Justia Commercial Law Opinion Summaries

A division of New Jersey's Department of Treasury purchased $300 million in preferred stock issued by the defendant, which later asked New Jersey to convert its preferred shares to common stock. New Jersey agreed, if the terms of conversion were as favorable as terms governing the exchange of other stockholders' preferred shares. Defendant agreed and in July 2008 the parties entered into a share exchange agreement with a forum selection clause providing that "exclusive jurisdiction . . . shall lie in the appropriate courts of the State [of] New Jersey." The state sued for breach and the defendant sought to remove the case to federal court. The district court held that the agreement waived the right to remove the pending litigation to the federal district courts in New Jersey. The Third Circuit affirmed, stating that federal courts are in the states, but not "of" the states.

Plaintiff and defendant, investment trusts that specialize in healthcare-related properties, participated in a two-step auction to purchase the assets of a Canadian company. The defendant's efforts derailed. Plaintiff entered into an agreement to purchase the assets, but before the agreement was approved by shareholders, the defendant made a higher bid and made a public announcement. After a flurry of press releases and a ruling by a Canadian court concerning a confidentiality clause that was part of the bidding process, the defendant revoked its bid. The stockholders rejected the agreement with the plaintiff; the deal closed after plaintiff increased its bid. The district court awarded the plaintiff $101,672,807 for tortious interference with contract and with prospective advantage. The Sixth Circuit affirmed, but remanded for consideration of punitive damages. The declaratory proceedings in Canada did not preclude the claims at issue. Jury instructions concerning tortious interference involving competitors, motive, causation, and breach of the confidentiality agreement as wrongful conduct were appropriate.

Wanting to retire from the trucking business, the owner entered into employment contracts so that the plaintiffs would act as CEO and vice president and a stock purchase agreement. The relationship broke down while they were negotiating a buy-sell agreement. The owner fired the plaintiffs and paid benefits specified in the employment contract. The plaintiffs did not purchase stock or place $750,000 into an escrow, as they were entitled to do to secure their position. The district court ruled in favor of the owner. The Seventh Circuit affirmed, holding that neither party violated a clause in the stock purchase contract that required that they use "best efforts" to enter into a buy-sell agreement. The plaintiffs retained the right to purchase stock, but chose not to do so, which entitled the owner to terminate their employment. The owner took full advantage of his rights under the contracts, but did not exploit the plaintiffs.

For many years the owners of the original bridal shop allowed family members to operate similar businesses under the same name. The owners sold one of their own shops and the buyer agreed to pay $75,000 per year for the use of the name and marks. When the agreement expired in 2002, the buyer continued to use the name and marks, without paying. The district court dismissed a 2007 claim under the Lanham Act, 15 U.S.C. 1117, 1125. The Seventh Circuit affirmed, holding that the owners abandoned their mark by engaging in "naked licensing:" allowing others to use the mark without exercising reasonable control over the nature and quality of the goods, services, or business on which the mark is used. It was not enough that the owners had confidence in the high quality of the buyer's operation; they retained no control.

Appellant appealed an order of summary judgment in favor of the United States Bureau of Customs and Border Protection ("CBP") in his eight Freedom of Information Act ("FOIA"), 5 U.S.C. 552, requests for 19 C.F.R. 133.21(c) Notices of Seizures of Infringing Merchandise ("Notices") from certain United States ports. Appellant raised several issues of error on appeal. The court held that the district court's findings that the Notices contained plainly commercial information, which disclosed intimate aspects of an importers business such as supply chains and fluctuations of demand for merchandise, was well supported. The court also held that the district court was not clearly erroneous in its finding that the information at issue was confidential and privileged where the trade secret exemption of FOIA ("Exemption 4") was applicable. The court further held that when an agency freely disclosed to a third party confidential information covered by a FOIA exemption without limiting the third-party's ability to further disseminate the information then the agency waived the ability to claim an exemption to a FOIA request for the disclosed information. Therefore, the district court's ruling was affirmed in regards to FOIA Exemption 4 but the district court's conclusion as to the fees charged to appellant was reversed where CBP must follow the FOIA fee provisions under 19 C.F.R. 103.

Dell manufactures and sells secondary batteries for laptop computers, which may be packaged with new computers, at the option of the customer. The batteries at issue were admitted separately from computers into Dellâs Foreign Trade Sub-Zone (âFTZâ) in Nashville with ânon-privileged foreign status,â meaning that they had not been cleared by Customs and would be appraised for tariff purposes at the time of their formal entry into the United States. Dell proposed to classify secondary batteries that were packaged with computers as duty-free âportable digital automatic data processing [âADPâ] machines,â the ordinary classification for laptop computers. Customs classified the batteries as "other storage batteries," not âgoods put up in sets for retail saleâ with the computers. The Court of International Trade upheld the designation. The Federal Circuit affirmed, noting that the computer and battery may be packaged and shipped to the customer together, but are not packaged as a single unit for retail sale. There is nothing anomalous about classification of an article depending on the manner in which it is combined or associated with other related articles that are imported with it.

The owner of a mortgage company was sentenced to 96 months for fraud and money laundering. The Sixth Circuit affirmed, holding that the conviction was supported by substantial evidence. Evidence of a government witness's prior inconsistent statements that referred to a conviction more than 10 years prior was properly excluded; the trial judge gave the defense proper latitude to impeach the witness. The sentence was properly enhanced for attempting to obstruct the investigation, use of "sophisticated means," and acting as the organizer or leader.

Franchisees, operating gas stations in Puerto Rico, alleged violations of the Petroleum Marketing Practices Act (PMPA), 15 U.S.C. 2801, based on the Esso's plan to leave the market and terminate their contracts. Esso sold its assets to Total and most of the franchisees eventually contracted with Total. The district court found some of the terms of the Total franchise contract invalid, but severable, and denied injunctive relief and damages against Esso. The First Circuit affirmed, first holding that PMPA does not require that terms offered by a substitute franchisor be identical for each franchisee and that there was no evidence that Total acted other than in good faith or intended that its offers would be rejected. That Total's franchise contract, consisting of more than 100 pages, contained five provisions found partially invalid under state law, did not render it "per se" in violation of PMPA.

The Tennessee holder of a patent on a pet-access door received communications from a New Jersey company concerning cooperative marketing of a portable pet-access door, but did not respond until the New Jersey company indicated that it had obtained patent 141. The companies negotiated; the owner of the New Jersey company traveled to Tennessee to demonstrate the product and the parties signed a non-disclosure agreement, with a provision identifying Tennessee as the forum of any litigation. When the Tennessee company sought a patent on a similar item, the New Jersey company claimed infringement. The Tennessee district court dismissed an action seeking a declaration of noninfringement and of invalidity of patent 141. The Federal Circuit affirmed, finding that the court lacked personal jurisdiction over the New Jersey defendant. Only activities of the patentee relating to enforcement or defense of the patent, not actions relating to commercialization, give rise to personal jurisdiction in a declaratory judgment action. The New Jersey company's efforts to interest the Tennessee company in its product were insufficient to vest jurisdiction; the New Jersey company's only activities relating to enforcement consisted of correspondence. The suit did not arise from the non-disclosure agreement.

The Court was asked to consider whether state law allows a sophisticated party in a commercial transaction, represented by counsel, with full knowledge of all the circumstances, without mistake or duress of any kind, to include in a contract a disclaimer, and later disavow that disclaimer as having been false at the time it was made. Petitioner Italian Cowboy Partners entered into a lease agreement with Respondents to open a new restaurant. Petitioners had been in the restaurant business for twenty-five years. The lease Petitioners signed contained a disclaimer against representations or promises with respect to the leased site. But Petitioners sued claiming Respondents misled them regarding the suitability of the chosen rental space for a new restaurant. The Court held that the lower court erred in granting Petitioners damages and attorneys fees based on its interpretation of the disclaimer in the lease, and remanded the case for an additional hearing.