Archive for the ‘Editorials’ Category
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.
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.
Kohl’s is based in Menominee Falls and operates 1,164 department stores in the United States including 126 in California.
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.
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. 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.
 Kesselheim et al., Whistleblowers’ Experiences in Fraud Litigation Against Pharmaceutical Companies, 362:19 New Engl. J. Med. 1832 (May 13, 2010).
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.
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.
Madison County, a small county in southwestern Illinois that has long been a prime venue for plaintiffs’ lawyers, may be the asbestos litigation capitol of the world. A new report by the Madison-St. Clair Record shows that 74.6% of cases filed in Madison County circuit court are asbestos cases.
The Illinois Trial Lawyers Association chalked the numbers up to historically large concentrations of industry and population. However the Record’s analysis challenged the Association’s claim and showed that industry in Madison County has drastically dropped over the past thirty years and that the county’s population only represents 2% of Illinois’ populace.
Madison County became a go-to destination for filing class action lawsuits around the turn of the 21st century. By 2002 it ranked third nationwide in the number of class actions filed per year behind only Cook County, IL, and Los Angeles County, CA. Lawyers frequently file more mesothelioma cases in Madison County than any other county in the nation. This stems in large part due to “rampant forum shopping” which has been detailed by a U.S. Chamber of Commerce report due to Madison County judges (and the Illinois Appellate Court) largely ignoring the forum non conveniens doctrine. According to the report many cases have little, if any, connection to the county and a minimal connection to the state of Illinois (The Record’s analysis shows that 98% of plaintiffs in these cases do not reside in Illinois).
Tort reform has been slow to come to Illinois. While the Class Action Fairness Act may be responsible for a temporary reduction of class action cases filed in Madison County, the numbers have since rebounded. Recently the Illinois senate judiciary committee voted down Governor Bruce Rauner’s tort reform bill. He has since stated that he intends to continue negotiations on tort reform as part of the state budget process. The budget process is currently stalled.
The U.S. Supreme Court recently granted certiorari to Tyson Foods, Inc. v. Bouaphakeo, a case which has the potential to shake up the class action bar.
The case revolves around a dispute raised by Tyson pork-processing workers from an Iowa plant who alleged they were underpaid for time spent putting on and taking off protective gear and walking to and from workstations. The scope of the class was created using statistical information about how much time the average Tyson worker took to don the gear and get to their work station. No individualized analysis of class members was undergone. The class was awarded a $5.8 million judgment at trial and the 8th Circuit Court of Appeals upheld the judgment. In challenging the judgment, Tyson contends the workers’ class should not have been certified because there were significant differences in the types of protective gear and equipment used by different workers. They argue these differences are significant enough to violate Federal Rule of Civil Procedure (FRCP) 23(a)(2), “there are questions of law or fact common to the class.” Under FRCP 23(b)(3), these questions must “predominate over any questions affecting only individual members.” Tyson further argues that class certification was inappropriate because hundreds of uninjured members (who would wrongfully be entitled to receive benefits) are in the class. The outcome of this case could be as groundbreaking as the Court’s 2011 decision in Wal-Mart Stores v. Dukes.
This case is representative of a series of litigation which has been winding its way through the federal courts. These cases all concern the same general question – whether or not a class can be certified by use of statistics when there are individualized differences among the members and the membership includes many individuals who are uninjured. The Supreme Court has yet to act on similar certiorari petitions, in Wal-Mart Stores v. Braun and Dow Chemical v. Industrial Polymers Inc.
2015 Wisconsin Assembly Bill 92 (AB 92) increases monetary fines, creates a new criminal penalty, and limits the types of damages that are recoverable in lawsuits that derive from car crashes for those who do not have automotive liability insurance.
In March, Representatives Sanfelippo, Spiros, Weatherston, Tom Larson, Kapenga, and Jim Ott introduced AB 92 and the bill was referred to the Assembly Judiciary Committee. On May 11th a substitute amendment was offered by Representatives Horlacher, Jarchow, Jacque, Kulp, and Sanfelippo.
Under current law, all motorists who drive on state highways are required to have automotive liability insurance (with a few exceptions). If the driver is stopped by the police and they do not have insurance for their vehicle, then they can be fined up to $500. Current law also requires that a driver have proof of insurance on their person or in their vehicle. A driver can be fined $10 for not having proof of insurance.
The original bill greatly increased the monetary fines for driving without insurance. For a first offense a driver would have been fined $1,000 – $5,000. For a subsequent offense within three years of the first one, a driver would be fined $2,500 – $7,500. If an uninsured driver injured someone, they would be fined $5,000 – $7,500, but if the driver knew they were uninsured then they would be fined at least $10,000 and be subject to a class I felony.
The original bill also changed financial responsibility rules. Under current law if a court files a judgment against a driver for more than $500 of damage to another’s property caused by operating their motor vehicle, then the driver’s license is suspended unless they prove “financial responsibility.” To prove financial responsibility the driver needs to show the Department of Transportation that they have adequate liability insurance or deposit $60,000 with the Department of Transportation, which the Department will keep until the judgment is paid. Under the original bill, drivers who are convicted of operating a motor vehicle without insurance must prove “financial responsibility” with the DOT for five years after the conviction or have their license suspended.
The largest change from current law in the original bill was that it prohibited uninsured drivers from recovering non-economic damages against an insured driver when involved in a car accident regardless of which driver was at fault.
The substitute amendment reduced the proposed increases in monetary fees. Under the amendment, a first offense of driving without liability insurance would be a $500-$750 fine; Causing bodily harm while driving without liability insurance would be a $1,000-$1,500 fine; And causing death while driving without liability insurance would be at least a $2,500 fine and a class H felony.
The financial responsibility language was retained from the original bill.
The substitute amendment does not mention limiting the types of damages that an uninsured driver can recover in a lawsuit concerning an accident with an insured driver.
U.S. District Court Judge James Peterson ruled that Patience Roggensack could remain chief justice while Justice Abrahamson’s, the former chief justice, lawsuit unfolds. Justice Abrahamson sued shortly after Wisconsin voters chose to amend the state constitution to allow the state supreme court justices to determine who amongst them would serve as chief justice. Prior to the referendum the longest serving justice on the court took on the role of chief justice. Abrahamson became chief justice in 1996 and contends that she should retain the role until the end of her elected term. In a hearing deciding the issue, Judge Peterson said he did not see the irreparable harm of Chief Justice Roggensack administering the court system while this case is decided.
On April 29, the Government Accountability Board certified the constitutional amendment results, and later that day the court voted to have Patience Roggensack become chief justice. Justices Gableman, Ziegler, Prosser voted for Roggensack, and Justices Abrahamson, Bradley, and Crooks did not participate. Roggensack cast the deciding vote for herself.
Justice Abrahamson filed a lawsuit on April 8, a day after voters approved the amendment. In her complaint, Justice Abrahamson is seeking declaratory judgment from the court to determine when the new constitutional amendment will come into effect. She argues that the amendment is prospective only and therefore does not apply until the end of her elected term in 2019. Alternatively she argues that a retroactive application of the amendment would change the terms of her office which would violate the Due Process and Equal Protection clauses of the 14th Amendment of the U.S. Constitution. Abrahamson argues that she has a property interest in her office and it is being taken without due process of law. She further argues that retroactive application of the amendment violates the Equal Protection Clause because no other elected official elected to a full term and still able to hold office would be “prematurely ousted from office on that basis.”
Judge Peterson has determined that the case can be decided without a trial. He will hand down his decision after July 1, the deadline for the last brief.