Partner Anne Ray to Discuss Ethical Issues Unique to the Consumer Space

-Jenner & Block Partner Anne P. Ray will speak at the 23rd Annual Consumer Financial Services Institute in Chicago. Hosted by the Practising Law Institute, the two-day program will focus on a broad array of recent regulatory, enforcement and litigation issues relating to mortgages; auto finance; credit, debit and prepaid cards; marketplace lending and Fintech; deposit accounts; student loans; and other products and services. Titled “Ethical Issues Unique to the Consumer Space,” Ms. Ray’s session will take place on May 8, 2018, the second day of the program. Ms. Ray and the other speakers will cover the impact of In re Payment Card Interchange Fee on litigating and settling class actions. They will also discuss the ethical implications in joint defense agreements and social media, as well as the ethical pitfalls in the settlement context—a mediator’s perspective. Ms. Ray’s session begins at 3:30 pm CT.

To learn more and to register for the event, please click here.


New York Attorney General Launches Cryptocurrency Exchange Inquiry

New-DevelopmentBy Jolene E. Negre

On April 17, the New York Attorney General’s Office released a statement that it has launched a fact-finding inquiry into 13 cryptocurrency exchanges. Questionnaires were sent to the following exchanges:

  • Coinbase, Inc. (GDAX)
  • Gemini Trust Company
  • bitFlyer USA, Inc.
  • iFinex Inc. (Bitfinex)
  • Bitstamp USA Inc.
  • Payward, Inc. (Kraken)
  • Bittrex, Inc.
  • Circle Internet Financial Limited (Poloniex LLC)
  • Binance Limited
  • Elite Way Developments LLP (Tidex.com)
  • Gate Technology Incorporated (Gate.io)
  • itBit Trust Company
  • Huobi Global Limited (Huobi.Pro)

The text of the questionnaires can be found here.

The Attorney General’s release suggests that the inquiry is part of a broader investor protection effort and emphasizes a greater need for transparency and accountability… 

To read the full Jenner & Block client alert on this subject, please click here.


Jenner & Block Launches FinTech Industry Group

image from https://s3.amazonaws.com/feather-client-files-aviary-prod-us-east-1/2018-04-19/aacfc4b6-5d30-4963-8a9b-a608a26cc836.pngToday, Jenner & Block announced the formation of a FinTech industry group, expanding the firm’s strong reputation in advising clients on complex financial services and consumer-related matters.  Leveraging our industry knowledge and significant capabilities, the FinTech industry group will work strategically with businesses to address and stay ahead of new developments as financial technology and the regulatory landscape continue to evolve.  Anchored by a team of experienced former government officials, including a former senior counsel at the Consumer Financial Protection Bureau, prosecutors and in-house counsel, the team focuses on advising FinTech companies and businesses that rely on financial technology to navigate challenges in this increasingly complex area of commerce.  The group assists clients in a variety of legal areas including compliance and controls, data security, trade secrets and intellectual property protection, insurance coverage, dispute and controversy resolution, government and internal investigations and corporate and transactional matters.

To learn more, please click here.


Legal Considerations When Using Big Data and Artificial Intelligence to Make Credit Decisions

Big-data-creditIn an article for Lending Times, Jenner & Block Partner Kali Bracey and Associate Marguerite L. Moeller discuss potential legal risks that may arise as a result of companies using big data to make credit extension decisions.  The article explains that despite the growing trend of using artificial intelligence and machine learning to make unbiased credit determinations and model credit risk, big data can in fact lead to inadvertent disparate impact on protected classes.  Lenders must ensure that they abide by the Fair Housing Act (FHA) and the Equal Credit Opportunity Act (ECOA) to avoid discriminatory impact in terms of race, gender or other protected classes in lending decisions.  The FHA prohibits discrimination in securing financing for housing, while the ECOA prohibits discrimination for credit transactions.  They must also comply with the Fair Credit Reporting Act (FCRA), which requires lenders to disclose to consumers if they deny credit based on a consumer report and to disclose to consumers if they charge more for credit based on a consumer report.  The authors recommend that companies incorporate federal fair lending and credit laws into their algorithmic models.  While it is unclear how the current administration will address these issues, federal regulators are paying attention to the emerging field of big-data-based lending.  Furthermore, private plaintiffs and state attorneys general may still take action in the form of seeking punitive damages and equitable and declaratory relief or enforcing state statutes that protect fair lending.

To read the full article, please click here.


Second Circuit Affirms Dismissal of Organic Baby Formula Suit on Preemption Grounds

By Kelly M. Morrison

Bottle-container-high-chair-374756On March 23, 2018, the Second Circuit affirmed the dismissal of a putative class action alleging that Abbot Laboratories mislabeled its Similac baby formula as organic, ruling that the plaintiffs’ claims were preempted by the federal Organic Foods Production Act (OFPA). 

The plaintiffs in Marentette v. Abbot Labs. Inc. alleged that Abbott violated New York and California consumer protection statutes and common law by labeling as “organic” Similac formula that contained ingredients that are prohibited in organic foods under the OFPA.  Because the organic label on the formula was approved under the National Organic Program (NOP) that was established to implement the OFPA, however, the Second Circuit held that the plaintiffs’ claims effectively challenged the OFPA certification process, and were therefore preempted. 

The Court’s conclusion rested primarily on the comprehensive nature of the NOP, which was enacted “to establish national standards governing the marketing of . . . organically produced products.”  The NOP requires a producer seeking organic certification to disclose all of the practices and procedures it will use in connection with the product, including every substance used during production, following which a certifying agent conducts an on-site inspection.  Only after the certifying agent confirms that production of the product complies with OFPA is a producer permitted to label it as organic.  The statutory scheme also confers enforcement power on the USDA and its agents, which the Court deemed further evidence that Congress did not intend individual consumers to challenge certification decisions. 

Continue reading "Second Circuit Affirms Dismissal of Organic Baby Formula Suit on Preemption Grounds" »


Do Business Interruption Policies Cover Ransomware?

RansomwareIn an article published by Law360, Jenner & Block Partner Jan A. Larson and Associate Catherine L. Doyle examine the potential impact of court action on ransomware coverage.  The authors explore the pending district court action of Moses Afonso Ryan Ltd. v. Sentinel Insurance Company Ltd.  They explain that the case wrestles with the classification of, and coverage for, business interruption and lost income suffered by a law firm in the wake of a ransomware attack.  “The case offers a preview into whether courts will construe broad, general business insurance provisions to protect insureds against significant lost-business income caused by ransomware attacks, or whether insurers will enjoy wide latitude to hide behind more stringent limitations of liability found in narrower provisions related to data and software damage,” they observe.

To read the full article, please click here.


Anticipating 2018’s HIPAA Enforcement Trends

HIPAA

In an article for Law360 titled “Anticipating This Year's HIPAA Enforcement Trends,” Partner David P. Saunders outlines the possible reasons for why it is still unclear what HIPAA enforcement may look like under the new administration.  Mr. Saunders suggests that perhaps the last 12 months of slow HIPAA enforcement represents the new normal.  To evaluate this hypothesis, he examines two documents that may indicate where HIPAA enforcement is headed in 2018:  1) the regulatory priorities of the US Department of Health and Human Services (HHS) and 2) the President’s budget for HHS.

To read the full article, please click here.

 


Update on the EU General Data Protection Regulation: Countdown to Implementation

Data protectionBy Emily A. Bruemmer and Jennifer J. Yun

Nearly two years ago, on May 24, 2016, the European Union (EU) adopted a new law—the General Data Protection Regulation (GDPR or Regulation)—to replace the Data Protection Directive, which has governed data protection in the EU since 1995. While the GDPR resembles the Data Protection Directive, it has some important differences. These include new rights for data subjects, such as the right to data portability and the right to erasure (“right to be forgotten”) in certain circumstances; new data breach notification requirements, including a requirement to notify the relevant Data Protection Authority within 72 hours of discovery of the breach (unless exceptions apply); and much stricter penalties and fines for non-compliance.

The Clock is Ticking

EU Data Protection Authorities can begin enforcing the GDPR against companies beginning on May 25, 2018, with no further action required by the EU Member States to bring the GDPR into effect. For companies that have operations in the European Union or that offer goods and services to (or monitor) EU residents, the time to get into compliance with the GDPR is running short…

To read the full Jenner & Block client alert on this subject, please click here.


The FAA and NLRA Go Head to Head in Epic Systems

AgreementBy Olivia Hoffman and Katie Rosoff

The Supreme Court first approved the use of mandatory arbitration provisions in employment contracts in 1991 in Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 31 (1991), which held that a securities broker could be compelled to arbitrate a federal age discrimination claim against his employer under the Federal Arbitration Act (“FAA”).  In the years since, arbitration agreements have proliferated in employment and consumer contracts, and legal challenges to the validity of these agreements have been largely unsuccessful.  While the general policy in favor of arbitration remains strong, it comes into potential conflict with the National Labor Relations Act (“NLRA”) in the case of Epic Systems Corp. v. Lewis, which the Supreme Court will decide this term. 

The case presents the question of whether mandatory individual (i.e., non-class) arbitration agreements in employment contracts violate the NLRA, which protects the right of workers to bargain collectively.  Three circuit courts have weighed in, with the Seventh and Ninth Circuits holding in Lewis v. Epic Systems Corporation, 823 F.3d 1147 (7th Cir. 2015) and Morris v. Ernst & Young, LLP, 834 F.3d 975 (9th Cir. 2016), respectively, that a ban on litigating or arbitrating on a class basis violates the NLRA’s collective bargaining guarantee, and the Fifth Circuit coming to the opposite conclusion in Murphy Oil USA, Inc.  v. NLRB, 808 F.3d 1013 (5th Cir. 2015).  Each of these cases arose when employees filed class action lawsuits against their employers based on labor law violations and the employers moved to compel arbitration. 

Continue reading "The FAA and NLRA Go Head to Head in Epic Systems" »


Navigating Cryptocurrency Regulation: Common Sense in an Uncommon Industry

CoinsIn an article published in FinTech Weekly, Jenner & Block Partners Gayle E. Littleton, David Bitkower and Justin C. Steffen discuss the recent rise of virtual currencies and warn individuals and companies that, although the growth of cryptocurrencies can give the appearance of a Wild West for the digital age, those active in the area should pay close attention to the technologies and the enforcement risks involved.  The authors note that regulators’ interest has intensified.  A number of US Government agencies, including the Securities and Exchange Commission, Commodity Futures Trading Commission and Internal Revenue Service, have issued guidance on the application of laws and regulations to virtual currencies, and numerous agencies have taken enforcement actions to protect consumers.  In the article, the authors outline some simple, straightforward practices that business can adopt in order to stay on the right side of regulators.

To read the full article, please click here.