Minding Your Business

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

Michigan Supreme Court Strikes Down Governor’s Emergency Powers

Are Michigan’s Enhanced Price Gouging Provisions Undone?

As much of the country remains under various and often overlapping states of emergency, one Governor’s powers have been limited by a state supreme court. On October 2, 2020, the Michigan Supreme Court held that Michigan Governor Gretchen Whitmer did not have authority to issue or renew COVID-related executive orders beyond April 30, 2020. The Court stated that “our decision today . . . leaves open many avenues for our Governor and Legislature to work together in a cooperative spirit and constitutional manner to respond to the COVID-19 pandemic.” Continue Reading

Tolling Statutes of Limitations in Products Liability Cases: Latent Injury or Unknown Cause?

Consider a hypothetical person named Jane, who bought a chair twenty years ago. The chair was designed to help relieve back pain, but it actually made it worse. Because Jane was trying many different remedies, she did not associate the chair with the new pain. Additionally, the problems with the chair were not discovered for many years, when a newspaper reported that the company had known this was a possibility. However, Jane had stopped using the chair after just a couple months, when she underwent a medical procedure that relieved her pain. Jane wants to bring a products liability claim for personal injury and negligent design, but are her claims time-barred? The answer may depend on the state in which Jane brings the action. Continue Reading

Happy Prime Day: Trump Directs Federal Government to Pursue Legislation Making E-Commerce Platforms Liable for Counterfeit Sales

In a recent post, we summarized recent developments in litigation and legislative activity concerning whether online marketplaces may be directly liable for the sale of defective and counterfeit products on their platforms. Now the executive branch has weighed in, with President Trump issuing (on Prime Day, no less) a Memorandum on Stopping Counterfeit Trafficking on E-Commerce Platforms Through Fines and Civil Penalties. Continue Reading

Professional Relators Under False Claims Act Find No Friends in Federal Government or Seventh Circuit

Qui tam cases in American jurisprudence rely on a simple premise: help prevent nefarious actors from defrauding the government and Uncle Sam will compensate you for your efforts. With its roots in English law, the American version was adopted during the Civil War in light of alleged fraud by federal contractors skirting the proper procurement process. Our American cousin to this English theory was colloquially known as “Lincoln’s Law,” better known today as the False Claims Act (the “FCA”). The FCA permits private parties or “relators” to relate the matter to the Court by suing on behalf of the federal government against any contractor who issued to the government “a false or fraudulent claim of payment or approval.” 31 U.S.C. § 3729(a)(1)(A). Should the government choose to intervene, the relator could see a payday ranging from 15 and 30 percent of the penalty collected in that action. Continue Reading

California Strengthens Penal Code Section 396, Codifies Price Gouging Executive Order

Since the beginning of the pandemic, many governors have issued executive orders targeted at combating price gouging. However, one California state senator, Senator Thomas Umberg, proposed going a step further. In April 2020, Senator Umberg introduced Senate Bill 1196, which would codify many of the provisions in California Governor Gavin Newsom’s Executive Order N-44-20. On September 30, 2020, Governor Newsom signed the bill into law. In connection with the signing, Senator Umberg stated that “[t]his decisive action ensures that fewer of our neighbors will be victims of price gouging.” Continue Reading

The (Potentially) Shifting Landscape of Online Marketplace Liability

Consumers are doing more and more shopping online. But when a consumer buys a product that is defective or counterfeit, are online marketplaces liable for misconduct by third-party sellers?

E-commerce platforms have generally avoided being treated like their brick-and-mortar counterparts by arguing that they do not actually “sell” goods, but rather provide services (e.g., payment processing, storage, shipping) to third-party sellers, who in turn sell products to consumers. However, recent court decisions and looming legislation may change this dynamic, opening up online marketplaces to product liability and intellectual property claims for products sold by third-parties on their platforms. Continue Reading

Price Gouging Laws Remain Even When Social Distancing Laws Have Ended

Florida Governor Ron DeSantis recently made headlines around the country by announcing that he was lifting physical distancing restrictions on restaurants and other businesses in Florida. The Governor’s order allows restaurants to open at full capacity, and prevents cities and counties from ordering them to operate at less than half capacity unless justified by health or economic reasons. Florida cities and counties are also barred from collecting fines for violations of social distancing or mask rules. But, while such actions may seem to indicate an imminent return to something resembling normalcy, or at least the end of widespread social distancing restrictions, it is important for companies to remember that price gouging laws may not follow the same path. Continue Reading

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