Justia Contracts Opinion Summaries

Articles Posted in Communications Law
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In the case before the United States Court of Appeals for the Sixth Circuit, Brandenburg Telephone Company and Sprint Communications were in disagreement over the interest rate on an award that Sprint Communications conceded it owed to Brandenburg Telephone Company. The $2.2 million award was for unpaid fees that Sprint Communications owed for connecting local telephone calls. The dispute centered on Brandenburg's filed utility tariff which set the interest rate. Sprint argued that the tariff set the rate at 8%, and thus owed $4.3 million in interest, while Brandenburg claimed the tariff imposed a rate of 10.66%, which would result in $7.1 million in interest. The district court ruled in favor of Sprint, and the appeals court affirmed this decision.The court reasoned that the 8% rate set by the Kentucky usury statute was applicable. The court noted that while Brandenburg's tariff offered two alternatives for late payment penalty: (1) the highest interest rate (in decimal value) which may be levied by law for commercial transactions, or (2) a rate of .000292 per day (which works out to an annualized rate of 10.66%); the court interpreted the phrase "levied by law for commercial transactions" to refer to the default rate that Kentucky permits to be collected by law, which is 8%.The court rejected Brandenburg's argument that the 10.66% rate was applicable because the tariff could be viewed as an agreement between the parties and Kentucky law allows for parties to agree on higher interest rates. The court pointed out that tariffs are not freely negotiated contracts, but represent the judgment of regulators about what rates and conditions will prove reasonable and uniform for utility customers. Once regulators approve a tariff, the filed-rate doctrine prevents utilities and their customers from contracting around its terms. In this context, the court determined that the tariff's reference to the maximum rate levied by the General Assembly for general commercial transactions aligned with the filed-rate doctrine, and thus, the 8% default rule of interest applied. View "Brandenburg Telephone Co. v. Sprint Comm'ns Co." on Justia Law

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BioCorRx, Inc. (BioCorRx) was a publicly traded company primarily engaged in the business of providing addiction treatment services and related medication. It issued several press releases that allegedly made misrepresentations and improperly disclosed confidential information about a treatment it was developing for opioid overdose. VDM Biochemicals, Inc. (VDM) specializes in the synthesis and distribution of chemicals, reagents, and other specialty products for life science research. It owned a patent (the patent) for VDM-001, a compound with potential use as a treatment for opioid overdose. In September 2018, VDM and BioCorRx entered into a Mutual Nondisclosure & Confidentiality Agreement (the NDA), which restricted each party’s disclosure of confidential information as they discussed forming a business relationship. A month later, VDM and BioCorRx signed a Letter of Intent to Enter Definitive Agreement to Acquire Stake in Intellectual Property (the letter of intent). The letter of intent memorialized the parties’ shared desire whereby BioCorRx would partner with VDM to develop and commercialize VDM-001. BioCorRx and VDM never signed a formal contract concerning VDM-001. Their relationship eventually soured. BioCorRx filed a complaint (the complaint) against VDM; VDM cross-complained. In response, BioCorRx filed the anti-SLAPP motion at issue here, seeking to strike all the allegations from the cross-complaint concerning the press releases. The Court of Appeal found these statements fell within the commercial speech exemption of California's Code of Civil Procedure section 425.16 (the anti-SLAPP statute) because they were representations about BioCorRx’s business operations that were made to investors to promote its goods and services through the sale of its securities. Since these statements were not protected by the anti-SLAPP statute, the Court reversed the part of the trial court’s order granting the anti-SLAPP motion as to the press releases. The Court affirmed the unchallenged portion of the order striking unrelated allegations. View "BioCorRx, Inc. v. VDM Biochemicals, Inc." on Justia Law

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Plaintiff Hughes Communications India Private Limited (“Hughes India”) appealed from a district court judgment dismissing its indemnification claims against The DirecTV Group, Inc. (“DirecTV”). The case arises out of an asset purchase agreement in which DirecTV spun off fourteen subsidiaries, including Hughes India (the “Agreement”). The Agreement requires DirecTV to indemnify Hughes India for certain contractually defined “Taxes” that accrued before the closing of the spin-off transaction and “Proceedings” that were initiated prior to the closing date. Hughes India sought a declaration that DirecTV must indemnify it for unpaid license fees, interest, and penalties imposed by India’s Department of Telecommunications (the “DOT”). The district court granted summary judgment for DirecTV, concluding that the license fees were not subject to indemnification because they were neither Taxes nor the result of Proceedings against Hughes India as defined by the Agreement. Hughes India appealed.   The Second Circuit vacated the district court’s judgment and remanded the case to the district court for further proceedings. The court agreed with Hughes India that under the plain terms of the Agreement, the license fees are Taxes, and the Provisional License Fee Assessment (the “Provisional Assessment”) issued by the DOT initiated a Proceeding against Hughes India. The court concluded that DirecTV is obligated to indemnify Hughes India for license fees, interest, and penalties accrued for tax periods ending on or before closing and for those amounts related to the Provisional Assessment issued for fiscal years 2001 to 2003, which was the only Proceeding initiated before closing. View "Hughes Communications India Private Limited v. The DirecTV Group, Inc." on Justia Law

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Broadband Voice, LLC, d/b/a Fuse.Cloud, LLC (Fuse), appealed a circuit court's dismissal of its complaint with prejudice. Fuse argued that it was entitled to $116,984.02 in early-termination fees from the four contracts it had with Jefferson County (the County). Fuse also argued that the trial court erred, inter alia, by denying its motion for judgment on the pleadings. Because the early-termination provision in Fuse’s contract with the County was unenforceable, the Mississippi Supreme Court found trial court did not err by denying Fuse’s motion for judgment on the pleadings or by dismissing Fuse’s complaint with prejudice. View "Broadband Voice, LLC v. Jefferson County, Mississippi" on Justia Law

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In Section 9(e) of a settlement agreement between Cox Communications and Sprint Corporation (T-Mobile U.S., Inc.'s predecessor-in-interest, Cox agreed that, before it offered wireless mobile services to its customers, it would enter into a “definitive” exclusive provider agreement with Sprint “on terms to be mutually agreed upon between the parties for an initial period of 36 months[.]” Cox and Sprint never entered into such a partnership. After T-Mobile finalized a purchase of Sprint in April 2020, the combined entity bid for Cox’s business, but Cox decided to partner with Verizon. After hearing that it would not be Cox’s exclusive partner, T-Mobile accused Cox of breaching the Settlement Agreement. Cox sued T-Mobile in Delaware's Court of Chancery, seeking a declaration that Section 9(e) was either an unenforceable “agreement to agree” or a Type II preliminary agreement requiring Cox and T-Mobile to negotiate in good faith. According to Cox, it was free to partner with Verizon because these good-faith negotiations failed. Shortly before trial, Cox also suggested that whatever Section 9(e) means, T-Mobile could not enforce it because the Settlement Agreement was between Cox and Sprint, and Cox never consented to an assignment. T-Mobile filed a compulsory counterclaim for breach of contract. In support of this claim, T-Mobile offered that Section 9(e) meant that, although Cox was not obligated to provide wireless mobile services, if it wished to do so, it had to first enter into an exclusive provider agreement with T-Mobile as the conceded successor-in-interest to Sprint. For T-Mobile, the failure of the parties’ attempt to negotiate the definitive terms of the agreement meant that Cox could not enter the wireless mobile market at all. The Court of Chancery agreed with T-Mobile and permanently enjoined Cox from “partnering with any mobile network operator other than T-Mobile to provide Wireless Mobile Service before entering into an agreement with T-Mobile. The Delaware Supreme Court disagreed with the Court of Chancery, finding the Settlement Agreement was a Type II preliminary agreement that obligates the parties to negotiate open items in good faith. The judgment was reversed, the injunction vacated, and the matter remanded so that the Court of Chancery could determine whether Cox and T-Mobile discharged their obligations to negotiate in good faith. View "Cox Communications, Inc. v. T-Mobile US, Inc." on Justia Law

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Murphy, a journalist with approximately Twitter 25,000 followers, had a Twitter “verification badge,” which “lets people know that an account of public interest is authentic.” Murphy “writes primarily on feminist issues, including the Me Too movement, the sex industry, sex education, third-wave feminism, and gender identity politics.” Murphy argues “that there is a difference between acknowledging that transgender women see themselves as female and counting them as women in a legal or social sense.” Murphy posted several tweets critical of transgender women. Twitter removed her posts and informed her she had violated its hateful conduct rules. After she posted additional similar messages, Twitter permanently suspended her account.Murphy filed suit, alleging breach of contract, promissory estoppel, and violation of the unfair competition law. The trial court dismissed the complaint, concluding Murphy’s suit was barred by the Communications Decency Act of 1996, 47 U.S.C. 230, under which interactive computer service providers have broad immunity from liability for traditional editorial functions undertaken by publishers—such as decisions whether to publish, withdraw, postpone or alter content created by third parties. The court of appeal affirmed. Each of Murphy’s causes of action seeks to hold Twitter liable for its editorial decisions. Murphy also failed to state a cognizable claim under California law. The Hateful Conduct Policy was in place when Murphy began posting her deleted tweets; Twitter expressly reserved the right to remove content, and suspend or terminate accounts “for any or no reason.” View "Murphy v. Twitter, Inc." on Justia Law

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Oakland entered into agreements with OBOT for the development of the former Oakland Army Base. The project was to include a bulk commodity shipping terminal for products, including coal. When the subject of coal became public, it activated interest groups, ultimately leading to an ordinance banning coal handling and storage in the city and a resolution applying the ordinance to the terminal. A federal court held that the resolution was a breach of the OBOT agreements, and enjoined Oakland from relying on the resolution. Friction between OBOT and Oakland continued. OBOT sued, alleging breach of contract and tort claims.The city filed a demurrer, then a special motion to strike (SLAPP motion, Code of Civil Procedure 425.16) that sought to strike “in part” the complaint. The SLAPP motion was heard with other matters. The hearing dealt primarily with the demurrer, which the court overruled in most part, and sustained in part with leave to amend. Days later, the court “denied without prejudice” the SLAPP motion, describing it as “premature” in light of the amended complaint to come.The court of appeal determined that the SLAPP motion has no merit because the complaint is not based on protected activity and remanded with instructions to deny the motion on the merits. The essence of the complaint arose from Oaklands’s acts or omissions in breach of its agreements, its refusal to cooperate, and its tortious conduct. View "Oakland Bulk and Oversized Terminal, LLC v. City of Oakland" on Justia Law

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The Fourth Circuit vacated the district court's order denying DIRECTV's motion to compel arbitration in an action brought by plaintiff, alleging violations of the Telephone Consumer Protection Act (TCPA). Plaintiff alleged that defendants called her cell phone to advertise DIRECTV products and services even though her telephone number is listed on the National Do Not Call Registry.Because plaintiff signed an acknowledgement expressly agreeing to the arbitration provision of the Wireless Customer Agreement with AT&T, which provision applies to her as an authorized user, the court rejected plaintiff's argument that she did not form an agreement to arbitrate. The court held that plaintiff formed an agreement to arbitrate with DIRECTV where the ordinary meaning of "affiliates" and the contractual context convinced the court that the term includes affiliates acquired after the agreement was signed. Furthermore, in light of the expansive text of the arbitration agreement, the categories of claims it specifically includes, and the parties' instruction to interpret its provisions broadly, the court must conclude that plaintiff's TCPA claims fall within the scope of the arbitration agreement. Therefore, the court remanded for further proceedings. View "Mey v. DIRECTV, LLC" on Justia Law

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T-Mobile customers can participate in “T-Mobile Tuesdays,” a promotional service, offering free items and discounts. Customers who no longer wish to receive marketing communications may opt-out by contacting T-Mobile’s customer service. T-Mobile user Warciak received a text message: This T-Mobile Tuesday, score a free 6” Oven Roasted Chicken sub at SUBWAY, just for being w/ T-Mobile. Ltd supply. Get app for details. The message came from T-Mobile. Warciak was not charged for the text. Warciak sued Subway claiming Subway engaged in a common-law agency relationship with T-Mobile, and that Subway’s conduct violated the Telephone Consumer Protection Act (TCPA). T-Mobile is not included in the lawsuit. The court dismissed the complaint as lacking sufficient support for claims of actual and apparent authority: control over the timing, content, or recipients of the text message. The court also found that the wireless carrier exemption applied so that no underlying TCPA violation exists ( 47 U.S.C. 227(b)(2)(C)). Prior written consent is not required for calls to a wireless customer by his wireless carrier if the customer is not charged. The Seventh Circuit affirmed. The only alleged conduct by Subway is its contractual relationship with T-Mobile. Warciak’s complaint lacks sufficient facts showing Subway manifested to the public that T-Mobile was its agent. He relied on T-Mobile’s conduct. Statements by an agent are insufficient to create apparent authority without also tracing the statements to a principal’s manifestations or control. View "Warciak v. Subway Restaurants, Inc." on Justia Law

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Defendants solicited and obtained $180,000 from plaintiff produce a documentary on the Syrian refugee crisis. Plaintiff sued, alleging that no “significant” work on the documentary has occurred, that defendants never intended to make the documentary, and that a cinematographer has not been paid and claims the right to any footage he has shot, putting the project in jeopardy. Defendants filed an unsuccessful anti-SLAPP (strategic lawsuit against public participation (Code Civ. Proc. 425.16)) motion to strike, arguing the complaint arises out of acts in furtherance of their right of free speech in connection with an issue of public interest--their newsgathering related to the Syrian refugee crisis, and that plaintiff could not demonstrate minimal merit on his claims because the action is subject to an arbitration provision; plaintiff’s allegations are contradicted by the investor agreement; and the evidence establishes that substantial progress was made. The court found that plaintiff’s claims did not arise out of acts in furtherance of defendants’ protected speech but were “based on the failure to do acts in furtherance of the right of free speech."The court of appeal reversed. Defendants made a prima facie showing that the complaint targets conduct falling within the “catchall” provision of the anti-SLAPP law. Defendants’ solicitation of investments and their performance of allegedly unsatisfactory work on the documentary constituted activity in furtherance of their right of free speech in connection with an issue of public interest. The court erred in denying the motion at the first stage of the anti-SLAPP analysis. View "Ojjeh v. Brown" on Justia Law