CJR Looking into Chances Senate Follows House’s Repeal of CFPB Arbitration Rule
Senator Tom Cotton (R-Arkansas) was one of the leaders of the congressional effort to cancel the Consumer Financial Protection Bureau’s (CFPB) rule that opens the door for more class action suits against financial institutions, but it’s unclear if the Senate has the votes to follow the House and approve a resolution canceling the rule. Republican Senators Susan Collins of Maine and Lisa Murkowski of Alaska are reportedly awaiting feedback from business leaders in their districts before committing to voting for the resolution.
On July 20, twenty-three Senate Republicans introduced their own “resolution of disapproval.” Under the Congressional Review Act, Congress may overturn a broad range of regulatory rules issued by federal agencies by enacting a joint resolution of disapproval within 60 days of the rules being announced.
The House voted 231-190 on July 25 to kill the rule.
GM Loses Out on Try to Have Asbestos Trust Contribute in Wrongful Death Case
U.S. Bankruptcy Judge Cecilia B. Morris (Southern District of New York) ruled on Monday (read HERE) that General Motors LLC may not sue a Manville Asbestos Trust to contribute to payments in a victim in a wrongful death case out of Ohio. The judge ruled that GM’s rights against the Manville Trust are limited to the terms set forth by the Trust Distribution Procedure (TDP). GM’s rights against the Manville Trust, if any, are limited to the terms of the TDP and GM must follow the procedures outlined in the TDP.
The complaint seeks a declaratory order that GM’s state court action against the Manville Trust pending before the Henry County Court of Common Pleas in Ohio, General Motors LLC v. Anna R. Bolen, et al., Case No. 16CV0089 (the “Ohio Action”), is not enjoined by the channeling injunction contained in the JohnsManville Corporation’s chapter 11 plan of reorganization (“Manville Plan”) and this Court’s accompanying orders and corresponding confirmation order (“Confirmation Order”). Am. Compl. ¶ 26. The Defendants filed a motion to dismiss the complaint, arguing this Court should abstain from issuing a declaratory judgment on prudential grounds. Mot. Dismiss 13–14, ECF No. 12 (hereinafter “MTD”). In the alternative, Defendants argue that the Manville Plan’s channeling injunction and the 1995 Trust Distribution Procedures (“TDP”) bar GM’s Ohio Action against the Manville Trust. Id. at 15–21.
Circuit Court Says Judge Wrong to Sanction Lawyers
In August, 2016, five Arkansas attorneys were formally reprimanded by federal Judge P.K. Holmes in the Western District of Arkansas after stipulating to dismissal “for the purposes of seeking a more favorable forum and avoiding an adverse decision” in connection with the approval of a class settlement. Now, the 8th Circuit Court of Appeals rules that Holmes federal judge in Fort Smith was wrong in deciding the lawyers acted improperly. The lawyers’ actions are permitted under federal court rules, according to an opinion written by the circuit’s Chief Judge Lavenski Smith.
The case was Mark and Katherine Adams v. United Services Automobile Association (USAA).In the case, the Adams’s accused USAA of not honoring its duty by depreciating the labor costs that would be incurred with repairs to the properties.
The plaintiff’s attorneys initially said they believe that “hundreds if not thousands” of Arkansas policyholders had been damaged by USAA’s actions and asked that the case be certified as a class action.The case remained in federal court for 17 months when in June, 2015 lawyers for the plaintiffs and USAA voluntarily dismissed it and filed the next day in Polk County Court. A deal was immediately approved that Judge Holmes said limited payments to claimants, but secured attorneys fees of $1.8 million.
A reporter with Arkansas Business, Mark Friedman, said the Judge wasn’t aware that the case had been refiled until he read about it in Arkansas Business.
“Defense counsel removed this action to federal court and then took advantage of the more difficult certification and settlement process in this forum to negotiate a settlement designed to result in a lower payout to an over-inclusive class in exchange for a high attorney’s fee,” the Judge’s April 15 opinion said.
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