Welcome to Critical Mass, Law.com’s weekly digest for class action and mass tort attorneys. This week: How the SEC avoided a decision on mandatory arbitrationthat could have dealt a “death blow” to securities-fraud class actions. A lawyer in the NFL concussion case was accused of collaborating with ex-Trump adviser Roger Stone. And an opioid judge heard disqualification testimony involving a key Baker Hostetler partner.
Why This SEC Decision Matters to Plaintiffs’ Lawyers
U.S. Securities and Exchange Commission Chairman Jay Clayton opted to punt in a simmering debate about mandatory arbitration of shareholder lawsuits,according to a report in The Wall Street Journal.
The question: Whether Johnson & Johnson was required to hold a vote on a shareholder proposal to include a mandatory arbitration provision in its bylaws. Hal Scott, a Harvard Law School professor who represents a trust with J&J shares, made the proposal. New Jersey Attorney General Gurbir Grewal, whose state is the corporate headquarters of J&J, wrote in a Jan. 29 letter to the SEC’s Division of Corporation Finance that such a provision would be illegal under federal and state laws. In a decision Monday, Clayton deferred to Grewal’s opinion.
Plaintiffs’ groups praised the SEC’s “no action” decision on Tuesday, with Public Citizen asking Congress to ban mandatory arbitration of shareholder suits, and the American Association for Justice calling it a “huge victory for investors.”
So why is this such a big deal? I reached out to Adam Pritchard at the University of Michigan Law School, who is speaking on securities litigation this month at a U.S. Chamber Institute for Legal Reform event. He said such a proposal, if adopted, would be “the death knell of securities fraud class actions.”
Even Johnson & Johnson opposed the shareholder vote. Pritchard told me why:
“I’m sure J&J would be happy if others did this, but they don’t want to be the first. If you are the first one, you will bring the wrath of the plaintiffs’ lawyers on you, and you’ll spend a lot of time and money in court defending the legality of this provision.”
Could Roger Stone Be a Player in NFL Concussion Case?
Could the $1 billion NFL concussion settlement’s latest opponent be … Roger Stone?
Last week, as reported by my colleague Max Mitchell, a lead attorney in the NFL case, Chris Seeger (Seeger Weiss), filed court papers alleging that Stone was linked to Patrick Tighe (X1Law), a Florida attorney and critic of the settlement. Stone, a former adviser to President Donald Trump, was indicted last month as part of Special Counsel Robert Mueller’s investigation into Russian meddling in the 2016 election.
Seeger’s filing accused Tighe of bringing in Stone to “sow the ‘media’ with misinformation” and spread “conspiracy theories and falsehoods about the settlement,” including on a blog called Advocacy for Fairness in Sports. Tighe denied the allegations.
Tighe isn’t the only critic of the settlement, of course, but Max told me he stands out:
“Pat Tighe and the ‘Advocacy for Fairness in Sports’ are longtime critics of Seeger’s approach as well, focusing mostly on what they see as problems with the settlement implementation. Unlike some of the other firms though, which generally stick to airing their grievance in court filings, Tighe has been more vocal in the media.”
Opioid Judge Hears Disqualification Testimony (But Court Callers Hear Hold Music)
The federal judge overseeing the multidistrict litigation over opioids held a rare public hearing last week in Cleveland on whether to disqualify Baker Hostetler and one of its partners, Carole Rendon, from the bellwether case scheduled for trial this year. Rendon is lead defense counsel for Endo Pharmaceuticals and co-liaison for the opioid manufacturers. The agenda was crowded: Rendon and three public officials testified in court, and, when it was over, U.S. District Judge Dan Polster in said he would check with the DOJ before making a decision.
For the record: More than 100 of us listened in on the hearing that day, but the testimony was barely audible over the various noises coming from callers who didn’t mute their phones. Among the distractions were barking dogs, hold music, yawning, typing, coughing and, yes, even a conversation about how hard it was to hear the court proceedings. Maybe this calls for a mute button tutorial?
Who Got the Work?
Kirkland & Ellis partner Kimberly Branscome is representing The 3M Co. in more than 50 lawsuits filed over allegedly defective earplugs used in the U.S. military. Branscome, who is in Los Angeles, filed an appearance on Monday before the U.S. Judicial Panel on Multidistrict Litigation, which is set to hold its next hearing on March 28 in Washington D.C. Branscome won a key defense verdict for Johnson & Johnson last fall in a case alleging its baby powder caused a woman’s mesothelioma. She also was on the defense teams for BP in the Deepwater Horizon oil spill litigation and GM in its ignition switch cases.
Here’s more you need to know:
IVC Verdict: An Indiana jury awarded $3 million to a woman over allegedly defective IVC filters made by Cook Medical – the first plaintiff’s verdict in the federal multidistrict litigation. Law.com reported that the winning team was Ben Martin (The Law Offices of Ben C. Martin), Denman Heard (Heard Law Firm), Laura Baughman (Baron & Budd), Joe Williams (Riley Williams & Piatt), Misty Farris (Fears Nachawati) and Robert Hammers (Schneider Hammers). Cook’s counsel was Chuck Webber and Andrea Pierson of Faegre Baker Daniels.
Marriott MDL: The U.S. Judicial Panel on Multidistrict Litigation sent the data breach class actions against Marriott to Maryland. Marriott, which now says the breach impacted fewer than 383 million guests of its Starwood properties, rather than the earlier-reported figure of 500 million, had argued for the district, which is home to its headquarters. The panel selected U.S. District Paul Grimm to oversee more than 80 cases.
Duck Boat Dinged: A Seattle jury awarded $123 million to about 40 victims of a deadly accident in 2015 that involved a duck boat. Last week’s verdict comes after nearly four months of trial. Lead plaintiffs’ counsel Karen Koehler (Stritmatter Kessler) was up against defense attorneys John Snyder (Rawle & Henderson) and Patricia Buchanan (Patterson Buchanan), plus lawyers for the city of Seattle and state of Washington. Koehler, nicknamed “The Velvet Hammer,” had some unique trial strategies: She personified the duck boat captain, donning a hat, and quoted from Cher’s “If I Could Turn Back Time.”