June 2011 Client Alerts

July 16, 2011

Authored by: Bryan Cave

The Implications for FCPA Enforcement of the SEC’s New Whistleblower Rules

The SEC’s recent adoption of rules to implement the whistleblower program mandated by the Dodd-Frank Act has particular significance for enforcement of the Foreign Corrupt Practices Act.  For a discussion of the overall SEC enforcement context for the new whistleblower rules, a summary of the rules,  and a discussion of the key issues for FCPA enforcement, including recommendations that companies should take now, please click here to read the Alert published by the Global Anti-Corruption Team of the Securities Litigation and Enforcement  and International Trade Groups on June 22, 2011.

Supreme Court De-Certifies Largest Employment Discrimination Class Action In History

In Wal-Mart Stores, Inc. v. Dukes, the Supreme Court reversed a lower court’s decision to certify a nationwide class pursuing employment discrimination claims against the nation’s largest employer.  A 5-4 majority of the Court concluded that the class of 1.5 million current and former female employees could not satisfy the commonality requirement.  For a discussion of the decision, please click here to read the Alert published by the Class and Derivative Actions section of the Labor & Employment Client Service Group on June 21, 2011.

Supreme Court Draws Bright Line Barring Securities Fraud Claims Against Advisers to Companies Who Do Not “Make” Statements At Issue

In June the U.S. Supreme Court issued a significant decision restricting the ability of plaintiffs to bring securities fraud actions against adviser defendants who play a role in preparing statements actually made by companies they are advising.  In Janus Group, et al. v. First Derivative Traders, the court held that an investment adviser to a mutual fund could not be sued in a private securities fraud action for false statements made in mutual fund prospectuses.  To read more, please click here for the Alert published by the Securities Litigation and Enforcement practice group on June 16, 2011.

Supreme Court Substantially Limits Federal District Courts’ Ability To Enjoin Similar Class Actions In State Courts

In Smith v. Bayer Corp., a case the Court indicates “does not even strike us as close,” the United States Supreme Court placed considerable limits on district courts’ powers to enjoin copycat class actions from proceeding in state courts.  Class action defendants that defeat class certification in federal court will have a difficult time obtaining injunctions to prevent another plaintiff from seeking to certify a similar class action in state court.  To learn more about the decision, please click here to read the Class and Derivative Actions Group’s Alert published June 16, 2011.

United States Supreme Court Defines Limits of Bankruptcy-Court Jurisdiction, Raises Additional Questions

The Supreme Court’s recent decision in Stern v. Marshall has significant implications for litigants, such as lenders, who often are forced to litigate non-bankruptcy issues in bankruptcy courts.  The case involves the sixteen-year-old legal battle between model/actress Anna Nicole Smith and her late husband’s son, Pierce Marshall.  To read more about the decision, please click here to read the Bankruptcy, Restructuring and Creditors’ Rights Client Service Group’s Alert published June 28, 2011.

Supreme Court Rejects Applying Stringent Loss Causation Requirement To Obtain Class Certification in Securities Fraud Class Actions

In a decision of consequence for publicly traded companies and their directors and officers, the Supreme Court recently rejected any requirement that class action plaintiffs prove “loss causation” at the class certification stage.  The decision in Erica P. John Fund, Inc. v. Halliburton Co. takes away from defense lawyers what might have been a valuable tool in seeking to defeat motions to have a class certified.  To read more about the decision, please click here for the Alert published by the Class and Derivative Actions practice of the Securities Litigation and Enforcement Client Service Group on June 9, 2011.

Supreme Court Considers Important Fiduciary Issues Under ERISA

In CIGNA Corp. v. Amara, an employee class action lawsuit, the Supreme Court discussed fiduciary disclosure requirements, the level of harm participants must show to prevail in a claim of breach of fiduciary duty, and remedies available to participants harmed by a fiduciary breach under ERISA.  To learn more about the opinion, please click here to read the Alert published by the Employee Benefits & Executive Compensation Client Service Group on June 1, 2011.

Class Action Waivers in Commercial and Consumer Arbitration Agreements after Concepcion

In AT&T Mobility, LLC v. Concepcion, the Supreme Court struck down a  California rule that invalidated more class action waivers in consumer contracts.  Many have hailed (or railed against) Concepcion as the death knell for class actions.  To read more about the case, please click here to read the Alert published by the Class and Derivative Actions, Commercial Litigation, Franchise and Distribution Law and Retail Groups on June 8, 2011.

Recent Supreme Court Decisions Clarify Important Patent Issues

In separate decisions, the Court clarified three important aspects of patent law.  To learn more about the Court’s decisions in Global-Tech Appliances, Inc. v. SEB SA (that inducement of patent infringement requires knowledge that a patent exists and the acts constitute infringement of that patent), Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems Inc. (that the Bayh-Dole Act does not change ownership of inventions that result from federal funding)and Microsoft Corp. v. i4i Ltd. Partnership (that a factual challenge to a patent’s validity requires clear and convincing evidence), please click here to read the Bulletin published by the Intellectual Property Client Service Group on June 10, 2011.

Georgia’s Immigration Crackdown Phases in E-Verify Requirements for Private Employers

In May Georgia became the latest state to enact immigration legislation when Governor Nathan Deal executed the Illegal Immigration Reform and Enforcement Act of 2011 (IIREA).  Portions of the law took effect on July 1, 2011, with the remaining portions becoming effective during the next two years.  To learn more about the Act, please click here to read the June 30, 2011 Alert published by the Labor & Employment Client Service Group.

ICANN Approves Process to Apply for Dot-Anything Domain Names

Following three years of intense discussions, commentary and numerous reports, in June the Internet Corporation for Assigned Names and Numbers (ICANN) — the body overseeing the Internet — approved a process to register virtually any combination of letters as a generic top-level name, such as “.com” and “.net,” among others.  Under the process, applicants may now seek ownership of terms such as “.bryancave,” “.movies,” and “.newyork.”   Please click here to read the June 30, 2011 Bulletin published by the Intellectual Property Client Service Group about the process.

Texas Law Allows Employees to Store Concealed Weapons in Privately Owned Automobiles in Company Parking Lots 

In June, Texas Governor Rick Perry signed into law Senate Bill 321, making it unlawful for an employer to prohibit an employee who holds a concealed handgun license from transporting or storing a lawfully possessed firearm or ammunition in a locked, privately owned automobile in any parking facility the employer provides for employees.  In passing the law, Texas has joined a growing number of states that restricts employers’ rights to exclude firearms from their parking facilities.  To read more about the legislation, please click here to read the Alert published by the Labor & Employment Client Service Group on June 29, 2011.

Increased Scrutiny of Contractors’ Code of Ethics, Compliance Program, and Internal Controls is Likely

A one-sentence addition to the Federal Acquisition Regulation effective June 30 should cause Federal contractors that have not reviewed their codes of conduct and business ethics recently to do so.  Similarly, they should also check that any business ethics awareness and compliance program required by their contracts will pass muster.  To learn more about the addition to the regulation, please click here to read the Alert published by the Government Contracts Team on June 22, 2011.

I-129 Form Amended to Require Certification by Petitioner of Compliance with U.S. Export Controls

As of February 20, 2011, the I-129 Petition for a Non-Immigrant Worker form for the first time requires companies that desire to sponsor a foreign national for temporary work in the United States to attest to compliance with U.S. export regulations.  Although this does not create any new compliance obligations, the required certification has raised awareness about export compliance with regards to the licensing of non-U.S. persons.  To learn more, please click here for the International Regulatory Bulletin published June 10, 2011.

DDTC Issues Proposed Rule Clarifying the Definition of “Defense Service”

In April the Department of State, Directorate of Defense Trade Controls issued a proposed rule to amend the International Traffic in Arms Regulations to clarify the scope of activities that constitute a “defense service.”   The proposed rule also introduces new definitions, dividing maintenance activities into one of three categories.  DDTC accepted public comment on the proposed rule through June 13, 2011.  To read more about the proposed rule, please click here to read the International Regulatory Bulletin published June 9, 2011.