• NCAA wins, but athletes' fight continues in separate suit
  • Barclays must pay legal fees for traders in London suit

When news of Volkswagen’s fraudulent emissions test first broke, the lawsuits, alleging consumer fraud, antitrust violations and securities fraud, followed in quick succession.

Most of the firms representing the consumers in the many suits already filed were familiar names in the plaintiffs’ bar.

But now litigation firm Quinn Emanuel Urquhart & Sullivan LLP has signed on to team up with Hagens Berman -- on the plaintiffs’ side -- in a case filed in federal court in Los Angeles against Volkswagen and its U.S. subsidiary.

While the firm represents both plaintiffs and defendants in its corporate practice, it is so far the only big firm to enter the Volkswagen fray to date on the plaintiffs’ side. Assuming the role of plaintiffs counsel wasn’t an easy decision.

“There was a lot of deliberation in the firm if we wanted to take on the plaintiffs’ side and ultimately we decided that this was an unusual situation where Volkswagen has already admitted fault,” Quinn Emanuel partner Shon Morgan, the chairman of the firm’s national class action practice group, said in an interview.

Because the allegations “seem limited to Volkswagen, we don’t see this as an attack on industry. In fact, some of our automotive clients were injured because of the competitive effects” of the cheating, he added.

“We’ve worked with Hagens Berman before -- both together and opposite them. We know them well, and when the opportunity came up, it seemed like the right pairing.”

Morgan said that Quinn Emanuel has three offices and almost 30 lawyers in Germany, which should be beneficial in interviewing witnesses and examining documents. With that German presence, he said, “we could have as easily ended up on the defense side, although that work went elsewhere,” a reference to Kirkland & Ellis LLP, which a Volkswagen spokesman said last week is representing the embattled company.

It was probably unlikely that Volkswagen would have chosen Quinn Emanuel. The firm represented General Motors in its successful suit alleging trade secret theft against Volkswagen and Jose Lopez, a former manager who left GM for the German automaker.

The current consumer cases against Volkswagen, still being filed in courts nationwide, could be consolidated. Such an action, by the federal panel on multidistrict litigation, isn’t likely to occur before the first quarter of 2016, Morgan said.

Lawsuit News

U.S. College Athletes Get College Costs Paid, But No Extra Cash

U.S. college athletes seeking a slice of the billions of dollars generated by video games, as well as broadcasts of their games and associated merchandising, were hit with a setback as a federal appeals court ruled they’re only entitled to compensation covering the cost of their education, rather than the deferred compensation ordered by a trial court judge.

The U.S. Court of Appeals for the Ninth Circuit ruled on Wednesday that while the National Collegiate Athletic Association is subject to the reach of the U.S. antitrust laws, it wasn’t required to set aside at least $5,000 per year for student athletes as compensation.
Wednesday’s ruling involved a 2009 lawsuit by ex-college basketball player Ed O’Bannon who challenged the treatment of students as amateurs as college basketball and football evolved into multibillion-dollar businesses, with money flowing to the NCAA, broadcasters, member schools and coaches -- everyone but the players. The case challenged the use of college players’ names, images and likenesses in video games without compensation. The ruling instead endorses the NCAA’s practice of offering stipends to meet the total cost of college attendance.

W. Stephen Smith, a partner at Morrison & Foerster LLP who specializes in antitrust law, said that while the ruling sets a “a high hurdle for future challenges to NCAA rules governing intercollegiate athletics” it nonetheless “left the door open” for those instances where the rules were stricter than necessary.

The ruling can be challenged further, he said, because either of the parties can seek review by the full 9th Circuit or, eventually, ask the U.S. Supreme Court to weigh in.
More immediately, there is a second -- and broader -- case pending that also involves compensation for student athletes. That case, in which the athletes are represented by noted labor lawyer Jeffrey Kessler, is scheduled for a hearing before a judge in Oakland, California, on Thursday. Kessler, a partner at Winston & Strawn LLP who in the past won free agency for National Football League players, is seeking to lift all limits on compensation for college athletes in a case most legal experts deem to be the biggest threat to the college model. Kessler declined in an e-mail to discuss how the O’Bannon ruling might affect his case.

The Ninth Circuit case is O’Bannon v. National Collegiate Athletic Association, 14-17068, U.S. Court of Appeals for the Ninth Circuit (San Francisco).

For more, click here.

Legal Fees

Barclays Plc must pay legal fees for three former traders charged in the U.K. with manipulating the Libor after a U.S. judge rejected the bank’s request to toss the suit because the trio had failed to show evidence of retaliation.

Alex Pabon, Jay Merchant and Ryan Reich were the first U.S.-based bankers to face prosecution in the Serious Fraud Office’s investigation into the manipulation of the London interbank offered rate. The traders sued in a U.S. court claiming the bank is obligated to pay their legal fees under a law protecting whistle-blowers. U.S. District Judge Lewis Kaplan in Manhattan ruled Wednesday there wasn’t enough evidence to dismiss the case.

The former traders were charged in April 2014 with conspiring with three other Barclays employees in London, from June 2005 to September 2007, to rig the interest-rate benchmark. They said they cooperated in U.K. and U.S. probes into the illegal manipulation of the benchmark Libor.

While the traders said they’d acted in Barclays’s interest, they alleged that the bank retaliated against them in May 2014 by discontinuing to pay their legal fees even though it had done so during the regulatory proceedings.

Mark Lane, a spokesman for Barclays, had no immediate comment on the judge’s decision.

The case is Pabon v. Barclays Bank Plc, 14-cv-07897, U.S. District Court, Southern District of New York (Manhattan).

Before it's here, it's on the Bloomberg Terminal. LEARN MORE