Alison Frankel

Can employee arbitration clauses stretch to cover co-defendants?

January 13, 2015

If you are an employee who has signed a contract requiring you to arbitrate claims against your employer, you’re pretty much stuck with it. After the U.S. Supreme Court’s rulings in AT&T Mobility v. Concepcion in 2011 and American Express v. Italian Colors in 2012, employees (and consumers, for that matter) have little to no hope of litigating their cases in court – rather than before arbitration panels – when they’ve agreed to arbitration clauses. But should employees’ arbitration agreements with their employers also force them to arbitrate against co-defendants that haven’t signed the agreements?

By restricting charity deals, appeals courts improve class actions

January 12, 2015

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.

The legal argument against mandatory vaccination

January 8, 2015

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.

Chancery Court backs ‘appraisal arbitrage.’ Good for shareholders?

January 8, 2015

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.

Bank defendants and forex: Not all rate-rigging class actions are alike

January 6, 2015

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.

Time for defendants to reassess risk in data breach class actions?

January 5, 2015

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.

Ugly-duckling shareholder derivative suits are poised for swandom

January 2, 2015

Even if you believe that shareholder litigation is an effective means of compensating investors for corporate misconduct, you have to wonder about derivative suits.

Terror victims to 2nd Circuit: Let case vs PLO go to trial next month

December 18, 2014

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.

Allergan shareholders sue Pershing, Valeant for insider trading

December 18, 2014

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.

Do Sony employees have the right to sue over data breach?

December 16, 2014

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.”