Blawgletter®

Ten Years Ago, a Brave Judge Did a Good Thing

On November 5, 1999, United States District Judge Thomas Penfield Jackson issued an order, spanning 412 paragraphs, that constituted his findings of fact in United States v. Microsoft Corp., 98-1232 (D.D.C. Nov. 5, 1999).  In the final paragraph, His Honor wrote:

Most harmful of all is the message that Microsoft's actions have conveyed to every enterprise with the potential to innovate in the computer industry. Through its conduct toward Netscape, IBM, Compaq, Intel, and others, Microsoft has demonstrated that it will use its prodigious market power and immense profits to harm any firm that insists on pursuing initiatives that could intensify competition against one of Microsoft's core products. Microsoft's past success in hurting such companies and stifling innovation deters investment in technologies and businesses that exhibit the potential to threaten Microsoft. The ultimate result is that some innovations that would truly benefit consumers never occur for the sole reason that they do not coincide with Microsoft's self-interest.

The D.C. Court of Appeals largely affirmed Judge Jackson, as it should have.  Further Blawgletter sayeth not.

Quote of the Day: David E. Mills

A man and his lawyer stand outside a building that looks like a courthouse:

Client:  What's wrong?  Why aren't we in court anymore?

Lawyer:  I just got Twombleyed in the Iqbals.

David E. Mills, Courtoons, Oct. 23, 2009.

Sad but true.

Judge Posner Explains Why Opinions Mislead

Blawgletter sometimes rues the length of court opinions.  We indeed find the feeling more common as we progress a few months into our second half century.  And yet our patience has lately improved.

Judge Richard Posner helped today by explaining, in an ironically long opinion for him, why judicial sound bites can make bad law.  He cited a phrase, "literally false", which a plaintiff brandished as it might a knife that cut its opponents' defense to a Lanham Act claim to ribbons:

This is an unfortunately common example of a litigant misled by general language in judicial opinions.  Opinions would be even longer than they are if judges couldn't use short phrases to denote what may be complex legal doctrines.  When those phrases are taken to be exhaustive statements of entire doctrines with all the necessary qualifications, the result is likely to be a misapprehension of the law.  William Blake declared that "to Generalize is to be an Idiot.  To Particularize is the Alone Distinction of Merit."   That is a bit extreme; but uncritical generalization is a path to error.  One form of uncritical generalization, ironically in view of Schering's invocation of the doctrine of "literal falsity," is reading general language literally.

Schering-Plough Healthcare Products, Inc. v. Schwarz Pharma, Inc., No. 09-1438, slip op. at 20 (7th Cir. Oct. 29, 2009).

AT&T Can't Beat Class by Offer to Lose $7,500 Penalty, Ninth Circuit Holds

Say you bought a cell phone.  Suppose the outfit that sold it to you said you'd get it for "free".  Say also the seller -- let's call it AT&T -- billed you 7.75 percent of what the phone would've cost if you'd purchased it at retail.  How would you feel about the freeness of the phone?

Not so good, Blawgletter guesses.  And yet the seller -- which we must still refer to as AT&T -- insists it did nothing wrong.

Alright.  Fine.  Okie dokie.

But AT&T takes things further.  It also adds to its contracts with customers like you a clause that bars you from suing on behalf of anyone else.  The attempt has worked in some states but seldom in federal court.

Which fact seems to have persuaded AT&T to add a sweetener, at least in the Golden State.  If you, the California customer, convince the arbitrator to award more than AT&T offered in settlement, you get a smacking $7,500.  But the district court and Ninth Circuit didn't accept the AT&T argument.  The latter said, in holding the class ban unconscionable under state law:

The $7,500 premium is available only if AT&T does not make a settlement offer to the aggrieved customer in a sum equal to or higher than is ultimately awarded in arbitration, and before an arbitrator is selected.  This means that if a customer files for arbitration against AT&T, predictably AT&T will simply pay the face value of the claim before the selection of an arbitrator to avoid potentially paying $7,500.  Thus, the maximum gain to a customer for the hassle of arbitratng a $30.22 dispute is still just $30.22. . . . As a result, aggrieved customers will predictably no file claims -- even if the odds are that after the letter-writing and arbitrator choosing they will get a $30.22 offer -- thereby "greatly reduc[ing] the aggregate liability" AT&T faces for allegedly mulcting small sums of money from many consumers.

Laster v. AT&T Mobility LLC, No. 08-56394, at 14397-98 (9th Cir. Oct. 27, 2009).

 Our feed admires the brevity of Circuit Judge Bea.

Quote of the Day: Clarence Thomas

So why do you beat up on people if you already know?  I don't know, because I don't beat up on 'em.  I refuse to participate.  I don't like it, so I don't do it.

Clarence Thomas, Oct. 23, 2009 (explaining to a group of law students at the University of Alabama why he doesn't ask questions during oral argument).

The Informant! A Brief Review

 
Matt Damon gives his all for his craft.

Blawgletter treasures the cinema.  Watching film makes us giddy.  Plus we adore any celluloid through which light can project flickering images, upon a screen or picture tube, of Matt Damon.  

You thus may imagine our joy at seeing he who played Will Hunting . . . James Francis Ryan . . . Jason Bourne . . . and Linus Caldwell last weekend at The Angelika.  Only this time Lord Damon gained 30 plus pounds in the name of portraying the lysine price-fixing, and Sherman Act section 1-violating, bad guy Mark Whitacre, a bipolar executive at Archer Daniels Midland, the former Supermarket to the World, at least on public television.

You may also guess at our chagrin that The Informant! director Steven Soderbergh and script-writer Scott Z. Burns chose not to include a lecture on how price-fixing hurts consumers.  And why the antitrust-phobic decision in Twombly will cost people who buy commodities -- all of us -- tens and maybe hundreds of billions of dollars.  But we digress.

At the risk of spoiling the surprise ending, we will tell you that Whitacre's felonious ways seem to owe a big debt to the fact that he lies a great deal.  The movie struck us in fact as a journey into the pathology of a man who can't tell the difference between truth and fiction . . . or at least cares nothing about it.

The Informant! doesn't actually end with a surprise.  We regret any misunderstanding.  Except that, in addition to fixing prices with competitors, Whitacre stole $11.5 million from ADM.  That fact seems less surprising after you've seen the movie.  Which we recommend.

Happy Friday!

MDL Panel Heads to Harvard for Nov. 19 Session

The Judicial Panel on Multidistrict Litigation ordered today that its seven members will gather for the next argument session on November 19 in Cambridge, Massachusetts.  Their Honors will hear from lawyers in, by Blawgletter's count, 16 potential MDL matters.

By the way, we confess to error in guessing the Panel would head south for this gathering.  You can't get a whole lot farther north in the lower 48 than the Ames Courtroom at Harvard Law School.

Further by the way, the numbers have come in for the last set of MDL cases.  By circuit and district court:

First Circuit

None

Second Circuit

Southern District of New York (2)
Western District of New York

Third Circuit

District of New Jersey

Fourth Circuit

District of Maryland

Fifth Circuit

Northern District of Texas (2)

Sixth Circuit

None

Seventh Circuit

Southern District of Illinois

Eighth Circuit

District of Minnesota
Western District of Missouri

Ninth Circuit

District of Arizona
Central District of California
Southern District of California

Tenth Circuit

None

Eleventh Circuit

Northern District of Alabama
Northern District of Georgia (2)

D.C. Circuit

None

Quote of the Day: Merle Travis (Update)

 
A lump of bituminous coal.

Thomas Hobbes wrote awhile back that, in the state of nature, "the life of man" tends toward the "solitary, poor, nasty, brutish, and short."

Kentuckian Merle Travis translated the Hobbesian view into the brief candle of a bituminous miner.  Travis sang:

You load sixteen tons [of hard coal], what do you get?  Another day older and deeper in debt.  Saint Peter, don't you call me 'cause I can't go.  I owe my soul to the company store.

Merle Travis, "Sixteen Tons" (1946).

Update:  "Tennessee" Ernie Ford made "Sixteen Tons" nationally famous in 1955.  His recording sold 2,000,000 units within two months after its release. 

Our feed still believes that David Hume could out-consume Schopenhauer and Hegel.

Supremes Debate Fees for Superb Work

Blawgletter has fussed before about judicial noticing of facts on the basis of wishful thinking.  Our prime targets have included the idea that class certification exerts "hydraulic pressure" for settlement and the notion that class actions involve little or no risk for plaintiffs' counsel.

Yesterday brought another instance -- although, with the decision pending and therefore in doubt, we can yet hope for a sensible outcome.

The case involved civil rights lawyers who did a world-class job against the State of Georgia.  The district court found for the plaintiffs and awarded their lawyers a fee above their "lodestar" -- hours times rates -- of around $6 million.  The Court heard argument on the Peach State's appeal from the award October 14.

We have court this morning and so can't give details on the back and forth but note, briefly, that the questions from several individual justices highlighted their inexperience with (a) working on a non-hourly basis, (b) representing plaintiffs, (c) how the market for legal services works in contingent fee settings, and (d) the imperfection of lodestars in reflecting a reasonable fee. 

One justice, for example, marveled that a law firm might pay a bonus, above hourly rates, for superior performance and results.  Another wondered how hourly rates could ever fail to capture the true value of lawyers' work.

The issue, as we understand it, turns on whether a "reasonable fee" means no more than the lodestar.  We tend to think Justice Sotomayor's questions aimed at the right answer.  If the market pays a premium for superior results, that premium reflects a reasonable fee.

Nobel Econ Prize Favors Antitrust

The Nobel Prize in Economic Sciences 2009 went today to a couple of American profs -- Elinor Ostrom (at Indiana U. and the first woman to win!) and Oliver Williamson (a Berkeleyite).  According to the Royal Swedish Academy of Sciences, both "Laureates have been instrumental in establishing economic governance as a field of research."

Dr. Williamson's work caught Blawgletter's eye because it looks to reflect an antitrust-friendly view of corporate bigness.  As the Academy summarized the professor's work:

Large corporations may of course abuse their power.  They may for instance participate in undesirable political lobbying and exhibit anticompetitive behavior.  However, according to Williamson's analysis, it is advisable to regulate such behavior directly rather than through policies that limit the size of corporations.

We can't tell what Dr. Williamson means by regulating "directly" but suspect that he favors active use of antitrust law to prevent, stop, remedy, and punish abuses of market power by dominant firms.  Good.