Tag: Litigation

American Conference Institute National Forum on Securities Litigation & Enforcement – Feb. 27-78, 2014

The National Law Review is pleased to bring you information about the upcoming American Conference Institute National Forum on Securities Litigation & Enforcement. Only one week away from the event!

ACI Securities

When

Thursday, February 27 – Friday, February 28 ,2014

Where

Washington, D.C.

ACI’s 3rd National Advanced Forum on Securities Litigation and Enforcement, this time in Washington, DC, is the only event in the industry where experienced in-house counsel, leading litigators, renowned jurists, and regulatory and enforcement officials from federal and state agencies will assemble in our nation’s capital to provide the highest level insights on the most current developments in the field.

Now, more than ever, lenders/issuers, officers and directors, underwriters, auditors, investment managers and broker-dealers need to know how to prepare for and respond to litigation, and how to deal with regulation and enforcement initiatives from various federal and state agencies.

In response, ACI has developed the 3rd installment of its lauded Securities Litigation and Enforcement conference, which will provide practitioners with the knowledge and expert strategies that they need in order to prepare for and defend against the newest claims and claimants.

Join us in Washington, DC, and hear from a highly regarded faculty featuring in-house counsel from the top financial services companies and leading outside counsel from law firms that excel in securities litigation, renowned judges, and key government bodies, including SEC, FINRA, PCAOB, U.S. Attorney’s Offices (EDNY & SDNY), and various state securities departments.

Trademark Infringement & Litigation Summit, San Francisco, April 28 & 29 – R

The National Law Review is pleased to bring you information about the upcoming Trademark Infringement & Litigation Summit hosted by IQPC.

Trademark

 

Register by Friday February 28th and receive up to $400 off!

When

Monday April 28 & Tuesday April 29, 2014

Where

San Francisco, California, USA

Trademark law may not be changing, but its application certainly has and will continue to do so. Brands are increasingly global, which opens up new possibilities for companies… but also new trademark issues and potential pitfalls. The online experience adds to this global focus and changes the interaction between brands and consumers dramatically.

IQPC’s Trademark Infringement & Litigation Summit will address the topics that you grapple with on a daily basis, including:

  • How business and infringement concerns guide strategic registration and vigilance
  • Methods of enforcing your mark, including a “soft approach,” ICANN dispute resolution, cancellation and opposition
  • Litigation and enforcement management
  • Evolving company domain name strategy

Perhaps the biggest benefit of attending, however, is the practical, frank conversation about the legal and business choices involved in protecting and maintaining your brand. Attend the Trademark Infringement & Litigation Summit to work through these issues with your colleagues.

Do not miss your opportunity to network and engage with top in-house and outside counsel working in the area. Register today!

NOTE: IQPC plans on making CLE credits available for the state of California (number of credits pending).  In addition, IQPC processes requests for CLE Credits in other states, subject to the rules, regulations and restrictions dictated by each individual state.  For any questions pertaining to CLE Credits please contact: amanda.nasner@iqpc.com.

Insurance by Number – Metrics in Litigation

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Jurist and law professor Richard Posner recently commented on a common problem among lawyers, namely, that they believe they have a “math block.”  Jackson v. Pollion, 733 F.3d 786, 788 (7th Cir. 2013).  More recently, Judge and Mediator Wayne D. Brazil noted that even sophisticated risk analysts “cannot reliably determine the ‘discounted settlement value’ of a case” because of their misunderstanding of how to apply mathematical principles to real-world decision making.[1]  In fact, if you are a lawyer, you have likely heard other lawyers make jokes about how if they could do math, they would not have gone to law school, but rather business or medical school.  You may have even made these jokes yourself.

Posner, however, believes that lawyers’ basic discomfort around math is a serious matter, and one that disadvantages clients.  He points to the need for lawyers in litigation related to emerging science or technology to understand the evidence and underlying facts.  We posit that the need for comfort with math applies much more broadly.  In fact, if a lawyer is uncomfortable with “math,” “numbers,” or “metrics,” there are an ever-vanishing number of circumstances where the lawyer can do his or her job effectively.  Our expertise is insurance recovery.  The underlying fact patterns in our field more frequently deal with decades-old contracts than cutting-edge technology.  Nevertheless, we quantify, organize data, make calculations, and wrestle with financial concepts in virtually every matter we encounter.

Here are just a few of the particular circumstances where a comfort with numbers and math come into play in insurance coverage, and many other types of litigation:

  • When we communicate with the CFO or other finance experts within our client organizations, or assist our client contacts in doing so, we must be able to communicate in the language of numbers, balance sheets and quantifiable results.  Speaking this language is similarly necessary to understand fully our clients’ business goals and constraints and the part our legal strategies may play within those goals.
  • Budgeting complicated long-term matters with various contingencies and uncertainties requires that you approach numbers without fear.
  • Evaluating the settlement value of a case with multiple potential issues requires, in the simplest terms, a probability analysis; but as Judge Brazil’s article points out, that may be more complex than many practitioners appreciate.
  • In large, multiparty matters where resolutions may require structures other than a single payment for dismissal, creating and evaluating settlement proposals (often in real time during a negotiation) requires a detailed understanding of how those proposals will translate to a client’s bottom line.
  • The various creative settlement solutions that are proposed may have tax or accounting impacts that must be considered.
  • Simple calculation of damages may become a complex mathematical exercise when lost profits or other complicated losses are involved.  Answering the question of “what did my client lose,” may require examination of balance sheets, income statements, cash flow statements, sales histories, cost histories, and other mathematic and economic evidence.

As insurance recovery lawyers, we deal with these and many more issues that require us to dig deep into data analysis, spreadsheets, numbers and accounting.  Understanding the complicated interaction between multiple dependent and variable outcomes on various insurers and policies necessitates a comfort with math and numbers.  Some lawyers may point out that where the “math part” becomes particularly complicated, experts are typically employed to handle those issues.  But the involvement of an expert does not excuse a lawyer from understanding the expert’s work.  It is ultimately the responsibility of the lawyer to understand and convey the meaning of those calculations to his or her client, opposing counsel, or trier of fact.  Indeed, an understanding of mathematical concepts helps a lawyer know what to ask his or her expert for in the first place.  Knowing how to direct consultants effectively reduces costs, and ultimately creates a greater value to the client.

[1] Judge Wayne D. Brazil, Don’t Apply Risk Analysis To Discounted Settlement Value(February 03, 2014, 9:49 AM),  http://www.law360.com/insurance/articles/500858?nl_pk=e5cceee0-d0cb-4d28-aa35-79dab830e7f8&utm_source=newsletter&utm_medium=email&utm_campaign=insurance.

Article by:

Of:

Gilbert LLP

ACI's 3rd National Forum on Securities Litigation & Enforcement – February 27-28, 2014

The National Law Review is pleased to bring you information about the upcoming American Conference Institute National Forum on Securities Litigation & Enforcement.

ACI Securities

When

Thursday, February 27 – Friday, February 28 ,2014

Where

Washington, D.C.

ACI’s 3rd National Advanced Forum on Securities Litigation and Enforcement, this time in Washington, DC, is the only event in the industry where experienced in-house counsel, leading litigators, renowned jurists, and regulatory and enforcement officials from federal and state agencies will assemble in our nation’s capital to provide the highest level insights on the most current developments in the field.

Now, more than ever, lenders/issuers, officers and directors, underwriters, auditors, investment managers and broker-dealers need to know how to prepare for and respond to litigation, and how to deal with regulation and enforcement initiatives from various federal and state agencies.

In response, ACI has developed the 3rd installment of its lauded Securities Litigation and Enforcement conference, which will provide practitioners with the knowledge and expert strategies that they need in order to prepare for and defend against the newest claims and claimants.

Join us in Washington, DC, and hear from a highly regarded faculty featuring in-house counsel from the top financial services companies and leading outside counsel from law firms that excel in securities litigation, renowned judges, and key government bodies, including SEC, FINRA, PCAOB, U.S. Attorney’s Offices (EDNY & SDNY), and various state securities departments.

Supreme Court Affirms Contractually Reduced Limitations Periods for Employee Retirement Income Security Act (ERISA) Benefit Claims Date

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A contractual limitations period in an ERISA disability benefits plan that required participants to bring suit within three years after “proof of loss is due” is enforceable, theU.S. Supreme Court has ruled unanimously. Heimeshoff v. Hartford Life & Accident Ins. Co. et al., 134 S.Ct. 604, 187 L. Ed. 2d 529 (2013).

Whether and under what circumstances an otherwise applicable statute of limitations can be contractually shortened where a claim for benefits is made under a plan subject to the Employee Retirement Income Security Act of 1974 has divided the courts of appeals for years. A participant in an employee benefit plan covered by ERISA may bring a civil action under §502(a)(1)(B) to recover benefits. Courts have generally required participants to exhaust the plan’s administrative remedies before filing these suits. ERISA, however, does not specify a statute of limitations for filing such a suit.

Heimeshoff is significant for three reasons. First, implicit in the Court’s decision is the recognition that “reasonable” contractual limitations periods are generally enforceable for ERISA claims. According to the Court, “in the absence of a controlling statute to the contrary, a provision in a contract may validly limit, between the parties, the time for bringing an action on such contract to a period less than that prescribed in the general statute of limitations, provided that the shorter period itself shall be a reasonable period” (quoting Order of United Commercial Travelers of America v. Wolfe, 331 U.S. 586, 608 (1947)).

Second, the decision also appears to assume, if not specifically hold, that contractual limitations periods for insured ERISA plans (at least where the limitations period is in the insurance policy) are subject to state laws that expressly prohibit contractual limitations periods shorter than a defined period (as opposed to state laws that merely set a default minimum statute of limitations that applies only in the absence of a contractual limitations period).

Finally, the decision overturns the law in certain circuits holding a contractual limitations period cannot begin to run until available administrative remedies have been exhausted. Heimeshoff should not have any application to claims of breach of fiduciary duty under ERISA; it is limited to ERISA benefits claim matters. It is certainly possible that the limitations Heimeshoff applies will have the effect of increasing ERISA fiduciary claims actions, although the federal courts are wary of benefits claim cases denominated as ERISA fiduciary breach matters.

The Court, referring to state insurance statutes, pointed out that “the vast majority of States require certain insurance policies to include 3-year limitations periods that run from the date proof of loss is due.” On the theory that federal law determines when an ERISA cause of action accrues, some circuits previously held the time for bringing the action does not begin to run until the administrative review process has been completed. In Heimeshoff, the Supreme Court held that such a hard and fast rule is inappropriate. Absent unreasonable limitations barring a participant’s ability to assert a claim, it said, the terms of the written plan are paramount and should be enforced. The new rule is more fact-specific. The contractual limitations period, including its commencement date as specified in the policy, should be enforced unless the claimant is left with an unreasonably short period to file suit after the administrative review process ends. The Court recognized that starting the limitations period at the point “proof of loss is due,” which necessarily is before the completion of the administrative review process, “will, in practice, shorten the contractual limitations period.” But the Court nevertheless held that such a requirement is enforceable, provided the claimant is left with a “reasonable” period of time to file suit.

The Court did not indicate what remaining period of time might be unreasonable. Because the plaintiff in Heimeshoff had about one year left to file a complaint following the completion of the review of her claim, 12 months presumably is not “too short” in the run of cases. Relying upon Heimeshoff, a federal District Court in New Jersey dismissed an ERISA benefits claim as untimely, finding a nine-month residual period for filing suit after exhaustion of administrative remedies provided the plaintiff with “ample opportunity to seek judicial review.” Barriero v. NJ BAC Health Fund, 2013 U.S. Dist. LEXIS 181277 at *12-*13 (D.N.J. Dec. 27, 2013).

In Heimeshoff, the Supreme Court recognized that the district courts retain the discretion to use appropriate traditional doctrines to free claimants from a contractual limitations provision “in the rare cases where internal review prevents participants from bringing §502(a)(1)(B) actions within the contractual period.” The Court observed, “[i]f the administrator’s conduct causes a participant to miss the deadline for judicial review, waiver or estoppel may prevent the administrator from invoking the limitations provision as a defense.” The Court also suggested that the doctrine of “equitable tolling” may apply “[t]o the extent the participant has diligently pursued both internal review and judicial review but was prevented from filing suit by extraordinary circumstances.” (Emphasis added.) These cases often include allegations of fraud and other extraordinary facts and are likely to define the limits of Heimeshoff.

Article by:

Of:

Jackson Lewis P.C.

Chief Litigation Officer Summit Spring 2014 – March 20-22, 2014

The National Law Review is pleased to bring you information about the upcoming Chief Litigation Officer Summit hosted by Marcus Evans.

Chief Lit.March2014

 

When

Thursday March 20 – Saturday March 22, 2014

Where

Las Vegas, Nevada

Register here!

In the current legal environment, the number of claims and costs associated with litigation are expected to escalate. With the pressure on to optimize legal spend, Chief Litigation Counsel are implementing cutting-edge solutions to reduce costs whilst maintaining high quality work. Deploying proactive procedures which focus on risk mitigation and litigation avoidance will be the key to overcoming litigation challenges.

 The Chief Litigation Officer Summit is the premium forum for bringing leading in-house litigation counsel across the nation together with service providers. As an invitation-only event taking place behind closed doors, the Summit offers a unique forum for service providers to interact with heads of litigation from the country’s leading organizations in an intimate environment.

4th Cir. First to Apply "Disability" Definition Under ADAAA – ADA Amendments Act of 2008

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On January 23rd, in a ground-breaking decision under the ADA Amendments Act of 2008 (“ADAAA”), the United States Court of Appeals for the Fourth Circuit held that an injury that left the plaintiff unable to walk for seven months and that, without surgery, pain medication, and physical therapy, likely would have rendered the plaintiff unable to walk for far longer can constitute a disability under the Americans with Disabilities Act.  The Fourth Circuit in Summers v. Altarum Institute, Corp. indicated that it is the first appellate court to apply the ADAAA’s expanded definition of “disability.”

The Court reversed a District Court’s dismissal of the plaintiff’s case pursuant to a Rule 12(b)(6) motion.  The U.S. District Court for the Eastern District of Virginia based its dismissal of the plaintiff’s disability-based discharge claim on its view that the plaintiff’s impairment was temporary and therefore not covered by the Americans With Disabilities Act. In its reversal, the Fourth Circuit held that the plaintiff “has unquestionably alleged a ‘disability’ under the ADAAA sufficiently plausible to survive a Rule 12(b)(6) motion.”

Article by:

Timothy M. McConville

Of:

Odin, Feldman & Pittleman, P.C.

Let the Light of Day Shine Re: SEC (Securities and Exchange Commission) Insider Trading Case

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We want to spend a moment talking about an old subject—the Securities and Exchange Commission’s insider trading case against Mark Cuban—and Cuban’s new business venture that has resulted from that case. The case, the SEC’s handling of the matter, and Cuban’s reactions (then and now) say a lot about how “the G” does business and may even be revelatory in the future.

As you recall, the SEC charged Cuban with insider trading in 2008. The case was originally dismissed by the trial court. The Fifth Circuit Court of Appeals reinstated the case, concluding that the inquiry into whether Cuban had, in fact, traded on the basis of material, non-public information was simply too fact-intensive for the trial court to have decided without a full factual inquiry.

This, of course, is the problem with fraud-based government enforcement: the question of a person’s intent is difficult to determine without an expensive factual inquiry—and the costs of such an inquiry (combined with the potential consequences) are so high that many people settle with the G rather than seek to exonerate themselves. Historically, the SEC “extorted” settlements (not our view, necessarily, see Al’s Emporium Commentary in the Wall Street Journal Online Edition as of October 19, 2010) in reliance on this heavy burden. At the heart of the SEC’s effort was the “no admit or deny” settlement.

In these settlements, the SEC would recite each allegation of wrongdoing against a defendant as well as the terms under which the defendant had settled the charges. The defendant would neither admit nor deny the SEC’s allegations. Since Mary Jo White took over at the helm of the SEC in April 2013, she purportedly has set a new course, requiring that defendants must admit wrongdoing in more and more settlements—whether or not that changes the seemingly extortive nature of these cases remains to be seen.

But Cuban, with his seemingly unlimited resources and non-retiring personality, would not be extorted. He fought back, all the way through trial, and won. Ultimately, a jury of Cuban’s peers concluded (among other things) that the SEC had not proven that Cuban received confidential information, that he traded on such information, or that he had acted knowingly or recklessly (with “fraudulent intent”) when trading. (See the Associated Press’ “Big Story” on October 16, 2013, which has a digital recreation of the jury verdict form).

When he walked out of the courtroom, Cuban went ballistic on the SEC. See his comments on YouTube – his specific comments about the SEC are found beginning about the 50th second of the clip.

“When you put someone on the stand and accuse them of being a liar, it is personal,” he said, criticizing specific members of the SEC’s staff and, generally, the SEC’s enforcement practices. Since then, Cuban has reinforced his criticism, stating: “There’s such a revolving door, and [the SEC] was run by attorneys with an attorney’s mind-set looking for their next job. It’s a résumé builder,” [Cuban] said. “No wonder they say or do whatever they damn well please. I’m like, ‘OK, I’m going to start calling them out by name.” (WSJ’s Law Blog)

Cuban isn’t stopping with these castigatory remarks. He is putting his money where his mouth is. Cuban’s latest business venture is to publicize SEC trial transcripts (which are not generally publicly available). Cuban hopes that, by publicizing trial tactics and tactics he believes are problematic, he will change the way this agency of the G does business.

Article by:

Vincent P. (Trace) Schmeltz III

Of:

Barnes & Thornburg LLP

Eastern District of North Carolina (E.D.N.C.) Bankruptcy Court Rules that Borrower Can Raise Unfair and Deceptive Trade Practices Claims Against Lender Based on Refusal to Modify Loan

Poyner Spruill

 

Does a lender have a duty to act in good faith when negotiating with a  borrower during a commercial loan modification?  In an order issued recently by the United States Bankruptcy Court for the Eastern District of North Carolina, in In re: Burcam Capital II, LLC, the court denied a lender’s motion to dismiss a borrower’s claims against the lender.  The Borrower alleged that the lender’s failure to modify the terms of the loan constituted a breach of the lender’s obligation to deal with the borrower in good faith, as well as an unfair or deceptive trade practice.  This was because the borrower alleged that the servicer, as agent of the lender, wanted the loan to go into default as a means of acquiring the real property collateral.  While the court acknowledged that the lender had no obligation to modify the terms of the loan, the court still reasoned that the failure to modify the loan under the particular circumstances of this case could constitute a breach of the lender’s obligations to proceed in good faith, and could constitute an unfair and deceptive trade practice under North Carolina law.

Burcam Capital II, LLC (Burcam Capital) is the owner of commercial real property containing retail and office units in Raleigh, NC.  The real property serves as collateral for two separate loans, with both loans administered by CWCapital Asset Management, LLC (CWCapital) as special servicer.  Burcam Capital defaulted on its note payments in 2011, and CWCapital initiated foreclosure as a result of this default.  On June 28, 2012, Burcam Capital filed for relief under Chapter 11 of the United States Bankruptcy Code to stay the foreclosure.

In the course of the bankruptcy proceedings, Burcam Capital filed a complaint against CWCapital alleging that after Burcam Capital’s default, CWCapital acted outside of its narrow role as special servicer of the debt.  In particular, Burcam Capital alleged that CWCapital concocted a scheme whereby CWCapital would position itself to either buy the debt from the lender whose loans it was servicing at an artificially low price, or would buy the real property collateral at the foreclosure sale for below market value in order to benefit itself at the expense of both Burcam Capital and the lender whose loans CWCapital was servicing.  Burcam Capital alleged that in furtherance of this scheme, CWCapital obtained a severely below market appraisal for the real property collateral and refused to deal with Burcam Capital in any meaningful way regarding any modification or work-out.

CWCapital moved to dismiss the complaint on the basis that neither the lender nor CWCapital breached the loan contract, and that absent a breach of contract or allegations of deceit, there could be no liability for CWCapital under North Carolina Law.  CWCapital argued that because under the existing loan contract neither CWCapital nor the lender had any obligation to modify the existing loan, the complaint against CWCapital and the lender should be dismissed.

While the court acknowledged that a lender does not have to reach an agreement with its borrower to modify its loan, and it does not act improperly when enforcing its rights, such as initiating foreclosure when the loan goes into default, the court refused to dismiss the complaint against CWCapital and the lender.  The court reasoned that Burcam Capital’s complaint alleged facts that could constitute a breach of the implied covenant of good faith and fair dealing which is applicable to contracts in North Carolina, together with facts that could constitute deceptive trade practices.  Unfortunately, the court did not explain its reasoning in great detail.  In particular, the court did not specifically address CWCapital’s argument that CWCapital cannot be liable for failing to act in good faith if there was never any breach by CWCapital of the existing loan contract.  Nevertheless, the court agreed with Burcam Capital’s allegations that CWCapital’s negotiations were a sham and its appraisal of the property constituted a ruse that could rise to the level of a breach of the lender’s obligations to deal in good faith as well as a false and deceptive trade practice.

One of the primary lessons for lenders in this case is that when the lender agrees to entertain discussions regarding potential loan modifications it should take steps to ensure that it will be seen by any future court or jury as having considered a borrower’s loan modification proposals in good faith.  Burcam Capital’s complaint placed great emphasis on CWCapital’s refusal to provide any reasoning behind its rejection of Burcam Capital’s modification proposals, CWCapital’s representative in the negotiations having no actual authority to agree to the terms of any settlement or work-out agreement, and CWCapital never informing Burcam Capital of what types of offers it would agree to regarding any future modification or work-out of the existing loan.  Once negotiations with a borrower begin, the lender should take steps to ensure that its negotiations are conducted in good faith.  If there are credible allegations that the lender refused to negotiate in good faith, such allegations may be used to prevent an early dismissal of a borrower’s counter-claims against a lender.

One means of preventing such allegations may be for the lender to require that the borrower agree to a pre-negotiation agreement prior to entering into loan modification discussions with the lender.  A well drafted pre-negotiation agreement can help reduce misunderstandings and later claims by a borrower against a lender.  The pre-negotiation agreement can help establish the ground rules of the discussion, and should include, among other things, agreements that: (a) no oral or written statements made during the negotiation may be used against the other side (to encourage open discussion); (b) any statements made prior to or during the negotiations are not admissible in court for any reason; and (c) confirm the validity of the existing loan documents.  While lenders may encounter some resistance from borrowers in using such an agreement, if a borrower does agrees to its terms, a lender may negotiate more freely because the risk of any liability to the lender as a result of such negotiations is minimized.

In this case, the court did not agree that Burcam Capital’s claims against CWCapital should be dismissed, so not all is lost for CWCapital.  While Burcam Capital survives in its battle against CWCapital, it must now prove its allegations against CWCapital in court, which is a much higher hurdle than simply arguing that its claims have some legal merit and should not be dismissed.  CWCapital recently amended its answer to Burcam Capital’s complaint in light of the court’s refusal to dismiss CWCapital’s claims, and Burcam Capital will now bear the burden of proving that the actions alleged in its complaints are true and that those actions constituted a breach of CWCapital’s obligation to deal in good faith and an unfair and deceptive trade practice.

Article by:

Of:

Poyner Spruill LLP

Supreme Court Will Rule on Whether Agency-Approved Beverage Label Can Be Challenged as ‘False Advertising’ in Federal Court

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On January 10, 2014, the U.S. Supreme Court agreed to hear an appeal by Pom Wonderful LLC against The Coca-Cola Company.  The Court will examine whether Pom can bring a federal Lanham Act false advertising claim against a Minute Maid juice product label that had been approved by the U.S. Food and Drug Administration (FDA).  (Pom Wonderful LLC v. The Coca-Cola Co., U.S. Supreme Court case no. 12-761).

At issue in the lawsuit is a Minute Maid label for “Pomegranate Blueberry Flavored Blend of 5 Juices.”  The label presents the words “Pomegranate Blueberry” in larger type than the remainder of the phrase.  Pom claimed that the label was misleading because the product contains 0.3 percent pomegranate juice and 0.2 percent blueberry juice.

A California federal trial court and the 9th Circuit federal appeals court in California both ruled that Pom could not bring a Lanham Act false advertising claim against the label, since it had been specifically examined and approved by the FDA.  Pom has argued that the decisions were contrary to established law in other U.S. courts, and that federal regulations establish a floor –but not a ceiling — on what an advertiser is required to do to avoid a claim that the advertising is false and misleading.  Coca-Cola has argued that product labeling that is specifically authorized by the Food, Drug and Cosmetic Act (FDCA) and approved by the FDA cannot be charged as false or misleading under another federal statute such as the Lanham Act.

Although the question before the Supreme Court is whether a private party can bring a Lanham Act claim challenging a product label regulated under the FDCA, the Supreme Court’s decision could potentially have significant implications for the alcohol beverage industry.  For example:

  • If the Supreme Court rules that a competitor cannot bring a Lanham Act claim against a label that has been approved by the FDA, a natural question is whether the same rule will apply with regard to alcohol beverage labels that have been reviewed and approved by the Alcohol and Tobacco Tax and Trade Bureau (TTB) (by its terms, the Federal Alcohol Administration Act does not preempt the Lanham Act); and
  • If a Lanham Act claim would be barred against labels approved by TTB, a question may arise about whether a Lanham Act claim would be barred on elements of the label that TTB does not specifically review as a matter of policy – such as contrast, size and placement of label elements.

The Supreme Court is expected to hear argument this spring and decide the case by June 2014.  Depending on the decision, alcohol beverage industry members could find they have additional insulation against a federal false advertising claim, but they may likewise be limited in bringing a federal false advertising lawsuit against a competitor’s label that has been approved by TTB.

Article by:

Robert W. Zelnick

Of:

McDermott Will & Emery