The California Supreme Court earlier this month issued an opinion that subjects litigants who settle their patent disputes to scrutiny under state antitrust law. The court reasoned that such settlements may create unreasonable restraints on trade. While the decision in In re Cipro Cases I & II to reinstate antitrust claims was not overly surprising—after all, the U.S. Supreme Court had previously held in FTC v. Actavis, Inc. that some patent litigation settlements might violate federal antitrust law—the breadth of the California Supreme Court’s decision could have a particularly negative impact on the free-enterprise system. Indeed, the decision suggests that parties to a patent litigation settlement will have great difficulty ever avoiding California antitrust liability if the settlement entails transferring anything of value from the patent holder to the alleged infringer. Because Cipro’s new state-law antitrust standard is so much more exacting than the standard announced by the U.S. Supreme Court in Actavis, federal antitrust law may well trump California’s standard. Indeed, were Cipro to reach the U.S. Supreme Court, the Court likely would reverse on federal preemption grounds.
“Reverse-Payment” Patent Settlements
When parties to litigation enter into a settlement, one would normally expect that any cash payments would flow from the defendant to the plaintiff. The normal expectations have been reversed in the context of litigation involving prescription-drug patents, however, as a result of financial incentives created by the Hatch-Waxman Act, a federal statute designed to ensure that generic versions of prescription drugs enter the market more quickly. The Act includes a provision that permits generic companies, by declaring to the Food and Drug Administration a belief that the patent held by a brand-name drug company is invalid, to essentially force the patentee to immediately file a patent infringement suit. It also grants huge financial awards to generic companies that successfully challenge drug patents. Continue reading
The WLF Legal Pulse has devoted a lot of digital ink to the issue of whether the members of a class action must be “ascertainable”—that is, capable of being feasibly identified. Opinions on this implicit class action procedural requirement have varied among the federal circuits and even within specific federal district courts. As an organization that generally favors uniformity, WLF was intrigued by reports that those responsible for making and amending the federal rules of civil procedure had ascertainability on their radar screen for class action rule reform.
The October 30-31, 2014 Agenda Book of the Advisory Committee on Civil Rules dumped cold water on the chances for a rule on ascertainability. The committee discussed the split among federal courts and concluded “in light of the likely difficulty of drafting rule provisions on class definition, the question is whether the problems described warrant making the effort.”
We can’t say we’re surprised, then, that the Advisory Committee’s Rule 23 Subcommittee left ascertainability out of its “draft concept amendments” for the class action rules, which can be read in the April 10-11 Agenda Book (starting on page 243). Considering what fellow legal reform enthusiast Andrew Trask of McGuire Woods LLP wrote on his blog about the Subcommittee’s proposals, perhaps we should be relieved ascertainability wasn’t also included. In any event, for the time being, class action defendants will have to continue fighting a court-by-court battle over this implied requirement.
As we’ve discussed previously, the U.S. Court of Appeals for the Ninth Circuit is poised to offer some clarity on ascertainability in Jones v. ConAgra. District courts in the circuit, especially within the Northern District of California (N.D. Cal., a/k/a The Food Court), have expressed divergent views on whether and how plaintiffs must demonstrate ascertainability.
For instance, in the Jones district court opinion, N.D. Cal. Judge Charles Breyer held that the plaintiffs must offer an objective and feasible method of identifying class members, though their failure to do so was not, by itself, fatal to their motion for class certification. Fellow N.D. Cal. Judge Samuel Conti, however, in Sethavanish v. ZonePerfect Nutrition Co., denied plaintiffs’ class certification motion entirely on the ground that they failed to demonstrate ascertainability. Continue reading
Federal courts have been inundated in recent years by suits filed by plaintiffs who have suffered no injury but who allege that a federal statute provides them with “standing” to sue for alleged violations of federal law. Such lawsuits can be extremely lucrative for the plaintiffs’ bar when the statute provides for an award of statutory damages (typically, $100 to $1,000) for each violation; by filing their suits as nationwide class actions, attorneys can often plausibly seek to recover billions of dollars. The Supreme Court may soon make it much more difficult for such suits to survive a motion to dismiss. The Court on Friday will consider whether to grant review in Spokeo v. Robins, a case that squarely addresses whether plaintiffs can assert Article III standing where their only “injury” is the affront to their sensibilities caused by the belief that someone is not complying federal law. The Court has indicated a strong interest in addressing the issue; Spokeo is an appropriate vehicle for doing so and ought to be granted.
The U.S. Solicitor General recently filed a brief recommending that the Court not hear Spokeo. That brief may, ironically, increase the likelihood that the Court will agree to hear the case, because the Solicitor General very pointedly declined to endorse the appeals court’s rationale for concluding that the plaintiff has standing.
Spokeo involves claims filed under the Fair Credit Reporting Act (FCRA), one of dozens of federal statutes that offer a bounty (in the form of statutory damages) to those who demonstrate a violation of a federal statute. Spokeo, Inc. operates a “people search engine”—it aggregates publicly available information from phone books, social networks, and other sources into a database that is searchable via the Internet, and displays the results of searches in an easy-to-read format. It has always emphasized that it does not verify or evaluate any piece of data and does not guarantee the accuracy of information offered. Continue reading
In the 1997 futuristic thriller “Gattaca,” character Vincent Freeman, played by actor Ethan Hawke, falls victim to genetic discrimination after the government begins to track and monitor human DNA strands via the Internet in a scheme to control and manipulate societal trends.
While the film’s plot seems nothing short of fantastical, the idea behind it—that the Internet has become an unguarded playground for identity thieves and major corporations to obtain unauthorized information in a quest to influence consumer behavior—echoes recent plaintiffs’ suits regarding the protection of personal privacy under the Video Privacy and Protection Act (VPPA) that have become increasingly popular in federal courts. 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
On March 4 in “By Treating Recusal Motions as a Game, Lawyers are Eroding Public Confidence in our Courts,” Washington Legal Foundation’s Chief Counsel Rich Samp wrote about the corrosive effect of plaintiffs’ lawyers’ demands that unfriendly judges be recused from hearing their cases. Much of the commentary centered around the multiple motions plaintiffs’ lawyers in a case called Price v. Philip Morris filed to recuse Illinois Supreme Court Justice Lloyd A. Karmeier from participating in the lawyers’ request to re-open that court’s 2005 decision.
As reported yesterday in Legal Newsline, the state high court denied the most recent request to disqualify Justice Karmeier from the Price case on March 11. The Court has yet to rule on the request to re-open the case.
Litigating away from “Home”: General Personal Jurisdiction One Year after the Supreme Court’s Daimler AG v. Bauman Decision
Mr. Beck utilized a PowerPoint slide presentation. The archive of the program, which includes a viewable version of the slides, is available at WLF’s website here. If you would prefer to watch the video above, a PDF of the slides are available here.
Related materials on Daimler AG v. Bauman and its application in civil litigation: