A month ago – right after U.S. District Judge Naomi Reice Buchwald of Manhattan issued a stunning decision that dismissed antitrust and racketeering class action claims against the global banks involved in the process of setting the benchmark London Interbank Offered Rate – I told you that individual investors might be able to rise from the wreckage with common-law fraud and federal securities suits, so long as they could show that they were deceived by the banks’ misrepresentations about Libor’s legitimacy and held enough Libor-pegged securities to justify the expense of litigating claims on their own. On Monday, Charles Schwab filed a new complaint in San Francisco County Superior Court asserting that it meets both of those conditions: Schwab entities supposedly purchased billions of dollars of Libor-based financial instruments based on false assurances that the benchmark was set honestly.
This is a rare sentiment, but thank goodness for Congress. Were it not for reports issued in 2011 by theFinancial Crisis Inquiry Commission (an expert panel created by federal statute) and the Senate Subcommittee on Investigations, we’d have precious little public-record testimony about the role that the credit rating agencies Standard & Poor’s, Moody’s and Fitch played in the near collapse of the economy. With Friday’s settlement between S&P, Moody’s and two groups of investors in collateralized debt obligations known as Cheyne and Rhinebridge, we’ve lost one of our last remaining chances to see the rating agencies answer to private investors.
For the first time ever, a federal district judge has decided what constitutes a reasonable license rate for a portfolio of standard-essential patents. U.S. District Judge James Robart ruled late Thursday that Motorola is entitled to royalties of a half cent per unit for Microsoft’s use of standard-essential video compression patents and 3.5 cents per unit for Motorola’s wireless communication patents. According to Microsoft, those terms would require it to pay Motorola a grand total of about $1.8 million a year in royalties – a far cry indeed from the billions Motorola requested in a royalty demand to Microsoft in 2010. It’s still to be determined at a trial this summer whether Motorola breached its obligation to license its essential technology to Microsoft on reasonable terms. But make no mistake: Robart’s ruling on reasonable royalties is a dreadful outcome for Motorola and its parent, Google.
On Thursday night, professional football teams will hold their annual draft of college players. For the young men who are selected, the draft will be a dream realized, the culmination of years of hard work and hard knocks. But before they sign their million-dollar contracts, they might want to have a look at a photo taken earlier this month. It’s of Mary Ann Easterling, the widow of former Atlanta Falcons safety Ray Easterling, who shot himself last year after a long struggle with dementia. Easterling’s widow broke down earlier this month, at a press conference following a crucial hearing before the federal judge overseeing consolidated litigation against the National Football League by about 4,500 retired players who claim that the NFL deceived them about the risk of traumatic brain injury. According to the players, their NFL dream ended in the tragedy of depression, dementia, and, for 40 of them, death.
On Monday, the directors and officers of Rupert Murdoch’s News Corp agreed to settle a derivative suit accusing them of breaching their duty to shareholders by failing to avert the phone-hacking scandal at the company’s British newspapers. News Corp’s insurers will pay $139 million, in what shareholder lawyers atGrant & Eisenhofer called the largest-ever cash settlement of derivative claims in Delaware Chancery Court. The settlement, which comes as News Corp prepares to split its news and entertainment branches into two publicly traded companies, was produced after several months of mediation that took place while the company’s motion to dismiss was pending before Vice Chancellor John Noble.
If Hugh Caperton’s litigation against Massey Coal were a cat, it would now be entering its sixth or seventh life, thanks to a ruling Thursday by the Supreme Court of Virginia.
I have a feeling that we’re going to be hearing a lot more about a ruling Wednesday by U.S. District Judge R. Brooke Jackson of Denver, who said that victims of the Batman movie massacre in Aurora, Colorado, may proceed with claims that the Cinemark movie theater is responsible for the tragedy under the state’s premises liability law. Moviegoers were owed “a duty to exercise reasonable care to protect them against dangers of which Cinemark knew or should have known,” Jackson ruled. The judge, who is overseeing 10 federal-court cases consolidated for discovery, found that the victims’ suits raised enough questions about whether Cinemark failed to anticipate that a killer could enter the theater unarmed, sneak out to obtain weapons and re-enter undetected – and whether the theater had in place adequate security to deal with a reasonably anticipated threat – to survive Cinemark’s dismissal motion.
When the U.S. Chamber of Commerce rushes out a statement hailing a decision by the U.S. Supreme Court, you can be sure that opinion is a defeat for plaintiffs’ lawyers. So it is with the court’s long-awaited ruling Wednesday in Kiobel v. Royal Dutch Petroleum. All nine justices agreed with Shell’s counsel at Quinn Emanuel Urquhart & Sullivan that claims by a group of Nigerian nationals suing under the Alien Tort Statute for Shell’s alleged abetting of state-sponsored torture and murder in their country should be dismissed, though they split on precisely why. The majority, in an opinion written by Chief Justice John Roberts, held that the presumption against extraterritoriality, most recently articulated by the court in Morrison v. National Australia Bank, applies to the Alien Tort Statute even though the ATS, unlike laws regulating conduct, is strictly a jurisdictional statute. Roberts’ opinion rejected (among other things) arguments that because the ATS was enacted to address piracy on the high seas, it extends to atrocities committed on foreign soil.
The last time I wrote about the Chevron environmental contamination litigation, after Chevron revealed a declaration from an Ecuadorean judge who swore that he acted as the middleman in setting up a $500,000 bribe from plaintiffs’ lawyers to the Ecuadorean judge who entered a $19 billion judgment against Chevron, I said it was profoundly disheartening that alleged misconduct by lawyers for the Ecuadoreans who claim to have been injured by drilling in the Amazon might prevent a final answer to the question of whether they’ve actually been harmed. But Chevron’s latest stunning revelations – a pair of declarations in which scientific consultants for the Ecuadorean plaintiffs disavow their work in the case in Ecuador – cast a deep, dark shadow over the plaintiffs’ claims.
In 2003, lawyers representing a class of five million merchants in antitrust class action litigation against Visa and MasterCard asked U.S. District Judge John Gleeson for $609 million in fees. They told the judge that they’d litigated all the way to jury selection in a case so vigorously defended that they’d had to oppose certiorari at the U.S. Supreme Court, and they’d achieved historic results: a $3 billion settlement fund for class members – at the time, the largest-ever recovery for Sherman Act violations – and injunctive relief that added billions more to the overall value of the deal. Their fee request represented 18 percent of the present-day cash value of the settlement fund and 9.7 times the lodestar value of their billings, but only about 2 percent of what they estimated to be the total value of the deal.