Seventh Circuit Rejects Disclosure-Only Settlement in Merger Tax Suit, Embracing Delaware Chancery Court’s “Trulia” Decision

ARickeyK. Whittaker Guest Commentary

By Anthony Rickey, a solo practitioner at Margrave Law LLC in Georgetown, DE, and Keola R. Whittaker, an Associate with McGuireWoods LLP in its Los Angeles, CA office.

U.S. Court of Appeals for the Seventh Circuit Judge Richard Posner’s criticism of meritless settlements in In re Walgreen Co. Stockholder Litigation, (Aug. 10, 2016) will cheer hearts skeptical of the utility of mergers-and-acquisitions (M&A) class actions.  The opinion reversed and remanded a district court’s approval of a disclosure settlement arising out of the merger of Walgreen Co. and Alliance Boot GmbH.   Judge Posner explained why each of the six supplemental disclosures offered to the class as settlement consideration were, variously, “worthless,” “provided no new information,” or “could be derived by simple arithmetic from data in the proxy statement. . . .”   After reversing the trial court, the appellate court suggested that the class counsel who had supported such a settlement, and sought $370,000 in fees, had not adequately represented the class, and advised the district court on remand to seriously consider dismissing the suit or appointing new class counsel.  Continue reading

Will Illinois State AG’s Action Put an End to Unabashed Abuse of State’s False Claims Law?

package deliveryThis past May, a Cook County Associate Judge dismissed 201 Illinois False Claims Act (IFCA) cases at the request of Illinois Attorney General Lisa Madigan. The state’s action is an encouraging, albeit overdue, development in a long-running legal saga where one enterprising lawyer has harnessed the state’s enforcement power to pursue personal financial gain that provides little or no benefit to the public.

Much like its federal equivalent, the IFCA allows private citizens (relators) to file fraud claims on behalf of the state. The fraud must be based on a false claim, typically a violation of a law or regulation. If successful, relators can collect up to 30% of the award plus attorneys’ fees. Continue reading

Pfizer False Claims Victory May Embolden Other Pharma Defendants

By Todd Hobbs, Judge K.K. Legett Fellow at Washington Legal Foundation and a rising third-year student at Texas Tech University School of Law

2nd CircuitIn May, the United States Court of Appeals for the Second Circuit upheld the dismissal of a qui tam lawsuit in U.S. ex rel. Polansky v. Pfizer, Inc.  Polansky, a former Pfizer Medical Director, brought suit under the federal False Claims Act (FCA) on behalf of the U.S. government. He alleged that Pfizer submitted a false claim for Medicare payment by illegally marketing its product for an off-label use.  The Second Circuit held that the complaint at issue failed to allege any off-label promotion and affirmed the district court’s dismissal on that basis.  Federal appeals courts have not considered many FCA lawsuits related to off-label marketing allegations, making the Polansky result worth closer review.

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Friday Finger on the Pulse: “Spokeo v. Robins” Edition

On May 16, the U.S. Supreme Court released its highly anticipated decision in Spokeo, Inc. v. Robins. The Court sent the case back down to the Ninth Circuit, which had ruled that the Fair Credit Reporting Act accorded the unemployed, single Mr. Robins standing to sue Spokeo—a “people search engine”—for inaccurately reporting that he was employed, married, and in good financial standing. The 6-2 decision, authored by Justice Samuel Alito, stated plainly that “bare” noncompliance with a statute “divorced from any concrete harm,” cannot “satisfy the injury-in-fact requirement of Article III.” WLF had filed an amicus brief in support of Spokeo. Our press release on the victory is here.

Even though the Court answered the question Spokeo posed to it—can a plaintiff sue based on “injury in law” alone?—with a clear “no,” Mr. Robins’ lawyer, Jay Edelson, remarkably asserted, “This is overall a major win for consumers and privacy advocates.” Continue reading

New Hampshire Court Deals Setback to Contingency-Fee “Parens Patriae” Suits

new hampshireFollowing the Supreme Court’s decision in Mississippi ex rel. Hood v. AU Optronics, state attorneys-general and their trial bar friends have been able to avoid federal court altogether by simply bringing their class and mass actions through the AG’s office as a parens patriae suit. Not only does this clever maneuver treat courtrooms as cash registers and corrode the integrity of the judicial process, but it also constitutes a staggering conflict of interest, as WLF has long argued. Continue reading

WLF Enjoys Significant Free-Enterprise Victories in Fifth and Ninth Circuits

Last week brought two significant appeals court victories for Washington Legal Foundation in cases in which we filed amicus briefs. The cases involved two highly contested civil-litigation issues: state-law liability for allegedly misleading food labeling and “fraudulent joinder.”

9thCirOn March 24, 2016, the U.S. Court of Appeals for the Ninth Circuit issued its long-awaited decision in Kane v. Chobani, Inc.  Continue reading

Will Popular Proposition 65 Carcinogen-Listing Device Survive Constitutional Challenge?

grimaldi-bio-photo-warmGuest Commentary

By Ann Grimaldi, Principal, Grimaldi Law Offices

In a significant challenge to the so-called “Labor Code mechanism” of adding chemicals to the California Proposition 65 list, Monsanto Company filed a lawsuit against the California Office of Environmental Health Hazard Assessment (“OEHHA”) in response to the agency’s September 2015 proposal to list glyphosate—the active ingredient in Roundup® weed and grass herbicide products—as a carcinogen. Monsanto Company v. Office of Environmental Health Hazard Assessment, et al. (Fresno County Superior Court). Asserting violations of the U.S. and California Constitutions, Monsanto seeks an injunction against the agencies’ listing of glyphosate and a court declaration that the Labor Code listing mechanism violates the U.S. and California Constitutions as applied to the proposed listing. Continue reading