Matthew G. Kaiser, Partner, Kaiser, LeGrand & Dillon PLLC
A court case that should be on the radar screen of all business executives and white-collar criminal-defense attorneys in 2016 is United States v. Clay, in which the U.S. Court of Appeals for the Eleventh Circuit heard oral argument on October 2.
The case, about which I authored a Washington Legal Foundation Legal Backgrounder last March, implicates the fundamental question of who decides the meaning of a law—a judge or a jury? The Eleventh Circuit will also implicitly decide whether the government can cast aside more appropriate civil or administrative remedies and prosecute corporate officers operating a business in a complex regulatory environment when their interpretation of a law is objectively reasonable. Continue reading
On Friday, October 2, the U.S. Court of Appeals for the Eleventh Circuit will hear oral arguments in a closely followed criminal health-care fraud case, U.S. v. Clay. Earlier this year, Washington Legal Foundation published a Legal Backgrounder on the case and its broader ramifications, Clay v. United States: When Executives Receive Jail Time for Ordinary Business Decisions.
In Clay, federal prosecutors converted a contract dispute between a medical services provider, WellCare Health Plans, and the State of Florida Agency for Healthcare Administration (AHCA) into a criminal action. The company had interpreted a complex state law regarding the repayment of Medicaid premiums to the state in a manner that was contrary to AHCA’s interpretation. AHCA’s interpretation was not memorialized in a state regulation or guidance document. Despite this lack of guidance, federal prosecutors indicted WellCare and its executives for health care fraud. The company entered into a deferred-prosecution agreement, leaving the executives to fend for themselves. Continue reading
Attorney Thomas R. Fox, a prominent Foreign Corrupt Practices Act (FCPA) practitioner and author of a forthcoming WLF Legal Opinion Letter, “Is SEC Heading toward a Strict Liability Application of the Foreign Corrupt Practices Act?,” recently interviewed WLF Legal Studies Division Chief Counsel, Glenn Lammi, about WLF’s public interest work and our focus on the FCPA.
Episode 151-Glenn Lammi, Washington Legal Foundation.
By Douglas W. Greene and Claire Loebs Davis, Shareholders with Lane Powell PC in Seattle, Washington. They co-authored WLF’s amicus brief pro bono in Omnicare.
In the opinion issued on March 24 in Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund (“Omnicare”), the Supreme Court rejected the two extremes advocated by the parties regarding how the truth or falsity of statements of opinion should be considered under the securities laws. Instead, it adopted the middle path advocated in the amicus brief filed by Lane Powell on behalf of Washington Legal Foundation (“WLF”).
In doing so, the Court also laid out a blueprint for examining claims of falsity under the securities laws, which we believe will do for falsity analysis what Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308 (2007), did for scienter analysis. Hence, Omnicare will help defense counsel defeat claims that opinions were false or misleading in § 11 cases, as well as in cases brought under § 10(b) of the Securities Exchange Act. Continue reading
In a recent post, we lampooned the “high trans fat intake consumer” the Food and Drug Administration (FDA) invented to advance its de facto ban of partially hydrogenated oils (PHOs) as being a cross between Augustus Gloop and Homer Simpson. The ramifications of such a PHO ban for many processed food makers and their customers, however, are no laughing matter. Among other things, FDA’s final determination could expose the food industry to an avalanche of lawsuits and potentially billions of dollars in liability costs.
The Current Litigation Environment. Plaintiffs’ lawyers have been working feverishly for the past decade to turn lawsuits against “Big Food” into the next big payday. As chronicled on this blog since its inception in 2011, a small but persistent segment of the Litigation Industry has filed hundreds of class-action lawsuits alleging that everything from a perceived excess of empty space in a bag of chips to the printing of “evaporated cane juice” on a label violates state consumer protection laws.
By Litigation Industry standards, this lawsuit product line has not yet met profit expectations. But the lawsuits have successfully established, especially in California, that private litigants can enforce federal food laws and regulations. Continue reading
Tomorrow morning from 10:00 a.m. to 11:00 a.m., Washington Legal Foundation will be broadcasting a live Web Seminar program entitled Aguinda v. Chevron: The Remarkable Rise and Fall of a Stage-Managed Litigation & PR Crusade. You can register for free viewing by clicking on the program title.
Our speakers will be Paul M. Barrett, Assistant Managing Editor of Bloomberg BusinessWeek and author of the just-released book Law of the Jungle; and Eric G. Lasker, a partner with the Hollingsworth LLP law firm.
Even though the litigation accusing Chevron of environmental harm in Ecuador has been going on for over two decades, the case itself, and Chevron’s counter-litigation alleging the plaintiffs’ lawyers committed fraud, remain unresolved. The U.S. Court of Appeals for the Second Circuit will soon hear the plaintiffs’ lawyers’ appeal of Federal District Court Judge Lewis Kaplan’s RICO ruling. And just yesterday, the U.S. Court of Appeals for the Fourth Circuit affirmed a lower court’s order that two lawyers affiliated with lead plaintiffs’ lawyer Steven Donziger provide documents and computer drives Chevron sought in support of its RICO charges. Paul Barrett’s coverage of that Fourth Circuit ruling can be read here.
by Lyle Roberts, Cooley LLP
*Editor’s note: We are cross-posting this commentary from Mr. Roberts’s blog, The 10b-5 Daily, where it originally appeared. Mr. Roberts authored Washington Legal Foundation’s amicus brief in Halliburton.
The U.S. Supreme Court has issued a decision in the Halliburton v. Erica P. John Fund case holding that defendants can rebut the fraud-on-the-market presumption of reliance at the class certification stage with evidence of a lack of stock price impact. It is a 9-0 decision authored by Chief Justice Roberts, although Justice Thomas (joined by Justices Alito and Scalia) concurred only in the judgment. As discussed in a February 2010 post on this blog, Halliburton has a long history that now includes two Supreme Court decisions on class certification issues. A summary of the earlier Supreme Court decision can be found here.
Under the fraud-on-the-market presumption, reliance by investors on a misrepresentation is presumed if the misrepresentation is material and the company’s shares were traded on an efficient market that would have incorporated the information into the stock price. The fraud-on-the-market presumption is crucial to pursuing a securities fraud case as a class action—without it, the proposed class of investors would have to provide actual proof of its common reliance on the alleged misrepresentation, a daunting task for classes that can include thousands of investors.
The fraud-on-the-market presumption, however, is not part of the federal securities laws. It was judicially created by the Supreme Court in a 1988 decision (Basic v. Levinson). In Halliburton, the Court agreed to revisit that decision, but ultimately decided that there was an insufficient “special justification” for overturning its own precedent. Continue reading