Alison Frankel

In RJR case, Supreme Court to decide if RICO reaches abroad

By Alison Frankel
October 1, 2015

(Reuters) – On Thursday, the U.S. Supreme Court agreed to hear RJR Nabisco v. European Community, which presents the question of whether U.S. courts can hear racketeering cases involving alleged overseas crimes or foreign enterprises. The Supreme Court’s answer to that question could have important consequences not just for global businesses like RJR but also for human rights plaintiffs shut out of court by the justices’ 2013 decision in Kiobel v. Royal Dutch Petroleum, which said victims of atrocities committed overseas generally cannot use the Alien Tort Statute to bring claims in U.S. courts.

Which court is going to hear Volkswagen class actions?

By Alison Frankel
September 30, 2015

(Reuters) – Here’s how fast class actions against Volkswagen are proliferating. Last Tuesday, when the California firm Morris Polich & Purdy filed the initial motion to consolidate litigation by VW owners who claim they were tricked by the automaker’s “clean diesel” claims, its brief cited “at least 20 actions” in seven jurisdictions. A week later, according to a brief by Lieff Cabraser Heimann & Bernstein and Seeger Weiss, the number was up to 175 suits. As of Wednesday, VW and Audi owners whose vehicles have been tainted by the emissions scandal have filed class actions in at least 40 federal jurisdictions in 30 different states.

Disgraced plaintiffs’ lawyer Gary Friedman on why his leaks shouldn’t topple the largest antitrust settlement in U.S. history

By Alison Frankel
September 29, 2015

(Reuters) – At last, Gary Friedman has decided to explain himself.

Friedman, in case you don’t remember his name, is the antitrust plaintiffs lawyer whose life was pitched into chaos in December, when his old friend Keila Ravelo was arrested for allegedly defrauding her client MasterCard and two law firms where she had been a partner, Willkie Farr & Gallagher and Hunton & Williams.

Ashley Madison hints at arbitration, plaintiffs’ lawyers say bring it on

By Alison Frankel
September 23, 2015

Last week, lawyers for the hacked adultery website Ashley Madison tipped their hand about how they intend to defend the site’s parent company, Avid Life Media, against class actions by users who claim they were injured when their personal information was exposed. In a filing before the Judicial Panel on Multidistrict Litigation, Barnes & Thornburg said the company favors consolidation of the litigation in federal court in St. Louis – but only so Avid Life can resolve the threshold issues of whether name plaintiffs can sue under pseudonyms and whether Ashley Madison users are compelled under user agreements to arbitrate their claims individually.
“Plaintiffs (and all Ashley Madison members) agreed to and are bound by a contractual arbitration provision that compels plaintiffs to bring their claims before the American Arbitration Association,” the filing said. According to Avid Life, federal courts won’t ever get to the merits of the class action claims because users waived the right to sue the site.
As you know, the U.S. Supreme Court’s recent rulings in AT&T Mobility v. Concepcion and American Express v. Italian Colors have made it exceedingly difficult for plaintiffs to bring class actions when they’ve signed arbitration agreements. But two of the lawyers who have brought class actions against Avid Life told me they’re braced to contest the enforceability of the Ashley Madison clause.
“We’ve fought many, many of these over the last few years,” said Julian Hammond of HammondLaw. He said the provision’s enforceability will depend on such factors as whether the contract terms are unconscionable, what disputes the agreement covers and whether Ashley Madison properly obtained users’ consent. Arbitration clauses are not easy to defeat, Hammond said, but he also said he looked hard at the Ashley Madison clause before he filed his case, anticipating that the company would move to compel arbitration.
Plaintiffs’ lawyer William Federman of Federman & Sherwood said Avid Life can’t compel arbitration against hacking victims who never completed the process of signing up as an Ashley Madison user or whose information was exposed because a relative signed up. “If Ashley Madison read the complaints, they’d see there are many plaintiffs who are not under the arbitration clause,” he said.
Those plaintiffs will have a harder time showing they were injured by the data breach than Ashley Madison users who claim the site falsely promised to scrub their profiles from its records if they paid a $19 fee. Federman, however, said he was confident judges will find these plaintiffs have standing to sue. Like Hammond, Federman said Avid Life’s resort to arbitration did not come as a surprise to him.
Obviously, a venue brief at the JPML isn’t Avid Life’s last word on the Ashley Madison arbitration clause. It’s just a hint at what’s to come when the cases are consolidated and transferred – but it’s a sign that this is going to be very interesting litigation.

Ascertainability sinks consumers’ antitrust case v. alleged egg cartel

By Alison Frankel
September 21, 2015

(Reuters) – Nearly 90 percent of American households, according to an Internet survey, buy plain old eggs. Not the fancy organic, free-range or Omega-3 eggs but the ordinary sort known in the industry as commodity shell eggs. And according to plaintiffs’ lawyers in a long-running antitrust class action in Philadelphia federal court, those egg-purchasing consumers were all victims of a conspiracy among egg producers to inflate the price of their product by restraining production. (Among the conspiracy’s alleged tactics was the untimely slaughter of flocks of egg-laying hens.)

Will crackdown on disclosure-only deals push M&A litigation out of Delaware?

By Alison Frankel
September 18, 2015

(Reuters) – We have reached a turning point in M&A shareholder litigation in Delaware Chancery Court.

Unlike SEC, FTC makes quick fix to ward off ALJ constitutional challenges

By Alison Frankel
September 16, 2015

(Reuters) – For the second time this month, a federal agency has declared its in-house judges are mere employees whose hiring is not addressed by the Appointments Clause of the U.S. Constitution. On Monday, four Federal Trade Commissioners denied LabMD’s motion to dismiss the FTC’s data security administrative proceeding against the cancer testing center, ruling that under the District of Columbia U.S. Circuit Court of Appeals’ 2000 decision in Landry v. Federal Deposit Insurance Corporation, its in-house judges are not “inferior officers’ because their initial decisions are reviewed by the commission before becoming final.

4th Circuit judges debate boycott conspiracies in new antitrust decision

By Alison Frankel
September 15, 2015

(Reuters) – In August 2000, a company called SawStop began showing table saw manufacturers a prototype of its technology to stop the saws when they come in contact with a hand or finger. A few companies were interested enough to open talks with SawStop, which wanted a royalty fee of as much as 8 percent of the wholesale price. Others worried about the cost and reliability of the safety feature, or wondered about the product liability implications if some but not all manufacturers included SawStop technology.

SEC not entitled to deference in State Street fraud appeal – law prof

By Alison Frankel
September 14, 2015

(Reuters) – When it comes to Securities and Exchange Commission enforcement litigation, the constitutionality of in-house proceedings is dominating journalists’ coverage (including mine). Former SEC officials, though, are dedicating a lot of attention of late to a less sexy – but perhaps more lastingly significant – question: Can the SEC redefine the parameters of securities fraud through a final determination in an enforcement action?

Time bar for class action opt-outs continues to divide trial courts

By Alison Frankel
September 11, 2015

(Reuters) – It has been just about a year since the U.S. Supreme Court abruptly tossed In re IndyMac, a case in which the justices were poised to resolve a split between the 2nd and 10th U.S. Circuit Courts of Appeal on time limits for securities fraud plaintiffs. The 10th Circuit had said in Joseph v. Wiles in 2000 that under the U.S. Supreme Court’s 1974 holding in American Pipe v. Utah, the filing of a class action stops the clock on both the statute of limitations and the statute of repose for plaintiffs who later decide to sue on their own. The 2nd Circuit disagreed in its 2013 IndyMac ruling, which concluded that because the statute of repose gives defendants a substantive right to be free from prospective liability after the specified time period, it cannot be tolled.