A Class-Action Paradise: Legal Environment in California Encourages Frivolous Claims

food-courtA Food Court Follies Analysis

California: the land of beaches, Hollywood, and lawsuits.  A land where dreams can come true and where plaintiff-friendly statutes and forgiving federal judges allow consumer class actions to reign supreme.  Here on the WLF Legal Pulse, we have previously blogged on series of cases filed in California in which consumers allege that wording or images on a packaged food product misled them into making a purchase.  One notable subset of these cases involves supposed geographical-location deception—brewers make purchasers believe their beer was brewed in a (usually exotic or foreign) location when it was actually made someplace else.

These suits are made possible by permissive California laws which allow plaintiffs to file class actions against any manufacturer for just about any reason.  Federal district court judges in the state compound the plaintiff-friendly atmosphere by being especially tolerant of poorly plead (or frivolous) claims, routinely handing plaintiffs’ attorneys two or three bites at the apple while also spelling out how to best amend their complaints.   Continue reading “A Class-Action Paradise: Legal Environment in California Encourages Frivolous Claims”

Bigger than a Bread Box? Defendants’ Shelf of Equipment Isn’t Enough for Patent Venue

bread boxFor years, patent owners, especially those that have never “performed” the patent, used the U.S. Court of Appeals for the Federal Circuit’s broad interpretation of the patent venue statute to force infringement lawsuits into favorable jurisdictions.  The U.S. District Court for the Eastern District of Texas was the model; often referred to as the “patent district,” patent holders most frequently—and non-practicing entities (aka “patent trolls”) overwhelmingly—filed suit in the Eastern District of Texas, regardless of where the allegedly infringing party conducted business.  Patent trolls leaned on sympathetic (and self-interested) judges to bully easy settlements out of defendants and force end consumers to pay more for all sorts of products. Continue reading “Bigger than a Bread Box? Defendants’ Shelf of Equipment Isn’t Enough for Patent Venue”

Federal Court Offers an Exemplar on Defusing the E-Discovery Litigation Weapon

quickenAny civil litigation target knows that the highest costs of defending a lawsuit arise not from the courtroom or motion work, but from discovery.  Those costs have paradoxically skyrocketed in the digital era.  Though computers made it faster and cheaper to find and disclose documents, the volume of discoverable documents has infinitely increased, inspiring overwhelming production requests that courts must weigh when issuing discovery orders.

As outlined in a WLF Legal Backgrounder, those burgeoning electronic discovery (or e-discovery) demands inspired the U.S. Judicial Conference to amend the Federal Rules of Civil Procedure in 2015.  Among other changes, the amendments altered the scope of discovery under Rule 26 by imposing a stricter proportionality test for e-discovery.  Continue reading “Federal Court Offers an Exemplar on Defusing the E-Discovery Litigation Weapon”

Settlement of Lawyer-Driven “Merger Tax” Litigation Stumbles in New York

ny state courtsTo paraphrase an Oscar-winning song, it’s hard out there for a corporate merger.  In recent years, opportunistic plaintiffs’ attorneys have descended upon proposed mergers of publicly owned companies, filing lawsuits to delay the proceedings alleging that management breached its fiduciary duty to the shareholders.

But one look at the typical settlement demonstrates that these cases are almost always cash grabs for the attorneys while providing almost no benefit for the allegedly harmed shareholders.  The defendant usually agrees to “disclose” additional, trivial information about the merger, while paying the plaintiffs’ attorneys thousands of dollars in legal fees.  It comes as little surprise that these claims are colloquially known as “merger tax” suits, with the “tax” being the attorneys’ fees public corporations now feel obligated to pay any time they want to combine. Continue reading “Settlement of Lawyer-Driven “Merger Tax” Litigation Stumbles in New York”

DOJ Memo and Court Opinion Show Trend in Damming Flood of False Claims Act Suits

11th CircuitBusinesses that routinely contract with the government know that while the relationship comes with high financial rewards, it also can expose those companies to massive civil liability.  Under the False Claims Act (FCA), government contractors can find themselves sued for hundreds of millions of dollars based on mere technical violations of complex regulatory schemes.

Luckily, as highlighted in several of our previous posts, the U.S. Supreme Court has recently reinforced the high evidentiary threshold FCA plaintiffs need to meet to bring a successful claim under the most common theory of FCA liability.  A recently disclosed U.S. Department of Justice (DOJ) memo and a recent opinion from the U.S. Court of Appeals for the Eleventh Circuit might similarly lead to fewer baseless claims against government contractors. Continue reading “DOJ Memo and Court Opinion Show Trend in Damming Flood of False Claims Act Suits”

Same-Old Drug Advertising Ban Proposal Would Fail for the Same-Old Reasons

first-amendmentAs the country debates the best path forward for the nation’s healthcare system, interest groups continue to advance different ideas to address their pet causes.  One popular cause is the reduction of drug prices.  Though that debate often occurs based on narrow perceptions of the dollar figures at issue, ideas for price reduction are worthy of consideration, especially given the increasing budgetary percentage that government and personal spending healthcare now occupies.  One drug-price-reduction idea advanced toward the end of last year, however, should be vigorously opposed. Continue reading “Same-Old Drug Advertising Ban Proposal Would Fail for the Same-Old Reasons”

A River Runs to Court: Environmental Activists Circumvent Democracy to Impose Agenda

colorado river gorgeThis is a frustrating time for environmental special-interest activists. Their cause is not one the public rates as a national priority. Their allies are no longer in leadership positions in federal agencies. And though they still have friends at the state and local levels, shrinking budgets prevent those regulators and elected officials from pursuing the activists’ agenda. With waning influence in other branches, many environmental organizations now increasingly look to a long-standing and reliable tool of advocacy—the lawsuit—to achieve their ends.

Some groups have gone well beyond such traditional environmental litigation as citizen suits under state or federal laws, and are instead seeking judicial injunctions that would force government regulators to implement activists’ preferred policies. These lawsuits suffer from a number of infirmities, not the least of which is they turn the entire democratic process on its head. Continue reading “A River Runs to Court: Environmental Activists Circumvent Democracy to Impose Agenda”