California Court Decision Offers Hope for Procedural Brake on Lawyer-Driven Class Actions

poolThis year’s rankings by civil-justice reform organizations (here and here) of states’ legal systems once again placed California near the bottom (or top, depending on how the listings are done) of the pack.  One of the California Supreme Court’s final decisions of 2017, which imposes liability on a pharmaceutical company for harm allegedly caused by a generic competitor’s copycat product, solidifies that hostile reputation going into a new year.

We write today, however, not to pile on (though we wholeheartedly share others’ California concerns), but to spotlight a December 4, 2017 California Court of Appeal ruling that is not only contrary to the state courts’ pro-litigation image but also bucks a national trend on a key class-action law issue. The question at issue in Noel v. Thrifty Payless, Inc. was whether a court can certify a class of plaintiffs when no objective method exists to ascertain who is or is not a class “member.” Continue reading “California Court Decision Offers Hope for Procedural Brake on Lawyer-Driven Class Actions”

President Commutes Sentence of Business Owner Victimized by Overcriminalization

rubashkinOn Wednesday, December 20, President Trump issued a statement commuting the sentence of Sholom Rubashkin, the former CEO of a kosher meatpacking plant. He had been convicted of financial fraud in 2009 and sentenced to 27 years in prison—a virtual life sentence for the then-51-year old Rubashkin. He had served 8 years of that sentence. Washington Legal Foundation actively participated in the courtroom and public resistance to the excessive sentence through amicus briefs and published commentaries. Continue reading “President Commutes Sentence of Business Owner Victimized by Overcriminalization”

With “LabMD” Decision Looming, FTC Workshop Delves into Privacy & Data Security Harms


Guest Commentary

By Douglas H. Meal, Michelle Visser, and David T. Cohen, Partners with Ropes & Gray LLP.

For years, the Federal Trade Commission (FTC), the primary consumer protection agency in the United States, has brought enforcement actions against companies on the basis that their alleged failure to use specified privacy and data security measures was purportedly an “unfair” business practice prohibited by § 5 of the Federal Trade Commission Act.  But FTC in fact has no authority under § 5 to declare a practice “unfair” unless, among other things, it causes or is likely to cause substantial, unavoidable injury to consumers that is not outweighed by countervailing benefits.

What (if anything), then, is a “substantial” injury in the privacy and data security context, how should its likelihood be measured, and how should one measure the benefits and costs of particular practices? Continue reading “With “LabMD” Decision Looming, FTC Workshop Delves into Privacy & Data Security Harms”

Federal Court’s Embrace of FTC Data-Breach Settlements as “Common Law” Treads on Due Process

d of washingtonThe Federal Trade Commission (FTC) has developed a well-known penchant for using individually negotiated settlement agreements and consent decrees to announce for the first time what qualifies as “unfair” or “deceptive” conduct under the FTC Act. In the data-privacy arena, FTC views these enforcement actions (and the resulting consent decrees) as a source of “common law” that places the business community on sufficient notice of what data-security practices § 5 of the FTC Act requires.

The U.S. District Court for the Western District of Washington recently ratified that view in a controversial ruling, Veridian Credit Union v. Eddie Bauer. The case arose following a 2016 cyberattack on Eddie Bauer’s network that compromised customers’ payment-card data. Veridian Credit Union, whose cardholders had their data stolen after shopping at Eddie Bauer, brought suit under Washington’s Consumer Protection Act (CPA), which like § 5 of the FTC Act also allows courts to award treble damages to private plaintiffs who are injured by “unfair” or “deceptive” acts. Veridian alleged that Eddie Bauer’s failure to adopt data-security measures that FTC has required in other cases constitutes an “unfair” practice under the Washington CPA. Continue reading “Federal Court’s Embrace of FTC Data-Breach Settlements as “Common Law” Treads on Due Process”

FDA Cannot Remain MIA as States’, Cities’ Drug-Litigation Crusade Threatens Regulatory Uniformity

FDAA November 30, 2017 post discussed the Food and Drug Administration’s (FDA) return to third-party courtroom advocacy for national, uniform regulation of products under its authority. In separate amicus briefs, the agency argued that federal law preempted both New York City’s enforcement of an expanded menu-labeling ordinance and certain claims in a products-liability suit against a medical-device maker. FDA also urged the International Trade Commission (ITC) to terminate an investigation into the drug-or-dietary-supplement status of an imported omega-3 substance because the inquiry would directly conflict with the agency’s authority in that area.

As a long-time proponent of regulatory uniformity, Washington Legal Foundation is encouraged by these developments, and we trust that FDA’s courtroom advocacy is a work in progress. The agency can make an even bigger difference in 2018 by weighing into litigation involving one of FDA’s most highly regulated class of prescription drugs: opioid-based pain medications. Continue reading “FDA Cannot Remain MIA as States’, Cities’ Drug-Litigation Crusade Threatens Regulatory Uniformity”

FTC Pharma Workshop Focuses on Supply Chain Issues and “Gamesmanship” of FDA Regulation

Featured Expert Column: Antitrust & Competition Policy — Federal Trade Commission

06633 - Royall, M. Sean ( Dallas )By M. Sean Royall, a Partner with Gibson, Dunn & Crutcher LLP, with Richard H. Cunningham, Of Counsel in the firm’s Denver, CO office, and Abiel Garcia, an Associate Attorney in the firm’s Los Angeles, CA office.

On November 8, 2017, the Federal Trade Commission hosted a workshop examining competitive dynamics in the pharmaceutical sector.  Participants in the workshop included professors Michael A. Carrier, Aaron Kesselheim, Stephen Schondelmeyer, Neeraj Sood, Erin Fox, and Rena Conti; representatives from industry interest groups Mark Merritt and Todd Ebert; consumer advocate David Mitchell; economists Adam Fein and Hal Singer; FDA Commissioner Dr. Scott Gottlieb; and FTC Acting Chairman Maureen Ohlhausen.

While FTC workshops are informal and have no binding effect on the policies of the agency, they frequently foreshadow areas of future investigative or enforcement focus.  Participants’ comments generally affirmed that areas of long-standing FTC activity in the pharmaceutical sector, including reverse payments and merger enforcement, are likely to remain areas of ongoing focus.  Two notable new issues also emerged:  scrutiny of the industry’s distribution system and potential abuse of FDA regulatory processes to inhibit generic entry.  In addition, Dr. Gottlieb announced three new FDA initiatives to facilitate generic entry into pharmaceutical markets. Continue reading “FTC Pharma Workshop Focuses on Supply Chain Issues and “Gamesmanship” of FDA Regulation”

Second Circuit Improperly Ducks Important First Amendment Issues

FirstAmendmentThe U.S. Supreme Court has repeatedly held that federal courts are under a “virtually unflagging” obligation to hear and decide federal claims over which they possess jurisdiction.  Yet, the U.S. Court of Appeals for the Second Circuit has repeatedly refused to decide a First Amendment challenge to a New York statute that restricts merchants’ ability to inform their customers of credit-card surcharges.

Just this past week, the appeals court yet again put off a decision by certifying to the New York Court of Appeals (the state’s highest court) a question on the meaning of the challenged statute.  The federal court’s rationale for its delay does not hold water and betrays a thinly disguised hostility to the First Amendment claims at issue. Continue reading “Second Circuit Improperly Ducks Important First Amendment Issues”