Justia Contracts Opinion SummariesArticles Posted in International Trade
Aldossari v. Ripp
In the 1990s, Aldossari’s company, Trans Gulf, entered into an agreement in Saudi Arabia with three other businesses to establish and operate an oil refinery in Saint Lucia, a Caribbean island nation. Crude oil was to be sourced from the Saudi government or its national oil company, Saudi Aramco. The project went forward, but, Aldossari alleged, the owners of the three contract counterparties – one of whom became the Crown Prince of Saudi Arabia –refused to pay Trans Gulf its share of the proceeds. Two decades later, the soon-to-be Crown Prince promised to pay Aldossari but never did. Aldossari, transferred his rights to his minor son, a U.S. citizen.The federal district court dismissed Aldossari’s subsequent tort and contract claims. The Third Circuit affirmed, holding that dismissal of the claims against a deceased defendant was proper because Aldossari failed to allege any basis for exercising subject-matter jurisdiction over those claims. As for the surviving defendants, the lack of any meaningful ties between those defendants and the United States in Aldossari’s claims defeats his effort to sue them in the U.S. The Foreign Sovereign Immunities Act precludes subject-matter jurisdiction over the claims against Saudi Arabia and Saudi Aramco. The case was remanded with directions to dismiss without prejudice since none of the dispositive rulings reach the merits. View "Aldossari v. Ripp" on Justia Law
Dimond Rigging Co. v. BDP International, Inc.
Dimond was hired by a Chinese manufacturer to “rig, dismantle, wash, and pack,” and ship used automotive assembly-line equipment to China. Dimond, which lacked experience in international shipment, hired BDP. Dimond asserted that BDP did not disclose that it was not a licensed Ocean Transport Intermediary by the Federal Maritime Commission. In May 2011, BDP informed Dimond that it had obtained a ship and sent a booking note to Dimond. Between May and October 2011, Dimond dismantled and weighed the equipment and prepared a “preliminary" packing list. BDP allegedly provided the preliminary packing list when it obtained quotes from third-party contractors to load the Equipment. In October 2011, BDP notified Dimond that the ship was no longer available. Dimond asserted that BDP “without Dimond’s knowledge, consent or approval” hired Logitrans to perform BDP’s freight forwarding duties. BDP and Logitrans hired a ship. As a result of many ensuing difficulties, Dimond became involved in multiple lawsuits, including suits with its Chinese customer and the stevedores. Dimond sued BDP in July 2013 but never served BDP with the complaint. When the summons expired, the district court dismissed without prejudice. In August 2017, Dimond filed a Motion to Amend and Praecipe for Issuance of Amended Summons for its 2013 suit. The Sixth Circuit affirmed the denial of the motion. The suit was not timely filed within the one-year statute of limitations set forth in the Carriage of Goods by Sea Act. View "Dimond Rigging Co. v. BDP International, Inc." on Justia Law
Armada (Singapore) PTE Ltd. v. Amcol International Corp.
Plaintiff, a Singaporean shipping company, entered into shipping contracts with an Indian mining company. The Indian company breached those contracts. Plaintiff believes that American businesses that were the largest stockholders in the Indian company engaged in racketeering activity to divest the Indian company of assets to thwart its attempts to recover damages for the breach. Plaintiff filed suit under the Racketeering Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1964(c). While the case was pending, the Supreme Court decided RJR Nabisco v. European Community, holding that “[a] private RICO plaintiff … must allege and prove a domestic injury to its business or property.” The district court granted the American defendants judgment on the RICO claims. The Seventh Circuit affirmed. Plaintiff’s claimed injury—harm to its ability to collect on its judgment and other claims—was economic; economic injuries are felt at a corporation’s principal place of business, and Plaintiff’s principal place of business is in Singapore. The court noted that the district court allowed a maritime fraudulent transfer claim to go forward. View "Armada (Singapore) PTE Ltd. v. Amcol International Corp." on Justia Law
Hemlock Semiconductor Operations, LLC v. SolarWorld Industries Sachsen GMBH
Hemlock and Sachsen manufacture components of solar-power products. They entered into a series of long-term supply agreements (LTAs), by which Hemlock in Michigan would supply Sachsen in Germany with set quantities of polycrystalline silicon (polysilicon) at fixed prices from 2006-2019. The market price of polysilicon was initially well above the LTA price, but the market price plummeted after the Chinese government began subsidizing its national production of polysilicon. The parties reached a temporary agreement to lower the LTA price in 2011. When that agreement expired, Hemlock demanded that Sachsen pay the original LTA price for 2012. Sachsen refused. Hemlock sued for breach of contract. The district court granted Hemlock summary judgment and awarded nearly $800 million in damages and prejudgment interest. The Sixth Circuit affirmed. The district court: properly struck Sachsen’s antitrust defense because enforcing the take-or-pay provision does not require the parties to engage in the precise conduct that is allegedly unlawful; properly struck Sachsen’s defense that the LTAs illegally tied Sachsen’s predominant demand for polysilicon to a single seller in violation of E.U. antitrust law; properly concluded that Sachsen’s affirmative defenses of commercial impracticability and frustration of purpose lack merit; and properly awarded the full amount of the remaining contract price as liquidated damages, despite Sachsen’s argument that the award was an unreasonable penalty. View "Hemlock Semiconductor Operations, LLC v. SolarWorld Industries Sachsen GMBH" on Justia Law
VLM Food Trading Int’l, Inc. v. Ill. Trading Co.
VLM, a Montreal-based supplier, sold frozen potatoes to IT in Illinois. After nine successful transactions, IT encountered financial difficulty and failed to pay for the next nine shipments. Invoices sent after delivery included a provision purporting to make IT liable for collection-related attorney’s fees if it breached the contracts. VLM sued; the deadline for an answer passed. The court entered a default. On defendants' motion, the court vacated the default as to IT’s president only. All three defendants then filed answers, contesting liability for attorney’s fees. The judge applied the Illinois Uniform Commercial Code and found that the fee provision had been incorporated into the contract. The Seventh Circuit reversed, holding that the U.N. Convention on Contracts for the International Sale of Goods applied. On remand, the judge applied the Convention and held that the fee provision was not part of the contracts and that IT could benefit from this ruling, despite the prior entry of default. The Seventh Circuit affirmed. IT never expressly assented to the attorney’s fees provision in VLM’s trailing invoices, so under the Convention that term did not become a part of the contracts. VLM waived its right to rely on the default by failing to raise the issue until its reply brief on remand. View "VLM Food Trading Int'l, Inc. v. Ill. Trading Co." on Justia Law
Creative Calling Solutions Inc v. LF Beauty Ltd.
Creative, an Iowa corporation, designs and sells beauty products. LF, a Hong Kong corporation, with its principal place of business in Hong Kong, provides services, including product development, shipping oversight, and production planning. LF contacted Unger, President of Creative, in Iowa, seeking to manage Creative’s operations in China and e-mailed a presentation describing proposed services. Unger traveled to Hong Kong to execute the contract. LF managed Creative’s supply chain; the companies communicated extensively electronically and by telephone for two years. As required by the contract, LF shipped pre-production and production samples (made in China by third party factories) to Iowa. LF received payments from Creative’s customers on its behalf, and sent proceeds, less deductions, to Iowa. No LF agents or employees visited Iowa and LF has no connection with Iowa outside of this business relationship. Creative filed suit in Iowa, alleging that LF breached the contract by sending samples that could not be used because they were defective. The district court dismissed for lack of personal jurisdiction. The Eighth Circuit reversed, stating that a reasonable jury could find that LF had sufficient contacts with Iowa to justify the exercise of personal jurisdiction and that the exercise of jurisdiction would not offend traditional notions of fair play and substantial justice. View "Creative Calling Solutions Inc v. LF Beauty Ltd." on Justia Law
Posted in: Civil Procedure, Contracts, International Trade
Yazdianpour v. Safeblood Techs., Inc.
Licensees entered into a licensing agreement with Safeblood Tech for the exclusive rights to market patented technology overseas. After learning that they could not register the patents in other countries, Licensees sued Safeblood for breach of contract and sued Safeblood, its officers, and patent inventor for fraud, constructive fraud, and violations of the Arkansas Deceptive Trade Practices Act (ADTPA), Ark. Code 4-88-101 to -115. The district court dismissed the fraud claims at summary judgment. The remaining claims proceeded to trial and a jury found for Licensees, awarding them $786,000 in contract damages and no damages for violations of the ADTPA. The district court awarded Licensees $144,150.40 in prejudgment interest. The Eighth Circuit reversed as to the common-law fraud claim and the award of prejudgment interest, but otherwise affirmed. Licensees produced sufficient evidence that the inventor made a false statement of fact; the district court did not abuse its discretion when it gave the jury a diminution-in-product-value instruction; and Licensees waived their inconsistent-verdict argument. View "Yazdianpour v. Safeblood Techs., Inc." on Justia Law
Posted in: Business Law, Commercial Law, Contracts, International Trade, Patents
Druckzentrum Harry Jung GmbH v. Motorola Mobility LLC
In 2008 Motorola agreed to make a good-faith effort to purchase two percent of its cell-phone user-manual needs from Druckzentrum, a printer based in Germany. After a year, Motorola’s sales contracted sharply. Motorola consolidated its cell-phone manufacturing and distribution operations in China, buying all related print products there. Motorola notified Druckzentrum. The companies continued to do business for a few months. After losing Motorola’s business Druckzentrum entered bankruptcy and sued Motorola, alleging breach of contract and fraud in the inducement. Druckzentrum claimed that the contract gave it an exclusive right to all of Motorola’s user-manual printing business for cell phones sold in Europe, the Middle East, and Asia during the contract period. The district judge entered summary judgment for Motorola. The Seventh Circuit affirmed. The written contract contained no promise of an exclusive right and was fully integrated, so Druckzentrum cannot use parol evidence of prior understandings. Although Motorola promised to make a good-faith effort, the contract listed reasons Motorola might justifiably miss the target, including business downturns. There was no evidence of bad faith. The evidence was insufficient to create a jury issue on the claim that Motorola fraudulently induced Druckzentrum to enter into or continue the contract. View "Druckzentrum Harry Jung GmbH v. Motorola Mobility LLC" on Justia Law
Posted in: Business Law, Commercial Law, Contracts, International Trade
Derr, et al. v. Swarek, et al.
The Swareks filed suit against Herman Derr and DPI in Chancery Court, alleging that Derr and his corporation breached a contract for the sale of Mississippi farmland. Derr died while the action was pending and years later, Derr Heirs filed suit against the Swareks in the German Regional Court seeking a declaratory judgment that they were not liable for any claims arising from the putative land contract. After the initiation of the German lawsuit but before the decision of the Regional Court, the Swareks dismissed all of their claims against Derr with prejudice and withdrew a pending motion to substitute the Derr Heirs in the Mississippi action. The Regional Court dismissed the Derr Heirs' claim but the German Higher Regional Court reversed. Subsequently, the Derr Heirs returned to Mississippi and attempted to enforce a German order for costs in federal district court. The court concluded that the district court did not abuse its discretion by refusing to enforce the German cost award where the Higher Regional Court's decision to sidestep the comity determination and readjudicate claims that had already been settled in the Chancery Court violated the Mississippi public policy of res judicata and the Swarek's right to permanently terminate their claims. Accordingly, the court affirmed the judgment of the district court.View "Derr, et al. v. Swarek, et al." on Justia Law
Posted in: Civil Procedure, Contracts, International Trade
Odhiambo v. Republic of Kenya, et al.
Plaintiff filed suit against Kenya in district court for breach of contract based on Kenya's underpayment of rewards owed to him. The court affirmed the district court's conclusion that the Foreign Sovereign Immunities Act (FSIA), 28 U.S.C. 1604, barred plaintiff's suit. In this case, Kenya did not waive its immunity in U.S. courts and Kenya's alleged breach of contract lacks the connection to the United States required by the commercial activity exception to the FSIA.View "Odhiambo v. Republic of Kenya, et al." on Justia Law
Posted in: Contracts, Government & Administrative Law, International Trade