BG ESOP Lawsuit Noted in New York Times Article

The New York Times reported on a lawsuit filed by Bailey Glasser. The article, titled “He Grew Up in the Shadow of the ‘Wolf of Wall Street.’ Then He Got Into Debt Settlement” (Saturday, February 10, 2024), details a debt settlement operation run by Ryan Sasson (the stepson of Stephen Drescher, a close associate of Jordan Belfort, the self-proclaimed “Wolf of Wall Street”) across several states and involving various entities and law firms – and even shoe designer Steve Madden – now facing serious civil fraud changes brought by the Consumer Financial Protection Bureau and the attorneys general of New York, Colorado, Delaware, Illinois, Minnesota, North Carolina and Wisconsin.

To cash out his stake in the company before the regulators pounced, Sasson sold the company to “to its employees, through a financial transaction known as an ESOP (Employee Stock Ownership Plan). The deal valued the company at $242 million. Mr. Sasson described the transaction as something of a gift to the employees — ‘our Strategic family,’ he called them — who had built the company. Mr. Sasson had, effectively, cashed out. His employees now owed 100 percent of Strategic.”

Bailey Glasser’s highly experienced ESOP team filed a lawsuit challenging the fair market value of the $242 million ESOP transaction, which the Times linked to in its article. In 2019, the ESOP trust allowed Sasson and others to reap an additional $104.5 million from the ESOP, supposedly because the company met certain targets. Sasson and the other defendants are trying to move the lawsuit to a secret arbitration proceeding and limit the damages to a fraction of the excess money paid to Sasson and others. A decision from the Second Circuit Court of Appeals on that issue is forthcoming.

Our award-winning and nationally ranked ERISA/ESOP team has deep experience in handling matters such as the one described by the New York Time article and has recovered hundreds of millions of dollars on behalf of employees and retirees. To learn more about our ERISA group visit here.

To read the New York Time article, visit here

Federal Appeals Court Vacates District Court Decision in Fresno State Title IX Case, Opens Door for All-Female-Student-Athlete Class Action

In an important appellate victory for six former members of the women’s lacrosse team at Fresno State, the U.S. Court of Appeals for the Ninth Circuit vacated the district court’s orders denying class certification, paving the way for the lawsuit to continue on behalf of all female student-athletes at the university.

First filed in 2021, the lawsuit alleged Fresno State violated Title IX by depriving women of equal opportunities to participate in varsity athletics and equal treatment and benefits. In February 2022, the women sought certification as a class action on behalf of all female student-athletes and/or potential athletes at the school. However, the district court twice denied certification, finding an inherent conflict between athletes who played on different teams.

The Ninth Circuit disagreed, finding the lower court “clearly erred” by holding such a conflict exists as to the equal opportunities claim. The court reached a similar conclusion as to the equal treatment claim, holding the district court erred by failing to analyze it separately.

“Today, the Ninth Circuit opened a door the district court twice tried to slam shut. In a real sense, this order vindicates the brave young women who stood up and demanded that Fresno State provide what Title IX promises—equality,” said BG partner Joshua I. Hammack, who briefed and argued the appeal. “The court confirmed that those who seek equality are not in conflict with those who stand to benefit from it. The fight isn’t over, of course, but today is an important step toward justice.”

In addition to Hammack, the Plaintiffs are represented by lead counsel and Title IX team leader Arthur Bryant, and partners Cary Joshi and Lori Bullock of Bailey Glasser, and Cynthia Chapman, Mike Caddell, and Amy Tabor of Caddell & Chapman.

To read the full press release and Ninth Circuit opinion, please visit here.

BG Victory in Sixth Circuit Stands as U.S. Supreme Court Denies Certiorari

On October 2, 2023, Joshua Hammack, Nick Johnson, and Chris Smith continued their string of litigation wins on behalf of Foresight Coal Sales. For years, Foresight has argued a Kentucky law—SB 257—violates the Constitution by discriminating against interstate commerce. In February 2023, the U.S. Court of Appeals for the Sixth Circuit ruled that Foresight’s constitutional claim was likely to succeed. Put simply, it held Kentucky could not “have its cake and eat it, too.”

Kentucky filed a petition for certiorari, asking the Supreme Court of the United States to review the Sixth Circuit’s decision. To show Kentucky’s arguments were wrong, the Bailey Glasser appellate team turned to a timeless classic: Animal Farm. (This one is worth a read!) On Monday, the Supreme Court denied Kentucky’s petition for certiorari.

For more please follow this link.

Fourth Circuit Court of Appeals Upholds Ramaco Jury Verdict

The United States Court of Appeals for the Fourth Circuit has upheld a jury verdict and reinstated contract damages awarded by the jury after a three-week trial in July 2021.

Two years ago, Bailey & Glasser, LLP, on behalf of Ramaco Resources, Inc., won $7.6 million in contract damages in a lawsuit against insurance companies indirectly owned by Chubb INA Holdings, Inc. The lawsuit stemmed from Chubb’s denial of insurance coverage after the collapse of a coal storage silo, which occurred at Ramaco’s Elk Creek coal complex in West Virginia on November 5, 2018.

The case was litigated in the United States District Court for the Southern District of West Virginia. The verdict included $7.6 million in compensatory damages and an additional $25 million for aggravation and inconvenience. After the jury trial was concluded, however, the district court reduced the contract damages and award of prejudgment interest believing the evidence could not support a conclusion that the critical “Period of Restoration” – during which Ramaco’s expenses and lost income were covered – could extend beyond November 30, 2018. Indeed, the district court reduced the verdict to $1.8 million in contract damages and further held that, because of the reduction, Ramaco had not “substantially prevailed” on its insurance lawsuit. As a result, the district court held that Ramaco was not entitled to any damages for aggravation and inconvenience. T

For more please visit here.

18 Public Interest Groups File Brief in Federal Appeal Supporting Title IX Challenge to Fresno State

Equal Rights Advocates and 17 other public interest groups have filed an amici brief with the 9th Circuit Court of Appeals supporting the Fresno State Title IX appeal by female student-athletes fighting for gender equality for all women athletes at the school.

The brief submitted by ERA argues that the lower court’s decision – ruling that student-athletes from one team cannot file class action lawsuits on behalf of women athletes on other teams – goes against the very spirit of Title IX as Congress defined it 50 years ago, as well as decades of established Title IX legal precedent.

“We and our clients are extremely grateful that ERA and these 17 groups dedicated to gender equity are supporting this critical appeal,” said lead counsel Arthur Bryant of Bailey & Glasser, LLP, who is representing the women along with Joshua Hammack, Cary Joshi, and Lori Bullock of Bailey Glasser and Cynthia Chapman, Mike Caddell, and Amy Tabor of Caddell & Chapman.

The amici curiae joining in the brief are:

Equal Rights Advocates
American Association of University Women
American Civil Liberties Union of Northern California
American Civil Liberties Union of Rhode Island
California Women’s Law Center
End Rape On Campus
Family Violence Appellate Project
Family Violence Law Center
Legal Aid at Work
Legal Momentum, The Women’s Legal Defense and Education Fund
National Organization for Women
Public Counsel
Southwest Women’s Law Center
The Drake Group, Inc.
Women’s Law Project
Women’s Sports Foundation

Follow the link to read more about the brief submitted by the amici and to read Plaintiffs’ opening brief.

Bailey Glasser’s Precedential Appellate Victory Against “Sandbagging, Disbarred Attorney” Profiled in Law360

Law360 profiles a win by Bailey & Glasser, LLP before the United States Court of Appeals for the Fourth Circuit. The article, “‘Sandbagging’ Sinks Disbarred Atty’s Appeal Of Sanctions” details the case and appeal, which affirmed an $828,000 default judgment as sanctions against a disbarred attorney-turned-telemarketing defendant and his cohorts who concealed key discovery and disobeyed court orders.

Bailey Glasser partner Sharon Iskra originally filed the lawsuit on behalf of Diana Mey in 2019 in the Northern District of West Virginia after Ms. Mey received a flood of unwanted telemarketing phone calls concerning debt relief. The suit alleged violations of the Telephone Consumer Protection Act (TCPA) and West Virginia Consumer Credit and Protection Act (WVCCPA) for illegally contacting Ms. Mey despite her registration on the national “Do Not Call” phone list and her repeated requests that the calls stop.

During the three years of ensuing litigation, Iskra uncovered that the defendants not only evaded discovery concerning their joint enterprise but had actively concealed over 15 shared companies, some of which had been formed while discovery was in progress. The district court agreed that the defendants had engaged in a “pattern of concealing discoverable material” and repeatedly balked at orders, resulting in the court sanctioning them with the default judgment in April 2022.

Bailey Glasser attorney Benjamin Hogan skillfully defended the award before the Fourth Circuit. In a unanimous, published opinion, the three-judge panel affirmed default judgment as an appropriate sanction for Defendants’ “relentless sandbagging and failure to disclose discoverable materials.”

Read the full Law360 article here, and to learn more about this case and read the opinion visit our website.

Fourth Circuit Affirms Bailey Glasser’s $828K Default Judgment Win, Sanctioning Defendants Who “Sandbagged” Discovery

The U.S. Fourth Circuit Court of Appeals has affirmed Bailey & Glasser, LLP’s $828,000 default judgment win as sanctions against a group of telemarketing defendants who concealed their joint enterprise from discovery and disobeyed orders of a lower court compelling full disclosures. The BG team led by partner Sharon Iskra requested the sanction against the companies for persistently “sandbagging” discovery necessary to their client’s case.

Over several years of litigation, Bailey Glasser’s team uncovered that Defendants evaded discovery and actively concealed over 15 shared companies. The district court judge found that Defendants acted in bad faith, warranting one of the most severe sanctions to deter future misconduct: granting Bailey Glasser’s request for default judgment for the full amount of statutory penalties available under telemarketing laws pled in her Complaint.

On appeal, the Fourth Circuit affirmed this decision in its entirety. In the scathing 39-page precedential opinion, the court noted the “[a]ppellants’ relentless sandbagging and failure to disclose discoverable materials, including the existence of business entities founded during the course of this case, demonstrate a continued pattern of discovery abuse.” Bailey Glasser lawyer Ben Hogan wrote the winning appellate brief and skillfully argued before the Fourth Circuit.

“Severe discovery abuses warrant severe sanctions. We are glad to see the Federal Rules of Civil Procedure still have teeth and that the district judges’ decisions to enforce them are upheld,” said Sharon Iskra. “We are especially pleased to have a published opinion that resonates to curtail future discovery abuses that cause delays and prejudice to litigants everywhere.”

Learn more and read the opinion here.

“Improvidently Granted”: Supremes Decline to Wade Into Attorney-Client Privilege Dispute

Katherine E. Charonko and Elizabeth L. Stryker

This past January 11, we wrote a blog post about the Supreme Court entertaining arguments on the scope of the attorney-client privilege in the context of dual-purpose communications paraphrasing a question from Justice Kagan during the argument to Petitioner’s counsel to comment on the adage, “If it ain’t broke, don’t fix it.”

Well, turns out the Supreme Court did not want to wade into that potential quagmire, and instead turned around and entirely dismissed the writ of certiorari granted in In re Grand Jury as “improvidently filed.” Accordingly, the Ninth Circuit’s opinion which had been appealed to the Supreme Court that had held the “primary purpose” test controls when assessing attorney-client privilege for dual-purpose communications remains in full effect. In re Grand Jury, 23 F.4th 1088 (9th Cir. 2021).This opinion is important reading for reasons other than the adoption of this test because the Ninth Circuit also discussed the disparate purposes of the attorney-client privilege and the work product protection doctrine and declined to adopt but did not fully reject the “a primary purpose” test. Continue reading ““Improvidently Granted”: Supremes Decline to Wade Into Attorney-Client Privilege Dispute”

Federal Appeals Court Rejects J&J Texas Two-Step Maneuver In Huge Victory For Plaintiffs Harmed By J&J Baby Powder

Washington, D.C.: In a huge victory for individuals grievously harmed by Johnson & Johnson baby powder, the Circuit Court of Appeals for the Third Circuit roundly rejected Johnson & Johnson’s attempt to shovel all 38,000 cases into a brand-new subsidiary which then, within hours of creation, declared bankruptcy. In strong language, the federal appeals court found that the JNJ/LTL petition “has no valid bankruptcy purpose” and dismissed the bankruptcy in its entirety, reversing a ruling by a lower bankruptcy court.

The dismissal of the LTL bankruptcy now allows plaintiffs harmed by J&J’s consumer products to continue pursuing justice before a jury trial of their peers, a right afforded them by the United States Constitution.

Brian A. Glasser, founding partner of the national law firm Bailey & Glasser, LLP, was co-lead counsel to the trial team vindicated by the appeals court. Mr. Glasser states today: “J&J has no special right to put talc victims in a bankruptcy box. It now has to face these claims in front of juries around the nation.”

Specifically, Mr. Glasser argued at trial that Johnson & Johnson’s choice of bankruptcy as means to control its liabilities costs was invalid because “LTL was never in financial distress during its brief existence” because the phantom subsidiary was “eminently solvent” as it enjoyed access to more than $60 billion in Johnson & Johnson funds.

The Third Circuit agreed with Mr. Glasser in its opinion, finding that “we cannot agree LTL was in financial distress when it filed its Chapter 11 petition. The value and quality of its assets, which include a roughly $61.5 billion payment against J&J and New Consumer, makes this holding untenable.” Continue Reading

“Enough Is Enough”: Female Athletes Secure Settlement Agreement Ensuring Michigan State University’s Title IX Compliance for Years to Come

“Enough is enough” – a two-year battle ended with Michigan State University agreeing to undergo a comprehensive Gender Equity Review and create a Gender Equity Plan to bring it into full Title IX compliance by the 2026-27 academic year. This settlement will positively shape MSU’s athletics program for years to come. Bailey Glasser partners Lori Bullock and Joshua Hammack fought tenaciously to get justice for the MSU female student-athletes and were ready to go to trial in February before MSU decided to settle.

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