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Posts tagged Reed Elsevier.
As States Begin to Ease COVID-19 Restrictions, How Are Businesses Faring in Business Interruption Coverage Disputes?

When state and local governments began issuing shutdown and stay-at-home orders a little over a year ago, it was difficult to fathom how long businesses would be struggling to operate within the boundaries of the unprecedented restrictions. The economy has been hit hard across the board, with the U.S. travel and hospitality industry suffering an estimated $1.1 trillion in direct and indirect losses in 2020, hospitals and healthcare systems losing at least $323 billion in 2020, the NCAA and the four major U.S. sports leagues losing at least $14.1 billion, many major retailers

Is There a Fix for COVID Business Interruption and Event Cancellations Losses on the Horizon?

The losses sustained by American businesses in the wake of the COVID-19 pandemic will be measured at a level that may never be seen again in our lifetime. On July 30th, the U.S. Bureau of Economic Analysis issued an advance estimate stating that the nation’s real gross domestic product (GDP) decreased at an annual rate of 32.9% in Q2 2020, which reportedly is the worst recorded drop in American history. It was estimated early on that “business interruption losses from the coronavirus just for small businesses in the U.S. could be between $220-$383 billion per month,” resulting ...

Pandemic Risk Insurance Act of 2020 Introduced in Congress – A Federal Backstop for Business Interruption and Event Cancellation Losses

After months of discussion and drafting, H.R.7011, the Pandemic Risk Insurance Act of 2020 (PRIA) was introduced by Representative Carolyn Maloney and twenty co-sponsors on May 26, 2020. If passed as currently drafted, the Act would mandate that insurance companies offering business interruption insurance policies must cover losses incurred due to pandemics and it would establish a Pandemic Risk Reinsurance Program (PRRP) within the Department of the Treasury under which private insurance companies and the federal government would share the responsibility to pay claims for ...

North Carolina Considering COVID-19 Workers’ Compensation Expansion for Frontline and Essential Workers

For the last two months, the doors of millions of businesses and homes have been shuttered due to government mandated stay at home orders. Through it all, the individuals who have served on the front lines and in essential businesses have been required to risk exposure to the novel coronavirus (COVID-19) to continue to serve and keep those businesses running. Several North Carolina Representatives recently introduced H.B. 1057 - WC/COVID-19 Front Line Coverage/Funds, a bill that would amend North Carolina’s workers' compensation law by creating a rebuttable presumption that ...

COVID-19 Business Interruption Insurance Litigation Proliferates

A few weeks ago we were discussing what was believed to be the first COVID-19 lawsuit related to business interruption insurance and a handful of state legislative efforts to redefine the scope of coverage for businesses impacted by COVID-19. Now, dozens of lawsuits have been filed across the nation, including several class actions, and legislation is circulating at the federal (and international) level proposing to provide a backstop to private insurers who pay out to policy holders. The impact of COVID-19 shutdowns on businesses is being felt wide and deep. The Risk & Insurance ...

Mandated Coverage and Public-Private Risk Sharing Initiatives Under Consideration for COVID-19 Related Business Interruption Losses

In just a few weeks, we have gone from discussing what was believed to be the first COVID-19 lawsuit related to business interruption insurance and a handful of state legislative efforts to redefine the scope of coverage for businesses impacted by COVID-19 to dozens of lawsuits filed across the nation, including several class actions, and legislation circulating at the federal (and international) level proposing to provide a backstop to private insurers who pay out to policy holders. The impact of COVID-19 shutdowns on businesses is being felt wide and deep. The Risk & Insurance ...

BEWARE COMPROMISED BUSINESS EMAIL . . . AND THE LITIGATION THAT FOLLOWS

*By Chris Tomlinson, Bill Butler, & Jim McLoughlin.  Businesses are facing this system hack with ever-increasing frequency:  An accounts payable employee receives new or updated payment instructions from a vendor via email.  The email appears to be from a familiar counterpart at the vendor; it contains accurate details specific to a current transaction; the new bank is well known; and the new instructions have the vendor’s name, or a version of it, as the beneficiary. The accounts payable employee executes the electronic transfer payment consistent with the wiring instructions.  ...

Retooling Your Business for COVID-19: Product Liability Immunity & Insurance for Manufacturing Pandemic Products

One thing, among many, that enduring the COVID-19 crisis is reminding us of is that the resilience of the human spirit is remarkable. Amidst calls for more personal protective equipment for the dedicated healthcare workers on the front lines and more ventilators for vulnerable patients fighting for their lives, company after company (and individuals) have responded by retooling their operations to manufacture the items needed to support the herculean effort to treat those infected and to stay ahead of and flatten the curve of this pandemic. The U.S. Food and Drug Administration ...

State Legislators Seek to “Rewrite” Insurance Policies, Requiring Coverage of COVID-19 Business Interruption Losses

The Novel Coronavirus (COVID-19) pandemic has elicited extraordinary suppression and mitigation measures from all levels of government in the U.S. and around the world. It is difficult to fathom the extent to which the economy, global and domestic travel, and life as we knew it have been disrupted in the span of only a few weeks. Lawmakers have been in the difficult position of having to weigh the public health implications of their policy decisions against the economic impact on businesses and individuals. At all levels, our governments have been taking steps to address mitigation of ...

28 U.S.C § 1782(a) – Obtaining Information in Aid of International Private Arbitration from U.S. Federal Courts: The Debate Shifts

In a noteworthy endorsement of international arbitration March 30, 2020, the U.S. Court of Appeals for the Fourth Circuit issued what may be the second watershed decision within six months in the use of 28 U.S.C. § 1782, “Assistance to foreign and international tribunals and to litigants before such tribunals”. The Fourth Circuit panel reversed the district court to rule that section 1782(a) may be employed to obtain testimony and other evidence in aid of private arbitration held outside the United States.[i]

Operating A Business Under North Carolina’s COVID-19 “Stay-At-Home” Order: Essential Business Designation & Reentry Certification

At 5:00 p.m. on Monday, March 30, 2020, all citizens and businesses of North Carolina will join hundreds of millions of others in the United States that are subject to state or local government issued “stay-at-home” orders. On March 27, 2020, North Carolina Governor Roy Cooper issued a statewide stay-at-home order via Executive Order 121, “Stay-At-Home Order and Strategic Directions for North Carolina in Response to Increasing COVID-19 Cases” (Stay-At-Home Order”). The Governor stated several findings as the basis for the Order, including that 763 COVID-19 cases ...

A Place for Insurance in a Global Pandemic: How Do Event Cancellation & Business Interruption Policies Apply to COVID-19?

It is an understatement to say that the foothold the 2019 Novel Coronavirus (COVID-19) has gained in the U.S. and resulting government mandates have developed at a rapid pace. Two weeks ago, companies were open for business, but were well advised to consider cancelling planned events and reviewing their contracts and insurance policies to determine coverage for potential losses. Given the travel advisories issued by the government and trepidation of individuals to travel or gather in the midst of the rising number of COVID-19 cases, cancellation of a major event may have been the ...

North Carolina State and Local Land Use Laws Under Revision to Prepare for the Future: The Charlotte UDO and NCGS §160D

Over the course of the last several years, we have seen movement at the state and local levels to revamp land use laws to prepare North Carolina for the future. Population growth in North Carolina has outpaced the nation during the last ten years and significant portions of that growth have been centered in Mecklenburg County and the Charlotte metropolitan area. Data reflects that North Carolina “ha[s] grown 8.5% compared to the nation’s 5.8%” since 2010. “From 2017 to 2018, the combined populations of Mecklenburg and Wake Counties grew by over 37,000 people, accounting for ...

An Agreement to Arbitrate Employment Claims Must Also Allow for Access to Full Remedies Before the NLRB

In a separate post, we discussed several cases decided by the National Labor Relations Board (NLRB) in which the Board invalidated agreements requiring employees to arbitrate employment-related claims due to vague language that did not make it clear that employees retained the right to pursue claims under the National Labor Relations Act (NLRA) before the NLRB. The recent decision in Kelly Services, Inc.. 368 NLRB No. 130 (12/12/2019) illustrates that even explicitly permitting claims before the NLRB will not guarantee an arbitration agreement’s survival if substantial ...

Watch Your Language: An Agreement to Arbitrate Employment Claims Must Allow for NLRA Claims Before the NLRB

The U.S. Supreme Court settled the long-standing dispute regarding the viability of class arbitration waivers in employment contracts with its determination in Epic Systems Corp. v. Lewis, 584 U. S. ____ (2018) that they indeed are enforceable, contrary to the position taken by the National Labor Relations Board (NLRB). But that did not close the book on all questions regarding employment agreement arbitration clauses, nor did it mean that the NLRB would resolve remaining questions regarding the limits on their enforceability in favor of the employer. While class waivers and ...

Exciting Times in Charlotte Development: City Council Moves UDO Process Forward with Transit Oriented Development Rezoning Approval & Ordinance Updates

It is an exciting time to be living in Charlotte, North Carolina, whether you have deep roots here or are a recent addition to our burgeoning city. North Carolina is experiencing rapid growth, adding nearly 309 people per day, and more than one third of the State’s growth by 2035 is projected to occur in Charlotte. This expansion is one of the key factors driving a focus on planning for the future of the City, with respect to both land use and transportation. The Charlotte City Council recently approved several zoning and land use initiatives spearheaded by the Department of Planning ...

U.S. Supreme Court Limited Authority to Remove Class Actions to Original Defendants, Third-Party Counterclaim Defendants May Not Remove Even Under CAFA

A defendant by any other name does not smell as sweet when it comes to removing class actions from state court to federal court, even under the Class Action Fairness Act of 2005 (“CAFA”). Congress passed CAFA to address perceived abuses in class action litigation and to provide an avenue for defendants to remove class actions filed in state courts to the more neutral ground of the federal court system. But, who can avail themselves of the removal authority provided by CAFA? The U.S. Supreme Court recently held in Home Depot U.S.A. , Inc. v. Jackson, 587 U. S. ____ (2019) that only the ...

U.S. Supreme Court Said “No” to Class Arbitration in Employment-Related Data Breach Dispute Because Arbitration Agreement Ambiguous on Class Procedures

The U.S. Supreme Court issued two 5-4 decisions in as many months regarding class procedures. Lamp Plus, Inc. v. Varela, 587 U. S. ____ (2019) was favorable to corporate defendants by limiting the availability of class arbitration when the arbitration agreement is ambiguous, while Home Depot U.S.A., Inc. v. Jackson, 587 U. S. ____ (2019) favored consumer plaintiffs by preventing third-party counterclaim defendants from removing class actions from state court to federal court under the Class Action Fairness Act (CAFA). Interestingly, Justice Thomas joined the conservative ...

New Charlotte Transit Oriented Development Regulations Approved, What’s Next?

NEW TRANSIT ORIENTED DEVELOPMENT REGULATIONS APPROVED, WHAT'S NEXT? (May 2019): The City of Charlotte has revamped its approach to Transit Oriented Development (TOD) as an initial step in the process of transforming the city into a liveable one that provides transportation options for all residents to access employment, services, and housing. As Chair of the Charlotte Unified Development Ordinance Advisory Committee (Advisory Committee), I was granted the opportunity to speak in support of the proposed TOD amendments at the public hearing in March 2019. After some revision

No Standing to Sue, No Class Action Settlement - U.S. Supreme Court Remands Cy Pres Settlement Case Without Reaching the Merits

We have been following the Frank v. Gaos, 586 U. S. __ (2019) class action case, which presented an opportunity for the U.S. Supreme Court to determine the limits on the use of the cy pres doctrine in the context of class action settlements to distribute damages paid by a defendant company to entities other than the plaintiff class. On March 20, 2019, the U.S. Supreme Court halted Gaos in its tracks, vacating the Ninth Circuit’s decision approving the contested cy pres settlement and remanding the case for further proceedings to determine whether any named plaintiffs had ...

Charlotte’s Transit Oriented Development Revision in Full Swing with Upcoming Public Hearing

CHARLOTTE'S TOD REVISION IN FULL SWING WITH UPCOMING PUBLIC HEARING (Jan. 2019): The Charlotte Department of Planning, Design & Development (Planning Department) is facilitating the transformation of the city into “a vibrant LIVEABLE CITY where all residents of all income levels have convenient transportation access to employment[,] services and housing options.” The revision of Charlotte’s Transit Oriented Development (TOD) Districts is a key component of making that vision a reality and it is in full swing. A text amendment application is pending City Council review ...

Standing in the Way of a Supreme Court Decision on Cy Pres-Only Class Action Settlements

What is the value of the class action mechanism if no redress is provided to plaintiffs at all? Is the class action about providing a remedy to plaintiffs, is it just about getting the defendant company to pay something to someone…or has it evolved simply into a mechanism for plaintiffs’ attorneys to collect fees? These are several of the questions raised by Frank v. Gaos, (No. 17-961), which presents the U.S. Supreme Court with an extreme case of the use of the cy pres doctrine in the context of class action cases. The High Court is faced with a cy pres-only settlement in which the ...

What About the Merits – What, If Anything, Will the Supreme Court Do With Cy Pres-Only Class Action Settlements?

We have been talking about Frank v. Gaos, (No. 17-961), since the U.S. Supreme Court decided to tackle the extreme case of the use of the cy pres doctrine in the context of class action cases. The settlement is a cy pres-only agreement which called for distribution of all funds paid by the defendant directly to charitable organizations and plaintiffs’ attorneys (in the form of attorneys’ fees) and there was no attempt at all to distribute any funds to the plaintiff class. The Supreme Court oral argument was held in Gaos on October 31st and the Justices probed several aspects of the heart ...

Drilling into Charlotte’s Transit Oriented Development (TOD) – Final Public Draft Available for Review

DRILLING INTO CHARLOTTE'S TRANSIT ORIENTED DEVELOPMENT (TOD) - FINAL PUBLIC DRAFT AVAILABLE FOR REVIEW (Oct. 2018): Several months ago, Charlotte’s Planning Director Taiwo Jaiyeoba charted a new course for drafting Charlotte’s Unified Development Ordinance (CLTUDO). We are now undertaking the development of a comprehensive vision plan for the City, with hopes of substantial community engagement, while work on the CLTUDO drafting process continues simultaneously. Comprehensive Plan development kicked off September 2018 with a goal of draft review beginning ...

How Much is that Disclosure Worth? NC Business Court Curbs Attorney Fee Award in Shareholder Disclosure-Only Class Action

Class actions challenging corporate merger transactions often result in settlement agreements in which the only remedy obtained by the plaintiff class is the company defendants’ additional disclosure of information related to the merger. These “disclosure-only” settlements have proliferated in recent years, drawing criticism, in part, due to questions regarding the materiality of any additional disclosures that are obtained and the broad release of claims that the corporate defendants typically receive in exchange for the disclosures. The Delaware Chancery Court ...

Has Cy Pres Gone Too Far: U.S. Supreme Court to Consider When Class Action Plaintiffs Get Nothing, but Their Lawyers and Charities Cash-In Via Plaintiffs’ Settlement

There has been a lot of discussion surrounding class action litigation over the course of the last several years. The U.S. Supreme Court has tackled a variety of issues ranging from the use of class action waivers in arbitration agreements to whether class action plaintiffs can base claims solely on statutory damages when they have suffered no concrete injury themselves. The use of class waivers in arbitration agreements, in particular, has been front and center with the Consumer Financial Protection Bureau’s (CFPB) arbitration study declaring that class waivers were ...

U.S. Supreme Court Says “No” to Plaintiff Attempts to File Repetitive Class Actions After Statute of Limitations Has Run Out

It is easy to overgeneralize the outcome of a legal dispute as pro-plaintiff or pro-defendant to paint a picture of which way a court is leaning and who is finding favor. This week, the U.S. Supreme Court issued its second class action decision in as many months that is favorable for defendant companies. No doubt this will stir grumblings about pro-business interests being elevated above the individual. But, at its heart, the Supreme Court’s decision in China Agritech, Inc. v. Resh, 584 U.S. ___ (2018) simply holds class actions plaintiffs to the bounds of the law as proscribed in the ...

A Split U.S. Supreme Court Upholds Class Waivers in Individual Employment Agreements, Highlighting the Role of Congress in the Class Waiver Fight

The viability of class waivers in employment agreements has been a closely watched battle in the courts since the National Labor Relations Board (NLRB) ruled in D. R. Horton, Inc. and Michael Cuda, Case 12–CA–25764, 357 NLRB No. 184 (2012) that class waivers in individual employment agreements violate the National Labor Relations Act (NLRA) by preventing employees from engaging in concerted action related to their employment. Faced with an Executive Branch that was “speaki[ng] from both sides of its mouth” on this issue and a Congress that recently overturned another ...

Inside Development of the CLTUDO: Casting a New Vision for Charlotte

INSIDE DEVELOPMENT OF THE CLTUDO: CASTING A NEW VISION FOR CHARLOTTE (May 18, 2018) - The Charlotte Mecklenburg Planning Department and the Charlotte Unified Development Ordinance (CLTUDO) Advisory Board have continued the meticulous work of transforming the City’s old zoning and land use ordinances into one unified ordinance, while making efforts to engage with stakeholders and the public to drive the process forward. Planning Director Jaiyeoba has discussed the need for the rewrite process to be “reset” to allow up to 18 months for the development of a new comprehensive ...

The Doors of State Courthouses Remain Open to Class Action Plaintiffs with Federal Securities Act of 1933 Claims Related to Offerings of Securities

In 2017, federal securities class actions were filed at a rapid clip, averaging more than one per day - a level not seen in nearly 20 years according to survey data. It was the third year of growth and a 44% increase over 2016. Only a small subset (25 or 5.7%) of the record-setting 432 federal securities class actions filed last year were claims filed under Section 11 of the federal Securities Act of 1933 (1933 Act), which is at the heart of the U.S. Supreme Court’s decision in Cyan Inc. v. Beaver County Employees Retirement Fund. The 1933 Act requires companies offering securities to the ...

The New Direction of CLTUDO Development

THE NEW DIRECTION OF CLTUDO DEVELOPMENT (March 23, 2018): The Charlotte-Mecklenburg Planning Department welcomed its new Director, Taiwo Jaiyeoba, in January 2018 and with him a new direction for facilitating the development of the Charlotte Unified Development Ordinance (CLTUDO). Under Director Jaiyeoba, the Advisory Committee will take a new direction to acknowledge the diverse interests of our stakeholders and to facilitate their involvement. As a complement outside of the Advisory Committee format, the Planning Department has scheduled several upcoming ...

Charlotte is Moving on Transit-Oriented Development

CHARLOTTE IS MOVING ON TRANSIT-ORIENTED DEVELOPMENT (March 12, 2018): Charlotte, North Carolina is set to adopt zoning ordinance revisions to create new transit-oriented development (TOD) districts this summer. What is TOD and what does it mean for Charlotte planning, development and transportation? Read more.

This year important questions regarding the viability of class action waivers in arbitration agreements have moved close to resolution. In July, the Consumer Financial Protection Bureau (CFPB) issued a long-awaited final rule that prohibited class waivers in arbitration agreements related to a broad range of financial products. And employees and the National Labor Relations Board (NLRB) have continued to push against the enforceability of class waivers in the context of individual employment agreements, driving the issue to the U.S. Supreme Court for review. On November 1 ...

U.S. businesses have the good fortune to be on the receiving end of a favorable U.S. Senate vote nullifying the hotly-contested Consumer Financial Protection Bureau (CFPB) rule banning class action waivers in certain consumer finance arbitration agreements. The rule, issued by the agency in July 2017, took several years to finalize and was criticized for being based on a flawed data, the result of the agency overreaching, and more beneficial to class action plaintiffs’ attorneys than the consumers it was supposed to protect. Our previous posts discuss in detail ...

The Consumer Financial Protection Bureau (CFPB) recently announced the release of its final rule prohibiting the use of class action waivers in certain consumer finance arbitration agreements. The rule has been several years in the making, and has been widely followed and hotly contested. The final rule was announced on July 10, 2017 and published in the Federal Register on July 19, 2017. Accordingly, it is set to take effect on September 18, 2017 (60 days following publication) and to apply to contracts entered into on or after March 19, 2018 (180 days after the effective date ...

The Consumer Financial Protection Bureau (CFPB) recently announced the release of its final rule that prohibits the use of class action waivers in certain consumer finance arbitration agreements. This rule banning class waivers has been several years in the making, and has been widely followed and hotly contested. The CFPB reports that it received more than 110,000 comments on its proposed rule during the comment period, which raised concerns regarding “whether the effects of arbitration agreements are salient to consumers, whether arbitration has proved to be a fair and ...

The reality of class action litigation is that what is supposed to be the court’s preliminary decision of whether to certify a case as a class action is often the end of the litigation. In many cases, plaintiffs will not proceed if the court denies class certification for reasons including that their individual claims are not large enough to justify the costs. And defendant companies often will settle a case once a class is certified, even if the claims are meritless, because the risk and costs of litigation are too high. Therefore, the opportunity to appeal a class certification ...

Companies Defending Class Actions in NC Have New Right to Appeal Class Certification

COMPANIES DEFENDING CLASS ACTIONS IN NC HAVE NEW RIGHT TO APPEAL CLASS CERTIFICATION (June 4, 2017): The North Carolina legislature recently passed H.B. 239, over Gubernatorial veto, which gives company defendants the right to appeal trial court decisions allowing class certification directly to the North Carolina Supreme Court, securing a guaranteed avenue for early review of class action cases that was not available to companies in the North Carolina courts before and minimizing delays and costs associated with the two-step appellate process. Read more.

Defendant Companies Now Have the Right to Appeal North Carolina Class Certification Decisions Directly to NC Supreme Court

The North Carolina legislature recently passed H.B. 239, over Gubernatorial veto, which gives company defendants the right to appeal trial court decisions allowing class certification directly to the North Carolina Supreme Court. This law parts from North Carolina case law precedent and eliminates the need for the NC Supreme Court to invoke its supervisory authority to review a grant of class certification prior to resolution of a trial, as the court recently did in Fisher v. Flue-Cured Tobacco Coop. Stabilization Corp., 794 S.E.2d 699, 2016 N.C. LEXIS 1120, (NC Dec. 21, 2016 ...

A Window View into the CLTUDO -- The Vision & Anticipated Timeline

A WINDOW VIEW INTO THE CLTUDO -- THE VISION & ANTICIPATED TIMELINE (May 22, 2017): The restructuring of Charlotte’s land use policies and zoning ordinance are among the most significant planning-related projects the City has undertaken. The impact of the CLTUDO will be long-lasting and will define in many ways the future of the City. The CLTUDO Advisory Board recently discussed an anticipated timeline for development of the CLTUDO and the Charlotte Place Types that will serve as a springboard for drafting the new ordinance. Read More for details.

As class action litigation has continued to proliferate, we have seen efforts to rein in the perceived abuses of the system on multiple fronts. Over a decade ago, Congress passed the Class Action Fairness Act of 2005 (CAFA) to provide an avenue for defendants to remove class actions filed in state courts to the more neutral ground of the federal court system. In the last several years, the courts have been called on repeatedly to define the contours of CAFA and the Judicial Conference Advisory Committee on Civil Rules (Advisory Committee) initiated proposed amendments to Federal Rule of ...

Rolling into the new year, North Carolina attorneys are on notice that the ability to gain approval of class action settlements and related attorneys’ fees may become more difficult in some cases. In recent years, we have seen more class actions challenging corporate merger transactions and settlements in which the only remedy obtained by the plaintiff class was the company defendants’ additional disclosure of information related to the transaction. In exchange for the additional disclosures, the corporate defendants typically would receive a broad-based release of ...

NC DISCLOSURE-ONLY CLASS ACTION SETTLEMENTS & ATTORNEYS' FEES MAY FACE INCREASED SCRUTINY (Feb. 2, 2017): Rolling into the new year, North Carolina attorneys are on notice that the ability to gain approval of class action settlements and related attorneys’ fees may become more difficult in some cases. Read More

In the years following the U.S. Supreme Court’s AT&T Mobility v. Concepcion decision, more and more courts enforced class waivers in arbitration agreements based on the commands of the Federal Arbitration Act (FAA). The National Labor Relations Board (NLRB) parted with the post-Concepcion trend to enforce class waivers in D. R. Horton, Inc. and Michael Cuda, Case 12–CA–25764, 357 NLRB No. 184 (Jan. 3, 2012), however, and held that such waivers in individual employment agreements violate the National Labor Relations Act (NLRA) by prohibiting employees from acting in ...

Federal class action jurisprudence has been evolving rapidly over the course of the last 5-6 years, with several major U.S. Supreme Court decisions defining and redefining many aspects of class litigation. With the first round of proposed amendments in over a decade, the civil rule governing federal class litigation is set to follow suit. On August 12, 2016, the Judicial Conference Advisory Committee on Civil Rules (Advisory Committee) published proposed amendments to Federal Rule of Civil Procedure 23, which have been in the works since the 2011 formation of the Rule 23 ...

DEFEATED NC CLASS ACTION ULTIMATELY RESULTS IN VICTORY IN MAP ACT FIGHT AGAINST NCDOT (June 16, 2016): What began several years ago as a defeated attempt at a class action against the North Carolina Department of Transportation (NCDOT) ultimately resulted in a win plaintiff landowners in Kirby v. NCDOT (No. 56PA14-2). On June 10, 2016, the North Carolina Supreme Court held that the State’s restrictions placed on property owners under the Roadway Corridor Official Map Act (Map Act) constitute a taking of their property, requiring the state to compensate the landowners ...

What began several years ago as a defeated attempt at a class action against the North Carolina Department of Transportation (NCDOT) ultimately resulted in a win this month for plaintiff landowners in Kirby v. NCDOT (No. 56PA14-2). On June 10, 2016, the North Carolina Supreme Court held that the State's restrictions placed on property owners under the Roadway Corridor Official Map Act (Map Act) constitute a taking of their property, requiring the state to compensate the landowners appropriately. The case was brought originally as a putative class action on behalf of nearly 800 ...

On May 24, 2016, the Consumer Financial Protection Bureau’s (CFPB) long-anticipated Proposed Rule prohibiting the use of class action waivers in consumer finance arbitration agreements was published in the Federal Register and opened for public comment. The Proposed Rule has been expected following the CFPB’s previous study and statements regarding the impact that arbitration agreement class action waivers have on consumers. The CFPB took 370+ pages to explain and justify its proposal, which boils down to consumers of financial products do not typically pursue redress ...

On May 11, 2016, President Obama signed S. 1890 – The Defend Trade Secrets Act (DTSA) into law, the final step in creating the first federal civil cause of action against those who misappropriate a company’s trade secrets. In signing the Act, President Obama spoke of American innovation and the threat that trade secret theft, particularly in Asian markets, poses to American jobs, markets, and leadership. Our previous post, See You in Federal Court: Congress Creates Federal Civil Action for Trade Secret Misappropriation, provides details regarding key components of the Act ...

Congressional efforts to create a federal remedy to protect company trade secrets have been underway for several years. Last week, S. 1890 - Defend Trade Secrets Act of 2016, which would amend the Economic Espionage Act of 1996 to create federal civil jurisdiction over the theft of trade secrets, was sent by Congress to the President for consideration. The Bill was introduced last year and was passed by an overwhelming majority of both the Senate and House in April 2016: by Senate vote (87-0) on April 4 and by House vote (410-2), without changes, on April 27. The Bill was presented to the ...

Plaintiffs can count the first class action decision to be issued by the U.S. Supreme Court since the death of Justice Scalia as a win; although, they did not receive broad authorization to proceed carte blanche, as some had hoped. On March 22, 2016, a 6-2 split Court issued its opinion in the Tyson Foods, Inc. v. Bouaphakeo et al Fair Labor Standards Act (FLSA) class action which called into question the extent to which statistical averaging may be used to establish liability on a classwide basis and whether a class may be certified if it contains uninjured class members. The Court issued a ...

MLB Litigation Brief: Class Action Questions Open After Scalia’s Death, Arbitration Fees and American Rule & More


Our goal is to serve as a cutting-edge resource for companies operating in an increasingly globalized and regulated business environment. Moore & Van Allen’s MLB Litigation Brief is a complement to our Litigation Blog’s in-depth individual treatment of critical issues emerging in federal, North Carolina state, and international litigation, as well as in arbitration, regulatory enforcement, and related business practices. MLB Litigation Brief hits the highlights of recent developments, streamlining access to critical information for our readers. Subscribe to the MVA ...

Class actions consume considerable company resources and can pose significant risk of exposure in the $ millions or $ billions. Therefore, it is critical for companies to prepare themselves – to know the trends in class action litigation and the tools available to minimize their exposure to class action liability. Over the last several weeks, the Supreme Court has heard arguments in three cases that have potential to further define the landscape of class action litigation: Campbell-Ewald Co. v. Gomez (No. 14-857), Spokeo, Inc. v. Robins (No. 13-1339), and Tyson Foods, Inc. v ...

Class actions consume considerable company resources and can pose significant risk of exposure in the $ millions or $ billions. Therefore, it is critical for companies to prepare themselves – to know the trends in class action litigation and the tools available to minimize their exposure to class action liability. Over the last several weeks, the Supreme Court has heard arguments in three cases that have potential to further define the landscape of class action litigation: Campbell-Ewald Co. v. Gomez (No. 14-857), Spokeo, Inc. v. Robins (No. 13-1339), and Tyson Foods, Inc. v ...

Class actions consume considerable company resources and can pose significant risk of exposure in the $ millions or $ billions. Therefore, it is critical for companies to prepare themselves – to know the trends in class action litigation and the tools available to minimize their exposure to class action liability. Over the last several weeks, the Supreme Court has heard arguments in three cases that have potential to further define the landscape of class action litigation: Campbell-Ewald Co. v. Gomez (No. 14-857), Spokeo, Inc. v. Robins (No. 13-1339), and Tyson Foods, Inc. v ...

Amendments to Federal Civil Rules Governing Discovery and Preservation of ESI Set to Take Effect December 1, 2015

The course of federal civil litigation will take a turn on December 1, 2015, with pending amendments to several rules governing discovery, case management, and the preservation of electronically stored information (“ESI”) set to take effect absent intervening Congressional action. The pending amendments are nearly five years in the making, flowing from the Conference on Civil Litigation sponsored by the Judicial Conference Advisory Committee on Civil Rules at the Duke University School of Law in 2010 (“Duke Conference”). Through the Duke Conference and the amendment ...

The North Carolina Court of Appeals considered for the first time whether it is legal in a class action settlement agreement for one party to agree to pay the other’s attorneys' fees and expenses. The court concluded that it is legal, subject to appropriate judicial review. But, the court’s ruling leaves local North Carolina counsel shut out of the roughly $1 million attorneys’ fee award granted to New York lead counsel. The appellate court’s opinion in Ehrenhaus v. Baker, Nos. 14-1201, 14-1083 (N.C. Ct. App. Sept. 15, 2015)(“Ehrenhaus II”) reads much like a primer on ...

CFPB Singles Out Class Action Waivers for Elimination from Consumer Financial Arbitration Agreements

The Consumer Financial Protection Bureau (“CFPB”) made clear this week that, in its view, class action waivers should be on the chopping block in the agency’s upcoming rulemaking aimed at regulating the use of arbitration clauses in consumer financial agreements.  In an October 7, 2015 release, CFPB Director Cordray expressed the agency’s critical stance on companies’ use of arbitration agreements that prohibit consumers from participating in class actions, calling such clauses a “free pass to sidestep the courts and avoid accountability for wrongdoing,” while ...

As it stands, the National Labor Relations Board (“NLRB”) has taken the position that class action waivers in individual employee/employer arbitration agreements are illegal and the agency continues to invalidate these agreements even though the Fifth Circuit Court of Appeals has held that they are enforceable.  In D.R. Horton (2012), the NLRB invalidated class action waivers in individual employment agreements on the grounds that such waivers interfere with an employee’s rights to collective action provided by the National Labor Relations Act (“NLRA”).  The Fifth ...

N.C. Court Warns Plaintiffs that Voluntary Dismissal of an Invalid Complaint Won't Toll the Statute of Limitations

At first glance there seems to be a saving grace in the North Carolina Rules of Civil Procedure for plaintiffs who are running up against the deadline for filing a lawsuit, i.e., Rule 41(a)(1).  Rule 41(a)(1) provides that if a complaint was filed timely and subsequently dismissed by the plaintiff voluntarily, the case may be refiled within one year of the dismissal, effectively granting a one-year extension of the statute of limitations.  But, there is a lesson for plaintiffs to learn from the recently decided Murhpy v. Hinson, et al., No. COA14-1230 (N.C. Ct. App. July 7, 2015) -- in the ...

Circumscribing an individual’s power to subject companies to class and collective actions has been on the forefront of corporate litigation for several years, particularly in light of the growing trend of class action filings.  An increasingly common scenario facing corporate defendants is the “no-injury class” in which many members of a certified class actually sustained no injury or damages, resulting in a much larger class to which damages might be awarded.  This issue has arisen in a variety of contexts, including product liability class actions like the Whirlpool moldy ...

Supreme Court to Decide if Class Action Machine Grinds to a Halt After Offer of Complete Relief to Named Plaintiff

A recent global survey of corporate counsel revealed that the increasing number of class actions filed is considered to be the most important litigation trend currently facing companies.  Over the last several years, companies and plaintiffs alike have been urging the U.S. Supreme Court to clarify the boundaries of class action litigation.  The High Court recently agreed to tackle an issue presented by Campbell-Ewald Co. v. Gomez (No. 14-857), which has the potential to arm companies with a method for shutting putative class actions down early.  The reality facing corporations is ...

MLB Litigation Brief: 4th Circuit Hostile Work Enviro, Class Action Trends Cause Concern, Low-Wage Non-Competes & More


Our goal is to serve as a cutting-edge resource for companies operating in an increasingly globalized and regulated business environment. Moore & Van Allen’s MLB Litigation Brief is a complement to our Litigation Blog’s in-depth individual treatment of critical issues emerging in federal, North Carolina state, and international litigation, as well as in arbitration, regulatory enforcement, and related business practices. MLB Litigation Brief hits the highlights of recent developments, streamlining access to critical information for our readers. Subscribe to the ...

NLRB Judge Finds Employment Contract’s Arbitration Clause Invalid Although No Explicit “Waiver” of Class Actions

Last week, a National Labor Relations Board (“NLRB”) Administrative Law Judge reiterated the agency’s position that employers who require the arbitration of grievances by employees on an individual basis violate the National Labor Relations Act (“NLRA”) by precluding protected concerted activity of the class and collective action mechanisms.  We have seen the NLRB strike down explicit class action waivers in employment contracts in its decisions since D.R. Horton (2012) and Murphy Oil (2014), contrary to the U.S. Supreme Court’s Concepcion line of cases that ...

On May 26, 2015, the U.S. Supreme Court issued its decision in Commil USA LLC v. Cisco Systems, Inc., 575 U. S. ____ ( 2015), rejecting the Federal Circuit Court of Appeals’ recognition of a defense to induced patent infringement claims based on the good-faith belief that a patent is invalid.  The Federal Circuit Court of Appeals decision had vacated Commil’s multi-million dollar award ($63.7 million in damages and $10.3 million in interest) against Cisco Systems, Inc. and required a third trial to consider Cisco’s good-faith defense to Commil’s induced infringement claims.  ...

Class action lawsuits have become a commonplace fixture in the American judicial landscape and carry the force to extract billions of dollars from defendants, many of whom settle once a class is certified due to the costs and risks of litigation, regardless of the merits of the plaintiff’s case.  Ten years ago, Congress tackled several perceived abuses of the class action mechanism by passing the Class Action Fairness Act of 2005 (“CAFA”), which allows defendants to remove certain class actions filed in state court to the more neutral ground of the federal system.  In February ...

The Four Factual Findings Necessary to Make an Award of Reasonable Attorneys’ Fees Stick in North Carolina

As a matter of course, a prevailing party cannot recover its attorneys’ fees from an opposing party in North Carolina.  But, attorneys’ fees can be awarded if there is specific statutory authority.  At the conclusion of litigation, the last thing the prevailing party wants to face is the reversal of its award for attorneys’ fees.  The plaintiff in Brown's Builders Supply, Inc. v. Johnson et al., No. COA14-836 (N.C. Ct. App. Mar. 17, 2015), a home renovation-related contract dispute, found itself in this unfortunate position because the trial court’s order granting ...

The answer should be a resounding “no,” according to the United States and Commil USA, LLC, the recipient of a multi-million dollar jury award against Cisco Systems, Inc.  Last week, the U.S. Supreme Court heard arguments in Commil USA, LLC v. Cisco Systems, Inc. (No. 13-896), which probes whether one who induces infringement of another’s patent can avoid liability under 35 U.S.C. § 271(b) of the Patent Act by claiming that they had a good-faith belief that the patent at issue was invalid.  Recall from our previous discussion, Commil won a jury verdict against Cisco for $74 million ...

Could Guaranteeing a Minimum Recovery for Consumers Abate CFPB Concerns Regarding Class Waivers in Arbitration Agreements?

With the recent release of the Consumer Financial Protection Bureau’s Arbitration Study: Report to Congress, pursuant to Dodd–Frank Wall Street Reform and Consumer Protection Act § 1028(a)”, it is widely anticipated that the agency will seek to impose restrictions on the use of class waivers in consumer finance agreement arbitration clauses. What form those restrictions will take, however, remains to be seen.  Some level of regulatory restriction on class waivers has been expected since the release of the CFPB’s December 2013 Preliminary Study, and the agency ...

The practice of restricting plaintiff access to class procedures through binding arbitration agreements has garnered significant attention over the last five years on the heels of several U.S. Supreme Court decisions validating companies’ use of class waivers.  One of the open questions remains, “who has the authority to determine whether class arbitration is available when the arbitration clause is silent – courts or arbitrators?”  The U.S. Supreme Court has not addressed whether the availability of class arbitration is a substantive “gateway” issue for the ...

Consumer Financial Protection Bureau’s Dodd-Frank Study Scrutinizes Arbitration Agreements & Class Action Waivers

On Tuesday, the Consumer Financial Protection Bureau ("CFPB") released its long-awaited "Arbitration Study: Report to Congress, pursuant to Dodd–Frank Wall Street Reform and Consumer Protection Act § 1028(a)", which presents the results of the agency’s study of the use of arbitration agreements in the context of consumer finance agreements for credit cards, checking accounts, payday and other small dollar loans, general purpose reloadable prepaid cards, private student loans, auto purchase loans, and mobile wireless agreements.  The 728-page study is extensive, to ...

Congress Takes Up Patent Litigation Reform – Innovation Act Reintroduced, Supreme Court Cases Examined

Patent litigation reform has been on the U.S. House Judiciary Committee agenda, with the recent reintroduction of legislation seeking to address patent litigation abuses and a hearing examining recent U.S. Supreme Court cases that have imposed some reforms that may, or may not, curtail the need for further legislative efforts.  In February, Chairman of the Judiciary Committee Rep. Rob Goodlatte reintroduced the bi-partisan Innovation Act, H.R. 9, which is the same in substance as the previous Innovation Act, H.R. 3309 that passed the House in December 2013, but ultimately ...

Rare Defendant Class Certified in Federal North Carolina Ponzi Scheme Class Action

Most of the cases that come to mind when you think “class action” consist of a large group of plaintiffs (hundreds or multiple thousands) seeking authorization to proceed as a class in one lawsuit against one or a handful of defendants. It is the rare case in which a large group of defendants are certified as a class in order to facilitate resolution of one plaintiffs’ claims against them. Rare though it may be, Federal Rule of Civil Procedure 23(a) does explicitly allow for the certification of defendant classes if the prerequisites for class certification (numerosity ...

Who Determines if Class Arbitration is Available? Why it Matters and Will the Supreme Court Decide

In the wake of several favorable U.S. Supreme Court decisions, companies increasingly are using arbitration agreements to control their exposure to class action liability.  Although recent cases have reinforced the power of arbitration agreements, companies must tread carefully when crafting their arbitration contracts and related class waivers.  In conjunction with giving force to arbitration agreements, the Federal Arbitration Act (“FAA”) limits the federal courts’ ability to review and reverse arbitrator decisions construing those agreements.  The Supreme ...

Supreme Court: Companies Fighting State Class Actions Can Remove to Federal Court Without Evidence of Damages

The Class Action Fairness Act of 2005 (“CAFA”) has found its way to the steps of the U.S. Supreme Court several times in the last two years, as plaintiffs and defendants seek to define the parameters of the federal law enacted, in part, to rectify state and local court abuses of the class action process and demonstrated biases against out-of-state defendants.  CAFA provides that a defendant may remove a state class action to federal court if the matter in controversy exceeds $5,000,000, exclusive of interest and costs, and certain other criteria are met.  On December 15, the U.S ...

Big Day for Patent Holders: U.S. Supreme Court to Decide if Good-Faith Defense to Induced Patent Infringement Survives

Imagine that you are fighting to enforce your valid patents and after winning two jury verdicts you feel vindicated by the $74 million award you have been granted for the defendant’s role in inducing the infringement…then the appellate court says “try again,” because the defendant believed in good-faith that the patent was invalid.  Today you may get to wake up from this daydream, but this is the real-world scenario from which Commil USA LLC is seeking relief in the U.S. Supreme Court.  On December 5th, the High Court agreed to hear Commil’s appeal challenging the Federal ...

Unanimous U.S. Supreme Court Gives FLSA Class Action Win to Employers Screening for Theft

Employers continue to face an increasing number of lawsuits (including class and collective actions) claiming they violated the federal Fair Labor Standards Act (“FLSA”) based on a wide variety of policies and conduct.  Recent federal statistics for the 12-month period ending March 31, 2014 show 8,126 FLSA cases had been filed by employees in 2014, up nearly 5% from the cases filed in 2013 and more than double the cases filed ten years prior.  Against this backdrop of unyielding employee litigation, Tuesday’s pro-employer decision issued by a unanimous U.S. Supreme Court in ...

4th Circuit Offers Defendants Seeking Federal Jurisdiction Relief Denied by Other Circuit Courts: Remands to State Court Obtained by Fraud Can be Revoked and Attorneys Sanctioned

Last week, the Fourth Circuit Court of Appeals kicked off the holiday by giving thanks for the power to prevent parties from reaping the benefits of fraud perpetrated against the federal courts. The Fourth Circuit decided in Barlow v. Colgate Palmolive Co., et al., No. 13-1839, No. 13-1840, 2014 U.S. App. LEXIS 22324 (4th Cir. Nov. 25, 2014) that the reach of federal jurisdiction extends far enough to snatch a case back from state court if a plaintiff secured remand based on fraudulent misrepresentations to the federal court.  The court also clarified that attorneys engaging in such ...

The Bittersweet in Whirlpool’s Moldy Washing Machine Class Action Victory: The War Wages On as We Still Question Whether the Class Should Have Been Certified At All

After many years of battle, Whirlpool Corporation finds itself celebrating a favorable jury verdict in a class action lawsuit. A few weeks ago, a jury had the rare occasion to find for Whirlpool in Glazer v. Whirlpool Corp. (In re Whirlpool Corp. Front-Loading Washer Prods. Liability Litg.), No. 08-65000 (N.D. Ohio), one of several cases in which the company faces product liability allegations associated with mold growth in front-loading washing machines. The harsh reality for corporate defendants is that once a class is certified, the majority of cases settle because the ...

Amendments to Federal Class Action Rules May be on the Horizon: Settlement, Issues Classes, and Notice Requirements on the Front Burner

Class action settlements, certification of issues classes, and class notice requirements are among the topics that may be the subject of upcoming proposed amendments to Federal Rule of Civil Procedure 23. On the agenda for the October 30-31, 2014 Advisory Committee on Civil Rules meeting is a report from the Rule 23 Subcommittee, which was formed in 2011 to consider modifying the rule governing class actions for the first time since the 2001-2003 cycle of amendments. Since its formation, the Subcommittee has identified several issues that may necessitate changes to Rule 23 and is now ...

Proposed Amendments to Federal Rules of Civil Procedure Governing Discovery and Preservation of Electronically Stored Information One Step Closer to Approval

Over the course of the past two years, litigants have faced significant changes to Federal Rules of Civil Procedure that are critical to navigating the federal litigation landscape, include rules governing subpoenas, discovery, case management, and preservation of electronically stored information (“ESI”). We previously discussed the long-awaited changes to Federal Rule of Civil Procedure 45 that were implemented on December 1, 2013 to streamline the use of subpoenas in federal civil actions (read our Rule 45 post). The wider reaching August 2013 Proposed Amendments

Will They Blow the Whistle for $30 Million? Whistleblower Rewards are Rising, Companies and Individual Lawyers Warned Not to Stand in the Way

Last week, the U.S. Securities and Exchange Commission (“SEC”) announced that it expects to pay the largest whistleblower reward pursuant to Section 922 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) that the agency has paid to date – “more than $30 million” to a foreign whistleblower.  The SEC’s announcement of this record award came shortly after Attorney General Holder reportedly urged Congress to increase the $1.6 million limit on whistleblower awards for information related to financial crimes provided for under the ...

On September 17, 2014, the House Judiciary Committee approved the bi-partisan federal Trade Secrets Protection Act of 2014, H.R. 5233, which we previously wrote about when introduced in July, 2014 by North Carolina Representative George Holding.  H.R. 5233 seeks to amend the Economic Espionage Act of 1996 to create a federal civil remedy for trade secret misappropriation.  Regarding the importance of the Act, Rep. Holding and other supporters noted that “[a]s of 2009, the value of trade secrets owned by U.S. companies was estimated to be nearly $5 trillion.  While current federal ...

Your Collective Action Waiver May Not Survive in a Vacuum: 6th Circuit Says Arbitration Was Key to Enforcing Waiver of FLSA Claims

The Sixth Circuit Court of Appeals recently noted in Killion et al. v. KeHE Distrib., LLC, Nos. 13-3357/4340 (6th Cir. Jul. 30, 2014) that it was the first appellate court to tackle head on the question of whether a collective action waiver in the context of Fair Labor Standards Act (“FLSA”) claims can survive in the absence of an agreement requiring individual arbitration.  The collective action waiver before the Sixth Circuit was included in a severance agreement signed by several of the defendant’s employees upon termination, and required that they not consent to be part ...

North Carolina continues to be cultivated into increasingly fertile ground in which sophisticated and complex businesses can flourish. Governor McCrory recently signed into law SL2014-102 (SB 853) (the “Act”), an act which began as an effort to modernize the procedures for complex business cases handled by the North Carolina Business Court, and which ultimately expanded to provide for internal corporate reorganizations using holding companies in a manner that has been compared to favorable provisions of Delaware law. The Act was introduced in May 2014 by Senators ...

House Judiciary Subcommittee Continued Its Review of Intellectual Property Law with Hearings on Copyright Infringement Remedies, The America Invents Act, and IP Policy Goals

The House Judiciary Committee’s Subcommittee on Courts, Intellectual Property and the Internet recently held hearings targeted at further exploring intellectual property laws and policy.  On July 24, the Subcommittee held another hearing in its series that is examining federal copyright laws, this time focusing on remedies for copyright infringement provided under Chapter 5 of Title 17.  This was a follow-up to a previous hearing that focused on the notice and take down provisions of Section 512.  Issues addressed in the July 24 hearing include the creation of a small claims ...

Trade Secrets Protection Act of 2014 Introduced in Bi-Partisan Effort to Protect Businesses From Cyber Security Threats

On July 29, 2014, North Carolina Congressman George Holding introduced the Trade Secrets Protection Act of 2014, H.R. 5233, which seeks to create a private federal remedy for victims of trade secret theft.  Representative Holding introduced the bill with five co-sponsors from both sides of the aisle, affirming in his statement the importance of protecting businesses from the damage caused by the loss of trade secrets:

American businesses face relentless cyber security threats every day, costing our economy billions of dollars and tens of thousands of jobs each year.  As a way to help ...

House Subcommittee Approved TROL Act Defining Bad Faith Communications Made During Patent Assertion as Unfair or Deceptive Practices Under the Federal Trade Commission Act

The House Energy & Commerce Committee’s Subcommittee on Commerce, Manufacturing, and Trade considered and approved the Targeting Rogue and Opaque Letters Act of 2014 (“TROL Act”) with a 13-6 vote.  The purpose of the TROL Act is to establish that certain bad faith communications made in connection with the assertion of a United States patent are considered unfair or deceptive acts or practices under section 5(a)(1) of the Federal Trade Commission Act (15 U.S.C. 45(a)(1)).  The Act was passed with minor amendment to the provision that establishes an affirmative defense that ...

D.C. Circuit Clarified 4 Critical Factors Regarding Attorney-Client Privilege in Corporate Internal Investigations, Finding District Court’s Decision “Irreconcilable with Upjohn”

In a recent post, we discussed the D.C. Circuit’s consideration of the District Court’s decision in U.S. ex.rel Barko v. Halliburton Co. et al., Case No. 05-01276 (D.D.C. 2014), which provided an alarming perspective on the applicability of the attorney-client privilege and work product doctrine to internal investigations conducted pursuant to government regulatory compliance requirements.  The District Court had ruled that the privilege and work product doctrine did not apply to communications generated during the course of an internal investigation, because the ...

Last week, the U.S. Supreme Court denied Family Dollar Stores, Inc.’s petition for writ of certiorari seeking review of the Fourth Circuit’s decision in Scott, et. al. v. Family Dollar Stores, Inc., No. 12-1610 (4th Cir. Oct., 16, 2013).  The Fourth Circuit had overturned the District Court’s decision to deny plaintiff’s motion to amend its employment discrimination-based class action complaint on the grounds that “as a matter of law plaintiffs cannot satisfy the Rule 23(a) commonality requirement because the alleged gender discrimination was a result of 'subjective ...

The highly anticipated U.S. Supreme Court ruling in Halliburton Co. v. Erica P. John Fund, Inc., 573 U. S. ____ (2014) (June 23, 2014) left intact the fraud-on-the-market theory established by the Supreme Court in Basic Inc. v. Levinson, 485 U. S. 224 (1988), which is the bedrock upon which securities class actions have rested for nearly thirty years. However, the Halliburton decision provided defendant companies with an avenue for early escape from the impending pressures to settle meritless class litigation by securing their right to rebut the Basic presumption of classwide ...

D.C. Circuit Considers Whether Complying With Federal Regulations Obviates the Attorney-Client Privilege & Work Product Doctrine During Internal Investigations

The internal investigation is a critical tool for companies operating in the current environment of stringent regulatory oversight and government scrutiny. The attorney-client privilege and work product doctrine are sacred cornerstones upon which companies rely when engaging counsel to investigate whether wrongdoing has occurred and to devise the best strategies for addressing the outcome of any such investigation. Recent orders by the federal District Court for the District of Columbia in U.S. ex.rel Barko v. Halliburton Co. et al., Case No. 05-01276 (D.D.C. 2014)

North Carolina Abusive Patent Assertions Act (H1032) Makes Its Way Through General Assembly

The 2013 General Assembly convened its 2014 Regular Session on Wednesday, May 14, 2014 with the introduction of House Bill 1032 The Abusive Patent Assertions Act by primary sponsor Representative Tom Murry (Rep).  The Bill also is sponsored by Representatives Conrad, Lambeth, S. Martin, Pittman, Saine, and  Whitmire.  The Act recognizes that the assertion of bad‑faith patent infringement claims poses a threat to North Carolina companies via costly and time-consuming litigation that may impose pressure to settle meritless claims.  The practice also “undermine[s] North ...

In an April 25, 2014 article published in Bloomberg BNA’s Patent, Trademark & Copyright Journal, MVA Intellectual Property Member Mark Wilson examines the U.S. Supreme Court’s recent decision in Medtronic, Inc. v. Mirowski Family Ventures, LLC, 134 S.Ct. 843 (2014) in which the High Court reversed the U.S. Court of Appeals for the Federal Circuit and held that the burden of proof remains with the patentee even in declaratory judgment actions filed by licensees. You can read Wilson’s article here

Failed Attempts to Enforce Employee Non-Compete and Confidentiality Agreements: On Employees of Acquired Companies in North Carolina & Running Afoul the NLRA

Non-competition and confidentiality agreements can serve as invaluable tools to safeguard against the loss of confidential and proprietary information through current and former employees. However, recent state and federal cases serve as a critical reminder that these agreements may fail to protect companies if they are poorly crafted with arguably over broad restrictions or unsupported by sufficient consideration. We discuss two scenarios presented by AmeriGas Propane, LP v. Coffey, 2014 NCBC 4 (N.C. Super. Ct. 2014) and Flex Frac Logistics, L.L.C. v. NLRB, 198 ...

HOUSE JUDICIARY COMMITTEE HEARING ON DOJ OVERSIGHT: The House Judiciary Committee recently held a hearing regarding oversight of the U.S. Department of Justice during which Attorney General Eric Holder testified.  A webcast of the hearing and testimony can be found here. Posted by Tony Lathrop, Apr. 28 2014

U.S. House Committee Holds Hearing on Abusive Patent Demand Letters

On April 8, 2014, the U.S. House Committee on Energy & Commerce, Subcommittee on Commerce, Manufacturing, and Trade held a hearing “Trolling for a Solution: Ending Abusive Patent Demand Letters.”  The purpose of the hearing was to discuss ways to balance the need to curb the increasing abuse of patent demand letters by “bad actors” with protecting the legitimate interest that entities with patent holdings have in using demand letters “to engage other companies in lawful and productive discussions around their businesses.”  The hearing background memo explains that the ...

Securities Class Actions at the Supreme Court: Halliburton and the Fraud-on-the-Market Theory

Over the last few years, securities class actions have given rise to several critical questions ripe for U.S. Supreme Court review, including whether the foundation of the fraud-on-the-market theory established more than twenty-five years ago remains viable. The Supreme Court’s February 2013 decision in Amgen Inc. v. Connecticut Retirement Plans and Trust Funds, 133 S. Ct. 1184 (2013) set the stage for one of the most interesting securities cases currently pending before the Court: Halliburton Co., et al. v. Erica P. John Fund S. Ct. No. 13-317. Amgen raised the issue of whether ...

HOUSE JUDICIARY COMMITTEE COPYRIGHT HEARING:  On April 2, 2014, the House Judiciary Committee’s Subcommittee on Courts, Intellectual Property, and the Internet held a hearing “Preservation and Reuse of Copyrighted Works.”  Witness testimony and a webcast of the hearing can be viewed here.  Posted by Tony Lathrop, Apr. 11, 2014.

HOUSE JUDICIARY COMMITTEE RECONSIDERS CHAPTER 11 BANKRUPTCY: Last week, the House Judiciary Committee's Subcommittee on Regulatory Reform, Commercial and Antitrust Law held its hearing to address Bankruptcy reform - Exploring Chapter 11 Reform: Corporate and Financial Institution Insolvencies; Treatment of Derivatives.  The witness list and testimony are available here.  Posted by Tony Lathrop, Apr. 4, 2014.

USPTO March 2014 Update to Guidance & Training for Evaluating Utility Patent Subject Matter Eligibility for Claims involving Nature, Natural Phenomena, & Natural Products

In response to recent U.S. Supreme Court decisions addressing utility patent subject matter eligibility under 35 U.S.C. § 101, the U.S. Patent & Trademark Office issued new guidance and training materials for patent examiners tasked with determining eligibility of machine, composition, manufacture and process claims "involving laws of nature,  natural phenomena, and natural products."  The USPTO published the guidance memorandum and training slides, requesting public comment and suggestions for future examiner training.

The USPTO explained that the new guidance ...

Class Arbitration Waivers Validated by the Eleventh Circuit in FLSA Actions

The Eleventh Circuit in Walthour v. Chipio Windshield Repair, LLC, No. 13-11309 (11th Cir. March 21, 2014) recently joined the Second, Fourth, Fifth, and Eighth Circuits in upholding class arbitration waivers in a Fair Labor Standards Act (“FLSA”) action.  Plaintiffs in Walthour argued that the statutory right to file a collective action under the FLSA cannot be waived, as it is a substantive right.  Plaintiffs pointed to the statute’s text, legislative history and purposes to support their position that the FLSA’s right to collective action trumps the Federal ...

Defining the power of arbitration agreements has been a hot topic at the federal and state levels for the past couple of years.  In a recent post, we discussed two North Carolina Court of Appeals decisions that validated the reach of the U.S. Supreme Court’s AT&T Mobility v. Concepcion, 131 S.Ct. 1740 (2011) and Italian Colors v. American Express 133 S.Ct. 2304 (2013) decisions to enforce class arbitration waivers in the State.  In one of those cases, Torrence v. Nationwide Budget Finance, et. al., No. 05- CVS 447 (N.C. Ct. App. Feb. 4, 2014), a question also was raised regarding the ...

On February 24, 2014, the U.S. Supreme Court denied certiorari in three “moldy” washing machine class actions, which presented questions regarding Fed. R. Civ. P. 23’s commonality and predominance requirements as clarified by Wal-­Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011) and Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013). In a previous post, we discussed in detail the Sixth Circuit’s rationale for upholding the trial court’s certification of a liability class in  Whirlpool Corp. v. Glazer, et al (No. 13-431), despite the fact that there were four different ...

The North Carolina Court of Appeals recently declared the enforceability of class arbitration waivers despite the North Carolina Supreme Court’s previous decision in Tillman v. Commercial Credit Loans, Inc., 362 N.C. 93, 655 S.E.2d 362 (2008), which invalidated an arbitration agreement based, in part, on a class arbitration waiver.  In companion cases, Torrence v. Nationwide Budget Finance, et. al., No. 05- CVS 447 (N.C. Ct. App. Feb. 4, 2014) and Knox v. First Southern Cash Advance, et.al., No. 05-CVS-445 (N.C. Ct. App. Feb. 4, 2014)**, plaintiffs had secured class ...

Redefining the Power of Arbitration in Unfair Labor Practice Cases: NLRB Solicited Briefs on the Issue

REDEFINING THE POWER OF ARBITRATION IN UNFAIR LABOR PRACTICE CASES: NLRB SOLICITED BRIEFS ON THE ISSUE - In line with recent efforts in the courts to define the scope of power of the arbitral forum, the National Labor Relations Board (NLRB) recently took on the issue of whether to modify the standard it applies to determine whether to defer to an arbitrator’s decision in a matter that presents unfair labor practice issues.  NLRB General Counsel requested that the Board modify the standard to require deferral, so long as it is not repugnant to the Act, if the party seeking deferral ...

A Liberal Shift in the Fourth Circuit? – Part 2
A LIBERAL SHIFT IN THE FOURTH CIRCUIT? - PART 2: In part two of this Bloomberg BNA series, MVA Litigation Associate Jason Idilbi continues analyzing whether the judges appointed during the 2010-2011 term to the historically conservative Fourth Circuit Court of Appeals have caused the court to lean towards the left.  Idilbi examines the outcomes of the Fourth Circuit’s recent en banc rehearings and whether they demonstrate that there has been an ideological shift on the court.  Idilbi Article Part 2.  If you missed Part 1, see our previous post. Posted Feb. 13, 2014 ...
February 15th Deadline to Comment on Proposed Amendments to Federal Rules of Civil Procedure

FEBRUARY 15TH DEADLINE TO COMMENT ON PROPOSED AMENDMENTS TO FEDERAL RULES OF CIVIL PROCEDURE:  In August 2013, the Advisory Committee on Civil Rules published proposed amendments to the Fed. R. Civ. P. which address the challenges of managing the scope of discovery in the digital age and the attendant consequences for a party’s failure to meet its discovery obligations. The proposed amendments impose limitations on discovery and spoliation sanctions. Read my previous post for details.  Comments are due February 15, 2014. You may submit comments online.  Posted by Tony Lathrop ...

A LIBERAL SHIFT IN THE FOURTH CIRCUIT: In a two-part Bloomberg BNA series, MVA Litigation Associate Jason Idilbi analyzes whether a shift in the political makeup of the Fourth Circuit in the 2010-2011 term has resulted in the court, which has been one of the most conservative, becoming more liberal. Read Idilbi Article Part 1. Posted Feb. 7, 2014
The Burden is on You: A Defendant Patent Holder Still Bears the Burden of Proving Infringement in a Declaratory Judgment Action Brought by a Licensee

For nearly 150 years, it has been established that a patent holder (“patentee”) ordinarily bears the burden of proving infringement.  The U.S. Supreme Court’s recent decision in Medtronic v. Mirowski Family Ventures, LLC, 571 U.S. ____ (Jan. 22, 2014) reversed the Federal Circuit Court of Appeals’ attempt to shift the burden of proof to a licensee seeking a declaratory judgment that its products do not infringe the patentee’s patents.  The unanimous Supreme Court found little support for upsetting the balance of our “well-functioning patent system” or ...

Foreign Companies Dragged into U.S. Courts Get Reprieve as U.S. Supreme Court Clarifies Limits on General Jurisdiction

In Daimler AG v. Bauman, 571 U. S. ____ (Jan. 14, 2014), the U.S. Supreme Court reiterated that general or “all-purpose” jurisdiction can be exercised over foreign corporations only “when their affilia­tions with the State are so ‘continuous and systematic’ as to render them essentially at home in the forum State.” No general jurisdiction lies over a foreign defendant in a suit by foreign plaintiffs for actions outside of the U.S., based solely on its indirect subsidiary’s contacts with a state in which it is neither incorporated nor holds its principal place of ...

D.R. Horton Still Alive: NLRB Judge Says Employer’s Intent to Compel Employees to Waive Class Claims Renders Arbitration Clause Unenforceable Even When there is No Explicit Waiver

Although the Circuit Courts of Appeals that have addressed the issue currently stand united in the view that class arbitration waivers in individual employment contracts do not violate the National Labor Relations Act (“NLRA”), the National Labor Relations Board (“NLRB”) ruling to the contrary in D. R. Horton, Inc. and Michael Cuda, Case 12–CA–25764, 357 NLRB No. 184 (Jan. 3, 2012) continues to drive the invalidation of arbitration agreements in employment agreements.  On January 17, 2014, an NLRB Administrative Law Judge relied on the NLRB’s decision in D.R ...

Unanimous U.S. Supreme Court Ruled State Parens Patriae Action is Not Removable Under CAFA

In a unanimous decision, the Supreme Court ruled on Jan. 14, 2014 that the state parens patriae action in Mississippi ex rel. Hood v. Au Optronics Corp. was not removable under the Class Action Fairness Act of 2005 as a “mass action,” because the state is the only named plaintiff:  571 U. S. ___ (2014).  You can read our previous posts on AU Optronics here and here.  Posted by Tony Lathrop, January 17, 2014.

“Loath to create a circuit split,” the Fifth Circuit Overturns NLRB’s D.R. Horton Ruling that Class Arbitration Waivers in Individual Employment Contracts Violate the NLRA

            The Fifth Circuit Court of Appeals recently rendered its long-awaited decision in D.R. Horton, Inc. v. NLRB, No. 12-60031 (5th Cir.  Dec. 3, 2013), revised December 4, 2013, which reversed the National Labor Relations Board (“NLRB”) ruling that held a class arbitration waiver contained in an arbitration provisions of individual employment contracts violated the rights of employees under the National Labor Relations Act (“NLRA”) to engage in concerted activities.  The NLRB issued its decision in D. R. Horton, Inc. and Michael Cuda, Case 12–CA–25764, 357 NLRB No. 184 ...

Two Principles “Readily Derived” from Wal-Mart v. Dukes that Drive Class Certification in Employment Discrimination Actions: The Fourth Circuit View in Scott v. Family Dollar

            The Fourth Circuit Court of Appeals identified two principles driving the potential certification of a class in employment discrimination cases in Scott, et. al. v. Family Dollar Stores, Inc., No. 12-1610 (4th Cir. Oct., 16, 2013) that it believes are “readily derived” from Wal-Mart Stores v. Dukes, 131 S. Ct. 2541 (2011), but were misunderstood by the District Court when it denied plaintiffs an opportunity to amend their complaint to provide additional detail regarding allegations that Family Dollar exercised “centralized control of compensation for store managers at ...

The Streamlined Subpoena Power under Amended Federal Rule of Civil Procedure 45 - Effective December 1, 2013, Barring Congressional Action

            This year several proposed amendments to the Federal Rules of Civil Procedure (“Civil Rules”) are under consideration.  In a previous post, we highlighted the most recent proposed amendments to the Civil Rules which focus on discovery limits and spoliation sanctions and were published for public comment by the Judicial Conference Advisory Committee on Civil Rules on August 15, 2013 (the “Discovery Amendments”).  On December 1, 2013, some of the most long-awaited changes to the Civil Rules will take effect – the proposed amendments to Rule 45, which governs the use of ...

If It Walks Like a Class or Mass Action…Is it Removable Under CAFA? (Part 2)

           We continue our exploration of removability under the Class Action Fairness Act of 2005 (“CAFA”) and the threshold question that has driven a split between the Circuit Courts of Appeals described as “intolerable as a matter of federalism,” carrying CAFA back to the steps of the U.S. Supreme Court.  Before determining whether any requirement for removal under CAFA is met, the critical question is: is the case at hand even a class or mass action?  CAFA debuted on the U.S. Supreme Court’s calendar last term with Standard Fire Ins. Co. v. Knowles, 133 S. Ct. 1345, 568 US __ (2013), and ...

If It Walks Like a Class or Mass Action…Is It Removable Under CAFA? (Part 1)

            Last term, the U.S. Supreme Court broke ground on interpreting the Class Action Fairness Act of 2005 (“CAFA”) by setting limits on plaintiffs seeking to maneuver around federal jurisdiction.  Having resolved in Standard Fire Ins. Co. v. Knowles, 133 S. Ct. 1345, 568 US __ (2013) the quandary presented by plaintiffs attempting to stipulate their way around CAFA’s $5 million threshold for class action removal, the Supreme Court and lower courts recently have been faced with a threshold question of a different nature regarding removability under CAFA: is the case at hand even a ...

Proposed Amendments to Local Rules for Middle District of North Carolina Open for Comment Until November 1, 2013

            On October 2, 2013, the Local Rules Committee of the Federal District Court for the Middle District of North Carolina announced that it has published for comment proposed amendments to the Local Civil Rules and Local Criminal Rules.  The proposed amendments to the Local Civil Rules include the addition of new rules and changes to some existing rules, including LR 5.4, 7.1(a), 7.3(i), 7.6, 15.1, 16.2, 16.3, 26.2, 37.1, 54.1, 72.4, 83.7, 83.9e(i), 83.10h(d), 83.11, and 103.2(b).  The only proposed amendment to the Local Criminal Rules includes the incorporation under LCrR 57.1 of ...

A Look at Class Certification through the Lens of In re: Whirlpool Corp. Front-Loading Washer Products Liability Litigation: Finding Commonality & Predominance Despite Comcast and Dukes

            Several opinions issued by the U.S. Supreme Court during the past few years have made it more difficult for plaintiffs to obtain class certification.  Despite the hurdles erected by the Supreme Court’s recent opinion in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011) which has been seen to raise the bar for establishing the commonality necessary to obtain class certification, and Comcast Corp. v. Behrend, 569 U.S. ___, 133 S. Ct. 1426 (2013) which addressed the class certification predominance requirement, cases like In re: Whirlpool Corp. Front-Loading Washer Products ...

Federal District Courts Continue to Use Local Patent Rules

            In our last post, we discussed proposed amendments to the Federal Rules of Civil Procedure recently published for comment by the Judicial Conference Advisory Committee.  Two years ago, I sat on a similar advisory committee for the U.S. District Court for the Western District of North Carolina with the mission to devise a set of local patent rules to enhance the Rules of Civil Procedure and guide parties through the unique aspects of patent litigation in our District.  Since 2001, Federal District Courts around the country have continued to establish local patent rules.  Local patent ...

Proposed Amendments to Federal Rules of Civil Procedure Include Limitations on Discovery and Spoliation Sanctions, Published for Comment until February 2014

            The costs that parties incur in the broils of litigation have been on the front burner in recent years, with the temperature rising. In 2010, the Judicial Conference Advisory Committee on Civil Rules sponsored a Conference on Civil Litigation at the Duke University School of Law (the “Duke Conference”) to address possible solutions for reducing the costs of civil litigation, particularly with respect to discovery.  We also have seen many reported cases over the past few years that have attempted to strike a balance between the obligations to preserve and produce information ...

            The viability of class arbitration waivers as a means for companies to limit their exposure to class actions continues to be tested, including in the employment arena.  One of the first cases to probe the enforceability of class arbitration waivers in employment agreements after AT&T Mobility v. Concepcion, 131 S.Ct. 1740 (2011) was Raniere, et al. v. Citigroup Inc. filed in the Second Circuit.  Raniere, et al. v. Citigroup Inc., 827 F. Supp. 2d 294 (S.D.N.Y. 2011) was decided by the District Court on November 22, 2011 and appealed to the Second Circuit Court of Appeals on December 19 ...

Beyond the Class Arbitration Waiver: The 9th Circuit View of Concepcion as Broadly Outlawing State Discrimination Against Arbitration

            The U.S. Supreme Court’s decision in AT&T Mobility v. Concepcion, 131 S.Ct. 1740 (2011) has been the cornerstone of recent jurisprudence validating the use of class arbitration waivers in arbitration agreements to insulate companies from exposure to class action litigation.  Concepcion also has served to bolster the overall strength of arbitration agreements and to illuminate the scope of the preemptive power of the Federal Arbitration Act (“FAA”).  The recent decision by the Ninth Circuit Court of Appeals in Mortensen v. Bresnan Comm’n, LLC, No. 11-35823, 2013 U.S. App ...

Legislative Update: Congress is Considering the Lawsuit Abuse Reduction Act of 2013 Which Seeks Increased Rule 11 Sanctions for Attorneys Filing Frivolous Lawsuits

            Attorneys practicing under the Federal Rules of Civil Procedure are very familiar with Rule 11, which requires that they sign all papers submitted to a federal court and subjects them to possible sanctions for filing frivolous, harassing or baseless lawsuits and motions.  The U.S. Congress is currently considering the Lawsuit Abuse Reduction Act of 2013 which aims to “amend Rule 11 of the Federal Rules of Civil Procedure to improve attorney accountability, and for other purposes,” those other purposes being to mandate and increase the sanctions facing attorneys for Rule 11 ...

The U.S. Supreme Court Ended the Term with an Exclamation Mark at the End of Its Statement on Class Actions and Arbitration: The Amex and Oxford Health Decisions

            The Supreme Court’s October 2012 Term could rightly be named “The Year of the Class Action.”  The High Court received many petitions for review and ultimately issued more than five decisions that tackled issues impacting the landscape of class action practice from questions regarding federal jurisdiction under the Class Action Fairness Act of 2005 to class certification requirements in fraud-on-the-market securities class actions.  Two of the Court’s final class action decisions addressed the impact of arbitration agreements on class actions and class arbitration ...

North Carolina Attorneys are on Notice that They Could Be Held Personally Liable for Failing to Reimburse the State Health Plan after Recovering Damages for an Injured Client

            When the law imposes personal liability on an attorney for actions connected with the representation of a client, it is worth noting and bringing to all of our attention.  Under North Carolina law, if a state employee is injured by a third party and recovers damages from the third party, the State Health Plan for Teachers and State Employees (the “State Health Plan”) has the right to reimbursement for the medical expenses it has covered due to the injury.  In the first North Carolina appellate case to review the statute that gives the State Health Plan this right, The State Health Plan for ...

Save the Last Dance for the Public Injunction: The 9th Circuit’s En Banc Decision in Kilgore v. KeyBank Dances Around Whether AT&T Mobility v. Concepcion Reaches Public Injunction Cases

            In our November, 2012 series, “Once Around the Dance Floor With a Public Injunction, the Vindication of State Rights and AT&T Mobility v. Concepcion,we discussed the potential impact of the impending Ninth Circuit Court of Appeals en banc review of Kilgore v. Keybank Nat’l Ass’n, No. 3:08-CV-02958-THE (N.D.Cal.). (See posts here, here, and here). In the initial appellate review of Kilgore, a Ninth Circuit three-judge panel held that California’s Broughton-Cruz rule that prohibits the arbitration of public injunction claims was preempted by the Federal Arbitration ...

The Fourth Circuit’s View on Class Arbitration Waivers and the Vindication of Statutory Rights: Muriithi v. Shuttle Express, Inc.

            The Fourth Circuit Court of Appeals recently issued a decision placing the AT&T Mobility, LLC v. Concepcion, 131 S.Ct. 1740 (2011) stamp of approval on class arbitration waivers in this Circuit.  In Muriithi v. Shuttle Express, Inc., No. 11-1445, 2013 U.S. App. LEXIS 6464 (4th Cir. Apr. 1, 2013), the Fourth Circuit took on several issues surrounding class arbitration waivers that have been the source of disagreement among lower courts since Concepcion.  The Shuttle Express plaintiff was a shuttle driver for defendant Shuttle Express, a company that provides transportation for ...

What Was the Question? The U.S. Supreme Court’s Answer in Comcast v. Behrend Leaves Us Wondering about the Standard for Analyzing Expert Evidence for Class Certification

             The U.S. Supreme Court’s review of Comcast v. Behrend, 655 F.3d 182 (3rd Cir. 2011) showed promise to resolve uncertainties raised by the lower courts regarding the applicability of Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S. Ct. 2786 (1993) at the class certification stage and the depth of analysis courts should apply to expert evidence under Federal Rule of Civil Procedure 23’s rigorous analysis.  We first discussed Comcast in August 2012, after the Supreme Court granted certiorari to review the Third Circuit’s decision upholding certification of a ...

A Unanimous U.S. Supreme Court Prevents Class Action Plaintiffs from Sidestepping Federal Jurisdiction under the Class Action Fairness Act

            Class action defendants hit a home run in Standard Fire Insurance Co. v. Knowles, 568 U.S. ___  (Mar. 19, 2013), one of the U.S. Supreme Court’s latest class action decisions and its first decision to address the Class Action Fairness Act of 2005 (“CAFA”).  Knowles questioned the power of class action plaintiffs to legally bind class members prior to class certification and, in particular, whether class action plaintiffs could avoid federal jurisdiction under CAFA by stipulating with the complaint that the class would not seek damages in excess of the $5 million CAFA ...

The Class Arbitration Waiver is Back at the U.S. Supreme Court: Insights from Arguments in the Amex Federal Antitrust Case

            The line-up of class action cases to be reviewed and ruled upon by the U.S. Supreme Court this year is stacked with heavy hitters.  On the same day that the Court issued its opinion in the Amgen securities fraud class action case (covered in last week's post), the Court heard oral arguments in American Express Co., et al. v. Italian Colors Restaurant, et al., (S.Ct. No. 12-133).  Amex is the first Supreme Court class arbitration waiver case that explores the impact of AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740 (2011) on federal claims.  The putative class plaintiffs are corporations and a ...

The U.S. Supreme Court Deals a Blow to Corporations Facing Fraud-on-the-Market Securities Class Actions

            While several of the U.S. Supreme Court’s recent decisions have raised the bar for plaintiffs seeking to bring class actions, the divided Court’s February 27th decision in Amgen, Inc. v. Connecticut Retirement Plans and Trust Funds, 568 U.S. ___ (2013) dealt a blow to corporate defendants in the securities fraud class action arena.  The Court heard arguments in Amgen in November, 2012 on the issue of whether plaintiffs in securities fraud class actions must prove the materiality of the alleged misrepresentation in order to obtain class certification based on the ...

The NC Court of Appeals Finds an “Agreement to Agree” on an Arbitration Panel and Procedures Definite Enough to Form a Binding Contract to Arbitrate under the FAA

            Arbitration under the Federal Arbitration Act (“FAA”) has been the hot topic of many cases in the past few years, with the U.S. Supreme Court having reaffirmed the federal policy favoring arbitration and the preemptive power of the FAA over state laws governing arbitration.  The North Carolina courts are among those that have been petitioned to resolve conflicts regarding the enforceability of arbitration agreements, and the North Carolina Court of Appeals recently issued another arbitration decision that should be of interest to businesses facing disputes in this state.  The ...

Justice Initiatives, Inc. Annual Report Reveals Another Successful Year of Service to Our Court System

            Justice Initiatives, Inc. (“JI”) has completed another year of service to the North Carolina justice system and Mecklenburg County by advocating for “reforms related to the Judicial Branch’s organization, structure and/or administration” and for “the needs of court system offices and programs within the 26th Judicial District, NC.”  JI recently released its 2011-2012 Annual Report which reflects the depth and breadth of the organization’s commitment to bridging gaps between our local communities and the court system, as well as making a difference to the ...

NC Court of Appeals Finds That The AAA’s Policy Against Arbitrating Certain Healthcare Disputes Prevents Enforcement of Arbitration Agreement in Wrongful Death Case

            The U.S. Supreme Court recently has reinforced in Marmet Health Care Center, Inc. v. Brown, 132 S. Ct. 1201 (2012) and AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740 (2011) that the Federal Arbitration Act (“FAA”) prohibits states from categorically excluding certain types of claims from arbitration.  However, companies still may have to contend with the policies of private organizations like the American Arbitration Association (“AAA”) that administer arbitrations and place categorical restrictions on the types of cases they will administer.  In Concepcion, the ...

How Has the Recession Impacted Justice in North Carolina? A Look at the NC Judicial Branch 2011-12 Annual Report

            The North Carolina Judicial Branch recently issued its Fiscal Year 2011-12 Annual Report, which gives us a real picture of the strain that our court system has been under for the past four years.  The stated mission of the Judicial Branch is “[t]o protect and preserve the rights and liberties of all the people, as guaranteed by the Constitutions and laws of the United States and North Carolina, by providing a fair, independent and accessible forum for the just, timely and economical resolution of their legal affairs,” (emphasis added).  Deep budget cuts and the corresponding ...

            The U.S. Supreme Court has issued several decisions over the past few years which have reinforced the federal policy favoring arbitration and have prevented class actions from proceeding against corporate defendants.  Among those decisions was Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 130 S.Ct. 1758 (2010), in which the Supreme Court took steps to preclude class arbitrations by prohibiting arbitrators from ordering the class arbitration of federal antitrust claims where (1) the arbitration agreement was silent on the class issue and (2) the parties stipulated that ...

Does the Class Action Fairness Act Bring an End to the World As We Know It?

            Argument in the first U.S. Supreme Court case reviewing the Class Action Fairness Act of 2005 (“CAFA”) was held on January 7th - The Standard Fire Insurance Co. v. Knowles (S.Ct. No. 1450).  We previously discussed the Knowles case in our series on the Supreme Court’s review of CAFA after the Court granted certiorari to review the case straight from the U.S. District Court for the Western District of Arkansas (see part 1, part 2, and part 3).  At the heart of Knowles is a fight against the notion that class action plaintiffs have the power as “masters of the complaint” to manipulate ...

Is the Fear of Being Slapped With Discovery Sanctions Keeping You Up at Night?

            This year we have seen state and federal courts issue opinion after opinion ordering sanctions against parties, and sometimes their counsel, for failing to adequately preserve electronically stored information relevant to litigation.  I moderated a discussion at the November 2012 Network of Trial Law Firms Litigation Management CLE seminar regarding critical issues that are keeping in-house counsel awake at night – concerns regarding discovery sanctions issued against in-house and outside counsel were high up on the list, coupled with concerns about the spiraling costs of ...

North Carolina Court Issues Leading Decision Regarding Copyright Infringement

            In the digital age where the internet permeates every aspect of our lives and commerce, the courts are continually called upon to demarcate where and how communications and intellectual property laws apply to the services provided by websites and internet service providers.  Many internet-based companies find themselves facing potential liability based upon their legitimate business activities due to the unfortunate attempts by users of their services to thwart the intellectually property rights of others.  The U.S. District Court for the Western District of North Carolina is ...

A Year in the Life of Arbitration and Class Action Litigation: An Update on Significant Developments in 2012

This year we have followed significant developments affecting class action litigation and the force of arbitration agreements.  Many of these developments can be traced to the U.S. Supreme Court’s April 2011 decision regarding class arbitration waivers in AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740 (2011), while others stem from broader issues related to requirements for certification of class actions, federal/state law preemption, and the viability of arbitration as an alternative forum for dispute resolution.  We have explored the enforceability of class arbitration ...

Once Around the Dance Floor with a Public Injunction, the Vindication of State Rights, and AT&T Mobility v. Concepcion (Concluded)

           Kilgore v. Keybank Nat'l Ass'n, No. 3:08-CV-02958-THE (N.D.Cal.) probes many questions as we already have discussed in our first and second posts, which you can read here and here.  In concluding our discussion, let us consider whether California’s Broughton-Cruz rule should be treated differently from other rules which categorically prohibit the arbitration of claims because the interests at stake in a case seeking public injunctive relief exceed the private interests of the parties to the arbitration agreement?  The California courts took the position that claims seeking ...

Once Around the Dance Floor with a Public Injunction, the Vindication of State Rights, and AT&T Mobility v. Concepcion (Continued)

            In this post, we will continue our discussion regarding Kilgore v. Keybank Nat'l Ass'n, No. 3:08-CV-02958-THE (N.D.Cal.), which soon will be reheard by the Ninth Circuit Court of Appeals en bancKilgore explores the impact of the U.S. Supreme Court’s decision in AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740 (2011) on the validity of arbitration agreements in cases seeking public injunctive relief when there is a state rule that prohibits the arbitration of such claims.  You can read the first part of our discussion here.   

            The Kilgore plaintiff argues in many respects that ...

Once Around the Dance Floor with a Public Injunction, the Vindication of State Rights, and AT&T Mobility v. Concepcion

            “[T]he sometimes delicate and precarious dance between state law and federal law” once again will be performed by the Ninth Circuit Court of Appeals in its en banc review of Kilgore v. Keybank Nat'l Ass'n, No. 3:08-CV-02958-THE (N.D.Cal.).  Kilgore presents another opportunity to define the reach and limitations of the U.S. Supreme Court’s decision in AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740 (2011), challenging long-standing state and federal policies regarding arbitration and probing the breadth of the preemptive power inherent in the Federal Arbitration Act ...

If at First You Don’t Succeed: Res Judicata and the Revival of Motions to Enforce Class Arbitration Waivers post-Concepcion

            The U.S. Supreme Court’s April, 2011 decision in AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740 (2011) marked a significant change in the class action landscape with its validation of class arbitration waivers pursuant to the Federal Arbitration Act (“FAA”), despite state laws which previously held such waivers unconscionable and unenforceable.  Post-Concepcion, an arbitration clause that requires the arbitration of all disputes between parties and precludes any class or representative actions could potentially safeguard defendants against costly and ...

The Master of His Complaint? U.S. Supreme Court Urged to Prevent State Class Action Plaintiffs’ Attempts to Evade Removal Jurisdiction under the Class Action Fairness Act (Part 3 of 3)

            Can it be that easy?  Can hundreds of plaintiffs avoid removal of their state actions to federal court simply by dividing their identical claims into two or more complaints with fewer than 100 plaintiffs on each complaint?  So far, two federal circuit courts of appeals– the Seventh Circuit and the Ninth Circuit - have answered “yes,” reasoning that this is precisely what the Class Action Fairness Act of 2005 (“CAFA”) permits in the provisions which circumscribe the removal of state mass actions.  Pointing to the Congressional purposes for enacting CAFA, corporate defendants ...

The Master of His Complaint? U.S. Supreme Court Urged to Prevent State Class Action Plaintiffs’ Attempts to Evade Removal Jurisdiction under the Class Action Fairness Act (Part 2 of 3)

            As a defendant in a state class action, you exercise your right under the Class Action Fairness Act of 2005 (“CAFA”) to remove the case to federal court.  You are facing a putative class action with potentially thousands of class members, and your experts have established by a preponderance of the evidence that the aggregate damages of the class is greater than the $5 million threshold for removal under CAFA.  The federal court, however, remands your case to state court because the plaintiff filed a stipulation along with his complaint which states that he will not seek aggregate ...

          Defendants in state class actions will be interested in this three-part blog series in which we will examine two cases involving the Class Action Fairness Act of 2005 (“CAFA”) that are under consideration by the U.S. Supreme Court: Standard Fire Insurance Co. v. Knowles (S.Ct. No. 11-1450) and Bristol-Myers Squibb Co., et al. v. Anglin (S.Ct. No. 12-147).  Congress passed CAFA, in part, to rectify abuses of the class action process by State and local courts, including demonstrated biases against out-of-state defendants.  See 190 P.L. 2, § 2(a)(4), (b).  CAFA provides that a ...

What Waiver? A Cautionary Tale for Defendants Seeking to Compel Arbitration in North Carolina

"Justice does not require that courts profess to be more ignorant than the rest of mankind."  -       NC Court of Appeals in HCW, 2012 N.C. App. LEXIS 939 (2012)

North Carolina public policy favors arbitration and requires that doubts about whether arbitration is appropriate be resolved in favor of arbitration.  However, the Court of Appeals made clear in a recent decision that the courts will not turn a blind eye or deaf ear to compel arbitration at all costs.  Defendants seeking to compel arbitration of claims brought against them must proceed with the awareness that missteps prior to moving to ...

Query: Whether a Class Arbitration Waiver Can Stand in the Face of Federal Claims and Whether the Vindication of Rights Doctrine Applies to State Law Claims?

The critical inquiry into the breadth and depth of the U.S. Supreme Court’s ruling in AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740 (2011) continues with two Petitions for Writ of Certiorari recently filed in the high court: Buffington et ux. v. SunTrust Banks Inc., S.Ct. case number 12-146, and American Express Co. et al. v. Italian Colors Restaurant et al., S.Ct. case number 12-133.  The decisions of the Second Circuit in Amex and the Eleventh Circuit in Buffington stand juxtaposed, with the Second Circuit having found a class arbitration waiver unenforceable because it was not ...

The Proper Expert Inquiry at the Class Certification Stage

     What is the proper inquiry into expert evidence proffered by parties at the class certification stage?  Last year, we discussed cases from several U.S. Courts of Appeals which highlighted some of the uncertainties surrounding the applicability of Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S. Ct. 2786 (1993) and the depth of analysis courts should apply to expert evidence at the class certification stage.  See my previous blog here.  The Daubert analysis and Rule 23 rigorous analysis often seem to be conflated by parties and lower courts.  And in the midst of the U.S ...

Will the Supreme Court Answer the Call to Revisit the “Class Arbitration Waiver”?

Discussion regarding the impact of the U.S. Supreme Court’s ruling in AT&T Mobility LLC v. Concepcion has included recognition of the likelihood that Concepcion would not serve as a stamp of approval on all class arbitration waivers – under some circumstances Concepcion likely would not preclude class actions or class arbitrations.  Over the last year, we have watched lower courts and regulatory bodies analyze Concepcion and the validity of class arbitration waivers in a variety of contexts:  state claims vs. federal claims, employment claims vs. consumer claims, antitrust ...

Will Your Arbitration Agreement Survive Bankruptcy?

Several recent U.S. Supreme Court cases have emphasized that there is a strong federal policy in favor of arbitration.  Yet, an arbitration agreement is not impenetrable or always enforceable.  It is beneficial for businesses to understand the areas in which the interest in enforcing arbitration agreements may not be as strong as other interests at issue.  The enforceability of arbitration agreements in the bankruptcy context is one such area, which the U.S. Supreme Court has recently been asked to address.  As it now stands in the Fourth Circuit and several others, an arbitration ...

The Duty to Preserve Evidence: Beyond Reasonable Anticipation

   The duty to preserve evidence in the face of impending litigation is a burden that befalls litigants and potential litigants.  We recently discussed the impact of the decision in Zubulake v UBS Warburg LLC 220 FRD 212 (S.D.N.Y. 2003) on the determination of when the duty to preserve attaches with respect to the preservation of electronic documents.  See my previous blog here addressing the reasonable anticipation standard established by Zubulake and as applied in state court in VOOM HD Holdings LLC v. EchoStar Satellite L.L.C., 2012 NY Slip Op 00658 (Jan. 31, 2012).  The duty to preserve ...

Raise a Glass to Justice Initiatives, Inc. for Raising the Bar!

   Justice Initiatives, Inc. continues to raise the bar in its efforts to support and advocate for our court system. For six years, Justice Initiatives, Inc. has hosted the illustrious “Evening at the Courthouse” fundraising event, which has a guest list that reads like a “Who’s Who” of North Carolina federal and state judges, state and local elected representatives, and members of the Mecklenburg County Bar and Community. The event is hosted free of charge to guests, with a request for donations to support the organization. At this year’s event on May 8th, I was among those ...

Preventing Personal Liability for the Missteps of the Limited Liability Company: 5 Critical Take Away Points From the North Carolina Courts

   Members, managers, directors, and executives of limited liability companies (“LLC”) are provided protections under North Carolina law which limit their personal responsibility for obligations incurred by the LLC.  This limitation includes liabilities incurred for professional negligence, malpractice, and other wrongdoing attributable to the LLC and other employees or members of the LLC.  There is, however, a limit to the limited liability protection provided under North Carolina General Statutes § 57C-3-30; and plaintiffs continue to attempt to impose personal ...

Unreasonable Delay in the Age of E-Discovery: The Zubulake "Reasonable Anticipation" Standard Applied in State Court

In the age of e-discovery, businesses across the nation have been challenged with seemingly insurmountable hurdles when facing litigation.  The costs of conducting e-discovery can be extraordinarily high, given the volumes of data often at issue in complex commercial litigation.  The recent case VOOM HD Holdings LLC v. EchoStar Satellite L.L.C., 2012 NY Slip Op 00658 (Jan. 31, 2012) decided by the New York State Supreme Court Appellate Division admonishes potential litigants that mishandling the e-discovery process comes at a much higher price.  Despite protests from litigants ...

NC’s Changes to Judicial Appointment Process

   Former U.S. Supreme Court Justice Sandra Day O’Conner was likely happy to see the news of Governor Perdue’s Executive Order 86 which established the North Carolina Judicial Nominating Commission.  In 2010, former Justice O’Connor highlighted that the U.S. was the only nation in the world that had elections for its judges (at the state level) and admonished: “I know you have some public funding of elections, and it's nonpartisan, but that doesn't do enough. So I hope that someday you'll think about something else in North Carolina.”  See here for former Justice ...

"He Will Be Missed" Does Not Say Enough

   While it is difficult to find the right words to say, I want to say something to honor my friend who recently passed away.  Judge Christopher M. Collier was far too young and taken too suddenly for me to have been prepared to reflect on his life and the impact he had made on the world and those around him.  I have had a couple of weeks since his passing for the loss to sink in.  We are incredibly fortunate to have been touched by Chris Collier while he was with us. 

    I first became friends with Chris when we were undergraduate students at University of North Carolina at Chapel Hill.  Our paths continued to ...

On Second Thought…Maybe Not: Even Federal Judges Second Guess Themselves

   It ain’t over ‘til the fat lady sings…or a federal court withdraws its controversial opinion.  Although infrequently, courts do withdraw their opinions and several federal court opinions of interest have been withdrawn since being issued this year.  No doubt these opinions addressed hot topics, leading to controversy over the courts’ initial opinions and prompting the courts to wipe the slate clean for reconsideration.

    Back of the Line Veterans:  Veterans’ rights could not be a more poignant and timely issue and it is one that is drawing a lot of attention.  On November 16 ...

Lower Courts Probe the Line Drawn by Concepcion: Class Arbitration Waivers and Vindication of Rights

Hypothetical Question: a contract contains an arbitration clause that requires the arbitration of all disputes and also prohibits the parties from arbitrating any claims as part of a class or representative action.  Is the class/representative arbitration waiver enforceable under AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740 (2011)?

We discussed that there is a significant possibility that Concepcion will not preclude all class actions.  See here.  Lower courts, both federal and state, are in the process of testing exactly where the line will be drawn.  Several lower courts have ...

From Class Action Waivers to State Administrative Hearing Waivers: How Far is the Reach of Concepcion?

Most are aware of the noteworthy U.S. Supreme Court decision in AT&T Mobility v. Concepcion, 131 S.Ct. 1740, issued on April 27, 2011.  I addressed the implications of Concepcion in a previous blog. Concepcion has generated a lot of discussion and has been feared by some to be the “death knell” of the consumer class action.  But can the reach of Concepcion actually be much farther?  Will Concepcion be labeled the “death knell” of preliminary state administrative hearings as well?  The U.S. Supreme Court’s recent summary disposition of a Petition for Writ of Certiorari in the ...

The Full vs. Tailored Daubert Review at the Class Certification Stage

Does expert evidence that is offered in support of class certification need to be scientifically reliable in order to be admissible at the class certification stage? While the Circuit Courts are reportedly split on the application of Daubert at the class certification stage, a look behind the terminology used by the courts (full vs. limited or tailored Daubert review) reveals that the courts consistently have required that the admissibility, i.e., the scientific reliability and relevance, of the expert evidence offered in support of class certification be determined at the class ...

The Fourth Circuit Advises Class Action Plaintiffs that Shady Grove Does Not Provide a License to Bypass All State Procedural Rules

   In March, 2010, the U.S. Supreme Court issued an important ruling in Shady Grove Orthopedic Associates v. Allstate Insurance Co., 130 S. Ct. 1431 (2010) that opened the federal courts to plaintiffs as a forum for class actions. However, the Fourth Circuit Court of Appeals recently advised putative class action plaintiffs that the door opened by Shady Grove is not as wide as they may have hoped.

   The Shady Grove plaintiff filed a class action in federal court based on diversity jurisdiction and sought state statutory penalties in spite of a New York state statute that prohibited class ...

The U.S. Supreme Court Upholds Class Arbitration Waivers and Arbitration Agreements

Over the last three years, the Supreme Court has issued a number of opinions that have given strength to arbitration agreements. The Court has reiterated that the Federal Arbitration Act (“FAA”) places arbitration agreements on equal footing with other contracts. As a result, corporations will be better able to use arbitration to safeguard against costly and lengthy individual and class actions. On August 5, 2011, I addressed these developments and their impact on corporate clients in the “Class Action Update” presented at the Network of Trial Law Firms “Litigation ...

About MVA Litigation Blog

Companies are operating in an increasingly globalized and regulated business environment, facing ever-changing and complicated litigation and regulatory challenges. We provide cutting-edge information regarding developments in federal, North Carolina State, and international litigation, as well as in arbitration, regulatory enforcement, and related business practices.

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