(Reuters) – The U.S. government made a fateful decision in January 2013 when it opted not to seek U.S. Supreme Court review of the 2nd U.S. Circuit Court of Appeals’ 2012 ruling in U.S. v. Caronia, which overturned the conviction of a pharmaceutical sales representative engaged in off-label marketing of a narcolepsy drug. The 2nd Circuit, in a split decision, held that as long as drug companies stick to truthful and accurate statements, off-label marketing is protected commercial speech under the First Amendment and Supreme Court precedent in Sorrell v. IMS Health. Commentary at the time called Caronia a landmark holding that might limit the Food and Drug Administration’s ability to police drug misbranding, but – perhaps fearing a loss at the Supreme Court – the Justice Department and the FDA portrayed the 2nd Circuit ruling as a narrow decision that wouldn’t affect enforcement.
(Reuters) – The mortgage lender PHH Corporation was understandably jolted in June, when the Consumer Financial Protection Board issued its final decision in an enforcement action accusing PHH of jacking up consumers’ closing costs by demanding that mortgage insurers buy reinsurance from PHH’s in-house reinsurance company. CFPB director Richard Cordray ruled that those re-insurance deals are effectively kickbacks to PHH and ordered the company to pay $109 million in disgorgement – $103 million more than the $6 million disgorgement recommended by Administrative Law Judge Cameron Elliot.
Gary Friedman of the Friedman Law Group can now put a price tag on the cost of his horribly misguided decision to share privileged and confidential documents from his antitrust class action against American Express with his old friend Keila Ravelo, a lawyer for MasterCard in a parallel case: $75 million.
(Reuters) – Here’s a rather terrifying vision of the future, inspired by the dire warnings contained in amicus briefs in a case called U.S. v. Ganias at the 2nd U.S. Circuit Court of Appeals. In the course of investigating someone you are connected to, perhaps a client or business associate, the government obtains a search warrant for the records of your involvement with its target. Rather than comb through your computer hard drive to find relevant documents, government investigators copy your entire drive: your business records, personal information, emails, whatever you’ve got on the computer. The feds pull out what they need for the case against their target. But instead of disposing of the rest of your electronic records, the government warehouses its copy of your hard drive. And if you happen to fall under scrutiny – or if the investigation of your colleague was just a pretext for getting a hold of your electronic files – your computer hard drive is sitting right there in government hands, waiting to be plumbed for evidence against you.
(Reuters) – Sandy and Lonnie Phillips, the parents of 24-year-old Jessica Redfield Ghawi – one of the 12 moviegoers killed in James Holmes’ 2012 rampage in Aurora, Colorado – told MSNBC this week that they are facing bankruptcy because they owe $203,000 to three online business that sold Holmes the ammunition and body armor he used in the massacre.
(Reuters) – We may never really understand why plaintiffs’ lawyer Gary Friedman of the Friedman Law Group sabotaged his own promising career by secretly disclosing a trove of privileged and confidential documents from his antitrust class action against American Express to Keila Ravelo, MasterCard’s counsel in a parallel class action against Visa and MasterCard. But thanks to filings Wednesday in the Amex case, we now know the breathtaking scope of Friedman’s improper disclosures, which Hofstra law professor Roy Simon described in an expert witness report as the most “repeated and serious violations” of professional duties that he can recall in 20 years of advising class counsel.
Class action lawyers may want to get up a petition to declare July 28 “Judge David Hamilton Day” because they could not have asked for a stronger defense of class actions – and the existing federal rules governing class certification – than they received Tuesday in Hamilton’s opinion for a three-judge panel of the 7th U.S. Circuit Court of Appeals in Mullins v. Direct Digital. The 7th Circuit scrutinized the 3rd Circuit’s controversial requirement of a “reliable and administratively feasible” way to ascertain class membership – and wholly rejected it. According to Judge Hamilton and his panel colleagues, Judges William Bauer and Michael Kanne, the 3rd Circuit’s 2013 ruling in Carrera v. Bayer upset the federal rules’ carefully wrought framework for class certification.
(Reuters) – Thirteen months after the U.S. Supreme Court decided not to do away with securities fraud class actions in Halliburton v. Erica P. John Fund, U.S. District Judge Barbara Lynn of Dallas has given the most intensive analysis yet to the high court’s ruling that defendants can try to ward off class certification by rebutting the presumption of marketwide fraud. Her 53-page opinion shows the Supreme Court’s Halliburton decision, which has so far been of little help to securities class action defendants, can benefit corporations willing to spend the time and money to hire economics experts and conduct price impact studies.
Facebook and its defense lawyers at Kirkland & Ellis and Willkie Farr & Gallagher pulled an interesting trick to deal with a proliferation of shareholder derivative suits that followed the company’s $16 billion IPO in 2012. And on Friday, the 2nd U.S. Circuit Court of Appeals gave their tactic its blessing. Corporate defendants take note: You may be able to get a federal judge to toss state-law breach-of-duty suits without ever establishing federal court jurisdiction.
Former Turtles bandmates Flo & Eddie may live forever on oldies stations, but their company’s lawyers at Gradstein & Marzano have lost a chance to set precedent on the prerogatives of class counsel. On Wednesday, U.S. District Judge Philip Gutierrez of Los Angeles denied Gradstein & Marzano’s motion to enjoin the satellite and Internet radio company Sirius XM from moving ahead with a $210 million settlement with five record labels that say they own or control the rights to 80 percent of the pre-1972 songs played on Sirius XM stations.