Thursday, August 28, 2014

All Zimmerman or All Trayvon Martin

Many criminal defense lawyers studiously ignore cases that catch the public's attention. They just aren't that legally interesting, even if the facts or issues give rise to popular passion. And so it's been for the trial of George Zimmerman for murder 2º in the killing of Trayvon Martin.  Aside from John Steele's having raised the question of the ethics of overcharging, there hasn't been a whole lot to write about.

Now that the trial is coming to a close, however, an interesting question, both legal and tactical, has arisen: would it be best for the defense to take an all-or-nothing approach, murder 2º or acquittal, or a split-the-baby approach, charging the jury on the lesser-included crime of manslaughter. 

As Jacob Gershman writes at the Wall Street Journal law blog, the die has been cast.

George Zimmerman was charged with second-degree murder in the shooting death of Trayvon Martin. So why do jurors now have an option of convicting him of manslaughter?

The short answer: the judge said they could.

Yet the option, which was supported by prosecutors but raised the hackles of the defense, is not clearly spelled out in Florida law.

Notwithstanding what either party individually contends, it remains the judge's responsibility to decide whether to submit a lesser-included offense to the jury if one party requests it.  So if the prosecution felt sufficiently secure in its case that it would get a murder conviction, while the defense feared conviction and was looking to find an out, they would be fighting against a manslaughter instruction lest the jury, feeling any sympathy toward the defendant, compromise.  That's not happening here.

While it may be that Zimmerman's claim of self-defense, that he feared his life to be so endangered as to allow him to lawfully kill another person, isn't entirely persuasive, there is strong support for his claim that he was in fear, even if he overreacted.

Florida law works differently. There’s no slicing and dicing of self-defense. The penal code doesn’t recognize “imperfect self defense.” The law forces juries to either believe that someone had a right to act in self-defense or is a murderer.

There is a loophole, however, as illustrated by Mr. Zimmerman’s trial, which entered into closing arguments Thursday.

In Florida, a judge can choose to give juries a middle-of-the-road option, saying it can convict someone of voluntary  manslaughter if it isn’t convinced that the defendant acted out of “ill will, hatred, spite, or evil intent.” Voluntary manslaughter is a catch-all offense that includes a killing caused by “culpable negligence.”


That the prosecution chose to shoot low and hope for a compromise rather than a murder conviction, while the defense went for all-or-nothing and fought the lesser charge, reflects their view of the relative strength of their case. Not surprisingly, the prosecution is showing some serious weakness in its faith that its murder 2 charge will bear out. 

As John Steele argued before trial, there is a strong current of thought that the prosecution followed a political path, appeasing angry voices demanding Justice for Trayvon without giving the facts of the case much thought. It appears that the trial evidence has borne this out to a large extent.

But most damning is the prosecution's second request of Judge Debra Nelson.

Prosecutor Richard Mantei argued that instructions for third-degree murder should be included on the premise that Zimmerman committed child abuse when he fatally shot 17-year-old Trayvon Martin because Martin was underage.

But defense attorney Don West called the proposed instruction "a trick," and he accused the prosecutor of springing it on the defense at the last minute.

"Just when I didn't think this case could get any more bizarre, the state is alleging child abuse?" West said. "This is outrageous. It's outrageous the state would seek to do this at this time."

So a reduced charge of manslaughter still isn't sufficient for the prosecution to reach its comfort zone, and it's digging even deeper for an even lesser charge of murder 3º.  Not only is that damning and humiliating, but as West says, it's "outrageous."  What's next, trespassing because Zimmerman walked on somebody else's lawn?

It appears that while the judge hasn't tossed the murder 2º count as being legally insufficient, which would seem to address the ethical question of the charge being within the very large ballpark of reasonable charges under the facts of the case, neither the judge nor the prosecution has much faith that the jury will convict. The prosecution is now grasping at straws, hoping to get a conviction for anything it can.

For the defense, given the evidence that's come in, this isn't a good thing or particularly fair thing. They tried a case to the charge, and are now faced with the possibility of a compromise verdict from a jury that might feel badly enough at the death of a young man (which is quite understandable, regardless of whether he contributed to it) to feel that Zimmerman ought to be convicted of something

While this isn't the way it's supposed to go in theory, it's a nightmare for the defense, having fought the charge only to face being skewered by a compromise.






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Source: http://blog.simplejustice.us/2013/07/12/all-zimmerman-or-all-trayvon-martin-2.aspx?ref=rss

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Mark Woods: Time to get it done when it comes to riverwalk (Florida Times-Union)

Share With Friends: Share on FacebookTweet ThisPost to Google-BuzzSend on GmailPost to Linked-InSubscribe to This Feed | Rss To Twitter | Law - Video Stories, RSS Feeds and Widgets via Feedzilla.

Source: http://news.feedzilla.com/en_us/stories/law/video/392636058?client_source=feed&format=rss

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Mid-year union dues increase: Hudson notice required, opt-in not opt-out

The US Supreme Court this morning held that "when a public-sector union imposes a special assessment or dues increase, the union must provide a fresh Hudson notice and may not exact any funds from nonmembers without their affirmative consent."

Knox v. Service Employees Intl Union (US Supreme Ct 06/21/2012)

This is a remarkable decision for two reasons.

First, the Court has never before held that unions must issue a Hudson notice before changing the amount of dues. Hudson notices have always been based on an after-the-fact look-back based on the previous year's audited accounts.

Second, the Court has never before held that unions cannot collect fees from nonmembers unless they affirmatively opt in. The Hudson notice system has always been based on the idea that nonmembers can get an after-the-fact refund.

The union representing California public sector employees has an agency shop agreement which requires nonmembers to pay an annual fee for "chargeable" expenses - nonpolitical costs related to collective bargaining. In June 2005 the union sent out its annual Hudson notice which estimated that chargeable expenses would be 56.35% of its total expenditures. After the 30-day period that nonmembers had to object, the union announced a 25% increase to fund a broad range of political expenses, but nonmembers were given no choice as to whether they would pay into this fund.

The US Supreme Court held (7-2) that

"when a public-sector union imposes a special assessment or dues increase, the union must provide a fresh Hudson notice and may not exact any funds from nonmembers without their affirmative consent."

The Court described this case as one involving compelled funding of the speech of other private speakers or groups, which is akin to compelled speech and compelled association. Therefore, it is subject to "exacting First Amendment scrutiny." In order to prevent the union from extracting a loan from unwilling nonmembers, the union must issue a fresh Hudson notice and must exempt nonmembers unless they opt in.

Two Justices, CONCURRING in the judgment, criticized the majority for adopting an opt-in system of fee collection which was "not contained in the questions presented, briefed, or argued."

Two Justices, DISSENTING, pointed out that unions have always been allowed to calculate each year's fee based on its expenses during the previous year. Although an imperfect system, it is not unconstitutional.

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Source: http://www.lawmemo.com/blog/2012/06/midyear_union_d.html

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The Federal Laws that Affect Workers Compensation Claims

When a workers' compensation claim is made, there are many elements of federal law that get triggered. Among those elements are the Civil Rights Act of 1964, Family and Medical Leave Act, and Americans with Disabilities Act. As an employer, navigating these intersecting laws can be a challenging task while running a business. On this episode of Workers Comp Matters, host Alan Pierce interviews Melissa Fleischer from the HR Learning Center LLC. Together they discuss multiple federal components affecting workers' compensation claim rights and duties. In addition they talk about when workers can be terminated, healthcare commitments under COBRA, and unpaid leave. Tune in to learn more about different paperwork requirements under the different federal laws plus much much more.
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.

Source: http://legaltalknetwork.com/podcasts/workers-comp-matters/2014/06/federal-laws-affect-workers-compensation-claims

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Wednesday, August 27, 2014

McDonnell Takes The Stand, Founding Defense On Marital Dysfunction

In the corruption trial of Virginia Gov. Bob McDonnell and his wife, McDonnell took the stand as a witness. Jeff E. Schapiro, politics columnist for the Richmond Times-Dispatch, discusses the testimony with Robert Siegel.

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Source: http://www.npr.org/2014/08/21/342228873/mcdonnell-takes-the-stand-founding-defense-on-marital-dysfunction?utm_medium=RSS&utm_campaign=law

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LawBiz® Legal Pad: What Are Clients Looking For Anyway?

Ed talks about lawyers who provide solutions and who communicate effectively and often with their clients.

Source: http://feeds.lexblog.com/~r/LawBizBlog/~3/phF8NiBJ0pc/

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LawBiz® Legal Pad: Technology Malpractice

Ed stresses the fact that knowledge of technology is now vital in order to be considered a competent lawyer.

Source: http://feeds.lexblog.com/~r/LawBizBlog/~3/-bWFzJ18xwQ/

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Holder Seeks To Soothe Nerves During Visit To Ferguson

The attorney general hugged community leaders, a highway patrol captain and the mother of Michael Brown during his visit, and got an update on the federal investigation into the teen's shooting.

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Source: http://www.npr.org/2014/08/21/342031589/holder-seeks-to-sooth-nerves-during-visit-to-ferguson?utm_medium=RSS&utm_campaign=law

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You Fell For The Old “Diversion-Style” Burglary?

faucet

As criminal schemes go, this actually isn’t a bad one. So no slamming the victim today. As reported by per NJ.com:

According to Montclair Detective Lt. David O’Dowd, the “diversion-style” burglary hit a Fairview Place home at about 2 p.m. on August 8 when a man wearing beige work clothes and carrying a portable radio rang the doorbell.

It begins …

The man told the homeowner he was working on a water issue in the area, and she let him in to test some of her faucets, police said. After running the water, he led the woman outside to a garden hose, where the two stood for about 30 minutes, police said.

When a voice through the radio said “we’re good to go,” the man left through the yard, police said. When the woman went back inside, police said she found the house ransacked, and $1,000 in cash stolen.

Good to go! And what about the perps?

Police described the suspect who distracted the woman as a 5-feet-10-inch tall white man with brown hair in his 30s. Anyone with information is asked to call Detective L. McCarthy at 973-509-4725.

You’ll find the source here.

Source: http://rss.justia.com/~r/LegalJuiceCom/~3/r6ImeRKkc3g/adfs-4.html

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House GOP Hires $500-an-Hour Lawyers for Suit Against Obama

House Republicans disclosed the contract they signed with a Washington law firm hired to sue President Obama. The terms: $500 an hour, and a cap on $350,000 price tag for the contract, which runs until the next

Source: http://blogs.wsj.com/law/2014/08/25/house-gop-hires-500-an-hour-lawyers-for-suit-against-obama/?mod=WSJBlog

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A Day in the Life of an E-discovery Case Manager

E-discovery is an intricate and complicated process where law and technology intersect to find solutions to complex litigation challenges. Lawyers and legal professionals going through the e-discovery process are often overwhelmed with data and information in varying systems in different stages of technological advancement. From millions of documents to tight production deadlines, no one understands the realities of the e-discovery frenzy better than an e-discovery case manager.
On this episode of The ESI Report, Michele Lange interviews Joe Edlund and Matt Samet, two e-discovery case managers from Kroll Ontrack. Edlund explains that it is the job of a case manager to establish a working relationship with the lawyer, including training on the data software, explaining data sets and performance, helping to make deadlines, and generally decreasing stress. Samet describes some of the benefits to the legal professional of having an e-discovery case manager. They are able to see the client from beginning to end and organize data recovery systems, identify response documents, and be proactive about potential issues. Through an open and communicative relationship with engineers and project level support, case managers are able to make the hectic process of e-discovery easier and more manageable. Stick around to the end for a fun quiz about job descriptions.
Joe Edlund is a Kroll Ontrack case manager who partners with law firms and corporate clients to provide sound advice and best practices in connection with e-discovery management. Matt Samet has experience as a case manager and is also a portfolio manager at Kroll Ontrack, also providing clients with e-discovery solutions.
Special thanks to our sponsor Kroll Ontrack.

Source: http://legaltalknetwork.com/podcasts/esi-report/2014/08/day-life-e-discovery-case-manager

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Summary of Knox v. SEIU

My summary of Knox v. SEIU at SCOTUSblog.com: Knox knocks unions on mid-year assessment for non-members.

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Source: http://www.lawmemo.com/blog/2012/06/summary_of_knox.html

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Tuesday, August 26, 2014

Federal judge rules Florida same-sex marriage ban unconstitutional

[JURIST] A judge for the US District Court for the Northern District of Florida [official website] ruled [opinion, PDF] Thursday that Florida's ban on same-sax marriage is unconstitutional and the state must recognize same-sex couples that were lawfully married in other states. The combined cases of Brenner v. Scott and Grimsley v. Scott involve 22 plaintiffs that currently reside in Florida, including nine same-sex couples who were lawfully married in other states, the surviving spouse of a same-sex couple married...

Source: http://jurist.org/paperchase/2014/08/federal-judge-rules-florida-same-sex-marriage-ban-unconstitutional.php

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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.

Source: http://www.corporatesecuritieslawblog.com/2014/05/delaware-court-of-chancery-underscores-heightened-pleading-standard-necessary-to-support-a-claim-for-breach-of-fiduciary-duty-in-connection-with-a-merger/

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Burwell v. Hobby Lobby: Religion, Contraception, and Regulation

The Supreme Court's recent decision in Burwell v. Hobby Lobby invokes passionate debates and fiery discourse. At the spearhead of exchange are questions about reproductive, First Amendment, and healthcare rights. On this episode of Lawyer 2 Lawyer, host Bob Ambrogi brings light to these issues along with Emily Martin from the National Women's Law Center and Elizabeth Slattery from the Heritage Foundation. Together they discuss the application of the Religious Freedom Restoration Act vs. invoking a Constitutional argument centered around the First Amendment. Tune in to learn more about the 4 debated methods of contraception, Justice Ginsburg's dissent, and religious rights of corporations.
Emily Martin is the Vice President and General Counsel at the National Women's Law Center, where she undertakes cross-cutting projects addressing women's health, economic security, and education and employment opportunities. Prior to joining the Center, Ms. Martin served as Deputy Director of the Women's Rights Project at the American Civil Liberties Union and served as a law clerk for Senior Judge Wilfred Feinberg of the U.S. Court of Appeals for the Second Circuit and Judge T.S. Ellis, III, of the Eastern District of Virginia. She has served as Vice President and President of the Fair Housing Justice Center, a non-profit organization in New York City.
Elizabeth Slattery is a senior legal policy analyst in The Heritage Foundation's Edwin Meese III Center for Legal and Judicial Studies. She researches a variety of issues such as the rule of law, the First Amendment, civil rights and equal protection, and the scope of constitutional provisions. Ms. Slattery also studies and writes about cases before the Supreme Court, judicial nominations, and the proper role of the courts. She manages the Meese Center's appellate advocacy programs, including moot court sessions to prepare litigators for oral argument before the Supreme Court. Ms. Slattery's analysis and commentary have appeared in The Washington Times and The Washington Examiner, as well as outlets including National Review Online, The Daily Signal, The Daily Caller and U.S. News and World Report.
Special thanks to our sponsor, Clio.

Source: http://legaltalknetwork.com/podcasts/lawyer-2-lawyer/2014/07/burwell-v-hobby-lobby-religion-contraception-regulation

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AM Roundup: Prosecutors Probe GM Lawyers; Facebook Privacy Class Action Clears Court Hurdle

AM Roundup: Law Blog rounds up the morning's news.

Source: http://blogs.wsj.com/law/2014/08/22/am-roundup-prosecutors-probe-gm-lawyers-facebook-privacy-class-action-clears-court-hurdle/?mod=WSJBlog

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White House to Lay Out Contraception Compromise for Religious Employers

The Obama administration is set to outline a new compromise Friday designed to shield religious business owners and Christian universities and charities from the health law's contraception-coverage requirements while maintaining the coverage for women, according to people familiar with the new rules.

Source: http://blogs.wsj.com/law/2014/08/22/white-house-to-lay-out-contraception-compromise-for-religious-employers/?mod=WSJBlog

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End of Lifed

As some of you know (and I know you know because you write me angry emails and exasperated twits), Simple Justice hasn't worked well for months now. It takes forever for the posts to load, assuming they load at all.  After trying to find out from my host, GoDaddy, why this is happening, I was eventually told that they had given up on the blogging program I use, stopped doing anything to maintain its efficacy a year ago, and were preparing to "End of Life" their involvement in blogging.

Mind you, this didn't stop GoDaddy from taking my money to use their program, but I digress.

Over the past couple of months, I have been involved in an effort to move SJ to a new platform over at WordPress with a new host. It had a few hitches along the way. My initial efforts involved some of the turnkey opportunities for blawgers, one of which involved spending huge sums of money because their business model is based on dopey law firms who buy into the "every lawyer needs a blawg or will die" vision of the future.

Since this isn't a marketing tool or money maker for me, there was no way I was going to throw thousands of dollars into this hole. My basic premise is that I write and people get to read, if they want, for free. While I am happy to provide the content for my own purposes, if not yours, I am not happy to pay through the nose to amuse readers.

Another wanted me as part of their stable of law blogs, which wouldn't have been so awful except that they quickly reneged on the deal offered when they saw the volume of traffic here.  Reneging isn't something I can live with.

Lacking the mad computer skillz to make this happen on my own, a few people who had significant computer skills and enjoyed SJ offered to lend a hand and make a move happen.  One gave me a lead on the big issues, but was too high on the pay grade to do the dirty work. Another was happy to make the nuts and bolts of a change happen. 

After being well on the way, he suffered some personal problems and, well, disappeared on me. As in, went dark. I grew far more concerned about his welfare than I was about moving this blog. Some things are real, like a good person's well-being, and to this moment, I have no clue whether he is dead or alive. I hope he gets in touch with me soon. I'm still deeply concerned.

It wasn't easy stuff. GoDaddy's system was proprietary, and didn't play nice with anyone else's system. While GoDaddy had developed an export feature to move content to WordPress, they found out that it wasn't particularly "robust," and that my rather extensive content crashed the system. It could handle about 100 blog posts. I had well over 5000. Nobody at GoDaddy anticipated someone as prolific as me.

But when their general counsel explained that I probably wasn't a great choice of people to piss off, they put some developers on the task of creating a means of moving my content. It took a couple of weeks, but they eventually managed to pull it off. It was a decidedly less than perfect solution, as they were able to include my posts and the comments, but they couldn't manage to get the contents to thread (or nest, if you prefer) at WordPress. Bear this in mind later, so no one bitches at me about the comments. It just couldn't be done.

Many people have suggested their hosts, web designers, programs, whatever, to fix the disaster of using GoDaddy. While I appreciated the concern, it wasn't really helpful after the first few thousand suggestions. Most of my griping had to do with prodding GoDaddy to keep SJ working, at least minimally, until a move could be completed.  This wasn't a bleg for suggestions, but deliberate effort to poke GoDaddy by a wee bit of public shaming for their inability to do what they took money to do.

Finally, I was hooked up with a guy who, for a fee, would do what was needed to finish the move. We were on the same page, and although it irks me that I have to pay someone to do the work, I wasn't ready to let SJ die and didn't want to see the content created over the past seven plus years disappear when SJ went dark. But my new guy developed some personal issues that pulled his attention away from making the move happen, I began to think I was a curse to computer people (or maybe computer people were a curse to me?). 

It appears that we're are all getting on the same page now, and provided an alien invasion, healthcare crisis or zombie Armageddon doesn't happen in the next couple of days, I anticipate that SJ will move to its new home.

It's not yet clear to me how easily I will accommodate to WordPress. I know, tons of you have told me how easy it is, but I'm an old dog and new tricks come hard. Heck, it took me a few hours to figure out how to use the "intuitive" wheel of an iPod. Yes, I can be that clueless.

I anticipate that there will a day or two, maybe more, when nothing will appear at SJ. It's not that I've quit or gone fishing. I'm not dead yet. It's just that there will be down time while all this happens, while the internet figures out that I've moved to a new home and redirects you to the right address.

There will be problems in the future as well. Images will be missing. Links will be broken. Formatting will get all screwed up do to differences in coding between GoDaddy and WordPress. It will be annoying to you. Me too, probably more so. But short of going back over the more than 5000 posts and cleaning up the mess by hand, there isn't much I can do to prevent the problems. I am not inclined to spend my time that way. Sorry, but we will all have to suck it up.

I hope this makes things a little clearer for readers, and I apologize for the problems, delays and frustration caused by GoDaddy's sucking. I've been working on it for months now, and I hope we've come to the end of the nightmare. In any event, it's better than being End of Lifed by GoDaddy.


© 2007-13 Simple Justice NY LLC. This feed is for personal, non-commercial & Newstex use only. The use of this feed on any other website is a copyright violation. If this feed is not via RSS reader or Newstex, it infringes the copyright.

Source: http://blog.simplejustice.us/2013/07/10/end-of-lifed.aspx?ref=rss

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Bank of America reaches $16.65 billion settlement with DOJ

[JURIST] The US Department of Justice (DOJ) [official website] on Thursday announced a $16.65 billion settlement [press release] with Bank of America (BOA) [corporate website] to settle claims that it sold precarious mortgage-backed securities to investors. Of the $16.65 billion, $9.65 billion will be split among federal and state entities while the remaining $7 billion will be paid to consumers harmed by BOA and Countrywide Financial's contribution to the 2008 financial crisis. Attorney General Eric Holder [official profile] said that...

Source: http://jurist.org/paperchase/2014/08/bank-of-america-reaches-1665-billion-settlement-with-doj.php

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Judge Denies Claims by Investors in Retirement Accounts Tied to Madoff

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Hundreds of people whose employers invested their retirement funds with Bernard Madoff cannot recover money from the liquidation of Mr. Madoff's firm because they weren't direct customers of the imprisoned Ponzi scheme operator, a bankruptcy judge has ruled.

Source: http://blogs.wsj.com/law/2014/08/25/judge-denies-claims-by-investors-in-retirement-accounts-tied-to-madoff/?mod=WSJBlog

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Monday, August 25, 2014

AM Roundup: A Bumpy Trip for Self-Driving Cars; The Christie-Giuliani Connections

AP
Law Blog rounds up the morning's news: Sharing More Than a Party: New Jersey Gov. Chris Christie has had a lot in common with former New York City Mayor Rudy Giuliani for a long time—two Northeast Republicans known for their tough talk, Italian-American roots and taste for the national spotlight. [WSJ] A Bumpy Road: Google is keen on developing a vehicle without a steering wheel and pedals because the company is gunning for the goal of a completely autonomous vehicle that can operate without any human intervention. But when there is no driver, the question of who is to blame in an accident gets complicated and the possible targets of lawsuits expand. [WSJ]

Source: http://blogs.wsj.com/law/2014/08/25/am-roundup-a-bumpy-trip-for-self-driving-cars-the-christie-giuliani-connections/?mod=WSJBlog

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2014 NSSTA Study on Structures

In 2014, the National Structured Settlements Trade Association (NSSTA) commissioned CLM Advisors to conduct a study, where the focus was on how senior claims executives perceive the value of structured settlements and the value that structured settlement consultants bring to the table. On Ringler Radio, host Larry Cohen and co-host, Robert Caples welcomes Taylor Smith, President of CLM Advisors, to spotlight this study, discuss the findings and explore how we can educate others on the value of structured settlements.

Source: http://traffic.libsyn.com/ringler/RR_072914_NSSTA_Study.mp3

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What Paralegals Need to Know About Information Governance, Social Media, and Data Security

Technology has changed the world of law firms and businesses, affecting the way lawyers are required to retrieve, record, and archive information. Instead of communicating entirely by email or phone, professionals are now also exchanging valuable information by instant message, collaboration systems, or social media. It is important for paralegals to understand the ways in which this data is stored and maintained as it can often result in expensive lawsuits.
On this episode of The Paralegal Voice, Vicki Voisin interviews social business management expert Doug Kaminski about data recovery, ediscovery, regulatory requirements, and archiving information that is exchanged through new forms of communication like social media. He emphasizes the importance for paralegals to become technology savvy, not only to assist in relevant lawsuits, but also to expand their skill set. As communications evolve, Kaminski explains, there will be an increased amount of potential evidence passed through instant messaging and social media. Paralegals should be knowledgeable about the laws concerning data retention in order to inform on custodial interviews and depositions. And most importantly, paralegals and everyone should be aware of the consequences of online communications.
Doug Kaminski, VP of Sales at West and Canada at Actiance, specializes in litigation, electronic discovery sales management, technology security, corporate compliance, corporate governance, information governance, archiving, social media, and enterprise software. He is requested as a speaker nationwide on topics including corporate compliance and governments, social media, security, and electronic discovery.
Special thanks to our sponsors NALA and ServeNow.

Source: http://legaltalknetwork.com/podcasts/paralegal-voice/2014/07/paralegals-need-know-information-governance-social-media-data-security

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China executes 8 for separatist violence and related crimes

[JURIST] Chinese officials in the western region of Xinjiang [official website, in Chinese] executed eight individuals charged with terrorism- and separatism-related crimes on Saturday. According to a press release by China's state-run news agency, the execution was conducted with approval [Xinhua report] by the Supreme People's Court [official website, in Chinese]. Three of the executed individuals were sentenced during a mass trial [JURIST report] in May, in which 55 people were sentenced for terrorism-related charges before a crowd of more...

Source: http://jurist.org/paperchase/2014/08/china-executes-8-for-separatist-violence-and-related-crimes.php

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Does A Consumer’s Exercise of a Rescission Right Mean that the Loan Is Automatically Rescinded? Perhaps Not, According to One Federal Court, If the Consumer Does Not Also File a Lawsuit for Rescission

In Baker v. Bank of America, N.A., No. 5:13-CV-92-F, 2014 U.S. Dist. LEXIS 9578 (E.D.N.C. Jan. 27, 2014), the United States District Court for the Eastern District of North Carolina held that even if a consumer timely exercises his or her right to rescind a loan transaction under the Truth in Lending Act (TILA), 15 U.S.C. § 1601, et. seq.i.e., during the three-day statutory “cooling-off” period — that exercise does not automatically cause the loan to be rescinded.  Rather, the court held, if a consumer’s notice of rescission is met with silence by the lender, the consumer must also file a lawsuit in order to complete the rescission before the statute of limitations expires (in this case, the statute of limitations was determined to be four years).   The Baker case provides a thorough interpretation of the effect of the statutory three-day “cooling-off” period, for which, it was noted in the decision, case law is “exceedingly sparse.”

In Baker, the consumer entered into a refinancing transaction knowing that the terms were less favorable than the consumer had been quoted.  Two days after closing the loan, the consumer mailed a signed rescission notice to the lender. The lender did not respond to the notice and funded the consumer loan.  The lender allegedly refused to rescind the transaction despite multiple requests from the consumer.  The consumer, unable to refinance on more favorable terms, eventually became delinquent on the loan and foreclosing procedures were initiated.  Personal bankruptcy proceedings resulted in a discharge of the personal obligations under the loan but the foreclosure proceedings continued on the basis of the lender’s security interest in the property.

This case arose when the consumer responded to the continued foreclosure proceedings by filing an action for rescission pursuant to the TILA, nearly six years after the original notice of rescission had been sent to the lender.  The defendants moved to dismiss the complaint for failure to state a claim upon which relief can be granted.  The consumer argued that the rescission automatically voided the security interest pursuant to Section 1635(b) of the TILA, which provides that “when an obligor exercises his right to rescind . . . he is not liable for any finance or other charge and any security interest given by the obligor . . . becomes void upon such a rescission” (emphasis added).  The consumer argued that this sentence provided for an automatic right of rescission that voided the transaction so long as the consumer sent notice of rescission within the three day statutory period.

The court disagreed.  Instead, the Court distinguished between the “exercise” of the right of rescission and “full rescission.”  The exercise of the right to rescind is accomplished by the giving of notice, whereas the full rescission is defined by a “full unwinding of the transaction and a return to the status quo.”  Because the security interest becomes void only upon rescission, the lender maintained a security interest that could be foreclosed upon until such time as the transaction was fully rescinded.

In reaching its conclusion, the Court declined to follow unpublished decisions from the United States Court of Appeals for the Ninth Circuit (which includes California) and the United States District Court for the Eastern District of Pennsylvania (within the Third Circuit), which had previously held that the notification made pursuant to the TILA automatically voided a security interest.  Rather, the Baker court held, where, as here, a lender fails to respond to a consumer’s exercise of his or her right to rescission within the three day statutory period, the consumer “must file a lawsuit to complete the rescission process in cases where the lender fails to respond to the notice or otherwise fails to recognize the borrower’s rescission rights.”

It is worth noting here that the Supreme Court granted certiorari on April 28, 2014 to a case which hinges on the question of whether or not the TILA right of rescission for the lender’s failure to furnish required disclosures must be invoked by filing a lawsuit or whether such rescission is automatic upon notice made within the three-year statutory period.  See Jesinoski v. Countrywide Home Loans, Inc., 729 F.3d 1092 (8th Cir. 2013) (per curiam), cert. granted, No. 13-684 (U.S. Apr. 24, 2014).

The Baker court also disagreed with the consumer that lawsuits seeking rescission pursuant to the TILA have an unlimited limitations period.  The court held that such a limitations period would cloud title to property to such an extent that Congress could not have intended that the right of rescission have an unlimited limitations period.  However, the court did not wade too deeply into the debate regarding which statute of limitations was appropriate.  Here, the right of rescission — that is, the right to sue for rescission — arose at the very latest when the lender failed to respond to the notice of rescission within the twenty day statutory period.  The suit in Baker was filed nearly six years later and therefore must have been untimely.  Although the court discussed the conflicting decisions of a number of other courts that placed the statute of limitations at the one-year and three-year mark, the court in Baker ultimately concluded that the relevant statute of limitation is “at most four years” and continues its analysis no further.

Given the uncertainties in the statute of limitations noted by the court, which identified decisions concluding the statute of limitations in these cases is as short as one-year, three-years or “at most four years,” the fate of individual rescission claims will remain varied.  In addition, a consumer may be required to assert a claim for rescission in order to effect the full rescission desired, but a lender that fails to take “any action necessary or appropriate to reflect the termination of any security interest” within twenty days after receiving notice of rescission remains liable for civil penalties.  Although such civil penalties are subject to a one-year statute of limitations, the TILA does provide for attorney’s fees in cases where the lender violates the TILA by failing to respond to a timely notice of rescission.  Thus a lender would still be wise to consider the risks and costs of litigation, civil penalties and attorney’s fees before ignoring a notice for rescission.

Source: http://www.corporatesecuritieslawblog.com/2014/05/does-a-consumers-exercise-of-a-rescission-right-mean-that-the-loan-is-automatically-rescinded-perhaps-not-according-to-one-federal-court-if-the-consumer-does-not-also-file-a-lawsuit-for-re/

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Mark Woods: Who knew the simple cure for teenage lust was a No. 2 pencil? (Florida Times-Union)

Share With Friends: Share on FacebookTweet ThisPost to Google-BuzzSend on GmailPost to Linked-InSubscribe to This Feed | Rss To Twitter | Law - Video Stories, RSS and RSS Feed via Feedzilla.

Source: http://news.feedzilla.com/en_us/stories/law/video/389531025?client_source=feed&format=rss

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Tips and Tricks for Lawyers Using PowerPoint in Trial Presentations

Many attorneys now use PowerPoint in trial to preview, highlight, and sum up the evidence for their arguments and organize their presentations. Effective PowerPoints garner the attention of court personnel and jury members and enhance their overall presentation. However, ineffective PowerPoints can be confusing, difficult to read, or distract the audience from the presentation's overall objective. Attorney and legal technology consultant Paul Unger argues that only with the proper skills and learning can a lawyer create an informative and engaging PowerPoint presentation that will be a useful tool in the courtroom.
In this episode of The Digital Edge, Sharon Nelson and Jim Calloway interview Unger about the best practices in using PowerPoint in the courtroom. Unger emphasizes simplicity, professionalism, and making PowerPoint a tool that reinforces the content rather than providing it. According to research Unger has done, audiences who are distracted by bullet points and excess text are unlikely to remember much of the slide's content or even the presenting lawyer's main point. He recommends that the PowerPoint slides provide only headlines and pictures that are held together by the attorney's narrative.
Unger's experience in PowerPoint and legal technology comes from being an attorney and founding principal of Affinity Consulting Group, a nationwide consulting company providing legal technology consulting, continuing legal education, and training. He specializes in trial presentation and litigation technology, document and case management, and paperless office strategies. To learn more, pick up a copy of his book, PowerPoint in One Hour for Lawyers, at the ABA bookstore.
Special thanks to our sponsor, ServeNow.

Source: http://legaltalknetwork.com/podcasts/digital-edge/2014/06/tips-tricks-lawyers-using-powerpoint-trial-presentations

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Obesity can be a disability, at least in Montana

Obesity can be a disability, at least in Montana.

Full decision: BNSF Railway v. Feit (Montana 07/06/2012)

Feit got a ruling from the Montana Department of Labor that BNSF Railway discriminated against him by refusing to hire him because BNSF regarded him as being disabled due to his obesity.

BNSF then went to federal court to get a review of whether it violated the Montana Human Rights Act (MHRA) by refusing to hire Feit because of his obesity.

The federal court then asked the Supreme Court of Montana to decide how to rule, asking this question: Is obesity that is not the symptom of a physiological condition a "physical or mental impairment" as it is used in Montana Code Annotated section 49-2-101(19)(a)?

The Montana Supreme Court answered with a qualified yes. The court answered: Obesity that is not the symptom of a physiological disorder or condition may constitute a "physical or mental impairment" within the meaning of Montana Code Annotated section 49-2-101(19)(a) if the individual's weight is outside the "normal range" and affects "one or more body systems" as defined in 29 CFR 1630.2(h)(1)(2011).

The federal court laid out these facts:

1. BNSF offered Eric Feit a conditional offer of employment as a conductor trainee. The employment was conditioned upon successful completion of a physical examination, drug screening, background investigation, proof of employment eligibility, and BNSF’s Medical History Questionnaire.

2. On February 6, 2008, BNSF informed Feit he was not qualified for his “safety sensitive” position because of the “significant health and safety risks associated with extreme obesity.”

3. BNSF told Feit he would not be considered for the job unless he either lost 10% of his body weight, or successfully completed additional physical examinations at his own expense. Regardless of the test results, BNSF did not guarantee Feit a job.

4. With the exception of a sleep study test, Feit successfully completed the additional physical exams BNSF requested. The sleep test cost at least $1,800, and Feit could not afford the test.

5. Because BNSF informed Feit that it would not consider him for the conductor trainee position unless he completed the sleep study, Feit set out to lose 10% of his weight.

6. A genuine dispute exists regarding whether BNSF received documentation of Feit’s weight loss.

The Montana Supreme Court noted that the EEOC Interpretive Guidance distinguished between conditions that were impairments and conditions that were simply physical characteristics, which suggested that a person with normal weight required a physical condition to qualify as an impairment. The court referred to the ADAAA which instructed courts that they were interpreting the statute too restrictively and expressed its specific intent that determination of disability not demand extensive analysis (122 Stat. at 3553-54).

The DISSENT noted that the definition of a "physical and mental impairment" included "any physiological disorder, or condition" that affects a major system of the human body (29 CFR 1630.2(h)(1)), and argued that the plain meaning required a physiological condition be present before an impairment existed.

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Source: http://www.lawmemo.com/blog/2012/07/obesity_can_be.html

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Sunday, August 24, 2014

General Motors Litigation Update

Recalls. Congressional Investigations. Litigation. General Motors (GM) has taken center stage over its ignition switch problem, which has been linked to drivers' catastrophic injuries and in some cases, death. On Ringler Radio, host Larry Cohen welcomes Attorney Jere Beasley, the senior member of the Beasley Allen Law Firm, to give an update on litigation involving the GM ignition switch problem and talk about the current investigation into General Motors.

Source: http://ringlerradio.com/?p=13812

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Holder Seeks To Soothe Nerves During Visit To Ferguson

The attorney general hugged community leaders, a highway patrol captain and the mother of Michael Brown during his visit, and got an update on the federal investigation into the teen's shooting.

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Source: http://www.npr.org/2014/08/21/342031589/holder-seeks-to-sooth-nerves-during-visit-to-ferguson?utm_medium=RSS&utm_campaign=law

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Straight From The Hole

It's far easier to wrap your head around torture when it involves the infliction of active pain. That doesn't make passive pain, the infliction of often unbearable psychological punishment, an less torturous. And it happens regularly, and many time arbitrarily, as explained in an op-ed by Wilbert Rideau, who served 44 years for manslaughter in Louisiana.

Before you dismiss Rideau as a killer who deserved whatever he got, bear in mind that stories from the inside aren't told by saints. Every once in a while, a former inmate emerges with the erudition necessary to put into words the world that most of us never knew existed. When this happens, it's a window through which we need to look. Rideau offers a view of solitary confinement, the hole.
I know something about solitary confinement, because I’ve been there. I spent a total of 12 years in various solitary confinement cells. And I can tell you that isolating a human being for years in a barren cell the size of a small bathroom is the cruelest thing you can do to a person.

Deprived of all human contact, you lose your feeling of connectedness to the world. You lose your ability to make small talk, even with the guard who shoves your meal through the slot in the door. You live entirely in your head, for there is nothing else. You talk to yourself, answer yourself. You become paranoid, depressed, sleepless. To ward off madness, you must give your mind something to do. In 1970, I counted the 358 rivets that held my steel cell together, over and over. Every time the walls seemed to be closing in on me, I counted them again, to give my mind something to fasten on to.

Without having been there, it's likely inconceivable to understand what happens to a mind in isolation. Some of us have trouble being alone for an hour, an evening, a day. Add day upon day, year upon year. But not the way it is for us, where we still have access to television or internet, even if there is no other living person around.  No, this is completely different.

But to add insult to injury, don't leap to the assumption that if a prisoner ends up in the hole, he must have done something pretty bad to deserve it.

In a world where authorities exercise absolute power and demand abject obedience, prisoners are almost always going to be on the losing side, and they know it.

The typical inmate doesn’t want trouble. He has little to gain and too much to lose: his job, his visits, his recreation time, his phone privileges, his right to buy tuna, ramen and stale bread at inflated prices in the commissary. The ways even a bystander to the most peaceful protest can be punished are limited only by the imagination of the authorities.

Punishment can be deserved or not. There's no due process in prison. There's no one to complain to about being punished based on a false accusation, a trumped up allegation, a guard pissed off by an attitude. Authorities own the lives of prisoners, and can be as harsh as they want to be, as arbitrary as they feel like. And there isn't a damn thing you can do about it.

Rideau explains that the prison protests in California are an outgrowth of a system run amok and no other means of addressing their grievance.

And yet, sometimes things get so bad that prisoners feel compelled to protest, with work stoppages, riots or hunger strikes. On July 8, some 30,000 inmates in the custody of the California Department of Corrections went on a hunger strike to demand improvements in prison conditions. Their biggest complaint was the runaway use of solitary confinement, the fact that thousands of prisoners are consigned to this cruelty indefinitely, some for decades.

While prisoners are sentenced to incarceration, no judge sentences them to isolation for decades. There is no requirement that any neutral party review the decision to inflict this torture on another human being. It can be imposed for a sound reason or no reason at all. Who is to disagree?  But no matter what the reason or nonreason, to put a person in the hole for years, for decades, is to impose psychological torture of a terrible kind on a human being.  And there is nothing, absolutely nothing, the prisoner can do about it. 

In California, inmates did the only thing left for them to do, protest. Not too many of us care about what happened to "criminals." After all, bad dudes who did bad things to other people. A pox on them. They get what they deserve and their out of sight, out of mind.  But there is good reason to give them just a little bit of though. For one thing, they are still people, and we are still purportedly a civilized society that doesn't condone the needless brutal treatment of people. But if you lack anything remotely resembling empathy, than do it for your own sake:

Why should you be concerned about the inhumane conditions of prolonged solitary confinement, with all the social, emotional and mental deterioration that it entails? Well, every year men from California’s Pelican Bay and other supermax prisons around the nation are released directly from the vacuum of their cells into free society, to live and work among you and your loved ones. As a matter of self-preservation, maybe we should all join the prisoners’ request for rehabilitative opportunities that will improve the mental health of those in solitary.

Go say "hi" to the guy who moved in down the block kids. So what if he spent the last two decades in the hole and seems a bit odd. I'm sure he'll get over it.



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Source: http://blog.simplejustice.us/2013/07/17/straight-from-the-hole.aspx?ref=rss

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U.S. Supreme Court Decision Gives More Latitude to Defeat Securities Fraud Class Action Lawsuits Prior to Class Certification

In Halliburton Co. v. Erica P. John Fund, Inc., No. 13-317, __ S Ct. __, 2014 WL 2807181 (U.S. June 23, 2014), the United States Supreme Court refused to overturn the landmark decision Basic v. Levinson, but ruled that securities class action defendants may rebut the fraud-on-the-market presumption of investor reliance before the class certification stage by demonstrating lack of price impact.

Plaintiff alleged that Halliburton Co. (“Halliburton”) and its CEO made a series of public misstatements concerning the company’s liabilities and revenues and the cost savings expected from a recent merger.  These misstatements purportedly inflated Halliburton’s stock price. According to plaintiff, when Halliburton eventually revealed the truth, the stock price fell, injuring plaintiff and other investors who purchased at the allegedly inflated prices.  Plaintiff, on behalf of a putative class, asserted claims against Halliburton and its CEO for violations of Section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b), and Securities & Exchange Commission Rule 10b-5, 17 C.F.R. § 240.10b-5, promulgated thereunder.

Plaintiff moved for class certification under Rule 23 of the Federal Rules of Civil Procedure, seeking to satisfy Rule 23(b)(3)’s requirement that common questions predominate by invoking the fraud-on-the-market presumption of reliance.  That presumption, when it applies, allows for common proof of reliance on the theory that investors rely upon the integrity of a stock’s trading price and, when the stock trades in an efficient market, such price reflects all public information, including any alleged material misstatements. See Basic, Inc. v. Levinson, 485 U.S. 224, 241-42 (1988).

The district court initially denied plaintiff’s class certification motion, and the Fifth Circuit affirmed.  But the Supreme Court vacated that judgment, concluding that securities fraud plaintiffs need not prove loss causation – a causal connection between the defendants’ alleged misrepresentations and the plaintiffs’ economic losses – at the class certification stage in order to invoke Basic’s presumption of reliance.

On remand, Halliburton argued that class certification was nevertheless improper because the evidence presented also showed that the alleged misrepresentations did not actually affect its stock price.  According to Halliburton, by demonstrating the absence of so-called “price impact,” it had rebutted the Basic presumption of investor reliance.  The district court disagreed and  certified the class.  The Fifth Circuit affirmed, finding that Halliburton could use price impact evidence to rebut the Basic presumption only at trial, not at the class certification stage.

Two issues were presented to the Supreme Court the second time around.  First, whether the Court should overrule or modify Basic’s presumption of reliance.  And, second, if not, whether defendants should nonetheless be afforded an opportunity in securities class action cases to rebut the presumption at the class certification stage, by showing a lack of price impact.

With respect to the first issue, the Supreme Court declined to overturn or modify Basic.  The Court found that none of the arguments that Halliburton presented so discredited the Basic decision to constitute a “special justification” for overruling it.  The Court remarked that Basic’s presumption of reliance was not inconsistent with recent decisions more strictly construing the Rule 10b-5 cause of action, including Stoneridge Investment Partners, LLC v. Scientific Atlanta, Inc., 552 U.S. 148 (2008), or decisions governing class action certification, including Wal-Mart Stores, Inc. v. Dukes, 564 U.S. ___ (2011), which require plaintiffs to prove, not merely plead, that the proposed class satisfies each requirement of Rule 23.

The Court also declined to modify the prerequisites for invoking the fraud-on-the-market presumption by requiring plaintiffs to have to prove “price impact” at the class certification stage.

But, in the final part of its majority opinion, the Court dealt a blow to securities fraud class action lawsuits.  The Court agreed with Halliburton that defendants must be afforded the opportunity to rebut the fraud-on-the-market presumption “before class certification” with evidence of a lack of price impact.  The Court found there is no reason to prohibit a defendant from presenting evidence showing that an alleged misrepresentation did not actually affect the stock’s price and, consequently, that the Basic presumption does not apply.

Notably, Justice Thomas, submitted an opinion concurring in judgment (joined by Justices Scalia and Alito), but voicing the opinion that Basic should be overruled.  The opinion suggested that economic realities and the Supreme Court’s subsequent jurisprudence have undermined the foundations of the Basic presumption, rendering it obsolete.  Citing Stoneridge, Justice Thomas opined that “Basic should be overruled in favor of the straightforward rule that ‘[r]eliance by the plaintiff upon the defendant’s deceptive acts’—actual reliance, not the fictional ‘fraud-on-the-market’ version— ‘is an essential element of the §10(b) private cause of action.’”

While the majority Supreme Court opinion did not do away with the Basic presumption, it did open the door for securities fraud defendants to defeat class-wide showing of reliance at an earlier stage.  That the Supreme Court ruled that defendants must be given an opportunity “before class certification” to defeat the presumption with evidence of lack of price impact, and did not say “at the class certification stage” is curious.  Perhaps, going forward, defendants may be afforded the opportunity to demonstrate lack of price impact at the earliest stages of a case, including possibly the pleadings stage.

Source: http://www.corporatesecuritieslawblog.com/2014/06/u-s-supreme-court-decision-gives-more-latitude-to-defeat-securities-fraud-class-action-lawsuits-prior-to-class-certification/

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Is Your Out-of-State LLC “Doing Business” in California?

Individuals and entities, including those from outside California, who invest in or do business through an out-of-state limited liability company (“LLC”) may be surprised to find out that they have filing obligations and tax liabilities in California as a result of California’s far-reaching rules and interpretations related to when an LLC is treated as “doing business” in California.

The law:

Under California law, all LLCs are required to annually file a California tax return and pay at least an $800 California franchise tax if they:

  • Engage in any transaction in California for the purpose of financial gain or profit.
  • Are incorporated or organized in California.
  • Have qualified or registered to do business in California.
  • Are “doing business” in California, whether or not they incorporated, organized, qualified or registered under California law.

The Franchise Tax Board (“FTB”) takes the position that an LLC organized in a jurisdiction outside California is nevertheless “doing business” in California if:

  • It is a member of an LLC that does business in California.
  • It is a general partner in a partnership that does business in California.
  • Any of the LLC’s members, managers, or other agents conducts business in California on behalf of the LLC.

In addition, an out-of-state LLC is “doing business” in California if:

  • The LLC is commercially domiciled in California (i.e., California is the place where realistic control of the LLC’s functions is centered).
  • Sales, including sales by the LLC’s agents and independent contractors, in California exceed the lesser of $500,000 or 25% of the LLC’s total sales.
  • Real or tangible property of the LLC in California exceeds the lesser of $50,000 or 25% of the LLC’s total real and tangible property.
  • The amount paid in California by the LLC for compensation exceeds the lesser of $50,000 or 25% of the total compensation paid by the LLC.

For purposes of these calculations, the sales, property and payroll of the LLC include the LLC’s pro‑rata or distributive share of any pass‑through entities (i.e., partnerships, LLCs and S‑corporations).

Some examples that may surprise you:

  • A Nevada LLC acquires a passive minority membership interest in a Delaware LLC that owns and operates several California shopping centers.  The Nevada LLC may be treated as “doing business” in California simply by reason of its ownership of a membership interest in the Delaware operating LLC, resulting in the Nevada LLC’s own California tax filing obligations.
  • A Montana LLC owns an apartment building in Montana that is managed by an on-site (Montana) property manager.  One of the three LLC managing members is a California resident.  The Montana LLC may be treated as “doing business” in California simply by reason of the existence of a California managing member.

Penalties:

The State can impose a penalty of $2,000 per taxable year if an out-of-state LLC is doing business in California and fails to file a tax return and pay the taxes and fees due. The penalty is due only if the FTB sends a written demand that a return be filed and the LLC does not file the return within 60 days.

Also, any contract made by an out-of-state LLC in California that is neither qualified to do business nor has a corporate account number from the FTB is voidable by any other party to that contract for the period during which the out-of-state LLC fails to file a tax return required by the FTB.

Note that the FTB’s determination of when an out-of-state LLC must file tax returns is in contrast with the California Corporations Code.  Under the California Corporations Code, any entity that “actively engages in any transaction in California for the purpose of financial gain or profit” must register with the California Secretary of State.  But for this purpose, an out-of-state corporation is not considered to be transacting business in California merely because it is a member or a manager of a domestic or out-of-state LLC or a limited partner of a domestic or out-of-state limited partnership.  Moreover, the new California Revised Uniform Limited Liability Company Act, effective as of January 1, 2014, provides that an out-of-state LLC “may” register in California and does not impose penalties for failing to do so.

Non-residents of California are also not necessarily off the hook for California taxes arising from ownership of an LLC.  Such non-residents may owe taxes on pass-through income sourced from an LLC’s California activities despite their non-resident status.

BOTTOM LINE:  Your out-of-state LLC may have nexus and filing obligations in California and taxes may be owed for such LLC’s activities in California!

Source: http://www.corporatesecuritieslawblog.com/2014/07/is-your-out-of-state-llc-doing-business-in-california/

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