Michael L. Montgomery

A California federal judge has found that Equifax, Experian and TransUnion must face key parts of a rejiggered proposed antitrust class action from medical practices and collection agencies targeting the credit reporting agencies' decision to exclude medical debt under $500 from consumer credit reports. U.S. District Judge Daniel J. Calabretta on Wednesday preserved the medical provider plaintiffs' state law contract interference claims pegged to patient billing and permitted the proposed collection agency class to move forward on antitrust claims under California and federal law that alleged the agreement to exclude some medical debt made it harder to collect. The judge, however, found that the medical provider plaintiffs, or MPPs, lack standing for the antitrust allegation because they are too far removed from debt collection performed by others. Equifax, Experian and TransUnion made the changes at the behest of the Biden-era Consumer Financial Protection Bureau, which had been raising concerns about including medical debt on credit reports since at least 2022 and formalized a rule barring the practice just two weeks before President Donald Trump reentered the White House. They convinced Judge Calabretta to dismiss an earlier version of the suit late last year because of the disconnect between MPPs and collection agencies, with the court concluding they don't participate in the same market as the credit reporting agencies and can't be harmed by an agreement to reduce competition within. Judge Calabretta came to a similar conclusion Wednesday, holding that the MPPs, headlined by named plaintiffs Derrick Adams and Cape Emergency Physicians, can't assert the collectors are their "agents" because of the level of autonomy for collection agencies to perform their work and the ability of medical practices to switch agencies. But this time around, the second amended complaint added debt collectors headlined by AmeriFinancial Solutions, and Judge Calabretta said that those agencies have adequately linked alleged harm to the reporting policy. "Unlike the MPPs, the collection agencies appear to have a direct relationship with the defendants," Judge Calabretta said. "Specifically, the SAC alleges that the collection agency plaintiff has personally furnished medical-debt information to defendants, … and that to provide medical data to a credit reporting agency the furnishing entity executes a contract and takes on an obligation to furnish 'full files on a monthly basis' to the credit reporting agency." The judge also rejected credit bureau assertions that the claimed injuries are too speculative and dependent on a variety of factors. "Plaintiffs contend that due to the devalued service by the defendants, the incentive for patients to pay their medical bills has been removed. As a result, there are increased costs that the plaintiffs experience," he said. "Although the exact amount is speculative, the injury itself does not appear to be — it is plausible that there is a devalued service for suppliers of medical debt information where defendants are alleged to have agreed to stop reporting certain types of information." The suit contends the policy made it more difficult to collect on unpaid bills by removing an incentive for patients to make payments. The suit also claims the agreement reduced the quality of the credit reports by excluding information. The tortious interference with existing contract claims, under California and New Jersey law, are also new to the latest complaint. Judge Calabretta preserved both for the MPPs, concluding their contracts with patients are valid while rejecting credit bureau arguments that the complaint would have to identify specific contracts. Instead, the judge said it's enough that the credit bureaus received data on specific billing between patients and providers, noting the bureaus referred to the data in a news release that revealed the new policy would take off nearly 70% of medical collection debt from consumer credit reports. He also found that the plaintiffs sufficiently accuse the bureaus of knowingly interfering. "This is supported by allegations that defendant's advertisements explain that reporting debts cause more payment and quicker payment. … Accordingly, the court finds it plausible that defendants had some understanding that by eliminating certain aspects of debt-reporting, there may be a decrease in payment to plaintiff," the judge said in preserving the California law claim. Judge Calabretta said the analysis was virtually the same under New Jersey law, which requires a showing of "malice." "Plaintiff argues that malice exists because the alleged conspiracies are unlawful. Here, the SAC appears to acknowledge a justification for the defendants' conduct in an effort to improve the financial well-being of patients who take on medical debt unexpectedly," the judge said. "However, even where a valid justification exists, such conduct cannot be employed through fraudulent, dishonest or illegal methods. Plaintiff contends that the defendants' conduct is an unlawful horizontal conspiracy. At this stage, these allegations appear sufficient to state a claim for tortious interference." An attorney for the plaintiffs hailed the decision on Thursday. "The court's ruling is a significant validation of this case against the credit reporting agencies' anticompetitive agreement to reduce the quality of reporting medical debt on consumers' credit reports," Hilgers Graben PLLC's Bennett Rawicki said in a statement. "The court has allowed to continue the medical provider plaintiffs' claims for tortious interference with their contracts with patients, and the nationwide antitrust claim brought by the collection agency plaintiff. We look forward to pursuing these claims on behalf of our clients and the classes." Counsel for the defendants did not immediately respond Thursday to requests for comment. The medical providers and AmeriFinancial are represented by Michael L. Merriman and Bennett J. Rawicki of Hilgers Graben PLLC. TransUnion is represented by Ian Simmons, Elizabeth L. McKeen and Danielle N. Morris of O'Melveny & Myers LLP. Experian is represented by Jeremy Ostrander, Robert Milne, Jack E. Pace III and Bryan Gant of White & Case LLP. Equifax is represented by Jeffrey S. Spigel, McGregor W. Scott, Christopher C. Yook, Emily Marsteller, Zoe Beiner and Adriana Dunn of King & Spalding LLP. The case is Adams v. Experian Information Solutions Inc. et al., case number 2:23-cv-01773, in the U.S. District Court for the Eastern District of California.

Dec 4

5 min

The North Carolina Business Court plowed into the fourth quarter with two big decisions in insurance disputes that involved $50 million in COVID-19-related losses at a chain of outlet malls, and an industrial accident at a Nucor Corp. iron plant in Louisiana. Meanwhile, the state attorney general's office and HCA Healthcare are battling it out for a pretrial win in a suit accusing HCA of breaching the terms of its agreement to buy the Mission Health System in western North Carolina. In case you missed those stories and others, here are the highlights. Rulings Two former employees of a transportation logistics company are temporarily barred from using confidential information they allegedly stole for the benefit of their new employer, Judge Adam M. Conrad said, finding the company had shown it was likely to succeed on its claim that they breached the confidentiality clauses in their employment agreements. The case is Best Logistics Group Inc. v. Bravo, case number 2025CVS25484. An attorney and his law firm can exit a widow's lawsuit in which she is battling to assert ownership over his assets, Judge Matthew T. Houston ruled, finding the lawyer lacks sufficient contacts with North Carolina to be dragged into court there. The case is Moore v. Brooks, case number 2025CVS1214. Judge Mark A. Davis asked 21 former independent agents of an insurance marketing company to refile their complaint challenging what they characterized as predatory and restrictive employment contracts, finding the first version was "impermissibly vague." The case is Britcher v. Assurance Group LLC, case number 2025CVS1638. Judge Conrad canceled a notice of lis pendens involving a real estate holding company, finding the lawsuit filed by two individuals seeking to claw back their membership interests following a crypto deal does not directly involve or affect title to the company's real property. The case is Sealy v. NWP Holdings LLC, case number 2025CVS3612. Nucor's equipment breakdown insurance doesn't cover an industrial accident at its Louisiana-based direct reduced iron plant, Judge Julianna Theall Earp ruled, but she said its 10 property insurers must provide coverage for the loss. The case is Aspen Specialty Insurance Co. et al. v. Nucor Corp. et al., case number 19CVS019887. Ace American Insurance Co. and Liberty Mutual Fire Insurance Co. can't duck a lawsuit by Tanger Outlets seeking coverage for more than $50 million in pandemic losses, Judge Davis said, finding the retail outlet chain sufficiently connected its insured interests to its operations in North Carolina. The case is Tanger Properties Limited Partnership v. Ace American Insurance Co. et al., case number 2025CVS5614. Judge Conrad won't cut a professional networking organization loose from a lawsuit by retired NFL player Mike Rucker and his wife claiming they were swindled by their longtime financial adviser, finding the complaint fairly traces the couple's financial harm to the company. The case is Rucker v. Kubler, case number 2025CVS15792. Judge Michael L. Robinson determined that posts about a Virginia couple insinuating they committed arson weren't defamatory, denying a motion for summary judgment on their counterclaims against the former executive of a defunct technology company and his wife. The case is rFactr Inc. v. McDowell, case number 2018CVS12299. Complaints An e-commerce platform for hemp has accused a former supplier of falsely insinuating that he built the business and is responsible for its success while claiming the true owners are running it into the ground, saying he has maligned its reputation in an effort to "inflate his credentials" and build up his own brand. The case is Mood E-Commerce LLC v. Rich, case number 2025CVS34582. A residential developer is suing a landowner in North Carolina for allegedly defaulting on a $40 million project by failing to comply with the development schedule, obtain approval of the construction plans and start grading on time. The case is Pulte Home Co. Inc. v. LP Rivertowne LLC, case number 2025CVS7746. Paladin Drones Inc., a manufacturer of emergency response drones, and its former vice president of sales are battling over his exit from the company, with the one-time executive claiming he's owed unpaid bonuses and equity. Paladin, meanwhile, alleges he sabotaged multiple rounds of funding and tried to oust its founder and CEO before quitting. The case is Kadah v. Paladin Drones Inc., case number 2025CVS50925. A pain management institute said one of its shareholders and a practicing physician who allegedly abruptly quit the practice owes hundreds of thousands of dollars, including a deficit in payments under his compensation plan and his shares. The case is Carolinas Pain Institute PA v. Ajam, case number 2025CVS10900. A group of investment companies are seeking to recoup upwards of $10 million they allegedly gave to an inventor of medical devices to develop two products, saying he milked them for cash during the development phase only to sign over ownership and intellectual property rights to a new entity once the products were completed. The case is Gaston Capital LLC v. Kellar, case number 2025CVS6056. Property owners in a private gated community are suing to block a $1.45 million special assessment levied by the property association to pay for damage caused by Hurricane Helene, saying the board spread misinformation and thwarted attempts to gather votes from lot owners to push the measure through. The case is Brock v. Kyryk, case number 2025CVS5368. Financial accounting firm Langdon & Co. LLP has been hit with a proposed class action claiming it failed to protect consumers' sensitive personal information from hackers, resulting in an April 2024 data breach. The case is Marino v. Langdon & Co. LLP, case number 2025CVS31425. A reinsurance company is looking to enforce the terms of its arbitration agreement with a life insurance company, saying the life insurance company is trying to change the umpire selection process after the fact and has stopped the arbitration process in its tracks. The case is SCOR Global Life Americas Reinsurance Co. v. Brighthouse Life Insurance Co., case number 2025CVS54606. The owner of a financial advising firm has alleged a company he partnered with to help sell his business exposed his confidential client list to a nonparty, forcing him to ultimately sell the firm for less than what it's worth. The case is Treece v. Advisors Excel LLC, case number 2025CVS7146. In Brief Investment giant Barings LLC wants the executive chairman of rival Corinthia Global Management held in criminal contempt for allegedly violating a court order forcing Corinthia to disclose any communications it had with Barings' clients, saying discovery has unearthed a host of telephone calls and emails with a major client that the chairman allegedly lied about under oath. The case is Barings LLC v. Fowler, case number 2024CVS12798. The North Carolina Attorney General's Office and HCA Healthcare have offered competing interpretations of a 2019 merger agreement involving the sale of the Mission Health System, with Attorney General Jeff Jackson arguing the sale was contingent on HCA continuing to offer certain emergency and oncology services. HCA meanwhile, countered that it only had to continue providing support for those services. Both are battling for summary judgment in the attorney general's case accusing HCA of breaching the terms of the purchase contract. The case is Jackson v. HCA Management Services et al., case number 2023CVS5013 Settlements Judge Davis gave a nod of approval to a class action settlement with Asheville Eye Associates PLLC over a data breach that compromised the personal information of more than 327,000 patients and employees. The deal includes identity theft protection, vouchers for glasses, and reimbursements for class members who submit a valid loss claim. The case is In re: Asheville Eye Associates Data Incident Litigation, case number 2025CVS809. Hearings Judge Davis was mildly miffed during a hearing on a motion to dismiss in an ammunition technology trade secrets suit against a former executive accused of defecting to a competitor, calling out the ambiguous language in his employment contract, which he said was "not the best worded contract in the history of the world." The case is Jekson USA, Inc. v. White, case number 2025CVS1391. For the Record "It continued to boggle my mind why we see poorly worded things that look like they're written in about ten minutes." –Judge Davis on the terms of an employment contract underpinning a technology trade secrets suit.

Nov 13

6 min

Paul, Weiss is advising Stonepeak portfolio company Rinchem Company, LLC, operator of the world’s largest chemical and gas distribution network, on its debt exchange and new money financing in connection with its combination with Louisiana-based Dupré Logistics. Dupré is a North American leader in chemical supply chain logistics. Financial terms of the transaction were not disclosed. Per the terms of the financing, a substantial majority of Rinchem’s lenders will, among other things, invest approximately $100 million and exchange up to about $300 million of their existing term loans for new loans with maturities extended by two years to 2031. Additionally, all of Rinchem’s revolving lenders agreed to, among other things, extend the maturity of Rinchem’s revolving credit facility for over three years to 2030. The Paul, Weiss team is led by partners Paul Basta, Brian Bolin and Eric Wedel, and includes corporate partner Michael Montgomery; tax partner Robert Holo and counsel Daniel Bleiberg; executive compensation partner Jarrett Hoffman; and intellectual property partner Claudine Meredith-Goujon.

Jan 28

1 min

A California federal judge Wednesday denied the Federal Deposit Insurance Corp.'s request that she empanel an advisory jury in a suit looking to force the agency to return some $1.9 billion in frozen deposits to the former operator of Silicon Valley Bank, finding "no compelling reasons" to do so. U.S. District Judge Beth Labson Freeman said she was initially drawn to the idea of empaneling an advisory jury, which is installed by a judge to provide a nonlegally binding opinion following a trial. However, "at the end of the day, the court concludes that there are no compelling reasons for doing that in this case," Judge Freeman said. In the suit, SVB Financial Group claims that the FDIC, in its capacity as receiver, broke bankruptcy protection and public promises to return account deposits to move forward, but permanently dismissed the debtor's requests for interest and lost revenue damages. The FDIC had pushed for the advisory jury, while SVB opposed it. Ultimately, Judge Freeman said Wednesday that any benefit "would clearly be outweighed by the extra time, expense and burden on citizens of our district, not to mention the burden on the court and parties." "Although the San Jose Division draws jurors from one of the most highly educated and sophisticated regions of the country, the complexity of the case also mitigates against imposing such a burden on jurors to merely suggest an outcome to the court," the judge said. "Accordingly, having considered the parties' thoughtful moving papers, the court declines to empanel an advisory jury." In the case, the defunct bank operator is looking to reclaim roughly $1.9 billion in deposits the company said were seized from its accounts in the days after the California-based bank's failure. SVB Financial filed for bankruptcy in New York with $3.3 billion in liabilities shortly after regulators took over the technology industry-focused bank in March 2023. The bank operator secured confirmation of a Chapter 11 plan in August 2024. Initially, the debtor was able to withdraw money from accounts taken over by the FDIC-appointed receivers, but then transfers were frozen, tipping it into bankruptcy, SVB said. Late last year, Judge Freeman trimmed the suit, keeping in place four counts and tossing six others. Still, she gave SVB the opportunity to refile five dismissed claims alleging the FDIC and receivers the agency appointed violated contract agreements and didn't follow federal and state regulations. The FDIC and counsel for SVB didn't immediately respond to requests for comment late Wednesday. SVB Financial is represented by Ryan Hayward, Ellen Watlington, Niharika Simran Sachdeva, Maya James, Julia Lees Allen, Jan Nielsen Little, Robert Addy Van Nest and Zainab Ramahi of Keker Van Nest & Peters LLP and Jonathan K. Chang of Davis Polk & Wardwell LLP. The FDIC is represented by Stephen Sorenson, Elliot McGraw and Michael L. Shenkman of Bailey & Glasser LLP, Lawrence H. Heftman, Lynn R. Fiorentino and David C. Giles of ArentFox Schiff LLP and Casey D. Laffey, Kurt F. Gwynne, Raymond A. Cardozo and Emily F. Lynch of Reed Smith LLP. The case is SVB Financial Group v. Federal Deposit Insurance Corp. et al., case number 5:24-cv-01321, in the U.S. District Court for the Northern District of California.

Nov 19

2 min

Paul, Weiss advised LongRange Capital on its acquisition of 24 Hour Fitness, one of the largest fitness chains in the U.S. Under the agreement, LongRange acquired the business alongside the chain’s founder, Mark Mastrov. Financial terms were not disclosed. The Paul, Weiss team was led by corporate partners Angelo Bonvino, Cullen Sinclair and Michael Montgomery, and includes partners Thomas de la Bastide, Marc Shepsman, Steven Kaye and Joseph Friedman; executive compensation partner Christopher Gonnella; tax partner Lindsay Parks; restructuring partner Ken Ziman; intellectual property partner Marisa Geiger; antitrust counsel Todd Hahn; and litigation counsel Audrey Paquet.

Jan 7

1 min