Category Archives: Business

Little Known Federal Court Ruling Hints At NCAA Showdown With Current Student Athletes

It’s one thing to have a federal lawsuit by former so-called student athletes against the NCAA. It’s quite another to have current players suing the premier college sports regulator.  And it is even more cataclysmic if the case is certified as a class action allowing innumerable student athletes to share the consequences. That is the revolution that some have advocated for decades. Yet an unceremonious court ruling days ago lighting a match to this war has been little more than a back page blurb or a verbal footnote in talk radio and sportscasts.

The discreet little ruling last week was from federal judge Claudia Wilken in a case where the lead plaintiff is former UCLA star basketball player Ed O’Bannon. He and several other former players claim the NCAA has been fixing the price of an athlete’s image and likeness in a way that virtually eliminates a player from sharing in the value they created. The suit alleges the NCAA colludes with its member schools, TV networks and videogame manufacturers in violation of anticompetitive provisions of federal antitrust law. The claimed relief includes a share of the billions in revenue generated from the current system.\

Continue the story at www.forbes.com/sites/rogergroves/2013/07/10little-known-federal-court-ruling-hints-at-ncaa-showdown-with-current-student-athletes

Foreign Tort Claims Against Corporations Limited By The US Supreme Court.

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William Fife

By William Fife, Florida Coastal School of Law graduate, Indiana University MA – International Relations.

Adopted in the first Judiciary Act of 1789, the Alien Tort Statute (ATS) is nearly as old as the American Republic itself.  Although the ATS was included in this bedrock of American judicial power, the ATS has rarely been used to exercise jurisdiction in U.S. district courts as forums for lawsuits by foreign citizens against foreign defendants for torts in violation of international customary law or a treaty of the U.S. (28 USC § 1350).  Congress furthered this standard by adopting the Torture Victim Protection Act (TVPA) in 1991 to enable both U.S. and foreign victims of torture and extra-judicial killing to seek redress in U.S. courts.  Filartiga v. Pena-Irala in 1980 set ATS precedent by pursuing not just states but also individuals for violations of international customary law.  Sosa v. Alvarez-Machain in 2004 affirmed Filartiga allowing federal courts to recognize claims for violations of international norms that are “specific, universal, and obligatory.”  The ATS has also been used in several claims against multi-national corporations, such as Unocal, Royal Dutch Shell, and Caterpillar with varying results.  However, the current U.S. Supreme Court, in Kiobel v. Royal Dutch Petroleum Co., limited the reach of the ATS by shielding corporate liability for international human rights violations—at least in terms of extraterritoriality.

In a unanimous decision, the Court in Kiobel held that “the presumption against extraterritoriality applies to claims under the ATS, and nothing in the statute rebuts that presumption.”  Originally framed around the issue of whether or not there is corporate liability under the ATS, the Court then shifted focus to the issue of jurisdictional extraterritoriality.  Why the about-face?  Did the Court shift issue-focus to create a new limitation regarding extraterritoriality to avoid affirming corporate liability for human rights abuses abroad?  The ATS only offers the following language: “the district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.”  The Court held that since the precise language of the ATS does not specifically state the ability for extraterritoriality, then it has none in order to avoid judicial interference in foreign policy.

In an apparent victory for limiting corporate liability for  human rights abuses abroad,  Kiobel still does not extinguish all claims against corporations under the ATS.  The opening to pursue claims under the ATS against corporations has just been narrowed in terms of extraterritoriality.  Justice Breyer’s concurrence provides the opening. In his view, “(T)oday’s pirates include torturers and perpetrators of genocide…and… they are “fair game” where they are found.”

Investors Lose Claim For Misleading Registration Statements Against Omnicare

By Contributor Joshua Goldsborough, graduate of Florida Coastal School of Law, after working with Well Fargo Financial, and was an intern for the Florida Chief Financial Officer.

The issue is whether Defendants, Omnicare, Incorporated, its officers, and directors, made material misstatements and/or omissions to Plaintiff investors. The investors bought Omnicare securities in connection with a December 2005 public stock offering.

Relief may be sought under § 11 of the Securities Act of 1933, which provides a remedy for investors who have acquired securities under a registration statement that was materially misleading or omitted material information. Furthermore, it imposes liability on issuers and signers of registration statements containing untrue statements or omissions of material fact.

Here, Plaintiffs allege that Omnicare’s Registration Statement stated that Omnicare’s therapeutic interchanges were meant to provide patients with more efficacious and/or safer drugs than those presently being prescribed and that its contracts with drug companies were “legally and economically valid arrangements that bring value to the healthcare system and patients that we serve.” Plaintiffs argue that these representations were material, untrue and misleading because they effectively concealed Omnicare’s illegal activities from its investors.

Omnicare argues that liability only exists to the extent that the statement was both objectively false and disbelieved by the defendant at the time it was expressed. Furthermore, Omnicare argues that Plaintiff’s failed to state a claim and moved to dismiss the complaint because Plaintiff’s did not adequately plead any allegations that Omnicare knew that the legal compliance statements were false when made.

The court held that the plaintiffs had not adequately pleaded knowledge of wrongdoing.

Raymond James Arbitration Claims by Investors Barred by the Statute of Limitations in Florida.

The Supreme Court of Florida examined a case certified by a lower court as an issue of great public importance held that Florida’s statute of limitations applies to an arbitration proceeding because it is within the statutory term “civil action or proceeding” under section 95.011 of Florida statutes. This case involved a mandatory provision for clients of Raymond James Financial Services, Inc. to arbitrate all disputes arising from their investments.  A group of investors claimed that the statute only applies to judicial actions, not contractual arbitration clauses, and thus claims could be brought against Raymond James beyond the statutory deadlines.  The Supreme Court reversed the 2nd District Court of Appeals, reasoning that the statutory terms “action” or “proceeding” was intended by the Florida legislature to include an adjudication by an arbitrator since the parties are engaged in a legal process to resolve a dispute. Additionally, the Court stated that if the legislature had intended to limit proceedings to only judicial actions, it would have so declared. The statute did not include that limitation, so the Court refused to add that limitation.  See the Supreme Court opinion, Case No. SC11-2513 (May 16, 2013).

Contributor: Roger M. Groves, Professor of Law, Director of Business Law Program

Publicly Traded Companies Can Use Social Media to Disclose Material, Non Public Information

By contributor Brittney Trigg: Florida Coastal School of Law JD and business law certificate candidate 2014, law clerk for Law Offices of Xavier Saunders, P.A.

Publicly traded companies can now use social media as a way to disclose material, non public information, and be in compliance with Regulation FD.  The company must give investors proper notice of the site that the company will use to disclose that information. Continue reading

Antenna Company Threatens Traditional Broadcast Rights and Revenue.

By Contributor Roger M. Groves, Professor of Law and Director of the Business Law Program at Florida Coastal School of Law.

A small startup company, Aereo, provides a method of streaming broadcast TV through a browser. It provides a DVR in a cloud storage system by micro-version TV antennas, thereby rebroadcasting programming content found in the public airwaves.  Aero has recently been sued by a contingent of broadcasters, including Fox, Univision, and PBS and a majority of the media outlets in New York City. The claim is that Aereo infringes of their copyrights. The broadcasters seek an injunction to immediately stop Aereo’s activities and attendant monetary damages.

The economic crux of the dispute is that Aereo provides this service for only $12 a month. This allegedly threatens the substantial license fees and advertising revenue the broadcasters generate from cable companies.  To view the complaint in this case see the link: http://docs.justia.com/cases/federal/district-courts/new-york/nysdce/1:2012cv01540/392820/1/