Decided - The FindLaw Noteworthy Decisions and Settlements Blog

November 2011 Archives

FTC, Facebook Reach Privacy Settlement

Facebook has reached a settlement agreement with the Federal Trade Commission over claims that the social network deceived consumers when it promised to keep personal information private. Most allegations stem from the 2009 privacy changes, which had much of the Internet up in arms.

Those changes reset search settings and made a number of items public even when a user had set them to "Friends Only." This included the publishing of friends lists, network information, and profile pictures.

The Facebook settlement ensures that this won't happen again.

Judge Rejects SEC Settlement with Citigroup

Federal Judge Jed S. Rakoff rejected an SEC settlement with Citigroup on Monday. The decision may have ramifications beyond the current case.

Citigroup was charged with negligence for selling customers funds known as Class V Funding III. The mortgage securities fund was populated by securities chosen by Citigroup, though the bank told investors they were picked by an independent third party. The bank then bet against their own fund, predicting that it would lose value.

And it did. Investors lost $700 million, while Citigroup gained $160 million in profits, according to the SEC. The rejected settlement would have allowed Citigroup not to admit any wrongdoing. They would have paid out $285 million.

Ninth Circuit Overturns AOL Privacy Settlement

Have you heard about the AOL privacy settlement? Probably not. A group of attorneys--with a few named plaintiffs--sued the company after it began placing banner ads in the bottom of emails.

How that violates user privacy, we may never know. The two sides settled for $250,000 in legal fees and $110,000 in damages. And the 66 million AOL users represented in the class action?

Before Monday, they were set to get absolutely nothing.

Merck to Pay $950M in Vioxx Settlement

The Department of Justice has announced that it reached a $950 million Vioxx settlement with Philadelphia-based drug manufacturer Merck. The total settlement includes a $321.6 million criminal fine and $628 million in civil damages. States participating in Medicaid will share in half of the monies.

The company already paid $4.85 billion to settle a number of related consumer product liability suits in 2007. As with those allegations, the Justice Department had accused Merck of making misleading statements about Vioxx’s cardiovascular safety, as well as illegally marketing the drug for off-label uses.

Oregon’s death penalty is history — again. The state’s Democratic Gov. John Kitzhaber announced Tuesday he will not allow any more executions while he’s in office.

Kitzhaber’s announcement followed Monday’s decision by the Oregon Supreme Court to allow a death row inmate to be killed by lethal injection Dec. 6. That inmate, convicted murderer Gary Haugen, has now been given a “temporary reprieve.”

In remarks Tuesday, Kitzhaber, a physician, called Oregon’s death penalty “a perversion of justice” — morally wrong and unjustly administered, The Oregonian reported.

Kitzhaber also cited high costs tied to the death penalty, and said Oregon should look to other states such as Illinois, New Jersey and New Mexico, which have recently turned their backs on capital punishment.

GA Supreme Court Rules Against Breakaway Congregation

The Georgia Supreme Court has ruled against a breakaway congregation of the Episcopal Church, Christ Church, deciding that the local church's property is legally owned by the national organization.

Christ Church was founded in 1733. The church co-founded the Episcopal Diocese of Georgia and joined the Episcopal Church in 1823. In 2007, the Episcopal Church affirmed its first openly gay bishop in New Hampshire. After this move, the congregation voted to sever its ties to the national organization. They became affiliated with an Anglican diocese in Uganda.

But, Christ Church refused to give up the buildings and property where their church was located.

Federal Judge Member of Discriminatory Country Club?

Belle Meade country Club is a 110-year old private organization in Nashville Tennessee. Its bylaws allow only 175 unmarried "Lady Members" at a given time. And despite a number of qualifying applicants, it counts only one African-American member amongst its ranks.

Judge George C. Paine, the Chief Judge for the Bankruptcy Court for the Middle District of Tennessee, has belonged to Belle Meade for over 30 years. On Thursday, his membership became the basis for a finding of judicial misconduct.

Prop 8 Standing: Proponents Have Right to Appeal Says Court

This morning, the California Supreme Court officially weighed in on the issue of Prop 8 standing, and it isn't looking too good for the initiative's opposition. The high court found that California law does give Protect-Marriage and Yes on 8 the right to appeal the 2010 decision overturning Proposition 8's ban on same-sex marriage.

Supporters of the ban took up the defense of Prop 8 when the governor and attorney general refused to do so. But once in the 9th Circuit, the court questioned whether they had standing to appeal. The appellate panel thus asked the California Supreme Court to determine whether such a right exists under state law.

Foreclosure Buyer Gets Nothing, Mass. High Court Rules

Massachusetts foreclosure buyers best beware after a just-released decision by the state's highest court.

Francis Bevilacqua purchased a foreclosure home from U.S. Bank in 2006, only to find out that he doesn't hold clear title to the property. Turns out that the bank didn't yet own the mortgage when it foreclosed on the building.

The bank therefore never legally transferred title to Bevilacqua, who must now contend with the original owner.

Glaxo $3B Fine Largest Healthcare Fraud Settlement in History?

In the largest healthcare fraud settlement in U.S. history, British drug manufacturer GlaxoSmithKline has agreed to pay the government $3 billion.

The settlement covers about 10 years worth of federal civil and criminal investigations. Glaxo had been accused of improperly marketing a number of drugs, including Wellbutrin, Paxil, Advair and Avandia.

Allegations of Medicaid fraud are also covered by the agreement.

New Graphic Cigarette Warnings Blocked by Judge

The Food and Drug Administration's new graphic cigarette warnings may never make it to market.

On Monday, the tobacco companies won a temporary injunction barring enforcement of a regulation that places graphic images on cigarette packs. The gory images depict the more horrendous effects of tobacco use, and are accompanied by a series of textual warnings.

Federal Judge Richard Leon determined that the regulation illegally compels speech in violation of the First Amendment.

Horn Honking Restrictions Violate Free Speech, Washington Court Rules

Horn honking is protected speech. At least when it is intended to convey an easily understood message.

This very conclusion was at the center of a Washington Supreme Court ruling this week, which dealt with a Snohomish County horn honking law. That law makes it illegal to honk one's horn for purposes other than public safety or as part of an official event.

Helen Immelt violated the law and spent one day in jail. She sued, arguing that the horn honking law is overbroad, and thus violates the First Amendment.

IL Court Upholds Verdict Despite Juror's Blog Posts

A blogging juror can ruin a trial, but luckily for the family of Scott Eskew, it did not ruin theirs.

Eskew's family sued Metra after one of its trains struck and killed him. During trial, freelance writer and blogger Eve Bradshaw posted 6 entries describing her time as a juror. This was in spite of a court order to keep the details to herself.

Metra found out and challenged the $4.75 million verdict. It has since been upheld by an Illinois appellate court.