Source: http://valawyersweekly.com/2014/01/02/contractor-cant-sue-city-on-bid/
Sunday, February 23, 2014
Contractor Can’t Sue City on Bid
In this suit arising out of a city procurement bid process, won by a third party, plaintiff’s complaint identifies plaintiff and defendant as a joint venture but the attached bid proposal describes them as “two primary subcontractors,” and the Richmond Circuit Court grants the city’s demurrer but overrules the demurrer on plaintiff’s breach of contract ...
Second Circuit Affirms Dismissal of Short-Swing Profit Claim Against Goldman Sachs Arising from Six-Month Call Options
In Roth v. The Goldman Sachs Group, Inc., No. 12-2509-cv, 2014 WL 305094 (2d Cir. Jan. 29, 2014), the United States Court of Appeals for the Second Circuit held that the short-swing profits rule imposed by Section 16(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78p(b), requiring corporate insiders (including ten-percent stockholders) to disgorge profits earned from certain purchases and sales of their company’s securities that take place within a six month period, does not apply where the purchaser was an insider when it wrote call options, but was no longer an insider by the time that the same options expired less than six months later. This decision, which adopts the views expressed by the Securities and Exchange Commission (“SEC”) in an amicus curiae brief, also clarifies that the expiration of a call option within six months is considered a “purchase” within the meaning of Section 16(b), and that “purchase” is paired with the “sale” which is deemed to occur at the time when the option was originally written.
Plaintiff was a stockholder of Leap Wireless International, Inc. (“Leap”). Plaintiff sued The Goldman Sachs Group, Inc. and Goldman Sachs & Co. (collectively, “Goldman”) derivatively on behalf of Leap for alleged violations of Section 16(b). Plaintiff alleged that Goldman owned more than ten percent of Leap’s equity securities at the time it wrote certain call options with respect to Leap stock (the “Options”). Plaintiffs alleged that the Options were written to expire less than six months later, and acknowledged that at the time that the Options expired Goldman no longer owned ten percent or more of Leap’s shares.
This fact pattern left the Court with two fundamental questions to answer: (1) was the expiration of the Options within six months a “purchase” within the meaning of Section 16(b) to match the “sale” that is deemed under SEC Rule 16b-6(a), 17 C.F.R. § 240.16b-6(a), to have occurred at the time the Options were written; and (2) even if the expiration is deemed a “purchase,” whether the fact that Goldman was no longer a ten-percent stockholder at the time of expiration took Goldman outside the disgorgement requirement of Section 16(b). (It should also be noted that derivatives, such as the Options, are considered “securities” within the meaning of Section 16(b).)
The Second Circuit held that “for purposes of Section 16(b), the expiration of a call option within six months of its writing is to be deemed a ‘purchase’ by the option writer to be matched against the ‘sale’ deemed to occur when that option was written.” The rationale for this ruling, which was also endorsed by the SEC, is simple: “When an insider sells a call option, and that same option expires unexercised less than six months later, the writer’s opportunity to profit on the underlying stock is realized.” Therefore, the expiration of the call option is considered a “purchase” under Rule 16(b).
However, the Court also held that because Goldman was no longer a statutory insider by the time the “purchase” occurred (because Goldman no longer owned ten percent or more of Leap’s shares), Goldman was not obligated under Section 16(b) to disgorge the profits it made on the transaction.
Going forward, statutory insiders writing six-month options can avoid Section 16(b) liability by making sure they relinquish insider status before the six-month period ends.
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How Bad Ideas Grow Legs
Last January, Instapundit lawprof Glenn Reynolds wrote a short essay that became the darling of many folks who take an interest in criminal justice issues entitled Ham Sandwich Nation: Due Process When Everything is a Crime. To be kind, it was a simplistic rehash of long-time, discredited silver-bullet solutions to complex problems. The only virtue was that it came from Reynolds, who was a law professor and thus credible by definition even though he was dabbling at the edges of an area of law about which he knew nothing.
It was excoriated here. Gideon beat it up at A Public Defender as well. Unlike Reynolds, this wasn't a theoretical exercise for us. We lived with the problems, and would wind up living with whatever inane solution seemed like a cool idea to an academic. Whereas Reynolds' mantle of scholarly credibility was an asset for others whose interest came from a distance, ours was nuts and bolts, from living with the detritus of bad ideas in the trenches.
Radley Balko took us to task for being critical of Reynolds. The Agitator offered a homily of cooperation, arguing that we ought to work with luminaries like Reynolds rather than saying mean things like their ideas aren't fabulous. After explaining what was horribly wrong with a particular idea promoted by Reynolds that Radley found especially interesting (loser pays in criminal litigation), I wrote:
Of course, I was shunning and mocking, just as Radley said. But then, I had no plan to suck up to Reynolds in an effort to gain him as an ally anymore than I planned to teach a pig to sing. As players in punditry go, Reynolds is a major player,* and he enjoys his importance. He doesn't swim with minnows like Gid and me. At most, he eats us for a snack. Radley may have been well-intended, but didn't really appreciate the pecking order.
Of course, there was nothing to stop Reynolds, either before or after he published his Ham Sandwich essay, from speaking with people who were actually knowledgeable about criminal law, whether that was Gid and/or me, or some other trench lawyers, who could explain why good ideas on paper don't play as well in the courtroom. But no. He didn't. Since it was his essay being published to enlighten the world, it was his duty to get a clue, and his choice not to.
My point to Radley at the time was the when loud voices with ascribed credibility write something like this, bad things happen. Bad ideas are taken more seriously. Other people will mistakenly assume that Reynolds, lawprof and all, has a clue what he's talking about and his ideas must have merit. After all, lawprofs could never be wrong about lawstuff. And now that Reynolds had rung the bell, it could not be unrung.
George Will, certainly one of this country's leading conservative intellectuals, heard the peal of Reynolds' bell this week. In an otherwise excellent column on Senators Leahy and Rand's efforts to provide a backdoor to mandatory minimums (which raises the question of why they aren't seeking to end mandatory minimums through the front door, but we'll take it anyway they offer it), Will goes from the sublime to the ridiculous:
Yet, I look forward to some fine senators extolling the virtue of a dangerous and hare-brained reform of the law, citing to Glenn Reynolds' Ham Sandwich essays as the font of practical criminal law brilliance. Because the myth has now been created and George Will gave it legs.
And this is how we end up with monumentally bad ideas being enshrined in law.
* For those who aren't familiar with Instapundit, this from Reynolds' Wikipedia page:
© 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.
It was excoriated here. Gideon beat it up at A Public Defender as well. Unlike Reynolds, this wasn't a theoretical exercise for us. We lived with the problems, and would wind up living with whatever inane solution seemed like a cool idea to an academic. Whereas Reynolds' mantle of scholarly credibility was an asset for others whose interest came from a distance, ours was nuts and bolts, from living with the detritus of bad ideas in the trenches.
Radley Balko took us to task for being critical of Reynolds. The Agitator offered a homily of cooperation, arguing that we ought to work with luminaries like Reynolds rather than saying mean things like their ideas aren't fabulous. After explaining what was horribly wrong with a particular idea promoted by Reynolds that Radley found especially interesting (loser pays in criminal litigation), I wrote:
Radley also questioned by twit why I wasn't more open to embracing the ideas proffered by Glenn Reynolds and Conor Friedersdorf, "And it's probably more productive to engage, persuade new allies than to shun and mock them." Since I hate to be a shunner or mocker, and I try to be relatively informative as reflected in this response to Radley's query, I look forward to Reynolds and Friedersdorf, our new allies, engaging. Engage away, guys. Your turn.
Of course, I was shunning and mocking, just as Radley said. But then, I had no plan to suck up to Reynolds in an effort to gain him as an ally anymore than I planned to teach a pig to sing. As players in punditry go, Reynolds is a major player,* and he enjoys his importance. He doesn't swim with minnows like Gid and me. At most, he eats us for a snack. Radley may have been well-intended, but didn't really appreciate the pecking order.
Of course, there was nothing to stop Reynolds, either before or after he published his Ham Sandwich essay, from speaking with people who were actually knowledgeable about criminal law, whether that was Gid and/or me, or some other trench lawyers, who could explain why good ideas on paper don't play as well in the courtroom. But no. He didn't. Since it was his essay being published to enlighten the world, it was his duty to get a clue, and his choice not to.
My point to Radley at the time was the when loud voices with ascribed credibility write something like this, bad things happen. Bad ideas are taken more seriously. Other people will mistakenly assume that Reynolds, lawprof and all, has a clue what he's talking about and his ideas must have merit. After all, lawprofs could never be wrong about lawstuff. And now that Reynolds had rung the bell, it could not be unrung.
George Will, certainly one of this country's leading conservative intellectuals, heard the peal of Reynolds' bell this week. In an otherwise excellent column on Senators Leahy and Rand's efforts to provide a backdoor to mandatory minimums (which raises the question of why they aren't seeking to end mandatory minimums through the front door, but we'll take it anyway they offer it), Will goes from the sublime to the ridiculous:
While Instapundit is a Big Kahuna on the interwebz and among academics, George Will has a soap box that dwarfs Reynolds. And he's taken Reynolds' "ideas" mainstream, not only crediting Reynolds for his position as an academic, but taking for granted that he's got criminal law chops. It's unlikely that George checked Reynolds out at Tennessee Law School, where he teaches Administrative Law, Constitutional Law, Law, Science, and Technology, Space Law, Internet Law. See criminal law in there? See anything in his past to suggest even a passing familiarity with the actual practice of criminal law? Me neither.The House Judiciary Committee has created an Over-Criminalization Task Force. Its members should read “Three Felonies a Day: How the Feds Target the Innocent,” by Harvey Silverglate, a libertarian lawyer whose book argues that prosecutors could indict most of us for three felonies a day. And the task force should read the short essay “Ham Sandwich Nation: Due Process When Everything Is a Crime” by Glenn Harlan Reynolds, a professor of law at the University of Tennessee. Given the axiom that a competent prosecutor can persuade a grand jury to indict a ham sandwich, and given the reality of prosecutorial abuse — particularly, compelling plea bargains by overcharging with “kitchen sink” indictments — Reynolds believes “the decision to charge a person criminally should itself undergo some degree of due process scrutiny.”
He also suggests banning plea bargains: “An understanding that every criminal charge filed would have to be either backed up in open court or ignominiously dropped would significantly reduce the incentive to overcharge. . . . Our criminal justice system, as presently practiced, is basically a plea-bargain system with actual trials of guilt or innocence a bit of showy froth floating on top.”
Yet, I look forward to some fine senators extolling the virtue of a dangerous and hare-brained reform of the law, citing to Glenn Reynolds' Ham Sandwich essays as the font of practical criminal law brilliance. Because the myth has now been created and George Will gave it legs.
And this is how we end up with monumentally bad ideas being enshrined in law.
* For those who aren't familiar with Instapundit, this from Reynolds' Wikipedia page:
Much of Instapundit's content consists of links to other sites, often with brief comments. (His frequent use of "heh," "indeed," and "read the whole thing" have been widely imitated and are often parodied by other bloggers.) Reynolds encourages readers to explore the wider blogosphere and to fully read articles and posts to which he links.And that's the foundation for being a major player on the internet.
© 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/how-bad-ideas-grow-legs.aspx?ref=rss
United States Supreme Court Holds That Non-U.S. Corporations Are Subject to General Personal Jurisdiction in U.S. States Only in States Where They Are “At Home”
In Daimler AG v. Bauman, No. 11-965, 2014 U.S. LEXIS 644 (U.S. Jan. 14, 2014) (Ginsburg, J.), the Supreme Court of the United States held that a court may not exercise general personal jurisdiction over a non-U.S. corporation unless that corporation’s contacts with the forum state are so continuous and systematic as to render the corporation “at home” there. The Supreme Court also held that a non-U.S. corporation will not be subject to a state’s general jurisdiction simply because the corporation’s subsidiary is “at home” in the forum state and the subsidiary’s contacts with the state are imputed to the corporation. Daimler limits the situations under which a large, multinational corporation will be subject to general personal jurisdiction. As a result, plaintiffs may have more difficulty establishing jurisdiction over an foreign corporation when the claims sued upon do not arise in or relate to the forum state.
Defendant DaimlerChrysler Aktiengesellschaft (“Daimler”) is a German public stock company that manufactures Mercedes-Benz vehicles in Germany. Plaintiffs were twenty-one residents and citizens of Argentina and one resident of Argentina who was also citizen of Chile. They alleged that MB Argentina, a wholly owned subsidiary of Daimler’s predecessor in interest, collaborated with Argentinian state security forces to kidnap, detain, torture and kill plaintiffs and their relatives during the military dictatorship in place from 1976 through 1983. Plaintiffs sued Daimler in the United States District Court for the Northern District of California asserting claims under the Alien Tort Statute, 28 U.S.C. § 1350, and the Torture Victim Protection Act of 1991, 106 Stat. 73 (1992), as well as claims for wrongful death and intentional infliction of emotional distress under the laws of Argentina and California. Plaintiffs made no allegations that MB Argentina’s purported collaboration with Argentinian authorities took place in California or in the United States.
Daimler moved to dismiss the action for lack of personal jurisdiction. Plaintiffs argued that jurisdiction over Daimler was proper because Daimler’s indirect subsidiary, MBUSA, has significant contacts with California. MBUSA, which is a Delaware limited liability company that operates in New Jersey, is Daimler’s exclusive importer and distributer of cars in the United States. Plaintiffs argued that MBUSA’s contacts should be imputed to Daimler based upon an agency theory and that those contacts were sufficient to establish general personal jurisdiction over Daimler in California.
The district court granted Daimler’s motion to dismiss for lack of personal jurisdiction. The court held that plaintiffs failed to demonstrate that MBUSA acted as Daimler’s agent, and therefore, its contacts with California could not be imputed to Daimler. On appeal, the United States Court of Appeals for the Ninth Circuit reversed and held that MBUSA acted as Daimler’s agent for jurisdictional purposes. Bauman v. Daimler-Chrysler Corp., 644 F.3d 909 (9th Cir. 2011). The Supreme Court granted certiorari to decide whether, consistent with the Due Process Clause of the Fourteenth Amendment to the United States Constitution, Daimler is amenable to suit in California courts for claims involving only foreign plaintiffs and conduct occurring entirely abroad.
First, the Supreme Court rejected the Ninth Circuit’s holding that MBUSA acted as Daimler’s agent for jurisdictional purposes. The Ninth Circuit’s agency finding rested primarily upon the observation that MBUSA’s services were “important” to Daimler. The Ninth Circuit held MBUSA’s services were “important” because Daimler would perform those services itself if MBUSA did not exist. The Supreme Court held this agency analysis unfairly tipped the scales in favor of finding an agency relationship. Under this analysis, the services of a subsidiary would almost always be “important.” However, the Court only held that the Ninth Circuit’s agency analysis was erroneous, and it did not pass judgment on the invocation of an agency theory in the context of general jurisdiction.
Second, the Supreme Court addressed whether Daimler was subject to general personal jurisdiction when assuming that MBUSA’s contacts with California could be imputed to Daimler. The Supreme Court explained that general personal jurisdiction over a corporation is appropriate when the corporation is deemed “at home” in a forum. Paradigm bases for general jurisdiction are a corporation’s principal place of business or place of incorporation. Additionally, a corporation may be amenable to general jurisdiction if the corporation’s connections with the forum state are so continuous and systematic as to render it essentially “at home” in the state.
The Supreme Court held that, even assuming MBUSA is “at home” in California and that MBUSA’s contacts were imputable to Daimler, Daimler still was not subject to California’s general jurisdiction because Daimler lacked sufficient contacts with the state. For Daimler to be subject to general jurisdiction in California, Daimler had to have such continuous and systematic contacts as to render it essentially “at home” there. In its analysis, the Supreme Court compared Daimler’s California contacts to its business operations worldwide. In light of the magnitude of Daimler’s worldwide business activities, Daimler’s activities in California, even after imputing MBUSA’s business activities to it, were too few to render Daimler “at home” there. Furthermore, Daimler was not “at home” in California under the paradigm bases because it was not incorporated in California and it did not have its principal place of business in California. Thus, Daimler was not subject to California’s general jurisdiction.
Lastly, the Supreme Court commented on how an expansive view of general jurisdiction affects international relations. According to the Solicitor General, foreign governments’ objections to an expansive view of general jurisdiction have impeded negotiations of international agreements on the reciprocal recognition of the enforcement of judgments. The Supreme Court held that embracing a more limited view of general jurisdiction also supported and helped protect international agreements.
Daimler limits the circumstances in which general jurisdiction will be applied to large, multinational corporations. Unless a defendant corporation is incorporated or has its principal place of business in a forum state, a court will rarely have general jurisdiction over it. This decision may make it more difficult for plaintiffs to sue non-U.S. corporations for their activities that take place entirely outside of the United States.
Contractor Can’t Sue City on Bid
In this suit arising out of a city procurement bid process, won by a third party, plaintiff’s complaint identifies plaintiff and defendant as a joint venture but the attached bid proposal describes them as “two primary subcontractors,” and the Richmond Circuit Court grants the city’s demurrer but overrules the demurrer on plaintiff’s breach of contract ...
Source: http://valawyersweekly.com/2014/01/02/contractor-cant-sue-city-on-bid/
OPINION: Chemerinsky: God, Birth Control and Corporate America
Can a corporation claim to have religious beliefs and, if so, does it violate those beliefs to force the business to include contraceptive coverage in the health insurance it provides its employees? The U.S. Supreme Court has just granted review in two cases on the issue.
Source: http://www.law.com/jsp/nlj/PubArticleNLJ.jsp?id=1202631180111&rss=rss_nlj
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Toxic Leak Taints North Carolina Coal Plants, And Regulators
Coal ash, a byproduct of burning coal, leaked into the Dan River this month, magnifying an ongoing fight. Now the Justice Department is examining how coal ash is stored and regulated in the state.
Saturday, February 22, 2014
The Legal Turbulence Facing Amazon’s Drones
News of Amazon’s plans to use delivery drones surprised many, but the fact is that a number of companies are developing drones for commercial uses. However, before any of these commercial drones can take flight, they need to clear a series of legal hurdles, from winning FAA approval to sorting out liability and privacy issues. In this edition of Lawyer2Lawyer, host Bob Ambrogi invites industry lawyer Ben Gielow and Above the Law editor Elie Mystal to discuss the legal issues facing commercial drones and how they are likely to play out.
Ben Gielow is the government relations manager and general counsel for the advocacy sector of the Association of Unmanned Vehicle Systems International. He has been featured in interviews covering the concept of commercial drones since the beginning regarding what legislation and other requirements are necessary for us to see commercial drones in our airways.
Elie Mystal is the editor of Above the Law. A graduate of Harvard Law School, he left his life as a litigator to pursue a career as an online provocateur. He has written editorials for The New York Daily News, The New York Times, and appeared on MSNBC and Fox News.
Special thanks to our sponsor, Clio.
Ben Gielow is the government relations manager and general counsel for the advocacy sector of the Association of Unmanned Vehicle Systems International. He has been featured in interviews covering the concept of commercial drones since the beginning regarding what legislation and other requirements are necessary for us to see commercial drones in our airways.
Elie Mystal is the editor of Above the Law. A graduate of Harvard Law School, he left his life as a litigator to pursue a career as an online provocateur. He has written editorials for The New York Daily News, The New York Times, and appeared on MSNBC and Fox News.
Special thanks to our sponsor, Clio.
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Blending Early Data Assessment and Predictive Coding for More Effective E-discovery
Most e-discovery specialists understand Early Data Assessment (EDA) and Predictive Coding as independent tools, both used to reduce data during e-discovery production. Kroll Ontrack’s experts are exploring the potential benefits of combining the efforts of EDA and Predictive Coding for a more efficient e-discovery production process. In this edition of The ESI Report, Michele Lange, Kroll Ontrack’s director of thought leadership, chats with Jonathan Sachs and Anthony Diana about syncing EDA and Predictive Coding processes.
Jonathan Sachs is a Senior Account Executive for Kroll Ontrack, where he leverages 16 years of experience consulting in the intersection of law and technology to help clients foster efficiency within their e-discovery portfolios.
Anthony Diana is a partner at Mayer Brown, where he co-leads their E-Discovery and Records Management Group. He has counseled on all aspects of the discovery and management of electronic information including collection, review, and production.
Jonathan Sachs is a Senior Account Executive for Kroll Ontrack, where he leverages 16 years of experience consulting in the intersection of law and technology to help clients foster efficiency within their e-discovery portfolios.
Anthony Diana is a partner at Mayer Brown, where he co-leads their E-Discovery and Records Management Group. He has counseled on all aspects of the discovery and management of electronic information including collection, review, and production.
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Second Circuit Holds that Federal Common Law Prohibits Trading By Insiders of a Cayman Islands Corporation While In Possession of Material Nonpublic Information
In Steginsky v. Xcelera Inc., Nos. 13-1327-cv, 13-1892-cv, 2014 WL 274419 (2d Cir. Jan. 27, 2014), the United States Court of Appeals for the Second Circuit held that even when a company’s securities are unregistered, federal law requires corporate insiders either to disclose material nonpublic information or abstain from trading in those securities. The Court also held that the “fiduciary-like” duty to refrain from insider trading under Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”), 15 U.S.C. § 78j(b), is imposed and defined by federal common law, not common law of the state (or here, country) of incorporation. This decision marks the first time that the Second Circuit has explicitly announced that the duty against insider trading is rooted in federal common law, and it leaves no question that federal laws prohibiting insider trading apply even to securities that are unregistered.
The case arises out of an alleged scheme by corporate insiders to depress a company’s stock price in connection with a buy out of minority shareholders. Defendant Xcelera Inc. (“Xcelera”) is a Cayman Islands conglomerate of technology companies based in Connecticut. It is controlled by two brothers, Alexander and Gustav Vik, and VBI Corporation, a Vik family company and Xcelera’s majority shareholder (collectively, the “Vik Defendants”). During the “dotcom” bubble, Xcelera common stock reached a high of $110 a share on the American Stock Exchange. By 2004, however, the stock price plummeted to around $1 a share and, following the delisting of Xcelera’s stock by the American Stock Exchange that same year, the company’s stock price dropped to around $0.25 a share. Two years later, the Securities & Exchange Commission revoked the registration of Xcelera securities.
In 2010, defendant OFC Ltd. (“OFC”), a company created by the Vik Defendants, made a tender offer for Xcelera stock at $0.25 a share. No information about Xcelera’s financial state was provided in connection with the tender offer. A year later, plaintiff, at the time a minority shareholder of Xcelera, sold her 100,010 shares at $0.25 through the tender offer.
Plaintiff filed a complaint in the United States District Court for the District of Connecticut alleging, among other things, claims for insider trading in violation of the Exchange Act. The complaint alleged that the defendants were corporate insiders who possessed nonpublic information that Xcelera was in fact worth more than $0.25 a share. The district court dismissed the complaint on the ground that the defendants had no duty to disclose any information before trading in Xcelera stock because (1) the duty to disclose under Section 10(b) does not apply to unregistered securities and (2) the duties potentially applicable here were those defined by the law of the Cayman Islands, where no such duty to disclose exists. Plaintiff appealed.
The Second Circuit reversed on both counts. First, the Court held that the defendants did owe a duty to disclose or abstain from trading because Section 10(b) applies to “any security registered on a national securities exchange or any security not so registered.” In so holding, the Court relied upon a prior case in which it held that “closed corporations that purchase their own stock have a special obligation to disclose to sellers all material information.” See Castellano v. Young & Rubicam, Inc., 257 F.3d 171, 179 (2d Cir. 2001).
Second, the Court held that this “fiduciary-like” duty is imposed and defined by federal common law, not the law of the Cayman Islands. Steginsky marks the first time the Second Circuit has explicitly announced that this duty is rooted in federal common law.
Steginsky did reject the notion that federal law imposes a general affirmative duty on corporate insiders to disclose material nonpublic information. The Court held that although the defendants owed no such general affirmative duty of disclosure once the SEC deregistered Xcelera’s stock, insiders still could not trade in the company’s stock while in possession of material nonpublic information. The Court observed that, under the Exchange Act, “any insider ‘in possession of material inside information must either disclose it to the investing public, or, if . . . he chooses not to do so, must abstain from trading in or recommending the securities concerned while such inside information remains undisclosed.’” In reiterating that the duty against insider trading under Section 10(b) applies to unregistered securities, the Steginsky decision leaves no question that federal laws prohibiting insider trading apply whether or not securities are registered, including in the context of a tender offer of unregistered securities.
Given differences in state law governing corporate fiduciary duties, it is not always easy to determine when the duty to disclose material nonpublic information or abstain from trading begins and ends. As the Second Circuit notes in Steginsky, “looking to idiosyncratic differences in state law would thwart the goal of promoting national uniformity in securities markets.” The clear pronouncement from the Second Circuit is that the duty either to disclose or abstain from trading is derived from federal common law and is not strictly dependent upon the laws of the state (or foreign country) of incorporation.
Dubious in the First Degree
While many folks from the heartland despise the New York Times for its purported coddling of criminals, its contents don't always bear out this sensibility. It's done it again by publishing Lawrence Downes' homage to ignorance in its editorial notebook.
Payback is a bitch, and to the extent Downes' screed offers anything, it's the insight to what motivates this tyranny of the majority against the 600 Long Island Railroad retirees on disability who had the misfortune of following the LIRR's advice and going to Dr. Peter Ajemian. Long Islanders hate the LIRR. They hate the price of tickets. They hate having to stand on their daily commute despite the absurdly expensive cost of the ride. They hate the uncaring conductors enforcing rules that presume their passengers to be criminals seeking to get free rides. The LIRR has done much to cause this hatred, and only a fool would deny it's well deserved.
This is payback time. Finally, the media and the government have given us an easy target of this hatred, this simmering anger, and the rest of us, the commuters, the business people who paid the hated Commuter Tax, have an excuse to unleash our venom.
For a working schlub who commutes from the suburbs, the Long Island Rail Road disability scandal of 2008 was powerful evidence that the game of life is rigged.
Hundreds of railroad employees — engineers to white-collar managers — would retire in fine health as early as 50, then become instantly and lucratively disabled. If they took their phantom neck and back pain to the right doctor and to an obscure federal railroad board that almost never said no to a disability claim, the checks would start to flow. The daily grind turned into daily golf.
Hundreds? Name them, Downes. After years of investigation, the government has prosecuted a grand total of 33 defendants, of which 25 have pleaded guilty. Does this amount to hundreds on disability playing "daily golf" using the New York Times version of math?
The scheme cost taxpayers more than a quarter of a billion federal dollars from 2000 to 2008. It also gouged the L.I.R.R., which had to pay for all those early retirees’ pensions and for overtime and training new employees. What was most shocking about this gravy train was how many L.I.R.R. employees were on it. Every year from 2000 to 2008, between 93 percent and 97 percent of employees over 50 who retired with 20 years of service got disability payments. Experts had to wonder what other workplace, besides the gulag, crippled so many of its workers.
Experts knew exactly what happened, even if pundits were confounded. Older employees cost the LIRR a lot of money. They were paid at a much higher rate than new employees, and to reduce costs, the LIRR sought to persuade older workers to move on so they could be replaced with far less expensive employees. Nothing hard to grasp here, Downes. It's just money.
So the LIRR held seminars for the older workers about how they could retire on disability, and steered workers to facilitators who would help them navigate their way through the Railroad Retirement Board's disability system. These workers were sent to physicians who knew what was needed and could help them obtain a disability annuity.
Of course (and nobody seems to get this part of it), the RRB would have these retirees examined by their own physicians, who would review not only the narrative reports of docs like Ajemian, but the treatment notes, x-rays and MRI's as well. Suggesting that one doc like Ajemian could single-handedly defraud the federal the government is absurd, unless you eliminate the nasty facts and ignore the parts that don't conform to the narrative of payback.
It's not that this doesn't give rise to issues. A railroad disability isn't like a disability that applies to desk jockeys. It's an occupation disability, where it's given because of the inability to do railroad work, meaning those guys who fix the broken switches in the middle of the night in a snowstorm so you can hate them during your morning commute.
Do you really want the guy popping Vicodin because of his herniated disks responsible for the lives of a thousand people? The potential for harm is so great that railroad workers have been singled out for random drug testing, approved by the Supreme Court in 1989 in Skinner v. Railway Labor Executives’ Assn even thought suspicionless testing would be unconstitutional if applied to, say, New York Times pundits.
Even putting aside these and myriad other "details" wholly ignored by the media, there remains a flagrant flaw:
The Railroad Retirement Board has only now decided to cut off payments to about 600 of the dubiously disabled, months after the doctor who signed off on their diagnoses, Peter Ajemian, pleaded guilty to fraud in federal court.
Meet the new criteria for terminating rights by the federal government, dubiousness. Forget "beyond a reasonable doubt," "preponderance of the evidence" or "probable cause." Heck, not even reasonable suspicion. Dubiousness. And why does the New York Times endorse the new standard of "dubiousness" for deprivation?
Disenchanted riders are counting on the feds and the L.I.R.R. to get the money back, and send the belated message that the schemers will be punished.
It's not about proof of wrongdoing. There is no proof of wrongdoing. The only "proof" is that guys with missing limbs and multiple surgeries went to Peter Ajemian (plus the unmentioned RRB doctors, but let's not muddle up anger with facts). As long as people are angry, we don't need no stinkin' evidence.
Lest someone get the misimpression that it's just the Times feeding into the anger and ignorance that pervades the media attention, Newsday offered an editorial as well:
Now the LIRR wants to revoke their pensions as well. Workers who are truly disabled can reapply for disability benefits -- a hassle, probably, but a crucial step to whittle out those who committed fraud.
Because it would be far too hard to expect the government of the United States of America to figure out first whether someone did wrong before convicting them of dubiousness in the first degree and denying them due process? The difference here is that expectations of thoughtfulness by Newsday are inherently lower than that of the Times. Tell the families who use the disability annuity for food that they just need to suffer the hassle of the next year without it to make the government's job easier.
As far as I can tell, I may be the only voice speaking out for the LIRR disabled, which is itself curious given that I commuted for 25 years on the railroad and hate the LIRR as much as the next guy. But my hatred of the railroad doesn't obscure the facts, my rage doesn't make me desire payback from innocent targets.
For those of you who rail about constitutional violations when it comes to the police, what's being done here isn't materially different. These 600 have been painted with the Ajemian brush, though none have been found guilty of any fraud nor afforded a fair opportunity to challenge the taint imputed to them for committing the crime of dubiousness.
But then, you aren't getting a disability annuity, so why should you care if the government wrongfully beats the crap out of some other guys, as long as you get to go about your life unimpeded. And besides, everybody hates the LIRR, so it's just too hard to muster any sympathy. Too hard for Newsday. Too hard for Downes. Too hard for the New York Times. Thinking is too damn hard. Let's just burn them all at the stake and call it a day.
© 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/2013/07/08/dubious-in-the-first-degree.aspx?ref=rss
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Public Crosses in Indiana: Artistic Expression or Constitutional Problem?
A federal appeals court is considering whether a church-sponsored public-art installation in Evansville, Ind., -- a display of 31 decorated six-foot-tall, plastic crosses -- violates the U.S. Constitution.
Nurse Has Sovereign Immunity
An Orange County Circuit Court grants a special plea of sovereign immunity to a defendant who provided nursing services at a county nonprofit nursing facility. In the requests for admission, plaintiff admitted Dogwood Village was a nonprofit nursing facility owned by Orange County and overseen by the Health Center Commission of Orange County, and that ...
Source: http://valawyersweekly.com/2014/01/02/nurse-has-sovereign-immunity/
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Enhanced 911, The FCC, and a Grandfather’s Mandate for Direct Dial
In an emergency, seconds count. What if you couldn't call 911 because you couldn't reach an outside line? On this episode of Lawyer 2 Lawyer, host J. Craig Williams interviews Henry "Hank" Hunt, the man petitioning for Kari's Law, and FCC Commissioner Ajit Pai. Together they discuss the importance of uniform dialing for 911.
Henry Hunt's nine year old granddaughter, through no fault of her own, could not reach 911 to save her mother. Despite her multiple attempts, the calls would not connect because the hotel's phone system required dialing 9 to get an outside line. In the wake of these events, this Texas grandfather started the Kari's Law petition which calls for mandated direct-dial 911.
Ajit Pai serves as FCC Commissioner focusing on regulatory environments where competition and innovation flourish. He is the former Associate General Counsel at Verizon. In addition, he has served as Senior Counsel with the Department of Justice and Chief Counsel to the Senate Judiciary Committee's Subcommittee on the Constitution, Civil Rights, and Property Rights.
Henry Hunt's nine year old granddaughter, through no fault of her own, could not reach 911 to save her mother. Despite her multiple attempts, the calls would not connect because the hotel's phone system required dialing 9 to get an outside line. In the wake of these events, this Texas grandfather started the Kari's Law petition which calls for mandated direct-dial 911.
Ajit Pai serves as FCC Commissioner focusing on regulatory environments where competition and innovation flourish. He is the former Associate General Counsel at Verizon. In addition, he has served as Senior Counsel with the Department of Justice and Chief Counsel to the Senate Judiciary Committee's Subcommittee on the Constitution, Civil Rights, and Property Rights.
Friday, February 21, 2014
Fast Food Liability: Would You Like Lawsuits With That?
Fast food and restaurant chains may have to worry about more than just wage and hour provisions in the Fair Labor Standards Act.
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Enhanced 911, The FCC, and a Grandfather’s Mandate for Direct Dial
In an emergency, seconds count. What if you couldn't call 911 because you couldn't reach an outside line? On this episode of Lawyer 2 Lawyer, host J. Craig Williams interviews Henry "Hank" Hunt, the man petitioning for Kari's Law, and FCC Commissioner Ajit Pai. Together they discuss the importance of uniform dialing for 911.
Henry Hunt's nine year old granddaughter, through no fault of her own, could not reach 911 to save her mother. Despite her multiple attempts, the calls would not connect because the hotel's phone system required dialing 9 to get an outside line. In the wake of these events, this Texas grandfather started the Kari's Law petition which calls for mandated direct-dial 911.
Ajit Pai serves as FCC Commissioner focusing on regulatory environments where competition and innovation flourish. He is the former Associate General Counsel at Verizon. In addition, he has served as Senior Counsel with the Department of Justice and Chief Counsel to the Senate Judiciary Committee's Subcommittee on the Constitution, Civil Rights, and Property Rights.
Henry Hunt's nine year old granddaughter, through no fault of her own, could not reach 911 to save her mother. Despite her multiple attempts, the calls would not connect because the hotel's phone system required dialing 9 to get an outside line. In the wake of these events, this Texas grandfather started the Kari's Law petition which calls for mandated direct-dial 911.
Ajit Pai serves as FCC Commissioner focusing on regulatory environments where competition and innovation flourish. He is the former Associate General Counsel at Verizon. In addition, he has served as Senior Counsel with the Department of Justice and Chief Counsel to the Senate Judiciary Committee's Subcommittee on the Constitution, Civil Rights, and Property Rights.
In 'Domain Awareness,' Detractors See Another NSA
Police are building software systems to integrate their data flows — from cameras to license plate scanners and social media — to better identify threats and suspects. But there's a privacy backlash.
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The Butcher, The Baker and FISA
The House Judiciary Committee will be holding a hearing today on FISA, the NSA and some guy named Snowden. Few people are aware of this, as their time and attention are consumed by more important legal concerns, as regularly voice by legal entertainer, Nancy Grace. But it will happen nonetheless.
Stewart Baker, who harbors some peculiar notions when it comes to the things the government does to keep us safe, will be testifying, and he has much to say about each of these subjects, and then some. While his testimony of extraordinary breadth is all worth reading in a morbid fascination sort of way, it spans far more than can be discussed here. Rather than try to overreach, let's take a look-see at just one small piece of his puzzle.
© 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.
Stewart Baker, who harbors some peculiar notions when it comes to the things the government does to keep us safe, will be testifying, and he has much to say about each of these subjects, and then some. While his testimony of extraordinary breadth is all worth reading in a morbid fascination sort of way, it spans far more than can be discussed here. Rather than try to overreach, let's take a look-see at just one small piece of his puzzle.
To be blunt, one of the reasons I’m here is that I fear we may repeat some of the mistakes we made as a country in the years before September 11, 2001. In those years, a Democratic President serving his second term seemed to inspire deepening suspicion of government and a rebirth of enthusiasm for civil liberties not just on the left but also on the right. The Cato Institute criticized the Clinton Administration’s support of warrantless national security searches and expanded government wiretap authority as “dereliction of duty,” saying,“[i]f constitutional report cards were handed out to presidents, Bill Clinton would certainly receive an F–an appalling grade for any president–let alone a former professor of constitutional law.” The criticism rubbed off on the FISA court, whose chief judge felt obliged to give public interviews and speeches defending against the claim that the court was rubber-stamping the Clinton administration’s intercept requests.
This is where I should insert a joke about the movie “Groundhog Day.” But I don’t feel like joking, because I know how this movie ends.
Gratuitous slams at Democrats aside, given that a two-term Republican in the middle didn't do any better, can you guess where Baker is heading?
And so, when a law enforcement task force of the FBI found out in August of 2001 that al Qaeda had sent two dangerous operatives to the United States, it did … nothing. It was told to stand down; it could not go looking for the two al Qaeda operatives because it was on the wrong side of the wall. I believe that FBI task force would have found the hijackers – who weren’t hiding – and that the attacks could have been stopped if not for a combination of bad judgment by the FISA court (whose minimization rules were later thrown out on appeal) and a climate in which national security concerns were discounted by civil liberties advocates on both sides of the aisle.
Rarely does a paragraph so grossly distort cause and effect, correlation and causation, while at the same time trivializing and blaming those darned "civil liberties advocates on both sides of the aisle." Maybe not Jefferson and Madison, but their elected descendants who, at least in Baker's mind, put us at risk for terrorism by the horrors of defending civil liberties, those things that make us who and what we are.
This is like a trick for fools, which makes it perfect for congressional testimony. As if the FBI having been on the wrong side of the "wall" before 9/11 was the cause of America's failure to stop the attacks. Because the FBI so effectively stopped others, say, Tsarnaev, when they had no wall to blame it on? Or that there was no other law enforcement apparatus in existence for the FBI to do its job, except to engage in a national secret colonoscopy but be forbidden from telling the patient the results.
There has never been any dispute that law enforcement would be both easier and more effective if we would just let them ignore all those nasty constitutional rights that the citizenry preserved for itself when deciding to let a government exist. Think about how much safer we would be if police could just enter our homes at will and search for whatever they want, or just for fun. You never know what they might stumble on.
That's what Baker considers the right way to go, because he believes that government can be trusted, that government is well-intended and would rarely abuse the vast power he would give it. Not that it would never abuse the power, but in those very rare instances where something went beyond his vision of propriety, government would also be fully capable of policing itself. Ronald Reagan, for all his faults, was elected on the platform that government was the problem. Baker disagrees.
I realize that this story is not widely told, perhaps because it’s not an especially welcome story, not in the mainstream media and not on the Internet. But it is true; the parts of my book that describe it are well-grounded in recently declassified government reports.
More importantly, I lived it. And I never want to live through that particular Groundhog Day again. That’s why I’m here.
The argument is reminiscent of the mother whose child was tragically killed, and goes before a legislative body to ask that no other child ever again be harmed. There is enormous sympathy for her loss, but whatever killed the child happens a million times without incident, and then once with a terrible outcome. What she is asking is that the million times be eliminated so that the one time never happen. It's understandable, as she speaks from personal grief, but it's an unsound basis to craft law. Baker plays the same cards.
Notice how he ties it to himself personally, as he was there in government service when the government failed to stop a tragic event. Of course, it wasn't the government's fault that it failed, but those "civil liberties advocates" who tied the government's hands from saving us. That's the claim, even though it relies on a logical fallacy that Baker, a smart guy, hopes no one on the committee will see.
Had there been no wall, and the FBI free to break into bedrooms and telephone calls at will, there is no correlation between their putative claim that they would have been able to stop 9/11. There is no basis to claim they would have done anything more than interrogate the two suspected terrorists and let them go. There is no basis to claim that the other terrorists, even if the two were held or expelled, wouldn't have flown planes into buildings. There is no line to be drawn from point A to point Z.
But Stewart Baker will be testifying before the House Judiciary Committee today and will tell them these things. And I won't. And you won't. And the wheels of government will grind on.
© 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/2013/07/17/the-butcher-the-baker-and-fisa.aspx?ref=rss
From Oscar Parties to 'Inter Partes'
We range widely in this look at the state of intellectual property law, beginning with the legal complications attorneys need to consider when negotiating endorsement deals with the stars. We also investigate the renewed respect being paid to the "indefiniteness" defense against business-method patents. Finally, "inter partes" review — an attempt to streamline patent disputes — may in some cases make the process more difficult.
Source: http://www.law.com/jsp/nlj/PubArticleNLJ.jsp?id=1202642058806&rss=rss_nlj
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