Justia Commercial Law Opinion Summaries

The Arkansas Health Services Permit Commission awarded Hospitality Care Center a permit of approval (POA) for a nursing facility. Gracewood Nursing and Rehabilitation Center subsequently requested approval from the Commission to transfer the POA to it from Hospitality. Twin Rivers Health and Rehab opposed the transfer. The Commission ultimately granted the transfer of the POA. Twin Rivers sought judicial review of the Commission's decision and declaratory relief, naming as defendants the Commission, the Arkansas Health Services Permit Agnecy (AHSPA), Gracewood, and Hospitality. The circuit court granted the summary judgment motion of the Commission and the AHSPA and affirmed the Commission's decision. The Supreme Court (1) reversed and remanded the matter with directions to enter findings of fact and conclusions of law because the Commission did not set forth any findings of fact or conclusions of law to support its decision to grant the transfer of the POA; and (2) dismissed without prejudice that portion of the appeal relating to Twin Rivers's request for summary judgment, as the Court does not hear appeals piecemeal.View "Twin Rivers Health & Rehab, LLC v. Health Servs. Permit Comm'n" on Justia Law

James Schlinger owned and operated Curtis Excavation and WW Construction. Schlinger, acting as president of WW Construction, entered into an oral agreement to lease his business and all associated equipment and land to Christopher McGhee and Jack Robinson. McGhee and Robinson formed Curtis-Westwood Construction as the entity to lease and operate the business. After eight months, Schlinger determined McGhee and Robinson were not properly managing the business and terminated the oral lease agreement. The parties disputed the financial implications of the termination. After a bench trial, the district court determined that Schlinger breached his oral agreement with Appellees, McGhee, Robinson, and Curtis-Westood Construction, and that Schlinger owed Plaintiffs $206,875. The Supreme Court (1) reversed the district court's judgment on Appellees' breach of contract claim and rejected Appellants' argument that they should be awarded breach of contract damages, holding that the district court committed clear error in awarding damages as there was insufficient evidence in the record to justify an award of damages to either party; and (2) affirmed the district court's denial of Schlinger's claims for recovery under the theory of unjust enrichment, holding that Schlinger's claims were unsupported by the evidence. View "Schlinger v. McGhee" on Justia Law

CACH, LLC, a debt collector, brought an action against Jon Askew for an alleged outstanding debt owed by Askew. The circuit court entered judgment in favor of CACH and against Askew. Askew appealed, contending that CACH did not properly demonstrate that it had been assigned the debt in question and that the circuit court improperly admitted an exhibit based on the business records exception to the hearsay rule. The Supreme Court reversed, holding (1) the disputed exhibit was erroneously admitted into evidence by the circuit court under the business records exception; (2) without admission of the exhibit into evidence, CACH failed to provide any competent evidence of the alleged assignment of Askew's account to CACH; and (3) without evidence of the validity of this assignment, CACH did not demonstrate it had standing to pursue the claim.View "CACH, LLC v. Askew" on Justia Law

Thomas & Thomas Court Reporters sued Douglas Switzer, an attorney, and his law firm, Hathaway & Switzer (Hathaway Switzer), for failure to pay for court reporting services. The district court entered judgment for Thomas & Thomas. At issue on appeal was whether Hathaway Switzer was liable to Thomas & Thomas for its fees or whether Hathaway Switzer's clients were. The Supreme Court (1) affirmed the district court's judgment to the extent that it held Hathaway Switzer rather than Hathaway Switzer's clients liable, as Hathaway Switzer had not disclaimed liability for those fees; and (2) reversed the court's judgment to the extent that it held Switzer personally liable. Remanded with directions to dismiss Thomas & Thomas' claim against Switzer as an individual.View "Thomas & Thomas Court Reporters, LLC v. Switzer" on Justia Law

The Faigins owned a lot in the Diamante subdivision. Diamante asserted a lien on the Faigins' lot for failure to pay monthly membership dues and thereafter filed a complaint in foreclosure on the lot. The Faigins filed a motion for class certification so that they could be sued as representative parties on behalf of all lot owners in the Diamante subdivisions. The circuit court denied the motion. The Supreme Court affirmed, holding (1) although the circuit court abused its discretion by basing part of its decision on the question of commonality upon the ability of the proposed class to withstand a Ark. R. Civ. P. 12(b)(6) motion, (2) the element of commonality was lacking in this case where there were only seven lot owners who were in foreclosure and the Faigins' defenses to the complaint were not common to the overwhelming majority of the proposed class, and (3) because Ark. R. Civ. P. 23 requires that all elements be present before class certification is appropriate, and at least one element was lacking here, class certification was appropriately denied.View "Faigin v. Diamante LLC" on Justia Law

Fore LLC, a Maine entity, purchased a Maine business from a New Hampshire client of William Benoit, a Massachusetts-based accountant. Fore sued Benoit, alleging that Benoit fraudulently misrepresented that the tax returns he prepared for the Maine business were accurate. The superior court granted Benoit's motion to dismiss for lack of personal jurisdiction. The Supreme Court vacated the superior court's judgment, concluding that Fore made the requisite prima facie showing that Benoit's contacts with Maine were related to the claims in this case and that they were sufficient for the exercise of personal jurisdiction. Remanded to determine whether it was reasonable to require Benoit to defend this action in Maine.View "Fore, LLC v. Benoit" on Justia Law

When Neighborhood Health Plan of Rhode Island (NHP), a not-for-profit corporation that operated a licensed health maintenance organization that provided health insurance coverage to its enrollees, began reimbursing ophthalmologists at a higher rate than the rate paid to optometrists for performing the same services, two optometrists brought an action on behalf of all optometrists who had entered into participating provider agreements with NHP during the period that the differential reimbursement policy was in effect, contending that this differential reimbursement violated state law. The superior court granted summary judgment in favor of NHP, reasoning that the antidiscrimination provision in R.I. Gen. Laws 5-35-21.1(b) applied only to expenditures of public funds and that NHP did not violate the statute because NHP paid for the ophthalmologists' services using private money. The Supreme Court affirmed, holding (1) the statute at issue was not ambiguous; and (2) the motion justice did not err in concluding that NHP is not an agency or department of the state and cannot otherwise be considered a state actor.View "Drs. Pass and Bertherman, Inc. v. Neighborhood Health Plan of R.I." on Justia Law

Gary Martin and Lewistown Miller Construction Company entered into a written contract for the construction of a dwelling on Martin's property. When construction was completed, Martin refused to pay additional amounts above the bid price, and LMCC filed a construction lien on the property. LMCC then filed suit, seeking damages for breach of contract, unjust enrichment, and foreclosure of the lien. Martin counterclaimed for declaratory relief that the lien was invalid and to quiet title, among other things. The district court (1) granted foreclosure of LMCC's construction lien and awarded damages to LMCC; and (2) denied LMCC's and Martin's request for attorney fees. The Supreme Court affirmed in part and reversed in part, holding (1) the district court did not err in ordering foreclosure of the construction lien, and the award of damages was not clearly erroneous; but (2) the district court erred in failing to award statutorily mandated attorney fees to LMCC, as it established its lien. Remanded.View "Lewistown Miller Constr. v. Martin" on Justia Law

POM, which produces and sells a pomegranate-blueberry juice blend, filed a Lanham Act suit (15 U.S.C. 1125) against Coca-Cola, alleging that the name, label, marketing, and advertising of a Coca-Cola juice blend mislead consumers into believing the product consists predominantly of pomegranate and blueberry juice when it actually consists of less expensive apple and grape juices, and that the confusion causes POM to lose sales. The district court granted Coca-Cola partial summary judgment, ruling that the Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. 321(f), 331, and its regulations preclude Lanham Act challenges to the name and label of the juice blend. The Ninth Circuit affirmed. The Supreme Court reversed, holding that competitors may bring Lanham Act claims challenging food and beverage labels regulated by the FDCA. The Court noted that the issue was preclusion, not pre-emption. Even if the Court’s task is to reconcile or harmonize the statutes instead of to determine whether one is an implied repeal in part of another, the best way to do that does not require barring POM’s Lanham Act claim. Neither the Lanham Act nor the FDCA expressly forbids or limits Lanham Act claims challenging labels that are regulated by the FDCA. The laws complement each other in major respects: both touch on food and beverage labeling, but the Lanham Act protects commercial interests against unfair competition, while the FDCA protects public health and safety. The FDCA’s enforcement is largely committed to the FDA, while the Lanham Act allows private parties to sue competitors to protect their interests on a case-by¬case basis. Allowing Lanham Act suits takes advantage of synergies among multiple methods of regulation. Because the FDA does not necessarily pursue enforcement measures regarding all objectionable labels, preclusion of Lanham Act claims could leave commercial interests, and indirectly the general public, with less effective protection in the food and beverage labeling realm than in other less regulated industries. Neither the statutory structure nor the empirical evidence indicates there will be any difficulty in fully enforcing each statute. View "POM Wonderful LLC v. Coca-Cola Co." on Justia Law

Lexmark sells the only type of toner cartridges that work with its laser printers; remanufacturers acquire and refurbish used Lexmark cartridges to sell in competition with Lexmark’s new and refurbished cartridges. Lexmark’s “Prebate” program gives customers a discount on new cartridges if they agree to return empty cartridges to the company. Every Prebate cartridge has a microchip that disables the empty cartridge unless Lexmark replaces the chip. Static Control makes and sells components for cartridge remanufacture and developed a microchip that mimicked Lexmark’s. Lexmark sued for copyright infringement. Static Control counterclaimed that Lexmark engaged in false or misleading advertising under the Lanham Act, 15 U.S.C. 1125(a), and caused Static Control lost sales and damage to its business reputation. The district court held that Static Control lacked “prudential standing,” applying a multifactor balancing test. The Sixth Circuit reversed, applying a “reasonable interest” test. A unanimous Supreme Court affirmed. The Court stated that the issue was not “prudential standing.” Whether a plaintiff comes within a statute’s zone of interests requires traditional statutory interpretation. The Lanham Act includes in its statement of purposes, “protect[ing] persons engaged in [commerce within the control of Congress] against unfair competition.” “Unfair competition” is concerned with injuries to business reputation and sales. A section 1125(a) plaintiff must show that its injury flows directly from the deception caused by the defendant’s advertising; that occurs when deception causes consumers to withhold trade from the plaintiff. The zone-of-interests test and the proximate-cause requirement identify who may sue under section 1125(a) and provide better guidance than the multi-factor balancing test, the direct-competitor test, or the reasonable-interest test. Static Control comes within the class of plaintiffs authorized to sue under section 1125(a). Its alleged injuries fall within the zone of interests protected by the Act, and it sufficiently alleged that its injuries were proximately caused by Lexmark’s misrepresentations. View "Lexmark Int’l, Inc. v. Static Control Components, Inc." on Justia Law