Tag Archives: Judge Rakoff

Judge Rakoff: Executives Cannot Buy Company Products at Grossly Inflated Prices to Trigger Earnout Bonus

The summary judgment ruling, issued yesterday, begins: Why would the executives (and former principals) of a paddle-board division of a sports and recreation company cause the company to make a one-time $60,500 purchase of one million stickers that the executives themselves immediately attempted to repurchase from the company for approximately $4 million? The answer is … Continue Reading

Judge Rakoff Bemoans “Insidious Trend” of Ordinary Citizens’ Decreasing Access to Courts

Judge Rakoff has published in The New York Review of Books a piece entitled Why You Won’t Get Your Day in Court, in which he describes several factors that have caused ordinary citizens to have less and less access to courts.  He argues, for example, that the Supreme Court’s decision in AT&T v. Concepcion, which upheld … Continue Reading

Supreme Court Grants Cert in Case Challenging New York’s Credit Card Surcharge Ban

Today the Supreme Court granted certiorari in a First Amendment challenge to New York’s ban on credit card surcharges.  The law allows merchants to charge different prices for cash and credit card purchases, but, according to the plaintiffs, it violates the First Amendment by prohibiting them from calling the extra charge for credit card purchases a … Continue Reading

Judge Rakoff Stays Antitrust Action Against Uber Pending Appeal Over Arbitrability

As part of the ongoing Uber antitrust litigation, Judge Rakoff granted today the defendants’ request to stay the proceeding pending an interlocutory appeal of his prior order denying defendants’ motion to compel arbitration (see our coverage here). Judge Rakoff noted that the while the defendants had not made a “strong showing” that they would succeed on the … Continue Reading

Judge Rakoff Rules That Uber’s Customer Arbitration Clause Is Not Conspicuous Enough to Be Enforceable

In an opinion today, Judge Rakoff denied a motion to compel arbitration of antitrust claims against Uber’s CEO because he found that the arbitration clause was too concealed for the plaintiff to have reasonably agreed to it.  (See our prior posts on the case here.) When a user enters his or her credit card information, … Continue Reading

Judge Rakoff Orders Uber Investigative Firm to Stop “Arguably Criminal Conduct,” Uber Will Pay Plaintiff’s Fees

In the latest chapter of the saga over Uber’s background investigations into an antitrust plaintiff and his counsel (see coverage here), Judge Rakoff has ordered Uber and its investigative firm, Ergo, to cease their background investigations and has enjoined Uber from using any information found during the investigation in the antitrust proceeding.  Uber had hired Ergo to … Continue Reading

Gender Dysphoria Class Action Will Proceed to Trial Before Judge Rakoff

Last week, Judge Rakoff held that a class action of transgender individuals challenging the coverage of gender dysphoria treatments under New York’s Medicaid program will proceed to trial.  Specifically, the class challenged the New York Department of Health (“DOH”)’s exclusion of coverage for gender reassignment and hormone therapy for individuals under 18, and a blanket ban on “cosmetic” procedures … Continue Reading

Judge Rakoff Won’t Stay Petrobras Securities Trial, Calls Delay “Bane” of U.S. Legal System

Last week, Judge Rakoff denied a request from the defendants in a group of Petrobras securities cases to stay a September trial date pending the Second Circuit’s consideration of an interlocutory appeal of class certification.  The defendants argued that the Second Circuit appeal was on an expedited schedule, and that significant expense could be saved in the … Continue Reading

On Heels of Inquiry Into Potential Litigation Misconduct, Uber CEO Moves to Have Case Heard in Arbitration

Yesterday — just hours after Judge Rakoff ordered broad discovery from Uber and its in-house counsel regarding potentially improper investigative techniques —  Uber’s CEO moved to compel arbitration in the antitrust class action brought by Uber riders (see previous coverage here).  The motion argues that the CEO, as an employee of Uber, is entitled to assert Uber’s arbitration clause … Continue Reading

Judge Rakoff Authorizes Discovery from Uber Counsel to Probe Potentially Improper Investigation of Adversary and Opposing Counsel

A memorandum order released today reveals that, in an antitrust case against Uber’s CEO (covered here), Judge Rakoff became concerned over improper investigative techniques that Uber (or its agents) employed.  Specifically, Uber hired an firm called Ergo to investigate the plaintiff and plaintiff’s counsel, and, in doing so, Ergo’s investigator allegedly made various misrepresentations to … Continue Reading

Second Circuit Reverses Judge Rakoff’s $1.2 Billion Penalty in BOA-Countrywide FIRREA Litigation

Today, the Second Circuit reversed Judge Rakoff’s $1.2 billion penalty against Bank of America/Countrywide for FIRREA violations (see our previous coverage here).  The case involved allegations that BoA/Countrywide had sold faulty mortgages to Fannie Mae and Freddie Mac, originally brought as a qui tam suit under the False Claims Act in which the government intervened.  The Second … Continue Reading

SEC Claims Cooperator Lied At Trial; Seeks To Up Penalty from $2,500 to $3 Million

The SEC claims that insider trading defendant Thomas Condradt committed perjury at the trial of his co-defendant Daryl Payton in breach of his cooperation agreement and, instead of the agreed-upon penalty of $2,533, the SEC is now seeking a penalty of almost $3 million.  The jury ultimately convicted Payton, even though the SEC was clearly … Continue Reading

Judge Rakoff Rejects Handwriting Expert Under FRE 702

Last week, Judge Rakoff held that courts should generally be wary of admitting handwriting expert testimony under Federal Rule of Evidence 702.  His opinion notes that handwriting analysis, unlike DNA or other forms of scientific evidence, did not arise from scientific inquiry and instead was created solely for use in the courtroom.  Judge Rakoff found … Continue Reading

Judge Rakoff Reluctantly Declines to Refer Defendant in SEC Civil Case for Criminal Perjury Prosecution

In an opinion today, Judge Rakoff explained why he would decline to refer Darlyl Payton, a defendant who was recently found liable an SEC insider trading case, to the U.S. Attorney’s Office for a perjury prosecution related to Mr. Payton’s testimony in the SEC case.  Mr. Payton had pleaded guilty to criminal insider trading charges but … Continue Reading

Judge Rakoff Dismisses 10(b) Claims Against PwC for Alleged Petrobras Bribery Scheme, But Allows Section 11 Claims to Proceed Despite Omnicare

Last week, Judge Rakoff granted Pricewaterhouse Coopers’ motion to dismiss Section 10(b) claims brought as part of the ongoing class action over an alleged bribery and kickback scheme at Brazilian oil giant Petrobras.  PwC’s Brazilian member firm had served as Petrobras’ independent auditor.  PwC argued that the fourth amended complaint had failed to properly allege scienter, and … Continue Reading

Judge Rakoff : “Conscious Avoidance” of Source of Stock Tip Can Result in Liability, Even After Newman Decision

In an opinion yesterday, Judge Rakoff denied a summary judgment motion brought by two SEC defendants who traded on a tip that IBM was about to acquire a company called SPSS.  The tip passed from a lawyer working on the deal (Dallas) to his friend (Martin), then to Martin’s roommate (Conradt) and, ultimately, to the two … Continue Reading

Second Circuit Upholds New York’s Credit Card Surcharge Ban

The Second Circuit this morning upheld New York State’s ban on credit card “surcharges.” Judge Rakoff had earlier found (see our coverage here) that the law, § 518 of the General Business Law, likely violated the First Amendment because it imposed criminal penalties for calling extra credit card fees “surcharges” but allowed merchants to offer the … Continue Reading

SDNY Blog Returns as Steptoe Blog

The SDNY Blog is relaunching as a publication of Steptoe & Johnson LLP.  We expect to post several times a week on decisions and other developments in the Southern District of New York.  You can find us right here at www.sdnyblog.com, or follow us on Twitter or Facebook. Here’s a quick summary of what’s been happening in the Southern … Continue Reading

Judge Engelmayer: Lawyers Using Confidential Witnesses in Complaints Should Confirm Their Testimony and Warn of Risks of Being Outed

In an opinion today allowing a securities class action to be dismissed without prejudice, Judge Engelmayer expressed concern about the lawyers using confidential witnesses in complaint without confirming the accuracy of the statements attributed to them or warning the witnesses that their identity might have to be revealed. On the first point, the complaint’s 11 … Continue Reading

Judge Rakoff, Acknowledging “Difficulties” In Defining Insider Trading, Upholds SEC Complaint Notwithstanding Newman Decision

In an opinion yesterday, Judge Rakoff denied a motion to dismiss an SEC complaint against two individuals who traded stocks after learning about an impending acquisition from a co-worker, Thomas Conradt, who, in turn, learned the information from his roommate Trent Martin.  The opinion begins by acknowledging the “difficulties” with having insider trading defined by … Continue Reading

Judge Rakoff Denies Class Cert Where Class Rep Faced Unique Defense Relating to “Netting” of Losses

In an opinion Friday, Judge Rakoff denied class certification in an class action accusing various defendants connected to a hedge fund of trading on insider information to the detriment of investors who traded around the same time. Judge Rakoff disqualified one of two proposed class representatives because he had an undisclosed arrangement for an attorney … Continue Reading

Judge Rakoff: Challenge to Countrywide “Hustle” Jury Verdict “Borders on the Frivolous”

In an opinion today, Judge Rakoff rejected motions to set aside a jury verdict in the so-called “Hustle” case, in which the government accused Countrywide (later acquired by Bank of America) and an officer named Rebecca Mairone of a scheme to defraud Fannie Mae and Freddie Mac into buying faulty mortgages.  The jury had ruled … Continue Reading
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