(Update: After this post was published, I learned from a reliable source that Chief Justice Strine was being facetious in his assessment of Beck! The Chief Justice was actually dissing Kanye; I misread his deadpan comment about Beck.)
On Tuesday, the 2nd U.S. Circuit Court of Appeals ruled that former employees of several Applebee’s restaurants in upstate New York are not barred from suing as a group over supposedly unpaid wages, even though the lost wages will eventually have to be assessed individually. The appeals court rejected the restaurant owner’s arguments that under the U.S. Supreme Court’s 2013 decision in a case called Comcast v. Behrend, plaintiffs cannot be certified to sue as a class unless they can offer a model for measuring damages that applies to everyone in the group.
Oh, to be a fly on the wall Tuesday afternoon at Willkie Farr & Gallagher, when the firm is slated to talk to retailers suing MasterCard about findings from Willkie’s internal investigation of the work of former partner Keila Ravelo.
A Maryland company called Beyond Systems has a business model like none I’ve ever seen. The company provides Internet services to a very small clientele. But mostly, according to a ruling Wednesday by the 4th U.S. Circuit Court of Appeals, it exists to sue corporations that send out supposedly misleading email spam. For a long time, that very unusual business plan worked out quite well for Beyond Systems’ founder, Paul Wagner, and his brother, Joe Wagner, who runs a similar enterprise, called Hypertouch, in California. Beginning in 2005, when Beyond Systems switched its litigation target from spam faxes to spam emails, the company took in more than $1 million in settlements with alleged spammers, mostly Internet ad and marketing companies, according to Beyond Systems’ list of its cases.
It has been a week since China’s State Administration for Industry and Commerce published a report accusing the e-commerce company Alibaba of selling counterfeits, infringing trademarks and other dubious business practices. The Chinese regulator has since retracted the report, but in the meantime Alibaba announced disappointing earnings for the third quarter of 2014. The company’s U.S.-traded American Depositary Shares, which launched in a record-setting initial public offering in September, fell sharply after both troubling disclosures. In all, Alibaba lost $11 billion in market capitalization last week.
For about a year, dozens of petitions from businesses and trade groups have been piling up at the Federal Communications Commission, asking the commission to tighten the standards for liability under the Telephone Consumer Protection Act of 1991. On Monday, the U.S. Chamber of Commerce and about 30 other trade associations sent a letter urging the FCC to act on requests for rule changes that would, for instance, exempt companies from TCPA class actions if they mistakenly autodial reassigned telephone numbers. On Tuesday, the American Association of Healthcare Administrative Management (which also signed the Chamber letter) reminded the FCC of its pending petition for a declaration that patients be deemed to have consented to calls from doctors and healthcare companies if they have provided their cellphone numbers.
The upstart business of appraisal arbitrage – a distant relation of M&A shareholder litigation – has attracted hundreds of millions of dollars of smart hedge-fund money in the past few years. As I described in more detail in a post last month, appraisal arbitrageurs acquire shares after a company has announced its acquisition, refuse to cash out their stake when the deal goes through and then bring claims in court that the sale price was too low. Essentially, they are betting that judges will set a higher value on shares of an acquired company than the company’s own board and the shareholders who voted to accept the offer.
A year ago, when the U.S. Supreme Court was considering whether to all but erase shareholder fraud class actions brought under the Securities Exchange Act of 1934, pension funds were strong voices in the chorus defending shareholder fraud litigation. The Council of Institutional Investors and an ad hoc group of nearly three dozen public pension funds submitted amicus briefs in Halliburton v. Erica P. John Fund, arguing that private shareholder suits deter corporate wrongdoing, recoup investors’ losses and are a critical supplement to Securities and Exchange Commission enforcement actions. That was a familiar refrain: Since Congress amended the securities laws in 1995, empowering institutional investors to lead shareholder fraud class actions, pension funds have become outspoken advocates of their right to sue the corporations they invest in.
The 2nd U.S. Circuit Court of Appeals has set a briefing schedule for its consideration of the dismissal of antitrust claims against more than a dozen global banks that allegedly conspired to fix the benchmark London Interbank Offered Rate. The opening brief from a class of bond purchasers whose appeal was reinstated last week by the U.S. Supreme Court is due on March 9. The banks’ response is supposed to be filed a month later.
If you ask the state of Connecticut, Lorraine Martin was never arrested in August 2010 on narcotics charges. Yes, the arrest took place – Martin was charged along with her two adult sons after police searched her home in Greenwich and found marijuana, scales and plastic bags – but in January 2012 the state dropped its case and scrubbed Martin’s record. Under Connecticut’s erasure statute, which is similar to those in other states, Martin is permitted to swear under oath that she has never been arrested.