Monthly Archives: March 2013

Drop in Employment Civil Rights Lawsuits

TRAC Reports has recently released its latest data on the trends of employment civil rights lawsuits.  The decrease of civil rights lawsuits in the employment context is not surprising.

TRAC Reports states:

The latest available data from the federal courts show that during February 2013 the government reported 950 new employment civil rights filings. According to the case-by-case information analyzed by the Transactional Records Access Clearinghouse TRAC, this number is down 7.9 percent over the previous month when the number of filings of this type totaled 1,032, and has dropped 13.2 percent from its level one year ago see Table 1.

Drop in Employment Civil Rights Lawsuits

 

TRAC further states that the volume of civil rights matters filed in federal districts during February 2013 was 3.1 per every million persons in the US.  Last year, that number of filings was 4.2.

via Drop in Employment Civil Rights Lawsuits.

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Class action plaintiff can’t avoid federal court

The SCOTUS blog reports on Standard Fire Ins. Co. v. Knowles, 11-1450 (2013).  Here, the Supreme Court held that federal courts aren’t bound by plaintiffs in proposed class actions who try to keep cases in state court by stipulating to the amount in controversy.

The Supreme Court ruled on Tuesday in a unanimous opinion by Justice Stephen G. Breyer. Lead plaintiffs don’t have the authority to bind others prior to class certification and their stipulations don’t make “a critical difference,” Breyer said.

At issue were provisions in the Class Action Fairness Act giving federal courts original jurisdiction in class actions when the aggregated amount in controversy exceeds $5 million and there are more than 100 class members.

Lead plaintiff Greg Knowles had filed his suit in Miller County, Ark., and stipulated that the amount in controversy was less than $5 million. His would-be class action against Standard Fire Insurance Co. had alleged the insurer underpaid claims for hail damage. According to the complaint, “hundreds, and possibly thousands” of people in Arkansas had similar claims.

A federal court considering Knowles’ bid to send the case back to state court had found that the amount in controversy would have exceeded $5 million, absent the stipulation.

Breyer said Knowles’ stipulation does not remove the case from the scope of the federal class-action law. “The stipulation at issue here can tie Knowles’ hands, but it does not resolve the amount-in-controversy question in light of his inability to bind the rest of the class,” Breyer wrote. “For this reason, we believe the district court, when following the statute to aggregate the proposed class members’ claims, should have ignored that stipulation.”

via SCOTUS: Class action plaintiff can’t avoid federal court by stipulating to amount in controversy – ABA Journal.

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Generic and Branded Drugs

This is an interesting case that the Supreme Court will hear today.  Does a branded drug maker, faced with a potential competitor who makes generic drugs, act illegally if it pays money to the competitor in a deal that postpones the sale of the generic drug for a period of years?

The FTC says it is unlawful, while the generic and branded drug makers disagree.

So why does this matter?  Everyone knows that generic drugs are cheaper than branded drugs.  As the NY Times reported, “73 percent of consumer spending” is spent on branded drugs.  When a generic drug, which costs about 15% of the branded drug cost, enters the market, branded drug makers lose about 90% of their profits.

In FTC v. Actavis, Inc., the 11th Circuit Court of Appeals held companies holding the patent to the branded drug could make those payments to the generic drug maker.  In this case, the generic drug maker challenged the patent of the branded drug maker in court.  Both drug makers came to a settlement, whereby the generic would get some payment as long as the branded drug maker could continue to sell its branded drug exclusively for a time period.

In sum, the 11th Circuit reasoned, “absent sham litigation or fraud” when the anticompetitive effects of a patent fell within that scope, there is no antitrust claim. Further, since there was a settlement, the 11th Circuit stated that it would be hard to predict what the effect would have been.  And since the settlement was with one generic drug maker, this did not impact other generic drug makers from selling the generic version of the drug.

Now, the Supreme Court has to decide on this issue.

via Generic-Brand Name Drug Case Goes to Supreme Court – NYTimes.com.

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ERISA: Appeal must be clear

In Reindl v. Hartford Life and Accident Insurance Co., –F.3d __, 2013 WL 425356 ( 8th Cir. February 5, 2013), the 8th Circuit clearly stated that when appealing an ERISA decision – the appeal must be clear.  In this case, the question was: Can a mere request for medical records, and a reference to an “appeal in the future tense,” trigger the appeal?  The 8th Circuit held no.

Here, the participant sought and obtained disability benefits.  Hartford later reassessed the claim of the participant and discontinued the benefits.  On November 25, 2008, Hartford sent a letter informing the participant that she had 180 days to file an administrative appeal.

On December 12, 2008, the participant’s lawyer sent a letter requesting medical records and stating, “We will be reviewing the records and obtaining additional medical information for my client’s appeal of the decision to terminate [benefits].” (emphasis added).

On July 8, 2009 the participant’s attorney expressed disagreement with the benefits termination decision and stated: “I would appreciate your reversal of the decision to terminate [Reindl’s benefit claim].”

The trial court held that the participant failed to file a timely appeal.  The 8th Circuit affirmed.  The 8th Circuit court reasoned that the December letter merely requested medical records.  The reference to a future appeal was not an actual appeal.

via 8th Circuit – Expressing Intent to Appeal in the Future Does Not Constitute an “Appeal.” | Boom: The ERISA Law Blog.

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Giving up your password when looking for a job?

Should your potential employer require you to give up your password to Twitter? Facebook? LinkedIn? Will your comments, background information, age, nationality, pictures be used against you?

What if the employer does not use that information, but still has access to it?  Would that raise a concern that it was in fact used against a job applicant?  Allowing the requirement of social media passwords bring potential liability issues to employers.

Minnesota Lawyer (subscription required) has a very interesting article.   The Minnesota proposed bill, introduced by Rep. Mary Franson (R-Alexandria) seeks to ban employers from asking job applicants for their social media passwords as part of the job interview.  It is important to note, as stated by the article, that the bill does not discuss already hired employees and the use of employer laptops, computers, smartphones, etc.

Pending legislation in Minnesota includes H.F. 293, H.F. 611, S.F. 484, and S.F. 596.  All of these bills seek to ban employers fro requiring social network passwords as a condition of employment.

The National Conference of State Legislation reports that there are at least 29 states with introduced or pending legislation seeking to ban employers from requiring/asking for these social media passwords.

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Gov. Dayton drops business-to-business tax

MinnPost reports that Governor Dayton dropped the controversial business-to-business tax, which would impose taxes on legal services.

Gov. Mark Dayton said in a speech Friday morning that he’s taking the controversial business-to-business tax — which had been much villified by many executives  — off the table.

Speaking to the TwinWest Chamber of Commerce Legislative Breakfast at a St. Louis Park hotel, Dayton brought much relief to many business leaders there. State officials said it would have added $2.2 billion in state revenue by taxing business services such as advertising and legal advice.

MPR reported that Dayton said his initial budget proposal “obviously lacked public support” and that now “it lacks mine.”

Now, the anticipated new budget was set to be released on Tuesday, but it was delayed.  Governor Dayton’s staff stated that it will released “later in the week” since the tweaking of numbers continues. You can read MinnPost article here.

via Gov. Dayton takes business-to-business tax out of his budget | MinnPost.

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FTC can serve foreign defendants via Facebook

FTC v. PCCARE Inc., 12 civ-7189 (S.D.N.Y. Mar. 3, 2013) is a very strange case because it shows how service of process might be altered and in what circumstances.  In this case, the FTC wanted to be able to serve documents other than the Summons and Complaint via Facebook or e-mail.  The Southern District of New York granted this request.

This is a very strange case.  Generally, the Hague Service Convention has guidelines detailing how abroad defendants may be served.  The Hague Service Convention doesn’t expressly authorize service on foreign defendants by email or social media accounts.

So why could you serve documents a foreign defendant over Facebook?

The court explained that “A court in this district has held that the Hague Service Convention only applies to the initial service of process, not subsequent documents.”  See SEC v. Credit Bankcorp., Ltd., 2001 WL 666158, *4 (S.D.N.Y. Feb 14, 2011).  In addition the court relied on Federal Rule of Civil Procedure 4(f)(3), whereby it stated,

a Court may fashion means of service on an individual in a foreign county, so long as the ordered means of service (1) is not prohibited by international agreement; and (2) comports with constitutional notions of due process.”  SEC c. Anticevix, 2009 WL 361739, at *3 (S.D.N.Y. Fec. 13, 2009).

The court reasoned that federal courts need to keep an open mind about technology.

The court acknowledges that service by Facebook is a relatively novel concept, and that it is conceivable that defendants will not in fact receive notice by this means.  But, as noted, the proposed service by Facebook is intended not as the sole method of service, but instead to backstop the service upon each defendant at his, or its, known email address. And history teaches that, as technology advances and modes of communication progress, courts must be open to considering requests to authorize service via technological means of then-recent vintage, rather than dismissing them out of hand as novel.

via FTC can serve foreign defendants via Facebook, federal judge rules – ABA Journal.

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Sup. Ct. Rejects Wiretapping challenge

I just realized that I never posted this decision.  The background of Clappler v. Amnesty Int’l USA, No. 11-1024 (Feb. 26, 2013) is as follows.  Attorneys for Guantanamo Bay prisoners challenged the surveillance of their attorney-client and confidential communications.  In this case, to avoid surveillance on attorney-client communications and confidential communications, attorneys traveled to Guantanamo and had face-to-face communications.  Respondents brought this lawsuit to prevent any current, past, or future surveillance on these communications.  The Supreme Court rejected all of respondents’ arguments.

This case solely focused on Foreign Intelligence Surveillance Act (“FISA”), 50 USC 1881a.  FISA allows the Attorney General and the Director of National Intelligence to acquire foreign intelligence information by jointly authorizing the surveillance of individuals who (1) are not “United States persons” and (2) are reasonably believed to be located outside of the United States.  Before any surveillance, the government must obtain the Foreign Intelligence Surveillance Court’s (“FISC”) approval.

This case, in other words, only dealt with the question of the powers of the United States when performing surveillance of foreign communications.

In the 5-4 vote, the Supreme Court ruled that the plaintiffs could not prove by “pointing to specific facts” that any surveillance actually happened. Justice Alito held,

Respondents assert that they can establish injury in fact because there is an objectively reasonable likelihood that their communications will be acquired under§1881a at some point in the future.  But respondents’ theory of future injury is too speculative to satisfy the well-established required that threatened injury must be “certainly impending.” And even if respondents could demonstrate that the threatened injury is certainly impending, they still would not be able to establish that this injury is fairly traceable to §1881a.

(Italics in original).

So what meets the burden of injury in fact? Justice Alito stated that “[a]lthough imminence is concededly a somewhat elastic concept, it cannot be stretched beyond its purpose, which is to ensure that the alleged injury is not too speculative… that the injury is certainly impending.” (Italics in original).

In sum, Justice Alito delineated how respondents might meet their burden.

Respondents must have “actual knowledge” that the government is performing surveillance on their contacts or clients.

Alternatively, respondents might meet their burden through imminent surveillance if two conditions are met.  First, respondents must bring about “specific facts demonstrating that the communications of their foreign contacts will be targeted.”  Second, if imminence was shown, respondents must show that the government “will seek to use <§1881a-authorized surveillance (rather than other methods) to do so” for the respondent’s contacts and clients, and that the court granted the FISC order.

What posits an interesting conundrum is how will parties know if they are or will be subjected to surveillance under the specific provision of § 1881a of FISA?  The government knows for sure whether the plaintiffs’ communications where intercepted.  Thus, the parties might only become aware when a case is brought against them with information gathered from a FISC order.

 

via Supreme Court Rejects Challenge to Surveillance Law – NYTimes.com.

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Judicial Ethics and Social Media

On February 21, 2013, the American Bar Association released a formal opinion (#462) regarding judicial ethics in the social media context.  The ABA concluded,

A judge may participate in electronic social networking, but as with all social relationships and contacts, a judge must comply with relevant provisions of the Code of Judicial Conduct and avoid any conduct that would undermine the judge’s independence, integrity, or impartiality, or create an appearance of impartiality.

So what does this mean?

Electronic Social Media and the Judicial Independence, impartiality, and integrity

The ABA recognized that social networking is a part of worldwide culture and that electronic social media interactions might be beneficial to judges in order to prevent them from being thought of as isolated or out of touch.

So how should judges then behave in this electronic environment?  Given the oath and importance of promoting public confidence in the independence, integrity, and impartiality,” the judge must be sensitive to the appearance of relationships with others.

It is important to understand that relations over the internet are difficult to manage because messages may be taken out of context, misinterpreted, or relayed incorrectly.

In other words, judges must assume that comments, images, or profile information, as well as any other information, might be publicly revealed without the judge’s permission.

In addition, judges should not form relationships with persons or organizations that might be violative of Judicial Ethics because these relationships convey that the individuals or organizations are in a position to influence the judge.

Furthermore, there might be disclosure or disqualification concerns regarding judges when the sites that were “friended” or “liked” which are used by lawyers or others who may appear before the judge.  The context is important here when assessing the judge’s relationship to attorneys or others who may appear before them.

Electronic Social Media and Election Campaigns

In the ABA Model Code (which may be adopted as a whole or in part by states), a judge or judicial candidate may engage in political or campaign activity with certain enumerated exceptions.

Of great importance is that judges and judicial candidates must “be free and appear to be free from political influence and political pressure.” ABA Model Rule 4.1 [1].

Similarly of equal importance, the judge or judicial candidate is prohibited from personally soliciting or accepting campaign contributions other than through a campaign committee.  ABA Model Rule 4.1(A)(8); see also ABA Model Rule 4.4.  In the Model Rules, the method of communication is not addressed or restricted.

In addition, judges and judicial candidates are prohibited from “publicly endorsing or opposing a candidate for any public office.” ABA Model Rule 4.1(A)(3).  This means that judges or judicial candidates should be aware that by “liking” or becoming a “fan” of, or by “sharing” messages, photos, or other content, this Model Rule might be violated.

In sum, judges and judicial candidates can use social media but must be aware of the potential pitfalls that might arise. These might arise from “friending,” “liking,” “sharing,” being a “fan” of, and posting comments, photos, or other information that might be distributed.  It is also important for judges and judicial candidates to be aware that any information on the Internet might be distributed by others and made public with or without their consent.

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In Minnesota, Amendments to the Rules of Civil Procedure Highlight Proportionality

On February 4, 2013, the Supreme Court of the State of Minnesota adopted amendments to the Rules of Civil Procedure, including those affecting discovery.  Of particular note were amendments to Rules 1 and 26.  Specifically (and significantly), Rule 1 was amended to state that it is the responsibility of the parties and the court to assure proportionality throughout the litigation.  Accordingly, Rule 1 now states (new language is underlined):

These rules govern the procedure in the district courts of the State of Minnesota in all suits of a civil nature, with the exceptions stated in Rule 81.  They shall be construed and administered to secure the just, speedy, and inexpensive determination of every action.

It is the responsibility of the court and the parties to examine each civil action to assure that the process and the costs are proportionate to the amount in controversy and the complexity and importance of the issues.  The factors to be considered by the court in making a proportionality assessment include, without limitation: needs of the case, amount in controversy, parties’ resources, and complexity and importance of the issues at stake in the litigation.

Similarly, in addition to other significant amendments to Rule 26, Rule 26.02(b) has been amended to require that the scope of discovery “comport with the factors of proportionality, including without limitation, the burden or expense of the proposed discovery weighed against its likely benefit, considering the needs of the case, the amount in controversy, the parties’ resources, the importance of the issues at stake in the action, and the importance of the discovery in resolving the issues.”  While such limitations to discovery were previously acknowledged, the amended rule more strongly emphasizes the importance of proportionality.

Significant amendments to other rules were also adopted.  Notably, an order attaching “corrective amendments” was entered several days later.  Those orders are available HERE and HERE.  The newly adopted amendments become effective July 1, 2013.

via In Minnesota, Amendments to the Rules of Civil Procedure Highlight Proportionality : Electronic Discovery Law.

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