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Charles Michael

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Charles Michael is an accomplished commercial litigator who resolutely defends clients in high stakes disputes and arbitrations. He is also experienced in regulatory and criminal investigations, and represents clients under investigation by the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), the Commodity Futures Trading Commission (CFTC), and the Department of Justice (DOJ).

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In an opinion Monday, Judge McMahon imposed over $900 million in damages and statutory penalties under the False Claims Act on long-term care pharmacy services provider Omnicare after a jury verdict finding that Omnicare submitted claims to the government for medications that lacked valid prescriptions.

The actual damages to the government were approximately $136 million, but that amount was then statutorily trebled and coupled with statutory penalties. Omnicare argued that the Constitution limited the government to a one-to-one ratio of actual damages to penalties. It relied on State Farm Mut. Automobile Co. v. Campbell, 538 U.S. 408 (2003), which found a jury award of $145 million in punitive damages on top of $1 million in actual damages violated due process and which suggested that in some cases a one-to-one ratio might be the maximum allowable.

But Judge McMahon disagreed, finding that the case was governed by the Constitution’s “excessive fines” clause, not the due process clause implicated in State Farm:Continue Reading Judge McMahon Concludes That $900 Million In False Claims Act Damages and Penalties Is Not Constitutionally Excessive Because Amount Was “Serious” But Not “Surreal”

Last week, a group of professional tennis players and the Professional Tennis Players Association (a group co-founded by Novak Djokovic) filed a 163-page complaint against the International Tennis Federation (which regulates professional tennis tournaments, including the four “Grand Slams”), the ATP Tour (which regulates men’s professional tennis tours), the WTA Tour (which regulates women’s professional…

In an Order yesterday, Judge Torres took issue with the “relentless” filings of counsel for Sean Carter (known professionally as Jay-Z) in a case accusing Mr. Carter and Sean Combs of abusing the plaintiff, a minor at the time of the alleged incident.

Mr. Carter was added to the case in an amendment on December 9, and his lawyer filed letters on December 9, December 10, and December 13, followed by an emergency motion on December 18, all of which argued that the case was meritless and attacked counsel for the plaintiff (who, for his part, responded with a letter on December 20).

Judge Torres was not amused by the “litany” of filings by Mr. Carter’s counsel and suggested that they were a disservice to Mr. Carter:Continue Reading Judge Torres Refuses to “Fast-Track” Abuse Case In Response to “Relentless” Filings from Jay-Z’s Counsel

John F. Keenan, a longtime federal judge in Manhattan who presided over the high-profile trials of Bess Meyerson, a popular former cultural-affairs commissioner in New York City and ex-beauty queen, and Imelda Marcos, the extravagant former first

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In an opinion Wednesday, Judge Torres held unconstitutional a New York City law mandating that online food delivery platforms like Door Dash share customer data (e.g., name, address, email, phone) directly with the restaurants from which customers order their food. The aim of the law was to allow the restaurants to tilt the balance of marketing power away from the online platforms and back to the restaurants.

Judge Torres first concluded that the law implicated speech (not conduct) under the First Amendment: “The Customer Data Law directly regulates what Plaintiffs can (indeed, must) ‘say’ to the restaurants that use their services. In other words, regulation of speech is the object—not an incidental byproduct—of the law.”

She next concluded that the law failed “intermediate” scrutiny because there was only a thin connection between the government interests at stake and the speech burden used to address the interest. The City argued that the law addressed “exploitative” practices like the platforms using data about one restaurant’s customers to pitch to those customers competitor restaurants or restaurants that pay higher fees. But Judge Torres found that the law did little to actually remedy those issues and reflected instead, a “mere preference for one industry over another”:Continue Reading Judge Torres: City Law Compelling Food Delivery Platforms to Share Customer Data With Restaurants Is Unconstitutional Compelled Speech

In an opinion today, the Second Circuit ordered a retrial of Sarah Palin’s defamation suit against the New York Times (see our prior coverage here). The suit arises from an editorial suggesting that her political action committee’s use of “stylized cross hairs” over the districts of several members of Congress in online materials incited the mass shooter who killed six people and wounded many others (including Representative Gabby Giffords) in 2011.

The Second Circuit reversed on multiple grounds, one of which relates to the unusual circumstances surrounding Judge Rakoff granting the Times judgment as a matter of law while the jury was still deliberating.  Although the jurors likewise found the Times not liable, certain of them received “push notifications” on their phones about Judge Rakoff’s ruling before reaching their decision. Judge Rakoff concluded that the notifications did not “remotely affect” the verdict, but the Second Circuit found otherwise, noting the “special position of influence” that a judge holds:Continue Reading Second Circuit: “Push Notifications” to Jurors Before Their Verdict Requires Retrial of Sarah Palin’s Defamation Case Against the New York Times

In an opinion last week, Judge Engelmayer dismissed most of the SEC’s fraud claims against the software company SolarWinds over the so-called “SUNBURST” cyberattack in 2020 that is generally attributed to state-sponsored Russian hackers.

Judge Engelmayer allowed the SEC’s claims to proceed as to certain pre-SUNBURST statements on SolarWinds’ website touting its cybersecurity practices, but dismissed the SEC’s claims based on statements the company made after the fact, finding that those claims “impermissibly rel[ied] on hindsight and speculation.” For example, a Form 8-K filed after the attack allegedly left out certain details about the extent of the harm, but Judge Engelmayer noted that “perspective and context are critical,” including that the filing was made as the facts were evolving and that, overall, the Form 8-K “by any measure bluntly reported brutally bad news for SolarWinds.”

Judge Engelmayer rejected a novel theory advanced by the SEC that SolarWinds’ cybersecurity failures violated a provision of the Securities Exchange Act requiring issuers to maintain “internal account controls sufficient” to prevent unauthorized “access to assets,” finding that the language concerned “financial accounting,” not cybersecurity:Continue Reading Judge Engelmayer: Securities Law Requiring “Internal Accounting Controls” Does Not Reach Cybersecurity Deficiencies

In an Order last week, Magistrate Judge Wang chided the parties in a terrorism funding case for having filed a joint, 73-page discovery letter, consistent with a pattern of “protracted letter-writing campaigns” that have embroiled the Judge in “day-to-day supervision” of discovery.

She ordered the offending letter stricken, but an an earlier one (at 54 pages) appears to be the type of correspondence sparking the forceful order, in which she cited Charles Dickens’ fictional case Jarndyce v Jarndyce, as illustrating the problem: Continue Reading Magistrate Judge Wang Warns Against “Protracted Letter-Writing Campaigns” Over Discovery