Justia U.S. 2nd Circuit Court of Appeals Opinion Summaries

Luitpold is a New York corporation that develops and markets drugs and medical devices, including dental implant products. Geistlich, a Swiss corporation that develops and manufactures dental products, now owns the patents and trademarks for the Bio-Oss and Bio-Glide dental products, which are used to aid bone and tissue growth in patients following dental procedures. In 1994,, following failed attempts to market its products in the United States through other companies, Geistlich and Luitpold entered into interdependent commercial and license agreements to establish a distribution relationship for the sale of Geistlich’s dental products throughout the United States and Canada. The parties later entered into additional agreements and amendments. In 2010, Geistlich declared its intent to terminate the distribution relationship, without compensation to Luitpold, as of 2011. Geistlich did not allege breach of the agreements, but declared that the agreements had been in effect for a “reasonable” time and that under New York law, Geistlich could unilaterally terminate them upon reasonable notice. Luitpold sought declaratory relief, specific performance, damages, and prejudgment attachment of Geistlich patents and trademarks. The district court rejected all claims. The Second Circuit vacated and remanded, finding that material issues of fact precluded dismissal or summary judgment on certain claims. View "Luitpold Pharm., Inc. v. Ed. Geistlich Sohne A.G." on Justia Law

Select Comfort manufactures and sells Sleep Number bedding, which has inflatable air chambers that adjust to vary mattress firmness; it sells those beds through its own retail stores. In 2005, Sleepy’s, a bedding retailer, and Select executed an agreement making Sleepy’s a Sleep Number authorized retailer only for Select’s “Personal Preference” line. Sales were disappointing. In response to reports that Select salespeople were disparaging Sleepy’s and its Personal Preference line, Sleepy’s began conducting “secret shops.” Sleepy’s contends its undercover shopping revealed a pattern of disparagement. In 2007, Sleepy’s confronted Select; the parties executed a Wind-Up Agreement. Sleepy’s sued, alleging that Select breached the agreement by failing to provide “first quality merchandise,” and by violating a non-disparagement clause. Sleepy’s also asserted fraudulent inducement, slander per se, breach of the implied covenant of good faith and fair dealing, unfair competition, and violation of the Lanham Act. The district court granted judgment for Select, finding that the contract had expired on September 30, 2006 and that Sleepy’s had consented to the allegedly slanderous statements. The Second Circuit vacated, except with respect to the “first quality merchandise” claim. The court erred in treating “expiration” and “termination” as interchangeable terms referring to the end of the contract term. View "SleepyÂ’s, LLC v. Select Comfort Wholesale Corp." on Justia Law

NAF filed suit against Trading for breach of contract and sought damages, alleging that Trading wrongfully repudiated the contract and that, as a consequence of the breach, NAF lost financing commitments provided by third parties and was unable to complete the acquisition of Hampton. On appeal, NAF challenged the district court's judgment in favor of Trading. The court certified the following question to the Supreme Court of the State of Delaware: Where the plaintiff has secured a contractual commitment of its contracting counterparty, the defendant, to render a benefit to a third party, and the counterparty breaches that commitment, may the promisee-plaintiff bring a direct suit against the promisor for damages suffered by the plaintiff resulting from the promisor’s breach, notwithstanding that (1) the third-party beneficiary of the contract is a corporation in which the plaintiff-promisee owns stock; and (ii) the plaintiff-promisee’s loss derives indirectly from the loss suffered by the third-party beneficiary corporation; or must the court grant the motion of the promisor-defendant to dismiss the suit on the theory that the plaintiff may enforce the contract only through a derivative action brought in the name of the third-party beneficiary corporation? View "NAF Holdings, LLC v. Li & Fung (Trading) Ltd." on Justia Law

Plaintiff filed suit against AECOM and AME under the whistleblower retaliation provision created by the Sarbanes-Oxley Act of 2002, 18 U.S.C. 1514A. The district court dismissed plaintiff's claim against AECOM and plaintiff appealed. The court concluded that an alleged whistleblowing employee's communications need not "definitively and specifically" relate to one of the listed categories of fraud or securities violations in section 1514A in order for that employee to claim protection under the statute; a complaint under section 1514A must, however, plausibly plead that plaintiff engaged in protected activity - that plaintiff reasonably believed the conduct he challenged constituted a violation of an enumerated provision; in this case, plaintiff did not plausibly allege that it was objectively reasonable for him to believe that there was such a violation here; and, therefore, the court affirmed the judgment of the district court.View "Nielsen v. AECOM Technology Corp." on Justia Law

TechnoMarine holds various trademark and copyright registrations for its word mark, logo, and watch dial. At issue in this appeal was whether a prior litigation between TechnoMarine and Giftports resolving claims of trademark infringement and other unfair business practices, and stemming from earlier conduct, bars the present suit of TechnoMarine over similar conduct that occurred after the settlement of the earlier suit. The court concluded that res judicata did not bar the trademark and other unfair business practice claims that arose after the original settlement agreement between the parties; the court affirmed the dismissal of the complaint on the alternative basis that TechnoMarine failed to state a claim upon which relief may be granted where TechnoMarine failed plausibly to plead its claims for trademark infringement, false designation of origin, trademark dilution, tortious interference, unfair competition, or copyright infringement; and the court affirmed the district court's denial of TechnoMarine's request to amend its complaint because TechnoMarine failed to indicate how further amendment would cure its pleading deficiencies. View "Technomarine SA v. Giftports, Inc." on Justia Law

StreetEasy filed suit under the Anticybersquatting Consumer Protection Act, 15 U.S.C. 1125(d). This appeal arose out of the attempted resolution of a dispute between a real estate listing website and one of its co-founders over the propriety of actions taken by the co-founder when he separated from the company, and the validity of corporate actions that occurred before his departure. Because the order of dismissal failed to retain jurisdiction over enforcement of the parties' settlement agreement, or to incorporate the terms of that agreement, the district court lacked jurisdiction to enforce the agreement. Therefore, the court vacated the district court's orders enforcing the settlement agreement and holding defendant in contempt for noncompliance. Because defendant was properly sanctioned for only one of the three factual contentions identified by the district court as the basis for its sanctions award, the court vacated that award and remanded the matter for reconsideration of the appropriate amount of monetary sanctions in light of this decision. View "StreetEasy, Inc. v. Chertok" on Justia Law

Plaintiff filed suit under the Sherman Act, 15 U.S.C. 1,2, alleging that defendants, a group of five competing electronics firms, have attempted to leverage their ownership of certain key patents to gain control of a new technology standard for USB connectors and, by extension, to gain monopoly power over the entire USB connector industry. The court held that, under principles articulated in a line of recent Supreme Court decisions extending from Arbaugh v. Y&H Corp. to Sebelius v. Auburn Regional Medical Center, the requirements of the Foreign Trade Antitrust Improvement Act (FTAIA), 15 U.S.C. 6a, are substantive and nonjurisdictional in nature. Because Congress has not clearly stated that these requirements are jurisdictional, they go to the merits of the claim rather than the adjudicative power of the court. In so holding, the court overruled the court's prior decision in Filetech S.A. v. France Telecom S.A. The court also concluded that, although the FTAIA's requirements are nonjurisdictional and thus potentially waivable, the court rejected plaintiffs' argument that defendants somehow have waived them by contract in this case; foreign anticompetitive conduct can have a statutorily required direct, substantial, and reasonably foreseeable effect on U.S. domestic or import commerce even if the effect does not follow as an immediate consequence of defendant's conduct, so long as there is a reasonably proximate causal nexus between the conduct and the effect; the court rejected the interpretation of "direct...effect" advanced by the Ninth Circuit in United States v. LSL Biotechnologies in favor of the interpretation advocated by amici curiae the United States and the FTC and adopted by the Seventh Circuit in its en banc decision in Minn-Chem, Inc. v. Agrium, Inc.; and the court need not decide, however, whether plaintiff here has plausibly alleged the requisite "direct, substantial, and reasonably foreseeable effect" under the proper standard. Accordingly, the court affirmed on alternative grounds the judgment of the district court dismissing plaintiff's claims. View "Lotes Co., Ltd. v. Hon Hai Precision Industry Co." on Justia Law

Plaintiffs, Joint Official Liquidators of the SPhinX Funds, filed suit against defendants, alleging that defendants aided and abetted fraud and breached their fiduciary duty to Refco, the brokerage and financial services firm that entered bankruptcy in 2005, and whose demise led to the bankruptcies of SPhinX and its investment manager, PlusFunds. The court concluded that the claims against defendants were properly dismissed for failure of the Amended Complaint to contain sufficient allegations that defendants had actual knowledge of Refco's fraud and breach of fiduciary duty. The district court did not abuse its discretion by dismissing the claims without leave to amend where amendment could not cure the absence of factual allegations as to actual knowledge on the part of defendants sufficient to state a claim against them for aiding and abetting Refco's fraud and breach of fiduciary duty. Accordingly, the court affirmed the judgment of the district court and denied the request for leave to amend the Amended Complaint. View "Krys v. Pigott" on Justia Law

Adelphia Recovery Trust, an entity created to represent the non-whole creditors of a debtor corporation that was part of a bankruptcy proceeding, appealed from a grant of summary judgment dismissing its fraudulent conveyance claim against Goldman. The court affirmed on the grounds of judicial estoppel, concluding that, in such a fraudulent conveyance claim, the Trust may recover only property owned by the parent-company debtor. The various schedules and Chapter 11 plan, which were consummated with the agreement of the Trust and its predecessors in interest in the bankruptcy proceeding, all treated the property transferred as owned by a separate subsidiary. View "Adelphia Recovery Trust v. Goldman, Sachs & Co., et al." on Justia Law

Starr, AIG's former principal shareholder, filed suit against the FRBNY for breach of fiduciary duty in its rescue of AIG during the fall 2008 financial crisis. The district court dismissed Starr's claims and Starr appealed. The suit challenged the extraordinary measures taken by FRBNY to rescue AIG from bankruptcy at the height of the direst financial crisis in modern times. In light of the direct conflict these measures created between the private duties imposed by Delaware fiduciary duty law and the public duties imposed by FRBNY's governing statutes and regulations, the court held that, in this suit, state fiduciary duty law was preempted by federal common law. Accordingly, the court affirmed the judgment of the district court. View "Starr Int'l Co. v. Federal Reserve Bank of New York" on Justia Law