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Business Torts Litigation
 

Case Notes

 

OVERVIEW OF CASE NOTES:

Antitrust
Arbitration
Civil Conspiracy
Civil Procedure
Contracts & Contract Breach
Damages
Defamation
Discovery
Economic Loss Rule
Expert Testimony
Evidence

 

Fiduciary Duty
Fraud
Insurance Coverage
Jurisdiction
Law of the Case
Remedies
Tortious Interference
Trade Secrets, Non-Compete Agreements
Unfair Trade Practices
 

Antitrust


  • » William O. Gilley Enter., Inc. v. Atlantic Richfield Co., et al.
    No. 06-56059 (April 3, 2009)
    The Ninth Circuit allows the accumulation of individual contracts to establish unreasonable restraint of trade for § 1 Sherman Antitrust Act claim.
  • » Golden Bridge Tech., Inc. v. Motorola, Inc., et al.
    547 F.3d 266 (5th Cir. (Tex.) 2008)
    Addressing litigation in the wireless communication technology realm, the Fifth Circuit Court of Appeals considered an appeal from a grant of summary judgment dismissing a claim under the Sherman Antitrust Act.
  • » Tripple Tee Golf, Inc. v. Nike, Inc.
    Nos. 05-10934, 05-11442, 2007 WL 1128138 (5th Cir. (Tex.) Apr. 17, 2007)
    The Fifth Circuit considers an antitrust action involving the alleged misappropriation of trade secrets.
  • » Merriman v. Crompton Corp.
    146 P.3d 162 (Kan. 2006)
    Kansas Supreme Court finds Kansas long arm statute gives jurisdiction over out-of-state tortious acts with injury, economic or physical, in Kansas, and adopts the civil conspiracy theory to assert jurisdiction over those whom jurisdiction would otherwise be lacking.
  • » In re Canadian Import Antitrust Litigation
    No. 05-3873 (8th Cir. November 30, 2006)
    When sold to pharmacies, Canadian drugs are branded “Pr” not “Rx only” as required under United States law.  Because of this mislabeling, the importation of Canadian drugs is prohibited by the Federal Food, Drug, and Cosmetic Act (FFDCA)


Arbitration


  • » Arthur Andersen LLP v. Carlisle | NEW
    U.S. Supreme Court, May 4, 2009
    U.S. Courts of Appeals have jurisdiction over appeals from district courts’ denials of applications for stay pursuant to § 3 of the Federal Arbitration Act (FAA), regardless of the merits of the underlying stay application. Section 3 stays should be granted if state law would allow the applicant to enforce the arbitration agreement, even if the applicant is not itself a party to the agreement.
  • » Downer v. Siegel
    489 F.3d 623 (5th Cir. (La.) 2007)
    The Fifth Circuit considers arbitration concepts, including whether an arbitrator exceeded his authority.
  • » Apache Bohai Corp. LDC v. Texaco China BV
    480 F.3d 397 (5th Cir. (Tex) 2007)
    The Fifth Circuit considers arbitration concepts, including whether an arbitrator exceeded his authority.
  • » Fair v. Bakhtiari
    40 Cal. 4th 189, 147 P.3d 653 (2006)
  • » Tittle v. Enron Corp., et al.
    463 F.3d 410 (5th Cir. 2006)
    The Fifth Circuit enunciates principles utilized in determining the arbitrability of specific issues.
  • » Albert M. Higley Company v. N/S Corporation
    No. 05-3393 (6th Cir. April 17, 2006)
    An arbitration provision allowing a primary contractor sole discretion about whether to arbitrate or litigate a dispute permitted the contractor to select litigation to resolve the contract dispute.
  • » Laws v. Morgan Stanley Dean Witter
    452 F.3d 398 (5th Cir. 2006)
    The Fifth Circuit addresses whether an arbitration panel committed misconduct when it denied the appellant’s request for a continuance and articulated applicable criteria.


Civil Conspiracy


  • » Borsellino v. Goldman Sachs Group, Inc.
    No. 06-1384 (7th Cir. Feb. 20, 2007)
    The heightened pleading requirements outlined in Rule 9(b), apply to all averments of fraud, not just claims of fraud.
  • » Sunbelt Rentals, Inc. v. Head & Engquist Equipment LLC | PDF
    No. 00-CVS-10358 (Mecklenburg Co. Sup. Ct. May 2, 2003)
    Conspiring to raid competitor’s employees, customer relationships, and trade secrets led to judgment for unfair competition, misappropriation of trade secrets, and civil conspiracy.


Civil Procedure


  • » In re Pharmaceutical Industry Average Wholesale Price Litigation
    252 F.R.D. 83 (D. Mass. Sept. 26, 2008)
    Nationwide classes of consumers and businesses certified under state Little FTC Acts for multiple/punitive damages and attorney fees.
  • » Gutman v. Klein
    No. 03 Civ. 1570 (BMC) (RML) (E.D.N.Y., Dec. 2, 2008 (Cogan, J.) and Oct. 15, 2008 (Levy, J.))
  • » Instituto de Prevision Militar v. Merrill Lynch, et al.
    No. 07-15079 (11th Cir. Oct. 29, 2008)
    State Securities Fraud Claims Preempted-Eleventh Circuit Applies Rigorous Preemption Provisions of the Securities Litigation Uniform Standards Act.
  • » Merriman v. Crompton Corp.
    146 P.3d 162 (Kan. 2006)
    Kansas Supreme Court finds Kansas long arm statute gives jurisdiction over out-of-state tortious acts with injury, economic or physical, in Kansas, and adopts the civil conspiracy theory to assert jurisdiction over those whom jurisdiction would otherwise be lacking.
  • » Cox Nuclear Pharmacy, Inc. v. CTI, Inc.
    Case No. 05-14713 (11th Cir. Feb. 13, 2007)
    Eleventh Circuit holds that fraud claim failed to the extent that these claims were dependent on the existence of an agreement that was barred by the statute of frauds; sua sponte summary judgment order appropriate where record sufficiently developed.
  • » Pritchett v. Pound
    No. 05-41445, 2006 WL 3704859 (5th Cir. (Tex.) Dec. 18, 2006)
    The Fifth Circuit holds that employer owns copyright to publication written by employee even though it mistakenly designated work as “not for hire” in a copyright registration form.
  • » Fiber Systems Int’l, Inc. v. Roehrs
    No. 05-41213, 2006 WL 3378403 (5th Cir. (Tex.) Nov. 22, 2006)
    The Fifth Circuit holds that the Computer Fraud and Abuse Act provides a basis for civil liability.
  • » Fair v. Bakhtiari
    40 Cal. 4th 189, 147 P.3d 653 (2006)
  • » More Civil Procedure Case Notes


Contracts & Contract Breach


  • » Newton Tractor Sales, Inc. v. Kubota Tractor Corp.
    No. 5-06-0087 (Ill. App. Ct. 5th Dist. June 5, 2008)
    In Illinois, promissory estoppel is not a theory under which a cause of action seeking monetary damages can be asserted.
    [See also: Court Opinion | PDF]
  • » Cedyco Corp. v. Petroquest Energy, LLC
    Nos. 05-20493, 05-20891, 2007 WL 2333192 (5th Cir. (Tex.) Aug. 17, 2007)
    The Fifth Circuit addressed conditions precedent in a breach of contract matter.
  • » Rawe v. Liberty Mutual Fire Insurance
    No. 05-5485 (6th Cir. September 1, 2006)
    Accident victim who was injured in one-car accident brought first and third-party bad faith claims against automobile insurer for its conduct regarding settlement of her bodily injury liability and underinsured motorist (UIM) claims.
  • » Johnson Controls, Inc. v. Jay Industries, Inc.
    Nos. 05-1826, 05-1879 (6th Circuit August 18, 2006)
    Seller brought action against buyer to recover for breach of contract and unjust enrichment for failing to eliminate charge for expendable packaging and charge for returnable packaging.
  • » Park v. Hyatt Corp.
    436 F. Supp. 2d 60 (D.D.C. 2006)
    The District Court of D.C. denies a motion to dismiss a claim for tortious interference with contract, finding that the complaint stated a tortious interference claim where it alleged that a hotel forced organizers of a party to breach their contracts with the party’s attendees by failing to provide the promised accommodations for the party.
  • » Texas v. American Tobacco Co., et al.
    No. 05-40671, 2006 WL 2522411 (5th Cir. (Tex.) Sept. 1, 2006)
    The Fifth Circuit holds that a court interpreting an ambiguous contract may consider parol evidence when the ambiguity is latent rather than patent.
  • » More Contract Breach Case Notes


Damages




Defamation


  • » Christoff v. Nestle USA, Inc., S155242
    (Cal. August 17, 2009)
    California Supreme Court Wrestles with Coffee Model’s Appropriation of Likeness Claim, Five Years After Publication
  • » Cecilia Barnes v. Yahoo, Inc.
    No. 05-36189 (9th Circuit Court of Appeals, May 7, 2009)
    Internet publishers may evade defamation liability under Communications Decency Act of 1996, 47 U.S.C. § 230(c)(1), but contract exposure remains.
  • » Kirch v. Liberty Media Corp.
    449 F.3d 388 (2d Cir. June 5, 2006)
    This case involved claims by the founder of a prominent group of German media entities and its exclusive North American agent based on an alleged conspiracy to destroy the KirchGroup.
  • » Shrout v. The TFE Group | PDF
    Case No. 2004-CA-000834-MR (Ky. App. April 1, 2005)
    Shrout, a commercial truck driver, was fired by his employer, The TFE Group, for failing a mandatory drug test. However, the drug test result was inaccurate – Shrout’s use of legal over-the-counter medications and the laboratory’s improperly handling of his sample resulted in a false positive finding. Shrout then sued TFE for wrongful discharge and for defamation.


Discovery


  • » May v. Pilot
    2006 WL 3827511 (S.D. Ohio Dec. 2006)
    Spoliation sanctions appropriate against Defendant where it failed to produce and preserve relevant evidence in Plaintiff’s wrongful termination suit.


Economic Loss Rule


  • » Terracon Consultants Western, Inc. v. Mandalay Resort Group et al. | NEW
    No. 477844 (March 26, 2009)
    The Nevada Supreme Court holds the economic loss rule bars professional negligence claims against design professionals providing advice on commercial development.
  • » Carlile v. Harbour Homes, Inc.
    147 Wn. App. 193, 194 P.3d 280 (October 20, 2008)
    Thirty-seven homeowners filed construction defect claims against developer Harbour Homes. The plaintiffs alleged numerous causes of action including negligent misrepresentation, fraud, and violation of the Consumer Protection Act (CPA).
  • » Alejandre v. Bull
    159 Wn.2d 674, 153 P.3d 864
    The Washington State Supreme Court recently reaffirmed the Economic Loss Doctrine as a bar to misrepresentation claims where the plaintiff’s loss is purely financial. The case arose from a residential real estate dispute in which the seller allegedly failed to disclose defects in a septic system.


Expert Testimony




Evidence


  • » Gutman v. Klein
    No. 03 Civ. 1570 (BMC) (RML) (E.D.N.Y., Dec. 2, 2008 (Cogan, J.) and Oct. 15, 2008 (Levy, J.))
  • » Cottman Transmission Systems v. McEneany
    Civil Action No. 05-6768, 2007 WL 210094 (E.D. Pa. Jan. 19, 2007)
    Applying the gist of the action doctrine and the parol evidence rule, the court granted summary judgment on counterclaims asserted by defendant/franchisee against plaintiff/franchisor.


Fiduciary Duty


  • » In re Citigroup Inc. Shareholder Derivative Litigation
    964 A.2d 106 (Del. Ch. 2009)
    The Chancery Court signals that large executive compensation packages paid by corporations that lose money might not survive corporate waste analysis but confirms that officers and directors are not personally liable for breach of fiduciary duty for substantial losses resulting from business risks.
  • » Armenian Genocide Museum and Memorial, Inc. v. Cafesjian Family Found. | NEW
    596 F. Supp. 2d 67 (D.D.C. Feb. 5, 2009), 2009 U.S. Dist. LEXIS 31880 (D.D.C. Apr. 15, 2009)
    The United States District Court for the District of Columbia denied motions to dismiss a breach of fiduciary duty claim against a nonprofit corporation’s officer’s former attorney, finding that the corporation had adequately alleged that the attorney undercut the purpose of the representation by advising his son on the execution of an agreement that was contrary to the corporation’s interests.
  • » DiCarolo v. St. Mary Hospital
    2008 U.S. App. LEXIS 13313 (3rd Cir. June 24, 2008)
    The Third Circuit holds that, under New Jersey law, a hospital does not owe a fiduciary duty to patients with respect to its billing practices.
  • » Fraud/Breach of Fiduciary Duty Claim Against Loan Broker | PDF
    Ellipso, Inc. v. Mann, 541 F. Supp. 2d 365 (D.D.C. 2008)
    The D.C. district court denies summary judgment on a fraud claim, finding that the defendant’s execution of a loan without disclosing that the broker responsible for arranging the deal owned a share in the defendant was a false representation, but grants summary judgment on a fiduciary duty claim, holding that a creditor ordinarily has no fiduciary obligation to a debtor.
    [See also: Court Opinion | PDF]
  • » N. Am. Catholic Educ. Programming Found., Inc. v. Gheewalla
    No. 521,2006, 2007 WL 1453705 (Del. May 18, 2007)
    Creditors of an insolvent corporation or a corporation operating in the zone of insolvency cannot bring a direct breach of fiduciary duty action against that corporation’s directors.
  • » Krahmer v. Christie’s Incorporated
    903 A.2d 773 (Del. Ch. 2006), affirmed by 2007 Del. LEXIS 177 (Apr. 25, 2007)
    In Delaware, the inherently unknowable injury rule does not toll the statute of limitations for claims of fraud or mistake where an auction house unknowingly sells a fake work of art.
  • » More Fiduciary Duty Case Notes


Fraud


  • » Instituto de Prevision Militar v. Merrill Lynch, et al.
    No. 07-15079 (11th Cir. Oct. 29, 2008)
    State Securities Fraud Claims Preempted-Eleventh Circuit Applies Rigorous Preemption Provisions of the Securities Litigation Uniform Standards Act.
  • » Official Comm. of Unsecured Creditors of Allegheny Health, Educ. and Research Found. v. PricewaterhouseCoopers, LLP
    No. 07-1397 (3d Cir. July 1, 2008)
    The Third Circuit certified two questions to the Pennsylvania Supreme Court stemming from a case brought by a creditors’ committee against the debtor’s former auditors. The questions concern (1) whether the intentional misconduct of the debtor’s officers should be imputed to the corporation under principles of agency law and (2) whether the doctrine of in pari delicto bars the creditors’ committee (which stands in the shoes of the debtor) from recovering for professional negligence, breach of contract and aiding and abetting breach of fiduciary duty against the debtor’s auditors.
    [See also: Court Opinion | PDF]
  • » Krahmer v. Christie’s Incorporated
    903 A.2d 773 (Del. Ch. 2006), affirmed by 2007 Del. LEXIS 177 (Apr. 25, 2007)
    In Delaware, the inherently unknowable injury rule does not toll the statute of limitations for claims of fraud or mistake where an auction house unknowingly sells a fake work of art.
  • » Cox Nuclear Pharmacy, Inc. v. CTI, Inc.
    Case No. 05-14713 (11th Cir. Feb. 13, 2007)
    Eleventh Circuit holds that fraud claim failed to the extent that these claims were dependent on the existence of an agreement that was barred by the statute of frauds; sua sponte summary judgment order appropriate where record sufficiently developed.
  • » Union Planters Bank, N.A. n/k/a Regions Bank v. Continental Casualty Co., et al.
    No. 05-6094/6095 (6th Cir. February 27, 2007)
    Bank that suffered multi-million dollar loss arising from mortgage lender’s fraudulent acts filed declaratory judgment against its primary insurance carrier and its three excess coverage carriers for a declaration of rights and obligations under the policies.
  • » Rawe v. Liberty Mutual Fire Insurance
    No. 05-5485 (6th Cir. September 1, 2006)
    Accident victim who was injured in one-car accident brought first and third-party bad faith claims against automobile insurer for its conduct regarding settlement of her bodily injury liability and underinsured motorist (UIM) claims.
  • » Moross Ltd. Partnership v. Fleckenstein Capital, Inc.
    Nos. 05-2280/2312 (6th Cir. October 24, 2006)
    Investor must demonstrate that manager engaged in “cherry-picking” to support investor’s claim of violation of Michigan’s Uniform Securities Act, fraud, and breach of fiduciary duty.
  • » More Fraud Case Notes


Insurance Coverage


  • » American Economy Ins. Co. v. Jackson
    No. 06-2728 (8th Cir. February 14, 2007)
    The Eighth Circuit conducts a de novo review and affirms district court’s grant of summary judgment to insurer finding that skilled nursing administrator exercised her professional judgment in determining whether to turn on the facility’s air conditioning and, therefore, policy exclusion for indemnity applied.


Jurisdiction

 

  • » Cuomo v. The Clearing House Ass’n, LLC, et al
    United States Supreme Court, June 29, 2009
    The National Bank Act’s reservation to the Federal Office of the Comptroller of the Currency of “visitorial powers” over national banks does not preclude state law enforcement officials from prosecuting state court enforcement actions against national banks to enforce state law.
  • » Arthur Andersen LLP v. Carlisle
    U.S. Supreme Court, May 4, 2009
    U.S. Courts of Appeals have jurisdiction over appeals from district courts’ denials of applications for stay pursuant to § 3 of the Federal Arbitration Act (FAA), regardless of the merits of the underlying stay application. Section 3 stays should be granted if state law would allow the applicant to enforce the arbitration agreement, even if the applicant is not itself a party to the agreement.
  • » The Board of Regents of the University of Texas System v. Nippon Telephone & Telegraph Corp.
    478 F.3d 274 (5th Cir. (Tex.) 2007)
    The Fifth Circuit addresses subject matter jurisdiction and foreign-sovereign immunity matters.
  • » Moncrief Oil Int’l, Inc. v. OAO Gazprom
    481 F.3d 309 (5th Cir. (Tex.) 2007)
    The Fifth Circuit addressed allegations of lack of personal jurisdiction in a breach of contract matter.


Law of the Case


  • » Hall v. White, Getgey, Meyer Co.
    465 F.3d 587 (5th Cir. 2006)
    The Fifth Circuit addresses the law of the case doctrine coupled with the concepts of pre- and post-judgment interest.


Promissory Estoppel




Remedies




Tortious Interference


  • » Ali v. Shaw
    No. 06-1384 (7th Cir. Feb. 20, 2007)
    The heightened pleading requirements outlined in Rule 9(b), apply to all averments of fraud, not just claims of fraud.
  • » Borsellino v. Goldman Sachs Group, Inc.
    No. 06-1800 (7th Cir. Mar. 23, 2007)
    An at-will employee who is terminated may have a tort action against a third-party who intentionally interferes with the employment relationship, but not against the employer or its agents.
  • » Park v. Hyatt Corp.
    436 F. Supp. 2d 60 (D.D.C. 2006)
    The District Court of D.C. denies a motion to dismiss a claim for tortious interference with contract, finding that the complaint stated a tortious interference claim where it alleged that a hotel forced organizers of a party to breach their contracts with the party’s attendees by failing to provide the promised accommodations for the party.
  • » Hawaii Medical Association v. Hawaii Medical Service Assoc., Inc.
    2006 Haw. LEXIS 464 (Hawaii 2006)
    HMA alleged that HMSA tortiously interfered with the physicians’ prospective economic advantage.
  • » More Tortious Interference Case Notes


Trade Secrets, Non-Compete Agreements


  • » Salazar v. District of Columbia
    596 F. Supp. 2d 67 (D.D.C. 2009)
    The United States District Court for the District of Columbia granted a motion to compel disclosure of certain treatment guidelines developed by Medicaid third-party administrators and held that the guidelines were not protected by trade secret law, as Medicaid regulations required that the subject matter of the guidelines be made available to beneficiaries.
  • » Misappropriation of Trade Secrets; Statute of Limitations | PDF 
    New Media Strategies, Inc. v. Pulpfree, Inc., 941 A.2d 420 (D.C. 2008)
    The D.C. Court of Appeals reverses a grant of summary judgment on statute of limitations grounds in a misappropriation of trade secrets action, finding the record unclear as to whether the plaintiff knew at the time of misappropriation that the defendant planned to use the plaintiff’s trade secrets.
    [See also: Court Opinion | PDF]
  • » General Reinsurance Corp. v. Arch Capital Group et al
    No. X05-FST-CV-4011668-S (Superior Court, October 17, 2007)
    In the recent Connecticut state trial court case, the court considered claims for misappropriation of trade secrets, breach of fiduciary duty and tortious interference with business relations brought against four former top executives of the plaintiff and their new employer.
  • » Tripple Tee Golf, Inc. v. Nike, Inc.
    Nos. 05-10934, 05-11442, 2007 WL 1128138 (5th Cir. (Tex.) Apr. 17, 2007)
    The Fifth Circuit considers an antitrust action involving the alleged misappropriation of trade secrets.
  • » Fiber Systems Int’l, Inc. v. Roehrs
    No. 05-41213, 2006 WL 3378403 (5th Cir. (Tex.) Nov. 22, 2006)
    The Fifth Circuit holds that the Computer Fraud and Abuse Act provides a basis for civil liability.
  • » Canadian Commercial Corp. v. Dep’t of the Air Force
    2006 U.S. Dist. LEXIS 53506 (D.D.C. Aug. 3, 2006)
    The D.C. Circuit prevents the Air Force from releasing pricing information in a “reverse FOIA” action because of trade secrets and confidential information under FOIA Exemption 4; however, the court allowed disclosure of the plaintiffs’ hourly labor rates.
  • » Action Tapes, Inc. v. Kelly Mattson dba Kelly J's New Home Servicing Center
    2006 WL 2483217 (8th Cir. 2006)
    In Action Tapes, the Eighth Circuit addresses the unique control provided to properly registered, computer program copyright owners under the Computer Software Rental Amendment Act of 1990, 17 U.S.C. § 109(a)
  • » More Trade Secrets Case Notes


Unfair Trade Practices


  • » Rescuecom Corp. v. Google | NEW
    562 F.3d 123 (2nd Cir. 2009)
    Second Circuit Finds Search Engine’s Sale of Trademarks as Keywords Is Use in Commerce Under the Lanham Act.
  • » In re Pharmaceutical Industry Average Wholesale Price Litigation
    252 F.R.D. 83 (D. Mass. Sept. 26, 2008)
    Nationwide classes of consumers and businesses certified under state Little FTC Acts for multiple/punitive damages and attorney fees.
  • » Harvey v. Great Seneca Financial Corporation
    No. 05-3870 (6th Cir. July 6, 2006)
    Consumer sued debt collector and collector's law firm, alleging filing of debt-collection suit without the means of proving the existence, amount, or ownership of debt, in violation of Fair Debt Collection Practices Act (FDCPA).
  • » Rawe v. Liberty Mutual Fire Insurance
    No. 05-5485 (6th Cir. September 1, 2006)
    Accident victim who was injured in one-car accident brought first and third-party bad faith claims against automobile insurer for its conduct regarding settlement of her bodily injury liability and underinsured motorist (UIM) claims.
  • » McGlawn v. Pennsylvania Human Relations Commission
    891 A.2d 757 (Pa. Commw. 2006)
    The fiduciary duties of mortgage brokers include ensuring that potential borrowers are not completely unable to pay back debt. Pennsylvania Human Relations Act (“PHRA”) prohibits reverse redlining by mortgage brokers.
  • » More Unfair Trade Practices Case Notes

 

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