LAW BLOG NEWSLETTER
from The Wall Street Journal Online
March 25, 2009 -- 6:30 p.m.
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TODAY'S POSTS
- The Bird is the (Constitutionally Protected) Word
- Does Teens Sending Nude Photos of Themselves Constitute a Crime?
- David Kris Confirmed as Assistant AG in 97-0 Vote
- The Wal-Mart Discrimination Debate Plays to a Full House . . . and Feisty Judges
- Settling For Dollars: Here's Who Landed 2008's Big Securities Settlements
- Picking Through the Whys of the Wolf Block Dissolution
- Could Hillary-Movie Case Bring Down McCain-Feingold?
- Bernie's Prison Number Comes up Big for Queens Man
- The In-House Job: A Good Gig if You Can Get (And Keep) It
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The Bird is the (Constitutionally Protected) Word
Sometimes - not often, but sometimes - reading an account of an event in the format of a legal opinion is more rewarding than reading it in an article or snarky blog dispatch or what have you.
An opinion issued by a federal judge in Pittsburgh on Monday is one such example (click here). It's not particularly Cardozo-esque or anything, but it's a fun read. So we're just going to reprint a bit of it here (no worries, it moves quickly). The opinion opens:
Plaintiff, David Hackbart ("Hackbart"), filed the instant action . . . alleging violation of his rights under the First, Fourth and Fourteenth Amendments to the Constitution of the United States by Defendants, the City of Pittsburgh (the "City") and Sergeant Brian Elledge ("Elledge"). . .
On April 10, 2006, Hackbart was traveling along Murray Avenue in the Squirrel Hill section of the City of Pittsburgh, looking for a place to park his vehicle when he saw an open metered parking space. As Hackbart was attempting to back into the parking space, a vehicle pulled up behind him and effectively blocked Hackbart's entry into the parking space. The driver of the vehicle behind Hackbart would not back up. Frustrated, Hackbart extended his left arm out the window of his vehicle and extended his middle finger to the driver.
At that time, Elledge was in uniform traveling along Murray Avenue in the direction opposite of Hackbart, and was driving a marked City of Pittsburgh police vehicle. As Hackbart was giving the driver behind him the finger, he heard Elledge say "Don't flip him off." Hackbart responded by directing the same gesture toward Elledge. Elledge activated the lights on his patrol car and turned around on Murray Avenue so he was traveling in the same direction as Hackbart. Seeing the lights on the police vehicle, Hackbart proceeded approximately one (1) block to a public parking lot where Elledge conducted a motor vehicle stop.
Elledge approached Hackbart's vehicle and asked him for his driver's license and Social Security number. Elledge told Hackbart that he was going to be cited for disorderly conduct "for flipping the guy off . . ." Elledge issued Hackbart a citation charging him with violation of Pennsylvania's Disorderly Conduct statute. Elledge wrote: "Disorderly Conduct. Driver made an obscene gesture towards me. Flipped me off while driving by. Also flipped off another driver."
On June 12, 2006, Hackbart attended a hearing before a Magisterial District Judge in Pittsburgh Municipal Court. . . . The District Judge found Hackbart guilty of Disorderly Conduct and imposed a fine as well as court costs in the total amount of $119.75. Hackbart filed a summary appeal from the judgment of the District Judge with the Allegheny County Clerk of Courts. On October 17, 2006, Hackbart, with counsel, attended a hearing on his summary appeal at which the Assistant District Attorney withdrew the disorderly conduct charge against him.
Hackbart then brought the instant action . . . Hackbart alleges that the City has a custom, pattern, practice and/or policy of authorizing its officers to issue citations under Pennsylvania's disorderly conduct statute based upon the use of profane, but not obscene, language and gestures which are expressions protected by the First Amendment.
So what happened? The judge, David Stewart Cercone, ruled that the gesture twice demonstrated by Hackbart does, in fact, constitute speech protected by the First Amendment of the Constitution:
Hackbart, in this instance, was expressing his frustration and anger when he gestured with his middle finger to both the driver behind him and to Elledge. Both gestures are protected expressions under the First Amendment, unless they fall within a narrowly limited category of unprotected speech such as obscene speech or fighting words.
In the end, Judge Cercone denied the defendants' motion for summary judgment and granted Hackbart's, finding that the police officer violated his constitutional rights. A handful of other related issues will proceed to trial.
See and Post Comments: http://blogs.wsj.com/law/2009/03/25/the-bird-is-the-constitutionally-protected-word?mod=djemWEB&reflink=djemWEB&reflink=djemWLB
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Does Teens Sending Nude Photos of Themselves Constitute a Crime?
What do you get when you mix cell phones and teenagers hopped up on hormones?
Sexting, of course, the practice of teens sending text messages of nude or partially nude photos of themselves to their buddies. It's the newest craze (along with smoking Smarties, see WSJ story here) that is shocking parents and teachers. Now prosecutors are weighing in with innovative ways to try to stop it.
In several sexting cases across the nation prosecutors have threatened child pornography charges against teens who received or sent the text messages. While technically applicable - after all the kids were possessing pictures of unclad minors - a kiddie porn conviction could mean jail time and registration as sex offenders, in some cases.
The most recent case is in Pennsylvania where three teenage girls are suing a prosecutor who wants to charge them with trafficking in child pornography after photos of themselves in their topless or skivvies ended up being sent to classmates' phones. The Wyoming County District Attorney George Skumanick has asserted that the girls were accomplices to the production of child pornography because they allowed themselves to be photographed. The girls say they didn't consent to the wide distribution, according to this Associated Press story. The ACLU sued Wyoming County DA today saying the photos are protected speech, not porn. (Here's the suit.)
"Kids should be taught that sharing digitized images of themselves in embarrassing or compromised positions can have bad consequences, but prosecutors should not be using heavy artillery like child-pornography charges to teach them that lesson," said Witold Walczak, Legal Director for the ACLU of Pennsylvania in this news release. "These are just kids being irresponsible and careless; they are not criminals and they certainly haven't committed child pornography."
The district attorney has offered that in order to avoid the charges, the girls be placed on probation, participate in a five-week re-education program and be subject to random drug testing. The photos were among several discovered by Tunkhannock School District officials on students' cell phones.
Skumanick says that he sees his actions as cutting the kids a break. "We could have just arrested them but we didn't." He said his actions came following the suicide last year of an Ohio girl who was taunted after nude photos of herself that she sent to her boyfriend that were then distributed elsewhere, according to the girl's mother.
"Kids have got to understand these things are out there forever," Skumanick said.
It should be noted that Skumanick is proposing what the ACLU has labeled a "re-education" program for the girls, in the form of a weekly course for five weeks. The course will teach the girls "[t]o gain an understanding of what it means to be a girl in today's society, both advantages and disadvantages," and "[i]dentify nontraditional societal and job roles," according to the complaint.
With the course, Skumanick says he wants to help girls "realize the severity of their actions."
See and Post Comments: http://blogs.wsj.com/law/2009/03/25/does-teens-sending-nude-photos-of-themselves-constitute-a-crime?mod=djemWEB&reflink=djemWEB&reflink=djemWLB
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David Kris Confirmed as Assistant AG in 97-0 Vote
It's never wise to show up your new boss with your first act.
So maybe David Kris will have to smooth things over with Attorney General Eric Holder Jr. after his Senate confirmation sailed through today with nary a nay, while 21 Senators gave the thumbs down to Holder. ("Really, boss, any of us would have flubbed the Marc Rich pardon.")
Kris, (Haverford, Harvard Law) deputy general counsel at at Time Warner and an adjunct law professor at Georgetown, will be assistant attorney general for the national security division. He was a no-brainer for the nomination after having served as an associate deputy attorney general from 2000 to 2003 dealing with national security issues. (Click here for his official bio.) Kris, who served in both the Clinton and second Bush administrations, previously had criticized the legal justifications behind Bush's warrantless wiretapping, the AP reported.
The selection of Kris certainly impressed Orin Kerr at the Volokh Conspiracy, who gushed in January: "If someone asked me who I thought should head the DOJ's National Security Division, I would probably have named David Kris. Bravo to President-Elect Obama for such an inspired pick."
Also joining up with Obama's team is Yale Law School Dean Harold Hongju Koh, a Clinton administration alum. Koh will serve as legal adviser to the State Department. (Here's the Hartford Courant story.)
See and Post Comments: http://blogs.wsj.com/law/2009/03/25/david-kris-confirmed-as-assistant-ag-in-97-0-vote?mod=djemWEB&reflink=djemWEB&reflink=djemWLB
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The Wal-Mart Discrimination Debate Plays to a Full House . . . and Feisty Judges
The bad news, from where we sit: Neither side emerged as the clear winner during Tuesday's oral arguments out in San Francisco over class-certification in the proposed Wal-Mart sex-discrimination class-action. (We like finality.) The silver lining: the suspense in the case will continue to build (We like suspense.)
Squaring off on Tuesday: Gibson, Dunn's Ted Boutrous, who argued for the company, and Brad Seligman of the Impact Fund, who argued for the plaintiffs. (After a three-judge panel ruled for Seligman's side back in early 2007, we anointed him lawyer of the day. Click here for that post.) On Tuesday's argument, click here for the Recorder article. Click here for a "curtain-raiser" (as we say in the biz) from Monday's Journal.
The quick backdrop:
The case began in 2001 when a 54-year-old Wal-Mart employee from California named Betty Dukes alleged in a discrimination claim that she was denied the training needed to obtain a higher-paying job because of her sex.
After a lower court allowed the case to proceed as a class-action, it grew to include more than 1.6 million women who have worked at Wal-Mart since December 1998. The class status was upheld by a three-member panel of the court of appeals in 2007. But Wal-Mart asked for a en banc rehearing, arguing that even if the plaintiffs prevail in getting class certification, punitive damages and back pay must be awarded on an individual basis, rather than on a class basis.
All the while, Wal-Mart has denied the allegations of discrimination on the basis of sex.
So what happened yesterday? According to the Recorder article, the more liberal judges of the 11 selected to serve on the en banc stuck it to Boutrous. For instance, when Boutrous argued that the district court applied the wrong standard in granting certification to female Wal-Mart workers, Judge Marsha Berzon pointed out that the women didn't have to prove actual discrimination at this point, just commonality of the class.
Moments later, when Seligman explained that Wal-Mart broke the law when the company delegated promotion and pay authority to regional managers - who discriminated - Judge Pamela Rymer wondered how and why plaintiffs could justify a national class.
Judge Susan Graber, however, wondered whether the court could tread an altogether different path. "What are the range of options we have? It seems like there's lots of ways to slice and dice this," she said.
Seligman reportedly agreed, saying the court could, for example, carve punitive damages out of the existing class certification - but allow claims for back pay to remain.
And that's, at least for the time being, what we're left with, LB readers. (Big sigh.) When the case heads back to the Northern District - in whatever form - Chief Judge Vaughn Walker will hear it, since the original lower-court judge, Martin Jenkins, who briefly played professional football for the Seattle Seahawks, moved to the appellate bench.
See and Post Comments: http://blogs.wsj.com/law/2009/03/25/the-wal-mart-discrimination-debate-plays-to-a-full-house-and-feisty-judges?mod=djemWEB&reflink=djemWEB&reflink=djemWLB
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Settling For Dollars: Here's Who Landed 2008's Big Securities Settlements
Purveyors of this little field we like to call the law generally do pretty well, financially, and some do a darn sight better than that; the global economic meltdown notwithstanding.
But then there are securities class actions lawyers. Those folks, especially the leaders in the field, can operate in a whole other financial strata; think hedge fund manager. Or at least a middling hedge-fund manager.
That's why we stand in abject awe annually when Securities Class Action Services, a unit of RiskMetrics Group, releases its annual rankings of the top 50 securities class actions firms, as measured by the total dollar value of their settlements from the previous year. (Click here for this year's study.)
Tops this year was Bernstein Litowitz, which snared $711 million in settlements. That firm was followed by Barroway Topaz of Philly, at $531 million in settlements, and San Diego juggernaut Coughlin Stoia, at a cool $484 million. Surprisingly, despite its well-publicized troubles, Milberg is hanging strong, ranked seventh, with a combined 13 settlements worth $253 million.
Ranked by the average size of their settlements, Grant & Eisenhofer of New York and Delaware was tops, with an average settlement of $108 million.
Of course, these firms do face one nagging detail: Their settlements must be approved by a court, and withstand a rash of objectors who typically show up come settlement time to complain that the lead plaintiffs' firms have done a lousy job. Furthermore, as noted here, no firm topped $1 billion in settlements this year, the first in the past six in which no one's cracked that barrier.
Still, for a day at least, let us dream about how phat it would be to divvy the spoils of a $100-plus million securities class-action settlement.
See and Post Comments: http://blogs.wsj.com/law/2009/03/25/settling-for-dollars-introducing-the-2009-scas-50?mod=djemWEB&reflink=djemWEB&reflink=djemWLB
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Picking Through the Whys of the Wolf Block Dissolution
The Philadelphia press, both legal and mainstream, is picking through the rubble of the Wolf Block dissolution, which officially took place on Monday when the partnership voted to disband the firm. Click here and here for stories from Philadelphia's Inquirer and Intelligencer.
So why did it have to come to this? Why did a firm that, as the Intelligencer puts it, took 100 years to build up have to vanish overnight?
For now, there don't appear to be too many easy answers. According to the Intelligencer, some are taking the long view, tracing the demise back to 1985 when Howard Gittis left as leader of the firm and new leadership came on board as the start of the downfall. Others say it was groups of partner defections in the early to mid-1990s, departures that were "never quite replaced."
Others blame a lack of practice-area diversity, that the firm relied too heavily on its well-respected real-estate practice. "It was like owning one stock in the stock market," says one consultant.
In the shorter term, others point to a lack of leadership in recent years. Or, perhaps more accurately, a distracted leadership. Critics said firm leadership was focused for a good part of 2008 on completing what turned out to be a failed merger attempt with Florida-based Akerman Senterfitt and that firm head Mark Alderman had in recent months spent a lot of time in Washington, D.C., on President Obama's transition team.
Alderman said the characterization that he and other firm leaders weren't providing leadership in 2008 was "not fair." He said the firm's leaders never worked harder on behalf of the firm than they have in the last year. There were "a thousand factors" that could probably even go back to the firm's founders that ultimately resulted in Monday's decision, he said.
When looking for root causes, Alderman chooses to look over his shoulder a bit. "There's no question the firm got staggered in the mid-90s with those departures," Alderman said. "The result speaks for itself. We spent 15 years trying to put Humpty Dumpty back together again."
See and Post Comments: http://blogs.wsj.com/law/2009/03/25/picking-through-the-whys-of-the-wolf-block-dissolution?mod=djemWEB&reflink=djemWEB&reflink=djemWLB
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Could Hillary-Movie Case Bring Down McCain-Feingold?
Arguments before the Supreme Court often make for rather dull, and predictable, affairs. The justices have presumably read the briefings, so they know what each side is going to argue. Often, they use the arguments to clear up a minor point or, Court watchers sometimes say, try to persuade the other justices to adopt their positions.
But the script seemed to get tossed out the window on Tuesday during arguments over whether the airing of a documentary attacking Hillary Clinton violated the McCain-Feingold campaign finance law and, in the end, just how far McCain Feingold is constitutionally permitted to reach. Click here for the NYT story; here for the take from Legal Times's Tony Mauro.
The issue bandied about on Tuesday asked whether banning the broadcast of "Hillary: The Movie," 30 days before last year's Democratic primary, violated McCain-Feingold (a lower court said yes), and whether that application of McCain-Feingold violated the constitution.
Much of the intrigue arrived courtesy of Malcolm Stewart, the lawyer for the government. According to the NYT's take, Stewart largely argued that Congress has the sweeping power to ban political books, signs and videos, so long as they're paid for by corporations and disseminated not long before an election.
Stewart argued there was no difference in principle between the 90-minute documentary and a 30-second television advertisement, a position which Justice Kennedy seemed to find hard to stomach.
"If we think that the application of this to a 90-minute film is unconstitutional," Justice Kennedy said, "then the whole statute should fall under your view because there's no distinction between the two?"
It didn't sit well with other justices, either. According to the NYT's Adam Liptak: "by the end of an exceptionally lively argument at the Supreme Court on Tuesday, it seemed at least possible that five justices were prepared to overturn or significantly limit parts of the court's 2003 decision upholding the McCain-Feingold campaign finance law . . . ."
Part of the problem facing the law seems to lie within the current makeup of the court. Justice Alito replaced Justice Sandra Day O'Connor, an author of the 5-to-4 decision upholding the McCain-Feingold law in 2003. Justice Alito appears to be more skeptical of campaign finance regulation than Justice O'Connor was.
The Court could take a somewhat narrow approach to the case. But, according to Liptak, Stewart's answers on Tuesday seemed to invite the court toward a broader ruling.
Justice Scalia admitted to feeling a little "disoriented." "We are dealing with a constitutional provision, are we not, the one that I remember which said Congress shall make no law abridging the freedom of the press?" he asked.
See and Post Comments: http://blogs.wsj.com/law/2009/03/25/could-hillary-movie-case-bring-down-mccain-feingold?mod=djemWEB&reflink=djemWEB&reflink=djemWLB
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Bernie's Prison Number Comes up Big for Queens Man
Okay, okay, okay. We know. This isn't exactly law-related, but hopefully you'll forgive us: It was simply too good to pass up.
The New York Daily News has a fun story today about a man who, well, "is finally making some money off Bernie Madoff." It has nothing to do with an investment; rather the man played part of Madoff's prison number in the New York Lottery and came away $1500 richer.
According to the story, a Queens construction worker named Ralph Amendolaro noticed the numbers under Madoff's mugshot on the front page of the Daily News the day after Madoff pleaded guilty. Amendolaro played the last three digits, 054, later that day. For three days, Amendolaro placed a $3 bet on the numbers. That Sunday, the numbers came up, and Amendolaro walked away with $1500, or, as the Daily News points out, a 16,000 percent return, "far more than even Madoff promised his bilked investors."
Amendolaro doubted Madoff, who is expected to spend the rest of his days behind bars, would be happy to hear someone cashed in on the $65 billion scam.
"He'll probably look to charge me on the investment that I made off of him," he said. "He'll probably want a cut."
See and Post Comments: http://blogs.wsj.com/law/2009/03/24/bernies-prison-number-comes-up-big-for-queens-man?mod=djemWEB&reflink=djemWEB&reflink=djemWLB
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The In-House Job: A Good Gig if You Can Get (And Keep) It
For many years and for many lawyers, an in-house position was the dreamy antidote to law-firm life. Sure, the financial upside wasn't as good, but everything else was better. The 9-7 M-F hours allowed for time with kids and weekend getaways. The job security was great; you felt part of a larger organization that worked for a common purpose; maybe there were stock options. Even after we switched to journalism, we still found the very notion of the in-house world somehow soothing.
That's why we were a bit chagrined to read today in this article that in-house lawyers and departments are struggling right alongside their law-firm counterparts.
According to the article, Hyatt, Cigna, General Electric, Motorola, Merrill Lynch and Yahoo! are among those that have reduced the number of attorneys in their law departments during the past year.
Some of the lawyers were shed as part of broad employee dismissals. "Anybody who's not generating revenue is particularly vulnerable," said Steve Shapiro, the general counsel at Rosemont, Ill.-based Cole Taylor Bank.
The pain for in-house attorneys has generally been spread across industries, with lawyers at those companies most affected by the recession faring worst, said Deborah House, who is deputy general counsel of the Association of Corporate Counsel.
It's funny. When times are good, in-house attorneys can be inexpensive alternatives to outside counsel in some cases. In recent years, in fact, "in-sourcing" at corporate legal departments has been all the rage.
Still, according to the story, there's a point at which the legal workflow slows so significantly that the cost equation tilts in the other direction, presumably when a company has eliminated all or most of its law-firm work and still doesn't have enough for its in-housers to do. Their high salaries and healthy benefit packages are suddenly seen as expensive overhead, in-house lawyers said.
"Name an industry where you've seen a significant problem, and attorneys are experiencing it along with everybody else," said House, pointing to auto manufacturing, insurance and financial services.
See and Post Comments: http://blogs.wsj.com/law/2009/03/24/the-in-house-job-a-good-gig-if-you-can-get-and-keep-it?mod=djemWEB&reflink=djemWEB&reflink=djemWLB
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LAW VIDEO
Matthew Gluck, a partner at Milberg LLP, tells Kelsey Hubbard how his firm hopes to help victims of Bernie Madoff's Ponzi scheme get compensated.
http://online.wsj.com/video/what-madoff-victims-can-expect/87A19AE4-927F-4852-A1BF-9B8E59A20EF8.html?mod=djemWEB&reflink=djemWEB
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TOP LAW NEWS
Authorities report a growing number of cars burned or ditched, as sinking home values and rising unemployment spur desperate owners to chase insurance payouts. - Photos: Fraud in the Desert
http://online.wsj.com/article/SB123793742263531857.html?mod=djemWEB&reflink=djemWEB
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A New York state judge temporarily froze the assets of Madoff's brother in a lawsuit brought by a Brooklyn Law School student who claims he lost nearly $500,000 in a decades-long Ponzi scheme.
http://online.wsj.com/article/SB123801533932041227.html?mod=djemWEB&reflink=djemWEB
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Dubai World is suing MGM Mirage, saying the casino operator is violating terms of their partnership in a Las Vegas project.
http://online.wsj.com/article/SB123783663634216785.html?mod=djemWEB&reflink=djemWEB
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The IRS is probing some tax deals structured by the same unit of AIG under scrutiny for employee bonuses.
http://online.wsj.com/article/SB123785925883921027.html?mod=djemWEB&reflink=djemWEB
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A lawyer for the trustee liquidating Madoff's firm confirmed they've located another $75 million in assets and announced plans to seize Madoff's residence in France.
http://online.wsj.com/article/SB123784325783017823.html?mod=djemWEB&reflink=djemWEB
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A federal judge ordered the FDA to allow sales of the Plan B morning-after contraceptive to women 17 years and older without a prescription.
http://online.wsj.com/article/SB123783499518316521.html?mod=djemWEB&reflink=djemWEB
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