News & Developments
Twombly Decision Impacts MDL Litigation—In Re: Pressure Sensitive Labelstock Antitrust Litigation
On May 21, 2007, the Supreme Court decided Bell Atlantic Corp. v. Twombly, 127 S. Ct., in which it considered “what a plaintiff must plead in order to state a claim under § 1 of the Sherman Act.” Id. at 1964. Relying on Twombly, defendants in the Pressure Sensitive Labelstock Antitrust MDL litigation moved to dismiss the claims asserted against them in Plaintiffs’ Second Amended and Consolidated Class Action Complaint. The Court had previously denied certain defendants’ motion to dismiss but defendants argued that decision was made based on the pleading standard that Twombly overruled. The Court disagreed and held that the Second Amended Complaint contained enough fact to “plausibly suggest” that one of the remaining defendants was a willing participant in an unlawful conspiracy to restrain trade, and the motion to dismiss was denied as to that party. The Court granted the motion to dismiss as to another defendant, however, holding that a cognizable antitrust conspiracy claim has not been presented against it.
The Sedona Conference Releases Commentary on ESI Evidence & Admissibility
The Sedona Conference has prepared a new “Commentary on Non-Party Production & Rule 45 Subpoenas.” The Commentary addresses the changes to Fed. R. Civ. P. 45 that were put into place when the federal e-discovery rules took effect. The Rule 45 amendments establish a fundamental difference between electronically stored information (ESI) and paper documents that are subject to subpoenas. The Sedona Conference has observed that “While Rule 45 provides the procedural roadmap for obtaining [ESI] from non-parties, it does not provide answers to a number of important practical questions for both the requesting party and the responding non-party.” There is little guidance in the case law about how Rule 45’s ESI provisions are to be applied. Thus, the Sedona Conference Working Group 1 on Electronic Document Retention and Production has prepared a Commentary on best practices regarding requests for non-party ESI under Rule 45.
The Commentary discusses the differences between the duties typically required by parties and non-parties as it relates to ESI including issues related to preservation, cost and burden of production, cost-shifting, and considerations for determining who has custody, possession and control of electronic information. The Commentary also addresses best practices for issuing, quashing and enforcing e-discovery subpoenas. Additionally, the Commentary addresses best practices and practical approaches for responding to e-discovery subpoenas, including reasonable accessibility, sampling, privilege, and form of production matters.
Supreme Court Raises Bar to Overcome Batson Challenges
By a 7-2 vote on March 19, 2008, the U.S. Supreme Court found that prosecutor Jim Williams improperly excluded blacks from the jury that convicted Allen Snyder of killing his estranged wife's companion. Snyder is black and the jurors were white. Justice Alito, writing for the majority, said the trial judge should have blocked Williams from striking a black juror. Justices Thomas and Scalia dissented. Thomas said he would not "second-guess" the judge. In a 4-3 decision, the Louisiana Supreme Court ruled that race had no part in the state's decisions involving black potential jurors.
Supreme Court Puts Brakes on Executive Branch Power
By a 6-3 vote on March 25, 2008, the U.S. Supreme Court held that President Bush overstepped his authority when he ordered a Texas court to reopen the case of Jose Ernesto Medellin, a Mexican citizen whom police prevented from consulting with Mexican diplomats, as provided by international treaty. Medellin was arrested a few days after the killings of Jennifer Ertman, 14, and Elizabeth Pena, 16, in June 1993.
Supreme Court Limits Secondary Actor Liability for Securities Fraud
On Tuesday, January 15, 2008, the United States Supreme Court handed down a landmark decision that finally clarifies the extent and scope of “secondary actor” liability under Section 10(b) of the Securities Exchange Act of 1934. In Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc., No. 06–43, the Court held that secondary actors who intentionally engage in a fraud scheme but who do not issue materially false or misleading statements to the markets or otherwise directly mislead investors can be liable for § 10(b) securities fraud only if investors actually relied on their statements or representations.
Attorney-client Privilege Bill Passes House
In mid-November, the U.S. House of Representatives took an important step when it approved — by voice vote — the Attorney-Client Privilege Protection Act of 2007.
H.R. 3013, introduced in the House by Rep. Bobby Scott (D-VA) and co-sponsored by Rep. Randy Forbes (R-VA) along with 10 other members from both parties, seeks to strike a balance between the legitimate needs of federal prosecutors and regulators, and the fundamental, constitutional legal rights of individuals and organizations.
U.S. Supreme Court Changes Pleading Standard Under Sherman Act
In Bell Atlantic v. Twombly (05-1126, decided May 21, 2007), the U.S. Supreme Court held that in order to bring a claim under §1 of the Sherman Act alleging a conspiracy to restrain trade, plaintiffs must provide enough factual matter to suggest that an agreement was made. In Twombly, plaintiffs alleged that existing local telephone service providers conspired to inhibit the growth of competitive local phone service carriers. The plaintiffs based their allegations on descriptions of parallel conduct by the existing service providers. The Court determined that the complaint must be dismissed, stating that "[a]n allegation of parallel conduct and a bare assertion of conspiracy will not suffice." Justice Souter delivered the opinion of the Court, in which Justices, Scalia, Kennedy, Thomas, Breyer, Alito, and Chief Justice Roberts joined. Justice Stevens filed a dissenting opinion, in which Justice Ginsburg joined in part.
