There have been a number of recent cases that have affected employers, including the Supreme Court's resolution of a circuit split on class action waivers and the Fifth Circuit's ruling that plaintiffs in retaliation cases may recover emotional distress damages. Further, the Eleventh Circuit recently held that disabled employees in need of reasonable accommodation must compete with other qualified candidates and the California Supreme Court ruled that on-call rest periods are not permissible.
The use of connected devices has become widespread among consumers and businesses. While this ability to send and receive data provides powerful tools to improve consumer experience and gather information about consumer behaviour, the Internet of Things presents discovery challenges concerning data preservation and extraction. Should litigation arise, data retention policies that ensure proper preservation of information and allow the sorting and production of data will help to facilitate the discovery process.
On the eve of St Louis being named by the American Tort Reform Association as the number one 'Judicial Hellhole' in the country, juries in neighbouring Jackson County staked their own claim to that dubious distinction by returning two staggering punitive awards on consecutive days. Six-figure compensatory awards are undoubtedly 'substantial', and the facts in these cases do not stand out as being so reprehensible as to warrant deviation from the 1:1 presumption established in State Farm.
A federal district court recently denied two employees' motion for reconsideration of its prior order enforcing a 'clickwrap' agreement containing restrictive covenants and a forum selection clause. While pen and ink agreements will likely remain the better choice for full employment agreements, employers may consider the use of electronic agreements for regular policies which require acknowledgement from a broad selection of employees and that might require frequent revision.
A key goal for companies responding to discovery demands is to identify responsive documents in a cost-effective and defensible manner. Using technology-assisted review allows companies to reduce the massive volume of data involved to a more manageable level by ranking, prioritising and classifying electronic data.
The Consumer Financial Protection Bureau (CFPB) recently petitioned the US Court of Appeals for the DC Circuit for en banc review of the three-judge panel decision that found the CFPB's single-director structure to be unconstitutional and rejected its interpretation of Section 8 of the Real Estate Settlement Procedures Act. The CFPB argued that the decision was contrary to Supreme Court precedent, not based on separation-of-powers principles, unduly restrictive and potentially damaging.
In a recent case arising from an attack on the defendant insurer's computer network, the US Court of Appeals for the Sixth Circuit addressed two questions that are frequently litigated in data breach cases: whether the plaintiffs had alleged an injury-in-fact required for constitutional standing and whether any such alleged injury was fairly traceable to the acts of the defendant and thus sufficient to establish the requisite causation.
Courts applying BMW and State Farm often emphasise the Supreme Court's admonition that the constitutional line is not "marked by a simple mathematical formula" – typically when rejecting a defendant's argument that the ratio of punitive to compensatory damages is indicative of an excessive award. However, the Texas Court of Appeals recently showed that this dictum is a two-way street, reducing a punitive award to a small fraction of the compensatory damages.
Lately there have been many occasions to criticise courts' analysis of punitive damages issues, so the 10th Circuit's insightful decision in Lompe v Sunridge Partners is a welcome change. The plaintiff prevailed at trial and was awarded a total of $25.5 million in punitive damages. The 10th Circuit has now eliminated the punitive award against one defendant, and reduced the punitive award against the other to $1,950,000.
Earlier this year Wright Medical Technology filed post-trial motions in the first trial arising out of alleged defects in its hip implant device. The district court has now resolved the motions, rejecting all of Wright's arguments for judgment as a matter of law or a new trial, but dramatically reducing the punitive damages from $10 million to $1.1 million.
The due process review of a punitive damages award for excessiveness has a number of interconnected parts. A series of relatively small errors can quickly add up and dramatically skew the outcome of a review process that is intended to impose predictability and consistency on the largely black-box process that juries use when setting the amount of punitive damages. The Illinois Appellate Court's decision in Crowley v Watson illustrates this point.
The Fourth Circuit recently reversed the dismissal of a False Claims Act complaint, explaining that the trial court had misapplied the public disclosure bar when it dismissed the relators' claims. The court held that when analysing the timing of the public disclosure that purportedly bars False Claims Act allegations, courts must focus on the pleading in which the relator first alleged the relevant fraud – not the most recent amendment to the complaint.
In Johnson v Goodyear Tire & Rubber Company a former non-exempt hourly employee filed a putative collective action for failure to pay regular and overtime wages. The California District Court denied Johnson's motion for collective action certification, holding that individualised issues predominated because Johnson's "idiosyncratic" experience on uncompensated time was not closely aligned with other employees' experience.
The United States experienced a punitive damages blizzard in February 2016. In rapid succession, juries in three states imposed four multi-million-dollar punitive damages awards. Three product liability cases each raised important issues regarding the appropriate absolute amount of punitive damages and ratio of punitive to compensatory damages, while an employment case raised its own set of interesting issues.
In November 2015 a federal jury in Atlanta returned a $10 million punitive damages award in the first hip implant case to go to trial against Wright Medical Technology. Wright Medical has now filed its opening brief in support of its post-trial motions. The brief raises a number of promising arguments.
In McPadden v WalMart Stores East, LP the jury awarded more than $31 million to a former Wal-Mart employee who had worked for the company as a pharmacist. The plaintiff sued for discrimination and retaliation after she was terminated as discipline for losing a pharmacy key. The award also included $15 million in "enhanced compensatory damages" for gender discrimination in violation of New Hampshire state law.
Many employee benefit plans governed by the Employee Retirement Income Security Act 1974 contain subrogation clauses requiring the participant to reimburse the plan if he or she sues the third-party tortfeasor and recovers money damages. However, the Supreme Court recently held that when the participant spends the proceeds of the tort judgment, the plan cannot sue under Section 502(a)(3) to recover the expenses it paid from the participant's general assets.
Not to be outdone by a Georgia federal jury awarding $1 million in compensatory damages and $10 million in punitive damages against the manufacturer of a hip implant, a California state court jury has awarded $9.8 million in compensatory damages and an eye-popping $70 million in punitive damages against Johnson & Johnson subsidiary Ethicon in a case alleging defects in a haemorrhoid stapler used to perform surgery on a haemorrhoid sufferer.
A large set of cases involving injuries allegedly resulting from the use of surgical mesh to treat pelvic organ prolapse and stress urinary incontinence is ongoing against medical device manufacturers. As well as 85,000 cases against surgical mesh manufacturers pending in federal district court in West Virginia, thousands of additional cases have been filed in state courts. As is inevitable with so many turns of the roulette wheel, some plaintiffs have hit the jackpot.
In the latter half of 2015 the National Labour Relations Board continued to attack class action waivers in accordance with its DR Horton and Murphy Oil USA decisions, despite the fact that both decisions were reversed by the Fifth Circuit. Further, a divided Third Circuit panel adopted the 'predominant benefit' test to determine whether a meal period is compensable under the Fair Labour Standards Act.