Limits on class-action lawsuits at Supreme Court

The Supreme Court appeared divided Monday in two cases in which businesses are trying to make it harder for customers or investors to band together to sue them.

The justices heard arguments in appeals from biotech company Amgen Inc. and cable provider Comcast Corp. that seek to shut down class-action lawsuits against the businesses.

Amgen is fighting securities fraud claims that misstatements about two of its drugs used to treat anemia artificially inflated its stock price. Comcast is facing a lawsuit from customers who say the company's monopoly in parts of the Philadelphia area allowed it to raise prices unfairly.

Last year, the Supreme Court raised the bar for some class-action suits when it sided with Wal-Mart against up to 1.6 million of its female employees who complained of sex discrimination. In the Wal-Mart case, the court said there were too many women in too many jobs at the nation's largest private employer to wrap into one lawsuit.

Class actions increase pressure on businesses to settle suits because of the cost of defending them and the potential for very large judgments.

Connecticut pension funds that sued Amgen said lower courts correctly ruled that the case could move forward as a class action. The issue at the Supreme Court is whether the pension funds have to show at an early stage of the lawsuit that Amgen's claims about the safety and effectiveness of the drugs Aranesp and Epogen affected the stock price.

Several justices indicated they had no problem with the idea that, unlike in the Wal-Mart case, all the Amgen investors were in the same boat and could clear an early hurdle that tripped up the Wal-Mart employees.

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Feds and Florida headed to court over voter purge

The administration of Florida Gov. Rick Scott is headed to a legal showdown with two different federal agencies over a contentious voter purge.
Florida filed a lawsuit in a federal court in Washington D.C., demanding that the state be given the right to check the names of its registered voters against an immigration database maintained by the U.S. Department of Homeland Security.
The lawsuit came the same day that the U.S. Department of Justice announced its plan to ask a federal court to block the state from pushing ahead with removing potential non-U.S. citizens from the voter rolls. Authorities contend that the state's effort violates federal voting laws.
"Please immediately cease this unlawful conduct," wrote Assistant Attorney General Thomas Perez to Florida Secretary of State Ken Detzner.
But Scott himself went on national television to defend the purge and the need to sue the federal government.

Court won't hear appeals from Bulger victim family

The Supreme Court won't hear an appeal over whether the family of a man allegedly killed by former Boston mob boss and FBI informant James "Whitey" Bulger should get millions of dollars from the government.

The high court on Monday refused to hear an appeal from Edward Halloran's estate, which wants more than $2 million in damages from the FBI.

Bulger and another gang member are alleged to have shot Halloran on the waterfront in 1982. Bulger was an FBI informant at the time, and two judges ordered the FBI to pay damages to the families.

But the 1st U.S. Circuit Court of Appeals ruled the families did not file their claims within the statute of limitations.

Appeals court: Seniors can't reject Medicare right

A federal appeals court ruled Tuesday that seniors who receive Social Security cannot reject their legal right to Medicare benefits, in a rare case of Americans suing to get out of a government entitlement.

Former House Majority Leader Dick Armey is among the five senior citizens who sued to stop their automatic eligibility for Medicare. But the appeals court ruled in a split decision that the law gives them no way to opt out of their eligibility if they want to keep their Social Security benefits.

Armey, a Texas Republican, and his co-plaintiffs say their private insurers limit their coverage because they are eligible for Medicare, but they would prefer the coverage from their private insurers.

"We understand plaintiffs' frustration with their insurance situation and appreciate their desire for better private insurance coverage," Judge Brett Kavanaugh wrote in a majority opinion joined by Douglas Ginsburg, both Republican appointees. But they agreed with the Obama administration that the law says those over age 65 who enroll in Social Security are automatically entitled to Medicare Part A, which covers services including hospital, nursing home care, hospice and home health care.

The case is being funded by a group called The Fund For Personal Liberty, which says its purpose is to take on burdensome government regulations. Attorney Kent Brown, who argued the case for the plaintiffs, say they want to keep their Social Security because they believe they earned it, but none of them want Medicare Part A.

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Court lets telemarketers be sued in federal court

The Supreme Court is keeping telemarketers and other businesses on the hook for nuisance phone calls, letting those annoyed by the disruptions sue in federal as well as state courts.

The high court's decision Wednesday involves a lawsuit claiming a debt collector harassed a man with repeated recorded calls.

Marcus Mims of Fort Lauderdale, Fla., said he kept getting the calls from Arrow Financial Services LLC, which was trying to collect a student loan debt for Sallie Mae. He sued for violations of the Telephone Consumer Protection Act, passed by Congress to ban invasive telemarketing practices.

Mims' lawsuit was thrown out by the 11th U.S. Circuit Court of Appeals, which said that Congress did not explicitly give permission for federal lawsuits in the Telephone Consumer Protection Act, although the law does say people can file in state courts. Other federal courts ruled differently and let lawsuits move forward.

The high court said in a unanimous opinion that federal lawsuits are allowed under the law.

Amazon Hit With Class Action Over Zappos Data Breach

Shoe retailer Zappos is facing a national class action suit one day after it warned customers that its servers had been hacked.

On Monday, the Amazon-owned shoe company sent a mass email stating that 24 million customer accounts had been breached. The incident resulted in hackers obtaining names, phone numbers, emails, encrypted passwords and the last four numbers of customer credit cards.

The lawsuit claims Amazon violated a part of the Fair Credit Reporting Act by failing to properly encrypt and secure customer information, and seeks unspecified damages for 24 million customers.

The lead plaintiff in the case is a Texas woman but the suit was filed in federal court in Louisville, Kentucky on the grounds that Amazon has servers located in that state.

As these type of hacking incidents have become more common, so too have related lawsuits. So far, though, few of these lawsuits been successful because customers have been unable to show that they have been harmed by the data breaches.

The Kentucky lawsuit appears based in part on a novel legal theory that customers will now be more susceptible to phishing and other online scams because hackers have their email. It also alleges the plaintiffs suffered emotional distress. Other high-profile data breach cases such as one involving Sony’s Play Station have been based in part on state consumer laws.

Although courts have been reluctant to find that customers have been harmed by data breaches, there is evidence this may be changing. A security publication recently reported
that an appeals court allowed customers to claim they suffered harm in the form of having to buy insurance for identity theft.

Some media publications this week praised Zappos’ for having a pre-arranged plan to respond to the data theft. The company claims that its customer credit cards remained secure because they were stored in a separate server.

Supreme Court upholds copyright law

The Supreme Court upheld a law Wednesday that extended U.S. copyright protection to books, musical compositions and other works by foreign artists that had been available without paying royalties.

The justices said in a 6-2 decision Wednesday that Congress acted within its power to give protection to works that had been in the public domain. The law's challengers complained that community orchestras, academics and others who rely on works that are available for free have effectively been priced out of performing "Peter and the Wolf" and other pieces that had been mainstays of their repertoires.

The case concerned a 1994 law that was intended to bring the U.S. into compliance with an international treaty on intellectual property. The law made copyright protection available to foreign works that previously could not have been copyrighted.

The court ruled in 2003 that Congress may extend the life of a copyright. Wednesday's decision was the first time it said that published works lacking a copyright could later be protected.

"Neither congressional practice nor our decisions treat the public domain, in any and all cases, as untouchable by copyright legislation. The First Amendment likewise provides no exceptional solicitude for works in the public domain," Justice Ruth Bader Ginsburg said in her opinion for the court.

But Justice Stephen Breyer, writing for himself and Justice Samuel Alito, said that an important purpose of a copyright is to encourage an author or artist to produce new work. "The statute before us, however, does not encourage anyone to produce a single new work. By definition, it bestows monetary rewards only on owners of old works," Breyer said.

Girard Gibbs LLP Announces Class Action Settlement

The law firm of Girard Gibbs LLP today announced that two years after bringing a class action case against Securities America, Inc., its corporate parent Securities America Financial Corporation and Ameriprise Financial, Inc., over 2,000 investors throughout the U.S. are receiving checks totaling $80 million. Investors will recover an average of over $30,000 per person.

The distribution represents the last chapter of a lawsuit filed by Securities America customers who purchased private placement investments in Medical Capital Notes and Provident Royalties, which were both revealed to be Ponzi schemes. Girard Gibbs and associated counsel represented the investors and won final approval of the $80 million settlement in Federal District Court in Dallas, Texas on July 25, 2011.

“We are pleased that our clients will recover a substantial percentage of their losses within two years of the date this litigation got underway,” said Daniel Girard, senior partner at Girard Gibbs. “We commend our adversaries for coming to the settlement table in good faith and negotiating a fair compromise with all the affected investors.”

For more information, please access the firm’s web site at www.GirardGibbs.com.

Colo. court weighs energy leases near Utah parks

A federal appeals court in Denver was to hear arguments Thursday on the Obama administration's decision to cancel Bush-era oil and gas leases near national parks in Utah, the auction for which prompted an environmental activist to drive up prices with his bidding in an act of civil disobedience.

The case before the 10th Circuit Court of Appeals involves leases near Arches and Canyonlands national parks and Dinosaur National Monument that were auctioned off in the final month of the President George W. Bush's administration. Interior Secretary Ken Salazar later canceled the leases and energy companies challenged his decision in court.

Thursday's hearing came after a federal judge ruled in September 2010 that a lawsuit brought by energy producers challenging the cancellation of the 77 oil and gas drilling leases was filed too late. U.S. District Judge Dee Benson ruled the companies failed to file their lawsuit within 90 days of Salazar's February 2009 decision.