A Michigan federal judge has granted final approval of an $8 million settlement between a civil engineering company and Flint, Michigan, residents, putting to rest claims the company failed to warn them of likely lead contamination that triggered a drinking water crisis in the city.

U.S. District Judge Judith E. Levy granted the parties’ motion for final approval in an order on Tuesday, saying there were no proper and timely objections to the settlement, which was initially filed before the court in a motion for preliminary approval on Oct. 31.

Under the deal, Lockwood Andrews & Newnam PC will pay out $4 million to individuals suing the company, with the other half going to the settlement class and subclass previously certified by the court in November 2021 as part of a $626 million settlement with the state of Michigan, Flint and McLaren Flint hospital.

The class is represented by Theodore J. Leopold of Cohen Milstein Sellers & Toll PLLC and Michael L. Pitt of Pitt McGhee Palmer Bonanni & Rivers PC.

“We are very pleased the court granted class certification to more than 1,700 CITGO employees and pensioners in this important ERISA case,” one of the plaintiffs’ counsel, Michelle C. Yau, chair of Cohen Milstein’s ERISA practice, said in a statement. “This ruling and the court’s recent order denying summary judgment pave the way for the class claims to move forward to trial and affirm our confidence that our clients will prevail.”

What You Need to Know

• Over 1,700 retirees are now a certified class in a complaint filed against CITGO Petroleum Corp.’s pension plans.
• The plaintiffs filed the suit alleging the company violated failed to failed calculate joint and survivor annuity benefits for retired employee.
• The estimated recovery underpayments could total over $30 million, according to the plaintiffs.

A federal judge in Chicago recently certified a class of over 1,700 members and beneficiaries against CITGO Petroleum Corp., after rejecting the fuel company’s summary judgment motion in a suit alleging it underpaid pension plans by upwards of $31 million.

U.S. District Judge Matthew F. Kennelly’s ruling will allow the plaintiffs’ case to move forward to trial against the gas and energy giant, alleging it violated the federal Employee Retirement Income Security Act by it imposing a “marriage penalty” on pension plans’ joint and survivor annuity recipients.

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“We are very pleased the court granted class certification to more than 1,700 CITGO employees and pensioners in this important ERISA case,” one of the plaintiffs’ counsel, Michelle C. Yau, chair of Cohen Milstein’s ERISA practice, said in a statement. “This ruling and the court’s recent order denying summary judgment pave the way for the class claims to move forward to trial and affirm our confidence that our clients will prevail. Married retirees and their beneficiaries deserve to receive accurate pension payments after years of hard work and should not be shortchanged or subjected toa ‘marriage penalty.’”

Yau told Law.com that CITGO recognized it was underpaying its retirees in 2018 when it amended its pension plans to use updated mortality assumptions. The company, however, only fixed the issues for its former employees who retired after 2018, which left behind all retirees who had previously started their pension.

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Yau said these issues have resulted from employers not having their pension plans compliant with the law and failing to update their mortality assumptions in the last 50-plus years. The shortcomings on these pensions led to spousal pensions for married retirees to diverge significantly than what the law requires. She also said potentially hundred of thousands of retirees could be affected in these cases, with her case involving AT&T having more than 38,000 retirees and including underpayments that could exceed $700 million.

“Our clients and other class members are retirees who are typically on a fixed income,” she said. “Over the course of their retirement, the monthly shortfall adds up, making it harder for them to pay for living expenses, which are getting more expensive with inflation.”

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The plaintiffs are also represented by Cohen Milstein Sellers & Toll in New York; Nina Wasow and Todd F. Jackson Feinberg, of Jackson Worthman and Waso in Berkeley, California; John R. Stokes, Peter K. Stris, Rachana A. Pathak and Victor A. O’Connell, of Stris & Maher; and Shaun P. Martin, of the University of San Diego Law School.

While artificial intelligence made headlines with ChatGPT, behind the scenes, the technology has quietly pervaded everyday life — screening job resumes, rental apartment applications, and even determining medical care in some cases.

While a number of AI systems have been found to discriminate, tipping the scales in favor of certain races, genders or incomes, there’s scant government oversight.

Lawmakers in at least seven states are taking big legislative swings to regulate bias in artificial intelligence, filling a void left by Congress’ inaction. These proposals are some of the first steps in a decades-long discussion over balancing the benefits of this nebulous new technology with the widely documented risks.

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“If you are letting the AI learn from decisions that existing managers have historically made, and if those decisions have historically favored some people and disfavored others, then that’s what the technology will learn,” said Christine Webber, the attorney in a class-action lawsuit alleging that an AI system scoring rental applicants discriminated against those who were Black or Hispanic.

Court documents describe one of the lawsuit’s plaintiffs, Mary Louis, a Black woman, applied to rent an apartment in Massachusetts and received a cryptic response: “The third-party service we utilize to screen all prospective tenants has denied your tenancy.”

When Louis submitted two landlord references to show she’d paid rent early or on time for 16 years, court records say, she received another reply: “Unfortunately, we do not accept appeals and cannot override the outcome of the Tenant Screening.”

Purchasers of the medication Intuniv have settled a years-old class action against drugmaker Shire PLC and manufacturer Actavis over allegations that the companies struck an anti-competitive deal to delay the production of a generic version of the attention-deficit/hyperactivity disorder drug.

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The class is represented by Lauren G. Barns, Thomas Sobol, Abbye Ognibene, Claudia Morera and Rachel Downey of Hagens Berman Sobol Shapiro LLP, Steve Shadowen, Richard Burnell and Tina Miranda of Hilliard Shadowen LLP, John Radice, Kenneth Pickle, Clark Craddock and April Lambert of Radice Law Firm PC, Joseph Meltzer and Terence Ziegler of Kessler Topaz Meltzer & Check LLP, Sharon Robertson and Donna Evans of Cohen Milstein Sellers & Toll PLLC, Linda Nussbaum and Peter Moran of Nussbaum Law Group PC, Peter Kohn and Joseph Lukens of Faruqi & Faruqi LLP, David Sorensen and Caitlin Coslett of Berger Montague PC, and Joseph Vanek, Paul Slater, David Germaine and John Bjork of Sperling & Slater LLC.

Help for lawyers in dealing with legal data challenges has come, thanks to corporate and law firm leaders who founded a new industry framework called Legal Data Intelligence. And at least one U.S. senator is questioning Amazon and Walmart’s use of new tech to create “dynamic pricing” that may harm consumers.

These are some of the stories in corporate legal news you may have missed in the past week.

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Whistleblowing Work Is Fueling Law Firm Growth

Over her two decades with federal financial regulatory agencies, Cohen Milstein Sellers & Toll PLLC attorney Christina K. McGlosson saw increased appreciation of the value of information provided by whistleblowers.

Today, there is wide recognition of how an insider’s expertise can help build a case and fight fraud, she recently told Law360 Pulse. As a result, she said, “everyone wants those whistleblowers. Everyone wants that data.”

The increasing visibility of whistleblowers and a growing array of incentives designed to bring them forward are fueling legal work, both for attorneys like McGlosson who represent whistleblowers and for those who counsel businesses. New practices focused on whistleblower work have set up shop in recent months, and the U.S. Department of Justice is working on a pilot program aimed at filling gaps in existing federal whistleblower initiatives.

McGlosson recently joined her firm’s whistleblower practice after serving as acting director of the whistleblower office at the Commodity Futures Trading Commission. An expert on the Dodd-Frank Act and other federal securities laws, she previously helped create and structure the U.S. Securities and Exchange Commission’s whistleblower office, and firm leaders said she will help Cohen Milstein expand its ability to represent people who expose corporate fraud.

Over her two decades with federal financial regulatory agencies, Christina K. McGlosson saw increased appreciation of the value of information provided by whistleblowers.

Today, there is wide recognition of how an insider’s expertise can help build a case and fight fraud, she recently told Law360 Pulse. As a result, she said, “everyone wants those whistleblowers. Everyone wants that data.”

McGlosson recently joined her firm’s whistleblower practice after serving as acting director of the whistleblower office at the U.S. Commodity Futures Trading Commission. An expert on the Dodd-Frank Act and other federal securities laws, she previously helped create and structure the U.S. Securities and Exchange Commission’s whistleblower office, and firm leaders said she will help Cohen Milstein expand its ability to represent people who expose corporate fraud.

More than a decade after a global financial crisis and the Bernie Madoff Ponzi scheme led to the establishment of two whistleblower award programs in the U.S., more U.S. regulators and other agencies worldwide are seeing the benefits of paying individuals for helpful information, signaling a change in momentum on the debate.

Regulators both inside and outside the U.S. in recent years have adopted or are looking to establish their own cash-for-tips programs, as existing ones in the U.S. become a mainstream part of enforcement efforts. 

In early March the U.S. Justice Department said it would start a pilot program that would pay whistleblowers who tell prosecutors about corporate crime, adding a new incentive to attract more tipsters to aid in the government’s enforcement efforts. A similar whistleblower award program has been proposed by lawmakers for the Consumer Financial Protection Bureau. 

Observers believe that the Justice Department established the pilot program, in part, after seeing the value whistleblowers are bringing to enforcement cases, based on the number of referrals prosecutors have received from the SEC and CFTC, according to Christina McGlosson, the former acting director for the CFTC’s whistleblower program and now a special counsel at law firm Cohen Milstein Sellers & Toll. She noted that the whistleblower tips accounted for one-third of all active CFTC enforcement investigations in fiscal year 2023.

A Monrovia-based nursing home chain that was the subject of a 2021 LAist investigation has reached a $7 million settlement over allegations that it falsely billed the government for Medicare during a COVID waiver program.

The Department of Justice and the state of California alleged the chain routinely submitted Medicare claims for residents, saying they needed skilled nursing care for an acute injury or illness even when they didn’t need that level of care. They claimed the company would submit claims for residents for simply being exposed to COVID.

As part of the settlement agreement, ReNew Health will pay $6,841,727 to the federal government and $242,273 to the state of California, plus interest.

The backstory

In order to free up hospital beds during the COVID pandemic, the federal government waived a requirement that nursing home residents needed to have been hospitalized for at least three days in order to qualify for skilled care reimbursements through Medicare. Those payments are often much higher than standard nursing home care, which involves help with daily living activities like bathing or eating.

The federal and state investigation into ReNew Health Group started after whistleblowers filed a lawsuit under the False Claims Act in October 2020. The case was under seal until a settlement was reached last month.

“The government has done an exceptional job in using its enforcement powers to recover money and programs that were instituted during the COVID pandemic,” said Ray Sarola, an attorney at Cohen Milstein Sellers & Toll, which represented the whistleblowers. “But cases like this show that whistleblowers are also a very important and critical part of that process.”

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A troubled history

ReNew Health has owned, operated or provided administrative services to over two dozen facilities across the state, many of them in Southern California. An LAist investigation in 2021 documented the chain’s troubled history of patient care and found it was operating facilities even after the state deemed the owner of the chain unfit to do so.

The California Department of Public Health’s denial letters to ReNew owner Crystal Solorzano cited a long list of serious issues at her facilities and said she submitted a fraudulent college transcript. The complaint in the federal and state case includes details about Solorzano that LAist previously reported.

The Biden Administration’s desire to intensify antitrust enforcement transcends its own litigation, with the Department of Justice and Federal Trade Commission making arguments helpful to private plaintiffs at a record pace.

All but two of the 51 statements of interest and amicus briefs submitted by the DOJ and FTC since President Biden’s inauguration have advanced positions in antitrust disputes beneficial to the plaintiff, according to analysis by GCR USA and Docket Navigator.

That shift in focus marks a notable increase from the Trump Administration, in which 62% of its 63 interventions in antitrust cases took positions beneficial to complainants.

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Pitching the Agencies

Most statements of interest and amicus briefs do not take a formal stance on the merits of the complaint but rather zero in on particular legal questions.

But such interventions can significantly boost complaints, according to Daniel McCuaig, who advises plaintiffs in antitrust damages claims.

“Those are often the tricky questions of antitrust doctrine that courts not infrequently get wrong or at least a little bit wrong,” the Cohen Milstein Sellers & Toll partner and former DOJ attorney said.

Private litigants typically pitch the Antitrust Division to get involved – and although courts might not always side with the government’s position, they take its arguments seriously, McCuaig said.

“They come into court with more credibility than any other litigant – especially when they’re not involved in the litigation,” he added.

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One-sided?

Plaintiffs’ lawyer McCuaig said it is risky for the DOJ or FTC to file briefs that take defendant-friendly positions.

Those briefs are on the record forever – and the government can expect litigants to throw them back at it if they conflict with a future case. Meanwhile, the antitrust defence bar is not necessarily enthralled with the Biden Administration’s use of amicus briefs

Redfin disclosed to regulators on Monday that it will pay $9.25 million to end claims that it caused home sellers to pay inflated commissions under rules set by the National Association of Realtors, allowing the company to exit a class action that ensnared several brokerage firms.

The online real estate listings platform told the U.S. Securities and Exchange Commission it had entered into a settlement term sheet last week to resolve allegations that it conspired with NAR by following the rules, making Redfin the latest company to sign deals to leave the litigation after the trade group agreed to pay $418 million earlier this year.

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The plaintiffs are represented by Steve Berman, Nathan Emmons, Jeannie Evans and Rio S. Pierce of Hagens Berman Sobol Shapiro LLP, Michael S. Ketchmark, Scott A. McCreight and Ben H. Fadler of Ketchmark & McCreight PC, Brandon J.B. Boulware, Jeremy M. Suhr and Erin D. Lawrence of Boulware Law LLC, Matthew L. Dameron and Eric L. Dirks of Williams Dirks Dameron LLC, Benjamin D. Brown, Daniel Silverman, Robert A. Braun and Brian E. Johnson of Cohen Milstein Sellers & Toll PLLC, and Marc M. Seltzer, Beatrice C. Franklin, Matthew R. Berry, Floyd G. Short, Alexander W. Aiken and Steven G. Sklaver of Susman Godfrey LLP.