LJN Newsletters

Operating leases are becoming increasingly important to many corporate lessees for a variety of reasons. The primary reason a corporate lessee prefers operating leases to capital leases is for balance sheet management reasons. Operating leases, or 'true leases' — as opposed to capital leases — reduce the lessee's outstanding debt recorded on the balance sheet, which results in a better debt-to-equity ratio. The other motivations behind the corporate lessee's preference for operating lease treatment vary. For example, many corporate credit facilities have covenants preventing corporations from creating debt, which usually includes capital leases. Also, many companies want to preserve current lines of credit and cash for other ventures, such as the acquisition of a new business line.

News about lawyers and law firms in the product liability field.

Highlights of the latest product liability cases from around the country.

For years, Hersh & Hersh ('H&H') has represented hundreds of users of a top-selling anti-psychotic drug in suits against its maker. Now the firm is taking on bigger clients against the same company: states that say they've been footing the public health costs from the drug. H&H's first such client against pharmaceutical giant Eli Lilly & Co. is the state of New Mexico, which claims it spent about $18 million on Zyprexa'-related medical expenses between 1999 and 2005.

This article discusses two interesting developments in recently published decisions. The Gorran case involves litigation over allegedly harmful consequences of following the well-known 'Atkins' Diet.' As will be seen, an attempt to structure the claim within product liability doctrine posed a big challenge. The Blockbuster decision answers a key question in light of new federal legislation, popularly called 'CAFA' (Class Action Fairness Act of 2005), which was intended to enhance removal of certain class actions from state to federal courts. The question is, who has the burden of proving CAFA's jurisdictional requirements: the defendant trying to stay in federal court or the plaintiff trying to send the case back to state court?

Depending on the source cited, California's expanding economy ranks in size, worldwide, anywhere between six and 10, if California were a country in and of itself. (www.en.wikipedia.org/wiki/economyofCalifornia#endnote_worldranking) California's position as a stand-alone economy may be matched as a stand-alone jurisdiction if recent appellate and trial court decisions permitting the expansion of the product liability theory to claims of environmental damage are upheld.

Parties involved in litigation have an obligation to preserve relevant information in existence at the time the duty to preserve attaches and must preserve relevant information created thereafter. Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 218 (S.D.N.Y. 2003) (Zubulake IV). Developing a comprehensive preservation plan to meet these obligations is both critical and difficult. The analysis of whether particular data need to be preserved involves murky, and often contradictory, legal standards.

The Class Action Fairness Act of 2005 ('CAFA') expanded federal jurisdiction over putative class actions. Under CAFA, the federal diversity jurisdiction statute, 28 U.S.C. '1332, was amended to allow for both original and removal jurisdiction over putative class actions where: 1) the putative class action consists of at least 100 proposed class members; 2) the citizenship of at least one proposed class member is different from that of any defendant ('minimal diversity'); and 3) the matter in controversy, after aggregating the claims of the proposed class members, exceeds $5 million, exclusive of interest and costs. See generally P.L. 109-2 '4(a), codified at 28 U.S.C. '1332(d). This expanded federal diversity jurisdiction is subject to certain exceptions, including the 'local controversy' and 'home-state controversy' exceptions, where, inter alia, a certain percentage of putative class members and the 'primary defendants,' or defendants from whom 'significant relief is sought,' are citizens of the forum state. See 28 U.S.C. '1332(d)(3) and (4).