01 Oct
2014

New Suit Challenges Constitutionality of SEC Administrative Proceedings Based on ALJs’ Insulation From Executive Oversight

Attorneys at Skadden Arps, on behalf of a client named Joseph Stilwell and his firm, today filed a complaint arguing that SEC administrative proceedings are unconstitutional:

SEC administrative proceedings violate Article II of the U.S. Constitution, which states that the “executive Power shall be vested in a President of the United States of America.”

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01 Oct
2014

Judge Oetken Certifies Liability-Only Class in MBS Case Against JP Morgan

In an opinion yesterday, Judge Oetken certified a class, for purposes of liability only, in a case alleging that certain JP Morgan mortgage-backed securites offering documents falsely represented (among other things) that the underlying loans complied with certain underwriting standards when, in fact, those standards were abandoned.

Judge Oetken rejected JP Morgan’s argument (among many others) that there were too many underwriting standards — 8,196 according to JP Morgan — to address on a class wide basis:

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30 Sep
2014

Judge Gardephe Allows DOJ to Proceed With Suit Accusing Novartis of Using “Sham” Speaker Events to Pay Doctors Kickbacks

In a 90-page opinion today, Judge Gardephe largely denied Novartis’ motion to dismiss a government suit alleging that it paid doctors kickbacks by hosting sham speaker events that allegedly “served as little more than upscale social outings designed to induce doctors to write prescriptions for Novartis drugs.”  He rejected Novartis’ argument that the complaint lacked sufficient detail under Rule 9(b):

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26 Sep
2014

Judge Castel Rules 10(b) Claims Are Limited to Buyers and Sellers, Even in Injunction Cases

In an opinion dated yesterday, Judge Castel dismissed a suit challenging the proposed merger between a Chilean bank (Itau) and a Brazlian bank (CorpBanca) because the plaintiff, Cartica, was not a “purchaser” or “seller” in relation to the alleged fraud.  It was merely a stockholder.

In doing so, he took one side of an issue that has divided the lower courts:

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23 Sep
2014

Judge Kaplan Allows Privilege Clawback; Notes Reviewers Can Err From “Too Many Hours in Front of a Computer”

In a discovery order dated yesterday, Judge Kaplan ruled (among other things) that Bank of New York Mellon could claw back a privileged email that it had inadvertently produced.  The order acknowledges the realities of large-scale document productions in which mistakes will be made “more often than desirable”:

The fact that the document as originally produced was partially redacted superficially could be said to cut against the inadvertence finding, as the limited redaction demonstrates that someone initially paid attention to the privilege issue and made a decision as to what was and what was not privileged. Given the fact that this was one of 71,000 redacted documents produced and the realities of document review in cases like this one, which often involve hundreds of thousands or even millions of documents, one cannot be blinded to the fact that mistakes are made more often than is desirable. The Court chalks the production of the scantily redacted copy of this document up as a mistake, doubtless by a young lawyer or paralegal who perhaps was not sufficiently briefed or suffering from fatigue borne of too many hours in front of a computer monitor. In any case, there certainly is no basis for concluding that the unduly limited redaction was “completely reckless.”

18 Sep
2014

Judge Furman: James Cameron’s Avatar Movie Does Not Infringe Copyright of Noted Rock Album Cover Artist

In a decision issued yesterday, Judge Furman dismissed a lawsuit alleging that director James Cameron infringed the copyrights of artist William Roger Dean in Cameron’s blockbuster movie Avatar.  The artist, whose work has graced the covers of many major rock albums, claimed that many of the movie’s fantastical settings are copied from 14 works he produced between 1972 and 2007.

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16 Sep
2014

Judge Torres Rejects Commerce Clause Challenge to Higher EZ Pass Rates for Passes Bought Outside New York

In an opinion today, Judge Torres granted the MTA summary judgment in a suit challenging the practice of charging higher bridge and tunnel tolls to customers using EZ Pass cards (or transponders) purchased out of state. She found no discrimination against out-of-staters because they, too, are free to purchase discounted, in-state EZ Pass transponders:

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10 Sep
2014

Judge Hellerstein Rules That Searchable TV Database Service is “Fair Use”

In an opinion dated yesterday, Judge Hellerstein ruled that a service called “TVEyes,” which “monitors and records all content broadcast by more than 1,400 television and radio stations twenty-four hours per day, seven days per week, and transforms the content into a searchable database for its subscribers,” was “fair use” under the copyright laws, and thus largely granted summary judgment against the plaintiff, Fox News.

The decision was based on the fact that the service is “transformative”:

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05 Sep
2014

Judge Swain Dismisses GM “Channel Stuffing” Securities Class Action

In an opinion yesterday, Judge Swain dismissed a securities class action accusing GM of “channel stuffing” — forcing excess inventory onto dealers to create the appearance of improving revenue — because the inventory at dealerships was fully disclosed:

The fundamental flaw of Lead Plaintiff’s thesis is that is own Amended Complaint reflects public knowledge of the excessive inventory problem, through press coverage and GM disclosures, at all relevant times, and acknowledges that GM’s disclosure in the Registration Statement identified the importance of customer-level sales figures in gauging revenue and inventory levels. Lead Plaintiff cites documentation demonstrating that GM disclosed information regarding its increasing inventories at the time the Registration Statement became effective. Moreover, GM’s Form 8-K, filed days before the IPO, fully disclosed inventory levels and sales levels for the previous month, and fully reflected growing dealer inventory volumes relative to sales.

Our prior post on the case is here.