First Circuit Holds that the Fraud-on-the-Market Presumption of Reliance in Securities Cases Does Not Depend Upon the Accuracy of Market Price, But Only Informational Efficiency.

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“The fraud-on-the-market presumption of reliance does not depend on the accuracy of the market price, and whether it mirrors the best possible estimates, in light of all available information, of the actual economic values of securities in terms of their expected risks and returns. Rather, this presumption depends on whether the market price of the stock reflects all available information, …

Sixth Circuit Rejects Claim of Spoliation under State or Federal Law where Destruction Occurs Before Defendant is Placed on Notice of Claim.

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Plaintiff was a driver for UPS. His daughter suffered physical and emotional problems, which caused plaintiff to miss work; he also became depressed, and took medication which prevented him from operating heavy machinery. UPS alleged that plaintiff shipped six packages without paying for them. Plaintiff challenged the termination through the union’s grievance procedure; the termination was upheld. Plaintiff filed suit …

Court Denies Motion for Sanctions Against Employer Accused of Misleading the Court Regarding the Scope and Accessibility of E-Discovery.

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A United States Magistrate Judge in the Southern District of New York rejected an employee’s claim that affidavits executed by the employer’s chief information officer and an electronic evidence consultant were incomplete, misleading, and contained outright false statements because they improperly focused on back-up tapes and violated the magistrate’s order by not addressing the costs of searching and contents of …

In an Unpublished Decision, the California First Appellate District Strikes Arbitration Clause Banning Class Actions as Unconscionable.

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After the issue was remanded by the California Supreme Court [118 P.3d 1017] for further consideration in light of Discover Bank v. Superior Court, the First Appellate District, in an unpublished decision, determined that the mandatory arbitration provision precluding class treatment was procedurally unconscionable as the amendment was provided through a bill insert, and was substantively unconscionable as in furtherance …

Lucent and Counsel to be Sanctioned for Withholding and Destroying Documents in Patent Infringement Case.

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Judge Ward in the Eastern District of Texas issued a ruling in November indicating that Lucent and Lucent’s counsel would be sanctioned in a patent infringement case. Lucent withheld four critical documents during much of the discovery process, revealing them in the eleventh hour in support of it’s expert’s rebuttal report. At the same time, deposition testimony made it clear …

Tenth Circuit reverses dismissal of action as sanction for failure to preserve electronic data in third party’s control.

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Proctor & Gamble filed a suit against Amway under the Lanham Act in 1995. In order to assess damages, P&G and its experts turned to IRI, which provides on-line market share data to companies such as P&G on a rolling basis. The district court dismissed the action based on P&G’s failure to preserve the relevant data, and the Tenth Circuit …

Fifth Circuit clarifies meaning of “inconsistent or varying adjudications” and again rejects the use of (c)(4) to certify a “composite” class.

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A class action was brought by landowners in Louisiana, Mississippi and Texas against Entergy, alleging that the company engaged in unauthorized transmission of voice, data and video communications across their land. The plaintiffs argued that certification was appropriate under all three subsections of 23(b), or that, in the alternative, a “composite” (or “hybrid”) should be certified under (b)(2) for liability …

Korean statute of repose bars third-party claims by cargo owners arising out of casualty aboard a Panamanian vessel on a voyage from France to the United States.

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In 1985, Hyundai added a section to a Swedish vessel through Lloyds per contract governed by English law. The addition and subsequent repairs were performed by Hyundai in Korea. Subsequently, the vessel was purchased by a Panamanian firm, and eventually “hogged” on a voyage from France to the U.S. The shipowner brought a limitation-of-liability proceeding in the Southern District of …

Ninth Circuit reverses $50,000 sanction where evidence of intent is lacking.

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In a Lanham Act case, the district court awarded the plaintiff $50,000 for the defendant’s breach of its license by failing to preserve all of its records of sales and purchases. The defendant argued that this was an improper award of contractual damages; the plaintiff countered that it could be considered a civil discovery sanction, or a civil penalty under …