class actions

Next week, the U.S. Supreme Court will hear arguments in a securities fraud class action and weigh the fraud-on-the market theory, The Southeast Texas Record reports. The case could affect the future of class actions, including whether the fraud-on-the-market theory can be used in class actions, the paper also notes.

"The theory assumes that all public information provided by a company is incorporated into its stock price," The Record reports. Halliburton was accused of inflating its stock price by misrepresenting "its asbestos liabilities, overstating its revenues and building up hype about the company’s merger with Dresser Industries," The Record further reports.

The litigation over same-sex marriage equality continues to burgeon in the United States. Most recently, a federal judge certified a class action to challenge Virginia's eight-year-old ban on same-sex marriage. The Associated Press reports that U.S. District Judge Michael F. Urbanski certified the class action Friday. The Virginia Attorney General already said he won't defend the ban in court. The class of couples could be around 15,000, according to the AP.

A federal judge has certified a class action over the treatment of American Indian children in South Dakota's foster care system, the Associated Press reports: "It alleges the state is violating the Indian Child Welfare Act by holding improper hearings after children are removed from homes. It says the hearings are sometimes as short as 60 seconds and do not give parents the opportunity to introduce evidence showing their ability to care for the child or to question the state."

A federal judge has certified a class action over the treatment of American Indian children in South Dakota's foster care system, the Associated Press reports: "It alleges the state is violating the Indian Child Welfare Act by holding improper hearings after children are removed from homes. It says the hearings are sometimes as short as 60 seconds and do not give parents the opportunity to introduce evidence showing their ability to care for the child or to question the state."

A federal judge has approved the National Football League's $50 million settlement with players who contended their rights to publicity were violated by NFL marketing. Bloomberg Businessweek reported U.S. District Judge Paul A. Magnuson opined "the chances of the lawsuit’s succeeding are 'slim at best,' ... calling the settlement a remarkable victory for the class as a whole." Another part of the settlement is the creation of an agency to handle the licensing of ex-players' publicity rights.

Drug and Device Blog reports on a California Court of Appeal decision in which an intermediate appellate panel held that the California Confidentiality of Medical Information Act does not allow for plaintiffs to sue over the negligent maintenance of their confidential medical information unless their information was accessed wrongfully or without authorization.

In the underlying case, a doctor took home a hard drive containing the personal health information for 16,000 patients. The hard drive, as well as the encryption passcodes, were stolen, but no one knows if the thief viewed or tried to view the patients' personal health information.

Drug and Device Blog said the case has "broad appeal because the fact pattern is so typical of 'data security breach' lawsuits: Private information resides on a stolen hard drive or is sent off into the ether with nary an indication that anyone received, reviewed, used, or otherwise paid any attention to the information. At another level, such lawsuits (which are usually class actions) almost never articulate any credible basis that the plaintiffs suffered any actual harm."

The Recorder reports on a couple problems that arise out of large privacy class actions:

One, the classes are so large that, even though claimaints in class actions typically only are entitled to a small amount per person, they are too large to settle because they require settlement funds worth billions of dollars.

Two, the people whose privacy was invaded aren't known to the class-action lawyers and to the court and it requires further invasion of their privacy to identify them to give them notice of the class action.

Three, giving unclaimed, or cy pres, funds to legal charities is increasingly coming under attack.

A judge today rejected a putative class action in which readers of Lance Armstrong's books alleged they were subjected to fraud and false advertising in "inspirational true accounts" that "should have been labeled fiction" due to Armstrong's use of performance-enhancing drugs. Instead, the books were protected as free speech.