This November marks the 225th anniversary of the District Court for the Southern District of New York, and the court has announced a series of events to commemorate and celebrate that anniversary. Events kick off on November 4 with a special session and reception, and will include a reenactment of the Pentagon Papers case, a performance of a patent trial – “American Pin v. National Button” – and panels on the judicial lives of Judges Edward Weinfeld, Learned Hand, and Constance Baker Motley. A full listing of events is here. The Southern District – which convened for the first time on November 3, 1789 – is the oldest federal court in the United States, pre-dating by several weeks the organization of the U.S. Supreme Court, which did not hold its first session until February 1790. A history of the court, published in 1962 by the Federal Bar Association of New York, New Jersey & Connecticut, can be found here.

A complaint filed yesterday is the second SDNY suit (see our post on the first one, here) to argue that SEC ALJ’s are too insulated from accountability to the executive branch, in violation of Article II of the Constitution. The underlying case involves administrative charges against Jordan Peixoto, who allegedly shorted Herbalife stock in advance of a presentation by the hedge fund Pershing Square accusing Herbalife of being a pyramid scheme. Peixoto allegedly received the information from a friend (Filip Szymik) who was roommates with an analyst at Pershing Square. Peixoto argues that the case was brought administratively to avoid having a jury rule on weak evidence and on a novel application of the insider trading laws:

Continue Reading Herbalife Case Raises Second Challenge to Constitutionality of SEC ALJs

The article includes the following answer detailing Judge Berman’s most interesting cases:

The most rewarding part of the job has to do with the breadth and sometimes the significance of the cases. Mine have included: a) two “three judge” cases (election redistricting and a challenge to the Communications Decency Act); b) two cases which were ultimately decided by the U.S. Supreme Court, one involving the importation of wine into New York State and another relating to civil RICO (Yes, I went to both oral arguments in Washington, D.C.); c) the New York City “subway search” case which was resolved after a compelling bench trial; d) the case that authorized the use of credit cards in New York City taxis (You’re welcome); e) the trial of a non-U.S. national for attempting to kill U.S. government officials (CIA, FBI and military officers) in Afghanistan; f) overseeing the District Council of New York City Carpenters Union trusteeship which calls upon my undergraduate degree in Industrial and Labor Relations; and g) the recent trial involving counterfeit wine which sold for $20-$30 thousand per bottle.

During argument yesterday in a Supreme Court case considering whether the labor laws require compensation for time spent in security screenings, Justice Kagan asked the following question:

Can I give you a different hypo, which is similar to some of the ones that have been floating around in a brief, but it’s actually based on real life circumstances. There was a judge ages ago in the Southern District of New York who had his clerks   — all that they did was help him with his opinions and his cases and that was their principal activity, but had his clerks come early in order to cut his grapefruit and otherwise make breakfast for him.  And would that be compensable?

As the National Law Journal reports, the judge in question was legendary Southern District Judge Edward Weinfeld:

[T]he 1998 book Closed Chambers by Edward Lazarus states that clerks for Southern District Judge Edward Weinfeld “knew they had to be in the office at 7 a.m. to cut the judge’s morning grapefruit.” After that, he added, the clerks “learned a lifetime’s worth of civil procedure and good lawyering.”

Attorneys at Skadden Arps and Post & Schell, 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.”

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

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:

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

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):

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

In an opinion today, Judge Gardephe dismissed a securities class action accusing Avon of defrauding its investors about its compliance with the FCPA.  Avon’s management received a whistleblower letter about bribes to Chinese officials, and Judge Gardephe found that it was not fraudulent for Avon to investigate the allegations before disclosing them:

Continue Reading Judge Gardephe Dismisses Class Action Accusing Avon of Hiding FCPA Exposure

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:

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

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.”