Update: Court Imposes Injunction on Proposition 65 Listing of Glyphosate

On November 27, 2017, a WLF Legal Pulse post by WLF Senior Litigation Counsel Cory Andrews discussed a lawsuit filed by makers and users of pesticides that include the chemical glyphosate against the California agency that administers Proposition 65. That law requires warnings on products that contain substances “known to the state of California” to cause cancer. On February 26, Eastern District of California Judge William B. Shubb imposed a preliminary injunction preventing the state from listing glyphosate as a carcinogen under Prop 65. The court held that the plaintiffs were likely to prevail on the First Amendment arguments in their suit. National Ass’n of Wheat Growers, et al. v. Zeise.

Under Prop 65, a substance must be listed if it is identified as a potential carcinogens by the International Agency for Research on Cancer (IARC), an international non-governmental entity. In 2015, IARC made that determination for glyphosate, triggering the automatic Prop 65 listing. IARC’s classification of glyphosate is contrary to the conclusions of many environmental regulators around the world, including the US EPA. Last November, a study published in the Journal of the National Cancer Institute reinforced those regulators’ conclusions that glyphosate was unlikely to pose a cancer hazard to humans.

To pass muster under the First Amendment, a commercial-speech mandate must require language that is “purely factual and uncontroversial.” The language must thus be factually accurate, and even if literally true, cannot be misleading. Judge Shubb found that the warning required for glyphosate is not factual or uncontroversial because it “conveys the message that glyphosate’s carcinogenicity is an undisputed fact, when almost all other regulators have concluded that there is insufficient evidence that glysophate causes cancer.”

Law of Copyright Reinterpretation Project Steers ALI Further Off Course

copyrightIn April 2015, a WLF Legal Pulse post expressed concern with a nascent American Law Institute (ALI) project, Restatement of the Law: Copyright. Three years later, the drafting process continues in the face of increasing criticism from intellectual property scholars, ALI members, and even the federal government’s chief copyright official. Some of those critiques echo and amplify the concerns we expressed initially and have repeated in our posts on ALI’s other troubled project, the liability-insurance-law Restatement.  Simply put, the Institute’s ambition to put its own imprint on the law imperils its credibility. Continue reading “Law of Copyright Reinterpretation Project Steers ALI Further Off Course”

Settlement of Lawyer-Driven “Merger Tax” Litigation Stumbles in New York

ny state courtsTo paraphrase an Oscar-winning song, it’s hard out there for a corporate merger.  In recent years, opportunistic plaintiffs’ attorneys have descended upon proposed mergers of publicly owned companies, filing lawsuits to delay the proceedings alleging that management breached its fiduciary duty to the shareholders.

But one look at the typical settlement demonstrates that these cases are almost always cash grabs for the attorneys while providing almost no benefit for the allegedly harmed shareholders.  The defendant usually agrees to “disclose” additional, trivial information about the merger, while paying the plaintiffs’ attorneys thousands of dollars in legal fees.  It comes as little surprise that these claims are colloquially known as “merger tax” suits, with the “tax” being the attorneys’ fees public corporations now feel obligated to pay any time they want to combine. Continue reading “Settlement of Lawyer-Driven “Merger Tax” Litigation Stumbles in New York”

Environmental Enforcement Implications from Recent DOJ and EPA Guidance

sboxermanFeatured Expert Column – Environmental Law and Policy

by Samuel B. Boxerman, Sidley Austin LLP

Last month, the U.S. Department of Justice (DOJ) and the Environmental Protection Agency (EPA) separately issued informal guidance documents that could have a major impact on businesses enterprises’ environmental law and regulatory compliance. DOJ’s guidance relates to civil enforcement activities generally, while EPA’s involves environmental law enforcement at the state level under the rubric of cooperative federalism. Each document is explained below. Continue reading “Environmental Enforcement Implications from Recent DOJ and EPA Guidance”

Perpetual Dual Class Stock versus the SEC’s Dubious Raised Eyebrow Power

bainbridgeFeatured Expert Contributor, Corporate Governance/Securities Law

Stephen M. Bainbridge, William D. Warren Distinguished Professor of Law, UCLA School of Law.

Newly confirmed SEC Commissioner Robert J. Jackson, Jr., gave his inaugural speech at Berkeley on February 15, 2018. In it, he criticized—in an admittedly nuanced way—the growing phenomenon of dual class stock. As he explained, most U.S. public corporations have a single class of common stock in which all shares have one vote per share. In recent years, however, some companies—especially in the tech sector—have gone public with a so-called dual class capital structure, which typically has two classes of common stock.

One class will have the traditional one vote per share, but the other will have multiple votes—usually 10—per share. The former shares are the ones sold to the public in the IPO, while insiders hold the super-voting shares. Facebook is a paradigmatic example: Mark Zuckerberg’s super-voting shares represent only 16% of the company’s equity but give him 60% of the total voting power. Continue reading “Perpetual Dual Class Stock versus the SEC’s Dubious Raised Eyebrow Power”

Another California Intrusion on Businesses’ Free Speech Fails in Court

FirstAmendmentFor a state with cities like Berkeley, which birthed the Free Speech Movement 54 years ago, California’s record on respecting the First Amendment is surprisingly spotty. That is especially true for the expressive activities of businesses. The state, as well as its municipalities, often curtail businesses’ speech, or compel them to speak, as a way to demonstrate government is “doing something” to solve complex social or public-health problems.

Occasionally, but not nearly often enough, courts reintroduce California’s censors to the First Amendment, as the U.S. Court of Appeals for the Ninth Circuit did last year in striking down San Francisco’s warning-label mandate for “sugary” drinks. On February 20, a Northern District of California judge handed the state its latest speech-regulation defeat, striking down a law designed to limit information that entertainment database company IMDb.com could publish (IMDb.com Inc. v. Becerra). Continue reading “Another California Intrusion on Businesses’ Free Speech Fails in Court”

Labor Issues in the Gig Economy: Federal Court Concludes That GrubHub Delivery Drivers are Independent Contractors under California Law

Forman_A_Main-large-headshot-photo-15242Sullivan_K_Main-large-headshot-photo-12239Guest Commentary

By Adam S. Forman, a Member in the Detroit, MI and Chicago, IL offices of Epstein Becker & Green, P.C., and Kevin D. Sullivan, an Associate in the firm’s Los Angeles, CA office.

Ed. Note: Cross-posted with permission from the Wage and Hour Defense Blog. Epstein Becker Members Nathaniel Glasser and Stuart Gerson authored a Washington Legal Foundation Legal Backgrounder in 2017 on this topic, ISO: Uniform, Transparent Regulatory Standard to Distinguish Independent Contractors from “Employees.”

Recently, a number of proposed class and collective action lawsuits have been filed on behalf of so-called “gig economy” workers, alleging that such workers have been misclassified as independent contractors. How these workers are classified is critical not only for workers seeking wage, injury and discrimination protections only available to employees, but also to employers desiring to avoid legal risks and costs conferred by employee status.  While a number of cases have been tried regarding other types of independent contractor arrangements (e.g., taxi drivers, insurance agents, etc.), few, if any, of these types of cases have made it through a trial on the merits—until now. Continue reading “Labor Issues in the Gig Economy: Federal Court Concludes That GrubHub Delivery Drivers are Independent Contractors under California Law”