Category: Litigation

New York’s New Child Victims Act Expands Opportunity for Filing Abuse Claims and The Path for Victims’ Justice

This week, a one-year “revival” period of statute of limitations began for individuals who assert civil claims of child abuse to file claims against institutions and individuals pursuant to New York’s Child Victims Act, even if those claims had already expired and/or were dismissed because they were filed late. The premise behind the Child Victims Act is that children are often prevented from disclosing abuse due to the social, psychological and emotional trauma they experience.

Additionally, the  Child Victims Act, also expands the statute of limitations for bringing criminal claims against alleged perpetrators of child sexual abuse, and  permits alleged victims of these crimes to file civil lawsuits up until they reach age 55. This aspect of the legislation will have a significant impact on the volume of criminal cases, and even more so civil lawsuits, 385 of which were filed in the first hours of the revival period, with hundreds more geared up for filing in the upcoming weeks and months. Indeed, the New York State court system has set aside 45 judges specifically to handle the expected crush of cases.

Institutional Changes Following the New Child Victim’s Act

Religious, educational and other institutions that are committed to providing a safe environment for children should be thinking about how they can implement safeguards against child abuse within their institutions. An important step is keeping internal lines of communication with staff and families open, as well as educating staff and leadership as to their reporting obligations under New York law and on how to provide appropriate support if child abuse is suspected.

The Child Victims Act joins the Sex Harassment Bill also signed into law by Gov. Cuomo as significant changes by New York Legislators involving sexual abuse and harassment in New York State.

©2019 Epstein Becker & Green, P.C. All rights reserved.

Genotyping Patent Claims Do Not Escape The Reach of s. 101

In Genetic Veterinary Sciences, Inc. v. Laboklin GMBH & Co., the University of Berlin, App. No. 2018-1565 (Fed. Cir., Aug. 9, 2019), a Fed. Cir. panel affirmed the district court’s JMOL ruling that the claims of the University’s U.S. Pat. No. 9,157,114 were patent-ineligible because they merely involved the discovery of a natural phenomenon. Interestingly, the Judges on the panel were Wallach, Hughes and Stoll, all of whom dissented from the refusal of the Fed. Cir. to rehear the Athena decision en banc. However, Athena was a straightforward “If A, then B” diagnostic test, while the claims of the ‘114 patent were not written as diagnostic claims, but as “method of genotyping” claims:

An in vivo method for genotyping a Labrador Retriever comprising:

  1. obtaining a biological sample from the Labrador Retriever,
  2. genotyping a SUV39H2 gene encoding the polypeptide of SEQ ID NO:1[;] and
  3. detecting the presence of a replacement of a nucleotide T with a nucleotide G at position 972 of SEQ ID NO:2.

This “genotyping method” detected a single point mutation in the gene that confirms the presence of a skin condition, HNPK, in the dog, that is heritable if both parents possess the mutation. It can also be used to confirm whether or not a skin condition present in the dog is HNPK.  However, the absence in the claim of a step directed to drawing a diagnostic conclusion from the presence of the mutation, while in accord with the PTO’s 2014 101 Guidance, did not save this claim from the judicial exception prohibiting claiming a law of nature. Rather, the claim jumped from a legal frying pan of Athena into the legal fire of Ariosa, that bars patenting the mere discovery or observation of a natural phenomenon:

“Similarly [to Ariosa], In re BRCA1 – & BRCA2-Based Hereditary Cancer Test Patent Litigation, we concluded that the claims were directed to a patent ineligible law of nature because the claims’ “methods, directed to identification of alterations of the gene, require[d] merely comparing the patient’s gene with the wild–type gene and identifying any differences that ar[o]se”. 774 Fed.. Cir.755, 763 (Fed. Cir. 2014). In each of these cases, the end result of the process, the essence of the whole, [Ed. note: Is this some new poetic legal standard?] was a patent-ineligible concept”. [Ed. note: “concept” seems to be veering into abstract idea-land.]…Taken together, the plain language of claim 1 demonstrates that it is directed to nothing more than ‘observing or identifying’ the natural phenomenon of a mutation in the SUV39H2 gene….Thus the asserted claims are directed to a natural phenomenon at Alice step 1.”

Since the next section of the opinion is entitled “The Asserted Claims Do Not Recite an Inventive Concept”, you know this opinion is going to end badly for Labokin, the exclusive licensee of the university patent. Given that this opinion was written by the dissenters in the Athena petition for rehearing in banc, might this case turned out differently? Could the existence of the mutation in some of the SUV39H2 genes have been part of a public data base but its significance be unknown until the inventor discovered that the mutation could be correlated to the presence of HPNK? In other words, could the panel have begun by giving weight to the fact that one could observe the mutation without knowing what it means?

To get “credit” for the discovery of the utility of the mutation, claim 1, at the least, would need a mental process step that draws a diagnostic conclusion, a la Athena. Now the Athena dissenters would argue that the discovery of the utility of the correlation should provide the “inventive step” required by Alice step 2. But the Fed. Cir.’s Meriel decision precludes that outcome, since that panel ruled that the discovery of the utility of a correlation cannot meet the “inventive step” requirement. (Genetics Techs. v. Meriel is cited at page 25 of the slip opinion, but only as supporting a finding a lack of inventive step when the laboratory techniques employed to carry out the diagnostic procedure are routine, conventional, etc.)

So to get this claim past the “inventive concept” gatekeepers, it would also need to recite a positive action step of some sort. Here, the panel cites and distinguishes Vanda because it taught “a specific method of treatment for specific patients, using a specific compound at specific doses to achieve a specific outcome.” Remember, the claims of Vanda recited a first genotyping step, and then drawing a conclusion from that step, but didn’t stop there. This case did not give the dissenters much to work with, so they wrote a decision that Siri could have come up with. This case could at least have taken a swing at the failure of the Alice test to consider the claim elements in ordered combination. Judge Newman may yet get to write for a panel that has the nerve to distinguish Mayo and to find that an “If A, then B” diagnostic claim based on the discovery if the utility of a natural correlation is patent eligible because the steps, considered as a whole, are not conventional or well-known to the art.

© 2019 Schwegman, Lundberg & Woessner, P.A. All Rights Reserved.

For more on patent eligibility see the National Law Review Intellectual Property law page.

Case Closed?: Not Quite Yet, But Serial TCPA Litigator Testing Court’s Patience

Well, no one can say that he did not get his day in Court.

Plaintiff Ewing, a serial TCPA litigator who filed yet another case assigned to Judge Battaglia, narrowly escaped dismissal of all his claims, and was permitted leave to amend for a second time.  See Stark v. Stall, Case No. 19-CV-00366-AJB-NLS, 2019 U.S. Dist. LEXIS 132814 (S.D. Cal. Aug. 7, 2019).  But in the process, the Judge called attention to the Plaintiff’s unprofessional conduct in an earlier case, ruled that he failed to name a necessary party, and found that he inadequately plead the existence of an agency relationship between the defendant and the necessary party that he had failed to join in the lawsuit.

At the outset, the court dismissed the claim brought by co-plaintiff Stark, as the Complaint contained no allegations that any wrongful telephone calls were placed to that particular individual.

In 2015, Ewing had already been put on notice of the local rules of professionalism and their applicability to him, despite his status as a pro se litigator.  Thus, the Court easily granted defendant’s motion to strike Plaintiff’s allegations to the effect that defendant had made a “derogatory remark” simply by pointing out that he was designated as a vexatious litigator.

The two most important pieces of the case for TCPAWorld are the Court’s rulings about Plaintiff’s failure to join a necessary defendant and his insufficient allegations to establish vicarious liability.

Plaintiff had failed to name as a defendant the entity (US Global) that allegedly made the calls to him.  The court determined that this company is a necessary party that must be added in order for the court to afford complete relief among the parties.  We often see situations where only a caller but not a seller, creditor, employer, franchisor, etc. are named, or vice versa, so it is encouraging to see courts strictly enforce Federal Rule 15 in the TCPA context.

The court further held that the relationship between Defendant and US Global was not such that Defendant could be held liable for violations of the TCPA that were committed by US Global.  While Plaintiff made unsubstantiated allegations that an agency relationship existed, the Court treated these as merely legal conclusions and granted dismissal based on insufficient allegations of facts to establish a plausible claim that there is a common-law agency relationship between Defendant and US Global.  Simply stated, the bare allegation that Defendant had the ability to control some aspects of the caller’s activity was insufficient to establish control for purposes of TCPA vicarious liability principles.

Plaintiff’s amended pleading is due on August 31—anticipating another round of motion practice, we will track any further developments in this case.

© Copyright 2019 Squire Patton Boggs (US) LLP

For more TCPA cases, see the Communications, Media & Internet law page on the National Law Review.

Will the Supreme Court Weigh in on the Copyright Lawsuit of the Decade?

When two tech titans clash in court, the outcome can reverberate widely. In what has been dubbed the “copyright lawsuit of the decade,” Oracle sued Google in 2010 for infringing its copyrights in 37 Java Application Programming Interface (API) packages used in Google’s Android software platform for mobile devices (as explained further below, API packages consist of pre-written computer programs that perform specified functions).

At the first trial in 2012, a jury found that Google infringed Oracle’s copyrights. The judge, however, concluded that the Java API packages were not copyrightable as a matter of law. In 2014, the Federal Circuit reversed and remanded for a second jury trial on Google’s fair use defense. Oracle Am., Inc. v. Google Inc., 750 F.3d 1339 (Fed. Cir. 2014). The Supreme Court denied Google’s cert petition.

In 2016, a second jury found in favor of Google on its fair use defense, and the trial court denied Oracle’s motion for judgment as a matter of law. In 2018, the Federal Circuit overturned the jury’s verdict, concluding that Google’s use of the 37 Java API packages was not fair use as a matter of law. Oracle Am., Inc. v. Google LLC, 886 F.3d 1179 (Fed. Cir. 2018).

On January 24, 2019, Google petitioned the Supreme Court for a writ of certiorari. It identified the issues presented as:

(i) whether copyright protection extends to a software interface; and

(ii) whether Google’s use of a software interface in the context of creating a new computer program constitutes fair use.

The Federal Circuit’s rulings sent shockwaves through the software industry, and fifteen parties—ranging from corporations like Microsoft to software-related associations, and intellectual property scholars—filed amicus briefs in support of Google’s petition. Microsoft warned that the Federal Circuit’s approach “threatens disastrous consequences for innovation” in the software industry by depriving third parties of access to and reuse of functional code used to “facilitate interoperability across myriad software platforms and hardware devices.” An association representing over 70,000 software developers worldwide asserted that the Federal Circuit’s conclusions had spawned confusion concerning whether longstanding practices such as sharing libraries of common software functions constitute copyright infringement. Likewise, Professor Peter S. Menell and Professor David Nimmer (the editor of Nimmer on Copyright) maintained that the Federal Circuit had “upended nearly three decades of sound, well-settled, and critically important decisions of multiple regional circuits on the scope of copyright protection for computer software.”

On March 27, 2019, Oracle filed its opposition to the petition. The tech giant identified the issues as:

(i) Whether the Copyright Act protects Oracle’s computer source code that Google concedes was original and creative, and that Oracle could have written in any number of ways to perform the same function?

(ii) Whether the Federal Circuit correctly held that it is not fair use as a matter of law for Google to copy Oracle’s code into a competing commercial platform for the purpose of appealing to Oracle’s fanbase, where Google could have written its own software platform without copying, and Google’s copying substantially harmed the actual and potential markets for Oracle’s copyrighted works?

After Google filed its reply, the Supreme Court invited the Solicitor General to file a brief expressing the views of the United States. This is where the case presently stands.

The Java Programming Language

Oracle’s predecessor, Sun Microsystems, Inc. (“Sun”) developed the Java programming language to allow programmers to write programs that run on different types of computing devices without having to rewrite the programs from scratch for each type of device. To that end, Java’s motto is “write once, run anywhere.”

To provide programmers with shortcuts for executing specific functions, Sun created the Java API, which consists of packages (akin to a bookshelf in a library), classes (akin to books on the shelves), and methods (akin to “how-to” chapters in each book). See Oracle Am., Inc. v. Google Inc., 872 F. Supp. 2d 974, 977 (N.D. Cal. 2012), rev’d and remanded, 750 F.3d 1339 (Fed. Cir. 2014).

Each method performs a specific programming function (for example, choosing between the greater of two integers). The key components of a method are: the “declaring code” that defines the package, class and method names, form of inputs and outputs, and the “implementing code” that provides instructions to the computer concerning how to carry out the declared function using the relevant inputs.

Google began negotiating with Sun in 2005 to license and adapt Java for its emerging Android software platform for mobile devices. After those negotiations failed, Google decided to use Java anyway, and copied verbatim the declaring code in 37 Java API packages (consisting of 11,500 lines of code), as well as the structure and organization of the packages (referred to as the SSO). However, Google wrote its own implementing code for the relevant methods.

In 2007, Google began licensing the Android platform free of charge to smartphone manufacturers. It earned revenue—$42 billion from 2007 through 2016—from advertising on the phones. In 2010, Oracle acquired Sun, and promptly sued Google for infringement.

The Copyright Question

In 2014, the Federal Circuit reversed the lower court’s ruling that the declaring code and SSO were not entitled to copyright protection. Importantly, while the Federal Circuit only has jurisdiction over patent-related matters, it handled the appeal because Oracle’s complaint had also included patent claims (which the jury rejected). The Federal Circuit, however, applied Ninth Circuit law to the copyright questions presented.

The Federal Circuit began by noting that “copyright protection extends only to the expression of an idea—not to the underlying idea itself.” Moreover, to the extent the particular form of expression is necessary to the use of the idea, then using the expression to that extent is not copyright infringement. This is known as the “merger doctrine” which states that if there are a limited number of ways to express an idea, the idea is said to “merge” with its expression—and the expression becomes unprotected. Further, the “scenes a faire doctrine,” bars certain standard, stock, or common expressions from copyright protection.

Thus, to use a simple example, while a book on arithmetic can be copyrighted, the idea of adding, subtracting, multiplying, and dividing cannot be. Moreover, if using symbols like “+” and “x” are necessary or commonly used to express the concepts of adding and multiplying, those expressions are not copyrightable.

Applying these principles, the Federal Circuit first observed that copyright protection extends to expressive elements of a computer program. It then rejected Google’s argument that Oracle’s expression merged with unprotectable ideas, noting that Oracle had unlimited options as to the selection and arrangement of the declaring code that Google copied. The Federal Circuit also rejected Google’s reliance on the scenes a faire doctrine. Because at the time the code was written, its composition was not dictated by external factors like “mechanical specifications of the computer” or “widely accepted programming practices within the computer industry.”

The Fair Use Question

After determining that Oracle’s declaring code and SSO were subject to copyright protection, the Federal Circuit remanded for a jury trial on Google’s fair use defense. As noted, the jury found that Google had established the defense, but the Federal Circuit overturned that verdict.

The fair use defense is a judge-made doctrine that has been incorporated into the federal copyright statute as Section 107, which provides that “the fair use of a copyrighted work…for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright.” To determine whether particular copying constitutes fair use, the statute identifies the following factors as:

(1) “The purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes.”

(2) “The nature of the copyrighted work.”

(3) “The amount and substantiality of the portion used in relation to the copyrighted work as a whole.”

(4) “The effect of the use upon the potential market for or value of the copyrighted work.”

The Federal Circuit ultimately concluded that because Google’s copying was for a highly commercial purpose, was not qualitatively insignificant, and substantially harmed Oracle’s own licensing efforts; the copying was not fair use as a matter of law, notwithstanding the jury’s verdict to the contrary.

Because APIs are key to broad acceptance of standardized software functions, IMS computer and software expert Dr. John Levy believes that were the Supreme Court to affirm the Federal Court’s ruling, it may severely limit the spread of useful API’s to important code bases. As an example, Dr. Levy notes that a small company will usually want to make its declaring code available to all users and developers, so that the underlying application code will get the broadest possible use and market share. The developer counts on having a competitive set of implementing code to make money.

According to Dr. Levy, the Federal Circuit may have been influenced by the fact that Google made so much money using the copied declaring code. But as evidenced by the large number of amicus briefs, the broader software industry cares more about defending a broad reading of “fair use” than assessing damages against companies who make money from copied declaring code.

Dr. Levy sees the issues in the Oracle case as similar to those in a case he worked on as an expert back in the 80386 chip days. In that case, Intel owned the instruction set of the 386 chip. But because Intel customers didn’t want to be limited to a single source for these Intel-compatible processors, Intel licensed the instruction set to other chip manufacturers.

“One licensee produced chips that performed the Intel-owned instruction set. Intel sued that licensee for copyright infringement of the underlying microcode (the implementation of the instruction set in the chip designed by the licensee company),” recalled Dr. Levy.

A federal court ruled that the microcode (firmware) was indeed copyrightable, but that there was no infringement under the “limited expression” doctrine explained above. There simply were not many ways to implement the licensed instructions in microcode, and therefore the licensee’s implementation did not infringe Intel’s own implementation. In the Oracle case, however, the Federal Circuit concluded that there were many ways for a programmer to select and arrange the declaring code that Google copied.

© Copyright 2002-2019 IMS ExpertServices, All Rights Reserved.

This article was written by Joshua Fruchter of IMS ExpertServices.
For more copyright cases, see the National Law Review Intellectual Property law page.

Big Food Price-Fixing Update: Court Certifies Three Putative Classes in Packaged Seafood Litigation

What started out as a proposed merger between two of the largest packaged seafood manufacturers spawned a lengthy criminal investigation into antitrust violations in the tuna industry by the Department of Justice (DOJ) and multiple class and individual civil lawsuits. After four years of litigation, a major development in the class action lawsuits occurred– the Court certified three putative classes.

In 2015, the Department of Justice investigated a proposed merger between Thai Union Group P.C.L. (the parent company of Chicken of the Sea) and Bumble Bee Foods LLC. As the DOJ’s civil attorneys reviewed information related to the merger, they discovered materials that appeared to raise criminal concerns.[1]

Chicken of the Sea then “blew the whistle” to the DOJ regarding their anticompetitive conduct. This admission helped DOJ reach plea agreements with two other manufacturers, Bumble Bee[2] and Starkist,[3] as well as three packaged seafood executives—two from Bumble Bee[4],[5] and one from Starkist[6]. In connection with its guilty plea, Bumble Bee agreed to pay a $25 million fine, while Starkist’s fine is still pending. Bumble Bee’s CEO has also been indicted, and faces up to 10 years in a federal penitentiary. [7]

Now, the tuna manufacturers face a new challenge in the related civil actions. In 2015, on the heels of the DOJ investigation, three separate class actions were filed in the Southern District of California. Plaintiffs alleged that Defendants took part in various forms of anti-competitive conduct, including agreeing to fix certain net and list prices for packaged tuna. Plaintiffs alleged that the conspiracy began as early as November of 2010 and lasted until at least December 31, 2016.

On July 30, 2019, Judge Janis L. Sammartino granted the respective Motions for Class Certification filed by the Direct Purchaser Plaintiffs, as well as the two indirect classes–the Commercial Food Preparer Plaintiffs, and the End Payer Plaintiffs.[8] Judge Sammartino found that each class had satisfied Rule 23’s requirements and—contrary to the Defendants arguments—that common issues predominate over individualized issues within each class. For example, Plaintiffs contended that common evidence exists that would be used to prove the existence and scope of Defendants’ purported price fixing conspiracy.

The certification orders represent a major victory for each of the classes. They can now proceed to summary judgment and trial without any concern that their claims may be narrowed due to the mechanics of the proposed class. While dispositive motions are scheduled to be submitted later this month, no trial date is currently set. With certification rulings issued and merits briefing on the horizon, renewed settlement discussions are likely to come.

[1] https://www.justice.gov/atr/division-operations/division-update-spring-2017/civil-investigations-uncover-evidence-criminal-conduct

[2] https://www.justice.gov/opa/pr/bumble-bee-agrees-plead-guilty-price-fixing

[3] https://www.justice.gov/opa/pr/starkist-co-agrees-plead-guilty-price-fixing

[4] https://www.justice.gov/opa/pr/packaged-seafood-executive-agrees-plead-guilty-price-fixing-conspiracy

[5] https://www.justice.gov/opa/pr/first-charges-brought-investigation-collusion-packaged-seafood-industry

[6] https://www.justice.gov/opa/pr/former-packaged-seafood-executive-pleads-guilty-price-fixing

[7] https://www.justice.gov/opa/pr/bumble-bee-ceo-indicted-price-fixing

[8] Case No.: 15-MD-2670 JLS (MDD) United States Court of Southern District of California

© 2019 Bilzin Sumberg Baena Price & Axelrod LLP
This article was written by Jerry Goldsmith and Lori Lustrin of Bilzin Sumberg.
For more food industry news, see the Biotech, Food & Drug page on the National Law Review.

When Good Sites Go Bad: The Growing Risk of Website Accessibility Litigation

For a growing number of companies, websites are not only a valuable asset, but also a potential liability risk. In recent years, the number of website accessibility lawsuits has significantly increased, where plaintiffs with disabilities allege that they could not access websites because they were incompatible with assistive technologies, like screen readers for the visually impaired.

If you have never asked yourself whether your website is “accessible,” or think that this issue doesn’t apply to your company, read on to learn why website accessibility litigation is on the rise, what actions lawmakers and the courts are taking to try to stem the tide, how to manage litigation risk, what steps you can take to bring your company’s website into compliance, and how to handle customer feedback on issues of accessibility.

The Growing Risk of Website Accessibility Litigation

In recent years, there has been a nationwide explosion of website accessibility lawsuits as both individual lawsuits and class actions. Plaintiffs have brought these claims in federal court under Title III of the Americans with Disabilities Act (ADA) and, in some cases, under similar state and local laws as well. In 2018, the number of federally-filed website accessibility cases skyrocketed to 2,285, up from 815 in the year prior. In the first half of 2019, these cases have increased 51.7% over the prior year’s comparable six-month period, with total filings for 2019 on pace to break last year’s record by reaching over 3,200.

Why Website Accessibility Litigation is on the Rise

The ADA was enacted in 1990 to prevent discrimination against people with disabilities in locations generally open to the public (known as public accommodations). The ADA specified the duties of businesses and property owners to make their locations accessible for people with disabilities, but it was enacted before conducting business transactions over the internet became commonplace. With the rapid growth of internet use, lawsuits emerged arguing that websites were places of public accommodation under the meaning of the ADA.

These claims have presented serious questions about whether, when, and how website owners must comply with the ADA. There is no legislation that directly sets out the technical requirements for website accessibility. And while the U.S. Department of Justice (DOJ) has stated that “the ADA applies to public accommodations’ websites,” it has not clarified exactly what standards websites must meet to comply with the law. In the absence of clear guidance, courts considering the question have frequently looked to the Web Content Accessibility Guidelines (WCAG), first developed by the World Wide Web Consortium (W3C) in 1999, but most recently updated in 2018.

In 2017, federal district courts in Florida and New York ruled that business websites failing to meet WCAG guidelines can violate Title III of the ADA, opening the door for litigants to bring an onslaught of claims in these courts. As a result, the rate at which these suits have been filed has skyrocketed, especially in New York and Florida, reaching businesses based throughout the U.S. and internationally. With the pace of these suits showing no signs of slowing, it is critical that every business operating a website consider how to manage the growing risk of litigation.

A Future Fix?
Some recent developments suggest that lawmakers or courts may soon stem the tide.  Congress may decide to enact precise standards, or the DOJ might give clarification or promulgate new rules. At the state level, lawmakers in New York have announced plans to address website accessibility suits based on an outcry from the business community.

Recent decisions in the Southern District of New York and the Fourth Circuit suggest that companies can successfully move to dismiss accessibility suits after mooting claims by taking swift remedial action or by showing that the plaintiff was neither eligible nor in a location to receive the goods or services provided on the website. In addition, the Eleventh Circuit and the Supreme Court may soon weigh in on whether Title III of the ADA categorically applies to all websites and apps.

How to Manage Litigation Risk for Website Accessibility

Knowing your level of exposure is an important first step. Individual risk is currently based on three factors:

  • Location: Brick and mortar locations, the delivery of products, or the performance of services in New York or Florida heighten a company’s exposure.
  • Industry: The present trend shows that retail, food service, hospitality, banking, entertainment industries, and educational institutions are especially at risk.
  • Current website structure: Sites with e-commerce functions or purchased from third-party developers not currently in compliance with WCAG standards are popular targets.

Unfortunately, it is often difficult to predict the cost and complexity of bringing a website into WCAG compliance-based simply on viewing it. An audit of the source code is often required. That said, you can start with a review of your site and develop plans and processes for accessibility. The first steps can include:

  • Assess current compliance: Use free online tools like wave and chrome vox and/or enlist a third-party audit to help you understand your current level of accessibility.
  • Plan for future compliance: Create an overall plan for achieving accessibility on a timeline that makes business sense.
  • Take immediate action: Adopt first-step improvements that can be implemented immediately, and create a process for considering accessibility before all future implementations.

Bringing your business into compliance with WCAG web standards does not need to be a standalone project. By integrating accessibility into regular updates, redesigns, and new pages, you can make meaningful improvements as part of your existing process. And if you don’t have a process for ongoing maintenance and updates on your website, consider whether your website is still looking fresh and modern and if it is still an accurate expression of your corporate brand.

Include in-house and third-party development teams as stakeholders in the process. Make accessibility a discussion in all new engagements and set expectations for accessibility going forward for new and existing teams:

  • Increase accessibility awareness: Make accessibility the topic of the next all-hands meeting with all stakeholders.
  • Ask third-party developers and vendors: Specifically, discuss your website’s current accessibility and which site options are readily available.
  • Integrate accessibility in projects: Ensure that agreements for ongoing and future site additions and upgrades incorporate accessibility. Seek representations, ask about compliance levels, and consider seeking warranties and indemnification.

Good customer care is always good business, but making thoughtful use of feedback on your website is a critical step to reducing your risk of an accessibility lawsuit. Everyone on the customer care team should be trained on the risk posed by non-compliance, and they should be empowered to carefully consider and respond to website feedback. The development team should also ensure that the site, whatever its level of WCAG compliance:

  • Encourages feedback: Provide a way for users to give feedback on and receive assistance with accessibility.
  • Supports engagement with feedback: Document, consider, and carefully respond to user feedback.
  • Reflects expert input: When receiving feedback, notices, complaints, or threatened litigation, consult with legal counsel and website accessibility experts as early as possible to ensure that your next steps limit potential liability.

Website accessibility is a fast-moving area of law that is primed for reform. With an increasing number of conflicting decisions and the possibility of new legislation or Supreme Court guidance, we will be closely monitoring this topic in the coming years.

©2019 Pierce Atwood LLP. All rights reserved.

Going Beyond: When Can Courts Look Past the Record in an APA Review?

Regulated companies need to understand what material courts can consider when they review administrative decisions. The Administrative Procedure Act generally allows courts to consider only the existing administrative record when reviewing agency decision-making to determine whether agency decisions are arbitrary and capricious. But the Supreme Court recently reminded us that this rule is not absolute by looking beyond the record in Dep’t of Commerce v. New York to block an agency decision that it found to be based on a “contrived,” pretextual rationale.

Regulated companies may be able to ask courts to consider information beyond the administrative record if they can show that the agency acted in bad faith or exhibited improper behavior. A company’s ability to present the court with information beyond a record carefully constructed by an agency can be a powerful tool.

The following cases illustrate that a movant may not need to conclusively prove that the agency behaved improperly to convince a court to review evidence beyond the administrative record. But the evidence must form a picture that gives the court reason to believe there was bad faith or improper behavior. Here’s a breakdown of several case examples:

Dep’t of Commerce v. New York Goes Beyond the Record

Dep’t of Commerce v. New York presented the Court with a challenge to Secretary of Commerce Ross’s decision to add a citizenship question to the 2020 census. In defense of his decision, the Secretary presented a record showing that the Department of Justice had asked that the question be added so it could more effectively enforce the Voting Rights Act. But extra-record discovery revealed that the DOJ’s request was not the real reason that Secretary Ross had added the question. Rather, extra-record discovery showed that the Secretary had planned to add the question all along and had, in fact, solicited the request for the question from the DOJ. Viewed in that light, the Supreme Court determined that the Voting Rights Act rationale was “contrived” and affirmed the lower court’s decision to bar the Department of Commerce from asking the question.

Writing for the majority of a fractured Court, the Chief Justice acknowledged that while “[i]t is hardly improper for an agency head to come into office with policy preferences and ideas . . . and work with staff attorneys to substantiate the legal basis for a preferred policy,” the Court “cannot ignore the disconnect between the decision made and the explanation given.” The Court noted that to confine itself to the administrative record and ignore the Secretary’s extra-record actions would be “to exhibit a naiveté from which ordinary citizens are free.”

To understand why this decision is important, observers need to take a deep-dive into the Court’s decision. Why could the courts look beyond the administrative record here? Because the district court invoked—maybe prematurely in this case—an exception to the rule against extra-record discovery from Citizens to Preserve Overton Park, Inc. v. Volpe. This exception gives courts discretion to go beyond the existing administrative record if the party challenging the agency action makes “a strong showing of bad faith or improper behavior” underlying the agency decision.

When Do Courts Use Overton Park to Look Beyond the Record?

While every circuit has recognized the Overton Park exception—and most also recognize other, circuit-specific exceptions that allow for a party challenging an agency decision to supplement the record—the overwhelming majority of courts have declined to use Overton Park’s exception to look beyond the administrative record. In his Dep’t of Commerce v. New York dissent, Justice Thomas followed this school of thought. He disagreed that plaintiffs had made a sufficiently “strong showing” of bad faith or improper behavior by Secretary Ross and noted that the Supreme Court “ha[s] never before found Overton Park’s exception satisfied.”

Given the fact that the APA requires courts to defer to agency decision-making, the courts’ reluctance to embrace Overton Park is unsurprising. Nonetheless, some have looked beyond the record.

In Sokaogon Chippewa Cmty. v. Babbitt, for example, the district court allowed the party challenging the agency decision to supplement the record after it made a strong showing of improper behavior behind a decision of the Department of the Interior. There, three Indian tribes had applied to the United States to convert a greyhound racing facility into an off-reservation casino. When the Department denied the application, citing the “strong opposition of the surrounding communities,” the tribes challenged the decision. The tribes argued that the Department’s reason was pretextual and pointed to unexplained procedural delays; suspicious communications between opposition tribes, senators, lobbyists, and White House staff; and a draft report from the Indian Gaming Management Staff, which had recommended that the application be approved.

The court initially limited its review to the record because plaintiffs had not proven improper behavior. But it then reversed course and granted the plaintiffs’ motion for reconsideration, noting that Overton Park’s “strong showing” requirement did not—and, logically, could not—require conclusive evidence of improper behavior. Instead, the court was satisfied that the plaintiff had “suppl[ied] sufficient evidence . . . as to raise suspicions that defy easy explanations.”

Following Babbitt’s lead, the district court in United States v. Sanitary Dist. of Hammond also allowed extra-record discovery, there after the party challenging an EPA decision had made a sufficient showing of bad faith. In that case, an EPA official recused herself from a dispute to avoid the appearance of partiality. But suspicions were later raised when she, without explanation, reinstated herself after receiving poignant, critical questions from her chosen successor’s counsel. The court allowed extra-record discovery to reveal any potential impropriety behind her decisions. The court noted that while it had “not f[ound] that bad faith or improprieties in fact influenced the [decision],” the defendant had made “a ‘strong showing’ that the evidence of record ‘suggests’ that bad faith or improprieties ‘may have influenced the decision maker.’”

Key Takeaways

A court’s decision to go beyond the record—as explained by the lower court in Dep’t of Commerce v. New York—is most often “based on a combination of circumstances that [when] taken together, [are] most exceptional.” Observers may note that the Court’s decision to go beyond the record in Dep’t of Commerce v. New York seems to conflict with last term’s decision in Trump v. Hawaii. But maybe they can be reconciled. There, the state of Hawaii and three U.S. citizens challenged Presidential Proclamation No. 9645—colloquially referred to as the “travel ban”—which placed elevated immigration restrictions on eight countries, six of which were predominantly Muslim. The plaintiffs argued that the President’s extra-record statements showed that the national security justifications behind the ban were, in fact, pretext for the Proclamation’s true animus: religious discrimination. Given the nature of then-Candidate Trump’s public statements, the case seemed to present the Court with the opportunity to consider evidence of pretext that went beyond the record.

But of course Trump v. Hawaii, unlike Dep’t of Commerce v. New York, did not involve any agency decision-making. It instead involved a challenge leveled directly at the Executive itself on a matter squarely within its traditional province: national security. This distinction compelled the Court to defer to the Executive and limited the Court’s consideration of extra-record material. Thus, the Court applied a rational basis review and found that even if the challenging party could demonstrate pretext, the President’s non-religious justifications rationally supported the entry restrictions.

Ultimately, Dep’t of Commerce v. New York reminds us that an administrative record may be permeable under the right circumstances. And although the “substantial showing” bar remains high, perhaps courts will now be more apt to allow extra-record discovery when reviewing agency decision-making. That willingness could enable companies to more effectively challenge agency decisions based on pretextual reasoning—reasoning that would not be reflected in the administrative record.

© 2019 Schiff Hardin LLP
Article by J. Michael Showalter and James Cromley of Schiff Hardin LLP.
For more on the Administrative Procedure Act see the Administrative & Regulatory page on the National Law Review.

Court Lets Trader Joe’s Out of Sticky Situation Over Honey Advertising

A magistrate judge in the Northern District of California recently dismissed a putative class action alleging that Trader Joe’s misled its consumers about the purity of its manuka honey.  Moore v. Trader Joe’s Co., No. 4:18-CV-04418-KAW, 2019 WL 2579219 (N.D. Cal. June 24, 2019).

Plaintiffs commenced a putative class action lawsuit alleging that Trader Joe’s engaged in “false, misleading, and deceptive marketing” by representing that its Trader Joe’s Manuka Honey product was “entirely” manuka honey when, purportedly, the product’s manuka honey content had been “adulterated by the inclusion of cheaper honey.” Manuka honey is produced from the nectar of New Zealand’s manuka tree and is said to have numerous medicinal benefits.

Plaintiffs specifically challenged the product’s “100% New Zealand Manuka Honey” label and the ingredient statement that lists “manuka honey” as the sole ingredient because Plaintiffs’ laboratory tests demonstrated that only between 57.3% and 62.6% of the pollen found in the product was from the manuka flower, with the remainder deriving from “other floral sources.” Plaintiffs claimed Trader Joe’s mixed manuka honey with non-manuka honey, and in doing so violated “consumer protection and similar laws in all fifty states” – which allegedly incorporate the adulteration and misbranding provisions of the Federal Food, Drug, and Cosmetic Act (the “FDCA”) – and committed common-law fraud and breach of warranty.

In her opinion, Magistrate Judge Kandis A. Westmore cut straight to the point and rejected Plaintiffs’ argument that the honey was adulterated. Citing hearing testimony, she noted that Plaintiffs’ adulteration allegation was premised on “bees visiting different floral sources and returning to the hive resulting in a lower manuka pollen count, rather than the manufacturer purposefully mixing Manuka honey with non-manuka honey.” Under Section 342(b) of the FDCA, a product is adulterated only:

(1) If any valuable constituent has been in whole or in part omitted or abstracted therefrom; or (2) if any substance has been substituted wholly or in part therefor; or (3) if damage or inferiority has been concealed in any manner; or (4) if any substance has been added thereto or mixed or packed therewith so as to increase its bulk or weight, or reduce its quality or strength, or make it appear better or of greater value than it is.

None of those definitions was met in this case, Judge Westmore held, because any impurities in the honey were introduced by the bees that made it, and not by Trader Joe’s. She, therefore, granted Trader Joe’s motion to dismiss without leave to amend as plaintiffs “could not plead sufficient facts to support their adulteration theory.” Judge Westmore also ruled that to the extent the applicable state laws imposed different standards than the FDCA, they were preempted.

Along similar lines, Judge Westmore found that the product’s label was not misleading. According to FDA guidance, honey is a “single ingredient food” that may be labeled with the plant or blossom name so long as that plant or blossom is the “chief floral source.” Trader Joe’s argued that “100%” in the phrase “New Zealand Manuka Honey” could refer to either manuka honey or the fact that the honey comes entirely from New Zealand. Because Plaintiffs’ adulteration theory failed and the “chief floral source [was] undisputedly Manuka,” Judge Westmore held that the label was accurate and that a reasonable person would not be misled. She dismissed Plaintiffs’ common law fraud and breach of express warranty causes of action on similar grounds.

© 2019 Proskauer Rose LLP.
This article was written by Lawrence I Weinstein, Carl Mazurek and Marc Palmer of Proskauer Rose LLP.

Ruth Bader Ginsburg, Max Scherzer, a $5 million settlement, and How They All Relate to Workplace Parental Leave Policies

Washington Nationals’ pitching ace Max Scherzer recently took parental leave and helped shine a light on a hot employment topic: ensuring that employers’ parental leave policies are fair and gender-neutral.

This issue also gained attention in May 2019 when JPMorgan Chase, one of the world’s largest banks, reached a $5 million settlement about the bank’s parental leave program. As part of the settlement, the bank will make payments to a group of male employees who were discouraged from taking 16 weeks paid parental leave to care for a new child. The settlement also directs JPMorgan Chase to implement a parental leave program that is fair and gender-neutral. JPMorgan Chase denied the allegations.

At first glance, JPMorgan Chase’s parental leave program seemed gender-neutral. It offered 16 weeks of paid leave for “primary caregivers” and 2 weeks for “secondary caregivers.” The bank, however, allegedly applied the policy differently when a male employee versus a female employee requested leave. That is, female employees requesting parental leave were presumed to be the primary caregivers, while male employees were presumed to be the secondary caregivers. The plaintiffs claimed that, for a male employee to receive parental leave as a primary caregiver, he had to show that his spouse or domestic partner had returned to work, or that he was the spouse or partner of a mother who was medically incapable of caring for the child. Female employees who had given birth themselves were not subject to this requirement.

The named plaintiff in the settlement, Derek Rotondo, requested 16 weeks of parental leave as a “primary caregiver” after the birth of his second child. Human resources, according to Rotondo, informed him that a father requesting parental leave would only be considered a “primary caregiver” if he could show that the mother had to return to work before the 16 weeks elapsed, or that she was “medically incapable” of caregiving. Rotondo could not demonstrate either option, and he received only two weeks of parental leave.

Rotondo then filed a charge of discrimination with the Equal Employment Opportunity Commission challenging JPMorgan Chase’s practice of denying primary caregiver leave to fathers. He also filed a class action complaint on behalf of himself and similarly situated individuals. Rotondo received 16 weeks parental leave, and the five thousand other male employees who were denied parental leave as a “primary caregiver” will be compensated from a fund created by the $5 million settlement.

This is not the first time that a step towards gender equality was taken in a case involving male plaintiffs who sought caregiver benefits, only to find out that the benefits are not available to them because they are men. Rotondo was represented by lawyers from the A.C.L.U.’s Women’s Rights Project, which was founded by now-Justice Ruth Bader Ginsburg in the early 1970’s. Ginsburg was an A.C.L.U. lawyer when she argued Moritz v. Comm’r of the Internal Revenue System before the U.S. Court of Appeals for the Tenth Circuit.

Moritz was the first federal court case to hold that discrimination on the basis of sex is unconstitutional. In that case, Moritz claimed a tax deduction for the cost of a caregiver for his mother, but the IRS denied it because the agency only allowed the deduction to be claimed by women and formerly married men. Ginsburg argued that no rational basis in the law exists for treating men and women differently. Moreover, she argued that the proper remedy was to allow men to claim the deduction as well, instead of eliminating the deduction for everyone.

Of course, in some families one parent is the primary caregiver to the children and one parent, for whatever reason, needs to return to work more quickly than their partner. The larger problem (for companies and their employees) is where the employer presumes a connection between an individual’s gender and that individual’s role at home. Doing so presumptively differentiates among employees and their parental leave needs based on sex. The settlement between JPMorgan Chase and their employees demonstrates that companies do so at their own risk.

As Supreme Court Justice Ruth Bader Ginsburg noted, “[w]omen will have achieved true equality when men share with them the responsibility of bringing up the next generation.”

 

© 2019 Zuckerman Law
This article was written by Eric Bachman of Zuckerman Law.
For more on parental leave policies, please see the Labor & Employment page on the National Law Review.

Claims of False Advertising and Unfair Competition Are Not Disparagement or Defamation

Most commercial general liability policies include coverage for personal and advertising injury claims by third parties.  In a recent case, the Third Circuit Court of Appeals addressed the issue of whether claims of false advertising and unfair competition brought against a competitor entitled the policyholder to a defense under its personal and advertising injury coverage.

In Albion Engineering Co. v. Hartford Fire Ins. Co., No. 18-1756 (3rd Cir. Jul. 10, 2109) (Not Precedential), the policyholder was sued by a competitor alleging claims for false advertising and unfair competition based on the allegation that the policyholder’s products were represented as being made in the US when they were really made overseas.  The policyholder sought coverage from its carrier under its personal and advertising injury coverage, particularly for publication of material that slanders or libels a person or disparages a person’s goods, products or services.  The carrier disclaimed and the policyholder brought suit seeing to enforce coverage.  The district court dismissed the complaint after summary judgment in favor of the carrier.

On appeal, the policyholder contended that the claims in the underlying suit were essentially disparaging and defamatory.  In applying New Jersey law, the circuit court rejected the policyholder’s arguments because nothing alleged by the underlying claimant or in the extrinsic evidence discovered constituted the publication of false statements about the competitor.  Under New Jersey law, for the duty to defend to arise, the false and defamatory statement has to be made about another (in this case about the competitor’s products).  “For the suit to fall within the policy’s coverage, [policyholder] must demonstrate [competitor] brings a claim that [policyholder] (1) made an electronic, oral, written or other publication of material that (2) slanders or libels [competitor] or disparages [competitor’s] good, products, or services.” Here, said the court, the claims were about the policyholder’s own products, not about the competitor’s products.  Thus, because the policyholder had not shown that the competitor’s claims constitute disparagement or defamation claims made by the policyholder about the competitor’s products, the carrier had no duty to defend the underlying lawsuit.

 

© Copyright 2019 Squire Patton Boggs (US) LLP