Justia Commercial Law Opinion Summaries

Between 2002-2006, Lucht purchased treated lumber for a deck on his vacation home in the Virgin Islands. The lumber allegedly decayed prematurely and he began replacing boards in 2010; he claims he did not discover the severity of the problem until the fall of 2011. Lucht sued the retailer, wholesaler, and treatment company of the lumber in February 2013, alleging a Uniform Commercial Code contract claim; a common law contract claim; a breach of warranty claim; a negligence claim; a strict liability claim; and a deceptive trade practices claim under the Virgin Islands Deceptive Trade Practices Act. The district court rejected the claims as time-barred. The Third Circuit affirmed, citing the “‘gist of the action doctrine,” which bars plaintiffs from bringing a tort claim that merely replicates a claim for breach of an underlying contract. View "MRL Dev. I, LLC v. Whitecap Inv. Corp" on Justia Law

Hyson USA and Hyson 2U are food distributors. Hyson USA is wholly owned by its president, Tansky, and has operated since 2006. Kaminskas was one of its managers. In 2012, Hyson USA encountered serious financial difficulty, culminating in the loss of its liability insurance, forcing the company to suspend operations. Months later, Kaminskas established Hyson 2U. Hyson USA transferred its branded inventory and equipment to the new company. Hyson 2U leased the warehouse from which Hyson USA had operated. Tansky then switched roles with Kaminskas and went to work at the new company. Hyson 2U operated in the same manner and in the same markets as Hyson USA. In 2014, Tansky was fired. He and Hyson USA, again operational, sued Hyson 2U and Kaminskas alleging trademark infringement under the Lanham Act. The judge dismissed the trademark claims, citing acquiescence, and relinquished supplemental jurisdiction over the state-law claims. The Seventh Circuit reversed, stating that acquiescence is a fact-intensive equitable defense that is rarely capable of resolution on a motion to dismiss. View "Hyson USA Inc. v. Hyson 2U, Ltd." on Justia Law

Alco, a vending machine company, contracted with B2B, a “fax broadcaster,” in 2005, and dealt with B2B and Macaw, a Romanian business, that worked with B2B. Each sample advertisement provided by B2B stated that the message was “the exclusive property of Macaw . . . , which is solely responsible for its contents and destinations.” According to Alco, B2B was to identify recipients from a list of businesses that had consented to receive fax advertising from B2B. Alco never saw this list, but believed that each business would be located near Alco’s Ohio headquarters, and had an existing relationship with B2B, so that the advertising would be “100 percent legal.” B2B broadcast several thousand faxes, advertising Alco. According to Alco, B2B did not inform Alco about the number of faxes, the dates on which they were sent, or the specific businesses to which they were addressed. After each broadcast, Alco received complaints of unauthorized faxes in violation of the Telephone Consumer Protection Act 47 U.S.C. 227(b)(1)(C), which it referred to B2B. Siding filed a purported class action against Alco. The district court rejected the suit on summary judgment. The Sixth Circuit reversed and remanded for determination of whether B2B broadcast the faxes “on behalf of” Alco, considering the degree of control that Alco exercised, whether Alco approved the final content, and the contractual relationship. View "Siding and Insulation Co. v. Alco Vending, Inc." on Justia Law

The underlying federal action involved a dispute between General Motors LLC (GM), a franchisor and Chevrolet car manufacturer, and Beck Chevrolet Co., Inc., an automobile dealership with a Chevrolet franchise. Beck sued GM alleging violations of the Dealer Act. The district court ruled against Beck on its claims. On appeal, the United States Court of Appeals for the Second Circuit determined that resolution depended on unsettled New York law and certified two questions requiring the Court of Appeals’ interpretation of two provisions of New York’s Franchised Motor Vehicle Dealer Act. The Court of Appeals answered as follows: (1) the use of a franchisor sales performance standard that relies on statewide data and some local variances but fails to account for local brand popularity to determine compliance with a franchise agreement is unlawful under the Dealer Act; and (2) a franchisor’s unilateral change of a dealer’s geographic sales area does not constitute a prohibited modification to the franchise. View "Beck Chevrolet Co., Inc. v. General Motors LLC" on Justia Law

WI buys furniture wholesale. OEC provided WI with non-vessel-operating common carrier transportation services. WI signed an Application for Credit that granted a security interest in WI property in OEC’s possession, custody or control or en route. As required by federal law, OEC also publishes a tariff with the Federal Maritime Commission, which provides for a Carrier’s lien. WI filed voluntary Chapter 11 bankruptcy petitions. OEC sought relief from the automatic stay, arguing that it was a secured creditor with a possessory maritime lien. OEC documented debts of $458,251 for freight and related charges due on containers in OEC’s possession and $994,705 for freight and related charges on goods for which OEC had previously provided services. The estimated value of WIs’ goods in OEC’s possession was $1,926,363. WI filed an adversary proceeding, seeking release of the goods. The bankruptcy court ruled in favor of WI, citing 11 U.S.C. 542. The district court affirmed, holding that OEC did not possess a valid maritime lien on Pre-petition Goods. The Third Circuit reversed, noting the strong presumption that OEC did not waive its maritime liens on the Prepetition Goods, the clear documentation that the parties intended such liens to survive delivery, the familiar principle that a maritime lien may attach to property substituted for the original object of the lien, and the parties’ general freedom to modify or extend existing liens by contract. View "In re: World Imports LTD" on Justia Law

An Automated Maritime Telecommunications System (AMTS) is a U.S. communication service between land and vessels in navigable waterways, existing on specific broadcast frequencies. Advances in technology have greatly expanded the potential uses of AMTSs. Under the original site-based system, small geographic regions were defined by location and the waterway served and the FCC provided licenses at no cost to the first applicant. In 2000, the FCC stopped issuing site-based licenses and began issuing licenses by competitive bidding; it divided the U.S. into 10 regions and, at public auctions, sold “geographic” licenses for two blocks of AMTS frequencies in each region. Although geographic licensees may generally place stations anywhere within their region, they may not interfere with the functioning of existing site-based stations, so the location of a site-based station creates a gap in a geographic licensee’s coverage area. Plaintiffs obtained geographic licenses in areas overlaying pre-existing site-based licenses. Site-based operators refused to provide plaintiffs with the operating contours for their site-based locations within plaintiffs’ geographic locations. Plaintiffs filed suit, alleging violation of the Federal Communications Act and the Sherman Antitrust Act. The Third Circuit affirmed dismissal of the FCA claims and a determination that no antitrust conspiracy existed. Plaintiffs did not identify particular actions that were determined by the FCC to be unreasonable or unjust and, therefore, do not possess a private right of action. View "Havens v. Mobex Network Servs., LLC" on Justia Law

Darling’s Auto Mall is a franchisee of General Motors LLC (GM) and and authorized dealer. Darling’s filed two small claims actions in district court alleging that it had been underpaid by GM for certain warranty repairs in violation of the Business Practices Between Motor Vehicle Manufacturers, Distributors and Dealers Act (Dealers Act). The district court ruled in favor of Darling’s on both small claims. GM appealed and requested a jury trial de novo. The superior court granted GM’s request. After a jury trial, the superior court entered a judgment in favor of GM. The Supreme Judicial Court affirmed, holding (1) the superior court’s decision to grant a jury trial de novo was not an appealable determination; (2) the trial court did not err in denying Darling’s motion for judgment as a matter of law; and (3) the trial court properly rejected Darling’s proposed jury instructions. View "Darling's Auto Mall v. General Motors LLC" on Justia Law

ACL manufactures and operates tow boats and barges that operate in U.S. inland waterways. Lubrizol manufactures industrial lubricants and additives, including a diesel‐fuel additive, LZ8411A. VCS distributed the additive. Lubrizol and VCS jointly persuaded ACL to buy it from VCS. Before delivery began, Lubrizol terminated VCS as a distributor because of suspicion that it was engaging in unethical conduct: a Lubrizol’s employee had failed to disclose to his employer that he was also a principal of VCS. Lubrizol did not inform ACL that VCS was no longer its distributor. No longer able to supply ACL with LZ8411A, VCS substituted an additive that ACL contends is inferior to LZ8411A. VCS didn’t inform ACL of the substitution. According to ACL, Lubrizol learned of the substitution, but did not inform ACL. When ACL discovered the substitution, it sued both companies. ACL settled with VCS. The district judge dismissed Lubrizol. The Seventh Circuit affirmed, rejecting claims that Lubrizol had a “special relationship” that required it to disclose ACL’s conduct, that VCS was Lubrizol’s apparent agent, and of “quasi contract” between ACL and Lubrizol. View "Am. Commercial Lines, LLC v. Lubrizol Corp." on Justia Law

In 1998 IGF bought Continental’s crop-insurance business at a price to be determined at either side’s option by the exercise of a put or call. In 2001 Continental exercised its put option; under the contractual formula, IGF owed Continental $25.4 million. Around that same time, IGF sold its business to Acceptance for $40 million. The Symons, who controlled IGF, structured the purchase price: $16.5 million to IGF; $9 million to IGF's parent companies Symons International and Goran in exchange for noncompetition agreements; and $15 million to Granite, an affiliated Symons-controlled company, for a reinsurance treaty. Continental, still unpaid, sued for breach of contract and fraudulent transfer. The court found for Continental and pierced the corporate veil to impose liability on the controlling companies and individuals. The Seventh Circuit affirmed, finding Symons International liable for breach of the 1998 sale agreement; Symons International, Goran, Granite, and the Symons liable as transferees under the Indiana Uniform False Transfer Act; and the Symons liable under an alter-ego theory. The Symons businesses observed corporate formalities only in their most basic sense. The noncompetes only made sense as a fraudulent diversion of the purchase money, not as legitimate protection from competition. The reinsurance treaty. which was suggested bySymons and outside industry norms, was unjustified and overpriced. View "Cont'l Cas. Co. v. Symons" on Justia Law

Nissan North America, Inc., a motor vehicle manufacturer, and Stephen McDaniels, a prospective Nissan dealer (collectively, Defendants), sought to relocate a Nissan dealership to a location 7.6 miles from a dealership operated by Wayzata Nissan, LLC. Wayzata filed an action against Defendants and then moved for a temporary restraining order, challenging the relocation under the Minnesota Motor Vehicle Sale and Distribution Act, Minn. Stat. 80E.01-.17. The district court denied the motion, determining that the exception in section 80E.14(1) for the “relocation of an existing dealer” applied. The court of appeals affirmed. The Supreme Court reversed on the merits, holding (1) even though the relocation at issue has already occurred this appeal is not moot; (2) the notice and good-cause requirements of section 80E.14(1) apply on the date that a manufacturer develops the intention to authorize a relocation, not on the date of the physical relocation of a dealership; and (3) the existing-dealer exception does not apply when the relocation of a dealership is accompanied by a change in the person or entity operating the dealership, and therefore, the existing-dealer exception does not apply in this case. View "Wayzata Nissan, LLC v. Nissan N. Am., Inc." on Justia Law