Eleven AGs Support Group’s Objection to Google Consumer Privacy Class Action Settlement
This week, 11 state attorneys general filed an amicus brief in support of the Competitive Enterprise Institute’s Center for Class Action Fairness (CCAF) and its objection to a consumer privacy class action settlement involving Google because it provides millions of dollars to attorneys and zero dollars to the class.
CCAF attorneys argue that the settlement is also improper and unfair because it gives funds to class counsel’s favorite third-party organizations through cy pres, when it’s feasible to distribute the funds to class members through a claims process. The cy pres payments also create a clear conflict of interest due to pre-existing relationships since Google regularly donates to four of the six organizations, and class counsel is the chairperson of the board of a fifth.
The state attorneys general agree with CCAF that the feasibility of distributing funds depends on whether it’s impossible to distribute funds to some class members, not whether it’s possible to distribute to all class members. According to CCAF director and senior attorney, Ted Frank, this is an important distinction that helps prevent nearly every class-action settlement from turning into an abusive cy-pres-only settlement, which harms class members.
“This case is an important test of whether courts will stand up against abusive cy pres settlements,” said Frank. “It is gratifying to have a coast to coast bipartisan coalition of state attorneys general to stand with us on the important principles here.”
SCOTUS to Decide Status of Whistleblowers Under Dodd-Frank
The U.S. Supreme Court will decide next term whether whistleblowers who report concerns within their companies are entitled to sue under the robust anti-retaliation provisions of the Dodd-Frank Act, even though Dodd-Frank elsewhere identifies whistleblowers as employees who tell the government about corporate wrongdoing. But when it comes to whistleblowers, defining who qualifies for which protections isn’t Dodd-Frank’s only inconsistency.
A new decision by a federal judge in Madison, Wisconsin, exposes a weird discrepancy in how Dodd-Frank deals with whistleblowers whose employment contracts include mandatory arbitration provisions. As it turns out, the law explicitly says whistleblowers cannot be forced to arbitrate anti-retaliation claims under the Sarbanes-Oxley Act – but Dodd-Frank does not specifically address whether employers can compel whistleblowers to arbitrate their anti-retaliation claims under Dodd-Frank itself.
SCOTUS Adopts Rule for Discovery Sanctions Set Forth by Shook Hardy’s Phil Goldberg
he Supreme Court of the United States ruled in Goodyear Tire & Rubber v. Haeger that discovery sanctions must be causally tied to the alleged misconduct. The unanimous ruling endorsed the position submitted to the court by Shook’s National Amicus Practice Co-Chair Phil Goldberg in an amicus brief filed on behalf of the National Association of Manufacturers.
In the case, Goodyear was fined $2.7 million for an alleged discovery violation, which comprised all of the plaintiff’s attorney’s fees and costs after the alleged violation occurred. Shook’s amicus brief explained the legal deficiency with this ruling, namely that the trial court abrogated its responsibility to tie the fee-shifting sanction to only those fees caused by the alleged violation. Instead, it simply awarded all of the fees and costs “incurred after the alleged discovery violation.” The Ninth Circuit Court of Appeals then “accepted this post hoc ergo propter hoc fallacy of whatever happens after an event can be attributed to the event.” Determining which fees and costs are causally connected to the alleged misconduct is necessary because “any amount paid to another party for attorney fees and costs not caused by one’s alleged misconduct is punitive and, therefore criminal in nature.”
In vacating the sanction, the Supreme Court highlighted these points. It stated that, here, the trial court’s sanctions established a “temporal limitation, not a causal one,” which it called “wide of the mark.” Rather, a district court must determine which fees and costs the innocent party “would not have incurred but for the bad faith.” “In other words, the fee award may go no further than to redress the wronged party ‘for losses sustained’; it may not impose an additional amount as punishment for the sanctioned party’s misbehavior. To level that kind of separate penalty, a court would need to provide procedural guarantees applicable in criminal cases, such as a ‘beyond a reasonable doubt’ standard of proof.” (Internal citation omitted).
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