Alison Frankel

Why do securities class actions drag on once SCOTUS gets involved?

July 21, 2016

(Reuters) – When Connecticut State Treasurer Denise Nappier announced Wednesday that the state retirement fund, as the lead plaintiff in a securities class action against the biotech company Amgen, had settled the case for $95 million, I was startled to realize the litigation was still going on.

In rare public order, judge denies DOJ access to murder suspects’ private data

July 20, 2016

U.S. Magistrate Judge Michael Harvey of Washington, D.C., is a brave man.

It cannot have been easy for the judge to deny the Justice Department’s sealed application for access to Facebook, Gmail, WhatsApp and other online accounts supposedly connected to nine suspects involved in the murder of a U.S. citizen abroad.

‘Inappropriate’ tweet prompts social media clampdown at DOJ

July 19, 2016

The U.S. Department of Justice has more than 1 million followers on Twitter, so someone was bound to notice a very odd tweet from the official Justice account on Tuesday morning.

Tarnished brand doesn’t give consumers right to sue: GM judge

July 19, 2016

(Reuters) – Corporate scandal is like a spot of rot on a piece of fruit: Even if the rot hasn’t ruined the whole apple, you’d rather pick a different one. It’s the downside of corporate branding. One wormhole can make the whole brand seem unappetizing to prospective customers. Or, to put the phenomenon in a real-world context, after news broke that GM failed to recall cars with a potentially deadly flaw in their ignition switch mechanism, sales of GM cars and trucks dipped, even though they weren’t affected by the defect. The GM brand was at least temporarily devalued by the ignition switch scandal.

Litigation funder facing SEC fraud claims made bad bets on mass torts

July 15, 2016

The Securities and Exchange Commission on Thursday accused the litigation financier RD Legal Capital and its founder, New Jersey lawyer Roni Dersovitz, of deceiving investors in the $170 million fund about where their money was being deployed. By 2015, as The Wall Street Journal was the first to report, Dersovitz’s interrelated funds were heavily concentrated in an anti-terror case accusing Iran of responsibility for the 1983 bombing of Marine barracks in Beirut. But even though more than $100 million of RD Legal’s capital was tied up in the litigation against Iran, according to the SEC order instituting an administrative proceeding against the funds, RD principals allegedly told investors repeatedly that their exposure to the case was limited and that the funds’ primary strategy was buying legal fee receivables in cases that had already been settled.

Fee fight blights $1.3 billion Chinese drywall case

July 14, 2016

(Reuters) – The litigation over allegedly defective Chinese-made drywall should be a triumphant emblem of the American tort system.

Guns, trade secrets and the public’s right to know

July 13, 2016

A stark battle between corporate and public interests is taking place in a courtroom in Bridgeport, Connecticut, where the families of 10 children killed in the 2012 massacre at Sandy Hook Elementary School are suing Remington Arms, the company that makes and sells the semi-automatic weapon used by the killer. The fight is over Remington’s marketing and sales information. Last spring, Connecticut Superior Court Judge Barbara Bellis refused to dismiss the families’ suit, which claims Remington is liable for the children’s deaths because it disregarded the unreasonable risk of entrusting a military-style weapon to civilians and violated Connecticut’s trade practices law. Though Bellis found only that she has jurisdiction to hear the case – rejecting Remington’s argument that the federal Protection of Lawful Commerce in Arms Act deprives her of jurisdiction – she set a trial date and ordered discovery to proceed.

Plaintiffs in BP oil spill case accuse their own lawyers of fraud

July 12, 2016

(Reuters) – The reputation of the plaintiffs’ bar – always a vulnerable target for the business lobby – has not been enhanced by long-running litigation stemming from the 2010 BP Deepwater Horizon oil spill. The good work by members of the plaintiffs’ steering committee, who negotiated and subsequently defended one of the biggest private settlements in U.S. history has been overshadowed by accusations against their supposedly less scrupulous colleagues.

SEC to vote Wednesday on rule changes for administrative proceedings

July 11, 2016

(Reuters) – The Securities and Exchange Commission’s three commissioners will vote Wednesday on tweaks to rules governing administrative proceedings before SEC in-house judges, despite complaints from the white-collar defense bar that the proposed rule changes do not resolve the fundamental unfairness of trying enforcement actions before in-house SEC judges.

3rd Circuit dings trial judge for unjustified cut of class counsel fees

July 8, 2016

(Reuters) – Based on the opinion he wrote a year ago, U.S. District Judge Richard Andrews of Wilmington, Delaware, was not bowled over by the work performed by plaintiffs lawyers who reached a shareholder derivative settlement in 2013 with board members of AmerisourceBergen Corporation, or ABC. The settlement agreement — in which ABC agreed to cancel the grant of more than 272,000 stock options, worth about $5 million, to its CEO — said ABC would not oppose a few award of $1 million to Levi & Korsinsky and Farnan. Judge Andrews awarded only $550,000 — and said he would have granted only $250,000 had it not been for ABC’s acquiescence to the higher fee.