Justia Contracts Opinion SummariesArticles Posted in Antitrust & Trade Regulation
CAE Integrated v. Moov Technologies
CAE Integrated L.L.C. and Capital Asset Exchange and Trading, L.L.C. (collectively CAE) sued its former employee and his current employer, Moov, for misappropriation of trade secrets and then moved for a preliminary injunction. The district court denied the preliminary injunction and CAE appealed. The Fifth Circuit affirmed the denial finding that CAE failed to establish a likelihood of success on the merits of its claims. The court considered that trade secret information derives independent economic value from being not generally known or readily ascertainable through proper means. What CAE refers to as the “transactional documents” are files from Google Drive with purchase orders, invoices, customer equipment needs, and pricing history. The former employee has not had access to his MacBook since 2016 and he testified that Google Drive contained none of the transactional documents when he started at Moov. The district court found the employee’s testimony credible and the forensic analysis confirmed that before the employee began at Moov, he deleted any remaining transactional documents from his Google Drive. Therefore, the district court did not clearly err in finding that neither the employee nor Moov misappropriated trade secrets. Further, even if CAE had established that the employee or Moov misappropriated trade secrets, it failed to show the use or potential use of trade secrets. View "CAE Integrated v. Moov Technologies" on Justia Law
REXA, Inc. v. Chester
The Seventh Circuit affirmed the judgment of the district court granting summary judgment to Defendants on all claims asserted against them, including misappropriation of trade secrets and breach of an implied contractual obligation to assign patent rights but vacated the judgment awarding attorneys' fees, holding that a reduction in fees was warranted.REXA, Inc. sued Mark Chester and MEA, Inc. for misappropriation of trade secrets and breach of an implied contractual obligation to assign patent rights, alleging that Chester and MEA incorporated and disclosed confidential designs. The district court granted summary judgment to Defendants. The Seventh Circuit affirmed in part and vacated in part, holding that the district court (1) properly granted summary judgment in favor of Defendants; but (2) abused its discretion in awarding Chester and MEA approximately $2.357 million in attorneys' fees, which they requested as a sanction for REXA's litigation conduct, where the court did not make specific findings about each of REXA's objections to the fee petition. View "REXA, Inc. v. Chester" on Justia Law
In re: Rotavirus Vaccines Antitrust Litigation v.
Under "loyalty contracts," Physician Buying Groups (PBGs) members are entitled to discounts if they buy a large enough percentage of their vaccines from Merck. The loyalty contracts include an arbitration provision. Membership contracts between PBGs and medical practices give medical practices discounts on Merck vaccines for enrolling in PBGs. PBGs contract with both Merck and medical practices and are middlemen but PBGs never possess the vaccines. Medical practices buy their vaccines directly from Merck, receiving discounts for belonging to a PBG. The Pediatricians, members of PBGs that contracted with Merck, never signed contracts containing an arbitration clause.The Pediatricians filed federal suits alleging Merck’s vaccine bundling program was anticompetitive. Merck moved to compel arbitration. On remand, following discovery, the district court again denied Merck’s motion and granted the Pediatricians summary judgment, reasoning that the Pediatricians were not bound under an agency theory. The Third Circuit reversed. The PBG membership contract made the PBG a “non-exclusive agent to arrange for the purchase of goods and services,” and the PBG acted on this authority by executing the loyalty contract with Merck that included the arbitration clause. The Pediatricians simultaneously demonstrated intent to create an agency relationship and exercised control over the scope of the PBG’s agency by contract. View "In re: Rotavirus Vaccines Antitrust Litigation v." on Justia Law
Hetronic International v. Hetronic Germany GmbH, et al.
Hetronic International, Inc., a U.S. company, manufactured radio remote controls, the kind used to remotely operate heavy-duty construction equipment. Defendants, none of whom were U.S. citizens, distributed Hetronic’s products, mostly in Europe. After about a ten-year relationship, one of Defendants’ employees stumbled across an old research-and-development agreement between the parties. Embracing a “creative legal interpretation” of the agreement endorsed by Defendants’ lawyers, Defendants concluded that they owned the rights to Hetronic’s trademarks and other intellectual property. Defendants then began manufacturing their own products—identical to Hetronic’s—and selling them under the Hetronic brand, mostly in Europe. Hetronic terminated the parties’ distribution agreements, but that didn’t stop Defendants from making tens of millions of dollars selling their copycat products. Hetronic asserted numerous claims against Defendants, but the issue presented on appeal to the Tenth Circuit centered on its trademark claims under the Lanham Act. A jury awarded Hetronic over $100 million in damages, most of which related to Defendants’ trademark infringement. Then on Hetronic’s motion, the district court entered a worldwide injunction barring Defendants from selling their infringing products. Defendants ignored the injunction. In the district court and before the Tenth Circuit, Defendants focused on one defense in particular: Though they accepted that the Lanham Act could sometimes apply extraterritorially, they insisted the Act’s reach didn’t extend to their conduct, which generally involved foreign defendants making sales to foreign consumers. Reviewing this matter as one of first impression in the Tenth Circuit, and after considering the Supreme Court’s lone decision on the issue and persuasive authority from other circuits, the Tenth Circuit concluded the district court properly applied the Lanham Act to Defendants’ conduct. But the Court narrowed the district court’s expansive injunction. Affirming in part, and reversing in part, the Court remanded the case for further consideration. View "Hetronic International v. Hetronic Germany GmbH, et al." on Justia Law
Aya Healthcare Services, Inc. v. AMN Healthcare, Inc.
In 2010, AMN Healthcare contracted with Aya Healthcare to provide travel nursing services to healthcare facilities. The contract prohibited Aya from soliciting AMN’s employees. In 2015, Aya began actively soliciting AMN’s travel nurse recruiters. AMN temporarily terminated Aya’s access to AMN’s platform. The parties ended their relationship. Aya filed suit under the Sherman Antitrust Act, 15 U.S.C. 1, 2, including a “per se” claim and a quick-look/rule-of-reason claim and claims for attempted monopolization and monopolization, and state law tortious interference and other claims. Aya claimed that it suffered exclusionary damages as a result of AMN’s non-solicitation covenant and retaliatory damages as a result of AMN’s termination of the relationship.The Ninth Circuit affirmed summary judgment in favor of AMN. The non-solicitation agreement is an ancillary, rather than a naked restraint, because it is reasonably necessary to the parties’ procompetitive collaboration; it is not per se unlawful but is subject to the rule-of-reason standard. Aya failed to satisfy its initial burden under that standard because it did not establish a triable issue of fact with respect to whether AMN’s nonsolicitation agreement has a substantial anticompetitive effect that harms consumers in the relevant market. Aya’s claim for retaliatory damages failed because it did not present any evidence of a cartel or a concerted action in the termination of the agreement. View "Aya Healthcare Services, Inc. v. AMN Healthcare, Inc." on Justia Law
Toddle Inn Franchising, LLC v. KPJ Associates LLC
The First Circuit affirmed the judgment of the district court judge confirming an arbitration award, holding that none of Appellant's legal theories for reversal were meritorious.KPJ Associates, LLC ran a daycare in Maine as a franchisee of Toddle Inn Franchising, LLC. When KPJ ended the franchise agreement on Friday and told Toddle it would open another daycare at the same site the following Monday Toddle filed a federal complaint alleging unfair competition under the federal Lanham Act and breach of contract and trade secret misappropriation under Maine law. Toddle then moved to compel arbitration and stay court proceedings. The judge compelled arbitration, and the arbitrator found for Toddle. The First Circuit affirmed, holding that the district court judge (1) did not lack subject matter in this case because Toddle did not present a frivolous Lanham Act claim; (2) did not err in ruling that Toddle did not waive its right to arbitrate by its litigation conduct; and (3) did not err in awarding additional attorneys' fees and costs. View "Toddle Inn Franchising, LLC v. KPJ Associates LLC" on Justia Law
Gem State Roofing, Incorp. v. United Components, Inc.
Beginning in the 1980s and 1990s, two Idaho businesses did roofing work under substantially similar names: one, Gem State Roofing, Inc., performed work primarily in Blaine County (Gem State-Blaine); the other was a corporation operating under the name Gem State Roofing and Asphalt Maintenance, which also did business as Gem State Roofing. The latter was based in Boise, Idaho, and performed work in a significantly larger area. In 2011, Gem State Roofing and Asphalt Maintenance was succeeded in interest by United Components, Inc. (UCI.) Notwithstanding its change of name, it continued to do business as Gem State Roofing. In 2005, prior to UCI’s name change, the two businesses with similar names entered into a Trademark Settlement Agreement (TSA), prohibiting UCI from advertising, soliciting, or performing business in Blaine County, with exceptions for certain services (i.e., warranty, maintenance work, or work performed for previous customers). In addition, UCI agreed that if it received a request for work it was contractually unable to fulfil because of the TSA, it would refer the work to Gem State-Blaine. In 2018, Gem State-Blaine sued UCI, alleging it had breached the TSA when it advertised, solicited, bid on, and performed roofing work in Blaine County, and had failed to refer requests for work as required under the TSA. After a bench trial, the district court concluded that, despite UCI’s breach of the TSA and the implied covenant of good faith and fair dealing, Gem State-Blaine had failed to prove damages or that it was entitled to a permanent injunction. The district court further found that Gem State-Blaine had no protectable common-law trademark. Finally, the district court concluded that there was no prevailing party and declined to award attorney fees and costs. Gem State-Blaine timely appealed. UCI timely cross-appealed the district court’s denial of its request for attorney fees and costs. After review, the Idaho Supreme Court reversed in part, affirmed in part, vacated in part, and remanded for further proceedings. The district court’s refusal to enter a permanent injunction was reversed, and the court directed to enter a permanent injunction to enjoin UCI from any further breach of the TSA. The district court’s refusal to award attorney fees and costs as a sanction for UCI’s discovery violations, and the district court’s conclusion that Gem State-Blaine did not have a protectable common-law trademark against UCI were also reversed. The Supreme Court vacated the district court’s determination that neither party prevailed. The matter was remanded for the district court to determine whether there was a prevailing party, and to determine if attorney fees and costs should be awarded. The district court’s decision denying damages was affirmed. View "Gem State Roofing, Incorp. v. United Components, Inc." on Justia Law
Poller v. Okoboji Classic Cars, LLC
The Supreme Court affirmed in part and reversed in part the judgment of the district court concluding that Plaintiffs were not entitled to relief on their contract claim and that Defendant was entitled to a verdict on its counterclaim for breach of contract, holding that judgment was improperly granted on Defendant's counterclaim.Plaintiffs, the owners of a 1931 Chevy, brought this lawsuit against Defendant, a company in the business of restoration of antique vehicles, arguing that Defendant violated certain provisions of the Motor Vehicle Service Trade Practices Act (MVSTPA), Iowa Code chapter 537B and breached its contract with Plaintiffs. Defendant filed a counterclaim alleging breach of contract. The district court concluded that there were no violations of the MVSTPA, that Plaintiffs were not entitled to relief on their contract claim, and that Defendant was entitled to damages on its counterclaim. The Supreme Court reversed the judgment in favor of Defendant on the counterclaim, holding that Defendant violated several provisions of Iowa Code chapter 537B and therefore may not seek to enforce the terms of a contract that was unlawfully formed, but Plaintiffs did not establish actual damages arising from the alleged damages. View "Poller v. Okoboji Classic Cars, LLC" on Justia Law
Monteglongo v. Abrea
The Supreme Court reversed the judgment of the court of appeals denying Defendants' motion to dismiss under the Texas Citizens Participation Act (TCPA), Tex. Civ. Proc. & Rem. Code 27.001-.011, as untimely, holding that because Plaintiff's amended petition in this case asserted new legal claims, Defendants' motion to dismiss those claims was timely.In his original petition, Plaintiff asserted claims for deceptive trade practice, negligence, and negligent misrepresentation. Plaintiff subsequently filed an amended petition reasserting the same claims, adding new claims for fraud, conspiracy to commit fraud, fraudulent concealment, and breach of contract, and alleging the same essential facts alleged in the original petition and requesting the same relief. The trial court denied Defendants' TCPA dismissal motion, concluding that the motion was untimely. The court of appeals affirmed. The Supreme Court reversed, holding that the court of appeals erred in holding that Defendant's motion to dismiss the new claims was untimely because the amended petition asserted new legal actions and thus triggered new sixty-day period for Defendants to file a motion to dismiss those new claims. View "Monteglongo v. Abrea" on Justia Law
HouseCanary, Inc. v. Title Source, Inc.
The Supreme Court affirmed the portion of the judgment of the court of appeals reversing the judgment of the trial court granting a motion to reconsider the court's denial of a motion to seal brought under Tex. R. Civ. P. 76a, holding that the Texas Uniform Trade Secrets Act (TUTSA), Tex. Civ. Proc. & Rem. Code 134A.006a, does not provide an independent, self-contained pathway for sealing court records.Plaintiff sued Defendant for breach of contract, and Defendant asserted counterclaims, including misappropriation of trade secrets. The jury found in favor of Defendant. Defendant subsequently filed a Rule 76a motion to seal thirty trial exhibits. The trial court denied the motion to seal but then granted Defendant's motion to reconsider that relied exclusively on section 134A.006a of TUTSA. The Supreme Court remanded this case to the trial court to exercise its discretion under the applicable provisions of both TUTSA and Rule 76a, holding that the trial court erred by failing to apply the non-displaced provisions of Rule 76a in ruling on the motion to reconsider. View "HouseCanary, Inc. v. Title Source, Inc." on Justia Law