Blawgletter®

Forget It, Jake. It's Kabletown.

At the end of the one of the Best Movies Ever, Evelyn Mulwray (Faye Dunaway) drives with her young daughter towards safety down a Los Angeles street. Will they escape? Yes, we think they just might!

A Los Angeles police lieutenant (Perry Lopez) steps onto the pavement. He aims his pistol and fires. Mulwray's car glides into a wall. The horn blares. It keeps blaring, as Mulwray's lifeless body presses against the steering wheel.

A look of crazy anguish pierces the face of Jake Gittes (Jack Nicholson), a private detective who has fallen in love with his client Mulwray. One of Jake's associates grabs him. He faces his boss and says:

"Forget it, Jake. It's Chinatown."

That pretty much sums up what Adam Liptak writes today in the Sunday NYT, on the front page of the Business section, about the rulings in business cases by the Roberts Court. Liptak titles his piece "Friend of the Corporation" (in the print version) and "Corporations Find a Friend in the Supreme Court" (online), and he opens it thus:

Not long after 10 a.m. on March 27, a restless audience waited for the Supreme Court to hear arguments in the second of two historic cases involving same-sex marriage. First, however, Justice Antonin Scalia attended to another matter. He announced that the court was throwing out an antitrust class action that subscribers brought against Comcast, the nation's largest cable company.

Almost no one in the courtroom paid attention, despite Justice Scalia's characteristically animated delivery, and the next day's news coverage was dominated by accounts of the arguments on same-sex marriage. That was no surprise: the Supreme Court's business decisions are almost always overshadowed by cases on controversial social issues.

But the business docket reflects something truly distinctive about the court led by Chief Justice John G. Roberts Jr. While the current court's decisions, over all, are only slightly more cnservative than those from the courts led by Chief Justices Warren E. Burger and William H. Rehnquist, according to political scientists who study the court, its business rulings are another matter. They have been, a new study finds, far friendlier to business than those of any court since at least World War II.

Liptak goes on to tell about the study, which appears in the Minnesota Law Review, by Wiliam M. Landes and Richard A. Posner, as well as "a despairing overview", in the New York University Law Review, by Arthur R. Miller.

Blawgletter says check it out.

You'll note that the case Liptak uses to kick off the article, Comcast Corp. v. Behrend, No. 11-864, holds a special place in our heart. We argued it to the Court last November, and in our giddiness afterwards dared to hope the Court would concede what became obvious during the argument -- that Their Honors had made a mistake in thinking, when they took the case, that it properly raised a question of admissibility of expert opinion evidence under the Daubert line of decisions.

The majority instead posed and answered a different question, one that it seems to have formulated after the briefing concluded. That explains the dissenters' view that the majority had engaged (per Liptak) in "unseemly judicial gamesmanship" by "refram[ing] the legal issue in the case so that they could rule for Comcast."

It's Kabletown.

New Gun Rights in Texas?

As the National Rifle Association meets this weekend in Houston, our Solons in Austin ponder new laws that bear on your right to bear arms in the Lone Star State.

See if you can tell the real bills from the ones Blawgletter made up.

Rep. Dan Flynn (R-Van) sponsors HB 47, which would, for purposes of getting a permit to conceal a handgun on your person: 

a.    Lower the number of hours you must spend in a classroom to four from six

b.    Require extra training on how to deal with a "criminal assault" involving a gun

Under HB 1009, which Rep. Jason Villalba (R-Dallas) offers, schools could

a.    Arm all teachers

b.    Appoint a secret "school marshal" who "would be trained extensively to protect students should something arise"

A bill by Rep. Allen Fletcher (R-Tomball), HB 972, relates to handguns on college campuses and would mandate that

a.    Anyone with a handgun permit may take the weapon into almost any college building, including chapels and gyms

b.    A professor who questions a student's exercise of second amendment rights may not obtain tenure

The crux of HB 1314, the brainchild of Rep. Brandon Creighton (R-Conroe), would make a criminal of any federal or state "officer or employee" who "seizes a firearm" under any federal law "that does not exist under the laws of this state" unless

a.    The federal law "is consistent with the United States Constitution"

b.    The officer or employee who seized the firearm used it to stop a serious state-law crime

Rep. Lyle Larson (R-San Antonio) urges passage of HB 1349 so that the Texas Department of Public Safety "may not request or require" a handgun permit applicant or holder to

a.    Pass a field sobriety test

b.    Disclose her federal Social Security number 

The entry by Rep. Matt Krause (R-Fort Worth), HB 928, would treat enforcing a purely federal ban on extra large ammunition clips, assault-style rifles, or the like as a crime if the enforcing person serves

a.    As sheriff or district attorney

b.    In no official capacity

 

Knowing It When You See It

Who wrote "I know it when I see it"? Do you think:

a. Jon Stewart, about comedic talent;

b. Rod Stewart, on pulchritude;

c. Jeb Stuart, concerning military audacity; or

d. Potter Stewart, in reference to "hard-core pornography".

The Second Circuit wrote something like that when it ruled on April 25 that Artist A's reaping in Artist B's garden, where Artist A had not sown, counted, as a matter of law, as "fair use" under the Copyright Act of 1976. The panel thus tossed a district court's decision that went the other way. Cariou v. Prince, No. 11-1197-cv (2d Cir. Apr. 25, 2013).

The case dealt with a claim by Patrick Cariou that Richard Prince infringed Cariou's copyrights in photos he'd taken during close study of Rastafarian people in Jamaica. Prince copied the smallish images into mostly big works, which his lawyers deemed "transformative" and therefore satisfying a critical part of the test for a fair use defense to Cariou's infringement claim.

The district court granted judgment to Cariou, holding that Prince hadn't done enough to transform the Cariou output. They key consisted in Prince's failure to "comment on, relate to the historical context of, or critically refer back to" the efforts by Cariou, the court thought.

The Second Circuit begged to differ. It opined that an artist can transform someone else's work without meaning to say, or actually saying, anything about it. And at least 25 of the images at issue dropped anchor in the fair use safe harbor as a matter of law, the two-judge majority ruled. The third member on the panel -- a guest from the Ninth Circuit -- said he would have fixed the legal standard and sent the case back for findings and conclusions by the district court in the first instance rather than deciding the issue in the apeal.

All agreed that they know fair use when they see it.

Blawgletter wishes to offer a couple of thoughts.

One, while we don't disagree with the substance of the majority's reasoning and decision, we do see a lot of merit in the dissenter's view that trial courts ought to have the first shot at ruling on a question of what conclusion the evidence leads to. Trial judges do that very well. Appellate judges do it less well, not least because they do it seldom and, on account of their relative isolation and their lack of contact with juries and other ordinary people, have less sense of community standards and a stronger streak of elitism. Cf. "The frequent irrelevancy of the Supreme Court", Hercules and the Umpire, Apr. 24, 2013 ("In short, while the Supreme Court may exist at the 'center of the universe,' it frequently plies its trade in a 'galaxy far, far away.'").

Two, Prince made a terrible witness for himself. In his deposition, he testified that he had zero intention of making something "new" out of Cariou's Rasta photos -- an admission that forced the majority to say his mental process mattered almost not at all. We wonder whether Prince told his lawyers beforehand that he planned to torpedo his best defense or whether he simply came out with it in a spontaneous burst of artistic freedom.

Bonus: Will the dissenting visitor ever get another invitation?

Hat tip to ABA Journal.

Quote of the Day: Matt Bai

[I]f people went around suing everyone who accepted a loan for less money than [he] actually needed, the courts wouldn't have time for anything else.

Matt Bai, "Thrown for a Curve", The New York Times, Apr. 21, 2013 (casting asparagus on Rhode Island's lawsuit against baseball great Curt Schilling and others for borrowing only about $54 million from the Ocean State when making a success of their start-up video game business required more than $75 million).

Form and Substance and Twombly -- Oh, My!

To Blawgletter's eye, a complaint that alleges patent infringement bears itself with a certain elegance. Such a pleading often runs but several pages, and in substance it states that the Bad Guy defendant does some thing or things that infringe the Good Person plaintiff's patent. And Form 18 -- which appears with its brothers and sisters in the Appendix of Forms to the Federal Rules of Civil Procedure -- says that will do just fine.

But Form 18 predates the Supreme Court's rulings in Bell Atl. Co. v. Twombly and Ashcroft v. Iqbal. As you will recall, Twombly and Iqbal designed, built, and launched a "plausibility" standard for judging whether a pleading states a claim that can survive a challenge under Rule 12. Many objected that the Court had amended Rule 12(b)(6) -- to make it harder to satisfy -- while pretending not to.

In 2012, a district court granted a motion to dismiss under 12(b)(6) for failure to state a plausible patent infringement claim despite the fact that the complaint complied with Form 18. Today, the Federal Circuit reversed, holding that doing what Form 18 calls for suffices, even after (the Court's sub silentio amendment of Rule 12(b)(6) in) Twombly and Iqbal. See K-Tech Telecommunications, Inc. v. Time Warner Cable, Inc., No. 12-1425 (Fed Cir. Apr. 18, 2013).

Should the Court grant review in K-Tech? If it does, it could then repeat why it thinks plausibility does NOT imply any degree of probability, and it then could go on to explain whether the bare-bones of Form 18 either fails Twombly and Iqbal (thus proving the amendment theory) or doesn't (ergo making patent cases a favorite of the federal courts).

We love pretzels!

The Saga of Dickie Scruggs

Blawgletter admires good writing, no matter whence it comes. But we like it better when a judge produces it.

Last week, Fifth Circuit Judge Jacques Wiener did a fine piece of work. It kind of sings. And it tells the on-going tale of Dickie Scruggs, the rich lawyer who flew too close to the sun. We think you'll enjoy his narrative of the facts:

    Scruggs made both a name and a fortune as a plaintiffs’ attorney in asbestos and tobacco litigation. Along the way, he became entangled in many fee-sharing disputes with co-counsel, one of which resulted in a lawsuit filed by Robert Wilson in the Circuit Court of Hinds County, Mississippi (“the Wilson Case”). Robert “Bobby” DeLaughter, best known first for successfully prosecuting Byron De La Beckwith for murdering civil rights leader Medgar Evers, sat on the Circuit Court of Hinds County, where he was assigned the Wilson Case and his path crossed with Scruggs.

Scruggs wanted a sure thing in the Wilson Case, having recently lost a similar fee fight. As the presiding judge, DeLaughter could put his finger on the scales. DeLaughter coveted a federal Article III judgeship more than anything else; as the brother-in-law of then-United State Senator Trent Lott, Scruggs could influence the person who sent candidates to the President. In early 2006, Scruggs retained Ed Peters, a close friend and mentor of DeLaughter’s, as a secret go-between who conveyed an offer: If DeLaughter would help Scruggs win the Wilson Case, Scruggs would recommend DeLaughter to Lott for a district court judgeship.

    DeLaughter kept his end of the bargain: When Scruggs badly needed a trial continuance, DeLaughter entered, verbatim, a scheduling order prepared by one of Scruggs’s attorneys, despite having disclaimed input from either party. DeLaughter also reviewed yet-to-be-filed motions for Scruggs, advising how he would rule and which arguments needed work. During 2006, three judicial vacancies opened on Mississippi federal district courts. In March 2006, after being passed over for nomination to one of those seats, DeLaughter relayed his dissatisfaction and concern that “he was doing his part of the bargain and that . . . Scruggs was not going to fulfill his part of the deal.” Immediately thereafter, Scruggs had Senator Lott call DeLaughter. Although the record suggests that Lott did not say that DeLaughter was being considered, DeLaughter nonetheless came away with the impression that he was in the running for the seat.

    Mollified that Scruggs was keeping his end of the bargain, DeLaughter continued secretly to tilt the scales in the Wilson Case. When Wilson filed a potentially dispositive motion asking DeLaughter to quantify the amount of fees Scruggs still owed, Scruggs’s attorneys did not know whether to oppose the motion and pursue a full trial or to agree to submit the quantification issue to the judge. DeLaughter assured them that Scruggs would win the quantification motion, and he did. After faxing a preview of his order to Scruggs’s counsel, DeLaughter held that Scruggs owed no more than he had already paid and denied Wilson’s motion for reconsideration without comment. But the quantification order was so
favorable that even Scruggs’s attorneys worried that it could not be affirmed on appeal, so Scruggs settled the Wilson Case before appeal with the help of DeLaughter, who revealed Wilson’s confidential settlement position.

    These machinations came to light when members of Scruggs’s legal team began cooperating with the government’s investigation of an unrelated judicial bribery scheme. A grand jury returned an indictment charging Scruggs and DeLaughter with one count of conspiracy to commit federal programs bribery, in violation of 18 U.S.C. § 666, and three counts of aiding and abetting honest-services mail fraud, in violation of 18 U.S.C. §§ 1341 and 1346. The honest-services counts in the indictment alleged “a scheme and artifice to secretly and corruptly influence” DeLaughter, thus “depriving [Wilson] and the citizens of the State of Mississippi of their intangible right to [his] honest services.” In particular, the indictment alleged that Scruggs prevailed on Lott to consider DeLaughter, and “in return” DeLaughter provided secret access and favorable treatment.

    Scruggs pleaded guilty to a superseding information charging him with a single count of aiding and abetting honest-services mail fraud, in violation of 18 U.S.C. §§ 1341 and 1346. Like the original indictment, the information alleged a scheme corruptly to influence DeLaughter and deprive the citizens of Mississippi of their right to his honest services, describing Scruggs’s call to Lott on DeLaughter’s behalf. But the Information omitted that which DeLaughter did for Scruggs “in return.”

    Pursuant to a plea agreement, the charges in the indictment were dismissed. Scruggs was sentenced to imprisonment for seven years, concurrent with a prior five-year term for conspiring to bribe another judge who was presiding over a different fee dispute.

    On June 24, 2010, the Supreme Court issued Skilling v. United States in which it addressed the constitutionality of 18 U.S.C. § 1346, the honest-services statute. Section 1346 states that “the term ‘scheme or artifice to defraud’ includes a scheme or artifice to deprive another of the intangible right of honest services.” To avoid problems of constitutional vagueness with this definition, the Court in Skilling limited the application of the statute to paradigmatic bribery and kickback schemes only.3 In June 2011, Scruggs filed a motion to vacate his sentence pursuant to 28 U.S.C. § 2255, contending in light of Skilling that, as he did not admit to bribing Judge DeLaughter, he is not guilty of a crime.

    The district court concluded that, by pleading guilty, Scruggs had procedurally defaulted on that claim. After a two-day evidentiary hearing, thedistrict court issued a thorough 48-page opinion denying the § 2255 motion because Scruggs had not shown either his actual innocence or cause and prejudice. The district court issued a certificate of appealability on the issue of “actual innocence” and “other issues in the opinion,” and Scruggs timely filed a notice of appeal.

United States v. Scruggs, No. 12-60423, slip op. at 1-4 (5th Cir. Apr. 12, 2013).

Scruggs lost the appeal, by the way. We can imagine your surprise.

Prof. Epstein Explains Why We Should Have Won Comcast Corp. v. Behrend

NYU Law School Professor Richard A. Epstein -- "an advocate of minimal legal regulation" and "one of the most influential legal thinkers of modern times" -- thinks the U.S. Supreme Court got its ruling wrong in Comcast Corp. v. Behrend, No. 11-864 (U.S. Mar. 27, 2013) (post here).

Leaving to one side the separate point that (according to a "stinging dissent by Justices Ginsburg and Breyer") "the writ of certiorari was improvidently granted because of a set of procedural wrangles on the question presented", Professor Epstein criticizes the majority's criticism of the regression analysis that estimated class-wide damages in Behrend:

No matter what regression is used, it is still the case that all the individual members of a given class will suffer somewhat different injuries that could never be picked up or measured if each person were to bring his own separate lawsuit. But in this instance, the class action offers a better vehicle for analysis because it attempts to measure aggregate social harm. That calculation in turn sets the stage for determining optimal deterrence against a defendant, by taking the total amount of antitrust injury that their actions caused and dividing it among the plaintiffs in a form that is certain not to reflect the exact injuries that each member of the class sustained. Yet at the same time, these errors do not systematically favor any identifiable class members and thus tend to cancel out. Allowing averaging across the plaintiffs, therefore, does improve the position of every member of the class, for each does far better off with a pro rata recovery than with nothing at all.

 

Hourly Rates and Control

The WSJ today came out with an item on the mirage of law firms' hourly rates.

The author posits that clients often ask for dollars-off the firms' rack rates -- a carry-over, she suggests, from the Great Recession. She also notes that bet-the-company cases and must-do deals still draw clients to the best legal talent and therefore the lawyers least willing to cut rates.

Let Blawgletter suggest a better way to look at paying for legal work. The hourly rate represents an imperfect proxy for value. How can you figure out how imperfect? If your lawyer will offer to represent you either on a straight hourly basis or under an arrangement that gives her a chance to earn a premium on her hourly rates, hire her. Because she has just shown you that she is worth the hourly charge.

You may also want to think about what you get for paying by the hour. You mainly get, in our view, more practical ability to control what the lawyers do. Under a contingent and hybrid arrangements, you know your lawyer has plenty of incentive not to waste effort and resources, and as a result you tend to give him a freer rein. You may also find yourself nit-picking bills less often.

All this assumes you trust your lawyer and that your lawyer deserves your trust. That in our experience is the most important thing of all. It may even be priceless.

Mothers Against Gun Misuse, in America

Guns, guns, guns

People up with which Blawgletter grew adored guns. They loved to look at them, handle them, clean them, buy them, hunt with them, display them, target-shoot with them, sight them, sell them, talk about them, load them, unload them, compare them, oil them, swap them, put scopes on them, make ammo for them, and nickname them.

They also treated firearms with respect. They tended to anyway. People looked down on the few who didn't hold in awe the power to kill and maim of rifles, shotguns, and pistols. You called those folks trashy -- or, in our love-the-sinner but hate-the-sin world view -- called those folks' disdain for the safety of others trashy.

(We've had a love-jones with guns ourselves, by the way. Just above here you can see our first firearm -- a 20-gauge Harrington & Richardson single-shot, with which we bagged a Fair Number of fowl, including dove, duck, and quail, and dusted many more skeet. Boy Scouts gave us safety training, in part courtesy of the National Rifle Association. And one of our all-time favorite books, Shooter's Bible, provided many hours of browsing enjoyment.)

Cars, cars, cars

The people we grew up with felt something close to the same way about cars and truck -- from big ones to little ones, fast ones to grandmaws, rag-tops to pickups, and on and on. But the great majority, while seeing nothing wrong with car- and truck-love, had the same dislike for reckless conduct on the road. Trashy conduct.

Threat to safety?

Vendors know how to appeal to the impulses that cause the mouth to water and send the pulse racing at the sight of a Bushmaster ACR as well as a Class 5 Ram 550 Crew Cab with dually tires. A great many of the buyers have no need for such extreme products. Yet, in a country that has become 80.7 percent urban, Ford and Chevy pickups sell more than any other vehicles, with Rams not far behind.

(You can see a mild example of a faux-farmer truck in the photo above.)

But does coveting the military style of a high-caliber, semi-automatic rifle or drooling over the sleek, low-to-the-ground profile of a Corvette pose a threat to the safety of anyone other than the coveters and droolers?

No. Because those things in themselves do not amount to misuse. A bit trashy, perhaps. Unseemly, maybe. Gauche, sure. But not the kind of thing that by its nature tends to hurt others.

Gun Debate

The NYT today (Sunday) features an op-ed item and a Q&A about gun laws. The former says people think we already have more gun control than we really do. It cites a new survey and argues:

The notion that all we need is better enforcement of our current federal laws has been a core argument of the gun lobby for years in its fight against sensible restrictions on guns in our communities. But that argument is a straw man. It masks the fact that many Americans don’t really know what gun laws are on the books and falsely construes that to mean they don’t want common-sense gun laws passed — when they clearly do. What Americans strongly believe, and what is at the core of the president’s reform agenda, is that with rights come responsibilities.

The second piece, the Q&A, has a business column-writer, Joe Nocera, talking with Dan Baum, the author of a new (but pre-Sandy Hook) book, Gun Guys: A Road Trip. Baum regards gun guys as key to making people safer in a populace that already bristles with 300 million firearms. And he says we need to enlist their help, partly by calling on them to -- and perhaps by passing laws that will make them -- take responsibility for gun misuse:

You need gun owners — the “gun guys” as I call them. They are the custodians of the guns. I also think, though, that gun guys need to take their responsibility as gun owners seriously. A lot of gun owners are perfectly fine, for instance, with universal background checks. I know I am. They are fine with it so long as it doesn’t lead to a database and de facto registration.

Gun guys need to lock ’em up; gun guys need to take our responsibility to us much more seriously.

For his part, Nocera seems to think most people shouldn't have guns at all. And his newspaper has little good to say about the NRA and other strong advocates of what they call second-amendment rights.

MADDness

The public's confusion about existing gun laws and the common sense of gun guys seem to present an opportunity for progress in enhancing gun safety. And we think the chance turns on the question of when does trashy (unsafe) conduct with guns become misuse of guns (and abuse of gun rights)?

Recent history furnishes an analogue. In 1980, a California mother who lost her daughter to a drunk driver started what has become Mothers Against Drunk Driving. MADD now has a budget north of $45 million. And it has done a teriffic job of getting states and Congress to enact tougher laws against one of the worst misuses you can think of for motor vehicles -- operating them while under the influence of alcohol or drugs.

In our home, the great State of Texas, where MADD now has its headquarters, drivers could tool around while swigging a longneck all the way until Sept. 2001. The Lone Star State only two years before had switched from .10 as the legal limit for blood alcohol content to .08. We changed the rules because in 1998 Congress passed the Transportation Equity Act, which included what it called "Alcohol Programs". The feds made us do it, with the money stick.

It worked. Between 1998 and 2008, fatal car accidents that involved at least one driver with a blood alcohol content of .08 or more fell (to 1,146 from 1,223) in Texas despite a 15+ percent growth in population. The rate has held steady, hovering at 1,200 per year, while we continue to grow. That is a sad statistic, but at least it marks progress.

MAGMA?

The focus on misuse has, more than anything else, made MADD a success. What normal person would support misuse? Would the NRA?

Which raises the question of whether a like organization that centers on misuse of guns would do as well.

We suspect so. Call it MAGMA -- Mothers Against Gun Misuse, in America.

The key, we think, consists in how we answer the question of what counts as misuse, versus the low-brow trashiness that repels many city and other non-gun people. The approach has to stress misuse -- not ownership, not shooting in gun ranges, and not normal features of the gun itself. Misuse. MIS. USE.

Possibilities include:

• handling a gun while under the influence of drugs or alcohol;
• letting someone else handle a gun while under such influence;
• allowing a mentally ill person handle, or have access to, a gun;
• failing to keep a gun in a secure place;
• selling a gun to a stranger;
• having inadequate training to use a particular kind of gun or to use it in a particular way;
• owning way more guns than you could possibly need; 
• failing to register your purchase or sale of a gun; and
• buying a bunch of guns in a short period of time.

Polls suggest that many people, nation-wide, support passage of laws that would discourage these sorts of gun uses/misuses. See here, here, and here.

Enacting new laws will not of course do the whole job. MAGMA would have to keep the pressure up to give the laws teeth and to enforce them with vigor.

What do you think?

Sorry Your Dog Died

People love dogs. At least some people do. Others adore cats. A few cherish both. Yet others go ga-ga over more exotic beasts. And they hate to see them suffer and grieve when they die.

The Supreme Court of Texas today shared the pain of critter-lovers across the Lone Star State, even citing a movie that broke many a young Texan's heart -- Old Yeller. But the Court-as-empath didn't translate into a ruling that the tragic loss of a pet entitles the owner to damages for the mental hurt that results. Strickland v. Medlen, No. 12-0047 (Tex. Apr. 5, 2012).

Chief Justice Wallace and Justice Johnson declined to join in part II-C, which dealt with what the legislature might do, and the Chief Justice also shunned footnote 58, which listed types of potentially recoverable damages, of Justice Willett's opinion for an otherwise unanimous Court.

The Court also issued a bundle of other opinions, which you can access here.