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Did the Supreme Court Open the Door for Class Action Lawsuits?
The Supreme Court's decision in Shady Grove Orthopedics Associates, P.A. v. Allstate Insurance Company, 130 S.Ct. 1431 (March 31, 2010) is of vital importance for any litigator or claims professional who handles class action lawsuits in federal court. It also may have a significant impact on the economics of writing coverage that includes defense costs in industries that are typically subject to class actions. In Shady Grove, the Supreme Court took on the issue of whether, in the context of a state law diversity action pending in federal court, Rule 23 of the Federal Rules of Civil Procedure, which generally permits a plaintiff to maintain a class action in federal court if certain preconditions are met, pre-empts a New York statute (N.Y. Civ. Prac. Law Ann. ' 901(b)) that prohibits a plaintiff from maintaining a class action suit seeking statutory penalties. In a 5-4 decision, the Court held that Rule 23 pre-empts the New York statute and permits the plaintiff to maintain a class action suit in federal court seeking statutory penalties, even though the plaintiff could not have maintained the same action in a New York state court.
Nevertheless, the Court could not agree on a single rationale for holding that Rule 23 pre-empted the New York statute, thus leaving an opening for defendants in other cases to distinguish their particular disputes from the New York statute. Another potential outcome is that state legislatures will attempt to amend their laws in order to potentially avoid the ruling in Shady Grove. More specifically, defendants can argue that other state laws are substantive, as opposed to the statute at issue in Shady Grove, which Justice John Paul Stevens (who gave the critical fifth vote in favor of pre-empting the New York statute) deemed to be procedural because it merely served to prohibit the procedural class action device in certain actions. Alternatively, state legislatures can amend existing laws to make them more “substantive” in nature, such as by tying them to particular substantive rights or expressly limiting the remedies available in certain actions, rather than procedurally barring the class action itself. While such arguments or amendments are not certain to withstand pre-emption in federal courts, Shady Grove leaves some room for that possibility.
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
Judge Rules Shaquille O'Neal Will Face Securities Lawsuit for Promotion, Sale of NFTs
A federal district court in Miami, FL, has ruled that former National Basketball Association star Shaquille O'Neal will have to face a lawsuit over his promotion of unregistered securities in the form of cryptocurrency tokens and that he was a "seller" of these unregistered securities.
Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It
Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?
Blockchain Domains: New Developments for Brand Owners
Blockchain domain names offer decentralized alternatives to traditional DNS-based domain names, promising enhanced security, privacy and censorship resistance. However, these benefits come with significant challenges, particularly for brand owners seeking to protect their trademarks in these new digital spaces.
Coverage Issues Stemming from Dry Cleaner Contamination Suits
In recent years, there has been a growing number of dry cleaners claiming to be "organic," "green," or "eco-friendly." While that may be true with respect to some, many dry cleaners continue to use a cleaning method involving the use of a solvent called perchloroethylene, commonly known as perc. And, there seems to be an increasing number of lawsuits stemming from environmental problems associated with historic dry cleaning operations utilizing this chemical.