Source: http://jurist.org/paperchase/2014/02/germany-court-rules-former-auschwitz-guard-unfit-for-trial.php
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Friday, February 28, 2014
Germany court rules former Auschwitz guard unfit for trial
[JURIST] A German district court in Ellwangen ruled Friday that accused former Auschwitz guard, Hans Lipschis, is unfit to stand trial. The ruling was based on Lipschis' early stages of incipient dementia, making him unable to comprehend the criminal trial. While Lipschis acknowledges being a member of the SS at Auschwitz, he maintains he only served as a cook and is not guilty of any war crimes. Lipschis was deported from the US in 1983 for lying about his Nazi...
Townhome Neighbors Can’t Challenge Access
Plaintiff townhome owners do not have standing to challenge defendant developer’s use of a 50-foot easement that runs between a church and the townhome community for access and a connection to a proposed development with seven new homes; the Fairfax Circuit Court says plaintiffs have not shown they would suffer any particularized harm from installation ...
Source: http://valawyersweekly.com/2014/01/02/townhome-neighbors-cant-challenge-access/
You Won’t Believe The Damage This Man Caused In His Attempt To Get Off Work Early
We all have days that we just want to end, even The Juice. But we all, er, most of us, that is, power through those days. Not this gent. The damage? You won’t believe it. As reported by The Union Leader:
A former civilian painter who pleaded guilty Thursday to setting two fires aboard the USS Miami could serve about 20 years in prison and have to pay some of the $500 million in damages and injuries. [The victims in the case include the Navy as well as seven firefighters and sailors who were injured during the first fire, which took 12 hours to extinguish.]
Casey James Fury, 24, who worked at Portsmouth Naval Shipyard for two years, faces two counts of arson after he confessed to setting a four-alarm fire aboard the $900 million Los Angeles Class submarine May 23 and a smaller fire in the dry dock at the Kittery facility June 12.
Why? [Just pretend that you don't already know.]
Investigators determined Fury, who worked as a painter and sandblaster, started the two fires because he was anxious and wanted to leave work.
Fury, who has been in custody at Cumberland County Jail since his arrest July 22, and his attorney, David Beneman, signed the agreement to plead guilty Tuesday with Thomas Delahanty, U.S. attorney for the District of Maine, and Assistant U.S. Attorneys Darcie McElwee and James Chapman.
Delahanty said Fury entered his plea in federal court Thursday.
So what’s the deal?
As part of the agreement, Fury could be imprisoned no less than 188 months – just over 15.6 years – and no more than 235 months – about 19.6 years, according to court records.
“The judge accepted it pending on a presentencing investigation,” Delahanty said, adding he anticipates the report to be finished in the next three months.
Here’s what Mr. Fury could have faced (or could be facing if the deal is ultimately rejected by the Judge):
Per federal statute, the first arson charge could keep Fury in prison for the rest of his life, and the second count has a maximum penalty of 25 years.
Here’s the source, including a photograph of Mr. Fury.
Source: http://rss.justia.com/~r/LegalJuiceCom/~3/C7lUS08HMOs/gf.html
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After Days Of Deliberation, Controversial Ariz. Bill Is Vetoed
A bill passed last week by Arizona lawmakers would have allowed business owners to refuse service to gays and lesbians on the basis of religious beliefs. Gov. Jan Brewer vetoed the bill on Wednesday.
NLRB "recess" appointments were unconstitutional; Board lacked a quorum
Noel Canning v. NLRB (DC Cir 01/25/2013)
The DC Circuit this morning held that the President's attempt to make "recess" appointments of three NLRB Members was invalid under the constitution.
On February 8, 2012 the Board issued its decision finding that the employer violated the NLRA by refusing to reduce to writing and execute a collective bargaining agreement reached with Teamsters Local 760. At that time the Board purportedly had five members. Two of these had been confirmed by the Senate. Three of these were appointed on January 4, 2012, purportedly pursuant to the constitution's recess clause.
At the time of the President’s purported recess appointments, the Senate was operating pursuant to a unanimous consent agreement, which provided that the Senate would meet in pro forma sessions every three business days from December 20, 2011, through January 23, 2012. The DC Circuit held that "recess" appointments must occur during an "intersession" recess of the Senate, that is to say, the period between sessions of the Senate when the Senate is by definition not in session and therefore unavailable to receive and act upon nominations from the President.
Because the appointments were invalid, the Board lacked a quorum (three Members) and its order was "void."
Lots of chatter from all over:
- New York Times
- Wall Street Journal
- Workplace Prof Blog
- New York Labor and Employment Law Report
- Faculty Lounge
- Jottings by an Employer's Lawyer
- SCOTUSblog
- Employment Law Watch
Source: http://www.lawmemo.com/blog/2013/01/nlrb_recess_app_1.html
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Supreme Court Watch: Employment law cases
We will be watching three pending cases at the US Supreme Court as the Court's session opens today:
Kloeckner v. Solis
Oral argument on October 2.
The Merit Systems Protection Board (MSPB) hears appeals by federal employees regarding certain adverse actions, such as dismissals. If the employee asserts that the challenged action was the result of unlawful discrimination, that claim is referred to as a "mixed case."
Question Presented: If the MSPB decides a mixed case without determining the merits of the discrimination claim, is the court with jurisdiction over that claim the Court of Appeals for the Federal Circuit or a district court?
Vance v. Ball State Univ
Oral argument on November 26.
Faragher v. City of Boca Raton, 524 U.S. 775 (1998) and Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998) held that under Title VII, an employer is vicariously liable for workplace harassment by a supervisor of the victim. If the harasser was the victim’s co-employee, however, the employer is not liable absent proof of negligence.
Question Presented: Whether the Faragher and Ellerth “supervisor” liability rule (i) applies to harassment by those whom the employer vests with authority to direct and oversee their victim’s daily work, or (ii) is limited to those harassers who have the power to “hire, fire, demote, promote, transfer, or discipline” their victim.
Genesis HealthCare v. Symczyk
Oral argument December 3.
Symczk sued under the Fair Labor Standards Act (FLSA) on behalf of herself and all others similarly situated. This was a section 216(b) collective action. The defendants extended an offer of judgment under Fed. R. Civ. P. 68 in full satisfaction of her alleged damages, fees, and costs - prior to her moving for conditional certification and prior to other potential plaintiffs opting in.
Question Presented: Whether a case becomes moot, and thus beyond the judicial power of Article III, when the lone plaintiff receives an offer from the defendants to satisfy all of the plaintiff's claims.
Source: http://www.lawmemo.com/blog/2012/10/supreme_court_w_11.html
New rules for IRS 1099
New rules relating to the issuance of 1099 forms are in place that impact even funds in one's IOLTA account. If you have oversight and management of the funds such as selecting the expert witnesses or investigators in a personal injury matter, you may have sufficient dominance to be required to issue a 1099.
See Priv. Ltr. Rul 97-44-02 (1997) and 91-02-013. See also Rev Rul 93-70, 1993-2 CD 294.
The threshold amount if $600. Beyond that, consider the consequences of filing/not filing. And if you're a co-recipient of a settlement draft with your client where a portion of the draft is for attorney's fees, you will still have to report and/or attach an explanation to your tax return.
Moral of the story: These laws are complex. Consult your tax adviser.
Source: http://feeds.lexblog.com/~r/LawBizBlog/~3/svZVL8o36k0/
Thursday, February 27, 2014
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.
© 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.
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.
© 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/straight-from-the-hole.aspx?ref=rss
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Rising Up: How “Large Enough” Law Firms are Winning the Market Share
In this edition of Legal Toolkit, co-hosts Jared Correia and Heidi Alexander invite members of the LexisNexis team to discuss their latest report, Enterprise Legal Management Trend Reports, 2013 Mid-Year Edition: The Rise of “Large-Enough” Law Firms. The report concluded that the nation’s largest law firms are losing the market share to smaller rivals, referred to as the “large-enough” law firms. Correia and Alexander speak to Kris Satkunas and Mike Haysley of LexisNexis CounselLink to further define the results regarding law-firm size, economic breakdown, and how all law firms can use this information to their advantage.
Director of Strategic Consulting Satkunas leads the CounselLink team in advising corporate legal department managers on improving operations with data-driven decisions. She is an expert in managing the business of law and in data mining, with specific expertise in matter pricing and staffing, practice area metrics and scorecards.
Director of Strategic Services Haysley helps corporate legal departments manage the business of law. With more than 15 years of experience working with large legal organizations, Haysley works with an expert team at LexisNexis to advise legal departments on improving operations and results.
Director of Strategic Consulting Satkunas leads the CounselLink team in advising corporate legal department managers on improving operations with data-driven decisions. She is an expert in managing the business of law and in data mining, with specific expertise in matter pricing and staffing, practice area metrics and scorecards.
Director of Strategic Services Haysley helps corporate legal departments manage the business of law. With more than 15 years of experience working with large legal organizations, Haysley works with an expert team at LexisNexis to advise legal departments on improving operations and results.
Living in Multiple Tech Worlds: Windows, Mac, and Android
The rise of cloud computing has made it easier for lawyers to live in multiple tech worlds, whether it's Windows, Mac, iOS, or Android. This phenomenon is becoming a trend that affects many people and is changing how we think about, talk about, and use technology. On this episode of the Kennedy-Mighell Report, hosts Dennis Kennedy and Tom Mighell discuss living in multiple tech worlds simultaneously, how this changes our experience of technology, and practical ways to prepare and adjust to this growing trend.
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The Go-To Law Schools
Our annual report on the law schools that supply the largest numbers of new associates to NLJ 250 law firms.
Source: http://www.law.com/jsp/nlj/PubArticleNLJ.jsp?id=1202644140760&rss=rss_nlj
The Best of the Plaintiffs Bar
These 19 firms are at the cutting edge of plaintiffs' work -- and are giving defense players a run for their money.
Source: http://www.law.com/jsp/nlj/PubArticleNLJ.jsp?id=1202624154645&rss=rss_nlj
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Delaware Supreme Court Holds That a Minority Stockholder Has No Common Law Right to a Conflict-Free Board Decision Regarding the Repurchase of Shares
In Blaustein v. Lord Baltimore Capital Corp., No. 272, 2013, 2014 Del. LEXIS 30 (Del. Jan. 21, 2014), the Delaware Supreme Court held that a closely-held corporation’s directors owe no fiduciary duty to decide, free from conflicts of interest, whether a corporation will repurchase a minority stockholder’s shares in the corporation. Additionally, the Supreme Court held that the implied covenant of good faith and fair dealing contained in a shareholders agreement did not give a minority stockholder the right to a good faith, conflict-free negotiation over the repurchase of her stock. If a minority stockholder wishes to have the right to put his or her stock to the corporation at a fair price to be set through negotiations with independent and disinterested decision makers at the corporation, the stockholder must contract for that right expressly in advance.
Plaintiff was a minority shareholder of the defendant, Lord Baltimore Capital Corporation (“Lord Baltimore”), a closely held Delaware corporation. Plaintiff wished to sell her shares back to Lord Baltimore. Lord Baltimore’s Shareholders’ Agreement stated that the company “may” repurchase a minority shareholder’s stock provided that the repurchase is either approved (i) by a majority of all the directors of the company or (ii) in writing by shareholders who own 70% or more of all shares issued and outstanding.
Lord Baltimore’s directors offered to repurchase plaintiff’s shares at a 52% discount from the net asset value of her shares. In response, plaintiff made several offers to sell her shares at a smaller discount. After considering these offers, the board rejected them and reoffered to purchase her shares at the 52% discount. Plaintiff believed her offers were rejected because a majority of the board had a conflict of interest. Specifically, she believed a majority of the seven directors refused to repurchase her shares at a higher price because it would jeopardize their personal tax benefits.
Plaintiff sued Lord Baltimore in the Delaware Court of Chancery. Plaintiff later filed a motion to amend her complaint to add two new claims: one for breach of fiduciary duty and one for breach of the implied covenant of good faith and fair dealing. In plaintiff’s new fiduciary duty claim, she alleged that the directors breached their fiduciary duty to consider and negotiate repurchasing her shares without any conflicts of interest. In plaintiff’s new implied covenant claim, she alleged that the directors violated her implied right in the Shareholders’ Agreement to a good-faith negotiation of her repurchase proposals. The Chancery Court denied plaintiff’s request to amend her complaint because it found the claims were futile. Blaustein v. Lord Baltimore Capital Corp., No. 6685-VCN, 2013 Del. Ch. LEXIS 108 (Del. Ch. Apr. 30, 2013).
On appeal, the Supreme Court first addressed whether, under common law, Lord Baltimore’s directors owed a fiduciary duty to consider and negotiate, free of any conflicts, a repurchase of plaintiff’s shares. The Court explained that under common law the directors of a closely held corporation have no general fiduciary duty to repurchase the stock of a minority stockholder. If minority stockholders want that right, they must contract for it. The Court then reasoned that if the board had no duty to repurchase plaintiff’s shares at all, then plaintiff had no right to a non-conflicted board decision on whether to repurchase her shares. Thus, the Supreme Court held, plaintiff’s motion to amend was properly denied because the fiduciary duty claim would have been futile under common law.
The Court also addressed whether the Shareholders’ Agreement created a fiduciary duty to consider and negotiate, free from conflicts of interest, a repurchase of plaintiff’s shares. The Shareholders’ Agreement gave Lord Baltimore the option to repurchase a minority stockholder’s stock and the ability to designate the price. The Shareholders’ Agreement did not require that Lord Baltimore negotiate the repurchase of a stockholder’s shares. It followed that because the directors had no duty to repurchase plaintiff’s shares, the directors also had no affirmative duty to negotiate, free from conflicts, plaintiff’s repurchase price. Therefore, the Supreme Court held, plaintiff’s request to add a breach of fiduciary duty claim was properly denied.
Next, the Supreme Court addressed whether the Court of Chancery erred when it rejected plaintiff’s new claim for breach of the implied covenant of good faith and fair dealing. Plaintiff argued that the Shareholders’ Agreement contained an implied contractual right to a good faith negotiation of her redemption proposals. The Court disagreed. The Supreme Court held that the implied covenant of good faith and fair dealing should be used to enforce “what the parties would have agreed to themselves had they considered the issue originally.” The covenant should not be used, the Court held, effectively to renegotiate the contract. Here, the parties decided that Lord Baltimore would repurchase minority stockholders’ shares at its own discretion. Also, the Shareholders’ Agreement said nothing about a minority stockholder’s right to a conflict-free negotiation. Therefore, adding an implied right to a good faith negotiation would be tantamount to rewriting the Shareholders’ Agreement. For this reason, the Court held plaintiff’s request to add a claim for breach of the implied covenant of good faith and fair dealing was properly denied.
Blaustein clarifies that a minority stockholder in a closely held corporation should address any concerns relating to the liquidity of his or her shares expressly through contract.
Supreme Court: Stanford’s Victims Can Sue Third Parties
Victims of R. Allen Stanford’s $7 billion Ponzi scheme can sue law firms and other third parties on allegations they aided the fraud, the Supreme Court ruled Wednesday.
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Lawyer Scams and How to Avoid Them
In this edition of The Digital Edge, hosts Sharon Nelson and Jim Calloway discuss check fraud with expert Dan Pinnington. Together, they reveal how lawyers are repeatedly falling into the trap of check fraudsters and what can be done to avoid it. Tune in for tips on how to spot a check fraudster in your practice or law firm.
Pinnington is the Vice President of Claims Prevention and Stakeholder Relations at Lawyers' Professional Indemnity Company (LAWPRO). He is a prolific writer, speaker, and blogger on topics including practice management, risk management, and legal technology. He is also a contributor to AvoidAClaim.com which is blog by LAWPRO that, among many things, helps attorneys prevent malpractice claims.
Pinnington is the Vice President of Claims Prevention and Stakeholder Relations at Lawyers' Professional Indemnity Company (LAWPRO). He is a prolific writer, speaker, and blogger on topics including practice management, risk management, and legal technology. He is also a contributor to AvoidAClaim.com which is blog by LAWPRO that, among many things, helps attorneys prevent malpractice claims.
Source: http://legaltalknetwork.com/podcasts/digital-edge/2014/02/lawyer-scams-avoid/
Wednesday, February 26, 2014
License Loss Keeps Habeas Claim Alive
A petitioner may pursue her habeas claim after completion of a jail sentence; an Augusta County Circuit Court says petitioner’s claim is not moot because she ultimately seeks reinstatement of her nursing license. It is reasonable to suggest that prior to the Supreme Court of Virginia’s decision in E.C. v. Va. Dep’t of Juvenile Justice, ...
Source: http://valawyersweekly.com/2014/01/02/license-loss-keeps-habeas-claim-alive/
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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.
Source: http://www.lawmemo.com/blog/2012/06/midyear_union_d.html
Gays And Lesbians Seeking Asylum In U.S. May Find A Hard Road
Laws like Uganda's that outlaw homosexuality may encourage some gay people abroad to seek asylum in the U.S. But proving a "well-founded fear of persecution" is not an easy path.
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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/
Court Enters Owners’ Draft Order
A Richmond Circuit Court will enter a dismissed agreed order submitted by defendant owners, in this dispute over whether a money judgment order should be entered or a dismissed agreed order due to the payment of the amount the court has said is due from defendants to plaintiff. The matter of the American Institute of ...
Source: http://valawyersweekly.com/2014/01/02/court-enters-owners-draft-order/
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Sidley Austin Looks to Riverbed to Build a Broader Network
Sidley Austin had a legacy network connecting its 17 offices in the U.S., Asia and Europe, resulting in slow data transfers and limiting the firm's ability to centralize IT resources. To create better connectivity between offices, the firm upgraded its network with Riverbed appliances.
Source: http://www.law.com/jsp/legaltechnology/pubArticleLT.jsp?id=1202473966828&rss=rss_ltn
What Should Lawyers Know About Information Governance?
In this edition of Digital Detectives hosts Sharon D. Nelson and John W. Simek invite Jason R. Baron, former director of litigation at the U.S. National Archives and Records Administration to discuss Information Governance as it relates to e-discovery, privacy, record keeping and security. Baron connects the dots between all these areas and helps lawyers understand they need to know about information governance and the current trends he is see in this area. Baron serves as counsel to the Information Governance and E-Discovery Practice Group at the law firm of Drinker Biddle and Reath, in Washington, DC. His prior career in the federal service included acting as trial lawyer and senior counsel at the Department of Justice, and for the past 13 years as director of litigation at the US National Archives and Records Administration. He is an internationally recognized speaker on the subject of electronic records.
Source: http://legaltalknetwork.com/podcasts/digital-detectives/2014/01/lawyers-know-information-governance
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Detroit Files Financial Restructuring Plan
The city of Detroit submitted its financial restructuring plan to federal court Friday, a move likely to set off a new round of jockeying among creditors asked to take a haircut in the nation's largest municipal bankruptcy.
Source: http://blogs.wsj.com/law/2014/02/21/detroit-files-financial-restructuring-plan/?mod=WSJBlog
Tuesday, February 25, 2014
US Supreme Court declines to hear gun rights cases
[JURIST] The US Supreme Court [official website] on Monday declined to hear rule on three new petitions that address the scope of the Second Amendment [Cornell LII backgrounder] of the Constitution. The Supreme Court denied the petitions [order list, PDF], two of which were filed by the National Rifle Association (NRA) [advocacy website], without opinion. In NRA v. Alcohol Tobacco and Firearms [opinion, PDF; JURIST report], the US Court of Appeals for the Fifth Circuit [official website] upheld a law...
Source: http://jurist.org/paperchase/2014/02/us-supreme-court-declines-to-hear-gun-rights-cases.php
Public Speaking: Conquer Your Fears, Deliver Your Message, and Change Lives
“Say something to make them put down their salad fork,” public speaking coach Deb Sofield said. The window of opportunity to engage an audience is small, and your introduction is a key factor in success. In this episode of The Paralegal Voice, Paralegal Mentor Vicki Voisin hosts a lively discussion with Sofield covering public speaking basics, how to conquer fears of public speaking, and general standards to advance your career and daily life.
Sofield is a public speaker, author, and coach. Her goal is help her clients find their voice and deliver their message so that is is impactful and it is heard. She frequently presents on the basics of how to succeed in public speaking worldwide.
Special thanks to our sponsor, NALA.
Sofield is a public speaker, author, and coach. Her goal is help her clients find their voice and deliver their message so that is is impactful and it is heard. She frequently presents on the basics of how to succeed in public speaking worldwide.
Special thanks to our sponsor, NALA.
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Comparing the New iPads for Lawyers
As we approach the gift-giving season, the new iPads are here. Will you be purchasing the newest model for yourself or as a gift, or are you still wondering what’s different and new? In this edition of The Kennedy-Mighell Report, Dennis Kennedy and Tom Mighell discuss the new iPad Air and iPad Mini with retina display, how the newest iPads reflect how we use technology, and which model makes the most sense for lawyers. The second half of the show will cover the findings of the Am Law Tech Survey 2013.
Dayton’s contract with Lillehaug for shutdown work violated statute
Justice David Lillehaug
When he first signed on to serve as legal counsel to Gov. Mark Dayton during the 2011 shutdown, David Lillehaug agreed to do so pro bono.
That arrangement changed, however, as the shutdown wore on. Lillehaug and his former law firm Fredrikson & Byron billed for their time. [LiIllehaug was appointed to the Minnesota Supreme Court last March.] Ultimately Fredrikson charged $77,000 for the work.
There is nothing wrong with hiring an outside lawyer, but the Minnesota Office of Legislative Auditor said that when Dayton’s office decided to pay Lillehaug, it violated state statute and policy. The OLA recently published its audit of the Governor’s Office.
The report said that when Dayton’s office hired the firm it did not draft a professional contract and instead used an engagement letter. The letter did not specify an end date for the legal work and did not set a cap on the attorney fees. The Governor’s did not free up funds to pay for the services either.
The report recommended the Governor’s office develop procedures to execute contracts that comply with state statute.
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LawBiz® Legal Pad: Client Relations
What can law firms do to interact with their clients more effectively? In today's clip, Ed will share a few ideas, such as developing a checklist of questions and creating surveys that will address this issue.
Source: http://feeds.lexblog.com/~r/LawBizBlog/~3/w4D-9DeyZcc/
Meeting Minutes Show Human Side To Fiscal Crisis
The Federal Reserve has released transcripts from more than a dozen meetings that took place in 2008, as Fed officials and other regulators struggled to get on top of an unfolding crisis.
Source: http://www.npr.org/2014/02/21/280759174/meeting-minutes-show-human-side-to-fiscal-crisis?ft=1&f=1070
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Monday, February 24, 2014
Magic Words, Magic Rights
Knowing my love of police "magic words," a reader pointed me to a thread on the subreddit Bad Cop No Donut on whether there is anything to be done when a police officer claims he "smells pot" in a car.
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Or does the 4th Amendment REALLY vanish with those magic words?
I've been stopped and the cop claimed he smelled pot, when, at the time, I hadn't touched the stuff in years. I told him I'd consent to a search if he apologized for wasting both of our time when he didn't find anything. He searched, didn't find anything, and I was on my way without an apology and a "verbal warning" to fix my tail light
Do you ask for another officer's opinion?
Do you tell the officer "bullshit"?
I'm just trying to help some people know what to do in this situation.
Initially, it helps for have a basic understanding of the law as it currently exists. When a cop says he "smells pot," he is invoking the automobile exception to the warrant requirement, which is based on exigent circumstances. Since a person can drive away, and thereby evade arrest and seizure of evidence of a crime in a car, the Supreme Court crafted the exception fin Carroll v. United States, a 1925 opinion about bootleggers getting away from the revenuers, which has done more harm to the 4th Amendment than perhaps any other case.
Since smell can't be captured and bottled for later presentation to a judge, the only "proof" of what an officer smelled is the officer's testimony. If he says so, it becomes real, and that's why they are magic words. Other than proving impossibility or incredibility, there is essentially nothing that can be done to challenge what the cop says he smelled. More importantly, even if a subsequent search turns up no pot, that doesn't mean he didn't smell what he smelled. The officer will testify about his training and experience in smelling pot, and yet he can be mistaken. The law doesn't require the cop to be right.
But the discussion thread about the magic words is where a grave misunderstanding about the system becomes clear. The problem derives from the absence of any marijuana in the car. The cop says he smelled it. This gives rise to probable cause to search and the automobile exception allows the cop to do so without a warrant. A search follows, and it can be as intrusive as the cop chooses to make it. By intrusive, it can include dismantling your brand new Maserati into a million pieces on the side of the road and, when it's over, leaving it there.
So the cop smells pot, searches and comes up empty. No apology. No help putting your Maserati back together. He drives away without so much as a tip o' the hat. This is where people don't seem to understand how constitutional rights work.
There are no elves in the backroom enforcing your constitutional rights. Had the police officer found something in the car to justify an arrest, the question of the constitutionality of the search could be hashed out in court in a suppression motion and hearing. Bear in mind that the cop may have claimed to smell marijuana, but that doesn't mean pot is what was found. Maybe other drugs. Maybe an illegal gun. Maybe a dead body. The smell of pot claim serves to except the search from the warrant requirement, and whatever comes of the search is the basis for the subsequent arrest.
But the cop finds nothing. Nada. Zip. You are clean and, surrounded by the pieces of your brand new Maserati, free to go. What then?
This is where people get confused. That's it? Don't the cops have to, you know, do something?
No red light goes off in the backroom of the constitutional elves. Actually, there is no such backroom. There's nothing. As the cop drives away, that's the end of the encounter, unless the person chooses to take action to contest the violation of his constitutional rights, such as a §1983 claim.
The problem there, of course, is that the cop, invoking the magic words that he "smelled pot," will very likely prevail despite the fact that he found nothing. You won't make it past summary judgment. More significantly, no lawyer will take the case on contingency, meaning that you will have to pay to play, and it will prove to be an expensive longshot to even make the effort to enforce your constitutional rights.
Consider the plight of people stopped in the street in New York City under the stop & frisk program, where the most generous view is that the police take action against 12% of the people stopped. They've performed millions of stops, and a tiny fraction have resulted in people going before a judge, where they can contest what happened. The others, the millions of people stopped and searched where nothing was found, just walk away, having been violated, humiliated and treated like pond scum.
The Constitution is not a self-effectuating document. It requires someone to act upon it to challenge police conduct. Otherwise, they are words without meaning, easily thwarted by police invoking the myriad exceptions the courts have provided. And here's an even worse secret: they don't even have to use magic words unless they ultimately find something, arrest a person and want to use it as evidence in court.
They get this. Most people don't. Most people harbor a naïve belief that, despite everything they know about how the police function, there is still some thread of honesty woven through their conduct that somehow makes them behave in accordance with the Constitution.
There are some excellent videos and writings about how to best conduct oneself to properly invoke constitutional rights and to create countervailing evidence to support one's invocation. The pervasiveness of video is a huge factor in showing that police have manufactured claims and false allegations, and these go a long way in keeping police clean where in the past they could make up anything they want to and there would be no way to challenge them.
But these rights we love so dearly don't happen on their own. Someone has to make them happen. We make them happen. And if we don't, then we're left on the side of the road with our Maserati in pieces cursing. The cops have magic words, but constitutional rights aren't magic. They only happen if we make them.
© 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/magic-words-magic-rights.aspx?ref=rss
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Fighting Video with Video
Sheriff's deputies in Clark County, Ohio, have been given dispensation to wear "pocket cameras" on the job. Not because someone decided it was a good idea for them to video their interactions with member of the public, which is not only a perfectly fine thing to do, but one that has been embraced by other department. According to the Dayton Daily News:
But what the Clark County Sheriff's office is doing shows the danger of playing this game. Inexplicably, police haven't quite gotten the memo that they are rather unique public employees. They aren't let loose on the streets with guns and shields because they are just a bunch of cool guys, but because they hold a special authority that society has entrusted to them to protect and serve.
When they take the oath and strap on theSam Browne body armor, they do with the knowledge that they are no longer acting as ordinary people who just happen to be entitled to seize other ordinary people by pointing a gun at their head. Their authority comes from the job, from the People, who put up the money for their uniform allowance.
Are there rules for the use of pocket cameras in Clark County? Who decides when the camera gets turned on? Must deputies preserve what the camera sees, whether it's good for them or not? Does Gene Kelly, the Sheriff, get to decide what's of "evidentiary value" and what's not? Who preserves the integrity of the video? On whose computer does it get downloaded? Or deleted? Or altered?
A picture may be worth a thousand words, but that's true whether the picture is accurate or modified to show something false. And if the picture shows a cop doing something bad, then the lack of a picture is worth even more words, the words of argument that there is no proof of a beating, a false arrest, a killing.
But the set up of deputies carrying personal video to offset the public having video of their own smacks of a deeply entrenched "us" versus "them" problem, and provides all sorts of opportunity for facile abuse. Cops want to video their interactions for everyone's benefit? Cool. But then it has to be done right, used from the initiation of all interactions and remain on until the bitter end, preserved in a manner that secures it from any alteration and available to everyone, cop or non-cop alike, should it be needed.
Why isn't the public required to do so if that's what you demand of cops? Because you are cops, whose function is to protect and serve at the behest of the public. This is the life you chose and the obligation that goes with it.
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Clark County Sheriff’s deputies are wearing pocket cameras that record their work to help their cases and to protect themselves against accusations of misconduct.So that's how it's going to be, if we record them, they record us. Tit for tat. Fight fire with fire. So nobody in Dayton will be arrested or hassled for videotaping police anymore? What's wrong with that?“Every call we go on, someone’s going to record us,” Clark County Sheriff Gene Kelly said. “We have that same technology.”
Deputies are not required to wear the cameras but can purchase them independently or with their uniform allowance.
Of course, that's not how it worked out when Rory Bruce was tried, but it reveals the one-way street attitude that video is going through on its way to maturity. When the cops want to use it, because it benefits them, it's perfect. A picture is worth a thousand words. When it reflects poorly on cops, it never tells the full story and should be completely disregarded.Kelly said that law enforcement can use the cameras to their benefit if there are false allegations.
“They say a picture is worth a thousand words,” Kelly said.
What Elliott records with his camera can be used for evidence.
“If I feel there are evidentiary purposes, I will submit it to the courts,” said Elliott, who has worn his for about a year.
But what the Clark County Sheriff's office is doing shows the danger of playing this game. Inexplicably, police haven't quite gotten the memo that they are rather unique public employees. They aren't let loose on the streets with guns and shields because they are just a bunch of cool guys, but because they hold a special authority that society has entrusted to them to protect and serve.
When they take the oath and strap on the
Are there rules for the use of pocket cameras in Clark County? Who decides when the camera gets turned on? Must deputies preserve what the camera sees, whether it's good for them or not? Does Gene Kelly, the Sheriff, get to decide what's of "evidentiary value" and what's not? Who preserves the integrity of the video? On whose computer does it get downloaded? Or deleted? Or altered?
A picture may be worth a thousand words, but that's true whether the picture is accurate or modified to show something false. And if the picture shows a cop doing something bad, then the lack of a picture is worth even more words, the words of argument that there is no proof of a beating, a false arrest, a killing.
Members of the Clark County Sheriff’s office are not permitted to have original copies of the digital media evidence after their shifts, according to digital media evidence policies for the office.
And what happens to the deputies if they do? Who decides what gets uploaded after a shift? Is this intended to prevent a deputy from screwing with videos at home or uploading embarrassing videos on Youtube of their interactions on the job?
There probably isn't anyone who disagrees with this, though its hardly as simple as Kelly would have it. We're still a ways off from figuring out how video will best serve "deputies and civilians," ignoring, of course, that deputies are civilians, but I hesitate to be overly critical of Ben Hunt, human resources and labor relations administrator at the Clark County Sheriff’s Office, for his confusion. It's got Tale of Two Cities potential, best and worst at the same time.“They can be used to protect deputies and civilians to be sure everything is safe and appropriate,” Hunt said.
Officials believe that the cameras will be helpful in protecting themselves and the community.
“I think there will be a time when everyone carries one,” said Kelly.
But the set up of deputies carrying personal video to offset the public having video of their own smacks of a deeply entrenched "us" versus "them" problem, and provides all sorts of opportunity for facile abuse. Cops want to video their interactions for everyone's benefit? Cool. But then it has to be done right, used from the initiation of all interactions and remain on until the bitter end, preserved in a manner that secures it from any alteration and available to everyone, cop or non-cop alike, should it be needed.
Why isn't the public required to do so if that's what you demand of cops? Because you are cops, whose function is to protect and serve at the behest of the public. This is the life you chose and the obligation that goes with it.
© 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/2013/07/14/fighting-video-with-video.aspx?ref=rss
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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Law of supply & demand in the legal profession
According to the ABA, only 56 percent of nearly 46,000 law school graduates had a job in 2012 requiring bar passage nine months after graduation. And less than 1 in 5 of the legal problems experienced by low-income people are addressed by a private attorney or a legal aid lawyer.
The president of the ABA told the House of Delegates that “‘There are so many examples of real, monumental life issues that could be alleviated with the help of a lawyer...And there is a pool of newly minted lawyers waiting for the chance to help.’”
This is the same problem or challenge that faced the legal profession in 1965 when I became a member. Bar leaders were wringing their hands, then, saying "oh my, oh my, what should we do?" One would think that the brilliance of lawyers, both before and since, could have found a solution to this challenge posed by the laws of economics, supply and demand. Well, the answer is they have.
The ABA president suggested that we should look at programs on the national, state and local levels, citing as examples New York’s legal incubator program aimed at helping new practitioners and South Dakota’s rural practice project, which provides financial incentives to lawyers willing to practice in rural areas. These are not new; examples exist from Coast to Coast. And no new regulations and no involuntary service is required to face and meet the challenges.
But there is no political will to embrace them and expand these options. Perhaps the established Bar is fearful of the results and the impact on the economics of those who have "made it."
Source: http://feeds.lexblog.com/~r/LawBizBlog/~3/KUBIsqhjOEU/
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Germany officials arrest three suspected former Auschwitz guards
[JURIST] German officials on Thursday raided the homes of three men and arrested them for their suspected roles as guards at the Auschwitz [USHMM backgrounder] death camp during World War II. The men, aged 88, 92 and 94, are currently being detained [BBC report] in the Hohenasperg prison hospital. They are being charged as accessories to murder, an example set by the successful prosecution [AP report] of John Demjanjuk, the first individual to be convicted in Germany on the basis...
DOJ Sued Over 'Discovery Blue Book'
The National Association of Criminal Defense Lawyers has sued the U.S. Department of Justice over public access to a criminal discovery "blue book" that was written after the collapse of the case against former Alaska senator Ted Stevens.
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NLRB's recent significant decisions
The NLRB this week made public a number of significant decisions, most reached in the final days of the term of Member Brian Hayes, which ended on December 16. The Board continues with three members, Chairman Mark Gaston Pearce and Members Richard F. Griffin, Jr. and Sharon Block.
The decisions touch on a variety of issues including social media postings, charter school jurisdiction, backpay awards, the chargeability of certain union lobbying expenses, and an employer’s responsibility to continue dues collection after the expiration of a contract.
Hispanics United of Buffalo
The Board found that the employer unlawfully fired five employees because of their Facebook posts and comments about a coworker who intended to complain to management about their work performance. In its analysis, the Board majority applied settled Board law to the new world of social media, finding that the Facebook conversation was concerted activity and was protected by the National Labor Relations Act. Member Hayes dissented.
Alan Ritchey, Inc.
In a unanimous decision that resolved the last of the two-member cases returned following the 2010 Supreme Court decision in New Process Steel, the Board found that where there is no collectively-bargained grievance-arbitration system in place, employers generally must give the union notice and an opportunity to bargain before imposing discipline such as a discharge or suspension on employees. Member Hayes was recused.
Latino Express
In a decision that will affect most cases in which backpay is awarded, the Board decided to require respondents to compensate employees for any extra taxes they have to pay as a result of receiving the backpay in a lump sum. The Board will also require an employer ordered to pay back wages to file with the Social Security Administration a report allocating the back wages to the years in which they were or would have been earned. The Board requested briefs in this case in July 2012. Member Hayes did not participate in the case.
Chicago Mathematics & Science Academy
Rejecting the position of a teachers’ union, the Board found that it had jurisdiction over an Illinois non-profit corporation that operates a public charter school in Chicago. The non-profit was not the sort of government entity exempt from the National Labor Relations Act, the Board majority concluded, and there was no reason for the Board to decline jurisdiction. Member Hayes dissented in part.
United Nurses & Allied Professionals (Kent Hospital)
The Board, with Member Hayes dissenting, addressed several issues involving the rights of nonmember dues objectors under the Supreme Court’s Beck decision. On the main issue, the majority held that, like all other union expenses, lobbying expenses are chargeable to objectors, to the extent that they are germane to collective bargaining, contract administration, or grievance adjustment. The Board invited further briefing from interested parties on the how it should define and apply the germaneness standard in the context of lobbying activities.
WKYC-TV, Gannet Co.
Applying the general rule against unilateral employer changes in terms and conditions of employment, the Board found that an employer’s obligation to collect union dues under a check-off agreement will continue after the contract expires and before a bargaining impasse occurs or a new contract is reached. Member Hayes dissented.
Source: http://www.lawmemo.com/blog/2012/12/nlrbs_recent_si.html
Sunday, February 23, 2014
Delaware Supreme Court Holds That a Minority Stockholder Has No Common Law Right to a Conflict-Free Board Decision Regarding the Repurchase of Shares
In Blaustein v. Lord Baltimore Capital Corp., No. 272, 2013, 2014 Del. LEXIS 30 (Del. Jan. 21, 2014), the Delaware Supreme Court held that a closely-held corporation’s directors owe no fiduciary duty to decide, free from conflicts of interest, whether a corporation will repurchase a minority stockholder’s shares in the corporation. Additionally, the Supreme Court held that the implied covenant of good faith and fair dealing contained in a shareholders agreement did not give a minority stockholder the right to a good faith, conflict-free negotiation over the repurchase of her stock. If a minority stockholder wishes to have the right to put his or her stock to the corporation at a fair price to be set through negotiations with independent and disinterested decision makers at the corporation, the stockholder must contract for that right expressly in advance.
Plaintiff was a minority shareholder of the defendant, Lord Baltimore Capital Corporation (“Lord Baltimore”), a closely held Delaware corporation. Plaintiff wished to sell her shares back to Lord Baltimore. Lord Baltimore’s Shareholders’ Agreement stated that the company “may” repurchase a minority shareholder’s stock provided that the repurchase is either approved (i) by a majority of all the directors of the company or (ii) in writing by shareholders who own 70% or more of all shares issued and outstanding.
Lord Baltimore’s directors offered to repurchase plaintiff’s shares at a 52% discount from the net asset value of her shares. In response, plaintiff made several offers to sell her shares at a smaller discount. After considering these offers, the board rejected them and reoffered to purchase her shares at the 52% discount. Plaintiff believed her offers were rejected because a majority of the board had a conflict of interest. Specifically, she believed a majority of the seven directors refused to repurchase her shares at a higher price because it would jeopardize their personal tax benefits.
Plaintiff sued Lord Baltimore in the Delaware Court of Chancery. Plaintiff later filed a motion to amend her complaint to add two new claims: one for breach of fiduciary duty and one for breach of the implied covenant of good faith and fair dealing. In plaintiff’s new fiduciary duty claim, she alleged that the directors breached their fiduciary duty to consider and negotiate repurchasing her shares without any conflicts of interest. In plaintiff’s new implied covenant claim, she alleged that the directors violated her implied right in the Shareholders’ Agreement to a good-faith negotiation of her repurchase proposals. The Chancery Court denied plaintiff’s request to amend her complaint because it found the claims were futile. Blaustein v. Lord Baltimore Capital Corp., No. 6685-VCN, 2013 Del. Ch. LEXIS 108 (Del. Ch. Apr. 30, 2013).
On appeal, the Supreme Court first addressed whether, under common law, Lord Baltimore’s directors owed a fiduciary duty to consider and negotiate, free of any conflicts, a repurchase of plaintiff’s shares. The Court explained that under common law the directors of a closely held corporation have no general fiduciary duty to repurchase the stock of a minority stockholder. If minority stockholders want that right, they must contract for it. The Court then reasoned that if the board had no duty to repurchase plaintiff’s shares at all, then plaintiff had no right to a non-conflicted board decision on whether to repurchase her shares. Thus, the Supreme Court held, plaintiff’s motion to amend was properly denied because the fiduciary duty claim would have been futile under common law.
The Court also addressed whether the Shareholders’ Agreement created a fiduciary duty to consider and negotiate, free from conflicts of interest, a repurchase of plaintiff’s shares. The Shareholders’ Agreement gave Lord Baltimore the option to repurchase a minority stockholder’s stock and the ability to designate the price. The Shareholders’ Agreement did not require that Lord Baltimore negotiate the repurchase of a stockholder’s shares. It followed that because the directors had no duty to repurchase plaintiff’s shares, the directors also had no affirmative duty to negotiate, free from conflicts, plaintiff’s repurchase price. Therefore, the Supreme Court held, plaintiff’s request to add a breach of fiduciary duty claim was properly denied.
Next, the Supreme Court addressed whether the Court of Chancery erred when it rejected plaintiff’s new claim for breach of the implied covenant of good faith and fair dealing. Plaintiff argued that the Shareholders’ Agreement contained an implied contractual right to a good faith negotiation of her redemption proposals. The Court disagreed. The Supreme Court held that the implied covenant of good faith and fair dealing should be used to enforce “what the parties would have agreed to themselves had they considered the issue originally.” The covenant should not be used, the Court held, effectively to renegotiate the contract. Here, the parties decided that Lord Baltimore would repurchase minority stockholders’ shares at its own discretion. Also, the Shareholders’ Agreement said nothing about a minority stockholder’s right to a conflict-free negotiation. Therefore, adding an implied right to a good faith negotiation would be tantamount to rewriting the Shareholders’ Agreement. For this reason, the Court held plaintiff’s request to add a claim for breach of the implied covenant of good faith and fair dealing was properly denied.
Blaustein clarifies that a minority stockholder in a closely held corporation should address any concerns relating to the liquidity of his or her shares expressly through contract.
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