(Reuters) – On the night of June 15, Harvey Geller and Henry Gradstein of Gradstein & Marzano had dinner in New York City with lawyers representing five major record labels and the Recording Industry Association of America. Based on a declaration Gradstein filed Wednesday, it didn’t go well.
(Reuters) – Running one of the busiest dockets in Manhattan federal court, sitting from time to time at the 2nd U.S. Circuit Court of Appeals and stirring up controversy in speeches and essays is apparently not enough to keep U.S. District Judge Jed Rakoff busy. On Monday, the 9th Circuit issued an important interpretation of insider trading law in its opinion in U.S. v. Salman. The author of this ruling was none other than Judge Rakoff, who sat on the 9th Circuit by designation when the appeal was argued last month in San Francisco.
At the beginning of 2015, I asked whether defendants should start reassessing their risk in data breach class actions. I pointed out that plaintiffs had learned from a string of dismissals in which federal judges said they didn’t have constitutional standing to sue under the U.S. Supreme Court’s 2013 decision in Clapper v. Amnesty International. Consumers suing Target, for instance, managed to keep their case alive by claiming they’d suffered the actual harm of unlawful charges on their accounts or restricted access to their funds. Similarly, financial institutions staved off the dismissal of their class action against Target with assertions based on their costs to replace customers’ compromised cards.
(Reuters) – The 2nd U.S. Circuit Court of Appeals seems to be eager to decide when, if ever, the federal government has the right to retain and search computer records seized in one investigation but later found to be relevant in another.
In a June 18 statement explaining his dissent in two recent enforcement actions against chief compliance officers at investment advisers, Commissioner Daniel Gallagher of the Securities and Exchange Commission pointed out that for the vast majority of the 11,700 investment advisers registered with the SEC, in-house compliance officers are “the only line of defense” against securities law violations. The SEC is undermanned and there’s no self-regulating organization for investment advisers, unlike broker-dealers, the commissioner said. So it’s critically important, he said, for the SEC to encourage chief compliance officers to perform their duties with vigor. According to Gallagher, that means the agency should stop using the blunt instrument of enforcement actions and start think about revising its rules in order to protect compliance officers when other people at their firms do something wrong.
In July 2014, the Chicago class action firm Anderson & Wanca moved for preliminary approval in Illinois state court of a $23 million settlement of allegations that Metropolitan Life Insurance violated the Telephone Consumer Privacy Act by sending out millions of unsolicited faxes. Five members of the class objected to the settlement. Two dropped protests on their own and the judge struck a third before granting final approval to the settlement in February 2015.
(Reuters) – On Friday, the 7th U.S. Circuit Court of Appeals ended a drama that has roiled the class action bar this month. A 7th Circuit motions panel agreed to dismiss appeals by objectors in a $75.5 million class action settlement with Capital One over debt collection robocalls. That sounds like a pro forma docket entry, since all of the objectors at the 7th Circuit moved to drop their cases. But there was a chance the appeals court might have taken bait dangled by Ted Frank at the nonprofit Center for Class Action Fairness and insisted on investigating settlements between the objectors and class counsel at Lieff Cabraser Heimann & Bernstein.
(Reuters) – Even after all the decision has cost him, Ted Frank of the non-profit Center for Class Action Fairness believes he was justified in accepting $250,000 in fees from a plaintiffs’ lawyer who engages in tactics Frank considers “repugnant” and “unethical.”
(Reuters) – More than 25 years ago, eight Coloradoans agreed to serve as the representatives for a class of about 13,000 property owners who believed the Rocky Flats nuclear weapons plant had contaminated their land with radioactive plutonium. In late 2005, after 15 years of pre-trial motions practice against the federal contractors Dow Chemical and Rockwell International, the case finally went to a four-month trial. Jurors deliberated for 17 days, answering a 30-page jury form, before returning a verdict of $177 million in compensatory damages and $200 million in punitive. With pre-trial interest, the compensatory damages alone topped $700 million.
I had a feeling the U.S. Chamber of Commerce might have something to say about the Securities and Exchange Commission’s split ruling last December against former State Street chief investment officer John Flannery. And so it does. The Chamber has filed an amicus brief at the 1st U.S. Circuit Court of Appeals, arguing that the SEC overstepped its authority when it used the State Street case to re-interpret anti-fraud provisions of the Securities Act of 1933.