Commercial Litigation Update

Shareholders who sue derivatively on behalf of a corporation are often faced with counterclaims against them as individuals. The issue of whether such counterclaims are properly interposed against a shareholder in their individual capacity is not typically a heavily contested issue in New York. However, this may soon change as a result of a recent decision in the case of Jean-Pascal Simon v. Francinvest, S.A., et. al., 2023 N.Y. Slip. Op. 32422[U] (Sup. Ct. N.Y. Co. July 7, 2023), where the court was confronted with arguments about the feasibility of such countersuits and ...

New episode of our podcast, Speaking of Litigation:  Float like a butterfly, sting like a . . . Swifty? From Muhammad Ali’s masterful prowess in the ring to Taylor Swift’s re-recorded classics, the art of counterpunching has long been portrayed in societal—as well as legal—media.

In the courtroom, a counterclaim can be used to disrupt the legal strategy of your opposition or even in anticipation of an incoming legal threat. In this episode of Speaking of Litigation, Epstein Becker Green attorneys Max Cadmus, Victoria Flinn McCurdy, and Anthony ...

On June 1, 2023, the U.S. Supreme Court unanimously settled a long-standing dispute over a subjective versus objective standard for scienter under the False Claims Act (FCA), holding that a defendant’s own subjective belief is relevant to scienter, rather than what an “objectively reasonable” person may have known or believed.

The case in question, U.S. ex rel. Schutte v. SuperValu Inc., consolidated from two lower court decisions, involved allegations that the defendants, two retail pharmacy chains, overcharged the government for prescription drugs in violation of ...

In a previous blog, we discussed the Federal Trade Commission’s (“FTC”) proposed changes to its Guides Concerning the Use of Endorsements and Testimonials in Advertising (the “Endorsement Guides”). The Endorsement Guides are intended to help businesses ensure that their endorsement and testimonial advertising conforms with Section 5 of the FTC Act, which prohibits “unfair or deceptive acts or practices in or affecting commerce,” including false advertising. We specifically highlighted the FTC’s proposed changes related to social media platforms and their users, deceptive endorsements by online “influencers,” businesses’ use of consumer reviews, and the impact of advertising on children. Now, approximately one year later, and after receiving and considering public comments on its proposed changes, the FTC has issued its final rule adopting revisions to the Endorsement Guides. See Guides Concerning the Use of Endorsements and Testimonials in Advertising, 88 Fed. Reg. 48092 (July 26, 2023) (to be codified at 16 C.F.R. pt. 255). In issuing its final revised Endorsement Guides, the FTC stated that the changes are intended to “reflect the ways advertisers now reach consumers to promote products and services, including through social media and reviews.” We summarize below the FTC’s final revisions to the same sections of the Endorsement Guides covered in our earlier blog.

New episode of our podcast, Speaking of Litigation:  The old adage about real estate is “location, location, location!” In this Speaking of Litigation podcast episode, however, the central theme shifts to “litigation, litigation, litigation!” as the discussion focuses on the significant implications of legal disputes and challenges in the realm of real estate development.

Detailing storied examples of development litigation controversies, such as that involving the “American Dream” retail and entertainment center in New Jersey, Epstein Becker Green attorneys Keith Randall, Sheila Woolson, and Jeremy Oliver explore the legal challenges developers face throughout a project’s life cycle. From entitlement and environmental issues to construction disputes and more, this episode addresses the ways you can mitigate these challenges from interfering with your next development endeavor.

Searching the internet for “AI and litigation” reveals tons of results about how AI will either replace lawyers or transform the legal profession. These results are unsurprising. Since the early 2010s, articles focusing on the potential impact AI may have on lawyers have popped up every few months. But these results miss the bigger and more important picture, which is that AI likely will spawn a myriad of litigation stemming from its use. This litigation will create the rise of AI lawyers who specialize in the complexities of AI.

In fact, this year we are already seeing the rise of AI lawyers as a handful of lawsuits surrounding AI have been filed. Below is a summary of current proceedings that have been filed this year and where they stand.

On July 26, 2023, the Securities and Exchange Commission (“SEC”) adopted its long-anticipated cybersecurity reporting rule (the “Final Rule”). The Final Rule applies to public companies subject to the reporting requirements of the Securities Exchange Act of 1934 and, in some cases, to foreign private issuers. As quoted in the SEC’s press release, SEC Commissioner Gary Gensler noted that many public companies already make cybersecurity disclosures to investors, and the Final Rule provides uniformity and structure for these future disclosures. The Final Rule also imposes a tight timeline for cybersecurity incident reporting and may include disclosure of an ongoing cybersecurity incident, as well as requiring periodic disclosures concerning organizational cybersecurity risk management processes and governance.

Mistakes sometimes happen. One of the most serious mistakes attorneys can make is to inadvertently disclose privileged or otherwise protected information during discovery. This may sound easy, but in the electronic era, where electronic documents with metadata are the norm, this creates special difficulties.

By now, the story of two New York attorneys facing scrutiny for citing nonexistent cases generated by the artificial intelligence (“AI”) tool ChatGPT has made national (and international) headlines. Late last month, a federal judge in the Southern District of New York sanctioned the attorneys and their firm $5,000. The court’s decision (Roberto Mata v. Avianca, Inc., No. 22-cv-1461-PKC (S.D.N.Y. June 22, 2023) (ECF No. 54)) provides a humbling reminder of both an attorney’s responsibilities in ensuring the accuracy of his or her filings, and the limits of certain technologies in the legal profession.

On June 28, 2023, the U.S. Department of Justice (“DOJ”) and the U.S. Department of Health and Human Services, Office of Inspector General (“HHS-OIG”), along with other federal and state law enforcement partners, announced a nationwide health care fraud enforcement action targeting a variety of alleged health care fraud schemes. As has been the case over the last few years, DOJ and HHS-OIG have moved away from categorizing the enforcement action as a “takedown”. The government has not explained the naming change, but one explanation is that it is no longer properly considered a true “takedown” because the enforcement activity (charges, arrests) occurs over many weeks leading up to the day it is announced.