Welcome to Critical Mass, Law.com's briefing on class actions and mass torts. I'm Amanda Bronstad in Los Angeles. Yahoo now faces punitive damages over its recent data breaches after Judge Lucy Koh refused to dismiss the case. Case law is emerging over litigation funding arrangements. And a judge is now weighing a $1.5 billion GMO settlement with Syngenta.

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Yahoo Faces Prospect of Punitives

Yahoo now faces the possibility of punitive damages over recent data breaches, which have impacted a total more than 3 billion – yes, that's with a “b” — user accounts.

On Friday, U.S. District Judge Lucy Koh refused to grant Yahoo's motion to dismiss a consolidated case brought over data breaches that occurred from 2013 to 2016 – including punitive damages claims that were added in December to their complaint. Here's my story. The judge found plaintiffs sufficiently alleged that Yahoo's executives knew there were problems with its security and referenced internal documents between a former chief information security officer and Yahoo's general counsel.

The ruling isn't all that surprising. After all, Koh refused to dismiss the case back in August. But there's more ahead: The plaintiffs are set to file their class certification motion in July. And plaintiffs have said they plan to depose several former chief information security officers, former General Counsel Ron Bell and former CEO Marissa Meyer. Yahoo, represented by Hunton & Williams, geared up for battle last month by adding Gibson, Dunn & Crutcher to its defense team.

 

 

Could NFL, 9/11 Cases Subject Lit Funders to State Usury Law?

Case law is emerging over whether litigation funding agreements are subject to state usury laws – with the $1 billion NFL concussion settlement and a fund linked to victims of Sept. 11, 2001, wading into the mix. Law.com's Max Mitchell has this story.

Last year, U.S. District Judge Anita Brody in Pennsylvania barred third-party litigation funders from signing agreements with plaintiffs in the NFL case. Meanwhile, in a case in New York, several briefs have been filed over whether similar agreements with claimants in the Sept. 11 fund should be blocked.

Max told me there's a “fair amount of emerging case law” finding that such arrangements aren't considered loans. But Brody's ruling was more complicated – in fact, one funder has already asked her to clarify her order (see Max's story here). According to Max:

“Brody found that the NFL settlement agreement specifically disallowed 'assignment agreements,' and since these companies structured these advances as 'assignment agreements,' they violated that clause. It sounds like case law about 'assignment agreements' is more unsettled, and so as the issue makes it way up the appellate ladder, the defendants are going to continue raising this issue about how non-recourse agreements aren't subject to usury laws, so their agreements should be fine in the eyes of the court, regardless of the 'assignment agreement' designation.”

Judge Gets Earful on GMO Corn

Following months of negotiations, lawyers on Monday filed a motion to approve a $1.51 billion settlement with Syngenta AG in the multidistrict litigation over genetically modified corn seeds that China refused to import. The announcement comes after a federal jury in June awarded a $218 million verdict to 7,300 farmers in Kansas. According to the motion, the deal would provide payouts to more than 600,000 farmers, grain handling facilities and ethanol plants.

Gray Reed & McGraw announced the settlement in a press release on Monday. Firm partner William Chaney was co-lead along with Patrick Stueve of Stueve Siegel Hanson, Don Downing of Gray, Ritter & Graham, and Scott Powell of Hare, Wynn, Newell & Newton.

The motion and release didn't say much about attorney fees. But in a statement on Monday, Syngenta said: “If the proposed settlement is approved by the Court, Syngenta will contribute a total of $1.51 billion to a settlement fund that would be used to make payments to eligible participants and to cover the costs of administering the settlement, including any court-approved award of fees to plaintiffs' counsel.”

Who Got the Work?

Steptoe & Johnson is representing L.L. Bean in a class action brought over its decision last month to end its lifetime return policy. The suit was filed by attorney Ben Barnow of Barnow & Associates on behalf of a nationwide class of customers who purchased the retailer's products prior to the new policy, which limits returns within a year. On Feb. 28, Steptoe & Johnson partner Anthony Anscombe appeared as lead counsel, along with associate Mary Beth Buckley. Both are based in Chicago, with Anscombe also listed as a partner in the San Francisco office. On March 2, another Chicago partner, Darlene Alt, appeared, as did two members of the firm's San Francisco office, partner Stephanie Sheridan and associate Meegan Brooks.

Here's what else you need to know:

In Reverse: Lawyers on both sides of the 9th Circuit's Hyundai decision have filed petitions to rehear en banc the 2-1 ruling that's sent shockwaves throughout the class action bar for potentially threatening nationwide settlements. Here's my story. Plaintiffs lawyers (repped by Steve Berman of Hagens Berman) and defense attorneys (Shon Morgan of Quinn Emanuel for Hyundai and James Azadian of Dykema Gossett for Kia) both argued that the 9th Circuit's Jan. 23 decision in In re Hyundai and Kia Fuel Economy Litigation creates a circuit split.

Prolift Plaintiff Wins: A federal jury in Indiana slammed Johnson & Johnson's Ethicon with a $35 million verdict over its Prolift pelvic mesh device. Here's Law.com's story. The jury awarded $10 million in compensatory damages and $15 million in punitive damages. Plaintiffs Barbara and Anton Kaiser were represented by Thomas O. Plouff of Costello McMahon Burke & Murphy, Jeff Kuntz of Wagstaff & Cartmell and Edward Wallace of Wexler Wallace.

Cy Pres Support: Google Inc. is urging the U.S. Supreme Court to deny review of an $8.5 million class action settlement in which class members got nothing but several third parties, including groups at Stanford and Harvard, got $5.3 million in cy pres funds. Here's Law.com's story, which notes that the trial judge who approved the deal, upheld by the 9th Circuit, found that distribution to 129 million Google users wasn't feasible and would result in each class member getting 4 cents. Mayer Brown's Donald Falk, writing for Google, said all of the circuits agree that “a cy pres-only settlement is appropriate in the rare circumstance where direct distribution to class members is infeasible, and all insist on a close nexus between the cy pres remedy and the interests of settling class members.”

Another Tide Pod Lawsuit?: A woman has sued Procter & Gamble after a Tide Pod detergent capsule ruptured while stashed in her bra, causing chemical burns, according to Law.com's story. Everyone now knows about the dangers of ingesting Tide Pods, but at first glance the suit raises the question: Why did she have a detergent capsule in her bra?

Anyone with a toddler already knows that answer–“With nowhere else to put it that was out of the children's reach, she tucked it into her bra, then headed to the laundry room to put it away,” the story says, citing the complaint that plaintiff Dana Arevalofiled (repped by Marisa Dominguez of Ricci, Fava & Bagley). “But before she got to the laundry room, the capsule broke and spilled its contents, causing her to suffer chemical burns.”