Justia U.S. 4th Circuit Court of Appeals Opinion SummariesArticles Posted in Business Law
OpenRisk, LLC v. MicroStrategy Services Corp.
OpenRisk filed suit against MicroStrategy after MicroStrategy continued to provide services to OpenRisk's ex-employees after they had left and formed a new company. The Fourth Circuit affirmed the district court's grant of summary judgment to MicroStrategy and held that the federal Copyright Act preempted OpenRisk's computer fraud claims under the Virginia Computer Crimes Act (VCCA). The court explained that the core of OpenRisk's VCCA claims was the unauthorized copying and transfer of its data, and that claim was "equivalent to" a copyright infringement action and was thus preempted. The court also held that MicroStrategy was entitled to summary judgment on OpenRisk's remaining claims of computer trespass, tortious interference, and conspiracy. View "OpenRisk, LLC v. MicroStrategy Services Corp." on Justia Law
Sharma v. USA International, LLC
Plaintiff filed suit against defendants, alleging fraud and conspiracy and seeking as damages the difference between the price he paid and the actual value of the restaurants he purchased from defendants based on a multiple of the restaurants' actual sales. The district court granted summary judgment for defendants, concluding that plaintiff failed to introduce adequate evidence of damages, particularly of the actual value of the restaurants at the time of the sale. The court vacated and remanded, concluding that plaintiff presented sufficient evidence to create a dispute of material fact as to the amount of their damages. In this case, plaintiff attempted to estimate with reasonable precision the actual value of the restaurants at the time of purchase, using the widely accepted income-based approach with a capitalization multiplier that was purportedly the industry standard and that the parties allegedly used to agree on the $600,000 purchase price. View "Sharma v. USA International, LLC" on Justia Law
Champion Pro Consulting Group v. Impact Sports Football
Champion Pro filed suit against Impact Sports and others, principally alleging that Impact Sports engaged in deceptive and unfair practices in violation of the North Carolina Unfair and Deceptive Practices Act (UDTPA), N.C. Gen. Stat. 75–1.1, by their recruitment of a football player, Robert Quinn. The court affirmed the district court's denial in part of Champion Pro's motion for sanctions based on the alleged spoliation of evidence and grant of Impact Sports motion for summary judgment on all claims. The court agreed with the district court that Champion Pro's allegations, even when assumed to be true, are insufficient to establish a violation of the UDTPA. Likewise, Champion Pro's civil conspiracy claim fails as a matter of law. Finally, Champion Pro's claim that the district court erred in failing to award sanctions in the form of an adverse jury instruction is moot. Accordingly, the court affirmed the judgment. View "Champion Pro Consulting Group v. Impact Sports Football" on Justia Law
US ex rel. Kurt Bunk v. Government Logistics N.V.
This case arose more than fifteen years ago as a bid-rigging scheme conjured up by shipping businesses to defraud the United States. In the qui tam proceedings at issue, a jury returned a verdict in 2011 against the Gosselin defendants. Relators appealed, contesting the district court's refusal to award civil penalties. The court granted relief and remanded for further proceedings. On remand, the district court was called upon to resolve the issue of whether relator Kurt Bunk was entitled to recover his judgment from another defendant, Government Logistics N.V. (GovLog). As a preliminary issue, the court concluded that the Peacock v. Thomas principle is inapplicable here, and the district court’s exercise of supplemental jurisdiction over the successor corporation liability claim against GovLog was entirely appropriate. The court concluded that the district court properly declined to apply the substantial continuity test here. However, the district court erred by dismissing Bunk's successor corporation liability claim as insufficiently pleaded. Finally, the court concluded that the district court erred in making the summary judgment award to GovLog. Accordingly, the court vacated and remanded for further proceedings. View "US ex rel. Kurt Bunk v. Government Logistics N.V." on Justia Law
Grayson v. Anderson
Victims of a massive ponzi scheme centered in South Carolina obtained a judgment of over $150 million against Derivium and others. Plaintiffs are now pursuing others whom they claim also participated in the scheme. The district court granted Vision International's motion to dismiss for lack of personal jurisdiction under FRCP 12(b)(2). The district court also granted Randolph Anderson, Patrick Kelley, and Total Eclipse's motion for judgment as a matter of law on plaintiffs' claim for aiding and abetting common law fraud. Plaintiffs filed separate appeals on the two rulings. The court consolidated the appeals. The court concluded that, because the parties engaged in full discovery on the jurisdictional issue and fully presented the relevant evidence to the district court, that court properly addressed Vision International’s Rule 12(b)(2) motion by weighing the evidence, finding facts by a preponderance of the evidence, and determining as a matter of law whether plaintiffs carried their burden of demonstrating personal jurisdiction over Vision International. Further, the court agreed with the district court’s conclusion that South Carolina has not recognized a cause of action for aiding and abetting common law fraud and that it is not the court's role as a federal court to so expand state law. Accordingly, the court affirmed the judgment as to both appeals. View "Grayson v. Anderson" on Justia Law
Feldman v. Law Enforcement Assoc. Corp.
Plaintiff filed suit alleging that he was unlawfully fired in retaliation for engaging in activities protected under the Sarbanes-Oxley Act of 2002 (SOX), 18 U.S.C. 1514A. On appeal, plaintiff challenged the district court's grant of summary judgment to defendants. The court affirmed, concluding that plaintiff had not successfully established the contributing factor element of his prima facie case. In this instance, the standard would be toothless if the court held that a preponderance of the evidence showed that the long-past activities at issue affected plaintiff's termination given the lengthy history of antagonism and the intervening events which caused the Outside Directors to view plaintiff as an insubordinate. View "Feldman v. Law Enforcement Assoc. Corp." on Justia Law
Johnson v. United States
Plaintiff filed suit against the government, seeking a refund of payments on a federal withholding tax penalty assessed against her under 26 U.S.C. 6672. The government counterclaimed against plaintiff and her husband to reduce to judgment the remaining balance of the trust fund recovery penalties assessed against them. The district court granted summary judgment to the government. The court affirmed the district court's grant of summary judgment against the husband individually where he did not provide a basis of law for his contention that the assessment of the 100% penalty against him was not made within the limitation period set forth in section 6672; affirmed the district court's grant of summary judgment against plaintiff because the undisputed record showed that she was properly liable for the 100% penalty where she was a "responsible person" under section 6672 during the relevant tax periods and where she "willfully" failed to see that the withholding taxes were paid; and affirmed the district court's determination of the amounts of the respective tax liabilities under section 6672. View "Johnson v. United States" on Justia Law
VRCompliance LLC v. HomeAway, Inc.
HomeAway filed suit in the District Court of Travis County, Texas, against Eye Street and others, asserting, inter alia, state law claims for breach of contract and misappropriation of trade secrets. Eye Street did not attempt to remove HomeAway's Texas suit to federal district court but, instead, filed its own action against HomeAway and others in federal district court. After HomeAway moved to dismiss Eye Street's action for improper venue or, alternatively, to transfer venue to the U.S. District Court for the Western District of Texas, the district court stayed the action pending the resolution of HomeAway's Texas lawsuit. On appeal, Eye Street challenged the propriety of the stay. The court concluded that the district court did not abuse its discretion in staying Eye Street's action. Given the strong case for a stay under the United Capitol Insurance Co. v. Kapiloff factors and Eye Street's deliberate choice to forego removal, the district court's decision would be an appropriate exercise of discretion under either Brillhart v. Excess Insurance Co. of America/Wilton v. Seven Falls Co. or Colorado River Water Conservation District v. United States. Accordingly, the court affirmed the judgment. View "VRCompliance LLC v. HomeAway, Inc." on Justia Law
Painter’s Mill Grille, LLC v. Brown
Painter's Mill Grille, the owner and operator of a restaurant, and its principals filed a complaint against the restaurant's landlord and its agents. Plaintiff alleged that defendants, motivated by racial animus, interfered with plaintiff's business and its opportunity to sell the restaurant, including its leasehold interest, in violation of 42 U.S.C. 1981, 1982, and 1985(3), as well as state tort principles. The court agreed with the district court's conclusion that plaintiff's principals did not have standing to be plaintiffs and that Painter's Mill Grille did not set forth sufficient facts to state a claim to relief that was plausible on its face. Accordingly, the court affirmed the district court's dismissal of the complaint under Rule 12(b)(6). View "Painter's Mill Grille, LLC v. Brown" on Justia Law
Grayson Consulting, Inc. v. Wachovia Securities, LLC
This is an adversary proceeding arising out of the bankruptcy of debtor (Derivium). Plaintiff (Grayson), assignee of the Chapter 7 bankruptcy trustee, appealed from a district court judgment affirming the bankruptcy court's decision to grant summary judgment for defendants (Wachovia). The court concluded that the district court did not err in affirming the grant of summary judgment for Wachovia on Grayson's Customer Transfers claim; summary judgment for Wachovia on Grayson's Cash Transfers claim; the bankruptcy court's determinations that the stockbroker defense applied to commissions; and the bankruptcy court's ruling that in pari delicto barred Grayson's tort claims against Wachovia. View "Grayson Consulting, Inc. v. Wachovia Securities, LLC" on Justia Law