As we ring in the new year, it is time once again to reflect on some of the most significant legal developments for drug and device companies this year. The list below is by no means exhaustive (who could forget the Rule 702 updates that took place this year, which will carry over into 2023?), but provides a brief recap and assessment of five of the most interesting and consequential developments affecting drug and device law in 2022.
Recent legislation will have a significant impact on the evaluation of personal injury and wrongful death cases across Illinois. For many years, Illinois plaintiffs in personal injury and wrongful death actions have been entitled to statutory postjudgment interest, currently at a rate of 9% per year. (735 ILCS 5/2-1303(a)). Prejudgment interest, however, has not been available under the Illinois judgment interest statute. That is about to change. The Illinois legislature recently passed Senate Bill 72, the Illinois Prejudgment Interest Act, which goes into effect on July 1, 2021, and imposes prejudgment interest on defendants at a rate of 6% per year.
Our language around settlements connotes war and peace – in settling we are “buying our peace” or “ceasing hostilities.” The old saw is that a good settlement leaves no one satisfied, but in truth, a good settlement leaves nothing significant left to do in the dispute. In abandoning claims or defenses, we seek a measure of closure. And in obtaining a durable settlement our client can live with, we necessarily rely, to some extent, on the regularity of the underlying proceedings, candor to the court, and some minimal level of good faith in the negotiations.
What happens when that reliance is upended and those expectations are dashed? A recent unpublished California decision provides a cautionary tale. It also stirred memories of a flawed settlement from three decades ago, inspiring this reverie.
The U.S. Supreme Court’s recent decision in Liu v. SEC, No. 18-1501 (June 22, 2020), limiting the SEC’s ability to obtain monetary equitable relief in securities fraud litigation, may seem an odd topic for this blog. But Liu is worth some attention because it may foreshadow an impact on calculation and distribution of monetary awards in consumer fraud class actions. The decision may influence the calculation of disgorgement or restitutionary remedies, and it may signal another hurdle for the controversial judge-made distribution mechanism, cy pres.
Liu v. SEC
In Liu, the SEC won summary judgment in an enforcement action for securities fraud, obtaining an award for “disgorgement” of the funds acquired by defendants from their fraudulent scheme. The district court declined to deduct any of defendant’s business expenses to offset the “ill-gotten gains,” awarding all sums fraudulently raised from investors. The Ninth Circuit affirmed, rejecting challenges to both the SEC’s authority to obtain disgorgement and its gross method of calculating the disgorgement award.