Commercial, Corporate, and Contracts

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Banned ItemsIn 2016, despite contracts that mandate one-on-one arbitrations, consumers will likely gain the right to bring claims against banks, credit card issuers, and other lenders in class actions. The new rule, which the Consumer Financial Protection Bureau announced on October 7, 2015 it will probably issue next year, will partially reverse a string of recent Supreme Court decisions that made class-banning arbitration clauses broadly enforceable.

The action by the Bureau will vastly raise the stakes for disputes involving practices affecting large numbers of consumer finance customers.
Continue Reading Banning Bans on (Some) Class Cases

In 2010, when it passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, Congress created the Consumer Financial Protection Bureau as a watchdog for consumers who buy financial products and services. The CFPB’s mission included looking at the effect of arbitration clauses in consumer contracts and proposing rules to regulate them if appropriate.…

HackedUnfair methods and data breaches

The Third Circuit has ruled that exposing credit card information to hackers can count as an “unfair method[] of competition” under the Federal Trade Commission Act. Federal Trade Comm’n v. Wyndham Worldwide Corp., No. 14-3514 (3d Cir. Aug. 24, 2015).

The decision opens the way for the FTC to seek injunctive and disgorgement remedies from companies whose cyber security measures fall short. It also has the collateral effect of bolstering consumer lawsuits for damages under the “Little FTC Acts” of California and 27 other states.

Any business that uses an online computer to store customer information should take notice.
Continue Reading What the FTC Win on Data Breaches Means

Apparently you can take it too far.
Apparently you can take it too far.

No privilege?

A district judge ruled that Kellogg Brown & Root could not withhold the results of a probe that it had conducted, with the help of lawyers, into allegations that it defrauded the U.S. Military in Iraq by inflating costs and paying kickbacks. The judge reasoned that KBR made inquiry and put together a report of its findings not for the purpose of getting legal advice — in which case the attorney-client privilege would apply — but “to try to comply with KBR’s obligation to report improper conduct to the Department of Defense” — in which case the privilege would not apply. “Firms Can Hide Routine Probe Details by Using Lawyers, D.C. Circuit Holds“, July 27, 2014.Continue Reading Catch a Waive

Screen Shot 2015-07-29 at 10.46.19 PMTexas Bar Top 10 Badge.pdfWho says law review notes don’t matter?

A new decision proves that what students write in law journals can matter a great deal.

In Mullins v. Digital Direct, LLC, No. 15-1776 (7th Cir. July 28, 2015), the Seventh Circuit all but adopted a Yale law student’s analysis of, and rationale for freeing class action law from, a godawful “ascertainability” test that threatens to kill class cases involving low-dollar claims. A pair of other circuits had either championed the standard since creating it in 2012 (the Third Circuit) or quietly embraced it (the Eleventh).

Both the Yalie and the panel deserve our thanks.
Continue Reading Can We Kiss Ascertainability Goodbye?

Remain calm
Remain calm

Changing the status quo

Plaintiffs’ lawyers tend not to count patience as a virtue.

Thirty years ago, I showed a busy plaintiffs’ lawyer a new Fifth Circuit decision that took three paragraphs to explain why the district court should have let the plaintiffs amend their complaint.

Those judges need…

Preview-microThe collapse in oil prices since June 2014, and the significant drop in those for natural gas, have put tremendous pressures on relationships in the industry. The stresses — between operators and non-operators, lessees and royalty owners, principals and contractors, investors and investees, among others — make legal disputes both more likely and harder to …