Justia Commercial Law Opinion Summaries

Plaintiff contracted to sell a furniture business to Mendoza in 2004. Westernbank provided partial funding and obtained a first mortgage. To secure a deferred payment of $750,000, Mendoza signed a mortgage in favor of plaintiff and a contract under which plaintiff consigned goods with expected sales value of more than $6,000,000. An account was opened at Westernbank for deposit of sales proceeds. Plaintiff alleges that Westernbank kept funds to which plaintiff was entitled for satisfaction of Mendoza’s debts to Westernbank. Mendoza filed for bankruptcy and transferred its real estate to Westernbank in exchange for release of debt to the bank. Plaintiff agreed to forgive unpaid debts in order to obtain relief from the stay and foreclose its mortgage, then sued Westernbank, employees, and insurers, alleging violations of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1961-68, and Puerto Rico law causes of action. After BPPR became successor to Westernbank, plaintiff agreed to dismiss the civil law fraud and breach of fiduciary duty claims and the RICO claim. The district court later dismissed remaining claims for lack of subject matter jurisdiction, declining to exercise supplemental jurisdiction over non-federal claims. The First Circuit affirmed. View "Fabrica de Muebles J.J. Alvare v. Inversiones Mendoza, Inc." on Justia Law

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

Trostel was founded in 1858. By 2007 the founder's relations still owned about 11 percent of its stock. Smith, which owned the rest, decided to acquire remaining shares by freezeout merger. Trostel became Smith's wholly owned subsidiary. Notz, one of the Trostel great-grandchildren, who owned 5.5 percent of the stock, rejected proffered compensation of $11,900 per share (about $7.7 million). The rest of the outside investors accepted. In an appraisal action (Wis. Stat. 180.1330(1)), the district court denied Nost's motion to dismiss for lack of subject matter jurisdiction and concluded that fair value of the stock on the merger date was $11,900 per share. The Seventh Circuit affirmed. Wisconsin's corporate is legislative, not contractual and does not block corporations from availing themselves of diversity jurisdiction. View "Albert Trostel & Sons Co. v. Notz" on Justia Law

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

A proposed consent order from an FTC investigation indicated that U-Haul attempted to implement a scheme to collude with competitors, Budget and Penske, to raise prices for truck rentals. The FTC concluded that U-Haul's conduct violated the Federal Trade Commission Act, 15 U.S.C. 45(a)(1). The proposed consent order was designed to prevent collusion. U-Haul consented to the relief, but did not admit the conduct or violation. A consumer filed a complaint charging U-Haul with violating Mass. Gen. Laws ch. 93A by engaging in an attempted price-fixing scheme and seeking damages on behalf of a large class. The suit, a follow-on action after a proposed government consent decree, is common in antitrust cases. Because the FTC Act contains no private right of action and the Sherman Act is of doubtful application to price-fixing, the suit rested chapter 93A, which prohibits "[u]nfair methods of competition and unfair or deceptive acts or practices," and permits consumer class actions. The complaint alleged that U-Haul's actions caused plaintiff to pay at least 10 percent more for truck rentals than she would have absent the unlawful action. The district court dismissed, stating that the complaint failed plausibly to allege injury. The First Circuit vacated, finding the claim plausible. View "Liu v. Amerco" on Justia Law

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

The Department of Commerce investigated Essar's participation in several programs, including its purchase of iron ore from India's government-owned National Mineral Development Corporation and participation in programs under India's Special Economic Zone Act, and found that Essar received countervailable subsidies (19 U.S.C. 1677(5)(E)(iv)) from the government of India for certain hot-rolled carbon steel flat products. The Court of International Trade affirmed that holding, but remanded with respect to whether the company received subsidies through the Indian state of Chhattisgarh Industrial Program. The Federal Circuit affirmed with respect to the subsidies from the Indian government, but reversed with respect to the CIP. The lower court should have upheld Commerce's application of adverse facts against Essar; Essar did not act to the best of its ability during the review with regard to the CIP issue.View "Essar Steel, Ltd. v. United States" on Justia Law

The Fair and Accurate Credit Transactions Act, 15 U.S.C. 1681c(g), requires that electronically printed receipts not display more than the last 5 digits of the card number, but does not define "card number." A Shell card designates nine digits as the "account number" and five as the "card number" and has 14 digits embossed on the front and 18 digits encoded on the magnetic stripe. Shell printed receipts at its gas pumps with the last four digits of the account number. Plaintiffs contend that it should have printed the final four numbers that are electronically encoded on the magnetic stripe, which the industry calls the "primary account number." Plaintiffs did not claim risk of identity theft or any actual injury, but sought a penalty of $100 per card user for willful failure to comply. The district court denied Shell summary judgment. The Seventh Circuit reversed, holding that Shell did not willfully violate the Act.View "Shell Oil Prods. Co. v. Van Straaten" on Justia Law

In 1998, the Supreme Court held that the Harbor Maintenance Tax, 26 U.S.C. 4461-4462, was unconstitutional as applied to exports. U.S. Customs enacted procedures for refunds and established a separate HMT database with data from its ACS database, through which HMT payments had been processed. Customs discovered wide-spread inaccuracies in its HMT database, but was unable to make corrections related to payments made before July 1, 1990, because it no longer had original documents. Customs established different requirements for supporting documentation, depending on whether an exporter was seeking a refund of pre- or post-July 1, 1990 payments. Ford sought HMT refunds for both pre- and post-July 1, 1990, payments and has received more than $17 million, but claims that Customs still owes about $2.5 million. In addition to a FOIA Report of Ford’s pre-July 1, 1990 payments was drawn from information in the ACS database, Ford submitted an affidavit attesting that it was only claiming refunds of HMT paid on exports and declarations about the consistency and quality of its quarterly HMT payment records. Customs denied the claims. The Trade Court entered judgment in favor of the government. The Federal Circuit affirmed. The claims were insufficient because there still was high potential for error. View "Ford Motor Co. v. United States" on Justia Law

GMG contracted with Amicas to develop and license computer programs to accept information from a radiology patient management system established by Sage and send information to a billing system established by Sage. The warranty excluded any failure resulting from databases of GMG or third parties and warned that Amicas did not warrant that the software would meet GMG’s requirements. Amicas worked with Sage on the interfaces. GMG began using the programs and reported problems, eventually returning to its old method of manual processing, but did not inform Amicas of that decision or of persistent problems with the interface. GMG began negotiating with Sage to develop substitute software. When Amicas became aware of problems with the interface, it worked with Sage to resolve the concerns, but GMG sent Amicas a termination notice, citing failure to deliver a functional product. The district court found for Amicas on its breach of contract claim, rejected counterclaims, and awarded $778,889 in damages, $324,805 in attorneys’ fees, plus costs and interest. The Third Circuit affirmed, finding that Amicas satisfied its burden of proving performance and that GMG offered only conclusory allegations of noncompliance. View "Amicas, Inc. v. GMG Health Sys., LTD." on Justia Law