Practice Tip: Buyer (of the Assets of a Company) Beware
Company X is evaluating whether it should purchase the assets of Company Y, which manufactures lawnmowers. Company X has been looking to break into the lawnmower market and sees the purchase of Company Y's assets as an excellent opportunity to do so. Company X is considering two courses of action if it purchases Company Y's assets: 1) continue the manufacture of Company Y's lawnmower product line, using Company Y's designs, specifications, diagrams, blueprints, personnel, and manufacturing facilities; or 2) cease the manufacturing of the product line, but continue Company Y's ancillary business of repairing and servicing the lawnmowers it sold to its customers. Company X comes to you with a seemingly straightforward question: Under these two scenarios, will it be held liable for product liability claims arising from Company Y's manufacture and sale of defective lawnmowers, even if, as part of the asset purchase, it expressly declines to assume Company Y's liabilities? Unfortunately, based on the current state of the law, you will not be able to provide Company X with an easy, clear-cut answer.
Is Your Web Site COPPA Compliant?
In 1998, Congress passed the Children's Online Privacy Protection Act (COPPA), broadly expanding the Federal Trade Commission's (FTC) enforcement powers in the Internet arena. Since then, states and the FTC have become more active in regulating the collection, use and security of consumer's personal information generally. However, the protection of children's personal information remains a top FTC enforcement goal, and the commission has become more aggressive in enforcement of COPPA each year. Companies that fail to proactively act to ensure COPPA compliance do so at the risk of seven-figure penalties. <br>This article provides Web site operators with suggestions on how to comply with the spirit of COPPA when legal obligations are not crystal clear, as in the case when the operator of the Web site in question believes that it can make a good faith effort to be a 'general audience' Web site, but has reason to believe that the site may attract visitors under the age of 13 and is unsure how the FTC will view and treat the site.
Removal to Federal Court: Death of the First-Served Defendant Doctrine
Under 28 U.S.C. §1446(b), defendants seeking to remove a case to federal court must file their notice of removal 'within thirty days of receipt, through service or otherwise, of the complaint.' Federal circuits historically have split over when the removal period begins and expires. <i>See generally</i> Brian Sheppard, Annotation, <i>When Does Period for Filing Petition for Removal of Civil Action From State Court to Federal District Court Begin to Run Under 28 U.S.C.A. §1446(b)</i>, 139 A.L.R. Fed. 331, at §§28-29 (1997). Some circuits have held that the removal period begins when the first defendant is served and expires 30 days later, regardless of when other defendants are served. Those circuits subscribing to the 'first-served defendant' doctrine hold that defendants served more than 30 days after the first defendant is served are precluded from removing the case if the earlier-served defendant failed to remove within 30 days after service. <i>E.g., Getty Oil v. Insurance Co. of North America</i>, 841 F.2d 1254, 1262-63 (5th Cir. 1988) (holding that the 30-day period for removal commences when the first defendant is served). Rejecting the first-served defendant doctrine, other circuits have held that the removal period begins anew each time a new defendant is served. <i>E.g., Brierly v. Alusuisse Flexible Packaging, Inc.</i>, 184 F.3d 527, 533 (6th Cir. 1999) (holding that later-served defendants have 30 days to remove even if first-served defendant's 30-day period has already expired). Those circuits reason that it is fundamentally unfair to foreclose removal by later-served defendants, particularly those defendants served after the expiration of the first 30-day period.
When Is Discretion the Better Part of Valor?
Counsel for companies faced with criminal violations of securities laws must maneuver carefully through a gamut of factors to determine whether to voluntarily disclose criminal conduct. A corporation may face administrative and criminal sanctions for non-cooperation from both the Department of Justice (DOJ) and the SEC. But the DOJ's 'Thompson Memorandum' also bestows attractive benefits for cooperation, measured in part by the corporation's willingness 'to disclose the complete results of its internal investigation.' The prosecution may grant a corporation 'immunity or amnesty or pretrial diversion' or 'a non-prosecution agreement in exchange for cooperation.'
The Expert Witness Affirmation
In recent years, numerous professional medical associations, such as the American College of Obstetrics and Gynecology (ACOG), the American Association of Neurological Surgeons (AANS), the American Medical Association (AMA), and many others have taken on the 'hired gun' experts by promulgating expert witness guidelines and oaths of affirmation intended to self-regulate medical expert testimony in the courtroom. The guidelines and affirmations are typically part of larger professional conduct programs meant to improve the quality of expert witness testimony and increase the probability of equitable outcomes. American Academy of Pediatrics, Guidelines for Expert Witness Testimony in Medical Malpractice Litigation.
Clinical Trial Litigation
It is no surprise to anyone that health care spending continues to rise at what is generally considered the fastest rate in U.S. history. As a result, the health care industry is growing exponentially and is under incredible market pressure. Medical device companies and pharmaceutical companies constantly compete to provide newer and better drugs and devices as well as balance issues relating to cost, patient safety and liability. In order to compete in this environment and develop safe and effective products, testing on human volunteers through clinical trials is necessary. Naturally, because they involve human beings, clinical trials have increasingly become the subject of litigation.
The Price of Holiday Parties
Now that the holiday season is over, employers may be facing fallout from their holiday parties. Although a review of recent cases asserting social host and workers' compensation liability reveals few reported decisions, there is likely no corresponding reduction in risk, and the increasing number of employers hosting holiday parties in recent years prompts an analysis of the challenges employers face in planning their annual holiday parties. It is not too soon to plan for next year's celebrations, while the experience from this year is fresh. This article discusses illustrative cases and suggests a number of concrete steps employers may wish to consider to reduce injuries and potential liabilities in planning their next holiday parties.
Why Most Document Retention Policies in the Digital Era Are Ineffective
Many companies have document retention policies in which paper and electronic documents are discarded or deleted after specified time periods, depending on the content and type of document. Those policies serve to keep sensitive information from getting into the hands of others, as well as to control the amount of physical and digital memory space needed to store documents. <i>See Arthur Andersen LLP v. United States</i>, 544 U.S. 696, 704 (2005). Some companies, for example, automatically delete e-mails older than 3 months, unless specifically saved by an employee. <i>See Hynix Semiconductor, Inc. v. Rambus, Inc.</i>, No. C-00-20905 RMW, 2006 WL 565893, at *11 (N.D. Cal. 2006). Courts, including the U.S. Supreme Court, have recognized that there is nothing wrong with such policies, even where they might result in the destruction of documents that might be material in a later lawsuit, as long as that lawsuit was not reasonably foreseen at the time the documents were destroyed. <i>See Arthur Andersen</i>, 544 U.S. at 704 ('It is, of course, not wrongful for a manager to instruct his employees to comply with a valid document retention policy under ordinary circumstances.'); <i>Samsung Elecs. Co. v. Rambus, Inc.</i>, 439 F. Supp. 2d 524, 543 (E.D. Va. 2006) (citing <i>Arthur Andersen</i>).
