The U.S. Court of Appeals for the Federal Circuit ruled today that the United States bears responsibility for causing atypical recurrent flooding along the Missouri River that has injured farms and property in the Missouri River Basin since 2007. In its opinion, the Federal Circuit confirmed that the United States violated the Fifth Amendment prohibition on the taking of private property without just compensation by implementing the Missouri River Recovery Program (MRRP), a program described by the court as required by the Endangered Species Act but “antithetical” to the 1944 Flood Control Act.
Plaintiffs in the case, Ideker Farms, Inc., et al. v. United States of America, have been led by Am Law 100 firm Polsinelli and its shareholders Seth C. Wright and David K. Schultz, in partnership with co-counsel Cohen Milstein and its partner Benjamin D. Brown, and lead appellate counsel Donald B. Verrilli, Jr. from Munger, Tolles & Olson and Elaine J. Goldenberg and Benjamin J. Horwich from Munger, Tolles & Olson.
The mass action, on behalf of over 370 landowners from Kansas, Missouri, Nebraska, Iowa, and North and South Dakota, sought just compensation from the Federal Government for the actions of the U.S. Army Corps of Engineers, which was tasked with implementing the MRRP.
The Federal Circuit ruled in favor of the plaintiffs on the issues of causation and the date of accrual that the government had raised in its appeal. The Federal Circuit affirmed the trial court’s findings that the government actions caused the flooding to occur on the plaintiffs’ properties. Furthermore, the Federal Circuit ruled in favor of the plaintiffs on their cross-appeal relating to recoverability of crop damages and 2011 flooding. The case was remanded to the trial court for further proceedings. The plaintiffs have won at every stage of the proceedings from the trial court’s rulings on causation and damages, as well as now on appeal.
“Today’s decision is an important step in securing just compensation for our clients,” said lead appellate lawyer Don Verrilli. “We are very pleased that the Federal Circuit affirmed the merits of our Takings Clause arguments.”
Seth Wright, Shareholder at Polsinelli and lead trial counsel, said: “We are pleased with today’s action by the Federal Circuit that confirms the previous decisions by the U.S. Court of Federal Claims. It is time for the government to do the right thing and pay the just compensation owed to these landowners who have been waiting for over a decade to receive as a result of the government’s actions.”
Benjamin Brown of Cohen Milstein added, “Over fifty years ago, the Supreme Court stated, ‘The Takings Clause exists to bar the government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.’ Today’s decision again vindicates this critically important principle.”
Lead plaintiff Roger Ideker of Ideker Farms, Inc. in Holt County, Missouri, was pleased with the decision: “We continue to see the courts recognize the substantial losses we have encountered, and that the government should take responsibility. We are bolstered to continue the fight for justice.”
For additional information, see the case’s website at www.missouririverflooding.com.
- Repeated flooding qualifies as a taking, court says
- Claims accumulated after expert confirmation
A group of farmers along the Missouri River will have a second shot at compensation for crops they lost because of flooding created by a strategic shift in planning by the Army Corps of Engineers, the Federal Circuit decided Friday.
Ideker Farms Inc. and landowners from six states sued the government, alleging that the Army Corps of Engineers took their farmlands and personal properties by making decisions that led to recurring flooding, without providing them compensation. The Corps of Engineers altered the flow of the Missouri River in 2004 to de-prioritize flood control in support of wildlife.
The Court of Federal Claims said the government was on the hook for taking the land and diminishing its value but denied the farmers their request to receive compensation for lost crops. The government appealed the decision to the US Court of Appeals for the Federal Circuit. The landowners and farmers also appealed over the denial of compensation for crops.
Read Farmers Win Shot at Crop Compensation in Missouri River Flooding.
Three PFAS manufacturers will pay $1.185 billion to water utilities around the country — but the Cape Fear region is excluded.
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While the settlement covers a lot of municipal and county utilities, it specifically excludes the Cape Fear River Basin because of ongoing local litigation.
Ted Leopold is a senior partner at Cohen Milstein, the legal firm representing Cape Fear residents in another lawsuit. He said, “there’ll be a fund there to pay for essentially, fixing or reconstructing those water utilities so that they can hopefully provide clean water to its customers.”
Because of the nature of the settlement, other utilities that aren’t currently involved can petition to have their utilities tested, and then may have access to that $1.185 billion fund.
“Certainly, you know, this is going to be very expensive. Cape Fear water utility has estimated somewhere in the range of $40 to $60 million to correct its facility,” Leopold said, referring to the Cape Fear Public Utility Authority (CFPUA). “So if you can imagine all the water utilities around the country, there’s going to be a significant number. So the settlement number may pale in comparison to what the actual damage number may be.”
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“The settlement doesn’t affect the contamination that occurs in the soil, groundwater, property damage and things of that sort,” he said. “This is only related to the water utilities around the country.”
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As for the Cape Fear case, Cohen Milstein is representing Cape Fear residents against Dupont and Chemours in a class action lawsuit dating back to 2018. The class action lawsuit seeks monetary damages and injunctive relief for physical injury, property damage and reduced property values, and the cost of filtering contaminated water and air in five Cape Fear counties.
Leopold says the recent settlement has positive implications for the other cases, like the case CFPUA has against Chemours.
“I think that’s the biggest result is the acknowledgment of the companies that have perpetrated these contaminations and caused people’s properties and health to be put at risk,” he said. “It’s an acknowledgment that, you know, these are serious chemicals that can cause harm both the property and to individuals. And, you know, they’re certainly paying a lot of money towards fixing the problem.”
As for a timeline on a result for that class action suit, Leopold said it’s unpredictable. “We’ve been waiting for some time. I wouldn’t be surprised if it came tomorrow, next week, or sometime this summer.”
Read What Does a Recent PFAS Settlement Mean for the Cape Fear Area?
Here are five rulings from the first six months of 2023 that benefits lawyers should have on their radar.
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ESOP Managers Lose 10th Circ. Arbitration Bid
The Tenth Circuit issued a published opinion Feb. 9 rejecting a radiology company’s bid to compel individual arbitration of an ERISA class action from workers who alleged mismanagement of their employee stock ownership plan, and the ruling has already popped up in district courts denying motions in similar cases nationwide.
A three-judge panel found an arbitration provision tucked into Envision’s ESOP plan documents was invalid because it blocked remedies under ERISA, particularly by taking away ERISA’s promise that workers can sue on their benefit plan’s behalf. The panel first indicated skepticism about reversing a lower court’s decision refusing to compel arbitration during oral arguments in January.
The panel found that a Colorado federal court properly denied the motion to compel arbitration based on a finding that the effective vindication exception under the Federal Arbitration Act applied. That doctrine allows a court to overrule an arbitration agreement if it blocks a party from being able to bring claims under federal law.
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In a sign of the potential impact of the decision, the ruling has already been cited as “persuasive” outside the Tenth Circuit, including by a Delaware federal judge in March who denied a similar motion to compel sought by a cargo airline and its ESOP managers.
The case is Harrison v. Envision Management Holding Inc. Board et al., case number 22-1098, in the U.S. Court of Appeals for the Tenth Circuit.
Read 5 Important Benefits Rulings From The 1st Half Of 2023
Most claims in a multicount class suit seeking damages from a take-public deal for special purpose acquisition company XL Fleet Holdings and its principals moved forward Friday after a Delaware Court of Chancery bench ruling that noted similarities to other recent SPAC disputes that survived dismissal.
Chancellor Kathaleen St. J. McCormick sent all but one count in the six-count case toward trial, in a decision that also dismissed a breach of fiduciary duty claim against James H.R. Brady, the SPAC’s chief financial officer. Also dismissed, without prejudice to refiling, were aiding and abetting fiduciary breach claims against two top officers of the target company, electric car startup XL Hybrids.
The consolidated suit challenged the fairness and terms for a more than $1 billion take-public transaction that merged “blank check” company Pivotal Investment Holdings II LLC and XL Hybrids, forming XL Fleet Corp.
Class attorneys argued that the SPAC target’s stock has fallen below a dollar per share amid a U.S. Securities and Exchange Commission investigation into “the very issues” raised in a March 2021 report by Muddy Waters Research LLC, an online investment research and due-diligence publication that covers a variety of markets.
The class complaint said Muddy Waters’ report found the deal proxy “false and misleading,” and said that it lacked needed information for stockholder decisions on supporting the merger or redeeming their shares for the original value. The online publication also reported that it had shorted the stock involved based on its findings.
“I find that the plaintiff adequately pleaded that the proxy was materially deficient,” the chancellor ruled. “By sending the stockholder on scavenger hunts, the disclosures obfuscated information” that was available and should have been shared with stockholders.
Instead, she added, investors were left with information “scavenger hunts,” a “type of game of Clue that we don’t countenance” in disclosures.
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The stockholders are represented by Michael J. Barry and Michael D. Bell of Grant & Eisenhofer PA, Richard A. Speirs and Amy Miller of Cohen Milstein Sellers & Toll PLLC and Peretz Bronstein and Eitan Kimelman of Bronstein Gewirtz & Grossman LLC.
Read Del. Chancellor Denies XL Fleet Class SPAC Suit Dismissal.
Reckitt Benckiser customers who accused the company of falsely marketing and labeling its Woolite brand laundry detergent with the phrases “color renew” or “revives colors” have asked a California federal judge to give her preliminary blessing to a $3.27 million nonreversionary settlement reached to resolve claims in the class action.
In a motion filed Thursday, class counsel told U.S. District Judge Beth Labson Freeman the plaintiffs reached a $3,275,000 deal with the British multinational consumer goods giant to resolve claims it misled customers by advertising and labeling its Woolite brand detergent as reviving or renewing color to clothing.
The customers alleged the representations were false or misleading, because the detergent neither “revives” nor renews colors. They brought claims against Reckitt Benckiser on behalf of three proposed classes of residents from California, New York and Massachusetts. Last year, Judge Freeman certified the three state classes.
“While plaintiffs believe both the facts and the law ultimately favored their position, the proposed settlement is poised to deliver meaningful relief without requiring further delay and expense,” Thursday’s unopposed bid for preliminary approval reads. “The settlement provides a $3.275 million non-reversionary cash fund from Reckitt. This is an exceptionally strong result for the class given that plaintiffs’ expert estimated that price premium damages for all three classes would total $3.7 million.”
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The classes are represented by Eric Kafka, Geoffrey Graber, and Theodore Leopold of Cohen Milstein Sellers & Toll PLLC.
Read Woolite Buyers Ink $3.3M False Ad Deal Over Color Claims.
Having just helped settle the historic $1B class action against Wells Fargo for alleged securities fraud, Laura Posner, a partner in our Securities Litigation and Investor Protection practice, is engaged in a high-profile spoofing lawsuit against Citadel, one of the world’s largest market makers. She recently talked to the editors at Lawdragon about her path to becoming a leading securities class action attorney.
The interview is available at Laura Posner Leads the Way in Investor Protection, and as a PDF.
Here’s an excerpt:
Lawdragon: You’ve had quite a career so far. What inspired you to pursue plaintiffs’ litigation?
Laura Posner: I went to law school planning to work for the government – specifically for the Department of Justice as a civil rights lawyer. I believe that working for the government is an important way to serve your country, and my motivation for entering the law was always to help others in need. But I temporarily shelved that idea to do plaintiff-side litigation after one of my professors at Harvard Law School clued me into the far-reaching social and economic impact of plaintiff-side class action work.
So, after summering at a plaintiffs’ class action firm, I was hooked and became a plaintiffs’ securities litigator.
LD: Why securities litigation?
LP: I strongly believe that fair and open financial markets lead to a more just society that can transform people’s economic lives. The ability of Americans to become upwardly mobile, save for a home and college, survive health scares, and ultimately retire securely is largely dependent on being able to participate in a fair market. So, it’s incredibly gratifying to me to help ensure markets are fair, honest and safe – and hopefully open to more investors.
LD: Tell us about your role as New Jersey’s top securities regulator.
LP: For me, it was an opportunity to fulfill my lifelong desire to work for the government. When a former colleague suggested I meet with the New Jersey Attorney General about the recently vacated state Securities Regulator role, I jumped at the opportunity. I’m glad I did. It was a transformative experience.
The Bureau of Securities does everything that the Securities Exchange Commission does, only on a statewide scale – which, particularly in the case of New Jersey, isn’t so small, including examinations, registration, investor education, enforcement, legislation and policy work. On the enforcement side, I had a lot of latitude and was able to push the office to take on more and bigger cases, resulting in hundreds of millions of dollars in recoveries for New Jersey residents and more than 20 criminal convictions during my time in office.
I also was able to do a lot of policy and legislative work through my roles with the North American Securities Administrators Association (NASAA), which represents state and provincial regulators in the United States, Canada and Mexico. As a result, I helped New Jersey become a leader in securities policy and regulation and take on large-scale enforcement work in collaboration with other states.
The companies Chemours, DuPont and Corteva announced on Friday they have agreed to pay more than $1 billion to settle claims that “forever chemicals” contaminated public US water systems.
The companies Chemours, DuPont and Corteva announced on Friday they have agreed to pay more than $1 billion to settle claims that “forever chemicals” contaminated public US water systems.
The family of ubiquitous synthetic chemicals – per- and polyfluoroalkyl substances, also known as PFAS – linger in the environment and the human body, where they can cause serious health problems, and are found in everyday products including fast-food wrappers, makeup and carpeting.
In June, based on the latest science, the EPA issued health advisories that said the chemicals are much more hazardous to human health than scientists originally thought and are probably more dangerous even at levels thousands of times lower than previously believed.
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Chemours, Dupot and Corteva, who deny the allegations, will still the pay the settlements, but the North Carolina lawsuits are still ongoing.
“I think clearly it’s a recognition when a company or companies pay this kind of money,” said Ted Leopold, co-lead counsel in the Cape Fear PFAS toxic tort class action lawsuit against Dupont and Chemours. “That’s a real problem in terms of what their conduct has done by way of affecting the environment.
Read Three Companies Agree to Pay More Than $1 Billion to Settle ‘Forever Chemical’ Claims.
- Plaintiffs firms Cohen Milstein, Lowey and Korein Tillery also on leadership team
- Syngenta, Corteva deny allegations
A U.S. judge has appointed a group of four plaintiffs’ firms to lead multidistrict litigation in North Carolina accusing the world’s largest seed and pesticide manufacturers of participating in a conspiracy with distributors to squelch competition.
In his order on Sunday, Chief U.S. District Judge Thomas Schroeder in Winston-Salem named Cohen Milstein Sellers & Toll, Korein Tillery, Lowey Dannenberg and Quinn Emanuel Urquhart & Sullivan to lead farmers’ claims against defendants including pesticide manufacturers Syngenta Corp and Corteva Inc (CTVA.N).
The judge’s order resolved six competing motions from firms seeking interim leadership over multidistrict litigation involving 29 lawsuits and 52 plaintiffs.
Firms in major U.S. class actions often vie for such roles, which gives them a chance to steer cases and potentially argue for attorneys’ fees at the end of litigation.
The private lawsuits, filed after the Federal Trade Commission in September brought its own case, seek unspecified damages for farmers’ costs.
Read Quinn Emanuel Among Law Firms Picked to Lead Pesticide Antitrust Litigation.
Companies should be bracing for the potential of increased litigation as the Environmental Protection Agency mulls regulations that would limit the amount of chemicals in drinking water, sources tell Agenda.
The EPA proposal comes as directors are eagerly awaiting the adoption of the Securities and Exchange Commission’s climate disclosure rule, which has put greenhouse gas emissions disclosures and reduction plans at the top of boards’ priorities. But with the EPA’s newly proposed regulations, experts say companies could soon be pressed to disclose how they plan to reduce or cut out the use of certain chemicals, as well.
Per- and Polyfluoroalkyl Substances, or PFAS, are man-made chemicals used to make nonstick cookware, water-repellent clothing and firefighting foams, among other products, and feature in the supply chain of everything from cosmetics to semiconductors. According to the EPA, peer-reviewed studies have shown that these chemicals can impact reproductive health by causing decreased fertility, lead to developmental effects in children and increase the risk of prostate, kidney and testicular cancer. They are known as “forever chemicals” because they don’t break down in the body and take thousands of years to break down in the environment.
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The EPA’s proposed limits “would significantly curtail future PFAS contamination compared to current and past regulations,” according to Ted Leopold, co-chair of the complex tort litigation and consumer protection practice at plaintiffs’ law firm Cohen Milstein.
He also said that the limits would make it easier to bring legal claims against companies if they are in violation of the more stringent standards.
“There’s certainly going to be more opportunity in the future for litigation if these companies don’t start meeting the lower threshold standards,” he said by email.
In addition to federal regulatory enforcement, companies could see lawsuits arising from property-related matters and contamination issues, which are also referred to as trespass, according to Leopold. Trespass occurs when contaminated water causes damage to someone’s property.
“There could also be an uptick in mass actions, which are filed by many people alleging their injuries, including cancer and other health issues, as the result of PFAS contamination. This will be a big battleground moving forward as the public becomes more aware of the dangers of PFAS,” he said, adding that chemical manufacturers were aware of certain harms associated with PFAS for decades, which could heighten this risk.
Read Directors Should Be Discussing Chemicals After EPA’s PFAS Proposal.