27 Mar
2015

Judge Forrest Allows Aluminum Warehouse Antitrust Case (As Amended) to Proceed

In an opinion yesterday, Judge Forrest denied (for the most part) various motions to dismiss the collection of cases alleging an antitrust conspiracy among commodity trading firms and their affiliated warehouse operators relating to the price of aluminum.  She had dismissed an earlier version of the case because it alleged only parallel (not conspiratorial) conduct (see here), but the updated pleadings, she ruled, are now sufficient:

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25 Mar
2015

Judge Pauley Bemoans Needlessly Long and Complicated Pleadings

In an opinion issued today, Judge Pauley lamented the “troubling trend toward prolixity in pleading [that] is infecting court dockets in this district and elsewhere.”  Pointing to the 175-paragraph complaint, “larded with more than 1,400 pages of exhibits” and the 303-page, 1,263-paragraph counterclaim in a “relatively straightforward” case, Judge Pauley admonished both sides for their failure to adhere to Rule 8′s exhortation that a pleading contain a “short and plain statement of the claim.”

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24 Mar
2015

Judge Swain, Based on “Implicit” Overruling of Second Circuit, Rules 3-Year Limit to Sue Over False Securities Offerings Is Not Subject to “Extender” Law

In an opinion today, Judge Swain ruled Section 13 of the Securities Act, which states that no action may be brought “more than three years after the security was bona fide offered to the public” was not extended by the so-called “FDIC Extender Provision” of the Financial Institutions Reform, Recovery, and Enforcement Act (or “FIRREA”) because, she concluded, the FDIC Extender Provision applied only to statutes of limitations, which are generally triggered from the time a claim accrues (or can be brought), as opposed to statutes of repose, which set forth an absolute end date for suit, regardless of equitable considerations and regardless of whether the harm necessary to sue even arisen.

Judge Swain’s ruling was based on the Supreme Court’s decision CTS Corp. v. Waldburger, 134 S. Ct. 2175 (2014), which rejected the application of a similar extender law in the context of federal environmental law.  She went further and found that Waldburger “implicitly” overruled parts of a Second Circuit ruling in one of the FHFA cases, FHFA v. UBS, which, based on an extender law, found the claims at issue to be timely: “The analytical framework set out by the Supreme Court in Waldburger calls into question the Second Circuit’s analysis of the extender provision . . .  in its UBS decision, implicitly overruling material aspects of the UBS decision’s rationale.”

Judge Swain also disagreed with the Tenth Circuit, which, after having been instructed to reconsider a ruling based on Waldburger, maintained its original conclusion that the extender law would apply.

If Judge Swain’s ruling carries the day with the Second Circuit, it would be welcome news to Nomura and RBS, which are in the midst of a trial against the FHFA involving a substantially identical issue.

Alison Frankel has been covering these issues in depth, see here, here and here.

23 Mar
2015

Judge Rakoff Denies Class Cert Where Class Rep Faced Unique Defense Relating to “Netting” of Losses

In an opinion Friday, Judge Rakoff denied class certification in an class action accusing various defendants connected to a hedge fund of trading on insider information to the detriment of investors who traded around the same time.

Judge Rakoff disqualified one of two proposed class representatives because he had an undisclosed arrangement for an attorney related by marriage to receive a 5 percent referral fee, and because his “difficulties with recollection and lack of familiarity with the litigation indicate[d] that he [was] wholly dependent on counsel to make crucial decisions affecting the interests of absent class members.”

Judge Rakoff disqualified the other because he was “subject to the potentially meritorious defense that he suffered no economic loss attributable to defendants’ alleged wrongdoing,” on the theory that his winning trades could “net” against his losing ones.  This was disqualifying, Judge Rakoff concluded, because:

For most class members, the netting question is of only secondary importance, as the more pressing issue for those who are net losers is establishing liability. For [the plaintiff], by contrast, the netting issue is paramount, since for him it means the difference between a substantial recovery and no recovery at all. He is therefore highly likely to focus on this issue to the detriment of the class.

This is an issue the SDNY Blog flagged in this case almost three years ago in a post stating: “being the victim of securities fraud seems to have worked out all right in this case.”

19 Mar
2015

Judge Torres Grants Police Unions a Say in Stop-and-Frisk Reform Efforts

In an order issued today, Judge Torres granted the motion of two police unions to participate in what Judge Torres described as “the difficult process of bringing the NYPD’s stop-and-frisk policies and practices into compliance with federal and state law.”  After having previously denied the unions’ motion to intervene in the case — a ruling that was upheld by the Second Circuit — Judge Torres agreed to permit the unions to provide their views to the Monitor appointed to oversee reforms.

Judge Torres explained:

By letters dated March 4 and 6, 2015, the Patrolmen’s Benevolent Association and the Sergeants Benevolent Association ask to participate in the reform process by presenting their views after the Monitor submits his Final Recommendations. The Court believes the unions’ “important perspective on these matters” should be heard earlier.

By letter dated March 18, 2015, the City suggests a way for all five police unions to participate in the remedial process now. Under the City’s approach, the City will share proposals with the unions before providing them to the Monitor and the Plaintiffs. The unions may then offer their comments, which the City will convey to the Monitor. The City will continue to confer with the unions about substantial revisions proposed by the Monitor and the Plaintiffs.  This approach affords the unions “a practical opportunity” to inform the Monitor of their viewpoints before the Monitor reaches conclusions and submits Final Recommendations to the Court.

Our prior coverage of this case can be found here.

18 Mar
2015

Judge Hellerstein Rules That Spanish Bank With New York Branch Must Gather Information Globally for Judgment Collection Subpoena

In an opinion yesterday, Judge Hellerstein emphatically rejected the arguments of a Spanish bank, Banco Bilbao Vizcaya Argentina (S.A.) (“BBVA”), that, under the recent Supreme Court decision in Daimler v. Bauman and the Second Circuit’s recent ruling in Gucci v. Li, the Court lacked jurisdiction to enforce a subpoena seeking information that related to judgment collection and that was located outside the New York branch:

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13 Mar
2015

FHFA Trial Against Nomura, RBS Begins Monday Before Judge Cote

The Federal Housing Finance Agency (or “FHFA,” as conservator for Fannie Mae and Freddie Mac) sued 18 banks in 2011 for misrepresenting the quality of mortgage bonds. All but Nomura and RBS have settled, for a total of around $18 billion.  The trial against Nomura and RBS begins Monday before Judge Cote. It will be a bench trial.

Coverage of the upcoming trial can be found from Reuters, American Lawyer ($), and Bloomberg.

The defendants’ 115-page pretrial memorandum is here. There is not a pretrial memorandum from the FHFA available online.

Our prior coverage of the FHFA cases is here

12 Mar
2015

Judge Francis Recommends Denying Class Certification in Goldman Gender Bias Case

On Tuesday, Magistrate Judge Francis issued a Report and Recommendation to Judge Torres in which he recommended  denying class certification in a gender bias case against Goldman Sachs.  The plaintiffs allege that Goldman’s practices of “360 Reviews” (employee reviews by peers, subordinates and superiors) and “quartiling” (requiring managers to rank their employees by placing them in groups, or “quartiles,” from best to worst performers) discriminate against women.

Judge Francis found that individualized causation and damages issues were too predominate for classwide treatment:

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09 Mar
2015

Judge Crotty Dismisses Trademark Case Against Oprah Over Phrase “Own Your Power”

In an opinion Thursday, Judge Crotty granted Oprah Winfrey summary judgment in a case that was brought by a  motivational speaking business, Own Your Power Communications, Inc., and that accused Ms. Winfrey of wrongfully using the phrase “Own Your Power” in her magazine, on her website and elsewhere.  Judge Crotty found that the mark had not acquired “secondary meaning” and thus was not protectable:

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03 Mar
2015

Judge Peck Publishes, For Guidance to Practitioners, Parties’ Protocol for Technology-Assisted Document Review

Magistrate Judge Peck, a widely recognized expert on e-discovery, published an opinion today approving a stipulated protocol for technology-assisted review of documents (or “TAR”).

The opinion is notable because it contains a clear statement supporting a party’s right to choose TAR: “the case law has developed to the point that it is now black letter law that where the producing party wants to utilize TAR for document review, courts will permit it.”

The opinion is also notable because it discusses one open issue in the TAR case law — the extent to which the parties must share information about their “seed” sets of documents — and because it attaches the parties’ protocol as guidance for practitioners. The key discussion is here:

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