August 2013 Newsletter


 S+S Partner Joseph P. Guglielmo Speaks on Pressing E-Discovery Issues at Sedona Conference Institute Event in New York

•  District Court Denies Motion to Dismiss Doryx Purchasers’ Product-Hopping Claims

•  Scott+Scott Files Amicus Curie Brief on Behalf of Consumer Attorneys of California

•  SEC Announces Second Ever Award Under Dodd-Frank Whistleblower Program

•  On The Record

•  Conferences and Educational Seminars


S+S Partner Joseph P. Guglielmo Speaks on Pressing E-Discovery Issues at Sedona Conference Institute Event in New York


On July 25, 2013, Scott+Scott partner Joseph P. Guglielmo was a participant and contributor on two panels at the Sedona Conference Institute’s “Practical Solutions to Pressing eDiscovery Issues in New York” event held at, and in association with, the Cardozo School of Law in New York, NY.  Distinguished panelists included a number of federal court judges in the Southern District of New York and justices of the New York State Supreme Court.

Electronic discovery (or “e-discovery”) refers to discovery in litigation in electronic format, i.e. stored emails and computer files.  As businesses and corporations quickly transitioned from paper documents to electronic documents, the Federal Rules of Civil Procedure did not similarly transition to address the realities of e-discovery as quickly.  In 2006 and 2010, the Federal Rules of Civil Procedure were amended to clarify the rules as they pertain to e-discovery to reduce the frequency of costly and time consuming e-discovery disputes in litigation.  One of the goals of the Sedona Conference Institute is to advocate for further changes to the Federal Rules of Civil Procedure to keep pace with and incorporate cutting-edge case law that emerges as courts continue to face e-discovery disputes.  

The primary discourse of the event focused on practical solutions to the most pressing e-discovery issues facing practitioners today.  In the morning session, Mr. Guglielmo spoke on proportionality and scalability in e-discovery, addressing recent cases advocating that the financial burden of producing electronic information should be weighed and scaled against the potential value and uniqueness of the requested information to the requesting party’s ability to develop its case.  In the afternoon session, Mr. Guglielmo spoke on the professional responsibilities and ethical obligations of legal counsel in e-discovery disputes.  Discussion included the application of the American Bar Association Model Rules of Professional Conduct to e-discovery issues, as well as recent case law illustrating emerging trends on the topic.

Mr. Guglielmo’s experience in litigating e-discovery issues is invaluable to Scott+Scott’s clients as e-discovery becomes increasingly important to securities, antitrust, and consumer protection litigation.  Since 2003, Mr. Guglielmo has been a member of the Sedona Conference Working Group on Electronic Discovery Retention and Production, and has participated in numerous panels and conferences for the Sedona Conference Institute. 

Mr. Guglielmo’s next speaking engagement on e-discovery will be at the Advanced eDiscovery Institute, one of the nation’s leading e-discovery conferences, on November 21-22, 2013.  The annual event will be held at the Georgetown University Law Center in Washington, D.C.


Table of Contents

District Court Denies Motion to Dismiss Doryx Purchasers’ Product-Hopping Claims

The United States District Court, for the Eastern District of Pennsylvania last month denied a motion to dismiss allegations that Warner Chilcott and Mayne Pharma engaged in an unlawful and anticompetitive product-hopping scheme, involving the oral anti-acne drug, Doryx. The claims, arising under Sherman Act Section 2 as well as state consumer protection and antitrust laws, were brought by a generic competitor, Mylan Pharmaceuticals, Inc., as well as direct and indirect purchasers of the drug.  The International Brotherhood of Electrical Workers Local 38 (“IBEW 38”), Health and Welfare Fund, represented by Scott+Scott, brought its case against Defendants on behalf of a class of indirect purchasers of Doryx.  The case is captioned Mylan Pharmaceuticals Inc., et al., v. Warner Chilcott Public Limited Company et al., 2:12-cv-03824-PD (E.D. Pa.).

Under the federal Food Drug and Cosmetic Act, any manufacturer seeking to market a new drug must obtain approval from the FDA by filing a New Drug Application (“NDA”), demonstrating the safety and efficacy of the proposed drug. A generic drug manufacturer wishing to market a generic equivalent to a drug, may submit an Abbreviated New Drug Application, that relies on the scientific findings of safety and efficacy of the brand-name drug manufacturer’s original NDA.  In order to be approved as generics, however, drug manufacturers must demonstrate that the proposed generic would be the bioequivalent of the branded drug in active ingredients, dosage form, route of administration and strength. Upon a showing of “bioequivalence” to the branded drug, the FDA assigns the generic drug an “AB” rating.

Plaintiff IBEW 38 alleged that Defendants engaged in an unlawful scheme to delay and prevent generic drug manufacturers from obtaining approval for – and ultimately marketing – AB-rated generic equivalents to Doryx. The complaint asserts that just prior to the entry of competing generic products, Defendants intentionally produced new formulations of Doryx, and withdrew prior formulations of the drug. This forced generic competitors to retreat from entry, and reformulate their products to conform with the new formulations, so as to demonstrate bioequivalency. The scheme unlawfully extended Defendants’ monopoly over Doryx, causing direct and indirect purchasers of Doryx to pay inflated and supra-competitive prices for the drug.

Defendant Warner Chilcott moved to dismiss the complaint on October 31, 2012, and IBEW 38 filed its opposition to the motion on November 15, 2011. Defendants argued that: their reformulations carried therapeutic benefits for Doryx-users and were not intended to delay entry of competing generic products; that plaintiffs’ claims were barred by the Noerr-Pennington Doctrine (providing First Amendment protection from petitioning and lobbying activities) and; that IBEW 38’s state law claims were pre-empted by federal law. The Court found no merit in these arguments under Fed.R.Civ.P. 8 pleadings standards. The case has since proceeded to fact discovery and IBEW 38’s motion for class certification, which is presently pending before the Court. 

Table of Contents

Scott+Scott Files Amicus Curie Brief on Behalf of Consumer Attorneys of California

            On June 24, 2013, Scott+Scott Attorneys Christopher Burke and John Jasnoch filed an amicus curiae brief on behalf of the Consumer Attorneys of California (“CAOC”) seeking to preserve the application of an important California consumer protection law in Federal Court.  An amicus curiae brief, also known as a friend-of-the-court brief, allows someone who is not a party to the case introduce concerns about the broad legal effects of a court decision.  The case that the CAOC filed its brief in is Makaeff et al. v. Trump University, LLC et al. Case No. 11-55016 (9th Cir.), and concerns the application of a California’s anti-SLAPP law, in federal court.  Strategic lawsuits against public participation, or SLAPP suits, are lawsuits that are intended to censor, intimidate, and silence critics by burdening them with the costs of legal defense.  California’s anti-SLAPP law, then, protects those who engage in constitutionally protected activities by establishing a framework to dismiss the harassing lawsuits against them.   

            At the district court level, the plaintiff, Tarla Makaeff, alleged that Trump University violated consumer protection laws and did not provide the services and education that the company had promised.  In responding to the suit, Trump University filed a counterclaim, alleging that Ms. Makaeff defamed the company.  Ms. Makaeff responded to the counterclaims by seeking dismissal of the suit pursuant to California’s anti-SLAPP law.  The district court refused to dismiss the counterclaims pursuant to California’s anti-SLAPP law and Ms. Makeaff appealed the decision to the Ninth Circuit Court of Appeals.  Scott+Scott, on behalf of the CAOC, filed an amicus curiae brief in connection with the appeal and argued that the counterclaims should be dismissed.  The Ninth Circuit agreed and ruled that Trump University’s counterclaims should be dismissed pursuant to California’s anti-SLAPP law.  After this decision, Trump University sought to have the case reheard en banc, meaning that nine justices would hear the appeal instead of the normal three justice panel.  Trump University’s argument is that California’s anti-SLAPP law should not be applied in federal court because it is procedural and conflicts with the Federal Rules of Civil Procedure.  The CAOC’s brief argues that California’s anti-SLAPP law provides substantive protections to those exercising their constitutionally protected rights, and is therefore properly applied in federal court. 

The CAOC is a voluntary, non-profit, membership organization of approximately 3,000 consumer attorneys practicing in California.  Its members predominantly represent individuals subject to a variety of unlawful and harmful business practices, including consumer fraud, personal injuries, wage and hour violations, and insurance bad faith.  CAOC has taken a leading role in advancing and protecting the rights of consumers in both courts and the legislature.

Table of Contents


SEC Announces Second Ever Award Under Dodd-Frank Whistleblower Program

Signed into federal law on July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 brought some of the most significant and sweeping changes to financial regulations in the United States since the Great Depression.  Among other things, Dodd-Frank was designed to tighten scrutiny of financial markets by regulatory agencies and implemented stricter rules in almost every part of the nation’s financial services industry.

A cornerstone of Dodd-Frank is Section 922, which expanded the rules and protections extended to “whistleblowers.”  Whistleblowers are individuals who step forward to report wrongdoing or illegal activity by a company that would otherwise go unnoticed.  Under Section 922, a whistleblower that voluntarily provides the United States Securities and Exchange Commission (“SEC”) with original information about a violation of the securities laws which leads to a successful SEC enforcement action is entitled to a percentage of the monetary sanction levied in the case.  The award is anywhere between ten to thirty percent of monetary sanctions that exceed $1 million.

The first whistleblower award occurred in August 2012.  On June 12, 2013, the SEC announced its second whistleblower award under the Dodd-Frank Act.  This award was given to three individuals who reported information to the SEC regarding securities law violations by Locust Offshore Management LLC (“Locust”) and Locust’s CEO, Andrey C. Hicks.  According to the SEC, two of the whistleblowers provided original information regarding Locust’s violation of federal securities laws that initially triggered the investigation, while the third whistleblower provided evidence to the SEC that confirmed the original allegations.  The three individuals will receive five percent of any sanctions that the SEC ultimately collects from its enforcement action against Locust, which is currently pending in the United States District Court for the District of Massachusetts.   

Despite having issued only two whistleblower awards to date, it is widely believed that the SEC will be increasing the number of whistleblower awards in the coming months and years.  Stephen Cohen, associate director of the SEC’s Division of Enforcement, recently stated that the whistleblower program will produce “incredibly impactful cases,” including some with “extremely significant whistleblower awards.”  Cohen predicts that the magnitude of these awards and the involvement of whistleblowers in SEC enforcement actions will significantly increase over the years to come.

Currently, the largest categories of whistleblower tips concern corporate disclosure and financials, offering fraud, and manipulation or insider trading.  It is hoped that the increase in tips will expand to other areas such as Foreign Corrupt Practices Act violations, as well as others.

Table of Contents

On the Record


“The future is not an inheritance, it is an opportunity and an obligation.”

Speech at UCLA 75th Convocation, Los Angeles, California


William “Bill” Clinton,
United States President



Table of Contents

U.S. Events

Conferences and Educational Seminars


+August 2-7, 2013


National Association of State Retirement Administrators (NASRA) 59th Annual Conference

Portland Marriott Downtown

Portland, Oregon


NASRA is a non-profit association whose members are the directors of the nation’s state, territorial, and largest statewide public retirement systems.  NASRA members oversee retirement systems that hold more than two-thirds of the more than $2 trillion in state and local government assets and that provide pension and other benefits to most state and local government employees.  The annual NASRA conference held exclusively for members takes place the first week in August every year.  Presentations by informed speakers are on a variety of pertinent subjects including investment management, world events applicable to the pension industry, actuarial, data processing, health care and significant happenings in each of the states and territories.


+August 4-6, 2013


Texas Association of Public Employee Retirement Systems (TEXPERS) Summer Forum

Grand Hyatt

San Antonio, Texas


A small group of individuals, who were members of several Texas Public employee retirement systems, formed Texas Association of Public Employee retirement Systems (TEXPERS) in 1989 as a statewide voluntary nonprofit association to provide quality education to trustees, administrators, professional service providers and employee groups and associations engaged or interested in the management of public employee retirement systems.  TEXPERS system and associate membership has grown substantially representing $475 billion in assets.  TEXPERS executes its educational mission by organizing two annual conferences for pension trustees to receive information about investments, fiduciary duties, governance, ethics, and legal matters.  This year’s forum takes a look into the market which is up 80% since 2009 and topics will include market risk in several asset classes.


+August 4-7, 2013


48th Annual Association of Public Treasurers of the U.S. and Canada (APT US & C)

JW Marriott

Houston, Texas


The Association of Public Treasurers of the United States and Canada (formerly called the Municipal Treasurers Association of the United States and Canada (MTA US & C) was founded in 1965 and represents public treasury and finance officials in local, county and state/provincial governments throughout North America.  The Association provides educational seminars and conferences, publications, policy and legislative information and technical assistance to members in several subject areas including investment policies and practices, pension and benefits administration, fraud and internal controls, debt policies and debt management and revenue collections.  The association works closely with more than 20 affiliated state associations and provinces.


+August 4-7, 2013

County Commissioners Association of Pennsylvania (CCAP) Annual Conference

Erie Bayfront Convention center and Sheraton

Erie, Pennsylvania


The County Commissioners Association of Pennsylvania is a statewide, nonprofit, bipartisan association representing the commissioners, chief clerks, administrators, their equivalents in home rule counties, and solicitors of Pennsylvania's 67 counties.  The County Commissioners Association of Pennsylvania (CCAP) and its member counties are committed to excellence in county government.  CCAP will advocates for and provides leadership on those issues that will enhance and strengthen the ability of county commissioners to better serve their citizens and govern more effectively and efficiently.  The Association strives to educate and inform the public, administrative, legislative and regulatory bodies, decision makers, and the media about county government.


+August 10-14, 2013


National Association of State Auditors, Comptrollers, and Treasurers (NASACT) 98th Annual Conference

The Seaport Boston Hotel and World Trade Center

Boston, Massachusetts


The National Association of State Auditors, Comptrollers and Treasurers was founded in 1915 to allow principal state officials concerned with state financial management to gather annually and discuss problems and issues of mutual interest.  Over the years, state financial management has become increasingly complex, and in response NASACT has grown to address new needs by offering increased levels of service, training and networking.  NASACT is also affiliated with the Center for Governmental Financial Management (CGFM), a not-for-profit 501(c)(3) entity created to facilitate NASACT’s Mission and goals on an international level.  The association’s Washington office acts as a liaison with Congressional committees, federal agencies and other national associations on issues of interest to NASACT while its Lexington, Kentucky’s office is the main headquarters for training and development.  Transparency and clear direction is an ongoing theme within NASCAT’s training.  NASCAT’s annual conference held each August is the association’s premiere event designed to provide maximum opportunities for state auditors, state comptrollers and state treasurers to network with each other and hear industry leaders speak on current and emerging issues.  The State of Washington hosts this year’s conference.


            Government Finance Officer’s Association Conferences


+August 14-16, 2013

Alabama Government Finance Officers’ Association (GFOAA)

Hampton Inn and Conference Center

Orange Beach/Gulf Front

Orange Beach, Alabama


+August 28-30, 2013

New Mexico Municipal League (NMML)

Taos Convention Center

Taos, New Mexico


Union Labor Conference


+August 4-10, 2013

IBEW 5th District Progress Meeting

Loews New Orleans

New Orleans, Louisiana


Table of Contents

Scott + Scott LLP is a nationally recognized law firm headquartered inConnecticut with offices in New York City, Ohio and California. The firmrepresents individual as well as institutional investors who have suffered from corporate stock fraud. Scott+Scott has participated in recovering billions of dollars and achieved precedent-setting reforms in corporate governance on behalf of its clients. In addition to being involved in complex shareholder securities and corporate governance actions, Scott+Scott also has a significant national practice in antitrust, ERISA, consumer, civil rights and human rights litigation. Through its efforts, Scott+Scott promotes corporate social responsibility.

Scott+Scott’s PT+SM System is the firm’s proprietary investment portfolio tracking service. Carefully combining the firm’s proprietary computer-based portfolio monitoring software with Scott+Scott’s hands-on approach to client  relations is a proven method for institutional investors and their trustees to successfully

  • Monitor their investment portfolios  
  • Identify losses arising from corporate fraud    
  • Consider what level of participation any given situation requires   
  • Recover funds obtained on their behalf through investor litigation action  

To obtain more information about Scott+Scott’s PT+SM services or to schedulea presentation to fund trustees, fund advisors or asset managers, please contact:    David R. Scott + Toll Free: 800.404.7770     email: + UK Tel: 0808.234.1396