A post on the website of Manatt, Phelps & Phillips discusses a case in which an Ohio federal court found that, where a contract required written revocation of consent to be contacted, a consumer’s attempt to orally revoke consent failed.

As part of the cardholder agreement between Carlton Barton and Credit One Bank, Barton provided his explicit consent to be contacted on his cellphone number in any way (such as prerecorded message, autodialer or text message), explain Diana L. Eisner and Christine M. Reilly. Barton later claimed that he revoked his consent by telling a representative of Credit One not to call him anymore.

Barton sued under the Telephone Consumer Protection Act, but the court found that the plaintiff provided his cellphone number to the defendant when he filled out his application form and “‘a party who gives an invitation or permission to be called at [a certain] number’ has given ‘prior express consent’ to be contacted.”

Read the article.

The GOP’s bid to transform the federal bench with conservative judges hit its first significant snag Thursday as the White House withdrew the nomination of Ryan Bounds to serve on the powerful and famously liberal 9th Circuit appeals court, reports The Washington Post.

After an hour-long delay on the vote, Senate Majority Leader Mitch McConnell announced that the nomination had been withdrawn. Two Republican senators planned to vote against the confirmation.

“The nomination drew widespread criticism over articles Bounds wrote in the Stanford Review as an undergraduate that ridiculed multiculturalism and groups concerned with racial issues,” writes Karoun Demirjian. “Bounds attempted to apologize for those writings earlier this year, but his apology — which focused more on his rhetoric than his views — failed to convince Democrats or satisfy all Republicans.”

Read the Post article.

A federal district court judge has affirmed a take-nothing defense verdict for the owner of an Oklahoma City-based company that unknowingly provided services in connection with a mineral royalties Ponzi scheme, finding that the company, Cianna Resources Inc., does not have to repay $21.7 million the scheme paid to Cianna for mineral interests and commissions.

“Our group of attorneys did an outstanding job and put together a powerful case,” said Sawyer Neely of Dallas-based Sayles Werbner, one of the attorneys who represented Cianna. “It certainly was a David-and-Goliath situation, and we appreciate that our hard work resonated with the jury.”

In a release, the firm described the case:

In 2008, Cianna Resources and owner Kyle Shutt entered into a sub-broker agreement with Oklahoma-based Ruthven Oil & Gas, LLC, for the purchase of mineral interests. Ruthven was working with Dallas-based Provident Royalties, Joseph Blimline and others, in what authorities described as a scheme involving nearly 7,800 investors and losses of more than $400 million.

The scheme collapsed and the company went bankrupt after natural gas prices fell. Mr. Blimline was convicted in 2012 for his role in the scheme, and a bankruptcy trustee later attempted to recover funds from investors who had profited before the collapse, including seeking $21.7 million from Cianna Resources.

The trial before U.S. District Judge Jane Boyle in Dallas lasted more than a week when the jury returned the defense verdict on March 28. The successful defense hinged on providing evidence that Cianna had acted in good faith and provided valuable services to an entity. On June 28, Judge Boyle entered a final judgment, denying the trustee’s motion for a new trial and rejecting requests to throw out the jury verdict.

Cianna was represented by Bill Johnson, David Elder, and Matt Brockman of Oklahoma City-based Hartzog Conger Cason & Neville, in addition to Mr. Neely.

The case is Segner et al v. Ruthven Oil and Gas LLC et al, case number 3:12-cv-01318, in the U.S. District Court for the Northern District.

An order resolving a bitter disqualification fight between Netflix Inc. and its lawyers at Winston & Strawn LLP is the latest example of the acrimony that “advance conflict waivers” can engender between corporations and the law firms they hire, reports Bloomberg Law.

Reporter Samson Habte explains: “The order disqualifying Winston—issued by a federal bankruptcy judge presiding over a high-stakes licensing dispute between Netflix and a financially troubled film studio—could emerge as a blueprint for a particularly contentious category of disqualification motions: those alleging law firms betrayed existing clients by bringing cases against them on behalf of newer clients.”

Because ethics rules prohibit law firms from taking a case against a current client unless both clients waive the conflicts created by the law firm’s concurrent representation.

The waivers—often broadly worded and vague—have become a regular feature of retainer agreements that large law firms execute with corporate clients.

Read the Bloomberg Law article.

Image by Open Grid Scheduler / Grid Engine

A lawyer for plaintiffs in the case against talcum-powder maker Johnson & Johnson said the company had spent 40 years covering up evidence of asbestos in some of its talcum-based products and should mark those products with warning labels or focus on powders made with cornstarch.

The New York Times quoted Mark Lanier of The Lanier Law Firm as saying the jury’s award of $4.14 billion in punitive damages is among the largest ever awarded in a product liability case. He added that the jury deliberated over compensatory damages for eight hours but decided on the punitive damages in roughly 45 minutes.

Times reporter Tiffany Hsu writes: “Johnson & Johnson was ordered Thursday to pay $4.69 billion to 22 women and their families who had claimed that asbestos in the company’s talcum powder products caused them to develop ovarian cancer.”

The jury’s award included $550 million in compensatory damages for the women, who had accused the company of failing to warn them about cancer risks associated with its baby and body powders.

Read the NY Times article.

Employers who use non-compete agreements take note: Minnesota courts want to see more than just words in a contract before they will grant injunctive relief against a former employee, warns a post on the website of Dorsey & Whitney LLP.

The article discusses St. Jude Medical, Inc. v. Carter, which arose after Heath Carter left his employer to work for a competitor. The employer filed suit against Carter and the competitor, alleging violations of Carter’s non-compete agreement. The employer sought an order enforcing the terms of the non-compete agreement and prohibiting Carter from working for a competitor in his then-current position. Although the jury found that Carter had breached his non-compete agreement, the court refused to enter an injunction, finding that the employer failed to establish that it had been harmed.

The Minnesota Court noted that “[a] private agreement is just that: private,” and concluded that such contractual language does not, by itself, entitle an employer to an injunction after proving the breach of a non-compete.

Read the article.

Dallas trial lawyer and Sayles Werbner co-founder Richard A. “Dick” Sayles was chosen by the Dallas Bar Association as the 2018 Trial Lawyer of the Year based on his achievements in the courtroom.

Sayles, a native of Gatlinburg, Tennessee, is profiled in the July issue of the Dallas Bar Association’s Headnotes in the article, “Dick Sayles: 2018 DBA Trial Lawyer of the Year.” The story highlights Sayles’ motivation for becoming a lawyer, provides a history of how he became a courtroom master, and explains how Sayles Werbner maintains its status among the most respected law firms in the nation.

“To me, there is no greater honor than to be recognized by your peers,” says Sayles. “It’s also a testament to the dedication and commitment of my colleagues at Sayles Werbner. I am very proud of what our firm has become.”

Sayles credits his firm’s strong relationship with large, national firms as a key factor in Sayles Werbner’s success. “We are often asked by major, out-of-state firms to serve as co-counsel in high profile, high stakes cases.”

In a release, the firm said Sayles has made a career of representing clients in big cases involving commercial litigation, personal injury and patent litigation. His list of accomplishments includes significant defense wins, 150 cases tried to verdict, and more than a dozen multimillion-dollar jury verdicts, the firm said.

This year Chambers USA, the legal guide, honored Sayles for the sixth time as a top litigator in Texas. Texas Lawbook named Sayles to the Lions of the Texas Bar, an exclusive list of the state’s most respected and influential lawyers. The Best Lawyers in America recognized him as the 2018 Dallas-Fort Worth Lawyer of the Year for bet-the-company litigation. He also received recognition in the 2018 edition of Benchmark Litigation and has been named seven times to the list of Top 10 attorneys in the state in the annual Texas Super Lawyers guide.

The Washington Post reports that  President Trump’s nominee for the Supreme Court may prove a crucial conservative vote in cases defining protections for gay and lesbian workers, the scope of union organizing and the rights of workers to take their grievances to court, according to labor law experts.

The president selected Brett M. Kavanaugh, a federal judge on the U.S. Court of Appeals for the District of Columbia Circuit.

Reporter Jeff Stein quotes Benjamin Sachs, a labor law expert at Harvard University: “This last term was horrendous for workers. If you are to have imagined a nightmare scenario for workers and workers rights, this would be it. But in those cases, the ruling justices also planted seeds that could lead to further damage against workers.”

Read the Washington Post article.

The Washington Post reports that tormer top executives at ITT Educational Services, the parent company of defunct ITT Technical Institute, have settled fraud cases with the Securities and Exchange Commission, avoiding a trial slated to begin Monday.

ITT chief executive Kevin Modany and former chief financial officer Daniel Fitzpatrick were chagred with civil fraud in 2015 for allegedly deceiving investors about high rates of late payments and defaults on student loans backed by the company, writes Danielle Douglas-Gabriel.

Although they didn’t admit or deny any wrongdoing, they agreed to pay penalties of $200,000 and $100,000, respectively. The agreement bars them from serving as officers and directors of public companies for five years.

Read the Washington Post article.

Energy giant Halliburton failed to act as two Muslim workers in North Texas were regularly harassed about their religion by supervisors and co-workers, the federal government alleges in a lawsuit.

Bloomberg Law reports the Equal Employment Opportunity Commission alleges Hassan Snoubar and Mir Ali were harassed and otherwise discriminated against because of their national origin. Snoubar is from Syria, and Ali is from India. Both worked for Halliburton Energy Services Inc. as operator assistants, the EEOC says.

Reporter Patrick Dorrian  writes: “The lawsuit continues the agency’s crackdown on employer practices or other workplace behaviors that target workers who are Muslim or Sikh, or of Arab, Middle Eastern, or South Asian descent. Eliminating such discrimination is one of the federal job rights watchdog’s top enforcement priorities.”

Read the article.

The International Association of Defense Counsel (IADC) recently submitted to the Law Commission of Ontario (LCO) recommendations for reform to the Ontario Class Proceedings Act (CPA) that could eventually affect class action legislation in Ontario and other Canadian provinces.

The IADC began the initiative in 2014 by forming its Canadian Class Actions Task Force to study and develop positions on key issues that the Ontario government asked the LCO to consider. The LCO has described the project as the most comprehensive assessment of the CPA in more than 25 years.

In a release, the organization said the Task Force is made up of IADC members who are lawyers with class action experience in Canada, the United States and Australia. The Task Force also includes representation from Lawyers for Civil Justice, DRI – The Voice of the Defense Bar and the Federation of Defense and Corporate Counsel, all of which have members who represent and serve as in-house attorneys with companies exposed to class actions in Ontario. All of these organizations, along with the Canadian Defence Lawyers and the Product Liability Advisory Council, supported the Task Force’s submission to the LCO.

The release continues:

“The IADC is committed to improving civil justice, and to positive reform of the civil justice system. This includes ensuring fairness in the judicial process and a proper balance between plaintiffs and defendants in litigation procedures in the United States, Canada and other countries as well,” said Gordon McKee, an IADC board member, chair of the Canadian Class Actions Task Force, and a partner at Blake, Cassels & Graydon LLP in Toronto. “When the Law Commission of Ontario requested stakeholder input as part of itsreview of class action procedures, the IADC committed to responding on behalf of its members who represent corporate defense interests.”

IADC members include lawyers with large and small law firms, senior counsel in corporate law departments, and corporate and insurance executives. A significant number of IADC members are Canadian, and many other IADC members represent multinational companies with subsidiaries that do business in Canada and/or that have been defendants in class actions in Ontario and other parts of Canada.

“Our corporate defense perception is that class action procedures in Ontario currently are unbalanced and unduly tilted in favor of plaintiffs, and a more level procedural playing field between plaintiffs and defendants is required to achieve fairness and judicial economy,” said Peter J. Pliszka, also a member of the IADC and its Canadian Class Actions Task Force, as well as a partner with Fasken Martineau DuMoulin LLP in Toronto.“We want to help ensure access to just outcomes that are not driven by matters extraneous to the merits of a case.”

McKee added that, for example, the current regime in Ontario can create undue pressure on companies to settle class actions for extraneous reasons such as the high cost of defense, potential impact on shareholder value or business transactions, and negative publicity surrounding a claim regardless of its lack of merit.

The IADC’s Canadian Class Actions Task Forcerecommendations for more fair and efficient class proceedings in Ontario include:

– Adding a merits analysis prior to or at certification, and giving the court more ability to critically review evidence, to weed out class actions with little or no merit, and to narrow overly broad class actions at an early stage;

– Requiring the court to consider coordinated case management and discovery as an alternative to a class action where there are a small number of cases, to allow more timely and proportionate resolution of the claims of the putative class members;

– Allowing plaintiffs and defendants equal opportunities to appeal certification decisions, and discouraging wasted resources and costs caused by material changes to the class claims/issues/definition on appeal;

– Codifying transparency and other requirements for third-party litigation funding to prevent unfairness to the parties or the class members and to remove incentives to fund claims with little or no merit; and

– Adopting provisions to address overlapping class proceedings in multiple provinces, including requiring a certification judge to consider whether he or she should defer to an overlapping class action in another jurisdiction.

After considering input from the IADC and other submissions, the LCO says it plans to issue a final report to the Ontario government at the end of this year or in early 2019. It is expected that the LCO’s report will also be carefully considered by governments in other Canadian provinces.

The Texas Supreme Court has held that an offset well clause in an oil and gas lease did not require the lessee to drill wells calculated to protect against drainage, reports Gray Reed & McGraw in its Energy & the Law blog.

According to authors Charles Sartain and Chance Decker: “The Court purported to limit its holding to these facts, but the opinion could have far-reaching consequences. Wells drilled in the most active plays in Texas today are by and large horizontal, tight-shale wells. The opinion indicates the historical understanding of an ‘offset well’ is antiquated in this context.”

Four dissenting justices believed the majority disregarded the well-established meaning of “offset well” used in the oilfield for decades.

Read the article.

U.S. Supreme Court Justice Anthony M. Kennedy announced his plans to retire this summer after serving 30 years on the nation’s highest court. Widely known for his swing vote on a range of issues, Justice Kennedy will leave at the end of July.

Attorneys like Larry Vincent of Dallas-based Burns Charest, who once clerked for Justice Kennedy, provide their reactions in a post on the website of Androvett Legal Media & Marketing.

“It’s disappointing that he chose to retire at this time. I’ve always been proud of his opinions regarding individual liberty grounded in the Fifth and 14th amendments. Given what we know about the list of potential replacements already circulated by this administration, I think his legacy in those areas will be eradicated. I hope he doesn’t look back in a few years and regret his decision to leave the court at this juncture.

“I’ve spent much of my legal career, including my time here at Burns Charest, working to help people and companies recover for losses caused by negligence or the breach of a legal duty. Given the ideological shift at the court to restrict the ability of parties to use the courts to recover the amount they are due for the harm done to them, the loss of a compassionate conservative like Justice Kennedy is particularly frustrating.”

Philip Hilder, founder of Houston’s Hilder & Associates, P.C.: “Retirement of the swing justice will energize voters from all political stripes to come out this mid-term. Voters now realize the significance that a Supreme Court Justice has over their daily lives. Any nominee will need Senate confirmation and those elections this fall will be red hot battlegrounds unlike any in recent memory.”

Lara Hollingsworth, appellate lawyer and Of Counsel at Houston’s Rusty Hardin & Associates, LLP: “The court will never be the same. The era of moderate appointments has passed never to be seen again. The Merrick Garlands of the world don’t stand a chance. It’s a sad day for justice and our country.”

Chip Babcock of Jackson Walker: “Justice Kennedy will be recorded by history as one of the great justices of the United States Supreme Court. It was regular practice in close cases for entire briefs and oral arguments to be tailored just for him. He was that important. That cannot be said of many, if any, other members of the court in its history.”

A recent California case may force companies doing business with foreign entities to reconsider—and maybe rewrite—their contracts, points out Sheppard, Mullin, Richter & Hampton in its Corporate & Securities Law Blog.

In Rockefeller Tech. Invs. (Asia) VII v. Changzhou Sinotype Tech. Co., No. B272170, the California Court of Appeal held that parties may not contract around the formal service requirements of the Convention on the Service Abroad of Judicial and Extrajudicial Documents, commonly referred to as the Hague Service Convention.

Authors Hwan Kim and Neil Popovic write that the decision could have profound implications for international business.

“The Rockefeller decision arguably makes it impossible to require foreign companies from some of the largest economies including China, Japan, Germany, U.K., India, Korea, Russia and Mexico, to show up in a California court based on notice provided by mail, courier (FedEx), or email even if the parties agreed to such forms of notice in their contract,” the authors warn. “This will have profound consequences for companies with global supply chains such as Apple and GM, for investment funds with foreign investors, for engineering and construction companies that procure materials and handle projects around the world, such as AECOM, and potentially for any company that imports or exports goods to or from the United States.”

Read the article.

Conservatives on the Supreme Court said Wednesday that it was unconstitutional to allow public employee unions to require collective bargaining fees from workers who choose not to join the union, a major blow for the U.S. labor movement, reports The Washington Post.

Reporter Robert Barnes writes that the 5-to-4 decision overturned a 40-year-old precedent and said that compelling such fees was a violation of workers’ free speech rights. The old rule could force the workers to give financial support to public policy positions they oppose, the court said.

“States and public-sector unions may no longer extract agency fees from nonconsenting employees,” Justice Samuel A. Alito Jr. wrote for the majority. “This procedure violates the First Amendment and cannot continue.”

Read the Post article.

A Pennsylvania appeals court rejected a request by a natural gas production company to rehear a case whose outcome could affect drillers across the country, reports WSKG.

Briggs v. Southwestern Energy Production Company involves the legal principle known as “rule of capture,” which means a property owner has the right to extract or “capture” an underground resource such as water, oil or gas, even if it flows from beneath another property owner’s land, explains reporter Susan Phillips. The case calls into question the longstanding practice as it applies to fracking, which requires subsurface rock to be deliberately broken in order to release trapped gas.

“In 2015, the Briggs family sued Southwestern Energy for trespass and conversion, arguing that the company’s fracking efforts were illegal and it should not be allowed to use wells on neighboring properties to tap gas beneath their land,” writes Phillips. “The family owns about 11 acres of land in Susquehanna County and did not lease its land for gas drilling.”

The trial court rejected their arguments, but an appellate court found that the Briggs’ arguments had legal merit.

Read the article.

Arbitration is a creature of contract, and an arbitrator’s powers are in effect defined by the parties’ arbitration agreement, points out a post on the Mintz, Levin, Cohn, Ferris, Glovsky and Popeo blog ADR: Advice From the Trenches.

“Paradoxically, although an arbitration agreement can be written (double-spaced) on one side of a cocktail napkin, in some cases it may grant greater authority to an arbitrator than a judge has,” writes Narges Kakalia.

In the post, she discusses Timegate Studios, Inc. v. Southpeak Interactive, LLC, in which the Fifth Circuit confirmed an arbitration award in which the arbitrator substantially reformed the parties’ commercial agreement by, among other things, awarding one a broad perpetual license to certain of the other’s intellectual property, despite the fact that the original agreement had granted only a more narrowly drawn ten-year license.

Read the article.

The Dallas Morning News is reporting that Dallas-based Texas Coastal Energy Company defrauded 80 oil and gas investors out of more than $8 million, according to a lawsuit filed Tuesday by the Securities and Exchange Commission, the stock market regulator.

The SEC alleges the company, its co-founder, Jefferey Gordon, and his sales representatives misrepresented the company’s finances, exaggerated a geologist’s background and inflated the reserves and expected production of its wells in Texas and Kansas, according to reporter Jeff Mosier.

“In an offering fraud, people who seek to steal investors’ hard-earned money will often use cold calls and inflated promises to carry out their schemes,” said Shamoil T. Shipchandler, director of the SEC’s Fort Worth regional office. “Their self-serving statements are no substitute for an investor’s due diligence.”

Read the Dallas News article.

Winston Maxwell and Gauthier Vannieuwenhuyse of Hogan Lovells point out that we are living in the era of constant technological progress, and then ask the question: As smart contracts emerge, why not think about totally automated arbitration?

“Big data and e-discovery can assist counsel in document management and reduce the risk of human error during discovery,” they write for an article for Bloomberg Law.

They discuss machine learning, predictive justice, and sophisticated programs that can even analyze the behavior of specific judges and arbitrators to predict their propensity to grant or deny certain motions and claims.

“This may open arbitration to new markets, such as low value disputes, whose players were traditionally reluctant to resort to this type of resolution,” they write.

“While it is possible to envision completely robotized arbitration taking place in a not-so-distant future, that sort of arbitration would not be recognized by state institutions. If the arbitration occurs in a self-contained, self-executing framework, then its nonrecognition by state institutions may not be a major obstacle,” the authors conclude.

Read the article.

Image by Mike Mozart

Bloomberg is reporting that Citigroup Inc. agreed to pay a combined $100 million to 42 U.S. states to resolve a probe into fraudulent conduct tied to interest-rate manipulation that affected financial instruments worth trillions of dollars.

The states had alleged Citigroup misrepresented the integrity of the Libor benchmark to state and local governments, not-for-profit organizations and institutional trading counterparties, sometimes to protect the bank’s own reputation, reports Erik Larson.

“The accord is the latest development in probes by governments around the globe into manipulation of benchmark interest rates, one of the key scandals that led to a cultural overhaul of the industry over the past decade,” Larson writes. “Global fines have topped $9 billion. In October, Deutsche Bank paid 45 states $220 million in penalties and disgorgements to resolve U.S. and U.K. probes.”

Read the Bloomberg article.