To get around the unilateral character of adhesive contracting, U.S. courts have, over the past five decades, refocused contract formation on constructive notice, points out Henry Allen Blair in Arbitration Nation.

“If a reasonable person in the position of the recipient of boilerplate should have seen the terms, the recipient will be bound by those terms, regardless of whether she ever actually read or understood the them. Constructive awareness coupled with an individual purchasing something from a commercial party amounts to assent,” he adds.

The article discusses Starke v. SquareTrade, Inc., in which the Second Circuit concluded that the a purchaser of a consumer product protection plan did not have reasonable notice of an arbitration provision contained in the terms and conditions communicated via a hyperlink in a post-sale email.

Read the article.

Above the Law reports that a U.S. District Judge delivered a benchslap to a Baker Donelson partner and a senior public policy advisor after they tried to jump the line in a receivership situation involving a hundred-million-dollar Ponzi scheme.

The judge had put a hold on any individual victim trying to carve back money in lieu of allowing a receiver to get the maximum recovery for all victims, but then Jon Seawright, the Baker Donelson partner, and Brent Alexander, the firm’s lobbyist, went out and tried to recover some money.

The judge responded with a lecture about the concept of a receivership, using the boarding process on Southwest Airlines as an example, writes Above the Law’s Joe Patrice.

Read the Above the Law article.

Expert Webcast will present a complimentary webinar roundtable titled “The Role of Financial Experts in Commercial Litigation.”

The event will be Tuesday, March 26, 2019, 1-2 p.m. Eastern time.

Speakers will be Dan Boland of Pepper Hamilton, Jeff Litvak of FTI Consulting, Clara Chin of FTI Consulting, and Alex Kasan of DelMorgan & Co.

Anyone who wants access to the replay of the webinar may indicate that preference in the last field of the registration form.

Register for the webinar.

A recent Texas Supreme Court opinion provides a definitive answer to the question of whether a party can ignore the written words of a contract that directly contradict what you are being told by your counterparty is the real deal.

Glenn D. West, writing for Weil, Gotshal & Manges LLP’s Global Private Equity Watch, discusses Mercedes-Benz USA, LLC v. Carduco Inc.

“While it is often said that fraud vitiates a contract that was entered into based upon that fraud (and such fraud would also trump the parol evidence rule), that statement is only true if there was actually legally-recognized fraud that induced the making of the contract. But a fraud cause of action does not consist simply of an allegation that the defendant made a false statement of fact to the plaintiff, knowingly or recklessly,” West writes.

The Texas Supreme Court found that “[b]ecause the conduct and action of [the defendants] on which [the plaintiff] relies to establish its fraudulent-inducement claim are directly contrary to the unambiguous terms of the contract it signed, we conclude that [the plaintiff’s] reliance thereon was unjustified as a matter of law.”

Read the article.

The 5th U.S. Circuit Court of Appeals has overturned a $1.5 million award to ex-NBA All Star David West, who claimed he qualified for a payout in the BP oil spill settlement because he earned less in 2010 than in 2009.

Reuters reporter Alison Frankel explains that West “was in the fourth year of a five-year, $45 million contract with the New Orleans Hornets when the Deepwater Horizon rig exploded in 2010. West was paid every penny of the $45 million he was owed under his contract, including the full amount he was due in the year after the spill. He nevertheless argued – and the settlement administrator agreed – that under the definitions and formulas in BP settlement, he qualified for a payout for economic losses because he earned less in 2010 than in 2009. The 5th Circuit shut that right down.”

5th Circuit Judge Andrew Oldham, who wrote for the panel, didn’t see it that way: “In 2010, he earned exactly what he was entitled to receive under his contract.”

Read the Reuters article.

Three trends have dominated the practice of law, and personal injury law in Texas, writes Bryan O. Blevins, an equity partner with Beaumont, Texas-based Provost Umphrey Law Firm. These are tort reform, judicial activism, and technology.

Tort reform has resulted in many more deserving victims having the courthouse doors slammed shut than frivolous claims being denied, Blevins writes in the article originally published in Texas Lawyer.

“Judicial activism can best be seen in the increase of appeals accepted and the almost universal reversal of trial judgments that favor plaintiff personal injury victims,” in Blevins’ view. “In the last 20 years, we have seen the explosive growth of appellate courts substituting their own version of end-result oriented justice through the guise of ‘expert’ qualification and testimony.”

And new technologies are forcing attorneys to rethink questions that, under other circumstances, may have been much simpler to answer, he added, citing legal issues surrounding driverless cars as an example of the new challenges lawyers must face.

Read the article.

Defendants in the college admissions cheating scandal case have been turning to Biglaw firms for representation, including Cooley, Sidley Austin, Latham & Watkins, Boies Schiller Flexner, and Ropes & Gray.

Bloomberg Law reports that two of the latest hires are Cooley partners Randall R. Lee and William Schwartz, who have been hired by Jane Buckingham, the founder and chief executive of Trendera, a youth marketing consultancy. Prosecutors allege she paid $50,000 for someone to take the ACT college entrance exam in her son’s place.

And Jack W. Pirozzolo, a partner in Sidley Austin’s Boston office, is representing William McGlashan Jr., who worked at private equity firm TPG before being fired in the wake of the scandal.

Read the Bloomberg article.

Cravath, Swaine & Moore is being sued by a former public shareholder of a grocery chain in a class action that alleges the firm breached its fiduciary duty by providing tainted advice that directed the grocer toward a buyer, private equity group Apollo Global Management, reports Bloomberg Law.

In the complaint, the former shareholder claims Cravath crafted a “false and misleading” U.S. Securities and Exchange Commission filing relating to the 2016 $1.36 billion leveraged buyout of The Fresh Market by Apollo.

The complaint alleges Cravath drafted the SEC filing “to procure stockholder approval and cover up prior wrongdoing,” and in doing so, pocketed $5.5 million in fees in what amounted to “a sham sale process.”

Read the Bloomberg article.

The Salt Lake Tribune reports that former members of the polygamous Fundamentalist Church of Jesus Christ of Latter-Day Saints have provided enough evidence of misdeeds by their old lawyers for parts of a lawsuit to proceed, the U.S. 10th Circuit Court of Appeals ruled.

The Tribune‘s Nate Carlisle explains:

The former sect members must still prove their case in a Salt Lake City courtroom, the appeals court said. The Denver-based appeals court only considered the narrow issue of whether federal Judge Ted Stewart correctly dismissed a lawsuit filed against FLDS President Warren Jeffs and the law firm which used to represent his church, Snow Christensen & Martineau.

The plaintiffs, ex-Jeffs followers, contend the lawyers helped Jeffs find legal mechanisms to hide child rape as well as benefit from child labor, kick people out of their homes and separate them from their families, Carlisle writes.

Read the Salt Lake Tribune article.

The Ninth Circuit has ruled in a contract arbitration case that incorporated multiple Federal Acquisition Regulation clauses that govern the recovery of expenses in the event a contractor is terminated for convenience, i.e. required documentation and procedures.

Pepper Hamilton’s Constructlaw blog discusses Aspic Eng’g & Constr. Co. v. ECC Centcom Constructors LLC, in which an arbitrator had awarded Aspic more than $1 million. The arbitrator concluded that Aspic was not required to strictly comply with the FAR requirements based on several factors.

“The crux of the decision turns on whether the arbitrator’s decision draws its essence from the contract. The Ninth Circuit also explained that whether the award directly conflicted with the subcontracts was insufficient—on its own—to vacate the award,” the blog post explains.

Read the article.

Image by Mitch Barrie

The Connecticut Supreme Court Thursday narrowly reversed a ruling by a lower court judge dismissing a lawsuit by the families of victims of the Sandy Hook shooting against Remington Arms Company, allowing the case to proceed, reports the Hartford Courant.

The decision that remanded the landmark gun case back to Bridgeport Superior Court possibly created a path that other mass shooting victims can follow to get around the federal Protection of Lawful Commerce in Arms Act, known as PLCAA, which has protected the manufacturers of the AR-15 assault rifle from lawsuits, writes the Courtan‘s Dave Altimari.

He explains:

The ruling paves the way for the families to subpoena internal documents on how the gun companies have marketed the AR-15, which has become the weapon of choice for mass shooters. The gun manufacturers have closely guarded information on how they market the assault weapons.

Read the Courant article.

Reuters is reporting that a U.S. federal judge has issued a preliminary ruling that Qualcomm Inc. owes Apple Inc. nearly $1 billion in patent royalty rebate payments, though the decision is unlikely to result in Qualcomm writing a check to Apple because of other developments in the dispute.

Reuters’ Stephen Nellis writes that a district judge in California ruled Thursday that Qualcomm must make the rebate payments to Apple, which for years used Qualcomm’s modem chips to connect iPhones to wireless data networks.

“In general, the contract factories that built Apple’s iPhones would pay Qualcomm billions of dollars per year for the use of Qualcomm’s patented technology in iPhones, a cost that Apple would reimburse the contract factories for,” according to the article.

Read the Reuters article.

Purdue Pharma’s chief executive said the company is considering bankruptcy as it faces a cascade of lawsuits alleging that the drugmaker played a key role in driving the nation’s opioid crisis, including aggressively and deceptively marketing the powerful painkiller OxyContin, reports The Washington Post.

Craig Landau said that the company has not yet decided whether to file bankruptcy, but it is something the company is weighing as it considers the impact of potential legal settlements or jury verdicts that could cost tens of billions of dollars, according to the Post‘s Katie Zezima.

“Declaring bankruptcy could halt litigation against the company, bankruptcy lawyers said, and it can be more difficult for plaintiffs to secure judgments in bankruptcy court than in civil court,” Zezima writes.

Read the Post article.

Bloomberg Law reports that Willkie Farr & Gallagher Co-Chairman Gordon R. Caplan has been charged along with dozens of others, including Hollywood actors and executives, in a criminal conspiracy to bribe college admissions officials to gain admission for their children to top universities.

According to Bloomberg’s Melissa Heelan Stanzione, Caplan was arrested at 6:30 a.m. Tuesday and was released on $500,000 bail after appearing in Manhattan federal court.

Caplan has been charged with donating $75,000 to the Key Worldwide Foundation. “In an exchange detailed in court filings, two of the FBI’s cooperating witnesses agreed to proctor his daughter’s college entrance exam and correct the answers after she finished it,” Stanzione reports.

Another Bloomberg report contains a transcript of a discussion involving a call Caplan had with William Singer, the founder of a corrupt college counseling and test-prep business who would later become a cooperating witness:

“Look, I’m particularly interested in working with you guys and figuring out what’s best for [my daughter],” Caplan said, according to the criminal complaint, which details the conversation intercepted on a court-authorized wiretap.

Read the Bloomberg reports
here and here.

Image by Mike Mozart

A lawyer representing a man who claims Bayer AG’s Roundup weed killer caused his cancer urged jurors to imagine the scales of justice ever so slightly tilted in his favor, as if weighted by a feather, and said that would be enough to advance his trial to the next and final phase, reports Bloomberg.

Reporter Joel Rosenblatt summarized the argument of Aimee Wagstaff, representing Edwin Hardeman:

Roundup, not hepatitis, caused Hardeman’s cancer, his lawyers argued at a critical juncture in the company’s second U.S. trial over the popular herbicide. Hardeman’s exposure to Roundup “was a real factor, it doesn’t have to be the only cause” of his cancer, Wagstaff said. “It doesn’t have to be the only cause of his harm,” even if they determine hepatitis “may have played a role,” she added.

Read the Bloomberg article.

CNN is reporting that Oklahoma Attorney General Mike Hunter has argued in court filings that Johnson & Johnson should be compelled to release millions of pages of documents about its role in the opioid epidemic.

The company acted as an opioid “kingpin” by using a web of foreign and domestic subsidiaries to supply raw materials “necessary to manufacture the opioid pain medications thrust upon the unsuspecting public since the 1990s,” Hunter alleged.

“The Oklahoma case is set to be the first in the nation to go before a jury that could determine pharmaceutical companies’ role in the nation’s opioid epidemic and whether Big Pharma should pay for it,” writes CNN’s Wayne Drash. “On Friday, District Court Judge Thad Balkman denied pharmaceutical companies’ request for a delay, saying it is in the public’s interest for the trial to begin May 28.”

Read the CNN article.

In a post for Above the Law, Tom Kulik of Dallas-based Scheef & Stone discusses what happens when a bankruptcy debtor exercises its statutory right to reject a contract.

The U.S. Supreme Court recently heard oral arguments in Mission Product Holdings Inc. v. Tempnology, LLC to address this question that has plagued the intersection of intellectual property and bankruptcy law for decades.

He writes that the supreme Court’s ruling on the issue “may draw a clear line for trademark licensors and licensees in the event of bankruptcy (a good thing), or leave a blot on the issue by finding that the issue is moot (a bad thing).”

Read the article.

The U.S. Court of Appeals for the Seventh Circuit held that merely requiring extrinsic evidence to interpret a provision of a form contract does not render class certification improper, and that absent a more thorough explanation of its reasoning from the trial court, it could not uphold the trial court’s ruling decertifying the class.

As a result, explains Jeffrey Karek in the Maurice Wutscher’s Consumer Financial Services Blog, the Seventh Circuit vacated the decision of the trial court and remanded for further proceedings.

His article gives the facts in Red Barn Motors, Inc. v. NextGear Capital, Inc. and traces the litigation through the courts.

Read the article.

The Supreme Court of Texas is considering whether to grant a petition for review to establish whether an indemnity provision covers only third-party claims, not first-party claims, unless the provision unequiv­oc­al­ly states otherwise, writes D.C. Toedt III in the On Contracts blog.

He describes the case of Claybar v. Samson Exploration LLC, in which a property owner sued Samson for alleged damage to the property during oil and gas drilling. Claybar settled with Samson’s contractor but still claimed Samson was con­tract­ually required to indemnify Claybar for the attorney’s fees and costs that Claybar had incurred in pursuing his negligence claim.

Read the article.