Justia Commercial Law Opinion Summaries

Legacy, a small family-owned business, provides nonemergency ambulance services in several Ohio counties that border Kentucky. After receiving many inquiries from Kentucky hospitals and nursing homes, Legacy sought to expand into the Commonwealth. Kentucky required Legacy to apply for a “certificate of need” with the Kentucky Cabinet for Health and Family Services. Existing ambulance providers objected to Legacy’s request. The Cabinet denied Legacy’s application partly on the ground that these providers offered an adequate supply. Legacy sued, alleging that Kentucky’s certificate-of-need law violated the “dormant” or “negative” part of the Commerce Clause.The district court granted the defendants summary judgment. The Sixth Circuit affirmed with respect to Legacy’s request to offer intrastate ambulance transportation in Kentucky. Under the modern approach to the dormant Commerce Clause, a law’s validity largely depends on whether it discriminates against out-of-state businesses in favor of in-state ones. Legacy’s evidence suggests that the state’s limits will harm Kentucky’s own “consumers.” It has not shown a “substantial harm” to interstate commerce. The court reversed with respect to Legacy’s request to offer interstate ambulance transportation between Kentucky and Ohio. States may not deny a common carrier a license to provide interstate transportation on the ground that the interstate market contains an “adequate” supply. The bright-line rule barring states from obstructing interstate “competition” does require a finding that a state has discriminated against out-of-state entities. View "Truesdell v. Friedlander" on Justia Law

The Supreme Court resolved a conflict between Arizona Rule of Civil Appellate Procedure (ARCAP) 7(a)(4)(A), which instructs courts to include "damages, costs, attorney's fees, and prejudgment interest" when setting the amount of a supersedeas bond, and Ariz. Rev. Stat. 12-2108(A)(1), which instructs courts only to include damages, in favor of the rule.The superior court entered judgment against Robert Wallace for wrongfully filing a UCC-1 lien and awarded statutory damages plus attorney fees and costs. Wallace appealed, asking the court to set a supersedeas bond at $0 under section 12-2108(A)(1). The court, however, calculated the bond under ARCAP 7(a)(4)(A), including the statutory damages, attorney fees, and costs. Wallace filed a petition for special action in the Supreme Court challenging the rule's validity. The Supreme Court affirmed, holding (1) ARCAP 7(a)(4)(A) and section 12-2108(A)(1) are in direct conflict; and (2) section 12-2108(A)(1) regulates a procedural area of law within the purview of the judicial branch and therefore must yield where it conflicts with ARCAP 7(a)(4)(A). View "Wallace v. Honorable Smith" on Justia Law

Consolidated suits claimed that many firms in the broiler-chicken business formed a cartel. Third-party discovery in that ongoing suit turned up evidence that Rabobank, a lender to several broiler-chicken producers, urged at least two of them to cut production. Some plaintiffs added Rabobank as an additional defendant.The Seventh Circuit affirmed the dismissal of those claims. The Sherman Act, 15 U.S.C. 1, bans combinations and conspiracies in restraint of trade and does not reach unilateral action. Here, all the plaintiffs allege is that Rabobank tried to protect its interests through unilateral action. The complaint does not allege that Rabobank served as a conduit for the producers’ agreement, helped them coordinate their production and catch cheaters, or even knew that the producers were coordinating among themselves. A flurry of emails among managers and other employees at Rabobank observing that lower output and higher prices in the broiler-chicken market would improve the bank’s chance of collecting its loans and a pair of emails from the head of Rabobank’s poultry-lending section, to executives at two producers indicated nothing but unilateral action. The intra-Rabobank emails could not have promoted or facilitated cooperation among producers and the two messages only reminded the producers that as long as demand curves slope downward, lower output implies higher prices. Advice differs from agreement. View "Amory Investments LLC v. Utrecht-America Holdings, Inc." on Justia Law

Miller, who describes himself as “an active wine consumer,” asserts that he wants to order wine from out-of-state retailers and would like to be able to buy wine in other states and transport that wine back into Ohio for his personal use. House of Glunz is an Illinois wine retailer and alleges that it wishes to ship wine directly to Ohio consumers but cannot. Miller and Glunz challenged the constitutionality of Ohio liquor laws preventing out-of-state wine retailers from shipping wine directly to Ohio consumers and prohibiting individuals from transporting more than 4.5 liters of wine into Ohio during any 30-day period.The district court held that the Direct Ship Restriction is constitutional under binding Sixth Circuit precedent; the Director of the Ohio Department of Public Safety is entitled to Eleventh Amendment immunity from the claims; and the plaintiffs lack standing to challenge the Transportation Limit. The Sixth Circuit affirmed the Director of the Ohio Department of Public Safety’s Eleventh Amendment immunity, reversed with respect to the Direct Ship Restriction and the plaintiffs’ standing to challenge the Transportation Limit. On remand, the district court shall determine whether the challenged statutes “can be justified as a public health or safety measure or on some other legitimate nonprotectionist ground,” and whether their “predominant effect” is “the protection of public health or safety,” rather than “protectionism.” View "Block v. Canepa" on Justia Law

Imperial Sugar went bankrupt in 2001 and suffered a costly accident in 2008, prompting its sale to Louis Dreyfus. Imperial receives from Louis Dreyfus only minimal investment and is an “import-based, price-uncompetitive sugar refinery” that is “structurally uncompetitive” and lost roughly 10 percent of its customers from 2021-2022. Florida-based refiner U.S. Sugar agreed to purchase Imperial. The government sought an injunction (Clayton Act. 15 U.S.C. 18), arguing that the acquisition would have anticompetitive effects, leaving only two entities in control of 75% of refined sugar sales in the southeastern United States. The government applied the hypothetical monopolist test to demonstrate the validity of its proposed product and geographic markets. U.S. Sugar responded that it does not sell its own sugar but participates with other producers in a Capper-Volstead agricultural cooperative that markets and sells the firms’ output collectively but exercises no control over the quantities produced. At capacity, Imperial’s facility could produce only about seven percent of national output. U.S. Sugar argued that distributors constitute a crucial competitive check on producer-refiners that would undermine any attempt to increase prices and noted evidence of the high mobility of refined sugar throughout the country.The Third Circuit affirmed the denial of an injunction, upholding a finding that the government overlooked the pro-competitive effects of distributors in the market, erroneously lumped together heterogeneous wholesale customers, and defined the relevant geographic market without regard for the high mobility of sugar throughout the country. View "United States v. United States Sugar Corp." on Justia Law

You, a U.S. citizen of Chinese origin, worked as a chemist, testing the chemical coatings used in Coca-Cola’s beverage cans. You was one of only a few Coca-Cola employees with access to secret BPA-free formulas. You secretly planned to start a company in China to manufacture the BPA-free chemical and received business grants from the Chinese government, claiming that she had developed the world’s “most advanced” BPA-free coating technology. On her last night as a Coca-Cola employee, You transferred the formula files to her Google Drive account and then to a USB drive. You certified that she had not kept any confidential information. You then joined Eastman, where she copied company files to the same account and USB drive. Eastman fired You and became aware of her actions. Eastman retrieved the USB drive and reported You to the FBI.You was convicted of conspiracy to commit theft of trade secrets, 18 U.S.C. 1832(a)(5), possessing stolen trade secrets, wire fraud, conspiracy to commit economic espionage, and economic espionage. The Sixth Circuit remanded for resentencing after rejecting You’s claims that the district court admitted racist testimony and gave jury instructions that mischaracterized the government’s burden of proof as to You’s knowledge of the trade secrets and their value to China. In calculating the intended loss, the court clearly erred by relying on market estimates that it deemed speculative and by confusing anticipated sales of You’s planned business with its anticipated profits. View "United States v. You" on Justia Law

Each of the four plaintiffs filed a putative class action complaint in state court, alleging violations of the Magnuson-Moss Warranty Act (MMWA), 15 U.S.C. 2301, claiming that the defendants either concealed written warranties prior to sale or provided warranties that prohibit the use of third-party repair services or parts in violation of MMWA. The defendants removed the actions to the U.S. District Court for the Western District of Pennsylvania pursuant to the Class Action Fairness Act (CAFA), 28 U.S.C. 1332(d)(2).The plaintiffs moved to remand to state court. The district court held that remand was appropriate because MMWA’s jurisdictional requirements were not satisfied and neither CAFA nor traditional diversity jurisdiction can be used to circumvent those jurisdictional requirements. The Third Circuit affirmed.MMWA claims can only be brought in federal court if section 2310(d)(3)’s requirements are satisfied, including that a class action name at least 100 plaintiffs; here, each complaint names only one plaintiff. MMWA’s stringent jurisdictional requirements are irreconcilable with CAFA. Allowing CAFA to govern MMWA class claims would undercut the MMWA’s requirement and allow an MMWA class action to proceed in contravention of the MMWA. View "Rowland v. Bissell Homecare, Inc." on Justia Law

The First Circuit affirmed the judgment of the district court granting Defendants' motion to dismiss the underlying complaint in its entirety, holding that the district court did not err in finding that the challenged regulations in this case were not null and remained enforceable and that there is no private right of action to enforce the Puerto Rico Oversight Management Stability Act (PROMESA), 48 U.S.C. 2101.Plaintiff, Camara de Mercadeo, Industria y Distribución de Alimentos, Inc., filed the underlying complaint on behalf of its members - businesses in the food industry - seeking declaratory and injunctive relief from certain regulations related to freight tariffs and implementing circular letters promulgated by the Commonwealth of Puerto Rico's Transportation and other Public Services Bureau. Specifically, Plaintiff alleged that the challenged regulations were unlawful under PROMESA. The district court granted Defendants' motion to dismiss. The First Circuit affirmed, holding that Plaintiff was not entitled to relief on its allegations of error. View "Camara de Mercadeo v. Emanuelli Hernandez" on Justia Law

Goodman dealt with Martinek of Southern Risk to obtain crop insurance and later discovered that portions of his property could not be farmed. Southern denied his claim. Goodman accused Martinek and Southern of failing to obtain proper coverage. Based on a perceived moral obligation, Martinek provided Goodman with checks drawn from Southern’s Commercial Bank account–for $100,000 and $200,000. Southern’s account had insufficient funds to cover the draws. Goodman gave Martinek nothing in consideration for the checks; they never discussed a lawsuit. Goodman twice unsuccessfully attempted to cash the checks. Months later, after exchanging text messages with Martinek, Goodman was heading to Commercial Bank when Martinek sent an “everything stopped” message. Goodman asked for cashier’s checks in exchange for the Southern checks, without mentioning his past attempts to negotiate the checks. The teller did not check the balance in Southern’s account but printed “teller’s checks” payable to Goodman for $100,000 and $200,000. When the teller realized the account lacked sufficient funds, the Bank issued a stop payment order.Goodman sued to enforce the checks. The Bank counterclaimed for restitution. Under Tennessee’s Commercial Code, if Commercial Bank paid the checks by “mistake” and Goodman had taken those checks in “good faith” and “for value,” the Bank was not entitled to restitution. The district court held that Commercial Bank paid the checks by mistake and that Goodman did not give value. The Sixth Circuit affirmed summary judgment for Commercial Bank. View "Goodman v. Commercial Bank & Trust Co." on Justia Law

Sunny sold seasonal merchandise to Walgreens, with Envision as an intermediary. From 2007-2012 Sunny shipped goods directly to Walgreens but routed documents through Envision. Every year Sunny sent documents calling for it to be named the beneficiary of letters of credit to cover the price. Envision passed these to Walgreens, which arranged for the letters of credit. In 2013 Sunny sent the usual documents but Envision substituted its own name for Sunny’s as the beneficiary of the letters of credit. Walgreens sent the letters of credit to Envision, which drew more than $3 million.A jury found that Envision breached its contract with Sunny by not paying it the money drawn on the letters of credit and that Envision had committed fraud. The Seventh Circuit affirmed, rejecting Envision’s argument that it cannot be liable for fraud because it was not Sunny’s agent or fiduciary and therefore did not have any duty to alert Sunny that it had changed the instructions about who would control the letters of credit. The cooperative business relations between Sunny and Envision from 2007-2012 created a “special relationship” that required Envision to notify Sunny about any deviation in their dealings. View "Sunny Handicraft (H.K.) Ltd. v. Envision This!, LLC" on Justia Law