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Delivery drivers for an online food delivery service sued the platform alleging violations of the Fair Labor Standard Act for failing to pay overtime. The delivery service sought to compel arbitration, which the drivers had agreed to in their employment agreements. The workers attempted to argue that they were engaged in foreign or interstate commerce and therefore were exempt from the Federal Arbitration Act, though the district court disagreed. The appellate panel found that the plaintiffs had completely ignored the governing framework and that being “engaged in commerce” and “involved in commerce” were two completely different concepts. The panel found that the § 1 exemption of the FAA was therefore narrowly tailored and that it was not unusual that the employment agreement failed to meet § 1’s more stringent requirement while still meeting the far broader requirements of § 2. The panel determined that the plaintiffs were not entitled to the exemption and it affirmed the decision of the district court

Grubhub is an online and mobile food-ordering and delivery marketplace. Grubhub provides a platform for diners to order takeout from local restaurants, either online or via its mobile app. When a diner places an order through Grubhub’s app, Grubhub transmits the order to the restaurant, which then prepares the diner’s meal. Once the food is ready, the diner can either pick it up themselves or request that Grubhub dispatch a driver to deliver it to her.

Grubhub considers its drivers to be independent contractors rather than employees. Several drivers who worked in cities including Chicago, Portland, and New York filed two suits against Grubhub, alleging violations of the Fair Labor Standards Act for failing to pay overtime. The suits hit a roadblock, however, as the drivers had signed agreements compelling arbitration. The workers attempted to argue that they were engaged in foreign or interstate commerce and therefore were exempt from the Federal Arbitration Act. The district courts disagreed and compelled arbitration. The plaintiffs then appealed, and the 7th Circuit consolidated the appeals. Continue reading ›

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Musicians have been trying for years to control whether and which politicians may play their music at events. Many see their efforts as a natural reaction to a legitimate concern with having their art associated with someone whose views may not align with their own. As seen in a recently filed lawsuit by Neil Young against President Trump’s reelection campaign, musicians are trying out new strategies.

There is no love lost between Young and President Trump. The President has been using Young’s songs at rallies and events ever since he announced his campaign in 2015. This never sat well with Young who expressed his displeasure numerous times online and in interviews. Young’s posts were laced with frustration as he conceded that “legally he has the right to” but added, “however it goes against my wishes.” On election day in 2018, Neil Young posted a frustrated statement about President Trump and his continued use of Young’s music at events.

Young’s gripe with Trump’s use of his music is no recent phenomenon. Musicians and songwriters have balked when politicians play their songs at public events for decades. A famous example is Bruce Springsteen’s objection to Ronald Reagan’s campaign’s use of “Born in the U.S.A.” at campaign events in 1984. Numerous other artists have objected to political co-opting of their music over the intervening years.

Young’s recently filed lawsuit takes issue with President Trump’s use of “Rockin’ in the Free World” and another song, “Devil’s Sidewalk,” at the President’s rally in Tulsa, Oklahoma in June. In his suit, the musician accused the President’s campaign of copyright infringement for playing the songs without a license. The lawsuit seeks to enjoin the campaign from using the songs as well as an award of statutory damages. In his complaint, Young contends that he “in good conscience cannot allow his music to be used as a ‘theme song’ for a divisive, un-American campaign of ignorance and hate.” Continue reading ›

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Many people have become wary of online forms asking for personal information since many of them prove to be opportunities for dishonest people and institutions to use and share that information for their own purposes. But there are institutions most of us assume to be trustworthy, and for most people, that would include the College Board, the same institution that develops and administers the SAT and ACT exams. According to a new lawsuit, the College Board allegedly collected and sold students’ personal information, including their names, addresses, gender, ethnicity, grades, and citizenship status.

According to a new lawsuit, which has been filed on behalf of the parent of a student of Chicago Public Schools, the College Board allegedly collected this information using a Student Search Survey. The College Board denies having done anything wrong, saying that the survey was optional and free for students to fill out. Legislators say the College Board did ask for students’ consent to distribute their information to colleges, universities, and scholarship providers, but did not mention that the information would be sold to those third parties – that the College Board was profiting off students’ personal information.

The lawsuit alleges that the College Board collected between 42¢ and 47¢ for each student name they sold to other organizations.

The lawsuit further alleges that, after obtaining students’ personal information, the College Board offered the students’ identifying information (including their names and addresses) for sale to third parties in order to promote Student Search Service, the survey they used to collect students’ information. Continue reading ›

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ATTENTION BUSINESS OWNERS: we are investigating possible wrongful denials of business interruption insurance claims due to COVID-19. If you would like us to review your policy, feel free to send it along.

As we have written about previously, the COVID-19 pandemic and the numerous restrictions and shelter in place orders that have been implemented have spawned a number of lawsuits from business owners against insurance companies. These suits seek to determine coverage for business income losses that resulted from businesses being forced to shut down in compliance with government orders. A recent ruling from a federal judge in Kansas City could open the window for thousands of businesses whose insurers have denied their COVID-19-related claims.

Background of the COVID Coverage Disputes

Businesses holding all risk or business income interruption polices have submitted claims throughout the country to their insurers seeking coverage for business interruptions based on COVID-19-related closures. The claims generally seek recovery of lost business income and extra expenses incurred due to having to close their places of business as a result of the presence of the virus or government orders. The response from insurance companies has been almost universal: denial of the claims on the basis that the losses do not constitute a “direct physical loss or damage” at the covered property. Following the filing of hundreds of insurance coverage lawsuits, some plaintiffs are seeking consolidation of the federal lawsuits in multidistrict litigation. The Judicial Panel on Multidistrict Litigation heard an argument for consolidation in August and is expected to issue a decision in the coming weeks.

To date, most court decisions have sided with insurance companies. The courts in these cases have held that the risks posed by COVID-19 do not meet the direct physical loss or damage requirement for coverage under the insured’s respective policies. The recent opinion from U.S. District Court Judge Stephen Bough is definitely an outlier but gives new ammo for those businesses whose claims have not yet been decided or who have yet to file suit against their insurance companies. Continue reading ›

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We often hear people talk about private companies going public, but it’s not as often that it goes the other way around – from a public company to a private one. There’s a lot of paperwork involved either way, but unless you have a plan for repaying your investors, going from public to private also means you are denying your shareholders (especially minority shareholders) the stake in the company for which they have already paid.

The National Company Law Appellate Tribunal (NCLAT) said as much in a recent ruling in which it decided against allowing Tata Sons, the holding company of Tata Group, to convert itself from a public company to a private one. Although the Registrar of Companies had approved the transition, the NCLAT said that approval went against Section 14 of the Companies Act of 2013. The NCLAT also pointed out that the move, made by the directors and majority shareholders of the software conglomerate, would be oppressive towards the company’s minority shareholders.

The NCLAT also reinstated Cyrus Mistry as the company’s executive chairman. He had previously been fired back in October of 2016 due to a supposed lack of performance, but the NCLAT ruled that his firing had been illegal.

Mistry’s family owns an 18.4% stake in Tata Sons, making them a minority shareholder of the conglomerate, and Mistry’s legal troubles with Tata Sons began in 2016 with accusations of mismanagement and oppressing minority shareholders – charges that eventually led to Mistry getting ousted as executive chairman. Continue reading ›

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Maryland’s highest court, the Court of Appeals, recently settled a longstanding question regarding whether Maryland law recognized an independent cause of action for breach of fiduciary duty. With its opinion in Plank v. Cherneski, the Court resolved an area of confusion that has troubled Maryland courts for more than 23 years since the Court’s 1997 opinion in the seminal case of Kann v. Kann.

In 1997, the Kann court held:

There is no universal or omnibus tort for the redress of a breach of fiduciary duty by any and all fiduciaries. This does not mean that there is no claim or cause of action available for breach of fiduciary duty. Our holding means that identifying a breach of fiduciary duty will be the beginning of the analysis and not its conclusion.

Continue reading ›

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Investing is supposed to be a long-term strategy to build wealth, but expecting shareholders to wait more than 60 years before they can get a fair return on their investment is far beyond what any investor would consider reasonable.

That was allegedly the case for the minority shareholders of Promega Corp., the biotechnology company based in Fitchburg, Wisconsin. According to a lawsuit filed by shareholders back in 2016, Bill Linton, Promega’s founder and CEO, allegedly used manipulative and bullying tactics to become a majority shareholder of the company. His actions allegedly left the minority shareholders with no hope of getting a decent return on their investments before 2078 at the earliest.

Circuit Judge Valerie Bailey-Rihn, who has been hearing the case, has said that she was leaning towards the plaintiffs and agreeing that they had been oppressed by Linton’s actions. Now the only two things left to determine are 1) how to punish Promega and provide restitution for the minority shareholders who were allegedly oppressed by Linton’s actions; and 2) how to determine the price of the stocks for which the minority shareholders are allegedly owed compensation. Continue reading ›

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Depending on the state in which they live, consumers sometimes have a hard time recovering the money they may have been deceived into giving to scammers who take their money and disappear, or to buy products that turn out to be harmful. Sometimes they can’t sue because they signed away their right to sue a company in their purchase agreement, or the amount spent is too small to justify the costs of an individual lawsuit. Other times they simply aren’t aware that the company has done something wrong. Regardless of the reason, it can be disheartening to see the number of consumers who are unable to recover funds lost as a result of scams or a company’s bad practices, but there is hope for those consumers.

One of the jobs of a state attorney general is to protect consumers against companies using predatory practices. Earlier this year Mark Brnovich, Arizona’s state attorney general, reported that his office had succeeded in recovering more than $38 million in restitution for consumers in 2019 alone.

Brnovich said the money has been recovered using a combination of out-of-court settlements, lawsuits filed (or backed) by the state, civil penalties, as well as costs associated with matters of consumer protection.

But the office of the state attorney general can’t protect consumers without the help of those same consumers. The state attorney general’s office relies on consumers, not only to notify them of potential scams and/or misconduct perpetrated by companies but also to provide evidence and testimony to help them pursue legal action, especially against large corporations. The Arizona state attorney general’s office reported having processed more than 14,000 written complaints, as well as 40,000 phone calls from consumers.

It’s a lot of information to go through, but it helped the Arizona state attorney general’s office bring legal action against large corporations, including e-cigarette manufacturers and pharmaceutical companies. Continue reading ›

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Having a bad credit score can negatively impact your life in a big way. It can prevent you from getting loans for things you need – everything from buying a car to getting repairs done on your home can become difficult, if not impossible when you have a low credit score. When you are able to obtain a loan, a low credit score can mean you have to pay a much higher interest rate than you would get if you had a higher credit score. People struggling to pay back debt often have low credit scores, but having a low credit score imposes another financial burden on them, making it even more difficult for them to dig themselves out of debt. When you take all that into consideration, it’s no wonder people are desperate to have their credit scores improved by any means necessary. Unfortunately, this makes them vulnerable to predators claiming to be credit repair companies.

While there are legitimate companies that can help you improve your credit score by removing debt and “hard” credit checks from your credit score, there are also companies out there that claim they can do these things, charge a hefty fee, and then never deliver.

The Federal Trade Commission (FTC) and the office of the Illinois attorney general have each filed lawsuits against companies offering credit repair services while allegedly engaging in deceptive business practices and defrauding consumers. Continue reading ›

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Best-Chicago-Business-Dispute-Lawyer-1-300x189AbbVie, a pharmaceutical company headquartered in Illinois, was sued by a trading firm after it conducted a Dutch auction to determine the price for its tender offer to repurchase shares of its own stock. Shareholders participated in the auction, offering to sell their stock back to AbbVie, and the lowest offered prices were selected by AbbVie until AbbVie had reached $7.5 billion worth of repurchases. AbbVie hired a company to receive bids and determine the final price it would purchase shares at. That company published preliminary numbers and later corrected them after the market had closed. The trading firm alleged that by publishing the preliminary numbers and correcting them after the close of trading, AbbVie had violated the Securities Exchange Act. The 7th U.S. Circuit Court of Appeals ruled in favor of AbbVie, affirming the decision of the district court and finding no violation.

AbbVie, Inc. made a tender offer to repurchase as much as $7.5 billion of its outstanding shares. AbbVie conducted a Dutch auction to determine the price. AbbVie began the auction by setting the price at $114. Shareholders participated by offering to sell their shares at or below $114. AbbVie then selected the lowest price that would allow it to purchase $7.5 billion of shares from the tendering shareholders.

The auction took place from May 1, 2018, to May 29, 2018. On May 30, AbbVie announced that it would purchase 71.4 million shares for $105 per share. AbbVie’s stock, which had been trading at $100 closed at $103 on May 30. Approximately an hour after the close, AbbVie announced that it had received corrected numbers from the company it hired to receive bids, Computershare Trust Co. Instead of purchasing 71.4 million shares at $105 a share, AbbVie would purchase 72.8 million shares at $103 a share. The next day, AbbVie’s share price fell to $99.

Walleye Trading LLC filed suit, contending that AbbVie’s announcement of preliminary numbers, followed by corrected numbers after trading closed, violated § 10(b) and 14(e) of the Securities Exchange Act of 1934. Walley also argued that William Chase, a controlling manager of AbbVie, was liable under § 20(a) of the act. The district court dismissed Walleye’s complaint for failing to state a claim, and Walleye appealed. Continue reading ›

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