May It Please The Court
Quote of the Day - It's not the size of the dog in the fight, it's the size of the fight in the dog.
Where Is The Lesson In $990,000 Award To Hell's Angels?
Sometimes it pays to settle early (which also means the converse is also true: sometimes it doesn't pay to settle early). In the case of the Hell's Angels Motorcycle Club, however, it did. After losing rounds in the lower courts, the County of Santa Clara appealed to the United States Supreme Court claiming that their sheriffs deputies' actions were immune from liability, but the Court denied certiorari (scroll down to highlighted term), and refused to hear the case.
Overlawyered points out that the City settled for $990,000 to avoid a trial for damages resulting not only from the deputies' actions of shooting and killing several Hell's Angels guard dogs, but also the Fourth Amendment violations of the Hell's Angels rights. That last link generated a lot of comments, mainly in support of the Hell's Angels. But is it the dogs who get the sympathy? Motorcycle gangs have long fought for their rights, and damages awards this size rarely occur when just people are involved.
According to press reports, the Santa Clara officers had a week in advance to prepare for the raid, and while they knew about the existence of the dogs, they did nothing to prepare for a lesser remedy, such as tranquilizer guns. On the other hand, officers are trained about the Fourth Amendment from the very inception of their career, yet violations of those constitutional rights rarely evoke these types of awards.
But the lesson to be learned is not whether people or dogs are involved. It arises in part, from a realistic evaluation of the potential exposure.
According to CNN, "Officers from the cities of Santa Clara and Gilroy also were involved in the raids, and those cities settled their cases several years ago for a total of less than $50,000, the plaintiffs' lawyer told the Chronicle." Then again, hindsight is 20/20.
Making Fairness Opinions Fair For Everyone
For the past 20 years, Wall Street brokers have hired white-shoe Wall Street law firms to render fairness opinions for the boards of directors and shareholders involved with mega-transactions. It all started with a little-known 1985 Delaware Supreme Court opinion, Smith v. Van Gorkom (free registration required), which ruled that a transaction otherwise apparently in the shareholder's best interests, might have been acceptable had a law firm issued an opinion regarding the fairness of the transaction.
Such opinions, commonly referred to as "fairness opinions" are not (yet) required by any Securities and Exchange Commission regulation or an Sarbanes-Oxley statute. They nonetheless are regularly issued, frequently costing around $1.5 million to complete. Those rules are about to change. Proposed Rule 2290 (scroll to top of page 3), which is currently being reviewed by the SEC, will likely require brokers and law firms who issue these opinions to disclose their relationship with the financial deal.
The problem arises from the insider nature of the transaction. It's the broker who hires the law firm. The law firm is then charged to advise the company that the transaction it is about to consummate, and pay a large contingency fee to the broker, and thus pay the law firm, is fair for all parties concerned. It would be hard for any broker to tell the attorneys to issue an opinion saying it's unfair. The law firm, therefore, is charged with advising its client, the brokerage house, that the transaction is fair, and to look for anyway to opine that it is fair.
Delaware may have begun to change its mind, however. In a December 21, 2005 ruling issued by Chancellor William B. Chandler, III, in In re Tele-communications, Inc. Shareholder Litigation, the Chancellor stated, "The contingent compensation of the financial adviser, [Donaldson, Lufkin & Jenrette], of roughly $40 million creates a serious issue of material fact, as to whether DLJ (and DLJ's legal counsel) could provide independent advice." Apart from the grammatical faux paux, the Chancellor may well have gotten it right.
Chandler didn't stop there, however, further criticizing the closeness of the parties. He complained, "[r]ather than retain separate legal and financial advisors, the Special Committee chose to use the advisors [DLJ] already advising TCI."
Brokers and companies involved in such deals would be wise to seek independent counsel from law firms with no relationship with any of the parties.
A $35,000 Marriage Contract Gone Awry?
Matthew Heller blogs about a woman in Pennsylvania sued for accepting a $35,000 engagement ring, who then sold it for $11,000 and donated the proceeds to charity after her suitor jilted her. In response, she claims that the suitor asked her to "consider" what to do with her six other diamond rings (was she married that many times before this proposal?). She contends that she agreed to her suitor's request to give up the other rings, valued at over $20,000. She fulfilled her end of the bargain by giving them to charity, with one family ring given to a niece.
Since she fulfilled her end of the contract, she's now claiming that it is her suitor who breached his contract with her.
Who wins? Matthew opines that the suitor looks like the likely winner under Pennsylvania law, and says, "In 1999, the state Supreme Court said the giving of an engagement ring is conditional on performance of a marriage ceremony, not acceptance of a marriage proposal." The woman, however, cites to a more feminist-leaning Montana law, which ruled that a gift is a gift, and not a bilateral contract that can only be fulfilled through performance.
What's your ruling, dear reader?
Take It With A Grain Of .... It's Not A Pollutant Anymore
You put it on your food, it's likely on your kitchen table, you sweat it out of your body and if someone associates it with you, you've received a compliment. Crystals of it form when ocean water evaporates, and it's spread on some roads and sidewalks in the winter to melt snow and ice. It helps make great homemade ice cream, and at least one company refers to one of its qualities in its motto: "When it rains, it pours."
The last thing you'd think of "it" - salt - would be to classify it as a pollutant.
That regulation, however, suffered a little-known setback in a recent federal district court ruling in New York. The ruling holding that salt was not a pollutant under the Clean Water Act was overruled on other grounds, but nonetheless, the ruling, issued in late January, appears to be intact given the decision (subscription required) of the Second Circuit Court of Appeals. You can also read the decision here, posted on the Second Circuit's webpage.
The case, Alliance for Environmental Renewal, Inc. v. Pyramid Crossgates Co., stands for the proposition that salt is not a pollutant, but the Court of Appeals overruled the District Court's opinion on the basis of standing, a procedural technicality. Nonetheless, the Second Circuit did not overrule the District Court's ruling that salt fell outside the category of pollutants regulated by the CWA.
Copyright Issued To Pole Dancer Teaching Exercise Class
Stretching the bounds of copyright law, a pole dancer has now copyrighted her routine according to the front page of Tuesday's Daily Journal (subscription required). No, she's not performing her moves, entitled the "Flirt," the "Peek-A-Boo" and the "Cat Pounce" in a dimly-lit corner establishment, she's teaching them to other women as part of her exercise class.
With exercise boutiques (what should they be called?) in Los Angeles, New York, San Francisco and Encino, the copyrighted routine has been featured on a number of national television shows, including Oprah (five times), 48 Hours, The View, Primetime Live, The Tonight Show and The O'Reilly Factor. You'd have to ask Sheila Kelley, the copyright holder, how Encino got included in that list of illustrious cities, but I'm sure it has nothing to do with the night life there.
The erotic moves merge striptease, pole dancing and lap dancing into a cardiovascular exercise program touted as the latest fitness craze to develop in LA. And no wonder. A two-hour class will set you back $50, but you can buy the DVD and/or book if you're not nearby. According to the website, you don't need a pole installed at home to use the book or video. You can learn the beginning moves on a floor mat.
Depending on the quality of your routine, however, I'm guessing that there may be certain establishments that would be willing to rent out their poles. For example, if this "exercise routine" takes off, then cities and counties might be able to add a new revenue stream by renting out fire station poles for classes. They'd probably be fairly well attended, too, but charging admission could raise some significant legal questions that I wouldn't want to answer.
Student Coursepacks Need Copyright Permission
It may be a difference in when you went to college or graduate school, but most likely you're familiar with "coursepacks," those stacks of paper copied from portions of textbooks, articles and other publications that are part of almost every college course syllabus. They're in the news now because of what's not included in a lot of those copies: permission to use copyrighted material.
A number of publishers have been filing suits, and one in particular has filed almost 20 lawsuits against the copy centers located close to college campuses. So far only the copy centers have been targeted, but as we know from the Napster case and other precedent, the Universities, colleges and professors could also find themselves targets of the litigation based on contributory copyright infringement.
Although the sales of coursepacks is relatively small compared to textbooks - the National Association of College Stores says it's about two percent - the sales total just less than a quarter of a billion dollars. That's a big market chunk not to regulate.
Coast to Coast Internet Radio Takes On The Business of LawBeing a lawyer today takes more than a legal degree - it also means running a business. My Coast to Coast co-host Robert Ambrogi discuss the complexities of the business of law beyond the courthouse. Our special guest is Reid Trautz, who serves as Director of the D.C. Bar Practice Management Advisory Service, where he provides practice management information and consulting services to lawyers to help them improve their businesses. Reid is a nationally recognized author and he is a frequent CLE presenter at the ABA and conferences nationwide. Listen in, and learn a bit more about the business of law.
Can The Government Subpoena Reporter's Telephone Records?
We're not done with Judith Miller yet. Some time ago while she was employed, the former New York Times reporter fielded a request from the government to turn over her phone records as a part of its investigation of leaks surrounding her reporting on the Global Relief Foundation, an Islamic charity accused of funding terrorism, as well as those of another Islamic charity, the Holy Land Foundation.
The NYT sued to protect the records and the Second Circuit held arguments today. According to this AP article, NYT attorney Floyd Abrams argued, "Telephone records are the extension of the journalist herself. Telephone records are the embodiment of the speech of the journalist and require the same protection."
The government lawyer argued that the records were necessary to investigate leaks surrounding the alleged terrorist charities. In the lower court, the judge denied the government access. Stay tuned on this one, MIPTC will follow up once the appellate court issues its decision.