The recent experience of the passengers the Carnival Triumph debacle once again raises the question of remedies sought and available for cruise passengers who suffer harms while at sea.  As with the Costa Concordia shipwreck a year ago, and with most hospitality-related providers, there are limitations on how and what guests can recover.  Forum selection clauses, of a similar type to what most of our clients use, frequently limit where suits can be brought.  For cruise passengers, who frequently travel from another location to the port city, the limitation on permissible fora can be an insurmountable hurdle to bringing suit.  For the passengers on the Triumph, any claims face the additional obstacle that recoveries are likely limited to only those individuals who suffered some physical harm as a result of the incident. 

These limitations are once again causing outrage among some who believe that the recourse of cruise passengers is too limited.  But before jumping on that bandwagon, it is important to consider the consequences of opening the floodgates to more claims.  For example, invalidating the forum selection clauses on cruise ship agreements could also open up hospitality providers like ski resorts or amusement parks, to claims far outside their operating jurisdictions. 

Extending the ability of a party to recover damages for emotional “injuries” without any physical harm could also dramatically change the legal landscape.  Would that allow individuals who claim to receive a “bad” dinner or view an “offensive” show the ability to recover damages for their claimed emotional injuries even without a physical harm?  Even with limitations for only egregious conduct, the implications could be far-reaching for those throughout the hospitality industry and beyond.

It seems as though Carnival is attempting to thwart the legal onslaught, and possibly the push for legal changes, by offering full refunds to passengers plus cash and a voucher for future travel.  We will see if it is enough.  In the meantime, I wonder if those vouchers are transferrable? 

Cynthia P. Arends,

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On Friday, August 24, a nine member jury entered a verdict in favor of Apple and awarded almost $1.05 billion in damages.  Apple filed suit against one of its largest competitors, Samsung Electronics, in April 2011, and alleged that Samsung’s Galaxy line of smartphones and tablets infringed seven of Apple’s patents covering the iPhone and iPod products.  In turn, Samsung countersued alleging that Apple infringed Samsung’s patents covering various wireless software components of its products.  After more than a year of highly contentious litigation and following a trial that began at the end of July and lasted the better part of August, the jury deliberated for less than three days before delivering the verdict in favor of Apple. 

Prior to trial, Apple received a significant e-discovery victory when the court sanctioned Samsung for its failure to preserve emails after Samsung should have anticipated the lawsuit by Apple.  The court determined that Samsung had a duty to preserve evidence as of August 23, 2010, and while Samsung issued a litigation hold and provided instructions detailing how to save emails using its email system, Samsung failed to disable the auto-delete function of its email system, which automatically deleted all emails every two weeks in Samsung’s Korean offices.  The court ordered that, as part of the sanctions, the jury would be allowed to draw an adverse inference against Samsung and that the jury would be told to presume that relevant evidence was destroyed and that the lost evidence was favorable to Apple.  

The court also entered pretrial preliminary injunctions against Samsung barring the sale of the Galaxy Nexus phone and the Galaxy Tab 10.1 in the United States. Moreover, the court delivered various ruling for and against both parties on various in limine motions.  One ruling against Samsung appeared to be very significant: Samsung took issue with the court’s ruling that, because Samsung failed to disclose in time contentions that Samsung’s designs were in development before the iPhone, Samsung was precluded from using slides containing images of the Samsung designs.      

In opening statements and during trial, Apple set forth its theory that Samsung had ripped off the unique design features of the iPad and iPhone and infringed certain utility patents.  Apple focused on comparisons between Samsung’s phones from 2006 to its newer smartphones from 2010.  Also, Apple relied on internal documents from Samsung comparing Samsung’s products with the iPhone hardware.  On the other hand, Samsung maintained the position that Apple had no right to claim a monopoly on certain design features that were not revolutionary.  Samsung’s theory to demonstrate non-infringement was to get the jury to focus on the specific legal requirements relating to each of Apple’s patents.  Samsung also went on the offensive by attempting to prove that Apple’s products use certain Samsung features for mobile devices, such as the process for emailing photos and the technology relating to easily finding photos in an album.  Moreover, Samsung attempted to demonstrate that Apple’s patents were invalid due to developments in technology that existed before Apple claimed to have invented such technology.  The parties relied on various liability and damages experts to support their respective positions. 

During closing arguments, counsel for Apple argued that Samsung copied Apple’s designs after realizing that Samsung could no longer compete with Apple.  Samsung, in turn, argued that a verdict in favor of Apple would severely suppress competition and reduce consumer choices.  In the end, with more than 100 pages of legal instructions, the jury was able to complete a 20 page-long verdict form and return a verdict in less than three days.    
For the specific articles from which the information in this summary was obtained, please visit  

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In recent years, the Court has provided important opinions for class action lawyers, including Dukes, Concepcion, Bayer Corp., Erica P. John Fund, and Janus Capital Group. The October Term 2012 reflects the Court’s continuing interest in this area and should provide two more important opinions.

Amgen—Class Certification In Securities Fraud Actions.

In Amgen Inc. v. Connecticut Retirement Plans & Trust Funds, No. 11-1085, the Court will resolve a circuit split regarding securities fraud class actions. In such class actions under Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, the plaintiffs may avoid having to establish individual class members’ reliance on allegedly-misleading statements or omissions (an impossible task). They do so through the fraud on the market presumption of reliance approved in Basic, Inc. v. Levinson, 485 U.S. 224 (1988). To benefit from the rebuttable presumption, a plaintiff must show that: (1) the defendant made public misrepresentations, (2) the misrepresentations were material, (3) the security traded in an efficient market, and (4) the plaintiff bought or sold shares after the misrepresentation but before the truth was known. The Court will address whether, as part of class certification proceedings, (1) a plaintiff must show the materiality of the misrepresentation and (2) the defendant must have the opportunity to rebut the application of the fraud on the market theory.

In the underlying dispute, the plaintiff alleges that Amgen misrepresented what the FDA would consider at an upcoming meeting. The plaintiff contends that the FDA intended to explore safety concerns about two Amgen drugs but Amgen misled the public about the meeting agenda. In response, Amgen denied that the alleged misrepresentations could have been material because many public sources disclosed to the market what the FDA was evaluating at the meeting; Amgen argued that the district court had to evaluate materiality as part of class certification so it could determine if the fraud on the market theory applied. The district court and Ninth Circuit, however, concluded that it would be an improper examination of the merits to require the plaintiff to establish materiality as part of class certification. The Seventh Circuit shares that view, but the Second and Fifth Circuits agree with Amgen’s arguments.

Combined with the Comcast case discussed below, this case could result in significant changes to class action jurisprudence across the spectrum. Even by itself, however, the matter could provide substantial tools for securities fraud class action defendants. Presently, defense lawyers in those cases do not have anywhere near the same number of tools to oppose certification as we do in, e.g., consumer fraud matters. If we are able to attack the application of the fraud on the market theory, then the class certification battle acquires greater significance and possible utility. Defeating matter at certification effectively ends the litigation while also avoiding the tremendous expense of post-certification litigation (particularly trial) and the almost unbearable risks of an adverse verdict.

Comcast—Examining The Merits And Expert Testimony At Class Certification.

In Comcast Corp. v. Behrend, No. 11-864, consumers brought antitrust claims against a cable television company. As typically happens in antitrust matters, the parties robustly disputed how to define the relevant market and whether the plaintiff could establish antitrust injury. They presented competing experts with strong qualifications, though each questioned the other’s methodology. In granting certiorari, the Court framed the issue a bit differently than Comcast did in its petition. Comcast focused on whether the Third Circuit improperly retreated from Wal-Mart v. Dukes in terms of permissible merits inquiries at class certification. The question the Court structured, however, is:

Whether a district court may certify a class action without resolving whether the plaintiff class has introduced admissible evidence, including expert testimony, to show that the case is susceptible to awarding damages on a class-wide basis.

In that respect, the Court seems poised to answer directly what it implied in Dukes (131 S. Ct. at 2553-54): does Daubert v. Merrell Dow Pharmaceuticals apply to expert evidence offered at class certification? Notably, that question presented does not require the Court to answer whether one or the other expert correctly analyzed competing data to define the relevant market. Instead, it only explores whether the plaintiff’s economist offered a methodology that truly can evaluate injury and allocating the resulting damages to the class members.

Taken Together

Amgen and Comcast will allow the Court to evaluate what type of proof class action plaintiffs must offer at the class certification stage. While no doubt exists any more that courts may delve into the merits to the extent they overlap with class certification, applying that standard turns out to be an inexact art that varies among trial courts. If a majority of the Court is so inclined, those justices could use these cases to broadly describe evidentiary showings a plaintiff must make well beyond securities fraud and antitrust disputes. The Court certainly seems poised to use the cases to limit plaintiffs’ ability to argue that certain substantive questions about their claims must wait until trial to be answered; instead, it is appropriate to consider whether plaintiffs can muster an adequate evidentiary record before consolidating hundreds or thousands of claims in a class. 

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Tell Us Why You’re Attending!

#10: You can learn the latest trends in IP and business litigation.

#9:  CLE credit.

#8: It’s a great opportunity to network with in-house counsel & more.

#7: Cool dine-arounds at some of the hottest NY restaurants.

#6:  The best in biz will be sharing their advocacy skills.

#5: Learning how to manage all your information without losing your mind.

#4: Did we mention the networking receptions?

#3: Protecting your client’s business & IP interests is a must.

#2:  Because the Yankees aren’t the only sluggers in town!

And Reason #1: It’s the DRI in the Big Apple! Need we say more?

Register Now and Tell Us Why You’re Attending!


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With recent amendments to Federal Rule of Civil Procedure 26 and a proliferation of Motions to Strike/Exclude Expert Testimony under the Court’s responsibility as a gatekeeper of information that is to be considered by a jury, keeping apprised of recent rulings on these issues is key to effectively using experts in defending mass tort claims. This presentation will discuss the changes to Rule 26, including how courts have handled discovery disputes involving experts, and will address recent Daubert and Frye decisions that may assist in having an opponent’s experts testimony stricken before presentation to a jury as well as other considerations as you work on expert preparation for mass tort cases. 

To hear the entire presentation and three other timely and important topics relating to Mass Torts and Class Actions, please join us Wednesday afternoon at 3:30pm at the Mass Torts and Class Actions SLG presentation. You'll be glad you did. 
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In “RULE OF EVIDENCE 703 — Problem Child of Article VII (Sept. 19, 2011),” I wrote about how Federal Rule of Evidence 703 is generally ignored and misunderstood in current federal practice.  The Supreme Court, in deciding Daubert, shifted the focus to Rule 702, as the primary tool to deploy in admitting, as well as limiting and excluding, expert witness opinion testimony.  The Court’s decision, however, did not erase the need for an additional, independent rule to control the quality of inadmissible materials upon which expert witnesses rely.  Indeed, Rule 702 as amended in 2000, incorporated much of the learning of the Daubert decision, and then some, but it does not address the starting place of any scientific opinion:  the data, the analyses (usually statistical) of data, and the reasonableness of relying upon those data and analyses.  Instead, Rule 702 asks whether the proffered testimony is based upon:

1. sufficient facts or data,
2. the product of reliable principles and methods, and
3. a reliable application of principles and methods to the facts of the case

Noticeably absent from Rule 702, in its current form, is any directive to determine whether the proffered expert witness opinion is based upon facts or data of the sort upon which experts in the pertinent field would reasonably rely.  Furthermore,  Daubert did not address the fulsome importation and disclosure of untrustworthy hearsay opinions through Rule 703.  See Problem Child (discussing the courts’ failure to appreciate the structure of peer-reviewed articles, and the need to ignore the discussion and introduction sections of such articles as often containing speculative opinions and comments).  See also Luciana B. Sollaci & Mauricio G. Pereira, “The introduction, methods, results, and discussion (IMRAD) structure: a fifty-year survey,” 92 J. Med. Libr. Ass’n 364 (2004); Montori, et al., “Users’ guide to detecting misleading claims in clinical research reports,” 329 Br. Med. J. 1093, 1093 (2004) (advising readers on how to avoid being misled by published literature, and counseling readers to “Read only the Methods and Results sections; bypass the Discuss section.”)  (emphasis added).

Given this background, it is disappointing but not surprising that the new Reference Manual on Scientific Evidence severely slights Rule 703.  Using either a word search in the PDF version or the index at end of book tells the story:  There are five references to Rule 703 in the entire RMSE!  The statistics chapter has an appropriate but fleeting reference:

“Or the study might rest on data of the type not reasonably relied on by statisticians or substantive experts and hence run afoul of Federal Rule of Evidence 703. Often, however, the battle over statistical evidence concerns weight or sufficiency rather than admissibility.”

RMSE 3d at 214. At least this chapter acknowledges, however briefly, the potential problem that Rule 703 poses for expert witnesses.  The chapter on survey research similarly discusses how the data collected in a survey may “run afoul” of Rule 703.  RMSE 3d at 361, 363-364.

The chapter on epidemiology takes a different approach by interpreting Rule 703 as a rule of admissibility of evidence:

“An epidemiologic study that is sufficiently rigorous to justify a conclusion that it is scientifically valid should be admissible,184 as it tends to make an issue in dispute more or less likely.185"

Id. at 610.  This view is mistaken.  Sufficient rigor in an epidemiologic study is certainly needed for reliance by an expert witness, but such rigor does not make the study itself admissible; the rigor simply permits the expert witness to rely upon a study that is typically several layers of inadmissible hearsay.  See “Reference Manual on Scientific Evidence v3.0 – Disregarding Study Validity in Favor of the “Whole Gamish” (Oct. 14, 2011) (discussing the argument put forward by the epidemiology chapter for considering Rule 703 as an exception to the rule against hearsay).

While the treatment of Rule 703 in the epidemiology chapter is troubling, the introductory chapter on the admissibility of expert witness opinion testimony by the late Professor Margaret Berger really sets the tone and approach for the entire volume. See Berger, “The Admissibility of Expert Testimony,” RSME 3d 11 (2011).  Professor Berger never mentions Rule 703 at all!  Gone and forgotten. The omission is not, however, an oversight.  Rule 703, with its requirement of qualifying each study relied upon as having been “reasonably relied upon,” as measured by what experts in the appropriate discipline, is the refutation of Berger’s argument that somehow a pile of weak, flawed studies, taken together can yield a scientifically reliable conclusion. See “Whole Gamish,” (Oct. 14th, 2011).

Rule 703 is not merely an invitation to trial judges; it is a requirement to look at the discrete studies relied upon to determine whether the building blocks are sound.  Only then can the methods and procedures of science begin to analyze the entire evidentiary display to yield reliable scientific opinions and conclusions.

The author, Nathan A. Schachtman, is in private practice in New York City, and is a lecturer-in-law at the Columbia Law School.  He keeps a web log of musings on tort and evidence law at his website:

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The Topps Company (“Topps”) is suing fellow baseball trading card manufacturer Leaf Trading Cards (“Leaf”) for copyright and trademark infringement in a lawsuit recently filed in federal court (The Topps Company, Inc. v. Leaf Trading Cards, LLC, USDC SDNY, No. 11-civ-5585).  Topps claims that Leaf does not have the right to use pictures of old Topps cards featuring the company’s logos and players it has under exclusive contract.  The dispute arose over Leaf’s recent advertisement for its “2011 Leaf Best of Baseball” product.  The Best of Baseball pack, available to collectors, consists of one Leaf-created cut signature card and a PSA or BGS graded and authenticated card previous issued by various other manufacturers.  Some of the cards included in the packs are a 1952 Topps Mickey Mantle, a 1972 Carlton Fisk rookie, a 2001 Albert Pujols rookie, as well as cards autographed by teenage phenom Bryce Harper. One-pack boxes have been selling at retail for $235-275.

In addition to Topps’ claim that it owns the copyrights of the images on the cards and the logos, Topps further claims that it owns the rights to the player’s names and autographs.  In its complaint, Topps asserts that Leaf’s sell sheet is a “blatant attempt at capitalizing on Topps’ goodwill and intellectual property to advertise and promote Leaf’s product” (Complaint ¶48). On the packaging of its product Leaf included a disclaimer about the cards that are pictured at the bottom of the sell sheet.  Despite Leaf’s disclaimer, Topps asserts the use of its pictures will cause confusion in the marketplace stating: “[w]ithout exclusivity, the license’s value is highly diminished, both to Topps and the exclusive players.” 

In deciding this issue a judge must determine how far Topps’ rights extend with regard to products that were previously released and now are being repackaged for customers. 
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Litigation Funding Equals Big Money

Posted on October 6, 2011 02:18 by Terrence L. Graves

The Wall Street Journal (“WSJ”) reported in the October 3, 2011 edition of the paper about the start-up of three brand new companies that were started with the purpose of entering what is considered the “fledging alternative litigation funding market.”  You can view the article here.  

The WSJ identifies the three new players in this market as BlackRobe Capital Partners, LLC, Fulbrook Management LLC, and Bentham Capital LLC.  What is ultimately interesting about the article is not that there are three new sources of alternative litigation funding now available, but the fact that it points out a level of investment in high stakes commercial litigation by alternative litigation funding companies of which many lawyers in smaller law firms are simply unaware.  

Many of us think of a sleazy operation that takes advantage of personal injury plaintiffs by lending them money at usurious interest rates in order to “tide them over” until they are able to settle their personal injury law suits when the term alternative litigation funding is used.  This practice is widespread throughout the United States and is only regulated in a few jurisdictions.  These include:  Ohio, Rhode Island, Florida, Maine, and Nebraska.  These states only mandate that the lending entity be licensed and that proper disclosures be made of the applicable interest rates.

The lenders discussed in the WSJ article are looking for what are described as “huge, untapped market[s] for betting on high stakes commercial claims.”  It was reported that companies that would be involved in litigation will spend $15.5 billion in commercial litigation and an additional $2.6 billion on intellectual property litigation.  The practice apparently has what is described as “cautious backing” from several “big law” firms, including Latham & Watkins, LLP, Patton Boggs LLP, and Cadwalader, Wickersham & Taft LLP.  The bottom line is that many firms see this as a way to engage in litigation while making sure that legal fees are paid in a timely fashion.  

There is no question that allowing smaller companies to tap this source of funding would allow them to potentially go against much larger companies in litigation and, might be considered to be a way of leveling the playing field.  On the other hand, critics of this practice have indicated that allowing alternative litigation funding increases the likelihood of frivolous claims and would continue to mean an increase in litigation that would continue to deplete resources from what many already consider to be an over-whelmed legal system.

In some cases, the litigation that is generated is between the alternative litigation funder and the borrower.  This circumstance is discussed in a companion article found as an insert in the Wall Street Journal here.  The case that is the subject of this article resulted in a law suit in which the alternative litigation funder is seeking to recoup its “investment” of $3 million that was provided to fund litigation involving the plaintiff’s international arbitration claim against the nation of Romania.  

No matter which side of the debate you come down on with regards to alternative litigation funding, one thing is clear.  This is a subject that is gaining momentum in the legal community on several levels.  The DRI’s Public Policy Committee, chaired by John C. Trimble of Lewis Wagner, LLP in Indianapolis is looking at this issue and will be providing recommendations to the Executive Committee of DRI in the near future.  

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The Commercial Litigation Committee's April 2009 Symposium is open for registration. Running April 22-24, 2009, in Chicago, this seminar will include substantial presentations on the Financial and Credit Crisis, Business Torts and Class Actions, ADR, and Intellectual Property Litigation. We'll have a great faculty, ranging from the former Chief Economist of the Comptroller of the Currency, to in-house counsel, to leading litigators. Folks can get more information at

Contact me or other committee leaders to find out more, and join us in Chicago.

Joseph Fortner
Chair, DRI Commercial Litigation Committee

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