Federal Judge Says School District Flunks Its Obligation to Educate Students Who Don’t Speak English by Making Them Take Class Taught Only In English

A decision issued by federal Judge Edward G. Smith in Pennsylvania last Friday confirms our faith in the ability of the legal system to get it right. The issue was whether 5 students living in Lancaster County, Pennsylvania, who came from Somalia, Sudan, Democratic Republic of Congo, and Burma had a right to attend a school run by the Lancaster County School District that includes a program to teach English to non-English speakers. The School District forced the children to attend a separate, academically inferior high school run by a for-profit corporation under contract with the School District. None of the students speaks English. All instruction at the separate school is in English. Judge Smith said that “[o]n its face, this practice appears to be counterintuitive; expert testimony confirmed that the practice was unsound.”

Judge Smith held that the students had made out a strong case that the School District had violated state and federal law and issued a preliminary injunction in their favor. Speaking of the students, he said: “They all escaped violence and tumult in their home and other lands. Now in America, all earnestly seek to learn English, advance their education, and contribute to society.”

We never applaud judges for getting it right, because that’s their job, but we are grateful. We are also grateful to the Education Law Center, the ACLU of PA and the law firm of Pepper Hamilton for bringing the case on a pro bono basis. Anyone who would like to read Judge Smith’s decision can find a copy here (https://www.aclupa.org/download_file/view_inline/2806/1030/).

How Hulk Hogan Scored $140 Million in a Single Lawsuit

Surely the most salacious legal development of 2016 (so far) is Hulk Hogan’s $140 million verdict in March from a Florida court against the online media company and blog network Gawker Media LLC for publishing a video of him having sex with the wife of his then friend, a radio personality by the name of “Bubba the Love Sponge Clem.” Gawker’s conduct must have angered the jury. It didn’t help when a former Gawker editor acknowledged at trial that he had said at his deposition that there would be a public interest in promoting child pornography of the children of celebrities if they were over the age of four, but claimed that he was just being sarcastic. The case took on renewed interest with the disclosure in late May that billionaire tech investor Peter Thiel provided $10 million in litigation funding for Hulk (real name Terry G. Bollea) to get revenge against Gawker for outing him as gay several years ago.

The prurient aspect of the case of course sells newspapers and drives clicks, but the case also raises the issue whether the First Amendment interest in Gawker’s publication of a video about a public figure outweighed Hulk’s interest in privacy. We leave that issue for others to discuss and for the appeal. Our interest in is the nuts and bolts of how the plaintiff’s legal team got the jury to award $140 million verdict in a single plaintiff case not involving death or serious bodily injury.

The case was originally filed in October 2012 and took over three and a half years to get to a trial. The trial lasted two weeks. The cause of action was not defamation. It was intentional infliction of emotional distress and invasion of privacy. The jury awarded $55 million in economic damages based on expert testimony that Gawker had been enriched by all of the site traffic drawn by the video, $60 million in emotional distress damages based on the testimony of Hulk and one other fact witness about the emotional distress Hulk felt, and $25 million in punitive damages in a second deliberation. The collectability of the verdict is unknown, although media reports have suggested that the case and other pending defamation cases against Gawker threaten its existence. Gawker has already begun the appeal.

The takeaway for those who follow litigation as a matter of business is that in today’s litigation climate, large jury verdicts can be expected—even without death or bodily harm—where harm to economic, reputational, or emotional interests arise out of proven misconduct. Punitive damages are not necessarily the key to a large recovery; economic damages can result in large verdicts and emotional distress damages in particular can be significant because they are unlikely to be disturbed by the trial court or on appeal. We don’t hear about these cases all that often because they settle or because plaintiffs cannot afford or find litigation counsel ready to bring the case to trial. Whether or not the Gawker Media verdict stands on appeal, the message to defendants who inflict economic and emotional harm on others is clear: beware the consequences when the case finally gets to the jury.

New Law Creates Federal Trade Secrets Cause of Action

New Law Creates Federal Trade Secrets Cause of Action

On May 11, 2016, President Obama signed into law the Defend Trade Secrets Act (DTSA), which provides a federal cause of action for trade secret misappropriation. Prior to the DTSA, plaintiffs seeking to enforce trade secrets rights relied exclusively on state law; most states have adopted the Uniform Trade Secrets Act (UTSA).

With limited exceptions, the rights granted under the DTSA are the same as under the UTSA. The basis for liability is the same. The damages are the same. Both the UTSA and the DTSA permits the recovery of enhanced double damages and attorneys’ fees for willful misappropriation of trade secrets.

One difference is that the DTSA provides immunity to whistleblowers who disclose trade secrets to law enforcement officials, or to an attorney, for the sole purpose of reporting or investigating a suspected violation of law. The DTSA provides immunity to parties who disclose a trade secret in a lawsuit, if the disclosure is made in a filing made under seal. The DTSA also requires employers to provide notice of this immunity in a contract or agreement with an employee that governs the use of trade secrets. Employers who fail to provide such notice are barred from recovering enhanced damages and attorneys’ fees.

Note to practitioners: employers who are concerned about the potential for trade secret misappropriation will want to update their policy manuals, employment contracts, or other employment materials to give the notice required by the DTSA if they want to take advantage of the possibilities for recovering enhanced damages and attorneys’ fees.

Another difference is that the DTSA forecloses the possibility of injunctive relief based on the inevitable disclosure doctrine. The DTSA requires evidence of threatened misappropriation before an injunction will issue. This differs from the law in many states, which authorize injunctive relief where use or disclosure of trade secrets is inevitable even if not yet proved.

Unlike the UTSA, the DTSA provides for ex parte civil seizure in extraordinary circumstances. Courts can issue seizure orders where the party against whom the seizure would be ordered misappropriated or conspired to misappropriate the trade secret at issue and is in possession of the trade secret. Such orders are appropriate where an injunction is insufficient because the party against whom the injunction order would be issued would not comply with the order.

The Bottom Line—Trade Secret Plaintiffs Can go to Federal Court if They Want

The differences between the DTSA and the UTSA will only matter in rare cases, with one exception: the right to bring suit in federal court. The DTSA ensures that every plaintiff who wants to bring a trade secrets claim in federal court can do so. But if there is no other basis for federal court jurisdiction (such as diversity of citizenship), a plaintiff can file in state court and avoid removal to federal court simply by pleading a state law trade secrets claim without reliance on the DTSA. This option to proceed in federal court now provides an important advantage for plaintiffs in trade secrets cases.

 

 

 

Supreme Court Holds That Rule 68 Offer of Judgment Does Not Make Class Action Moot

Yesterday, the United States Supreme Court, in a 6-3 decision, with Justice Thomas providing the sixth vote, held that an unaccepted offer of judgment under Rule 68 of the Federal Rules of Civil Procedure in a case seeking class certification under Rule 23 does not render the case moot, even though the defendant’s offer of judgment would have provided the named plaintiff in the case all the relief to which he would have been entitled even if he won the case. A link to the decision in Campbell-Ewald Co. v. Gomez is available here. The decision is significant as the latest in a series of disputes between corporate defendants and class action plaintiffs about when federal courts can grant class action relief. In general, corporate defendants seek to limit class action relief for persons claiming injury and class action plaintiffs seek greater access to the courts and the possibility of large damages awards.

The plaintiff in this case brought the case claiming that he had received a text message from the defendant that violated the Telephone Consumer Protection Act (“TCPA”), a federal statute that limits the ability of companies to send unsolicited text messages. The defendant sent the text messages as a contractor for the United States Navy. The messages were designed to promote Navy recruiting.

The TCPA provides for actual damages or statutory damages of $500 per violation, whichever is greater, plus treble damages for willful and knowing violations as well as injunctive relief. The defendant made an offer of judgment under Rule 68 that if accepted would have provided the plaintiff with $1,503 (treble statutory damages plus three dollars) as well as injunctive relief. The plaintiff did not accept the offer, even though it provided all of the relief to which he would have been entitled if the case went all the way through trial and he won.

The defendant then sought to dismiss the case as moot under Article III of the Constitution, which provides that federal courts can only hear actual “cases or controversies.” Prior to yesterday’s decision, the federal circuit courts were split on the issue of whether an offer of judgment to a named plaintiff that provided all of the relief available renders the case subject to dismissal as moot.

Justice Ginsburg wrote the decision for the majority joined by Justices Kagan, Breyer, Sotomayor, and Kennedy, with Justice Thomas concurring in the result but writing his own opinion setting forth a different rationale for the result. In her opinion, Justice Ginsburg noted that contract principles govern offers of judgment under Rule 68, and that any unaccepted offer to enter into a contract has no legal effect. Her opinion also rejected a secondary argument made by the defendant that as a contractor to the Navy it was entitled to the sovereign immunity of the federal government on the grounds that the Navy’s contract with the defendant required compliance with the TCPA and sovereign immunity did not apply because the defendant allegedly exceeded its authority under the contract.

The decision is unquestionably an important victory for class action plaintiffs, as corporate defendants have for years been using Rule 68 offers of judgment to pick off named plaintiffs and render their cases moot, meaning that the substance of their claims on behalf of classes of other similarly situated persons never got to be heard. But the extent of the victory will remain unknown until the Supreme Court hands down its decision in two other important class action cases now pending before it. In Spokeo, Inc. v. Robins, the Court will decide whether a plaintiff who cannot show any actual harm from an alleged federal statutory violation nevertheless has standing under Article III of the U.S. Constitution to sue for statutory damages in federal court.  In Tyson Foods, Inc. v. Bouaphakeo, the Court will consider whether the trial court should have certified a Rule 23 class action and a Fair Labor Standards Act collective action for claims alleging that Tyson Foods had not paid its employees for all time spent donning and doffing protective gear. Decisions in Spokeo and Tyson Foods are expected before June. For now, its round one, at least this term, for class action plaintiffs.