Blog: Today in Legal Reform
Usury laws don’t apply to lawsuit lenders says NY judge
A New York judge has decided that a company that advanced more than $1 million to plaintiffs at an alleged 40 percent interest rate is not subject to state usury laws. The ruling comes in the wake of the New York City Bar Association’s warning to lawyers to avoid “unlawful” funding arrangements, Reuters reports.
Investors & companies hurt when SEC blocked arbitration clauses
Hal Scott and Leslie Silverman take issue with a recent decision by the Securities and Exchange Commission that rejected Carlyle Group’s requirement that investors submit claims to arbitration rather than litigation. Arbitration offers lower costs and quicker results than litigation, while class actions rarely benefit small shareholders, they opine. Read their op-ed in the Wall Street Journal.
Madison County makes changes to controversial asbestos court
The Belleville News-Democrat notes ILR President Lisa Rickard’s support of a change to Madison County’s controversial “pre-assignment” of asbestos court slots. The old system would give trial slots to trial attorneys rather than individual plaintiffs, which “created an asbestos lawsuit futures market of immense value and was at the root of the ‘cash-for-trials’ scandal that lead to the reassignment of the docket’s previous presiding judge.”
Colorado proposal would hurt state’s business climate
A bill before the state legislature would “drive a stake into the heart of manufacturing in Colorado,” warns Loren Furman in the Denver Post. The proposed law, which would require companies to disclose proprietary information such as intellectual property and trade secrets to the public, has been called “the most blatantly anti-business bill of 2012.”
Judge OKs Merck’s suit against Kentucky AG
A federal judge has reversed an earlier decision and will allow Merck’s suit against the Kentucky attorney general to proceed. The company is accusing the AG’s office of violating their due process rights when it hired private lawyers to pursue a “quasi-criminal enforcement proceeding” on a contingency fee basis, the American Lawyer reports.
DoJ drops FCPA suit
The Department of Justice has asked a federal judge to dismiss the convictions of three executives who pled guilty to violating the Foreign Corrupt Practices Act to win a military contract in Gabon, writes the Wall Street Journal. Last month, prosecutors dropped charges against 16 other individuals in the same case after the case began to unravel.
Administration is ‘unequivocally opposed’ to reforming FCPA
Secretary of State Hilary Clinton announced last week that the administration opposes any changes to the Foreign Corrupt Practices Act, reports Main Justice. “We don’t need to lower our standards,” said Clinton. “We need to work with other countries to raise theirs.”
Law firm accused of keeping competitor’s confidential documents
The Wall Street Journal reports that a lawyer is suing his former firm, accusing them of holding onto confidential documents from a competitor that could net millions of dollars in additional fees. The plaintiff, who says he was once “the number one filer of asbestos mesothelioma/lung cancer cases in the County of Los Angeles,” says he was fired after discovering the database.
Globalization of class actions
ThomsonReuters examines the growing numbers of American class action lawyers that are looking for opportunities to export aspects of the U.S. tort system overseas, given that recent Supreme Court decisions have narrowed their options at home. “It’s pretty scary stuff,” said ILR president Lisa Rickard, who has warned European businesses of the dangers of such lawsuits.
Tort system foisting costs on US businesses
The president of Cybex International, a fitness-machine company, writes in Forbes that American businesses are paying billions of dollars towards excessive and frivolous litigation, putting the economic recovery in jeopardy. He adds that businesses such as his, which was hit with a $66 million jury verdict in a case of misused gym equipment, are devoting more of their budgets to legal defense than to hiring and innovation.
