Fed Up Multidistrict Litigation Judge Reminds Plaintiffs’ Lawyers of His Sanction Authority

jpml“Enough is enough.”

That is how Judge Clay D. Land, Chief Judge of the US District Court for the Middle District of Georgia, concluded the first paragraph of a scathing five-page order in the multidistrict litigation (MDL) proceeding In re Mentor Corp. Obtape Transobturator Sling Products Liability Litigation. The September 7, 2016 order includes three-and-a-half pages of what Judge Clay himself labeled “Obiter Dictum.” For non-lawyers or those not fluent in Latin, obiter dictum is that part of a judicial opinion that is not necessary to the holding of the case.

Dicta it may be, but those three-and-a-half pages offer a spot-on critique of the MDL process by an experienced judge who has garnered significant criticism from defense-side lawyers for some of his pro-plaintiff rulings in the In re Mentor litigation. Continue reading

Court Pours Cold Water on Unreasonable Serving-Size Class Action vs. Starbucks

Warning: Includes Ice

Warning: Includes Ice

Since its inception in the spring of 2010, the WLF Legal Pulse has routinely cast aspersions upon (mostly California-based) class-action lawsuits alleging fraudulent food labeling and the shopping-cart-chasing lawyers who file them. The blog even has a tag devoted entirely to posts on these suits: Food Court.

Of all the lawsuits we’ve discussed here, few cases epitomize the absurdity of this litigation trend better than the recently decided Forouzesh v. Starbucks Corp. Filed not in the “Food Court” (aka the Northern District of California), but rather in the Central District of California, this suit alleged that Starbucks committed, among other wrongs, fraud, false advertising and breach of warranty by misrepresenting the specific number of ounces in an iced drink. In other words a “Grande” iced coffee or tea, which is 16 ounces, actually contains 12 ounces of coffee plus 4 ounces of ice. As reflected by the grainy photos of a Starbucks cup and a Pyrex bowl in the complaint, Forouzesh actually measured this out. He sought to represent a class of California Starbucks iced-drink purchasers and demanded compensatory and punitive damages, and injunctive relief. 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

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.

Continue reading

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