Saturday, June 28, 2014
NFL Lifts Cap on Concussion Damages; Lerner Sought Audit of Senator
THE NLJ 350: The NLJ 350 Regional Report: The Top U.S. and International Markets
Source: http://www.nationallawjournal.com/id=1402583484262?rss=rss_nlj
Friday, June 27, 2014
High Court Ruling On Search Warrants Is Broader Than Cellphones
The justices unanimously ruled that police must obtain a warrant before searching electronic devices at the time of arrest. The decision has been called "a bold endorsement of digital privacy."
Sound The Retreat (Update)
"Justice," people cried. They demanded justice. Don't let these super-predator kids destroy our world with wilding.
Except it didn't happen. The kids never beat and raped a woman in Central Park, and were coerced into false confessions. Of course, we didn't learn that until much later, after the wilding scare had done its damage to our laws, procedures and psyches, to save us from the super-predators and give us justice.
The New York Times has a post-Zimmerman-verdict editorial today that threatens to do the same. It's titled "Trayvon Martin's Legacy," a blatant appeal to emotion. Invoking the name of a dead child has proven one of the most utilitarian methods of manipulation available, and the Times unabashedly uses it to further its point.
But the point of the editorial is just plain wrong:
The jury reached its verdict after having been asked to consider Mr. Zimmerman’s actions in light of Florida’s now-notorious Stand Your Ground statute. Under that law, versions of which are on the books in two dozen states, a person may use deadly force if he or she “reasonably believes” it is necessary to prevent death or great bodily harm — a low bar that the prosecutors in this case fought in vain to overcome.It's been explained, calmly and rationally, over and over. It's impossible to believe that the editorial board of the Times, a smart bunch of folks, didn't hear it or grasp it. If so, then what's written here can only be attributed to disingenuousness and a deliberate effort to deceive.These laws sound intuitive: who would argue that you may not protect yourself against great harm? But of course, the concept of “reasonable belief” is transformed into something deadly dangerous when firearms are involved. And when the Stand Your Ground laws intersect with lax concealed-carry laws, it works essentially to self-deputize anyone with a Kel-Tec 9 millimeter and a grudge.
Stand Your Ground laws apply to one aspect of the larger concept of self-defense, and only one: they eliminate the requirement that a person retreat if he can safely do so. To be clear, I believe that Stand Your Ground laws are fundamentally wrong. The balance is a human life, on the one hand, and some machismo principle that a person should not have to endure the humiliation of retreat on the other.
The argument is that they have a right to stand their ground and fight rather than be forced to run away in the face of an attack, even if they can safely do so. Life is not so cheap that it should be taken to protect ego. Many disagree with me, and they're allowed. This isn't a legal judgment, but a moral balance. I come out in favor of life, and have no plans to change.
But that's not how the Times plays the game in its editorial. While blaming Stand Your Ground, they are attacking the basic concept of self-defense having absolutely nothing to do with Stand Your Ground. It's not merely intuitive, which is used to suggest the inherent fight or flight instinct in human beings, but characterized by the Times as some unnatural shift imposed by law to empower "self-deputized" gun nuts with "a grudge."
This is an artfully crafted diversion from the law that existed long before anybody came up with the cool phrase, Stand Your Ground. We always had the right to defend our lives when threatened with death or serious physical injury. If we could safely retreat, then that was the best option and we were required to do so. If not, then we defended our lives.
The underlying gripe is twofold, neither of which have anything to do with Stand Your Ground. The first is playing the race card. Like most people, I can't let go of the assumption that race influenced perceptions here, even though I have no basis for the assumption. But there is no law, nor can there be, that requires us to behave one way when the interaction is black and white versus white and black, or people of the same race. Does the Times suggest we start writing two sets of laws, maybe more, to accommodate the races of participants?
The second is the gun card, as reflected in the "Kel-Tec 9 millimeter" language. New York, not being at all gun-friendly, is easily shaken by words that make guns sound particularly vicious and high tech. And again, I'm no personal fan of guns, having no interest in strapping one on. But a great many other people are fans, and the Second Amendment protects their right to be fans. It's irrelevant whether that's my favorite amendment, just as it's irrelevant whether cops like the Fourth.
The same Constitution we invoke to protect the rights we favor protects some things that we don't. Either we honor the Constitution or not, and that includes all the parts, even the ones that aren't as dear to us as others.
A guy is cornered, there is no escape. The other guy is big. Huge. Strong. And is about to bash his head in. The cornered guy has a gun (give it whatever nasty gun-type name you want). Should the law prohibit him from using it to save his life? But that's not the facts in Zimmerman, you say. True, but laws don't exist for every conceivable set of facts and circumstances people can come up with, and the law of self-defense applies to this scenario the same as it did in Zimmerman. Would it make you feel better to have the cornered guy die because the law prohibited him from using his gun to save his life?
While the New York Times editorial may fairly argue for racial tolerance and the evils of guns, Second Amendment be damned, what it cannot do is lie to people by claiming that Trayvon Martin would not be dead but for Stand Your Ground laws, and then call for the evisceration of our basic, age-old right to self-defense. The alternative to self-defense when one cannot safely retreat is to die.
While it's painfully hard to know whether a person's fear of harm was "reasonable," especially when there is only one side to the confrontation who is alive to tell the story, it's a necessary evil in distinguishing whether force can be lawfully used. The choice was made hundreds of years before anyone ever heard of Trayvon Martin or George Zimmerman, and it's been the right choice for all those years since.
As much as many feel that it played out poorly here, it was always understood that some variations in fact on the same theme would touch our sensibilities differently than others. But the flaw was never with the law. The flaw is that we're human and subject to feelings that may defy reason, and not every application of sound and neutral law will make us feel good about what happened. It's what we must suffer in a society of laws. And the New York Times should know this and be ashamed of itself for engaging in this deception.
Update: In an interview on Anderson Cooper 360, one of the jurors spoke:
COOPER: Because of the only, the two options you had, second degree murder or manslaughter, you felt neither applied?
JUROR: Right. Well, because of the heat of the moment and the stand your ground. He had a right to defend himself. If he felt threatened that his life was going to be taken away from him or he was going to have bodily harm, he had a right.
This mention of stand your ground gave rise to an apology from Eugene Volokh, who had also written about this Times editorial subsequent to this post.
It thus appears that at least one of the jurors did “consider Mr. Zimmerman’s actions in light of the ... Stand Your Ground provision in Florida’s self-defense law,” and on that the Times editorial was right, and I was wrong to criticize it; my apologies to the editorialists, and to our readers.
While there is no issue that stand your ground had no legal bearing on the case, Eugene apologized for arguing that the aspect of the editorial suggesting that the jury somehow relied on it in reaching its verdict. My view is that these were empty words to the juror, having been uttered too many time in the media before trial, and she offered them in the interview either without any grasp of what they meant or inadvertently.
It was a loose phrase, not a reflection that an unrelated legal concept, mentioned in passing as part of pattern jury instructions, and never argued to the jury, played a role. Loose language shouldn't be taken too seriously and serve as a basis for assuming scholar-like attention to something that scholars universally agree had no place in the case.
While it was gracious of Eugene to apologize, it was both unnecessary and, perhaps, a mistake to feed misguided understandings about a law which is being blamed for a role it never played.
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Jordan court acquits radical cleric of terrorism charges
Source: http://jurist.org/paperchase/2014/06/jordan-court-finds-radical-preacher-not-guilty-of-terrorism.php
Plaintiffs Seek to Consolidate Target Data Breach Suits
Source: http://www.nationallawjournal.com/id=1202637342683?rss=rss_nlj
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The Federal Laws that Affect Workers Compensation Claims
Melissa Fleischer, Esq. is the President and Founder of HR Learning Center LLC with 20 years of law practice experience specializing in employment discrimination litigation. Her HR consulting firm specializes in providing workplace solutions and training to employers on a wide range of legal and human resource management issues. She was previously associated with Epstein Becker and Green in NYC and served as a chapter editor for the Family and Medical Leave Act Treatise, published by the Bureau of National Affairs. Ms. Fleischer is also an adjunct faculty member with the Professional Development Center at SUNY/Westchester Community College in Valhalla, New York and a member of the Society for Human Resource Management (SHRM).
Special thanks to our sponsor, PInow.
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Fourth Circuit Affirms Dismissal of Securities Fraud Complaint Where Inference of Scienter Was Not Sufficiently Strong
In Yates v. Municipal Mortgage & Equity, LLC, No. 12-2496 (4th Cir. Mar. 7, 2014), the United States Court of Appeals for the Fourth Circuit affirmed the dismissal of a securities fraud claim under Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. § 78(b), against defendant Municipal Mortgage & Equity (“MuniMae”) and its individual officer and director defendants. The Court held that plaintiffs failed to plead facts sufficient to give rise to a strong inference of defendants’ scienter under the Private Securities Litigation Reform Act of 1995 (“PSLRA”), 15 U.S.C. § 78u-4, et seq. The Court declined to accept that the inference of scienter offered by plaintiffs — supported by statements from confidential witnesses, presence of red flags, allegations of insider trading and general business incentives — was at least as compelling as the opposing inference of mere negligence that could be drawn from the amended complaint. Yates is one of the few reported decisions from the Fourth Circuit applying the PSRLA, and it solidly reaffirms the PSLRA’s requirement that a plaintiff plead more than just allegations based upon conjecture and happenstance to satisfy heightened pleading requirements.
During the putative class period (May 3, 2004 to January 29, 2008) MuniMae was involved in organizing investment partnerships to pool low-income housing tax credits (“LIHTCs”) and sell them to investors. Prior to 2003, MuniMae treated its LIHTC investment partnerships as off balance sheet entities. In 2003, the Financial Accounting Standards Board adopted Interpretation No. 46R (“FASB 46R”), requiring that a company that is the primary beneficiary of “Variable Interest Entities” consolidate the entities assets and liabilities onto its financial statements. MuniMae began asserting compliance with FASB 46R in the first quarter of 2004. However, at that time MuniMae internally concluded that FASB 46R did not require it to consolidate for financial statement purposes all of tis LIHTC investment partnerships. MuniMae continued to assert compliance with FASB 46R through 2006. In September 2006, MuniMae announced it would be restating certain financial statements and through a series of later disclosures finally announced that the restatement would deal with FASB 46R accounting errors. As a result of the piecemeal disclosures, MuniMae’s share price dropped precipitously. The following day, MuniMae disclosed the full extent of the restatement’s scope and MuniMae’s stock experienced an additional decline. Eventually, in April 2008, MuniMae disclosed that it had spent over $54 million on the restatement.
Plaintiffs filed a class action complaint alleging that defendants made false representations that MuniMae was complying with FASB 46R and concealed the expected cost of the restatement in violation of Section 10(b). The United States District Court for the District of Maryland held that the amended complaint did not sufficiently allege a claim under Section 10(b) because it did not meet the PSLRA’s heightened pleading standard for scienter allegations. Plaintiffs appealed.
The Court of Appeals affirmed. First, the Fourth Circuit held that the confidential witness testimony supplied by plaintiffs did not support a “strong inference of wrongful intent.” The testimony did suggest that defendants knew earlier than disclosed that MuniMae was not in compliance with 46R and that the required restatement would be a difficult and costly undertaking. It also indicated that the issue was difficult and complex and had thrown MuniMae into “confusion and chaos” — which the Court held supported the opposing inference that the defendants were merely negligent. In fact, the Court explained, defendants’ subsequent disclosures negated an inference of fraudulent intent because, although the disclosures were not “as timely or as fulsome” as plaintiffs would have liked, they gave rise to a compelling inference that the MuniMae defendants were attempting to keep the investing public informed.
Second, the Court held that while there were several “red flags” concerning MuniMae’s core operations — the need in and of itself for several restatements, frequent accounting meetings, the firing of outside auditors, and rapid CFO overturn — they did not in and of themselves give rise to a strong inference of scienter. Not only was the FASB 46R accounting error not especially obvious, but the other warning signs easily lent themselves to benign interpretations as a result of MiniMae’s obvious attempts to get a handle on its creeping accounting problems.
Third, the Court of Appeals followed the decisions of several other Circuits in holding insufficient plaintiffs’ allegation that the individual defendants “must have acted intentionally or recklessly” merely because they were senior executives and the LIHTC investment partnerships represented a core business of MuniMae.
Fourth, in addressing plaintiffs’ allegations concerning insider trading, the Court held that while the overall value of MuniMae shares sold during the class period was higher than in previous years and thus consistent with an inference that the insiders who traded had a motive to commit fraud, the inference that the trades were innocent was stronger. There were no allegations that the insiders timed their sales to take advantage of any particular disclosure. Nor was the level of any insiders’ divestiture particularly alarming. Moreover, the Court noted, the fact that several of the individual defendants traded under non-discretionary Rule 10b5-1 plans further weakened any inference of fraudulent purpose.
Finally, the Court held that plaintiffs other allegations of motive were similarly lacking as the alleged motivations amounted to nothing more than “financial motivations common to every company.”
Thus, in Yates, the Fourth Circuit reaffirmed the heightened standard of pleading a plaintiff must meet to satisfy the PSLRA. Specifically, the Court emphasized that the allegations of scienter under Section 10(b) cannot be read in a vaccum. They must be holistically analyzed in comparison with the disclosures actually made by defendants. General business motivations, insider trading and the core nature of the problems alleged by plaintiffs cannot turn a company’s repeated attempts to inform investors of the ongoing and ever-evolving nature of a problem into intentional rather than merely negligent conduct.
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Revenge Porn: Societal Costs and Legislative Solutions
Dr. Holly Jacobs is the Founder, President, and Executive Director of Cyber Civil Rights Initiative, which is the parent organization for the End Revenge Porn Campaign. She is a national commentator and writer on the subject and holds a PhD in Industrial/Organizational Psychology. While pursuing her graduate degrees, Jacobs became a victim of revenge porn and has since dedicated her life towards providing resources and advocacy to victims of online harassment.
Professor Mary Anne Franks is the Vice President of Cyber Civil Rights Initiative and an Associate Professor of Law at the University of Miami School of Law. She holds a JD from Harvard Law School and prior to her teaching career, obtained both her Masters and PhD in Modern Languages and Literature as a Rhodes Scholar at Oxford University. As part of her continuing efforts with the Cyber Civil Rights Initiative, she works with state legislatures to draft legislation against non-consensual pornography.
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Payout Resolves Objections to $1.6B Toyota Settlement
Source: http://www.nationallawjournal.com/id=1202637032014?rss=rss_nlj
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Thursday, June 26, 2014
Delaware Court of Chancery Underscores Heightened Pleading Standard Necessary to Support a Claim for Breach of Fiduciary Duty In Connection With a Merger
In Houseman v. Sagerman, C.A. No. 8898-VCG, 2014 WL 1478511 (Del. Ch. Apr. 16, 2014), the Delaware Court of Chancery (Glasscock, V.C.) granted, in part, a motion to dismiss filed by certain directors and the financial advisor of Universata, Inc. (“Universata” or the “Company”) arising out of the Company’s merger with HealthPort Technologies, LLC (“HealthPort”). The Court’s analysis serves as a reminder that a stockholder plaintiff must plead an “extreme set of facts” to support a claim for breach of fiduciary duty against a corporation’s directors arising out of allegations that the directors breached their duty of loyalty as a result of the process used to approve a strategic transaction. Although the allegations suggested that Universata’s board of directors (the “Board”) did not conduct a “perfect” process, plaintiffs did not plead facts sufficient to show that the Board “utterly failed to undertake any action to obtain the best price for stockholders.” As a result, the Court dismissed plaintiffs’ claim for breach of fiduciary duty.
Universata was a Delaware corporation focused on providing services with respect to medical records for hospitals and clinics. In 2006, plaintiffs sold a previous business known as Med-Legal, Inc. to Universata and obtained shares in the Company and put rights to those shares whereby a director of the Company, Thomas Whittington, committed to repurchase plaintiffs’ shares pursuant to the put rights.
In 2010, HealthPort approached Universata regarding a potential acquisition. In response to HealthPort’s indication of interest, the Board consulted with its legal advisors and with KeyBanc Capital Markets, Inc. (“KeyBanc”), which it hired as its financial advisor. Due to expense, the Board limited KeyBanc’s engagement to assisting in diligence and identifying additional parties with an interest in acquiring the Company. Notably, the Board did not request that KeyBanc prepare a fairness opinion on the proposed transaction.
In May 2011, the Board approved an Agreement and Plan of Merger between Universata and HealthPort. As a result of the merger, the stockholders of Universata would receive $1.02 per share. In addition the stockholders of Universata would receive stock in a new corporation known as “TechCo” created to hold a patent previously held by Universata. At the meeting approving the merger, KeyBanc advisors informally gave the opinion that the merger price was within the range of reasonableness. Because the directors who approved the merger collectively held a majority ownership interest in the Company, the Board did not solicit a stockholder vote to approve the transaction. Nevertheless, at the same time as the Board approved the merger, it amended a previous equity incentive plan to treat all outstanding stock options like outstanding shares upon a change in control. In addition, the Board voted to vest all outstanding “in the money” warrants for the purchase of shares in the Company.
Plaintiffs, who were a director of the Company and his wife, approved the letter of intent with HealthPort, but did not vote or execute a consent in favor of the merger. Two years after the merger closed, plaintiffs filed a verified complaint against certain directors of Universata and against KeyBanc asserting causes of action for (i) breach of fiduciary duty against the director defendants; (ii) an accounting against director Whittington; (iii) quasi-appraisal against Universata and the director defendants; (iv) aiding and abetting a breach of fiduciary duty against KeyBanc; and (v) for failing to obtain consideration for alleged “litigation assets.” Defendants moved to dismiss.
The Chancery Court denied defendants’ motion to dismiss the accounting claim. With respect to the other claims, the Court granted, in part, and denied, in part, defendants’ motion to dismiss.
Plaintiffs’ breach of fiduciary duty claim was premised on the allegation that the director defendants acted in bad faith by “knowingly and completely fail[ing] to undertake their responsibilities” to maximize shareholder value. Nevertheless, the Court noted that the directors satisfied their duty of loyalty by acting on the advice of legal counsel and hiring KeyBanc as their financial advisor. Moreover, the directors were entitled to decide that the expense of obtaining a fairness opinion outweighed its benefits. The allegations in the complaint showed that Board considered bids from several interested parties, negotiated with HealthPort regarding the deal terms, and ultimately obtained from HealthPort “everything that [the Board] felt [it] could get.” Plaintiffs failed to allege any facts to show that the directors had a motive to act in “bad faith.” To the contrary, the Court observed, the directors had a personal financial interest in obtaining the best deal possible, in alignment with the company’s public stockholders. Accordingly, the Court granted defendants’ motion to dismiss plaintiffs’ cause of action for breach of fiduciary duty.
The Court also dismissed the cause of action for aiding and abetting breach of fiduciary duty against KeyBanc. It found that there were no allegations that KeyBanc actively concealed information from the Board. In addition, KeyBanc did not aid or abet the Board’s alleged breach of fiduciary duty as a result of providing “limited services.” Boiled to its essence, plaintiffs were arguing that “an investment bank must provide all or none of the financial services it offers in valuing and marketing a company.” The Court disagreed and recognized that “Revlon makes clear that there is no single way to sell a company — no single financial service is required.” Accordingly, the Court dismissed plaintiffs’ aiding and abetting a breach of fiduciary duty claim.
The decision in Houseman confirms that stockholders face a high pleading burden when challenging a disinterested board’s decision to approve a strategic transaction. Although the Court recognized that the Board’s process was “less than optimal,” plaintiffs’ allegations could state a claim only for a violation of the fiduciary duty of care. The board’s decision to proceed with the transaction despite several procedural deficiencies did not amount to an “extreme set of facts” sufficient to support a claim for breach of the duty of loyalty.
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Revenge Porn: Criminal Legislation vs. Rights and Freedoms
For part one of this two-part series, please listen to Revenge Porn: Societal Costs and Legislative Solutions.
Lee Rowland is a Staff Attorney with the ACLU's Speech, Privacy, and Technology Project. Prior to joining the ACLU, she was a voting rights counsel with the Brennan Center for Justice, where she successfully represented the League of Women Voters of Florida and others in constitutional challenges to Florida's 2011 election law. Rowland previously ran the Reno office of the ACLU of Nevada, where she regularly argued before the Ninth Circuit Court of Appeals and the Nevada Supreme Court.
Marc Randazza is a First Amendment lawyer for the Randazza Legal Group located in Las Vegas, Nevada. A graduate of Georgetown University Law Center, he found his passion for the First Amendment while attending the University of Massachusetts at Amherst Journalism Program. Randazza has law offices in five states and represents both adult entertainment companies and private individuals. He is a regular contributor to news sources such as CNN and Fox News, and is a frequent commentator on legal issues to the international media.
Professor Mary Anne Franks is the Vice President of Cyber Civil Rights Initiative and an Associate Professor of Law at the University of Miami School of Law. She holds a Juris Doctor degree from Harvard Law School and prior to her teaching career, obtained both her Masters and Ph.D. in Modern Languages and Literature as a Rhodes Scholar at Oxford University. As part of her continuing efforts with the Cyber Civil Rights Initiative, she works with state legislatures to draft legislation against non-consensual pornography.
Special thanks to our sponsor, Clio.
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Affirmative action ban in state constitution violates US constitution (8-7)
Michigan voters adopted a state constitutional amendment that prohibits "all sex- and race-based preferences in public education, public employment, and public contracting."
The 6th Circuit (8-7) held this provision - as it relates to education - violates the 14th amendment's equal protection clause.
Coalition to Defend Affirmative Action v. Univ of Michigan (6th Cir 11/15/2012)
(Plaintiffs limited their challenge to racial discrimination in public education.)
The court said that a black applicant could seek adoption of a constitutionally permissible race-conscious admissions policy only through the "lengthy, expensive, and arduous process" of amending the state constitution. On the other hand, someone wishing to change any other aspect of a university's admissions policy has four options - lobby the admissions committee, petition the leadership of the university, seek to influence the school's governing board, or initiate a statewide campaign to alter the state's constitution.
"The existence of such a comparative structural burden undermines the Equal Protection Clause's guarantee that all citizens ought to have equal access to the tools of political change."
Seven judges wrote five DISSENTING opinions. Six said that the majority relied on two US Supreme Court cases that "have no application here," and one said that the majority relied on "an extreme extension" of those cases. The cases are Hunter v. Erickson, 393 US 385 (1969), and Washington v. Seattle Sch Dist, 458 US 457 (1982).
Source: http://www.lawmemo.com/blog/2012/11/affirmative_act.html
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Federal judge strikes down Indiana same-sex marriage ban
Source: http://jurist.org/paperchase/2014/06/federal-judge-strikes-down-indiana-same-sex-marriage-ban.php
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Aereo's TV Streaming Service Is Illegal, Supreme Court Says
The court's 6-3 decision reverses a lower court ruling on what has been a hotly contested issue. Aereo lets subscribers watch TV programming that it routes onto the Internet.
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Supreme Court: Police Can’t Search Smartphones Without Warrant
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Parties Reach New Accord in NFL Concussion Litigation
Wednesday, June 25, 2014
Odds Improve for New Law Graduates, but Hiring Levels Remain Soft
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Of Course You Should Never Return To The Scene Of The Crime …
If you’ve watched any TV, you would know that only serial killers return to the scene of the crime. In this case, returning to the scene of the crime isn’t the issue. This dude never left! As reported in The Brooklyn Paper’s police blotter (88th Precinct – Fort Greene–Clinton Hill):
Authorities arrested a 34-year-old who they say stole beer from a Classon Avenue deli after threatening the clerk with a gun wrapped in a purple bandana on June 12.
You already have more than an inkling as to how this gent was caught.
The deli worker told cops he was in the store between Putnam and Gates avenues at 7:45 am when the accused came in and placed the festively adorned weapon on the counter. The suspect then ambled over to the refrigerator, grabbed three beers, and left without paying, according to a police report.
Cops responded to a call from the clerk and found the accused outside the store, the report says. Police arrested the fellow after they searched him and found a stolen Beretta from Saint Louis, Missouri wrapped in a bandana tucked into his front pocket, according to officials.
He never left!
Source: http://rss.justia.com/~r/LegalJuiceCom/~3/IQAmt3znX7E/adf-12.html
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