The employer vaccinate-or-test rule has been particularly contentious, even amongst business and labor groups.
As the U.S. Supreme Court prepares to hear arguments over the Biden administration’s vaccine mandates, there is not just a familiar division between business and workers in the amici briefs, but division within their own ranks as well, over the legal and social policy issues.
The justices on Friday will hear expedited arguments in challenges to the administration’s vaccine requirement for health care workers at federally-funded Medicaid and Medicare facilities, and its vaccinate-or-test rule for employers with 100 or more employees.
The employer vaccinate-or-test rule has been particularly contentious and so it is probably not surprising that business and labor struggle to project united fronts before the justices.
On the morning of Jan. 7, the justices are set to hear arguments first in two employer mandate cases in which the National Federation of Independent Business and its business allies and Ohio, along with 26 Republican-led states and varied employers, ask the high court to block the employer rule while their appeals proceed in the U.S. Court of Appeals for the Sixth Circuit. The appellate court refused to impose an injunction halting the mandate.
The National Federation of Independent Business has been a party in many Supreme Court cases, perhaps most famously, NFIB v. Sebelius, its unsuccessful challenge to the Affordable Care Act in 2012. Along with a number of national and regional business associations, its counsel, Steve Lehotsky and Scott Keller of Lehotsky Keller, argue the employer rule exceeds the authority of the Occupational Safety and Health Administration.
But the division within the business community is particularly pronounced in their views of whether the mandate causes harm. The potential for irreparable harm is one of the key factors in weighing the request for a stay.
The employer rule “will inflict irreparable harm upon hundreds of thousands of businesses across the retail, wholesale, warehousing, transportation, travel, logistics, and commercial industries that collectively employ millions of Americans,” Lehotsky contends. “It will impose substantial, nonrecoverable compliance costs on those businesses.”
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But the Small Business Majority and the American Independent Business Alliance, which, they say, represent “tens of thousands of small businesses,” and their small business allies, support the employer mandate in their amicus brief by counsel, Richard Koffman of Cohen Milstein Sellers & Toll.
“Amici are concerned that a stay would endanger small and independent businesses in three ways,” Koffman wrote. “First, those businesses which have at least 100 employees lose the direct protection of the ETS (Emergency Temporary Standard). Second, businesses that have fewer than 100 employees lose the indirect protection of having larger businesses abide by the ETS. Third, states would remain free to prevent employers from voluntarily implementing vaccination and/or testing requirements to protect their employees and customers.”
Koffman contends that businesses and business organizations opposing the employer mandate “do not represent the views of most American businesses.”
Some of the financial sector’s hottest trends and flashpoints in 2021 lie at the center of lawsuits that securities attorneys will have their eyes on in the coming year, from a challenge to the legality of the largest-ever special purpose acquisition company to multidistrict litigation against the controversial Silicon Valley titan of online trading.
The new year marks the next chapter in a highly anticipated test of the U.S. Securities and Exchange Commission’s jurisdiction over crypto assets and 2022 could be the year that a decade-old securities suit against Goldman Sachs, which raised key questions about class certification in the U.S. Supreme Court last summer, comes to a close.
Here, Law360 breaks down five securities cases to watch in the year ahead.
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Goldman Rolls On
Goldman Sachs and a class of its shareholders have tangled in court for more than a decade now over allegations the bank misled investors about conflicts of interest in a financial crisis-era transaction it underwrote.
Now back from a trip to the U.S. Supreme Court, the class action appears is finally pushing forward in New York federal court, though Goldman recently teed up a third challenge to the class’ certification.
The shareholders claim that Goldman’s assertions in corporate filings about avoiding conflicts of interest were misrepresentations used to keep the bank’s stock price artificially inflated until an SEC action, settled in 2010 for $550 million, revealed that Goldman helped a client short a collateralized debt obligation while simultaneously selling it elsewhere.
After the class won certification in 2015, lost it in January 2018 and regained it later that year, Goldman launched a second appeal over class certification, this time claiming it had successfully rebutted the presumption of classwide reliance — established under the 1988 Supreme Court case Basic v. Levinson — by showing that the allegedly misleading corporate statements were too generic to have affected the bank’s stock price.
A Second Circuit majority found in April 2020 that alleged corrective disclosures about these conflicts revealed new information and moved Goldman Sachs’ share price, but with the concerns of one dissenting judge in hand, the bank asked the Supreme Court to weigh in on whether defendants could point to the generic nature of alleged misstatements when attempting to rebut the so-called Basic presumption.
By the time the high court heard the case in March, the justices found that the dispute over whether a statement’s generic nature is relevant to price impact had “largely evaporated” since both sides agreed that courts could consider expert testimony and “use their common sense” when assessing a generic statement’s price impact.
The justices remanded the case with a directive for lower courts to include the generic nature of alleged misstatements as one of the many factors considered during a price impact analysis, leading the Second Court to kick the case back to U.S. District Judge Paul A. Crotty for clarification on whether he had indeed factored in the “genericness” of the alleged misstatements.
After reviewing the case with “fresh guidance” from the upper courts, Judge Crotty again certified the class, writing in his December order that the bank had still failed to prove its corporate statements were too generic to have kept its share price artificially inflated. Goldman claims that the judge got it wrong again, and has asked the Second Circuit to take its third look at the case.
Cohen Milstein Sellers & Toll PLLC partner Laura Posner said Judge Crotty was right to find that some of the alleged misstatements weren’t generic in nature and that others “that could, in a vacuum, potentially be seen as generic, were not in the specific context of the facts at issue in this case.” Posner added that “it would be a mistake” for Goldman to aim for yet another appeal.
“While I certainly cannot predict whether Goldman will continue to otherwise litigate the case, the facts appear to be quite strongly in support of the plaintiffs — as further supported by the $550 million penalty it paid to the SEC for related actions — and I believe the plaintiffs will succeed on the merits if the case does go to trial,” she told Law360.
Google‘s $13 million class settlement resolving claims over personal data collected by its Street View vehicles remains intact after the Ninth Circuit rejected arguments Monday it unfairly benefited charitable groups at the expense of consumers.
Settlements that provide monetary relief only in the form of cy pres payments to third parties may be appropriate where there is a “direct and substantial nexus” to class members’ interests, Judge Bridget S. Bade said.
Bade signed off on the distributions to a number of internet privacy-protection organizations on behalf of the U.S. Court of Appeals for the Ninth Circuit, but she also wrote separately about her concerns over the court’s precedent on charitable awards.
It wasn’t feasible to distribute the money directly to the estimated 60 million people whose personal data was collected, given the difficulty of verifying their claims, Bade said.
Bade also noted that, despite objector David Lowery’s characterization of the settlement, it wasn’t really a “cy pres-only” deal in light of additional injunctive relief. The district court said the court-ordered relief went beyond measures Google was already required to implement pursuant to an earlier agreement to resolve related state-government investigations.
Lowery argued that the impracticality of distributing class funds should have precluded certification. But judicial oversight over the cy pres settlement provisions ensures that the settlement prioritizes class members’ interests, Bade said.
The court also rejected Lowery’s argument that the settlement amounted to compelled speech in violation of the First Amendment.
Without deciding whether a court’s approval of a settlement amounts to “state action” to trigger the constitutional argument, the court said the agreement doesn’t compel speech because class members can opt out.
The court also rejected Lowery’s arguments over counsel’s alleged conflicts of interests, and his challenge to the fee award. There’s no rule that courts have to discount the value of cy pres relief, Bade said.
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The class is represented by Cohen Milstein Sellers & Toll PLLC, Lieff Cabraser Heimann & Bernstein LLP, and Spector Roseman & Kodroff PC.
The consumers leading antitrust litigation over an alleged industrywide scheme to fix broiler chicken prices won final approval from a federal judge in Chicago for their $181 million class action settlement with Pilgrim’s Pride Corp., Tyson Foods Inc., and other poultry processors.
Judge Thomas M. Durkin signed off late Monday on six agreements resolving “indirect purchaser” claims in the U.S. District Court for the Northern District of Illinois.
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The deal includes a $99 million agreement with Tyson, a $76 million pact with Pilgrim’s, and four settlements with smaller poultry processors worth a combined $6 million. Durkin called it “fair, reasonable, and adequate” in light of the costs and risks of additional litigation.
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The consolidated proposed class actions, which began in 2016, are part of a wave of cartel cases involving livestock and protein, including beef, turkey, pork, tuna, salmon, and eggs.
Most of the lawsuits allege price-fixing schemes centering on unlawful exchanges of sensitive information through Agri Stats Inc., which compiles farm sector databases.
The broiler chicken industry has been particularly hard hit. Along with the main civil case and the criminal charges, top poultry processors and executives face claims they conspired to drive down pay for chicken farmers and their largely immigrant workforce.
Many of the companies have settled many of the claims against them over about the past year. Tyson and Pilgrim’s, a subsidiary of Brazilian meatpacking giant JBS SA, have agreed to pay more than $200 million each in total.
Durkin approved the consumer settlements after a court hearing Monday. He noted that the $181 million figure is larger than similar deals reached on behalf of wholesalers or restaurants, despite legal technicalities that limit the consumers to pursuing claims in “about half the states in the country.”
About 1.2 million consumers have filed claims already, while only three have objected, the judge said.
Hagens Berman Sobol Shapiro LLP and Cohen Milstein Sellers & Toll PLLC are class counsel for the consumers.
An Illinois federal judge Monday gave a final signoff to settlements totaling $181 million that six chicken producers have agreed to pay to resolve claims that they conspired to fix the price of broiler chicken.
During a teleconference, U.S. District Judge Thomas Durkin granted final approval to the deals end-user consumer plaintiffs have reached with Fieldale Farms, Peco Foods, George’s, Tyson Foods, Pilgrim’s Pride, and Mar-Jac Poultry.
The settlements were reached with Tyson for $99 million, Pilgrim’s for $75.5 million, Peco for $1.9 million, George’s for $1.9 million, Fieldale for $1.7 million and Mar-Jac for $1 million, according to filings in the case. The end-user consumer plaintiffs are still pursuing claims against 12 remaining defendants, including Perdue Farms, Koch Foods and others.
Judge Durkin said Monday that the settlements were the best outcome for the end-user class plaintiffs, and that they’ve recovered more from the defendants than any other class. The cash form of compensation is better than any coupons that could expire, and they’ll have plenty of time to put in their claims, he said.
These six defendants have agreed to cooperate with the plaintiffs by authenticating documents and providing witnesses for trial, which may be significant as the case moves forward against other producers, the judge said.
He also praised the “fairly extraordinary” notice plan, noting the difficulty of reaching millions of class members who’ve purchased chicken in different states over multiple years. Still, it’s estimated direct email notice was delivered to more than 80% of email addresses, Judge Durkin said.
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The consumers are represented by Hagens Berman Sobol Shapiro LLP and Cohen Milstein Sellers & Toll PLLC.
Milling company Kruse-Western Inc.’s board of directors must face a proposed class action for allegedly overcharging its employees in a $244 million stock deal before an animal feed contamination problem drove the company’s share value down, a California federal judge has ruled.
U.S. District Judge Dale Drozd ruled on Monday that the lawsuit from former Kruse-Western worker Armando Zavala can proceed against various defendants including Kruse-Western’s board of directors, the plan’s administration committee, employee stock ownership plan trustee GreatBanc Trust and Kevin Kruse, the president of Western Milling, which is one of Kruse-Western’s companies.
Judge Drozd found that Zavala had sufficiently alleged that the selling shareholders, Kruse and GreatBanc were fiduciaries to the company’s employee stock ownership plan and had engaged in a prohibited transaction in violation of the Employee Retirement Income Security Act. However, the judge granted a motion to dismiss a second cause of action brought by Zavala against the plan’s administration committee, charging that the complaint failed to properly purport foul play in the orchestration of the deal by the stock ownership plan’s administration committee.
Zavala filed the suit in February 2019, claiming that a $244 million sale of Kruse-Western stock to its employee stock ownership plan was far over fair market value. Zavala claimed that merely two months after the challenged sale, the Kruse-Western stock was worth just $26.6 million and that a year later, it was worth $24.8 million — meaning the purchase of stock had occurred at nearly 10 times its actual value.
In a separate order, the judge also rejected the argument from the defendants that Zavala’s complaint should be tossed because he signed a severance agreement when he left Kruse-Western containing a release that barred him from suing under ERISA and other laws.
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The proposed class is represented by Michelle C. Yau and Mary J. Bortscheller of Cohen Milstein Sellers & Toll PLLC, and Daniel Feinberg and Nina Wasow of Feinberg Jackson Worthman & Wasow LLP.
Animal feed company Kruse-Western Inc. must face the bulk of a lawsuit claiming it forced workers to pay $244 million for company stock worth only $27 million following a contamination and recall, according to a California federal judge’s ruling.
The proposed class action by former Kruse-Western employee Armando Zavala states a valid claim for a prohibited transaction between the company’s employee stock ownership plan and a party in interest to the plan under the Employee Retirement Income Security Act, Judge Dale A. Drozd of the U.S. District Court for the Eastern District of California said Monday. That’s because the relief Zavala seeks—the return of money allegedly in the defendants’ possession—is equitable in nature and therefore allowable under the statute, Drozd said.
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The case centers on Kruse-Western’s employee stock ownership plan, which was created two months after the company issued a recall for Western Blend Horse Feed due to a possible contamination in 2015. Zavala says the defendants caused the stock plan to pay $244 million for all the company’s stock in a debt-financed transaction that relied on unreliable valuations and unrealistic management projections that didn’t adequately account for the contamination issues.
On the same day Drozd ruled on Kruse-Western’s motion to dismiss, he issued a separate opinion denying the company’s motion for summary judgment, which argued Zavala had released his claims against the company under a severance agreement.
Feinberg Jackson Worthman & Wasow LLP and Cohen Milstein Sellers & Toll PLLC represent Zavala.
FOR IMMEDIATE RELEASE
Lawsuit Alleges LensCrafters Misrepresented to Customers the Superiority of Its AccuFit System
NEW YORK, NY – The Eastern District of New York District Court today certified a class action lawsuit against Luxottica Retail North America, also known as LensCrafters, that alleges the company misrepresented to customers the supposed superiority of its AccuFit measurement system and overcharged for glasses made using AccuFit. According to the lawsuit, LensCrafters falsely claims and markets AccuFit as capturing measurements five times more accurate than manual measurements.
The plaintiffs are represented by national firm Cohen Milstein Sellers & Toll in the class action lawsuit.
“With today’s class certification in three states — New York, Florida and California — we are one step closer to holding LensCrafters accountable for misleading and overcharging its customers,” said Theodore J. Leopold, Partner at Cohen Milstein, co-chair of the firm’s Consumer Protection practice group, and Lead Counsel in the case. “We look forward to moving forward with our lawsuit, adding more states, all of which aims to defend consumers’ rights in the face of LensCrafters’ material misrepresentations.”
“The Court’s thorough and well-reasoned decision makes clear that these claims should – and will be – tried before a single jury. We look forward to seeking redress on behalf of the class and holding LensCrafters accountable,” said Geoffrey Graber, Partner with Cohen Milstein and counsel in the case.
If you think you may be affected by this lawsuit, please email information@cohenmilstein.com.
Media Contact: Berlin Rosen / cohenmilstein@berlinrosen.com
About Cohen Milstein Sellers & Toll
Cohen Milstein Sellers & Toll PLLC is recognized as one of the premier law firms in the country handling major, complex plaintiff-side litigation. With more than 100 attorneys, Cohen Milstein has offices in Washington, D.C., Chicago, Ill., New York, N.Y., Palm Beach Gardens, Fla., Philadelphia, Pa. and Raleigh, N.C.
There may be more discrimination-related lawsuits coming in the near future thanks to a recently passed New York City bill governing the use of artificial intelligence in hiring.
One of the major implications of the bill, which New York’s city council passed in November and has now “lapsed” into law, is that companies will be required to disclose to job candidates whether they used A.I. in the recruiting process. This means that job recruits will now be able to learn whether companies they applied to used A.I.-powered hiring software that study people’s facial movements or analyze voices during job interviews, among other tasks.
This is a big deal because it could provide people some transparency when it comes to learning why they weren’t hired, explains Christine Webber, a civil rights attorney for plaintiffs’ firm Cohen Milstein. She believes that there haven’t been many A.I.-related employments lawsuits filed against companies because people are typically unaware that the technology may have been used on them.
“People don’t know what’s going on,” Webber said. “They don’t come and complain, ‘Hey, a computer denied me a new job.’”
For people of color, knowing whether A.I. was used to determine if they were a good fit for the job could be revelatory. After all, facial recognition software is widely known to not work as well on women and people of color as white men.
Webber brought up the scenario of a company using A.I.-powered facial recognition software that looks for facial cues and “micro expressions” during job interviews that could lead hiring managers to believe a person is deep in thought and therefore may make a better candidate than others. An example may be a person furrowing their brow, creating a little crease in their forehead.
Putting aside whether or not it’s even possible to deduce a person’s fit for the job by using A.I. to scan their face (there are many critics of this kind of use of the technology), Webber noted the potential problem that such a task would pose for people of color.
“It’s really important to be able to see the crease in everybody’s forehead,” she said.
In the chance that a company does use such technology during the hiring process, people of color will finally get more details about why they may have been overlooked for a role, at least those who live in New York City.
The A.I.-related hiring law isn’t expected to come into effect until 2023, which gives companies some time to evaluate the technology they currently use. But other states could pass similar laws, Webber said, also noting that the Equal Employment Opportunity Commission is also taking a tougher look at this kind of hiring software.
Either way, Black and brown people in New York City have something to look forward to: more information about how A.I. is used on their communities.
“New York is a large city, it’s a diverse city, so there’s a chance that somebody is going to be turned down for a job and thinks it’s discrimination and now they know there’s A.I.,” Webber said.
“I feel like it gives us a chance whereas before, there just wasn’t opportunity,” Webber said regarding people bringing up A.I.-related hiring lawsuits.
Two former Performance Sports Group executives will pay $13 million through company insurance to end a proposed class action alleging they lied to shareholders about the now-bankrupt athletic gear manufacturer’s sales tactics, according to a proposed deal filed Wednesday.
The all-cash deal requires former PSG CEO Kevin Davis and ex-CFO Amir Rosenthal, through the company’s directors & officers insurance policy, to compensate potentially thousands of class members who purchased the company’s common stock between January 2015 and October 2016, according to a preliminary approval motion in the 5-year-old Manhattan federal court case.
If approved, the $13 million settlement would supplement a $1.2 million deal that PSG inked with investors in its Delaware bankruptcy case in 2017 as part of a Chapter 11 plan that sold off $575 million of PSG’s assets.
The shareholders, led by the Plumbers & Pipefitters National Pension Fund, told U.S. District Judge Gregory H. Woods that they struck a deal with Davis and Rosenthal at a JAMS mediation session in September. The agreement followed the depositions of numerous former PSG executives and relied on documents subpoenaed from the company’s auditor KPMG and former investor Kohlberg & Co., the investors said.
“The settlement was reached after extensive litigation, including … extensive fact discovery including the service of more than 40 subpoenas by the parties on non-party witnesses and production and review of over 21.2 million pages of documents produced by PSG’s bankruptcy estate and various non-parties,” the investors wrote.
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PSG held an initial public offering in 2014, just months after it was formed in a $330 million tie-up between sports gear company Bauer Hockey and iconic baseball equipment maker Easton.
After the company reported significantly reduced earnings in January 2016, investors filed suit alleging PSG, Davis and Rosenthal had for years juiced quarterly profits by threatening to reduce wholesale discounts unless retail chains increased their order sizes.
This aggressive sales tactic blew up in PSG’s face, shareholders said, when demand plummeted over the course of 2016 because retailers were faced with a buildup of unused inventory. Investors said the company and its top brass silenced internal critics of these ill-fated sales strategies and lied to the public with a rosy picture of a well-run company and solid earnings.
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The proposed class is represented by Carol V. Gilden, S. Douglas Bunch, Steven J. Toll and Joshua C. Handelsman of Cohen Milstein Sellers & Toll PLLC.