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Legal News Report 8-28-15
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Planned Parenthood filing second lawsuit to protect state funding
Aug 28, 2015 | The Hill
By Sarah Ferris
Planned Parenthood is planning to file a lawsuit against a second state next week as part of a coordinated national effort to protect its funding. -
Lawsuit Filed Against 10 Automakers Over Keyless Ignitions Linked to Carbon Monoxide Deaths
Aug 28, 2015 | Reuters
By Jonathan Stempel
Ten of the world’s biggest automakers were sued on Wednesday by consumers who claim they concealed the risks of carbon monoxide poisoning in more than 5 million vehicles equipped with keyless ignitions, leading to 13 deaths. -
Dole Foods Case Shows The Good Side Of Shareholder Litigation
Aug 28, 2015 | Forbes
By Daniel Fisher
Delaware courts have a reputation for zealously protecting the rights of minority shareholders, and they delivered on that yesterday, socking billionaire David Murdock with a $148 million penalty for manipulating his 2013 takeover of Dole Foods. -
ACLU launches lawsuit against Nevada school voucher law
Aug 27, 2015 | Las Vegas Sun
By Ian Whitaker
Nevada’s sweeping new school voucher program is facing a lawsuit from the American Civil Liberties Union, which claims it violates state laws prohibiting public money being used for religious purposes.
Legal News
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Planned Parenthood filing second lawsuit to protect state funding
Aug 28, 2015 | The Hill
By Sarah Ferris
Planned Parenthood is planning to file a lawsuit against a second state next week as part of a coordinated national effort to protect its funding.
The group is suing Alabama Gov. Robert Bentley (R), who has taken steps to block all state Medicaid funding in light of the fetal tissue video controversy. Planned Parenthood is filing the lawsuit in a joint effort with the American Civil Liberties Union.
“Governor Bentley is trying to dictate where a woman can go for contraception and other preventive care if she’s enrolled in Medicaid,” Staci Fox, who leads Planned Parenthood Southeast, wrote in a statement. “Meanwhile, Alabama is dealing with some of the nation’s worst health outcomes, and restricting access to providers will do nothing to help the urgent problems we face.”
The lawsuit will be Planned Parenthood’s second legal move in response to the undercover video controversy spurred by anti-abortion-rights activists this summer. The group announced earlier this week that it would sue Louisiana Gov. Bobby Jindal (R), who took the same step as Bentley to cut off Medicaid funding for Planned Parenthood services.
The Obama administration has already warned the move by Alabama and Louisiana would be illegal because Medicaid enrollees are entitled to the healthcare provider of their choice.
Shortly after the Louisiana and Alabama governors announced their plans, they were contacted by the federal agency that runs Medicaid. Both were notified that they “may be in conflict with federal law,” Department of Health and Human Services spokesman Ben Wakana said in a statement.
But Jindal, who is seeking the GOP presidential nomination, has already pledged to stand his ground and allow the battle to play out in court – potentially dragging out the controversy for months.
Meanwhile, the threat to Planned Parenthood’s state and federal funding grows as more videos are released.
The man behind the videos, David Daleiden, said this week that he has as many as four videos left. If they are released weekly, that would drag the controversy into the center of the federal government’s funding fight.
Several Republicans, led by Sen. Ted Cruz (R-Texas), are already threatening a government shutdown if GOP leaders do not defund Planned Parenthood through the budget process. The group receives about $500 million a year from the government, making up about 40 percent of its budget. Under current law, none of those funds can be used for abortions.
Planned Parenthood has also said it is considering legal action to stop the videos about the health provider's handling of fetal tissue, accusing the group behind them of illegally recording their footage.
“There’s nothing off the table at all. Already, cases have been filed by others about conspiracy and fraud and certainly Planned Parenthood preserves the right, given this information, to pursue that as well,” the group’s executive vice president Dawn Laguens told reporters this week.
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Lawsuit Filed Against 10 Automakers Over Keyless Ignitions Linked to Carbon Monoxide Deaths
Aug 28, 2015 | Reuters
By Jonathan Stempel
Ten of the world’s biggest automakers were sued on Wednesday by consumers who claim they concealed the risks of carbon monoxide poisoning in more than 5 million vehicles equipped with keyless ignitions, leading to 13 deaths.
According to the complaint filed in Los Angeles federal court, toxic gas is emitted when drivers leave their vehicles running, sometimes in garages attached to homes, when they take their key fobs with them, under the mistaken belief that the engines will shut off.
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Find Out More.Keyless ignitions let drivers start their vehicles by pushing a button on electronic fobs, rather than inserting traditional keys.
The defendants include BMW, including Mini; Daimler’s Mercedes Benz; Fiat Chrysler ; Ford ; General Motors ; and Honda, including Acura.
Also named as defendants were Hyundai, including Kia; Nissan, including Infiniti; Toyota, including Lexus; and Volkswagen, including Bentley.
Drivers claim that the defendants have known for years of the risks of keyless ignitions, which have been available since at least 2003, yet marketed their vehicles as safe.
They also accused the automakers of failing to install an inexpensive feature that would automatically turn off unattended engines after a period of time. The plaintiffs said this could have averted the 13 deaths, and many more injuries.
“Plaintiffs believed the automakers’ repeated promises that the affected vehicles were safe,” the complaint said. “In fact they are not.
The lawsuit seeks an injunction to require the automakers to install an automatic shut-off feature. It also seeks compensatory and punitive damages, among other remedies.
Toyota declined to comment. None of the other automakers had an immediate comment.
Lawyers for the plaintiffs did not immediately respond to requests for comment.
The National Highway Traffic Safety Administration, a U.S. federal regulator, did not immediately respond to a similar request.The lawsuit is the latest seeking to hold the automotive industry liable for defects that could make driving unsafe, such as Takata airbags and ignition switches on GM vehicles.
It was filed in the same court where Toyota defended against lawsuits claiming that some of its vehicles accelerated unintentionally.
U.S. District Judge James Selna in 2013 approved a $1.6 billion settlement to resolve claims that Toyota vehicles lost value because of the defect. It is unclear whether he will be assigned the keyless ignition case.
The case is Draeger et al v. Toyota Motor Sales USA Inc et al, U.S. District Court, Central District of California, No. 15-06491.
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Dole Foods Case Shows The Good Side Of Shareholder Litigation
Aug 28, 2015 | Forbes
By Daniel Fisher
Delaware courts have a reputation for zealously protecting the rights of minority shareholders, and they delivered on that yesterday, socking billionaire David Murdock with a $148 million penalty for manipulating his 2013 takeover of Dole Foods.
The 108-page decision by Judge Travis Laster of Delaware Chancery Court was the latest in a string of big verdicts against insiders and investment banks for fleecing shareholders in takeover deals. In April, Laster ordered an affiliate of El Paso Corp., now part of Kinder Morgan, to pay $171 million for overcharging shareholders in a related master limited partnership for natural-gas assets. And in 2011, the Chancery Court ordered Grupo Mexico S.A. to pay $2.3 billion, including interest and legal fees, for overcharging Southern Peru Copper, which it controlled, for a Mexican mining subsidiary it also owned.
These cases represent the good side of shareholder litigation in Delaware. But they are isolated examples in a sea of bad cases, knee-jerk lawsuits plaintiff lawyers file practically every time a public company’s stock price falls or one company announces plans to buy another. The problem for judges in Delaware and elsewhere is determining good from bad. The Dole case was brought by several pension funds represented by Grant & Eisenhofer, whose other victories include the El Paso case and a 2011 decision halting a proposed takeover of Del Monte Foods amid accusations of conflicts of interest at Barclays Capital, the advisor on the deal.
“They don’t come in wearing t-shirts saying `I’m a good case’ and `I’m a bad case,’” said Lawrence Hamermesh, a corporate-law expert at Widener University’s Delaware Law School. “You need good judges who can smell out the cases where there has been trouble, and throw out the cases where they just sue at the drop of a hat.”
There was plenty of trouble at Dole Foods, according to Laster’s opinion. Murdock, a 92-year-old billionaire who took control of Dole in 1985, had already taken the food company private once in 2003. He sold a 41% stake to the public again in 2009 at $12.50 a share, but the forceful high-school dropout never really took to working with independent directors, according to former Paramount Pictures Chief and Dole director Sherry Lansing, who testified Murdock “seemed frustrated with boards …he seemed not to like the push back.” (Murdock partially agreed, saying in a video deposition: “I‘m abrupt. I‘m always a strong-willed man. That‘s the reason why I get so many things done.”)
When Murdock decided to take Dole private again, the court found, he worked with a trusted lieutenant, Dole general counsel Michael Carter, to conceal favorable information from the company’s independent directors, who under Delaware law were charged with approving any offer.
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ACLU launches lawsuit against Nevada school voucher law
Aug 27, 2015 | Las Vegas Sun
By Ian Whitaker
Nevada’s sweeping new school voucher program is facing a lawsuit from the American Civil Liberties Union, which claims it violates state laws prohibiting public money being used for religious purposes.
“The education savings account law passed this last legislative session tears down the walls separating church and state erected in Nevada’s constitution,” said Tod Story, executive director of the Nevada ACLU. “So today we have filed a lawsuit to stop this unconstitutional program.”
The program, passed as SB302 by lawmakers earlier this year, goes far beyond similar voucher programs elsewhere in the country. Instead of only being available to certain families based on income or special needs, it is available to any family whose child is attending public school. Those who qualify will receive around $5,000 to spend on things like private school tuition, tutoring or distance education.
The program has proved popular in the short time the Nevada Treasurer’s office has allowed parents to apply for it. In just a few weeks of open enrollment, more than 2,500 parents have applied.
But now the ACLU is seeking an injunction to stop the state from disbursing public funds under the program before the law officially takes effect at the start of next year.
“The treasurer’s office has taken many steps to actively implement this program,” said Amy Rose, legal director for the Nevada ACLU. “I think it’s very clear that if we don't stop this, [the money] will go to private religious schools."
Central to the debate is Nevada’s laws governing the use of public funds, and whether parents can take taxpayer dollars to use at schools that are often explicitly religious in nature. In its lawsuit, the ACLU included 10 pages of examples of religious private schools in the state that require students to learn religious doctrine.
Spring Valley Christian Academy, one of the Las Vegas private schools cited by the ACLU, outlines in its school handbook the “Pledge of Allegiance to the Bible,” where students are told to repeat the words “I pledge allegiance to the Bible, God’s Holy Word.”
The ACLU points to the Nevada Constitution, which states, “No public funds of any kind or character whatever, State, County or Municipal, shall be used for sectarian purpose.”
They also accuse state lawmakers of intentionally wording SB302 to skirt existing state law, like Nevada Revised Statute 387.045, which states, “No portion of the public school funds shall in any way be segregated, divided or set apart for the use or benefit of any sectarian or secular society or association.”
SB302 specifically exempts the program from that part of the NRS.
Reaction to the announcement was swift, especially from conservative groups and politicians in support of the program. Several issued statements criticizing the action.
State Treasurer Dan Schwartz said in his statement: “The ACLU certainly has the right to air their issues in court. But we believe that SB 302 is clearly aimed at aiding and improving our children’s education, whether it be in public or private schools, secular or non-sectarian institutions. The bill’s intent is to give parents the choice on how and where their children should be educated."
Victor Joecks, of the right-leaning Nevada Policy Research Institute, called it "a shame that Nevada’s ACLU would attempt to prevent these parents from obtaining better educations for their children."
Republican State Sen. Ben Kieckhefer accused the ACLU of wanted to go "back to a system of hard zoning, forcing poor and minority students into chronically failing schools and furthering cycles of generational poverty."
“Republicans passed education savings accounts this year to break those cycles and give every child a chance at a high-quality education," he said.
Institute for Justice attorney Mark Keller said the libertarian organization, which helped craft the program, would fight the lawsuit.
“We worked closely with the state legislature throughout the drafting process to ensure the program’s constitutionality, and we fully intend to defend it against this baseless and cynical lawsuit,” Keller said. “Nevada's Education Savings Account (ESA) Program was enacted to help parents and children whose needs are not being met in their current public schools, and we will work with them to intervene in this lawsuit and defeat it.”
Crystal Van Kempen-McClanahan, principal at Mountain View Christian Academy said private school administrators knew this day would come.
“We were told to expect it, so obviously we weren’t surprised," she said, noting that voucher programs have been upheld in other states. "We’re certainly hopeful that it's going to be defended successfully here as well.”
She, like many proponents of the program, feels the lawsuit is baseless because parents make the ultimate decision about where the money goes, not the state.
“Whose individual rights are being trampled on?" she said. "The money isn't even going to us. It's going to the parents, and they have the right to choose."
Named as plaintiffs in the lawsuit are a number of local activists, including Ruby Duncan, an African-American woman whose advocacy on behalf of welfare mothers during the 1970s led to the Clark County School District naming a North Las Vegas school after her.
“There are so many poor parents in the state of Nevada,” she said. “They will not be treated fairly under SB302.”
The lawsuit in Nevada comes as other states have examined their voucher programs.
In June, the Colorado Supreme Court struck down the state’s voucher program, but other states have recently upheld theirs, including Alabama and North Carolina.
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