October 2015 Newsletter


Court Certifies Nationwide Class of Financial Institutions in Target Data Breach Litigation

Scott+Scott Files Lawsuits on Behalf of California Consumers against E-cigarettes Manufacturers

U.S. Federal Trade Commission Issues Statement of "Unfair Methods of Competition" Enforcement Principles Under FTC Act § 5

DOJ Issues New Policy to Prosecute Individual Wrongdoers

Conferences and Educational Seminars


Court Certifies Nationwide Class of Financial Institutions in Target Data Breach Litigation

On September 15, 2015, Judge Paul Magnuson of the United States District Court for the District of Minnesota certified a nationwide class of all entities that issued payment cards compromised in the payment card data breach that occurred at retail locations of the Target Corporation (“Target”) in November and December 2013.  This is the first decision where a federal court certified a class of financial institutions in a data breach class action.  In its decision, the Court certified Scott+Scott as Co-Class Counsel for the nationwide class.

After Target disclosed the data breach on December 18, 2013, numerous banks and financial institutions from across the country sued Target.  These entities were forced to cancel and reissue millions of credit and debit cards that were compromised in the breach.  Furthermore, these entities incurred fraud losses associated with charges on compromised cards, as well as other monetary damages. 

Under Federal Rule of Civil Procedure 23(a), plaintiffs must satisfy the four requirements of numerosity, commonality, typicality, and adequacy to pursue a case as a class action.  Additionally, plaintiffs must prove that they can proceed with the case under Rule 23(b) requirements regarding certain types of relief a class may seek.  Accordingly, a class action may not be maintained absent certification under Rule 23.  Judge Magnuson’s decision in Target therefore represents a significant step for the nationwide class in this action.

The Court rejected all of the arguments proffered by Target in opposition to class certification.  The bulk of Target’s opposition argued that the plaintiffs failed to satisfy Rule 23(a)’s commonality requirement, and Rule 23(b)’s predominance requirement.  These requirements necessitate that common questions of law or fact among class members’ claims exist, and that these questions predominate over individual issues. 

Judge Magnuson held that the plaintiffs satisfied these requirements, and went so far as to criticize Target for the “absurdity” of some of its legal positions, including Target’s argument that the class of financial institutions should have done nothing in the face of the data breach.  Judge Magnuson determined that, for the purposes of class certification, the plaintiffs suffered injury proximately caused by the data breach, and that the plaintiffs’ claims may be supported by class wide proof.

Finally, in his decision to appoint Scott+Scott and other law firms as Co-Class Counsel, Judge Magnuson wrote that he had “ample opportunity to observe the high quality of legal work by the members of the putative class’s legal team.”

Discovery in the matter is set to conclude on November 1, 2015.  The parties anticipate that the matter will proceed to trial on March 1, 2016.

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Scott+Scott Files Lawsuits on Behalf of California Consumers against E-cigarettes Manufacturers

On September 1, 2015, Scott+Scott filed a class action on behalf of consumers against ITG Brands, LLC, Fontem US, Inc., LOEC, Inc., and Reynolds American Inc. for their failure to warn California consumers that the Blu brand electronic cigarettes contain carcinogens formaldehyde and acetaldehyde. On September 8, 2015, Scott+Scott filed a similar suit against RJ Reynolds Vapor Co. targeting its Vuse electronic cigarettes.

Electronic cigarettes, known as e-cigarettes are perceived as being a healthy substitute for traditional cigarettes because they allegedly contained nicotine but no carcinogens. Unlike traditional cigarettes where tobacco leaf is burned and the resulting smoke inhaled, e-cigarettes heat liquid which is turned into an aerosol that is inhaled by the user. A recent independent testing of Defendants’ e-cigarettes revealed that the aerosol inhaled by users contains significant amount of carcinogenic toxic chemicals including formaldehyde and acetaldehyde. The aerosol also contains high concentrations of ultrafine particles that are inhaled and become trapped in the lungs. Once inhaled, these chemicals travel through the circulatory system, affecting the brain and all organs.

Under Proposition 65, California consumers have the right “[t]o be informed about exposures to chemicals that cause cancer, birth defects, or other reproductive harm.” Despite knowing the e-cigarettes contain carcinogens, Defendants failed to provide any warnings or disclose to consumers the presence of the carcinogenic toxin formaldehyde and acetaldehyde in their products.  In the law suits filed by Scott+Scott in the District Court of Northern District of California, the plaintiffs allege three different causes of action: (1) violation of California’s Unfair Competition Law based on deceptive practices; (2) violation of California’s Unfair Competition Law based on unfair acts and practices; (3) violation of the California Consumer Legal Remedies Act.  

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U.S. Federal Trade Commission Issues Statement of "Unfair Methods of Competition" Enforcement Principles Under FTC Act § 5

On August 13, 2015, the U.S. Federal Trade Commission (“FTC”) issued a Statement of Enforcement Principles on how the agency enforces Section 5 of the FTC Act ("Section 5") against “unfair methods of competition” that may fall outside of the scope of the main federal antitrust statutes, the Sherman and Clayton Acts.  While the statement consists of only three bullet points, this is the first formal statement of enforcement principles regarding "unfair methods of competition" under Section 5 issued by the FTC since the enactment of Section 5 more than 100 years ago.

The three “enforcement principles” are as follows:

1) “the Commission will be guided by the public policy underlying the antitrust laws, namely the promotion of consumer welfare;”

2) “the act or practice will be evaluated under a framework similar to the rule of reason, that is, an act or practice challenged by the Commission must cause, or be likely to cause, harm to competition or the competitive process, taking into account any associated cognizable efficiencies and business justifications”; and

3) “the Commission is less likely to challenge an act or practice as an unfair method of competition on a standalone basis if enforcement of the Sherman Act or Clayton Act is sufficient to address the competitive harm arising from the act or practice.”

Chairwoman Edith Ramirez emphasized that the statement did not reflect any change in the FTC’s priorities or its approach to its standalone Section 5 authority, but merely formalized the principles that have long guided the FTC in this area.  These core principles, she claimed, were already apparent from the FTC’s standalone Section 5 enforcement activity.

The enforcement principles also make explicit that the FTC will use a framework “similar” to the rule of reason in deciding whether to assert standalone Section 5 authority.  The framework announced takes into account “cognizable efficiencies and business justifications” associated with a given practice. The fact that potentially offsetting efficiencies are formally factored into the analysis is important, as it confirms the FTC’s processes will include some safeguard against stifling pro-competitive activity.  Nevertheless, merely stating that the FTC’s inquiry will be guided by the “rule of reason” provides slight direction regarding what is and is not prohibited.

Most notably, the principles included no specific examples of activity that may constitute a standalone Section 5 violation, even though past FTC guidelines in other areas have usually included such examples.  The Statement expressly states that Congress did not want “to define the specific acts and practices” that violate Section 5, in recognition of the need for application to “evolve with changing markets and business practices,” leaving the FTC to exercise its authority “on a flexible case-by-case basis.” 

However, during Ramirez’s announcement, the Chairwoman cited invitations to collude, competitors’ exchange of competitively sensitive non-price information, and patentees’ breaches of their commitments to license certain patents on fair and reasonable terms as examples of past FTC enforcement actions illustrating the application of the announced principles beyond the Sherman Act.  Still, neither of these examples nor any others were parts of the written Statement adopted by the FTC, so it is unclear whether the other Commissioners agreed with these examples.

While the principles do not provide concrete guidance on what activity falls within the FTC’s standalone Section 5 authority, this was likely not the FTC’s initial intent.  With some formal principles now in place, perhaps more Section 5 enforcement actions will reach the courts.  At the very least, the principles indicate that the FTC still wants flexibility in deciding what constitutes a standalone Section 5 violation and desires to develop the scope of Section 5 on a case-by-case basis.

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DOJ Issues New Policy to Prosecute Individual Wrongdoers

On September 9, 2015, Deputy Attorney General, Sally Quillian Yates, issued a new policy for the U.S. Department of Justice (“DOJ”) regarding the prosecution of individual executives and employees in cases of corporate misconduct.  The new policy was detailed in a memo sent to attorneys at the DOJ and Federal Bureau of Investigation. 

The memo states that firms are required to turn over evidence of wrongdoing by their executives and employees for criminal investigation in order to be eligible for cooperation credit.  Cooperation often leads to lesser fines and penalties.  Yates wrote, “One of the most effective ways to combat corporate misconduct is by seeking accountability from the individuals who perpetrated the wrongdoing.  Such accountability is important for several reasons: it deters future illegal activity, it incentivizes changes in corporate behavior, it ensures that the proper parties are held responsible for their actions, and it promotes the public’s confidence in our justice system.”

The memo details six key steps the DOJ is taking to strengthen the pursuit of individuals implicated in corporate wrongdoing: “(1) in order to qualify for any cooperation credit, corporations must provide to the Department all relevant facts relating to the individuals responsible for the misconduct; (2) criminal and civil corporate investigations should focus on individuals from the inception of the investigations; (3) criminal and civil attorneys handling corporate investigations should be in routine communication with one another; (4) absent extraordinary circumstances or approved departmental policy, the Department will not release culpable individuals from civil or criminal liability when resolving a matter with a corporation; (5) Department attorneys should not resolve matters with a corporation without a clear plan to resolve related individual cases, and should memorialize any declinations as to individuals in such cases; and (6) civil attorneys should consistently focus on individuals as well as the company and evaluate whether to bring suit against an individual based on considerations beyond that individual’s ability to pay.”

One day after issuing the memo, Yates cautioned during a speech at New York University School of Law that the DOJ’s new approach would not produce results overnight, since criminal cases often take years to materialize.  She added that some companies may decide that the benefits of cooperating are not worth “coughing up” individual employees, potentially leading to fewer settlements and smaller recoveries by the government.  In addition, Yates said, some individuals who are prosecuted may choose to fight the charges, leading to more jury trials.  Yates concluded her remarks by stating, “We can change corporate cultures to appropriately recognize the full cost of wrongdoing, rather than treating liability as a cost of doing business.”

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October 2015 Events

Conferences and Educational Seminars


+September 30- October 2, 2015

Council of Institutional Investors (CII)

Westin Copley Place

Boston, Massachusetts


Founded by 21 public pension and municipal visionaries in 1985, the Council of Institutional Investors is known as “The Voice of Corporate Governance”.  As a nonprofit association of public, union and corporate pension funds the council’s mission is to educate its members, policymakers and the public about corporate governance and that environmental, social and corporate governance (ESG) issues can affect the performance of investment portfolios. More than 200 members will attend this annual conference. The September 30 session will be offered by CII in partnership International Corporate Governance Network (ICGN) and will require an additional registration.


+October 4 - 7, 2015

Florida Public Pension Trustees Association (FPPTA) Fall Trustees School

Naples Grand Hotel

Naples, Florida


The FPPTA Certification Program for Public Pension Plan Trustees run by the FPPTA, the Florida Public Pension Trustee Association, is the premier training program and has become the model for funds and state organizations across the nation.  The goal of the CPPT program is to provide an educational setting that is conducive to the development of well-informed individuals so that they will be able to actively and meaningfully participate in the management of their retirement boards. Courses range from basic to advanced and are open to all, including service providers. The FPPTA also offers an annual conference at the beginning of summer where trustees are encouraged to bring their families.  The FPPTA has been in existence for almost three decades. 


+October 4-7, 2015

Massachusetts Association of Contributory Retirement Systems (MACRS)

The Sheraton Springfield

Springfield, Massachusetts


The Massachusetts Association for Contributory Retirement Systems (MACRS), which was established in 1937, is the only organization whose sole purpose is to preserve and strengthen the 106 public retirement systems of the Commonwealth. Collectively, MACRS represents the interests of over 350,000 active and retired employees.  MACRS conducts two statewide meetings each year featuring speakers, small group presentations, and roundtable discussions. In addition, each meeting is an important opportunity for informal exchange of ideas and information about retirement benefits. When important issues confront the retirement community, MACRS sponsors regional workshops to educate the members and to provide a forum for questions and debate.


+October 5-7, 2015

National Coordinating Committee for Multiemployer Plans (NCCMP)

Westin Diplomat Hotel

West Hollywood, Florida


The NCCMP is an organization of national, regional and local multiemployer pension and health and welfare plans, International and Local Unions, national and local employer associations, individual local employers, and multiemployer fund professionals.  For more than 30 years, it’s been representing the interests of multiemployer plan participants in the halls of Congress, in regulatory arenas, and in the courts.  The NCCMP has saved multiemployer plans hundreds of millions of dollars in regulatory and administrative costs. Pre Conference educational functions will take place October 3 & 4 and requires separate registration.


+October 5-7, 2015

Uniformed Professional Fire Fighters’ Association of CT (UPFFA) 19th Biennial Convention

Foxwoods Resort & Convention Center

Ledyard, CT


The Uniform Professional Fire Fighters’ Association is an state organization under the jurisdiction of  the International Association of Fire Fighters (IAFF) and under the leadership of an International District Vice President of the IAFF. The UPFFA mission is to organize all unorganized fire departments in the state. The association will also support and serve locals and act as a clearing house for all statewide legislation introduced by locals. Headquartered in D.C. the IAFF is the driving force behind nearly every advance in the fire and emergency services in the 21st century and its Political Action Committee (PAC) is among the top 25 of more than 4,000 in the country.


+October 6 - October 9, 2015

Illinois Public Pension Fund Association MidAmerican Pension Conference (IPPFA)

Grand Geneva Hotel

Lake Geneva, Wisconsin


“Preparing Pension Funds for Tomorrow”

The Illinois Public Pension Fund Association is available to more than 600 Police and Fire Pension Funds.  The original IPPFA, Illinois Police Pension Fund Association, was organized by a group of police trustees in 1985 for the education and protection of Police pension funds in Illinois. The Firefighters joined the group more than eight years later and the IPPFA became known as the Illinois Public Pension Fund Association.  The IPPFA educational programs are certified trustee programs and are offered throughout the year at various locations throughout the state.  Other IPPFA sponsored programs include regional seminars, referral programs, on-line training,  legislative support, and an annual conference, as well as financial support to all member families who have lost a police officer or firefighter in the line of duty.  This year’s Keynote speaker will be General Conway USMC (retired).


+October 10-14, 2015

National Council on Teacher Retirement (NCTR)

Hilton La Jolla, Torrey Pines

La Jolla, California


The National Council on Teacher Retirement celebrates its 93rd Annual Convention.  The NCTR is a national alliance of teachers, paraprofessionals, and service provider members which was created to meet the needs of its membership.  The annual convention is dedicated to serve as the national voice of concerns and issues that affect many facets of the teaching profession; from legislation, curriculum, and benefits to pension issues related to investments and economic policy, actuarial analyses, healthcare policies, and political affiliations. Meredith Williams, formerly of the Colorado Public Employees Retirement System and Kansas Public Employees Retirement System is the “voice from within” the organization and the executive director of NCTR.  Traditionall,y the National Teacher of the Year Award Dinner and address is celebrated mid-conference.


+October 17-21, 2015

National Association of State Treasurers’ Annual Conference (NAST)

Omni hotel

Nashville, Tennessee


Each year more than a hundred private sector firms take advantage of the prosperous public-private partnership with NAST through the Corporate Affiliate Program, founded in 1986.  The Corporate Affiliate Program consists of finance and legal professionals who are nationally recognized for their expertise, experience and quality business practices.  They understand the complex needs of state treasurers- ranging from investment and pension fund management including corporate governance to debt and cash management functions and are often the first to provide services to states.


+October 18-21, 2015

American Society of Pension Professionals & Actuaries (ASPPA)

Gaylord National Resort & Convention Center

National Harbor, MD


Education is one of ASPPA’s most important roles.  Its strategic plan and mission statement identify continuing education to its members as its primary purpose.  National and regional conferences are held throughout the year in various regions of the country.  Pension professionals from all aspects of the pension industry provide knowledge and leadership for retirement plan professionals. The 1,500 attendees will have their seminar choices from 70 (75 minute) workshops, offering up to 25 continuing education credits. More than 80 service providers have registered for the event.


+October 19-20,  2015

National Association of Securities Professionals (NASP), New York Chapter, Trustee Education Conference

The New York Marriott at the Brooklyn Bridge

Brooklyn, New York


 The New York Chapter of the National Association of Securities Professionals presents the 18th Annual Trustee Education Conference.  For more than two decades, NASP has been the premier, non-profit organization advocating for women and people of color in the financial services industry since 1986. NASP’s annual Pension and Financial Services Conference has evolved into one of the industry’s most respected and influential educational forums. Awards will be given during the conference including Special Recognition and Trustee of the Year awards.


+October 24-27, 2015

122nd  Annual International Association of Chiefs of Police Conference and Law Enforcement Education Exposition and Technology Exposition (IACP)

McCormick Place West Convention Center

Chicago, Illinois


Each year more than 10,000 law enforcement men and women take advantage of the IACP conference to advance their knowledge and careers. The conference provides a built-in network of valuable connections in several different areas of law enforcement, researchers, experts, and authorities in various specialized fields.  The level of professional development opportunities range from forums for first time attendees thru “masters programs” for lifetime attendees: all with the same goal of improving operations for the future. The IACP has more than 16,000 members from more than 94 countries. The leadership and guidance participants receive at this 4 day conference is invaluable. This year’s conference takes place in the largest convention center in the U.S., McCormick Place in Chicago which has a combined total of more than 2.6 million square feet.


+October 24-27, 2015

The Public Safety Employees’ Pension & Benefits Conference (PSEP&BC) sponsored by NCPERS

Westin Mission Hills

Rancho Mirage, California


For more than 30 years the Public Safety Employees’ Pension & Benefits Conference has been the premier  forum bringing together pension administrators, trustees, union leaders and representatives of the financial community to discuss issues related to retirement and other benefits for public safety employees.  As an affiliate of NCPERS this conference is the ideal venue to exchange information and learn examples of best practices and the latest strategies in investment and management.


+October 24-28, 2015

National Pension Education Association (NPEA) 2015 Annual Conference

Lexington Hilton Downtown

Lexington, Kentucky


This is the 35th  Annual National Pension Education Association Conference.  This year’s conference once again includes topics on ethics, reporting and communicating under the “New Rules”, pension legal issues and legislative changes, as well as how to most efficiently use available technology and which technology is most user friendly for the tasks at hand. The conference will provide information to participants that empowers them to make better fiduciary decisions and encourages its members to work together to maximize opportunities in retirement investments.  Continuing education courses and credit are offered through NPEA’s partnership the the International Foundation for Retirement Education (InFRE).


+October 25-28, 2015

12th Annual Public Pension Financial Forum 9th Annual Conference (P2F2)

Hyatt Regency Mission Bay

San Diego, California


Public Pension Financial Forum (P2F2) is the only professional organization specifically organized for and by public pension finance professionals.  It was designed so that all finance-related employees of public pension systems would have a forum that specifically provides a platform for professional growth, education, and networking. Nearly 100 different pension systems are represented by its 170 members. Members may earn up to 27 continuing professional education (CPE) units by attending this year’s conference.  P2F2 is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. 


+October 28, 2015

Connecticut Public Pension Forum (CPPF)

Waters’ Edge Conference Center

Westbrook, CT


The Connecticut Public Pension Forum (CPPF) is a not-for-profit association created to provide a formal setting of educational and related programs for all public retirement systems within the State of Connecticut.  The CPPF's primary objective is to provide continuing educational programs to public retirement systems through scheduled seminars and written and verbal communications.  The purpose of the seminars will be to provide objective research on specific issues of common interest and create resources for public retirement systems.  Additionally, the seminars will provide a forum for discussion on national and state issues of interest to public retirement systems.


+October 28-30, 2015

Family Office & Private Wealth Management Forum (produced by Opal Financial Group)

Napa Valley Marriott Hotel

Napa, California


 The Family Office and Private Wealth Management Conference will provide a forum for the free exchange of ideas concerning portfolio planning and investment strategies.  Rather than focusing on a particular investment style, this conference will tackle the issues that are most relevant to the nation’s endowments and charitable foundations by examining critical investment topics.  Participants and delegates will speak on a range of issues, including the necessity for corporate governance, methods of choosing money managers, problems of ethics,  liability in fiduciary planning, tax planning, and disbursement reporting.


Government Finance Officers’ Association Conferences


+October 4-7, 2015

Georgia GFOA 30th Annual Conference

Jeykll Island, Georgia



+October 4-7, 2015

Michigan GFOA Fall Conference

Mission Point Resort

Makinac Island, Michigan



+October 5-7, 2015

Oregon Municipal Finance Officers’ Association

The DoubleTree Lloyd Center

Portland, Oregon



+ October 6-9, 2015

South Dakota Municipal League       

Ramkota Hotel and Watertown Event Center

Watertown, South Dakota



+October 7-9, 2015

Montana League of Cities and Towns Conference

Best Western Plus Gran Tree Inn

Bozeman, Montana



+October 7-9, 2015

Louisiana  GFOA 32 Annual Fall Conference         

Baton Rouge Hilton

Baton Rouge, LA



+October 14-16, 2015

Kansas GFOA 16th Annual Fall Professional Conference

Holiday Inn & Suites Overland Park West

Overland Park, Kansas



+October 18-21 , 2015

South Carolina GFOA Annual Conference

Marriott Grand Dunes

Myrtle Beach, South Carolina



+October 21-23, 2015

Ohio Municipal League 64th Annual Conference

Renaissance Hotel

Columbus, Ohio



+October 21-23, 2015

Iowa Municipal Finance Officers Association (IMFOA)

Des Moines Hilton Airport Conference Center,

Des Moines, Iowa       



+October 21-23, 2015

Tennessee GFOA Annual Conference

Embassy Suites Hotel and Convention Center

Murfreesboro, Tennessee



+October 21-23,  2015

Virginia GFOA Fall Conference       

Staunton Stonewall Jackson Hotel

Staunton, Virginia



+October 23, 2015

Maryland Government Finance Officers’ Association (MDGFOA) Quarterly Conference

BWI Marriott

Linthicum Heights, Maryland



+October 23, 2015

Maine GFOA Annual Business Meeting and Training

The Senator Inn

Augusta, Maine


+October 29-30, 2015

Ohio Municipal Finance Officers’ Association Annual Conference

Marriott Northwest

Dublin, Ohio



Table of Contents

Scott + Scott LLP is a nationally recognized law firm headquartered inConnecticut with offices in New York City, Ohio and California. The firm represents 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: drscott@scott-scott.com + UK Tel: 0808.234.1396