California Supreme Court Continues Its “Grasping” and “Exorbitant” Personal Jurisdiction over Nonresident Defendants

California supreme courtIn its seminal 2014 decision, Daimler AG v. Bauman, the U.S. Supreme Court imposed strict limits on the authority of courts to exercise personal jurisdiction over out-of-state corporate defendants.  It condemned as “grasping” and “exorbitant” a California court’s efforts to exercise jurisdiction over claims lacking any connection with the State based solely on a corporate defendant’s regular conduct of business there.  But apparently the California Supreme Court did not get the message.  This week it ruled 4-3 that out-of-state plaintiffs whose tort claims arose outside the State could sue an out-of-state corporation in California courts simply because other plaintiffs who live in California have filed similar claims against the corporation.  Bristol-Myers Squibb Co. v. Superior Court (BMS).  That decision conflicts both with Daimler and basic notions of due process.  The U.S. Supreme Court ought to reverse it in short order. Continue reading

When Prices for an App Increase, There’s a Lawsuit for That

LogMeInBy Trey Wassdorf, a Judge K.K. Legett Fellow at Washington Legal Foundation in the summer of 2016 who is currently a third-year student at Texas Tech University School of Law.

Recently, online video-on-demand service Hulu decided to migrate from a business model that had provided either a free ad-supported service or a subscription-based premium service. The new service is a bit complicated; there will be a $7.99 per month ad-supported service, an $11.99 per month ad-free service, and users will still be able to watch some Hulu content for free through their distribution partners, most notably Yahoo’s new Yahoo View.  Hulu will also offer customers that currently use its free service a 30-day free trial to the subscription service.

Hulu’s decision is one that many digitally-based businesses, especially developers of mobile-device applications, are making. They accept that some users won’t be thrilled with having to pay for what they previously got gratis, but it’s unlikely that many businesses have contemplated the threat of litigation when making such a move. Recent litigation against app developer LogMeIn, however, should act as a wake-up call to digital businesses large and small. Continue reading

Update: Activists Hostile to Domestic Energy Development Fail in Colorado Ballot Initiative Effort

natural gasIn an August 26, 2016 Washington Legal Foundation Legal Backgrounder, Fighting the Frack Attack: The State of State Preemption Efforts, Kelley, Drye & Warren LLP attorneys Wayne D’Angelo and Travis Cushman document how the highest courts in four states have addressed local government limits on highly successful oil and gas extraction methods, such as hydraulic fracturing and horizontal drilling. The most recent state court to consider the issue, the Colorado Supreme Court, held that two local governments’ limits on extraction techniques conflicted with the state’s oil and gas regulatory regime.

The paper noted that at the time of its release, it was unclear whether the Colorado Supreme Court’s rulings would remain in force because “Colorado is at the epicenter of a heated ballot initiative to change the state’s oil and gas laws.”

The Denver Post reported August 29 that the sponsors of two ballot initiatives related to oil and gas extraction failed to collect the number of requisite signatures for a November 8 vote. One measure would have prohibited new oil and gas facilities within 2,500 feet of homes; the other would have expanded local governments’ authority to restrict hydraulic fracturing. The Colorado Secretary of State’s random sampling of signatures for the two initiatives not only showed that their sponsors came up short of the 98,492 needed, but also that some of the signatures may have been forged.

Activists hostile to domestic energy development also failed in 2014 to place similar measures before Colorado voters.

Update: FCC Declines Appeal of Sixth Circuit Loss in Municipal Broadband Preemption Case

FCCThe Federal Communications Commission (FCC) announced on August 29 that it will not be appealing its loss in the US Court of Appeals for the Sixth Circuit in Tennessee v. FCC. The August 10 decision held that FCC lacked the authority under Telecommunications Act § 706 to preempt state limits on municipalities’ offering of broadband services. Washington Legal Foundation supported the Petitioners in the case with an amicus brief on which we represented former FCC Commissioner Harold Furchtgott-Roth.

FCC argued that § 706 granted the Commission broad public-interest authority to dictate how states regulated the activities of their own local towns and cities. Tennessee and North Carolina both permit municipalities to offer government-owned broadband services, but they limit the offering of those services to the municipalities’ geographical borders. The Commission acknowledged it could not prohibit states from banning municipal broadband, but asserted that once states allowed such services, § 706 empowered FCC to preempt state policies that stood “as a barrier to infrastructure investment and broadband deployment.”

As former Commissioner Furchtgott-Roth and his Hudson Institute colleague Arielle Roth explained in an August 18 WLF Legal Pulse post, “The Sixth Circuit correctly rejected FCC’s basis for preempting the North Carolina and Tennessee statutes, stating that nowhere in § 706 did Congress indicate an intent to preempt internal state laws governing broadband deployment.”

The extent of FCC’s overreach was made manifest last November when the Department of Justice declined to sign FCC’s Sixth Circuit brief. Experts noted at the time that DOJ’s absence conveyed a not-so-subtle message to the Sixth Circuit. The Sixth Circuit sent an even clearer message to FCC with its August 10 decision, one that the Commission finally appears to have received.

Crusade or Charade?: What’s Really Motivating Efforts to Mandate GMO-Labeling?

amber_waves_of_grain_2

Because “public-interest” groups cloak themselves with the feel-good mantle of protecting consumers, the environment, animals, etc., the motives of such groups rarely get questioned. But several recent developments show that all too often, activists put their own self-interest before the public’s interest.

Consider, for example, environmental groups’ opposition to a Washington state ballot measure going before voters this fall. Initiative 732 pursues a major environmentalist goal—carbon-emissions reduction—by imposing an excise tax. Revenues from the carbon tax would in turn fund sales, manufacturing, and low-income-household tax cuts. In other words, it’s revenue neutral, and that doesn’t sit well with green activists who see climate change as an effective proxy for a broader ideological goal: expanding government. Continue reading

Texas Supreme Court Restricts Scope of Common-Law Nuisance

New Faulk photoFeatured Expert Column − Toxic Tort and Environmental Litigation

Richard O. Faulk, a Partner with Alexander Dubose Jefferson & Townsend LLP serving clients in Texas and Washington DC.

*The views and opinions expressed in this article are those of the author and do necessarily represent or reflect the views of Alexander Dubose Jefferson & Townsend LLP.

In a unanimous decision, the Texas Supreme Court recently clarified key points regarding the common-law doctrine of private nuisance.  See Crosstex North Texas Pipeline v. Gardiner.1 Although the doctrine of public nuisance has given rise to a great deal of litigation over the past decades,2 private nuisance cases have been considerably less conspicuous.  The distinction between the two torts is based not upon the defendant’s conduct, but rather on the nature of the interest the conduct affects.  Historically, a public nuisance is “an act or omission ‘which obstructs or causes inconvenience or damage in the exercise of rights common to all,”3 while a private nuisance is a condition that substantially interferes with the use and enjoyment of land causing unreasonable discomfort or annoyance to persons of ordinary sensibilities attempting to enjoy it.”4 Continue reading

SEC Drifting Further Away from Its Statutory Mission with Latest “Therapeutic Disclosure” Idea

bainbridgeFeatured Expert Contributor — Corporate Governance/Securities Law

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

*Editor’s Note: Washington Legal Foundation is pleased to have Professor Bainbridge joining our roster of WLF Legal Pulse Featured Expert Contributors. Professor Bainbridge is a member of WLF’s Legal Policy Advisory Board. He is a prolific scholar, whose work covers a variety of subjects, but with a strong emphasis on the law and economics of public corporations. He also authors ProfessorBainbridge.com, which over the last ten years has consistently earned ABA Top 100 law blog honors.

____________________________________

An August 15, 2016 Wall Street Journal opinion piece critiqued the Securities and Exchange Commission’s (SEC) plan to require that public companies, in the words of SEC Chairman Mary Jo White, “include in their proxy statements more meaningful board diversity disclosures on their board members and nominees.”

This sort of disclosure, as Chairman White remarked when discussing another potential SEC disclosure mandate, is “directed at exerting societal pressure on companies to change behavior, rather than to disclose financial information.” So what she’s proposing now with regards to board diversity is known as therapeutic disclosure. Continue reading