Business Torts

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A recent decision by EDVA District Judge Henry Hudson granting a preliminary injunction to a wealth management firm against four of its former employees who left to open a competing firm is a good example of the speed of the EDVA on requests for preliminary injunctions. Salomon & Ludwin, LLC v. Winters, Civil Action No. 3:24-cv-389 (HEH), 2024 U.S. Dist. LEXIS 13038 (July 23, 2024). Judge Hudson’s ruling also illustrates how employment agreements with confidentiality and nonsolicitation provisions can be used to prevent former employees from using a company’s confidential customer information to solicit the company’s clients.

Parties involved in contract disputes often desire to avoid contractual limitations on recovery, fostering creative attempts to transform breach of contract claims into tort or other noncontractual causes of action. Such efforts face numerous hurdles, and the recent decision by U.S. District Judge Mark Davis in , Civil Action No. 4:23CV153, 2024 U.S. Dist. LEXIS 83430 (E.D. May 7, 2024), illustrates the difficulty in squeezing the square peg of a breach of contract claim into the round hole of tort or bailment.

Litigation challenging government economic regulation has become more common, as courts appear increasingly less deferential to legislative and executive action. Most of this type of litigation focuses on federal regulation, but states have also taken a more active role in business regulation, prompting more frequent challenges to state laws in federal courts.

In a September 22 decision, District Judge David J. Novak denied the bulk of a motion to dismiss a suit alleging that a general contractor had infringed an architectural firm’s copyright on design plans for a brewery and tasting room to be built in Williamsburg. Michael Pellis Architecture PLC v. M.L. Bell Construction LLC, Civil Action No. 3:22CV470 (DJN), 2023 U.S. Dist. LEXIS 169697 (E.D.Va. Sept. 22, 2023)

Plaintiffs who secure a preliminary injunction may now be able to recover attorney’s fees in the Eastern District of Virginia, due to the Fourth Circuit’s departure from its previous position that such plaintiffs are not “prevailing parties” for purposes of recovering attorney’s fees.