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.”
Baker Botts has to be feeling good about the amicus support it received this week at the U.S. Supreme Court, where the firm is trying to overturn a decision by the 5th U.S. Circuit Court of Appeals that not only cut $5 million from the fees awarded to Baker Botts in the Asarco bankruptcy but also held that the U.S. Bankruptcy Code, as a matter of law, precludes debtors’ lawyers from charging for the cost of defending their fee applications. Baker Botts persuaded the Supreme Court in October to take up the question, arguing that the Bankruptcy Code gives judges the authority to award fees for the successful defense of a fee application.
Arab Bank really, really wants the 2nd U.S. Circuit Court of Appeals to hear its arguments that last summer’s jury verdict holding the bank liable for Hamas attacks was hopelessly tainted. But after a ruling Wednesday by U.S. District Judge Brian Cogan of Brooklyn, it’s pretty clear that the bank won’t get to the 2nd Circuit before a Brooklyn jury hears a bellwether damages trial that could expose Arab Bank to a judgment of tens or even hundreds of millions of dollars, if past judgments in Anti-Terrorism Act cases are a reliable guide.
(Reuters) – To bring an insider trading case in the 2nd U.S. Circuit Court of Appeals, prosecutors must prove both that the tipster received a personal benefit from leaking confidential information and that those who traded on the information knew of the benefit. That is now established beyond any doubt, after an emphatic 2nd Circuit opinion Wednesday that erases the government’s case against former hedge fund executives Todd Newman and Anthony Chiasson.
(Reuters) – A Reuters special report Monday pinpointed eight lawyers who made a whopping 20 percent of the oral arguments at the U.S. Supreme Court in the last decade. One of them, David Frederick of Kellogg Huber Hansen Todd Evans & Figel, frequently appears on behalf of plaintiffs in business cases, most recently in a 2013 securities case, Amgen v. Connecticut Retirement Plans. (Frederick would have argued for investors in Public Employees’ Retirement System of Mississippi v. IndyMac but the justices dismissed the case.) Paul Clement of Bancroft argued for a class of small businesses suing American Express in the 2013 case Amex v. Italian Colors.
(Reuters) – Ten years ago, the government contractor KBR began an internal investigation of allegations that it overbilled the U.S. government for shoddy work by Iraqi subcontractors who paid kickbacks to KBR employees. The U.S. Defense Department requires its contractors to investigate kickback allegations, and KBR has in the past offered credits to the U.S. government based on the findings of internal investigators. In this case, however, after two years of interviewing witnesses and reviewing documents, KBR did not inform the Defense Department that there were reasonable grounds to believe kickbacks had been paid. Nor did it tender any credit to the government for overcharges.
In a decision that could have important consequences for other corporations facing data breach cases, U.S. District Judge Paul Magnuson of St. Paul, Minnesota, ruled this week that financial institutions claiming to have spent billions of dollars replacing their customers’ compromised credit and debit cards may proceed with a negligence class action against Target.
The random assignment of federal circuit court judges to the three-judge panels that hear appellate arguments is a bedrock assumption about the U.S. judicial system. That’s why it’s notable when panel assignments appear to be the result of something other than sheer fate. I told you yesterday, for example, about a law review article by a University of Georgia law professor who hypothesized that two judges at the 7th U.S. Circuit Court of Appeals have taken advantage of an idiosyncratic policy that permits 7th Circuit judges serving on motions panels to claim authority over the merits of appeals they’ve allowed to proceed. When Edward Whelan of the Ethics and Public Policy Center, who writes the Bench Memos blog at the National Review Online, recently raised questions about assignment procedures at both the 7th and 9th Circuits, he drew responses from judges at both circuits.
Are judges in the 7th U.S. Circuit Court of Appeals quietly taking advantage of their unusual assignment system to effect particular results?