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Orange County Business Litigation and Legal Malpractice Law Blog

Banana Republic's 40% Off Sale Leads to Unfair Competition Claim; Misleading Advertisement Could Not Be Cured at Point of Sale

In Veera v. Banana Republic, LLC, a California Court of Appeal recently reversed a judgment in favor of Banana Republic in a false advertising class action based on in-store ads promoting a 40% off sale. The plaintiffs alleged they were lured into Banana Republic stores after seeing ads in store windows stating "40% off." Plaintiffs learned at the cash register that the discount did not apply to the items they wanted to purchase. Out of frustration and embarrassment, plaintiffs claim they bought some but not all of the items they selected at full price. They later sued for violations of California's Unfair Competition Law ("UCL") at Business and Professions Code sections 17200 and 17500, claiming the "40% Off" signs were misleading because they did not disclose that the discount only applied to certain items.

Contract disputes and your Orange County business

In our blog, we often discuss the nature of contract disputes. We choose these kinds of topics because we understand the impact a contract dispute can have on businesses operating in the Orange County region. Most people never expect a dispute to arise, but the reality of the situation is that they often do arise and can be quite damaging.

Contracts are important in developing business relationships. They outline the obligations of all parties involved in an agreement. If a person does not fulfill his or her obligation, a breach of contract may arise. Contract disputes can take several forms including employment agreement disputes, non-compete agreement disputes and many others. One thing all of these have in common is that at least one party has allegedly failed to deliver on his or her end of the contract.

Why business fraud is such a complex legal matter

When you hear of cases that involve fraud and business, you would like to think that it is something that is done to you (or to the victimized party) from the outside, mainly because that seems the most logical way for fraud to occur. But, in fact, many business fraud cases actually happen from inside -- a rogue employee or someone with nefarious intent undermines your company and deliberately neglects his or her fiduciary duty to steal money or assets from the company.

These are very serious issues that need to be addressed as soon and as effectively as possible. Fraud could involve shareholders or business partners who do egregious things that harm the reputation of your company and undermine the financial viability of it too. Fraud could involve outside forces and third parties that become entangled in the case. And fraud can have a lot of different legal factors involved in any particular case.

Acquisition leads to intellectual property lawsuit

Back in 2012, the company CoStar Group Inc., which specializes in commercial real estate data, acquired LoopNet Inc in an $860 million deal. LoopNet held a partial stake in another company, Xceligent, which was a competitor of CoStar's. So in order for the acquisition to go through, the Federal Trade Commission imposed a number of requirement on CoStar to ensure the deal was fair. Two of these conditions involved having LoopNet sell its stake in Xceligent and forcing CoStar to give Xceligent a list of broker that were used by LoopNet in the years prior to the deal.

In the wake of this deal and these conditions, Xceligent posted some 9,000 images that, CoStar says, breaches intellectual property of CoStar as they were republished without permission from LoopNet.

What forms of bankruptcy are available to businesses?

When a business is deciding whether to go bankrupt or not, there are usually three chapters of bankruptcy that they would be considering. The first is Chapter 7 bankruptcy, a fairly standard form of bankruptcy whether you are a business or an individual. In Chapter 7, liquidation is the process by which the bankrupt entity fulfills its debts, while also clearing out other debts through discharge. For a business, Chapter 7 usually means the end. It is also a good option for companies that don't have significant assets.

Chapter 13 bankruptcy, meanwhile, is usually meant for individuals and not businesses. But a business can be an extension of an individual via a sole proprietorship. In this case, Chapter 13 can be used by a business. This form of bankruptcy will see the business restructure its debts and come up with a payment plan to satisfy creditors.

Iceland vs. Iceland: trademark dispute embroils country, store

Iceland is a tiny country off the eastern coast of Greenland and to the north and west of Europe. Iceland is also a supermarket that primarily is known for its frozen foods in the United Kingdom. Why are we talking about these two entities?

Well, Iceland Foods has a trademark in the European Union for the word "Iceland." This was granted to them in 2014. Iceland the country is not a member of the European Union. As a result, Iceland Foods has a stranglehold on the name Iceland in Europe. They can dictate quite a bit about the frozen food market and their brand as a result.

When a breach of contract arises, get legal help

When a contract is breached or two parties have a dispute over a business-related matter, there can often be difficult legal issues that have to be figured out. Contract disputes are relatively common, but that doesn't mean that the solution to these disputes is easy to reach. We talked about partnership disputes in our last post, and this is just one form of a potential contract dispute. Shareholder disputes can arise, as can disagreement over purchases and sales, leases and contracts that involve employees.

Contract disputes are simply a part of the business world. You may not want to be involved in them as an owner of a business, but you should be prepared for one just in case.

Disputes between business partners can lead to legal claims

A partnership implies that two or more people are agreeing to work together to strive towards a common goal. A partnership is also a type of business that, unsurprisingly, sees two or more people own and run a company.

Given the fragile nature of business relationships, it is common for partners to, over time, have disagreements with each other. They may disagree over business philosophy; they may disagree with the way the company is approaching employment or other business relationships; and, in general, they may disagree over how to address tangible, important issues. These disagreements can lead to partnership disputes, and often these disputes require legal help to untangle and settle.

Pet food companies settle contentious lawsuit

Pet food may not be the industry that you would immediately consider when you hear the phrase "business litigation," but for a few years, two rival pet food companies have been locked in a false advertising lawsuit. Nestle Purina, which makes numerous pet food brands, filed a lawsuit against Blue Buffalo, which is a pet food company that says they use natural ingredients in their products. It is central to their ad campaign and packaging.

However, Nestle Purina alleged that Blue Buffalo's pet food actually contained poultry byproducts and thus filed a lawsuit since such ingredients would contradict their packaging. Blue Buffalo denied the claim, but later disclosed that their pet food did have poultry byproducts in them, but only because a supplier lied to them about the contents of their food.

Movement against non-competes gains steam

As you may have heard, there is a movement by the federal government to roll back non-compete agreements. The White house wants a crackdown on these contracts so that employees have more freedom in their movement if they want to change jobs. This is certainly understandable -- but it also puts a lot of pressure on employers too. Companies want their secrets, work processes, services and products protected, and these non-competes do help them in this regard.

Non-competes have always been a bit contentious and controversial, and for good reason. They restrict the options of an employee if they want to move on to a different company. They can restrict them in terms of time; they can restrict them in terms of geography; they can even restrict them in terms of industry.

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