Commercial Litigation Update

In a unanimous ruling, the New York Court of Appeals held that the New York State Legislature did not alter the substantive pleading requirements of Section 11(b) of the Court of Claims Act (the “Act”) for claims brought against the State of New York (the “State”) pursuant to the New York Child Victims Act (“CVA”).

In Chi Bartram Wright v. State of New York, the plaintiff alleged that between 1986 and 1990, when he was twelve to fifteen years old, he was repeatedly sexually assaulted by various men at a state-owned performance arts facility located in Albany, New York. The complaint filed in the Court of Claims failed to identify any of the men who allegedly assaulted plaintiff, the specific months and dates of the alleged assaults, why plaintiff was in the company of the alleged abusers multiple times over a four year period, or what repeatedly brought plaintiff to the performance arts facility. Instead, the complaint generally alleged that during the alleged time period, plaintiff was assaulted by various State employees and members of the general public while on the state-owned premises. Plaintiff sought over $75 million in damages based on various negligence-based causes of action, including negligent hiring, retention, direction, and supervision.

Immigration-related cases have recently been highly controversial and much in the news.

Thus, it should be unsurprising that the U.S. Supreme Court was sharply divided in the case of Monsalvo Velázquez v. Bondi, the central issue of which has to do with whether a 60-day deadline for the voluntary departure of a person who had entered the United States unlawfully should be interpreted as referring to consecutive calendar days, or whether the period should be extended when the deadline falls on a weekend or holiday.

Followers of this blog will likely say offhand that there should be nothing controversial about that question. After all, most of my readers are lawyers who file court papers and deal with case filings, the deadlines of which are, by rule, generally and automatically interpreted to allow filings beyond the designated numerical deadline to the first business day following a weekend or holiday. Nevertheless, a question so apparently simple, here in the context of the voluntary departure deadline of 8 U. S. C. §1229c(b)(2), produced a 5–4 decision, with Justice Gorsuch writing for the Chief Justice and Justices Sotomayor, Kagan, and Jackson, with a variety of mix-and-match dissents filed by Justices Thomas, Alito, Kavanaugh, and Barrett.

New episode of our video podcast, Speaking of Litigation: When businesses face regulatory uncertainty, how can they effectively adapt, respond, and, if necessary, challenge government action?

In this episode, Epstein Becker Green attorneys Mike Brodlieb, Jim Flynn, Jimmy Oh, and Jack Wenik navigate the complexities of regulatory action and inaction. The conversation dives into the changing administrative landscape and covers how businesses can strategize to challenge regulations, the pros and cons of litigation, and the critical importance of aligning legal goals with practical business objectives.

The panelists also explore how agencies’ evolving processes create both challenges and opportunities, including how internal agency relationships and unexpected legal arguments can shape outcomes. From assembling the right legal team to balancing risk and reward in high-stakes scenarios, they discuss real-world tactics for crafting solutions that address uncertainty while keeping business interests front and center.

Gain insight into how legal professionals are managing the intricate interplay between government regulation, litigation strategies, and client priorities in today’s dynamic environment.

On April 14, 2025, the United States Court of Appeals for the Seventh Circuit issued a decision in a case involving the federal Anti-Kickback Statute (“AKS”) and marketing services that the court framed as an appeal “test[ing] some of the outer boundaries of the [AKS]….” In United States vs. Mark Sorensen, the Court of Appeals overturned the judgment of conviction against Mark Sorensen from the United States District Court for the Northern District of Illinois. In the district court case, Sorensen, the owner of SyMed Inc., a durable medical equipment (“DME”) distributor, was found guilty of one count of conspiracy and three counts of offering and paying kickbacks in return for the referral of Medicare beneficiaries to his DME company, which the United States claimed resulted in SyMed’s fraudulently billing $87 million and receiving $23.6 million in payments from Medicare. The district court judge denied Sorensen’s post-trial motions for acquittal and for a new trial, finding that the evidence regarding willfulness allowed the jury to find beyond a reasonable doubt that Sorensen “knew from the beginning of the agreement in 2015 that the percentage fee structure and purchase of the [doctors’] orders violated the law.” He was sentenced to 42 months in prison and ordered to forfeit $1.8 million.

Notwithstanding its mounting backlog, the U.S. Supreme Court resolved only one case today, an unsurprising unanimous decision in Cunningham v. Cornell University. 

The case concerns pleading causes of action under the Employee Retirement Income Security Act of 1974 (ERISA), but provides a useful reminder to litigants more generally.

ERISA prohibits plan fiduciaries from causing a plan to engage in certain transactions with parties in interest. 29 U.S.C. §1106. However, another provision, §1108(b)(2)(A), provides an exemption for transactions that involve “[c]ontracting or making reasonable arrangements with a party in interest for office space, or legal, accounting, or other services necessary for the establishment or operation of the plan, if no more than reasonable compensation is paid therefor.” 

The question considered by the Court is whether a viable claim under §1106 requires a plaintiff to plead that §1108(b)(2)(A) does not apply to an alleged prohibited transaction. A unanimous Court, led by Justice Sotomayor, held that a plaintiff is not required to do so.

Late in the day on April 10, the U.S. Supreme Court issued a unanimous opinion relating to an order in the case of Noem v. Abrego Garcia.

This order is noteworthy for several reasons. First, this is yet another of what has become a series of emergency-motion cases resolved without full briefing or oral argument on the so-called “shadow docket.” Second, contrary to what some have argued about that docket in the past, there is nothing that isn’t fully transparent about this opinion rendered on behalf of all the Justices. Third, and most importantly, yesterday's opinion, while brief, might be a significant chapter in what very well may prove a classic separation-of-powers clash between the increasingly unorthodox executive branch and the Supreme Court.

The much-in-the-news Kilmar Armando Abrego Garcia was removed by the United States to El Salvador, where he is currently detained. The government now acknowledges that he had been subject to a withholding order forbidding his removal to El Salvador and that his removal was thus illegal. The government alleges the removal was caused by an “administrative error” but nevertheless argues that he was a member of a gang that had been designated as a foreign terrorist organization. Abrego Garcia denies this, and there is no record of his having engaged in any illegal activities. 

The motions docket of the U.S. Supreme Court remains busy.

Following the April 4 decision in Department of Education v. California—in which the Court, treating a temporary restraining order (TRO) as if it were a preliminary injunction, stayed an order that would have blocked the government from ending over 100 education-related grants and allowed the case to proceed in the U.S. Court of Appeals for the First Circuit without requiring the government to meet payment obligations—a similar result was reached today in the Court’s 7–2 order in the case of OPM v. AFGE.

In AFGE, the Court was again confronted with an application for a stay, this time with respect to an appeal to the Ninth Circuit from an injunction issued by the United States District Court for the Northern District of California that would have required the reinstatement of approximately 16,000 fired federal workers who had probationary status at the departments of Agriculture, Defense, Energy, Interior, Treasury and Veterans Affairs. The case had been brought by the American Federation of Government Employees, the AFL-CIO, and several other nonprofit organizations that argued that the terminations were based on the pretense that the employees’ performance was “deficient.” Over the dissents of Justices Sotomayor and Jackson, the Court held that the nine plaintiffs had failed to demonstrate organizational standing.

While not a decision on the merits, the U.S. Supreme Court’s opinion on April 4, 2025, in Department of Education v. California is worth considering.

The case came to the Court on an application to stay the temporary restraining order (TRO) of the U.S. District Court for the District of Massachusetts enjoining the government from terminating various education-related grants made by the U.S. Department of Education, and requiring that department’s payment of past-due grant obligations and the continuing payment of current and future ones. The district court based its conclusion on its finding that the respondents were likely to succeed on the merits of their claims under the Administrative Procedure Act (APA).

In a per curiam opinion, the Supreme Court viewed the TRO as having “many of the hallmarks of a preliminary injunction” and treated it that way. In granting the stay, the Court held that the government was likely to succeed in showing that the district court lacked jurisdiction under the APA to order the payment of money. While the APA provides a limited waiver of sovereign immunity on the part of the government, that waiver “does not extend to orders [of a district court] to enforce a contractual obligation to pay money” along the lines of what the district court ordered here. Instead, noted the Court, the Tucker Act, 28 U. S. C. §1491(a)(1), gives the Court of Federal Claims jurisdiction over suits based on “any express or implied contract with the United States.”

The Racketeer Influenced and Corrupt Organizations Act (RICO) allows any person “injured in his business or property by reason of” racketeering activity to bring a civil suit for damages. 18 U. S. C. §1964(c). However, the statute forbids suits based on “personal injuries.” But are economic harms resulting from personal injuries “injuries to ‘business or property?’”

Yesterday, in Medical Marijuana, Inc. v. Horn, the U.S. Supreme Court, in a 5–4 opinion written by Justice Barrett and joined by Justices Kagan, Sotomayor, Gorsuch, and Jackson, answered that question in the affirmative. Justices Thomas and Kavanaugh wrote dissenting opinions, the latter joined by the Chief Justice and Justice Alito.

Attempting to alleviate his chronic pain, Douglas Horn purchased and began taking “Dixie X,” advertised as a tetrahydrocannabinol-free (“THC-free”), non-psychoactive cannabidiol tincture produced by Medical Marijuana, Inc. However, when his employer later subjected him to a random drug test, Horn tested positive for THC. When Horn refused to participate in a substance abuse program, he was fired. Horn then brought his RICO suit.

On February 27, 2025, by a vote of 52 to 0, the Georgia Senate passed Senate Bill 69, titled “Georgia Courts Access and Consumer Protection Act.” If signed into law, the bill would regulate third-party litigation financing (“TPLF”) practices in Georgia where an individual or entity provides financing to a party to a lawsuit in exchange for a right to receive payment contingent on the lawsuit’s outcome. This bill represents another effort by states to restrain the influence of third-party litigation financiers and increase transparency in litigations.

Senate Bill 69 sets forth several key requirements. First, a person or entity engaging in litigation funding in Georgia must register as a litigation financier with the Department of Banking and Finance and provide specified information, including any affiliation with foreign persons or principals. Such filings are public records subject to disclosure.