Justia U.S. 9th Circuit Court of Appeals Opinion Summaries

The Ninth Circuit certified the following questions to the California Supreme Court: Does section 16600 of the California Business and Professions Code void a contract by which a business is restrained from engaging in a lawful trade or business with another business? Is a plaintiff required to plead an independently wrongful act in order to state a claim for intentional interference with a contract that can be terminated by a party at any time, or does that requirement apply only to at-will employment contracts? View "Ixchel Pharma, LLC v. Biogen, Inc." on Justia Law

Defendant appealed a jury verdict finding that he vicariously and contributorily infringed Erickson's copyrighted images by displaying them on his website and did so willfully. This case arose when defendant hired a website developer, Only Websites, to redevelop defendant's company website and three photos taken by Erickson were incorporated on the company site.The panel vacated the jury's vicarious liability verdict because Erickson presented no evidence that could constitute a direct financial benefit as a matter of law. However, the panel affirmed the jury's contributory liability verdict and upheld the judgment against defendant, because the district court did not plainly err in instructing the jury that "knowledge" for contributory infringement purposes includes having a "reason to know" of the infringement. Finally, the panel vacated the jury's willfulness finding and remanded for a determination of whether defendant's infringement was willful on the existing record. View "Erickson Productions, Inc. v. Kast" on Justia Law

Harmoni, the only zero-duty rate importer of Chinese garlic, filed suit alleging that other importers, jealous of Harmoni's competitive edge, conspired to eliminate or reduce that advantage through two separate unlawful schemes in violation of the Racketeer Influenced and Corrupt Organizations Act (RICO). The first scheme alleged that Chinese competitors submitted fraudulent documents to U.S. customs officials in order to evade applicable anti-dumping duties and then sold garlic in the United States at less than fair value. The second scheme alleged that Chinese competitors recruited domestic garlic growers to file sham administrative review requests with the U.S. Department of Commerce to determine whether plaintiffs were being subjected to appropriate antidumping duties.The Ninth Circuit held that Harmoni has not adequately alleged proximate cause with respect to the first scheme because the relationship between the importers' conduct and Harmoni's injury were too attenuated. However, Harmoni has adequately alleged proximate cause in the second scheme in regard to damages for expenses incurred in responding to the Department of Commerce's administrative review. The panel held that the district court should have granted leave to amend for the loss sales and harm to business reputation claims, as well as the claims against Huamei Consulting. View "Harmoni International Spice, Inc. v. Hume" on Justia Law

The Ninth Circuit reversed the district court's grant of summary judgment for sellers of two Ginkgold nutritional supplements in a consumer class action that alleged false advertising claims under California law. The panel clarified that claims under California's Unfair Competition Law (UCL) and Consumers Legal Remedies Act (CLRA) are to be analyzed in the same manner as any other claim, and the usual summary judgment rules apply.The panel held that plaintiff had the burden of proving by a preponderance of the evidence that a challenged advertisement is false or misleading under the UCL and CLRA. Furthermore, plaintiff need only produce evidence of a genuine dispute of material fact that could satisfy the preponderance of the evidence burden at trial. In this case, plaintiff met her burden by producing expert testimony and other scientific data that the nutritional supplement had no more of an effect on mental sharpness, memory, or concentration than a placebo. The panel held that the district court erred by requiring plaintiff to do more and by elevating the burden of proof well beyond what is usually required to defeat summary judgment. The panel remanded for further proceedings. View "Sonner v. Schwabe North America" on Justia Law

The Ninth Circuit affirmed the district court's dismissal of a shareholder derivative suit on behalf of the Walt Disney Company, holding that plaintiff failed to satisfy Federal Rule of Civil Procedure 23.1's demand futility requirement. In this case, plaintiff alleged that Disney and its board of directors and several corporate officers participated in a conspiracy to enact illegal anticompetitive agreements between Disney and other animation studios.The panel held that the allegations in plaintiff's amended complaint did not constitute particularized facts demonstrating demand futility. The panel explained that, whether the board's misconduct is characterized as conscious inaction or active connivance, plaintiff needed to demonstrate that a majority of the director defendants knew of the conspiracy, and he failed to do so. View "Towers v. Iger" on Justia Law

The Ninth Circuit affirmed the district court's decision affirming the bankruptcy court's dismissal of a Chapter 11 petition filed by the former board members of Sino. The panel held that the bankruptcy court properly dismissed the action because plaintiffs lacked corporate authority under Nevada law when they filed the petition where a receiver appointed by the Nevada state court already had removed them from the corporation's board of directors. Therefore, plaintiffs were not authorized to file the petition on behalf of the corporation. View "Sino Clean Energy, Inc. v. Seiden" on Justia Law

Where such delivery of summonses to attorneys of companies provides actual notice to a foreign organization, it satisfies Federal Rule of Criminal Procedure 4(c)(3)(D). The Ninth Circuit denied a petition for a writ of mandamus brought by companies owned and controlled by the Chinese government, seeking to vacate the denial of their motion to quash service of criminal summonses the government had delivered to attorneys for the companies. The panel held that the evidence established that the companies had actual notice of the summonses and thus the district court did not err, let alone clearly err, in denying their motion to quash service. View "In re Pangang Group Co." on Justia Law

The Ninth Circuit reversed the district court's grant of summary judgment for CES in a class action alleging that natural gas companies colluded to fix retail natural gas prices in Wisconsin. CES, a wholly owned subsidiary of Reliant, asserted that it acted innocently and without knowledge of its parent company's price-fixing scheme.The panel held that Supreme Court precedent established that a parent and a wholly owned subsidiary always have a unity of purpose and thus act as a single enterprise whenever they engage in coordinated activity. Copperweld Corp. v. Indep. Tube Corp., 467 U.S. 752 (1984). In this case, plaintiffs raised a triable issue of CES's anticompetitive intent; plaintiffs' evidence was sufficient to raise a triable issue of whether CES knowingly acted to further the alleged price-fixing scheme; any knowledge of the alleged price-fixing scheme that CES's directors and officers acquired while concurrently acting as directors or officers of the other Reliant companies was imputable to CES as a matter of Wisconsin law; and plaintiffs submitted sufficient evidence to raise a genuine issue under the Sherman Act – and Wisconsin Statute 133.03(1) – as to whether CES participated in coordinated activity in furtherance of the alleged inter-enterprise price-fixing conspiracy. View "Arandell Corp. v. CenterPoint Energy Services, Inc." on Justia Law

Professional golf caddies filed suit against the PGA Tour after it required them to wear bibs containing advertisements at professional golfing events. The Ninth Circuit affirmed the district court's dismissal of all claims with prejudice, holding that the caddies consented to wearing the bibs and that they did not do so under economic duress. Therefore, the caddies failed to state claims for breach of contract and quasi-contract relief, California state law publicity claims, a Lanham Act false endorsement claim, or a plausible economic duress claim. The panel also held that the caddies failed to allege plausibly that the Tour secured their consent through economic duress, and thus the district court properly dismissed the antitrust claims for failure to state a relevant market and the California unfair competition claims for failure to plead that any of the Tour's conduct was unlawful, unfair, or fraudulent. The panel remanded to allow the district court to reconsider whether to grant the caddies leave to amend their federal antitrust and California unfair competition claims. View "Hicks v. PGA Tour, Inc." on Justia Law

These consolidated appeals stemmed from the Commissioner's efforts to hold the former shareholders of a close corporation, Slone Broadcasting, responsible for taxes owed on the proceeds of its sale of assets to another broadcasting company, Citadel. The shareholders followed up the asset sale to Citadel by selling Slone Broadcasting's stock to another company, Berlinetta, an affiliate of Fortrend. Berlinetta and Slone Broadcasting then merged into a new company called Arizona Media.The Ninth Circuit reversed the tax court's judgment on the petition for redetermination of federal income tax deficiency challenging the shareholders' liability for taxes in connection with an asset and stock sale. The panel applied Arizona's Uniform Fraudulent Transfer Act and held that the transaction was constructively fraudulent as to the creditor (the IRS) because the debtor (Slone Broadcasting) did not receive a reasonably equivalent value in exchange for the transfer to the shareholders and was left unable to satisfy its tax obligation. In this case, the purpose of the shareholders' transaction with Berlinetta was tax avoidance and thus reasonable actors in the shareholders' position would have been on notice that Berlinetta never intended to pay Slone Broadcasting's tax obligation. The panel held that the shareholders' sale to Berlinetta was a cash-for-cash exchange lacking independent economic substance beyond tax avoidance. The panel also held that the shareholders were liable to the government for Slone Broadcasting's federal tax obligation as "transferees" under 26 U.S.C. 6901, because Slone Broadcasting's liquidating distribution to the shareholders was a constructively fraudulent transfer under Arizona law. View "Slone v. Commissioner of Internal Revenue" on Justia Law