Articles Posted in Business Law

SMRI filed suit alleging that defendants, through their participation in the selling of Rushmore's unlicensed motorcycle rally-related products, had violated several provisions of the Lanham Act and related South Dakota statutes. The Eighth Circuit held that the district court did not err in declining to apply licensee estoppel against defendants; the trial record did not support a finding that SMRI owned the rally or its intellectual property, that SMRI and the Chamber before it have been the substantially exclusive users of the word "Sturgis" in relation to either the rally or rally-related goods and services, or that relevant consumers associate the word "Sturgis" with a single source of goods and services in any context; and thus the court reversed the jury's finding that defendants diluted the "Sturgis" mark and vacated the jury's finding that defendants engaged in cybersquatting. The court also held that defendants should have been granted judgment as a matter of law on the infringement claims relating to SMRI's unregistered marks, "Sturgis Motorcycle Rally" and "Sturgis Rally & Races," because the jury was not presented with sufficient evidence to find that the marks had acquired secondary meaning. Finally, the evidence at trial supported the jury's finding that SMRI's mark "Sturgis Bike Week" was valid; there was sufficient evidence to show that SMRI's "Monahan Composite Mark" was widely used in connection with the rally and that defendants' infringement of the mark was willful and intentional; the differences between the shot glass's design and the Monahan mark were so obvious that the jury did not have any basis in the record for its finding of a counterfeit; SMRI's claims for deceptive practices, false advertising and unfair competition were not time-barred; the district court did not err in granting judgment as a matter of law to JRE; the court vacated the district court's order granting defendants the defenses of laches and acquiescence; and the court reversed and remanded the permanent injunction. View "Sturgis Motorcycle Rally, Inc. v. Rushmore Photo & Gifts, Inc." on Justia Law

The Eighth Circuit affirmed the district court's grant of defendant's motion for summary judgment for defendant in an action alleging that defendant's actions created "significant duress" that forced her to sell her minority interests in Progressive Swine Technologies. The court held that plaintiff failed to prove actionable economic duress under Nebraska law; the Unit Purchase Agreement was not unconscionable as a matter of law, and the district court properly determined that plaintiff failed to show a fraudulent misrepresentation on which she relied in entering into the Unit Purchase Agreement; and because plaintiff did not enter into the Agreement as the result of actionable economic duress, and the Agreement was not the result of fraudulent inducement, the Agreement's mutual release provision barred plaintiff's other claims, including a claim that defendant breached his fiduciary duty to a minority shareholder and a claim that defendant had previously deprived plaintiff of a corporate opportunity. View "Rasby v. Pillen" on Justia Law

FC appealed the district court's judgment in favor of Qwest, finding FC was liable for tortious interference with Qwest's contractual relationship with Tekstar. The Eighth Circuit held that the district court did not err in finding that FC caused Tekstar to breach its tariff with Qwest; the breach was material; FC's justification defense was rejected where the district court did not clearly err in finding that, prior to contracting with Tekstar, FC was on notice that it was not an end user and that Tekstar would violate its tariff by charging Qwest tariff rates for FC’s traffic; the district court's conclusion was not precluded by collateral estoppel; the district court did not clearly err in finding that the nearly $1 million Qwest paid to AT&T and other long-distance carriers to route FC's traffic flowed directly from FC's tortious interference; and there was no error in the district court's award of attorney's fees to Qwest. View "Qwest Communications Co. v. Free Conferencing Corp." on Justia Law

Six siblings dispute over ownership and control of OKISDA, a family corporation their mother established. The district court concluded that nearly all the claims hinge on whether the transfer of Class A stock from the mother's trust to defendant was valid. The Eighth Circuit affirmed the district court's grant of summary judgment to defendants and dismissal of all the claims. The court held that transfer of two Class A shares did not violate the transfer restriction of OKISDA's bylaws. Furthermore, the validity of the stock transfer established that plaintiffs' other claims were foreclosed. View "Rains v. Jones" on Justia Law

The Eighth Circuit affirmed the district court's dismissal of an action brought by four taxicab drivers against Uber, alleging that Uber tortiously interfered with a valid business expectancy. The court held that it need not decide whether there was a valid business expectancy because plaintiffs failed to allege the absence of justification under Missouri law. In this case, there was no evidence that the legislature intended to create a private cause of action based on violation of the Missouri Taxicab Commission's code and requirements. View "Vilcek v. Uber Technologies, Inc." on Justia Law

Plaintiff brought a putative class action against Air EVAC asserting three claims for relief under Arkansas law. The district court dismissed all claims as preempted by the express preemption provision in the Airline Deregulation Act (ADA). The Eighth Circuit affirmed on a narrower basis and held that the fairness of plaintiff's transaction with Air EVAC and the reasonableness of Air EVAC's price were governed by federal law. Likewise, the court held that the ADA preempted plaintiff's claim that Air EVAC may not seek restitution against class members because it lacked clean hands. Finally, the court held that plaintiff's declaratory judgment claims, like his fraud claims, were ADA-preempted. The court noted that plaintiff's may bring contract defenses and unpreempted judicial remedies were also available. View "Ferrell v. Air EVAC EMS, Inc." on Justia Law

The Eighth Circuit vacated the tax court's valuation of Medtronic's true income for the 2005 and 2006 tax years. The Commissioner claimed that Medtronic shifted income from its highly profitable U.S. operations and intangibles to an offshore subsidiary operating in a tax haven in Puerto Rico by charging an artificially low rate for the intangibles. The court held that the tax court's factual findings were insufficient to enable the court to conduct an evaluation of the tax court's determination that the Pacesetter agreement was an appropriate comparable uncontrolled transaction (CUT) because it involved similar intangible property and had similar circumstances regarding licensing. In this case, the tax court did not address in sufficient detail whether the circumstances of the settlement between Pacesetter and Medtronic US were comparable to the licensing agreement between Medtronic and Medtronic Puerto Rico; did not analyze the degree of comparability of the Pacesetter agreement's contractual terms and those of the Medtronic Puerto Rico licensing agreement; did not evaluate how the different treatment of intangibles affected the comparability of the Pacesetter agreement and the Medtronic Puerto Rico licensing agreement; and did not decide the amount of risk and product liability expense that should be allocated between Medtronic US and Medtronic Puerto Rico. View "Medtronic, Inc. & Consolidated Subsidiaries v. Comissioner" on Justia Law

Hildene filed suit against Bannister and Arvest, alleging that the asset purchase transaction between Bannister and Arvest breached the "successor obligor" term of an indenture agreement between Bannister and U.S. Bank National Association as trustee and that Arvest tortiously interfered with the Indenture. The Eighth Circuit affirmed the district court's grant of summary judgment, holding that the asset purchase transaction did not violate the Indenture. The court held that the plain meaning of the word "property" in this context was property directly owned by Bannister, the "company" that signed the Indenture; and Bannister's "property and capital stock" did not include assets of Bannister subsidiaries. The court also held that the district court did not err in dismissing plaintiff's tortious interference claim against Arvest because Bannister did not breach the Indenture's successor obligor provision. View "Hildene Opportunities Master Fund, Ltd. v. Arvest Bank" on Justia Law

In 2007-2010, the Hargises bought and operated nursing homes. Bobby was the sole owner of corporations that operated the homes (Operating Corporations), which were S corporations. Brenda owned interests in companies that bought and leased the homes to the Operating Corporations (Nursing Home LLCs). The Nursing Home LLCs were partnerships under 26 C.F.R. 301.7701-3(a). All the entities had net operating losses, which the Hargises deducted on their joint tax returns for 2009 and 2010. The Commissioner issued the Hargises a notice of deficiency, disallowing their deduction of most of the nursing home losses, due to the Hargises’ insufficient basis in their companies. The Hargises owed $281,766. The Tax Court ruled for the Commissioner. The Eighth Circuit affirmed. The Tax Court correctly denied Bobby any basis in the indebtedness of the Operating Corporations, finding “no convincing evidence that any of the lenders looked to [Bobby] as the primary obligor on the loans.” The Commissioner properly calculated Brenda’s basis from the Nursing Home LLCs’ tax returns (Schedule K-1). Her deduction of their losses is limited to “the adjusted basis of [her] interest in the partnership.” View "Hargis v. Koskinen" on Justia Law

The Eighth Circuit affirmed the district court's grant of summary judgment to defendant in an action alleging claims of negligent misrepresentation, unjust enrichment, and denial of equitable relief. The court held that the district court did not err in granting defendant's summary judgment motion on the negligent misrepresentation claim because Lonesome Dove had not alleged any specific damage from the misrepresentation; the district court did not err by granting summary judgment as to the unjust enrichment claim because Lonesome Dove failed to present specific facts to illustrate any benefit to defendant other than the list of things in the contract; the district court did not abuse its discretion by denying Lonesome Dove equitable relief where Lonesome Dove had an adequate remedy at law in this case; and the district court did not err by denying Lonesome Dove's motion for a new trial where the verdict was not against the clear weight of the evidence. View "Lonesome Dove Petroleum, Inc. v. Holt" on Justia Law