Last week, Judge Liman granted in part plaintiff ChromaDex’s motion for summary judgment on part of defendant Elysium’s counterclaim for false advertising under the Lanham Act. The case arose from a dispute between the two competitors over the sale of nutritional products claiming to improve cellular health and cellular aging. Elysium argued that statements made by a blogger regarding ChromaDex’s product were false, and should be attributable to ChromaDex under the Lanham Act, because the blogger was a ChromaDex shareholder who was paid by ChromaDex for referring customers. ChromaDex argued that it was not liable for statements that appeared on a third-party blog, regardless of whether they were false, material, or caused injury, because the statements did not constitute “advertising or promotion,” as required under the Lanham Act.

Judge Liman agreed with ChromaDex, finding that Elysium had not presented evidence that ChromaDex had an agency relationship with Shelly Albaum, the blogger. Furthermore, Judge Liman found that Elysium had not presented evidence that ChromaDex controlled the content of Albaum’s blog. Elysium cited to an email between a ChromaDex executive (Jaksch) and Albaum regarding whether the executive wanted Albaum to post a certain article. Judge Liman concluded: Continue Reading Judge Liman: Blogger-Shareholder Touting a Company’s Product Was Not Its Agent for Purposes of Lanham Act

It is rare for a judge to express views on the merits of a case ahead of a trial, but last week Judge Engelmayer did so, apparently at the urging of the parties who both thought that it would foster settlement. The views were set forth in an Order last week denying summary judgment in a case over escrowed funds following a corporate acquisition (see an earlier ruling here with more background). In the Order, Judge Engelmayer “took note of counsels’ observation that their attempts to resolve this matter would be assisted by some guidance from the Court as to its present assessment of certain issues in the case.”

Accordingly, ahead of a forthcoming bench trial, Judge Engelmayer essentially foreshadowed that the buyer had a strong case that the seller breached a particular warranty in the deal documents, but some risk associated with its associated theory of damages: Continue Reading Judge Engelmayer Shows Willingness to Preliminarily Assess Contract Dispute, to Help Foster Settlement

In a new putative class action complaint filed today, former Miami Dolphins head coach Brian Flores accuses the NFL of racial discrimination in hiring. One aspect of the allegations concerns the “Rooney Rule,” by which teams are supposed to interview at least one diverse candidate when coaching and management vacancies arise. Continue Reading Complaint: Bill Belichik’s Text to the Wrong “Brian” Proves Giants Engaged in “Sham” Interview of Black Coaching Prospect

In a complaint filed Tuesday, a non-profit organization and a pastor from the South Bronx sued N.Y. AG Letitia James, alleging that New York’s rules governing the unauthorized practice of law (“UPL”) prevent them from advising low income clients facing debt collection lawsuits, in violation of their First and Fourteenth Amendment Rights.  The non-profit organization plans to train non-lawyers to provide “reliable, free, straightforward, and narrowly circumscribed” advice to low income New Yorkers facing debt collection lawsuits “on a strictly non-commercial basis to ensure that defendants can understand their rights and respond to the debt collection lawsuits against them.”  However, New York’s UPL rules make it a crime and civilly sanctionable to engage in, solicit, or aid in the provision of legal advice by non-lawyers. Continue Reading Complaint: New York’s Rules on Unauthorized Practice of Law Violate Non-Profit’s First and Fourteenth Amendment Rights

In an opinion Friday, Judge Cote concluded that a trade secret holder’s accidental revelation of trade secret information to a competitor, in connection with due diligence for a possible transaction, could not constitute the competitor’s acquisition of the information by “improper means,” as required to prevail on a misappropriation claim. The plaintiff, TransPerfect, argued that the defendants used information learned during the diligence process to poach TransPerfect’s clients.

While Judge Cote agreed that certain information TransPerfect had shared with the defendants constituted trade secrets, she found that TransPerfect had failed to adduce evidence that defendants acquired the information by improper means, as required under the Defend Trade Secrets Act: Continue Reading Judge Cote: Acquiring Trade Secrets Accidentally Produced In Deal Diligence Is Not Acquisition by “Improper Means”

In an opinion today, Judge Furman dismissed a putative class action against a retailer, Bonobos, whose customer data (names, addresses, emails, and the like) was stolen and posted online. Judge Furman found that the plaintiff, Bradley Cooper, did not allege a level of impending harm or risk that was sufficient to establish standing to sue. Judge Furman contrasted the facts at issue with those in other cases where more sensitive information was stolen (like Social Security numbers), giving rise to high risk of identity theft.

Cooper had sought to establish standing based on his alleged risk of “credential stuffing,” which is described in the opinion as a “technique in which [hackers] enter credentials gained from a hack into third-party websites, hoping that they will match an existing account because the consumer has reused the same password elsewhere,” but Judge Furman was not persuaded: Continue Reading Judge Furman Dismisses Data Breach Class Action Because Stolen Information Didn’t Give Rise to “Impending” Harm

In an opinion Monday, Judge McMahon denied a motion by Blackberry and certain former executives for summary judgement in a securities class action. In the same ruling, she denied Blackberry’s motion to strike the plaintiffs’ Rule 56.1 statement, which allegedly contained improper legal arguments instead of factual responses.  Judge McMahon criticized the motion as “pointless” and “desperate”:

Defendants filed a Rule 56.1 statement in this case, and Plaintiffs filed their responsive paragraph-by-paragraph contention, citing evidence, of the facts in dispute. At times, Plaintiffs admittedly stray into improper legal argument in their “factual” recitations. But Plaintiffs version of the facts — and the evidence supporting that view of the facts — is perfectly apparent from reading the Rule 56.1 statement.

Defendants move to strike Plaintiffs’ responses in whole and “deem Defendants’ undisputed facts admitted.” This is a silly and pointless motion, one obviously (and desperately) made because, unless the Rule 56.1 statement is stricken, the record is replete with disputed facts. . . . .

Plaintiffs’ responses and objections, which dispute Defendants’ facts and cite to evidence that rebuts Defendants’ statement of facts, does not contravene Rule 56.1. Rather, it is Defendants’ motion to strike that is procedurally improper. To the extent that Plaintiffs incorporate legal argument into their responses and objections — and they do — this Court will simply not consider those statements.

In an opinion issued yesterday, Judge Seibel rejected a plaintiff’s argument that a defendant in a multi-defendant case must consent to removal within 30 days of service on its statutory agent, regardless of when the defendant actually received the complaint. The case was filed in New York state court against two defendants, one of whom timely removed the action. The second defendant consented to removal of the action four days after receiving the complaint from its agent for service of process, but more than 30 days after plaintiff had served the complaint on the defendant’s statutory agent (the Secretary of State). The plaintiff moved to remand, arguing that defendant’s consent to removal was late because it occurred more than thirty days after plaintiff had served the Secretary of State.

The plaintiff argued that the Second Circuit’s holding that the removal clock does not start running upon service of a statutory agent was inapplicable to cases involving the rule of unanimity, codified at 28 U.S.C. § 1446(b)(2)(A), which requires that “all defendants who have been properly joined and served must join in or consent to the removal of the action.”  According to the plaintiff, “application of cases holding that service on the Secretary of State does not start the thirty-day removal clock improperly ‘conflates’ the rule of unanimity with provisions setting out the thirty-day removal period.” Continue Reading Judge Seibel: Service on Secretary of State Does Not Trigger Clock for Consent to Removal in Multi-Defendant Case

In a complaint filed today, four minor league baseball teams sued Major League Baseball for violating the Sherman Act by allegedly orchestrating an agreement among its clubs to eliminate 40 minor league teams (out of 160) from being affiliated with major league clubs.

The Staten Island Yankees, Tri-City Valley Cats, Salem-Keizer Volcanoes and Norwich Sea Unicorns allege that MLB “collectively decided to artificially reduce the number” of affiliated minor league teams to cut expenses, instead of allowing the free market to determine which minor league teams will survive and prosper.  The Plaintiffs allege they brought the suit given the Supreme Court’s recent signaling in NCAA v. Alston, 141 S. Ct. 2141 (2021) of its willingness to reconsider MLB’s exemption from antitrust scrutiny: Continue Reading Minor League Baseball Teams Sue MLB for Antitrust Violations

In an opinion yesterday, Judge McMahon vacated the Purdue Pharma bankruptcy settlement because she found that the bankruptcy court lacked authority to issue releases in favor of the Sackler family.  (See our previous coverage here.) The family members had “offered to contribute toward a settlement, but if—and only if—every member of the family could ‘achieve global peace’ from all civil (not criminal) litigation, including litigation by Purdue to claw back the money that had been taken out of the corporation.”

But Judge McMahon concluded that there was no authority in the bankruptcy law for those releases. This is an issue that has been the subject of “long-standing conflict among the Circuits that have ruled on the question,” with no clear answer yet from the Second Circuit.

Among the reasons that Judge McMahon cited for siding with the Circuits that have refused to find authority for third party releases is the fact that Congress in 1994 authorized third-party releases in the specific context of asbestos, with the Judiciary Committee noting: “How the new statutory mechanism works in the asbestos area may help the Committee judge whether the concept should be extended into other areas.” This statement suggested to Judge McMahon that a broader authority to issue third-party releases in “other areas” did not exist in the first place, particularly given that Congress has not acted on the question since: Continue Reading Judge McMahon: Bankruptcy Court Lacked Authority to Release Sackler Family as Part of Purdue Settlement