Justia Contracts Opinion Summaries

Argonaut Insurance Company (“Argonaut”) appealed from an order of the district court remanding this breach-of-bond action, brought by LeChase Construction Services, LLC (“LeChase”), to New York state court after Argonaut removed it on the basis of diversity jurisdiction. The district court purported to issue its remand order pursuant to 28 U.S.C. Section 1447(e), which authorizes remand if, after removal, a plaintiff joins defendants whose inclusion would destroy diversity jurisdiction. The district court expressly acknowledged that section 1447(e) is facially inapplicable here, as LeChase was not seeking to join a non-diverse defendant or otherwise contesting the existence of diversity jurisdiction. Nevertheless, the district court reasoned that, since remand would facilitate this case’s consolidation with two related actions then pending in New York state court, thus conserving judicial resources and avoiding the risk of inconsistent outcomes, it was appropriate under the “rubric” of section 1447(e). At issue was: (1) whether the Second Circuit has appellate jurisdiction over the district court’s remand order notwithstanding Section 1447(d; and (2) if the court does, whether the district court issued such order in excess of its statutory authority under section 1447(e).   The Second Circuit vacated the district court’s order and remanded. The court concluded, as a matter of first impression, that “[section] 1447(d) permits appellate review of a district-court remand order that dresses in [section 1447(e)’s] jurisdictional clothing a patently non-jurisdictional ground,” such as the prudential considerations invoked by the district court here. The court concluded – for essentially the reasons acknowledged by the district court itself – that its remand order here was unauthorized under section 1447(e). View "LeChase Constr. Servs. LLC v. Argonaut Ins. Co." on Justia Law

Plaintiff appealed the district court’s decision dismissing her claims against New York University (NYU) and declining to allow her to amend her complaint to add another plaintiff. Plaintiff s a parent of an adult student who attended New York University (NYU) (Defendant-Appellee) during the Spring 2020 semester—a semester during which NYU suspended its in-person operations and transitioned to remote instruction. Alleging breach of contract, unjust enrichment, and other claims, Plaintiff brought a putative class action suit against NYU to partially recover the tuition and fees she paid for her daughter’s Spring 2020 semester. The district court granted NYU’s motion to dismiss on the basis that Plaintiff lacked standing and denied Plaintiff’s motion to amend her complaint to add a current NYU student as an additional plaintiff because it concluded that amendment would be futile.   The Second Circuit affirmed the judgment of the district court in part, vacated in part, and remanded for further proceedings. The court concluded that the district court correctly determined that Plaintiff lacks standing to bring her breach of contract and unjust enrichment claims because she has not alleged an injury-in-fact to herself, rather than to her daughter. The court held that Plaintiff fails to plausibly allege a claim for conversion. The court wrote that for these reasons, the district court properly dismissed her claims. However, the court concluded that amending the complaint to add a current student as plaintiff would not be futile. The student plaintiff plausibly alleged claims for breach of contract, unjust enrichment, and money had and received that would survive a motion to dismiss. View "Christina Rynasko v. New York University" on Justia Law

MLB and the MLBPA began an investigation into the sale and use of performance-enhancing drugs; Plaintiff and his company were among those investigated. Since then, Plaintiff has filed a series of lawsuits across the country against MLB, the MLBPA, their members and employees, and an increasing number of assorted defendants. This appeal involves the latest in a series of unsuccessful lawsuits by Plaintiff, proceeding pro se. Defendants moved to dismiss under Rule 12(b)(6) in five separate motions; MLB and the MLBPA also moved for sanctions. The district court dismissed Plaintiff’s claims, denied him leave to amend, and imposed sanctions.   The Fifth Circuit affirmed and granted Defendants’ motion for sanctions. The court ordered that no pleading or lawsuit in any federal court within the jurisdiction of the Fifth Circuit shall be filed by, or on behalf of, Plaintiff, his affiliates, or his related entities against any of the defendants in this suit without first obtaining the permission of the court in which he seeks to file. He must attach a copy of this opinion to any such request for permission. The court explained that aggravating the situation is Plaintiff’s patent bad faith. Plaintiff was not only on notice from the district court that he was a vexatious litigant and that his lawsuit was frivolous, but he was also on notice from two other courts that have imposed sanctions on him (a California federal court and a New York state court) that his claims have no merit. View "Nix v. Major League Baseball" on Justia Law

Plaintiff-appellant Tracey Weinberg (“Weinberg”) was the former Chief Marketing Officer of defendant-appellee Waystar, Inc.(“Waystar”). During her employment, the company granted her options to purchase stock in its co-defendant Derby TopCo, Inc.,(“Derby Inc.”), pursuant to a Derby TopCo 2019 Stock Incentive Plan (the “Plan”). Weinberg was awarded three option grants under the Plan pursuant to three option agreements executed between October 2019 and August 2020. By the time Weinberg was terminated in 2021, 107,318.96 of her options had vested. She timely exercised all of them in November 2021, and the options immediately converted to economically equivalent partnership units in co-defendant Derby TopCo Partnership LP, a Delaware limited partnership (“Derby LP”) (the “Converted Units”). Each Option Agreement contained an identical call right provision providing Appellees the right to repurchase Weinberg’s Converted Units (the “Call Right”), “during the six (6) month period following (x) the (i) [t]ermination of [Weinberg’s] employment with the Service Recipient for any reason . . . and (y) a Restrictive Covenant Breach.” This appeal turned on the meaning of the word “and” in the three option agreements. Specifically, the question presented for the Delaware Supreme Court was whether two separate events (separated by the word “and”) had to both occur in order for the company to exercise a call right, or whether the call right could be exercised if only one event has occurred. Although Weinberg had been terminated within the time frame specified by the Call Right Provision, a Restrictive Covenant Breach had not occurred. The parties disputed whether the Call Right was available in the absence of a Restrictive Covenant Breach. The Court of Chancery decided that it was, and the Delaware Supreme Court concurred, affirming the Court of Chancery. View "Weinberg v. Waystar, Inc." on Justia Law

Plaintiff is a former federal employee and participant in a health-insurance plan (“Plan”) that is governed by the Federal Employees Health Benefits Act (“FEHBA”). The Plan stems from a contract between the federal Office of Personnel Management (“OPM”) and Blue Cross Blue Shield Association and certain of its affiliates (together, “Blue Cross”). Blue Cross administers the Plan under OPM’s supervision. Plaintiff suffered from cancer, and she asked Blue Cross whether the Plan would cover the proton therapy that her physicians recommended. Blue Cross told her the Plan did not cover that treatment. So Plaintiff chose to receive a different type of radiation treatment, one that the Plan did cover. The second-choice treatment eliminated cancer, but it also caused devastating side effects. Plaintiff then sued OPM and Blue Cross, claiming that the Plan actually does cover proton therapy. As against OPM, she seeks the “benefits” that she wanted but did not receive, as well as an injunction directing OPM to compel Blue Cross to reform its internal processes by, among other things, covering proton therapy in the Plan going forward. As against Blue Cross, she seeks monetary damages under Texas common law. The district court dismissed Plaintiff’s suit.   The Fifth Circuit affirmed. The court held that neither the advance process nor the proton-therapy guideline poses an immediate threat of injury, so injunctive relief is therefore unavailable. Further, the court found that FEHBA preempts Plaintiff’s common-law claims against Blue Cross. Accordingly, the court held that no relief is available under the relevant statutory and regulatory regime. View "Gonzalez v. Blue Cross Blue Shield" on Justia Law

Philander Smith College fired Plaintiff after she referred to a student as “retarded” for using a cell phone during class. She sued for sex discrimination, retaliation, and breach of contract. After granting summary judgment to the college on the first two claims, the district court declined to exercise supplemental jurisdiction over the third.   The Eighth Circuit affirmed. The court held that Plaintiff has not put forward sufficient evidence of pretext. So summary judgment marks the end of the road for her sex-discrimination claim. Further, the court reasoned that even if the conditions were intolerable, in other words, Plainitff’s own role in provoking these incidents undermines the claim that the college created a workplace full of discriminatory intimidation, ridicule, and insult. Moreover, the court explained once Plaintiff’s federal claims were gone, the district court had no obligation to exercise supplemental jurisdiction over Plaintiff’s Arkansas breach-of-contract claim. View "Patricia Walker-Swinton v. Philander Smith College" on Justia Law

Plaintiffs brought a class action under the Employee Retirement Income Security Act of 1974 ("ERISA"), arguing that Defendant Colgate-Palmolive Co. miscalculated residual annuities based on an erroneous interpretation of its retirement income plan and improperly used a pre-retirement mortality discount to calculate residual annuities, thereby working an impermissible forfeiture of benefits under ERISA. The district court granted summary judgment to Plaintiffs on these claims. Colgate appealed that order and the final judgment of the district court.   The Second Circuit affirmed. The court concluded that the text of the RAA is unambiguous and requires Colgate to calculate a member's residual annuity by subtracting the AE of LS from that member's winning annuity under Appendix C Section 2(b). Further, the court wrote that Colgate's "same-benefit" argument does not disturb our conclusion that the RAA's language is unambiguous. Because "unambiguous language in an ERISA plan must be interpreted and enforced in accordance with its plain meaning," the court affirmed the district court's grant of summary judgment to the class Plaintiffs as to Error 1. View "McCutcheon v. Colgate-Palmolive Co." on Justia Law

Plaintiff, a franchisor of tax preparation services, appeals from the district court’s denying its motion for preliminary injunctive relief to enforce, among other things, covenants not to compete or solicit former clients against Defendants, its former franchisees. On appeal, Plaintiff argues that the district court erroneously applied a heightened standard for obtaining preliminary injunctive relief, failed to credit an undisputed fact that Plaintiff had grounds to terminate the franchise agreements because Defendants were violating federal tax laws, and was compelled as a matter of law to find that it would suffer irreparable harm to its goodwill and client relationships in the absence of an injunction.   The Second Circuit affirmed the order denying preliminary relief. The court concluded that the district court applied the appropriate standard, permissibly credited Defendants’ denials that they violated federal tax laws, and acted well within its discretion in concluding that Plaintiff would not suffer irreparable harm. The court reasoned that nothing in the court’s precedents compels a district court to find irreparable harm to goodwill and client relationships in covenant-not-to-compete or -solicit cases simply because irreparable harm is often found in such cases. Instead, a plaintiff must present the district court with actual evidence. On that record, the court wrote it cannot conclude that the district court’s finding that Plaintiff had failed to make a strong showing of irreparable injury represented a clear error or exceeded the court’s discretion. View "JTH Tax d/b/a Liberty Tax Service v. Agnant" on Justia Law

The Professional Airline Flight Control Association complained that Spirit is attempting to change its agreement. Spirit responded that its unilateral decision to open a second operations control center is permitted by the parties’ agreement. The district court agreed with Spirit that this dispute is minor and dismissed the action for lack of subject-matter jurisdiction.   The Eleventh Circuit affirmed. The court explained that the Railway Labor Act, 45 U.S.C. Section 151 et seq., divides labor disputes into two categories: disputes over the interpretation of an existing agreement are “minor” and resolved exclusively through binding arbitration, and disputes over proposed changes to an agreement or over a new agreement are “major” and addressed through bargaining and mediation. During a major dispute, district courts have subject-matter jurisdiction to enjoin violations of the status quo. But district courts ordinarily lack jurisdiction over minor disputes. Accordingly, the court affirmed the district court’s dismissal. View "Professional Airline Flight Control Association v. Spirit Airlines, Inc." on Justia Law

Plaintiffs, owners of Samsung SmartTVs, filed a putative class action in 2017, alleging that the SmartTVs used automatic tracking software to collect personally identifying information about them, such as the videos or streaming services they watch, and transmit that data to third-parties, who allegedly used the information to display targeted advertisements. When setting up their SmartTVs, plaintiffs had to agree to Terms and Conditions to access the Internet-enabled services. On some SmartTVs, the Terms and Conditions contained an arbitration provision. In 2018, the plaintiffs disclosed the Model Numbers for the named plaintiffs' SmartTVs, which enabled Samsung to determine whether they agreed to Terms containing an arbitration clause.The district court dismissed all except for the Wiretap Act claims. In 2020, Samsung notified the court that it would move to compel individual arbitration, arguing that it did not waive its right to arbitrate because “the prerequisites of waiver— extensive discovery and prejudice—are lacking.” The Third Circuit affirmed the denial of the motion. Samsung waived its right to arbitrate and compelling arbitration would cause the plaintiffs to suffer significant prejudice. Samsung’s actions evinced a preference for litigation over arbitration. Samsung continuously sought and agreed to stays in discovery and pursued successful motions to dismiss on the merits. It assented to all pre-trial orders and participated in numerous court conferences. View "White v. Samsung Electronics America Inc." on Justia Law