Tag: lawsuit

Patent Infringement Verdict Nixed over Judge’s Stock Ownership

The US Court of Appeals for the Federal Circuit reversed a district court’s opinions and orders and remanded the case for further proceedings before a different district court judge because the original judge had failed to divest all financial interests in the case. Centripetal Networks, Inc. v. Cisco Systems, Inc., Case No. 21-1888 (Fed. Cir. June 23, 2022) (Dyk, Taranto, Cunningham, JJ.)

Centripetal sued Cisco for patent infringement. The original district court judge presided over a 22-day bench trial, which included a more than 3,500-page record, 26 witnesses and more than 300 exhibits. The court heard final arguments on June 25, 2020. While the case was still pending before the district court, the judge learned that his wife owned Cisco stock, valued at $4,687.99. The district court judge notified the parties on August 12, 2020, that he had discovered that his wife owned 100 shares of Cisco stock. He stated that his wife purchased the stock in October 2019 and had no independent recollection of the purchase. He explained that at the time he learned of the stock, he had already drafted a 130-page draft of his opinion on the bench trial, and virtually every issue had been decided. He further stated that the stock did not—and could not have—influenced his opinion on any of the issues in the case. Instead of selling the stock, which might have implied insider trading given his knowledge of the forthcoming order, the judge placed it in a blind trust. Under the terms of the trust, the judge was to be notified when the trust assets had been completely disposed of or when their value became less than $1,000.

Centripetal had no objections. Cisco, however, filed a motion for recusal under 28 U.S.C. § 455(a) and (b)(4). The judge ordered Centripetal to file a response. On October 2, 2020, the court denied Cisco’s motion for recusal. On October 5, 2020, the court issued a 167-page opinion and order containing the judge’s findings that Cisco willfully infringed the asserted claims of the patents-at-issue and awarded Centripetal damages of more than $755 million, pre-judgment interest of more than $13 million and a running royalty of 10%. Cisco moved for amended findings and judgment under Rule 52(b) or a new trial under Rule 59(a)(2). The court denied both motions. Cisco appealed the district court’s findings and asserted that the judge was required to recuse himself under 28 U.S.C. § 455(b) absent divestiture under § 455(f) (the only exception to the bright line rule that a federal judge is disqualified based on a known financial interest in a party).

On appeal, the Federal Circuit addressed two issues: whether the district court judge was relieved of his duty to recuse under § 455(b)(4) because his wife had divested herself of her interest in Cisco under § 455(f), and, if the requirements of § 455(f) were not satisfied, a determination as to the proper remedy.

The Federal Circuit analyzed whether placement of the stock in a blind trust satisfied the divesture requirement of § 455(f). The Court explained that a blind trust is “an arrangement whereby a person, in an effort to avoid conflicts of interest, places certain personal assets under the control of an independent trustee with the provision that the person is to have no knowledge of how those assets are managed.” Centripetal admitted that there are no cases holding that placement of stock in a blind trust constitutes divestment. The Court next turned to the intent of Congress when it drafted the statute. The Court reasoned that to “divest” was understood at the time to mean “dispossess or deprive,” which is only possible when an interest is sold or given away. The Court also noted that Congress used the present tense—that a judge should not sit when he or she has a financial interest in a party. The Court concluded that while placing the stock in a blind trust removed the judge’s wife from control over the stock, it did not eliminate her beneficial interest in Cisco. The Court also found that the Judicial Conference’s Committee on Codes of Conduct had previously ruled that a judge’s use of a blind trust does not obviate the judge’s recusal obligations. Accordingly, the Court found that placing assets in a blind trust is not divestment under § 455(f) and, thus, the district court judge was disqualified from further proceedings in the case.

As for the appropriate remedy, the Federal Circuit considered whether rulings made after August 11, 2020, when the district court judge became aware of his wife’s financial interest in Cisco, should be vacated as a remedy for his failure to recuse. The Court determined that the risk of injustice to the parties weighed against a finding of harmless error and in favor of vacatur. The Court reversed the district court’s opinion and order denying Cisco’s motion for recusal; vacated the opinion and order regarding infringement, damages and post-judgment motions and remanded for further proceedings before a new judge.

Article By Jodi Benassi of McDermott Will & Emery

For more intellectual property legal news, click here to visit the National Law Review.

© 2022 McDermott Will & Emery

Gerber Argues FDA Preemption in Baby Food Lawsuit

  • In February 2021, the U.S. House of Representatives subcommittee on Economic and Consumer Policy released a report on the levels of heavy metals found in baby foods and the respective manufacturers. The report findings described “significant levels of toxic heavy metals” based on internal documents and test results submitted by baby food companies.  Lawsuits quickly followed, including many actions against Gerber Products Co., that allege Gerber falsely and deceptively failed to disclose the presence of unsafe levels of heavy metals in their baby foods.
  • Gerber argues in a recent motion to dismiss  that the primary jurisdiction doctrine should control. For background, the primary jurisdiction doctrine is a judicial doctrine used when courts and an agency have concurrent jurisdiction, but the court favors administrative discretion and expertise in deciding the issue.   In this case, Gerber argues that the Food and Drug Administration (FDA) is in a better position to decide “acceptable levels of heavy metals in baby foods” because of the need for expertise in issues of infant nutrition.
  • Gerber further alleges that Plaintiff’s claims are preempted by the Food, Drug, and Cosmetic Act (FDCA). Gerber argues that Plaintiff’s demand for mandatory disclosures on packaging is preempted by FDA because it is the Agency’s role to establish national policy on food safety and labeling.  Finally, Gerber says the Plaintiffs fail to plead deception, pointing to a lack of misleading statements on their packaging and no legal requirement to disclose heavy metals on a product label.
  • Keller and Heckman will continue to monitor and report on this litigation and any responsive regulatory actions or developments.

Article By Food and Drug Law Practice Group at Keller and Heckman LLP

For more biotech, food, and drug law legal news, click here to visit the National Law Review.

© 2022 Keller and Heckman LLP

You Have Mail (Better Read It): District Court Finds EEOC 90-Day Deadline Starts When Email Received

If a letter from the EEOC is in your virtual mailbox but you never open it, have you received it? Most of us are familiar with the requirement that a claimant who files an EEOC charge has 90 days to file a lawsuit after receiving what is usually required a “right-to-sue” letter from the agency. This is one of the deadlines that both plaintiff and defense counsel track on their calendars. But when is that notice officially “received” by the claimant — especially in these days of electronic correspondence? In Paniconi v. Abington Hospital-Jefferson Health, one Pennsylvania federal court decided to draw a hard line on when that date actually occurs.

A Cautionary Tale

Denise Paniconi worked for a hospital in Pennsylvania and filed a charge of discrimination with the EEOC alleging race and religious discrimination. The EEOC investigated and issued a right-to-sue letter dated September 8, 2021, which gave her 90 days to file her complaint. She filed her complaint 91 days after the EEOC issued the letter. The employer moved to dismiss the complaint for failing to comply with the 90-day deadline.

What ordinarily would just be a day counting exercise took a twist because of how the EEOC issued the notice. The EEOC sent both the plaintiff and her lawyer an email stating that there was an “important document” now available on the EEOC portal. Neither the plaintiff nor her lawyer opened the email or accessed the portal until sometime later. They argued that the 90-day filing deadline should run from the date that the claimant actually accesses the document, not from the date the EEOC notified them it was available.

The court dismissed the complaint for failing to meet the deadline. The opinion noted that although the 90-day period is not a “jurisdictional predicate,” it cannot be extended, even by one day, without some sort of recognized equitable consideration. Paniconi’s lawyer argued that the court should apply the old rule for snail mail  ̶  without proof otherwise, it should be assumed that the notice is received within three days after the issuance date. The court disagreed and pointed out that no one disputed the date that the email was sent  ̶   it was simply not opened and read by either Paniconi or her lawyer. The court said that there was no reason that those individuals did not open the email and meet the 90-day deadline.

Deadlines Are Important

This is another example of how electronic communication can complicate the legal world. The EEOC has leaned into its use of the portal, and the rest of the world needs to get used to it. The minute you receive an email or notice from the portal, you need to calendar that deadline. Some courts (at least this one) believe that electronic communication is immediate, and you may not get grace for not logging on and finding out what is happening with your charge. Yet another reason to stay on top of your emails.

Article By J. William Manuel and Anne R. Yuengert of Bradley Arant Boult Cummings LLP

For more labor and employment legal news, click here to visit the National Law Review.

© 2022 Bradley Arant Boult Cummings LLP

ERIC Files Amicus Brief Rebutting DOL Attempt to Create New Regulations in Lawsuit, Petitions US Supreme Court on Seattle Healthcare Case

Read on below for coverage of recent law firm news from McDermott Will & Emery.

ERIC Files Amicus Brief Rebutting DOL Attempt to Create New Regulations in Lawsuit

McDermott Will & Emery’s Andrew C. Liazos, Michael B. Kimberly and Charlie Seidell recently filed an amicus brief in the US Court of Appeals for the 10th Circuit on behalf of the ERISA Industry Committee (ERIC). McDermott filed the brief in response to a US Department of Labor (DOL) amicus brief that advanced a novel interpretation of its regulations which, if adopted through litigation, would change longstanding procedures for benefit determinations under self-funded medical plans sponsored by large employers. The amicus brief focuses on key arguments against the DOL’s attempted regulatory reinterpretation, including that:

  • DOL may not rewrite its regulations outside of notice-and-comment rulemaking;
  • DOL’s interpretation of its own regulations is inconsistent with the plain text of the regulations;
  • There are good policy reasons underlying differential treatment of healthcare and disability benefits determinations; and
  • DOL’s interpretation of the regulations in its amicus brief is not entitled to deference under the Supreme Court decision in Kisor.

Read ERIC’s amicus brief here.

Read ERIC’s statement here.

ERIC Petitions US Supreme Court on Seattle Healthcare Case

McDermott Will & Emery’s Michael B. Kimberly, Sarah P. Hogarth and Andrew C. Liazos, are co-counsel on a petition for certiorari before the Supreme Court of the United States on behalf of the ERISA Industry Committee (ERIC). The petition calls for review of ERIC’s legal challenge to the City of Seattle’s hotel healthcare “play or pay” ordinance. The ordinance mandates hospitality employers make specified monthly healthcare expenditures for their covered local employees if their healthcare plans do not meet certain requirements. The petition demonstrates that Seattle’s ordinance is a clear attempt to control the benefits provided under medical plans in violation of the preemption provision under the Employee Retirement Income Security Act of 1974, as amended (ERISA). This case is of significant national importance. Several other cities have proposed making similar changes, and complying with these types of ordinances will substantially constrain the ability of employers to control the terms of their medical plans on a uniform basis. ERIC’s petition is joined by several trade associations, including the US Chamber of Commerce, the American Benefits Council and the Retail Industry Leaders Association.

Read ERIC’s petition for writ of certiorari here.

Read ERIC’s statement here.

 

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Court Reversed Order Appointing Temporary Administrator Due To A Lack Of A Bond

In In re Robinett, a party filed a petition for writ of mandamus, challenging a trial court’s order appointing a temporary administrator. No. 03-21-00649-CV, 2022 Tex. App. LEXIS 926 (Tex. App.—Austin February 9, 2022, original proc.). The petitioner complained that the trial court failed to hold an evidentiary hearing and also appointed a temporary administrator without a bond. Regarding the hearing complaint, the court of appeals disagreed:

Under Section 55.001 of the Texas Estates Code, “[a] person interested in an estate may, at any time before the court decides an issue in a proceeding, file written opposition regarding the issue.” Relators are correct that such interested persons are entitled “to process for witness and evidence, and to be heard on the opposition.” Id. But, based on the record before us, they did not file any “written opposition” to the appointment until they filed their motion to reconsider three days after the appointment had already been decided. The trial court therefore did not abuse its discretion by appointing the temporary administrator without first conducting a hearing pursuant to Section 55.001 because there was no requirement for the trial court to hold a hearing under that statute.

Id. The court, however, agreed that the trial court abused its discretion by appointing the temporary administrator without bond:

The Estates Code expressly requires that the order appointing a temporary administrator “set the amount of bond to be given by the appointee.” Moreover, the Estates Code requires that a party must enter into a bond unless they meet one of a limited number of exceptions: (1) a will directs that no bond be required; (2) all the relevant parties consent to not requiring bond; or (3) the appointee is a corporate fiduciary. And other statutory provisions require a hearing and evidence before “setting the amount of a bond.” Based on the record before us, there is no evidence that the temporary administrator met any of the exceptions to the bonding requirement, nor is there any indication that the trial court undertook any evidentiary hearing regarding the bond amount. Accordingly, the trial court abused its discretion by failing to follow the statutory requirements for setting bonds as part of a temporary administrator appointment.

Id.

© 2022 Winstead PC.
For more articles about civil procedures in litigation, visit the NLR Civil Procedure section.

Wisconsin Judge Rules that the WDNR Lacks Authority to Regulate PFAS

On April 12, 2022, a Wisconsin judge ruled in the case of Wisconsin Manufacturers & Commerce, Inc. and Leather Rich, Inc. v. WDNR, (Waukesha County Case 2021CV000342) that the WDNR lacks the authority to regulate PFAS chemicals because the Wisconsin Legislature has not established regulatory standards for them. According to the lawsuit, Leather Rich, Inc. entered into a voluntary WDNR environmental cleanup program in 2019, and the following year WDNR indicated that the businesses enrolled in the program were required to test for emerging contaminants, including PFAS. The plaintiffs in the case argued that because the WDNR had created a list of emerging contaminants without any legislative oversight or opportunity for public comment, and had not adopted regulatory standards through administrative rulemaking, the WDNR lacked the authority to require such testing. The judge’s ruling would require the WDNR to wait until legislators have established standards for PFAS through adoption of regulatory limits in state law or through administrative rules. It is estimated that the adoption of standards for PFAS could require 1-2 years. An attorney for the WDNR indicated that the WDNR plans to appeal the decision and file a motion to place the judge’s order on hold.

The WDNR has historically taken the position that the agency has authority under Wisconsin’s “Hazardous Substance Spill Act” (“Spill Act” – Wis. Stats. 292.11) to regulate PFAS even in the absence of established standards, as the Spill Act gives the WDNR broad authority to require testing and remediation of such chemicals. In late February, the WDNR’s Natural Resources Board (NRB)—the entity that sets policy for the WDNR—took steps toward the adoption of statewide standards for two of the most common PFAS compounds, which included an approval to adopt a drinking water standard of 70 parts per trillion (ppt) for two of the most common PFAS compounds; perfluorooctanoic acid (PFOA) and polyfluorooctane sulfonate (PFOS).

PFAS is an acronym for per- and polyfluorolalkyl substances, which are chemicals that were widely used from the 1960s to the early 2000s in the manufacture of a variety of consumer products, such as stain resistant carpets, non-stick cookware (e.g., Teflon), firefighting foam, food packaging (e.g., microwave popcorn bags/pizza boxes), water resistant clothing (e.g., pre-2000 GoreTex), water resistant repellent (e.g., Scotchgard) and dental floss. While the use of PFAS compounds has largely been phased out in the U.S., these compounds are still used in the manufacturing of many products worldwide. These substances, known as “forever chemicals,” have received considerable attention by federal and state environmental regulatory agencies because of their resistance to chemical breakdown due to the chemical bond between carbon and fluorine atoms in the PFAS compounds, which is one of the strongest in nature. Because of this, humans can still be exposed to PFAS long after the chemicals were released into the environment.

The WDNR has identified approximately 90 sites throughout Wisconsin with PFAS contamination, including municipalities such as Madison, Marinette, Peshtigo and Wausau with PFAS-contaminated groundwater.

©2022 von Briesen & Roper, s.c
For more articles about state lawsuits, visit the NLR Litigation section.

Agriculture Groups Sue FDA on Chlorpyrifos Ban

  • As previously reported, the Environmental Protection Agency (EPA) published a final rule on August 30, 2021 that revoked all tolerances for the pesticide chemical chlorpyrifos on raw agricultural commodities; the rulemaking was driven by toxicity concerns, primarily concerning exposure in children. The tolerances are set to expire on February 28, 2022, effectively banning the use of chlorpyrifos on food crops. In light of the expiration, FDA published a guidance document to assist food producers and processors that handle foods which may contain chlorpyrifos restudies.
  • In October of 2021, agriculture stakeholders submitted formal written objections and a request to stay the tolerance revocations to EPA. More than 80 stakeholders signed the document, arguing that significant harms would result from banning chlorpyrifos and urging the agency to stay implementation of the rule until objections were formally addressed by EPA.
  • Agriculture stakeholder groups are now seeking a court injunction against EPA’s ban on chlorpyrifos. On February 10, 2022, agricultural trade groups representing thousands of members filed a lawsuit against EPA before the Eight Circuit Court of Appeals, alleging that the agency ignored its own scientific findings regarding 11 high-benefit and low-risk crop uses for chlorpyrifos and that the revocation will cause irreparable damage. It remains to be seen how EPA will respond to the lawsuit.

Article By Food and Drug Law Practice Group at Keller and Heckman LLP

For more food and drug legal news, click here to visit the National Law Review.

© 2022 Keller and Heckman LLP

Texas AG Sues Meta Over Collection and Use of Biometric Data

On February 14, 2022, Texas Attorney General Ken Paxton brought suit against Meta, the parent company of Facebook and Instagram, over the company’s collection and use of biometric data. The suit alleges that Meta collected and used Texans’ facial geometry data in violation of the Texas Capture or Use of Biometric Identifier Act (“CUBI”) and the Texas Deceptive Trade Practices Act (“DTPA”). The lawsuit is significant because it represents the first time the Texas Attorney General’s Office has brought suit under CUBI.

The suit focuses on Meta’s “tag suggestions” feature, which the company has since retired. The feature scanned faces in users’ photos and videos to suggest “tagging” (i.e., identify by name) users who appeared in the photos and videos. In the complaint, Attorney General Ken Paxton alleged that Meta,  collected and analyzed individuals’ facial geometry data (which constitutes biometric data under CUBI) without their consent, shared the data with third parties, and failed to destroy the data in a timely matter, all in violation of CUBI and the DTPA. CUBI regulates the collection and use of biometric data for commercial purposes, and the DTPA prohibits false, misleading, or deceptive acts or practices in the conduct of any trade or commerce.

Among other forms of relief, the complaint seeks an injunction enjoining Meta from violating these laws, a $25,000 civil penalty for each violation of CUBI, and a $10,000 civil penalty for each violation of the DTPA. The suit follows Facebook’s $650 million class-action settlement over alleged violations of Illinois’ Biometric Privacy Act and the company’s discontinuance of the tag suggestions feature last year.

Article By Hunton Andrews Kurth’s Privacy and Cybersecurity Practice Group

For more privacy and cybersecurity legal news, click here to visit the National Law Review.

Copyright © 2022, Hunton Andrews Kurth LLP. All Rights Reserved.

Texas AG Sues Meta Over Collection and Use of Biometric Data

On February 14, 2022, Texas Attorney General Ken Paxton brought suit against Meta, the parent company of Facebook and Instagram, over the company’s collection and use of biometric data. The suit alleges that Meta collected and used Texans’ facial geometry data in violation of the Texas Capture or Use of Biometric Identifier Act (“CUBI”) and the Texas Deceptive Trade Practices Act (“DTPA”). The lawsuit is significant because it represents the first time the Texas Attorney General’s Office has brought suit under CUBI.

The suit focuses on Meta’s “tag suggestions” feature, which the company has since retired. The feature scanned faces in users’ photos and videos to suggest “tagging” (i.e., identify by name) users who appeared in the photos and videos. In the complaint, Attorney General Ken Paxton alleged that Meta,  collected and analyzed individuals’ facial geometry data (which constitutes biometric data under CUBI) without their consent, shared the data with third parties, and failed to destroy the data in a timely matter, all in violation of CUBI and the DTPA. CUBI regulates the collection and use of biometric data for commercial purposes, and the DTPA prohibits false, misleading, or deceptive acts or practices in the conduct of any trade or commerce.

Among other forms of relief, the complaint seeks an injunction enjoining Meta from violating these laws, a $25,000 civil penalty for each violation of CUBI, and a $10,000 civil penalty for each violation of the DTPA. The suit follows Facebook’s $650 million class-action settlement over alleged violations of Illinois’ Biometric Privacy Act and the company’s discontinuance of the tag suggestions feature last year.

This article was written by the team at Hunton Andrews Kurth. For more articles about biometric information protection, please see here.