Latest news with #DavidBoies
Forbes
5 days ago
- Business
- Forbes
New Lawsuits Allege Companies Conspired To Secretly Pocket Class Action Payouts
The new lawsuit accuses the companies that manage class action payouts and the banks that hold the settlement funds of conspiracy and fraud, among other charges. Getty Prominent attorney David Boies and his firm Boies Schiller Flexner filed three lawsuits this week alleging that at least five companies handling payouts for class action settlements conspired to secretly pocket bank interest payments and award each other business outside the view of attorneys and judges. The suit says the scheme has resulted in lower class action payouts for consumers. The firm filed the suit against claims administration companies Angeion, Epiq and JND Legal Administration, three firms that were also the subject of a recent lawsuit accusing them of taking secret payments from fintech companies. The Boies suit also named Huntington and Western Alliance, the two leading custodial banks for class action lawsuits, as defendants. Boies filed the case in three different federal courts: the Northern District of California, the Southern District of New York and the Southern District of Florida. The charges are numerous and include allegations of conspiracy, fraud, breach of fiduciary duty, unjust enrichment and unfair competition. (The multiple filings, with different plaintiffs, may be an attempt to position the Boies firm to be the lead counsel in any multidistrict class action that is certified.) The allegations are part of a troubling pattern in class action payouts that Forbes reported on last week in an in-depth article about the companies quietly pocketing class action payouts. In statements to Forbes, representatives from Angeion and JND denied the allegations of the new suit, calling them 'baseless.' A spokesperson for Western Alliance called them 'false' and 'full of inaccuracies.' Huntington declined to comment, and Epiq didn't respond to our request for comment. Have a story tip? Contact Jeff Kauflin at jkauflin@ or on Signal at jeff.273. Here's how the money in class action payouts moves: When a lawsuit is settled, a judge appoints a claims administration company to handle the distribution of funds to consumers. The administrators also choose a bank to house the money before it's distributed. These deposits can total hundreds of millions of dollars in a large case, and since it can take months or years for the money to be paid out, the funds can earn millions of dollars in interest while sitting idle. Most settlement agreements dictate that any interest earned on the settlement funds should go to the consumers harmed by the company being sued, but the new Boies suit alleges that claims administrators, instead of giving all the interest to the class members, 'demanded that they be given a cut of the profits.' If the banks said no, the administrators threatened to take the lucrative deposits elsewhere. 'The Administrator Defendants agreed with each other that they would implement such a scheme, and each of them proceeded to act accordingly, in concert with one another,' the suit says. The filed complaint gives examples of eight class action suits, including the $119 million Capital One data breach and the $117 million Yahoo! data breach, where the interest rate paid to class members was less than 0.5% despite market rates then being between 4% and 6%. The suit says that, according to former employees at Huntington and Western Alliance, the banks paid to claims administrators 'at minimum, the difference between the market rate on an interest bearing account and the interest that the Bank Defendants paid to the class members.' The banks would 'deposit the kickbacks into [special purpose entities] separately created by the Administrator Defendants to hide the scheme.' None of these payments were ever reported to a judge, the suit says, despite the fact that claims administrators are required to submit a proposal outlining all of their services and costs and get them approved by a judge before a payout begins. One topic the Boies lawsuit doesn't address is the rebates that fintech companies have paid to settlement administrators in exchange for hiring them to distribute class action payouts through digital prepaid cards, which Forbes covered in our reporting last week. Boies Schiller Flexner declined to comment.
Reuters
5 days ago
- Business
- Reuters
Class action administrators, banks accused of kickback scheme in new lawsuits
May 30 (Reuters) - Leading companies and banks involved in the administration of class action settlements have been engaged in a years-long kickback scheme that eroded payouts to class members in thousands of cases, a pair of new lawsuits alleged on Thursday. The lawsuits filed in federal courts in New York, opens new tab and Florida, opens new tab accused class action service providers Epiq Solutions, Angeion Group and JND Legal Administration of taking illegal payments from Huntington National Bank and Western Alliance Bank in order to maintain dominance in the settlement administration market. The class members who filed the lawsuits said the administrators for years have diverted settlement deposits to the two banks, and in exchange received a cut of profits from them. The lawsuits said the alleged scheme reduced competition in the class action administration industry and illegally fixed prices in violation of U.S. antitrust law. JND in a statement said, "the allegations in these complaints regarding JND are baseless and JND will defend itself vigorously in court." Huntington declined to comment. Epiq, Angeion and Western did not not immediately respond to requests for comment. Prominent litigator David Boies of law firm Boies Schiller Flexner, who represents the plaintiffs, did not immediately respond to a similar request. Court-appointed class action administrators oversee all facets of settlement administration, including notifying class members. They work with banks, which are also appointed, to hold funds and distribute them to class members once a settlement is approved. Huntington and Western, the lawsuits said, oversee more than 80% of the settlement funds in class and mass actions in the United States. Epiq, Angeion and JND oversee more than 65% of the market for class action administration services, according to the complaint. The lawsuits said the rise of interest rates in 2021 spurred the alleged scheme. Settlement administrators threatened to refrain from using the banks if they did not agree to share profits, the lawsuits alleged. The interest rates Huntington and Western provided on settlement deposits should have been higher in a competitive market, the lawsuits said. The lawsuits claimed the settlement administrators have reaped hundreds of millions of dollars in undisclosed kickbacks and compensation from the bank defendants. The cases are Mary Jane Whalen v. Epiq Systems Inc et al, U.S. District Court, Southern District of New York, No. 1:25-cv-04499, and Roger Tejon v. Epiq Systems et al, U.S. District Court, Southern District of Florida, No. 1:25-cv-22453. For plaintiffs: David Boies, Mark Mao, James Lee and Alison Anderson of Boies Schiller Flexner For defendants: No appearances yet Read more: Lawsuit accuses American Arbitration Association of monopolizing consumer market US court reporter group sued over fees, certification rules Law firm Milberg skirts sanctions over fake claims in credit card fees case
Reuters
27-05-2025
- Business
- Reuters
US appeals court rejects challenge to federal marijuana ban
BOSTON, May 27 (Reuters) - A U.S. appeals court on Tuesday rejected arguments by several Massachusetts cannabis businesses that the federal prohibition on marijuana could no longer be deemed constitutional, as the U.S. Supreme Court held two decades ago. The Boston-based 1st U.S. Circuit Court of Appeals ruled, opens new tab that changes in how marijuana is regulated and sold in the decades since the Supreme Court upheld the law in 2005 did not mean the federal ban was no longer constitutional. Lawyers for the cannabis businesses including prominent litigator David Boies had argued that Congress has abandoned its goal of controlling all marijuana in interstate commerce, which they said was a key predicate of the Supreme Court's holding. In that case, Gonzales v. Raich, the high court held that under the U.S. Constitution's Commerce Clause, Congress had the authority to criminalize the possession and use of marijuana even in states that permit its use for medical purposes as it did in the Controlled Substances Act. Today, 38 states, including Massachusetts, have legalized marijuana for medical or recreational use, and under the Rohrabacher-Farr Amendments that have been included in annual appropriation bills since 2014, the Justice Department may not spend funds to interfere with state medical marijuana laws. Boies during arguments in December also pointed to Congress' decision in 2010 to permit medical marijuana in the District of Columbia. But Chief U.S. Circuit Judge David Barron, writing for a three-judge panel, said that the so-called appropriations rider was of "limited scope" and did not apply to the cultivation and distribution of marijuana for non-medical purposes. "After all, notwithstanding those appropriation riders, the CSA remains fully intact as to the regulation of the commercial activity involving marijuana for non-medical purposes, which is the activity in which the appellants, by their own account, are engaged," he wrote. He said that a ruling for the plaintiffs would result in a nationwide exemption to the Controlled Substances Act's comprehensive drug regulatory regime that was far broader than the one the Supreme Court rejected in the 2005 case, which concerned only medicinal marijuana sales, not recreational uses. Jonathan Schiller, a lawyer for the plaintiffs at Boies Schiller Flexner, said it "is fair to assume that we shall seek Supreme Court review." The lawsuit was filed in 2023 by Massachusetts retailer Canna Provisions, marijuana delivery business owner Gyasi Sellers, grower Wiseacre Farm and publicly traded multistate operator Verano Holdings ( opens new tab. U.S. District Judge Mark Mastroianni, an appointee of Democratic President Barack Obama, last year rejected their arguments, saying only the U.S. Supreme Court could overturn its 2005 ruling upholding the law. The plaintiffs say that holding has been undercut by subsequent developments. In 2021, conservative Justice Clarence Thomas wrote that the 2005 ruling's reasoning may no longer apply and that the ban "may no longer be necessary or proper", in response to the court's decision not to hear a different case. The Justice Department during the last year of Democratic President Joe Biden's tenure moved to make marijuana use a less serious federal crime by reclassifying it as a Schedule III drug instead of Schedule I, which is reserved for drugs with a high potential for abuse. The fate of that proposal remains uncertain. Republican President Donald Trump's nominee to lead the U.S. Drug Enforcement Administration, Terry Cole, has declined to commit to rescheduling cannabis, saying only that he would "give the matter careful consideration." The case is Canna Provisions Inc v Garland, 1st U.S. Circuit Court of Appeals, No. 24-1628. For the plaintiffs: David Boies and Jonathan Schiller of Boies Schiller Flexner For the U.S.: Daniel Aguilar of the U.S. Department of Justice Read more: US appeals court skeptical of challenge to federal marijuana ban Cannabis businesses lose court challenge to US marijuana ban
Time of India
22-05-2025
- Business
- Time of India
Google defeats Rumble's antitrust lawsuit over video sharing market
HighlightsAlphabet's Google successfully had a lawsuit from video platform Rumble dismissed due to being filed outside the four-year statute of limitations for antitrust claims. Rumble alleged that Google engaged in anticompetitive practices by favoring its YouTube platform in user searches and preventing Rumble from being preinstalled on certain Android devices. Rumble, which reported an average of 59 million global monthly active users in early 2025, has expanded its legal team to include prominent litigator David Boies. By Mike Scarcella Alphabet's Google has persuaded a federal judge in California to reject a lawsuit from video platform Rumble accusing the technology giant of illegally monopolizing the online video-sharing market . In a ruling on Wednesday, U.S. District Judge Haywood Gilliam Jr said Rumble's 2021 lawsuit seeking more than $2 billion in damages was untimely filed outside the four-year statute of limitations for antitrust claims. Rumble accused Google of violating antitrust law by rigging user searches to give preference to Google's YouTube platform over Rumble. The lawsuit also accused Google of scheming with device makers to bar Rumble from being preinstalled on some Android phones. Google had no immediate comment, and Rumble did not immediately respond to a request for one. At the heart of its case, Rumble said there was "considerable direct evidence" that Google illegally was "self-referencing" its YouTube platform in web searches. Rumble claimed it lost out on billions of video views on its platform. Google has denied Rumble's claims and had urged Gilliam to end the case before trial, which was set for July. Gilliam said Rumble failed to present evidence allowing a jury to find and apply an exception to the statute of limitations. The judge criticized Rumble for presenting "bare attorney argument lacking any evidentiary support." Rumble, founded in 2013, had an average of 59 million global monthly active users in the first quarter of 2025, the company said this month. The platform had recently expanded its trial team to include prominent litigator David Boies of law firm Boies Schiller Flexner. Rumble separately is suing Google over its digital advertising practices . The lawsuit, filed last year in California, accused the company of anticompetitive conduct relating to online advertising. Google has called Rumble's claims in that case "simply wrong" and said Rumble uses "dozens" of competing ad services in addition to Google's ad manager. Google faces other antitrust allegations by the U.S. government and groups of states that are challenging the company's dominance in digital advertising and search markets. Google has denied the allegations in those cases. The case is Rumble v. Google, U.S. District Court for the Northern District of California, No. 4:21-cv-00229. For Rumble: Nicholas Gravante, Philip Iovieno and Danielle Tully of Cadwalader, Wickersham & Taft; David Boies of Boies Schiller Flexner; and Robert Dickerson Jr of the Competition & Technology Law Group For Google: John Schmidtlein and Stephen Fuzesi of Williams & Connolly; and David Kramer of Wilson Sonsini Goodrich & Rosati Read more: Rumble hires litigator David Boies in Google antitrust lawsuit ahead of trial Google seeks to limit reach of US judge's digital ads ruling Google asks US appeals court to overturn app store verdict
New York Times
21-05-2025
- Politics
- New York Times
What Would a Conservative Superlawyer Say About His Firm Bowing to Trump?
When I read recently that the law firm Gibson Dunn had backed away from suing the Trump administration over its mass deportation policy for fear of becoming another of the president's targets, I thought back to a dinner at a judicial conference in the late spring of 2009. My dinner partner was Theodore Olson, the well-known Washington lawyer who represented George W. Bush in the decisive Supreme Court battle over Florida's votes in the 2000 election. After serving as solicitor general in Mr. Bush's first term, he returned to his law practice. His firm was Gibson Dunn. Days before the dinner, Mr. Olson and his opponent in the 2000 election case, David Boies, announced that on behalf of two gay couples, they were suing the State of California over the ban on same-sex marriage imposed by Proposition 8, which the state's voters approved the previous November. Mr. Boies, a liberal, was a free agent, the founder of the law firm that bore his name. Mr. Olson was different, a founding member of the Federalist Society, a Republican insider who personified Big Law. The lawsuit drew fire from both left and right. L.G.B.T.Q. rights advocates were intensely distrustful of Mr. Olson's motives and of the lawsuit's chances, having spent years trying to cultivate political support for same-sex marriage while keeping the issue away from courts they viewed as hostile. An account of the lawsuit's filing in The Times referred to the two lawyers as 'limelight-grabbing but otherwise untested players in the bruising battle over Proposition 8.' I was intrigued, and now here by chance was Mr. Olson, an elbow away. Why are you doing this, I asked him. What's the story? His response removed any doubt I might have had about his sincerity or his commitment to his clients. He believed in marriage, he said. (I knew that his third wife, Barbara Olson, died in one of the hijacked planes on Sept. 11 and that he had recently married for a fourth time.) He had gay friends and saw no reason the law should prevent them from marrying the people they wanted to spend their lives with. Somebody would bring such a lawsuit, he observed, and it might as well be someone with his resources and lifetime of knowledge of how the federal courts worked. He believed he had a winning case. His death last November at the age of 84, after suffering a stroke, meant that he didn't live to see how quickly a Republican president's extortion could reduce once-proud law firms to pitiable supplicants for the president's grace. As the serial capitulations mounted, with firms promising to bestow millions of dollars' worth of lawyers' time on the president's favorite causes in return for continued access to the federal government for themselves and their clients, I often thought of Mr. Olson and of how he might have responded. I know that my instinct that he would have fought back hard is presumptuous; no more than the rest of us, he could not have imagined what has unfolded, let alone formulated an anticipatory response to the unthinkable. Gibson Dunn was not among the firms targeted by Mr. Trump with executive orders that would have seriously damaged their businesses had they not acquiesced to his demands. But Gibson Dunn, two months after suing the Trump administration to restore legal representation for unaccompanied immigrant children, did nonetheless stop providing help because it was fearful of the consequences. Would Mr. Olson have demanded that the law firm where he spent his entire career, aside from interruptions for government service, not abandon its previous commitment to those children out of fear of giving offense? Of course, I don't know, but I'd like to think he was savvy enough to know that those firms that decided to fight the president's astonishing overreach were likely to win. One of them was Perkins Coie, even though many of the nation's big law firms declined to sign a legal brief on its behalf. The lawsuit that he and Mr. Boies filed was not the case that led to the Supreme Court decision establishing a nationwide right to same-sex marriage. That came later, in the Obergefell case, decided in 2015. The victory in the California case was limited to marriage in that state. After Federal District Judge Vaughn Walker declared Proposition 8 unconstitutional, Gov. Jerry Brown declined to appeal. The appeal was carried forward by the group that had proposed the marriage ban. The Supreme Court ruled in June 2013, in Hollingsworth v. Perry, that the group lacked standing, a decision that had the effect of making Judge Walker's ruling the final word. As random chance would have it, I was in Mr. Olson's company again that summer when county clerks' offices in California, responding to the Supreme Court's Hollingsworth decision, began issuing marriage licenses to same-sex couples. We were two of maybe a dozen people seated around a seminar table at Duke Law School. His cellphone rang, and he took the call. When he finished talking, he turned to the group and told us that it was one of his clients reporting that he had just been married. This tough embodiment of Big Law had tears in his eyes. Soon enough, so did many of the rest of us. I don't mean to suggest that the same-sex marriage case provided an epiphany that turned him into a liberal Democrat. Far from it. In the summer of 2017, he and I were speaking at the Chautauqua Institution in western New York, a place where a favorite evening activity is for people to gather their friends and even slight acquaintances to sit on a porch for a glass of wine and an evening's conversation. Mr. Olson and I and our spouses were guests at such a gathering, most of us journalists who had known him over the years. Mr. Trump had been in office for a few months, and it appeared to most of us that things were not going well. The Muslim ban, in particular, concerned us, and we gently poked at Mr. Olson to get him to express any doubts about the new president. He kept deflecting us, and we kept trying while being careful not to cross the line into rudeness. Finally, with a tired smile, he put his hands up in surrender. 'Look, I'll put it this way,' he said. 'We got Gorsuch.' Whatever the pros and cons of Mr. Trump's first Supreme Court nominee, Neil Gorsuch, who took the seat that President Barack Obama intended a year earlier for Merrick Garland, it was a revealing moment. 'But Gorsuch' was to become a mantra among Republicans who had their doubts about other aspects of the Trump agenda but not about his designs on the courts. Mr. Olson's comment was a deft conversation ender; there wasn't much more to say. Yes, we all had Justice Gorsuch. And we also, for a time, had Ted Olson. I wish we still did. I think he would have something to tell us.
