Justia Commercial Law Opinion Summaries

In 1999 plaintiff pled guilty to making false statements while working on a project funded by the Federal Highway Administration (18 U.S.C. 2, 1014, and 1020). The agreement prohibited plaintiff from participating in any FHWA-funded project for a year. Plaintiff challenged Puerto Rico agencies' subsequent actions. The parties negotiated settlements; plaintiff entered into an agreement allowing it to bid on FHWA projects. Puerto Rico then enacted Law 458, which prohibits award of government contracts to any party convicted of a crime constituting fraud, embezzlement, or misappropriation of public funds and requires rescission of any contract with a party convicted of a specified offense. The statute states that it does not apply retroactively. One agency cancelled plaintiff's successful bids, another withdrew its consent to the settlement. The district court rejected claims of violation of the federal Contracts Clause and breaches of contract under Puerto Rico law. The First Circuit affirmed with respect to the constitutional claim. Any breach of the settlement agreements did not violate the Contracts Clause, even if committed in an attempt to unlawfully enforce Law 458 retroactively; defendants have not impaired plaintiff's ability to obtain a remedy for a demonstrated breach. Given the stage of the litigation, the district court should have retained the breach of contract claims. View "Redondo Constr. Corp. v. Izquierdo" on Justia Law

Plaintiff, a supplier of outdoor power equipment, gave defendant, a disttributer of such equipment, as well as of irrigation equipment, a distributor agreement with a multi-state territory. After about four years, plaintiff provided notice of termination and shifted sales to another distributor. Defendant was in significant debt, its lenders had refused to loan it any more money. Defendant is now out of business. During the contract period, defendant also distributed products for other companies. Plaintiff claimed that defendant owed for products purchased. The district court ruled in favor of plaintiff on the breach of contract claim and rejected defendant's claims of wrongful termination and that the new distributor improperly induced plaintiff to terminate. The Seventh Circuit affirmed. Rejecting a Connecticut Franchise Act claim, the court noted that defendant failed to show that more than 50 percent of its business resulted from its relationship with plaintiff. The district court properly awarded interest and rejected claims of unjust enrichment and tortious interference. View "Echo, Inc. v. Timberland Machines & Irrigation, Inc." on Justia Law

Plaintiff, sued by a competitor and by consumers for unfair trade practices, false and misleading advertising, and deceptive labeling, among other claims, sought indemnity and defense costs from its insurer. The insurer claimed that the suit fell within an exclusion for "antitrust violations, price fixing, price discriminations, unfair competition, deceptive trade practices and/or monopolies." The district court ruled in favor of the insurer. The First Circuit affirmed, finding that the policy headings were not determinative and that the paragraph at issue clearly excluded coverage. View "Welch Foods, Inc. v. Nat'l Union Fire Ins.Co. of Pittsburgh" on Justia Law

Factors purchase accounts receivable to assume garment manufacturers' risk with respect to amounts owed by retailer. A manufacturer typically cannot make sales to retailers for which factors decline to assume the risk. Factors determine the terms and conditions, including the discount rate at which they purchase receivables, payment terms required of retailers, and whether purchases by particular retailers will be financed. Plaintiff, a major discount clothing retailer had sub-par performance and declining sales for two years. Factors declined to extend credit, which caused increased costs and decreased profitability until plaintiff filed for bankruptcy. The trustee filed suit under the Sherman Act, 15 U.S.C. 1, and New York law, alleging that factors engaged in "cartel-like behavior," unlawfully exchanged information, and entered into illegal agreements in secretive weekly meetings and telephone conversations to minimize their risks and cost of doing business, maintain and stabilize pricing structures for factoring services; and stabilize their respective market shares. The district court dismissed. The Third Circuit affirmed, finding no direct evidence of agreement between the factors or of parallel behavior. View "Burtch v. Milberg Factors, Inc." on Justia Law

Hackers breached the security of the database for the grocery store where plaintiffs shop. The district court determined that plaintiffs failed to state a claim under Maine law for breach of fiduciary duty, breach of implied warranty, strict liability, and failure to notify customers. Although the court concluded that plaintiffs adequately alleged breach of implied contract, negligence, and violation of the unfair practices portion of the Maine Unfair Trade Practices Act, it dismissed those claims because alleged injuries were too unforeseeable and speculative to be cognizable under Maine law. The First Circuit affirmed in part, but reversed dismissal of the negligence and implied contract claims. Mitigation damages are available under those claims, for card replacement costs and credit insurance. View "In Re: Hannaford Bros Co. Cust" on Justia Law

The Information Security Management Act, 44 U.S.C. 3541–49, requires that federal agencies meet information security standards. Compliance is monitored by the Office of Management and Budget. The Department of Justice purchased a license for plaintiff’s compliance product. Plaintiff participated with DOJ in seeking designation as a "Center of Excellence." Without notifying plaintiff, DOJ developed an alternative product, accessing plaintiff's database to learn the system’s architecture. OMB selected DOJ as a Center of Excellence and required agencies to purchase from COEs. DOJ’s product substituted its alternative for plaintiff's software. Plaintiff filed, in district court, a Lanham Act claim; a common law unfair competition claim; and a breach of fiduciary duty claim. Months later, plaintiff filed, in the Court of Federal Claims, claims of: breach of oral or implied contract, breach of license agreement, and breach of duty of good faith and fair dealing. The district court dismissed all but the Lanham Act claim. The Claims Court dismissed all claims, applying 28 U.S.C. 1500, which precludes it from exercising jurisdiction over "any claim for or in respect to which the plaintiff … has pending in any other court any suit … against the United States." The Federal Circuit reversed, in part, reasoning that the license agreement claim does not arise from substantially the same facts as the district court claim. View "Trusted Integration, Inc. v. United States" on Justia Law

This case arose from a consolidated appeal. In the underlying cases, the respective property owners failed to satisfy their debt obligations to professional lending institutions, which precipitated the foreclosure proceedings. In both cases, the professional lenders asserted that their respective mortgages were superior to the general tax liens filed pursuant to Ky. Rev. Stat. 134.420(2). The circuit court entered a judgment granting the professional lenders' liens priority over the other liens. The court of appeals determined that the circuit court had erred in reordering the priorities and reversed the judgment. The Supreme Court affirmed the court of appeals, holding (1) the prior-recorded section 134.420(2) tax liens enjoyed priority pursuant to the long established first-to-file doctrine; and (2) the doctrine of equitable subrogation does not act to relieve a professional lender of a negligent title examination. View "Wells Fargo Bank v. Commonwealth" on Justia Law

A group of investors (Borrowers) bought a golf course by contributing part of the purchase amount in cash and financing the remaining balance through a nonrecourse loan with Community Bank of Nevada (CBN). To facilitate the sale, William Walters entered into a separate guaranty with CBN where he personally guaranteed the loan. Prior to the Borrowers' default and the eventual foreclosure of the golf course, Walters filed a complaint against CBN, asserting causes of action for declaratory relief and breach of the implied covenant of good faith and fair dealing. CBN counterclaimed, asserting breach of guaranty against Walters. The district court granted summary judgment in part to CBN, concluding that no genuine issues of material fact existed as to Walters' guaranty liability to CBN. Walters filed a petition for a writ compelling the district court to vacate its partial summary judgment in favor of CBN and to preclude CBN from recovering any amount from Walters under his guaranty. The Supreme Court denied the writ, holding (1) CBN complied with the deficiency application requirements of Nev. Rev. Stat. 40, and (2) CBN was not attempting double recovery because double recovery was not an issue in this case. View "Walters v. Dist. Court" on Justia Law

In this dispute between a law firm and two banks, the issues presented were (1) the scope of the duty a payor bank owed to a non-customer depositor of a counterfeit check and (2) the scope of the duty a depository bank owed its customer when it acted as a collecting bank during the check collection process. The court held that neither the depository/collecting bank nor the payor bank violated any duty owed to the depositor and that summary judgment dismissing the complaint was properly granted. View "Greenberg, Trager & Herbst, LLP v. HSBC Bank USA, et al." on Justia Law

The parties to this lawsuit claimed rights to a punch press used in the manufacturing business of now-defunct Vitco Industries. Plaintiff, Gibraltar Financial Corporation, held a perfected security interest in Vitco's tangible and intangible property, including its equipment. Defendants, several entities including Prestige Equipment, who had acquired the press, and Key Equipment Finance, claimed that the security interest did not cover the press because the press was not Vitco's equipment, but rather, the press had been leased to Vitco by Key Equipment. The trial court granted summary judgment in favor of Defendants after concluding that the lease was a true lease. The court of appeals affirmed. The Supreme Court reversed, holding that genuine issues of material fact existed regarding whether the press was leased. The Court noted that no evidence was on the record relating to the economic expectations of Vitco and Key Equipment at the time the transaction was entered into. Remanded. View "Gibraltar Fin. Corp. v. Prestige Equip. Corp." on Justia Law