New York State Supreme Court Justice Barry Ostrager of Manhattan is not afraid to stir things up. In April 2018, you may recall, the judge – previously a longtime litigation partner at Simpson Thacher & Bartlett – issued a preliminary injunction to block Xerox from allowing a shareholder vote on a proposed merger with Fuji, holding that the deal was hopelessly tainted by Xerox board members’ conflicts. Justice Ostrager’s decision was effectively a death knell for the Xerox management team that approved the Fuji deal. In a subsequent settlement with activist investor Darwin Deason and a proposed settlement with a class of shareholders, the company replaced four of its directors with new board members proposed by Deason and fellow activist Xerox investor Carl Icahn. Xerox also ditched the Fuji deal.
For us class action geeks, Tuesday was a landmark day. U.S. District Judge Dan Polster of Cleveland certified a first-of-its-kind ‘negotiating class’ to promote global settlements with defendants in multidistrict litigation against opioid manufacturers, distributors and sellers.
The Federal Trade Commission has just published a staff report on what it believes to be the most comprehensive study ever conducted on consumers’ response to class action settlements. Its marquee finding, after collating data on 149 consumer class actions from seven different claims administrators: The median claims rate in these cases is 9%. The weighted mean claims rate, which takes into account the number of class members who received settlement notifications, is 4%.
The en banc 5th U.S. Circuit Court of Appeals ruled (2019 WL 4233612) Friday that the structure of the Federal Housing Finance Agency is unconstitutional under separation of powers doctrine because the agency’s lone director is insufficiently accountable to the president.
The governor of Delaware filed a petition Wednesday at the U.S. Supreme Court, asking the justices to overturn a federal appellate ruling that Delaware's practice of balancing judicial appointments among Democrats and Republicans is a violation of the First Amendment of the U.S. Constitution.
Ohio Attorney General Dave Yost believes that the people of his state will be disadvantaged if two Ohio counties, Cuyahoga and Summit, go to trial next month in federal court in Cleveland with claims that opioid manufacturers, distributors and sellers contributed to a crisis of drug abuse.
The Americans for Prosperity Foundation, a libertarian nonprofit founded by Charles and David Koch, filed a petition this week at the U.S. Supreme Court, asking the justices to review a 2018 ruling (903 F.3d 1000) by the 9th U.S. Circuit Court of Appeals that would require Americans for Prosperity and other California-registered charitable foundations to disclose their major donors to the California Attorney General.
On Monday, as you’ve surely heard, Oklahoma state court judge Thad Balkman ruled after a months-long bench trial that Johnson & Johnson was responsible for stoking the state’s opioid abuse crisis. The judge determined that J&J’s “false and misleading” marketing of opioid products made the company liable under Oklahoma public nuisance law. He ordered J&J to pay $572 million to abate Oklahoma’s drug abuse crisis.
On Friday, U.S. District Judge William Orrick of San Francisco ruled (2019 WL 3997459) that Juul users can move forward with most of their claims in a class action alleging that the e-cigarette maker Juul Labs deceptively advertised and marketed its products. The judge tossed plaintiffs’ claims of negligence per se, negligent marketing and breach of express warranty, but otherwise rejected arguments by Juul’s lawyers at Gibson, Dunn & Crutcher that (among other things) class representatives’ claims were preempted by Food and Drug Administration regulations or were not adequately pleaded.
Marty Lipton’s inchoate feud with the Council of Institutional Investors may be the juiciest early story to emerge from the Business Roundtable’s announcement this week of a new corporate paradigm. But it’s not the only legal story prompted by the bombshell BRT announcement, in which business leaders pledged to consider the interests of an array of stakeholders – employees, customers, suppliers and community members – in addition to shareholders’ interest in maximizing profits.