The vast majority of breach of contract lawsuits in commercial litigation involve one party to a contract suing the other party to the contract for failing to perform. Recently, an Illinois Appellate Court was forced to address a less common scenario where the plaintiff alleging a breach of contract was not a party to the original contract. The court ultimately ruled that a non-party property owner could not assert breach of contract or negligence claims against parties to various construction contracts between the tenants of the property and the contractors and architects. The Court based its conclusion on the determination that the property owner was not an intended beneficiary of the contracts at issue.

Navigant Development, LLC owned a restaurant property on Wells Street in downtown Chicago. After two separate tenants completed two separate renovations at the property, defects in the trusses supporting the property’s ceiling were discovered. Further investigation revealed extensive damage to several of the trusses forcing Navigant to shut the building down and make repairs costing nearly a million dollars to fix the structure. Navigant’s insurer paid Navigant for the cost of these repairs and for the income lost during the time the restaurant was closed. As the owner’s subrogee, the insurer then sued various contractors and architects involved in the renovation projects, alleging multiple counts of breach of contract and negligence. In its complaint, the insurer alleged that Navigant was an intended third-party beneficiary because the defendants knew the work was to be performed at a property owned by Navigant.

The defendants sought dismissal of the claims arguing that Navigant was not an intended third-party beneficiary of the contracts at issue. The defendants also argued that the negligence claims were precluded by the economic loss doctrine. The trial court ultimately granted the defendants’ motions with prejudice finding that Navigant could not be an intended third-party beneficiary to the contracts between defendants and Navigant’s tenants. The trial court also found that the negligence claims were barred by the economic loss doctrine and that none of the exceptions to the doctrine applied to the case. After the court denied the insurer’s motion to reconsider the dismissal, the insurer appealed. Continue reading ›

The restaurant industry has long been famous for chefs who yell, insult, and throw things at their staff. Various reality TV shows, such as Hell’s Kitchen, have even glorified celebrity chefs throwing temper tantrums when something comes out of the kitchen with minor imperfections, and even targets of such abuse often say it’s just part of the job: you put up with the abuse, you get better, and you move up the ladder until you’re head chef at your own restaurant … if you’re a man.

Recent movements, including #MeToo and Black Lives Matter, have called for society to stop enabling the toxic behavior of white men in power, including chefs. Change doesn’t happen overnight, but the call has been heard and the tide has shown signs of turning, however slowly.

One of the most recent chefs to come under fire for creating a toxic work environment, as well as for allegedly violating various labor laws is Blaine Wetzel, head chef and co-owner of the Willows Inn. The inn is located on Lummi Island near the San Juan archipelago in Washington State and is only accessible by ferry. People come from all over the country to stay at the inn and eat at the restaurant, all while enjoying the rustic scenery of the island, but the employees allege the true story of the inn is much uglier.

Many former employees of the Willow Inn allege Wetzel used sexist, racist, and homophobic slurs with his staff. Wetzel also allegedly used a slur to suggest some of his staff members were mentally challenged when he didn’t consider their work to be up to par.

According to several employees, the abuse wasn’t always verbal, especially when it came to the girls and women who worked at the Willows Inn. Wetzel and other male employees allegedly plied them with drugs and alcohol (including underage employees), often to the point of unconsciousness. The toxic behavior started at the top with Wetzel who at one point allegedly offered a girl a ride home after work, then drove to his house and refused to take her home until after she’d taken shots with him. He then allegedly drove her home while drunk. Continue reading ›

As we previously covered here, an Illinois appellate court revived a lawsuit filed by Chicago Bears legend Richard Dent which seeks to learn the identity and addresses of unidentified individuals who published allegedly defamatory statements about Dent which allegedly cost him several lucrative marketing contracts. Following the ruling in Dent’s favor, the respondents in the case sought to challenge the First District’s ruling and requested a review of the case by the Illinois Supreme Court. Recently, the Illinois Supreme Court granted the petition for leave to appeal and will hear arguments in the case later this year.

For background, the case dates back to 2018 when energy supplier Constellation NewEnergy terminated various energy supply and marketing contracts with Dent and his company RLD Resources, LLC. Dent met with the energy company’s attorneys during which the attorneys informed Dent that the company had received complaints about him from multiple individuals accusing him of inappropriate comments and conduct at several Constellation-sponsored events. The attorneys refused to identify the complaining individuals. Shortly after the meeting, Constellation terminated its contracts with Dent. Continue reading ›

On April 5, 2021, the United States Supreme Court issued its much-anticipated decision in the long-running case of Google v. Oracle, a case that we have been following for nearly five years. In its long awaited decision, the Court held that Google’s copying of the “declaring code” from the application program interface (API) of Oracle’s Java SE platform when creating Google’s Android operating system constituted fair use under copyright law. By deciding the case on these grounds, the Court managed to sidestep the issue of whether the software code at issue was copyrightable in the first place. Instead, the Court simply assumed that it was, virtually guaranteeing that it will be forced to address the issue in a future case.

Background

The saga that culminated in the Court’s decision dates all the way back to 2005 when Google acquired Android and began creating its now-famous Android software platform for mobile devices. Google’s goal was to create an open platform that would allow software developers to build mobile applications to run on it. The Java programming language, originally invented by Sun Microsystems which was later acquired by Oracle, was an obvious candidate for use in the Android platform as it was a popular programming language among software developers.

Shortly after Google’s acquisition of Android, Google began talks with Sun to explore the potential for licensing the entire Java platform. However, negotiations broke down after it became apparent that Sun’s requirement of interoperability was not compatible with Google’s vision for the Android platform. This left Google to build the Android platform on its own.

Creating the Android platform required roughly 100 Google engineers working for more than three years and required writing millions of lines of new code. Google did not write the entire platform from scratch, however. Instead, it copied roughly 11,500 lines of code from the Java SE program, consisting of 37 Java API packages. APIs are used by software programmers to simplify the creation of complex computer programs by allowing two programs to communicate with each other. Java’s API provides access to a collection of prewritten software programs that carry out a large number of specific tasks.

When Oracle Corporation acquired Sun in 2010, Google’s Android platform had been completed for several years and was already a notable success. Oracle promptly filed suit against Google alleging infringements of Oracle’s patents and copyrights. The first trial ended in a victory for Google when the district court ruled that the API packages were not copyrightable as a matter of law. That decision was overturned on appeal and remanded further proceedings on Google’s copyright infringement defense of fair use. Following a second trial, a jury found that Google’s copying constituted fair use, but this verdict was overturned on appeal when the Federal Circuit found that Google’s use of the declaring code was not a fair use as a matter of law. The Supreme Court then agreed to consider both the copyrightability and fair use questions. Continue reading ›

Midwest grocery giant, Jewel-Osco, is seeking dismissal of a potentially massive putative class-action lawsuit filed against it alleging violations of the Illinois Biometric Information Privacy Act (BIPA). The grocery chain is accused of running afoul of the Illinois BIPA in connection with the technology used by the company to scan fingerprints of certain employees. The company has shot back against the complaint arguing that the suit should be thrown out because it is “conclusory and speculative” and is based entirely on “bald information and belief,” without hard facts.

In 2018, a former Jewel-Osco pharmacist, Gregg Bruhn, filed a putative class action lawsuit against New Albertsons Inc., the parent company of Jewel-Osco, alleging various violations of the Illinois BIPA. Albertsons operates nearly 200 stores located throughout Illinois, Indiana and Iowa, but mostly in the Chicago area. The plaintiff was employed by Jewel-Osco from 1989 to 2018.

In his complaint, Bruhn alleges that he and other employees had to scan their fingerprints in order to gain access to the pharmacy’s computer system for more than a decade beginning in 2006 until at least 2018. Bruhn further alleges that his former employer violated the Illinois BIPA in connection with these fingerprint scans by passing his prints to out-of-state third parties and by failing to give him and the other employees notice concerning how their prints were to be used, stored, shared and ultimately destroyed. He also alleged that Jewel-Osco failed to secure the consent of the employees before acquiring their prints. Under the Illinois BIPA, an employer can be found liable and made to pay damages for each time an employee scanned their fingerprints when verifying their identity. He is seeking to represent both himself and a class of similarly situated employees and has requested as much as $5,000 in statutory damages per violation, per employee. Continue reading ›

On March 18, the Illinois Supreme Court issued a much awaited opinion finding that private investigator Paul Ciolino’s defamation lawsuit against Chicago attorney Terry Ekl among others was not filed too late. In their briefs before the Court, the parties framed the question in terms of whether or not the discovery rule delayed the beginning of the one-year statute of limitations. The Court held that Ciolino’s action was timely but based its decision not on the arguments proffered by the parties either side or on the reasoning of the appellate court.

The case centers on a book titled Justice Perverted: How the Innocence Project of Northwestern University’s Medill School of Journalism Sent an Innocent Man to Prison and a later documentary titled “Murder in the Park.” The subject of both the book and the documentary was the effort to convict Alstory Simon of a 1983 double homicide on Chicago’s southeast side, one of the most famous murder cases in Illinois’ recent history. Ekl, an attorney who represented Simon in his post-conviction proceedings, is among those whose comments are featured in the documentary.

The book and documentary posit the theory that Ciolino and others framed Simon in order to secure the exoneration of Anthony Porter, who was originally targeted for the murders, and to ultimately bring about an end to the death penalty in Illinois. They claimed that Ciolino and a Northwestern journalism professor coerced Simon into confessing to the crimes for which Porter had been earlier convicted. Simon’s conviction was later overturned and he was ultimately cleared of the murders in 2013, after Ciolino was accused of impropriety in obtaining the confession. Continue reading ›

For years people used the term “in a Swiss bank account somewhere” to refer to money that had been hidden overseas where the IRS couldn’t reach it. Taking advantage of offshore bank accounts has long been (and still is) a way for rich people to avoid paying taxes on large portions of their wealth, and Swiss banks provided one of the most popular safe havens from American taxes. In theory, that all should have changed in 2014, but according to a whistleblower who used to work for Credit Suisse, a major Swiss bank, the reality is that many Americans are continuing to hide millions of dollars from the IRS with help from Credit Suisse.

Congress and the IRS spent years in the early 2010s investigating Credit Suisse and its involvement in helping American citizens hide their wealth from the IRS. The result was that Credit Suisse ended up pleading guilty and reaching a settlement agreement with federal prosecutors in May of 2014, in which they were fined $2.6 billion. That sounds like a lot, but given how much money they were allegedly helping Americans hide from the IRS, they got off lightly, and that was only because they told the Department of Justice (DOJ) and the Senate they wouldn’t do it anymore, and that they would close all the accounts whose holders were in violation of American tax law.

But now the whistleblower is stepping forward claiming Credit Suisse violated its plea deal and has continued to shelter American funds from the IRS. Continue reading ›

After a spectator at a Chicago Cubs game, who was hit in the face by a baseball, sued, the team and MLB moved to compel arbitration. The Illinois trial court rejected the motion, finding that the arbitration provision was procedurally unconscionable and therefore unenforceable. The Illinois appellate court agreed, pointing to the fact that the fine print on the back of the ticket failed to include all of the arbitration terms and conditions, and that expecting a ticketholder to access a separate website to view the full terms and conditions while navigating the commotion of a baseball game was so onerous that it could not be said that the plaintiff had fairly agreed to the conditions.

Laiah Zuniga was hit in the face by a foul ball while attending a Chicago Cubs baseball game at Wrigley Field. Zuniga obtained entry to the ballpark by presenting a paper ticket created by the Cubs’ ticket office. Zuniga had been given the ticket earlier that day by her father, who won it in a raffle at his workplace. The front of the ticket contained artwork depicting one of the Cubs players; information about the opponent, the date and time of the game, the seat location, the ticket price, a barcode, and small print that stated that the ticket was subject to terms/conditions on the reverse side.

On the back of the ticket was an advertisement as well as six paragraphs of fine print. The fine print made reference to terms and conditions available either on the Cubs’ website or available at the Cubs administrative office. The ticket did not specify where the administrative office could be found. The fine print contained a warning that baseballs could be hit into the stands and that spectators should stay alert and disclaimed liability for any injuries resulting from such occurrences. The final paragraph specified that any disputes would be resolved by binding arbitration. Continue reading ›

While the government was quick to hand out Business Interruption Grants to businesses across the country struggling from the effects of the pandemic-induced shutdown, company’s applying for the grant did have to meet certain criteria. The companies needed to be able to prove they had been financially impacted by COVID-19, and that they would use the money from the grants for necessary business expenses, such as payroll. What was less widely discussed was the fact that recipients of grants also needed to abide by all city, state, and federal labor laws applicable to their business, something Tank Noodle allegedly failed to do.

The Vietnamese restaurant was asked to return the grant money it received after federal investigators found they were in violation of several labor laws, including allegedly withholding wages from their employees. Tank Noodle also received two loans from the Payment Protection Program totaling almost $400,000, although it is not yet clear whether they will be made to pay back that money in addition to the grant money they received.

Poor working conditions for very little pay is a systemic and long-standing problem throughout the restaurant industry, and it’s not limited to fast-food restaurants. High-end restaurants are equally likely to ignore labor laws, and white employees are just as often subject to very low pay as their minority coworkers (although white servers do tend to receive larger tips).

In the summer of 2020, amidst the nationwide social unrest and calls for racial justice, several Chicago restaurants were accused of abusing their staff, including allegations of racism. Some of those restaurants were forced to permanently shut down as a result of the accusations, but Tank Noodle managed to keep its kitchen open.

Tank Noodle, a Vietnamese restaurant located in the Uptown neighborhood of Chicago, hired a Vietnamese server in 2018, explaining the server could start right away, but that the only pay they would receive would be in tips. The server took the job because they needed the money, not realizing how low the pay would be or the lack of transparency at the restaurant when it came to tips. Continue reading ›

A former teacher at a high school who was fired later sued the school, alleging he was fired because he was an atheist. After the teacher was dismissed, the school published a press release on its website stating that the teacher had been terminated. The teacher and the school entered into a settlement agreement that included a nondisparagement clause. The teacher later sued the school a second time, arguing that it violated the nondisparagement clause by keeping the press release active on its website. The district court granted summary judgment for the school, and the teacher appealed. The appellate panel affirmed the decision of the district court, finding that the settlement agreement clause was only forward-looking and that the teacher could have negotiated for the removal of the existing press release but failed to do so. The panel rejected the teacher’s argument that each time a person accessed the press release online a new breach occurred.

In August 2013, Middlebury Community Schools hired Kevin Pack to teach high school German. Pack’s employment was terminated less than a year later, in April 2014. Soon after the termination, the school published a press release about Pack on its website criticizing Pack. The press release remains publicly available on the school’s website. In January 2015, Pack sued the school, claiming that it fired him because he was an atheist. Continue reading ›

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