Sanctioned Morgan Stanley hit with $1.45 Billion verdict.

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Florida Circuit Court Judge Elizabeth Maass had entered summary judgment in favor of Ronald Perelman in his fraud case against Morgan Stanley as a sanction for refusing to turn over documents, including large numbers of e-mails. See Gasparino, “Time to Invest in Some More E-Storage Space” Newsweek, May 30, 2005, p.12; “All That Missing E-Mail … It’s Baaack” New York …

Florida Court of Appeal rules that pharmacists can be liable for the negligent filling of prescriptions.

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Despite the Florida Supreme Court’s ruling in McLoed v. W.S. Morrell that a retail druggist who fills a lawful prescription of a medical doctor with an unadulterated compound cannot be held strictly liable for breach of implied warranty, an intermediate appellate court held, on June 1, 2005, that a pharmacist could be held liable for his or her negligence, such …

Supreme Court reverses Arthur Andersen’s obstruction of justice conviction; troubling dicta regarding document destruction policies.

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Having advised its Enron team to comply with its document “retention” policy in the face of Government and other investigation, Arthur Andersen was convicted of obstruction of justice, under 18 U.S.C. 1512(b)(2), which makes it unlawful to knowingly use intimidation or physical force, threaten, or corruptly persuade another person withhold testimony, or withhold a record, document, or other object, from …

Tenth Circuit joins Third, Eighth and Ninth Circuits that authority or control over plan assets does not have to be “discretionary”.

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On May 19, 2005, the U.S. Court of Appeals for the Tenth Circuit held that accountants who received plan contributions, deposited them into their business account, and then wrote checks for the amount of the contribution on behalf of the plan were fiduciaries. Rejecting the argument that these responsibilities were “ministerial”, the court re-affirmed the distinction in the ERISA statute …

The Sixth Circuit finds that breach of fiduciary duty claims for improper processing emergency-medical-treatment claims are excused from the exhaustion requirement under the futility exception.

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“Although it is well settled that ERISA plan beneficiaries must exhaust administrative remedies prior to bringing a suit for recovery on an individual claim, we have not yet decided whether a beneficiary must exhaust administrative remedies prior to bringing claims based on statutory rights, such as┬áSections 1104 and 1105 fiduciary-duty claims. Instead, we have resolved such cases on the grounds …

Texas District Court rules that the FDCA does not preempt state failure-to-warn claims.

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The estate and heirs of Bethany Cartwright sued Pfizer, alleging that it’s anti-depressant drug Zoloft caused her to commit suicide. Denying the defendant’s motion to dismiss, the court noted that the FDA’s regulations “merely set minimum standards with which manufacturers must comply” and “expressly do not prohibit a manufacturer from ‘adding [to] or strengthening a contraindication, warning, precaution, or adverse …

Illinois Court sheds light on appropriate remedies for spoliation.

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The drastic sanction of dismissal is a last resort, and should only be invoked when spoliation is deliberate, contumacious, or evidence’s an unwarranted disregard for the court’s authority. When an opponent’s negligence leads to the destruction of evidence, the remedy is a claim for damages, which is separate and distinct. Adams v. Bath & Body Works, Inc., 2005 Ill. App. …

Lead plaintiff’s acceptance of settlement offer did not moot claims of entire class.

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Judge Arthur Spatt of the Southern District of New York ruled on March 14, 2005 that a class action initially filed in May of 2003 could proceed with a new class representative. While the Equitable’s motions to dismiss the original complaint were pending, the original plaintiff instituted a NASD arbitration against the broker who sold him his annuity, and the …

Intercepted electronic communications from husband’s computer excluded.

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Wife, who secretly installed software on husband’s computer that copied and stored electronic communications between her husband and another woman, did not get to use the evidence in her divorce proceeding. Because the program copied the communications as they were transmitted, they were “intercepted” and therefore in violation of State Law. The court distinguished between the use of spyware to …