Yesterday the Third Circuit upheld a District of New Jersey decision denying class certification as to plaintiffs’ consumer fraud and unjust enrichment claims. Grandalski v. Quest Diagnostics Inc., 2014 U.S. App. LEXIS 17543 (3d. Cir. Sep. 11, 2014).
Plaintiffs alleged that Quest had overbilled them for testing services and their complaint proposed multiple nationwide
Today, the United States Supreme Court decided Halliburton Co. v. Erica P. John Fund, Inc., No 13-317 (U.S. June 23, 2014). Here’s a link to the
opinion. As we mentioned in our prior post, one of the questions the Supreme Court took the case to decide was whether to abolish altogether the so-called “fraud on the market” presumption of reliance in securities cases that the Court had recognized, 4-3, in Basic, Inc. v. Levinson, 485 U. S. 224 (1988).
The Court didn’t do that. The vote on that point was six-to-three. A combination of stare decisis (slip op. at 4, 7-8, 11), that Congress could have abolished the presumption itself but hadn’t (id. at 12-13, 15-16), and the Court’s emphasis on the rebuttable nature of the presumption – its “modest premise” (id.
at 10, see id. at 7, 10, 14-15) preserved it in cases where the evidence supported the existence of an “efficient” securities market.
We’re not securities lawyers here. We’re interested in Halliburton primarily for its effect in keeping “fraud on the market” presumptions out of our sandbox – the manifestly non-“efficient” market for prescription medical products, where patients cannot even buy these products without a learned intermediary physician first prescribing them. As we laid out at some length in a prior post (one of our 50-state surveys) back in 2010, the fraud on the market theory has been roundly rejected by courts applying state law, even in securities cases. Our chief concern at present isn’t state law, but rather the abominable RICO-based liability theories that the First Circuit embraced in its Neurontin trilogy. We discussed at length here how that court had allowed expert testimony that didn’t just presume reliance in a RICO case claiming off-label promotion, but allowed expert testimony amounting to a conclusive presumption of reliance – a presumption that that court held overcame the testimony of every prescribing physician who testified that they had not relied on the promotion. What’s more, the First Circuit in Neurontin even allowed that expert to impugn the credibility of the physician witnesses before the jury.
What happened in Neurontin was unprecedented, and we hope that, after what we gleaned from today’s Supreme Court decision, it remains that way. There’s a chance of that because the Supreme Court today had a lot to say about rebuttable presumptions of reliance, even in the sometimes “efficient” securities market.Continue Reading Supreme Court Dents, But Keeps, “Fraud on the Market” in Securities Cases
This post was actually written by Steve McConnell who is currently on vacation in a little country that gave Jay Gatsby an award for military heroism. So where in the world is Stevie Mac?
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Any day now you might be getting your piece of the settlement proceeds in the Ticketmaster class action litigation, which has been banging around since 2003. The complaint alleged that the fee labels were misleading. Maybe everybody already suspected that the “convenience” fee (a misnomer if ever there was one) was a profit center, but the plaintiffs alleged that order processing and delivery fees were, too – that they had little to do with, er, order processing or delivery. The proposed settlement would offer roughly $400 million in credits to 50 million ticket buyers. But the defendant estimates that the settlement would cost it only $35 million, because of the low participation rate in class action settlements. Meanwhile, the plaintiff lawyers are seeking $15 million in fees, along with up to $1.5 million in expenses. The math speaks for itself.
The same day that we read about the Ticketmaster settlement, we read Judge Posner’s opinion that rejects – actually hammers – a proposed settlement of the Pella windows litigation. Posner called the settlement “scandalous,” pointing out plaintiff counsel’s conflicts of interest and challenging the valuation of the settlement. Judge Posner did some math on his own, and concluded that the purported $90 million settlement was more likely to be something on the order of $1 million. It is a judicial beat-down.Continue Reading Settling Down, part 2
Have you ever heard the phrase “A Snickers Bar a day keeps the doctor away”? Neither have we. That is because chocolate is a dessert, a luxury, and not a food with significant health benefits. Sure, chocolate can provide much needed energy, and a taste of chocolate from time to time won’t do a typically
Maybe I can start a class action. I mean, I find it annoying that convenience stores don’t carry cold 12-ounce soda cans anymore. They don’t even carry the 16-oz bottles that existed years ago. Nowadays, everything’s in a 20-ounce bottle. But I don’t need 20 ounces of soda. A twelve-ounce can is fine. Heck, sometimes
Safe harbor. We like the sound of that. The term connotes a level of calmness and predictability that we find appealing in the regulation of drugs and medical devices, and we find ourselves writing about safe harbors a lot lately. Bexis recently gave us his survey of safe harbors against state consumer fraud claims, and
One of the best developments in drug and device law over the last 15 years has been the demise of the class action. Although seen by plaintiffs and some commentators as convenient devices that can be used to resolve large numbers of claims in bunches, courts have generally come to understand that class actions just
More and more we find ourselves at parties on Oscar night. Lately they’ve become red carpet parties. Jeez. We have no idea how that happened, but that’s where things are. There’s an upside though: the alcohol. Oh, and the snide comments. The alcohol and the snide comments make for fun. A couple of years ago, we stood watching yet another actor wrapped in suspect confidence and dazzling designer fabric standing in front of a microphone on the red carpet talking about [insert far away country] and how uninformed we are about its dire circumstances and how this actor was now going to inform us. Yummy. A guy holding a beer next to this particular DDL blogger summed things up: “Actors. What would we do without them?”
That’s pretty funny. But watch out. Lawyers may be worse. At those same parties others seem to think that you as a lawyer mysteriously have the answers to all sorts of difficult questions because your daily work-life is filled with complicated, intellectual problems that you approach in complicated, intellectual ways. But then you leave the party, go to work the next day and deal with crazy stupid stuff.
A Ninth Circuit panel seems to have faced this same feeling 11 days ago when it wrote this opening paragraph:
Some days we are called upon to consider such profound issues as eleventh-hour death penalty appeals, catastrophic threats to the environment, intense and existential questions of civil and human rights, and the most complicated, controversial problems in civil, criminal and administrative law. Today we consider the coating on sunflower seeds.
Lilly v. ConAgra Foods, Inc., 2014 U.S. App. LEXIS 3159, at *2 (9th Cir. Feb. 20, 2014).Continue Reading More Food Litigation in California: Attack of the Sunflower Seeds
We’ve made no bones on this blog about our distaste for the “cy pres” rationale that keeps finding its way into class action litigation. Indeed, we consider resort to cy pres as a virtually conclusive indication that the litigation in question is bogus. Our philosophy is “Cy Pres – No Way!”
For those
Data privacy is a hot topic. We regularly speak on data privacy at Reed Smith’s annual California continuing legal education day, and it takes hours to prepare because the landscape changes so rapidly. The law changes day-by-day, both legislatively and in our courts, and entire emerging industries (e.g., the “apps” industry) are organized around the collection and monetization of personal information disclosing what we do, when we do it, for how long, and where we are located. The very definition of “privacy” is now robustly debated, which is a significant change from the days when everyone knew that “private” information meant name, date of birth, social security number, account numbers, or some combination thereof. Today if you asked 25 privacy professionals to define “private” information, you might get 25 answers, and some would say “everything.”
When we expanded our drug and medical device practice into the data privacy realm a few years ago (along with the co-author of this post, Reed Smith’s Joshua Marker, an outstanding privacy lawyer and active blogger in his own right), we found that the healthcare industry was, for the most part, ahead of the game because the rules were relatively clear. Everyone agreed that personal health information was private, and there was HIPAA, the ubiquitous federal law that has regulated the security and privacy of personal health information since enacted in 1996. Drug and medical device companies typically are not HIPAA-covered entities, but they often have possession of personal health information in connection with patients who use their products, and our experience is that our clients and the lawyers who represent them take patient privacy very seriously.
One thing that has not changed is that there is no private right of action under HIPAA. That does not mean, of course, that plaintiffs have not tried to sue over breaches of security involving their private information. A handful of cases have permitted state law claims supported in part by alleged HIPAA violations, pleaded as claims like “negligence per se.” And there are numerous state laws regulating medical information that have garnered more attention as data privacy has become front-page news.Continue Reading Privacy of Medical Information: No Harm, No Foul, No Private Right of Action