Justia Commercial Law Opinion Summaries

The plaintiffs deal in silver and gold jewelry, ingots, numismatics, and other related items. They challenged the facial constitutionality of the Precious Metals Dealers Act, Ohio Rev. Code 4728, alleging violation of the commercial speech rights of businesses dealing in precious metals, vagueness, and violation of the Fourth Amendment by imposing overly burdensome retention, reporting, and record-keeping requirements. The district court granted a preliminary injunction, finding that the Act violated the First Amendment because only those engaged in commercial speech are subject to its licensing requirement. The injunction prohibited the state from requiring licenses or fining those, like plaintiffs, who previously violated the statute. The Sixth Circuit reversed, applying “rational basis” review. The Act does not burden the commercial speech rights of unlicensed precious metals dealers. Such dealers do not have a constitutional right to advertise or operate a business does not comply with reasonable requirements of Ohio law and cannot “hold themselves out” to the public without a license, regardless of whether they advertise. The issue is not advertising, but whether a business holds itself out to the public, which can occur by posting a sign, placing goods in a window, or simply conducting business in a manner that is visible to the public. The court noted the public interest in the statutory scheme .View "Liberty Coins, LLC v. Goodman" on Justia Law

Former GM and Chrysler dealers, whose franchises were terminated in the 2009 bankruptcies of those companies, sued, alleging that the terminations constituted a taking because the government required them as a condition of its providing financial assistance to the companies. The Bankruptcy Code, 11 U.S.C. 363, 365, authorizes certain sales of a debtor’s assets and provides that a bankruptcy trustee “may assume or reject any executory contract or unexpired lease of the debtor.” Debtors-in-possession in chapter 11 bankruptcies, like GM and Chrysler, generally have a trustee’s powers. The Claims Court denied motions to dismiss. In interlocutory appeals, the Federal Circuit remanded for consideration of the issues of the “regulatory” impact of the government’s “coercion” and of economic impact. While the allegations of economic loss are deficient in not sufficiently alleging that the economic value of the franchises was reduced or eliminated as a result of the government’s actions, the proper remedy is to grant to leave to amend the complaints to include the necessary allegations. View "A&D Auto Sales, Inc. v. United States" on Justia Law

Aleris supplied aluminum to Behr under a requirements contract until a labor dispute forced Aleris to close its Quebec factory in 2008. After learning of the closure, Behr took delivery of aluminum worth $2.6 million from Aleris without paying for it and scrambled to obtain aluminum from other suppliers, which Behr says increased its costs by $1.5 million. Behr filed suit in Michigan state court. That suit was stayed in 2009 when Aleris’s parent company filed for bankruptcy in the U.S. Aleris filed for bankruptcy in Canada. Aleris sued Behr in federal court seeking recovery of $2.6 million for the aluminum delivery. Behr asserted numerous defenses and counterclaims including a setoff for its increased costs after the factory closure. The district court abstained from adjudication of Behr’s counterclaim, characterizing it as “part and parcel of the stayed state-court proceedings,” then granted summary judgment to Aleris in the amount of $1.1 million and closed the case. Behr satisfied the judgment. The state court declined to lift the stay. The Sixth Circuit reversed, stating that the decision gave Behr full value for its untested counterclaim and has the impact of depriving the Canadian estate of monies to which it might be entitled.View "RSM Richter, Inc. v. Behr America, Inc." on Justia Law

In 2009, the U.S. Department of Commerce initiated the Fifth Administrative Review of the Antidumping Duty Order covering TPBI’s polyethylene retail carrier bags imported from Thailand during the 2008–2009 review period, 19 U.S.C. 1673. Commerce calculated the normal value of TPBI’s merchandise based on a constructed value, having determined that the sales in the exporting country of the foreign like product had been made at prices below the cost of production. Commerce found that TPBI’s methodology did not reasonably reflect actual costs because it resulted in products with few or minor physical differences being assigned significantly different costs of manufacturing. Commerce disregarded the below-cost sales. The Court of International Trade affirmed. Finding Commerce’s determinations supported by substantial evidence and in accordance with law, the Federal Circuit affirmed. View "Thai Plastic Bags Indus. Co., Ltd. v. United States" on Justia Law

In 2004, Plaintiff, a manufacturer and distributor of medical devices, and Defendant, the developer and manufacturer of CoStar, a coronary stent, entered into an agreement designating Plaintiff as the exclusive distributor of CoStar for a worldwide market territory. In 2007, Defendant notified Plaintiff that it was recalling CoStar and removing it from the worldwide market. Plaintiff subsequently sued Defendant for breach of contract, seeking damages for lost profits related to its resale of the stents. Supreme Court granted summary judgment in favor of Defendant on the issue of damages, concluding that the lost profits sought by Plaintiff were consequential damages and subject to the agreement’s damages limitation provision. The court subsequently dismissed the complaint because, by denying Plaintiff lost profits as a remedy, the court effectively ended the lawsuit. The Appellate Division affirmed, concluding that Plaintiff’s claim was barred by the agreement’s limitation on consequential damages. The Court of Appeals reversed, holding that, under the parties’ exclusive distribution agreement, the lost profits constituted general damages, which fell outside the scope of the agreement’s limitation on recovery. View "Biotronik A.G. v. Conor Medsystems Ireland, Ltd." on Justia Law

Motorola and its foreign subsidiaries buy LCD panels and incorporate them into cellphones. They alleged that foreign LCD panel manufacturers violated section 1 of the Sherman Act, 15 U.S.C. 1, by fixing prices. Only about one percent of the panels were bought by Motorola in the U.S. The other 99 percent were bought by, paid for, and delivered to foreign subsidiaries; 42 percent of the panels were bought by subsidiaries and incorporated into products that were shipped to Motorola in the U.S. for resale. The other 57 percent were incorporated into products that were sold abroad and never became U.S. domestic commerce, subject to the Sherman Act. The district judge ruled that Motorola’s claim regarding the 42 percent was barred by 15 U.S.C. 6a(1)(A): the Act “shall not apply to conduct involving trade or commerce (other than import trade or import commerce) with foreign nations unless such conduct has a direct, substantial, and reasonably foreseeable effect on trade or commerce which is not trade or commerce with foreign nations, or on import trade or import commerce with foreign nations.” The Seventh Circuit affirmed, reasoning that rampant extraterritorial application of U.S. law “creates a serious risk of interference with a foreign nation’s ability independently to regulate its own commercial affairs.” View "Motorola Mobility LLC v. AU Optronics Corp." on Justia Law

Corning hired Hyundai, an ocean shipper, to transport thin glass sheets for use in televisions and computer monitors from the U.S. to Asia. Although it is not clear when the damage occurred, damage was noted when Hyundai unloaded the containers from flatcars operated by its subcontractors (Norfolk Southern Railway and BNSF, another rail carrier). Corning had no role in selecting and no relationship with the subcontractors. There were opinions that the damage was caused by movement of the railcars, not by packing, but the actual cause was not established. Corning’s insurer paid Corning $664,679.88 and filed suit. The district court held that the case would proceed solely under the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. 11706, apparently reasoning that the damage undisputedly occurred while the cargo was in the possession of a rail carrier. The court found that a Subcontracting Clause did not immunize the rail carriers from suit, but obligated Corning to indemnify Hyundai for any resultant claims by a subcontractor against Hyundai arising out of the same facts. The court held that a $500-per-package limit of liability did not apply to the rail carriers or Hyundai. After a jury trial, the court found Hyundai and the railroads liable, but denied prejudgment interest. The Sixth Circuit affirmed the judgment against Hyundai, reversed and vacated judgments against the railroads, and remanded for reconsideration of prejudgment interest.View "CNA Ins. Co. v. Hyundai Merch. Marine Co., Ltd." on Justia Law

James Taylor sued Chase Bank for failure to comply with the Uniform Commercial Code in regard to a check that had been returned for insufficient funds. The trial court concluded that there was an arbitration agreement between the parties and referred the case to arbitration. The arbitrator later granted Chase’s motion to dismiss the claim because of Taylor’s delay in filing the arbitration claim. Thereafter, the trial court set aside its earlier order finding that an arbitration agreement existed and its referral of the case to arbitration and denied Chase’s motion to confirm the arbitration award. Chase took an interlocutory appeal of the order denying its motion to confirm the arbitration order, arguing that the trial court was bound to confirm the arbitrator’s decision. The court of appeals affirmed the trial court. The Supreme Court affirmed, holding that the trial court had the authority to set aside the order compelling arbitration after the arbitrator had rendered a dispositive order because the matter was not final and there was insufficient proof of the existence of a valid arbitration agreement. View "JPMorgan Chase Bank, N.A. v. Bluegrass Powerboats" on Justia Law

Plaintiff, a seller seeking damages from a buyer that breached contracts to purchase goods, argued at trial that it was entitled to recover its market price damages. The trial court determined that plaintiff was entitled to the lesser of its market price damages or its resale price damages, and the court ultimately awarded plaintiff its resale price damages. The Court of Appeals reversed and remanded, because the it determined that plaintiff could recover its market price damages, even though it had resold some of the goods at issue. Upon review of the matter, the Supreme Court agreed that plaintiff was entitled to recover its market price damages, even if those damages exceeded plaintiff's resale price damages. View "Peace River Seed Co-Op v. Proseeds Marketing" on Justia Law

The Supreme Court granted a petition for a writ of certiorari to review the decision of the Court of Appeals in "Rider v. Estate of Rider," (713 S.E.2d 643 (Ct. App. 2011)), which applied the common law of agency to hold that certain financial assets were part of the decedent's probate estate. The decedent had directed his bank to transfer specified assets in his investment account to a new account for his spouse, but died before all of the assets were credited to the account. The issue in this case was one of first impression for the Supreme Court, and after review of the facts, the Court reversed the appellate court: "[o]nce Husband issued the entitlement order and was the appropriate person, Wachovia was obligated by the UCC and the parties' Account Agreement to obey his directive. Wachovia had set up a new investment account in Wife's name and commenced the transfer of securities within a few days of Husband's request, so at that point, Wife already had a recognizable interest, even though Wachovia had not posted all of the securities to her account. The Court of Appeals, in focusing solely on the date of the 'book entry,' which it took to mean the date the securities were credited or posted to Wife's account, seemed to view this as the exclusive means for obtaining an interest in the securities." View "In the Matter of Charles Rider" on Justia Law