Yesterday, the Business Court issued its first published opinion of 2010, Marosi v. M.F. Harris Research, Inc., 2010 NCBC 1 (N.C. Super. Ct. January 28, 2010), and ordered specific performance of a Subscription Agreement for the purchase of stock.
The dispute concerned a purchase by Thomas Marosi, shortly before he died, of stock in
Does it make any sense to make a motion in limine before a bench trial? No, not according to Judge Diaz, who ruled as follows in a short Order in Hilb Rogal & Hobbs Co. v. Sellars:
"In a jury trial, motions in limine serve the useful purpose of giving counsel advance notice of
If this blog were a dartboard, cases involving corporate and LLC governance issues would be at the bullseye. A bankruptcy case would be pretty far from the center, sometimes maybe even off the board.
With that perspective in mind, coupled with a dearth of bullseye type cases lately, this post is about the Fourth Circuit’s
Not responding to Requests for Admissions is dangerous. Rule 36 of the North Carolina Rules of Civil Procedure say that a request is admitted if not answered, and that “any matter admitted under [Rule 36] is conclusively established unless the court on motion permits withdrawal or amendment of the admission.”
Two different panels of the
The Fourth Circuit’s ruling last Friday in Galustian v. Peter reinstated a Iraq-based defamation case which had been dismissed by the District Court on the grounds of forum non conveniens. The opinion also contains some significant points on amendments as of right under the Rules of Civil Procedure.
The lawsuit was brought in the Eastern
The circumstances under which an individual can be personally liable for an employer’s failure to pay payroll taxes was the subject of Erwin v. United States, decided yesterday by the Fourth Circuit.
The Court affirmed a grant of summary judgment by Judge Beatty of the Middle District of North Carolina imposing personal liability on
What do you get when you mix together a luxury automobile, a tiger, and a wind tunnel?
It sounds like something out of the movie The Hangover, but it’s the case of BCD LLC v. BMW Manufacturing Co. LLC, an unpublished decision from the Fourth Circuit Court of Appeals.
BMW and Clemson University
Diversity is determined differently for corporations and limited liability companies. Corporations are citizens of the states in which they are incorporated and the state where they have their principal place of business, but an LLC is a citizen of each state in which its members reside. See, e.g., General Technology Applications, Inc. v. Exro Ltda, 388 F.3d 114 (4th Cir. 2004).
But when the Class Action Fairness Act is involved, things are different. Last Friday, the Fourth Circuit ruled in Ferrell v. Express Check Advance of SC LLC that a limited liability company is an "unincorporated association" for CAFA purposes, and that the determination of the "principal place of business" of an LLC should be determined using the same test applied to a corporation. In other words, the citizenship of the members of an LLC isn’t necessarily determinative of diversity in a CAFA case, and it wasn’t in Express Check.
The LLC defendant conducted its operations in South Carolina, but its sole member was a corporation incorporated in Missouri with a principal place of business in Kansas. It had been sued by a Plaintiff who was an individual resident of South Carolina.
The Defendant, relying on the Missouri and Kansas citizenship of its sole member, removed the case to federal court based on diversity jurisdiction, and the Plaintiff moved for a remand.
If CAFA hadn’t been at issue, the general rule for determining the citizenship of an "unincorporated association" would have applied. That rule looks to the citizenship of each member of the entity, so an LLC would be a citizen of each state in which its members resided. There would have been diversity under that test because the Defendant was either a Missouri entity or a Kansas entity.
But under CAFA, Congress changed the traditional rule, and said that an "unincorporated association" should be treated like a corporation, and deemed a citizen of the State "under whose laws it is organized" and also where it has its principal place of business. 28 U.S.C. Sec. 1332(d)(1).
Express Check, concerned that its principal place of business might be found to be diversity-defeating South Carolina, sought to get out from under the CAFA rule. It said that an LLC wasn’t intended by Congress to be included in the definition of an "unincorporated association." The Fourth Circuit cut through that argument quickly, calling it "linguistic," and held that an LLC’s "citizenship for purposes of CAFA is that of the State under whose laws it is organized and the State where it has its principal place of business."
The decision sweeps beyond LLCs, as Judge Niemeyer ruled that the term "unincorporated association," under CAFA, "refers to all non-corporate business entities."
The Court then turned to the issue of where the LLC had its principal place of business.Continue Reading Fourth Circuit Rules On Determining The “Principal Place Of Business” Of A Limited Liability Company Under The Class Action Fairness Act
I had no idea that utility companies trim trees with saws hanging from helicopters. That’s going to make me all the more certain to look up when I hear a helicopter.
I learned this interesting tidbit from one of the new cases (with a plaintiff aptly named "Aerial Solutions") of the six designated to the
A split Fourth Circuit affirmed the dismissal yesterday of a defamation claim against a consumer complaint website, in Nemet Chevrolet, Ltd. v. Consumeraffairs.com, Inc. The Court found the Defendant, Consumeraffairs.com, to be entitled to immunity under the Communications Decency Act, relying on the heightened standard for considering a Motion to Dismiss from the Supreme Court