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Good morning. The first lawsuits have been filed since an FDA expert panel concluded a key ingredient in many over-the-counter cold medicines was no better than a placebo. Plus, Samsung is ordered to pay arbitration fees for nearly 36,000 biometric privacy plaintiffs, and a group of Sweetgreen employees say they faced harassment at work. That’s right – it is Friday.
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Just days after an outside panel of experts for the FDA declined to back the effectiveness of an anti-congestant used in a slew of over-the-counter medicines, the first lawsuits over the products began to emerge, reports Jonathan Stempel.
Johnson & Johnson, Procter & Gamble, Walgreens, GSK and Reckitt Benckiser were hit with proposed class actions claiming the companies deceived consumers about cold medicines containing the ingredient. The lawsuits were filed on Wednesday and Thursday, after the panel concluded this week that the ingredient phenylephrine marketed as a decongestant was essentially no better than a placebo.
According to an agency presentation, about 242 million products with phenylephrine were sold in the U.S. last year, generating $1.76 billion in sales and accounting for about four-fifths of the market for oral decongestants. The companies did not respond to requests for comment.
What appeared to be the first lawsuit, filed in Pensacola, Florida, said Johnson & Johnson’s consumer health business and Procter & Gamble should have known by 2018 that their marketing claims about products with phenylephrine were “false and deceptive.” That year was when new FDA guidance for evaluating symptoms related to nasal congestion demonstrated that earlier data about phenylephrine’s effectiveness could no longer be relied upon, the complaint said.
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- A New York state appeals court judge temporarily halted the scheduled Oct. 2 trial in New York Attorney General Letitia James’ fraud lawsuit against Donald Trump and his family business after the former U.S. president sued Justice Arthur Engoron, the trial judge overseeing the case. (Reuters)
- A U.S. Senate panel advanced nine of President Joe Biden’s nominees to serve as federal judges, adding to a backlog of 16 nominees now awaiting votes on the floor by the full Senate, where the focus has turned to averting a government shutdown by Sept. 30. Progressive advocates are raising alarms about the slowing pace of judicial confirmations in the Democratic-controlled chamber. (Reuters)
- California lawmakers passed new legislation to strengthen regulations to protect against attorney fraud and to require lawyers to inform the state bar if they suspect other lawyers of engaging in seditious conspiracy, insurrection or treason. The still-unraveling scandal involving disbarred California lawyer Tom Girardi has exposed state bar’s tools as “inadequate,” the bill said. The bill will go to Governor Gavin Newsom. (Reuters)
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That’s the number of Illinois biometric privacy plaintiffs for which Samsung was ordered to pay arbitration fees. U.S. District Judge Harry Leinenweber is one of only a handful of judges – and apparently the first outside of California – to back up his order compelling arbitration with a ruling that the defendant must pay $4.13 million in arbitration fees to launch the cases, writes columnist Alison Frankel. Samsung and its lawyers did not respond to requests for comment.
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What to catch up on this weekend
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- In Ohio federal court, U.S. District Judge Michael Newman is slated to hear oral arguments on the U.S. Chamber of Commerce’s motion for preliminary injunction and the federal government’s motion to dismiss a lawsuit by the business group, which is challenging a new law that for the first time gives Medicare the power to negotiate drug prices with pharmaceutical companies. The chamber and other groups, represented by lawyers at King & Spalding and Porter Wright, sued the government in June and are seeking to block the drug pricing program, which was enacted last year through the Inflation Reduction Act. Groups including the AARP and Public Citizen have filed amicus briefs in support of the government’s opposition to an injunction.
- The D.C. Circuit is scheduled to hear oral arguments in a case brought by several state attorneys general and a group of fuel industry groups challenging an EPA decision restoring California’s waiver allowing it to set stricter emissions standards for cars and trucks sold there. The state’s ability to receive a waiver is key to the state’s plan to require that all new cars sold in the state are either electric or plug-in electric hybrids by 2035. The fuel groups argue that the EPA lacks the authority to grant California that waiver, and the states argue that the section of the Clean Air Act that the EPA relied on is unconstitutional.
- Carrie Tolstedt, the only Wells Fargo executive to be criminally charged in the bank’s fake accounts scandal, is scheduled to be sentenced before U.S. District Judge Josephine Staton in Los Angeles. The former head of Wells Fargo’s retail banking unit had pleaded guilty in March to obstruction of a banking examination. Prosecutors have asked that Tolstedt receive a one-year prison term, while Tolstedt is asking for probation.
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Court calendars are subject to last-minute docket changes.
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- Donald Trump’s Georgia trial on charges of trying to overturn his 2020 election defeat won’t begin in October, Fulton County Superior Court Judge Scott McAfee said in a ruling that will allow the former U.S. president to be tried after two of his former attorneys. McAfee cited logistical concerns and the array of unsettled legal issues in separating the trial of attorneys Kenneth Chesebro and Sidney Powell from Trump and the other 16 co-defendants. (Reuters)
- Roni Cohen-Pavon, a former executive at Alex Mashinsky’s now-bankrupt cryptocurrency lender Celsius, has pleaded guilty to federal criminal charges and agreed to cooperate with prosecutors’ investigations, court records show. Cohen-Pavon, Celsius’ former chief revenue officer, and Mashinsky had each been charged in July with market manipulation and wire fraud for artificially inflating the value of the exchange’s crypto token Cel, and cashing out their personal holdings prior to Celsius’ July 2022 collapse. Lawyers for Cohen-Pavon, Mashinsky and a spokesman for the U.S. Attorney’s office in Manhattan did not immediately respond to requests for comment. (Reuters)
- Salad chain Sweetgreen is being sued by a group of Black and female employees at seven of its New York City locations who claim they faced racial and sexual harassment. The New York state court amended complaint claims that workers faced anti-Black racial slurs and female employees were subjected to sexual comments and unwanted touching. Sweetgreen in a statement said the company is committed to diversity and a safe and inclusive workplace. (Reuters)
- A group of major textbook publishers, including Cengage, Macmillan Learning and McGraw Hill, sued file-sharing service Library Genesis in Manhattan federal court for what they described as copyright infringement on a “staggering” scale. The publishers, who are represented by Matt Oppenheim of Oppenheim + Zebrak, claim the group of websites also known as LibGen illegally distributed more than 20,000 of their textbooks. LibGen could not immediately be reached for comment. (Reuters)
- Employees of the former Bed Bath & Beyond filed a proposed class action against the committee that oversaw its 401(k) retirement plan, saying its “imprudence” caused them to suffer millions of dollars in losses after the retailer filed for bankruptcy. The former employees said they lost more than $5 million when their MassMutual “guaranteed investment account,” which they thought had little risk, suffered a 10% loss because rising interest rates hurt the value of its underlying investments. (Reuters)
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- Crowell & Moring brought on New York trial lawyer Eric Aronson. He most recently was at Stroock. (Reuters)
- Duane Morris picked up Terry Weiss and Stefanie Wayco, who focus on securities litigation, for its trial practice group in Atlanta. The pair arrives from Maynard Nexsen. (Duane Morris)
- Nelson Mullins added Washington, D.C.-based partner David Yang, who represents government contractors in disputes. Yang most recently was at Maynard Nexsen. (Nelson Mullins)
- Saul Ewing hired trial partner Jason McElroy, who handles matters including consumer financial services litigation, in Washington, D.C. He arrives from Weiner Brodsky Kider. (Saul Ewing)
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