The Business Litigators
The Business Litigators
The Business Litigators
The Business Litigators
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Our firm today filed an amicus brief or friend of the court brief in the on behalf of the National Association of Consumer Advocates and Consumers for Auto Reliability and Safety in an important consumer rights case and commercial law case, arising out of an interpretation of a provision of the Uniform Commercial Code. That provision expressly allows for consumers to revoke acceptance of and return for a full refund a product with hidden defects without having to allow the seller the opportunity to repair the defects. The express language of UCC requires this result yet the trial and the appellate court ignored the plain language of the UCC and that the majority of states interpret this provision of the UCC to allow for revocation of acceptance without any opportunity to cure. The Illinois Supreme Court decisions dictate that Illinois should follow the majority view of the other States in interpreting UCC provisions.

This case involves an RV that Plaintiffs bought in April for a summer vacation. When the RV turned out to be allegedly defective (massive water leaks), and when, by August, the RV Dealer/Warrantor allegedly would not give an estimate as to when it would repair the RV, and allegedly refused to “cure,” Plaintiffs revoked acceptance and canceled their contract.  Continue reading

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When a contract dispute arose between two telecommunications companies over the rates charged during the switching process of telephone call transmission, district court committed error in granting partial summary judgment to plaintiff, as it was likely that the same facts and issues would appear before the appellate court in the future after the FCC resolved certain regulatory issues.

Local Exchange Carriers and Interexchange Carriers are types of telecommunications service providers. LECs operate in limited geographical regions, and IXCs transport calls between them, enabling consumers to make long distance telephone calls. IXCs pay a fee in exchange for access to an LEC’s network. These rates are set either by regulatory agencies or in negotiated agreements between the IXC and the LEC.

In February 2009, Peerless Network, a LEC, and Verizon, an IXC, entered into one such agreement. The contract provided for lower rates for certain switching services. If a rate in the agreement did not apply, Peerless billed Verizon at its tariff rates, which were the rates that Peerless had filed with the Federal Communications Commission. In 2013, the relationship between Peerless and Verizon broke down, and Verizon began withholding payment. In September 2014, after negotiations failed to resolve the dispute, Peerless sued Verizon.

Peerless’ complaint alleged several counts, including breach of the Tandem Service Agreement, and breach of federal and state tariffs. Verizon asserted that Peerless was not entitled to the higher rates that it charged, due to its status as an Access Stimulator, which is a LEC that charges high rates to companies engaged in high volume call services, such as adult entertainment calls, chat lines and “free” conference call lines. Such LECs charge high rates to IECs and then pass a portion of the tariff revenue back to the companies that generated the high call volume. In turn, the FCC regulates the maximum rates that LECs meeting this definition can charge. Continue reading

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The Illinois Appellate Court overturned a trial court’s decision that allowed for Farmers Insurance to get out of its contractual obligation to pay for our client’s successful defense of a meritless libel suit. When a business or homeowner is sued for libel, they may not realize it but their CGL business insurance policy or homeowners insurance policy often plainly provides for coverage of libel, defamation and slander suits. Most insurance carriers stand behind their insureds and honor the obligation to pay for the defense, even when the allegations are ugly.  That is what happened for Bill Cosby who used his homeowners’ insurance policy to defend against libel suits brought by women when he denied drugging and raping them. If a carrier is willing to defend Cosby it should defend its insureds when they are wrongfully sued for libel simply for exercising their First Amendment free speech rights by posting a negative review on Yelp or stating a strongly held position at work that they don’t like how their supervisor treats them. After all the insurance we pay for insurance policies to protect us even when we make a mistake.

Farmers spends millions of dollars on television advertising claiming that it will stand behind its insureds when they make every conceivable mistake; it never advertises that it will attack its own insureds, place all the blame on them and refuse to honor the express provisions of its form home owners insurance policy which contains a standard provision to defend homeowners sued for libel.

Given Farmers’ advertisements, our client never imagined that Farmers would betray and attack him as opposed to paying for his defense of meritless libel suit.

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Where a beverage distributor fell behind on license payments and failed to hit required annual sales targets, the trial court did not err at trial when it admitted evidence of threats made by a manager at beverage distributor and declined to interrupt jury deliberations.

Playboy Enterprises International, Inc. is a corporation with its principal place of business in California. Playboy derives substantial revenue from licensing its name and bunny-head logo to entities who sell products as varied as apparel, handbags, luggage, and fragrances. PlayBev is a limited liability company based in Utah, which was formed in 2006 for the purpose of creating and selling a non-alcoholic drink.

PlayBev and Playboy entered into an exclusive license agreement in December 2006. Playboy agreed to license the Playboy marks to PlayBev for use on the Playboy Energy Drink. The license agreement provided that PlayBev would pay Playboy minimum annual royalties, beginning at $1 million and later increasing to $2 million, for the use of the marks. The agreement also required PlayBev to achieve certain annual sales. The original principals of PlayBev did not have experience with beverage marketing or distribution. In 2007, the PlayBev principals sold their interest in PlayBev to Iehab Hawatmeh, the CEO of Cirtran Beverage Corporation. CTB had experience in marketing consumer products. PlayBev subsequently contracted with CTB to manufacture and distribute the Playboy Energy Drink. Continue reading

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Where a person whose biometric information was collected by a private entity who failed to comply with the requirements of the Illinois Biometric Information Privacy Act was an aggrieved person entitled to sue within the meaning of the act even if they had sustained no further injury beyond the violation of the act itself.

Six Flags Entertainment Corporation and its subsidiary Great America LLC own and operate the Six Flags Great America amusement park in Gurnee, Illinois. As part of this operation, Six Flags sells repeat-entry passes to the park. Since 2014, Six Flags has used a fingerprinting process when issuing those passes. The Six Flags system scans pass holders’ fingerprints, collects, records and stores “biometric” identifiers and information gleaned from the fingerprints, and then stores that data in order to quickly verify customer identities upon visits by pass holders to the park.

In May or June 2014, while the fingerprinting system was in operation, Stacy Rosenbach’s 14-year-old son, Alexander, visited the amusement park on a school field trip. In anticipation of the trip, Rosenbach purchased Alexander a season pass online. Rosenbach paid for the pass and provided personal information about Alexander, but Alexander was required to complete the sign-up process at the amusement park. Alexander was asked to scan his thumb into Six Flags’ biometric data capture system. He was then issued a season pass card. Rosenbach allegedly learned that Alexander’s fingerprints had been taken for the first time when Alexander returned home from the field trip.

Rosenbach eventually filed suit, acting in her capacity as mother and next friend of Alexander, against Six Flags. Continue reading

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Where an insurance agent’s contract with Allstate was terminated for failure to meet performance goals, and the insurance company subsequently denied the agent’s request to transfer the book of business to the agent’s husband, instead selling to the wife of the agent’s former supervisor, the trial court erred in dismissing agent’s claims for breach of contract and breach of the covenant of good faith and fair dealing.

In 2004, Ray McKnight, a territory manager for Allstate Insurance began recruiting Mary Slay to become an exclusive Allstate insurance agent in Lake City, Florida. Ray offered Mary the opportunity to purchase an existing book of business from a retiring agent, Rick Bringger. Ray, however, failed to disclose that he had a conflict of interest, as his wife, Faye McKnight, wanted to purchase an Allstate agent’s book of business and open up her own office in Lake City in direct competition with Mary. Ray also failed to disclose that Allstate was in the process of canceling approximately 30% of the policies in Bringger’s book of business and that Allstate had begun the process of non-renewing all mobile home policies, commercial policies, and landlord and rental policies in Florida.

In reliance on Ray’s representations, Mary retired from her job, obtained an $800,000 loan to purchase Bringger’s book of business, and signed an exclusive agency agreement with Allstate. Mary worked as an exclusive agent reporting directly to Ray, and she subsequently grew her book of business. A few months later, Ray’s wife Faye opened an exclusive Allstate agency, competing directly with Mary’s agency. Mary’s business was also harmed by the subsequent announcement by Allstate that it would no longer write commercial insurance policies in Florida and that it would not renew 95,000 homeowner insurance policies. Allstate also implemented substantial price increases, and in 2008 had its license to write new policies suspended by the Florida Insurance Commission due to its failure to comply with a subpoena. Continue reading

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Late last month, the family of Nicholas Sandmann filed a defamation lawsuit against The Washington Post seeking $250 million in damages (roughly the amount Jeff Bezos paid to purchase the newspaper in 2013). Sandmann is the Covington Catholic High School teenager whose standoff with Native American activist Nathan Phillips went viral earlier this year. According to the lawsuit, the Post allegedly defamed Sandmann by initially describing Sandmann as the instigator of the confrontation with Phillips and for portraying Sandmann as “engaged in acts of racism by ‘swarming’ Phillips, ‘blocking’ his exit away from the students, and otherwise engaging in racist misconduct.”

Sandmann was one of a number of students from Covington Catholic High School who were wearing red “Make America Great Again” hats during a trip to the National Mall when they encountered Phillips. A media firestorm surrounding Sandmann kicked off following an online video depicting an apparent standoff between Sandmann and Phillips near the Lincoln Memorial. Comments online and on Twitter following the release of the video were quick to brand Sandmann and to a lesser extent the other Covington students shown in the video, as MAGA bigots. News accounts, including in The Washington Post, of the confrontation, sparked a media firestorm and national debate over the behavior of the participants.

Additional video footage, however, seemed to complicate the characterization of Sandmann as a bigot or the instigator of the confrontation with Phillips. Ultimately, several prominent media outlets and personalities issued apologies for having rushed to judgment. The Sandmann family, however, has contended that the alleged harm to their son’s reputation and standing in the community was already done and is demanding both compensatory and punitive damages. Continue reading

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Where a blogger posted a blog post accusing photographer of attempting to engage in child pornography and sexual assault, the trial court did not commit an error in concluding that blogger had failed to demonstrate that her blog post constituted protected opinion.

Ronald Ladao filed suit against Lauren Faits, alleging libel and false light. Ladao alleged that in 2016, Faits published several false and defamatory statements about him in a post on her blog, “Geek Girl Chicago.” The statements were contained in a blog post that stated that, in 2003, Faits, then a minor, attended an anime cosplay convention in Chicago. Faits then stated that she and a group of cosplayers went to a hotel room to change out of their costumes, and that they were followed by a photographer, who broke through the locked hotel room door and attempted to get nude photos and/or videos of underage cosplayers, and that the photographer’s name was Ron “Soulcrash” Ladao.

Faits then stated that after she threatened to call the police, Ladao left the room, calling her a rude name on his way out. Faits described the incident as a sexual assault. Ladao alleged that Faits statements that he rushed into a hotel room in an effort to obtain nude photographs of underage girls, and that he committed sexual assault, were libel per se because they accused him of conduct that was damaging to his reputation as a professional photographer and because they accused him of criminal conduct. Ladao alleged that as a result of the blog post he suffered harm to his reputation and career, humiliation, and emotional distress. Continue reading

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Two lawsuits brought by “The Fresh Prince of Bel-Air” actor Alfonso Ribeiro against Epic Games, the maker of Fortnite Battle Royale, and Take-Two Interactive Software, which makes NBA 2K, appear likely to end soon after Ribeiro suffered a setback when the U.S. Copyright Office denied copyright protection to the “Carlton” dance, a dance Ribeiro made popular on the show in the 1990s as seen here. In the lawsuits, Ribeiro alleges that characters in the videogames make illegal use of the “Carlton” dance which amounts to copyright infringement. A side-by-side comparison of the “Carlton” and the move as seen in Fortnite, as well as a discussion of the lawsuits, can be seen here.

Ribeiro has submitted three copyright applications involving the “Carlton” dance to the U.S. Copyright Office. So far, the Copyright Office has rejected two of the applications and is still considering the third. In the two applications that have been rejected to date, the Copyright Office ruled that the “Carlton” dance amounts to a simple dance move, which cannot be copyrighted, as opposed to a choreographed dance routine, which can be copyrighted.

Lawyers for the video game makers named in Ribeiro’s infringement lawsuits have filed motions to dismiss which are scheduled for hearing later in March. Although not bound by the rulings of the Copyright Office, the judges in the lawsuits would almost certainly have taken the rulings into account when deciding the motions to dismiss. Perhaps this fact played into Ribeiro’s decision to dismiss his lawsuit against Epic Games, a move which Ribeiro’s legal team announced in documents filed in the lawsuit on March 7, 2019. Ribeiro’s legal team also announced similar plans to dismiss the other lawsuit filed against Take-Two Interactive Software. Continue reading

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Massachusetts’ new non-compete agreement statute, The Massachusetts Noncompetition Agreement Act, may provide the blueprint for states like Illinois to follow in codifying the requirements for enforceability of non-competition agreements. Unlike in Massachusetts, much of the current non-compete law in Illinois is not statutory but has been developed at common law by judges over the years in a multitude of judicial opinions. Massachusetts has taken a different approach by choosing to codify its requirements for an enforceable covenant-not-to-compete. In doing so, Massachusetts joins states such as Utah and Idaho who have also recently passed laws regulating non-compete agreements.

The new Massachusetts law went into effect in late 2018 and applies only to non-compete agreements (also known as agreements-not-to-compete or covenants not-to-compete) entered into after October 1, 2018. As a result, its full ramifications have not yet been realized. The new law is an effort to regulate non-compete agreements by limiting their enforceability and codifying express requirements for enforceability. The new law applies not only to agreements with employees but also to agreements with independent contractors. To be enforceable under the new law, a non-compete agreement must (1) be in writing; (2) be signed by the employer and the employee; and (3) expressly state that the employee has the right to consult with counsel prior to signing. In addition, the employer must provide a copy of the non-compete agreement to the employee or independent contractor at the earlier of a formal offer of employment or ten business days before the start of the employment. Finally, non-competes entered during employment must be supported by independent consideration beyond continued employment. Continue reading