Kang Haggerty NewsA federal court in Pennsylvania recently ruled that counterclaims against the whistleblower filed by the target of a whistleblower action can survive. The United States District Court for the Eastern District of Pennsylvania, in United States of America ex rel. Lorraine Notorfransesco v. Surgical Monitoring Association, Inc., et al. (Tucker, C.J.) has denied a motion by the whistleblower, Lorraine Notorfransesco, to dismiss counterclaims made by her former employer, Surgical Monitoring Association (“SMA”). While the recent ruling seems to suggest that potential whistleblowers would be dissuaded from “blowing the whistle” for fear of being retaliated, the ruling is not exactly as controversial as it seems.
Floorgraphics Corporate Officers Held Liable for Appropriating $12 million
On September 23, 2014, in Potok v. Rebh, the Philadelphia Court of Common Pleas held that the corporate officers of Floorgraphics, an advertising company, were held liable for appropriating $12 million from a settlement deal from the sale of their company in 2009 to News America Marketing.
Three Big Reasons Family Businesses Fail…and How to Avoid Them
Philadelphia Business Journal
Shareholders, not the Corporation, Holds Attorney-Client Privilege for Communications Between the Shareholders and Counsel
On August 7, 2014, the Western District of Pennsylvania’s Judge Maurice B. Cohill, Jr. entered an order preliminary denying plaintiff’s motion to compel compliance with subpoena on counsel. In the case of Gary Miller Imports, Inc. v. Carter Dolittle, et al., plaintiff sought to compel the law firm of Macdonad Illig Jones & Britton, LLP to produce eight documents they felt did not fall under attorney-client privilege. Continue reading ›
Independent Fraud Claim Cannot be Forced Into Arbitration
In its August 11, 2014 decision in Griswold v. Coventry First, LLC, et al. the Third Circuit affirmed the District Court’s decision that denied Defendant’s motion to compel arbitration, and held that Plaintiff, Lincoln T. Griswold, was not estopped from pursuing his fraud claim by rejecting arbitration.
Griswold purchased an $8.4 million life insurance policy in January of 2006, establishing a Lincoln T. Griswold Irrevocable Trust for the “sole and exclusive purpose” of maintaining ownership of the policy. Shortly thereafter the formation of the Trust, Griswold formed a limited liability partnership in Georgia, Griswold LLP, as the sole beneficiary of the policy. Upon the receipt of the proceeds from the life insurance policy, this limited liability partnership would be dissolved, and the trustee would then liquidate the property, satisfy the claims of creditors, and distribute remaining property to the partners. At the completion of this task, the trustee would file a “Cancellation of the Election to Become a Limited Liability Partnership” to terminate the partnership.
GFI Group, Inc.’s Merger with CME Group, Inc. May Prove Detrimental in the Long Run for GFI Group Stockholders
It was announced on July 30, 2014 that Chicago Mercantile Exchange Group, Inc. (“CME”), the world’s largest future exchange operator, would purchase GFI Group, Inc. for a net price of $655 million.[1] GFI Group was targeted for its two units that would boost CME’s influence in the global market, Trayport and FENICS.[2]
Pennsylvania Adopts Amendment Creating Bright-Line Rule on Attorney-Expert Communications during Discovery
Continuing off our earlier blog post that had raised questions regarding attorney-expert communications in Barrick, et al. v. Holy Spirit Hospital, et al. (read here!), on July 10, 2014 the Pennsylvania Supreme Court made official a rule change barring attorney-expert communications during discovery. Following its decision in Barrick, the Supreme Court approved an amendment to the Pennsylvania Rule of Civil Procedure 4003.5 concerning attorney-expert communication during discovery. This amendment to the Pennsylvania Rules of Civil Procedure created a bright-line rule, and creates a difficult arena for attorneys to maneuver during the discovery process.
Point Five Percent (0.5%) of the Real Thing
With lawsuits directed at the marketing campaigns of trendy products becoming as trendy as the products themselves,1 the United States Supreme Court recently gave POM Wonderful its blessing to bring a Lanham Act claim against Coca-Cola for a potentially misleading label that is compliant with the Food, Drug, and Cosmetic Act (FDCA).
Insurance Bad Faith Practice leads to $18 million Punitive Damage Award
A Pennsylvania state court has found Nationwide Insurance Co. engaged in bad faith in handling its insured’s first party auto insurance claim and in its litigation tactics when the dispute led to a lawsuit. The court’s forty page opinion catalogues the types of specific conduct that evidences bad faith in violation of Pennsylvania Insurance Bad Faith Statute ( 42 Pa. C. S. A. § 8371), which warrants an imposition of punitive damages to deter insurers from engaging in such conduct.
SEC Flexes Dodd-Frank Muscles for the First Time Against Employer Retaliation
The SEC has flexed its (new…ish) muscles for the first time, penalizing Paradigm Capital Management Inc. in an enforcement action for retaliation against a whistleblower.
The Dodd-Frank Act prohibits retaliation against whistleblowers, specifically providing that “No employer may discharge, demote, suspend, threaten, harass, directly or indirectly, or in any other manner discriminate against, a whistleblower” because of certain whistleblowing activities. 15 U.S.C. §78u-6(h)(1). The regulations (specifically, 17 C.F.R. §240.21F-2(b)(2)) provide for enforcement in an action brought by the SEC.