Articles Posted in Featured Posts

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Agrochemical giant Monsanto, which is now owned by Bayer, is facing a slew of lawsuits based on its popular Roundup weed killer. Roundup contains an herbicide called glyphosate. Critics argue that this herbicide is carcinogenic and responsible for causing numerous cases of cancer.

949759_dollar_signCalifornia plaintiff Edward Hardeman sued Bayer-Monsanto on the grounds that use of Roundup contributed to his diagnosis with non-Hodgkin lymphoma. Hardeman owns property consisting of more than 50 acres. For 25 years, he sprayed the property with Roundup to control poison ivy and other invasive plants. Attorneys estimate that he used 6,000 gallons of the product throughout those years.

When Hardeman was diagnosed with cancer, it didn’t take long for him and his doctors to start taking a closer look at his habitual use of Roundup. Bayer-Monsanto currently is dealing with in excess of 11,000 lawsuits in the U.S., all of which argue that the glyphosate used in the product causes cancer in people.

Recently, a jury agreed with Hardeman’s conclusion that Roundup caused his illness. Their decision is said to be based on scientific evidence, which is in line with another jury decision from last year. In that case, the plaintiff was a landscaping employee with a public school district. The jury concluded that Roundup was responsible for the plaintiff’s terminal illness, awarding him almost $290 million. Eventually, the verdict was reduced to $78.5 million, a decision that is currently on appeal.

In the second phase of the current trial, plaintiffs will have to demonstrate that Monsanto had knowledge of the possibility that glyphosate could cause cancer and they did not provide adequate warnings. Presiding judge Vincent Chhabria unsealed documents that allegedly demonstrate that Monsanto worked to discredit independent scientific research that showed their product was unsafe. Moreover, the documents may indicate that Monsanto executives persuaded officials at the EPA to approve glyphosate contrary to the scientific evidence.

The outcome of this case remains in the balance, as does the outcome of the thousands of similar lawsuits. It seems Monsanto did a poor job of protecting their customers and in doing so failed to protect themselves.

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Facebook is dealing with a massive class action lawsuit that may see them refunding millions of dollars to parents who were the victims of so-called “friendly fraud.” The complaint alleges that since around 2011, Facebook has permitted minors to unwittingly make multiple transactions on their parent’s credit card through playing online games at the social media platform’s website.

Social-Media-37877338-001Kids love to play games like Angry Birds, Barn Buddy, Ninja Saga and others on Facebook. Frequently, they log in to the website using their parent’s Facebook account, though they also may have an account of their own. If the parent lets the child use their credit card to make an in-game purchase just once in one of Facebook’s games, the system stores the card number. Subsequently, the child makes multiple charges as they play, sometimes adding up to hundreds or thousands of dollars that parents may not be aware of until weeks later.

Evidence suggests that Facebook was aware of the loophole and that employees took a fairly hard line against allowing refunds for a practice that they referred to as “friendly fraud” or “FF.”

A paper trail from within Facebook shows conflicting viewpoints on the practice. One email from a Facebook employee mentions that game developers should be counseled to block friendly fraud transactions. Other internal documents reveal that Facebook actually educated developers about friendly fraud and encouraged them to enable such practices in their games.

When parents were stonewalled in their attempts to get refunds from Facebook, they contacted their credit card companies in attempts to invalidate the charges made by their children. Once again, internal Facebook documents show that the company was aware of an inordinate number of chargebacks associated with games like Angry Birds. However, there was concern that taking steps to minimize or eliminate friendly fraud transactions might also interfere with legitimate transactions.

The California lawsuit is still ongoing, but the recently published documents concerning it are illuminating. Business owners and executives may want to consider the transparency of their transactions and how well they communicate pricing strategies to customers in order to avoid similar confusion.

If you a California business owner with a legal challenge or issue, I invite you to call and let’s find out whether we are a great fit for each other. I can be reached at 818-461-8500 or via the Contact form on this page.

Richard Oppenheim

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Shareholders Sue Mindbody Over Acquisition Deal

Shareholders in software company Mindbody are suing the company for breach of fiduciary duty. Plaintiffs claim that the company’s proposed acquisition by Vista Equity Partners provides plenty of compensation for Mindbody executives and the board of directors but leaves stockholders out in the cold.

Vista Equity Partners is a private equity company that focuses on acquiring promising software and tech companies like Mindbody. In December 2018, Vista and Mindbody reached an acquisition agreement that is valued at $1.9 billion.

Lawsuit-64354059-001The next month, public shareholder in Mindbody Joseph Schmit filed a lawsuit against the companies in San Luis Obispo Superior Court. Among the claims, Schmit alleges that Mindbody and its board “breached their fiduciary duties of loyalty, good faith, due care and disclosure” with their acceptance of the acquisition deal.

Schmit believes that the deal was engineered to benefit Mindbody executives and board members without giving appropriate consideration to the financial interests of shareholders. The company went public in 2015, and stocks traded at an all-time high of $43.85 in May 2018. However, the acquisition deal will make the company private again. Vista will pay just $36.50 per share.

Schmit argues that Mindbody is a company on the rise. While the stocks may be trading today at approximately $36.50 per share, he believes that profits will skyrocket. The acquisition locks out shareholders from financially benefitting from that profit.

In the lawsuit, Schmit details that Mindbody executives and board members will receive huge payouts because of the deal. One executive stands to take home $61 million while another may receive just over $11 million. Several other executives and board members stand to earn a few million dollars each.

Qatalyst Partners LP, an investment bank, advised Mindbody on the terms of the agreement and whether or not it was fair to all involved. The bank also acted as an adviser to Apptio Inc. which was acquired by Vista in November 2018.

Several other law firms are looking for plaintiffs who feel they may have been injured by this deal, which may mean that Mindbody and Vista could be facing a class action lawsuit.

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Sidecar, a former competitor in app-based ride-sharing services, recently launched a lawsuit against Uber. The complaint alleges that Uber used illegal anticompetitive strategies to drive its rivals out of business so that it could monopolize the industry.

Sunil Paul, who was the CEO of Sidecar, writes on his blog that “It was never a fair fight.” He goes on to argue that customers are now stuck paying higher rates and being forced to choose Uber because of that company’s illegal practices.

scales-and-gavel-90061933-001Uber was established in 2009. At the time, they specialized in providing black-car rides that were summoned via an app. Sidecar began offering paid shared rides in 2012. In their complaint, plaintiffs state that their company fostered many innovations including estimations for trip duration and fares. Uber then launched UberX in 2013, which offered a similar paid ride-sharing service. This soon made up the bulk of Uber’s business.

In the complaint, lawyers note that Uber began engaging in predatory pricing practices in an effort to stifle competition. It’s alleged that the company was subsidizing passenger fares as well as driver payments.

Additionally, Sidecar alleges that Uber engaged in a campaign of fake ride requests, with these requests either being subsequently canceled or being taken by a representative of Uber who would try to convince the driver to switch allegiances. Back in 2014, Lyft made similar accusations against the ride-sharing giant. Those charges were substantiated at the time.

Sidecar shuttered operations in 2015 with its assets and technology being sold to GM. Reports suggest that GM is now using those items to develop a robot-driven taxi service. Meanwhile Uber is looking to go public in the first quarter of 2019. It’s one of the most highly anticipated IPOs to come along in recent years, and Uber executives feel that the timing of the lawsuit is suspicious at best.

After all, it’s been three years since Sidecar ceased operations, so why sue now? It may be that Sidecar’s former executives are hoping to undermine the public offering. Time will tell, but it may be difficult for Sidecar to substantiate its claims.

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Self-driving cars have been the dream of many a science fiction writer over the decades, and modern technology is drawing ever closer to making that dream a reality. The companies that have been selling cars with autonomous features have run into difficulties, which sometimes include lawsuits.

scales-and-gavel-90061933-001One such car maker is Tesla. Heather Lommatzsch has filed a lawsuit in Utah with the main complaint being that Tesla spokespeople weren’t honest when describing how to use her Model S’s Autopilot feature. Lommatzsch claims that she didn’t understand how to use the feature, which resulted in a serious crash. Her Model S collided with the back of a stopped firetruck, and Lommatzsch says that she was left with life-altering injuries.

Tesla issued a statement saying that they always recommend that drivers do not remove their hands from the steering wheel while using Autopilot. Moreover, the company emphasizes that this feature does not make vehicles impervious to crashes.

Lommatzsch charges that when she bought the car in 2016, the salespeople told her that she only had to touch the wheel intermittently. Additionally, she claims that when she realized that the car was not slowing down to avoid a collision with the firetruck, she attempted to manually use the brakes, but they failed.

Lommatzsch broke bones in her foot in the crash, and police charged her with a misdemeanor for not keeping a proper lookout. Dave Arnold, a spokesman for Tesla, notes that Lommatzsch told authorities that she was using the GPS feature on her cell phone before the crash. Data from the car suggests that her hands were not on the wheel for almost a minute and a half before the collision. Additionally, the car actually picked up speed for about three and a half seconds before the crash, and the brakes were manually engaged just a fraction of a second before the impact occurred.

It’s not clear which party will prevail in this lawsuit. However, this situation is a reminder for companies to ensure that their marketing campaigns and sales staff provide accurate portrayals of the features and benefits of any product.

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Electric car company Tesla has filed a lawsuit against a former employee over what it claims are stolen secrets. Martin Tripp is named as the defendant.

System-Failure-51347065-001Tripp began working for Tesla in October 2017. His job was at the organization’s Nevada battery factory. As a process technician, Tripp was required to sign a non-disclosure agreement like other employees. Supervisors at Tesla began noticing problems with Tripp’s employment after a few months. They allege that Tripp was combative with colleagues and caused disruptions. In May 2018, he was reassigned to another department. The company also claims that this prevented Tripp from getting a promotion that he felt he deserved.

In the complaint, Tesla alleges that Tripp’s reassignment and the denied promotion are what sparked the employee to retaliate. Tripp admitted to internal investigators at Tesla that he wrote a software program that was capable of transferring gigabytes of data to computers outside the company. The data included photographs and videos, and Tesla claims that all of the data was privileged. Tripp is alleged to have placed the hacking software on the computer systems of three other employees so that he could continue to receive data even after he left the company. Additionally, this measure would implicate the other employees in the data theft.

According to the complaint, Tripp then leaked some of the stolen data to the media, combining it with falsehoods such as a claim that punctured battery cells were used in Tesla’s Model 3 car. The company further alleges that Tripp falsified data regarding the amount and value of scrap metal that is generated in the organization’s production processes.

Tesla CEO Elon Musk warned employees in an email about the hacking and the falsehoods that were leaked to the media. He noted that many other entities, like oil and gas companies, “want Tesla to die,” and that this is leading them to investigate whether or not Tripp acted alone.

It is not known if any criminal investigation has been launched, but this situation serves as a reminder of the importance of protecting intellectual property using all legal means available.

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The Walt Disney Company recently suffered a setback in a California federal court. Specifically, a judge has denied Disney’s request for a preliminary injunction against Redbox that would have forced the DVD-rental company to stop reselling the download codes for digital copies of the studio’s films.

redbox-1Redbox’s movie rental kiosks have become a familiar part of the landscape in recent years. Consumers stop by these kiosks for the latest releases. For the most part, Redbox has distribution deals with the major movie studios that allow them to profit by renting out the studios’ films. However, Redbox has no such agreement with Disney.

Accordingly, Redbox purchases Disney-distributed movies from retailers, then slips them into their kiosks for customer rental. Disney and other movie studios frequently put new films in combo packs that feature DVD and Blu-ray copies of the films along with a download code for getting a digital copy. In addition to renting DVDs and Blu-rays, Redbox has been selling the download codes on slips of paper that are obtainable at their kiosks.

When Disney found out about this practice, they immediately launched a lawsuit. Among the charges in the complaint were copyright infringement, false advertising, unfair competition, tortious interference with customer contracts and breach of contract. Redbox quickly countersued, arguing that the studio was trying to stifle possible competition for its soon-to-be launched digital streaming service.

Not only has a federal judge denied Disney’s request that Redbox be stopped from re-selling download codes, but also the judge says Disney is actually misusing copyright law. On each Disney movie combo pack, consumers will find language stating that the download code cannot be sold or transferred. The studio argued that this constitutes a legally binding contract, but the judge did not agree. In fact, the judge said that there is no law that prevents what Redbox did. After the “first sale,” which was the lawful purchase of the combo pack, the owner is then free to dispose of the copies as they wish.

Copyright law can be incredibly nuanced. Work with a skilled business attorney to protect your intellectual property rights.

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When a corporation hires a coach for an executive, that executive probably expects to hone skills that enable her to take on a more advanced role. However, that was not the experience had by Denise Stilwell, a former executive at Twentieth Century Fox.

Gender-Discrimination-105366239-001Stilwell began her employment with Fox in 1999. By 2013, she had been promoted to a vice president position in enterprise rights management. The position came with a four-year contract, which included a promise of promotion to a senior vice president position within the first two years.

Her immediate supervisor accepted a voluntary retirement package in 2016, which meant that she began reporting to Fox CFO Dean Hallett. Shortly after the change, Stilwell was summoned to Hallett’s office. She expected to be given a promotion. Instead, Hallett informed her that she “smiled too much,” and that an executive coach was going to begin working with her.

That coach was Jack Zwissig from Zwissig and Associates. Zwissig allegedly told Stilwell that her “smile is fake,” that she laughed too much and that people generally didn’t like her. Most troubling of all is Stilwell’s assertion that Zwissig told her that she should “lift her skirt.”

Stilwell reported Zwissig’s comments to Hallett, calling them sexist and improper. Almost immediately, she was reassigned to another executive vice president, Joanie Wallace, who refused to meet with her for months. Abruptly in January 2017, Stilwell was fired because her department wasn’t moving in the right direction.

Recently, Stilwell filed a lawsuit naming her former employer, Zwissig and Zwissig’s firm as defendants. The complaint levels charges of gender discrimination, retaliation and hostile work environment, among others. If she prevails, the plaintiff hopes to collect unspecified damages for loss of future earnings and benefits as well as emotional distress.

This situation acts as a vital reminder that all complaints regarding possible harassment and discrimination must be followed up on swiftly and thoroughly. Failing to do so often exacerbates the situation to a point that is difficult to control. Working closely with a qualified employment attorney is the best way to prevent these circumstances from occurring.

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James Damore, a former Google employee who made headlines last year after his written diatribe regarding why women are barred biologically from being successful at engineering, is making headlines again for suing the company.

Gender-Discrimination-105366239-001In his long and considerably detailed complaint, Damore alleges that the tech giant discriminates in its hiring policies against white, conservative men. He accuses the company of having hiring quotas for workers who are female or belong to an ethnic minority. Citing meetings in which department managers are singled out and chastised for not having reached their quota of female or minority workers, Damore says that it is difficult for a white man who does not hold liberal views to get ahead at Google.

Among the charges, Damore says that Google actively discriminates against white male employees who have “perceived conservative views by Google.” The complaint goes on to state that Google has a practice of disciplinary action against employees who “expressed views deviating from the majority view at Google on political subjects raised in the workplace ….”

Google’s own diversity reporting makes Damore’s claims seem at least partially spurious. The company’s latest reports say that their workforce is 69 percent male and 56 percent white. What is more, their technical employees are 80 percent male and 53 percent of these workers are white. This may make it difficult for Damore to support his claims in court.

At the same time, Google is being sued by four female former employees who say that the company openly discriminates against women, paying them less than male counterparts and making it more difficult for them to advance to more responsible positions. In fact, the government is already investigating Google for suspected discriminatory practices against females and minorities.

Google seems to be embattled on all sides thanks to these lawsuits. Their position is a stark reminder of how important it is to develop hiring, promotional, disciplinary and firing practices that are in strict accordance with the law. Working closely with a business and employment attorney is an excellent way to ensure that your company does not run afoul of the law.

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The line that divides free speech from school speech is one that often gets blurred. In an age where multitudes of information is available at the touch of a finger, the situation becomes even more complex. When a student creates an Instagram account that is rife with racist statements and images of classmates, are his efforts protected by the First Amendment?

zero-tolerance-at-schoolOne student at Albany High school in Albany, California created such an Instagram account in November 2016. He invited a handful of friends to access the derogatory pictures that he had taken of other students, most of whom were African-American girls. Along with his friends, he made racist comments. Some of his friends “liked” the images.

The Instagram feed was discovered in March 2017. The students who had been targeted by the account were threatened with violence in many of the posts. When school officials reviewed the account, punishments were swift. The account’s creator was expelled in June. Other students received suspensions. An anti-racism rally was held on the day that the suspended students returned. Concurrently, another faction of students decided it was time for a session of “restorative justice.” The suspended students were essentially forced to walk a gauntlet of screaming, angry students, some of whom became violent. One of the students who was returning to school after being suspended had his nose broken in the incident.

The students who were punished for their involvement filed a lawsuit that named the school district, several officials, employees at the school and board members as defendants. Recently, Judge James Donato issued a ruling on part of that lawsuit. He agreed with the defendants’ assertions that the punishments had been reasonable as they were levied by the district in the case of most of the students. However, he ruled that other students who had not targeted specific students with their posts were too harshly punished.

Other claims must be decided in this complex case. When it comes to questions of free speech, it is always best to stay on the side of caution, especially when schools or the workplace are involved.