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FCPA Guidance Needed to Help Businesses Comply
Today, the U.S. Chamber Institute for Legal Reform and a broad-based business coalition sent a letter to the Department of Justice (DOJ) and Securities and Exchange Commission (SEC) regarding forthcoming guidance on enforcement under the Foreign Corrupt Practices Act (FCPA).
The letter details many areas of ambiguity that we ask the Administration to address through a meaningful and efficient process in order to provide much needed clarity and certainty for businesses making a good faith effort to comply with the statute. The DOJ’s forthcoming guidance is an important first step towards providing a foundation for lasting legislative improvements to the statute, and we are hopeful that DOJ accepts the recommendations included in the letter.
Antibribery law needs clarification
“Congress and the courts need to curtail this latest antibusiness crusade,” says a Wall Street Journal editorial of the Justice Department’s increasing enforcement of the Foreign Corrupt Practices Act. While the editorial admires the law’s goal of combating overseas corruption, the effort is hurt by vague definitions of foreign officials, weak cases, and prosecutorial misconduct.
Ohio court upholds legal reforms
The Ohio Supreme Court has upheld a 2005 tort reform measure that allows either party to a lawsuit to request separate trials for compensatory damages and punitive damages. The court rejected arguments from the law’s opponents that the measure violated the separation of powers, the Associated Press reports.
Contingency Fees Agreements, Lawsuit Lending and Enforcement of Foreign Judgments Among Top Lawsuits Trends for 2012
The trial bar is always looking for new ways to sue – and new ways to fund potentially lucrative lawsuits. We asked four key practitioners to identify the trends in litigation which should be of concern to the business community in 2012. Their answers – shown in this video – include the use of contingency fee counsel by state attorneys general, the rise of third-party litigation financing, the expansion of liability through novel theories, the application of the Alien Tort Statute (which is headed for the Supreme Court), and litigation over the commonality standard in class action cases.
John Beisner starts with a discussion on broader use of contingency fee arrangements between state attorneys general and private lawyers, pointing out that AGs have started handing penalties cases (what he calls ‘quasi-criminal’) over to contingency fee counsel. The outside lawyers are trying to impose penalties, as opposed to trying to recover money lost by the state, which raises major due process concerns. Beisner isn’t the only one uncomfortable with the relationship between AGs and the plaintiffs bar: Katherine Adams asks if the contracts awarded to donors are legitimate or are they influenced by the political process?
Adams goes on to say that plaintiffs’ lawyers are advancing numerous novel theories of liability that try to bring multiple defendants into cases even when they did not have any direct connection to the alleged injury. The trial bar’s attempts to broaden the scope of liability through asbestos conspiracy and public nuisance have so far been unsuccessful, but that won’t stop them from trying again.
Thurbert Baker focuses on the hazards that come with 3rd party lending for lawsuits, where a large investor, such as a hedge fund, purchases a stake in a class action. The practice prolongs litigation and drives up the costs.
A court case that was decided by the U.S. Supreme Court last year could revolutionize the way class actions are litigated according to Lisa Blatt. In June, the court dismissed a potentially huge class action against Wal-Mart, writing that the plaintiffs had too little in common to form a single class. In the future, courts will ask if the commonality standard has been met before moving the case forward. Another case of interest to the business community is scheduled to go before the Supreme Court in 2012. Kiobel vs. Royal Dutch Petroleum will decide whether companies can be held liable for human rights violations committed by governments overseas under the Alien Tort Statute, a 200-year-old law that has traditionally been applied to individuals, not companies.
The business community should be aware of these emerging trends. Counteracting these troubling developments is critical to keeping time and resources focused on creating jobs instead of fending off dubious suits.
Text messages undermine FCPA case
The front page of the Washington Post details an FCPA sting case that was hailed as a “new chapter” in prosecutions but, after two years, hasn’t resulted in a single conviction. The latest salvo involves inappropriate texts between agents and informants, another example of missteps that led one jury foreman call the sting an “absolutely amateurish operation.” According to the story, the government’s case has gotten to the point that prosecutors are debating whether they should continue with the case or abandon it altogether.
Proposal to change attorney contracts advances in Mississippi
A Mississippi House panel has approved a bill that would give state agencies a say in the retention of counsel to represent the state. The bill also provides that all legal service contracts be approved through the state’s contracts review board, and adds public disclosure to proposed contracts for hourly as well as contingency fee litigation on behalf of the state. The bill, opposed by the AG, now moves onto the full House for debate, reports the Biloxi SunHerald.
Litigation Funding in Australia
A new report explores the potential conflicts of interest in litigation funding agreements, where a third party provides financing for a lawsuit in exchange for a percentage of any winnings. The paper discusses the impact such arrangements have on lawyers and their duties to their clients, which could take a back seat to the lawyers’ obligations to their funders.
Appeal of litigation dropping as more people opt for alternative dispute resolution
A new report finds that the number of civil trials in Pennsylvania is falling as more people choose mediation to resolve disputes. Plaintiffs are turned off by the high cost of litigation and its confrontational nature, and tort reforms have forced lawyers to be more selective when deciding whether to litigate a case. (Pittsburgh Tribune)
Minnesota House passes tort reform bills
Proponents of the new rules, which would limit attorney fees, reform class action procedures and reduce the statute of limitations, say that the changes will make businesses in the state more competitive. The proposals now move to the state Senate and then onto the governor, reports the Star-Tribune.
UK lawsuit funding regulations lack teeth to prevent abuses
The Law Society Gazette reports on ILR President Lisa Rickard’s concerns that a proposed set of rules for UK litigation funders lacks the mandatory requirements that could prevent abuses. “These investors are completely profit-driven and not in it to bring access to justice,” said Rickard. “We don’t think a voluntary code will have any teeth or enforcement powers and lacks any built-in safeguards against wrongdoing.”
