WLF Supreme Court Preview Briefing Delves into Cases and Petitions Affecting Free Enterprise

Our October Term 2018 preview aired live at 12:30 on September 18. Thomas Goldstein of Goldstein & Russell, P.C. moderated a panel that featured Professor John Yoo of UC Berkeley School of Law; Shay Dvoretzky of Jones Day; and Beth Brinkmann of Covington & Burling LLP.

Washington Legal Foundation has filed amicus briefs in four cases currently on the Court’s October 2018 docket and in support of five certiorari petitions:

Merits cases

Cert. Petitions

Relevant WLF Publication

Air & Liquid Systems Corp. v. Devries: Asbestos Litigation’s “Bare Metals” Defense Goes Before the U.S. Supreme Court

Courts Reject Buyers’ Remorse and Wasted Time as Redressable Class-Wide Injuries

article IIIWe return once again (click here for past posts) to the seemingly banal legal doctrine of standing to sue—a subject that few, if any, likely contemplated when celebrating Constitution Day this week. This doctrine does, however, arise from the Constitution’s ingenious separation of powers among the three branches of government. Article III limits the judiciary’s role to resolving “cases” and “controversies.” From that the U.S. Supreme Court derived the standing doctrine as a way to test whether plaintiffs’ claims are fit for judicial resolution. A key part of the test is whether a plaintiff can factually establish that she suffered a concrete “injury in fact” that can be traced to the defendant’s conduct and can be redressed by a judicial remedy.

Legal claims based on conjectural or hypothetical harm, therefore, should not be inundating federal courts’ dockets. Unfortunately, too many no-injury class actions are passing the standing test, thanks in part to broadly worded state consumer-protection laws (and judges’ reluctance to reject jurisdiction). Just last week, for instance, a federal court ruled that state fraud laws are so broad that consumers who purchased vehicles with faulty ignition switches can recover damages even if the defect never manifested itself. And earlier this year, the Supreme Court refused to review an appellate court decision that allows eye-drop users to sue based on the speculative theory that eye-drop producers would charge the same price for a vial with a smaller dispensing hole.

Given the current trend on standing, it is critical to highlight positive outcomes in this area. We discuss two encouraging decisions here, one from the court that allowed the aforementioned eye-drop suit to proceed, the U.S. Court of Appeals for the Third Circuit, and the second from a federal court in California, a state with perhaps the nation’s most permissive consumer-protection laws. Continue reading “Courts Reject Buyers’ Remorse and Wasted Time as Redressable Class-Wide Injuries”

Fifth Circuit Signals Sea Change in CFPB Civil Investigative Demand Analysis

Featured Expert Contributor, White Collar Crime & Corporate Compliance

Brower_GregAuchterlonieSarah

By Gregory A. Brower, a Shareholder with Brownstein Hyatt Farber Schreck, LLP in Las Vegas, NV and Washington, DC with Sarah Auchterlonie, a Shareholder in the Denver, CO office.

On September 6, 2018 the U.S. Court of Appeals for the Fifth Circuit raised the standard under the Consumer Financial Protection Act (CFPA) (12 U.S.C. § 5562(c)(2)) for the specificity in a Bureau Civil Investigative Demand’s notification of purpose. In Consumer Financial Protection Bureau v. The Source for Public Data, Case No. 17-10732 (5th Cir. Sept. 6, 2018), the CFPB sent a CID to Source for Public Data, Inc., a company that provides records from local, state, and federal agencies about individuals through an internet-based search engine. The CID stated that its purpose was to investigate “unlawful acts and practices in connection with the provision or use of public records information.” It referenced the Fair Credit Reporting Act (FCRA). Continue reading “Fifth Circuit Signals Sea Change in CFPB Civil Investigative Demand Analysis”

California Supreme Court Says Use of Industry Custom and Practice Evidence Is a “Two-Way Street” in Products Liability Actions

RobertWrightJAT updated 150106_024_1a_webFeatured Expert Contributor, Mass Torts—Asbestos

By Robert H. Wright, a Partner with Horvitz & Levy LLP in Los Angeles, CA, with Partner John A. Taylor, Jr. Mr. Taylor was counsel of record on an amicus brief filed by the Alliance of Automobile Manufacturers in Kim.

In 2016, the California Supreme Court granted review in Kim v. Toyota Motor Corporation to determine whether, in a strict products liability action, evidence that a product’s design conforms with industry custom and practice is relevant and admissible.  Several appellate decisions in California had previously held that such evidence is categorically inadmissible, but the lower appellate court in Kim had taken a more nuanced approach, saying, in effect, “it all depends.”

Manufacturers awaited Kim with some anxiety, given that California is now the world’s fifth largest economy, other states look to California law for guidance on products liability law issues, and recent personnel changes on the court made the outcome in the case somewhat unpredictable.

The manufacturing industry therefore breathed a collective sigh of relief when, in August 2018, the California Supreme Court finally issued its decision in Kim, after considering briefing from the parties and nearly a half dozen amicus briefs from industry groups, business organizations, and the defense bar.  Continue reading “California Supreme Court Says Use of Industry Custom and Practice Evidence Is a “Two-Way Street” in Products Liability Actions”

What’s Extraterritorial on the Blockchain?: “In re Tezos Securities Litigation” and the Application of U.S. Securities Law to “Foreign” ICOs

Alter_Daniel_web2_8784879218361Featured Expert Contributor—Legal & Regulatory Challenges for Digital Assets

By Daniel S. Alter, a Shareholder in the New York, NY office of Murphy & McGonigle P.C.

*Ed. Note: This is Mr. Alter’s inaugural post as the WLF Legal Pulse’s newest Featured Expert Contributor. Prior to joining Murphy & McGonigle P.C., Mr. Alter was General Counsel for the New York State Department of Financial Services.

In July 2017, the Tezos Foundation—a Swiss non-profit organization—conducted an online initial coin offering (or ICO) that raised more than $230 million in value.  The terms of sale purportedly governing the ICO contained a forum selection clause designating Switzerland as the exclusive forum for all ICO-related litigation and choosing Swiss law to govern disputes.  Soon after the ICO concluded, however, purchasers of Tezos tokens brought suits in U.S. federal district court against multiple defendants (including American and European individuals and entities) involved in managing the token sale.

The plaintiffs alleged that the defendants had sold unregistered securities in violation of §§ 12 and 15 of the Exchange Act of 1934 (“Exchange Act”).  15 U.S.C. §§ 77l, 77O.  Once the cases were consolidated, several defendants moved to dismiss the complaint arguing, among other things, that—because the Exchange Act does not apply to the extraterritorial sale of unregistered securities—a foreign ICO cannot give rise to federal liability.[1] Continue reading “What’s Extraterritorial on the Blockchain?: “In re Tezos Securities Litigation” and the Application of U.S. Securities Law to “Foreign” ICOs”

New Jersey: Now the Product-Liability Defendant’s Playground?

Featured Expert Contributor, Litigation Strategies

Joe_Hollingsworth_thumbnail 1By Joe G. Hollingsworth, Partner, Hollingsworth LLP, with Robert E. Johnston, Partner, Hollingsworth LLP.

Atlantic City, New Jersey—often called A.C. or America’s Playground—has the bright lights and casinos of Las Vegas set on the southern Jersey shore.  We confess that we have tried our luck rolling the bones at the Borgata on occasion, but our defense-side colleagues rolled a “natural” just last month in the New Jersey Supreme Court.

On August 1, 2018, New Jersey became the latest state to adopt (in civil cases) the principles governing the admissibility of scientific opinion evidence articulated by the United States Supreme Court in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993) – a win made even sweeter because it comes in the In re Accutane Litigation Mass Tort litigation, which has been churning (outrageously) in A.C. for more than a decade.  In re Accutane Litigation, (A-25-17) (079958) slip op. (N.J. August 1, 2018) (“Accutane”).  The New Jersey Supreme Court’s decision is a full-throated endorsement of the trial judge’s gatekeeper role and offers the hope that defendants litigating scientific cases in New Jersey may find the courts more hospitable.   The Accutane decision also may represent a turning point in the erosion of the gatekeeping function that has occurred over the twenty-five years since Daubert was first handed down. Continue reading “New Jersey: Now the Product-Liability Defendant’s Playground?”

Second Circuit Contradicts SEC/DOJ Guidance in Limiting Scope of FCPA

Featured Expert Contributor, White Collar Crime & Corporate Compliance

Brower_GregBy Gregory A. Brower, a Shareholder with Brownstein Hyatt Farber Schreck, LLP in Las Vegas, NV and Washington, DC, with Thomas J. Krysa, a Shareholder with the firm in its Denver, CO office.

In a much watched Foreign Corrupt Practices Act (FCPA) case that originated in the U.S. District Court for the District of Connecticut, the U.S. Court of Appeals for the Second Circuit recently held in U.S. v Hoskins that a foreign national who is not employed by a U.S. company cannot be guilty of violating the law as an accomplice or co-conspirator. In so ruling, the court directly contradicted a 2012 FCPA guide promulgated jointly by the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ).  A unanimous three-judge panel held that “the government may not expand the extraterritorial reach of the FCPA by recourse to the conspiracy and complicity statutes.”  This decision is significant because it clarifies federal regulators’ and prosecutors’ jurisdiction over nonresident foreign nationals. Continue reading “Second Circuit Contradicts SEC/DOJ Guidance in Limiting Scope of FCPA”