Kang Haggerty News

Independent Fraud Claim Cannot be Forced Into Arbitration

August 18, 2014 | Kang Haggerty LLC

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

August 1, 2014 | Kang Haggerty LLC

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

July 18, 2014 | Kang Haggerty LLC

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

July 10, 2014 | Kang Haggerty LLC

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

July 3, 2014 | Kang Haggerty LLC

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.

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SEC Flexes Dodd-Frank Muscles for the First Time Against Employer Retaliation

June 20, 2014 | Kang Haggerty LLC

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.

Third Circuit Adopts Liberal Notice Pleading Standard for False Claims Act Cases

June 16, 2014 | Kang Haggerty LLC

Refusing to adopt the heightened pleading standard under Rule 9(b), the US Court of Appeals for the Third Circuit reversed the U.S. District Court for New Jersey’s order, which held that Plaintiff Foglia failed to meet the pleading requirements under Rule 9(b) for pleading a false claims act case. U.S. ex rel. Foglia v. Renal Ventures Mgmt., LLC, 2014 WL 2535339 (3d Cir. June 6, 2014). In contrast to the District Court, the Third Circuit agreed to a more liberal standard for pleading cases under the federal False Claims Act and concluded that Foglia’s factually false claim against Renal proved sufficient to satisfy Rule 9(b). The circuits are split over whether a whistleblower must allege specific examples of false claims to survive a Rule 12(b)(6) motion, and the Third Circuit held that the whistleblower need not provide such specific examples.

5 Ways to Transition Your Business to Next Generation

June 10, 2014 | Kang Haggerty LLC

1. Define your goals. What is your ultimate goal in transitioning your business? Do you plan on funding your retirement through this transition? Is it to leave a legacy? The reason behind your desire to transition will determine how you proceed.

2. Plan & Implement Your Strategies. Create a clear plan as you move forward with the transition. Always be sure you have this plan set before you start so you do not run into confusion while transitioning. Consider the following to include in your strategy as you prepare:

a. Financial. If your goal is towards retirement, how will you be funding it? What will be your compensation as you leave the company? Be sure you highlight financial issues clearly and consult with the appropriate experts to make sure these issues are handled well.

You Need to Make a Demand First Before Filing a Derivative Claim

June 6, 2014 | Kang Haggerty LLC

United States Court of Appeals for the Third Circuit. Robert FREEDMAN, Appellant v. Sumner M. REDSTONE; Philippe P. Dauman; Thomas E. Dooley; George S. Abrams; Alan C. Greenberg; Shari Redstone; Frederic V. Salerno; Blythe J. McGarvie; Charles E. Phillips, Jr.; William Schwartz; Robert K. Kraft; Viacom, Inc. No. 13–3372. Decided: May 30, 2014

The United States Court of Appeals for the Third Circuit affirmed the Delaware District Court’s July 16, 2013 decision by further solidifying the most basic requirements for filing a derivative and direct claim. The plaintiff, Robert Freedman, as a stockholder, failed to make a pre-suit demand to Viacom’s Board of Directors in his derivative claim. Also, the plaintiff failed to state a cause of action in his direct claim against the defendant. As such, the District Court dismissed the case, which the Third Circuit affirmed.

Commerce Judges Offer Tips on Practice

May 25, 2014 | Jacklyn Fetbroyt

Philadelphia Bar Reporter

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