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Terminating an employee can be a difficult thing for an employer. It can become even more difficult if the former employee decides to sue her former employer. An Illinois appellate court recently addressed such a situation and ultimately found that the trial court had properly granted summary judgment in favor of the employer on the former employee’s claims of retaliatory discharge and intentional infliction of emotional distress.

The plaintiff, Rita DiPietro began working for GATX Corporation, a Chicago-based equipment finance company, in July 2016 as a customer service representative. During her employment, the plaintiff took sick leave occasionally to care for her mother. Her manager told her to record this time off in the company’s timekeeping program. The program only accepted time recorded in half-day increments. As a consequence, even when the plaintiff took leave of fewer than four hours, the timekeeping program would reflect that she had taken four hours of leave.

When the plaintiff discussed the issue of the timekeeping program overstating the amount of sick time she had used, her manager allegedly told her to continue using the system to track her leave time. The plaintiff later complained about the sick time issue to both her manager’s manager and someone in the human resources department. She allegedly asked that her manager not be informed about the complaints because her manager had warned her not to complain to human resources or her manager’s manager about the issue. Nonetheless, her manager was informed of the plaintiff’s complaints.

Upon learning that the plaintiff had gone over her head, the plaintiff’s manager allegedly began contacting the plaintiff’s coworkers to question them about the plaintiff, seeking negative information that could be used to justify terminating the plaintiff. Approximately six weeks after making her complaint to HR and her manager’s manager, the plaintiff was terminated.

When the plaintiff requested a copy of her personnel file from GATX, it allegedly contained handwritten notes from the plaintiff’s manager that falsely documented counseling sessions with the plaintiff and back-dated documents that purported to criticize the plaintiff. The plaintiff denied that her manager or anyone else told her that her performance was deficient, counseled her in any respect, or took away any of her responsibilities. Instead, she asserted that she frequently received praise from upper management and attached emails representing a portion of those accolades to her pleadings. She also pointed to the fact that she received a rating of “solid achievement” on her only performance review and was given an above-average performance bonus in response. Continue reading ›

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Following a trial that spanned over 16 days, the UK’s High Court dismissed Johnny Depp’s libel claim against The Sun newspaper over an article that accused Depp of being a “wife beater.” The judge presiding over the trial, Justice Andrew Nichol, issued a 129-page, 585-paragraph opinion thoroughly detailing the allegedly defamatory statements and the trial. Justice Nicol ultimately held that Depp had proved the necessary elements for a libel action, but also found that The Sun had proven that the article in which the allegedly defamatory statements appeared was “substantially true.”

In April 2018, The Sun published an article originally titled “GONE POTTY: How can JK Rowling be ‘genuinely happy’ casting wife-beater Johnny Depp in the new Fantastic Beasts film?” The article’s title was later changed to “GONE POTTY How Can JK Rowling be ‘genuinely happy’ casting Johnny Depp in the new Fantastic Beasts film after assault claim?” The article asserted among other things that Depp was violent towards his ex-wife Amber Heard throughout the course of their relationship. In response to the story, Depp filed a defamation lawsuit against The Sun’s publisher, News Group Newspapers Ltd., and executive editor, Dan Wootton. Continue reading ›

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Copyright infringement lawsuits over tattoos have become increasingly popular since Mike Tyson’s tattoo artist famously sued Warner Brothers over its recreation of Tyson’s face tattoo on the face of actor Ed Helms in the Hangover II. The latest bout of suits involving copyrighted tattoos involves video game maker Take-Two Interactive Software.

Take-Two is responsible for a number of popular game franchises including Grand Theft Auto, NBA 2K, and WWE 2K. In addition to releasing some of the most popular video games titles of the year, Take-Two has found itself defending against two separate copyright infringement suits over the company’s use of tattoos in its NBA 2K and WWE 2K games.

A federal judge in New York earlier this year dismissed the lawsuit over Take-Two’s depiction of athletes’ tattoos in its NBA 2K video games. In dismissing the lawsuit, the judge found that Take-Two’s use of the tattoos did not infringe the plaintiff’s copyrights because Take-Two had an implied license to display the tattoos and also because Take-Two’s use constituted fair use and was de minimis in the context of the entire games.

The second lawsuit filed in an Illinois federal court concerned Take-Two’s depiction of tattoos in its WWE 2k games. After the case proceeded to discovery, the parties filed cross-motions for summary judgment. The plaintiff’s motion sought partial summary judgment on the issue of actionable copying based on Take-Two’s admission “to copying Alexander’s tattoos in their entirety in order to depict Orton in WWE 2K as he appears in real life.” Take-Two’s motion asserted the same affirmative defenses of implied license, fair use, and de minimis copying. Despite the similarity of the cases and Take-Two’s defenses, the federal judge overseeing the Illinois case did not warm to Take-Two’s arguments. Continue reading ›

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The Edelson law firm filed a motion to protect its Lion Air Crash victims’ settlement monies from alleged selling off by Erika Jayne of her expensive designer clothing suspecting she would allegedly spend the proceeds in violation of the Court’s order.  The Motion states in relevant part:

On information and belief, some and likely all of the property offered for sale is community property in which Tom Girardi has an interest, and is therefore among his assets. For example, one of the items offered for sale is a $1,000 dress from Australian label Ellery. Ellery was founded during the Girardis’ marriage and the dress therefore could not have been acquired prior to the marriage. Further, while Edelson is unaware of the exact relationship between Vestiaire Collective and Erika Girardi, Erika Girardi may be attempting to move Tom Girardi’s assets outside the United States by selling them through a French company. Although Erika Girardi is not herself a party to the asset freeze order, she is bound by it. “[A]n injunction is binding on the parties to the proceeding; their officers, agents, and employees (acting in that capacity); and nonparties with notice who are either ‘legally identified’ with a party or who aid and abet a party’s violation of the injunction.” Nat’l Spiritual Assembly of Baha’is of U.S. Under Hereditary Guardianship, Inc. v. Nat’l Spiritual Assembly of Baha’is of U.S., Inc., 628 F.3d 837, 840 (7th Cir. 2010). “[T]he ‘legal identity’ justification for binding nonparties is limited to those who have notice of the injunction and are so closely identified in interest with the enjoined party that it is reasonable to conclude that their rights and interests were adjudicated in the original proceeding.” Here, Erika Girardi has notice of the injunction, because a copy of it was sent to her attorney. And even though divorce proceedings have been initiated, Erika Girardi could not be more closely associated with Tom Girardi. The property she is attempting to sell likely belongs, in part, to Tom Girardi, and she is only permitted to manage or sell it as a fiduciary to Tom Girardi. In addition, Edelson PC suspects that Tom Girardi and Erika Girardi have acted and continue to act in concert to divert money from Girardi Keese for their personal use. Tom Girardi’s creditors attested to $20 million in “loans” advanced to Erika Girardi’s company by Girardi Keese. Given the opacity of Tom Girardi and Girardi Keese’s finances, there is every reason to believe that Erika Girardi has client money. Simply put: the Court froze all of Tom Girardi’s assets, and that means all community property is frozen too. Erika Girardi must stop selling her clothes.

Here is the motion filed by the Edelson firm regarding stopping Erika Jayne from selling off her expensive clothing. Continue reading ›

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In a recent decision, the Delaware Court of Chancery granted a motion to dismiss filed by the defendants in response to a shareholder’s lawsuit requesting to compel the company to pay a dividend and also seeking to find that the board of directors breached their fiduciary duty of care.

The plaintiff in the case of Buckley Family Trust v. Charles Patrick McCleary, was the Buckley Family Trust. The trust was one of seven stockholders of McCleary, Inc., a privately held snack food company headquartered in South Beloit, Illinois near Rockford, and only one of two stockholders that were not family members of the Company’s founder, Eugene “Mac” McCleary. Neither of the two non-family member shareholders served on the Company’s board of directors.

Unhappy with the direction of the Company and the decisions being made by the Company’s board of directors, the Plaintiff filed a two-count complaint against the Company and the five family members who served on the Company’s board of directors. In its first count, the Trust alleged that the board of directors engaged in minority shareholder oppression by failing to declare a dividend for seven years. In its complaint, the Trust argued that the Company had the funds to pay a dividend but refused to in an effort to squeeze-out the Trust and force it to sell its shares to the defendants at a steep discount.

In its second count, the Trust sought to bring a shareholder derivative action against the board of directors for allegedly breaching their fiduciary duties when it approved certain actions and failed to act on other occasions. In particular, the Trust sought to challenge the Company’s decisions to transition away from the grocer Aldi, a key customer; to authorize building a new warehouse; and to improve the Company’s production facilities to do business with a competitor. The Trust also challenged various non-actions by the board members including their failure to authorize improvements to the Company’s existing food production facilities or to manage the Company’s tax obligations and to observe corporate formalities.

In deciding the motion to dismiss, it reviewed the requirements for adequately pleading each of the Trust’s claims. With regard to the shareholder oppression claim, the Court found that the Trust failed to demonstrate that the board member’s actions were part of a squeeze-out scheme. For one, the Court pointed to the fact that the decision affected the Trust and the members of the board equally as they were all holders of common stock and would share equally on a pro rata basis any dividend paid by the Company. The Court also pointed to the fact that the “steep discount” referenced by the Trust in the Complaint was a contractually agreed to “discount of thirty (30%) percent applicable to all non-voting shares for lack of marketability and control” found in the Common Stock Purchase and Restriction Agreement to which the shareholders were a party. Consequently, the Court dismissed the claim concluding that the lack of dividend was not an abuse of discretion and that there was no evidence of self-interest.

In turning to the second claim, the Court noted that the Trust did not make a pre-suit demand on the board members before filing the derivative action on behalf of the Company. Consequently, the Court was required to analyze whether failing to make such a demand was excused under the demand futility exception to the demand requirement, which excuses the failure to make such a demand if it would have been futile to do so. The Trust argued that a demand would have been futile because the board members faced significant likelihood of personal liability under any such suit brought by the Company, a recognized exception to the demand requirement.

The Court reviewed various board meeting minutes and other documents presented by the parties to determine if the board members sought to properly educate themselves before making decisions or whether they acted with reckless indifference or without the bounds of reason, which would open them up to a substantial risk of personal liability. The Court determined that this evidence did not establish that the board acted recklessly or outside the ordinary bounds of reason. As such, the Court concluded that the Trust failed to demonstrate that making a demand on the board before filing the lawsuit would have been futile, and dismissed the Trust’s derivative claim.

The Court’s full opinion can be found here. Continue reading ›

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The Americans with Disabilities Act requires employers to provide reasonable accommodation to qualified employees with disabilities. The key phrase in that sentence that is so often the subject of litigation is “reasonable accommodation.” In a recent decision, the Seventh Circuit considered whether a two-pound lifting limit and a restriction on repetitive grasping and lifting arms more than 5% above the shoulder were reasonable accommodations for an employee of a regional sporting goods retailer. In affirming an order of summary judgment in favor of the sporting goods store, the Seventh Circuit found that such accommodations were unreasonable and left the employee unable to perform her essential job functions.

The plaintiff in the case, Angela Tonyan, was employed as a store manager at a Dunham’s Sports store in Wisconsin. During her employment, Tonyan sustained a series of injuries to both shoulders and left arm. After multiple surgeries and various temporary restrictions failed to remedy her condition, her doctor imposed several permanent restrictions including a two-pound lifting limit and restricting her from having to raise her arms above her head.

In response to these restrictions, Dunham’s fired Tonyan. The sporting goods retailer contended that its “lean” staffing model made physical work such as unloading and shelving merchandise essential job functions of its store managers like Tonyan. Following her termination, Tonyan sued claiming that the company violated her rights to reasonable accommodation under the ADA. The District Court found that the store did not violate her rights under the ADA and granted summary judgment to her former employer. Continue reading ›

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After the plaintiff purchased an economic interest in an LLC at a UCC sale, she brought claims for breach of fiduciary duty and breach of good faith and fair dealing against the manager of the LLC. The plaintiff alleged that she was entitled to inspect the books and financial documents of the LLC under the membership agreement, and that the LLC had not properly distributed her share of the profits of the sale of its sole asset. The trial court rejected the plaintiff’s arguments, finding that she had only an economic interest, and not a membership interest, in the LLC. The appellate court affirmed, finding that the plaintiff lacked the standing to bring her claims as she was not a member of the LLC under the LLC Act or the amended operating agreement

CFC is an Illinois limited liability corporation created to manage, convert, and sell an apartment complex in Grayslake. The original members of CFC executed an operating agreement which provided that each member’s ownership interest depended on their capital contributions. The Stanley A. Smagala Revocable Trust contributed $3,465,000 and owned 45%, the McGlynn Trust and Grayslake Investments each contributed $1,925,000 and each owned 25%, and John R. Kelly contributed $385,000 and owned a 5% interest.

Smagala was the manager of CFC and had full authority to direct, manage, and control the business of CFC and also to employ accountants, legal counsel, managing agents, and other experts to perform services for CFC. At the end of 2006, the members signed an amended agreement changing their interests from a capital contribution interest to an “economic interest” in the company’s profits and losses.

To fund its $1,925,000 contribution, Grayslake Investments had borrowed $1,500,000 from Founders Bank. Founders Bank filed a UCC-1 to secure its interest in CFC. In July 2009, the Illinois Department of Financial and Professional Regulation of Banking closed Founders Bank, and the Federal Deposit Insurance Company was named receiver. Some assets, including the loan made to Grayslake and its security interest, were sold to Private Bank. Private Bank then renewed its UCC-1 and the note matured in January 2010. Grayslake was unable to refinance or repay the balance of the note, and Private Bank began foreclosure proceedings. Continue reading ›

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A collection of car dealerships operated through independent LLCs but received management services from the same company. The management services company was owned by the same person who owned the majority interest in each of the dealership LLCs. Each dealership had fewer than fifteen employees individually. A salesman with one of the dealership was fired, and later sued the dealership for racial discrimination. The salesman claimed that the dealerships were subject to Title VII because, in aggregate, they employed more than 15 people. The salesman argued that the corporate veil should be pierced because the dealerships were not actually independent entities. The district court rejected these arguments, and the appellate court affirmed. The appellate court found that the management company and the dealerships observed proper corporate formalities and did not demonstrate the degree of integration that would justify piercing the corporate veil for employee aggregation purposes.

Shannon Prince worked as a salesman with Applecars, LLC for several months in 2017 until he was fired. Applecars claimed that Prince was fired for performance issues, while Prince maintained that the defendants discriminated against him because of his race.

Applecars operated a used car dealership in Appleton, Wisconsin. The dealership was affiliated with four other dealerships throughout Wisconsin: in Wausau, Antigo, Green Bay, and La Crosse. Each of the dealerships was independently owned by a separate Wisconsin limited liability company. Robert McCormick owned a majority or outright share in each of the LLCs. Each of the dealerships also received management services from Capital M, Inc., which McCormick also owned. Applecars had fewer than fifteen employees, but in aggregate the dealerships employed more.

The overlap between the dealerships was substantial, as Capital M provided many services to each dealership, and also tracked dealership inventory, held personal employee records, and issued identical employee handbooks for each dealership. Capital M’s operations manager hired, fired, and promoted each dealership’s general manager. The employees for each dealership gathered as one for events and parties several times per year. Each dealership and LLC, however, properly maintained corporate formalities and records. Capital M billed each dealership separately and each paid Capital M individually for services and for the use of the single website and its associated trademark. Each dealership also filed and paid their own taxes, paid their own employees, and entered into their own contracts for business purposes. Continue reading ›

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We talked about the lawsuit between Promega Corp., a biotech company based in Madison, Wisconsin, and its shareholders a couple months ago in this blog post. At the time, Circuit Judge Valerie Bailey-Rihn said she was convinced minority shareholders had been oppressed by the company and its founder and CEO, Bill Linton, but she was unsure of the best way to remedy the situation and make sure the oppressed shareholders received a fair return on their investment. If she accepts the settlement agreement reached by both parties, she might not have to spend any more time deliberating.

Over the summer, both parties had said they were willing to have a third party buy the shares from the minority investors. All that was needed was to define the terms of the settlement, which they did. Afterwards, they submitted an order to dismiss the case.

The third party is Eppendorf AG, a German company that makes life science instruments. Having a third party buy the shares off the minority investors is a solution that works for everyone because the minority shareholders get a return on their investment without the company having to liquidate any assets to come up with the money to buy the shares back. The judge had mentioned the option of dissolving the company in order to come up with the funds to pay back the minority shareholders, but that would have been a drastic option.

The amount of the settlement has not been made public, but Karen Burkhartzmeyer, a spokesperson for Promega, has said the settlement is fair to all parties and affirms Promega’s commitment to remaining a private company. Continue reading ›

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A federal judge recently dismissed a defamation lawsuit filed by former Playboy model Karen McDougal against Fox News host Tucker Carlson. The lawsuit concerned statements Carlson had made about McDougal during his show “Tucker Carlson Tonight” which airs on the Fox News Channel. The judge ultimately granted the motion to dismiss filed by Fox News after determining that the allegedly defamatory statements constituted only nonactionable opinion and rhetorical hyperbole as a matter of law.

The statements at issue in the lawsuit were made by Carlson on a segment of his show that aired on December 10, 2018. During that show, Carlson discussed alleged payments made to McDougal in an effort to keep her from discussing her alleged affair with President Trump back in 2006. Carlson did not refer to McDougal by name when making the comments, though at one point during the show her picture was displayed on-screen.

The opinion by U.S. District Judge Mary Kay Vyskocil quotes at length from the transcript of the show in which Carlson made the allegedly libelous statements. From the several minutes of dialogue reproduced in the opinion, the Court identified two statements that McDougal cited in her complaint as giving rise to a claim of defamation per se. The first statement was that McDougal “approached Donald Trump and threatened to ruin his career and humiliate his family if he doesn’t give [her] money.” The second statement claimed that McDougal’s actions were “a classic case of extortion,” which is a crime. Nearly a year after these statements aired, McDougal filed a single count complaint for defamation per se in a New York state court which Fox News subsequently removed to federal court.

In its motion to dismiss, Fox News argued that the lawsuit was an attempt to silence the media from discussing matters of public concern. It argued that the defamation per se claim failed because the statements constituted nonactionable opinion and rhetorical hyperbole that is protected by the First Amendment. It also argued that the complaint failed to allege facts to support an inference that Fox News acted with actual malice, a necessary requirement when the plaintiff is a public figure. Continue reading ›

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