The full Ninth Circuit ruled on Friday that Congress’ 2023 bill clarifying civil liability for companies that “attempt to benefit” from human trafficking retroactively applies to a group of Cambodian workers’ lawsuit against a California importer, overturning a district court’s refusal to vacate the importer’s 2017 summary judgment win.

The en banc panel’s majority opinion by U.S. Circuit Judge Susan P. Graber reversed the California federal court’s decision to uphold Rubicon Resources LLC’s summary judgment win after Congress in 2023 passed the Abolish Trafficking Reauthorization Act, which clarified that defendants are civilly liable under the Trafficking Victims Protection Reauthorization Act “when they attempt to benefit, but do not succeed in benefiting, from human trafficking.”

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On Friday, the en banc majority held that the ATRA “was not simply labeled ‘clarifying’; it actually clarified an ambiguous statute,” noting that the TVPRA had been subject to more than one reasonable interpretation. It also was the subject of a circuit split, with two circuits concluding that civil liability attaches for attempting to benefit from human trafficking and the Ninth Circuit earlier holding the opposite.

In addition, following the workers’ unsuccessful appeals to the Ninth Circuit and Supreme Court, Congress “acted swiftly” to pass the ATRA, “adding the precise words that we had held were missing the statute,” the majority said.

“That timeline strongly suggests that Congress acted to resolve the disagreement between circuit courts and to correct [the 2022 panel’s] error,” it said. “Congress’ speed and its minimal discussion strongly suggest that Congress intended to clarify retroactively what the law already meant, not to make a substantive change in the law.”

The majority held that the district court erred in denying the workers’ bid to overturn Rubicon’s summary judgment win and remanded the case for further proceedings.

. . .

Agnieszka M. Fryszman of Cohen Milstein Sellers & Toll PLLC, representing the workers, told Law360 on Friday,” We are grateful for the Ninth Circuit’s careful review. Our clients’ claims fall within the core protections of the Trafficking Victims Protection Act, and they are looking forward to proving their claims at trial.”

. . .

The workers are represented by Agnieszka M. Fryszman, Madeleine Gates, Emily Ray and Nicholas J. Jacques of Cohen Milstein Sellers & Toll PLLC, Paul L. Hoffman, Catherine Sweetser and John C. Washington of Schonbrun Seplow Harris Hoffman & Zeldes LLP and Dan Stormer of Hadsell Stormer Renick & Dai LLP.

The Securities and Exchange Commission is making extensive changes in the auditing and accounting fields as it continues to deregulate and shows greater openness to cryptocurrency investing in the Trump administration.

. . .

Atkins and the Commission have already acted on an overhaul of the PCAOB, naming a new chairman, Demetrios Logothetis and three other board members, last month. They are expected to move the PCAOB to a more industry-friendly approach, while also accepting a steep reduction in compensation.

Atkins and SEC chief accountant Kurt Hohl discussed some of the changes at an AICPA conference in December, where they pointed to the need for PCAOB inspections to focus more on a firm’s overall system of quality management as opposed to deficiencies in specific audits. Atkins wants accountants and auditors to “get back to basics,” focusing on integrity, objectivity and professional skepticism. But the new approach toward deregulation could be a problem for investors.

“It is not often that you see the industry and all various interested parties agreeing that those moves are a bad idea,” said Laura Posner, a partner at Cohen Milstein’s Securities and Investor Protection practice. “I think there is real merit to ensuring that the PCAOB conducts audits, that it has independence, that it is reviewing the independence of auditors. And I think even the industry recognizes that, even if they disagree with the specifics of how audits have proceeded in the past, and they want perhaps some clarity or specificity, or more definitive answers at the end of a given audit. But my understanding is even the industry thinks that there is real value in having an independent PCAOB conduct these types of reviews, and that’s not surprising to me. I don’t think the auditing industry wants a replay of what led up to the creation of the PCAOB back when we were dealing with WorldCom and Enron and the destruction of Arthur Andersen. I think they’ve recognized that the changes that have been made have been largely really beneficial and helpful in ensuring that not only the auditors but the issuers are acting more appropriately.”

Since the passage of the Sarbanes-Oxley Act of 2002 and the establishment of the PCAOB, she noted there are fewer financial restatements now by companies. “When there are restatements, they are typically much smaller on average than they used to be,” Posner added. “The success of these changes has been borne out by the evidence. All the participants don’t see any reason to go back to the laissez faire world in which we were all operating that led to those huge scandals.”

Posner has led several shareholder and auditor class-action lawsuits, including a $1 billion lawsuit against Wells Fargo, a $400 million lawsuit against KPMG, and a $34 million settlement in a case involving Deloitte that recently received preliminary approval from the court.

“We just settled, at least preliminarily, litigation against Deloitte for its audits of SCANA, which was a big electricity company in South Carolina,” said Posner in an interview last month. “It was one of the largest frauds ever in South Carolina history, and we just resolved that case. There were a number of these issues that actually kind of came up. The conflict of interest rules were really interesting to look at, specifically with regard to what we alleged there. We had a situation where Deloitte made up all of the executives of SCANA, who were former Deloitte people. It had been SCANA’s auditor for I think 70 years. On top of that, Deloitte had been auditing SCANA, but also had been auditing or doing consulting work for all of the various entities that were involved in this humongous project, and we allege that they knew information from those audits and that consulting work that were relevant to their audits here. It plays into my thinking about the conflict of interest rules and what they should look like and why they matter.”

She believes it’s important for the SEC to continue to enforce rules designed to prevent conflicts of interest between clients and auditors.

“That is clearly a 360 from what was being contemplated during the last administration,” said Posner. “If anything, the conflict of interest rules need to be strengthened, not watered down. And I think that’s particularly true given the proliferation and expansion of the consulting arms, for lack of a better word, of all of these Big Four accounting firms. There are real considerations that should be put into place beyond those dealing with conflicts of interest, for example, situations in which you have a given auditor not only auditing the company, the issuer that is the subject of the audit, but also doing consulting work or other audit type work for related entities that impact that issuer, and I really think that is an area that has not been explored nearly enough, and would have real material impacts on the quality of the audits that are conducted.”

With an increase in labor trafficking litigation, this article provides an overview of recent examples as well as the elements needed to prove a claim. With this knowledge, companies can implement proper policies and procedures to defend against a labor trafficking allegation, should one arise.

The Trafficking Victims Protection Reauthorization Act (TVPRA), codified at 18 U.S.C. §§ 1581–1597, is a federal statute addressing human trafficking, including labor trafficking and forced labor. While the TVPRA initially focused on criminal liability for traffickers, Congress expanded its reach to include a civil remedy for victims. Especially important is the “beneficiary” or “venture” liability provision, which allows victims to bring civil actions not only against direct perpetrators but also against entities that knowingly benefit from participation in ventures that engage in trafficking or forced labor.

Under 18 U.S.C. § 1595(a), a victim may bring a civil action against “the perpetrator (or whoever knowingly benefits, or attempts or conspires to benefit, financially or by receiving anything of value from participation in a venture which that person knew or should have known has engaged in an act in violation of this chapter).” This provision has become a focal point for litigation against companies alleged to have benefitted from labor trafficking in their supply chains or through contractors.

Recent trends in labor trafficking lawsuits

The last few years have seen a surge in Section 1595 litigation targeting companies for alleged labor trafficking in their supply chains.

Examples include:

• Doe v. Starbucks (United States District Court for the District of Columbia, Case No. 1:25-cv-01261): Plaintiffs alleged that Starbucks knowingly benefited from forced labor and trafficking on Brazilian coffee farms, citing deceptive recruitment, debt bondage, and abusive working conditions. The complaint emphasized Starbucks’ long-term relationship with a supplier cooperative and alleged that Starbucks’ monitoring program was ineffective. Starbucks has until Sept. 1, 2025, to file a Motion to Dismiss.
• Bumble Bee Foods (United States District Court for the Southern District of California, Case No. 3:25-cv-00583): Indonesian migrant fishers alleged that Bumble Bee Foods benefited from forced labor and human trafficking on tuna fishing vessels supplying the U.S. market. The complaint detailed physical violence, debt bondage, and wage theft, and referenced widespread reports of forced labor in the global tuna industry. Bumble Bee Foods moved to dismiss the Complaint on June 2, 2025.

. . .

Knowledge, actual or constructive

The TVPRA requires that the defendant knew or should have known that the venture engaged in trafficking or forced labor. Courts have found that the knowledge must relate to the specific venture at issue, not to the industry or region as a whole. In Ratha v. Phatthana Seafood, 35 F.4th 1159 (9th Cir. 2022) the 9th U.S. Circuit Court of Appeals explained that “sweeping generalities about the [relevant] industry are too attenuated to support an inference that [the defendant] knew or should have known of the specifically alleged TVPRA violations at the [relevant facility].”

The court rejected the notion that evidence, such as government and NGO reports about widespread labor abuses in the Thai shrimp industry, was sufficient to establish knowledge that the defendant knew or should have known about abuses at the particular factory at issue.

Cohen Milstein’s benefits team struck a $14.75 million deal with Citgo to end an outdated mortality data suit and secured a $7.9 million settlement in a 401(k) mismanagement case, earning the firm a place among the 2025 Law360 Benefit Groups of the Year.

Michelle Yau, who chairs Cohen Milstein Sellers & Toll PLLC’s employee benefits and ERISA practice group, pointed to the $7.9 million settlement her team secured with George Weiss Associates Inc. that was finalized in September 2025 as one of the practice group’s most impressive achievements of the year.

She chose it not only because the recovery was so strong — class members walked away with whopping individual payouts estimated at an average of $26,000 each — but because she had never before dealt with the mix of allegations at play.

A class of retirees accused the hedge fund and owner George A. Weiss of not only investing their savings into risky funds, but also of funneling 100% of its employees’ retirement savings into its proprietary funds, which Yau said created an unprecedented mix of mismanagement, diversification and self-dealing issues.

As the case was being litigated, the hedge fund and its owner also declared bankruptcy. This created another challenge for Yau and her team — having to go before the bankruptcy court in order to ensure her clients saw a recovery. Ultimately, she said, she successfully convinced a judge that her clients deserved payment under an insurance policy, amid other creditors also seeking payment.

“I appeared before two different bankruptcy judges explaining what our claims were and how we needed to preserve them for the class,” Yau said. “To state the obvious, I’m not a bankruptcy lawyer. But I definitely feel like after this experience, I could at least play one on TV.”

Yau also highlighted her clients’ $14.75 million recovery, finalized in January 2025, in a class action claiming Citgo Petroleum Corp. shorted retirees on benefit payouts by using outdated mortality data from the 1970s to calculate how much they were owed. This incorrect data informed how Citgo converted retirees’ single life annuity benefits to joint and survivor annuity benefits, which would provide payments to a retiree’s spouse in the event of their death, the retirees claimed.

Those who retired within six years of the lawsuit’s filing recovered 87% of their estimated losses — double the highest recovery rate secured in any similar mortality data case so far, the firm said. Yau said this outcome was particularly rewarding because while the claims behind the case were fairly simple, the math used to assess the pension calculations is complicated and difficult for the average worker to sort out on their own.

“I personally, and my team, feel very comfortable fighting through the numbers to see how retirees are getting underpaid, and then proving that to the court if need be,” Yau said. “I think that’s why these cases are so meaningful to us, because we can see clear as day the underpayment.”

Yau said her team, as demonstrated in the Citgo case, doesn’t bluff when they prepare for trial in these complex ERISA cases. The class struck a deal with Citgo just weeks before the case was set to go to a bench trial. Yau said she thinks the strength of the settlements the benefits practice group has been able to secure for her clients is the direct result of her team’s commitment to try these cases in an area of law where trials don’t often take place.

That commitment also sets Cohen Milstein’s benefits group apart from its competitors, she said.

“We just work harder than anyone else,” Yau said. “We leave everything out on the field.”

Katie Wolfe, of counsel in Cohen Milstein’s Civil Rights & Employment practice, will speak at the ABA National Conference on Equal Employment Opportunity Law at the Loews New Orleans on Wednesday, March 18^th. 

Katie’s panel, “From the Inside Out: An Analysis of Current Legal Trends by Former Government Practitioners” will take place from 3:30 to 4:45 pm EST. 

Katie, a former senior attorney with the U.S. Department of Justice, joins other former senior ranking members of the of the Equal Employment Opportunity Commission, the Department of Labor, and the National Labor Relations Board, for what should be a compelling discussion on the current administration’s enforcement efforts and impact on Equal Employment Opportunity laws and other agencies that regulate the workplace.   They will also share their thoughts on relevant executive orders, directives, and guidance applicable to enforcement of EEO laws; and examine trends they are seeing or anticipating in legal challenges to federal enforcement efforts. 

The last few months have seen rapid and dramatic policy change at the Securities and Exchange Commission (SEC) that institutional investors, including pension funds, should pay attention to.

The SEC has stated that the goal of these changes is to promote capital formation by increasing flexibility for public companies, but critics say the changes may significantly limit investors’ access to information and their ability to hold the companies in which they invest accountable.

This blog will look at three recent changes implemented or in progress at the SEC and discuss the implications for multiemployer pensions and their fiduciaries.

Arbitration of Shareholder Claims

On September 17, 2025, the SEC issued a policy statement stating that it would no longer delay approval of registrations with provisions that make arbitration of shareholder claims mandatory.

Background

One of investors’ main tools for holding public companies accountable is the ability to bring class action lawsuits for violations of federal securities laws. The Private Securities Litigation Reform Act (PSLRA) requires a highly structured and efficient process to try and recover investors’ losses if they believe that a public company has misled investors or manipulated the stock market. In a class action suit, a single investor or small group of investors takes leadership of the case; all other investors are passive class members who can recover a portion of losses if the case is successful, without the burden of participating in litigation.

In arbitration, a dispute is resolved in a private, confidential forum, without the procedural safeguards of a traditional court proceeding. Arbitrators are not required to follow legal precedent or rules of evidence, which can create a highly unpredictable environment where two shareholders bringing the same lawsuit may reach wholly different outcomes. While there are some scenarios where arbitrations proceed as a class or collective action, those proceedings are increasingly rare. Many companies that favor forced arbitration try to preclude class or collective arbitrations, meaning that every investor or fund that wanted to bring a claim to recover for securities fraud would have to proceed alone. Supporters of arbitration of shareholder claims argue that it saves companies significant time and money; opponents note the loss of the deterrent impact of large class actions and the sunlight that comes from public court proceedings.

Historically, the SEC has upheld the class action process and pushed back on corporate efforts to force mandatory arbitration of shareholder claims. In the past, the SEC has expressed concern that mandatory arbitration of shareholder claims violates state law and may violate federal law. Specifically, if a company was trying to go public and included a mandatory arbitration provision in its registration materials, the SEC would have essentially delayed approval. As a result, companies either did not include those provisions or eventually dropped them.

Fiduciary Considerations

The SEC’s new policy statement has sparked significant concern from institutional investors. They claim that without an efficient, centralized method to challenge securities fraud, every pension fund will need to conduct its own investigations and litigate its own cases or give up the ability to recover any funds lost to fraud. Because they no longer have the concern of having to face a single, major class action that can achieve a major recovery, some companies may be emboldened to engage in misstatements, omissions or fraudulent activity, knowing that they face less risk of consequence, contend critics.

Fiduciaries may benefit from periodic updates from counsel or a knowledgeable advisor on whether any companies are trying to impose mandatory arbitration of shareholder claims; as of the time of this article, only one small company has taken that step. If this becomes a trend—or a more prominent and heavily traded company takes this step—fiduciaries may wish to consider a process for identifying whether companies in which they invest are utilizing mandatory arbitration and, if so, whether any steps need to be taken to monitor for or pursue potential securities claims.

Shareholder Proxy Proposals

Typically, spring is the start of proxy season, where the majority of public companies hold their annual shareholder meetings and file their DEF 14A proxy statements with the SEC. The proxy is a key opportunity for shareholders to vote and express their views on issues such as executive compensation, board member elections and shareholder proposals. On November 17, 2025, the SEC announced that it would no longer provide its views or a substantive response to no-action requests for the upcoming proxy season, with a limited exception for no actions based on certain state law issues.

Background

In addition to litigation, shareholders can express concerns and their priorities to the companies in which they invest by making nonbinding proposals. Frequent topics for proposals include opposition to executive pay packages; requests to separate the board chair and CEO positions or eliminate dual-class voting; and requests for the company to provide disclosures on issues like political lobbying, human capital management or plans for navigating environmental issues. If the proposal meets certain criteria, including that it was filed timely and relates to an appropriate topic, the company must include the proposal on its proxy for a vote by all shareholders. Historically, if a company received a shareholder proposal that it thought was improper and did not want to include on the proxy, it would go to the SEC for an advisory opinion that it could take no action on the proposal—hence, referred to as the “no-action” process. The no-action process allowed the SEC to referee these disputes, which many viewed as a way to ensure that companies and shareholders alike had a fair process.

In its November announcement, the SEC stated that if a company submitted a no-action letter and stated that it had a reasonable basis to exclude the proposal based on the applicable regulation, prior published guidance or judicial decisions, the SEC would confirm in writing that it could exclude the proposal based on that representation. Critics say this essentially gives blanket approval to what are typically complex, debatable questions of law and policy.

Fiduciary Considerations

Investors and many companies alike have expressed concern about the change. Investors have heightened concerns about their proposals being improperly omitted. Public companies and their advisors are concerned that the unpredictable environment may lead to burdensome litigation. The SEC stated that its abandonment of the no-action process is for the current proxy season due to “current resource and timing considerations.” It is not clear whether the SEC will extend this practice in future years or revert to the past protocol.

Fiduciaries of institutional funds that are typically engaged in making shareholder proposals may wish to pay particular attention this year to how companies respond. In addition, as fiduciaries consider how to vote their proxy and any policies or guidance they provide proxy advisors or related consultants, they may wish to consider how companies have reacted to this situation. For instance, a fund may wish to discuss with its advisors whether—for those companies in which the fund has significant holdings or a particular concern about long-term value—the fund should create a process to determine whether proper proposals have been omitted and how (if at all) that bears on the fund’s view of the company’s leadership and its vote on issues like executive compensation and director elections.

A certified class of participants in a barbecue company’s employee stock ownership program is seeking assurance that a $15 million settlement among the U.S. Department of Labor, the company’s executives and the ESOP’s caretaker won’t affect a coming trial on the matter.

The certified class in the W BBQ Holdings Inc. ESOP filed a letter Monday in its Employee Retirement Income Security Act suit requesting assurance from the court. The letter requests information about the DOL’s consent order and judgment in a different enforcement case, which the DOL separately docketed Friday. U.S. District Judge Denise L. Cote signed off on the deal on Tuesday.

The DOL filed an enforcement case in December 2024 against Argent Trust Co. and Herbert Wetanson and Gregor Wetanson, the president and vice president of W BBQ Holdings Inc., aimed at the same $99 million private stock purchase by the ESOP in 2016 that the certified class targeted in 2022 with its suit. The consent judgment proposed Friday came after the DOL, Argent and the executives told the court Jan. 30 they’d reached a deal to end the case.

The class, which won certification in May, asked in its letter filed Monday for the court to confirm that the deal wouldn’t bar it from bringing claims in their dispute.

. . .

The class is represented by Michelle C. Yau, Daniel R. Sutter, Caroline E. Bressman, Elizabeth McDermott, Michael Eisenkraft and Ryan A. Wheeler of Cohen Milstein Sellers & Toll PLLC.

Cohen Milstein Sellers & Toll PLLC will represent a proposed class of Perrigo Company PLC investors who allege the company failed to disclose critical issues with infant formula operations that it purchased from Nestlé and caused stock prices to drop as the issues came to light.

In a Friday order in Manhattan federal court, U.S. District Judge Margaret M. Garnett appointed Cohen Milstein lead counsel for the proposed class, finding that the firm’s pension fund client had the greatest financial interest in the suit with about $2.8 million in alleged losses.

“[The International Brotherhood of Teamsters Local No. 710 Pension Fund]’s selected counsel, Cohen Milstein, is an established firm with significant experience representing plaintiffs in complex securities fraud class actions, there is no evidence that Teamsters 710 has interests adverse to the class, and the court is confident that the nearly $2.8 million in claimed losses will motivate Teamsters 710 to vigorously prosecute the case,” Judge Garnett said Friday.

Cohen Milstein’s client beat out three other would-be lead plaintiffs for the chance to represent the class.

. . .

On Tuesday, Carol Gilden, an attorney for the pension fund, told Law360 via email that “We are pleased the court appointed our client Teamster 710 Pension Fund as lead plaintiff and approved the firm as lead counsel.”

“We look forward to pursuing this action and holding Perrigo and its officers accountable for the allegedly false and misleading statements made to investors regarding the company’s infant formula business,” Gilden said.

. . .

The International Brotherhood of Teamsters Local No. 710 Pension Fund is represented by Michael Eisenkraft, Carol V. Gilden, Steven J. Toll and Claire Marsden of Cohen Milstein Sellers & Toll PLLC.

Fighters who accuse the Ultimate Fighting Championship of suppressing wages asked a Nevada federal judge to order a third-party talent agency to explain why it should not be held in contempt for violating a discovery order. 

The fighters, led by Kajan Johnson, said Dominance MMA LLC has inexplicably refused to comply with an August 2025 court order that directed it to turn over materials responsive to a half-dozen discovery requests. 

According to the fighters, Dominance MMA initially went along with agreements related to search terms, lists of devices that could contain responsive materials, and schedules. But it then started to delay and, in early January, indicated it would not produce any materials without a second court order. 

… 

Plaintiffs are represented by Joseph R. Saveri, Christopher K.L. Young, Kevin E. Rayhill, Itak Moradi and T. Brent Jordan of Joseph Saveri Law Firm LLP, Eric L. Cramer, Michael Dell’Angelo, Patrick F. Madden and Joshua P. Davis of Berger Montague PC, Benjamin D. Brown, Richard A. Koffman and Daniel H. Silverman of Cohen Milstein Sellers & Toll PLLC, W. Joseph Bruckner, Brian D. Clark and Kyle Pozan of Lockridge Grindal Nauen PLLP and Michael J. Gayan of Clagget & Sykes. 

Pegasystems has agreed to pay $7 million to settle three shareholder derivative suits in Massachusetts state and federal courts alleging the software company’s top officials sat on details of a 2020 trade secrets suit that led to a now-overturned $2 billion verdict. 

The deal, if approved by judges in the two courts, would resolve claims against Pegasystems founder and CEO Alan Trefler and board members stemming from the suit filed by competitor Appian Corp. in Virginia. 

The plaintiffs alleged in the three cases that the board’s failure to prevent alleged corporate espionage by Pegasystems employees, and a “corporate culture that encouraged and protected illegal activity and unethical conduct in pursuit of profits,” which led to the lawsuit, eroded the value of the company and their shares. 

… 

Jayne Birch and Robert Garfield are represented by Richard Speirs of Cohen Milstein Sellers & Toll PLLC, Peretz Bronstein of Bronstein Gewirtz & Grossman LLC, Rusty E. Glenn and Brett D. Stecker of Shuman Glenn & Stecker, and Michele Carino of Greenwich Legal Associates LLC.