Administrative law

  • January 17, 2012
    Guest Post

    By Ann C. Hodges, a professor of law at the University of Richmond

    In the past 20 years the Supreme Court has interpreted the Federal Arbitration Act broadly, allowing businesses to require consumers and employees to arbitrate, rather than litigate, many legal claims. Businesses frequently use arbitration agreements to bar class actions, which can be costly and time-consuming. Just last term, in AT&T v. Concepcion, the Court enhanced this business tool, striking down a California law that prevented businesses from barring class actions in cases involving small claims brought by less powerful parties bound to arbitrate by contracts of adhesion. Although the case involved consumers, it offered employers a vehicle to restrict employee class actions.

    The NLRB’s decision in D.R. Horton, issued in early January, significantly limited the effectiveness of this tool for employers by invalidating an arbitration agreement that banned class actions. This case is likely to generate significant controversy, provoking even more attacks on the agency by its vocal critics, but experienced labor lawyers will recognize the case as an unremarkable application of long-settled legal principles.

    Class claims frequently offer the only vehicle for consumers or employees to challenge unlawful actions that cause limited damages to each individual while often reaping millions for the business. For each person injured, the cost of litigating a claim outweighs the potential benefit.  Without class actions, these claims often go unremedied. In the workplace, Fair Labor Standards Act cases seeking minimum wage or overtime payments are most likely to be abandoned on this basis and Horton involved such a claim, alleging that the nonunion employer misclassified employees as exempt from overtime pay.

  • January 13, 2012

    by Nicole Flatow

    The Justice Department’s Office of Legal Counsel released a memo yesterday explaining the legal justification for President Obama’s recess appointments of Richard Cordray to head the Consumer Financial Protection Bureau and three others to the National Labor Relations Board.

    "This is one opinion that is likely to be followed by future presidents,” UNC law professor Michael Gerhardt told Mother Jones. “It's not easy to overturn opinions of the [Office of Legal Counsel], as the history of the [Bush-era] Torture Memos demonstrate."

    The memo concludes that Obama was authorized to act under the Constitution’s Recess Appointments Clause, and that the Senate’s attempt to block appointments by holding “pro forma” sessions every few days did nothing to disrupt its recess.

    "[W]hile Congress can prevent the President from making any recess appointments by remaining continuously in session and available to receive and act on nominations, it cannot do so by conducting pro forma sessions during a recess," Assistant Attorney General Virginia Seitz writes in the memo.

    Ohio State University’s Peter Shane calls the memo’s argument that Obama made the appointments during what was effectively a 20-day recess the more “institutionally modest” approach. He and others have argued that even during a three-day recess, Obama could have made such appointments.

    Bolstering these arguments is the fact that Obama only made appointments to those agencies that were unable to perform essential functions so long as the vacancies remained open.

  • December 27, 2011
    Video Interview

    by Jonathan Arogeti

    A new rule adopted by the National Labor Relations Board (NLRB) will simplify elections to form unions and delay the appeals process until after those elections. The board said the changes are slated to take effect on April 30, 2012, The Blog of Legal Times reports.

    “This rule is about giving all employees who have petitioned for an election the right to vote in a timely manner and without the impediment of needless litigation,” said NLRB Chairman Mark Gaston Pearce.

    These changes are part of a more comprehensive rules reform proposal put forth by the board in July. In a release announcing the changes, the NLRB said it would hold for further review the most debate-generating proposals, but that they would push forward with these “less controversial” ones.

    AFL-CIO President Richard Trumka (pictured) hailed the move, saying, “It's good news that the NLRB has taken this modest but important step to help ensure that workers who want to vote to form a union at their workplace get a fair opportunity to do so.” He warned, though, “Many more improvements are needed to protect workers' rights. We hope the Board will quickly move to adopt the rest of its proposed reforms to modernize and streamline the election process.”

    The U.S. Chamber of Commerce immediately moved to counter the rule change, filing a lawsuit in the U.S. District Court for the District of Columbia.

    Meanwhile, similar future decisions by the NLRB are in jeopardy, as the Board is slated to lose its necessary quorum at the end of the month. Currently, only three of the five seats are filled; that number will go down to two when Craig Becker’s recess appointment expires Dec. 31. The Supreme Court held last year in New Process Steel v. NLRB that the NLRB could not legally operate with less than three members, and voided more than 400 NLRB rulings made by only two members. 

     Victor Williams, a professor at the Catholic University of America Columbus School of Law, writes in Jurist that the Republican obstruction of two pending confirmations to the board amounts to “nullification” and urges president Obama to use his power make recess appointments. Williams argues that senators’ attempt to block recess appointments by holding sessions every three days during the holiday break is without legal authority.

    He writes:

  • October 18, 2011
    Guest Post

    By Reuben Guttman and Oderah Nwaeze. Reuben Guttman is a Director at the firm of Grant & Eisenhofer and heads the firm's False Claims Act litigation group. He is a Senior Fellow and Adjunct Professor at the Emory Law School Center of Advocacy and Dispute Resolution. Oderah Nwaeze is member of the Grant & Eisenhofer False Claims Act Litigation Group, and a 2011 graduate of Emory Law School.

    Buried in President Obama’s healthcare reform law, the Patient Protection and Affordable Care Act (PPACA), is a measure called the Physician Payments Sunshine Provision or the “Disclosure Law.” This law requires the public disclosure of payments made to doctors by pharmaceutical and medical device manufacturers.  Since even small gifts can compromise a doctor’s objectivity, a patient should know whether his physician has received money and/or gifts from drug or device companies.  Recent civil prosecutions of the pharmaceutical and medical device industries under the False Claims Act (FCA), resulting in pharmaceutical giants paying millions of dollars to resolve allegations that they paid kickbacks in order to induce the writing of prescriptions, demonstrates that the transparency required by this law is long overdue.

    The FCA allows private citizens with knowledge of a fraud on the government to bring suit in the name of the government. Whistleblower cases brought under the FCA against some of the world's largest pharmaceutical companies have surfaced allegations and information raising real concerns that illegal marketing schemes including off label marketing -- or marketing a drug for purposes outside its indication -- and kickbacks in form of payments made to doctors under the guise of research studies -- have caused billions of dollars of prescriptions to be written for drugs that are not needed or that may actually cause injury or illness with additional costs for treatment further burdening our nation's health care system. Within the last five years alone, Pfizer, AstraZeneca, Boston Scientific, Eli Lilly, and Biovail paid a combined total of $4.3 billion to settle claims of unlawful marketing.  Although Pfizer's share was a record $2.3 billion, the company posted revenues of more than $171 billion for the drugs that were illegally marketed. To a large degree, these settlements -- even with the huge monetary sanctions -- only serve to highlight problems rather than fully address them.     

  • September 22, 2011
    All the Justice Money Can Buy
    Corporate Greed on Trial
    Snigdha Prakash

    By Snigdha Prakash, an investigative journalist and former NPR reporter. Prakash received the Fund for Investigative Journalism's Gene Roberts Book Award for All the Justice Money Can Buy: Corporate Greed on Trial, her first book.

    A few years ago I found myself in the journalistic equivalent of hog heaven — behind closed doors I had never expected to penetrate — watching from a ring-side seat as plaintiffs’ lawyers took on the drug giant, Merck, in a products liability trial involving Merck’s popular painkiller, Vioxx.

    Merck had withdrawn Vioxx in September 2004, citing new data showing an increased risk of heart attacks on Vioxx. Some 20 million Americans had used Vioxx over its five-and-a-half year market life, and scientists would implicate it in up to 54,000 deaths. By the end of 2006, Merck faced 27,000 products liability cases. But Merck’s lawyers insisted the company would never settle with the plaintiffs; rather it would defend every case in court. It was a hollow threat. As is usual with mass torts, the cases had been consolidated under a federal multi-district litigation (MDL) judge and a few state mass tort judges, and the judges were unlikely to countenance Merck’s foot-dragging indefinitely. Fifteen cases had already gone to trial by this point (I had covered some of them as a reporter for NPR), and Merck had won most.

    Two more cases were set to be tried in New Jersey state court in January 2007. Mark Lanier, the Texan trial lawyer who had twice beaten Merck, would lead the plaintiffs’ legal team, and I arranged to be embedded with his lawyers and observe the trial up close. For seven weeks I shadowed Lanier and the other plaintiffs’ lawyers, sitting in on early-morning strategy sessions in Lanier’s hotel room, riding to court in his rental SUV and squeezing into the stuffy, bare-bones plaintiffs’ war room in the Atlantic County Civil Courthouse during breaks in testimony. I took notes, I asked questions. Eventually, I wrote a book about the experience, All the Justice Money Can Buy: Corporate Greed on Trial.