Arbitration, Attorneys' Fees, Class Actions, Federal Practice, Legislative Updates, MLB Litigation Brief, U.S. House, U.S. Supreme Court

MLB Litigation Brief: Class Action Questions Open After Scalia’s Death, Arbitration Fees and American Rule & More

Litigation Brief Header

Our goal is to serve as a cutting-edge resource for companies operating in an increasingly globalized and regulated business environment. Moore & Van Allen’s MLB Litigation Brief is a complement to our Litigation Blog’s in-depth individual treatment of critical issues emerging in federal, North Carolina state, and international litigation, as well as in arbitration, regulatory enforcement, and related business practices. MLB Litigation Brief hits the highlights of recent developments, streamlining access to critical information for our readers. Subscribe to the MVA Litigation Blog via email or RSS to ensure that you receive MLB Litigation Brief, as well as our comprehensive posts. Please contact us if you have any questions regarding the materials covered.

Class Actions and Arbitration

    • 2015 Witnesses Record Securities Class Actions: The National Economic Research Associates, Inc. (NERA) recently released its report, Recent Trends in Securities Class Action Litigation: 2015 Full-Year Review, detailing the highest level of securities class action filings since 2008. According to NERA, 234 securities class action complaints were filed in 2015, with the majority involving electronic technology and technology services (22%) followed by healthcare technology and services (19%). Class action plaintiffs moved more quickly in 2015 as well. NERA reports a 40% reduction in the time plaintiffs waited between the end of an alleged class period and filing a complaint. The report also addresses settlement trends, attorneys’ fees and expenses, and trials, among other issues.

    • No Attorneys’ Fees – Seeking Court Review of Arbitration Award Under FAA Does Not Breach Agreement to be Bound by Arbitration: The Second Circuit Court of Appeals recently decided in Zurich Am. Ins. Co. v. Team Tankers A.S that the American Rule prevails in the fight for attorneys’ fees under the Federal Arbitration Act. The defendant prevailed in arbitration and the plaintiff sought to overturn the arbitration decision while defendant sought to confirm the award in District Court. The District Court upheld the arbitration decision and awarded the defendant its attorneys’ fees and costs incurred during the District Court proceeding based upon the arbitration agreement provision that damages for breach of contract included all provable damages, and attorneys’ fees and costs “incurred in any action hereunder.” The Second Circuit reversed the attorneys’ fee award because there was no allegation that the plaintiff had breached the underlying contract at issue, and the plaintiff’s action seeking District Court review of the arbitration award did not breach the agreement’s terms, which explicitly incorporated the FAA and consented to confirmation of the arbitral award in any court of competent jurisdiction. Further, the Circuit Court held that “[p]arties seeking to enforce arbitration awards through federal‐court confirmation judgments may not divest the courts of their statutory and common‐law authority to review both the substance of the awards and the arbitral process for compliance with § 10(a) and the manifest disregard standard.” Therefore, plaintiff’s resisting confirmation of the arbitration decision could not constitute a breach of the agreement.

U.S. Supreme Court

    • Class Action Questions Open After Scalia’s Death: The Supreme Court heard arguments in three class action cases last year that we covered in our What’s Hot In Class Actions seriesCampbell-Ewald Co. v. Gomez (No. 14-857),Spokeo, Inc. v. Robins (No. 13-1339), and Tyson Foods, Inc. v. Bouaphakeo (No. 14-1146). Two of these cases, Spokeo and Tyson Foods, remain open pending a decision by the now eight-Justice panel of the High Court. Just weeks before Scalia’s passing, the Court issued its decision in Campbell-Ewald, which was celebrated by class action plaintiffs. The Court held in a 5-4 split that an unaccepted settlement offer or offer of complete relief does not moot a class action plaintiff’s complaint. The Court reasoned that the plaintiff’s settlement bid and Rule 68 offer of judgment, once rejected, had no continuing effect and the parties remained adverse with the same interests in the litigation they had at the beginning. “We hold today, in accord with Rule 68 of the Federal Rules of Civil Procedure, that an unaccepted settlement offer has no force. Like other unaccepted contract offers, it creates no lasting right or obligation. With the offer off the table, and the defendant’s continuing denial of liability, adversity between the parties persists.” Justice Scalia joined Chief Justice Roberts and Justice Alito in the dissent, supporting the approach argued by businesses seeking to limit their class action liability. With Justice Scalia absent from the bench, it remains to be seen whether the Court’s class action jurisprudence will continue in the same direction that largely has benefitted efforts to limit class action exposure over the past six years. Justice Scalia’s absence certainly will increase the risk that defendants will find themselves on the losing end of pending, and possibly future, class action cases.

On Capitol Hill

    • House Passes Act to Protect Local Businesses and Defendants Seeking Federal Forum: On February 25, the full U.S. House of Representatives passed H.R. 3624 – the Fraudulent Joinder Prevention Act of 2016. Federal law permits defendants to remove cases filed in state court to a federal court if the plaintiffs are diverse in citizenship from the defendants. Plaintiffs have joined in-state defendants who are not sufficiently liable or connected to a case solely to defeat diversity and prevent removal, giving rise to the fraudulent joinder doctrine. Identifying a gap in jurisprudence defining the boundaries of the fraudulent joinder doctrine, H.R. 3624 was introduced by Representative Ken Buck in 2015 to create a single standard for determining whether a defendant has been joined fraudulently in an effort to defeat federal jurisdiction. The Judiciary Committee anticipates that the Act “will give out-of-state defendants a better opportunity to secure the neutral Federal forum that they would be entitled to if sued alone. And it will help to protect individuals and small businesses from being dragged into court when their involvement in the controversy is peripheral at best.” The Act was sent by Committee to the full House for consideration earlier this month and was passed, with amendment, by a 229-189 vote.
Tony Lathrop

About Tony Lathrop

Tony Lathrop brings experience and a high level of analytical ability, professional credibility and creativity to handling litigation matters. He rigorously represents his clients' interests in a diverse range of claims and actions. A certified mediator, Mr. Lathrop has extensive experience representing business clients in mediation. His service to the legal profession in North Carolina has allowed him to develop relationships across the state that benefit the firm's clients.


No comments yet.

Leave a comment

Your email address will not be published. Required fields are marked *

Spam Protection by WP-SpamFree

Welcome to the MVA Litigation Blog!

In an increasingly globalized and regulated business environment, companies are faced with ever-changing and complicated litigation and regulatory challenges. The Moore & Van Allen Litigation Blog provides cutting-edge information regarding developments in federal, North Carolina State, and international litigation, as well as in arbitration, regulatory enforcement, and related business practices.

Connect to Recent Authors

  • Tony Lathrop:  View Tony Lathrop's Bio View Tony Lathrop's LinkedIn profileFollow @TonyLathropLaw on Twitter
  • Subscribe to Blog Via Email

    Follow MVA


    Blog Topics


    Our Litigation Practice

    Headquartered in the banking and energy hub of Charlotte, North Carolina, Moore & Van Allen has assembled a team of litigators with the intellectual acuity, knowledge of complex commercial transactions, and breadth of experience necessary to successfully serve our clients in all aspects of sophisticated business litigation and white collar criminal defense.

    Guided by trial lawyers with years of substantial state, federal, and international experience, our team addresses the diverse challenges facing our clients, ranging from general commercial litigation and matters involving employment, antitrust, trust & estate, securities or corporate governance issues, to class actions, regulatory enforcement proceedings, and government & internal investigations.

    We represent large Fortune 500® corporations, as well as start-ups, in banking, securities, healthcare, manufacturing, construction, energy, and other industries. We work closely with our clients to develop strategies to meet their business needs, whether that includes taking a case to trial or appeal, arbitrating a case or finding an alternative means of resolution. Read More About Our Practice and Meet the MVA Litigation Team.


    No Attorney-Client Relationship Created by Use of this Website: Neither your receipt of information from this website, nor your use of this website to contact Moore & Van Allen or one of its attorneys creates an attorney-client relationship between you and Moore & Van Allen. As a matter of policy, Moore & Van Allen does not accept a new client without first investigating for possible conflicts of interests and obtaining a signed engagement letter. (Moore & Van Allen may, for example, already represent another party involved in your matter.) Accordingly, you should not use this website to provide confidential information about a legal matter of yours to Moore & Van Allen.

    No Legal Advice Intended: This website includes information about legal issues and legal developments. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. You should contact an attorney for advice on specific legal problems. (Read All)