As President Joe Biden begins his third year in office on Friday, the U.S. Department of Labor’s Wage and Hour Division remains without a Senate-confirmed leader, despite the president’s having put forward two nominees for the role.
Though the DOL’s Wage and Hour Division has operated effectively without a Senate-confirmed leader under Biden, a confirmed head can accomplish more than a temporary one can, observers say. (Liu Jie/Xinhua via Getty Images)
On the two-year anniversary of Biden’s inauguration, the Wage and Hour Division administrator post remains vacant. As of Thursday evening, no nomination was pending, after the Senate blocked attempts to vote on two nominees, David Weil and Jessica Looman, and returned the Looman nomination when its session ended in early January.
. . .
Confirmed Officials Have ‘Gravitas’
The Wage and Hour Division, which dates to 1938, has often operated without a Senate-confirmed leader, and there have been just three in the past 21 years. Legal and political observers and agency veterans attribute that to strong opposition either from worker advocates or the business community, depending on the president’s party.
Having to function without someone who’s made it through the Senate process has “become the norm,” said D. Michael Hancock, a former assistant administrator for the Wage and Hour Division under Obama.
“Whether it’s Republican or Democrat in the White House, the Senate is reluctant for a variety of reasons, largely policy-based, I think, to confirm an administrator,” said Hancock, who is now of counsel at worker-side firm Cohen Milstein Sellers & Toll PLLC.
Though the agency can function day to day without a Senate-confirmed administrator, someone lawmakers have approved can better advocate for bigger-picture policy and budgetary issues, Hancock said.
“Part of this is atmospheric, that it’s somebody that’s gone through the process, has been confirmed, is fully vested with the powers of the administrator, and their voice takes on a certain heft that it may not have otherwise,” Hancock said. “If you’re Senate-confirmed, your voice is taken more seriously and is heard by more people.”
Read the article on Law360.
The Tenth Circuit appeared skeptical Tuesday of a radiology company’s argument that ex-workers alleging the company mismanaged their employee stock ownership plan should be booted to individual arbitration, citing language in the Employee Retirement Income Security Act allowing workers to seek plan-wide relief.
A three-judge panel during oral arguments quickly focused on whether workers’ rights to plan-wide relief under ERISA would be illegally cut off if the arbitration provision from Envision Management Holding Inc.’s ESOP was enforced as written. That’s because Envision’s ESOP specified that plan participants couldn’t sue in court and that any arbitration had to be brought individually.
Within minutes of arguments beginning, Senior Circuit Judge Mary Beck Briscoe zeroed in on whether the proposed class led by ex-imaging technician Robert Harrison could obtain the relief they were seeking under ERISA given the arbitration clause at issue.
That was key to the reasoning behind District Judge Regina M. Rodriguez’s denial of the motion to compel from Envision and plan trustee Argent Trust Co. in March, when she held the arbitration agreement conflicted with an individual’s rights under ERISA to seek relief on behalf of the entire plan under Section 502(a)(2). Judge Rodriguez cited the effective vindication doctrine, an exception to the Federal Arbitration Act that permits a court to overrule an arbitration agreement if it blocks a party from being able to bring claims under federal law.
. . .
Kai Richter, attorney for Harrison and the proposed class, said during a brief interview following the argument that “we’re pleased with the way that the argument went. We think the arguments reflect why the district court decision was properly decided.”
“The arbitration provision here — it’s really a misnomer that it’s even an arbitration provision. They did the one thing that you absolutely cannot do, and in that provision, it literally cited provisions of the United States Code with respect to statutory remedies under ERISA, and says ‘you can’t have that.’ And that is obviously not lawful,” Richter said.
. . .
Robert Harrison and the proposed class are represented by Rachana Pathak, John Stokes and Peter K. Stris of Stris and Maher LLP and Ryan Wheeler, Michelle C. Yau and Kai H. Richter of Cohen Milstein Sellers & Toll PLLC.
- Arbitration clause limits remedies provided by statute
- Company urges court to focus on ‘effective’ vindication
Envision Management Holding Inc.’s effort to force arbitration in a dispute over its employee stock ownership plan appeared to be in jeopardy on Tuesday, when a panel of Tenth Circuit judges had tough questions for the company’s lawyer.
Judge Mary Beck Briscoe honed in on a perceived mismatch between the type of relief authorized by the Envison plan’s arbitration provision and the remedies available under the Employee Retirement Income Security Act. She appeared skeptical of whether an arbitration provision that only allows a participant to get their “little tiny bit of money back” is sufficient under ERISA, which authorizes participants to file lawsuits seeking the removal of plan fiduciaries.
Envison’s attorney, Barbara A. Smith with Bryan Cave Leighton Paisner LLP, urged the court to focus on whether the arbitration clause allows participants to effectively vindicate their “core” ERISA right to protect their own plan benefits. The Envision plan allows any participant to seek their own alleged damages, and the Labor Department is authorized to seek other remedies, like removal of fiduciaries, she said.
Briscoe appeared unpersuaded, calling Smith’s response a concession that fiduciary removal is an effective remedy that plan participants should be able to pursue.
Judge Robert E. Bacharach pushed back on the idea that participants who can seek individual damages but not fiduciary removal have been allowed to exercise their core ERISA rights. His questions suggested he saw Envison’s argument as improperly weighing one ERISA remedy as more important than others.
Growing Debate
The case gives the US Court of Appeals for the Tenth Circuit an opportunity to weigh in on the growing debate over whether employers can force class litigation over their retirement plans into arbitration by pointing to such clauses in either plan documents or individual employment contracts. The Second, Sixth, Seventh, and Ninth Circuits have issued varying rulings on these questions over the past few years, and the US Supreme Court recently declined to hear a petition seeking arbitration in an ERISA dispute involving Cintas Corp.’s 401(k) plan, despite initially expressing some interest in the topic.
The lawsuit against Envision targets a 2017 transaction in which the company’s former owners sold their shares in the company to a newly created employee stock ownership plan for $164 million—a price plan participants say was significantly inflated. Envision sought to have the lawsuit sent to arbitration, pointing to a provision in the plan document requiring that disputes involving the plan be resolved through individual, binding arbitration.
A Colorado federal court denied the request in 2022, ruling that the provision is invalid because it acts as a prospective waiver of plan participants’ right to seek statutory remedies that are guaranteed by ERISA, including the right to seek relief on behalf of the entire plan.
. . .
Envision is also represented by Groom Law Group. The plan participants are also represented by Cohen Milstein Sellers & Toll PLLC.
Read the article on Bloomberg Law.
US Attorney says algorithms are susceptible to human biases
Two Black Women from Massachusetts are at the center of what could become a landmark federal case about whether software that screens potential tenants is illegally biased against Black and Hispanic applicants.
Rachael Rollins, the US attorney for Massachusetts, weighed in on the case, Louis vs. SafeRent Solutions, in a court brief this week, arguing that the technology used by tenant screening companies must comply with anti-discrimination rules. “Algorithms are written by people. As such, they are susceptible to all of the biases, implicit or explicit, of the people that create them,” Rollins said in a statement. Rollins said her filing “recognizes that our 20th century civil rights laws apply to 21st century innovations.”
SafeRent Solutions is a company used by landlords to screen potential tenants. SafeRent gives rental applicants a risk score based on their credit history, other credit-related information including non-tenancy debts, and eviction history.
Mary Louis, 54, of Malden, and Monica Douglas, 65, of Canton, both Black women with subsidized housing vouchers, are the plaintiffs, along with the Community Action Agency of Somerville, which helps people with vouchers find housing. They sued SafeRent and Metropolitan Management Group, a Boston-based apartment management company, in August in US District Court in Massachusetts. Both women were denied apartments by Metropolitan because of SafeRent scores. The plaintiffs are represented by attorneys from Greater Boston Legal Services, Washington, DC-based firm Cohen, Milstein, Sellers & Toll, and the Boston-based National Consumer Law Center.
The lawsuit alleges that SafeRent “assigns disproportionately lower SafeRent Scores to Black and Hispanic rental applicants compared to White rental applicants,” partly because it measures credit history, which includes non-tenant-related debt.
Read the article on CommonWealth.
The U.S. government told a Massachusetts federal court that tenant-screening firm SafeRent Solutions is subject to the Fair Housing Act, giving a boost to claims by two would-be renters that the company’s algorithm was unfairly used against them.
In a brief filed Monday, the U.S. Department of Justice and attorneys at the U.S. Department of Housing and Urban Development said previous court cases, including an active one in Connecticut involving SafeRent Solutions LLC, support its position that the company can be liable for discrimination even if it is not a direct housing provider.
“The language of the FHA plainly focuses on prohibited acts, not specific actors,” according to the government’s brief.
Since SafeRent, formerly known as CoreLogic Rental Property Solutions, does not share details about its algorithm, housing providers effectively have to rely on the tenant-screening firm to decide whether to approve or deny a rental application, the brief said.
The two women who sued SafeRent and Metropolitan Management Group said their applications for apartments in the Boston area were denied because of their credit history. They said the defendants’ reliance on “SafeRent scores” for tenants derived from the algorithm had a disparate impact on Black, Hispanic and low-income people, who tend to have lower credit scores than white applicants.
. . .
The plaintiffs are represented by Todd S. Kaplan and Nadine Cohen of Greater Boston Legal Services; Christine E. Webber and Samantha N. Gerleman of Cohen Milstein Sellers & Toll PLLC; and Stuart T. Rossman, Charles M. Delbaum and Ariel C. Nelson of the National Consumer Law Center.
Read the article on Law360.
The recent explosion of litigation accusing a wide range of companies of violating wiretap and video privacy laws through the technology they deploy on their websites will continue to proliferate in 2023, joining robocall and biometric privacy disputes that have long plagued businesses and also show no signs of abating.
Here, Law360 looks at the privacy litigation and trends that bear watching this year.
. . .
Meta Pixel Takes Center Stage
Meta Pixel, a code snippet and user tracking tool embedded in many websites, has also prompted a wave of litigation against both the companies that use the code and Meta Platforms Inc. itself.
. . .
The Meta Pixel is also at the heart of separate litigation that the social media giant is currently embroiled in over its alleged collection of confidential patient information and tax filing data.
An anonymous Maryland hospital patient launched a putative class action in June accusing Meta of violating the medical privacy of millions of Americans through the Pixel tool. The lawsuit claimed that the company knows — or should have known — that the web tracker is being improperly used on hospital websites, resulting in Facebook receiving such data as when a person registers as a patient, signs in to a patient portal or sets an appointment, among other information.
Meta has countered that while its Pixel tool is offered as a code that allows website developers to gather analytics information about people who visit their websites, it tells health care providers not to send Meta sensitive data.
More recently, two anonymous Facebook users hit Meta with another suit in December accusing the company of breaking privacy and taxpayer protection laws by collecting sensitive information from popular tax filing websites H&R Block, TaxAct and TaxSlayer through its Pixel tool.
These disputes, particularly the one related to the transfer of health care information, have “opened up a Pandora’s box of data privacy issues,” according to Aloke Chakravarty, a partner at Snell & Wilmer LLP.
“They’ve added scrutiny as to what data is made available to web beacons, how they are configured and who configures them, and the specter that more data than expected may have been incidentally captured from health care providers and more than consumers and clients may have expected,” Chakravarty said.
A bulletin about online tracking technologies released by the U.S. Department of Health and Human Services’ Office for Civil Rights on Dec. 1 is also poised to fan the flames of this fight, according to attorneys.
The guidance lays out the obligations of entities covered by the Health Insurance Portability and Accountability Act when using online tracking technologies like Meta Pixel or Google Analytics that collect and analyze information about how internet users interact with a regulated health provider’s website or mobile app.
According to HHS, “regulated entities are not permitted to use tracking technologies in a manner that would result in impermissible disclosures of [electronic protected health information] to tracking technology vendors,” an assertion that plaintiffs are likely to seize on in litigation challenging technology like the Meta Pixel on hospital websites, attorneys say.
. . .
The cases are In Re Meta Pixel Healthcare Litigation, case number 3:22-cv-03580, and Doe et al. v. Meta Platforms Inc., case number 3:22-cv-07557, both in the U.S. District Court for the Northern District of California.
Read the complete article on Law360 (subscription required).
Two Massachusetts renters and an advocacy group asked a federal judge not to dismiss their lawsuit against SafeRent Solutions LLC, saying they can prove the company’s scoring tool disproportionately denies housing to people of color by using credit scores.
Nancy Louis and Monica Douglas, along with Community Action Agency of Somerville Inc., told Judge Angel Kelley on Monday to deny SafeRent’s motion to dismiss the case for failure to state a claim and lack of jurisdiction. Louis and Douglas said their discrimination complaint clearly shows the company is in violation of both state and federal fair housing laws by creating an unnecessary barrier to accessing housing.
“[R]elying on such data in scoring potential tenants disproportionately impacts Black and Hispanic tenants, and those with low income, like those who use housing vouchers,” Louis and Douglas said in the memorandum filed Monday. “Black, Hispanic and low-income individuals all have lower credit scores and worse credit history compared to white individuals. That means that SafeRent assigns these groups disproportionately lower scores than white applicants, which, in turn, causes the disproportionate denial of housing.”
. . .
The plaintiffs are represented by Todd S. Kaplan and Nadine Cohen of Greater Boston Legal Services, Christine E. Webber and Samantha N. Gerleman of Cohen Milstein Sellers & Toll PLLC, and Stuart T. Rossman, Charles M. Delbaum and Ariel C. Nelson of the National Consumer Law Center.
Read the article on Law360 (subscription required).
Pharmaceutical giant Janssen is refusing to comply with previous orders for discovery, impeding the progress of a suit alleging that it paid kickbacks to doctors to boost sales of certain drugs, attorneys for a relator told a Massachusetts federal judge Thursday.
In a memorandum to U.S. District Chief Judge F. Dennis Saylor, relator Julie Long said Janssen had not complied with previous orders to produce answers about its affirmative defenses in the False Claims Act case, several “discrete categories of highly relevant documents” that were supposed to be turned over three months ago, as were all documents being withheld under a claim of privilege.
“The company’s stonewalling and evasiveness are stymieing progress, including delaying the creation of the court-ordered plan for searching for and producing relevant documents from current and former employees who had significant involvement,” the memorandum said. “Janssen cannot be permitted to continue ignoring the court’s orders and the federal rules.”
The 120-page qui tam action was first filed in 2016. It alleged that beginning around 2003, Janssen provided a “wide variety of practice management and infusion suite operational support and consulting services and related programs” to some rheumatology and gastroenterology practices. The services were said to have helped the doctors open in-office infusion suites and induce them to prescribe and infuse Janssen’s rheumatoid arthritis drugs Remicade and Simponi ARIA.
. . .
Julie Long is represented by Jonathan Shapiro and Lynn G. Weissberg of Stern Shapiro Weissberg & Garin and Casey M. Preston, Gary L. Azorsky, Jeanne A. Markey, Leslie Kroeger, Theodore Jon Leopold, Diana L. Martin and Poorad Razavi of Cohen Milstein Sellers & Toll PLLC.
Read the article on Law360. (Subscription required.)
Cohen Milstein Sellers & Toll PLLC will receive $4.25 million of a $6.25 million global settlement they brokered on behalf of investors in aircraft company Boeing who accused the company’s brass of concealing issues with its 737 Max jet, an Illinois federal judge said.
In the order, U.S. District Judge Harry D. Leinenweber said the legal team representing lead plaintiff Seafarers Pension Plan in derivative litigation against Boeing could have their requested seven-figure fee and expense award, calling the sum “fair and reasonable.” He also granted the pension plan’s request for a $15,000 service award.
The legal team requested the sum in November, telling Judge Leinenweber that the global settlement included claims that had been “vigorously contested” in Illinois, in Delaware and before the Seventh Circuit.
They added that the proposed settlement agreement also contained “valuable corporate governance benefits” that include the company revising its bylaws to allow Boeing investors to bring derivative claims in federal courts in both Delaware and the Eastern District of Virginia, where Boeing is now headquartered.
A Florida federal judge ruled Thursday that banana grower Chiquita Brands International Inc. need not face certain claims over its financial support for a defunct Colombian paramilitary group, finding no evidence that the relatives of some plaintiffs were killed by that organization.
The decision, which U.S. District Judge Kenneth A. Marra issued in a 105-page order, terminates seven bellwether suits Chiquita was facing in multidistrict litigation over its support for Autodefensas Unidas de Colombia, a right-wing group accused of killing thousands of people.
Judge Marra’s ruling also allows 10 other bellwether cases to proceed to trial after he identified enough evidence that the plaintiffs’ relatives were killed or disappeared by the AUC during armed conflict in Colombia in the 1990s and early 2000s. Those plaintiffs, the judge said, have at least presented a “triable issue” on the existence of an AUC link to their family members’ eventual fates.
The Thursday decision added to a flurry of recent activity in the long-running MDL, which seeks to hold Chiquita liable for hundreds of AUC-linked deaths or disappearances due to the company’s financial support for the paramilitary group, which amounted to more than $1.7 million.
Earlier this year, the Eleventh Circuit revived 12 cases Judge Marra dismissed in 2019, out of an initial batch of 50 bellwether lawsuits. In its Sept. 6 ruling, the appeals court found the judge had wrongly rejected some of the plaintiffs’ evidence that the AUC was responsible for the deaths of their relatives.
. . .
The plaintiffs are represented separately by Paul Wolf, Jack Scarola of Searcy Denney Scarola Barnhart & Shipley PA, James K. Green of James K. Green PA, Richard Herz, Marco Simons, Marissa Vahlsing and Sean Powers of EarthRights International, John de Leon of the Law Offices of Chavez & De Leon PA, Agnieszka M. Fryszman of Cohen Milstein Sellers & Toll PLLC, Paul L. Hoffman of Schonbrun DeSimone Seplow Harris & Hoffman LLP, Judith Brown Chomsky of the Law Offices of Judith Brown Chomsky, Arturo Carrillo of the Colombian Institute of International Law, Jonathan C. Reiter of the Law Firm of Jonathan C. Reiter, and by Ronald Guralnick of Ronald Guralnick PA.
Read the article on Law360. (Subscription required.)