Contingency Business Litigation Attorney Blog

A doctor will receive more than $4 million as part of a Florida qui tam lawsuit settlement after blowing the whistle on a dermatologist accused of defrauding the federal government.

Our qui tam attorneys understand that this case goes all the way back to a 1997 agreement the dermatologist reportedly made with a small clinical laboratory - one that involved illegal kickbacks, improper Medicare billing and in some cases even performing unnecessary (and expensive) procedures in order to make more money.

As the former physician employee had done the right thing in bringing it all to light, he will now reap the rewards, per 31 USC 3729, The False Claims Act.

According to the Department of Justice, the dermatologist would take biopsy samples from Medicare patients. Those samples would then be sent to the local laboratory. The lab then returned the results of those tests, except with paperwork that made it appear to Medicare that the dermatologist's office itself had conducted the diagnostic tests. Then, the dermatologist would bill Medicare for that work as if it was his own.

In doing so throughout the course of more than 10 years, he fraudulently collected more than $6 million from the government.

What's more, it appears that a number of those biopsies weren't even necessary. In comparing the sheer number of biopsies the dermatologist ordered prior to that agreement, significant increase was noted -- indicating that many of those procedures were only being conducted so that the doctor could increase the Medicare payouts and the lab could increase its referral business.

The dermatologist was also accused of conducting literally thousands of skin surgeries that were not necessary. Specifically, these were adjacent tissue transfers. This is a complex and lengthy procedure that doctors will sometimes perform in order to close a defect that has resulted from the removal of another growth on a person's skin. Curiously, these were primarily conducted on Medicare patients - and at a much higher rate than one might expect to normally see.

The doctor to bring forth the allegations, filed in the District Court for the Middle District of Florida, was a pathologist who worked at the lab. The doctor who ran that lab had already settled with the government for $1 million.

A qui tam lawsuit is one in which a private-party whistleblower files a lawsuit on behalf of the U.S. government for a violation of false claims. In turn, that plaintiff may collect a share of the recovery. In this case, the whistleblower received 15 percent of the total settlement amount. In some cases, whistleblowers have received even more.

The Department of Justice reports that as of January 2009, its offices have recovered more than $10 billion under the False Claims Act - specifically for federal health care fraud. This is huge not only here in Florida but across the country, as it accounts for the bulk of cases under the False Claims Act. Total U.S. DOJ recoveries under the act since 2009 are just above $14 billion.

This case was reportedly the largest qui tam settlement for the Middle District of Florida.

Continue reading "Florida Qui Tam Lawsuit Wins Medicare Fraud Whistleblower $4 Million of $26.1 Million" »

Attorneys for the state of Florida have agreed to pay $7 million in order to avoid a potentially expensive and protracted legal battle with a technology firm with which it contracted for e-mail consolidation.

Contingency business litigation lawyers know that in general, while settlements tend to be less than what a client might obtain in the event of a trial win, they are less risky and take considerably less time. Still, legal expenses can be a primary concern when it comes to deciding whether or not to pursue litigation. By hiring a business law firm on a contingency-fee basis, you can be assured of experienced legal help and will only pay legal fees in the event the firm is successful in making a recovery on your behalf.

This case is an illustration of what is too often typical when dealing with the government. A project had been approved and then funding later pulled out from underneath it - after a contract with a private company had been signed. However, the fact that the state didn't have the funds to cover the project doesn't legally make it any different than any other entity.

Three years ago, state legislators reportedly ordered the project to consolidate the varying e-mail systems used to maintain nearly 120,000 e-mail accounts held by various state government employees, with the ultimate objective to give all state workers common e-mail addresses.

Gov. Rick Scott reportedly liked the idea as well, and a subsidiary of Xerox was tapped in 2011 to complete the project in a seven-year window. However, other high-ranking state officials, such as Attorney General Pam Bondi, were not in favor. They contended that the $15 million in savings that was promised as a result of the switch would never materialize.

So last year, state legislators formally backed out, pulling the rug out from underneath the project by refusing to release the necessary funds.

Even if the Xerox subsidiary hadn't actually started any work, there would still have been grounds upon which to take the state to court. Breach of contract is simply when one party of a binding agreement doesn't honor its obligation. The evidence that this occurred here was ample.

Putting the company on even firmer footing, though, was the fact that it had reportedly already spent $30 million to get the project underway.

So in fact, the settlement only mitigates what amounts to a $23 million loss for the company. However, the state would likely have fought vigorously - and for a long time - against any payout, which is why the plaintiff likely decided to simply take the settlement. Such a move will reduce your overall legal costs, time investment and public relations efforts, but again, will likely be significantly less than the overall amount you stood to win had you taken the case to trial.

In this case, company officials said part of their reasoning for accepting the settlement was to continue what they hoped would be a constructive working relationship with the state. That is, souring the business relationship would have been an added cost of trial - one that the firm wasn't willing to make for such a large potential future client.

The settlement will still require approval from the state legislature. There is no assurance this will happen either, as several state senators are taking a political stance on the matter - despite this being a clear issue of contract law.

That's the danger sometimes when you enter into government contracts. As such, all these agreements should be thoroughly vetted by a business attorney BEFORE they are signed - to assure that if you run into this kind of problem, your rights, assets and interests will be well-protected.

Continue reading "Florida Pays Tech Firm $7M to Settle Business Contract Dispute" »

An airport in northern Florida is on the brink of filing a business litigation lawsuit against an airline that has not made good on its debts.

Our contingency business litigation attorneys understand that Northwest Florida Regional Airport administrators are at the end of their rope - saying that they have tried unsuccessfully for the last year to get Vision Airlines to settle its debts.

We recognize that even when trying to maintain a civil business relationship, there is only so much leeway a company can give to avoid litigation. It is in these cases that firms must seek the experience of a skilled business litigation lawyer who can aid in the aggressive pursuit of obtaining what rightfully belongs to the company. Such action also sends a clear message to current and potential clients that you will deal fairly with clients while doing what's necessary to protect your rights.

In this case, the airline allegedly owes the airport some $150,000. Despite ongoing discussions for the last year, the airline suddenly cut off contact with the airport. Airport officials are now in the process of requesting notice of legal action to be filed in the event that full payment isn't made by a set date.

The primary issue is passenger facility charges. At the time of each ticket sale, the airline charges customers a fee as part of its overall ticket price that goes toward covering the airport expenses. These fees are collected in accordance with Federal Aviation Administration standards - and its been documented that the airline did in fact collect them from passengers. However, the airline has reportedly failed to pass those funds on to the airport, as required.

The charge per ticket is minimal - $4.50 each. The airline even gets to keep 11 cents of that. The rest, however, must go to the airport within a month's time. Given the debt of what's owed, we can see that this has been a systematic and ongoing failure.

The airline reportedly began offering flights at the airport back in late 2010. However, it didn't start charging passenger facility fees until almost a year later. At that time, the airline submitted a $55,000 payment to the airport.

Officials with the airport say they haven't taken action up until now because they have been trying to work with the airline and give them a chance to do what's right. The agreement was that the airline would send in a $25,000 payment every week until the debt has been satisfied.

But it hasn't. And now, the amount owed has ballooned.

Most of the $150,000 owed in this case is from those unpaid passenger fees. However, about $35,000 of it is from utilities that weren't paid, as well as overdue rent, fuel for ground servicing equipment and tacked-on late fees.

Quoted by local reporters, an airport spokesman said part of the reason they delayed action so long was because they didn't want to send the message to their other business partners that they would be quick to sue. They are of course trying to maintain the relationships they have in an industry that has suffered tremendously in a down economy. However, a company can only be pushed so far.

If you find your firm has reached that point, call us today to see how we can help.

Continue reading "Florida Business Files Lawsuit After Failed Compromise Attempts" »

Broward County officials have filed suit against the parking management company of the Fort Laurderdale-Hollywood International Airport, as well as its owner, alleging that the company knowingly submitted false - and inflated - invoices.

Contingency business litigation attorneys realize that cases such as this, with conflicting payment disputes, often stem from innocent misunderstandings or accounting errors. However, proving it in civil court, however, requires a skilled attorney - particularly in a case like this, where $47 million is at stake.

According to the Sun Sentinel newspaper, the county is suing USA Parking and owner Central Parking Corp. (both out of Tennessee) for allegedly defrauding the county by submitting more than 100 false invoices that made it seem as if the county owed more money to the company than it actually did.

While the company has denied billing the county anything over what was actually owed, plaintiff attorneys maintain that company officials admitted the fraud under oath. It's not clear at this point what evidence the county has to support this claim.

Both sides are currently discussing a settlement, but it's not clear if they are anywhere near reaching a resolution.

The county says that the company significantly over-billed on insurance for at least two years. Apparently, the parking company was largely self-insured. It reportedly charged the county for insurance at a premium rate, while the parking company was paying a much lower rate, and then keeping the difference. The county is going so far as to say the parking company produced phony letterhead from an insurance broker.

Parking administrators say these bills were appropriate and that the county was never charged any more than what it had agreed to pay.

Still, as a result of the seriousness of the allegations, the county's director of aviation is attempting to bring in another company to at least temporarily handle the airport's parking contract on an emergency basis. That includes waiving any competitive bid process that a company might normally have to undergo to land such a job.

If it is later revealed that the parking company was in the right, it may be owed hundreds of thousands of dollars in lost revenue as a result of this action, specifically.

Parking is actually the biggest money maker for the airport, raking in nearly $3.5 million every single month, with profits topping $40 million annually. The company has held the contract for more than 15 years.

The allegations of fraud come at an interesting time, given that the county is a holding pattern with the company over that contract, which the county voted not to renew in the spring. It opened the bidding process, but the current company didn't make the shortlist. Now it's appealing that decision, and the entire process has been brought to a halt.

Usually, when a new bid is being negotiated, the old contractor will hold onto it until there is a final decision. But the county is attempting to use these allegations to push the old company out sooner.

Parking company officials say that the move is an unnecessary risk at a time when the airport is at its absolute busiest - during the holidays. Not only would the parking company lose, but the county could as well. Allowing an inexperienced company to move in on such short notice during such a chaotic time could result in all sorts of problems for travelers, which could spell big headaches for both the airport and the county.

Continue reading "Florida Business Lawsuit Over "False" Invoices to Broward County" »

At the outset, the case of Vringo v. Google would seem akin to David v. Goliath.

Our contingency business litigation lawyers understand that while search giant Google trades at a market value of about $250 billion, Vringo is a tiny tech company with a market cap that is under $250 million. For those keeping score at home, that makes it less than 1/1,000th the search giant's size.

But when it comes to patents, the size of your company doesn't matter - it's whether you have a valid claim to the technology or idea in question.

Vringo is among a number of smaller companies that have been derogatorily dubbed "patent trolls," for the simple fact that they rarely have an operational business outside of purchasing and fighting for patent rights in court. These are also sometimes referred to as Non-Practicing Entities. Vringo recently purchased some 500 patents and patent applications from Nokia. Other examples include Acacia Research and Virnet X, which now both have market caps of more than $1 billion.

This case in particular centers on the way Google makes its money, namely, through a product called Adwords. This is the way it monetizes search results through advertisement placement that it considers relevant. Let's say that you conduct a Google search for "lose weight." The results will appear with the right column showing relevant ads and the left your actual results. Google then is paid on the basis of the number of "click-throughs" that users make to business pages, based on those searches.

Vringo, however, says that it holds the patent for this type of search and search advertising. It claims the technology was originally held by Lycos, which was one of the first search engine companies in the mid-1990s.

Interestingly, Google has chosen not to settle, as many had initially assumed it would. The company settled for $200 million back in 2004 with Overture, a Yahoo subsidiary, over a similar advertising infringement. But the outcome could be negative for both sides. Let's say Google loses. That would set a precedent that would essentially leave Google and other larger companies vulnerable to continued litigation from other Non-Practicing Entities. However, if Google loses, but only a small amount relative to the $1.3 billion Vringo is seeking, other companies may be sent a warning that the risks of bringing such litigation may not be worth it. On the other and, if Vringo loses, other such companies are going to have a tougher time making money on these type of patents.

The trial, which is being held in the Eastern District of Virginia, is expected to last about two weeks, and is currently underway.

One company that will likely be paying especially close attention is Document Security Systems. This is not a Non-Practicing Entity, but it previously purchased four patents that may be at the heart of the way that Facebook and Linkedin store, retrieve and share documents. In fact, the company has filed a similar patent suit against those companies and two others, also filed in the Eastern District of Virginia, almost one year after Vringo's.

Continue reading "Vringo v. Google - High Stakes in the Patent Wars" »

A federal judge has awarded more than $42 million to former residents of FEMA trailers who were reportedly sickened by the high levels of the chemical formaldehyde, a toxic substance often used to embalm the dead.

Our contingency business litigation attorneys understand this was a class action case involving about 55,000 residents who were Hurricane Katrina victims. They will split the award, which will be paid by more than two dozen manufacturers of the trailers. Manufacturers will be responsible for about $37 million of the damages, while FEMA contractors will be responsible for $5.1 million.

Class action lawsuits are one way that many victims are able to receive compensation for some type of common injury. Similarly, businesses that have been victimized by a common injury may seek assistance by consulting with a business contingency litigation attorney. Both permit plaintiff's access to experienced legal representation without cost until there is a recovery.

In this case, FEMA, or the Federal Emergency Management Agency, has employed the trailers as a form of intermediate housing for victims of natural disasters, namely hurricanes. For example, after Hurricanes Charley, Frances, Jean and Ivan struck Florida, FEMA distributed some 7,500 travel trailers and mobile homes across 14 sites in six counties, according to local news reports dating back to 2005.

But after that, many of those trailers were pulled from Florida to house victims of Hurricanes Rita and Katrina in Alabama,Texas, Louisiana and Mississippi. By 2006, people began to complain of falling ill after living in the trailers. There were cases of developing nosebleeds, headaches, asthma and other respiratory problems.

Air quality tests of more than three dozen of the trailers were conducted back in 2006. Those studies found formaldehyde levels that were reported as high as 0.34 parts per million. To put that into perspective, that's about what someone who works in the embalming business would be exposed to while working, according to the research.

Subsequently hundreds of trailers were tested by the government in Mississippi and Louisiana. The findings were that residents there were exposed to five times more than what someone living in a modern home would be.

Formaldehyde is a gas that is used in a large variety of products, including plywood paneling and composite wood, which are the products used in the FEMA trailers. It's a toxic, cancer-causing chemical, as defined by the International Agency for Research on Cancer. Similarly, the federal Environmental Protection Agency lists it as a substance that is a "probable" cancer-causing agent.

Although the settlement sounds quite substantial, the actual amount victims are expected to receive is about $4,000 each.

Previously, there had been three jury trials related to the issue, with hundreds of cases combined. Those took place in 2007. In each case, the jury sided with the companies, denying damage awards to the plaintiffs. FEMA has not been a party to the lawsuits.

This settlement stemmed from the companies' desire to put the issue to rest, though there are still a few pending, individual cases.

Continue reading "Former FEMA Trailer Residents Land $42M Settlement From Manufacturers" »

It appears Carnival cruise line will argue U.S. courts lack jurisdiction to preside over the lawsuits of thousands of passengers and businesses claiming damages in the wake of the Costa Concordia disaster.

The ship ran aground Jan. 13, killing 32 people. The disaster caused significant financial losses for numerous businesses when it crashed after passing too close to Giglio Island, off Italy's Tuscan coast.

The Miami-based cruise line is the corporate parent of the Costa brand, which operated the vessel, according to the lawsuits filed in both state and federal court. There is no method of bringing a class action lawsuit in Italy, where the law also does not permit attorneys to work on a contingency fee basis.

Contingency business litigation lawyers typically shoulder the cost of building a case and bringing it to trial and are only paid if they are successful in obtaining a settlement or verdict on a client's behalf. Thus, businesses have access to experienced legal help, which might otherwise be out of financial reach.

So it's no surprise that Carnival would like to see the cases moved out of the United States, where victimized passengers and businesses would have to shoulder the cost of pressing forward with such lawsuits with the hope of prevailing against the world's largest cruise-ship operator. In this case, Giglio Island businesses claim the disaster led to environmental pollution, depressed property values and deterred visitors.

The lawsuit alleges Carnival Corp. is ultimately responsible for any safety violations, negligence or recklessness that contributed to the accident. Carnival contends that everything involving Costa Crociere, the Concordia disaster and the subsequent investigation is more readily available in Italy. Costa Crociere is a subsidiary of London-based Carnival plc, which shares the same top executives and board of directors with Carnival Corp., according to the Associated Press.

Costa Crociere is based in Genoa, Italy and the Concordia never sailed into a port in the United States. However, the U.S. lawsuits argue all of Carnival's brands ultimately answer to its Miami headquarters. The company contends it does not own Concordia or manage Costa's day-to-day operations.

This case is indicative of what plaintiffs are often up against when pursuing a negligence lawsuit against an international conglomerate. The Miami Herald reports half of the 50,000 people a day who embark on a cruise do so on a Carnival ship. With 99 ships flying under nine brands, Costa is the company's third-largest cruise line. Despite a projected $400 million loss due to the tragedy, the company is still projected to earn profits of $1.5 billion in 2012.

In other words, it's business as usual at Carnival Corp. And that means a platoon of lawyers will fight lawsuits filed against the cruise ship company every step of the way -- starting with a challenge of a plaintiff's right to sue the company in U.S. courts. Additional layers of protection are already in place, via the various corporations and entities Carnival has established to own and operate cruise lines, in an attempt to further insulate the company from liability in the event of a tragedy.

Without contingency business litigation, the legal and financial resources would too often be unavailable for victims seeking justice -- and that includes cases in which businesses are harmed by the actions of an individual or corporation.

Continue reading "Contingency Business Litigation has Carnival Challenging U.S. Jurisdiction in Costa Concordia Wreck" »

The tech world is abuzz with news of the $1 billion win that a federal jury awarded multi-media giant Apple Inc. against competitor Samsung Electronics Co., which had been accused of copying key design elements of the iPhone and iPad for its own products.

It's one of the largest - if not the largest - intellectual property cases ever.

Our contingency business litigation attorneys understand that following the unanimous verdict, Apple gave the federal judge overseeing the case a list of more than a half dozen of Samsung's products that it wants pulled from the market, and the judge is set to consider that request in late September. Additionally, Apple asked the judge to triple the damages award, contending that Samsung willfully violated its patents and copied its products.

It's a case that's been closely watched due to the potential implications for a number of smartphone companies, and in turn, for millions of consumers.

Samsung is contending that the loss will mean fewer options - and higher prices - for consumers. However, at the end of the day, consumers should expect that products sold are the result of original innovation.

Although hundreds of millions of dollars are at stake here, many patent infringement cases involve smaller amounts, but are no less important. Patent and copyright infringement is akin to cheating. It's looking over someone else's shoulder to see what they're doing, and then claiming it as your own. As a society, we view this as both ethically - and legally - out of bounds.

Contingency litigation can be a smart option if you're exploring action for copyright infringement. Not many companies have the coffers that Apple Inc. does, and therefore, sometimes they view such legal costs as prohibitive to defending their rights. Contingency litigation allows you to pay your legal fees (or, more often, have the other company pay them) when you win. The problem with waiting to explore your legal options in these cases is that the longer the infringement is allowed to continue, the more difficult your case may become. That doesn't mean it's impossible, but if you can stop such action as soon as you learn about it, your chances of winning have improved.

In this case, the win was big for Apple because it not only halts Samsung's copying, it sends a clear message to future would-be violators that they should think twice before ripping off the company's distinctive designs and technology.

One way companies can protect themselves from such litigation is to consult an attorney about securing patents for any and all products uniquely created by the firm, and conversely to ensure that any other technology, services or products don't cross the threshold of patent violation.

In this case, not only will Samsung likely have to pull a number of products from the shelves (an injunction against the sale of the company's tablet similar to an iPad had already been approved by the judge in June), it will likely have to implement swift redesigns and features.

Still, we may not see the effects immediately, as Samsung is appealing the verdict and dismissal of its $500 million countersuit.

Continue reading "Apple v. Samsung Verdict Seen as a Victory for Innovation" »

Swedish manufacturer Spyker filed suit in federal U.S. court against American auto maker General Motors Co., claiming that GM is at fault for the bankruptcy of its subsidiary, Saab Automobile.

Contingency business litigation attorneys understand that Spyker is seeking $3 billion from GM in compensatory and punitive damages, as well as interest and legal fees, saying that the American carmaker sabotaged a deal between Spyker and Chinese investors.

The Saab was always produced in Sweden, but it was owned by GM, which purchased half of the company in 1990 and the other half in 2000. However, the company was reportedly only profitable during one of those years, and GM decided to sell it when the financial crisis hit. Spyker purchased it in 2010, with the understanding that GM would supply parts and technology for the Saab until at least 2014.

But then GM stopped providing those assets. Saab couldn't make any more cars, so it couldn't pay its employees. It filed for bankruptcy and was out of business entirely by December.

In its lawsuit filed in the U.S. District Court of the Eastern District of Michigan, Spyker alleged that when GM sold Saab, it never intended to allow the vehicle to compete with its other brands in China.

So when Spyker thought it had discovered a way to keep Saab afloat with the help of Chinese investors, GM acted to ruin that deal, according to Spyker, by publicizing false information about its own rights to the vehicle brand under the original contract.

Spyker said that GM's intention was to drive Saab - and Spyker - into bankruptcy. The company succeeded in one of those efforts, the lawsuit claimed, but not the other, as Spyker is still in business.

Spyker reportedly said that GM representatives were concerned about Chinese manufacturers learning trade secrets of its manufacturing process if Chinese investors obtained access to Saab.

A representative from GM was quoted in various media reports as saying that the allegations are without merit and will be fought in court.

GM said that it stopped supplying technology and vehicles to Saab's new owners because to do so would not be in the interest of its shareholders.

Spyker, however, claims that the last deal it worked out with GM concerning technology and supplies specifically excluded rights to GM's intellectual property, which purportedly should have been enough to protect GM's interest and compel it to honor its contract, which ran through 2014.

Spyker claims that when GM failed to honor its end of the bargain, this amounted to an unlawful "pulling out the rug from under Saab," which quickly forced the company to go bankrupt and liquidate its assets.

The $3 billion is what Spyker contends it would have earned had the deal with China moved forward.

This lawsuit, which has taken months for Spyker to prepare, is reportedly being funded by an anonymous third-party, who will share in the settlement if one is reached. Breech of contract lawsuits can lead to the death of a business. Hiring a contingency business litigation law firm may be the best way to fund the fight for justice.

Continue reading "Business Litigation Watch: Auto Makers Duel Over Deal With Now-Defunct Saab" »

Class action lawsuits are piling up against a number of big banks accused by investors of falsely setting benchmark interest rates.

A number of banks are scrambling to reach settlements, rather than go to court. However, contingency business litigation law firms know that some investors might be better suited going at it alone. That's the case too for many others seeking legal recourse against larger companies.

To understand why, we first need to explore what's happened in this case.

A number of banks, including Barclays PLC, Citigroup, HSBC and UBS, have come under fire for reportedly manipulating the Libor rate, which is the rate that sets pricing on nearly $400 trillion worth of financial products and derivatives.

Because the number of pending class-action lawsuits against these institutions threatens to drive their legal costs sky-high, many are working out deals with authorities in both the U.S. and the United Kingdom. Barclays, for example, recently signed off on a $450 million payout.

However, even these deals don't insulate companies from individual litigation, should investors choose to go this route. The benefit of opting out of a class-action suit in these cases would mean that investors could have more control over the direction of the litigation, and could negotiate potential settlements on their own terms, rather than the terms negotiated for the entire class.

Class actions, in general, do have certain benefits. In these cases, it allows investors to pool resources, reducing their own legal costs. Class-action suits also establish strength in numbers. They are often used to combat larger corporations, which tend to have more resources and legal muscle than any singular individual. Class-action suits also generally don't mandate that you pay any fees upfront. Lawyers are paid a portion of the settlement. You may be more likely to win a class action than if you filed on your own, but you'll also probably be getting a smaller portion than you would have otherwise.

That brings us to the negative aspects of a class action. First, is that class action members aren't generally awarded the high dollar figures, relative to what they lost, in a class action, as compared to individual litigation. That's the general idea: everyone gets paid, but not everyone gets paid as much. Secondly, you have little control in a class action when it comes to deciding whether the settlement terms are acceptable or whether you want to continue the litigation.

That seems to be where the investors in these cases are opting out. Charles Schwab Corp., for one, has already filed its own lawsuit, rather than join the class action. Part of its decision may stem from the fact that it does have the financial resources to press forward with such litigation on its own.

Lawyers representing other firms said class action status would not have well-suited them because they were affected in different ways and at different times. This is an element that could prove problematic for them, were they to move forward with class-action status.

Others say that they are looking for larger pay-outs than would otherwise be available in a class-action suit. For example, five years ago, the state of Alaska opted out of a class action suit against Time Warner Inc., which was facing allegations that the company was dishonest with investors about AOL. It agreed to a $3 billion settlement to investors involved in the class-action suit. This sounds like a huge amount, but that was divided among many investors. Alaska filed its own suit and won $60 million, which is five times what it would have recovered had it maintained class action status.

In fact, opt-out settlements cost Time Warner an additional $800 million.

Continue reading "Pros and Cons of Class Action Status in Contingency Business Litigation" »

A contingency business litigation lawsuit stemming from a gas explosion in Southern Florida has garnered headlines, as a circuit judge denied the gas company's request to dismiss the claims.

Our contingency business litigation lawyers understand that nearly a dozen businesses are suing the gas company as well as the construction company, alleging significant financial losses in November 2010 when a worker hit a gas line, sparking a huge explosion and a major natural gas outage throughout Southwest Florida.

According to media reports out of Fort Myers, the worker was employed by a local construction company called Posen. The company had been contracted by government officials to do work to widen a local roadway. However, in the course of that work, the employee hit an eight-inch gas line, operated by TECO Peoples Gas System. This caused an explosion. The rupture occurred to a primary natural gas supply line. The worker was critically injured, though he did survive. However, the line break affected some 6,000 residential properties, as well as about 1,200 businesses.

Many of those businesses say they were forced to either shut down operations or press on with only limited services. This caused them to lose a substantial amount of their earnings, they claim.

These companies are suing TECO for breach of contract, saying that the company is paid to provide a service, which it failed to do. Even though the worker wasn't employed by TECO, the companies are going after TECO because the gas line that was struck was reportedly not properly marked by TECO prior to the work. The businesses, which are mostly restaurants and hotels, are also suing the construction company for negligence.

However, TECO took Posen to federal court, alleging that the construction company destroyed those gas line markers when it began digging. The U.S. Occupational Safety and Health Administration has already fined Posen $70,000 for failing to take certain precautions before they started to dig for the project.

TECO attempted to fight off the class action suit, filed in circuit court, by alleging that while it tries to provide service as best it can, that service isn't guaranteed.

At particular issue during the most recent hearing was the wording of a particular utility contract held by the affected businesses. That contract states that the gas company "will endeavor" to provide gas on a continuous basis, but it doesn't guarantee that service. The question that arose was what the word "endeavor" means. The gas company argued that it meant "to attempt or try."

One would think the issue of a definition wouldn't be that difficult, but five different dictionaries were brought out as attorneys delved into what the contract actually meant.

Lawyers for the businesses, however, say that by digging shallow lines and not properly marking them, the gas company failed in their promise to try.

The circuit court judge ultimately sided with the plaintiff businesses, rejecting the gas company's request to dismiss the case. It's possible more plaintiffs could join the case, should it be granted class action status.

Continue reading "Gas Company Faces Class Action Contingency Business Lawsuit" »

The massive environmental litigation case brought forth by numerous coastal companies against British Petroleum is still trudging along, despite preliminary approval of a nearly $8 billion settlement reached last month.

Our contingency business litigation lawyers know that cases like this are rarely swift.

First, that has to do with the amount of time and resources that plaintiff attorneys must put into the case. Extensive research can mean the difference between a win or a loss. And secondly, you'll have the defendants fighting you almost every step of the way - particularly if they have deep pockets and can afford to do so, as is the case with BP.

We all know by now that in April of 2010, there was an explosion and fire on the Deepwater Horizon drill, which was situated in the Gulf of Mexico, about 40 miles off the coast of Louisiana. Eleven workers were killed and another 17 were hurt. This sparked one of the worst oil spills in U.S. history, as the oil continued gushing into sea, killing plant life, disrupting animal life and ultimately doing great harm to those businesses all along the coastline that relies on the health of the Gulf.

It was so bad that many businesses were forced to shutter their doors, either temporarily or for good.

In the details that emerged in the following days, weeks and months, scientists scrambled to contain the leak, while BP officials scrambled to do damage control.

The two most recent developments involve a capping of the amount of the settlement agreement that can be paid to plaintiff attorneys and the hand-over of some 3,000 scientific e-mails to BP's defense lawyers.

The first situation follows an agreement made last month, approved by a federal judge in New Orleans, to award nearly $8 billion to some 100,000 plaintiffs - both individuals and businesses - who say they were negatively impacted by the spill. The judge just last week ruled that the contingency fee that attorneys can be awarded will be capped at 25 percent of the total award.

However, that only covers the individuals who move forward in accepting the settlement agreement. There are others, however, who wish to push forward with further civil litigation.

It was with regard to those cases that the federal judge awarded the oil company access to thousands of e-mails produced by scientists who were some of the first on scene in the wake of the spill. These e-mails reportedly contain information that was considered confidential, and includes ideas and theories that were traded regarding the depth of the spill and how it could be addressed.

Plaintiff attorneys had argued that not only do these e-mails not constitute any formal hypothesis or plan, to release them would be a breach of academic freedom. This is because scientists need to be able to exchange ideas and know that their work will be at least somewhat protected from private interests. The future implications of this, not only potentially for this case but in other cases, is that scientists may be less willing to lend their expertise if they believe their research will be misused for some non-scientific purpose.

The bottom line is that in these cases, you need a law firm dedicated to your case and to fighting for an outcome that is most favorable, given your circumstances.

Continue reading "Contingency Litigation and Environmental Law: BP Spill Litigation Ongoing" »

An appellate court has upheld the decision of a lower circuit court with regard to an allegation of trademark infringement.

Our contingency business litigation lawyers understand that this case pitted croutons against garlic bread. But protecting your competitive advantage is no laughing matter -- it's often vital to a business's survival. Contingency litigation services can permit a business without a lot of working capital to set aside for legal expenses to nevertheless protect their rights in court.

Here's what we know of the case, T. Marzetti Co. v. Roskam Baking Co., as spelled out in court documents from the U.S. District Court in Southern Ohio.

The plaintiff in the case was Marzetti, a corporation that sells frozen garlic bread, vegetable and apple dips, mustard, salad dressing and croutons.

On the other side was Roskam, a company that sells caramel corn, candy bars, doughnuts, chocolate bars, breads and croutons.

The only market in which the two compete is the crouton business.

Now Marzetti sells a brand of garlic bread called "New York Brand the Original Texas Toast," and has been doing so since 1995. It's a frozen product that has been sold for years, and other companies, such as Walmart, Pepperidge Farms and Meijer also sell so-called Texas toast. However, the company has never registered the terms "Texas Toast" or "The Original Texas Toast" as trademarks, nor has it tried to sue other competitors for violating any trademark for calling their bread "Texas toast."

Still, Marzetti has been successful with its frozen bread sales. Hoping to branch out with that success, the company also decided to make croutons, which it started doing in 2007. The croutons were called "New York Brand the Original Texas Toast" croutons. There were other crouton types as well, but the Texas toast croutons were said to be larger (although they actually weren't).

This product was eventually spotted by an employee at Roskam. It was suggested that Roskam market a similar product under the brand name Rothbury Farms. Now, Rothbury Farms brand already had croutons, but the idea of making them from Texas toast - and making a bigger crouton - was what appealed to executives at Roskam. So when the product was unveiled, it had to do with the size of the product, not the name.

It wasn't until after Roskam began making its product that Marzetti filed for a patent on the Texas toast name. It was originally denied by the patent office on the basis that it conflicted with the other garlic bread brands, but it was later granted.

Following that, Marzetti sent notice to Roskam to cease and desist its use of the Texas toast name on its croutons. Roskam refused. The case was filed in federal court, alleging violation of trademark infringement, unfair competition and common-law dilution.

A bench trial judge, however, concluded that the name "Texas Toast," specifically as it applies to croutons, is generic. It refers to the size or style, rather than the brand. Additionally, the packaging and font of Roskam's product was significantly different than Marzetti's.

While both sides sought damages, neither side won any. However, the court did side with Roskam in determining they hadn't violated any laws.

That decision was appealed by Marzetti, but the appeals court has upheld the lower court's ruling.

Continue reading "T. Marzetti Co. v. Roskam Baking Co. - Texas Toast Gets Burned" »

Our contingency business litigation lawyers have been watching with interest the developments unfolding in the case brought against Google Inc. by writers and authors with the Authors Guild (Authors Guild v. Google Inc.).

The core issue in this business litigation is the difference between copyright infringement and fair use, as it pertains to intellectual property. Back in 2004, Google, in its effort to provide more information to users who utilize its search engines, announced plans to scan digitally portions of text from books obtained in university and public libraries. The following year, the Authors Guild sued.

Google says the portions of the text that it offers are covered under the Fair Use section of U.S. copyright law, which falls under U.S. Code Title 17. This law is fairly in-depth, but there are a few considerations that are made when determining whether there has been copyright infringement:

1. The nature of the original work;
2. The character and purpose of the reproduction, including whether the person reproducing it is doing it for educational/non-profit uses or whether it's of commercial value;
3. How much of the work is reproduced, in relation to the length of the original work;
4. The effect of that use as it pertains to the value of the original work.

This is one of those cases where the courts haven't quite caught up with technology. Look in particular at No. 2. While Google's search-engine offerings do provide a clear educational value to the public at-large, the company at the same time is for-profit, and the more clicks or "hits" they receive, the more advertising revenue they can command.

Last year, the company reached a $125 million settlement with the Guild. However, that agreement was rejected by the U.S. Circuit court judge. The two sides have been unable to find an agreeable middle ground ever since.

Now, Google is asking the court to break up the class action status of the plaintiffs, thereby dismissing this case altogether.

However, the Guild is arguing that to do so would be a tremendous burden on the court system. A class action suit, they said, would be the most effective route - and as our contingency business litigation attorneys know, the method most likely to garner a success for them.

Google's lawyers argue that the authors don't actually have a right to that work, as in most cases, those rights were signed away to the publishers. What's more, the attorneys say that Google's excerpts have actually equated to an economic benefit to the plaintiffs. More people having access to a portion of the works means more people may be interested in seeking the entire product.

The judge in this case has said the two sides can ask to have their case heard solely by him, but the authors want a trial by jury. The judge is expected to make a decision on which way to proceed in September.

A similar lawsuit has also been lodged against Google by visual artists. Google said it's still talking with publishers of these works to possibly determine a settlement with them. That could have a big impact on the case if it's determined the authors don't actually own the copyrights to their own work.

According to the Internet search giant, some 20 million books have been scanned, and English excerpts are available for more than 4 million of those titles. It started when a handful of high-profile universities and libraries began digitizing their collections.

Continue reading "Authors Guild v. Google Inc. Highlights Copyright vs. Fair Use Issues" »

Business litigation is very complex and it is important to have an experienced business litigation attorney guiding you.

One of the most complicated components of business litigation cases can be determining which court has the jurisdiction to hear and decide on your case. This problem arises because a business is created and incorporated in one state and may be headquartered in another state; however, it does business in many states. Determining in which state the business has citizenship is integral to establishing which court can hear the case. Therefore, when a case involves two businesses, it becomes incrementally more intricate a determination.

The Eleventh Circuit Court of Appeals discussed the complexity involved in determining the citizenship of a dissolved corporation. Holston Investments In. B.V.I., et al., v. LanLogistics, Corp., No. 11-11122 (11th Cir. Apr. 17, 2012). LanBox Inc. (LanBox) was owned by LanLogistics and its principal business was to deliver consumer purchases throughout the United States, Europe and Latin America. In 2007, LanLogistics decided to sell LanBox and two other companies to Paul Gartlan (Gartlan) for a total of $3.5 million. A little less than half a million was allocated to LanBox from the funds of the Gartlan purchase.

The problem in this case arose because LanLogistics (defendant) had previously signed a contract with Holston Investments Inc. (Holston) giving Holston the right of first refusal (ROFR). This right indicates that defendant is required to negotiate with Holston first in the sale of LanBox. Additionally, where an offer is made regarding LanBox, Holston was supposed to be given the opportunity to match any offer and purchase the company itself. Because LanLogistics had failed to abide by the contractual obligation giving Holston the ROFR, Holston filed suit in federal court.

LanLogistics was incorporated in Delaware but its corporate headquarters were in the state of Florida. Right before Holston filed suit, LanLogistics forfeited its right to conduct business in Florida and was dissolved.

After two years of litigation in the federal courts, LanLogistics argued that it was a citizen of Florida and because of this the case should have been heard in the state of Florida.

When establishing the citizenship of a corporation, a corporation is considered to be a citizen of the state where it is incorporated and any state that is its principal place of business. Because LanLogistics was dissolved it did not have a principal state of business. Thus, it was determined that because LanLogistics was incorporated in Delaware it was a Delaware resident. This was why Holston filed suit against LanLogistics in federal court claiming diversity jurisdiction.

Diversity jurisdiction is a type of jurisdiction used where the citizen of each plaintiff is different from the citizenship of each defendant. At the time the complaint is filed, jurisdiction is determined. In applying this law to the facts, diversity jurisdiction was granted because at the time Holston filed the complaint it was a citizen of Florida and LanLogistics was a citizen of Delaware. So the federal court was given the authority because of this diversity jurisdiction to hear this case, and the state courts were avoided.

Therefore the rule coming out of this case is that when a corporation is dissolved before the entry of suit, the state where it was incorporated is the state of citizenship. The state where the now dissolved corporation had its principal place of business is irrelevant.

Continue reading "Holston Investments. v. LanLogistics Illustrates that Jurisdiction is a Critical Component in Business Litigation Cases" »