In House: May 2011 Archives
In House - The FindLaw Corporate Counsel Blog

May 2011 Archives

eBay, PayPal Sue Google Over Mobile Payment Trade Secrets

In a clash of titans, eBay and PayPal have sued to stop Google implementing a mobile payments system for its Android phone. The system would allow consumers to make bank and merchant payments through mobile phones.

The EBay/PayPal lawsuit, filed in California state court this week against Google, highlights an ongoing turf war over a $1 trillion opportunity in mobile payments. Combatants range widely from traditional financial and credit card companies, to tech-sector companies, reports Reuters.

The latest battleground centers on the contents of the heads of two executives.

Stephanie Tilenius worked at eBay for eight years, before joining Google in February 2010 as vice president of e-commerce.

Sure, SEC, we'll investigate your foreign corruption allegations ourselves. Our lawyers will want to talk to you, then they will start piling up billable hours.

The Justice Dept. and SEC continue to rely heavily on companies to investigate themselves, and to root out potential fraud, reports The Washington Post.

The probes range wide and cost a lot. So Justice and the SEC often let the companies investigate themselves, reports the Post.

And it happens most commonly in cases of foreign corruption allegations.

So who benefits?

In Bauman v. DaimlerChrysler Corporation, the Ninth Circuit Court of Appeals has overruled the trial court's dismissal of Daimler Chrysler AG, from a lawsuit brought by survivors and heirs of Argentina's "dirty war," reports Reuters.

The trial court had dismissed the plaintiffs' case for lack of personal jurisdiction over DaimlerChrysler AG. So now Daimler-Chrysler must defend the plaintiffs' claims on the merits.

Argentina's military government engaged in a "dirty war" against its political opponents between 1976 and 1983. Dark accusations of responsibility for the deaths and disappearances of between 13,000 and 30,000 individuals followed the junta during and after its run in power. Most of the "disappeared ones" ("desaparecidos") were political activists, students, labor organizers and journalists.

A group of 22 survivors and heirs, all but one Argentine nationals, sued DaimlerChrysler in U.S. District Court in San Jose, California, in 2005. Plaintiffs allege Daimler-Chrysler's subsidiary, Mercedes-Benz Argentina, participated in the kidnapping of employees and labor organizers by the military dictatorship. Thus, plaintiffs claim, DaimlerChrysler has liability for those individuals' kidnapping, beatings and deaths, reports Reuters.

So how does a U.S. District Court in California have in personam jurisdiction over a multinational corporation with headquarters in Germany?

Quest Diagnostics to Pay $241M in Medi-Cal Overcharging

California's Medi-Cal program will receive $241 million from Quest Diagnostics, to settle an overcharging case, reports the Associated Press.

Quest Diagnostics, the largest provider of medical laboratory services to Medi-Cal, will now pay the largest-ever reimbursement recovery under the state's False Claims Act.

California Attorney General Kamala Harris' announcement this week that Quest Diagnostics has agreed to pay the $241 million, illustrates just how seriously a qui tam action can affect a Medi-Cal provider company.

Quest Diagnostics agreed to pay the $241 Million to settle allegations it overcharged Medi-Cal and paid kickbacks to doctors, hospitals and clinics over a 15-year period.

In-house law staff seem to have discovered a radical notion, hitherto anathema to the in-house defense mindset: you can sue people for money.

And if you file and win "plaintiff recovery actions," you might even pay for all or a big chunk of your law department budget.

In at least one recent quarter, Ford offset their entire legal department budget with plaintiff recoveries, Ford general counsel David G. Leitch told The Wall Street Journal.

Plaintiffs' lawyers can only smile, and nod knowingly. Yes, when you sue someone who owes you money, get a judgment or settlement, and collect it, you can make money.

Raj Rajaratnam Case Will Affect Many Corporations Going Forward

Billionaire investor Raj Rajaratnam has been found guilty of fraud and conspiracy by a federal jury in New York. He will likely face up to 15-1/2 years in prison, according to Reuters.

His conviction - and the government's push for use of wiretap evidence against Rajaratnam in trial - will have repercussions in securities law, and the way securities violations are prosecuted.

"It's a historic verdict. It's a dramatic verdict. It will likely set the stage for a dramatic change not only in the way that the Wall Street insider-trader activities are investigated and prosecuted, but most likely this will have a chilling effect on individuals and companies that trade," says Bill Singer, a securities lawyer with Gusrae, Kaplan, Bruno & Nusbaum to Reuters.

Justice Department searching Google. Google's advertising practices. Not antitrust violations.

Search that on your favorite Internet search engine, and you will find Google, Inc., just set aside $500 million of the $2.3 billion it reported to the Securities and Exchange Commission (SEC) as earnings in the recently-closed first quarter of 2011.

That means Google, Inc. has set aside half a billion dollars for something. Something related to the Justice Department investigation. But the search giant is being cryptic about it. Perhaps at the GC's request?

Many are wondering just where has the Justice Department focused its probe? It turns out that beyond "advertising practices by certain advertisers," nobody is talking about the specific advertising problem, or the specific advertisers, reports Siliconvalleywatcher.com.

Whistle-Blower Lawsuit Alleges Fraud in AIG Bailout

You've heard noise in the press about the lack of indictments against corporations and individuals after the AIG bailout, and the subsequent government intervention in equity markets in late 2008.

In view of a civil case just unsealed in San Diego, in-house counsel should consider their client entities' exposure to suits from individuals under the False Claims Act, 31 U.S.C. sec. 3729. This is especially true of counsel to any entity that received money or loan guarantees as part of the TARP program.

Miss. Jury's $322M Asbestos Verdict is Largest in US History

Is asbestos litigation back in the spotlight?

A $322 million jury verdict in Mississippi, the largest asbestos verdict in U.S. history, has pushed the envelope. Plaintiffs and plaintiff's attorneys are cheering - while attorneys for chemical companies are reeling.

Deutsche Bank Under Fire: Sued by US Attorney, City of Los Angeles

Counsel for Deutsche Bank is about to become incredibly busy.

Both the Department of Justice and the City of Los Angeles have filed suit against the mega-lender this week, the former accusing the company of mortgage fraud, and the latter alleging that is has allowed its local properties to illegally fall into disrepair.

Should Foreign Lawyers be Able to Practice in Limited Fashion?

The ability of foreign attorneys to provide legal advice and serve as in-house counsel in the United States may soon be expanded.

The ABA Commission on Ethics 20/20 is proposing amendments to the ABA Model Rules of Professional Conduct.

Independent Contractors: Beware Worker Misclassification Traps

Last month it was announced that Levi Strauss & Co has agreed to pay $1 million in back wages to about 600 employees after a government investigation found that the company had misclassified employees, deeming them exempt from overtime.

The settlement is one of many in a recent deluge of employee misclassification lawsuits and investigations under the Fair Labor Standards Act, and with new legislation on the way, it’s only going to continue.