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Holland & Knight's Peter Prieto Appointed to the Judicial Nominating Commission for the Third District Court of Appeals
Peter Prieto, executive partner of Holland & Knight's Miami office, has been appointed by Governor Jeb Bush to the Judicial Nominating Commission for the Third District Court of Appeal. The appointment is for a four-year term.

The role of the Commission is to interview, assess and then select nominees to recommend to the Governor for appointment to the court when a vacancy occurs.

Prieto is a former federal prosecutor with significant trial experience. He practices in the areas of complex civil litigation and white collar criminal defense. Prieto has represented clients, including Fortune 500 companies, in a wide array of civil litigation, including commercial, business, employment, securities, antitrust, products liability and class action litigation. He has also represented individual and corporate clients in criminal investigations and prosecutions involving public corruption; business, banking and health care fraud; aviation; environmental violations; tax evasion; and money laundering.

Prieto has substantial trial and appellate experience having tried over 25 criminal and civil cases and argued over a dozen appeals before the Eleventh Circuit Court of Appeals. He has also conducted corporate internal investigations. Because of his skills as a litigator, he is listed in Florida Trend's Legal Elite, Best Lawyers in America and Chambers USA.

07-13-2006

Ashurst Paris acted for RBS on the €880 million refinancing of the Picard Surgelés group
Ashurst Paris acted for The Royal Bank of Scotland in connection with the €880 million refinancing of the Picard Surgelés group, France's leading frozen food retailer.

The refinancing has been implemented through the provision of senior debt comprising:

- a €350 million senior term A facility and a €500 million senior term B facility for the purposes of refinancing the senior and mezzanine debt arranged by Calyon and Intermediate Capital Group plc and made available in December 2004 to OBO2, Picard Surgelés group's acquisition holding, at the time the group was bought by BC Partners; and

- a €30 million revolving credit facility to be made available mainly to Picard Surgelés.

The Ashurst team comprised international finance partners Diane Sénéchal and James Collis assisted by Mounir Letayf and Guillaume Rémy. Also advising was corporate partner Guy Benda assisted by Marie-Christine Combes and Claire Paccagnini, and tax partner Catherine Charpentier assisted by Nadine Gelli.

07-12-2006

Kaye Scholer Scores Proposition 64 Victory
California Appellate Court Holds That Proposition 64 Requires a Showing of Injury and Reliance by Plaintiff and Each Class Member in UCL Consumer Fraud and False Advertising Actions

In a major decision interpreting Proposition 64's recent amendment of California's Unfair Competition Law (""UCL""), on July 11th, the California Court of Appeal unanimously granted Pfizer a writ of mandate and vacated certification of a class of Listerine consumers alleging false advertising. The people of California overwhelmingly passed Proposition 64 in November 2004 to address wide-scale abuses arising from plaintiffs' use of California's Business & Professions Code §§ 17200/17500. Proposition 64 amended the UCL to require that only persons who ""suffered injury in fact"" and ""lost money or property as a result of"" the alleged deception have standing to assert claims of false advertising. In Pfizer v. Galfano, B188106 (Cal. App. 2d Dist. July 11, 2006), the Court made three major holdings on issues that had not previously been addressed by any California appellate court.

First, the Court held that this new requirement applies to each class member, and rejected the argument of the plaintiff and the California Attorney General (as amicus curiae) that the Proposition applied to just the named plaintiffs. The Court reasoned that otherwise the named plaintiffs' claims would not be typical of the class members the plaintiffs seeks to represent.

Second, the Court held that Proposition 64 requires that a plaintiff ""have read"" and ""actually relied on the false or misleading misrepresentation or advertisement in entering into the transaction in issue."" (Emphasis by the Court). This finding is significant in that previously California courts have found that neither causation nor reliance is required for UCL claims.

Third, the Court explained that a showing of ""mere likelihood of harm"" to the public, which was sufficient under prior case law, ""is no longer sufficient for standing to sue"" for false advertising. These three critical holdings will make it more difficult for certain claims of deceptive advertising to be certified as class actions in California.

As to the specific facts of the case, the Court found that ""to have suffered an injury in fact as a result of the alleged misrepresentation, a plaintiff would have had to read Pfizer's label . . . and relied thereon in buying Listerine. A consumer who was unaware of, or did not rely upon, Pfizer's claims comparing Listerine to floss did not suffer 'an injury in fact' as a result.""

Pfizer was represented before the trial court and throughout the appellate proceedings by attorneys in Kaye Scholer's New York (led by Thomas A. Smart and Richard DeSevo) and Los Angeles offices (Jeffrey Gordon). Tom Smart argued the case for Pfizer in the Court of Appeal.

If you have any questions regarding the Court's decision or consumer fraud or class action issues, please contact Tom Smart, Richard De Sevo or Paul Llewellyn in our New York offices, or Jeff Gordon, Aton Arbisser or Robert Barnes in our Los Angeles offices.

Click here to read the Court's Opinion

07-12-2006

Primax Recoveries, Inc. Sold to Affiliated Computer Services, Inc.
Kaye Scholer's Private Equity Practice Group in Chicago represented various Securityholders of Primax Recoveries, Inc. in its sale on July 12 to Affiliated Computer Services, Inc. (NYSE: ACS) for $40 million, plus contingent payments based upon future financial performance. Primax is one of the industry's oldest and largest health care payor cost recovery firms. ACS is a global provider of business process outsourcing and IT solutions. Gary R. Silverman, partner and Russell Pallesen, counsel, led the representation of the Primax Securityholders with substantial assistance from Arthur Woodard and Louis Tuchman, both Tax partners in the New York office, along with Lauretta Moran, counsel in the Corporate and Finance Department in the Chicago office, and John Rynkiewicz, counsel in the Litigation Department of the Washington, DC office.

07-12-2006

Supreme Court to Revisit Constitutionality of Punitive Damages Awards
For the second time in less than three years, the U.S. Supreme Court will consider the constitutionality of a punitive damages award in Philip Morris v. Williams. The case, set to be argued in October 2006, will allow the Court a chance to further clarify the interplay between condemning corporate wrongdoing while ensuring that due process is served.

In 2003, the Court issued a decision in State Farm Mutual Automobile Insurance Co. v. Campbell, which many believed would be a landmark decision with widespread effect. The decision questioned the constitutionality of punitive damages awards where punitive damages are more than a single-digit multiple of compensatory damages. Since that time, state and federal courts across the country have grappled with how to apply State Farm, particularly in cases involving “extraordinarily reprehensible” conduct.

In Philip Morris, Mayola Williams, widow of Jesse Williams – a life-long smoker who smoked up to three packs of cigarettes a day – sued Philip Morris. She claimed that the company knowingly lied when it minimized the health risks of smoking. Williams’ lawyer urged the jury to consider other Oregon residents who might have died because of Philip Morris’ alleged fraud and negligence. The jury awarded Williams more than $800,000 in compensatory damages and $79.5 million in punitive damages – nearly 100 times the compensatory damages. Although the trial judge reduced the jury’s verdict to $32 million, the verdict was upheld by the Oregon Supreme Court by applying the guideposts of State Farm and BMW of North America, Inc. v. Gore, 517 U.S. 599 (1996), a Supreme Court decision that allowed the fact finder to consider the reprehensibility of the defendant’s conduct when awarding punitive damages.

In its Petition for Writ of Certiorari to the Supreme Court, Philip Morris argued that the jury’s punitive damages award and its consideration of the effect of Philip Morris’ conduct on non-parties violated the Court’s ruling in State Farm. Philip Morris asked the Court to grant its appeal to consider whether the finding that its conduct was “highly reprehensible and analogous to crime” could override the constitutional requirement that punitive damages be reasonably related to the harm to the plaintiff. In addition, Philip Morris asked the Court to consider whether due process permits a jury to punish defendants for the effects of its conduct on non-parties. The case will be decided by July 2007.

07-12-2006

Supreme Court Widens Employee Protection from Retaliation
The U.S. Supreme Court’s June 22, 2006, ruling in Burlington Northern v. White redefined the anti-retaliation provision under Title VII of the Civil Rights Act of 1964. Employers now must be careful to avoid any action – in or out of the workplace – that may be considered retaliatory by a “reasonable employee or job applicant.”

Title VII’s anti-retaliation provision prohibits discrimination against an employee who has “made a charge, testified, assisted or participated in” any Title VII case. In Burlington, plaintiff White filed a sexual harassment claim with the EEOC. After she filed her complaint, Burlington removed White from her duties as a fork-lift operator and reassigned her to another position. White filed a second complaint with the EEOC, alleging gender discrimination and retaliation. Burlington suspended her for 37 days without pay for insubordination, but later determined that no insubordination had taken place and reinstated White with full back-pay.

A federal court determined that the suspension and job reassignment was unlawful retaliation under Title VII. In its decision affirming the lower court, the Supreme Court expanded the scope of the anti-retaliation provision by not confining it to actions that are related to employment or that occur in the workplace.

To be actionable, the Court said, the retaliation must cause harm that “could well dissuade a reasonable worker from making or supporting a charge of discrimination.” The Court noted that a change in position may not be actionable for some, but may be to others, for example, a mother with school-aged children. Similarly, the Court noted that while failing to ask an employee to join a supervisor for lunch may not rise to retaliation under some circumstances, it might if the supervisor were excluding the employee from lunches that would lead to professional advancement.

The ruling may result in an increase in retaliation claims filed by employees after making or supporting a discrimination claim. The Supreme Court, however, acknowledged that the adversity experienced must be material, and that it is important to distinguish significant from trivial harms. Employers should train supervisors and managers to comply with the company’s anti-harassment, anti-retaliation and equal opportunity policies, and should act quickly to investigate allegations of discrimination and/or retaliation while protecting (to the extent possible) the confidentiality of the employees bringing such complaints.

07-12-2006

Supreme Court OKs Amendments to Federal Rules of Civil Procedure Regarding E-Discovery
On April 12, 2006, the U.S. Supreme Court adopted amendments to the Federal Rules of Civil Procedure regarding the discovery of electronically stored information. The amendments are intended to avoid the uncertainties litigants face when applying the old rules to emerging issues caused by a society increasingly reliant on computer databases, e-mail and other paperless information sources.

The amendments address five related areas:

a) early attention to issues relating to electronic discovery, including the form of production, preservation of electronically stored information and issues of privilege

b) discovery of electronically stored information that is not reasonably accessible

c) assertion of privilege after production

d) application of Rules 33 (interrogatories) and 34 (requests for production) to electronically stored information

e) guidance on sanctions available under Rule 37 for a party’s failure to produce electronically stored information that was lost as a result of routine computer system operations.

Should litigants anticipate electronic information discovery in a federal lawsuit, the amended Rules draw the parties’ attention to any issues early in the discovery process. For example, Rule 26(f) – preliminary meeting of the parties – requires the parties to address electronic information discovery and disclosure issues, including the form or forms in which it should be produced, during the discovery planning conference. Parties also should discuss any issues related to privilege, including procedures for asserting claims of privilege or protection after production.

Rule 26(b) – setting forth the scope of discovery – provides guidance regarding electronically stored information. Under Rule 26(b)(2), a party responding to a discovery request does not need to provide electronically stored information from sources that the party identifies as not “reasonably accessible” because of undue burden or cost. If the requesting party moves to compel the information (or the responding party seeks a protective order), the responding party bears the burden of showing that the information is not reasonably accessible. Even if this showing is made, the court may order discovery for good cause and may specify terms and conditions for discovery.

The production of electronically stored information raises the risk of inadvertent disclosure of privileged information – a problem that Rule 26(b)(5) addresses. If privileged information is inadvertently produced, the responding party must, within a reasonable period, notify the receiving party that he or she has produced privileged information. The receiving party must then return, sequester or destroy the information.

The amendments also clarify the application of Rules 33 (interrogatories) and 34 (requests for production) to discovery of electronic information. Rule 33, which allows a party to produce its business records in lieu of substantive interrogatory answers, has been amended to include electronically stored information. A responding party may substitute access to its electronically stored information for an answer, but only if the responsive information is as readily identifiable to the requesting party as it is to the responding party. A party employing this rule may be required to provide technical support or other assistance to meet this accessibility requirement. Rule 34 now expressly identifies electronically stored information in addition to documents. Responding parties should understand that a request for “documents” includes electronically stored information, unless discovery in the action clearly distinguishes between electronically stored information and “documents.”

Finally, recognizing the routine alteration and deletion of information inherent in computer operations, Rule 37 (sanctions) contains a new subsection providing that, “absent exceptional circumstances,” a court may not impose sanctions against a party that fails to provide electronically stored information that was lost as a result of the routine, good-faith operation of an electronic information system.

Unless Congress intervenes, the amended rules will become effective on December 1, 2006. The amended rules and corresponding Committee Notes are available online at http://www.uscourts.gov/rules/EDiscovery_w_Notes.pdf.

07-12-2006

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