Plaintiffs often try to define the broadest possible class at the outset of a case on the belief that the scope of the class can be refined on class certification after discovery has been completed. For this strategy to work, however, plaintiffs must get past the pleading stage. Historically, this has not been too difficult for class plaintiff. But a recent decision in In re Railway Industry Employee No-Poach Antitrust Litigation suggests that the tide may be turning. There, the court held that plaintiffs’ conclusory class allegations – standard fare in many antitrust class action complaints – failed to set facts that, if true, demonstrated that injury could be proven on a class-wide basis, and striking the class allegations from the Complaint. The decision thus shows a new boldness in striking class allegations before discovery or a motion for certification. If it stands, this holds great promise for defendants seeking to attack the class action procedure at the pleading stage.
For The First Circuit, Transaction Costs in Structured Settlements are Not Fraud
Liability insurers charge premiums in exchange for an agreement to cover certain claims against their policyholders. When settling a tort claim against a policyholder, the insurance company can pay a lump-sum of cash or, in some cases, will enter into a “structured settlement” with the claimant. Here, the insurance company purchases an annuity (or a stream of payments over a set period of time) from, for example, a life insurance company, under which the beneficiary/claimant will receive these payments to settle the claim. However, the process of buying an annuity generates certain transaction costs in the form of a broker’s commission payable by the liability insurer to the life insurance agent. If the liability insurer were to purchase a stream of payments for the amount owed to the claimant but the claimant received less than the insurer paid, what should we call the missing funds: fraud or the price of doing business? Continue Reading
State Liquor Law Tossed: Industry Changes Ahead
In a decision with major implications for fans of wine, liquor, or free trade, the Supreme Court has affirmed a ruling that struck down a Tennessee law, which imposed certain residency requirements to operate retail liquor stores, as impermissibly violating the Commerce Clause. Tennessee Wine and Spirits Retailers Assn. v. Thomas. Justice Alito, writing for the majority in the 7-to-2 decision, said that the 21st Amendment, which ended Prohibition in 1933, did not authorize states to discriminate against new residents. Because the law “blatantly favors the state’s residents and has little relationship to public health and safety,” the opinion explains, “it is unconstitutional.” Continue Reading
CCPA: Consumers and the Right to Sue
The California Consumer Privacy Act of 2018 (“CCPA”) is a California privacy law that gives consumers, defined as natural persons residing in California, affirmative rights with respect to their data privacy. Namely, the CCPA endows consumers with certain rights to access information about and control what a business does with their personal information. (For an in-depth review of the CCPA and further explanation of these rights, please view our previous Privacy Blog post.) Continue Reading
A Radical Change to Ratification: Key Takeaways from Henderson v. United Student Aid Funds, Inc.
On Friday, March 22, a split panel of the Ninth Circuit Court of Appeals found that a company with no direct contractual relationship with independent contractors could be found vicariously liable for the actions of those contractors in a class action suit. The majority held that ratification may create an agency relationship when none existed before, and that a reasonable jury could have found the defendant, owners of billions of dollars in student loan debt, vicariously liable for violations of third party debt collectors. The holding in Henderson potentially could have widespread agency law ramifications, especially when it comes to Telephone Consumer Protection Act (TCPA) violations. Continue Reading
Defense Funding: The Next Frontier for Litigation Financing
Litigation funders are well aware that half of the potential market is largely untapped. Clients would prefer to focus on their business rather than litigation, and offload some or all of their defense costs to a third-party. Law firms want the fee flexibility that defense-side funding could provide.
So why is defense funding still the exception rather than the rule? To begin with, because the synergies that propel plaintiff-side funding are much more difficult to capture on the defense side. Continue Reading
When Gym Gossip Can Change Your Lifetime
As one of the more closely watched insider trading prosecutions of the past few years heads towards trial, observers can look to the investigation surrounding the 2015 acquisition of Life Time Fitness Inc. as a reminder of the dangers that can befall those who seek to engage in a tipping scheme. Continue Reading
