News

SCOTUS Denies Certiorari, Lets Win Stand

January 18th, 2022

     The Supreme Court denied a petition for a writ of certiorari today on an issue of preemption, where CCL represented the plaintiffs in opposing review. 

     In Edward D. Jones & Co., L.P. v. Anderson, No. 21-552, the financial management firm sought Supreme Court review of a Ninth Circuit decision that the plaintiffs' claims were not preempted by the federal Securities Litigation Uniform Standards Act (SLUSA), which was enacted to cover lawsuits based on the purchase or sale of a covered security. The Ninth Circuit had held that, when Edward D. Jones switched the plaintiffs from commissioned-based fees on their investments to an annual management fee arrangement, the complaint about the higher fees was unrelated to purchases or sales. The plaintiffs were "buy and hold" investors, which means that after making their original purchases they largely rode the market, rather than engage in frequent trading. As a result, their accounts generated very few commissions. The annual management fee, on the other hand, taxed clients a percentage of their investment, guaranteeing income to the firm.

     Lawyers for Edward D. Jones argued that the federal appellate circuits had split on whether the litigated issue had to "coincide with" or be "material to" a purchase or sale and asked the Supreme Court to settle that issue through this case. CCL's brief in opposition to certiorari argued that the issue in the case was utterly unrelated to a purchase or sale and thus provided no occasion for the Supreme Court to take up the issue. In representing the plaintiffs, CCL joined Franklin D. Azar & Associates, who had won the case in the Ninth Circuit. 

CCL Urges Supreme Court to Reject Cert Petition in Investors' Lawsuit

December 15th, 2021

      Representing investors who sued Edward D. Jones (EDJ), the financial management company, a CCL brief urged the Supreme Court to deny certiorari after the Ninth Circuit held that the case could move forward. 

      As co-counsel with Franklin D. Azar and Associates, CCL represents a putative class of passive investors, who purchase stock and then hold it while its value appreciates. They held their investments at EDJ, which only charged commissions when the stocks held were traded. Because these investors rarely traded, EDJ did not make any profit on the funds held. To make these investments generate money, EDJ convinced the investors to switch to annual management-fee accounts that charged them for "advice" on maintaining or increasing their investments. Although no advice was ever given, the cost to investors was substantially greater.

     The investors then sued under state law, arguing that EDJ's failure to conduct a suitability analysis before pushing for the change in the accounts. EDJ countered by arguing that federal Securities Litigation Uniform Standards Act (SLUSA) preemptively barred any lawsuits. A federal district court sided with EDJ and dismissed all claims with prejudice. The Ninth Circuit, however, unanimously reversed, finding that the claims were not premised on the sale or purchase of a security, a requirement for application of SLUSA, but instead on fees charged for passive accounts.

      EDJ argues that the federal circuit courts are in disagreement about what constitutes a qualifying sale or purchase, with some relying on Supreme Court precedent that the basis of the lawsuit must merely "coincide" with a sale or purchase, while others rely on subsequent Supreme Court precedent that requires the complaint topic be "material" to a purchase or sale. In its opposing brief, CCL argues that the dispute between "coincide" or "material" is irrelevant to this case because the gravamen of the complaint has no connection at all with a sale or purchase. 

     An EDJ reply brief is expected in early January. Afterwards, the Supreme Court will review the case in conference to determine whether to take up the matter.

Federal Court Holds Prep Act Does Not Apply to the Non-Use of Countermeasures, Remands Case to State Court

October 22nd, 2021

     In a case in which CCL assisted the Levin Perconti law firm, a federal judge in Illinois granted the plaintiffs' motion to remand the case to state court where the defendant nursing home had removed it to federal court. Martin v. Petersen Health was brought on behalf of a nursing home resident who died as a result of exposure to COVID-19. The defendant removed the case to federal court, claiming that it was acting on behalf of the federal government and that the federal PREP Act completely preempted the cause of action.

     In rejecting both claims, the federal court found that nursing homes were highly regulated but under Supreme Court precedent the homes cannot claim to be operating at the direction of a federal officer by complying with regulations. It further held that the PREP Act provides an exclusive remedy in federal court in Washington, DC for lawsuits based on the administration or use of approved countermeasures during a national health emergency. However, it does not provide a defense for the non-use of those countermeasures, as plaintiffs had pleaded. The court ordered the case returned to state court, where the defendant was free to assert any federal defenses it might have.

CCL Amicus Brief for Local Government Groups Supports Baltimore in Fourth Circuit

September 14th, 2021

    CCL filed an amicus brief arguing that cities, no less than any other plaintiff, have a right to choose their causes of action and litigate in state court without being removed to federal court. The case, Mayor and City Council of Baltimore v. BP, is currently before the U.S. Court of Appeals for the Fourth Circuit on remand from the U.S. Supreme Court. The issue is whether any of the remaining grounds asserted by the defendant oil companies constitute a federal cause of action that should be heard in federal, rather than state, court. The Fourth Circuit had previously held that one ground, that the oil companies were acting at the direction of the federal government when they allegedly created a public nuisance and deceived the public about the climate-changing properties of fossil fuels, did not justify removing the case from state court. It further held that the statute that permitted that appeal, restricted the appeal to that issue.

     Subsequently, the Supreme Court ruled that all grounds for removal were subject to appeal when an order covers both federal officer removal justifications and other ones. 

     In its brief on behalf of the National League of Cities, U.S. Conference of Mayors, and International Municipal Lawyers Association, CCL argued that the oil companies were wrong to claim that the state law causes of action were a disguised form of federal common law, that the federal Clean Air Act explicitly did away with federal common law in this field and opened the door to state lawsuits seeking to remedy localized harms, and that the lawsuit did not seek to remedy climate change, but instead sought compensation for distinct effects that Baltimore suffered.

    The defendant oil companies will have an opportunity to file a reply to Baltimore's brief and all amicus briefs supporting it before the case is scheduled for oral argument.

     

CCL Files Amicus Brief for Local Government Groups in Eighth Circuit Climate Change Case

August 25th, 2021

     Arguing that state and local governments have the same rights as other plaintiffs to choose state, rather than federal court, a CCL amicus brief asserted that there was no legitimate basis for oil companies to remove a climate-change lawsuit brought by the State of Minnesota to federal court. The brief, on behalf of the National League of Cities, the U.S. Conference of Mayors, and the International Municipal Lawyers Association, focuses most heavily on the oil industries' argument that federal common law completely displaced the state causes of action asserted in the case. 

     In June, the U.S. Supreme Court held that a similar action brought by the City of Baltimore required lower courts to review all the claimed bases for federal-court jurisdiction when a defendant asserts that it was acting at the direction of a federal officer, even if that assertion fails as a matter of law. In the Minnesota case, the oil company defendants made that argument but did not seriously pursue it on appeal, emphasizing the other grounds that would permit it to be in federal, rather than state, court. 

     As for the "federal common law" argument, the amicus brief argued that the Clean Air Act displaced any federal common law and explicitly opened the door to state causes of action, such as the ones filed by Minnesota. The amicus brief was filed with the Law Offices of William Rossbach.

Ninth Circuit Finds No Preemption in Medical Device Case

August 13th, 2020

     Agreeing with an amicus curiae brief filed by CCL on behalf of the American Association for Justice, the Ninth Circuit held that the Supreme Court cases of Medtronic v. Lohr (1996) and Reigel v. Medtronic (2008) controlled the decision on preemption in this medical device case. 

      The case concerned defective Bard IVC Filters, which are transplanted into a person's body. Bard argued that the two precedents had been impaired and that a subsequent congressional enactment meant that states could not impose liability for failure to warn of known defects. CCL's brief refuted those contentions, and the Ninth Circuit agreed that they had no merit. 

      The case was In re Bard IV Filters Prods. Liab. Litig., No. 18-16349.

Supreme Court Preserves Victory of Railroad Crossing Preemption Issue

April 22nd, 2019

     The U.S. Supreme Court denied the railroad's petition for certiorari in BNSF Railroad Co. v. Nye today, marking the end of the case in which CCL served as Supreme Court counsel. 

      The case involved the death of an eighth-grade science teacher after his car was struck by a BNSF train. His widow asserted that the train was negligent because of the railroad's failure to post adequate warning signs of the crossing, its failure to trim vegetation that obscured the line of sight so a driver could see the approaching train, and the train's failure to sound its horn as it approached the crossing, as required by law. An Oklahoma jury found the railroad liable, and that determination was affirmed by the Oklahoma Supreme Court.

      The railroad argued that it could not be held liable for its failure to post adequate warning signs because the signs at the crossing was part of a federally funded program in the 1970s. If that were true, participation in the program preempts claims for inadequate warnings. However, the railroad's evidence of federal funding was weak and rebutted by strong evidence that federal funds were not used at the crossing. The trial court submitted the question on the competing evidence to a jury. The Oklahoma Supreme Court upheld the jury's determination.

     The railroad asked the Supreme Court to revisit the question and lessen the burden of proof that the railroad needed to qualify for preemption, particularly in light of how long ago the railroad crossing sign was said to have been posted. It further asked that the Court hold that the factual determination of federal funding be treated as a legal, rather than jury, question. Alternatively, the railroad asked the Court to seek the opinion of the Solicitor General of the United States on whether the case should be taken, or to hold the case while the Court decided a drug-preemption case that also involved a jury's determination of facts.

     The denial of certiorari today means that the Court did not take up any of the railroad's entreaties, and the case is over. CCL President Robert S. Peck served as counsel of record in writing the brief in opposition to certiorari.

CCL Files Brief in Opposition to Supreme Court Petition in Preemption Case

March 19th, 2019

     Today, CCL filed a brief on behalf of Juanita Nye, opposing the petition for certiorari filed by BNSF Railway Co., which seeks to avoid its liability in the death of Ms. Nye's husband at a railway crossing in Oklahoma.

     Jeffrey Nye, a 51-year-old eighth-grade science teacher and sports coach, was killed when a BNSF train hit his car. Vegetation overgrowth hid the approaching train, which also failed to sound its horn to warn motorists at the crossing. The vegetation also obscured the railroad crossing sign. A passenger in the vehicle who was injured but survived reported that Mr. Nye yelled "train" just as his car began to cross the tracks and the train first became visible.

     BNSF asserted that it cannot be sued for inadequate signage, known as crossbucks, because the signs were funded as part of a federal program that preempts state causes of action on those grounds. However, it failed to produce evidence that the particular crossbucks at issue were part of the federal funding project. Instead, evidence established that, at the time the federal project was completed, only one crossbuck had been erected and that the current crossbucks were different on each side of the track, both facts are inconsistent with any claim of federal funding and compliance with the specifications of the program, which require two crossbucks that would be identical. The trial court found the evidence sufficiently in dispute that it denied BNSF summary judgment and held that the issue was ripe for the jury's decision.

     The jury found liability and implicitly decided the factual issue of funding against BNSF. It appealed to the Oklahoma Supreme Court, which upheld the verdict. That court determined that BNSF's appeal was little more than an attempt to re-try the case in the supreme court by arguing all facts were matters of law for the court's, rather than the jury's determination.

     Before the U.S. Supreme Court, BNSF argues that Oklahoma imposed a more stringent standard of proof to support preemption than federal courts do and that intervention is necessary to permit railroads to claim preemption on the basis of unrebutted circumstantial evidence because records from 30 years ago are too scattered and fragmented. CCL's brief demonstrates that the Oklahoma Supreme Court's decision is consistent with both prior U.S. Supreme Court decisions and with other federal courts. BNSF's claimed circuit split simply does not exist. Moreover, the facts overwhelmingly support Ms. Nye's claim that federal funding was not involved with these particular crossbucks and that liability exists even without the sign issue because of the overgrown vegetation and the failure of the train to sound its horn.

     BNSF will have an opportunity to write a reply brief, and the Supreme Court is likely to take the matter up at its April 5 conference.

Minnesota Star-Tribune Reports on CCL Victory in Jones v. Medtronic

March 29th, 2018

Appeals court panel revives suit faulting Medtronic drug pump in patient death

CCL Wins Medical Device Preemption Appeal

March 26th, 2018

     The Minnesota Court of Appeals today held that claims on behalf of a 17-year-old girl who died when her medical implant failed were not preempted by the federal 1976 Medical Device Amendments.

      In Jones v. Medtronic, Inc., the court ruled that the trial court had mistakenly dismissed claims for manufacturing defects, failure to warn, and breach of express and implied warranty as preempted. Instead, the court held that the liability action paralleled federal requirements and therefore could proceed.

     Kaitlyn Jones suffered from congenital severe cerebral palsy with spastic quadriplegia. She was implanted with a Medtronic SynchroMed(R) II device to deliver periodic, controlled doses of medication to control her muscle spasticity. Due to undisclosed cycles of overinfusion and underinfusion caused by malfunctions, the medication was not delivered, resulting in Kaitlyn's death. 

     Accepting Medtronic's argument that the complaint filed on her behalf lacked sufficient specificity to constitute a parallel claim, the trial court dismissed the case. CCL President Robert S. Peck represented the plaintiffs on appeal, arguing that violations of federal regulations identified by the Food & Drug Administration in warning letters, recalls of the device, and a lawsuit seeking to enjoin its further use replicated product liability actions under Minnesota law. Citation of these federal violations in the complaint with the parallel elements of Minnesota law provided fair notice of the basis of Medtronic's liability, he said in briefs and the February 1 oral argument before the court. The Court of Appeals unanimously agreed.