Legal Briefing: Novartis Settles Sex Discrimination Case for $152 Million


A daily look at legal news and the business of law:

Novartis Settles Sex Bias Case

Pharmaceutical giant Novartis (NVS) lost a huge gender discrimination case in May, and faced $250 million in punitive damages, plus possibly hundreds of millions more in compensatory damages. The settlement announced Wednesday puts its liability at far less -- $152 million, plus about $22 million in programs to change the culture and practices at Novartis. Of the $152 million, plaintiffs' attorneys are seeking $38 million in fees, leaving plaintiffs with $114 million, reports AmLaw Litigation Daily.

Settling, even for significantly less, has huge advantages for both sides: Novartis pays less; plaintiffs get paid quickly, and with certainty. Without the settlement, years of appeals lay ahead -- of the class certification decision, of the punitive damages, possibly of rulings at trial.

However, because Novartis and its female sales reps both gave up the appeals gamble, one side in the larger fight generally between employers and employees lost big too, although it's impossible to say which. That's because class certifications in gender discrimination cases are always battles, and a Second Circuit Court of Appeals decision upholding or overturning certification in this case would have had major repercussions for future cases.

Nine States Back Arizona Against U.S. Immigration Law Challenge

When the Department of Justice sued to invalidate Arizona's immigration law, it based its case on the idea that the federal government is the only one with the right to regulate immigration, under a doctrine called preemption. (Another suit is challenging the law on civil liberties grounds.) That assertion of federal power has upset other states. Nine state attorneys general, led by Michigan's Mike Cox, have just filed a friend of the court brief in support of Arizona.

Interestingly, the states making the states-rights immigration argument mostly aren't border states or Dixie states: Michigan, Nebraska, South Dakota, Pennsylvania, South Carolina, Alabama, Virginia, Texas and Florida. Even a U.S. territory is involved: the Northern Mariana Islands. Three of the states filing the brief are represented by Republican attorney generals facing re-election fights this fall: Cox, Florida's Bill McCollum and Pennsylvania's Tom Corbett, notes USA Today. Still, whatever role politics is playing, there's clearly a core substantive reason for the filing: The states involved aren't ready to cede what they see as a traditional police power to the federal government.

'Don't Ask, Don't Tell' Constitutionality Trial Starts

Even before Congress ends its debate on the "don't ask, don't tell" military policy regarding gay service members, and before the Pentagon reports the results of its survey of soldiers about it, a trial in Riverside, Calif., may decide whether the policy is constitutional. Not definitively, of course: Any ruling will be appealed. Nonetheless, the trial's outcome could have a big impact on the dynamics of the congressional process, assuming the ruling comes in time. The trial is expected to take a week, reports the National Law Journal.

And in the Business of Law...

• Akin Gump is the latest firm to restore first-year associates' salaries to $160,000, reports Above the Law.