Top 10 U.S. Court Awards in 2011 and Their Impact in 2012
1. Wal-Mart Stores vs. Dukes. The U.S. Supreme Court denied 1.5 million plaintiffs the right to bring suit against the employer as a class action. The decision will have a big impact on employment practices liability, directors' and officers' and errors and omissions risks, Willis said.
2. AT&T Mobility LLC vs. Concepcion.
The Supreme Court upheld the pre-emption of federal law over state law, allowing companies to eliminate exposure to class action lawsuit via contract. This decision is most likely to affect E&O, cyberliability and EPLI coverage, Willis said.
3. Multiple states vs. U.S. Dept. of Health and Human Services, challenging healthcare reform. The Supreme Court is expected to rule on the law soon. Three appeals courts have found the section requiring Americans to buy health insurance by 2014 to be constitutional, but a fourth appellate court has not. The Supreme Court's ruling is expected to have an impact on fiduciary liability, Willis said.
4. Erica P. John Fund Inc. v. Halliburton Co. The Supreme Court decided that investors did not need to prove a relationship between a company's "alleged fraudulent statements and the investor's financial losses," Willis said. It's a win for the plaintiff's bar because it makes it easier to pursue federal securities class actions in the early stages of a dispute. The ruling is expected to have the greatest impact on D&O coverage, Willis said.
5. Claridge vs. RockYou. Information about users of RockYou, a social gaming website, was exposed in a data breach, website users alleged. The claim is strong enough to allege a generalized injury, but the court may dismiss the claim if plaintiffs can't demonstrate tangible harm, Willis said. Cyberliability coverage will be most affected.
6. Thompson vs. North American Stainless.
The Supreme Court could be willing to read anti-discrimination laws more broadly, after it found the company guilty of firing an employee as retaliation for his fiancée filing a gender discrimination complaint against the same company. The case is expected to effect employment practices liability risks, Willis said.
7. Loomis vs. Exelon Corp. The court ruled in favor of the employer and against the plaintiffs who alleged that 401(k) plan administrators violated their fiduciary duties under Employee Retirement Income Security Act by offering mutual funds at more expensive retail rates instead of negotiating for volume discounts and offering wholesale investment options. The case will affect fiduciary liability risks, Willis said.
8. Staub vs. Proctor Hospital. The Supreme Court found that employers may be liabile for unlawful discrimination under the Uniformed Service Employment and Reemployment Rights Act "when it unwittingly terminates an employee based on a supervisor's biased recommendation or false allegations," Willis said. The case affects mostly EPLI coverage.
9. Matrixx Initiatives Inc. vs. Siracusano. The Supreme Court held that a securities fraud claim based on a drug company's alleged failure to disclose reports of adverse reactions is a valid claim, Willis said. D&O liability risks are expected to be the most affected by this decision.
10. Spano et al. vs. The Boeing Co. et al. The Seventh Circuit found that in order for two ERISA 401(k) fee cases to receive class action designation, the classes would have to be "more narrowly drawn and isolated to identifiable participants." Fiduciary liability coverage will be most affected.
?Compiled by Cyril Tuohy
February 21, 2012
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