Business and Commercial Litigation Newsletter

By Paul McDonald and Dan Murphy

Our January recap highlights cases that address a dispute regarding Oracle’s disclosure of Google’s sensitive financial data, a recent ban on fantasy sports contests, an increase in securities class actions, and other news that will have an impact on business and litigation.

Google Seeks Sanctions for Disclosure of Confidential Information

Google has sought sanctions against Oracle based on its disclosure of confidential information in open court, including sensitive profit figures for its Android operating system. In 2010, Oracle filed suit against Google in the U.S. District Court for the Northern District of California, alleging that Google misappropriated its copyrighted material and patents related to its Java software platform. At a recent hearing in open court, counsel for Oracle reportedly disclosed Google’s sensitive financial information obtained in discovery that was subject to “Attorney’s Eyes Only” protections. At the hearing, it was learned that since 2008 Google has earned $22 billion in profit on $31 billion of revenue related to its Android operating system. In addition, it was revealed that Google paid Apple approximately $1 billion in 2014 to keep its search bar on Apple smartphones. Calling the disclosures “gratuitous” and a clear violation of a Protective Order entered in the case, Google has moved for a finding of contempt and sanctions against Oracle and its counsel.

Read more about this development here.

Daily Fantasy Sports Contests Declared Illegal in Hawaii

The Attorney General of Hawaii has issued an advisory opinion stating that popular daily fantasy sports contests violate state gambling laws in Hawaii. Participants in daily fantasy sports contests can win money based on the athletes or teams that they select. The online leagues, which can include betting, have been declared illegal in Arizona, Iowa, Montana, Washington and Louisiana. They also have come under legal scrutiny in New York and Illinois. Hawaii’s attorney general, Douglas Chin, determined that fantasy sports leagues, such as FanDuel and DraftKings, are illegal “contests of chance.” Because participants in daily fantasy sports leagues risk something of value upon the outcome of “future contingent events” that are outside of their control, the leagues fall well within the definition of gambling under the laws of Hawaii. In one form or another, gambling has been illegal in Hawaii since 1850.

Read more about this development here, and access the Advisory Opinion here.

U.S. Supreme Court to Clarify Entitlement to Attorney’s Fees Under the Copyright Act

The United States Supreme Court has agreed to revisit a copyright case in order to provide needed guidance on the scope of a provision of the Copyright Act that allows for the discretionary award of attorney fees. In the underlying action, Kirtsaeng v. John Wiley & Sons, Inc., a publisher sought damages and injunctive relief from an American student for copyright infringement based on his resale of foreign editions of textbooks that were lawfully purchased in Thailand and then resold over the Internet in the United States. The U.S Supreme Court ultimately held that the Copyright Act’s First Sale Doctrine applies to works that are lawfully made outside of the United States, rejecting the publisher’s claims. Following the decision, the student, as the prevailing party, sought an award of attorney’s fees under Section 505 of the Copyright Act, which empowers courts with discretion to make such awards. On remand, the trial court refused to award attorney’s fees to the student, a decision that was affirmed by the Second Circuit. Observers believe that the Supreme Court has accepted the case for review in order to provide definitive guidance on the analytical framework applicable to requests for awards of attorney’s fees under the Copyright Act.

Read more about this development here.

Rebound in Securities Class Actions

Securities class actions in the United States rebounded to a seven-year high in 2015. Last year, there were 189 securities class action lawsuits, up from a total of 170 class actions in the previous year. The increase in 2015 represents the largest number of securities class actions since 2008, when some 223 suits were filed in the United States. In addition, the maximum dollar amounts sought in securities class actions increased to $371 billion, up from $215 billion in the previous year. Settlements increased in 2015 to 108, up from 99 in 2014.

Read more about this development here.