all of Cyberco's personal property, including deposit accounts. After discovering the fraud, the government seized approximately $4 million in Cyberco assets, including $705,168.60 from a Huntington Bank Account. Cyberco principals were charged in a criminal indictment with conspiring to violate federal laws relating to bank fraud, mail fraud, and money laundering. Count 10 issued forfeiture allegations against individuals regarding Cyberco assets, including the Account. In their plea agreements, defendants agreed to forfeit any interest they possessed in the assets or funds. The district court entered a preliminary order of forfeiture with regard to the assets, including the Account. Huntington filed a claim, asserting ownership interest in the forfeited Account. The district court found that Huntington did not have a legal claim. On remand, the district court again denied the claim. The Sixth Circuit reversed. A party who takes a security interest in property, tangible or intangible, in exchange for value, can be a bona fide purchaser for value of that property interest under 21 U.S.C. 853(n)(6)(B). View "United States v. Huntington Nat'l Bank" on Justia Law
In re: Pierce
In 2007, Debtor purchased a manufactured home, borrowing the funds from Creditor and granting a security interest. Creditor filed an application for first title and a title lien statement in Whitley County, Kentucky. The seller of the manufactured home is located in Whitley County. Debtor resided at the time in Laurel County, Kentucky. Later, the Kentucky Transportation Cabinet issued a Certificate of Title for the Manufactured Home showing the lien as being filed in Whitley County. In 2010, Debtor filed his voluntary Chapter 7 bankruptcy petition. The Chapter 7 Trustee initiated an adversary proceeding. The Bankruptcy Court avoided the lien, 11 U.S.C. 544. The Sixth Circuit affirmed. The statute requires that title lien statements be filed in the county of the debtor’s residence even if the initial application for certificate of title or registration is filed in another county under KRS 186A.120(2)(a). View "In re: Pierce" on Justia Law
Maker’s Mark Distillery, Inc. v. Diageo North America, Inc.
Maker's Mark sued Jose Cuervo for trademark infringement, based on Cuervo's use of red dripping wax seal on bottles of premium tequila. The district court found that the Maker's Mark trademark was valid, rejecting an argument of "functionality" under 15 U.S.C. 1065, and had been infringed. The court entered an injunction, but denied damages. The Sixth Circuit affirmed. The court traced the history of bourbon whiskey and noted that Maker's Mark and its use of a red dripping wax seal, a registered trademark since 1958, occupy a central place in the modern story of bourbon. The majority of the factors indicate a possibility of "confusion of sponsorship" trademark infringement: strength of the trademark, relatedness of the goods, similarity, and marketing channels. Whether there was actual confusion was a neutral factor. View "Maker's Mark Distillery, Inc. v. Diageo North America, Inc." on Justia Law
Glazer v. Whirlpool Corp.
The named plaintiffs are Ohio residents who purchased front-loading washing machines manufactured by defendant. Within months after their purchases, the plaintiffs noticed the smell of mold or mildew emanating from the machines and from laundry washed in the machines. One plaintiff found mold growing on the sides of the detergent dispenser, another saw mold growing on the rubber door seal, despite allowing the machine doors to stand open. They filed suit, alleging tortious breach of warranty, negligent design, and negligent failure to warn. The district court certified a class comprised of Ohio residents who purchased one of the specified machines in Ohio primarily for personal, family, or household purposes and not for resale (Federal Rule of Civil Procedure 23(a) and (b)(3)). The Sixth Circuit affirmed class certification, with proof of damages reserved for individual determination. Plaintiffs’ proof established numerosity, commonality, typicality, and adequate representation. Common questions predominate over individual ones and class action is a superior method to adjudicate the claims.View "Glazer v. Whirlpool Corp." on Justia Law
Carrier Corp. v. Outokumpu Oyj
Plaintiffs are among the world’s largest purchasers of air conditioning and refrigeration copper tubing. Defendants imported ACR copper into the U.S. In 2003 the Commission of the European Communities found that defendants and other conspired on prices targets and other terms for industrial tubes and allocated customers and market shares in violation of European law. The findings did not identify any conspiratorial agreements with respect to U.S. markets. In 2004, another EC decision found violation in the market for plumbing tubes. Plaintiff claimed that the European conspiracy was also directed at the U.S. market for ACR industrial tubes, violating the Sherman Act and the Tennessee Trade Practices Act. Two similar cases, involving different plaintiffs, had been dismissed. The district court dismissed for lack of subject matter jurisdiction and failure to state a claim. The Sixth Circuit reversed, finding that the complaint adequately stated a claim under the Sherman Act and was not barred by the Act's limitations period, 15 U.S.C. 15b and that the court had personal jurisdiction. The fact that the complaint borrows its substance from the EC decision and then builds on the EC’s findings does not render its allegations any less valid.View "Carrier Corp. v. Outokumpu Oyj" on Justia Law
Salling v. Budget Rent A Car Sys., Inc.
Plaintiff rented a car, drove 64 miles in one day, refilled the fuel tank, and returned the car to the same location from which he rented the car. In addition to rental and other fees that he does not dispute, he was charged a $13.99 fuel service fee that he challenged by filing a putative class action, claiming breach of contract, fraud, and unjust enrichment. Defendant claimed that, because plaintiff drove fewer than 75 miles during the rental period, to avoid the charge he was required to return the car with a full fuel tank and to submit a receipt. The district court dismissed, finding that the contract was not ambiguous. The Sixth Circuit affirmed, citing the voluntary payment doctrine.View "Salling v. Budget Rent A Car Sys., Inc." on Justia Law