news 2012

Federal Court approves class settlement with Bank of the West in overdraft fee case

December 18, 2012 -- A federal district court in Miami entered an order of final approval of an $18 million settlement with Bank of the West that the firm helped conclude in mediation on behalf of customers charged by the bank with overdraft fees as the result of the bank's reordering of its customers' debit card transactions. The settlement results in return of a substantial portion of those fees to bank customers. The court's order noted, among other things, the "very high level of skill" of class counsel in the prosecution of the case, and that class counsel "achieved a superb result" in the case. The firm remains counsel for a putative class of bank customers in a similar case against M&T Bank. Last year, the same court approved the settlement of the firm's case against Bank of America for $410 million, an amount generally credited as one of the largest settlements ever for a consumer class action.

San Francisco Board of Supervisors approves balance billing class action settlement

December 5, 2012 -- The San Francisco Board of Supervisors yesterday approved the class action settlement in Combrisson v. City and County of San Francisco. PE&G represents the plaintiff class, patients of San Francisco General Hospital, who alleged that they had been illegally balance billed by the hospital.  Under the settlement the class members will receive a 100% recovery of the amount they were overcharged. Attorneys fees and costs and costs of administration will be paid separately by the defendant City, and will not reduce the class members' recovery. The next step in the approval process is signature by the Mayor, expected to take place on December 14, 2012. PE&G attorneys Nick Carlin and Cari Cohorn led the effort. For more information about the case, see here.

San Francisco Superior Court grants preliminary approval to balance billing class action settlement

November 21, 2012 -- The San Francisco Superior Court today granted preliminary approval to the class settlement in Combrisson v. City and County of San Francisco. PE&G represents the plaintiff class, patients of San Francisco General Hospital, who alleged that they had been illegally balance billed by the hospital. Under the settlement the class members will receive a 100% recovery of the amount they were overcharged. Attorneys fees and costs and costs of administration will be paid separately by the defendant City, and will not reduce the class members' recovery. The next step in the approval process is final approval by the San Francisco Board of Supervisors and the Mayor, expected to take place on December 14, 2012. PE&G attorneys Nick Carlin and Cari Cohorn led the effort. For more information about the case, see here.

Federal Court approves record label settlement with former hedge fund manager

November 7, 2012 -- PE&G attorneys David Given and Nick Carlin helped to successfully conclude a favorable settlement on behalf of its long-standing client OM Records in litigation pitting it against former hedge fund manager Lawrence R. ("Larry") Goldfarb and his solely owned entity, LRG Capital Group, over various improprieties committed by Goldfarb in connection with supposed "investments" made by him through LRG Capital in OM Records. United States District Judge William H. Alsup, who is presiding over parallel civil and criminal proceedings against Goldfarb initiated by the Securities and Exchange Commission and the U.S. Department of Justice respectively, approved the settlement made by OM Records with the receiver appointed by the court to oversee Goldfarb's business and financial affairs. As previously reported here, that appointment followed Goldfarb's default in his deferred prosecution agreement with the federal government; Goldfarb now faces the possibility of a felony conviction on pending wire fraud charges and a sentence of jail time if convicted. In the OM Records litigation, Goldfarb faced terminating sanctions for violating court orders to appear for his deposition and to produce documents (and to pay a monetary penalty for his previous failures). The settlement with Goldfarb's receiver allows OM Records to conclude all litigation on the subject as well as to separate itself completely from any business relationship with Goldfarb (who sat on its board) and LRG Capital (with whom it had entered into various financing agreements), all for a small fraction of the over $2 million Goldfarb and LRG Capital tried to extract from it.

Press seeks comment from firm on settlement of digital download case

October 30, 2012 -- Both Variety Magazine and the New York Times recently featured prominent articles covering Universal Music Group's settlement of its long-running battle with the producers of Eminem over the treatment of digital download income in its royalty accounting to recording artists and others. Firm partner David Given, who is one of the attorneys leading wide-ranging class action litigation against UMG on the same issue, provided his views on the meaning of the settlement for that litigation as well as on its expected impact on the music industry. NPR later interviewed Mr. Given for a piece featured on its "Market Place" program on the same subject.

Nick Carlin and David Given named as finalists for CAOC Consumer Attorneys of the Year

October 23, 2012 -- The Consumer Attorneys of California (CAOC) has named Nick Carlin and David Given finalists for the "Consumer Attorney of the Year" award for their work in obtaining a $410 million settlement from Bank of America on behalf of customers who were overcharged for overdraft fees, one of the largest settlements in a consumer class action ever. Bank of America and other banks had engaged for years in a scheme to systematically process debit card transactions not in the order they occurred but from highest to lowest, for the sole purpose of maximizing overdraft fees. Carlin and Given originated the case, which was eventually consolidated with other lawsuits against the nations' leading banks in multi-district litigation. The federal judge who approved the settlement wrote: "This is a marvelous result for the members of the class ... but for the high level of dedication, ability and massive and incredible hard work by [their] attorneys ... I do not believe the Class would have ever seen a penny." For an article from the Business Wire about the award nomination, click here.

Variety Magazine reports on new complaint in Rick James case

October 11, 2012 -- Variety Magazine featured an article on its website and daily edition by veteran music industry reporter Chris Morris describing recent developments in the firm's case against Universal Music Group in the case over UMG's treatment of digital download income in its royalty reporting to recording artists and others. The filing of a new complaint (which Morris characterized as "a scathing indictment of UMG's business practices in the digital era") adds two new plaintiffs to the case as well as additional claims, all of which have now been consolidated in one pleading, and expands upon previous factual allegations made by the plaintiffs based upon evidence adduced by the firm thus far in discovery in the case. The filing follows the court's order rejecting UMG's attempt to block the plaintiffs from amending their complaint.

Luce song infringement case settles

October 5, 2012 -- PE&G attorneys Nick Carlin and David Given, along with co-counsel Elliot Cahn, on behalf of their clients, the Bay Area band Luce (Tom Luce, Matt Blackett, Brian Kroll and Lawrence Riggs), have settled the band's copyright infringement lawsuit against Selena Gomez and the writers of Gomez's 2010 hit song "A Year Without Rain." Luce had contended that "A Year Without Rain" infringed on their song "Buy a Dog." The defendants denied the allegations. The terms of the settlement are confidential.

Individual employee can assert representative claim in arbitration for Labor Code Private Attorneys General penalties

September 19, 2012 -- In an arbitration proceeding in which class actions are barred, PE&G attorneys Nick Carlin and Cari Cohorn persuaded the arbitrator, in an apparent case of first impression, that an individual employee may pursue Private Attorney General Act ("PAGA") penalties for Labor Code violations committed against all other similarly situated employees. The arbitrator rejected the employer's contention that representative actions under PAGA are akin to class actions such that the class action bar should also apply to representative PAGA actions.

New pleading seeks to sharpen focus in class action over download royalties

September 7, 2012 -- Plaintiffs in the class action case against Universal Music Group moved today for permission from U.S. District Judge Susan Illston to file an amended complaint. The proposed amended complaint serves to consolidate the party plaintiffs (including two new ones - Bo Donaldson ["Billy Don't Be A Hero"] and The Black Sheep ["Strobelite Honey"]) and their various prior pleadings into one operative complaint and to conform the allegations of the complaint to the evidence adduced thus far in the case. That evidence includes, among other things, discovery of an internal memorandum authored by a highly-placed UMG executive in late 2002 setting the stage for treatment of UMG's licenses with its digital download providers as "resale" agreements, and apparently reversing UMG's prior course of conduct and course of performance in the customary accounting for licensing income, to the detriment of recording artists and producers. UMG has opposed plaintiffs' motion for leave to file this complaint on various grounds. The court has set a hearing for the motion on October 12th.

PE&G attorney's article on discovery of surveillance materials published in California Lawyer

August 2012 -- California Lawyer, a magazine published by the California Bar Association and distributed to all of its members, has published an article by Cari Cohorn entitled "Using Surveillance Material in Discovery." The article grew out of Ms. Cohorn's and firm partner Nicholas Carlin's successful efforts to compel disclosure of such materials, overcoming defendant's objection that the materials were privileged attorney work product.

Firm appointed to lead counsel role in class action against Warner Music Group

June 1, 2012 -- United States District Judge Richard Seeborg has chosen PE&G to help lead the class action brought on behalf of recording artists and others against Warner Music Group relating to that label's receipt and accounting of digital download income. This is the second case brought by the firm as a class action against a major record label over the issue of how income from the online distribution of digital music is accounted to and paid to recording artists and other royalty participants. The first, against Universal Music Group, has survived UMG's attempts to dismiss the case and various of its claims, and is currently set for class certification proceedings beginning later this year. With Judge Seeborg's order appointing lead counsel, the case against WMG can now get underway in earnest. The case's first case management conference is expected to be set soon, after which discovery will commence.

Nicholas Carlin weighs in on court funding crisis in Daily Journal

May 14, 2012 -- Click here for the Daily Journal article on cuts to courts funding.

Firm stands by local record company OM Records in legal battle with former hedge fund manager

May 8, 2012 -- The Daily Journal featured an article on PE&G's representation of long-time client OM Records in litigation with former hedge fund manager Lawrence R. "Larry" Goldfarb and his wholly-owned business entity, LRG Capital Group. Goldfarb, arraigned in federal court last month on one count of wire fraud, has been accused by the federal government of "secretly diverting" approximately $12 million from a hedge fund he managed -- part of which allegedly ended up as an "investment" by LRG Capital in OM Records. In a judgment entered against him and one of his related business entities, Goldfarb was ordered to pay the amount of the allegedly "diverted" money together with interest and penalties into a court-established fund. (In a related administrative proceeding, Goldfarb was barred from the investment advisory business.) To date, he has failed to do that, and now faces the possibility of contempt of court, following a hearing at which United States District Judge William H. Alsup repeatedly referred to Goldfarb as a "fraudster." OM Records has been engaged in litigation with Goldfarb and LRG Capital related to this history and those parties' efforts to extract consideration from OM Records, including membership on its board of directors. In that action, San Francisco Superior Court Judge Loretta M. Giorgi entered an order last year finding that OM Records had "raised sufficient concerns on the current record as to how... Goldfarb acquired his directorship, i.e., by fraud." Goldfarb was also the subject of a recent sanction for failing to appear for his deposition in the case. The court has set a November trial date in the matter.

UPDATE -- June 26, 2012 -- In a blistering order, Judge Alsup found Goldfarb in civil contempt and imposed several remedial sanctions, including the appointment of a receiver to take control of his business and financial affairs. The order appointing the receiver stays all further proceedings in the Om Records case. The client is currently engaged in negotiations with the receiver in the hope of resolving this litigation.

Luce files $1 million plagiarism lawsuit against Selena Gomez

April 25, 2012 -- PE&G attorneys Nick Carlin and David Given (along with co-counsel) recently filed a lawsuit in the San Francisco federal court on behalf of Bay Area band Luce (Tom Luce, Matt Blackett, Brian Kroll and Lawrence Riggs), who contend that pop sensation Selena Gomez's 2010 hit song "A Year Without Rain" infringes on their song "Buy a Dog." Buy a Dog was released by Luce in 2005 and was a #1 hit record on several radio stations around the United States, including WRLT in Nashville and KFOG in San Francisco, at both of which it was among the ten most played records in 2005. The firm's clients allege that the melodies in the choruses of the two songs (A Year Without Rain at 0:50, Buy a Dog at 1:00) are virtually identical. The complaint names Gomez and her band, The Scene, as defendants, as well as Gomez's writers and producers, Lindy Robbins and Toby Gad, her record label, Hollywood Records, and distributors, including Apple iTunes. The lawsuit seeks damages in excess of $1 million.

Court denies defendant's summary judgment motion in Rick James digital download class action

April 19, 2012 -- PE&G partner David Given (together with attorneys from two allied law firms) helped defeat Universal Music Group's motion for summary judgment in the ongoing class action on behalf of recording artists and other royalty participants concerning UMG's treatment of income derived from its licenses with download music providers. In her seven-page order dispensing of the matter without oral argument, Federal District Court Judge Susan Illston concluded that the class claims for violation of California's Unfair Competition Law and related open book account were still viable, allowing discovery to continue into UMG's policies and practices. Among other things, Judge Illston rejected UMG's arguments that the claims were either time-barred or otherwise legally unsound on various technical grounds. The decision sets the stage for plaintiffs' effort to certify a class of recording artists, producers and others entitled to an enhanced royalty from UMG's receipt of digital download income; the Court set a hearing on class certification in the case for early January of next year. The firm recently commenced another class action on the same subject against Warner Music Group; that case is just now underway in the same San Francisco court before a different judge.

Class arbitration of employment claims is alive and well

March 29, 2012 -- PE&G attorneys Nick Carlin and Cari Cohorn overcame a challenge to a class-wide arbitration of wage and hour claims - despite two recent decisions of the United States Supreme Court sharply limiting the circumstances under which arbitration of class claims is permitted. The firm's clients brought an arbitration proceeding on behalf of themselves and all other current and former employees unlawfully denied meal and rest breaks and overtime (among other things) by their employer. The employer filed a motion seeking a ruling that the parties' employment agreement did not allow class proceedings, thereby forcing each employee to arbitrate his or her claims individually. Former Utah Supreme Court Justice Michael D. Zimmerman, acting as arbitrator in the matter, rejected this position, accepting the firm's argument that the terms of the agreement evidenced the parties' intent to resolve all disputes - including those involving representative and class claims - through arbitration, thus allowing the class claims to proceed.

Firm obtains groundbreaking ruling on individual liability for wage and hour violations

March 26, 2012 -- PE&G attorneys Nick Carlin and Cari Cohorn secured a groundbreaking ruling that corporate officers can be personally liable for penalties arising from wage and hour violations. In an ongoing class arbitration over those issues, the arbitrator accepted the firm's theory that, notwithstanding California law holding that corporate officers are not "employers" and therefore cannot be held personally liable for the corporation's failure to provide meal and rest breaks or to pay overtime (or for related violations of the Labor Code), the Labor Code allowed aggrieved employees to recover civil penalties from officers who cause wage and hour violations. The firm argued that the Labor Code imposes penalties against any "person" who causes a wage and hour violation, and that related provisions of the Code create a private right of action allowing the employees themselves (rather than a state agency) to enforce the statute and collect the penalties. Although no California appellate court has ruled on this theory of recovery, the arbitrator held that the claims were viable, and denied the individual defendants' motion to dismiss the claims against them.

Randy Erlewine again named Super Lawyer

March 9, 2012 -- Partner Randy Erlewine has been selected as a Super Lawyer in the 2012 list of Northern California Super Lawyers, an honor given to the top 5% of lawyers practicing in Northern California. Randy has previously received this award for each of the years 2005-2010.

Firm appointed to lead counsel role in class action against Universal Music Group

March 7, 2012 -- Federal District Court Judge Susan Illston has appointed PE&G to serve as co-lead counsel in a class action on behalf of artists, producers and other royalty participants against the world's largest recorded music company, Universal Music Group, concerning UMG's treatment of income derived from its licenses with download music providers. The firm filed the first of several class cases against UMG on this issue following the decision of the Ninth Circuit Court of Appeals in F.B.T. Productions v. Aftermath Records. That case -- involving the Eminem catalog -- established the right of recording artists, music producers and other royalty participants of legacy music catalog to receive up to half (instead of a much reduced "record" royalty) of the income UMG and its affiliated record labels receive from their licenses with download music providers. In its role as co-lead counsel, the firm will be responsible for overseeing the conduct of the litigation, including directing discovery and motion practice in the matter, as well as supervising any settlement efforts on behalf of the class. Earlier, Judge Illston ordered UMG to produce all of its producer and artist agreements to plaintiffs' counsel by the end of this month. That production of documents continues. The court has set the next case management conference in the case for April 6th.

Firm achieves major victory for clients in balance billing case against San Francisco General Hospital

January 24, 2012 -- PE&G attorneys Nick Carlin and Cari Cohorn achieved a major victory for the victims of balance billing by San Francisco General Hospital, when Superior Court Judge James J. McBride ruled that plaintiff Gilles Combrisson and the class of patients covered by heath insurers regulated by the California Department of Insurance ("DOI") could continue to pursue their claims in state court. At a previous hearing, Judge McBride ruled that a 2009 California Supreme Court decision (Prospect Medical Group v. Northridge Emergency Medical Group), holding that balance billing of insured emergency patients was illegal, did not apply to patients such as Combrisson whose insurers (in his case, Anthem Blue Cross Life & Health Ins. Co.) are regulated by the DOI, therefore dismissing Combrisson's claims. (The rest of the case - on behalf of patients covered by insurers regulated by the California Department of Managed Health Care - was unaffected.) But Combrisson amended his Complaint to add a claim seeking a declaration of rights from the Court that if San Francisco recovers the balance billed amounts paid by Combrisson (and other class members covered by insurers regulated by the DOI) from Anthem (or the other insurers), the City would have to reimburse that amount to its patients. The City sought to dismiss this claim as well, but at the hearing, the Court agreed with the firm and allowed that claim to stay in the case.

Firm clients reach tentative settlement in overdraft fee case against Bank Of The West

January 20, 2012 -- PE&G attorneys Nick Carlin and David Given (along with lawyers from several other firms) helped reach a tentative settlement in a bank overdraft fee case on behalf of a group of Bank of the West customers. The firm's client, Michele Draper, one of three named plaintiffs, is a Bay Area resident who alleged that the bank unlawfully charged her and other bank customers excessive overdraft fees on their debit card transactions. The plaintiffs alleged that the bank employed a bookkeeping device to multiply the number of overdraft occurrences its customers would incur, and thereby increase the number of overdraft fees charged to a customers' account. By re-ordering customers' daily debit transactions in a high-to-low order - instead of in the order in which they occurred - the bank depleted account balances as fast as mathematically possible, maximizing the possibility that insufficient funds would be left for the string of lower dollar transactions. The parties expect to submit their proposed settlement (currently embodied in a Memorandum of Understanding) for preliminary approval by the federal judge presiding over the case within the next 45 days. This development follows several other such settlements, including in the firm's case against Bank of America, in which the bank agreed to pay $410 million. That deal was finally approved last November.

Firm beats back summary judgment motion in wage and hour case for database administrator

January 9, 2012 -- PE&G attorney Cari Cohorn helped defeat a motion for summary judgment filed in a hotly contested wage and hour case. The firm's client, a database administrator, sought to recover wages and penalties in excess of $450,000 for alleged unpaid overtime and missed meal and rest breaks owed by his former employer. The company argued that it properly classified the firm's client as exempt from overtime laws and related employee protections under the federal computer professional exemption, as well as the state and federal exemption for administrative employees. The court rejected the company's effort to dismiss the case and avoid a trial, agreeing with the firm that the evidence submitted by the firm concerning its client's job duties created an issue of fact as to whether client was an exempt administrative employee or an exempt computer professional. Shortly following this ruling, the case settled in mediation.