Fraudulent Inducement

News & Analysis as of

Appellate Court Holds HUD Regulations Don’t Provide Private Right of Action Unless Incorporated into Written Agreement

A federal appeals court recently decided that a plaintiff could not assert a claim against the issuer of a reverse mortgage for breach of regulations issued by the U.S. Department of Housing and Urban Development (HUD), when...more

A Ponzi Scheme Where One Investor Directly Paid Another

In the typical Ponzi scheme unscrupulous individuals induce investors to part with their cash based on a series of misrepresentations about the proposed investment. The investor money is then in part misappropriated and in...more

Career Securities Law Violator Pleads Guilty To Manipulation

The Manhattan U.S. Attorney’s Office secured a guilty plea in a stock manipulation case from a career securities law violator. The guilty plea is the fourth conviction for defendant John Galanis. U.S. v. Galanis, No....more

First Circuit Affirms Dismissal For CVS Caremark Under Public Disclosure Bar

The FCA’s public disclosure bar precludes liability when a relator’s allegations have been publicly disclosed in a list of statutorily enumerated sources. Last week, the First Circuit added to the growing jurisprudence both...more

Do Kanye’s Words Speak Louder than Tidal’s TOS?

A Chicago law firm has challenged Jay-Z and Kanye West, filing a class action complaint for violations of the California Business & Professions Code, fraudulent inducement and unjust enrichment in the Northern District of...more

Florida Court Says it’s Not Fraud When Misrepresentations are Made During Settlement Negotiations

When settling a case, litigators are naturally focused on avoiding “Round 2” of the litigation for their clients. Toward this goal, lawyers avoid drafting settlement agreements that include any sort of representations or...more

The Employment Exemption and Its Temporal Scope

Generally, N.C. Gen. Stat. § 75-1.1 does not apply to employer-employee disputes. Most courts have held that these disputes fail the “in or affecting commerce” test under the statute. In a recent decision, however, the...more

Superior Court Explains Reliance Disclaimer Clauses

A party to a contract may try to limit any future claims of fraudulent inducement by providing an anti-reliance clause in its contracts. As this decision explains, such clauses need to be carefully drafted and particularly...more

Federal Court Allows Terminated Employee to Proceed with Age Discrimination Claim Despite Her Execution of a Release of Claims

A recent Colorado federal court decision serves as a good reminder to employers on how not to obtain a release of claims from a terminated employee. For starters, don’t tell the employee her job is being eliminated and then...more

FRANCHISOR 101: Catch-all Disclaimers No Substitute for Untrained Salespeople

How strong are "non-reliance disclaimers" or "integration" or "merger" provisions in franchise agreements at protecting a franchisor when it really matters? Only so much, a New York court recently decided....more

Business Litigation Reporter October 2015

Goodwin Procter’s Business Litigation Reporter provides timely summaries of key cases and other developments within dedicated Business Litigation sessions and related courts throughout the country – courts within which...more

Clear Contractual Terms Prevail Over Equitable Principles in Bankruptcy Cases (Again)

Bankruptcy courts in the U.S. are widely viewed as favorable fora for debtors, trustees and creditors’ committees to pursue creative and difficult causes of actions against deep-pockets lenders and others in an attempt to...more

FRANCHISEE 101: Franchisee Keeps Case in Home Court Despite Forum Selection Clause

Rob & Bud's Pizza ("R&B") is a Papa Murphy's franchisee and owns and operates multiple Papa Murphy's Take 'n' Bake Pizza restaurants in Arkansas, Missouri and Kansas. In April 2014, R&B and other Papa Murphy's franchisees...more

Delaware Superior Court Explains Fraudulent Inducement Claims

ITW Global Investments Inc. v. American International Partners Capital Fund IV, L.P., C.A. No. 14C-10-236 JRJ (June 24, 2015) This decision explains several important aspects of Delaware law. First, a claim for fraud...more

Kentucky Supreme Court Reinforces Importance of Properly Incorporated Arbitration Provisions to Larger Agreements

The Kentucky Supreme Court recently held that an arbitration provision signed by a class of students upon their application and acceptance to a for-profit college was unenforceable because the enrollment agreement did not...more

Is That Covered - Misrepresentations In Sale of Life Insurance

A Pennsylvania appellate court on Tuesday affirmed a $300,000 judgment against Riversource Life Insurance Co. in a suit accusing the insurer and its agent of making fraudulent misrepresentations in the sale of a couple's...more

Fortis Advisors LLC v. Dialog Semiconductor PLC, C.A. No. 9522-CB (Del. Ch. Jan. 30, 2015) (Bouchard, C.)

In this memorandum opinion, the Court of Chancery granted a motion to dismiss certain claims relating to a dispute over earn-out payments owed to the former equity holders of iWatt, Inc. (“iWatt”) following the sale of iWatt...more

Texas Supreme Court Relaxes Its Grip on the Discovery Rule

The Texas Supreme Court – that elephants’ graveyard of claims and causes of action – has sided with a lessor-plaintiff who relied on the discovery rule to defeat a limitations defense. For the many with low expectations when...more

Southern District of Ohio Strikes Policyholders Class From Suit Against State Automobile Mutual Insurance Company

In Schumacher v. State Auto. Mut. Ins. Co., No. 13-cv-00232, 2015 U.S. Dist. LEXIS 11857 (S.D. Ohio Feb. 2, 2015), the Southern District of Ohio struck class allegations from a putative class action alleging breach of the...more

Ambac Sues Countrywide For Alleged Fraud in Connection with $1.7 Billion in RMBS

On December 27, Ambac Assurance Corporation filed a complaint against several Countrywide entities and Bank of America Corporation in New York state court, seeking to recover at least $600 million in damages in connection...more

In Battle Of Apparel Companies, Court Compels Arbitration

In early September, a New York district court granted defendants United States Polo Association, Inc. (“USPA”) and Arvind Ltd.’s (“Arvind”) motion to compel arbitration. It further dismissed Ralph Lauren Corporation and its...more

Great Hill Equity Partners IV, LP v. SIG Growth Equity Fund I, LLLP, C.A. No. 7906 (Del. Ch. Nov. 26, 2014) (Glasscock, V.C.)

In this memorandum opinion, the Court of Chancery largely denied but granted in part defendants’ motion to dismiss claims relating to a 2011 merger in which plaintiffs Great Hill Equity Partners IV, LP and related entities...more

MBIA Allowed to Pursue Fraudulent Inducement Claim Against J.P. Morgan

On September 19, Justice Alan D. Scheinkman of the New York Supreme Court for Westchester County granted in part MBIA’s motion for leave to amend its complaint against J.P. Morgan in an action related to a Bear Stearns RMBS...more

Sixth Circuit says ERISA does not preempt state law claim for fraudulent inducement.

The Sixth Circuit recently held that ERISA did not preempt a plan participant’s claim for state law fraudulent inducement. McCarthy v. Ameritech Pub., Inc., No. 12-4510, 2014 WL 3930572 (6th Cir. 2014). Defendant-API’s...more

IP Solicitation Scams on the Rise

In recent months, an increasing number of companies have reported receiving official-looking intellectual property notices and solicitations. These fraudulent solicitations may take the form of invoices, renewal notices, or...more

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