5 notable GCs in the news

General counsel sound off on a new Penn State lawsuit, a billion-dollar settlement, corporate political spending and more

Sanctions Squabble

“While the innocence that was stolen can never be restored, Penn State has accepted the consequences for its role and the role of its employees and is moving forward. The announcement by the Governor is a setback to the University’s efforts.”

--Donald Remy, general counsel of the National Collegiate Athletic Association (NCAA)

In October, former Pennsylvania State University assistant football coach Jerry Sandusky was sentenced to 30 to 60 years in prison for sexually abusing multiple young boys over the course of more than a decade. But the Penn State sex abuse scandal appears to be far from over, if a new lawsuit from Pennsylvania Governor Tom Corbett is any indication.

Corbett filed suit last week against the NCAA, which hit the university with significant sanctions in the wake of the scandal. Corbett argues that the sanctions, which include a $60 million fine and a four-year ban on postseason football, are “overreaching and unlawful” and will hurt Pennsylvania’s economy. But in a statement last week, Remy criticized the state’s lawsuit, calling it “an affront” to Sandusky’s victims.

Demanding Disclosures

“Qualcomm is well regarded for its open and transparent culture and fully complies with all local, state and federal laws governing political activity and the disclosure of that activity—and the lawsuit does not suggest otherwise.”

--Don Rosenberg, general counsel of Qualcomm Inc.

New York’s public pension fund has thrown another log onto the raging inferno that is the corporate political spending debate by suing telecommunications company Qualcomm Inc. in an effort to force spending disclosures. According to the lawsuit filed by the New York State Common Retirement Fund, Delaware law requires Qualcomm to reveal how much it is donating to political causes.

The official overseeing the fund claims that shareholders have a right to know what causes companies are supporting, although Qualcomm maintains that it has not given any money to super PACs.

Problematic Promotion

“That would be like comparing a Toyota to a Lexus.”

--Keith Nelsen, general counsel of Best Buy Co. Inc., in a letter to Florida’s attorney general

Wal-Mart is known for its low prices, but some rivals are claiming that the retail giant is overstating the savings it offers customers. At issue is a Wal-Mart advertising campaign that directly compares its prices on certain items to those of competitors, prompting Best Buy, Toys “R” Us Inc. and several regional supermarket chains to complain to state attorneys general, arguing that the ads are misleading or inaccurate.

Toys “R” Us, for instance, claims that the Wal-Mart listed inaccurate prices in ads for a Fisher-Price toy kitchen, Barbie doll and electric Razor scooter. Best Buy, meanwhile, argues that the Wal-Mart advertised a Dell laptop for $251 less than Best Buy, despite the fact that the two computers shown in the ad are allegedly different models. Wal-Mart denies the accusations.

Ensuring Equality

“This agreement demonstrates that HUD will vigorously enforce its Equal Access rule and pursue lenders that discriminate on the basis of sexual orientation, gender identity or marital status.”

--Helen Kanovsky, general counsel of the Department of Housing and Urban Development (HUD)

Bank of America (BoA) will pay $7,500 to settle charges that it denied a mortgage to a lesbian couple, in the first settlement involving HUD’s Equal Access rule, which prohibits lenders from denying Federal Housing Administration-insured mortgage loans based on applicants’ gender identity, sexual orientation or marital status.

In this case, one member of the couple was listed as the loan applicant, but the other partner was unemployed, so her mother was listed as a co-applicant on the loan with BoA’s approval, according to HUD. But the bank reportedly reversed course, denying the mortgage because it did not consider the applicant and co-applicant to be directly related since the applicant and her partner were unmarried. Along with the fine, BoA will also update its fair lending training program to reflect the Equal Access rule.

Driver Deal

"In keeping with our core principles, we have structured this agreement in ways that work to put our customers first and demonstrate that they can count on Toyota to stand behind our vehicles.”

--Christopher Reynolds, general counsel of Toyota Motor Corp.

Toyota is one step closer to resolving a lengthy legal battle over its vehicles’ sudden, unintended acceleration, after a proposed $1.1 billion settlement with consumers won preliminary court approval last week. The problems date to 2009, when the company voluntarily recalled millions of cars and trucks after reports surfaced that the vehicles were unexpectedly accelerating.

Subsequent lawsuits against the company fall into two categories: those related to economic losses and those related to wrongful death. The current settlement involves Toyota owners who claim that the value of their vehicles plummeted following the company’s recall. A trial on the wrongful death cases will begin next month.

Contributing Author

Alanna Byrne

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