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Court Watch
In two recent cases, California state courts considered issues that have been the subject of federal court opinions interpreting California law. In both cases, there was no clear guidance from California courts on the issues prior to the federal decisions. Under appropriate circumstances, federal courts will apply state law to a dispute. In order to determine what the applicable state law may be, federal courts look first to state court cases. In the absence of definitive state court cases on the issue, a federal court will make its own interpretation of what it considers the applicable state law to be.
Federal courts had engrafted a “partial restraint” exception to California Business & Professions Code '16600's prohibition against covenants not to compete. In Edwards v. Arthur Andersen, LLP, 44 Cal.4th 937, 81 Cal.Rptr.3d 282 (Aug. 7, 2008) the California Supreme Court made clear that there is no such exception under Section 16600. The court considered the validity of a covenant against competition that restrained a former employee of the defendant from working for or soliciting certain clients of the defendant for a limited period following the termination of his employment. California Business and Professions Code '16600 prohibits contracts restraining anyone from engaging in a lawful profession, trade, or business except in limited circumstances prescribed by statute, such as upon the sale of a business, corporation, or limited liability company, or the dissolution of a partnership. However, federal cases interpreting California law had decided that there was also a “narrow restraint” exception to Section 16600 allowing a limited restraint on competition as long as it did not completely prohibit someone from practicing their profession, trade, or business. See Comedy Club, Inc. et. al v. Improv West Associates, et. al, 502 F.3d 1100 (9th Cir., 2007) amended 514 F.3d 833, (9th Cir., Jan. 23, 2008), discussed in Franchising Business & Law Alert, Oct. 2007, pages 5-6.
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
Judge Rules Shaquille O'Neal Will Face Securities Lawsuit for Promotion, Sale of NFTs
A federal district court in Miami, FL, has ruled that former National Basketball Association star Shaquille O'Neal will have to face a lawsuit over his promotion of unregistered securities in the form of cryptocurrency tokens and that he was a "seller" of these unregistered securities.
Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It
Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?
Blockchain Domains: New Developments for Brand Owners
Blockchain domain names offer decentralized alternatives to traditional DNS-based domain names, promising enhanced security, privacy and censorship resistance. However, these benefits come with significant challenges, particularly for brand owners seeking to protect their trademarks in these new digital spaces.
'Insurable Interest' and the Scope of First-Party Coverage
This article reviews the fundamental underpinnings of the concept of insurable interest, and certain recent cases that have grappled with the scope of insurable interest and have articulated a more meaningful application of the concept to claims under first-party property policies.