Alison Frankel

VW: Restraining order bid is just maneuver by class action firm

October 6, 2015

Can hundreds of class action lawyers be wrong?

Every day brings another clutch of filings against Volkswagen by clean diesel car owners who claim the automaker lied about their cars’ noxious emissions. Plaintiffs’ lawyers seem to regard the litigation against VW as a sure thing, thanks in no small part to the company’s own admissions. They’re assuming the case won’t be about whether VW is liable to car owners but about how much the company is going to have to pay.

VW hit with TRO application, Mayer Brown revealed as defense counsel

October 5, 2015

(Reuters) – Volkswagen AG and its corporate offspring have been close-mouthed about revealing the law firms that will defend the automaker in U.S. class actions by owners of clean diesel vehicles. Kirkland & Ellis environmental partner Stuart Drake was copied on the Environmental Protection Agency’s Sept. 18 notice of violation to the company and the company confirmed Kirkland’s involvement to Bloomberg. But as the Am Law Daily has reported, Kirkland and VW haven’t said any more about the scope of Kirkland’s engagement. No lawyers have yet entered an appearance for the VW defendants at the Judicial Panel for Multidistrict Litigation, which will decide in December where the more than 200 class actions against the company will be consolidated.

Dow wields SCOTUS amicus brief to erase $1.1 billion antitrust judgment

October 2, 2015

(Reuters) – Has Dow Chemical inserted itself into the U.S. Supreme Court’s review of the Tyson Foods wage-and-hour class action as part of a sophisticated strategy to wipe out a $1.1 billion antitrust judgment against Dow? That’s the accusation in an amicus brief filed this week in the Tyson case by urethanes purchasers who beat Dow in a 2013 trial in Kansas federal court.

In RJR case, Supreme Court to decide if RICO reaches abroad

October 1, 2015

(Reuters) – On Thursday, the U.S. Supreme Court agreed to hear RJR Nabisco v. European Community, which presents the question of whether U.S. courts can hear racketeering cases involving alleged overseas crimes or foreign enterprises. The Supreme Court’s answer to that question could have important consequences not just for global businesses like RJR but also for human rights plaintiffs shut out of court by the justices’ 2013 decision in Kiobel v. Royal Dutch Petroleum, which said victims of atrocities committed overseas generally cannot use the Alien Tort Statute to bring claims in U.S. courts.

Which court is going to hear Volkswagen class actions?

September 30, 2015

(Reuters) – Here’s how fast class actions against Volkswagen are proliferating. Last Tuesday, when the California firm Morris Polich & Purdy filed the initial motion to consolidate litigation by VW owners who claim they were tricked by the automaker’s “clean diesel” claims, its brief cited “at least 20 actions” in seven jurisdictions. A week later, according to a brief by Lieff Cabraser Heimann & Bernstein and Seeger Weiss, the number was up to 175 suits. As of Wednesday, VW and Audi owners whose vehicles have been tainted by the emissions scandal have filed class actions in at least 40 federal jurisdictions in 30 different states.

Disgraced plaintiffs’ lawyer Gary Friedman on why his leaks shouldn’t topple the largest antitrust settlement in U.S. history

September 29, 2015

(Reuters) – At last, Gary Friedman has decided to explain himself.

Friedman, in case you don’t remember his name, is the antitrust plaintiffs lawyer whose life was pitched into chaos in December, when his old friend Keila Ravelo was arrested for allegedly defrauding her client MasterCard and two law firms where she had been a partner, Willkie Farr & Gallagher and Hunton & Williams.

Ashley Madison hints at arbitration, plaintiffs’ lawyers say bring it on

September 23, 2015

Last week, lawyers for the hacked adultery website Ashley Madison tipped their hand about how they intend to defend the site’s parent company, Avid Life Media, against class actions by users who claim they were injured when their personal information was exposed. In a filing before the Judicial Panel on Multidistrict Litigation, Barnes & Thornburg said the company favors consolidation of the litigation in federal court in St. Louis – but only so Avid Life can resolve the threshold issues of whether name plaintiffs can sue under pseudonyms and whether Ashley Madison users are compelled under user agreements to arbitrate their claims individually.
“Plaintiffs (and all Ashley Madison members) agreed to and are bound by a contractual arbitration provision that compels plaintiffs to bring their claims before the American Arbitration Association,” the filing said. According to Avid Life, federal courts won’t ever get to the merits of the class action claims because users waived the right to sue the site.
As you know, the U.S. Supreme Court’s recent rulings in AT&T Mobility v. Concepcion and American Express v. Italian Colors have made it exceedingly difficult for plaintiffs to bring class actions when they’ve signed arbitration agreements. But two of the lawyers who have brought class actions against Avid Life told me they’re braced to contest the enforceability of the Ashley Madison clause.
“We’ve fought many, many of these over the last few years,” said Julian Hammond of HammondLaw. He said the provision’s enforceability will depend on such factors as whether the contract terms are unconscionable, what disputes the agreement covers and whether Ashley Madison properly obtained users’ consent. Arbitration clauses are not easy to defeat, Hammond said, but he also said he looked hard at the Ashley Madison clause before he filed his case, anticipating that the company would move to compel arbitration.
Plaintiffs’ lawyer William Federman of Federman & Sherwood said Avid Life can’t compel arbitration against hacking victims who never completed the process of signing up as an Ashley Madison user or whose information was exposed because a relative signed up. “If Ashley Madison read the complaints, they’d see there are many plaintiffs who are not under the arbitration clause,” he said.
Those plaintiffs will have a harder time showing they were injured by the data breach than Ashley Madison users who claim the site falsely promised to scrub their profiles from its records if they paid a $19 fee. Federman, however, said he was confident judges will find these plaintiffs have standing to sue. Like Hammond, Federman said Avid Life’s resort to arbitration did not come as a surprise to him.
Obviously, a venue brief at the JPML isn’t Avid Life’s last word on the Ashley Madison arbitration clause. It’s just a hint at what’s to come when the cases are consolidated and transferred – but it’s a sign that this is going to be very interesting litigation.

Ascertainability sinks consumers’ antitrust case v. alleged egg cartel

September 21, 2015

(Reuters) – Nearly 90 percent of American households, according to an Internet survey, buy plain old eggs. Not the fancy organic, free-range or Omega-3 eggs but the ordinary sort known in the industry as commodity shell eggs. And according to plaintiffs’ lawyers in a long-running antitrust class action in Philadelphia federal court, those egg-purchasing consumers were all victims of a conspiracy among egg producers to inflate the price of their product by restraining production. (Among the conspiracy’s alleged tactics was the untimely slaughter of flocks of egg-laying hens.)

Will crackdown on disclosure-only deals push M&A litigation out of Delaware?

September 18, 2015

(Reuters) – We have reached a turning point in M&A shareholder litigation in Delaware Chancery Court.

Unlike SEC, FTC makes quick fix to ward off ALJ constitutional challenges

September 16, 2015

(Reuters) – For the second time this month, a federal agency has declared its in-house judges are mere employees whose hiring is not addressed by the Appointments Clause of the U.S. Constitution. On Monday, four Federal Trade Commissioners denied LabMD’s motion to dismiss the FTC’s data security administrative proceeding against the cancer testing center, ruling that under the District of Columbia U.S. Circuit Court of Appeals’ 2000 decision in Landry v. Federal Deposit Insurance Corporation, its in-house judges are not “inferior officers’ because their initial decisions are reviewed by the commission before becoming final.