Latest 6 Cases This Week: J.S.T. Corp. v. Foxconn Interconnect Technology, Ltd. (7th Cir.), Murfey v. WHC Ventures, LLC (Del.), Bliss v. Minidoka ...

The Future of Faithless Electors and the National Popular Vote Compact: Part Two in a Two-Part Series

VIKRAM DAVID AMAR

In this second of a two-part series of columns about the U.S. Supreme Court’s recent decision in the “faithless elector cases, Illinois Law dean and professor Vikram David Amar describes some good news that we may glean from those cases. Specifically, Amar points out that states have many ways of reducing elector faithlessness, and he lists three ways in which the Court’s decision paves the way for advances in the National Popular Vote (NPV) Interstate Compact movement.

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Impoverishing Women: Supreme Court Upholds Trump Administration’s Religious and Moral Exemptions to Contraceptive Mandate

JOANNA L. GROSSMAN

SMU Dedman School of Law professor Joanna L. Grossman comments on the U.S. Supreme Court’s recent decision upholding the Trump administration’s religious and moral exemptions to the contraceptive mandate of the Affordable Care Act (ACA). Grossman provides a brief history of the conflict over the growing politicization of contraception in the United States and argues that the exemptions at issue in this case should never have been promulgated in the first place because they have no support in science or public policy.

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J.S.T. Corp. v. Foxconn Interconnect Technology, Ltd.

Court: US Court of Appeals for the Seventh Circuit

Docket: 19-2465

Opinion Date: July 13, 2020

Judge: Barrett

Areas of Law: Business Law, Civil Procedure

Bosch, an engineering company, asked J.S.T. to design and manufacture a connector that Bosch could incorporate into a part that it builds for GM. For a time, Bosch retained J.S.T. as its sole supplier of those connectors. Then, according to J.S.T., Bosch wrongfully acquired J.S.T.’s proprietary designs and provided them to J.S.T.’s competitors, who used the stolen designs to build knockoff connectors and eventually to displace J.S.T. from its role as Bosch’s supplier. After filing various lawsuits against Bosch, J.S.T. filed suit in Illinois against the competitors, alleging misappropriation of trade secrets and unjust enrichment. The Seventh Circuit affirmed the dismissal of the case for lack of personal jurisdiction. The competitors’ only link to Illinois is that they sell their connectors to Bosch, knowing that the connectors will end up in GM cars and parts that are sold in Illinois. For personal jurisdiction to exist, though, there must be a causal relationship between the competitors’ dealings in Illinois and the claims that J.S.T. has asserted against them. No such causal relationship exists.

Murfey v. WHC Ventures, LLC

Court: Delaware Supreme Court

Docket: 294, 2019

Opinion Date: July 13, 2020

Judge: Karen L. Valihura

Areas of Law: Business Law, Corporate Compliance

Two limited partners demanded the books and records of certain limited partnerships. Most of the documents demanded were produced, but one category of documents remains in dispute: the Schedule K-1s (“K-1s”) attached to the partnerships’ tax returns. Although the limited partners were provided with their own K-1s, the limited partners sought the K-1s of the other limited partners for the purpose of valuing their ownership stake in the partnerships and in order to investigate mismanagement and wrongdoing. The partnerships countered that the K-1s were not necessary and essential to the valuation purpose and there was no credible basis to suspect wrongdoing. The Court of Chancery, based upon its history of interpreting 6 Del. C. section 17- 305 in the same manner as 8 Del. C. section 220, held that the K-1s were subject to the requirement that documents sought be “necessary and essential” to the stated purpose, and found they failed the "necessary and essential" test. The Delaware Supreme Court disagreed, finding that the limited partners were entitled to the K-1s under the terms of the partnership agreements. The Court thus reversed the Court of Chancery and remanded for further proceedings.

Bliss v. Minidoka Irrigation District

Court: Idaho Supreme Court - Civil

Docket: 46374

Opinion Date: July 15, 2020

Judge: Roger S. Burdick

Areas of Law: Business Law, Contracts, Real Estate & Property Law, Zoning, Planning & Land Use

Victor Bliss appealed the grant of summary judgment in favor of the Minidoka Irrigation District (“MID”). Bliss filed a complaint against MID in April 2017, alleging: (1) breach of contract; (2) breach of fiduciary duty; (3) trespass; (4) declaratory relief; and (5) wrongful prosecution/infliction of extreme emotional distress. The complaint encompassed multiple events stemming from his decades-long relationship with MID. The district court granted MID’s motion for summary judgment on all claims, dismissing Bliss’s complaint for lack of notice under the Idaho Tort Claims Act, lack of standing, and failure to produce evidence. Bliss timely appealed, but finding no reversible error, the Idaho Supreme Court affirmed summary judgment.

Plank v. Cherneski

Court: Maryland Court of Appeals

Docket: 3m/19

Opinion Date: July 14, 2020

Judge: Booth

Areas of Law: Business Law

The Court of Appeals held that an independent cause of action exists for breach of fiduciary duty and that, to establish a breach of fiduciary duty, a plaintiff must demonstrate the existence of a fiduciary relationship, breach of the duty owed by the fiduciary to the beneficiary, and harm to the beneficiary. William Plank and Sanford Fisher, both minority members of Trusox, LLC, filed an action alleging direct and derivative claims against James Cherneski, Trusox's president and majority member. Among other relief, Plank and Fischer (together, Minority Members), sought an order dissolving the LLC or appointing a receiver to take over its management. The circuit court entered judgment in favor of Cherneski on most of the Minority Members' claims and in favor of the Minority Members on certain other claims and awarded attorneys' fees in favor of Cherneski and Trusox. The Court of Appeals affirmed, holding that the circuit court (1) did not err in entering judgment in favor of Cherneski on the breach of fiduciary duty count; (2) did not err in interpreting the contractual language of the fee-shifting provision and concluding that Cherneski and Trusox were the substantially prevailing parties; and (3) did not abuse its discretion by awarding Cherneski and Trusox all of their attorneys' fees.

Wittingham v. TNE Limited Partnership

Court: Utah Supreme Court

Citation: 2020 UT 49

Opinion Date: July 15, 2020

Judge: Matthew B. Durrant

Areas of Law: Business Law, Contracts

The Supreme Court reversed the determination of the district court that a contract entered into by a dissolved partnership was void, holding that the contract was voidable. Two years after the Muir Second Family Limited Partnership was administratively dissolved, the former general partner of the partnership - Nicholas Muir - obtained a loan from the TNE Limited Partnership through a trust deed. Wittingham, LLC, a successor-in-interest to the Partnership, brought suit to declare the trust deed void and recover damages. The district court concluded that the trust deed was void because the Partnership was dissolved prior to the time Muir signed the trust deed. The Supreme Court reversed, holding that the trust deed was voidable because the relevant statutes failed to provide a clear and well-defined public policy indicating that the type of transaction here should be void and because the transaction deed did not harm the public as a whole.

Kerbs v. Kerbs

Court: Wyoming Supreme Court

Citation: 2020 WY 92

Opinion Date: July 15, 2020

Judge: Kautz

Areas of Law: Business Law

The Supreme Court affirmed the judgment of the district court denying as untimely Kathleen Kerbs' motion to intervene in an action brought by her husband, Scott Kerbs, against Carl, Kip, and Nadene Kerbs for dissolution of the Kerbs Four Bar Ranch Partnership, holding that the district court did not abuse its discretion by denying the motion to intervene. Carl and Nadene formed the Kerbs Four Bar Ranch Partnership with Scott and Kip. Carl and Nadene gifted Scott, Kathleen, Kip, and Kip's wife, Rebecca an interest in the partnership. Scott later filed an action against the partnership, Kip, Carl, and Nadene seeking dissolution of the partnership. The parties agreed on a procedure to dissolve the partnership, and the agreement was memorialized in a dissolution order. Kathleen later filed a motion to intervene. The district court denied the motion as untimely. The Supreme Court affirmed, holding that, under the circumstances, the district court reasonably concluded that Kathleen's motion to intervene was untimely.