Proskauer’s perspective on developments and trends in commercial litigation.

“Unconscionable” Standard Need Not be Clean Cut: NY Appellate Court Reverses Lysol Price Gouging Case

By Christopher E. Ondeck, John R. Ingrassia and Kelly Landers Hawthorne on September 14, 2022 Posted in Antitrust, Price Gouging

One of the bellwether price gouging cases from the early days of the COVID-19 pandemic was recently reversed and remanded by New York’s First Judicial Department of the Appellate Division.

New York Attorney General Letitia James announced in May 2020 that her office had filed a lawsuit against a wholesale grocery distributor – Quality King Distributors – and its CEO for price gouging. The lawsuit alleged that between January 2020 and April 2020, Quality King raised the price of Lysol when its costs had not increased, “dramatically boost[ing] its gross profit margins for Lysol Spray, almost quintupling them over its pre-crisis margins.” Quality King sold 46,104 cans of Lysol during the time in question, and “each time one of these [] cans of Lysol was sold at retail for an inflated price – and each time a person bought any other Lysol product whose price Quality King had inflated – Quality King’s price-gouging caused injury to a consumer,” the lawsuit stated. The Attorney General seeks, among other relief, disgorgement of all profits from the illegal practice and a civil penalty of $25,000.

Tags: compliance, consumer goods, coronavirus, ecommerce, emergency declarations, Enforcement, federal price gouging, Federal Trade Commission (FTC), FTC GUIDANCE, goods and services, market prices, price cap, price control, Price Fixing, price gouging, Price Gouging Compliance, price gouging enforcement, price gouging liability, Price gouging restrictions, Price gouging statutes, price gouging violations, retail prices, State Attorneys General

Cryptic Guidance? Despite Regulatory Ambiguity, New SEC Enforcement Could Drive Increase in Cryptocurrency-Related Shareholder Class Actions

By Justin Cohen on September 14, 2022 Posted in Federal Rules, Securities and Shareholder Litigation, Securities Law

In late-July, the U.S. Securities and Exchange Commission brought insider trading charges against a former manager at Coinbase—the largest crypto asset trading platform in the United States. The charges are the latest move in the agency’s efforts to regulate cryptocurrency, and could spur an increase in cryptocurrency-related securities litigation.

In SEC v. Wahi, et. al, the SEC alleged that the former manager, Ishan Wahi, improperly provided, or “tipped,” material nonpublic information about the timing and content of Coinbase’s “listing announcements” to his brother and a close friend. These individuals then allegedly used the information to trade ahead of multiple listing announcements and earn at least $1.1 million.

Read the full post on our Corporate Defense and Disputes blog.

Tags: cryptoassets, Cryptocurrency, insider trading, SEC, Securities and Exchange Commssion, securities litigation

Head-to-Head: Comparing Three Arbitration Regimes for US Based Asset Managers

By Julia Bihary and Alexis L. Namdar on August 31, 2022 Posted in International Arbitration, Litigation

The choice of arbitration institution can arise at any point in an investment cycle: from finalising initial agreements at fund or portfolio company level, or on an ad hoc basis when a dispute arises.

To help demystify some differences – this article sets out the key features of three commonly used international arbitration regimes that an asset manager should take into account when making such a choice.

Tags: American Arbitration Association (AAA), Arbitration, asset management, compliance, Confidentiality, coronavirus, ICC arbitrations, ICDR Rules, international arbitration, International Chamber of Commerce (ICC), Litigation, Terms of Reference, The International Centre for Dispute Resolution (ICDR), The International Chamber of Commerce (ICC), The London Court of International Arbitration (LCIA), tribunal

New York AG Files Suit to Compel Tyson to Comply with Price Gouging Subpoena

By John R. Ingrassia and Timothy E. Burroughs on August 30, 2022 Posted in Antitrust, Price Gouging

New York State Attorney General Letitia James has filed a petition to compel Tyson Foods to comply with a subpoena in connection with ongoing price gouging investigations by the state. New York’s price gouging statute imposes civil penalties on sellers of essential goods charging unconscionably excessive prices during an abnormal disruption of the market. The subpoena requests information relating to prices, dates of sale, purchasers, costs, and profit margin for Tyson’s meat products sold in New York from December 1, 2019 through April 2022.

The Seventh Circuit Clarifies the Role Rejection of Settlement Offers Plays in Determining Attorney Fee Awards

By Lucas Kowalczyk on August 17, 2022 Posted in Appellate, Commercial Litigation, Federal Rules

The Seventh Circuit recently clarified an important distinction between offers of judgment under Federal Rule of Civil Procedure 68 and non-Rule 68 offers of settlement, and explained the role rejection of such offers plays in reducing statutory attorney fee awards.

Tags: Attorney Fees, Federal Rule of Civil Procedure, Rule 68, settlements, Seventh Circuit

E-cigs & E-discovery: When Marriage Cannot Save Sloppy Document Productions

By Yena Hong on August 16, 2022 Posted in Appellate, E-Discovery, Federal Rules, Litigation

What began as a trademark infringement dispute concerning electronic cigarettes has evolved into a never-ending series of discovery issues, and lessons about the limits of Federal Rule of Evidence 502 and privilege waivers. DR Distributors, LLC filed its initial complaint against 21 Century Smoking, Inc and its owner, Brent Duke, in September 2012 alleging trademark violations. The defendants filed their counterclaim also alleging trademark violations about a month later. Though fact discovery was supposed to have ended in 2015, the parties continued to assert problems with discovery seven years later. The latest issue presented before the U.S. District Court in the Northern District of Illinois in this case was whether the defendants waived the marital communications privilege by disclosing certain communications during discovery. In its decision finding that the privilege had been waived, the Court described the limited application of Rule 502 and warned against the dangers of arguing that a disclosure was “inadvertent” without providing any explanation of how the privilege review was performed.

Tags: Disclosure, Document Productions, E-Discovery, Federal Rule of Civil Procedure 26(b), Federal Rule of Evidence 502, federal rules, Privilege, privilege waivers, Rule 502(d), trademark infringement, U.S. District Court in the Northern District of Illinois

The Seventh Circuit Asks, “What’s Wrong With Having Lots of Patents?”

By Siegmund Y. Gutman, Christopher E. Ondeck and David Munkittrick on August 10, 2022 Posted in Antitrust, Appellate, Life Sciences

The answer? Not much, in itself. If one patent is good, 132 is probably fine too. That was Judge Easterbrook’s reasoning in a recent decision addressing indirect purchasers’ antitrust challenge to AbbVie’s so-called “patent thicket” of 132 patents around the blockbuster drug Humira, arguing the sheer number of patents blocked would-be biosimilar competition. But “if AbbVie made 132 inventions,” Judge Easterbrook asked rhetorically, “why can’t it hold 132 patents?” As he noted, Thomas Edison alone held 1,093 patents. Having lots of patents shouldn’t be an antitrust issue, according to Judge Easterbrook. It’s how you use the patents.

Read the full post on the Proskauer in Life Sciences blog.

Tags: Antitrust Laws, biopharmaceuticals, biosimilars, BPCIA, life sciences, patent law, patent thickets, Seventh Circuit, Sherman Act

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