That scenario isn’t far-fetched given the CIT’s view on the Ninth Circuit’s Universal Fruits decision. The trade court found the decision “to be flawed, and courts generally don’t expand on rulings that are apparent mistakes,” said Mark Strauss, founder and managing member of whistleblower firm Mark A. Strauss Law PLLC.
“Probably for this reason, no other appellate courts have followed Universal Fruit,” he said. “Rather, courts across the country, appellate and district, have fully adjudicated customs-related FCA cases without regard to it.”
“An attorney for other whistleblowers says this case illustrates how courts are forcing whistleblowers, at the pleadings stage, to raise stronger facts than defendant contractors to survive motions to dismiss for lack of materiality. Instead, the courts should simply say, when the factual issues are contested, that enough of a dispute has been raised for the case to go on, said attorney Mark A. Strauss of Mark A. Strauss Law PLLC in New York.”
“The bottom line is that they can’t force people to not participate in the class action and to go to arbitration instead,” says Mark Strauss, a securities litigation and whistleblower attorney based in New York.
Reading lawyer Mark Strauss of Kirby McInerney said in an email that the 3rd Circuit panel decision should be the end of the forum selection issue. There’s no reason for the 3rd Circuit to rehear the case en banc, he said, because the unanimous decision was based on the appellate court’s own 1987 precedent on implicit waiver in Patten Securities v. Diamond.
“Usually it’s the brokerage industry that’s the party seeking to compel arbitration of disputes with customers,” Strauss said. “But it has to be remembered that, under FINRA rules, customers have the right to compel arbitration, too. This decision acknowledges the importance of that right. It establishes — at least in the Third Circuit — that the industry can’t compel customers to litigate in court by putting cryptic supposed waiver clauses in their contracts which they can then decide to invoke whenever it suits them.”
