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Choosing the best attorneys for a corporate oppression matter in Illinois involves considering several factors. Look for a legal team with extensive experience in corporate law and specifically in handling shareholder disputes and oppression cases. They should have a strong track record of successfully advocating for minority shareholders’ rights. Also, consider firms that offer personalized attention to understand the unique aspects of your situation and provide tailored legal strategies. It’s important to choose attorneys who are adept in both negotiation and litigation, as resolving these disputes can require a flexible approach. Firms like Lubin Austermuehle, known for their experience in business litigation, including shareholder and LLC member disputes, is a good choice. Continue reading ›

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In Illinois, the pleading requirements for consumer fraud and common law fraud differ in several key aspects:

  1. Common Law Fraud: To establish a case for common law fraud, you must demonstrate five elements:
    • A false statement of material fact made by the defendant to the plaintiff.
    • The defendant knew the statement was false.
    • The statement was made with the intent that the plaintiff would rely on it.
    • The plaintiff did rely on the statement.
    • The plaintiff suffered damage due to this reliance.
  2. Consumer Fraud: Under the Illinois Consumer Fraud Act, the requirements are slightly different and only four elements are needed:
    • A deceptive act or unfair practice (involving a public policy violation) by the defendant.
    • The defendant intended for the plaintiff to rely on the deception.
    • The deception or unfair practice occurred in the course of trade or commerce.
    • The plaintiff suffered actual damage as a result of the defendant’s violation of the act.

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Illinois has two rules that can be used to dismiss cases which allows for more flexibility in defending some actions then in federal court where there is only one means to seek dismissal of an action.

A Section 2-615 motion to dismiss and a Section 2-619 motion to dismiss under Illinois law are two distinct legal tools, each serving specific purposes.

A Section 2-615 motion to dismiss tests the legal sufficiency of a complaint by challenging whether the complaint states a claim upon which relief can be granted. This motion is concerned with defects appearing on the face of the complaint and does not rely on matters outside the complaint. It admits all well-pleaded facts and attacks the legal sufficiency of the complaint [5], [7], [12]. The court, in ruling on a 2-615 motion, considers only the allegations in the pleadings.

On the other hand, a Section 2-619 motion to dismiss acknowledges the legal sufficiency of the complaint but asserts that there are certain external defects or defenses that defeat the claims. It admits the legal sufficiency of the plaintiff’s claim but asserts ‘affirmative matter’ outside of the pleading that defeats the claim. This motion is sometimes referred to as a ‘Yes, but’ motion because it essentially says, ‘Yes, the complaint was legally sufficient, but an affirmative matter exists that defeats the claim’.

The two types of motions can be combined under Section 2-619.1, but it is important to maintain procedural distinctions between them. Each part of a combined motion should be limited to and specify that it is made under one of Sections 2-615, 2-619, or 2-1005, and should clearly show the points or grounds relied upon under the Section upon which it is based.

In dealing with these motions, the court interprets all pleadings and supporting documents in the light most favorable to the plaintiff. Furthermore, dismissals pursuant to sections 2-615, 2-619, and 2-619.1 are reviewed de novo. Continue reading ›

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Choosing Lubin Austermuehle for business litigation offers several compelling advantages. Firstly, the firm is known for its commitment to achieving significant victories and effecting change for clients and the community. This dedication is reflected in the firm’s ability to deliver high-quality services with a level of personal attention that is sometimes lacking in larger law practices​​.

Lubin Austermuehle’s team is adept at handling a wide range of business litigation matters. This includes shareholder, owner, LLC member, and partnership disputes, trade secret theft, copyright and trademark infringement, business fraud, non-compete agreements, and restrictive covenants​​​​. Their experience also extends to dealing with emergency (preliminary) injunctive relief in business disputes, class actions, consumer fraud, employment litigation, and real estate litigation​​.

The firm’s reputation for integrity and success is well-recognized in the Chicagoland area and among peers. Notably, Peter Lubin has been distinguished as a “Super Lawyer,” and Patrick Austermuehle has been named a “rising star” by a prestigious rating service. These accolades reflect their commitment to legal excellence and professionalism​​.

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In Illinois, tortious interference with contract and tortious interference with prospective business relations are two distinct torts with different pleading requirements.

To establish a case for tortious interference with contract, the plaintiff must show the following [7]:
1) Existence of a valid and enforceable contract between the plaintiff and another party
2) The defendant’s awareness of this contractual relationship
3) The defendant intentionally and unjustifiably induced a breach of the contract, which results in a subsequent breach by the other contracting party
4) The plaintiff suffered damages as a result of the breach. Continue reading ›

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Diversity of citizenship cannot be asserted merely on information and belief when it comes to the members of a Limited Liability Company (LLC). For diversity jurisdiction purposes, the citizenship of an LLC is determined by the citizenship of each of its members. A simple declaration of diversity of citizenship is not enough. The court needs to understand the identity and citizenship of each member. In case any member is an unincorporated association, such as an LLC or partnership, the citizenship must be traced through all layers of ownership to ensure no member shares a common citizenship with the opposing party.

Merely claiming that all members are citizens of a certain state or that no members are citizens of a certain state is insufficient. It is also not enough to claim that an LLC was organized under a specific state’s laws, maintains its principal place of business in a certain state, or that an LLC has a parent corporation. The citizenship of an LLC must be proven by underlying facts, not merely alleged on information and belief. If the members of an LLC have members, the citizenship of all those members must also be set forth. Continue reading ›

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“As is” and certain other non-reliance or purported exculpatory clauses under the common law, have not provided a defense against fraud in Illinois courts for decades. This is particularly important where, as in most automobile sales transactions, one party is unsophisticated, and the other party, like a used car dealer, is an expert in the field. As Zimmerman v. Northfield Real Estate, Inc., 156 Ill. App. 3d 154, 164 (1st Dist. 1986), found: “Exculpatory clauses are not favored and are strictly construed and must have clear, explicit and unequivocal language showing that it was the intent of the parties.” And the Consumer Fraud Act contains an anti-waiver provision which makes a sold “as is” clause defense to used car auto fraud matter a non-starter for statutory fraud, even if the common law already did not do that.

The Consumer Fraud Act, like other analogous Illinois statutes, such as the Real-Estate Disclosure Act, has an anti-waiver provision which preludes use of an “as is” clause or the no warranty clause present here to defeat a claim for misrepresentation or knowingly failing to disclose material defects. As the Court in Bauer v. Giannis, 359 Ill.App.3d 897, 906 (2d Dist. 2005) holds:

The policy prohibiting waiver of the obligations under the Act applies with equal force here. By insisting on the “as is” clause, which provides that plaintiff accepted the property without any warranty or representation, defendants in effect sought to obtain a waiver of their obligation under the Act to disclose material defects. … We see nothing in the “as is” provisions of the disclosure form that may be read as allowing a seller to contract out of its disclosure obligations.

Used car dealers may dream that “as is” language or a warranty disclaimer clause ends their obligations to tell the truth and saves them from having to disclose known material defects but that is not the law. If that were the case, there would be no used car consumer fraud claims unless the claims arose out of false written statements labeled as warranties. Used car dealers would then be free to sell cars that they knew were dangerous to drive and that they knew had defects by simply inserting an “as is”, no warranty or other exculpatory clause into a form contract, and then concealing and omitting to disclose those known defects. This would not only violate the Consumer Fraud Act’s prohibition on selling products with known material defects simply by failing to disclose them or by misrepresenting that they did not exist, but it would also violate the dealers’ obligations under the Vehicle Code requiring that they put safe cars on the road. Allowing used car dealers to sell dangerous cars would endanger not only the buyer and the buyer’s family and passengers but also the public. The Vehicle Code makes it: “unlawful for any person to . . . knowingly permit to be driven or moved on any highway any vehicle . . . which is in such unsafe condition as to endanger any person or property …” 625 ILCS §5/12-101(a). Continue reading ›

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In the realm of defamation law, the distinction between public and private figures holds significant weight. Public figures have a higher burden of proof when pursuing defamation claims due to their assumed access to media platforms and the assumed public interest in their lives or opinions. However, what happens when someone becomes an involuntary public figure, particularly in the context of Illinois law?

In Illinois, as in many other jurisdictions, individuals may become involuntarily thrust into the public eye due to circumstances beyond their control. The legal concept of involuntary public figures was established in the famous case of involving a well known Illinois lawyer Elmer Gertz. This case sets out the framework for the doctrine: Justice Mikva in DC federal  appeals decision, Dameron v. Washington Magazine, Inc., 779 F.2d 736, 742 (D.C. Cir. 1985) provides a very good description of the doctrine:

By sheer bad luck, Dameron happened to be the controller on duty at the time of the Mt. Weather crash. As in Gertz, Dameron “assume[d a] special prominence in the resolution of [a] public question[ ].” Gertz at 351, 94 S.Ct. at 3012. He became embroiled, through no desire of his own, in the ensuing controversy over the causes of the accident. He thereby became well known to the public in this one very limited connection. The numerous press reports on the Mt. Weather crash introduced by the defendants in their motion for summary judgment amply demonstrate this. Dameron’s name and likeness were often used in these reports. See R.E. at 134–49 (reproducing articles from The Washington Post, The Star-News, UPI and the PATCO Newsletter). It was in that same very limited connection that The Washingtonian’s brief and oblique reference to him surfaced years later.
Paradoxically, the magazine article never mentions Dameron’s name or other identifying characteristics. If Dameron had not been previously linked with accounts of the tragedy, no magazine reader could tie the alleged defamation to Dameron. Indeed, it was partly because of the defendant’s public notoriety that he was identifiable at all from the oblique reference in The Washingtonian.
There is a marked contrast between the controlling facts of this case and the facts of Time, Inc. v. Firestone, 424 U.S. 448, 96 S.Ct. 958, 47 L.Ed.2d 154 (1976), a case Dameron claims shows that he was not a public figure. Indeed, Firestone butresses our conclusion that Dameron is a public figure for the limited purpose of discussion of the Mt. Weather crash. In Firestone the scion of a prominent family of industrialists was sued for divorce. The charges and countercharges in the suit were sensational and the press displayed a great deal of interest in the proceedings. The Court, however, declined to find Mrs. Firestone even a limited-purpose public figure merely because of her much-publicized divorce trial. The Court found that Mrs. Firestone’s resort to the judicial process to arrange her marital affairs was, for all practical purposes, involuntary and that the controversy, if any, over her marriage and divorce was a private one. Id. at 454–55, 96 S.Ct. at 965–66. The Court said that “even though the marital difficulties of extremely wealthy individuals may be of interest to some portions of the reading public” a divorce proceeding was not a public controversy. Id. at 454, 96 S.Ct. at 965. That is, public interest in a controversy does not make a public controversy. The newsworthiness of an event is not the measuring stick for identifying public controversy. Nor is a voyeuristic interest in someone’s private affairs an appropriate substitute. Dameron’s situation, however, is far removed from that of Mrs. Firestone. Dameron was at the center of a controversy involving the loss of many lives in a mishap involving a public carrier. At issue was the management of a program administered by the FAA, an arm of the government. Another governmental agency—the NTSB—conducted an extensive, public investigation into the events surrounding the Mt. Weather Crash. Dameron appeared at these hearings and testified for many hours about his role in the crash. The hearings, and Dameron’s role in them, were widely publicized. We think that, like it or not, Dameron was embroiled in a public controversy.

The Illinois courts or federal courts interpreting Illinois law, like other courts around the country, have recognized that some individuals, despite being private citizens, can become involuntarily involved in public controversies or discussions. In these situations, they may temporarily take on the role of a public figure for the limited context of that particular controversy. For instance, someone who becomes part of a widely covered news story or controversy, such as a victim of a high-profile crime or a witness to a significant event or a reputed mobster who has a high profile and been indicted but not convicted, might be considered an involuntary public figure for the duration or context of that particular issue.

However, meeting the criteria for involuntary public figure status is not a simple task. The courts evaluate various factors, such as the extent of media coverage, the person’s role in the events, and whether the individual has voluntarily sought public attention. Additionally, the Illinois courts consider whether the allegedly defamatory statements are related to the public controversy that led to the individual’s involuntary public figure status.

Despite being classified as an involuntary public figure, individuals in Illinois are not stripped of all protection against defamation. They still possess the right to seek legal recourse if defamatory statements are made about them. However, the burden of proof or the elements needed to be proved (i.e. wilful or intentional disregard of the truth) may be higher compared to that of a private individual due to the limited-purpose public figure status they’ve acquired.

It’s essential to understand that defamation law can be intricate, and each case is evaluated on its unique circumstances. If you believe you’ve been the subject of defamatory statements in Illinois, seeking legal counsel to assess your situation is crucial. Understanding the nuances of involuntary public figure status and how it pertains to defamation law can significantly impact the outcome of a case.

In conclusion, Illinois recognizes the concept of involuntary public figures and provides certain protections in defamation cases. The courts carefully analyze the circumstances surrounding an individual’s involvement in a public controversy to determine their status. If you find yourself in such a situation, consulting a legal professional who specializes in defamation law is advisable to navigate these complexities effectively.

You can read an interesting law review article on the topic here.

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In the digital age, where information spreads rapidly across various platforms, businesses are susceptible to reputational harm through false statements or misleading information. Business libel, a form of defamation, can significantly impact a company’s reputation, credibility, and ultimately, its bottom line. Understanding what constitutes business libel and how to protect your business is crucial in safeguarding its reputation.

What is Business Libel?

Business libel refers to false and damaging statements or representations made about a business, its products, services, or practices. This defamation can occur through various mediums such as online reviews, social media posts, articles, or spoken statements. These false statements can negatively impact the company’s brand image, customer trust, and even its relationships with stakeholders.

Elements of Business Libel:

For a statement to be considered libelous against a business, it typically must fulfill the following criteria:

  1. False Statement: The statement in question must be untrue or misleading.
  2. Publication: The false statement must be communicated to a third party, whether through written, spoken, or digital means.
  3. Harm: The false statement must have caused or have the potential to cause harm to the business’s reputation or financial standing.
  4. Negligence or Intent: In some cases, proving that the false statement was made either negligently or with malicious intent can strengthen a business’s libel claim.

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The duty of oversight, often referred to within the context of corporate governance, is a critical aspect of the responsibilities of a corporation’s board of directors. This duty is essentially the requirement that board members are attentive to and oversee the business and affairs of the corporation, including its compliance with the law and its risk management processes. The duty of oversight is a component of the fiduciary duties that directors owe to the corporation and its shareholders.

The case In re McDonald’s Corp. S’holder Deriv. Litig., 2023 WL 387292, C.A. No. 2021-0324-JTL, at *1, *9 (Del. Ch. Jan. 26, 2023) is centered around allegations that the McDonald’s directors overlooked signs of a corporate culture permitting sexual harassment and misconduct from 2015 to 2020. The plaintiffs, who are shareholders, contend that this resulted in harm to the company due to subsequent employee lawsuits, loss of employee trust, and a damaged reputation. Nine directors who served during this period were named as defendants.

David Fairhurst, who served as Executive Vice President and Global Chief People Officer of McDonald’s from 2015 until his termination in 2019, was among the defendants. The plaintiffs argued that Fairhurst, as a fiduciary, was aware of potential issues with sexual harassment and misconduct in the company. They claimed that under his leadership, a culture of sexual misconduct and harassment was allowed to develop, leading to coordinated Equal Employment Opportunity Commission (EEOC) complaints, a 30-city walkout, and a second round of coordinated EEOC complaints, followed by a second one-day strike in 10 cities.

To fully grasp how this case has impacted Delaware Law concerning the duty of oversight, it is essential to understand the concept of a Caremark claim. This type of “failure of oversight” theory is observed to be one of the most challenging theories in corporation law upon which a plaintiff might hope to win a judgment. Under Delaware law, plaintiffs must plead with particularity that there were so-called ‘red flags’ that put the directors on notice of problems with their systems, but which were consciously disregarded. Continue reading ›

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