The Texas Supreme Court dealt a fatal blow to Brazilian state-run petroleum company Petrobras’s breach of fiduciary duty claims against former joint venture partner Belgian Transcor Astra Group S.A. The Texas high court ruled that an $820 million settlement agreement between the two oil and gas companies precluded Petrobras from asserting breach of fiduciary duty claims accusing Astra of bribing certain high-ranking Petrobras employees.
In 2006, Petrobras and Astra formed an ill-fated joint venture of Pasadena Refining System Inc. The joint venture between the two multi-national oil companies soon began to unravel. After the parties found themselves embroiled in several
Continue Reading Texas High Court Rules that Breach of Fiduciary Duty Claims Barred by $820 Million Settlement
Lubin Austermuehle, P.C.
The lawyers at Lubin Austermuehle, P.C. handle all types of internal disputes that may take shape during the course of a company’s formation, management, or dissolution. When it comes to managing a family business, for example, complications may arise that are perhaps unforeseeable. For instance, when spouses who co-own a company decide to divorce, the entity’s value as well as who retains ownership and managing responsibilities must be determined either through negotiations leading to an agreement or by a judge in court.
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Illinois Supreme Court Rules that Richard Dent not Entitled to Learn the Identity of his Accusers
We previously wrote about Chicago Bears legend Richard Dent’s lawsuit seeking the identities of individuals who he alleges defamed him and cost him and his company to lose a lucrative contract. Dent initially lost at the trial court level but won in the appellate court. The Illinois Supreme Court then agreed to consider the case. In its recent opinion, the Court ruled against Dent finding that he is not entitled to discovery to determine the names of people that he claims wrongly accused him of sexual harassment and drunken behavior in the course of an investigation, which ultimately cost…
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Bankruptcy Is Used by Wealthy Companies to Avoid Legal Liability
Approximately 38,000 consumer lawsuits have been filed against Johnson & Johnson for allegedly including asbestos in their baby powder, which allegedly caused ovarian cancer and mesothelioma. Executives at Johnson & Johnson allegedly knew about the risks of asbestos for decades and still included it in their baby powder. Those same executives deny the allegations that their product is contaminated or that it caused anyone to get sick.
The company finally pulled its baby powder off the shelves in 2020, but only because bad publicity had hurt sales, according to the giant pharmaceutical company.
The results of the lawsuits against Johnson…
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Federal Appeals Court Revives Class Action against Airline over Undisclosed Fee
In a recent decision, the U.S. Court of Appeals for the Eleventh Circuit revived a class action lawsuit filed against Avior Airlines accusing the airline of forcing passengers to pay undisclosed fees in order to board flights from Miami to Venezuela. In its decision, the appeals court ruled that the class action suit could proceed and that the district court erred when it found the claims preempted by the Airline Deregulation Act.
Plaintiffs Roberto Hung Cavalieri and Sergio Enrique Isea purchased tickets for flights operated by the defendant Avior Airlines. According to the plaintiffs’ compliant, the plaintiffs purchased tickets from…
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Restrictive Covenants in Shareholder Disputes
Covenants not to compete and non-solicitation agreements are frequent fixtures of employment agreements. They are also frequently found in operating, shareholder or partnership agreements. Though courts and legislatures across the country have become increasingly hostile to the notion of enforcing non-compete agreements against employees, courts have not displayed a similar reluctance to enforce restrictive covenants in shareholder disputes.
When shareholders have a dispute or desire to sell their interest in a company, restrictive covenants seek to protect the existing company and shareholders by placing limitations on what departing shareholders can and cannot do in terms of competing with the…
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Delaware Court Rules that Consent to Merger in Stockholders Agreement Did not Waive Right to Bring Fiduciary Duty Claims
Recently, the Delaware Court of Chancery refused to dismiss an action for post-closing damages stemming from alleged breaches of fiduciary duty brought by former stockholders of Authentix Acquisition Company, Inc. In doing so, the Court rejected the defendants’ arguments that a provision in a stockholders agreement entered by the plaintiffs waived such claims for breaches of fiduciary duties.
The dispute arose out of the sale of Authentix to Blue Water Energy in 2017. The plaintiffs in the case were holders of common stock in Authentix. In connection with their investment in the company, the plaintiffs entered into a Stockholders Agreement…
Continue Reading Delaware Court Rules that Consent to Merger in Stockholders Agreement Did not Waive Right to Bring Fiduciary Duty Claims
Supreme Court Rules that Inadvertent Mistake of Law Does not Invalidate Copyright Registration
In a recent decision, the Supreme Court held that a copyright applicant’s inadvertent mistake of law in a copyright registration application does not invalidate the application or corresponding registration. In so holding, the Court erased an earlier victory for fashion retailer H&M in a long running copyright dispute with fabric designer Unicolors, Inc. handed down by an appeals court. Before the Supreme Court’s decision, the Ninth Circuit court of appeals had ruled in favor of H&M nixing a $750,000 win for Unicolors.
To obtain special rights for copyright holders afforded by the Copyright Act of 1976, the creator must apply…
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Customers and Employees Accuse State Farm of Racial Discrimination When Denying Claims
Many people are familiar with insurance companies denying claims for a variety of reasons. Every dollar they use to repair or replace property is a dollar they can’t categorize as a profit or distribute to their executives as a bonus, so it’s common for insurance companies to try to find ways out of paying for claims. What is less common is to hear a claims adjuster say they don’t believe your story because your area is supposedly rife with fraud. That’s exactly what Darryl Williams, a former property owner on the South Side of Chicago, heard when he filed a…
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Ninth Circuit Allows State Law Claims to Survive in Mislabeling Class Action
Preemption is familiar battleground for class-action litigants prosecuting or defending product mislabeling claims concerning the labels of federally regulated products. Plaintiffs asserting state law mislabeling claims must contend with the fact that federal laws often expressly preempt state law claims out of a desire to prevent states from imposing requirements different from or stricter than those found in federal statutes or regulations.
Recently, the Ninth Circuit Court of Appeals analyzed the issue of federal preemption in a case involving the labeling of poultry products. In the case of Cohen v. ConAgra Brands, the plaintiff filed a putative class-action lawsuit alleging…
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Technology Company Files Defamation Lawsuit for $900 million against McDonald’s
People who want to be entrepreneurs are often told to find a problem in the world that they can solve, then build their business (and their marketing efforts) around solving that problem for their customers. That’s exactly what Melissa Nelson and Jeremy O’Sullivan thought they were doing for McDonald’s and its customers before McDonald’s started telling its franchisees that the technology Nelson and O’Sullivan had created could lead to worker injuries.
The problem Nelson and O’Sullivan sought to solve is the prevalence of ice cream machines at McDonald’s constantly breaking down. It’s such a common occurrence that it has inspired…
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Former Alaskan Governor Sarah Palin Loses Defamation Trial against The New York Times
Earlier this month, former governor of Alaska and vice presidential candidate Sarah Palin lost her defamation suit against the New York Times when a federal jury found in favor of the newspaper. Palin’s lawsuit had alleged that the New York Times and its former editor, James Bennet, defamed the former governor when it published an opinion column that incorrectly linked Palin to the 2011 Tucson, Arizona mass shooting, in which a federal judge was killed and Democratic House of Representatives member Gabrielle Giffords was wounded.
As many legal commentators and defamation law practitioners had noted, Palin faced an uphill battle…
Continue Reading Former Alaskan Governor Sarah Palin Loses Defamation Trial against The New York Times
Statements of Opinion Do Not Qualify as Defamation
Melissa McGurren, former co-host of the popular radio show, “Eric in the Morning,” recently sued Hubbard Radio Chicago for allegedly defaming her in an internal email in which an executive of the radio station said they did not agree with McGurren’s statements about workplace harassment at the station. McGurren alleges the email defamed her to her former coworkers because it implied she was a liar, but according to a federal judge, defendants need to do more than imply in order to be found guilty of defamation.
McGurren spent more than two decades working at WTMX-101.9-FM, the radio station that hosts…
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Supreme Court Strikes Down OSHA Vaccine Mandate for Large Employers
The Supreme Court has stayed the OSHA’s vaccine-or-test mandate for large private employers, while litigation over its legality continues in the lower courts. Over a dissent from the Court’s three liberal justices, the court ruled that OSHA exceeded its congressionally granted authority in issuing such a sweeping mandate. In a separately issued decision, the Court by a 5-4 vote permitted a vaccination mandate covering health care workers at facilities receiving federal funding through Medicare or Medicaid programs to go into effect.
Six Justices agreed that OSHA exceeded its statutory authority to impose universal COVID-19 safety standards under its power to…
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Judge Rules Against Palin Before Jury Has a Chance to Decide
Sarah Palin’s libel lawsuit against The New York Times was already unusual in that it made it all the way to trial, whereas most libel lawsuits settle outside of court. The lawsuit recently became even more noteworthy when the defense attorneys asked the court to rule in their favor, even if the jury ruled in Palin’s favor, and Judge Rakoff said he would. The decision effectively nullified the jury’s decision before the jury had a chance to reach a decision.
The jury did rule in favor of The New York Times, but there is no longer any way to tell…
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Court Rules Disgruntled Customer Must Arbitrate Claims against Used Car Dealer
Arbitration has been a hot topic in legal circles and court opinions over the last decade. The U.S. Supreme Court and Federal Appeals courts have issued a number of high-profile decisions addressing issues of the enforceability of arbitration agreements, who gets to decide the threshold issue of arbitrability, and whether class claims can be decided in arbitration. Proponents of arbitration argue that it is quicker and less expensive than traditional litigation and provides greater confidentiality than the public court record. Opponents argue that it provides fewer avenues for discovery and allows unscrupulous defendants to shield their unsavory conduct or practices…
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Sarah Palin Defamation Trial against New York Times Delayed after Palin Tests Positive for COVID-19
Former Alaska Governor and vice-presidential candidate Sarah Palin’s much-anticipated defamation trial against the New York Times was set to begin in federal court, but was rescheduled at the last minute after she tested positive for Covid-19 a day before jury selection was slated to begin. Defamation and First Amendment attorneys and legal scholars around the country have been keenly following the litigation as it could test key First Amendment protections for media. The trial has been rescheduled for February 3.
After learning of Palin’s positive COVID-19 test, the judge presiding over the case prepared ready to move forward with the…
Continue Reading Sarah Palin Defamation Trial against New York Times Delayed after Palin Tests Positive for COVID-19