As I made my way through the 15 briefs submitted to the U.S. Supreme Court by amici who believe that Congress was within its rights when it designed the Consumer Financial Protection Bureau to be headed by a lone director who can’t be removed from office without good cause, I was looking for arguments about what the CFPB’s defenders believe the justices should do if they’re wrong. What if the Supreme Court sides with the debt-relief law firm Seila Law – and with the Justice Department – and concludes that the CFPB’s structure violates separation of powers doctrine?
Back in March 2018, Google was trying to persuade the U.S. Supreme Court not to take a look at so-called cy pres settlements in class actions, which deliver cash to charities instead of class members. The class action watchdog Ted Frank of the Center for Class Action Fairness, had petitioned the justices to use an $8.5 million Google privacy class action settlement (869 F.3d 737) - in which all the money was slated to go to nonprofits rather than offering pennies to millions of purported class members – to determine whether cy pres-only settlements comply with the federal rule that requires class action settlements to be fair, reasonable and adequate. One of Google’s primary arguments against Supreme Court review, as I told you at the time, was that the justices need not bother with the issue because cy pres-only settlements were already a dying breed. Google acknowledged that cy pres remained a feature of class settlements, but said that after years of appellate skepticism, lawyers had, in the main, learned to resort to cy pres payouts to nonprofits only after making all feasible payments to class members.
On Friday, the U.S. Supreme Court agreed to hear two cases in which Ford is challenging rulings by state supreme courts that allowed state residents involved in in-state car accidents to proceed with product liability suits against Ford. The company and its amici from the U.S. Chamber of Commerce, the National Association of Manufacturers and other business groups are hoping that the Supreme Court uses the cases to establish that plaintiffs in personal injury suits cannot establish specific personal jurisdiction unless they can show that defendants’ actions within the jurisdiction led directly to the claims in the case.
When shareholders of the tax and accounting software company Intuit Inc gather for the company’s annual meeting on Jan. 23, they will have a chance to vote on a historic proposal to require investors to arbitrate their federal securities claims individually, rather than suing in class actions. Intuit appears to be only the second public company in the U.S. to allow investors to vote on a mandatory shareholder arbitration proposal - Google shareholders voted down a shareholder arbitration proposal in 2012 – and the first to consider such a proposal since the U.S. Supreme Court’s pro-arbitration rulings in 2013’s American Express v. Italian Colors (133 S.Ct. 2304) and 2018’s Epic Systems v. Lewis (138 S.Ct. 1612).
There is a reasonable possibility, according to Vice-Chancellor Travis Laster, that shareholders of the wholesale pharmaceutical distributor AmerisourceBergen Corporation will turn out to have an actionable claim that the company’s directors breached their fiduciary duties by failing to avert what the judge called the “significant corporate trauma” of the opioid crisis. As Laster recounted in a Jan. 13 opinion ordering AmerisourceBergen to give shareholders access to years of formal board materials related to opioid distribution, the company is facing billions of dollars in exposure from private litigation and regulatory investigations stemming from its distribution of opioids. Shareholders have “a credible basis,” Vice-Chancellor Laster said, to use AmerisouceBergen’s internal books and records to explore whether board members and senior executives condoned or consciously ignored violations of reporting systems that might have alerted them about suspicious drug orders.
In late November, the online fantasy sports sites FanDuel and DraftKings won a sweeping victory in multidistrict litigation alleging that they duped consumers about the odds of winning a contest at either of the sites. U.S. District Judge George O’Toole of Boston ruled (2019 WL 6337762) that consumers who agreed to the companies’ terms of service – which included a mandatory arbitration provision – must arbitrate their claims. Plaintiffs' lawyers leading the MDL had argued that the FanDuel and DraftKings arbitration provisions were unenforceable, but Judge O’Toole agreed with the companies that threshold issues about their consumer contracts must be decided by an arbitrator, not by the court.
In December 2017, U.S. District Judge Cynthia Rufe of Philadelphia seemingly drove a stake through the heart of litigation by two employee healthcare funds suing GlaxoSmithKline over its marketing of the diabetes drug Avandia. The plans, which sued back in 2010, alleged that GSK had falsely touted Avandia as a boon to the cardiovascular health of diabetes patients, which is why health plans were willing to cover the drug’s high cost. But in 2007, the Food and Drug Administration required the company to change Avandia’s label to add a black-box warning that the drug may exacerbate heart conditions in some patients and was available only through a restricted distribution program.
The 7th U.S. Circuit Court of Appeals has cleared the way for two Wisconsin lawyers to head to the U.S. Supreme Court with their First Amendment challenge to the state bar association’s structure, which requires lawyers to join the bar group and pay mandatory dues in order to practice in Wisconsin.
The International Institute for Conflict Prevention and Resolution announced last week that Shira Scheindlin, a former Manhattan federal judge who now specializes in arbitration and mediation at Stroock & Stroock & Lavan, will serve as the administrative arbitrator of CPR’s new mass claims program.
The Justice Department arrested Virginia plaintiffs' lawyer Timothy Litzenburg on Monday, alleging in a criminal complaint unsealed late Tuesday that Litzenburg attempted to extort $200 million from an unnamed chemical manufacturing company that makes a product contained in Monsanto’s Roundup weedkiller. According to the Justice Department, Litzenburg told the company’s outside counsel in several emails, phone calls and meetings in October and November that he would launch a mass torts onslaught against the chemical company unless he and two co-counsel were paid $200 million as “consultants.”