A foreign currency trading firm was implicated in misconduct when a separate company it had traded with was investigated by a regulatory authority. The second company settled the investigation with the regulator, and the regulator published documents relating to the investigation and settlement on its website. The documents named the trading firm and implied that the firm had engaged in illegal practices. The trading firm sued the regulator, arguing that the regulator had violated its due process rights and defamed it in the documents on its website. The district court dismissed the action, finding that the trading firm had not exhausted its available administrative remedies. The appellate panel affirmed, and also found that the state-law claims for defamation were preempted by the federal regulatory scheme and not available as a remedy to the trading firm.

National Futures Association is a self-regulatory organization under the Commodities Futures Trading Commission Act of 1974. The Commodity Exchange Act requires that SROs set forth many types of regulations and rules, including rules that provide that its members and persons associated with its members shall be appropriately disciplined for any violation of its rules. The NFA is subject to the broad authority of the Commodity Futures Trading Commission. The authority includes review of NFA disciplinary actions or denials of membership.

Effex Capital, LLC is a closely held, foreign-currency trading firm managed and controlled by John Dittami. Effex operates as an institutional over-the-counter, foreign-exchange liquidity provider and engages solely in transactions with other eligible contract participants such as financial institutions or highly capitalized trading counterparts. Because of the nature of Effex’s trading, it is not subject to regulation by the NFA and is therefore not a member of the NFA. Continue reading ›

On July 31, 2019, Illinois Governor J.B. Pritzker signed into law HB834, which amends the Illinois Equal Pay Act by restricting employers’ ability to inqure about or use pay history in hiring and compensation decisions. Illinois becomes the eleventh state to enact legislation prohibiting salary history inquiries by private employers. Other states like Michigan and Wisconsin, however, have gone the opposite way passing legislation prohibiting local governments from enacting salary history inquiry ban laws. The No Salary History law, will take effect by October 1, 2019, giving employers just 60 days to adjust their policies and hiring procedures to ensure compliance with the new law.

Since 2003, the Equal Pay Act has prohibited Illinois employers from paying employees who perform “substantially similar work” different pay rates based on their sex or race, though employers are free to pay employees of different sexes or races differently provided that the pay differential is based on factors other than sex or race.

Under the amendments, employers may no longer screen job applicants by requiring that their current or past salary “satisfy minimum or maximum criteria; or to request or require such wage or salary history as a condition of being considered for employment.” Continue reading ›

A company that purchases tax liens in order to obtain tax deeds to properties sued Law Bulletin for breach of contract over a misprinted hearing date in a Take Notice, which the company alleged cost it $1 million when the circuit court denied the company’s tax deed application due to the misprint. Following a trial, the jury entered a verdict in favor of Law Bulletin and against the company finding that the company had not fully performed its obligations under the parties’ contract. The First District Appellate Court affirmed finding that the trial court had not committed an error in denying the company’s pre-trial motion for summary judgment or mid-trial motion for a directed verdict.

Every year, Wheeler Financial purchased hundreds of tax liens from the Cook County Treasurer’s Office at the annual auction to sell tax liens on properties with delinquent tax bills. Under the Illinois Property Tax Code, if the property owner fails to satisfy a tax lien by paying the amounts due within the applicable redemption period, the tax lien purchaser may obtain fee simple title to the property. To obtain title to the property, the tax lien purchaser must apply to the circuit court for a tax deed and publish a Take Notice in a newspaper giving the property owner certain information including the hearing date on which the petition for tax deed will be heard by the court.

Law Bulletin publishes these Take Notices in its newspaper, the Chicago Daily Law Bulletin. Wheeler Financial used the Law Bulletin exclusively to publish its Take Notices for 15 years, publishing between 1000 to 1600 Take Notices annually with the Law Bulletin during that time. In one instance, Law Bulletin misprinted the hearing date for the tax deed for a particular property. When the circuit court discovered that the wrong hearing date had been published in the Take Notice, it denied Wheeler Financial’s petition for a tax deed. Continue reading ›

In a 3-0 decision, the U.S. Court of Appeals for the Ninth Circuit ruled that Facebook users in Illinois can move forward with a class-action lawsuit challenging the company’s use of facial recognition technology. Facebook had argued that the court should not let the plaintiffs proceed on a class basis with claims that it violated the Illinois Biometric Information Privacy Act (often referred to a “BIPA”). The Ninth Circuit’s ruling in Patel v. Facebook affirmed the District Court’s decision to certify a class of Illinois Facebook users.

The BIPA is intended to protect the biometric privacy of Illinois citizens by imposing restrictions on the collection and storage of certain biometric information by private companies. One of the protections afforded by the law is the requirement that a company must obtain an individual’s written consent before collecting and storing any such biometric information.

The case stems from a class action complaint filed by three Illinois Facebook users on behalf of all Illinois Facebook users accusing the social media company of unlawfully gathering and storing its users’ biometric information, including through the use of facial recognition technology, without consent. Specifically, the suit targets a feature Facebook launched in 2010 called “Tag Suggestions” which uses facial recognition technology to build a “face template” of an individual from pictures uploaded to the site. The software builds these face templates by analyzing an individual’s face in uploaded photos and measuring various geometric data points on an individual’s face such as the distance between eyes, nose, and ears. Users are able to opt-out of the feature, and Facebook argued that it only builds face templates of Facebook users who have not opted-out and have the feature turned on. Continue reading ›

Automated Transactions LLC (“ATL”), a small patent assertion entity, has collected millions enforcing a portfolio of patents relating to automated teller machines. After being labeled a “patent troll” by a number of critics of ATL’s enforcement practices, ATL filed a defamation suit in New Hampshire state court against 12 individuals and trade groups claiming that the cognomen was libelous. Earlier this month, the New Hampshire Supreme Court affirmed the dismissal of the suit finding the term “patent troll” to be a non-actionable opinion and rhetorical hyperbole.

This case stems from the patents of inventor David Barcelou, who claims to have come up with the idea of connecting ATMs to the internet. In 1994, Barcelou created a prototype of an automated gaming machine, which included ATM-like features such as the ability to immediately dispense cash to winners. Barcelou filed patent applications and was ultimately granted an ATM-related patent by the U.S. Patent and Trademark Office in 2005 and several other patents in the following years.

Barcelou’s efforts to commercialize his invention were largely unsuccessful and his “Automated Tournament Machine” never caught on. Barcelou later formed ATL, made ATL the exclusive licensor of the patent, and began licensing the patent and bringing infringement litigation. ATL filed infringement suits against numerous banks and credit unions allegedly using Barcelou’s patent in their ATMs. Additionally, nearly 200 different companies paid ATL roughly $3 million in licensing fees to avoid litigation.

ATL’s targets and several trade groups began vocalizing their criticism of ATL and Barcelou. One of the defendants in the slander lawsuit, an attorney who represented a number of the financial institutions targeted by ATL, said in an interview with the Boston Business Journal that ATL’s practices were “nothing more than a shakedown” and referred to ATL as a “patent troll” on his website. Another defendant, the Credit Union National Association, gave a presentation which contained a cartoon picture of a troll and referred to ATL as “a well-known patent troll.” A third defendant, the American Bankers Association, gave testimony before the United States Senate Committee on the Judiciary in which it referred to ATL as a “patent troll” that resorts to “extortive” practices “in an effort to extort payments” from financial institutions. Continue reading ›

The First District Appellate Court of Illinois recently affirmed the entry of summary judgment against the plaintiff in a commercial breach of contract and mechanic’s lien dispute. In upholding the grant of summary judgment, the Court found that the plaintiff’s discovery responses doomed its mechanic’s lien claim, providing yet another example of why it is crucial for a party to carefully review its discovery responses – something the best commercial litigation attorneys make painstaking efforts to do.

The case stems from a dispute arising over an alleged verbal contract between the plaintiff, MEP Construction, LLC, and defendant, Truco MP, LLC, to build out the defendant’s restaurant. According to the plaintiff’s complaint, under the oral contract, it agreed to provide “construction management and other related services” to the defendant for a cost of $791,781.16 (though the parties later agreed to have the plaintiff do an additional $80,000.00 of work). The plaintiff further alleged that it “fully performed” its contractual obligations, but the defendant only made partial payment of $612,447.15 and refused to pay anything further. The plaintiff later recorded a mechanic’s lien naming the defendant and others and claiming an amount of $251,870.45 was owed to it.

In August 2017, the plaintiff filed a three-count complaint against the defendant alleging breach of contract and seeking to foreclose on the mechanic’s lien. In the course of discovery, the defendant issued a document request to the plaintiff asking for all documents showing all payments that the plaintiff had made for work performed either “by MEP or at the direction of MEP.” The plaintiff’s response to the document request stated that all “contractors, subcontractors and material were paid directly by Truco.” The defendant also sought production of all contracts between the plaintiff and “any and all contractors, sub-contractors or other persons with whom MEP contracted for purposes of performing work” at the property. The plaintiff responded to this request by stating that all contractors and subcontractors “contracted directly with Truco” and were paid directly by Truco. Continue reading ›

An angry customer of a luxury car rental service posted comments on an internet message board alleging that the service defrauded him out of payments it owed him for the rental of his Lamborghini. The customer posted several times over a period of years, and then went quiet. Four years later, the customer marked a post that he made in 2011 “updated” without including any new content. The owner of the car rental service then sued, arguing that the postings constituted libel, breach of contract, and infliction of emotional distress. The district court dismissed the action. The appellate panel affirmed, finding that the action was untimely and that the act of marking a post as “updated” without actually altering or adding to its content was not sufficient to treat the post as a new publication and reset the statute of limitations.

George Kiebala owns a luxury car share service called Curvy Road Holdings LLC. Curvy Road allows customers to purchase time-ownership rights to high-end automobiles that are owned by “investors.” In September 2009, Derek Boris became a Curvy Road “investor” and received a share of the rental revenue when customers drove his Lamborghini Gallardo. Kiebala made payments to Boris in late 2009 and March 2010.

In May 2010, however, Boris withdrew his car from the program, and Kiebala’s check for his final payment to Boris did not clear. Kiebala emailed Boris in July and August to explain that various medical and business difficulties were preventing payment. Boris never received his final payment, and communications between the two seemed to come to an end.

After a period of quiet, Boris posted angry and derogatory statements on various websites about Kiebala and Curvy Road. He did this on eight occasions from December 2010 through July 2011. Boris then when dormant for a few years, but resumed his postings regarding Kiebala and Curvy Road in the summer of 2015. The following year, Kiebala, representing himself, sued Boris alleging libel, intentional infliction of emotional distress, breach of a non-disclosure agreement, breach of contract, and tortious interference with business expectancy. Boris moved to dismiss, and the district court granted the motion on all counts. Kiebala then appealed. Continue reading ›

A reseller of athletic apparel entered into a contract with a large retailer to resell aged and customer-returned athletic wear products. The agreement contained a right of refusal and other provisions, including an automatic extension provision. The agreement was extended several times over a period of 14 years. The parties continued to deal with each other after the final expiration, but eventually, the retailer pulled out of the arrangement. The reseller sued, arguing that the retailer’s behavior in continuing to sell it product served to extend the term of the agreement. The district court disagreed and dismissed the case. The appellate panel affirmed, finding that the contract was not ambiguous and that the reseller’s interpretation of the agreement was not reasonable.

Finish Line Sports is a large retailer of athletic shoes, apparel, and accessories. Division Six specializes in the resale of both aged and customer-returned athletic wear products. In 2001, Finish Line and Division Six entered an agreement by which Division Six received the exclusive right to purchase aged and customer-returned merchandise from Finish Line. The agreement provided for an 18-month term that could be extended by written agreement of the parties prior to the expiration of the term or any extension thereof. The agreement also gave Division Six a right of first refusal if Finish Line received a bona fide arms-length offer from a third party to purchase its surplus merchandise within six months prior to the term’s expiration. If Finish Line did not receive such an offer, the agreement would automatically renew for an additional eighteen-month term. Continue reading ›

Divorce proceedings can be contentious but some can be more contentious than others. In the case of disbarred McHenry County lawyer, Mark McCombs, a contentious divorce led to his filing of a defamation and malicious prosecution lawsuit. The First District Appellate Court affirmed the trial court’s dismissal of the complaint in which McCombs alleged that his former wife defamed him and had him falsely charged with harassment. The Court also affirmed the denial of sanctions that McCombs sought against his ex-wife in the suit.

McCombs and his former wife, Kathryn Crivolio, started divorce proceedings in 2010. The proceedings soon became contentious. So contentious in fact that at one point in the proceedings, the judge entered an order prohibiting McCombs “from filing any pleadings in this matter without first seeking leave of court [ ] to do so.”

Shortly before the divorce proceedings began, McCombs, who had served as special counsel to the Village of Calumet Park from 2002 to 2010, was indicted for stealing between $600,000 to $800,000 from the Village. McCombs pled guilty and was sentenced to six years in prison. A few months later in January 2012, he was disbarred.

While McCombs was in prison, he conversed with his wife via email. In one of the email exchanges, Crivolio allegedly wrote to McCombs: “You have stolen from me, your employers, your client’s (sic) and your own mother.” McCombs alleged that Crivolio also published this statement to his children, family, and others, which he alleged “lowered [him] in the eyes of the community.” The complaint pled claims for both defamation per se and defamation per quod. Circuit Judge Kathy Flanagan dismissed the complaint with prejudice on the grounds that the allegations lacked substance. Continue reading ›

In an 8-1 decision, the Supreme Court ruled that a company’s bankruptcy does not allow it to rescind a trademark licensing agreement it had entered with a licensee. In so ruling, the court settled an issue that had split the federal appellate circuits and congress over the handling of trademarks licenses in bankruptcy.

The case stems from a 2012 license agreement between New Hampshire-based Tempnology LLC and New York-based Mission Product Holdings Inc. over the exclusive rights for U.S. distribution of Tempnology’s apparel and accessory products, which were designed to stay cool when worn during exercise. The products, chemical-free towels, socks, and headbands, were sold under the brand names Coolcore and Dr. Cool. The license also included the nonexclusive right for Mission Product Holdings to use Tempnology’s trademarks.

In 2014, the parties’ relationship soured, which led to the filing of arbitration. In arbitration, the arbitrator ruled that Mission Product Holdings was entitled to maintain its distribution and trademark rights through July 2016, even though it did not intend to place any further orders with Tempnology. In 2015, Tempnology filed for Chapter 11 bankruptcy, claiming that Mission Product Holdings had “starved” it of income. In bankruptcy, Tempnology attempted to rescind the license agreement under Section 365 of the Bankruptcy Code.

At the time Tempnology made the request to rescind the license agreement, the law in the various circuits was not settled, which likely prompted the high court to take on the issue in the first place. The First Circuit had long followed the Fourth Circuit’s 1985 ruling in Lubrizol Enterprises v. Richmond Metal Finishers, Inc., which held that a debtor-licensor could abrogate a licensee’s rights by rejecting the license agreement pursuant to Section 365(a) of the Bankruptcy Code. Congress later overruled Lubrizol as it related to patents and copyrights but refused to do so with regard to trademarks, insisting that more study of the issue was required due to the unique ongoing obligations of mark owners in policing their marks. Continue reading ›