Month: July 2015

Law Librarian Sounds Sour Note for Warner Music Group

Warner Music Group (Warner) claims the rights to “Happy Birthday to You” – the most recognized English language song in the world. Warner has aggressively asserted rights to anyone who performs a public rendition of the song, from celebrities to parents audacious enough to post videos of their children’s birthday parties online, demanding licensing fees and threatening to sue if not paid. However, according to a University of Pittsburgh Law Librarian, Warner may not have a valid patent for the song.

A class action lawsuit was filed against Warner challenging their copyright to the song, from which Warner receives approximately $2 million in revenue a year. The case was cracked open after evidence of a book, the fourth edition of “The Everyday Song Book,” published in 1922, has an un-copyrighted version of “Happy Birthday to You” in it. This would predate Warner’s 1933 copyright. Evidence of this book was uncovered in Warner’s own files which were handed over during discovery. Attorneys representing the plaintiffs reached out to University of Pittsburgh Law Professor Michael Madison on a hunch that the University had a copy of the book. A law librarian found a copy in the university library’s storage facility. The librarian quickly sent copies of the relevant pages to the plaintiffs, who then motioned for summary judgment.

Two Class Action Lawsuits Filed Against Kohl’s in California

Kohl’s Corporation is being targeted by two class action lawsuits in California over its pricing practices. These suits were recently filed in the U.S. Southern District of California.

Both lawsuits argue that Kohl’s discounted pricings on its own brands violate California’s Unfair Competition Law, False Advertising Law, and Consumer Legal Remedies Act because the retailer gets to set the original price in the first place. One suit alleges that it is possible that hundreds of thousands of California consumers, “have been victims of [Kohl’s] deceptive, misleading, and unlawful pricing scheme.”

The lead plaintiffs essentially argue that if Kohl’s wants to sell a piece of clothing for $20, then they mark the original price at $40, place a 50-percent discount on the item, and the consumer buys the product at $20 thinking they are getting a deal even though the item was never worth $40. The plaintiffs argue these pricing schemes have led to Californians unknowingly purchasing merchandise of lesser value and quality than they expected.

The suits only alleges state law claims and therefore only applies in California. Read the complaints here and here.

Kohl’s is based in Menominee Falls and operates 1,164 department stores in the United States including 126 in California.

Class Action Lawsuit Filed in Milwaukee Against Major Airlines

Three Wisconsin residents have filed a lawsuit against Delta, United, Southwest, and American airlines claiming they violated anti-trust laws. The plaintiffs are currently attempting to get their class certified.

In their complaint, the plaintiffs allege (in their only count) these airlines conspired to restrain trade and commerce in violation of the Sherman Act (15 U.S.C. §§ 1, 3) by artificially lowering the amount of airline flights thereby reducing competition within the industry. They explain that since 2008 the four major airlines have cut flights, raised fares, and have gained control of 80% of the market place. Fares have continuously increased despite a 34% drop in fuel prices, which are airlines single largest expense.

This lawsuit comes on the heels of the U.S. Department of Justice opening an investigation into “possible unlawful coordination” among major airlines’ plans to expand in a way to reduce competition and keep rates high. Several major airlines have announced they would limit growth in order to keep fares high to protect profit margins. However these statements were made in the context of preventing airline stock prices from declining further than they have in recent months.

Multiple similar lawsuits have been filed in major cities across the U.S. including New York, Chicago, San Francisco, Dallas, and Washington. The defendant airlines have released statements saying the lawsuits have no merit.

Read the complaint.

Governor Repeals “False Claims for Medical Assistance Act”

Repeal Expected to Improve Legal Climate and Return More Money to Medical Assistance Fund

 

WCJC has accomplished one of its major objectives for the 2015-2017 state budget with the repeal of Wis. Stat. §20.931, Wisconsin’s “False Claims for Medical Assistance Act”.

The act allows private individuals, unaffiliated with the government, to sue private businesses alleging fraud against the state’s medical assistance program. The act rewards private individuals for filing these actions by providing that the person who brings a private cause of action may be awarded up to 30 percent of amounts recovered in addition to expenses, costs, and reasonable attorney fees. While the original intent of the act, to root out fraud, is admirable this law was ineffective and unnecessary.

The act, originally created in the 2007-2009 state budget act, is ineffective because the Department of Justice (DOJ) proactively prosecutes these claims on its own. Furthermore, DOJ has stated the repeal of the act could increase recoveries for the Medical Assistance program because the state will not have to pay the 30 percent “bounty” to the whistleblowers who bring a private cause of action.

The repeal of this act will not discourage legitimate whistleblowers from bringing information about fraud forward. There are already other avenues in place for whistleblowers to contact state officials, anonymously if need be, such as the governor or attorney general and report fraud. Studies have also shown that whistleblowers with legitimate claims do not have a profit motive and thus the lack of a financial award is unlikely to result in less whistleblowers coming forward.[1] Thus the act is unnecessary.

Repeal of the act was included in the Joint Finance Committee motion #495, the committee’s omnibus motion on Medical Assistance. The motion was adopted by the committee on Thursday, May 21, 2015.

WCJC is grateful for the support of the state legislature and Governor Walker in helping to better Wisconsin’s legal climate.

 

[1] Kesselheim et al., Whistleblowers’ Experiences in Fraud Litigation Against Pharmaceutical Companies, 362:19 New Engl. J. Med. 1832 (May 13, 2010).

Michigan v. EPA – SCOTUS Rules EPA Must Consider Costs in Initial Decision to Regulate

Scalia, writing for the Court, stated that “[EPA] gave cost no thought at all, because it considered cost irrelevant to its initial decision to regulate,” he continued, writing, “It is unreasonable to read an instruction to an administrative agency to determine whether ‘regulation is appropriate and necessary’ as an invitation to ignore cost.” With that the Court found the Obama Administration’s most monumental environmental regulation to date unreasonable and remained to the D.C. Circuit Court of Appeals.

The regulation in question was the EPA’s Mercury and Air Toxics Standards (MATS). MATS required coal-burning power plants to reduce emissions of mercury, arsenic, and lead by installing control technologies or retiring plants. The rule was finalized in December 2012. While reducing the amount of hazardous emissions may seem admirable, the direct benefits of the regulation were valued at $4 million to $6 million, while the annual cost to industry would be approximately $9.6 billion. EPA contested the direct benefit of the program saying that, fully implemented, the MATS would yield between $37 billion and $90 billion in health benefits. EPA did not contest the cost of the program.

Opponents of the rule argued the costs imposed on business and society versus the limited benefits were unreasonable and that the practical implication of the MATS standard would be to put many coal-burning plants out of business. Environmentalists, and the EPA, have pointed out the health benefits to the program which they argue would protect vulnerable populations, such as pregnant women.

The practical effects this ruling may be limited. Because the rule has been implemented for two years just under 70% of coal burning power plants are already in compliance with the regulation. Furthermore, SCOTUS did not vacate the rule, only remanded it, therefore MATS will stay in effect while the D.C. Circuit reconsiders the case.

Furthermore, initial discussions make it seem unlikely that this case will have a broader effect on other EPA regulations. Some legal commentators contend that Justice Scalia seemed to cabin his analysis within the confines of the MATS program. As evidence of this, Justice Scalia took several pages drawing distinctions between the National Ambient Air Quality Standard, EPA’s largest Clean Air regulatory regime, and MATS making it unlikely that the rationale from this ruling can easily be applied more broadly throughout the Clean Air Act. Time will tell if these preliminary analyses correct.

Read the full opinion.

House Judiciary Committee Passes Fairness in Class Action Litigation Act

Further reform to class actions may be on the horizon after the House of Representatives Judiciary Committee passed the Fairness in Class-Action Litigation Act (FICALA) of 2015 on June 24. The legislation was introduced by House Judiciary Committee Chair Bob Goodlatte (R-VA) and Civil Justice Subcommittee Chair Trent Franks (R-AZ). FICALA seeks to limit which potential plaintiffs can opt into a class action lawsuit based on the severity of the potential plaintiff’s injuries compared to the injury of the party. In a press release the Judiciary Committee stated, “uninjured or non-comparably injured parties can still join class actions, but must do so separately from parties that experienced more extensive injury.” The legislation is short and to the point:

§1716. Limitation on certification of class

(a) In General.—No Federal court shall certify any proposed class unless the party seeking to maintain a class action affirmatively demonstrates through admissible evidentiary proof that each proposed class member suffered an injury of the same type and extent as the injury of the named class representative or representatives.

(b) Definition.—In this section, the term ‘injury’ means the alleged impact of the defendant’s actions on the plaintiff’s body or property.

(c) Clerical Amendment.—The table of sections at the beginning of chapter 114 of title 28, United States Code, is amended by adding at the end the following new item:

In its present form this bill would only affect class actions with economic or monetary losses, not civil rights cases. Proponents of the bill, such as the U.S. Chamber of Commerce, argue the reform is necessary to prevent lawyers from “gaming the system” to inflate their legal fees. Opponents argue that the bill could effectively end class actions by forcing individuals to have identical injuries in order to join class action lawsuits.

The Wisconsin Civil Justice Council will keep you updated as the bill moves forward.