Nuclear Option: Mediation

A multibillion-dollar fight over who should pay for the San Onofre nuclear plant failure will go to mediation with the mediator from the recent NFL owners and players settlement, according to a joint filing with the Ninth U.S. Circuit Court of Appeals and the California Public Utilities Commission. Lawyers report that Layn Phillips will host an initial conference by telephone and then in-person mediation sessions this summer. Phillips, a former federal prosecutor and judge, will try to resolve the complicated dispute over almost $5 billion in costs stemming from the premature shutdown of the California coastal power plant amid a radiation leak in 2012. Any settlement would have to be approved by the federal appeals court, which took the case last year when consumers sued the commission and Edison over the original terms of a settlement agreement. The commission which ordered the latest round of negotiations, also would have to approve any revised agreement. The 2,200-megawatt nuclear plant along the Pacific failed after newly installed replacement steam generators leaked radiation. Majority plant owner Edison opted to permanently shutter the facility in 2013. The following year, state regulators approved a settlement deal allowing the utility to recover 70 percent of the $4.7 billion in premature closure costs from customers, as opposed to shareholders. Edison later disclosed its executives met privately with utility regulators at a luxury hotel, negotiating a framework for the deal eventually approved in 2014. Those backchannel communications between utility executives and regulators are under criminal investigation by the California Attorney General’s Office. The mediation effort agreed to by Edison and consumers aims to resolve a federal court case filed by the group Citizens Oversight shortly after regulators approved the settlement. As public criticism of the original settlement terms mounted, the Public Utilities Commission ordered the San Onofre record reopened. While the terms from 2014 remain in place, regulators ordered the two sides to begin new settlement talks this year and now the parties will go to mediation. Interestingly, earlier this month, arbitrators at the International Chamber of Commerce resolved an arbitration case between Edison and Mitsubishi Heavy Industries, which manufactured the equipment that led to the plant failure in 2012, awarding Edison a fraction of the damages the utility had sought. The Chamber also ordered Edison to pay $58 million in legal fees to Mitsubishi. The Japanese manufacturer is seeking to keep portions of the evidence submitted in the arbitration case confidential. The federal appeals court has ordered regular updates to the negotiations. See more reported here-- http://bit.ly/2nE84bd and a statement of mediation from the court here-- http://www.ca9.uscourts.gov/mediation/

Takata Deal Parties Ask for Special Master

Last week, the U.S. Attorney in Detroit announced Takata Corporation agreed to plead guilty to wire fraud and pay $1 billion in penalties stemming from the company’s fraudulent conduct related to sales of defective air bag inflators. The federal prosecutor said automotive suppliers who sell products that are supposed to protect consumers from injury or death must put safety ahead of profits. Under the terms of the agreement, which is subject to court approval, Takata pleaded guilty for falsifying testing data and reports that were provided to automakers. Takata will pay a criminal fine of $25 million and establish a $125 million restitution fund for individuals who suffered or will suffer personal injury caused by the malfunction of a Takata airbag inflator, and who have not already resolved their claims. In addition, Takata will establish an $850 million restitution fund for the benefit of automakers who received falsified testing data and reports or who have purchased airbag inflators from Takata containing phase-stabilized ammonium nitrate. The deal includes appointment of an independent monitor, who will report to the Justice Department and monitor Takata’s compliance with its legal and ethical obligations. The parties asked the federal judge to appoint mediator Kenneth Feinberg as a special master to distribute restitution payments. He handled restitution funds in the General Motors ignition switch and BP oil spill cases, among others. Payments to individuals must be made soon and automakers must be paid within five days of Takata's anticipated sale or merger. Takata is expected to be sold to another auto supplier or investor sometime this year. See more in stories here-- http://detne.ws/2jUBC5x and http://trib.in/2jfzRPf and press release-- http://bit.ly/2jzi2YZ

Uber Arbitration Agreements Upheld

Last week, the Ninth Circuit Court of Appeals in the case of Mohamed v. Uber Technologies, Inc. overturned a District Court’s ruling which originally found Uber’s arbitration agreements to be unenforceable. Last year, the District Court held Uber's arbitration agreements were unconscionable due to the inclusion of a waiver of claims brought under California’s Private Attorneys General Act (“PAGA”). The decision invalidated nearly 250,000 arbitration agreements between Uber and independent drivers, allowing the case against Uber to proceed as a class action in civil court. Uber appealed the decision, arguing that the District Court should have simply severed the PAGA waiver pursuant to a severability provision, rather than invalidating the entire agreement. The Court of Appeals agreed with Uber, ruling that the PAGA waivers be severed from the arbitration agreements and the agreements are otherwise enforceable. The Ninth Circuit dismissed the trial judge's reasons for declaring parts of the arbitration agreement unenforceable as artificial. The appeals panel found the lower court judge also ignored Ninth Circuit precedent, erroneously applying a California Supreme Court decision that itself cited a relevant Ninth Circuit decision. This lastest decision will allow Uber drivers to pursue their PAGA claims in court, but will allow Uber to compel individual arbitration on all other claims. Uber had agreed to a $100 million settlement, which the trial court rejected last month, calling it unfair and inadequate. See more on here-- http://bit.ly/2cB6ylD and full decision-- http://bit.ly/2cnJaco

NFL No-Cap Concussion Settlement Approved

Just before the start of the 2013 professional football season, thousands of former players settled with the National Football League (NFL) over concussion-related suits. The league agreed to pay for medical benefits and injury compensation to retired players, as well as to fund medical exams, research and to pay litigation expenses. After that first deal was rejected by the trial court, a second deal doing away with a cap on the fund from which injured former players would draw was reached. The lower court, however, kept out a class of players who had argued that they should benefit from the settlement because in the future they may develop the disease chronic traumatic encephalopathy (CTE). Failure to compensate players with CTE was the primary objection to the previously approved deal which only compensates for CTE if the player has died. Several players appealed to the United States Court of Appeals for the Third Circuit. The appeals court noted that the research surrounding CTE is still nascent. Currently, CTE can be detected only by an autopsy of the brain, and the families of several former players who died and were found to have the condition stand to receive millions. Those awards apply only to players found before the settlement was approved. Appellate judges in affirming approval of the deal stated,"This settlement will provide nearly $1 billion in value to the class of retired players. It is a testament to the players, researchers and advocates who have worked to expose the true human costs of a sport so many love. Though not perfect, it is fair." At the outset, the district judge had signaled a preference for settlement of the case, believing that the interests of all parties would be best served by a negotiated resolution. The settlement was characterized as avoiding litigating thousands of complex individual claims over many years and providing immediate relief and support. NFL Commissioner Roger Goodell and team owners claim they wanted to "do the right thing" for former players with neurological conditions who believe their problems stem from on-field concussions. The underlying case accused the league of hiding concussions to protect its image. See more here--http://nyti.ms/1pbsOWv and http://ble.ac/1qTAD4I

Court Approves NFL Concussion Settlement

After the first deal was rejected by the trial court just over a year ago, a second deal doing away with a $675 million cap on the fund from which injured former players would draw was reached. Reportedly, the National Football League (NFL) projects 6,000 of some 20,000 retired football players will suffer from dementia or Alzheimer's disease. The approved settlement could payout more than $1 billion. Plaintiffs lawyers not involved in negotiations on the second deal may still appeal over previously expressed concerns about the settlement terms. One attempt to appeal to the U.S. Court of Appeals for the Third Circuit failed last fall, with that court declining to exercise jurisdiction on review of an order granting or denying class certification. The issue on appeal involved preliminary approval of the settlement and granting conditional certification of the class for settlement purposes. Even now that approval of the settlement is final, it could be appealed which would delay benefits to eligible players. Failure to compensate players with chronic traumatic encephalopathy (CTE) is the primary objection to the deal which only compensates for CTE if the player has died. The case faced significant legal hurdles at the start that could have landed the case in arbitration instead of federal court. At the outset, the district judge signaled a preference for settlement of the case, believing that the interests of all parties would be best served by a negotiated resolution. The settlement has been characterized as avoiding litigating thousands of complex individual claims over many years and providing immediate relief and support. NFL Commissioner Roger Goodell and team owners claim they wanted to "do the right thing" for former players with neurological conditions who believe their problems stem from on-field concussions. The lawsuit accused the league of hiding known risks of concussions for decades to return players to games and protect its image. See more here-- http://bit.ly/1x1uRxX and settlement info here-- http://www.bbc.com/news/world-us-canada-32420600 and http://bit.ly/1bAyhjS and www.nflconcussionsettlement.com

Will Preemption Cause NFL Concussion Opt-outs to Opt-in Settlement?

The NFL maintains the appropriate forum for dealing with player injuries and concussions should be the Collective Bargaining Agreement grievance process, not litigation. For players that opted out of the NFL Concussion Settlement and are continuing their concussion litigation, a motion to dismiss based on preemption may be back on the table when just last week, a federal judge dismissed the prescription drug lawsuit filed by 1,300 former players (Richard Dent et al. v. NFL) on preemption grounds. In that case, the judge decided that the league addressed serious concerns in a serious way-- by imposing duties on the clubs via collective bargaining and placing a long line of health-and-safety duties on the team owners themselves. He went on to state that these benefits may not have been perfect, but they have been uniform across all clubs and not left to the vagaries of state common law. They are backed up by the enforcement power of the union itself and the players' right to enforce these benefits. This does not bode well for the former players that opted out of the settlement thousands of former players made with the National Football League (NFL) over concussion-related suits last summer. The league is reportedly paying $765 million for medical benefits and injury compensation to retired players, as well as funding medical exams, research and litigation expenses. The settlement has been characterized as avoiding litigating thousands of complex individual claims over many years and providing immediate relief and support. NFL Commissioner Roger Goodell and team owners reportedly wanted to "do the right thing" for former players with neurological conditions who believe their problems stem from on-field concussions. The lawsuits accused the league of hiding known risks of concussions for decades to return players to games and protect its image. For the lawyers who negotiated the proposed settlement of the NFL's massive concussion litigation, the agreement was groundbreaking. For the lawyers whose clients objected to the settlement, it fails to compensate players suffering from the "industrial disease of football," and it allows the league to escape any determination of whether the league concealed the effects of head injuries from its players. Defending the deal, NFL and the players' attorneys insisted they wanted to help suffering players now, emphasizing difficulty in litigating causation between blows to the head and brain damage known as chronic traumatic encephalopathy (CTE) in these football concussion cases. See more here-- http://bit.ly/1x1uRxX and settlement info here-- https://www.nflconcussionsettlement.com

NFL Concussion Settlement Questioned

This week, a hearing took place to consider the deal covering thousands of former players that settled with the National Football League (NFL) over concussion-related suits last summer. The league is reportedly paying $765 million for medical benefits and injury compensation to retired players, as well as funding medical exams, research and litigation expenses. The settlement has been characterized as avoiding litigating literally thousands of complex individual claims over many years and providing immediate relief and support. NFL Commissioner Roger Goodell and the owners reportedly wanted to "do the right thing" for former players with neurological conditions who believe their problems stem from on-field concussions. The lawsuits accused the league of hiding known risks of concussions for decades to return players to games and protect its image. For the lawyers who negotiated the proposed settlement of the NFL's massive concussion litigation, the agreement was groundbreaking. For the lawyers whose clients objected to the settlement, it fails to compensate players suffering from the "industrial disease of football," and it allows the league to escape any determination of whether the league concealed the effects of head injuries from its players. Now a judge must decide whether the agreement is fair, adequate and reasonable, following a lengthy hearing and request for written briefs before a decision. Defending the deal, NFL and the players' attorneys insisted they wanted to help suffering players now, emphasizing difficulty in litigating causation between blows to the head and brain damage known as chronic traumatic encephalopathy (CTE) in these football concussion cases. See full story here-- http://es.pn/1xVGuVJ and settlement info here-- https://www.nflconcussionsettlement.com

Apple E-Book Settlement Contingent on Losing Appeal

With trial set to begin before U.S. District Judge Denise Cote in New York next month, Apple has agreed to pay as much as $400 million to settle a lawsuit over accusations that it colluded with publishers to fix the price of e-books. Interestingly, the settlement avoids a second trial and depends on Apple losing an appeal of last year's ruling that it violated anti-trust laws over pricing. That ruling found Apple orchestrated a conspiracy with five publishers to artificially raise e-book prices. Apple has continued to deny that it engaged in any wrongdoing and will not have to pay if it prevails in its appeal, now in the Second Circuit in New York. If approved by the trial judge, the money would go to consumers and Apple will pay legal fees upon losing the appeal. Lawyers representing consumers and 33 states were requesting over $800 million in damages for those negatively impacted by the alleged higher prices for e-books. Publishers accused of colluding with Apple-- Hachette Book Group, HarperCollins Publishers, Penguin, Macmillan and Simon & Schuster already settled in a separate lawsuit. Reportedly, the settlement had previously been announced last month, but the details had not yet been released. See stories here-- http://bbc.in/1mVvS4W and http://abcn.ws/1jyQqB3

Toyota Seeks Settlements

This month, Toyota said it would begin negotiations to settle hundreds of pending federal and state lawsuits over the sudden acceleration of its vehicles. Lawyers suing Toyota claim unintended acceleration reports increased after Toyota began equipping vehicles with electronic throttle control via its ETCS-i system. Signals from a sensor detecting how far the gas pedal is pressed control the throttle. An Oklahoma jury recently found a Camry’s electronic throttle system was defective and that Toyota had acted with reckless disregard. Previously, Toyota won sudden-acceleration trials; this being the automaker’s first loss. Reportedly, this verdict likely caused Toyota to pursue settlements in its remaining cases. Negotiations could put an end to a lengthy process that hurt Toyota financially and affected its reputation for quality. Last summer, Toyota agreed to pay $1.6 billion to settle a class-action lawsuit brought by vehicle owners who suffered financial losses. Toyota still faces hundreds of personal injury and wrongful death suits, most of which are consolidated in California. The decision to pursue a comprehensive settlement process will suspend that litigation. Lawyers representing plaintiffs in those cases felt talks would save both sides time and legal costs. Over the past few years, Toyota recalled over ten million Toyota and Lexus vehicles for problems including floor mats that caused the accelerator to become stuck. U.S. District Judge James Selna of Santa Ana issued an order halting the lawsuits. A hearing has been set next month in case 8:10-ml-02151, United States District Court for the Central District of California. See stories here-- http://nyti.ms/1h46mJ4 and http://bloom.bg/KbMiqp

Judge Questions SEC Settlement

Manhattan Federal District Judge Victor Marrero today questioned a hedge fund paying the government $600 million in penalties to settle insider trading accusations while not having to admit doing anything illegal. Reserving judgment on approving the settlement during a hearing on the landmark deal between the Securities and Exchange Commission and SAC Capital Advisors, the judge found it incongruous when told the client merely made a business decision in agreeing to pay such a large fine. Allegations included illegally trading pharmaceutical stocks after a former portfolio manager obtained secret information from a doctor about clinical drug trials. The hearing focused heavily on “neither admit nor deny wrongdoing” language in the agreement. Reportedly, federal judges across the country have expressed concerns over whether government agencies are letting defendants off too easy by not forcing them to admit liability. Last year, District Judge Jed S. Rakoff rejected the settlement in a fraud case brought against Citigroup by the SEC that let the bank avoid acknowledgment that it did anything wrong. That decision and whether he exceeded his authority in rejecting the settlement is now under review by a Federal Appeals Court. As such, Judge Marerro hinted that he might condition any approval of the SAC settlement on the outcome of the Citigroup appeal. Though the United States Court of Appeals for the Second Circuit is likely limited to Judge Rakoff’s ruling within the context of the specific facts of the Citigroup case relating to the bank’s sale of a complex $1 billion mortgage bond deal, it could impact other cases. Judge Marerro noted that other federal judges across the country had recently followed Judge Rakoff’s lead and cast skepticism on the “neither admit nor deny language,” in some cases demanding greater accountability before approving settlements. SEC counsel urged Judge Marerro to approve the settlement with SAC, despite the pending appeals court decision, acknowledging risk of a shifting legal landscape. “But the ground is shaking,” said Judge Marerro,“there are tremors.” See full story here-- http://nyti.ms/11TD9G0

Knocking heads together for NFL settlement

At NFL meetings this week, settlement of a class action lawsuit against the league by retired players was announced along with the creation of a league fund to help former players in need. Jim Brown, who lobbied hard for the deal, was asked incidentally about his opinion of the proposal to ban backs from using their head to smash into defenders. “I didn’t use my head,” Brown said. “I wasn’t putting my head into too much of anything. I don’t think that’s a good idea." The NFL agreed to pay $42 million as part of a settlement with a group of retired players who challenged the league over using their names and images without consent. The league will use the money to fund a trust to help retired players with an array of issues including medical expenses, housing and career transition. The settlement also establishes a licensing agency for retired players to ensure they are compensated for the use of their identities in promotional materials."We look forward to building an unprecedented new relationship with retired players that will benefit everybody, especially those who need extra medical or financial assistance," Commissioner Roger Goodell said in a statement issued by the league. The federal class action lawsuit accused the NFL of blatantly exploiting retired players' identities in films, highlight reels and memorabilia to market the league's "glory days." The so-called Common Good fund will be administered by a group of retired players approved by the court. A licensing agency will for the first time market retired players' publicity rights in conjunction with the NFL, making it easier for retired players to work with potential sponsors and advertisers. A new licensing agency, to be overseen by a board of retired players, will streamline that process for one-stop shopping. The league will also pay another $8 million in assorted costs associated with the settlement, including money needed to help set up the trust and pay attorneys. The settlement still needs court approval. Retired players will have the chance to review the settlement throughout the summer, when final approval is scheduled. See items at http://bit.ly/ZYSmUF and http://on.nfl.com/ZtAHW8