18 Apr
2014

Judge Scheindlin Rules that Alien Tort Claims May Proceed Against Corporate Defendants

In an opinion issued yesterday, Judge Scheindlin denied the motion to dismiss claims under the Alien Tort Statue against Ford, GM and IBM, finding that two recent Supreme Court rulings had undermined the Second Circuit’s prior decision that corporations could not be liable under the statute. The case, In re South Afican Apartheid Litigation, accuses the defendants of aiding and abetting violations of the ATS by providing military and computer equipment to the apartheid regime.

In 2009, the defendants had sought a writ of mandamus of Judge Scheindlin’s decision allowing the ATS claims to go forward. Before ruling, the Second Circuit decided the Kiobel case, in which it held that the ATS did not cover corporate defendants (Kiobel I). That case went to the Supreme Court, which ultimately decided the case on different grounds — whether the ATS could apply extraterritorially — declining to hold that the ATS did not apply to corporations (Kiobel II).

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17 Apr
2014

Judge Marrero Rules on Another Motion to Dismiss MF Global Claims

In an opinion issued yesterday, Judge Marrero granted in part and denied in part the latest motion to dismiss one of a “plethora” of lawsuits against MF Global, Jon Corzine and other former employees and directors of the now-defunct firm.  With this his third ruling in the past several months on claims based on the same set of operative facts, Judge Marrero praised the parties for recognizing that certain of their arguments had been ruled upon in the prior decisions, while noting that they were still re-arguing some points that had already been decided:

As the parties forthrightly admit, the Court’s ruling in the Commodities Customer Action effectively disposes of several of Sapere’s claims. The Court appreciates the extent to which the parties have acknowledged areas of agreement and consensus.

However, the Complaint filed here contains claims beyond those made in the Commodities Customer Action. Sapere raises causes of action for fraud and violation of New York state law, and it has brought claims against defendants not sued in the Commodities Customer Action. To this extent, Sapere repeats the failures made by the plaintiffs in the Commodities Customer Action: it has “brought claims that fly in the face of clear precedent” and “brought other claims against some defendants who could not plausibly bear responsibility for any of the harm
[Sapere] allege[s].  And Sapere’s lengthy, 75 page opposition memorandum of law cannot save those claims because “[n]o amount of argument can overcome the lack of legal support for several of the claims [Sapere] filed in this action.

Prior posts on the MF Global cases are here.

15 Apr
2014

Judge Griesa Reinstates Claims of Madoff Feeder Fund Investors After Recent Supreme Court Decision on SLUSA

In an opinon issued yesterday, Judge Griesa reinstated state law fraud claims of investors in so-called Madoff “feeder funds” that he had previously dismissed under the Securities Litigation Uniform Standards Act (SLUSA). SLUSA bars large class actions brought under state law that allege “a misrepresentation or omission of a material fact in connection with the purchase or sale of a covered security.” A “covered security” is defined as, among other things, a security traded on a national stock exchange.

In a prior decision, Judge Griesa had held that SLUSA barred plaintiffs state law claims even though their own investments were not in “covered securities” but in funds that invested with Madoff. Madoff’s subsequent purported transactions in covered securities was sufficient for SLUSA to apply and bar any claims based on Madoff’s fraud. Plaintiffs moved to reinstate their state law claims after the Supreme Court ruled in Chadbourne & Parke LLP v. Troice, 134 S. Ct. 1058 (2014). Judge Griesa agreed that Troice had changed the landscape:

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14 Apr
2014

Judge Forrest Again Provides Parties Advance Draft in Dismissing Lululemon Derivative Suit

In an opinion filed on Friday, Judge Forrest dismissed a derivative suit brought by shareholders in yoga apparel company Lululemon.  The complaint centered on the March 2013 recall of one of Lululemon’s “flagship” products — black yoga pants that turned out to be sheer when worn.  Judge Forrest ruled that the plaintiffs had not adequaetly pled demand excuse for failing to bring the claim to the company’s board, who the plaintiffs said were not disinterested.  Judge Forrest has not yet ruled on the pending motion to dismiss the related putative securities fraud class action, which we covered previously.

In addition, as in a previous case, Judge Forrest provided the parties with a draft of her opinion a few hours before a scheduled court conference.  In her order announcing issuance of the draft opinion, Judge Forrest told the parties:

The Court will listen to any argument the parties would like to make as to the Court’s tentative rulings, or proposals as to next steps. For instance, if there is a total dismissal, the plaintiffs should be prepared to address whether they will seek an opportunity to amend and if so, what facts they would propose to add. If the Court does not dismiss in whole or in part, then the parties should be prepared to address the timing of motions for class certification and discovery.

11 Apr
2014

Concussion Class Action Filed Against NHL

In a complaint filed Wednesday, a group of former NHL hockey players filed a class action alleging that the NHL failed to warn, and concealed, the risk of concussions and other injuries:

Ice hockey is the most difficult team sport in the world. The puck changes possession on average 450 times per game. Players move at speeds of up to 30 miles an hour.  For this, ice hockey demands levels of agility, dexterity, strength, and mental prowess like no other team sport.

While fans have continually flocked to marvel at the world’s best athletes competing in the sport of ice hockey, the NHL has looked at ice hockey players as a means to an end. For the NHL, it has been about exploiting the supreme athleticism of its players in order to generate revenue. And early on, the NHL saw extreme violence as a way to bring more fans to the game.

As opposed to other elite-level ice hockey organizations, like the European ice hockey leagues and the Olympics, the NHL fostered and promoted an extremely physical game of ice hockey. Through enclosed rink designs and lax rules for fighting, the NHL vectored a culture of extreme violence and packaged the spoils to adoring fans . . . .

Plaintiffs bring this class action lawsuit on behalf of all current and former NHL players because the NHL’s exploitation of its players has been and is inequitable. . . .Specifically, despite the fact that the NHL’s violent game design induces head trauma, including concussions, the NHL has failed and continues to fail to warn its players of the risks to their lives and the devastating and long-term negative health effects.  In fact, the NHL affirmatively concealed specific anecdotal evidence from players and scientific evidence about the health risks and consequences associated with playing in the NHL, including head injuries.

The case is before Judge Scheindlin.

09 Apr
2014

Judge Nathan Refuses to Enjoin Allegedly “Uninformed” Shareholder Vote Relating to Aetna Political Donations

In an opinion today, Judge Nathan refused to issue a preliminary injunction that would required Aetna to alter the proxy materials by which it opposes two upcoming shareholder proposals seeking to require Aetna to provide more detail about its political contributions. The complaint alleges that Aetna’s prior opposition to similar proposals falsely claimed that Aetna already provided “robust” and “extensive” disclosure, when, in fact, Aetna omitted or misstated various political donations.

Judge Nathan found that the plaintiff could not show “irreparable harm”:

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03 Apr
2014

AIG Brings Constitutional Challenge to N.Y. Regulation of Insurance Sales to Out-of-State Customers

In a complaint filed today, AIG seeks to enjoin the New York State Department of Financial Services from any enforcement action arising from the Department’s investigation into a former AIG subsidiary called ALICO.  The Department has allegedly threatened to fine AIG based on the allegation that ALICO was conducting an unlicensed insurance business in New York.  AIG’s complaint argues it would be unconstitutional to apply the statute at issue, New York Ins. Law § 1101(b) (defining “insurance business”), to ALICO because ALICO marketed insurance products only to out-of-state customers:

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31 Mar
2014

Judge Daniels Agrees With Judge Buchwald That Rate Manipulation Does Not Create Antitrust Injury

In a decision Friday dismissing antitrust claims arising from the alleged manipulation of Euroyen TIBOR and Yen-LIBOR rates, Judge Daniels agreed with Judge Buchwald — who dismissed similar allegations regarding LIBOR rates (see our post here) — that fixing rates does not give rise to antitrust injury because the process of establishing interest rate indexes is “not competitive,” but a “cooperative effort.”

Reuters’ Alison Frankel has a detailed analysis of the issue here.