Ninth Circuit Decision Underscores Need for Clarity on ADA’s Application in Cyberspace

patchworkDebate over whether the Americans with Disabilities Act’s (ADA) applies to websites has been raging for years—mostly in the federal courts. As happens all too often, federal legislators and regulators have remained mostly mute, leaving judges to resolve this thorny question. This default appeal to the judiciary, which has produced divergent decisions, deprives website owners the consistent and transparent fair notice that the free-enterprise system needs (and that businesses deserve under our Constitution) to function.

The Ninth Circuit is the latest court to stitch a new block onto the patchwork quilt of website-related ADA rulings. On January 15, the court held in Robles v. Domino’s Pizza, LLC that the company’s website was a service of a “place of public accommodation” (Domino’s physical stores) and thus must be accessible under the ADA. The court also rejected Domino’s argument that the Justice Department’s failure to offer formal guidance on the websites’ ADA status violated their Fifth Amendment right to due process. The Robles decision was highly anticipated and will have a broad impact, evidenced by the amicus brief filed by a coalition of business associations. Continue reading “Ninth Circuit Decision Underscores Need for Clarity on ADA’s Application in Cyberspace”

Food-Labeling Suit’s Successful Class Certification is Cause for Concern in California

Featured Expert Contributor—Civil Justice/Class Actions

Frank Cruz-Alvarez, Shook, Hardy & Bacon L.L.P., with Rachel Forman, Shook, Hardy & Bacon L.L.P.

California is broadening the legal landscape of food-labeling class actions to the dismay of the food and beverage industry.  The Southern District of California in Hilsley v. Ocean Spray Cranberries, Inc. et al. has thrown the doors open for class certification in food-labeling cases.  The court issued an opinion partially certifying a class of consumers consisting of California citizens who purchased one of various Ocean Spray Cranberries, Inc. (“Ocean Spray”) products, such as Ocean Spray Cran Apple or Cran Raspberry, that contain labels which state, “‘No . . . artificial flavors’ when in fact the products contain artificial flavoring chemicals that simulate the advertised fruit flavors.”  Id. at “2. Continue reading “Food-Labeling Suit’s Successful Class Certification is Cause for Concern in California”

With Emulex Corp., Supreme Court Could Raise Bar for “Merger Tax” Securities Suits

bainbridgeFeatured Expert Contributor, Corporate Governance/Securities Law

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

In the wake of the Delaware Chancery Court’s pathbreaking decision in the Trulia case,1 which sharply increased the scrutiny given settlements of cases challenging mergers and other takeovers, there has been a dramatic shift of M&A litigation to federal courts.2 How receptive federal courts will be to this flood of new claims will be determined in part by Emulex Corporation, et al., v. Varjabedian, which is currently pending before the U.S. Supreme Court. Emulex turns on whether scienter is an element of the private-party cause of action under § 14(e) of the Securities Exchange Act of 1934. Section 14(e) prohibits fraud in connection with tender offers and thus will be a key provision in assessing the survivability of these new M&A lawsuits.3 Continue reading “With Emulex Corp., Supreme Court Could Raise Bar for “Merger Tax” Securities Suits”

The Judiciary Can Corral the Administrative State, but Only the People Themselves Can Tame It

madison
James Madison

The executive power of this nation would, James Madison wrote in Federalist 48, be “restrained” within a “narrow compass.” The judicial power could, in his view, be “described by landmarks still less uncertain.” It was against “the enterprising ambition” of the legislature, he believed, that “the people ought to indulge all their jealousy and exhaust all their precautions.” Unless the other departments and the people remained vigilant, Madison warned, the legislature would draw “all power into its impetuous vortex.”

This outlook was informed by the excesses of the ancient Athenian mob, which, as Madison put it in Federalist 63, decreed “to the same citizens the hemlock on one day and statues on the next.” But although he still talks, on occasion, like a fanatic, the modern congressman pushes much of his power away with both hands. That power is gladly accepted by the modern bureaucrat, an upstart bent on steering the ship of state off the course set by the Founders. Continue reading “The Judiciary Can Corral the Administrative State, but Only the People Themselves Can Tame It”

Knick v. Scott Township: Whack-a-Mole at the Supreme Court

whackToday’s Supreme Court argument in Knick v. Scott Township made clear that state and local governments are playing Whack-a-Mole with private property rights. Whack-a-Mole is the arcade game in which every time a mole is whacked down, a new one pops up. At issue in Knick is whether to overturn the Court’s 1985 Williamson County decision, which held that Fifth Amendment Takings Clause claimants are generally relegated to state court.

When property rights advocates subsequently pointed out that Williamson County effectively barred property owners from ever asserting their Fifth Amendment rights, state and local governments persuaded the Court to re-interpret the nature of a Takings Clause violation (in its 2005 San Remo Hotel decision) to eliminate the no-right-to-assert problem. But when Justice Gorsuch suggested at today’s oral argument that this revised interpretation of the Takings Clause undercuts Williamson County’s rationale, the attorney for Scott Township denied the validity of the revised interpretation—in effect arguing that San Remo ought to be overruled. Continue reading Knick v. Scott Township: Whack-a-Mole at the Supreme Court”

Quality Control at a Sustainable Cost: Blockchain Solutions for Bank Secrecy and Anti-Money-Laundering Compliance

Featured Expert Contributor, Legal & Regulatory Challenges for Digital Assets

Alter_Daniel_web2_8784879218361By Daniel S. Alter, a Shareholder in the New York, NY office of Murphy & McGonigle P.C.

I’ve banged on this drum before in American Banker but—given recent and exciting developments in blockchain technology—it’s time to beat on it again.  The costs of Bank Secrecy Act and Anti-Money Laundering (BSA-AML) compliance are an enormous regulatory burden on financial institutions, particularly for small and middle market firms.  And considering the global security implications posed by terrorist financing and other criminal money-laundering operations, there are no corners to cut in meeting these requirements.

Yet, as one major vendor of compliance systems has observed, criminals are “increasingly laundering money through smaller regional banks, believing that these institutions do not have the millions to invest in the processes and technology needed” to combat the problem.  I say again, there is a private-market solution to this public-safety challenge. Continue reading “Quality Control at a Sustainable Cost: Blockchain Solutions for Bank Secrecy and Anti-Money-Laundering Compliance”

Ninth Circuit Judges Call for En Banc Review of FTC’s Authority to Obtain Monetary Relief

Featured Expert Contributor, Antitrust & Competition Policy — Federal Trade Commission

By M. Sean Royall, a Partner with Gibson, Dunn & Crutcher LLP, with Blaine H. Evanson, and Richard H. Cunningham, Partners, and Brandon J. Stoker, an Associate, with the firm.

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Less than two years ago, David Vladeck, a Professor at Georgetown University Law Center who served as the Director of the FTC’s Bureau of Consumer Protection from 2009 to 2012, described the argument that the FTC Act does not permit the agency to obtain equitable monetary relief as “repeatedly and uniformly rejected by every court to address it.”  Two Ninth Circuit judges, however, recently signaled that the landscape in this area may be changing in the wake of the Supreme Court’s 2017 Kokesh v. SEC decision.

In an extraordinary procedural move, on December 3, 2018, Ninth Circuit Judge Diarmuid F. O’Scannlain, joined by Judge Carlos T. Bea, wrote a special concurrence to his majority opinion in FTC v. AMG Capital Management, LLC et al., in which he described permitting the FTC to obtain monetary relief under Section 13(b) of the FTC Act as “an impermissible exercise of judicial creativity” that “contravenes the basic separation-of-powers principle that leaves to Congress the power to authorize (or to withhold) rights and remedies.”  Slip Op. at 36.  The concurrence called on the Ninth Circuit to hear the case en banc to reconsider its 2016 decision in in FTC v. Commerce Planet, Inc.,* which held that  the FTC may obtain monetary relief pursuant to Section 13(b), and walked through how the Kokesh decision calls the reasoning of Commerce Planet into question. Continue reading “Ninth Circuit Judges Call for En Banc Review of FTC’s Authority to Obtain Monetary Relief”