I am sure that Legal Services of Eastern Missouri, which provides free help to low-income and elderly folks in and around St. Louis, could have done a lot of good with the $2.3 or so million it was designated to receive from the settlement fund in a long-running securities class action over the 1998 merger that created Bank of America. But if you believe in the long-term future of class actions, you should welcome an 8th U.S. Circuit Court of Appeals decision last week that said that Legal Services isn’t entitled to the money.
A three-judge panel at the 2nd U.S. Circuit Court of Appeals heard oral arguments on Jan. 5 in Phillips v. City of New York, in which three families sued the city and the state over enforcement of New York’s law mandating vaccination for public school children. Just two days later, the appeals court affirmed a trial judge’s dismissal of the families’ constitutional challenge. In a 14-page per curiam opinion, 2nd Circuit Judges Gerard Lynch and Denny Chin and U.S. District Judge Edward Korman of Brooklyn, sitting by designation, said that New York’s mandatory vaccine law does not violate the families’ constitutional due process, equal protection or religious freedom rights.
Companies involved in mergers and acquisitions lost a couple of big decisions Tuesday in Delaware Chancery Court, where Vice Chancellor Sam Glasscock assured the future of a burgeoning investment strategy known as “appraisal arbitrage.” But according to a forthcoming study – the first in-depth analysis of the recent explosion in post-merger suits over the fair market value of stock in M&A targets – appraisal arbitrage litigation is a boon to shareholders.
On Monday, JPMorgan Chase filed a letter with U.S. District Judge Lorna Schofield of Manhattan, reporting an agreement to settle a big antitrust class action alleging that the bank colluded with 11 other global financial institutions to manipulate benchmark trading prices in the foreign exchange market. My colleague Jon Stempel reported that JPMorgan – which was one of six banks in a $4.3 billion forex deal with U.S. and British regulators in November – will pay about $100 million to private plaintiffs who claim to have lost money as a result of the alleged price-fixing conspiracy.
Based on sheer numbers of people affected, I doubt there’s any litigation bigger than data breach class actions. Information on hundreds of millions of consumers has been exposed by hackers who overcame corporate cyber-defenses at banks and retailers such as JPMorgan Chase, Home Depot and eBay. That’s an awful lot of plaintiffs for privacy breach defendants to face.
Even if you believe that shareholder litigation is an effective means of compensating investors for corporate misconduct, you have to wonder about derivative suits.
The Palestinian Authority and the Palestinian Liberation Organization are scheduled to go to trial in federal district court in Manhattan next month to defend against claims by more than 40 U.S. citizens (or their survivors) who were injured or killed in attacks in Israel between 2000 and 2004. U.S. District Judge George Daniels has set jury selection to begin on Jan. 7 and opening statements to be presented on Jan. 13.
Did you think the whole Allergan/Pershing Square/Valeant takeover mess ended last month when Allergan’s board voted to accept a better offer from Actavis and Valeant withdrew its bid? Think again. On Tuesday, an Allergan shareholder who sold stock right before Pershing and Valeant first announced their joint bid for Allergan in April brought a class action claiming that Pershing and Valeant owe damages to him and other Allergan shareholders because they violated insider trading prohibitions when they acquired a toehold in Allergan.
Sony’s headaches from the wholesale theft of its data worsened Tuesday when two former employees filed the first class action accusing the movie studio of failing to protect their confidential information. The former employees, represented by Keller Rohrback, allege that Sony was negligent for leaving its computer systems insufficiently shielded from hackers. They also claim Sony violated a California state law that requires employers to protect employees’ medical records, as well as California and Virginia state laws requiring companies to put out broad notifications when their data storage systems are breached. The complaint was filed in federal court in Los Angeles on behalf of thousands of current and former Sony employees and family members who, according to plaintiffs’ lawyer Gretchen Cappio, “are outraged their private information is floating around the Internet.”
Word broke this weekend that Sony Pictures Entertainment has hired celebrated lawyer David Boies of Boies Schiller & Flexner to warn news organizations away from publishing stories based on information hacked from the studio’s servers. Boies’ letter, sent to top in-house counsel at the New York Times, Bloomberg, Variety and the Hollywood Reporter, said the hacked documents contain trade secrets, Sony intellectual property and privileged legal advice. If news organizations use the stolen material, the letter said, Sony “will have no choice but to hold you responsible.”