Fox News has reached a $787.5 million defamation settlement with Dominion Voting Systems, following accusations that the network had ruined Dominion’s business by airing claims that its machines were used to rig the 2020 U.S. presidential election in favor of Democrat Joe Biden and against Republican Donald Trump. Fox still faces a $2.7 billion lawsuit from Smartmatic, another voting technology company, over its coverage of debunked election-rigging claims. Smartmatic is seeking damages from Fox and five individuals, including former Trump lawyers and hosts, alleging that they knowingly spread false claims that its software was used to flip votes. While the Dominion settlement is half of the $1.6 billion Dominion sought, it is the largest ever defamation settlement publicly announced by an American media company, according to legal experts. Fox denies the allegations in both cases.
The Federal Deposit Insurance Corp. (FDIC) has claimed the rights to $2bn that Silicon Valley Bank's former parent company, SVB Financial Group, believes is theirs. The $2bn deposit could provide potential cash recovery for the bankrupt parent company and its bondholders, which are owed $3.3bn, but the FDIC has laid claim to the money to offset claims relating to Silicon Valley Bank that are believed to have cost the FDIC's deposit insurance fund an estimated $20bn. The ensuing litigation could test the FDIC's power over the costs of failed banks. While SVB may get some of the cash back, it is likely to be on the FDIC's timetable. The FDIC has previously been blocked from retrieving nearly $905m against a bankrupt holding company in 2010. A New York bankruptcy judge will have to address whether the FDIC has a valid claim against the bankrupt company and whether the FDIC should be first in line to be paid back.
Contingency Capital has filed a lawsuit against ACAP Litigation Fund seeking the return of more than $8.8m it says it loaned to the Houston-based Dunken Law Firm, alleging ACAP and Dunken defrauded the company into lending money to the firm to pay off its debts to ACAP. Contingency claims ACAP lied to it that the loan would cover Dunken's debt to ACAP. ACAP allegedly later declared Dunken in default of a new loan that it had agreed not to extend, according to the complaint. Litigation funders are increasingly providing more general loans to lawyers and firms, often used to pay off existing debts, as the popularity of mass torts has grown. Dunken is facing accusations of fraud and breach of contract over its handling of transvaginal mesh and talcum powder cases. The case highlights the risks litigation funders face in any deal, even when they do their due diligence. Further, and as we’ve discussed at length in previous episodes, it highlights the potential pitfalls and working at cross purposes of the entire litigation funding industry.
Williams & Connolly law firm partner Robert Shaughnessy and Susan Shaughnessy have agreed to pay nearly $7.3 million to resolve a U.S. civil lawsuit alleging unpaid federal income taxes. The U.S. Justice Department filed the lawsuit against the Shaughnessys in September, seeking unpaid taxes from 2001 to 2006 and other years. Litigation-focused Williams & Connolly, a 300-plus lawyer firm based in D.C., was not named in the lawsuit. Shaughnessy joined Williams & Connolly in 1988 and became a partner in 1996. The settlement was reached after months of negotiations, according to court filings. The Shaughnessys were due to respond to the lawsuit by May 5.
The US Supreme Court is considering an appeal by three whistleblowers to revive lawsuits accusing pharmacy operators of overbilling government health insurance programs for prescription drugs. The whistleblowers accused Safeway Inc and SuperValu Inc of offering prescription drugs at discounted prices to most customers, while improperly charging higher rates to the government. The litigation was filed under a law called the False Claims Act that lets individuals sue on behalf of the US government when they have evidence of fraud against federal programs. The issue at hand is whether companies can avoid liability for fraud by showing that an "objectively reasonable" reading of the law supported their conduct, regardless of whether they truly believed that interpretation at the time of their alleged wrongdoing. The Chicago-based 7th US Circuit Court of Appeals previously sided with the companies. President Joe Biden's administration backed the whistleblowers, arguing that the 7th Circuit's ruling undermined the False Claims Act. A ruling is due by the end of June.