Business Law Journal

In Camden Systems, LLC v. 409 North Camden, LLC, a California Court of Appeal recently affirmed that a limited liability company (“LLC”) “shall have all the powers of a natural person in carrying out its business activities”, which included ratifying its prior acts. Moreover, the California Court of Appeal affirmed that a member does not have standing to challenge actions taken before it became a member of the LLC, of record or beneficially; and that LLC operating agreements may (with some limitations) deviate from and supersede statutory default provisions.

With the growing popularity and prevalence of generative artificial intelligence, courts are increasingly being called upon to decide novel legal issues based on never-before-seen phenomena that are challenging the traditional paradigm applied to human-generated content.  And copyright law is no exception.

Following the Legislature’s 2024 amendments to Section 16600, a new spotlight has been shown down on the so-called Trade Secret Exception and the rift that has emerged over the past few years between California courts about its continued application.  Ultimately, the California Supreme Court will likely be called upon in the near future to address whether—and to what extent—an employer may include restrictive covenants in an employment agreement as necessary to protect the employer’s trade secrets.  Until it does, litigants may credibly argue that the legislature’s recent amendments to Section 16600 abrogated the exception, diminished the exception, or had no effect on it at all.  

Click here to read more

In VFLA Eventco, LLC v. William Morris Endeavor Entertainment, LLC, the California Court of Appeal recently affirmed the importance of drafting a contract with a clear understanding of every word and clause, and the effect each has on the contract as a whole.

On September 30, 2023, California Governor Gavin Newsom signed into law Senate Bill (SB) No. 235, now codified as California Code of Civil Procedure section 2016.090, introducing a significant shift towards encouraging proactive initial disclosures in state court civil litigation. This legislative change amends California’s Civil Discovery Act to include proactive initial disclosure rules that align with those used in Federal Court. Effective for almost all civil cases filed after January 1, 2024, until January 1, 2027, this amendment heralds a new era of discovery rules in California that aim to foster judicial efficiency, transparency, and fairness in civil litigation.

The recent decision in Epochal Enterprises, Inc. v. LF Encinitas Properties, LLC, 2024 WL 358231 (1/31/24), asks the question: Will common exculpatory lease terms protect the landlord from an adverse jury verdict of gross negligence?  Ultimately, the answer is “No.”

California requires that businesses file a Statement of Information to maintain compliance and the legal standing of your business - corporations are required to file a Statement of Information annually in the month of registration, while LLCs are required to submit the Statement of Information biennially (and within 90 days of registration). One of the latest scams targeting business, both foreign and domestic, involves fraudulent or misleading requests to submit a California Statement of Information on the business’ behalf. These deceptive practices can pose severe risks to your business by exploiting your legal obligations and imposing exorbitant fees.

Arbitration is a creature born of contract, and is favored as an expeditious and economical alternative to a civil lawsuit — in part due to the limited discovery available to parties in arbitration. Increasingly, however, arbitrations have increased in complexity, with discovery growing to proportions more typically seen in civil lawsuits (and likewise growing in cost). However, a California Court of Appeal has now explicitly enforced one of the limitations on discovery in arbitration, foreclosing discovery efforts from spilling over to nonparties to an arbitration unless the parties have otherwise agreed.

International enforcement of U.S. trademark rights just became much more difficult.  On Thursday, the Supreme Court issued a unanimous decision with concurrences from Justices Jackson and Sotomayor in Abitron Austria GmbH v. Hetronic International, Inc., No. 21-1043, 2023 WL 4239255 (U.S. June 29, 2023) (“Abitron”).  The Court settled a decades-long circuit split on extraterritorial application of the Lanham Act by applying a new framework that focuses on where the mark is being used in commerce rather than where the effect of that use is felt.

In an eleventh-hour ruling made shortly before enforcement of the California Privacy Rights Act’s regulations was set to begin on July 1, a California judge has delayed enforcement until March 29, 2024.  The delay reduces the pressure on businesses who had been facing potential enforcement of unfinalized regulations.  However, the ruling is not a complete reprieve as the delay does not affect enforcement of the statute itself which can still be enforced as of July 1 by both the California Privacy Protection Agency (“CPPA”) and the California Department of Justice.