LexisNexis® Legal Newsroom
Mealey's Insurance - Breach Of Contract Claim Completely Preempted By ERISA, Federal Judge Says

SAN DIEGO - A California federal judge on March 13 denied a disability claimant's motion to remand and granted a disability insurer's motion to dismiss after determining that a breach of contract claim is completely preempted by the Employee Retirement Income Security Act and fails to state a claim upon which relief can be granted (James Heldt v. Guardian Life Insurance Company of America, No. 16-885, S.D. Calif.; 2017 U.S. Dist. LEXIS 36490).

Mealey's Labor & Employment - Insurance Associations File Emergency Injunction Motion Over DOL's Fiduciary Rule

DALLAS - A Texas federal judge on March 14 instructed a coalition of insurance associations opposed to the U.S. Department of Labor's (DOL) new "fiduciary rule" to file a supplemental brief to their emergency motion for an injunction pending appeal of a ruling that the DOL has not exceeded its authority in formulating the new rule and that the new rule does not violate the Employee Retirement Income Security Act (Chamber of Commerce of the United States of America, et al. v. Edward Hugler, Acting Secretary of Labor, et al., No. 3:16-cv-1476, consolidated with 3:16-cv-1530, 3:16-cv-1537, N.D. Texas).

Mealey's Securities/D&O Liability - Reinsurers Sue Insurer For Indemnification Of Securities Probes

NEW YORK - A group of reinsurance companies and individuals sued an insurer in a New York state court on March 10, seeking indemnification from the insurer for various governments' financial department investigations (Beechwood Re Holdings, Inc., et al. v. Starr Indemnity & Liability Company, No. 651263/2017, N.Y. Super., New York Co.).

Mealey's Insurance - Reinsurers Sue Insurer For Indemnification Of Securities Probes

NEW YORK - A group of reinsurance companies and individuals sued an insurer in a New York state court on March 10, seeking indemnification from the insurer for various governments' financial department investigations (Beechwood Re Holdings, Inc., et al. v. Starr Indemnity & Liability Company, No. 651263/2017, N.Y. Super., New York Co.).

Mealey's Securities/D&O Liability - Investor Appeals Ruling In Yahoo Derivative Suit To 9th Circuit

SAN FRANCISCO - The plaintiff in a shareholder derivative lawsuit against Yahoo! Inc. and certain of its executive officers and directors on March 10 appealed a California federal judge's order dismissing the shareholder's second amended complaint with prejudice (UFCW Local 1500 Pension Fund v. Marissa Mayer, et al., No. 17-15435, 9th Cir.).

Mealey's Litigation Procedure - Shareholders May Amend Complaint To Add Claim In Securities Suit, Judge Rules

HOUSTON - Shareholders in a securities class action lawsuit against an energy company, several of its executive officers and directors and others may amend their complaint to add a claim for relief because their motion was filed prior to the deadline for amendments and amendment would not be futile, a federal judge in Texas ruled March 10 in granting the motion (In re Cobalt International Energy Inc. Securities Litigation, No. 14-3428, S.D. Texas; 2017 U.S. Dist. LEXIS 34437).

Mealey's Securities/D&O Liability - Shareholders May Amend Complaint To Add Claim In Securities Suit, Judge Rules

HOUSTON - Shareholders in a securities class action lawsuit against an energy company, several of its executive officers and directors and others may amend their complaint to add a claim for relief because their motion was filed prior to the deadline for amendments and amendment would not be futile, a federal judge in Texas ruled March 10 in granting the motion (In re Cobalt International Energy Inc. Securities Litigation, No. 14-3428, S.D. Texas; 2017 U.S. Dist. LEXIS 34437).

Mealey's Labor & Employment - 6th Circuit Affirms Court's Decision To Uphold Denial Of ERISA Benefits

CINCINNATI - The Sixth Circuit U.S. Court of Appeals on March 9 held that an insurer's decision to deny an insured's benefits is supported by substantial evidence notwithstanding the insurer's inherent conflict of interest as both the plan administrator and payer, affirming a lower federal court's decision to uphold the denial of benefits sought under Section 502(a) of the Employee Retirement Income Security Act (Daniel Collins v. Unum Life Insurance Company of America, No. 16-3918, 6th Cir., 2017 U.S. App. LEXIS 4322).

Mealey's Securities/D&O Liability - Texas Federal Judge Denies Motion To Amend ERISA Complaint Against BP

HOUSTON - A Texas federal judge on March 8 denied a motion filed by participants and beneficiaries of BP entities' employee investment and savings plans covered by the Employee Retirement Income Security Act to file an amended complaint related to the Deepwater Horizon Gulf of Mexico oil spill that resulted in a steep drop in the BP stock price for failure to state a claim (In Re: BP P.L.C. Securities Litigation, In re: BP ERISA Litigation, No. 4:10-cv-4214, S.D. Texas, 2017 U.S. Dist. LEXIS 33302).

Mealey's Litigation Procedure - Texas Federal Judge Denies Motion To Amend ERISA Complaint Against BP

HOUSTON - A Texas federal judge on March 8 denied a motion filed by participants and beneficiaries of BP entities' employee investment and savings plans covered by the Employee Retirement Income Security Act to file an amended complaint related to the Deepwater Horizon Gulf of Mexico oil spill that resulted in a steep drop in the BP stock price for failure to state a claim (In Re: BP P.L.C. Securities Litigation, In re: BP ERISA Litigation, No. 4:10-cv-4214, S.D. Texas, 2017 U.S. Dist. LEXIS 33302).

Mealey's Insurance - Judge Suspends Schedule For Claimant To Support Claim In Liquidation Proceeding

CHICAGO - An Illinois judge on March 10 granted a motion to suspend the briefing schedule on a liquidator's petition so that a claimant can secure documentation in support of his workers' compensation claim (In the Matter of the Liquidation of Illinois Movers' & Warehousemen's Risk Management Group, No. 12-CH-09140, Ill. Cir., Cook Co.).

Mealey's Labor & Employment - Texas Federal Judge Denies Motion To Amend ERISA Complaint Against BP

HOUSTON - A Texas federal judge on March 8 denied a motion filed by participants and beneficiaries of BP entities' employee investment and savings plans covered by the Employee Retirement Income Security Act to file an amended complaint related to the Deepwater Horizon Gulf of Mexico oil spill that resulted in a steep drop in the BP stock price for failure to state a claim (In Re: BP P.L.C. Securities Litigation, In re: BP ERISA Litigation, No. 4:10-cv-4214, S.D. Texas, 2017 U.S. Dist. LEXIS 33302).

Mealey's Litigation Procedure - Judge: Investors Failed To Plead Scienter In Chipotle Securities Suit

NEW YORK - Lead plaintiffs have failed to plead any material misrepresentations or scienter in making claims that Mexican restaurant chain Chipotle Mexican Grill Inc. and certain of its executive officers issued certain misrepresentations concealing issues surrounding a widespread series of E. coli outbreaks in violation of federal securities laws, a federal judge in New York ruled March 8 in granting the defendants' motion to dismiss (Susie Ong v. Chipotle Mexican Grill Inc., et al., No. 16-141, S.D. N.Y., 2017 U.S. Dist. LEXIS 33170).

Mealey's Litigation Procedure - Banks Seek Approval Of $27.2 Million Settlement In Home Depot Data Breach Suit

ATLANTA - A putative class of banks and financial institutions (FIs) on March 8 filed an unopposed proposed settlement of their claims against The Home Depot Inc. arising from a 2014 data breach, asking a Georgia federal court to approve the $27.2 million settlement that they state was the result of good-faith arm's-length negotiations with the retailer (In re: The Home Depot Inc., Customer Data Security Breach Litigation, No. 1:14-md-02583, N.D. Ga.).

Mealey's Securities/D&O Liability - Judge: Investors Failed To Plead Scienter In Chipotle Securities Suit

NEW YORK - Lead plaintiffs have failed to plead any material misrepresentations or scienter in making claims that Mexican restaurant chain Chipotle Mexican Grill Inc. and certain of its executive officers issued certain misrepresentations concealing issues surrounding a widespread series of E. coli outbreaks in violation of federal securities laws, a federal judge in New York ruled March 8 in granting the defendants' motion to dismiss (Susie Ong v. Chipotle Mexican Grill Inc., et al., No. 16-141, S.D. N.Y., 2017 U.S. Dist. LEXIS 33170).

Mealey's Litigation Procedure - Defendants In Securities Suit Not Entitled To Sanctions Under PSLRA, Judge Rules

SAN JOSE, Calif. - Defendants in a securities class action lawsuit are not entitled to sanctions pursuant to the Private Securities Litigation Reform Act (PSLRA) because they have not shown that an investor's amended complaint was "legally or factually baseless from an objective perspective" or that the investigation performed by the investor's counsel was reasonable and competent before filing the amended complaint, a federal judge in California ruled March 6 in denying the defendants' motion to amend by imposing sanctions (Tai Jan Bao, et al. v. SolarCity Corp., et al., No. 14-1435, N.D. Calif.; 2016 U.S. Dist. LEXIS 105179).

Mealey's Litigation Procedure - New York Federal Judge: Record-Keeper Services Didn't Give Rise To Fiduciary Duty

NEW YORK - A New York federal judge on March 7 granted a motion to dismiss an Employee Retirement Income Security Act lawsuit alleging that a record-keeper breached its fiduciary duty by preventing ERISA plans from getting a more competitive rate for record-keeping services, finding that the record-keeper was not a fiduciary of the plans (Elaine Malone, et al. v. Teachers Insurance and Annuity Association of America, No. 15-cv-08038, S.D. N.Y., 2017 U.S. Dist. LEXIS 32308).

Mealey's Securities/D&O Liability - Defendants In Securities Suit Not Entitled To Sanctions Under PSLRA, Judge Rules

SAN JOSE, Calif. - Defendants in a securities class action lawsuit are not entitled to sanctions pursuant to the Private Securities Litigation Reform Act (PSLRA) because they have not shown that an investor's amended complaint was "legally or factually baseless from an objective perspective" or that the investigation performed by the investor's counsel was reasonable and competent before filing the amended complaint, a federal judge in California ruled March 6 in denying the defendants' motion to amend by imposing sanctions (Tai Jan Bao, et al. v. SolarCity Corp., et al., No. 14-1435, N.D. Calif.; 2016 U.S. Dist. LEXIS 105179).

Mealey's Labor & Employment - New York Federal Judge: Record-Keeper Services Didn't Give Rise To Fiduciary Duty

NEW YORK - A New York federal judge on March 7 granted a motion to dismiss an Employee Retirement Income Security Act lawsuit alleging that a record-keeper breached its fiduciary duty by preventing ERISA plans from getting a more competitive rate for record-keeping services, finding that the record-keeper was not a fiduciary of the plans (Elaine Malone, et al. v. Teachers Insurance and Annuity Association of America, No. 15-cv-08038, S.D. N.Y., 2017 U.S. Dist. LEXIS 32308).

Mealey's PI/Product Liability - Judge: Investors Pleaded Elements Of Securities Law Claim Against Drug Company

CHICAGO - An investor group has shown that a pharmaceutical company and certain of its current and former executive officers issued a series of misrepresentations concealing certain financial reporting errors for fiscal year 2014 and concealing the integration of two companies it acquired in violation of federal securities laws, a federal judge in Illinois ruled March 6 in denying the defendants' motion to dismiss (In re Akorn Inc. Securities Litigation, No. 15-1944, N.D. Ill.).

Mealey's Litigation Procedure - Judge: Investors Pleaded Elements Of Securities Law Claim Against Drug Company

CHICAGO - An investor group has shown that a pharmaceutical company and certain of its current and former executive officers issued a series of misrepresentations concealing certain financial reporting errors for fiscal year 2014 and concealing the integration of two companies it acquired in violation of federal securities laws, a federal judge in Illinois ruled March 6 in denying the defendants' motion to dismiss (In re Akorn Inc. Securities Litigation, No. 15-1944, N.D. Ill.).

Mealey's Securities/D&O Liability - Judge: Investors Pleaded Elements Of Securities Law Claim Against Drug Company

CHICAGO - An investor group has shown that a pharmaceutical company and certain of its current and former executive officers issued a series of misrepresentations concealing certain financial reporting errors for fiscal year 2014 and concealing the integration of two companies it acquired in violation of federal securities laws, a federal judge in Illinois ruled March 6 in denying the defendants' motion to dismiss (In re Akorn Inc. Securities Litigation, No. 15-1944, N.D. Ill.).

Mealey's Securities/D&O Liability - Hedge Fund Manager's Motions To Vacate Sentence, Civil Forfeiture Denied

NEW YORK - Convicted hedge fund manager Raj Rajaratnam has failed to show that his trial counsel in his criminal proceedings was ineffective by failing to bring certain arguments on appeal of Rajaratnam's conviction for insider trading, a federal judge in New York ruled March 3 in denying a pair of motions to vacate Rajaratnam's sentence and civil forfeiture (Raj Rajaratnam v. United States of America, No. 15-5325, related to: 09cr1184, S.D. N.Y., 2017 U.S. Dist. LEXIS 30726).

Mealey's Insurance - Judge Denies Social Security Fraud Defendants' Requests For Bill Of Particulars

LEXINGTON, Ky. - A federal judge in Kentucky on Feb. 28 denied requests from two defendants accused of Social Security fraud for a bill of particulars, finding that it was an improper way of seeking itemized evidence from the government (United States of America v. David Black Daugherty, et al., No. 16-cr-22-DCR-REW, E.D. Ky., 2017 U.S. Dist. LEXIS 27496).

Mealey's Labor & Employment - Arkansas Federal Judge: ERISA Preempts State Law That Regulates PBMs

LITTLE ROCK, Ark. - An Arkansas federal judge on March 1 granted a pharmacy benefit managers (PBM) trade association summary judgment on its claim that Arkansas Act 900, a law that requires PBMs to pay pharmacies the amounts those pharmacies spent to buy generic drugs from wholesalers, is preempted by the Employee Retirement Income Security Act and denied the state of Arkansas' motion for summary judgment because Act 900 is invalid as applied to PBMs in their administration and management of ERISA plans (Pharmaceutical Care Management Association v. Leslie Rutledge, No. 4:15-cv-00510 BSM, E.D. Ark.).