HB Litigation News

Category: Class Actions

Class Certification After Olean v. Bumble Bee with Jonathan Rubin of MoginRubin LLP
Featured Speaker

Jonathan RubinPartner

Jonathan focuses his practice exclusively on antitrust and competition law and policy. As a litigator, he has led trial teams in major antitrust cases in courts throughout the country. As a thought-leader in competition law, he has published in influential academic journals and has spoken to numerous professional groups, including the Directorate General for Competition of the European Commission, the Antitrust Section of the American Bar Association, the University of Wisconsin, and the American Antitrust Institute. Jonathan has also made several appearances before congressional committees.

More About Rubin

For more information please email Tom Hagy

Explore more from MoginRubin LLP!

Blog: Emboldened by New Resources and Expanded Authority, Feds Continue 10-Year Look Back at Chinese Investment. By Dan Mogin, Jonathan Rubin, Jennifer Oliver, and Timothy LaComb. List

OnDemand CLE Webinar: The Antitrust Case Against Google. Dan Mogin, Jonathan Rubin, Jennifer Oliver, Timothy LaComb, John Newman, Dr. Alan Grant

Blog: FTC’s Case Against Facebook Will Test the Flexibility of U.S. Antitrust Law.Authors: Jonathan Rubin and Jennifer Oliver, MoginRubin LLP

Blog: Full Ninth Circuit Removes Unwarranted Hurdles to Class Certification.

Journal: Policy Derailed: Can U.S. Antitrust Policy Toward Standard Essential Patents Get Back on Track by Jonathan Rubin

Webinar: Class Certification After Olean v. Bumble Bee with Jonathan Rubin, James Bogan lll, Jonathan Cohn, Bradley Hamburger.

Journal: FTC v. Amazon: Market Definitions and Section 5 of the FTC Act

Podcast: Algorithmic Software Facilitated Price Fixing with Jonathan Rubin

Plus, additional insights from the MoginRubin Blog.

Class Certification After Olean v. Bumble Bee

Expert Testimony, Uninjured Class Members, and Article III Standing

This CLE course will discuss the ramifications arising from the Ninth Circuit’s en banc decision in Olean Wholesale Grocery v. Bumble Bee Foods, 31 F.4th 651 (9th Cir. 2022) (en banc), addressing numerous important class certification issues. The program will address Olean’s critical holdings regarding the evidentiary burden under Rule 23, how expert testimony should be assessed at the class certification stage, and the relevance of injury and Article III standing to assessing Rule 23’s predominance requirement and the scope of a proposed class definition. The panel will discuss the impact Olean will have for both plaintiffs and defendants, and will assess how lower courts have reacted to this important Ninth Circuit ruling.

Description

Olean addresses numerous key class certification issues and outlines a refined framework for class certification that may extend beyond the Ninth Circuit. The decision clarifies the burden of proof under Rule 23 and a district court’s obligation to assess both the admissibility of expert evidence and its adequacy to satisfy the prerequisites of Rule 23. Counsel will need to understand Olean’s holding regarding uninjured class members. While the Ninth Circuit rejected a categorical rule that a class cannot be certified if it includes more than a de minimis number of uninjured members, it emphasized that injury, both as an element of the underlying claim and as a requirement of Article III, is an essential issue in determining whether Rule 23(b)(3)’s predominance requirement is satisfied.

Listen as this panel of preeminent class action lawyers discusses how Olean will affect certification and offers new strategies to consider. Get the history of the case, its key holdings and strategies for applying them, and recent decisions applying it.

The panel will discuss these and other critical issues:
- How will the issue of uninjured class members impact class certification after Olean?
- How will Olean change the use of expert testimony at the class certification stage?
- How will Olean’s guidance impact consumer and employment class actions?
The speakers:

Jonathan Rubin, Partner, MoginRubin LLP

James F. Bogan, III, Partner, Kilpatrick Townsend & Stockton

Jonathan F. Cohn, Partner, Sidley Austin

Bradley J. Hamburger, Partner, Gibson Dunn & Crutcher
July 19, 2022
Alternative Financial Support for Plaintiffs During Litigation with Erin Waas

Our Guest

Erin WaasThe Milestone Foundation

Erin Waas is Executive Director of The Milestone Foundation, a national 501(c)(3) nonprofit that provides financial assistance to people pursuing a personal injury lawsuit. Erin brings nearly two decades of experience working in the public sector and with nonprofits in fundraising and communications, most recently at the University at Buffalo, where she served as senior advancement writer.

Prior to relocating to Buffalo, Erin spent the bulk of her career to-date in Boston, where she worked in stewardship at Harvard University and as a consultant for nonprofits of all sizes.

Alternative Financial Support for Plaintiffs During Litigation with Erin Waas

For an individual, merely navigating litigation can be expensive, time consuming, and at times overwhelming. But when that individual is also unable to work, or cannot function normally because they have been disabled by an injury, that explodes the level of stress on a person and their family.

There are companies in the “non-recourse settlement advancement” space that will provide financial support to claimants in litigation. This helps them with their regular daily expenses – plus medical costs – until their case settles or until they receive an award. But most of these companies, as you can imagine, are for-profit entities. As such, their fees can make their support unaffordable and can leave the plaintiff with a substantially diminished payout.

Listen to my interview with Erin Waas, Executive Director of The Milestone Foundation, a national 501(c)(3) nonprofit that provides financial assistance to people pursuing a personal injury lawsuit. Erin brings nearly two decades of experience working in the public sector and with nonprofits in fundraising and communications, most recently at the University at Buffalo, where she served as senior advancement writer. Prior to relocating to Buffalo, Erin spent the bulk of her career to-date in Boston, where she worked in stewardship at Harvard University and as a consultant for nonprofits of all sizes. Speaking of fundraising, and if you believe in the cause, consider supporting the Foundation with a donation today.

This podcast is the audio companion to the Journal on Emerging Issues in Litigation. The Journal is a collaborative project between HB Litigation Conferences and the Fastcase legal research family, which includes Full Court Press, Law Street Media, and Docket Alarm. The podcast itself is a joint effort between HB and our friends at Law Street Media. If you have comments or wish to participate in one our projects please drop me a note at Editor@LitigationConferences.com.

Tom Hagy
Host
Emerging Litigation Podcast

June 21, 2022
Antiracism and Antitrust with Eric Cramer

Our Guest

Eric L. CramerBerger | Montague

Eric Cramer is Chairman of the Firm and Co-Chair of the Firm’s antitrust department. He has a national practice in the field of complex litigation, primarily in the area of antitrust class actions. He is currently co-lead counsel in multiple significant antitrust class actions across the country in a variety of industries and is responsible for winning numerous significant settlements for his clients totaling well over $3 billion.

Mr. Cramer is also a frequent speaker at antitrust and litigation related conferences and a leader of multiple non-profit advocacy groups. He was the only Plaintiffs’ lawyer selected to serve on the American Bar Association’s Antitrust Section Transition Report Task Force delivered to the incoming Obama Administration in 2012.

Antiracism and Antitrust with Eric Cramer

Among the legal and regulatory avenues one might follow to mitigate the impact of racism, most of us would look to various manifestations of discrimination law in employment, lending, real estate, education, healthcare, voting rights, and other categories. When presented in those contexts, the anti-racism objectives are clear.

There are several federal laws and many state laws that prohibit anticompetitive behavior. At the top of the heap is the Sherman Antirust Act of 1890, which outlaws illegal monopolies and anticompetitive tactics, conspiracies to restrain trade, cartels and syndicates. But what do wages, including those paid to minorities, have to do with antitrust? What about no-poach agreements, whereby groups of companies agree not to hire employees away from each other? The answer is “quite a lot.”

Listen to my interview with Eric Cramer, Chairman of Berger Montague and co-chair of the firm’s antitrust department, a team that handles antitrust class actions across the country involving a variety of industries. Eric and the firm are responsible for winning numerous significant settlements for clients — a total value that now exceeds $3 billion. His recent focus has been representing workers who allege their employers’ anticompetitive practices suppressed their pay. Recipient of numerous accolades and awards that include terms like titan, elite, thought leader, visionary, and lawyer of the year, Eric is a summa cum laude graduate of Princeton University where he earned membership in Phi Beta Kappa, and a cum laude graduate of Harvard Law School. Listen to what he had to say about this important subject.

This podcast is the audio companion to the Journal on Emerging Issues in Litigation. The Journal is a collaborative project between HB Litigation Conferences and the Fastcase legal research family, which includes Full Court Press, Law Street Media, and Docket Alarm. The podcast itself is a joint effort between HB and our friends at Law Street Media. If you have comments or wish to participate in one our projects please drop me a note at Editor@LitigationConferences.com.

Tom Hagy
Litigation Enthusiast and
Host of the Emerging Litigation Podcast

June 20, 2022
Full Ninth Circuit Removes Unwarranted Hurdles to Class Certification

The Authors

Jonathan RubinPartner | MoginRubin LLP

Co-founding partner at MoginRubin LLP, Jonathan Rubin focuses his legal practice exclusively on antitrust and competition law and policy. Based in Washington, DC, he has litigated and led trial teams in major antitrust cases throughout the country. He has published in influential academic journals and has spoken to numerous professional groups, including the Directorate General for Competition of the European Commission, the Antitrust Section of the American Bar Association, and the American Antitrust Institute.

Dan MoginManaging Partner | MoginRubin LLP

Dan Mogin, founding and managing partner of MoginRubin LLP, concentrates his practice on antitrust, unfair competition and complex business litigation. He has served as lead counsel in numerous large antitrust cases, chaired the Antitrust Section of the California Bar, taught antitrust law and was editor-in-chief of a leading competition law treatise.

Explore more from MoginRubin LLP!

Blog: Emboldened by New Resources and Expanded Authority, Feds Continue 10-Year Look Back at Chinese Investment. By Dan Mogin, Jonathan Rubin, Jennifer Oliver, and Timothy LaComb. List

OnDemand CLE Webinar: The Antitrust Case Against Google. Dan Mogin, Jonathan Rubin, Jennifer Oliver, Timothy LaComb, John Newman, Dr. Alan Grant

Blog: FTC’s Case Against Facebook Will Test the Flexibility of U.S. Antitrust Law.Authors: Jonathan Rubin and Jennifer Oliver, MoginRubin LLP

Blog: Full Ninth Circuit Removes Unwarranted Hurdles to Class Certification. Jonathan Rubin, Dan Mogin.

Journal: Policy Derailed: Can U.S. Antitrust Policy Toward Standard Essential Patents Get Back on Track by Jonathan Rubin

Webinar: Class Certification After Olean v. Bumble Bee with Jonathan Rubin, James Bogan lll, Jonathan Cohn, Bradley Hamburger.

Journal: FTC v. Amazon: Market Definitions and Section 5 of the FTC Act

Podcast: Algorithmic Software Facilitated Price Fixing with Jonathan Rubin

Plus, additional insights from the MoginRubin Blog.

Full Ninth Circuit Removes Unwarranted Hurdles to Class Certification

“Nothing in Rule 23 suggests that the presence of more than a de minimis number of uninjured class members affects whether questions affecting only individual class members predominate. The Ninth Circuit’s en banc decision is a model of clear thinking and a welcome course correction in the law of class certification.”

Excerpt:

There was reason for optimism in August 2021, when the Ninth Circuit Court of Appeals granted rehearing en banc of a 2-1 decision that would have made it more difficult for antitrust claimants to secure class certification. The three-judge panel in Olean Wholesale Grocery Coop., Inc. v. Bumble Bee Foods LLC, 993 F.3d 774 (9th Cir. 2021) had determined that Federal Rule of Civil Procedure 23(b)(3) required a district court to find that no more than a de minimis number of class members are uninjured before a class may be certified. Having announced this de minimis rule in its opinion, the court then took the unusual step of inviting the parties to argue whether the full court should rehear the issue en banc.

As we wrote last year when en banc rehearing was granted, with its de minimis rule, “the panel really jumped the median strip.” We argued that the rule conflated the question of whether issues common to the class predominate over issues unique to individual class members with the question of how the class is defined and that the Ninth Circuit’s new and unrealistic de minimis requirement erected an unnecessary procedural hurdle to class certification. Other commentators and amici argued that requiring proof that all but a de minimis number of class members are injured requires a determination on the merits, impermissible at the class certification stage.

In welcome news for claimants and attorneys who bring antitrust class actions, the Ninth Circuit sitting en banc decided against the de minimis rule, for all of the foregoing reasons, in Olean Wholesale Grocery Coop., Inc. v. Bumble Bee Foods LLC, No. 19-56514, 2022 U.S. App. LEXIS 9455 (9th Cir. Apr. 8, 2022).

In a thorough review of the requirements for class certification under Rule 23, the Ninth Circuit held that the movant’s burden is to prove the prerequisites of Rule 23 by a preponderance of the evidence, bringing the Ninth Circuit in line with the law in the First, Second, Third, Fifth, and Seventh Circuits …

Read the full article on the MoginRubin Blog

April 14, 2022
Overconfidence: A Risky but Pervasive Phenomenon in Litigated Disputes

The Author

Jeff TruemanMediator / Arbitrator

Jeff Trueman (jt@jefftrueman.com) is an experienced, full-time mediator and arbitrator. He helps parties resolve a wide variety of litigated and pre-suit disputes and interpersonal problems concerning catastrophic injuries, wrongful death, professional malpractice, employment, business dissolution, real property, and domestic relations. Jeff is a past Director of Dispute Resolution for the Circuit Court for Baltimore City where he oversaw over 70 retired judges and senior attorneys conducting over 1,500 mediations, settlement conferences, and neutral evaluations per year. He is a Distinguished Fellow of the International Academy of Mediators, an invitation-only membership organization consisting of some of the most successful commercial mediators in the world.

Emerging Litigation PodcastProduced by HB Litigation and Law Street Media

Interviews with leading attorneys and other subject matter experts on new twists in the law and how the law is responding to new twists in the world.

Overconfidence: A Risky but Pervasive Phenomenon in Litigated Disputes

“Lady Justice symbolizes fairness and impartiality as she oversees the adjudication process. Although she may hold the scales of justice in one hand, she also carries a large sword in her other hand. And she’s blindfolded. Knowing that, how confident should you be?”

Abstract: “Overconfidence” may have negative connotations, but it can be beneficial in competitive situations like litigation where parties compete for resources. Nonetheless, posturing and overconfidence of opposing parties and counsel are common frustrations felt by lawyers and claims professionals. Most litigants fail to see themselves as overconfident even though that can result in miscalculations and erroneous risk assessments. Litigants can employ techniques to improve decision making but sometimes going to trial is considered the right decision for reasons that are considered more important than whether the result is better than the last settlement demand or offer. In addition to focusing on legal and financial threats that are external to themselves, litigants might also consider threats of their own making; namely, how they think about risk amid uncertainty. Download the complete article for more insights from the author.

Download the article now!

April 8, 2022
The Shifting Gun Liability Landscape: Plaintiffs Say Companies are Marketing Illegally, Insurers End Up Paying

The Author

Charlie KingdollarInsurance Industry Expert

Charlie spent more than four decades with General Reinsurance, three-quarters of which as the company’s Emerging Issues Officer. One colleague described him as “one of the most prescient and gifted industry futurists I have met in my 36 year professional career within the insurance industry. Entertaining and insightful, his ability to digest and communicate complex issues, many before they are readily apparent, is both a gift and a talent.” Charlie is also a member of the Editorial Board of Advisors for the Journal on Emerging Issues in Litigation.

The Shifting Gun Liability Landscape: Plaintiffs Say Companies are Marketing Illegally, Insurers End Up Paying

By Charlie Kingdollar

On Feb. 15, 2022, Remington Arms, manufacturer of the Bushmaster AR15-style rifle agreed to pay $73 million to settle a lawsuit filed by the families of nine of the victims of the Dec. 14, 2012, Sandy Hook Elementary School shooting. The $73 million will be paid by four of Remington’s insurers (and likely their reinsurers).[i]

Why is this a big deal? Insurers and reinsurers providing liability coverage for gun manufacturers did so believing that federal law protected gun manufacturers from liability arising from shootings under the federal Protection of Lawful Commerce in Arms Act (PLCAA). It seems likely that policy terms and conditions as well as pricing of the risk reflected that perceived liability protection.

Things have changed. The Connecticut plaintiffs filed their suit under the Connecticut Fair Trade Practices Act. The plaintiffs alleged that the Bushmaster was a combat weapon and that Remington improperly marketed it to civilians – particularly trying to reach young men. In 2019, the Connecticut Supreme Court ruled that the federal PLCAA did have some carve-outs for state laws and subsequently declined Remington’s request to dismiss the lawsuit. It seems a safe bet that the families of other Connecticut gun violence victims will file similar suits over past and/or future incidents.

Okay, so this is Connecticut. But it seems likely that this lawsuit will be used as a template by plaintiffs in other states that have similar statutes – and many do. This lawsuit and settlement could result in burgeoning litigation against gun manufacturers.

Presumably, even a single victim shot with a Bushmaster, or any gun that could be argued is a combat weapon, could file a similar suit under a state’s Fair Trade Practices Act.

Which other guns could be deemed “combat weapons” and therefore unfit for civilian populations? Only time and future litigation will tell. One possible example is the WEE1 Tactical, the manufacturer of the AR-15, which is similar to the Bushmaster, may find itself facing litigation. A look at AR-15-style guns on Wikipedia results in a list of 27 guns by 26 manufacturers – and I doubt this is a comprehensive list.[ii] Would a machine pistol be considered a “combat weapon”? How many other types of firearms might be deemed “combat weapons”?

WEE1 Tactical has recently begun advertising the JR-15 – a smaller, lighter version of the AR-15 that fires smaller .22 caliber rounds for use by children. WEE1’s website states: “The JR-15 is the first in a line of shooting platforms that will safely help adults introduce children to the shooting sports.”[iii] Given that the plaintiffs in the Sandy hook case stressed the firm was specifically marketing the Bushmaster to young men it will be interesting to see how this marketing strategy will play out in any future similar litigation.

There’s been another crack in the perceived liability protection afforded to gun manufacturers in the U.S. Last year the State of New York enacted a law that “would classify the illegal or improper marketing or sale of guns as a nuisance…that supporters said would bolster litigation against gun companies.”[iv]

Will other states follow? If even a few enact similar statutes, the defense and indemnity costs could be significant to the gun manufacturers and their insurers and reinsurers.

Bushmaster has settled once before with the families of victims shot by one of its guns. In 2004, the company agreed to pay $2.5 million to settle with the families of victims shot by the D.C. sniper.[v] Not much changed after that settlement. It may be different this time.

What about other entities in the gun liability chain? If the gun manufacturer can be held libel for marketing a combat weapon to civilians, can wholesalers and retailers also be found liable? Could courts find that these companies also played a role in putting “combat weapons” into the hands of civilians? If so, the costs to the Property/Casualty insurance industry will be greater.

Unfortunately, mass shootings and gun violence are on the rise in the United States. The number of mass shootings (defined as 4 or more people shot – killed or wounded) have increased every year except one from 2014 to 2021. In 2014 there were 269 mass shootings in the U.S. By 2021, this increased to 691 mass shootings. There have been 2,402 mass shootings in the U.S. in the past five years. And we’ve only mentioned mass shootings incidents.[vi]

Gun violence generally continues to rise. “Guns were involved in 75% of all homicides and 91% of homicides involving youths between 2018 and 2019 … those new numbers represent a significant and troubling uptick from a decade before.”[vii]

I suspect insurers and reinsurers providing liability for companies that manufacture and sell guns find themselves as defendants in an increasing number of lawsuits.

[i] https://www.washingtonpost.com/nation/2022/02/15/remington-sandy-hook-settlement/

[ii] https://en.wikipedia.org/wiki/AR-15_style_rifle

[iii] https://en.wikipedia.org/wiki/AR-15_style_rifle

[iv] https://www.nytimes.com/2022/02/15/nyregion/sandy-hook-families-settlement.html?referringSource=articleShare

[v] https://www.washingtonpost.com/nation/2022/02/15/remington-sandy-hook-settlement/

[vi] https://www.gunviolencearchive.org/

[vii] “Gun Deaths Continue to Rise In American Cities,” U.S. News, 1/10/22

March 7, 2022
Going Viral or Going Nuclear: Social Inflation’s Impact on Jury Verdicts …

The Authors

All three authors are with the law firm of Hall Booth Smith, P.C., and concentrate on various aspects of healthcare defense. Lindsay A. Nishan (lnishan@hallboothsmith.com) is an Associate in the HBS Charleston office. Samantha Bowen Myers (smyers@hallboothsmith.com) is an Associate in their West Palm Beach, Florida, office. Sandra Mekita Cianflone (scianflone@hallboothsmith.com) is a Partner in the firm’s Atlanta office. She is also a member of the Editorial Board of Advisors for the Journal on Emerging Issues in Litigation, and a frequent contributor to the Emerging Litigation Podcast.

Going Viral or Going Nuclear:

Social Inflation’s Impact on Jury Verdicts and How to Safeguard Against It

By Lindsay A. Nishan, Samantha B. Myers
and Sandra M. Cianflone

A juror’s perception of companies and healthcare providers is increasingly colored by TV and social media. The same is true for their understanding of the practice law or medicine, which may be as wrong as it is immovable. “Social inflation” refers to rising litigation costs and the resulting higher insurance payouts which drive up the cost of insurance. In this article the authors, each of whom represents parties in the healthcare industry, discuss the evolving social trends that lead jurors to render “nuclear verdicts,” and what attorneys should consider in mitigating the effects of this phenomenon.

Social media feeds today are crammed with flashy advertisements from lawyers promising big-dollar settlements against “rich insurance companies.” The number of these commercials has spiked since the 1970s as the phenomenon known as “social inflation” has taken root in the legal system.

Social inflation is a term of art that refers to rising litigation costs, the impact those costs have on insurance claim payouts, and how much the average policyholder is expected to pay for basic coverage. Recently, the term social inflation has taken on a new meaning as it has become more widely used in the general press. The phrase has come to be associated with tort reform rollbacks, litigation funding, and is most seen in references to so-called “nuclear” jury verdicts, i.e., a jury award that exceeds $10 million.

But the question remains: What factors contribute to these exorbitantly high jury verdicts? These outsize awards are often driven by myriad factors including sympathetic jurors, societal conceptions about income and wealth of corporations, the use of emotion-driven “Reptile Theory” tactics by plaintiff attorneys, the media spotlight on “bad apple” physicians, and numerous other social factors. A new factor that influences elevated jury verdicts is the increasing volume of information—whether true or false—that is exchanged on social media platforms.

One of the lines most affected by this form of social inflation is the healthcare industry and the soaring costs of medical malpractice litigation. This includes lawsuits involving hospital systems, pharmaceutical companies, and their insurers.

See what the authors have to say about mitigating the impact of social inflation.

Get the article now!

February 22, 2022
Can we rely on shareholders to compel corporations to meaningfully act on ESG issues? | By Rebecca Boon and John Rizio-Hamilton | Bernstein Litowitz Berger & Grossmann

The Authors

Rebecca BoonPartner | Bernstein Litowitz Berger & Grossmann

Rebecca Boon has been litigating securities fraud and shareholder rights actions for over a decade, recovering more than $1.5 billion for the firm’s institutional investor clients. Her work at the firm expands beyond litigation. Rebecca has advanced equality in the workplace by co-founding the Beyond #MeToo working group and leading landmark recoveries that have resulted in hundreds of millions of dollars back to investors and important social change among industries.

Contact: rebecca.Boon@blbglaw.com

John Rizio-HamiltonPartner | Bernstein Litowitz Berger & Grossmann

John Rizio-Hamilton is one of America’s top shareholder litigators. He works on the most complex and high-stakes securities class action cases, and has recovered billions of dollars on behalf of institutional investor clients.

John led the trial team that recovered $240 million for investors in In re Signet Jewelers Limited Securities Litigation, a precedent-setting case that marks the first successful resolution of a securities fraud class action based on allegations of sexual harassment.

Contact: johnr@blbglaw.com

Can we rely on shareholders to compel corporations to meaningfully act on ESG issues?

By Rebecca Boon and John Rizio-Hamilton

This article was first published in the Responsible Investor, Aug., 10th, 2021. Posted with permission of the authors. Copyright 2021 by Rebecca Boon & John Rizio-Hamilton. All rights reserved.

There is an ongoing debate about the role that regulators should take regarding corporate obligations and accountability for ESG issues. Earlier this year, the Ontario Capital Markets Modernization Taskforce weighed in with its long-anticipated recommendation on diversity quotas for corporate boards. After receiving significant industry feedback, the Ontario Taskforce changed its initial recommendation from a requirement that public companies meet specific diversity targets, to allowing companies to set their own targets, report them, and develop a timeline for implementation. This ‘market-based’ framework for diversity would rely on investors to push corporations and hold them accountable.

There was significant backlash when the Ontario Taskforce changed its initial recommendation. It was accused of not going far enough and caving to corporate pressure. However, it decided that allowing corporations to set their own quotas would avoid a ‘one size fits all’ approach, prevent corporations from simply complying with a minimum target, and limit instances of tokenism. The reporting requirement would force companies to implement material quotas and stand by them because they would be too afraid of investor reactions to do anything less than meaningful.

In crafting governance reforms in some of the most significant derivative litigation in history, we spend considerable time thinking about how to enact meaningful and lasting social change at corporations. One key component is to get insider buy-in – because if the change is simply imposed from above, there could be internal resistance, a lack of commitment and a tendency to make only superficial progress. But the question is: can we rely on shareholders to compel corporations to meaningfully act on ESG issues? Recent history says yes. A market-based approach that incentivises good ESG practices could make a significant difference, when coupled with smart regulation.

A recent study found that for every additional 8% of a company’s stock owned by the Big Three, the number of new women board members increased by 76%.

For example, UK regulators just announced that London-listed companies should have at least 40% women and one non-white director on their boards. Similar to the Ontario Taskforce, the goals are not binding but if companies do not meet them, they must explain why. In the US, the Securities and Exchange Commission’s Advisory Panel also recently offered ESG and Diversity & Inclusion disclosure recommendations, designed to allow investors to understand what terms like ‘sustainable’ or ‘green’ actually mean.

According to Chairman Gary Gensler, “investors should be able to drill down to see what’s under the hoods” at the companies and investment funds making these claims.

The ‘Big Three’ asset management firms – BlackRock, Vanguard and State Street Global Advisors – recently made headlines when they supported Engine No.1, the Exxon activist investor that led a successful campaign to secure three board seats for its chosen candidates, in a bid to push Exxon to address long-term climate risk and move to clean energy, among other things. Exxon Director Ursula Burns acknowledged that the campaign’s success is part of a “tidal wave” of investor concerns on ESG issues. This victory would not have been possible without the support of three of the biggest investors in the US.

In addition, big investors have committed to vote against firms that do not appoint more women directors to their boards. In January, State Street announced that it will now vote against the Chair of the Nominating & Governance Committee at companies in the S&P 500 and FTSE 100 that do not disclose the racial and ethnic composition of their boards; and in 2022, it will vote against them if they do not have at least one director from an underrepresented community.

Similarly, Goldman Sachs will no longer take a company public without two diverse board members, one of whom must be a woman.

The SEC has just approved a proposal by US marketplace Nasdaq for all its listed companies to disclose board-level diversity statistics and either meet the objective of 1 or 2 ‘diverse’ directors (depending on size) or explain why they have not. Some criticised the Ontario Taskforce – and others heralded it – for not taking Nasdaq’s “extreme position”.

Are any of these initiatives enough? No. But investor pressure works. A recent study from the Kellogg School of Management at Northwestern University found that for every additional 8% of a company’s stock owned by the Big Three, the number of new women board members increased by 76%. Critically, the same study found that in response to investor pressure, women on boards get “power positions” on audit and nominating committees at even higher numbers than companies complying with mandatory quotas.

Investors have also taken direct action by filing lawsuits alleging toxic workplace cultures of discrimination and retaliation against female executives, and racial and gender bias. And investors are no less active on environmental issues. For example, investors are currently prosecuting a securities fraud class action in Ohio against Energy Transfer, arising from the explosion of a natural gas pipeline that wreaked environmental havoc in Pennsylvania. These lawsuits are in early stages, but the pressure is on. Corporations have to address social issues because investors are demanding it.

We have already seen what investor demands for accountability can do in US securities cases involving #MeToo issues and sexual harassment allegations. As the #MeToo movement went mainstream, we saw the first successful securities case addressing sexual harassment allegations – in a shareholder derivative lawsuit involving Fox News parent Twenty-First Century Fox. Investors were listening.

Following a year of litigation, the lawsuit uncovered allegedly systemic problems at the network involving multiple senior executives, multiple types of discrimination and harassment, and a toxic workplace characterised by surveillance, retaliation and fear.

Ultimately, as part of a $90m settlement, the plaintiff and the company unveiled a series of governance reforms designed to fix the broken sexual harassment culture at Fox News. The resulting Fox News Workplace Professionalism and Inclusion Council is majority-independent, but also has company participation, along with broad powers and a mandate to identify and solve the problems at the company. A critical component is investor accountability – the Council has the power to issue minority reports that Fox is mandated to post publicly for investors and the world to see. It also has a mandatory five-year term and if Fox determines to dissolve the Council, it must publicly state the reasons why. This approach set the stage for the recent high-profile settlement of a securities case against L Brands, which also settled for $90m. The firm committed to invest a further $45m over at least five years in a Diversity, Equity & Inclusion Council, and take other measures to protect employees from harassment and discrimination, requiring accountability when misconduct occurs.

We also recently saw the first successful direct securities action certified as a class action involving allegations of sexual harassment against Signet Jewelers. When the market learned that hundreds of women had submitted declarations describing alleged sexual harassment reaching to the company’s highest levels, Signet was forced to halt trading to address them; and when trading resumed, the company’s stock price declined 13%. Again, investors were listening. The Signet case settled for $240m in late 2020.

It is too soon to know whether the newer cases will be successful, or whether the new regulations will have any teeth. But pressure from the Big Three and the corresponding dramatic increase in the number of women on corporate boards confirms that when investors demand diversity, companies respond. Investors have shown that they are willing and ready to compel corporations to act on important social issues. And recent securities cases involving #MeToo issues have demonstrated to the corporate world that investors can use their significant power to demand change and hold corporations accountable when they fail to act.

February 22, 2022
The Humble Beginnings and Wild Evolution of the TCPA with Joe Apatov

The Humble Beginnings and Wild Evolution of the TCPA with Joe Apatov

Only $32 million! I mean, why bother even getting out of bed? Joining me to discuss the evolution of the TCPA is Joseph A. Apatov (japatov@mcglinchey.com), a member of the McGlinchey Stafford law firm’s Consumer Financial Services Litigation practice group. Based in their Fort Lauderdale office, Joe litigates on behalf of financial services clients in both state and federal courts, with an emphasis on defending banks, mortgage lenders and servicers, private-label card issuers, and automobile finance companies.

Apologies for my trip down memory lane. Bear with me as I regale you with stories from the newsroom at Mealey’s Litigation Reports and the team’s anxious reliance on the “latest” technology: the facsimile machine.

This podcast is the audio companion to the Journal on Emerging Issues in Litigation, a collaborative project between HB Litigation Conferences and the Fastcase legal research family, which includes Full Court Press, Law Street Media, and Docket Alarm. The podcast itself is a joint effort between HB and Law Street Media. If you have comments or wish to participate in one our projects, or want to tell me how much Joe enlightened you, please drop me a note at Editor@LitigationConferences.com.

Tom Hagy
Litigation Enthusiast and Host of the Emerging Litigation Podcast

“The Telephone Consumer Protection Act had humble beginnings,” our guest writes, “with the bill’s sponsor explaining that the statute would permit consumers to bring small claims cases ‘without an attorney,’ and provides for an ‘amount of damages … fair to both the consumer and the telemarketer.’ Twenty-eight years after its enactment in 1991, the Eighth Circuit Court of Appeals affirmed a District Court’s decision to reduce a $1.6 billion jury award in a TCPA class action to only $32 million because the former was ‘shockingly large’ and ‘oppressive,’ in violation of the Due Process Clause …..”

January 29, 2022
Where’s Your Head? Managing the Mind in Mediation with Jeff Trueman

Where’s Your Head? Managing the Mind in Mediation with Jeff Trueman

Joining me to discuss this is Jeff Trueman, an experienced, full-time mediator and arbitrator. Jeff helps parties resolve a wide variety of litigated and pre-suit disputes and interpersonal problems concerning catastrophic injuries, professional malpractice, wrongful death, employment, family business dissolution, real property, estate, and domestic relations. He is a panel mediator for the American Arbitration Association; a panel arbitrator for the Financial Industry Regulatory Authority; a Distinguished Fellow of the International Academy of Mediators; a recipient of the Paul A. Dorf Alternative Dispute Resolution Memorial Award by the Bar Association of Baltimore City; and will soon hold an LLM from the Straus Institute for Dispute Resolution at the prestigious Pepperdine School of Law.

Finally, did I really suggest that having a mediator with a bad hip could help achieve a faster resolution? Did I really give a review of the HBO original movie Oslo, which I consider a must-see for anyone interested in conflict resolution? Did I really compare married couples during Covid-19 lockdowns to angry bees in a jar? Listen and find out. Spoiler alert: Yes. Yes I did.

This podcast is the audio companion to the Journal on Emerging Issues in Litigation, a collaborative project between HB Litigation Conferences and the Fastcase legal research family, which includes Full Court Press, Law Street Media, and Docket Alarm. The podcast itself is a joint effort between HB and Law Street Media. If you have comments or wish to participate in one our projects, or want to tell me how Jeff really got you thinking, please drop me a note at Editor@LitigationConferences.com.

Tom Hagy
Litigation Enthusiast and Host of the Emerging Litigation Podcast

“Attorneys possess many of the same characteristics as their human cousins.” Someone said that. Probably me. They often bring to their jobs cognitive barriers that get in the way of negotiating resolutions to conflicts. Same for their human clients.

Things like refusal to cede the moral high-ground, or stubbornly believing there must always be someone to blame. Then there is overconfidence (i.e., “I am right and will win in court!”) or they might enjoy selective memory, confirmation bias, and loss aversion. Attorneys are often in the position of mediator and problem solver. What can attorneys do to more effectively achieve satisfactory outcomes when the parties bring in their own set of human characteristics and emotions?

January 13, 2022