Data Breach Class Action Settlement Approval Affirmed by Ninth Circuit with Attorneys’ Fee Award Reversed and Remanded
Some data breach class actions settle quickly, with one of two settlement structures: (1) a “claims made” structure, in which the total amount paid to class members who submit valid claims is not capped, and attorneys’ fees are awarded by the court and paid separately by the defendant; or (2) a “common fund” structure, in which the defendant pays a lump sum that is used to pay class member claims, administration costs and attorneys’ fees awarded by the court. A recent Ninth Circuit decision affirmed the district court’s approval of a “claims made” settlement but reversed and remanded the attorney’s fee award. The decision highlights how the approval of the settlement terms should be independent of the attorney’s fees although some courts seem to merge them.
In re California Pizza Kitchen Data Breach Litigation, – F.4th –, 2025 WL 583419 (9th Cir. Feb. 24, 2025) involved a ransomware attack that compromised data, including Social Security numbers, of the defendant’s current and former employees. After notification of the breach, five class action lawsuits were filed, four of which were consolidated and proceeded directly to mediation. A settlement was reached providing for reimbursement for expenses and lost time, actual identity theft, credit monitoring, and $100 statutory damages for a California subclass. The defendant agreed not to object to attorneys’ fees and costs for class counsel of up to $800,000. The plaintiffs estimated the total value of the settlement at $3.7 million.
The plaintiffs who had brought the fifth (non-consolidated) case objected to the settlement. The district court held an unusually extensive preliminary approval hearing, at which the mediator testified. The court preliminarily approved the settlement, deferring its decision on attorneys’ fees until the information regarding claims submitted by class members was available. At that point, the district court, after estimating the total value of the class claims at $1.16 million (the claim rate was 1.8%), awarded the full $800,000 of attorneys’ fees and costs requested, which was 36% of the total class benefit of $2.1 million (including the $1.16 million plus settlement administration costs and attorneys’ fees and costs).
On appeal, the Ninth Circuit majority concluded that the district court did not abuse its discretion in approving the settlement. Based on the mediator’s testimony, the district court reasonably concluded that the settlement was not collusive. The Ninth Circuit explained that “the settlement offers real benefits to class members,” “the class’s standing rested on questionable footing—there is no evidence that any CPK employee’s compromised data was misused,” and “courts do not have a duty to maximize settlement value for class members.”
The attorneys’ fee award, however, was reversed and remanded. The Ninth Circuit explained that the class claims were properly valued at $950,000 (due to a miscalculation by the district court), and the fee award was 45% of the settlement value, “a significant departure from our 25% benchmark.” In remanding, the Ninth Circuit noted that a “downward adjustment” would likely be warranted on remand.
Judge Collins concurred in part and dissented in part. He would have reversed the approval of the settlement, concluding that the district court failed to adequately address the objections and the low claims rate, and citing “the disparity between the size of the settlement and the attorney’s fees.”
From a defendant’s perspective, this decision demonstrates how it can be important to convey to the court that the approval of the proposed settlement should be evaluated independently of the attorney’s fees application. If the court finds the proposed fee award too high, that should not warrant disapproval of the settlement if the proposed relief for the class members is fair and reasonable. This is true of both “claims made” and “common fund” settlement structures.
Unusual Combinations of Justices Denying Veterans’ Claim but Requiring Executive to Make Foreign Aid Payments to Contractors – SCOTUS Today
The U.S. Supreme Court resolved more textual battles today, one in a fully argued case, the other on procedural motions.
The combinations of Justices continue to defy stereotypes, and at least one of those combinations, led by the Chief Justice, constitutes a majority that is willing to stand up to presidential assertions of expansive powers.
Bufkin v. Collins involved the application by the Department of Veterans Affairs (VA) of the so-called “benefit of the doubt” rule, a kind of “tie goes to the runner” rule that “tips the scales in a veteran’s favor when evidence regarding any issue material to a service-related disability claim is in ‘approximate balance.’” 38 U. S. C. §5107(b).
The petitioners in the case are veterans who applied for disability benefits related to their service-connected post-traumatic stress disorder. The VA found no clear link between the claimed condition and the veterans’ military service. These adverse determinations were reviewed de novo by the Board of Veterans Appeals (the “Board”), which rendered final decisions on behalf of the VA denying the claims. The veterans then challenged these adverse determinations before the U.S. Court of Appeals for Veterans Claims (the “Veterans Court”). The Veterans Court is charged with reviewing legal issues de novo and factual issues for clear error. In doing so, the Veterans Court must “take due account” of the VA’s application of the benefit-of-the-doubt rule.
Here, the Veterans Court affirmed the VA’s adverse benefit determinations, finding that the Board’s approximate-balance determinations were not clearly erroneous. On further appeal, the U.S. Court of Appeals for the Federal Circuit rejected the veterans’ argument that the statutory command to “take due account” of the VA’s application of the benefit-of-the-doubt rule requires the Veterans Court to review the entire record de novo and decide for itself whether the evidence is in approximate balance.
Writing for a 7–2 majority affirming the Federal Circuit, Justice Thomas opined that the VA’s determination that the evidence regarding a service-related disability claim is in “approximate balance” is a predominantly factual determination reviewed only for clear error. According to Justice Thomas and the six Justices who joined him, “[r]eviewing a determination whether record evidence is approximately balanced is ‘about as factual sounding’ as any question gets.”
An interesting feature of the case is not just that the dissent is longer than the lengthy majority opinion but that it was written by Justice Jackson and joined by Justice Gorsuch. Jackson suggested, not without the force of considerable reason, that “[n]othing about the text, context, or drafting history” of the provision at issue “demonstrates that ‘take due account’ actually means ‘proceed as normal.’”
The Trump administration suffered a significant loss in Department of State v. AIDS Vaccine Advocacy Coalition, in which the Court voted 5–4—with the Chief Justice and Justice Barrett joining the Court’s three jurisprudential liberals—to deny the president’s emergency application to lift a lower court order to pay nearly $2 billion to contractors in foreign aid funds for already-completed work.
Though there is no substantial record in the case and the majority’s order is contained in a single paragraph, the outcome demonstrates that the Chief Justice is an institutionalist first and foremost and, as I have been suggesting recently, so is Justice Barrett. Together with the liberals, particularly Justice Kagan, there is a functional majority that is willing to exert judicial power over a president whose wide-ranging executive orders would greatly extend the power of his office.
A caveat: It ain’t over till it’s over. Litigation in this matter will continue in the lower courts, so the case could come back to the Court in the future. At that point, we’ll see whether the division among the Justices persists. Joined in dissent by Justices Thomas, Gorsuch, and Kavanaugh, Justice Alito vehemently posited the rhetorical question:
Does a single district-court judge who likely lacks jurisdiction have the unchecked power to compel the Government of the United States to pay out (and probably lose forever) 2 billion taxpayer dollars? The answer to that question should be an emphatic “No,” but a majority of this Court apparently thinks otherwise. I am stunned.
We are sure that Justice Alito will find his bearings. As he does, will the Court’s majority continue to stand up to the executive? We shall soon see.
Deregulation: Uncertainty and Opportunity
The Trump administration has issued Executive Orders that direct federal agencies to review, rescind, or modify current regulations deemed unconstitutional, overly burdensome, or contrary to the national interest.
Agencies are tasked with identifying regulations that conflict with principles like the non-delegation doctrine, major question doctrine, and those previously upheld under Chevron deference, as well as those imposing significant costs not justified by their public benefits.
Agencies have a 60-day timeline to identify suspect regulations and work with the Office of Information and Regulatory Affairs to revise the regulatory framework. Businesses should monitor these developments closely.
The Trump administration has recently issued a series of Executive Orders on “deregulation,” directing federal agencies to review, rescind, and modify existing federal regulations. This regulatory overhaul presents both challenges and opportunities for regulated businesses.
The rules under which many industries currently operate may undergo significant change in the coming months. Recission or modification of regulations could also spur litigation, adding to the uncertainty. But these deregulation plans also provide an opportunity for businesses to help administrative agencies identify regulations that should be rescinded and shape new rules.
60-Day Review Period
On February 19, 2025, President Trump issued an executive order titled “Ensuring Lawful Governance and Implementing the President’s ‘Department of Government Efficiency’ Deregulatory Initiative.” The EO directs agencies to identify, within 60 days, regulations that should be rescinded or modified because they are unconstitutional or not in the national interest. Agencies are also directed to de-prioritize the enforcement of such regulations. The EO contains a list of the types of regulations to be identified for rescission. In addition to identifying “unconstitutional regulations and regulations that raise serious constitutional concerns” generally, the EO identifies several categories of constitutionally suspect regulations based on recent Supreme Court decisions that have limited regulatory authority.
The Non-Delegation Doctrine
The EO directs agencies to identify “regulations that are based on unlawful delegation of legislative power.” This criteria invokes the non-delegation doctrine, which has been largely dormant since the New Deal era. The doctrine currently only requires that Congress provide the agency with an “intelligible principle” to guide its rulemaking. Several Supreme Court justices are interested in developing a more robust non-delegation doctrine, and the Supreme Court is set to hear a case this term regarding whether the FCC’s Universal Service Fund is unconstitutional under the non-delegation doctrine. (Regardless of the outcome of that case, Trump’s Executive Order is designed to identify regulations that raise non-delegation concerns.
Loper Bright and Chevron
Agencies are also directed to identify “regulations that are based on anything other than the best reading of the underlying statutory authority or prohibition.” This category refers to the Supreme Court’s decision last term in Loper Bright Enterprises v. Raimondo, which overruled Chevron deference. (See our previous client alert). Instead of deferring to an agency’s reasonable interpretation of ambiguous statutory language, courts are now required to “exercise their independent judgment” when interpreting statutory authority of agency action.
In his ruling, Chief Judge Robert explicitly stated that the Court was not overruling prior cases upholding regulations under the Chevron framework, such as the Clean Air Act which was at issue in Chevron. Those cases are still binding precedent. But Trump’s executive order calls into question regulations that were previously upheld under Chevron because agencies are directed to self-evaluate whether any of their existing regulations are “based on anything other than a best reading of the underlying statutory authority,” regardless of past precedent.
Major Question Doctrine
The last category of legally suspect regulations that agencies are to identify are “regulations that implicate matters of social, political, or economic significance that are not authorized by clear statutory authority.” This category refers to the “major question doctrine,” a principle of statutory interpretation which has recently received increased attention from the Supreme Court. The doctrine requires a clear statement by Congress to delegate regulatory authority over questions of major political or economic significance. For example, in 2022’s West Virginia v. EPA, the Supreme Court struck down EPA emissions regulations under major questions doctrine. The following year, Biden v. Nebraska struck down a student loan forgiveness program).
Cost-Benefit Analysis
The rest of the categories listed in the Executive Order are based on policy or practical considerations, rather than constitutional concerns. Agencies are to identify:
(v) “regulations that impose significant costs upon private parties that are not outweighed by public benefits.”
(vi) “regulations that harm the national interest by significantly and unjustifiably impeding technological innovation, infrastructure development, disaster response, inflation reduction, research and development, economic development, energy production, land use, and foreign policy objections;” and
(vii) “regulations that impose undue burdens on small businesses and impede private enterprise and entrepreneurship.”
These categories focus on the traditional cost-benefit analysis that goes into agency rulemaking, although the executive order focuses its attention on economic growth and potential costs and burdens on businesses.
Next-Steps
Agencies are to identify such regulations within 60 days and are instructed to work with the Administrator of the Office of Information and Regulatory Affairs (OIRA) to develop a regulatory agenda that seeks to rescind or modify these regulations. Presumably agencies will then begin the process of rescinding or modifying the rules which they have identified as suspect, which would include notice and public comment under the Administrative Procedures Act (APA).
10 to 1 Repeal
This deregulation order follows on the heels of a January 31, 2025 Executive Order providing that for every new regulation any agency proposes to enact, the agency must identify “at least” 10 existing regulations to be rescinded. In addition, together with the Office of Management and Budget, agencies must determine the incremental costs imposed by new regulations and ensure that the net costs – new costs minus the cost savings of rescinded regulations – are “substantially” less than zero. See accompanying Fact Sheet.
Both Executive Orders apply generally to all executive agencies, except regulations that address military or foreign affairs functions, homeland security or immigration-related initiatives.
What This Means For Your Business
In the short term, regulated businesses should be prepared for uncertainty regarding the future of the rules governing their industries. To get ahead of the curve, companies should review the entire landscape of federal regulations which govern their operations and consider whether any regulation falls within the categories specified in the Executive Order. Companies should consider how a change would affect the competitive landscape of their business and consider how to prepare for such change. It will also be important to monitor proposed changes and participate in public comment periods.
Moreover, if a regulation is particularly burdensome (or helpful), there is an opportunity to highlight the need for reform (or maintaining the status quo) directly to the governing agency and Congress. Businesses and their trade associations can prepare white papers or engage in direct advocacy to rescind or modify harmful regulations and to keep helpful regulations.
Together with recent changes in regulatory law announced by the U.S. Supreme Court, the new administration’s deregulatory agenda represents a once-in-a-generation opportunity for American business to participate in reshaping the regulatory landscape.
Premier Li Qiang Delivers China’s 2025 Work Report – Strengthen the Protection of Intellectual Property
On March 5, 2025, Premier Li Qiang delivered the 2025 government work report on behalf of the State Council at the third session of the 14th National People’s Congress. The work report set up economic and development tasks for 2025 providing insights on how China plans to achieve its economic goals. Excerpts relating to science, technology, and intellectual property follow. More insight into intellectual property goals for 2025 will presumably follow in the Supreme People’s Court’s work report scheduled for March 8, 2025.
The opening ceremony of the third session of the 14th National People’s Congress was held in the Great Hall of the People in Beijing.
The first part of the report, the 2024 work report, mentioned:
We will vigorously promote innovation-driven development and promote the optimization and upgrading of the industrial structure. We will advance the construction of a strong country in science and technology , fully launch and implement major national science and technology projects , accelerate the improvement of major science and technology infrastructure systems , and strengthen the training of top innovative talents .
Part II, the overall requirements and policy orientations for economic and social development in 2025, mentions:
Promote the integrated development of scientific and technological innovation and industrial innovation .
Part III of the 2025 government work tasks mentioned:
We will develop new quality productive forces in accordance with local conditions and accelerate the construction of a modern industrial system. We will promote the integrated development of scientific and technological innovation and industrial innovation , vigorously promote new industrialization, expand and strengthen advanced manufacturing, actively develop modern service industries, and promote the accumulation of new momentum and the renewal and upgrading of traditional momentum.
Cultivate and expand emerging industries and future industries. Deepen the integrated cluster development of strategic emerging industries. Carry out large-scale application demonstration actions for new technologies, new products and new scenarios, and promote the safe and healthy development of emerging industries such as commercial aerospace and low-altitude economy. Establish a mechanism for the growth of investment in future industries, and cultivate future industries such as biomanufacturing, quantum technology, artificial intelligence, and 6G . Deepen the pilot program for the integrated development of advanced manufacturing and modern service industries, and accelerate the development of service-oriented manufacturing. Strengthen the overall layout of industries and capacity monitoring and early warning, and promote the orderly development of industries and healthy competition. Accelerate the innovative development of national high-tech zones. Gradual cultivation of innovative enterprises , promote the development and growth of specialized, refined and new small and medium-sized enterprises, support the development of unicorn enterprises and gazelle enterprises , and allow more enterprises to accelerate in new fields and new tracks.
Stimulate the innovative vitality of the digital economy. Continue to promote the “artificial intelligence +” action , better combine digital technology with manufacturing advantages and market advantages, support the widespread application of large models, and vigorously develop a new generation of intelligent terminals such as intelligent networked new energy vehicles, artificial intelligence mobile phones and computers, and intelligent robots, as well as intelligent manufacturing equipment. Expand the large-scale application of 5G, accelerate the innovative development of the industrial Internet, optimize the national computing power resource layout, and create a digital industry cluster with international competitiveness. Accelerate the improvement of the basic data system , deepen the development and utilization of data resources, and promote and standardize the cross-border flow of data. Promote the standardized and healthy development of the platform economy , and better play its positive role in promoting innovation, expanding consumption, and stabilizing employment.
We will implement the strategy of rejuvenating the country through science and education, and improve the overall efficiency of the national innovation system. We will insist on innovation-driven development, promote education development, scientific and technological innovation, and talent cultivation in an integrated manner, and build a solid foundation and strategic support for China’s modernization.
Promote high-level scientific and technological self-reliance and self-improvement. Give full play to the advantages of the new national system , strengthen key core technology research and development and cutting-edge and disruptive technology research and development, and accelerate the organization and implementation of major scientific and technological projects . Optimize the layout of national strategic scientific and technological forces, promote the reform of scientific research institutes, explore new scientific research organization models of national laboratories, and enhance the radiation and driving capacity of international and regional scientific and technological innovation centers. Promote the tilt of scientific and technological expenditure towards basic research, improve the investment mechanism that combines competitive support with stable support, and improve the degree of organization of basic research. Give full play to the leading role of science and technology leading enterprises, strengthen the deep integration of industry, academia and research led by enterprises, and institutionally guarantee that enterprises participate in national scientific and technological innovation decision-making and undertake major scientific and technological projects. Improve the allocation and management and use mechanism of central fiscal science and technology funds. Improve the support policies and market services for the transformation of scientific and technological achievements, promote the reform of empowerment of official scientific and technological achievements and separate asset management , and improve the efficiency of scientific and technological achievements transformation. Strengthen the protection and application of intellectual property rights. Accelerate the construction of concept verification, pilot verification and industry common technology platforms. Improve the differentiated supervision system of venture capital funds, strengthen policy-based financial support, accelerate the development of venture capital, and strengthen patient capital. Expand scientific and technological openness and cooperation. Strengthen science popularization work and improve citizens’ scientific literacy. Carry forward the spirit of scientists and promote the formation of an innovative environment that encourages exploration and tolerates failure.
The full text is available here (Chinese only).
First Circuit Joins Other Circuits in Adopting Stricter Causation Standard in FCA Cases Based on Anti-Kickback Statute
On February 18, 2025, the First Circuit joined the Sixth and Eighth Circuits in adopting a “but for” causation standard in cases involving per se liability under the federal Anti-Kickback Statute (AKS) and the False Claims Act (FCA). In U.S. v. Regeneron Pharmaceuticals, the First Circuit held that for an AKS violation to automatically result in FCA liability, the government must show that the false claims would not have been submitted in the absence of the unlawful kickback scheme. The decision is the latest salvo in the battle over what it means for a false claim to “result from” a kickback, as discussed in our False Claims Act: 2024 Year in Review.
With the fight becoming increasingly one-sided — the Third Circuit remains the only circuit that has adopted a less stringent causation standard — the government may look at alternative theories to link the AKS and FCA.
Key Issues and the Parties’ Positions
As outlined in our previous posts on the issue, the legal dispute revolves around the interpretation of the 2010 amendment to the AKS, which states that claims “resulting from” a kickback constitute false or fraudulent claims under the FCA.
In this case, the government accused Regeneron of violating the AKS by indirectly covering Medicare copayments for its drug, Eylea, through donations to a third-party foundation. The government’s key argument relied on the Third Circuit’s Greenfield decision, the AKS’s statutory structure, and the 2010 amendment’s legislative history to argue that a stringent causation standard would defeat the amendment’s purpose. It urged the court to find that once a claim is tied to an AKS violation, it should automatically be considered false under the FCA — without the need to prove that the violation directly influenced the claim.
Regeneron, on the other hand, argued that an FCA violation only occurs if the kickback was the determining factor in the submission of the claim. Relying on the Eighth and Sixth Circuits’ decisions, prior Supreme Court precedent, and a textual reading of the amendment, Regeneron contended that the phrase “resulting from” could only mean actual causation and nothing less.
The Court’s Decision
The First Circuit sided with Regeneron. It found that, given the Supreme Court’s prior interpretation of “resulting from” phrase as requiring but-for causation, this should be the default assumption when a statute uses that language. While acknowledging that statutory context could, in some cases, suggest a different standard, the court concluded that the government failed to provide sufficient contextual justification for a departure from but-for causation.
The court rejected the government’s argument that, in the broader context of the AKS statutory scheme, it would be counterintuitive for Congress to impose a more stringent causation standard for civil AKS violations than for criminal AKS violations, which require no proof of causation. The court also dismissed the government’s legislative history argument — specifically, the claim that a but-for causation standard would undermine the impetus for the amendment.
Implication: False Certification Theories May Become More Prominent
The First Circuit was careful to distinguish between the per se liability at issue in this case and liability under a false certification theory. While the government must show but-for causation for an AKS violation to automatically give rise to FCA liability, the court said that the same is not true for false certification claims.
Any entity that submits claims for payment under federal healthcare programs certifies — either explicitly or implicitly — that it has complied with the AKS. The court noted that nothing in the 2010 amendment requires proof of but-for causation in a false certification case. The government may take this as a cue to pivot toward false certification claims as a means of linking the AKS and FCA, potentially leaving the 2010 amendment argument behind.
Final Thoughts
The First Circuit’s decision in U.S. v. Regeneron Pharmaceuticals further cements the dominance of the “but for” causation standard in linking AKS violations to FCA liability, making it increasingly difficult for the government to pursue claims under a per se liability theory. With three circuits now aligned on this interpretation and only the Third Circuit standing apart, the tide appears to be turning in favor of a stricter causation requirement.
However, as the court acknowledged, this ruling may not foreclose other avenues for FCA liability — particularly false certification claims, which at least this court has found do not require the same level of causal proof. Given this, the government may shift its focus toward alternative enforcement strategies to maintain the strength of its anti-kickback enforcement efforts. As the legal landscape continues to evolve, healthcare entities and compliance professionals should remain vigilant, as new litigation trends and regulatory responses may reshape the interplay between the AKS and FCA in the years to come.
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New York Commercial Division Clarifies How Claims Will Be Valued
The New York Commercial Division, the specialized arm of the New York State Supreme Court composed of justices experienced in handling complex civil matters, recently amended its rules to clarify how actions seeking equitable or declaratory relief will be valued for purposes of meeting the Commercial Division’s monetary thresholds. See AO/038/25 (Jan. 28, 2025).
In order to qualify for assignment to the Commercial Division, the relief sought in an action must exceed a certain monetary value, which varies from county to county. In New York County, for example, actions must meet the monetary threshold of $500,000. NYCRR 202.70(a).
The rule change clarifies how actions seeking equitable or declaratory relief are valued. Going forward, whether such actions meet the Commercial Division’s monetary threshold will be measured by the “value of the object of the action,” defined as “the value of the suit’s intended benefit, the value of the right being protected, or the value of the injury being averted, whichever is greatest.” NYCRR 202.70(b). The court will assess the value based on the Commercial Division addendum filed with the Request for Judicial Intervention, as well as the allegations in the operative pleadings when the case is sought to be assigned to the Commercial Division.
The rule change provides litigants and Commercial Division justices with much-needed guidance for evaluating the monetary value of actions seeking equitable or declaratory relief and whether such actions qualify for assignment to the Commercial Division.
This Week in 340B: February 25 – March 3, 2025
Find this week’s updates on 340B litigation to help you stay in the know on how 340B cases are developing across the country. Each week we comb through the dockets of more than 50 340B cases to provide you with a quick summary of relevant updates from the prior week in this industry-shaping body of litigation.
Issues at Stake: Antitrust; Contract Pharmacy; HRSA Audit Process; Rebate Model
In an antitrust class action case, the court granted the defendant’s motion to dismiss.
In an appealed case challenging a proposed state law governing contract pharmacy arrangements, a group of amici filed an amicus brief in support of appellees.
In an appealed case challenging a proposed state law governing contract pharmacy arrangements, defendants-appellants filed an opening brief.
In a Freedom of Information Act (FOIA) case, the plaintiff filed a reply in support of its motion to strike the government’s motion for summary judgment.
In one Health Resources and Services Administration (HRSA) audit process case, the plaintiff filed a supplemental brief in support of the plaintiff’s motion for preliminary injunction.
A group of 340B covered entities filed a complaint against a group of commercial payors, alleging that the payors were in breach of their contracts by failing to pay the proper amounts for 340B-acquired drugs.
In three cases challenging a proposed state law governing contract pharmacy arrangements in Missouri, the court denied in part and granted in part two separate motions to dismiss and denied plaintiff’s motion for a preliminary injunction in a third case.
In two cases against HRSA alleging that HRSA unlawfully refused to approve drug manufacturers’ proposed rebate models:
In one such case, a group of amici filed an amicus brief in support of defendants.
In one such case, a group of amici moved for leave to file an amicus brief in support of plaintiffs’ motion for summary judgment.
Additional Authors: Kelsey Reinhardt and Nadine Tejadilla
Assembly Bill 3 Proposes to Raise Jurisdictional Cap on Nevada Diversion Program
Jurisdictional changes may be coming to Nevada’s court annexed non-binding arbitration program, which currently involves most civil cases where the amount in controversy is $50,000 or less. Nevada’s courts have proposed AB 3, which is currently before the Assembly’s judiciary committee. This bill would change the NRS 38.310(1)(a) jurisdictional cap for that program from $50,000 to $100,000, effective for cases filed on or after January 1, 2026. The arbitration program was created in 1992 with an original cap of $25,000. That cap was increased to $40,000 in 1995 and raised to $50,000 in 2005. The Bureau of Labor Statistics Consumer Price Index Inflation Calculator estimates that the buying power of $50,000 in February 2005 equates to approximately $83,000 of buying power in January 2025.
Proponents of AB 3 testified at a committee hearing that the percentage of civil cases entering the program has dropped by nearly 20% in recent years due to inflationary pressures negatively impacting medical bills, property damage repairs, and other types of damages. If fewer cases enter the program, the caseload for the district courts increases. Proponents assert that by increasing the cap to $100,000, the number of cases entering the program should return to historical averages.
AB 3 generally appears to benefit defense clients. The arbitration program was expressly designed to streamline discovery and reduce litigation costs, allowing lower-value disputes to be litigated on their merits. Raising the jurisdictional cap to $100,000 would benefit litigants by enabling more cases to enter the program. Another benefit of program participation is that principal damages are capped at the jurisdictional maximum.
At a committee hearing on February 17, several attorneys testified in support of AB 3, but there was no participation from broker or carrier lobbying groups. Notably, the plaintiff-oriented Nevada Justice Association (NJA) testified that while it presently opposes AB 3, it is willing to work with the bill’s proponents to reach a compromise. However, the NJA did not hint regarding what it may want in return for supporting AB 3.
The judiciary committee did not vote on AB 3 at the February 17 hearing but is expected to continue consideration of AB 3.
Federal Circuit Refuses to Rehear Case Involving Orange Book Listing of Device Patents
Late last year we reported on the United States Court of Appeals for the Federal Circuit decision holding that certain device patents should not have been listed in the FDA’s Orange Book since the claims of the patents in question did not recite the active drug substance.
Following that decision, the brand company patent holder, Teva, filed a petition to request the Federal Circuit to rehear the case in front of all judges in the Circuit. Teva’s position was supported by a number of brand pharmaceutical companies, as well as the Pharmaceutical Research and Manufacturers of America.
On Monday, March 3, 2025, the Federal Circuit entered an Order denying Teva’s rehearing request. Teva may still attempt to appeal the December 2024 Federal Circuit decision to the United States Supreme Court, but there is no guarantee that the Supreme Court will agree to hear the case.
If left undisturbed by the Supreme Court or further legislative or regulatory actions, the Federal Circuit decision begins to provide some clarity regarding whether device patents can be listed in the Orange Book when they do not recite the active ingredient. Either way, further litigation involving Orange Book patent listings can be expected. It will be important for both brand and generic companies to carefully review the specific language of all patent claims that may be or are currently in the Orange Book for approved drugs where there are device components associated with the drug.
What to Do If the Government Doesn’t Pay You as a Federal Contractor
Winning a federal contract can be a significant opportunity, but what happens if the government doesn’t pay you on time — or at all? While the federal government is typically a reliable payer, delays or disputes can arise, especially in today’s political climate. If you’re facing non-payment under your contract, here’s what you need to do:
Review Your Contract
Start by carefully reviewing the payment terms in your contract.
Check deadlines, invoicing requirements, and any clauses related to payment disputes.
Government contracts generally follow the Federal Acquisition Regulation (FAR), which provides guidelines for how and when payments must be made.
Follow Up with the Contracting Officer
Your contracting officer is your primary point of contact.
If a payment is late, send a formal inquiry to confirm the status of your invoice.
Sometimes, delays result from administrative errors that can be resolved quickly.
If a formal inquiry from the contractor doesn’t do the trick, then consider having your attorney contact agency counsel about the matter.
Submit a Proper Invoice
Ensure that your invoice meets all federal requirements, including:
Proper formatting per FAR 32.905
Correct payment information
Invoice submission through the designated payment portal (such as Wide Area Workflow (WAWF) for DoD contracts)
File a Claim Under the Contract Disputes Act
If informal efforts fail, you can file a formal claim under the Contract Disputes Act (CDA).
For a formal claim, the contractor should prepare (usually with the assistance of legal counsel) and submit a written claim to the contracting officer, clearly stating the amount owed, the basis for payment, citing relevant law, and certifying the claim, if appropriate.
As the U.S. Court of Appeals for the Federal Circuit has made clear, “a ‘pure breach’ [of contract] claim accrues when a [contractor] has done all [they] must do to establish [their] payment and the [government] does not pay.” Brighton Village Assoc. v. United States, 52 F.3d 1056, 1060 (Fed. Cir. 1995).
The contracting officer has 60 days to respond to the claim.
Escalate the Issue
If the contracting officer denies your claim or fails to respond, you have the right to appeal to:
The Civilian Board of Contract Appeals (CBCA) for civilian contracts
The Armed Services Board of Contract Appeals (ASBCA) for defense contracts
The U.S. Court of Federal Claims for both civilian and defense contracts
Final Thoughts
Unfortunately, non-payment by the government is becoming more common lately.
However, understanding your contract, maintaining proper documentation, communicating with your contracting officer, and following dispute resolution procedures can help you recover your rightful payments.
TRANSFERRED: Shelton Suit Against Freedom Forever Pulled from PA and Sent to California
Famous TCPA litigator James Shelton had home court advantaged yanked away from him yesterday when a court ordered his TCPA suit against Freedom Forever, LLC transferred to California.
In Shelton v. Freedom Forever, 2025 WL 693249 (E.D. Pa March 4, 2025) the Court ordered the case transferred where the bulk of the activity leading up to the calls at issue took place in California.
While Shelton claims to have received calls in PA, the calling parties and all applicable principles and policies were California based. Since the case was a class action–and not an individual suit–the court determined Shelton’s presence in one state was not important as an entire nation worth of individuals must be taken into account.
On balance it made more sense to have the case tried in California where the key defense witnesses were rather than in PA where only Shelton resided.
Pretty straightforward and good ruling. TCPA defendants should consider transfer motions where a superior jurisdiction may exist that aligns with the interests of justice.
Generally California is not where one wants to litigate a case but let’s assume Freedom Forever thought that through before filing their motion.
CASE OF THE STOLEN LEADS?: Court Refuses to Enforce Lending Tree Lead That Was Not Transferred to the Mortgage Company That Called Plaintiff
So a loan officer at one mortgage company leaves the mortgage company he was with and seemingly steals leads and takes them to another mortgage company (maybe this was allowed, but I doubt it.)
While at the new mortgage company he sends out robocalls to the leads he obtained from the prior company–including leads submitted on leandingtree.com.
One of the call recipients sues under the TCPA claiming she had consented to receive calls from the first mortgage company but not the second because Lending Tree had only transferred the lead to the first company.
The second mortgage company–Fairway Independent Mortgage Company– moved for summary judgment in the case arguing that because it too was on the vast Lending Tree partners list, the consumer’s lead was valid for the calls placed by the LO while employed by it as well.
Well in Shakih v. Fairway, 2025 WL 692104 (N.D. Ill March , 2025) the Court determined a jury would have to decide the issue.
Although Plaintiff submitted the Lending Tree form and thereby agreed to be contacted by over 2,000 companies–including both of the mortgage companies at issue– the Lending Tree website provided the information would only be provided to five of those companies.
In the Court’s view a jury could easily determine the consumer’s agreement to provide consent was limited to only the five companies Lending Tree selected on the consumer’s behalf to receive calls– not to all 2,000 companies.
Lending Tree itself submitted a brief explaining that sharing leads between partners is not permitted, and the Court found this submission valuable in assessing the scope of the consent the consumer was presumed to have given.
The Court was also unmoved that the LO had previously spoken to the plaintiff while employed at his previous mortgage company–the mere fact that the LO changed jobs did not expand the scope of the consent that was previously given.
So like I said, absolutely fascinating case. The jury will have to sort it out and we will pay close attention to this one.