On Monday, Judge Cote granted a laser hair removal operator’s request for an injunction (included as part of a summary judgment motion) against another laser hair removal operator that had posted false reviews from fake accounts on internet consumer forums including Yelp.com and CitySearch.com.  Judge Cote found that these reviews represented unfair trade practices under the Lanham Act and granted a permanent injunction, citing the defendants’ “willingness to use deceit to shape the market in which it functioned.”
Continue Reading Judge Cote Grants Permanent Injunction for Fake Internet Reviews About Competitor

In a 2-1 opinion yesterday, the Second Circuit affirmed the bench trial findings of Judge Cote that Apple orchestrated a price fixing conspiracy with book publishers to collectively raise the $9.99 per-book price that Amazon was charging and that publishers believed was damaging to their business in the long term. Apple signed contracts with the publishers for its own e-bookstore under an “agency model” (in which the publishers set the price and Apple would take a cut), and those contracts included a “most-favored nations” clause requiring the publishers to price the books in Apple’s store at the lowest offered anywhere else. The Second Circuit agreed with Judge Cote that the intended effect of these terms was to compel the publishers to act together to challenge Amazon’s flat, $9.99 pricing:
Continue Reading Second Circuit Affirms Antitrust Ruling Against Apple in E-Books Case

Following a bench trial, Judge Cote today issued a 361-page ruling in favor of FHFA (the conservator to Freddie Mac and Fannie Mae) in a case accusing Nomura and RBS of misrepresenting the quality of mortgages underlying various securities.  There had been 16 similar cases before Judge against various banks, all of which settled except this one.  Judge Cote resolved various disputes between the parties as to how damages should be calculated, but did not specify the final judgment amount. She instead directed the FHFA, which had initially sought over $1 billion, to submit a proposed judgment following the formula in her opinion. The opinion begins:
Continue Reading After Bench Trial, Judge Cote Rules For FHFA in Case Against Nomura, RBS

In an opinion Friday, Judge Scheindlin largely denied Barclays’ motion to dismiss a securities fraud class action alleging that Barclays misled investors about its anonymous trading platform, or “dark pool,” referred to as “LX.”  At the outset, Judge Scheindlin found it appropriate for the plaintiffs to have borrowed substantially from the New York Attorney General’s

The Federal Housing Finance Agency (or “FHFA,” as conservator for Fannie Mae and Freddie Mac) sued 18 banks in 2011 for misrepresenting the quality of mortgage bonds. All but Nomura and RBS have settled, for a total of around $18 billion.  The trial against Nomura and RBS begins Monday before Judge Cote. It will be

In an opinion today, Judge Cote granted Tory Burch summary judgment in a case concerning knock-off merchandise.  The motion was deemed unopposed based the defendants’ misconduct, including spoliation and fabrication of evidence.  In a particularly notable passage, the opinion discloses that the Court ordered a forensic examination of the defendants’ opposition papers, and, from that examination, determined that those papers were served too late:
Continue Reading Judge Cote Employs Forensic Examination to Determine Brief Was Served Too Late

In an opinion dated yesterday, Judge Castel dismissed a suit challenging the proposed merger between a Chilean bank (Itau) and a Brazlian bank (CorpBanca) because the plaintiff, Cartica, was not a “purchaser” or “seller” in relation to the alleged fraud.  It was merely a stockholder. In doing so, he took one side of an issue that has divided the lower courts:
Continue Reading Judge Castel Rules 10(b) Claims Are Limited to Buyers and Sellers, Even in Injunction Cases

In an opinion dated yesterday, Judge Hellerstein ruled that a service called “TVEyes,” which “monitors and records all content broadcast by more than 1,400 television and radio stations twenty-four hours per day, seven days per week, and transforms the content into a searchable database for its subscribers,” was “fair use” under the copyright laws, and thus largely granted summary judgment against the plaintiff, Fox News. The decision was based on the fact that the service is “transformative”:
Continue Reading Judge Hellerstein Rules That Searchable TV Database Service is “Fair Use”

In an opinion today, Judge Cote largely denied motions to dismiss from various banks and others accused of colluding to maintain control of the market for credit default swaps. According to the complaint, a joint venture led by Citadel tried to establish a clearinghouse called CMDX that would potentially threaten the defendants’ market dominance, and the defendants responded by conspiring to block critical market participants, ISDA and Markit, from granting licenses that would be necessary for the clearinghouse to function. Judge Cote rejected the defendants’ arguments that the pleadings were not detailed enough to suggest a conspiracy:
Continue Reading Judge Cote Allows Credit Default Swap Antitrust Action to Proceed

In an opinion dated Friday, Judge Cote granted partial summary judgment to the FHFA (the conservator for the two Government-Sponsored Enterprises, or “GSEs,” Fannie Mae and Freddie Mac), dismissing various banks’ affirmative defense that the GSEs had knowledge that the mortgage securities at issue were defective. The essence of her ruling was that, while the GSEs may have had generalized knowledge of problems with mortgage origination, there was no evidence that they had specific knowledge that the representations at issue were false:
Continue Reading Judge Cote Rejects, As a Matter of Law, Banks’ Defense That FHFA Knew Mortgage Securities Were Defective