Justia Contracts Opinion Summaries

A plaintiff who won a substantial lottery prize in Maine sought to protect his identity and that of his minor daughter from public disclosure. He entered into a non-disclosure agreement (NDA) with the mother of his child, intending to keep details of his lottery win and finances private. After the plaintiff believed the NDA was breached, he sued for injunctive relief and damages in the United States District Court for the District of Maine. Throughout the proceedings, both parties were initially allowed to litigate under pseudonyms, and a local news organization intervened to advocate for public access. As trial approached, the plaintiff moved to close the courtroom to the public and to continue using pseudonyms, arguing that disclosure could jeopardize his family’s safety and his daughter’s privacy.The District Court for the District of Maine denied both requests. It issued a detailed opinion emphasizing the strong presumption of public access to judicial proceedings, citing common-law tradition and relevant federal rules. The court found that while the case involved sensitive financial and familial information, such concerns did not outweigh the public’s right to access. The court determined that the plaintiff’s wealth and desire for privacy did not constitute “unusually severe harm” justifying deviation from established principles. Additionally, the court noted that any potential harm to the minor child would be mitigated by identifying her only by initials, a standard protocol. The plaintiff timely appealed these rulings.The United States Court of Appeals for the First Circuit reviewed the case under the abuse of discretion standard. It affirmed the District Court’s decision, holding that neither the plaintiff’s wealth nor purported risks to his family met the exceptional circumstances required for trial closure or continued pseudonymity. The appellate court found no abuse of discretion in the lower court’s balancing of public access against privacy interests and awarded costs to the appellees. View "Doe v. Smith" on Justia Law

A television production company maintained insurance coverage for its shows, including one chronicling the struggles of obese individuals to lose weight. In 2011, the insurer added an exclusion to the general liability portion of the policy, barring coverage for “any/all reality shows.” The company did not object to this exclusion. Years later, several participants or their families sued the production company for injuries allegedly arising from the show’s filming. The insurer refused to defend or indemnify the company, citing the “reality show” exclusion.The insurer brought a declaratory judgment action in the United States District Court for the Southern District of Texas, seeking confirmation that it had no duty to defend or indemnify. The production company counterclaimed for breach of contract, fraudulent inducement, and violations of Texas consumer protection statutes. The district court granted summary judgment to the insurer, finding that the exclusion unambiguously barred coverage for bodily injuries arising from reality shows like the one at issue. At a subsequent bench trial, the district court rejected the company’s fraud and statutory claims, finding no misrepresentation by the insurer and concluding the company could not have justifiably relied on any representation given its knowledge of the exclusion and the show’s nature.On appeal, the United States Court of Appeals for the Fifth Circuit affirmed. The Fifth Circuit held that the company forfeited its argument about the ambiguity of "reality show" by not raising it in the district court and, in fact, previously represented the show as a “reality show.” The appellate court also found no clear error in the district court’s factual findings rejecting the fraud and consumer protection claims, noting substantial evidence of the company’s understanding of the exclusion. The district court’s judgment was affirmed in full. View "Megalomedia v. Philadelphia Indemnity" on Justia Law

The dispute centers on royalty payments under thousands of Kansas oil-and-gas leases. The lessors (royalty owners) claim that the lessees (operators and working interest owners) improperly deducted certain midstream processing costs from royalties paid on natural gas produced from their wells. The lessors argue that, under Kansas law’s implied duty to market, lessees must bear all costs necessary to make raw gas “marketable” before calculating royalties, and that gas is only marketable when it meets the requirements of the market where it is actually sold (in this case, the interstate pipeline market). The lessees respond that gas can be marketable at the wellhead even if not actually sold there, and that processing merely enhances value rather than making the gas marketable, so post-production costs may be shared with royalty owners if the lease allows.The United States District Court for the District of Kansas, facing this disagreement and noting the absence of controlling Kansas precedent, certified a question to the Kansas Supreme Court regarding when natural gas is considered “marketable” for purposes of royalty obligations and the proper application of the marketable condition rule. The federal court provided a limited factual record and sought guidance on whether marketability depends on the intended or actual market of sale, or if it may occur earlier.The Supreme Court of the State of Kansas held that oil-and-gas leases must be interpreted according to their express terms. If the lease is silent or ambiguous about allocation of costs, the court may apply the marketable condition rule to fill contractual gaps, but this rule does not apply categorically. Determining when gas is “marketable” is a fact-specific inquiry that depends on the particular lease language and surrounding circumstances, and must be decided case-by-case. Express royalty provisions such as “proceeds if sold at the well” or “market value at the well” must be enforced as written and are not displaced by the marketable condition rule. The certified question was answered accordingly. View "Cooper-Clark Foundation v. Scout Energy Management " on Justia Law

Three individuals deposited approximately $85,000 into a joint account with a bank. When one of the depositors became subject to a civil judgment in an unrelated matter, the judgment creditor garnished the account. The bank paid about $38,000 from the joint account to the creditor without seeking the depositors’ permission. The depositors sued the bank for breach of contract and fiduciary duty in the Allegheny County Court of Common Pleas, which compelled arbitration under the account agreement. The arbitrator ruled in favor of the bank and awarded attorney fees. After the award, the bank sought confirmation of the arbitration award. The depositors’ attorney missed the 30-day deadline to seek judicial review due to a family emergency, specifically the unexpected death of his stepson.The depositors’ counsel filed a motion for nunc pro tunc relief in the Court of Common Pleas, requesting an extension to file for review. The court granted an additional 20 days. Counsel filed the belated appeal, and the court vacated the attorney fee award but otherwise affirmed the arbitration award. The bank appealed. The Pennsylvania Superior Court, after remanding for an unrelated issue, considered cross-appeals. The depositors argued due process violations during arbitration, while the bank contended the court lacked jurisdiction to modify the award after the statutory deadline and erred in granting nunc pro tunc relief.The Supreme Court of Pennsylvania reviewed whether the “non-negligent happenstance” exception to statutory filing deadlines—established in Bass v. Commonwealth—remained viable and whether it applied to the attorney’s family emergency. The Court held that the statutory 30-day period in 42 Pa.C.S. § 7342(b) is mandatory and not subject to an equitable, non-negligent-happenstance exception absent express statutory language. The Court affirmed the Superior Court’s order, disapproving Bass as a basis for extending arbitration review deadlines without legislative authorization. View "Carr v. First Commonwealth Bank" on Justia Law

A Michigan marijuana grower entered into a contract with two subsidiaries of a larger company to supply all marijuana grown in its 2020 and 2021 harvests. At the time of contracting, the grower was licensed by Michigan to produce medical marijuana, while the buyers held both medical and recreational licenses. The contract required the marijuana to meet recreational testing standards, and the buyers paid a deposit. After the initial shipment, the buyers refused further deliveries due to a price drop, prompting the grower to sell the remaining harvests to other entities at lower prices.The grower sued the buyers for breach of contract in Michigan state court, seeking lost profits. The buyers removed the case to the United States District Court for the Eastern District of Michigan, raised counterclaims, and asserted that the contract was unenforceable due to federal illegality. After cross-motions for summary judgment, the district court denied the buyers’ illegality defense and allowed the case to proceed to trial. A jury found the buyers liable and awarded substantial damages to the grower. The buyers renewed their motion for judgment as a matter of law and requested a new trial, again arguing federal illegality.The United States Court of Appeals for the Sixth Circuit reviewed the district court’s denial de novo. The Sixth Circuit held that federal courts cannot enforce contracts founded on agreements to commit conduct that is explicitly prohibited by federal law, such as distribution and possession of marijuana under the Controlled Substances Act. Because the contract was not limited to medical use and encompassed conduct criminalized under federal law, the court found the contract unenforceable. The Sixth Circuit reversed the district court’s denial of the buyers’ motion for judgment as a matter of law. View "Hello Farms Licensing MI, LLC v. GR Vending MI, LLC" on Justia Law

Ford hired Versata to develop software for vehicle configuration, resulting in two products: Automotive Configuration Manager (ACM) and Materials Cost Analytics (MCA). In 2004, the parties entered into a licensing agreement called the Master Subscription and Services Agreement (MSSA). When the MSSA expired in 2014 and negotiations failed, Ford developed its own software, PDO, while still licensing Versata’s products. Ford sought a declaratory judgment that it had not infringed Versata’s rights. Versata counterclaimed, alleging misappropriation of trade secrets (specifically three combination secrets within ACM) and breach of contract.The United States District Court for the Eastern District of Michigan excluded testimony from Versata’s damages expert regarding trade secret damages, limiting Versata to damages based on the parties’ licensing history. At trial, a jury found Ford liable for trade secret misappropriation (of ACM, not MCA) and breach of contract, awarding Versata $22,386,000 for misappropriation and $82,260,000 for breach. Post-trial, the district court reduced both awards, setting trade secret damages to $0 and breach damages to $3, reasoning that the jury lacked sufficient evidentiary basis for their calculations. The district court denied Ford’s motion for judgment as a matter of law on liability.The United States Court of Appeals for the Federal Circuit reviewed the case. It held that Versata was entitled to pursue unjust enrichment damages under both the Defend Trade Secrets Act and the Michigan Uniform Trade Secrets Act, and the district court erred in precluding this. The Federal Circuit vacated the district court's judgment on trade secret damages, remanding for a new trial with instructions to consider previously excluded damages models. For breach of contract, the Federal Circuit reversed the district court’s reduction and reinstated the jury’s $82,260,000 award. It affirmed the district court’s denial of Ford’s motion for judgment as a matter of law regarding liability for trade secret misappropriation. View "VERSATA SOFTWARE, LLC v. FORD MOTOR COMPANY " on Justia Law

Two families who had worked together for two decades in home renovation projects developed a dispute after collaborating on the purchase and remodeling of a property known as the Rose home. One couple provided financing, while the other managed the remodeling. Their financial arrangement involved consolidating an outstanding debt from a previous project with new loans for the Rose property into a single promissory note, secured by a deed of trust. The relationship deteriorated over disagreements about the remodeling approach, leading to negotiations for the lender to purchase the property from the remodelers. The transaction closed with the lender receiving a substantial sum from escrow to pay off the promissory note.After the transaction, the lender claimed that the remodelers had not properly repaid the debt, despite the escrow transfer. The lender filed suit in the Superior Court of Los Angeles County, asserting multiple causes of action including breach of contract and fraud. The remodelers moved for summary judgment, contending that the lender had been fully repaid and that a covenant not to sue barred the claims. The Superior Court granted summary judgment, finding that the debt was repaid and the lender suffered no damages, and entered judgment in favor of the remodelers.Upon appeal, the California Court of Appeal, Second Appellate District, Division Eight, independently reviewed the record and affirmed the judgment. The court held that undisputed objective evidence showed the debt had been fully repaid through the escrow process, and that the lender’s subjective assertions were insufficient to create a genuine factual dispute. The court further found that arguments concerning other damages were forfeited because they had not been raised below. The judgment in favor of the remodelers was affirmed, and costs were awarded to the respondents. View "Buchheim v. Anaya" on Justia Law

A public utility owned by a municipality owned poles used for distributing electric power. Other companies, such as telephone and cable providers, attached their equipment to these poles under agreements with the utility. In 1984, one such agreement allowed a cable company’s predecessor to attach equipment in exchange for an annual fee, with an escalator clause for potential increases. The contract required both parties to comply with all applicable laws that affected their rights and obligations. Over time, the cable company (later known as Spectrum) paid increasing rates, while another company (AT&T) continued to pay the original rate. After changes to state law in 2005 prohibited discrimination in pole-attachment rates and capped those rates at a federal maximum, the utility began invoicing both companies at the higher rate. Spectrum paid the higher invoices, but AT&T continued to pay the older, lower rate.Legal disputes ensued. Spectrum sued the utility, arguing the utility had breached the contract and violated statutory requirements by charging discriminatory rates. After initial proceedings before the Public Utility Commission and the trial court, the Third Court of Appeals held that the utility had not violated the statute because it had invoiced both companies at the same rate, and the Thirteenth Court of Appeals later ruled that the contract did not incorporate new statutory requirements arising after the agreement’s formation.The Supreme Court of Texas reviewed the case. It determined that the parties’ contract, by its express language, incorporated future changes in law affecting the parties’ rights and obligations. The court held that the relevant statutory provisions applied to the agreement and that Spectrum could pursue its breach-of-contract claim based on the utility’s alleged failure to comply with these laws. The Supreme Court of Texas reversed the judgment of the court of appeals and remanded the case to the trial court for further proceedings. View "SPECTRUM GULF COAST, LLC v. CITY OF SAN ANTONIO" on Justia Law

Twin brothers, both Black international students, were enrolled as doctoral candidates at the University of Mississippi’s Department of Pharmacy Administration. One brother, Bennard, disagreed with changes to his faculty mentorship arrangement, objected to mandatory in-person meetings, and declined to complete a required program assessment called the Abilities Transcript. After being repeatedly warned and given extensions, he was placed on provisional status for failing to complete the requirement, which also caused the loss of his graduate assistantship. Bennard and his brother each filed lawsuits against the University and several faculty members, alleging constitutional, statutory, and contract violations related to academic sanctions and alleged discriminatory treatment.The United States District Court for the Northern District of Mississippi consolidated the brothers’ cases. It dismissed Bennard’s claims against the University on sovereign-immunity grounds, dismissed his remaining federal claims under Rule 12(b)(6) for failure to state a claim, and declined to exercise supplemental jurisdiction over his individual-capacity state contract claims. Bennard appealed, while his brother’s appeal was dismissed for failure to prosecute.The United States Court of Appeals for the Fifth Circuit reviewed Bennard’s remaining claims. The court held that sovereign immunity barred claims against the University, claims against one defendant in her official capacity, and official-capacity state-law contract claims; those dismissals must be without prejudice. The court further found that Bennard failed to plausibly allege First or Fourteenth Amendment violations, and that the faculty defendants were entitled to qualified immunity on individual-capacity claims. The court affirmed the district court’s refusal to exercise supplemental jurisdiction over the remaining contract claims and upheld consolidation of the cases and dismissal of moot preliminary injunction motions. The judgment was affirmed as modified to clarify the proper form of dismissal for sovereign-immunity-barred claims. View "Eriakha v. University of MS" on Justia Law

In this case, a dispute arose over membership interests in Freedom Pass Partners, LLC, which owns undeveloped property near Big Sky, Montana. Carol Hudson, through her estate and beneficiaries Alan and Jeffrey Johnson, claimed that Hudson funded the purchase of the property based on assurances she would be a member of Freedom Pass. After Hudson’s death, her sons, acting as trustees and beneficiaries of her trust, filed suit asserting multiple claims including breach of contract, fraud, unjust enrichment, and conversion, alleging Hudson’s investment entitled her to membership or ownership interests.The Eighteenth Judicial District Court reviewed the claims and granted summary judgment for Freedom Pass Partners, LLC. It found that the Johnsons lacked standing because the estate’s personal representative had not joined the litigation, and concluded that all claims were time-barred based on the statute of limitations. The court also denied Johnsons’ motions to amend the complaint, to compel discovery identifying a prospective property buyer, and for relief from judgment regarding the dissolution of a lis pendens notice.The Supreme Court of the State of Montana reviewed the District Court’s decisions de novo for summary judgment and for abuse of discretion on the remaining motions. It held that genuine disputes of material fact existed about whether Hudson knew or should have known she was not a member of Freedom Pass, particularly given conflicting evidence and potential concealment or fiduciary duties. The Supreme Court also found the denial of leave to amend the complaint was an abuse of discretion because adding the estate’s personal representative could cure the standing defect. The denial of discovery and failure to consider mootness regarding the lis pendens were also found to be abuses of discretion. The Supreme Court reversed the District Court’s rulings and remanded the case for further proceedings. View "Hudson Revocable Trust v. Freedom Pass" on Justia Law