MENU

Litigation

In Re: Walgreen Co. Stockholder Litigation Update

Litigation Practice Group Teleforum Thursday, February 23, 01:00 PMFederalist Society Teleforum Conference Call

According to the Competitive Enterprise Institute, over 97% of mergers and acquisitions result in "strike suits," litigation seeking to enjoin a merger that often quickly settles for attorneys' fees and supplemental disclosures to shareholders. In In Re: Walgreen Co. Stockholder Litigation, 832 F.3d 718, a recent case over such a settlement, Judge Richard Posner called the practice a "racket," and the Seventh Circuit rejected the lawsuit’s claims. Meanwhile, Delaware and New York courts have come out on opposite sides of the issue. 

Ted Frank of the Competitive Enterprise Institute, who successfully argued Walgreen and has multiple appeals on the subject pending in other jurisdictions, will discuss developments in the area over the last year and answer questions

Featuring:

  • Theodore H. Frank, Senior Attorney & Director, Center for Class Action Fairness (CCAF), CEI

Criminal Regulatory Statutes: Is “Deliberate Indifference” Sufficient Mens Rea For A “Knowing" Violation? Case Update: Farha v. United States - Podcast

Criminal Law & Procedure Practice Group Podcast
Paul D. Kamenar, Jeff Lamken, John G. Malcolm February 15, 2017

Farha v. United States, currently pending on a petition for writ of certiorari to the U.S. Supreme Court, is a case study raising basic notions of due process, fair notice, the rule of lenity, mens rea, and whether administrative and civil remedies would be more appropriate.  What began as a highly publicized raid by some 200 FBI agents on a Florida health care company over an accounting dispute ended in the indictment, conviction, and prison sentences for the Wellcare executives for fraud.  

On appeal, where the case was captioned Clay v. United States, the U.S. Court of Appeals for the Eleventh Circuit upheld the convictions over the objections of the defendants that the jury instruction impermissibly allowed the jury to convict if the defendants were “deliberately indifferent” to the law’s requirement as opposed to finding a “knowing” violation as the statute requires.  The Supreme Court in 2011, in Global-Tech Appliances, a civil case involving patent infringement, held that "knowledge" cannot include "deliberate indifference" to show sufficient mens rea to establish infringement. Accordingly, the cert petition, filed by Seth Waxman of WilmerHale, seeks to have the Court rule that the jury instructions should require a higher mens rea standard, all the more so in a criminal case. 

This case is particularly important for all regulated industries, where there are numerous laws and complex regulations governing conduct subject to administrative, civil, and criminal enforcement.

Featuring:

  • Paul Kamenar, Washington, D.C. Public Policy Attorney and Senior Fellow, Administrative Conference of the U.S.
  • Jeff Lamken, Partner, MoloLamken
  • ModeratorJohn G. Malcolm, Director and Ed Gilbertson and Sherry Lindberg Gilbertson Senior Legal Fellow, Edwin Meese III Center for Legal and Judicial Studies, The Heritage Foundation

 

 

State Farm Fire and Casualty Co. v. U.S. ex rel. Rigsby - Post-Decision SCOTUScast

SCOTUScast 2-9-17 featuring Lawrence Ebner
Lawrence S. Ebner February 09, 2017

On December 6, 2016, the Supreme Court decided State Farm Fire and Casualty Co. v. U.S. ex rel. Rigsby. State Farm Fire and Casualty Co. (State Farm) administered separate wind and flood damage policies in the Gulf Coast area at the time of Hurricane Katrina. In general, State Farm was responsible for paying wind damage from its own assets, while federal funds would pay for flood damage. The Rigsby sisters were State Farm claims adjusters who allegedly discovered in the aftermath of Hurricane Katrina that, with respect to properties covered under both wind and flood policies, State Farm was unlawfully classifying wind damage as flood damage in order to offload the cost of payment onto the federal government. Rigsby sued on behalf of the United States under the provisions of the federal False Claims Act (FCA), and continued to litigate the case after the United States declined to intervene. The district court focused discovery and trial on a single bellwether claim, and the jury found an FCA violation and awarded damages.  

Both sides appealed, with the Rigsbys (classified under the FCA as “relators”) seeking additional discovery to uncover and pursue other similar FCA violations by State Farm--and State Farm arguing, among other things, that the case should be dismissed because the Rigsbys’ counsel had violated the FCA’s seal requirement, by disclosing the existence of the FCA lawsuit to various news outlets. The U.S. Court of Appeals for the Fifth Circuit acknowledged the seal violation but concluded (as the district court had)--after applying a multi-factor test--that the breach did not warrant dismissal here.

The question before the Supreme Court was what standard governs the decision whether to dismiss a relator's claim for violation of the False Claims Act's seal requirement, an issue on which the federal circuit courts of appeals have split three ways.

By a vote of 8-0, the Supreme Court affirmed the judgment of the Fifth Circuit. In an opinion by Justice Kennedy, the Court unanimously held that a seal violation does not mandate dismissal of a relator's complaint under the False Claims Act and that whether to dismiss is a matter left to the discretion of the district court. In this case, the Supreme Court added, the district court did not abuse its discretion in declining to dismiss the relator’s complaint.

To discuss the case, we have Lawrence Ebner, who is the Founder of Capital Appellate Advocacy.

Pending Litigation and the New Administration - Podcast

Litigation Practice Group Podcast
Steven G. Bradbury, William S. Consovoy February 09, 2017

Given the size and scope of the federal government, many agency regulations, guidance documents, and cases are left in various stages of development as the executive branch changes hands. The first episode of our Legal Options for the New Administration Teleforum Series focused on pending litigation in the executive branch. Is the administration free to dismiss or stop prosecuting cases which do not align with its policies? Can the administration stop defending actions in court? What are the constraints? What has been the past practice? These and other questions were discussed by our experts. 

Featuring:

  • Steven G. Bradbury, Partner, Dechert LLP 
  • William S. Consovoy, Partner, Consovoy McCarthy Park PLLC

 

What Are We Learning About For-Profit Education? - Podcast

Administrative Law & Regulation Practice Group Podcast
Lucas Townsend February 07, 2017

During the Obama administration, the Department of Education promulgated a host of rules aimed specifically at for-profit educational institutions, which enroll over a million students. For instance, the Obama Department of Education has required for-profit schools to show that graduates are spending less than 20% of their postgraduate discretionary incomes on student loan repayment as a condition of for-profit schools’ continued eligibility for federal financial aid dollars. Another rule threatens to make it substantially easier for graduates of for-profit schools to demand student loan forgiveness. Now that President Trump has taken office, will his administration change course on these regulations? What are the options if his administration wishes to do so, and how feasible are they for the sector?

Lucas Townsend, a partner at Gibson Dunn with substantial experience litigating agency challenges, surveyed some of the most significant regulations. He discussed options for the Trump administration or Congress to withdraw or alter these actions.

Featuring:

  • Lucas Townsend, Partner, Gibson Dunn