News

New Orleans CityBusiness Names Lynn Swanson 2016 Woman of the Year and Bessie Daschbach to the 2016 Women of the Year Class

At a luncheon awards ceremony on November 3, 2016 honoring New Orleans CityBusiness’ 2016 Women of the Year, Jones Swanson’s Lynn E. Swanson was named the overall 2016 Woman of the Year. The firm’s Bessie Daschbach was also named to the 2016 CityBusiness Women of the Year class.

The CityBusiness event and special publication recognizes 50 outstanding women who are making notable contributions to the local business community and society at-large. As a three-time recipient of the honor, Lynn was also entered into the Women of the Year Hall of Fame at this year’s induction ceremony. She was the only member inducted into the Hall of Fame this year. According to the CityBusiness website, less than 20 women hold such an honor.

Both Lynn and Bessie are featured in the Women of the Year special publication, which will be inserted in the November 11 issue of CityBusiness and published on the CityBusiness website.

woy_lynn-swanson_2016_reprint

Jones Swanson, Fishman Haygood collaborate to form new international arbitration practice

NEW ORLEANS, LA (September 7, 2016) – Jones, Swanson, Huddell & Garrison, LLC is pleased to announce its alliance with the New Orleans and Baton Rouge firm of Fishman Haygood to develop a new international arbitration practice.

Jones Swanson and Fishman Haygood have collaborated for years on numerous projects. This is the first time, however, that the two firms have developed an entirely new practice area together. This practice will draw on both firms’ resources and legal talents.

At the center of the new practice will be Jones Swanson Special Partner Jennifer Morrison Ersin, who joined the firm earlier this year, and who has advised on arbitrations in all sectors, including natural resources, agribusiness, and construction.

Ms. Morrison Ersin—who divides her time between New Orleans and Istanbul, Turkey—has more than a decade of experience representing clients in international, commercial and investment arbitrations involving European, American, Turkish and Central Asian parties. She focuses her practice in disputes arising from large-scale infrastructure projects.

“It’s an exciting moment for both of our firms,” said Fishman Haygood Managing Partner Jim Swanson, who spearheaded the new strategic project with Jones Swanson Founding Member Gladstone Jones. “We’ve certainly worked on some big, complex cases together, and I’ve represented clients in lots of arbitrations, but now this international practice will give us a chance to put our experience to work in a whole new context.”

Six questions regarding Brexit

Brexit: What now?

Citizens of the United Kingdom shocked the world last Thursday when they voted to leave the European Union. Overnight, global markets tanked, London lost its place as the financial gateway to the EU, and international trade treaties were thrown into doubt. Now, legal and financial experts all over the world are struggling to answer a wide range of urgent questions that, as yet, have no clear answers. The following are six of the questions — as well as some preliminary answers — that we at Jones Swanson are currently tracking.

 

What role will law firms play as Brexit unfolds?
Legal scholars discuss how thoroughly intertwined EU law and UK law have become, and how they might be separated.
Law firms weigh in about mergers and acquisitions that may be put on hold, possible lay-offs at US law firms that have UK offices.
Brexit’s legal implications — what’s known, and what’s not yet known (a lot). 

 

How might Brexit affect international arbitration cases?
Macro-level and micro-level repercussions of Brexit on international arbitration.
Brexit happened when arbitration in London was already facing external and internal challenges.

 

How might Brexit affect international trade agreements?
How Brexit could affect international trade deals for the UK and other countries around the world.
Graphic explanation showing how Brexit might affect trade of specific goods. Includes “A beginner’s guide to tariff data.”
Survey of trade deals affected by Brexit.

 

How might Brexit affect international financial markets? US markets?
A survey of Brexit effects on US financial markets.
After coming out of a trough earlier this year, US commodities were vulnerable.
How Brexit has affected international bond markets.

 

How might Brexit affect businesses around the world? In the US? In Louisiana?
A discussion of what happens when the UK is no longer the gateway to the EU for international business.
Post-Brexit losses in the airline industry.
Brexit effects on banks, automakers, airlines, the housing market.
The oil industry takes a hit, but experts expect it to balance out. What to watch.
How Brexit might affect Louisiana’s economy. 

 

What are the next steps in Brexit, and when will they happen?
An explanation of the legal mechanism by which the UK must leave the EU.
With UK leaders stalling and most EU leaders calling for immediate withdrawal, the situation could get nasty very quickly.

 

Changes to the Federal Rules of Civil Procedure

Late last year, significant changes to the Federal Rules of Civil Procedure inserted a new consideration for courts when deciding the proper scope of discovery. Gone is the familiar test of “reasonably calculated to lead to the discovery of admissible evidence.” In its place is a requirement of proportionality “to the needs of the case” — a determination that is based upon the following factors:

(1)   the importance of the issues at stake in the action,

(2)   the amount in controversy,

(3)   the parties’ relative access to relevant information,

(4)   the parties’ resources,

(5)   the importance of the discovery in resolving the issues, and

(6)   whether the burden or expense of the proposed discovery outweighs its likely benefit.

While these factors are not new to the rules (with the exception of the parties’ relative access to relevant information), they were moved front and center in the new rule in order to address a perceived problem of overbroad and overly expensive discovery. It will be interesting to track how these rule changes play out in practice. Already the new rules have played a prominent role in the following matters, wherein they are discussed by the courts:

Benson v. Rosenthal, No. CV 15-782, 2016 WL 1046126 (E.D. La. Mar. 16, 2016)(Wilkinson, M.J.);

Henry v. Morgan’s Hotel Grp., Inc., No. 15-CV-1789, 2016 WL 303114 (S.D.N.Y. Jan. 25, 2016); and

State Farm Mut. Auto. Ins. Co. v. Fayda, No. 14-CIV-9792-WHP-JCF, 2015 WL 7871037 (S.D.N.Y. Dec. 3, 2015).

Click here to read an article about these rule changes in The Wall Street Journal

SCOTUS on Tyson Foods: A sea change in class action litigation, or much ado about nothing?

By Kerry Murphy
Supreme Court

Case: Tyson Foods, Inc. v. Bouaphakeo, No. 14-1146, 2016 WL 1092414 (U.S. Mar. 22, 2016)

The U.S. Supreme Court has declined to place further limits on representative evidence admissible in class action cases or to address the issue of whether class action plaintiffs must demonstrate that uninjured class members will not receive damages. On March 22, 2016, the Court decided the second of three class action cases before the Court this term, Tyson Foods, Inc. v. Bouaphakeo et. al., a class action brought by employees of a pork processing plant in Iowa, seeking to be paid for time spent “donning and doffing” protective gear needed for their work.  In this case, the Court declined to adopt the “categorical exclusion” of all representative evidence in class actions. The Court held that the admissibility of representative or statistical evidence turns not on whether the case is an individual suit or a class action but rather simply on its reliability and relevance under the Federal Rules of Evidence.

The class of employees had sought to admit a statistical analysis by an industrial relations expert based on hundreds of videotaped observations because Tyson had failed to keep records of the time its employees spent donning and doffing. The Court focused on this lack of record-keeping and relied upon a 1946 Supreme Court decision, Anderson v. Mt. Clemens, which allowed representative evidence in a Fair Labor Standards Act collective action when the defendants failed to keep records of their employees’ time. The Court found that in Tyson Foods, as in Mt. Clemens, the employees “sought to introduce a representative sample to fill an evidentiary gap created by the employer’s failure to keep adequate records,” and that just as that evidence would likely have been admissible in the employees’ individual actions, it was in Tyson Foods a permissible means of proving the injury to the class. As such, the district court did not err in certifying the class based in part on the representative evidence.

Also significantly, the Court limited its 2011 holding in Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011), holding that Wal-Mart “does not stand for the broad proposition that a representative sample is an impermissible means of establishing class-wide liability.” The Court distinguished the two cases and held that while in Wal-Mart, an employment discrimination class action, the experiences of the employees “bore little relationship to one another, in this case each employee worked in the same facility, did similar work, and was paid under the same policy” and under those circumstances, “the experiences of a subset of employees can be probative as to the experiences of all of them.”

Perhaps just as important as what the Court did hold in Tyson Foods, is what it did not. The Court declined to reach the second issue raised by Tyson Foods in its petition for certiorari — whether a class may be certified if it contains members who were not injured and have no right to damages. This was an extreme position which, if adopted by the Court, could have posed major obstacles to class certification, particularly with respect to ascertainability under Rule 23. (For example, how could the members of a class be ascertained if that class could only include individuals who purchased a food product which caused minor food poisoning and actually suffered such food poisoning, rather than including all individuals who purchased that food item during certain identifiable dates?) In its briefing to the Court, however, Tyson Foods conceded that the courts’ lack of authority to compensate uninjured persons does not mean that a class action cannot be certified in the absence of proof that all members were injured. Instead, Tyson Foods argued that plaintiffs must demonstrate that there is some mechanism to identify the uninjured class members prior to judgment and ensure that uninjured members do not contribute to the size of the award or recover damages. The Court, however, declined to reach even that issue, finding it was premature because the jury’s damages award had not yet been disbursed to the class.

Tyson Foods has garnered significant attention in the press as a plaintiff-friendly class action decision by the Supreme Court, rare in recent years. Commentators in the defense bar have sought to frame the decision as a narrow one which focused on wage and hour law and the specific facts of the case, or even as a positive decision for class action defendants. While Tyson Foods may not have reached any broad conclusions limiting or governing future class actions, it may prove quite significant for just that reason. In refusing to adopt a bright-line rule excluding representative evidence in class actions and in distinguishing and limiting Wal-Mart, the Court opened the door a bit wider to class action plaintiffs, giving them an opportunity to argue the admissibility of such evidence on a case by case basis under a traditional evidentiary framework. And in declining to address the issue of uninjured class members at the certification stage, the Court refused to create a very substantial barrier to class certification.

 

Click the links below for further reading:

Jones Swanson welcomes Jennifer Morrison Ersin as a special partner

Jones, Swanson, Huddell & Garrison, LLC is pleased to announce the addition of Jennifer Morrison Ersin to the firm as a Special Partner, practicing out of Istanbul, Turkey.

Jennifer has been representing private and sovereign entities in arbitrations under the rules of the International Chamber of Commerce (ICC), United Nations Commission on International Trade Law (UNCITRAL), American Arbitration Association (AAA), and International Centre for Settlement of Investment Disputes (ICSID) for more than a decade. She advises on arbitrations in all sectors, including natural resources, agribusiness, and construction. She focuses on managing disputes arising from large-scale infrastructure projects.

Jennifer received her J.D. from Columbia Law School in 2002, where she was a Harlan Fiske Stone Scholar. She is admitted to practice in New York, State Courts of New York and the District of Columbia.

In addition to her practice, she serves as an instructor in the graduate and undergraduate programs at Yeditepe University Law School i
n Istanbul, Turkey, where she teaches courses in international commercial and investment arbitrations.

Please read Jennifer’s full bio here.

Jennifer Ersin

jersin@jonesswanson.com

Pan-American Life Center
601 Poydras Street, Suite 2655
New Orleans, LA 70130
(504) 523-2500

Investor state dispute settlement and the $50 billion case

On July 18, 2014, an arbitral tribunal sitting in The Hague ordered the Russian Federation to pay shareholders of the defunct oil company Yukos an unprecedented sum of damages — $50 billion, plus $60 million in legal fees and costs.

One year later, after Russia had made no move to pay the award, courts in France and Belgium responded to a request by the claimants and froze dozens of Russian state-owned assets, including bank accounts and buildings, in anticipation that they might be seized as payment on the arbitral award. Meanwhile, the Yukos shareholders have told reporters that they’re seeking similar actions in the U.S., the U.K., Germany and the Netherlands.

The Yukos case has created headlines all over the world. It’s also drawn attention to a field of law many people have never even heard of, but that I’ve been practicing for about 10 years — namely, investor state dispute settlement, or ISDS.

ISDS is a neutral, international arbitration procedure, designed to provide investors with a way to settle claims against sovereign states, without having to try those claims in the same states’ local courts.

ISDS arbitrators are appointed by the parties in each case, or by an appointing authority if the parties fail to or choose not to appoint them. These arbitrators do not have to be tied to any particular geographic region or national bar. Many, if not most, of them are from North America and Western Europe, but an increasing number are from other regions and legal backgrounds. While they almost universally have experience in international law, very few arbitrators have served as judges in traditional courtrooms.

Given this system that has no traditional judges, no direct ties to traditional courts, and, most importantly, no right to appeal, why do investors bring ISDS claims? In some cases, it’s because they cannot reasonably expect to get a fair hearing in a local court. The tribunal for the Yukos case, for instance, noted the Russian authorities’ “intimidation and harassment of Yukos’s senior executives, mid-level employees, in-house counsel and external lawyers.”

Even more disturbing, the tribunal found that Russia had conducted a “ruthless campaign to destroy Yukos, appropriate its assets, and eliminate [its primary owner] Mr. Khodorkovsky as a political opponent” by putting him in prison. By the time the company’s former majority owners brought their arbitration in The Hague, they were living abroad, and didn’t dare return to Russia.

But not all ISDS cases involve concerns about judicial bias or the claimants’ safety. Small businesses and individuals may choose to bring an ISDS case simply because it’s a more efficient and straightforward means of prosecuting their claims, and one that offers a near-certain path to payment of any resulting award. According to the Office of the U.S. Trade Representative, about half of all ISDS cases are brought by individuals and small or medium businesses.

ISDS cases have recently produced some stunning outcomes. In 2012, two of these cases — brought by Dow Chemical against Kuwait and by Occidental Petroleum against Ecuador — resulted in awards of $2.19 billion and $1 billion.

Arbitration awards in the tens and hundreds of millions have become routine. Just this month, a case brought against Panama by a consortium of international construction companies resulted in a $233 million award.

But it was the Yukos case — which generated 6,500 pages of court filings, 11,000 exhibits, 3,300 pages of hearing transcripts and 37 days of hearings, then ended in a $50 billion award — that has prompted the most discussion in the legal profession.

“This … story not only confounds those who say that international law does not matter,” said Harvard Law School Assistant Professor Mark Wu, in a panel discussion about the case last month, “it also shows the extraordinary tenacity of the people involved in shaping international law.”

Provisions allowing for ISDS appear in more than 3,000 bilateral and multilateral investment treaties worldwide. For instance, both NAFTA and the Energy Charter Treaty, which came into play in the Yukos case, include ISDS provisions.

But the foundational document for the ISDS system is the 1965 Washington Convention on the Settlement of Investment Disputes between States and Nationals of Other States.  This Convention, which has been ratified by 152 countries, created the International Centre for Settlement of Investment Disputes, commonly referred to as ICSID. Together, the Washington Convention and the procedural rules of ICSID create an arbitration system that is tailored to disputes between investors and states. If states lose an ICSID arbitration and fail to pay the award, they face international sanctions.

If the ICSID Convention does not apply to a country or dispute, claimants may have other pathways to pursue arbitration.

The Yukos claimants, for instance, brought their case under the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards, commonly known as the New York Convention. This treaty, which primarily applies to commercial disputes, has been ratified by 156 countries, including nearly all the countries in Europe, the former Soviet Union and North America.

The New York Convention requires that ratifying states recognize arbitration as a means to settle disputes between governments and investors, if both the investor and government have consented to arbitrate their disputes.  This consent is usually found in an investment treaty or agreement, or in a contract between the investor and a state-owned entity.

The Convention also requires all 156 of its ratifying states to enforce arbitration awards made in other contracting states. In other words, if an investor can identify assets owned by the state in any one of the ratifying states, then the investor has an automatic right to attach those assets — provided they are used for commercial, and not diplomatic, purposes.

The investor can then repeat this enforcement process as many times and in as many countries as it takes, until the compensation due under the award is fully paid. Which is why the Yukos claimants can ask courts in five different countries to freeze Russian assets.

Notably, arbitral awards do not expire, and interest on the award accrues until it is paid in full.

In my practice, I am regularly contacted by investors who have lost everything because of failed contracts with states and state entities. Under international law, these people are due compensation. ISDS is often the best way — and sometimes, it is the only way — for them to get it.

Primary source materials about international arbitration:

Lynn Swanson discusses the value of collaboration in the legal field in Biz New Orleans article

From Biz New Orleans

“We collaborate quite a bit,” says Lynn Swanson, partner with Jones, Swanson, Huddell & Garrison. “We are in the business to help our clients and be the most efficient with our cases that we can possibly be. If a client needs a counsel in an area that we do not specialize in, we have no problem referring them to a specialist. Just as other firms refer their clients to us if we are specialists in an area that they are not.”

“A lot of attorneys in New Orleans are very close, and some firms have partnered together for years,” she adds. “We share notes and best practices with other firms to make sure we are providing our clients with the best possible services, and collaboration with other firms allows us to gain a skill set that can enhance a case with additional and new information.”

Jones, Swanson, Huddell & Garrison, LLC, is a boutique litigation law firm based in New Orleans, with a second office in Baton Rouge. The firm primarily handles complex commercial and environmental/property disputes. In those litigation arenas, the firm has a strong nationwide presence. Click here to read the full article.

Attorney Tad Bartlett provides legal perspective to The Louisiana Record

From The Louisiana Record:

A white paper by Emory University Law Professor Joanna M. Shepherd examines the costs and consequences of the Louisiana Unfair Trade Practices and Consumer Protection Law (LUTPA), but not everyone agrees with her assessment.

The 26-page report published by Shepherd and the American Tort Reform Foundation, examines the history and origins of LUTPA, and analyzes data on related litigation to reach the conclusion that LUTPA has become less effective over time.

“Indulgent amendments and overly permissive interpretations of LUTPA have allowed enterprising litigants and lawyers to bring claims unrelated to the original intent of the legislature,” the report states.

According to a chart in the paper, the number of unfair trade practices and consumer protection law cases published in Louisiana has trended upward from an average of 1.1 cases per 100,000 people in 2005 to slightly more than 1.8 cases per capita in 2009. Nationally, the number of cases published has also grown, but at a fairly steady rate, whereas Louisiana saw a drastic jump from 1.4 in 2006 to 1.9 in 2008.

Tad Bartlett, an attorney at Jones Swanson Huddell and Garrison LLC, told the Louisiana Record that Shepherd’s numbers do not account for the fact that LUTPA-only lawsuits are rare. Click here to read the full article.

Gladstone N. Jones, III and Lynn E. Swanson featured in Biz New Orleans’ “Inside the Industry”

From Biz New Orleans

Inside the IndustryJones, Swanson, Huddell & Garrison, LLC is a boutique business and environmental litigation law firm based in New Orleans. Throughout its existence, the firm has successfully handled a wide variety of cases and has been recognized for its successes in several prestigious publications. The impressive legal achievements, nationally recognized, would not be possible without the joint efforts of founding member, Gladstone N. Jones, III and managing member Lynn E. Swanson. Together, the two members play an integral role in the firm’s overall success. Click here to read the full article.