December 2014

In an opinion today, Judge Oetken ruled that Sprint was collaterally estopped from revisiting an arbitration ruling in Kansas concluding that, under Kansas’s Unfair Trade and Consumer Protection Act (“KCPA”), a customer named Vincent Emilio was allowed to bring his claims against Sprint as a class action. In the underlying dispute, Emilio alleges it was unlawful for Sprint to pass along to its customers a fee to cover a New York state tax. Sprint argued that its agreements with customers bar class actions, and that, while the KCPA prohibits these types of class waivers, the KCPA was applicable only to conduct “within this state” (i.e., Kansas), not to issues relating to a New York tax. Judge Oetken ruled, however, that Sprint bargained for the arbitrator to make this decision, and already lost on the point:
Continue Reading Judge Oetken: Sprint Can’t Re-litigate Arbitral Ruling Allowing Customer Class Action

In a 135-page opinion issued Thursday, but made public for the first time Friday in redacted form, Judge Sweet granted the New York Attorney General’s motion to enjoin drug maker Activis from dropping a twice-a-day Alzheimer’s drug called Namenda IR, whose patent protection is about to expire, in favor of a once-a-day version called Namenda XR. The switch was allegedly motivated to prevent triggering state laws requiring pharmacists to substitute generics that are “AB-rated” to the brand name drug — i.e., have the same active ingredient, “form, dosage, strength, and safety and efficacy profile.”  These laws can cause a sharp decline in revenue when a patent expires (referred to as the “patent cliff”). As Judge Sweet explained, companies may try to avoid the “patent cliff” through a practice called “product hopping”:
Continue Reading Judge Sweet Blocks Activis From “Product Hopping” Alzheimer’s Drug To Avoid Triggering Laws Requiring Substitution of Generics

In an opinion today, Judge Kaplan denied the motion of CDO manager Harding Advisory and its principal Wing Chau to preliminarily enjoin SEC administrative proceedings against them.  The hearing has already been completed, but they await a decision that is expected next month.  As we reported in March, the plaintiffs initially moved to stay the proceedings before they even began (see our prior post here), but that motion was denied. Harding and Mr. Chau’s basic allegation is that administrative proceedings are so lacking in procedural protections that they violate due process, especially as compared to federal court.  Judge Kaplan concluded, however, that they could make those arguments within the administrative process itself – i.e., through an appeal to the Commission and then to the Second Circuit.  The cumbersome nature of that route, Judge Kaplan ruled, does not deny the plaintiffs due process:
Continue Reading Judge Kaplan Denies Motion Challenging SEC Administrative Proceedings As Unfair

In an opinion today, Judge Cote granted Tory Burch summary judgment in a case concerning knock-off merchandise.  The motion was deemed unopposed based the defendants’ misconduct, including spoliation and fabrication of evidence.  In a particularly notable passage, the opinion discloses that the Court ordered a forensic examination of the defendants’ opposition papers, and, from that examination, determined that those papers were served too late:
Continue Reading Judge Cote Employs Forensic Examination to Determine Brief Was Served Too Late

In an opinion last week, Judge Scheindlin denied the plaintiffs in a securities class action leave to amend their complaint to assert securities fraud claims against the company’s auditors, PriceWaterhouseCoopers and Ernst & Young. The proposed amendment would have alleged that PwC and E&Y took at face value the erroneous opinion of a third party tax preparer (referred to as “Frankel”), which the plaintiffs argued is as reckless and fraudulent as simply taking management representations as true:
Continue Reading Judge Scheindlin: Auditors’ Failure to Investigate Tax Preparer’s Opinions is Not Fraud