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Legal News Report 7-15-2016
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Trump Seeks $10 Million From Former Adviser in Campaign Legal Dispute
Jul 13, 2016 | Reuters
By Emily Stephenson and Noeleen Walder
Republican White House hopeful Donald Trump is seeking $10 million in damages from a fired former employee, shedding light on a campaign that has at times seen high-profile exits and internal fights spill over into public view. -
Appeals Court Deals Blow to GM on Ignition-Switch Suits
Jul 13, 2016 | The Wall Street Journal
By Peg Brickley and Mike Spector
A federal appeals court denied General Motors Co.’s attempt to use a bankruptcy shield to block some lawsuits over faulty ignition switches, ruling the Detroit auto maker’s failure to reveal the defect violated consumers’ legal rights in chapter 11 court proceedings. -
Virginia School Board Asks Supreme Court to Block Order on Transgender Bathroom Use
Jul 13, 2016 | The Wall Street Journal
By Jess Bravin
WASHINGTON—A Virginia school board asked the Supreme Court Wednesday to block a lower court order allowing a transgender student who identifies as male to use the boys’ restroom. -
Microsoft just won a huge legal victory on email privacy
Jul 14, 2016 | The Washington Post
By Andrea Peterson
A federal appeals court sided with Microsoft on Thursday in a case over whether the U.S. government could force the tech giant and other companies to hand over customer emails stored overseas.
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Trump Seeks $10 Million From Former Adviser in Campaign Legal Dispute
Jul 13, 2016 | Reuters
By Emily Stephenson and Noeleen Walder
Republican White House hopeful Donald Trump is seeking $10 million in damages from a fired former employee, shedding light on a campaign that has at times seen high-profile exits and internal fights spill over into public view.
Trump in May started arbitration proceedings against Sam Nunberg, a former adviser who was fired in 2015, accusing him of violating a confidentiality agreement, according to a court filing obtained by Reuters.
"He has a confidentiality agreement which he has repeatedly breached, and we've taken action to enforce it," said Alan Garten, general counsel with the Trump Organization who is representing the campaign in the arbitration.
Nunberg did not respond to a request for comment.
The flare-up comes after a period in which campaign in-fighting led Trump to fire some top aides, including national political director Rick Wiley and campaign manager Corey Lewandowski. Other staffers have separately resigned from Trump's campaign.
Trump's legal conflicts, which also include a lawsuit over his Trump University real-estate seminars, have at times distracted public attention from his campaign.
Nunberg in court documents dated Tuesday accused Trump of starting arbitration proceedings to retaliate against him for switching his support to rival presidential hopeful Ted Cruz during the Republican primaries. Cruz dropped out of the race in early May.
Garten said the suit was unrelated.
Nunberg also said Trump tried to use the arbitration to "cover up media coverage of an apparent affair" between two members of his presidential campaign staff.
"The Trump campaign is attempting to bring a frivolous and retaliatory arbitration proceeding against me essentially to punish me and shut me up," Nunberg said in an affidavit accompanying his petition to halt the arbitration proceedings.
The petition was filed on Tuesday in New York state court in Manhattan. The Trump campaign fired Nunberg in August 2015 after the discovery of Facebook posts that critics deemed racist. Nunberg at the time denied he wrote the posts.
He said in the court filings that Trump accused him of being the source for a New York Post story in May that recounted a public argument between Lewandowski, who was then with the campaign, and Hope Hicks, Trump's spokeswoman.
In the affidavit, Nunberg said the argument was part of an "sordid and apparently illicit affair" between the two. He denied being the source for the New York Post story, saying the argument occurred in public and others saw it.
Garten called the allegation "categorically untrue" and said Nunberg had recently asked for his job back.
"This is an individual who time and time again has demonstrated that he will say anything that is outrageous, regardless of whether it's factually accurate, to get his name out there and create trouble," Garten said.
Hicks and Lewandowski did not respond to requests for comment.
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Appeals Court Deals Blow to GM on Ignition-Switch Suits
Jul 13, 2016 | The Wall Street Journal
By Peg Brickley and Mike Spector
A federal appeals court denied General Motors Co.’s attempt to use a bankruptcy shield to block some lawsuits over faulty ignition switches, ruling the Detroit auto maker’s failure to reveal the defect violated consumers’ legal rights in chapter 11 court proceedings.
The Second U.S. Circuit Court of Appeals in Manhattan Wednesday reversed a bankruptcy judge’s decision that had barred lawsuits with more than $10 billion in potential claims that arose before the auto maker’s bankruptcy.
The appeals court found GM had evidence of a defective ignition switch, now linked to 124 deaths, during its 2009 government-brokered bankruptcy restructuring, and violated some consumers’ due process rights by failing to reveal it. GM didn’t disclose the defectuntil early 2014 despite employees knowing of problems with the switch more than a decade earlier.
GM “essentially asks that we reward debtors who conceal claims against potential creditors,” the court wrote in a 74-page ruling by Judges Chester Straub, Denny Chin and Susan Carney. “We decline to do so.”
The decision allows some personal injury and wrongful death cases, and claims from car owners alleging their vehicles’ resale values fell as a result of the ignition-switch defect to proceed. It exposes GM potentially to hundreds of additional cases. But the ultimate fallout for the Detroit auto maker remains uncertain until plaintiffs’ cases make their way through court.
“The Second Circuit’s ruling neither addresses nor decides the merits of any claims,” a GM spokesman said. “Many of the claims we face have been brought on behalf of car owners who want to be compensated even though they have not suffered any loss.” Plaintiffs must prove cases in court, he said.
The ignition switches could slip from the run position, disabling safety features including air bags. GM has reached settlements with the U.S. Justice Department, shareholders and thousands of consumers totaling more than $2 billion. That included GM paying $900 million to settle criminal charges of wire fraud and concealing the defect from regulators.
GM waived the bankruptcy shield for ignition-switch victims seeking payouts from a compensation fund run by an outside attorney that reached about $600 million.
The court determined affected creditors likely would have had increased leverage to negotiate terms of GM’s bankruptcy restructuring had the defect been disclosed. GM in 2009 made concessions to assume certain liabilities amid objections from state attorneys generals, the court said.
“Finally, a majority of the victims whose claims have been languishing under a bankruptcy stay will have their day in court,” said Texas attorney Bob Hilliard, who represents some plaintiffs.
The court ruling stems from the complex legacy of GM’s $50 billion government rescue and 2009 bankruptcy filing. After seeking bankruptcy protection, the Detroit auto maker sold assets to a new company often dubbed “New GM,” while leaving reams of liabilities with “Old GM.” The bankruptcy sale, done “free and clear” of certain liabilities, prevented consumers from pursuing claims that predate the July 10, 2009 court-approved sale.
But the appeals court Wednesday found GM should have known of the ignition-switch defect—or strongly suspected it—at the time and disclosed it. “At minimum, Old GM knewabout moving stalls and air bag non‐deployments in certain models, and should have revealed those facts in bankruptcy,” the court wrote. “Those defects would still be the basis of ‘claims,’ even if the root cause (the ignition switch) was not clear.”
The court said GM remained obligated to disclose the defect in 2009 despite a speedy bankruptcy case that aimed to keep the auto maker from the financial brink only months after the onset of the global financial crisis.
“While the desire to move through bankruptcy as expeditiously as possible was laudable, Old GM’s precarious situation and the need for speed did not obviate basic constitutional principles,” the court wrote. “Due process applies even in a company’s moment of crisis.”
Separately, lawyers for GM have also been defending the company in a number of so-called bellwether trials in New York, arising from other cases. The first of the planned trials ended abruptly after GM uncovered evidence that the plaintiff committed fraud. A second trial resulted in a jury finding that the ignition switch wasn’t to blame for the crash despite the part being defective.
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Virginia School Board Asks Supreme Court to Block Order on Transgender Bathroom Use
Jul 13, 2016 | The Wall Street Journal
By Jess Bravin
WASHINGTON—A Virginia school board asked the Supreme Court Wednesday to block a lower court order allowing a transgender student who identifies as male to use the boys’ restroom.
The case is the first over transgender restroom use to reach the high court. It could provide the justices an opportunity to decide whether prohibitions of sex discrimination extend to gender identity—a position taken by some Obama administration agencies, but disputed by more than a dozen Republican-leaning states.
“For decades, our nation’s schools have structured their facilities and programs around the sensible idea that in certain intimate settings men and women may be separated ‘to afford members of each sex privacy from the other sex,’” the Gloucester County School Board said in its petition.
The board wants to temporarily halt implementation of an April decision by a three-judge panel of the Fourth U.S. Circuit Court of Appeals in Richmond, Va., which ruled in favor of high-school junior Gavin Grimm that the policy violated federal law barring discrimination based on sex.
Gavin was born female but has said that since age 12 he has identified as male. Gavin “has been diagnosed with gender dysphoria, a medical condition characterized by clinically significant distress caused by an incongruence between a person’s gender identity and the person’s birth-assigned sex,” the Fourth Circuit opinion said. He has undergone hormone therapy but not sex-reassignment surgery, the court said, and “lives all aspects of his life as a boy.”
School officials were allowing him to use the boys’ restroom, the appeals court said. He did so “without incident for about seven weeks,” but word of this “excited the interest of others in the community,” who complained to the school board. The board responded in December 2014 with a resolution limiting use of restrooms and locker rooms “to the corresponding biological genders,” adding that “students with gender-identity issues shall be provided an alternative appropriate private facility.”
Gavin, 17 years old, through his mother, sued to block the policy. A federal-district court in Newport News, Va., dismissed the suit, finding that the federal educational sex-equity law, known as Title IX, doesn’t extend to sexual orientation, gender identity and other categories beyond biological sex.
Federal courts in the past typically have rejected arguments that prohibitions of sex-discrimination cover sexual orientation. The Fourth Circuit’s April opinion, however, relied heavily on new guidance from the U.S. Education Department addressing transgender questions. A January 2015 opinion letter from the department’s Office of Civil Rights advised that schools “generally must treat transgender students consistent with their gender identity.”
“This case presents one of the most extreme examples of judicial deference to an administrative agency this court will ever see,” the Gloucester school board said, noting that the Education Department’s opinion letter “was generated in response to an inquiry about the school board’s restroom policy in this very case.”
The Gloucester board addressed its application to Chief Justice John Roberts, who apart from presiding over the Supreme Court oversees the Fourth Circuit. He can act on the request himself or refer it to the full court for action. No decision is expected before additional briefing by both sides in the case.
In May, the Obama administration provided detailed guidance on bathroom use by transgender students by telling educators around the country they should allow students to use the bathroom and locker facilities of their chosen gender, saying federal law bars discrimination against such students.
http://www.wsj.com/articles/virginia-school-board-asks-supreme-court-to-block-order-on-transgender-bathroom-use-1468445619
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Microsoft just won a huge legal victory on email privacy
Jul 14, 2016 | The Washington Post
By Andrea Peterson
A federal appeals court sided with Microsoft on Thursday in a case over whether the U.S. government could force the tech giant and other companies to hand over customer emails stored overseas.
The decision is a victory for privacy advocates and reverses a 2014 court order that required Microsoft to turn over email content stored on a server in Ireland. The original warrant that sparked the legal showdown was for emails connected to a narcotics case.
The latest decision came from the U.S. Court of Appeals for the Second Circuit in New York, where Judge Susan Carney found that the federal Stored Communications Act only applies to data stored in the United States — and thus can't be used to force a company to produce information from servers outside the country.
Without the warrant, the government has to go through a much lengthier process set up through a mutual legal assistance treaty with the Irish government to obtain the data. Ireland filed a brief supporting Microsoft in the case, as did many tech companies, including Apple and Cisco.
Tech companies often have data centers all over the world and user data may be moved around so that it could be backed up or more easily accessed by users. And Microsoft argued that turning over data stored overseas to U.S. authorities could ultimately put the privacy of Americans in jeopardy.
"If the Government prevails here, the United States will have no ground to complain when foreign agents — be they friend or foe — raid Microsoft offices in their jurisdictions and order them to download U.S. citizens’ private emails from computers located in this country," the company argued in its opening brief of the appeal.
Microsoft President and Chief Legal Officer Brad Smith said the company was pleased with the court's ruling. "The decision is important for three reasons: it ensures that people’s privacy rights are protected by the laws of their own countries; it helps ensure that the legal protections of the physical world apply in the digital domain; and it paves the way for better solutions to address both privacy and law enforcement needs," Smith said in an emailed statement.
Privacy advocates also celebrated the decision. "This is a groundbreaking decision that helps protect privacy rights around the world," the Electronic Frontier Foundation, which had submitted a brief supporting Microsoft in the case, said in a statement.
The government was less enthusiastic.
“We are disappointed with the court’s decision and are considering our options," Justice Department spokesman Peter Carr said in an emailed statement. Being able to quickly access information stored by American companies overseas is important for ensuring public safety and obtaining justice for crime victims, he added.
https://www.washingtonpost.com/news/the-switch/wp/2016/07/14/microsoft-just-won-a-huge-legal-victory-about-email-privacy/
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