Research Proposal on "Business Law - 6 Case Briefs Buckeye"

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The Supreme Court decided that the arbitration clause is not automatically voided by the unenforceability of the underlying contract. Unless the arbitration clause itself is void for other reasons, the parties are held to the terms of that clause. In this case, the dispute would have to be resolved through arbitration.

Rationale:

The main line of reasoning relied upon by the Court was that voiding the arbitration clause would permit any party who wished to escape arbitration to simply challenge the validity of the underlying contract, effectively making arbitration clauses unenforceable.

GRANHOLM vs. HEALD (544 U.S. 460)

Procedural History:

Granholm v. Heald was a decision issued by the U.S. Supreme Court in 2005 based on series of cases from New York and Michigan. In New York, the Second

Federal Circuit Court had decided the issue in favor of the state and in Michigan, the Sixth Federal Circuit Court had decided for the state as well. The Supreme Court reviewed the cases together because they presented the same issue of law.

Facts:

The plaintiffs challenged the laws of New York and Michigan that prohibited out- of-state wine producers from shipping wine directly to state residents. The states involved relied on the portion of the 21st Amendment that reads, "The transportation or importation into any State, Territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited," arguing that the clause allows states to regulate wine importation. The plaintiffs argued that the "Dormant Commerce Clause" doctrine that states may not enact laws that discriminate against out-of-state commerce. In both New York and Michigan, in-state wine distributors could ship directly to consumers whereas out-of-state shippers could not.

Legal Issue:

Does the 21st Amendment allow states to prohibit importation of alcohol or does the Commerce Clause of Article I of the Constitution prohibit that as a violation of the Dormant Commerce Clause doctrine against discrimination against out-of-state commerce?

Decision:

The 21st Amendment allows states to regulate (or prohibit) alcohol consumption but does not permit discriminating laws that treat in-state and out-of-state commerce differently. Rational:

The purpose of the 21st Amendment was merely to repeal the 18th Amendment and restore the status of alcohol to state regulation. Neither the 18th nor the 21st Amendment created any rights to regulate interstate commerce.

BAD FROG BREWERY, INC. Vs. NEW YORK STATE LIQUOR AUTHORITY (134 F. 3d 87)

Procedural History:

Bad Frog Brewery v. New York State Liquor Authority was a decision by the Federal District Court for the Northern District of New York State of a case previously decided by the Second Circuit State Court of Appeals denying Bad Frog an injunction against the NYSLA from taking any action against the sale of its product.

Facts:

The plaintiffs manufactured a beer called "Bad Frog" and used a picture of a frog presenting a rude gesture known as "giving the finger." The NYSLA had refused to license the product on the grounds of this gesture and the beer manufacturer sued to prevent any action taken against it until the issues of free speech could be resolved.

Legal Issues:

1. Is the picture of the frog entitled to 1st Amendment protection as "speech"?

2. Was the plaintiff entitled to injunctive relief pending resolution of the commercial speech issue?

Decision:

The picture of the frog served to propose a commercial transaction in the form of the sale of beer. Therefore, it was entitled to the same protection as other forms of commercial speech. The plaintiff should have been granted injunctive relief against state action to prevent the use of the label and the sale of the product.

Rational:

Commercial speech is any communication of ideas related to advertising a product, and therefore, is afforded 1st Amendment protection.

CRUZ vs. FAGOR AMERICA (146 Cal. App. 4th 488) Procedural History:

The Defendant, Fagor, appealed a 2005 San Diego Superior Court decision granting a default judgment to plaintiff, Cruz. The Fourth Appellate District Court vacated the default judgment against Fagor and Cruz appealed to the California Supreme Court. The California Supreme Court reversed the decision of the lower court and upheld the default judgment of the Superior Court.

Facts: Plaintiff Cruz was injured by a product manufactured by Fagor in 2001. Cruz filed suit against Fagor grounded in product liability and obtained a default judgment when the defendant never appeared to enter a defense to the action. After a default judgment was awarded, Fagor made a motion to vacate the judgment alleging failure of process because notice of the claim was served upon a person other than the person authorized to receive service of process. Legal Issue:

Is service of process valid in serving a summons and complaint on an individual employed by an out-of-state corporate defendant, who is not the individual designated for receipt of service of process?

Decision:

In this case, the facts showed that the person who received service of process was an employee who regularly performed the function of receiving mail addressed to the company president. Therefore, service of process on the individual who received the summons and complaint constituted a valid notice of complaint and the default judgment was reinstated because the defendant could not establish any justification for failing to answer the summons and complaint within the time period specified by law.

Rationale:

The purpose of requiring personal services is to guarantee due process; it is not a mechanism for defendants to avoid answering claims. In this case, the plaintiff proved that the individual receiving service of process was authorized by the defendant to direct mail addressed to the president. COMPUTER TASK GROUP, INC. Vs. BROTBY (364 F.3d 1112)

Procedural History:

The defendant, Brotby, appealed the decision of the Federal District Court for the District of Alaska granting judgment in favor of plaintiff, Brotby. The U.S. Court of Appeals for the Ninth Circuit affirmed the decision in 2004.

Facts:

Brotby had been employed by Computer Task Groups as a consultant in connection with which he had signed a non-compete/non-disclosure agreement prohibiting him from disclosing certain business information and from working for a competitor for a specified period. Subsequently, Brotby violated that agreement by working for a competitor of Computer Task Group. During the discovery phase, Brotby had repeatedly failed to comply with judicial orders and had purposely abused the process to stall and defeat the claim. Eventually, the trial judge entered a judgment against him. Brotby appealed arguing that a final decision could not be based on failure to comply with discovery orders.

Legal Issue:

Can a judge enter judgment for the plaintiff because the defendant failed to comply with pretrial motion orders.

Decision:

Where multiple lesser sanctions fail to achieve compliance with discovery orders, judge may enter judgment against the non-complying party.

Rationale:

Once a litigant demonstrates complete lack of respect for the authority of the Court and the pretrial process in a civil action, the court has little recourse besides entering a default judgment against the non-complying party. The mere fact that the defendant had managed to prolong the case so long demonstrated the need to impose harsher penalties, up to and including rendering a decision in lieu of trial on the merits as a means of deterring such conduct.

NOVAK vs. TUCOWS, INC. [73 Fed. R. Evid. Serv. (Callaghan) 331]

Procedural History and Facts:

Novak lost a legal dispute in Alabama and to escape the seizure of his property to satisfy the judgment,… READ MORE