Mealey's Litigation Procedure - 9th Circuit Extends Barabin To Criminal Actions, Grants New Trial In Threats Case

SAN FRANCISCO - In a criminal trial against a man accused of sending threatening emails to police and prosecutors, a judge erred in excluding a psychologist's testimony regarding diminished capacity because he had evaluated the defendant only for competency to stand trial, a Ninth Circuit U.S. Court of Appeals panel ruled April 17 in reversing the conviction and ordering a new trial (United States of America v. Eric Leon Christian, No. 12-10202, 9th Cir.; 2014 U.S. App. LEXIS 7218).

Mealey's Securities/D&O Liability - Herbalife Faces Securities Class Suit Following Criminal Probe

LOS ANGELES - A purchaser of Herbalife Ltd. stock filed a class complaint in California federal court on April 14 accusing the company and its executives of hiding the fact that the company's operations were based on a pyramid scheme, resulting in artificially inflated stock prices before the disclosure (Abdul Awad, et al. v. Herbalife Ltd., et al., No. 14-2850, C.D. Calif.).

Mealey's Litigation Procedure - Herbalife Faces Securities Class Suit Following Criminal Probe

LOS ANGELES - A purchaser of Herbalife Ltd. stock filed a class complaint in California federal court on April 14 accusing the company and its executives of hiding the fact that the company's operations were based on a pyramid scheme, resulting in artificially inflated stock prices before the disclosure (Abdul Awad, et al. v. Herbalife Ltd., et al., No. 14-2850, C.D. Calif.).

Mealey's Toxic Tort/Environmental - Judge Requires CITGO To Pay Interest On Fines, Sets Deadline For Restitution

CORPUS CHRISTI, Texas - A Texas federal judge on March 25 amended judgments issued in a criminal pollution sentencing to address the prosecution's concerns about potential restitution to residents claiming damages and to require the defendants to pay interest on the fines he had imposed (United States v. CITGO Petroleum Corp., et al., No. CR-06-563, S.D. Texas, Corpus Christi Div.).

Mealey's PI/Product Liability - Toyota Forfeits $1.2B, Accepts Deferred Prosecution In Sudden-Acceleration Probe

NEW YORK - Toyota Motor Corp. will forfeit $1.2 billion as part of a deferred criminal prosecution agreement for wire fraud for allegedly misleading consumers, the federal government and Congress about "sudden acceleration" problems in the company's cars, the parties announced March 19 (United States of America v. Toyota Motor Corporation, No. n/a, S.D. N.Y.).

Mealey's Toxic Tort/Environmental - U.S. Magistrate: Limits On Native Inmates' Religion Are Least Restrictive Means

CORPUS CHRISTI, Texas - Restrictions on Native American prison inmates' ability to smoke ceremonial tobacco, grow their hair long and wear items of religious significance impose substantial burdens on their religious exercise, a Texas federal magistrate judge said in a Feb. 27 opinion, but are nevertheless lawful because the policies are the least restrictive means of furthering the Texas Department of Criminal Justice's (TDCJ) interest in maintaining security and controlling costs (Teddy Norris Davis, et al. v. William Stephens, et al., No. 2:12-CV-166, S.D. Texas, Corpus Christi Div.; 2014 U.S. Dist. LEXIS 25030).

Mealey's PI/Product Liability - Endo Health Solutions To Pay $192M In Criminal, Civil Penalties For Off-Label Sales

SYRACUSE, N.Y. - Endo Health Solutions Inc. and subsidiary Endo Pharmaceuticals Inc. will pay $192.7 million in criminal and civil penalties for their off-label marketing of the drug Lidoderm, the U.S. Justice Department announced Feb. 21.

Mealey's Insurance - Homeowner Sanctioned For Misrepresentation, Fraudulent Claims After House Fire

HOUSTON - In granting an insured's motion to voluntarily dismiss claims against his insurer, a Texas federal judge in a Feb. 11 ruling took the man to task for acts that went "beyond civil fraud to criminality" and for filing a "nuisance" lawsuit that was "contemptuous of the judicial process, granting the insurer's motion for sanctions in the form of attorney fees (Tony Alexander v. State Farm Lloyds, No. 4:12-cv-00490, S.D. Texas; 2014 U.S. Dist. LEXIS 16891).

Mealey's PI/Product Liability - Device Maker Valor Medical, 2 Officers Plead Guilty To Withholding Test Results

SAN DIEGO - Biomedical device manufacturer Valor Medical Inc. and two of its officers pleaded guilty to federal criminal charges for allegedly withholding critical information from the Food and Drug Administration, the U.S. attorney for the Southern District of California said in a Jan. 30 press release (United States of America v. Valor Medical Inc., et al., No. 3:`14-cr-196, S.D. Calif.).

Majority Of Class Suit Over Incorrect Criminal Background Check Survives Dismissal

SAN FRANCISCO - A California federal magistrate judge on Jan. 17 largely rejected a motion to dismiss a class complaint filed by a California couple accusing a resident screening company of supplying an inaccurate consumer report to a prospective employer and landlord (Harold Meyer, et al. v. National Tenant Network, Inc., No. 13-3187, N.D. Calif.; 2014 U.S. Dist. LEXIS 6797).

Drug Importer Pleads Guilty To Selling Misbranded Drugs

ALEXANDRIA, Va. - A Virginia-based drug importer and its co-owner on Dec. 2 pleaded guilty to federal criminal charges related to the importation of misbranded Botox, chemotherapy drugs and other drugs, the U.S. Attorney's Office for the Eastern District of Virginia said in a press release (United States of America v. Gallant Pharma International Inc., et al., No. 13-cr-130, E.D. Va., Alexandria Div.).

Judge Stays Government's Clean Water Act Suit During Criminal Investigation

NEW ORLEANS - A federal judge in Louisiana on Nov. 26 entered a 60-day stay in a Clean Water Act (CWA) suit against the owner and operator of a floating oil and gas production platform in the Gulf of Mexico for the government to conduct a criminal investigation into the company's operation of the ATP Innovator (United States of America v. ATP Oil & Gas Corporation, et al., No. 13-0262, E.D. La.; 2013 U.S. Dist. LEXIS 168061).

Washington State Teen-Smoking Ordinance Is Ruled Constitutional

SEATTLE - A Washington appellate court has affirmed the constitutionality of a state law under which a Walgreen's clerk was fined $100 for selling tobacco to a minor, saying in a Nov. 12 opinion that the fine is not a criminal conviction that would implicate the plaintiff's right to trial (John F. Klinkert v. Washington State Liquor Control Board, No. 69359-0-I, Wash. App., Div. 1; 2013 Wash. App. LEXIS 2637).

Criminal Conduct Exclusion Bars Coverage Of Suits Against Insurance Broker, Judge Says

WEST PALM BEACH, Fla. - An insurance professionals errors and omissions policy's criminal conduct exclusion absolves the insurer of its duty to defend an insurance broker against two underlying lawsuits, a Florida federal judge ruled Nov. 7, granting the insurer's motion for final summary judgment (Certain Interested Underwriters at Lloyd's, London v. AXA Equitable Life Insurance Co., et al., No. 10-62061, S.D. Fla.; 2013 U.S. Dist. LEXIS 159639).

Johnson & Johnson, 2 Units Plead Guilty, Pay $2.2B In Criminal, Civil Penalties

WASHINGTON, D.C. - Two Johnson & Johnson subsidiaries have pleaded guilty, and the parent company and two subsidiaries will pay $2.2 billion in criminal fines, civil penalties and forfeitures in one criminal and several civil cases for off-label marketing of three drugs, for paying kickbacks to health care providers and a nationwide pharmacy and for causing false claims to be submitted to Medicare and Medicaid, the U.S. Justice Department announced today.

Rabobank To Pay $1 Billion To Settle Allegations That It Manipulated Libor

WASHINGTON, D.C. - Dutch bank Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank) has agreed to pay more than $1 billion in civil and criminal penalties to settle allegations that it manipulated the London InterBank Offered Rate (Libor), the U.S. Department of Justice (DOJ) announced Oct. 29.

Virgin Islands High Court Upholds Conviction, Sentence Against Insurance Broker

ST. THOMAS, Virgin Islands - The Virgin Islands Supreme Court on Sept. 20 affirmed convictions against an insurance broker for violating the Criminally Influenced and Corrupt Organizations Act, 14 Virgin Islands Code Section 600, et seq. (CICO), and obtaining money by false pretenses (John J. Gumbs v. People of the Virgin Islands, No. 2010-0034, Virgin Islands Sup.; 2013 V.I. Supreme LEXIS 61).

UBS Subsidiary To Pay $100M To Settle Libor Manipulation Claims

NEW HAVEN, Conn. - UBS Securities Japan Co. Ltd. will pay a $100 million fine as part of a plea agreement with the U.S. government to end a criminal suit alleging that UBS Japan illegally manipulated the London Interbank Offered Rate (Libor), according to court documents filed on Sept. 18 in a Connecticut federal court (United States of America v. UBS Securities Japan Co. Ltd., No. 12-cr-0268, D. Conn.).

Manager: Media Company Forced Into Bankruptcy By Former Controller's Embezzlement

LOS ANGELES - The finance manager for bankrupt KSL Media Inc. on Sept. 11 filed a declaration in the U.S. Bankruptcy Court for the Central District of California saying that the company was forced into Chapter 11 bankruptcy by the "criminal malfeasance" of its former corporate controller who allegedly embezzled $145 million from the company between 2006 and 2010 (In Re: KSL Media Inc., No. 13-15929, Chapter 11, C.D. Calif. Bkcy.).

Pollution Exclusion Bars Coverage For Criminal Charges, Federal Judge Says

DETROIT - An insurer has no duty to provide coverage to its insured for criminal proceedings arising out of the violation of an air use permit because the pollution exclusion clearly precludes coverage, a Michigan federal judge said Aug. 27 (Arch Insurance Co. v. Commercial Steel Treating Corp. et al., No. 11-15535, E.D. Mich.; 2013 U.S. Dist. LEXIS 121574).

Bankrupt K-V Discovery Reaches $23.8M Settlement With States, Federal Government

NEW YORK - Bankrupt pharmaceutical company K-V Discovery Solutions Inc. on Aug. 28 reached an agreement under which it will pay the United States and certain states asserting Medicaid claims $23.8 million to settle criminal fines and claims made against the bankruptcy estate (In Re: K-V Discovery Solutions Inc., No. 12-13346, Chapter 11, S.D. N.Y. Bkcy.).

Wyeth Pleads Guilty, Pays $490M In Criminal, Civil Penalties For Off-Label Sales

OKLAHOMA CITY - The Wyeth Pharmaceuticals Inc. subsidiary of Pfizer Inc. has pleaded guilty to misbranding and paid $490.9 million in criminal and civil penalties to resolve allegations that it marketed its Rapamune anti-rejection drug for off-label uses, the U.S. Justice Department announced July 30 (United States of America v. Wyeth Pharmaceuticals Inc., et al., No. 5:13-cr-129, United States of America, ex rel. Mark B. Campbell v. Wyeth Inc., No. 5:07-cv-51, W.D. Okla., and United States of America ex rel. Marlene Sandler, et al. v. Wyeth Pharmaceuticals, Inc., No. 5:10-cv-1317, E.D. Pa.).

Federal Judge Grants Stay To Subjects Of Ponzi Scheme Action

SAN JOSE, Calif. - A federal judge in California on July 24 stayed for six months a civil suit against individuals also facing criminal charges for their alleged perpetration of a Ponzi scheme, stating that forcing the defendants to make a choice between preserving their privilege against self-incrimination, thereby exposing themselves to a "one-sided discovery process," would impinge on their Fifth Amendment rights (Lynn Bridges, et al. v. John A. Geringer, et al., No. 13-1290, N.D. Calif.; 2013 U.S. Dist. LEXIS 103852).

Georgia High Court Finds Agency Ruling Does Not Preclude Future Criminal Case

ATLANTA - The Georgia Supreme Court on June 17 held that an agency-level ruling on whether Medicaid payments can be suspended while the state investigates Medicaid fraud criminal violations cannot preclude a future criminal prosecution under the doctrine of collateral estoppel. The state high court concluded that the state did not have the opportunity to fully litigate the alleged criminal conduct before the administrative law judge and, therefore, cannot be barred from filing criminal fraud charges once the investigation was complete (Tyrone Cecil Malloy v. The State, No. S13A0188, Ga. Sup.; 2013 Ga. LEXIS 546).

Oklahoma Court Upholds Expert Admission, Father's Conviction In Shaken Baby Case

OKLAHOMA, CITY - New disagreement over a scientific theory does not render it novel and require an admissibility hearing under Daubert v. Merrill Dow Pharmaceuticals, the Oklahoma Court of Criminal Appeals held June 18 in affirming admission of medical experts in a shaken baby murder case (Jason Scott Day v. State of Oklahoma, No. F-2012-143, Okla. Crim. App.; 2013 Okla. Crim. App. LEXIS 10).