After a disgruntled client posted a review on Yelp page of his former attorney, and the attorney responded, the attorney sued the client for defamation. The client responded by filing counterclaims for defamation, breach of fiduciary duty, and legal malpractice. The district court dismissed the client’s counterclaims for breach of fiduciary duty and malpractice while denying the attorney’s motion to dismiss the defamation counterclaim. The court then denied cross-motions for summary judgment, finding that genuine disputes of fact remained.

Alisa Levin is an attorney licensed in Illinois. Paul Abramson is a resident of California Abramson hired Levin to assist a different attorney with writing services in an Illinois lawsuit. Abramson alleged that he hired Levin as a ghostwriter, and her name was not to be included in any filings. Abramson paid Levin a $4,000 retainer and signed a written retainer agreement specifying that Levin would charge $315 an hour for her time.

In December 2015, Levin sent Abramson an invoice for 37.5 hours of her time, which resulted in fees of $9,167 over and above the $4,000 retainer. Abramson responded and disputed the amount, but Levin charged Abramson’s credit card later that day. Abramson then terminated Levin shortly after that by asking her to stop work in an email. Abramson then made complaints to the Chicago Bar Association and Illinois Attorney Registration and Disciplinary Committee. Abramson also initiated a chargeback dispute with his bank, but after an investigation the bank returned the funds to Levin in June 2016. In 2017, Abramson began invoicing Levin’s firm and had a collection agency make calls to Levin. Continue reading ›

The ARDC Hearing Board recommended a two-year suspension for attorney Joel Brodsky due in large part to a case where his own attorney Joe “the Shark” Lopez admitted that Brodsky engaged in “Rambo” tactics. The Hearing Board found based on clear and convincing evidence that Brodsky harrassed opposing counsel and the Plaintiff’s expert witness with baseless claims.  It held:

We find the Administrator proved a violation of Rule 3.1 by clear and convincing evidence. Moreover, we concur with the district court’s view of Respondent’s actions as “wildly inappropriate” and the Seventh Circuit’s opinion that his conduct was “beyond the pale.”

As to Brodsky’s failure to provide any meaningful apology or show true remorse the Hearing Board had this to say:

After a dispute occurred between Chairman and members of the board of directors of closely held corporation, Chairman removed several members from the board and sued them for civil conspiracy, tortious interference, libel, and breach of fiduciary duty. The Delaware Court of Chancery granted the defendants’ motion to dismiss, finding that the plaintiffs failed to allege facts sufficient to prove civil conspiracy, breach of fiduciary duty, or tortious interference. The court also determined that the Chairman was a limited-purpose public figure and the plaintiffs therefore did not meet the heightened pleading standard for their libel claim.

In 2010, Todd O’Gara founded Wanu, a Delaware corporation based in California that produces nutrient-infused water. In 2014, O’Gara stepped down as CEO, but continued as Wanu’s President, Chairman, and largest stockholder. In 2017 O’Gara executed voting agreements and irrevocable proxies with a number of Wanu stockholders. The voting agreements, combined with his shares, gave O’Gara control over approximately fifty-two percent of the voting power in Wanu.

In March 2018, a majority of Wanu’s board of directors voted to remove Wanu’s CEO, Steve Dollase. In April 2018, Dollase and two Wanu stockholders, Jay Binkley and Greg Hunter, raised allegations against O’Gara. The three alleged that O’Gara had inhibited Dollase’s ability to perform as Wanu’s CEO in a variety of ways. The three also alleged that O’Gara’s business expenses and spending were excessive and unsustainable and that O’Gara had executed an unauthorized certificate issuing several hundred thousand shares to himself.

In May 2018, Wanu engaged independent counsel to investigate the allegations. The investigation concluded in July 2018 and its findings, that Dollase was informed or had the ability to be informed about many of the issues he complained about; that his allegations were motivated by his dislike of O’Gara’s management style and personality; that he was generally not well-liked as a leader; and that his management style created tension within the office, were reported to the board. After this, the Dollase faction raised new allegations against O’Gara, namely that O’Gara made misstatements about his educational background in various documents prepared for prospective investors in 2014 and 2015. Wanu engaged another investigator to look into the new allegations. This investigator summarized his findings in August 2018, stating that he was unable to confirm that O’Gara had in fact received degrees from the various educational institutions he claimed to have attended. Continue reading ›

After CEO and Chairman of closely held company was removed by board of directors, he sued, requesting specific performance of the removal of the other members of the board. The Chancery Court dismissed several claims in the complaint for want of personal jurisdiction, and also denied the CEO’s motion for summary judgment, finding that each side of the litigation alleged disputed facts and complex legal theories not appropriate for resolution on summary judgment.

In 2016, Craig Bouchard founded Braidy Industries, Inc., a Delaware corporation with principal places of business in Kentucky and Massachusetts whose purpose is to manufacture efficient and eco-friendly aluminum alloys. Bouchard served as CEO, Chairman of the board of directors, and Secretary. The board also consisted of John Preston, Charles Price, Michael Porter, and Christopher Schuh. All members of the board were Braidy stockholders.

In 2018, Bouchard and the other directors entered into an Amended and Restated Voting Agreement. The directors and Bouchard executed the agreement in their capacity as stockholders. The board unanimously approved the agreement, and the agreement was referenced throughout the Braidy bylaws. The agreement specified that only persons who were nominated in accordance with the agreement were eligible for election as directors. The agreement also contained provisions regarding the removal of directors. Continue reading ›

Over the coming weeks and months, employees will begin returning to work in increasing numbers across the state. As they do, employers will find themselves facing unique challenges created by the risk of workplace exposure to COVID-19. Potential transmission of COVID-19 by employees can create liability concerns for employers. The primary concern for employers is whether they will be entitled to the tort immunity typically provided by workers’ compensation laws in light of the unique nature of the COVID-19 pandemic. Far from being just a hypothetical concern, the first workplace COVID-19 exposure case in Illinois was filed a few weeks ago by the estate of an employee who passed away from complications of COVID-19.

Under many states’ workers’ compensation statutes, a claim under the state workers’ compensation system is the exclusive remedy for an employee who suffers a work-related injury. This is often referred to as the “workers’ compensation bar” or “exclusivity bar” and represents a trade-off for employers and employees. For employees, workers’ compensation laws make it easier for employees to recover from employers for workplace injuries. Many workers’ compensation laws are no-fault laws, meaning the employer must cover the employee’s injury even if it was not at fault for causing the injury. In exchange for lowering the threshold for recovery, the workers’ compensation laws usually prevent employees from suing their employer for additional compensation under a different legal theory for workplace injuries. Continue reading ›

Directors of a corporation owe fiduciary duties to the shareholders of the company. This means that when directors communicate with shareholders about the company, they have a fiduciary duty to exercise due care, good faith and loyalty. Directors can be held personally liable if they intentionally or recklessly mislead shareholders about the business or condition of the corporation. A Delaware Chancery Court recently dismissed a suit filed against the directors of GoPro, Inc. by a group of disgruntled shareholders who alleged that the directors misled them by issuing overly optimistic revenue guidance that the company was unable to live up to.

In 2016, GoPro, the camera manufacturer, had plans to roll out several new products to the market including a premium drone equipped with the latest GoPro cameras and a new wearable camera that has become ubiquitous among outdoor enthusiasts and influencers around the globe. GoPro’s board of directors issued revenue guidance for 2016 based on projected sales of both products. The revenue forecasts were generally positive. Continue reading ›

Minority shareholders in closely held businesses generally lack the ability to control the actions of a company which makes them vulnerable to oppression from the controlling shareholder or shareholders. Minority shareholder oppression claims frequently include allegations that the controlling shareholders have funneled company money or resources to themselves and attempted to hide the misconduct by excluding minority shareholders from accessing books and records. Minority shareholders in Illinois are not without recourse, however, as they have a statutory right to examine the corporation’s books and records. As the First District appellate court recently reminded us, the right to examine corporate books and records demands compliance with certain technical requirements.

The case, Elleby v. Forest Alarm Service, Inc., was filed by a minority shareholder, Ruth Elleby, who owned a 33.5% interest in Forest Alarm Service, Inc. which the complaint described as a family-owned, closed corporation. In addition to Elleby, Forest had three other shareholders: Linda Lichtenauer, Mark Coyle, and Ron Lyngen who owned 33.5%, 16.5%, and 16.5% of Forest, respectively. Coyle was the President and Secretary of Forest in addition to being a shareholder. Continue reading ›

Last year we witnessed the filing of a first of its kind putative class-action lawsuit claiming that gift cards that did not contain Braille violated the Americans with Disabilities Act (ADA) along with similar state and local laws. Within weeks, more than 240 nearly identical complaints had been filed against a multitude of retailers and restaurant chains in New York. Recently, a federal judge issued the first opinions in these gift card cases dismissing the plaintiffs’ claims. While the court granted the plaintiffs the ability to amend their complaints, it is unclear how they will be able to successfully retool the complaints given that the opinions soundly rejected the plaintiffs’ theories of liability.

The court’s first opinion came in a case captioned Dominguez v. Banana Republic LLC. In the following days, the same judge released similar opinions dismissing six additional Braille gift card lawsuits before him on the same grounds. The factual circumstances in the seven cases are similar. In each case, the plaintiffs alleged that they called the defendant and asked whether the defendant’s gift cards contained the information printed on the cards in Braille. After the defendant responded that the gift cards did not contain Braille, the plaintiffs filed suit alleging violations of the ADA and various state and local laws. Each case was filed as a putative class action on behalf of the named plaintiff and a nationwide class of similarly situated blind individuals. Continue reading ›

As we previously discussed here, the Virginia legislature was considering a bill earlier this year that would limit the use of non-compete agreements with certain categories of employees. Earlier this month, Virginia’s governor signed a series of new employment laws including one that bans using covenants not to compete with “low-wage” employees. The law takes effect July 1, 2020, but does not apply retroactively.

The new law provides that “[n]o employer shall enter into, enforce, or threaten to enforce a covenant not to compete with any low-wage employee.” It defines a “covenant not to compete” as “a covenant or agreement, including a provision of a contract of employment, between an employer and employee that restrains, prohibits, or otherwise restricts an individual’s ability, following the termination of the individual’s employment, to compete with his former employer.” Importantly, the statute clarifies that non-compete agreements “shall not restrict an employee from providing a service to a customer or client of the employer if the employee does not initiate contact with or solicit the customer or client.” Continue reading ›

A couple of weeks ago, President Donald Trump made history as the first sitting president to file a defamation lawsuit against a media outlet. President Trump’s reelection campaign filed a lawsuit in New York state court alleging that The New York Times published defamatory statements in a 2019 opinion editorial concerning claims of a quid pro quo between Russia and then-candidate Trump’s 2016 campaign. Suits like this involving protected political speech are nearly impossible to win.

The article, entitled “The Real Trump-Russia Quid Pro Quo,” was written by a former New York Times executive editor. The article concluded that the Trump campaign and Russian officials “had an overarching deal: the quid of help in the campaign against Hillary Clinton for the quo of a new pro-Russian foreign policy.” According to the complaint, this conclusion “is false” and “knowing it would misinform and mislead its own readers,” The New York Times made the decision to publish the piece anyways.

The President’s campaign alleges that the purportedly defamatory article fails to offer any proof of its claim of a quid pro quo. Instead, the complaint alleges, the article “selectively refers to previously-reported contacts between a Russian lawyer and persons connected with the [President’s 2016] Campaign” and insinuates that “these contacts must have resulted in a quid pro quo or a deal.” Moreover, the complaint goes on to allege that the article failed to “acknowledge that, in fact, there had been extensive reporting, including in The [New York] Times, that the meetings and contacts . . . did not result in any quid pro quo or deal between the Campaign and Russia, or anyone connected with either of them.” Continue reading ›

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