Ford started installing a new dual-clutch transmission (referred to as the DPS6 transmission) in its Focus and Fiesta models back in 2010 and as many as 1.5 million of the allegedly defective vehicles remain on the road today. The new transmission allowed the cars to reach 40 mpg, but according to recent allegations, Ford failed to properly test the new transmission before putting it out on the road, where it allegedly failed and put customers in danger.

As if that wasn’t bad enough, Ford allegedly ignored warnings from internal engineers and lawyers before putting the cars on the market, at which point the car company allegedly proceeded to ignore complaints from customers for more than five years.

According to complaints, the new transmission allegedly did everything from losing power on highways for no apparent reason to shoot into intersections without warning. Instead of issuing a recall, Ford allegedly gave its dealers talking points that included telling them the cars were operating normally when that was far from the truth.

The financial result of all this doesn’t look good for Ford. The company has had to spend hundreds of millions of dollars in repair costs, many of which didn’t actually fix the cars. In addition to having to litigate lawsuits from thousands of consumers, Ford has also lost a significant amount of business from many loyal fans who now say they will never buy another Ford. Combine that with word of mouth reports of the dangerous cars it let on the road, plus bad press, and it will be difficult for the company to recover financially from this mess. In fact, the company recently warned its investors that litigation over the new DPS6 transmissions poses a financial threat. According to an internal report by Ford, the total costs related to the new transmission could reach $3 billion by the end of next year. Continue reading ›

Worldwide, the impact of global change is being felt. While some people deny that climate change is even happening, the courts are, in fact, seeing the effects in the litigation scene. Suits concerning the issue are trending upwards. Jurisdictional restraints and distance are not stopping litigants from coming forward to file suit. Science, damages, and people being passionate about the cause have increased the number of people wanting to seek retribution, restraint or some form of way to mend harm done by being awarded damages and the cutting of carbon emissions. The biggest offenders? Large corporations. The Human Rights Commission in London is currently investigating the catastrophic effects of Typhoon Yolanda which affected those in the Philippines. The nexus between the polluting corporations with the effects on the environment is what will need to be established and whether the condition was exacerbated as a result of that pollution. The difficulty in being able to produce evidence to present this case and the distance of greater than six thousand miles is no bar.

One possible reason for the increase in lawsuits is the lack of response from governance. People are also more environmentally conscious and know of the impacts of gas emissions
when it comes to health, land and air quality. Successful litigation in this realm has not been as successful as environmentalists would like. However, the pendulum is shifting. Public
awareness and better-equipped machines with techniques to track results also tie in with that. A worldwide consensus is now there when it comes to damage. It is proving that a single
corporation is responsible and to what degree used to be more difficult than it is now. We also know that from a few prior posts on our blog, those actions have started in the USA
also. We discussed this when we looked at a suburban business in Chicago that is under scrutiny for implementation of a system in which the way they sterilized caused emissions of
a cancer-causing substance. The operational facility provided sterilization services to the medical, pharmaceutical and food industries. Ironically, the health damage by its emissions made locals
worse off. Continue reading ›

Although many financial planning companies rely on the relationship between the financial planner and the customer, E-Trade’s customers primarily conduct business online – usually without communicating directly with any of the company’s financial planners.

Even so, the company includes a non-solicitation agreement as part of their employment contract with their financial consultants and brokers. According to a recent employment lawsuit, Heather Pospisil, a former financial consultant for E-Trade, allegedly violated that agreement by taking E-Trade clients with her when she moved to Morgan Stanley.

According to the lawsuit, Pospisil allegedly accessed a considerable amount of client information late one night, just a few days before she left to join Morgan Stanley, another financial planning company that competes directly with E-Trade.

Pospisil alleges she was merely accessing the information so she could let clients know she was leaving the company. Not only would those clients be unlikely to care, given the online nature of E-Trade’s business, but U.S. Judge Ronald A. Guzman pointed out that it would have been much faster to send a mass email to all her clients. In addition to being more efficient, it also would have provided evidence to support her claim that all she did was provide notice of her departure.

Judge Guzman also noticed that the number of files she accessed on that night accounted for 75% of all the files she had ever accessed in the more than four-and-a-half years she had been working for E-Trade. Continue reading ›

Earlier this year, the U.S. Supreme Court ruled in Lamps Plus, Inc. v. Varela that an ambiguous arbitration agreement does not provide a sufficient basis to conclude that parties agreed to class arbitration. In a 5-4 vote, the Supreme Court reversed the Ninth Circuit’s decision that the arbitration agreement between Lamps Plus and one of its employees permitted pursuing class claims in arbitration despite the fact that the arbitration agreement did not expressly address the issue of class arbitration. This is a follow-up to an earlier post where we discussed the District Court’s ruling in this case.

By way of background, the case stemmed from a dispute regarding whether an employer properly protected the tax information of its nearly 1300 employees. After a fraudulent tax return was filed in the name of one of the employees, the employee filed suit against his employer, Lamps Plus. Lamps Plus responded by seeking to dismiss the lawsuit and compel arbitration, relying on the arbitration provision in the employee’s employment contract. Citing the Supreme Court’s 2010 decision in Stolt-Nielsen, S.A. v. Animal Feeds Int’l Corporation, which bars arbitrating claims on a class basis in the absence of a “contractual basis for concluding” that the parties agreed to class arbitration, Lamps Plus sought to compel the employee to arbitrate on an individual basis. The District Court ruled in favor of Lamps Plus on the request to dismiss the case and compel arbitration but rejected the employer’s request to require the employee to arbitrate his claims on an individual basis. Continue reading ›

It has become increasingly common over the past few years for employers to include non-compete agreements in their employment contracts. In most cases, they are required to have geographic and time limits, meaning they can only be enforced in a certain geographical area for a certain period of time (usually six months to a year after termination of employment).

The restrictions on non-compete agreements vary from state to state, with a few states, such as California, refusing to recognize any non-compete agreements, even those signed in states that do recognize such contracts.

In one recent case against a realtor in Connecticut, Century 21 Access America successfully sued a former employee and obtained an injunction against her. Under Connecticut state law, non-compete agreements are recognized and enforceable.

Vassilia Mazzotta’s employment agreement with Century 21 stated that she would not work for a competitor or solicit clients within 15 miles of Century 21’s offices for a period of two years after termination of her employment with Century 21.

Shortly after resigning from her position as a real estate broker with Century 21, Mazzotta went to work for a competing real estate company and continued to provide services and solicit clients within 15 miles of Century 21’s offices. Continue reading ›

When two founders of a company sued the company that had come into possession of the founders’ patents and intellectual property rights, the district court dismissed their suit for lack of personal jurisdiction. The appellate court affirmed on appeal, finding that the plaintiffs’ lawyer contrived to create personal jurisdiction by ordering a single item from the defendant company be shipped into the state of Illinois, even though the defendant company did not do business in or specifically target the Illinois market. The appellate panel also noted that the conduct that allegedly created personal jurisdiction had happened after the plaintiffs filed suit and was therefore clearly contrived.

Tai Matlin and James Waring, and other business partners co-founded a company called Gray Matter Holdings, LLC in 1997. Matlin and Waring developed certain products for Gray Matter, including an inflatable beach mat known as the “Snap-2-It” and a radio-controlled hang glider called the “Aggressor.” In 1999, facing failure of the company, Matlin and Waring entered into a Withdrawal Agreement with Gray Matter wherein they sold their partnership shares and forfeited their salaries. The agreement also assigned Matlin and Waring’s intellectual property to Gray Matter but entitled them to royalty payments. In the following years, Matlin and Waring frequently brought Gray Matter to arbitration to enforce royalty payments.

In 2002, Gray Matter filed an assignment of the products’ intellectual property rights with the United States Patent and Trademark Office. Matlin and Waring allege that Gray Matter filed the assignment without their knowledge and that the company forged Waring’s signature on the paperwork. The following year, Gray Matter sold assets to Swimways, including the patent rights to Matlin and Waring’s products. A 2014 arbitration between Gray Matter and Matlin and Waring determined that Gray Matter did not assign the Withdrawal Agreement to Swimways upon the sale of the products and that the plaintiffs were owed no further royalties. In 2016, Spin Master acquired Swimways and intellectual property rights. Continue reading ›

When non-compete agreements first started to be used, they needed to establish a geographic perimeter in order to be enforceable. Non-compete agreements were intended to prevent workers from going to work for the competitor across the street and taking clients, vendors, and/or proprietary secrets with them. In order to stay fair to workers while still protecting the employer, most non-compete agreements were restricted to a certain geographical range – for example, the employee could not go to work for a competitor less than 20 miles away from the employer.

Over the past few years, employers have started expanding the geographical limits in their non-compete agreements until they didn’t bother putting them in at all – in a few cases, they actually specified that the non-compete agreement was effective worldwide.

With the dawn of the Digital Age, businesses started expanding their reach across the globe, making it increasingly difficult to specify a geographical area in which they conduct business. For this reason, some U.S. courts have ruled that it’s OK for companies to leave out the geographical restrictions on a non-compete agreement, but the Nevada Supreme Court recently stated otherwise. Continue reading ›

Reversing the dismissal of the plaintiff’s Title IX complaint against Purdue University by a magistrate judge, the Seventh Circuit breathed new life into a claim against the university by a former student. The student, referred to only as John Doe in the opinion as is common in Title IX suits, alleged that Purdue University’s improper handling of a Title IX investigation ruined his ability to pursue a career in the Navy.

John Doe was a student at Purdue University on an ROTC scholarship when he was accused of sexual assault by a former girlfriend, who also was a member of Purdue’s ROTC program. After the university’s investigation, it held a hearing where, according to John’s complaint, the university prohibited him from presenting evidence and witnesses. Further, the university did not require John’s accuser to testify but instead chose to consider a letter written by one of the university’s Title IX coordinators containing a summary of the accusations against John. The university ultimately found John guilty of sexual assault and suspended him for one academic year. In addition, John lost his scholarship, was involuntarily discharged from the ROTC program, and banned from re-enlistment in the program. Purdue also shared the findings of its investigation with the Navy.

The university moved to dismiss John Doe’s complaint. A magistrate granted the motion to dismiss finding that John had failed to state a claim under Title IX. The Seventh Circuit began its analysis by reiterating that the protections of Title IX are enforceable through an implied cause of action. The court then proceeded to review the doctrinal tests developed by other circuits for establishing bias based on one’s sex. The Seventh Circuit declined to adopt any particular test opting instead to simply review the totality of the allegations to determine if it creates an inference that sex was a motivating factor in the university’s decision. Continue reading ›

As reported by the Cook County Record, Lubin Austermuehle achieved an immediate settlement for its client one of the largest diamond wholesalers in the world in a libel defamation and slander lawsuit filed in Chicago’s federal court. The Defendant agreed to provide a public full retraction and apology as part of the otherwise confidential settlement admitting that it had made baseless claims against Lubin Austermuehle’s client. The headline to the article states:

Settlements end diamond wholesalers’ fraud, defamation disputes; lawyer accused of ‘extortion ring’

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The article starts out:

A legal dispute, in which one diamond wholesaler allegedly falsely accused another of fraud, has ended in a settlement to resolve a potential multi-million dollar defamation lawsuit, amid accusations the plaintiff in the original fraud suit was acting in coordination with an attorney facing a racketeering action over claims he has participated in an alleged scheme to use alleged fraud lawsuits to allegedly pressure jewelers into settlements.

On Aug. 17, a Chicago federal judge signed off on the settlement deal between diamond wholesalers David Cohen and Ofer Mizrahi. The case was terminated on Aug. 20.

You can view the entire article here.

You can view the public apology and retraction the Defendant gave as part of the settlement here.

The retraction and apology appears below::

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After a surgery went horribly awry at a private surgical center, and the center was sued by the patient, it could not recover the full amount of judgment against it from its insurer an appellate court found. The court found that the surgery center had urged its insurer, who was defending it in the patient’s lawsuit, not to settle, as it believed its case to be highly defensible. Because of this, the panel found that the insurer had behaved appropriately even though it eventually lost and the jury awarded damages that were more than quintuple the surgical center’s policy limit.

Surgery Center at 900 North Michigan Avenue, LLC is an outpatient surgical center that permits outside physicians to perform day surgery at its facility. American Physicians Assurance Corporation, Inc. is a medical malpractice insurance company that insured Surgery Center. The insurance policy that Surgery Center purchased from APA limited APA’s liability to $1 million per claim and provided that APA would defend and indemnify Surgery Center for claims that fell within the policy’s coverage. Continue reading ›