Saturday, July 18, 2009
Corruption Statutes - Are They Bad Policy and Trade Sanctions ?
Are anti-bribery statutes actually trade sanctions that discourage investment, and should such statues be modifed? For more on that topic, see this post at Conglomerate and its link to a scholarly article on the topic.
Friday, July 17, 2009
# 1 - Growing Battles Over Techniques and Rules Used on Wall Street, in Tort Trials, and By Government to Shift Financial Obligations for Tort Losses
The tort litigation industry is seeing new battles emerge at the micro and macro level regarding the techniques and rules used on Wall Street, in tort trials, and by government to shift financial responsibility for payments for expenses arising from legitimate and illegitimate tort claimants. The battles are ongoing at both the micro and macro level, and will take years to resolve. Over time, billions and ultimately trillions of dollars are at stake when one considers direct and indirect payments, plus stock price changes, legal fees, and other associated costs and expenses of tort litigation and ancillary litigation. Posts over the next few weeks will present examples of the battles and their consequences. Throughout, one key is to look for whether, when and how one person/entity (or a group) are allowed to make deals that increase or decrease the risks and financial obligations for others involved in the same tort.
Today's example is a micro battle being fought in Illinois in a case arising from falling scaffolding killing Mr. Ready during a construction project at a power plant. One issue is whether fault can be apportioned at trial against defendants that settled before trial. Why does that matter? Because the plaintiff and one or more defendants can and may agree to a settlement contract because the settlement monies paid 1) will give plaintiff some level of financial certainty and 2) will shift to the remaining defendants the risk and financial obligation for the plaintiff's losses as determined at trial because the settlement, if approved, will by statute block the remaining defendants from suing the settling defendants for "contribution," and may block the trial defendants from asking the jury to apportion a percentage of fault to the settling parties. Further, the settlement also may influence whether the remaining defendants can offer trial proof of the actions of the settled defendant even if even if the jury is not allowed to apportion a percentage of fault to the settled defendants.
So, the most basic macro issue is whether and when this private settlement contract between three private parties will become the operative event that will enable the government (the courts) to take pre-existing claims and legal rights of the other defendants. In this instance, the defendants are Mr. Ready's employer, the general contractor and a subcontractor. In teh case, the employer and the general contractor settled, leaving the subsontractor exposed to a trial, which it lost. And, of course, lurking in the background are the insurers for those entities. But, for the macro level, bear in mind that some companies are self-insured, and some companies were insured but that insurance is or may be gone because the insurer actually is insolvent or may be trying to run away from "incurred but not reported" losses (that is, future losses) by ceasing its business operations and/or invoking a dissolution process specific to insurers. And, the issues arise in the context of events during a trial held during a period of time for which a "tort reform statute was said to be applicable.
In short, the Illinois Supreme Court held, under the statute, that the jury could not apportion fault against the settled defendants. Thus, the private settlement was converted into a government enforced agreement with legal consequences for the remaining defendant, which had not objected to the settlement. Left open by the Supreme Court was whether the jury should have been allowed to hear evidence about the actions (or inaction) of the settled parties. On remand, the appellate court held that the trial court should have allowed the jury to hear evidence of the actions of the settled defendants. The case may now be headed back to the Supreme Court of Illinois.
The Illinois Supreme Court's opinion from late 2008 is here (for now, but will move later when the opinion is archived.) Here is the June 30, 2009 opinion of the appellate court on remand. Here is a press article updating the case history, and explaining that the case is perhaps headed back to the Illinois Supreme Court. Here prior commentary by a large law law firm that represents corporate defendants.
Today's example is a micro battle being fought in Illinois in a case arising from falling scaffolding killing Mr. Ready during a construction project at a power plant. One issue is whether fault can be apportioned at trial against defendants that settled before trial. Why does that matter? Because the plaintiff and one or more defendants can and may agree to a settlement contract because the settlement monies paid 1) will give plaintiff some level of financial certainty and 2) will shift to the remaining defendants the risk and financial obligation for the plaintiff's losses as determined at trial because the settlement, if approved, will by statute block the remaining defendants from suing the settling defendants for "contribution," and may block the trial defendants from asking the jury to apportion a percentage of fault to the settling parties. Further, the settlement also may influence whether the remaining defendants can offer trial proof of the actions of the settled defendant even if even if the jury is not allowed to apportion a percentage of fault to the settled defendants.
So, the most basic macro issue is whether and when this private settlement contract between three private parties will become the operative event that will enable the government (the courts) to take pre-existing claims and legal rights of the other defendants. In this instance, the defendants are Mr. Ready's employer, the general contractor and a subcontractor. In teh case, the employer and the general contractor settled, leaving the subsontractor exposed to a trial, which it lost. And, of course, lurking in the background are the insurers for those entities. But, for the macro level, bear in mind that some companies are self-insured, and some companies were insured but that insurance is or may be gone because the insurer actually is insolvent or may be trying to run away from "incurred but not reported" losses (that is, future losses) by ceasing its business operations and/or invoking a dissolution process specific to insurers. And, the issues arise in the context of events during a trial held during a period of time for which a "tort reform statute was said to be applicable.
In short, the Illinois Supreme Court held, under the statute, that the jury could not apportion fault against the settled defendants. Thus, the private settlement was converted into a government enforced agreement with legal consequences for the remaining defendant, which had not objected to the settlement. Left open by the Supreme Court was whether the jury should have been allowed to hear evidence about the actions (or inaction) of the settled parties. On remand, the appellate court held that the trial court should have allowed the jury to hear evidence of the actions of the settled defendants. The case may now be headed back to the Supreme Court of Illinois.
The Illinois Supreme Court's opinion from late 2008 is here (for now, but will move later when the opinion is archived.) Here is the June 30, 2009 opinion of the appellate court on remand. Here is a press article updating the case history, and explaining that the case is perhaps headed back to the Illinois Supreme Court. Here prior commentary by a large law law firm that represents corporate defendants.
Thursday, July 16, 2009
Investment Losses Claims by Calpers and Others Against Ratings Agencies
Susan Beck has a great AmLaw summary article today with links to underlying complaints, and to a Wall Street Journal article on the same topic by Nathan Koppel. The articles explain that ratings agencies are defending claims by Calpers and others based in part on the notion that their pronouncements are constitutionally protected opinions that invoke First Amendment standards. The articles, however, do not address whether that argument will fly against, for example, investors not based in the United States. Claims by non-US investors plainly will create choice of law issues.
In Illinois, there are fairly well-settled rules regarding claims for negligent misrepresentation of information. Inquiry will focus on, among other things, the scope of the duty related to the information supplied. A 2006 Illinois Supreme Court opinion (here) states the rules as follows:
"To state a claim for negligent misrepresentation, a plaintiff must allege: (1) a false statement of material fact; (2) carelessness or negligence in ascertaining the truth of the statement by the party making it; (3) an intention to induce the other party to act; (4) action by the other party in reliance on the truth of the statement; (5) damage to the other party resulting from such reliance; and (6) a duty on the party making the statement to communicate accurate information. Board of Education of the City of Chicago v. A, C & S, Inc., 131 Ill. 2d 428, 452 (1989). See also Fox Associates, Inc. v. Robert Half International, Inc., 334 Ill. App. 3d 90, 94 (2002); Neptuno Treuhand-Und Verwaltungsgesellschaft Mbh v. Arbor, 295 Ill. App. 3d 567, 572-74 (1998). Where, as here, purely economic damages are sought, this court has imposed a duty on a party to avoid negligently conveying false information only if the party is in the business of supplying information for the guidance of others in their business transactions. Brogan v. Mitchell International, Inc., 181 Ill. 2d 178, 183-84 (1998); Moorman Manufacturing Co. v. National Tank Co., 91 Ill. 2d 69, 89 (1982)." (emphasis added).
In Illinois, there are fairly well-settled rules regarding claims for negligent misrepresentation of information. Inquiry will focus on, among other things, the scope of the duty related to the information supplied. A 2006 Illinois Supreme Court opinion (here) states the rules as follows:
"To state a claim for negligent misrepresentation, a plaintiff must allege: (1) a false statement of material fact; (2) carelessness or negligence in ascertaining the truth of the statement by the party making it; (3) an intention to induce the other party to act; (4) action by the other party in reliance on the truth of the statement; (5) damage to the other party resulting from such reliance; and (6) a duty on the party making the statement to communicate accurate information. Board of Education of the City of Chicago v. A, C & S, Inc., 131 Ill. 2d 428, 452 (1989). See also Fox Associates, Inc. v. Robert Half International, Inc., 334 Ill. App. 3d 90, 94 (2002); Neptuno Treuhand-Und Verwaltungsgesellschaft Mbh v. Arbor, 295 Ill. App. 3d 567, 572-74 (1998). Where, as here, purely economic damages are sought, this court has imposed a duty on a party to avoid negligently conveying false information only if the party is in the business of supplying information for the guidance of others in their business transactions. Brogan v. Mitchell International, Inc., 181 Ill. 2d 178, 183-84 (1998); Moorman Manufacturing Co. v. National Tank Co., 91 Ill. 2d 69, 89 (1982)." (emphasis added).
The James Hardie Saga - Tax Regulator Will Gain Access to Asbestos Papers
James Hardie's asbestos trust continues to create issues. Here is an article regarding the Australian tax regulator seeking and gaining access to asbestos-related papers, apparently including papers exchanged with its accountants. Trusts are plainly an excellent concept for resolving asbestos and other toxic tort claims without massive litigation waste, but they are indeed complex undertakings.
Wednesday, July 15, 2009
Would the Cubs Need Bankruptcy Court Approval to Put on The Take Sign in an Important Game (That Might Change the Value of the Cubs) ?
The AmLaw Daily has more here on whether the Chicago Cubs corporate entity may file for chapter 11 to cleanse itself of potential claims by creditors. Various involved lawyers were contacted but declined to be quoted. The article goes on to say:
"Should the committee approve the proposed sale, Tribune plans to have the Cubs seek bankruptcy protection in a quick process that could last anywhere from a few days to several weeks, according to several sources. (All agree that the idea of a one-day bankruptcy procedure, which has been floated in some news stories, is unrealistic). The Chapter 11 process would clean up the team's books in preparation for a sale." (emphasis added)
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Some uses of chapter 11 create constitutional and bankruptcy law issues because the bankruptcy court orders/injunctions approving the asset sales or a plan purport to cut off present or future state law claims and other property rights held by some persons or entities. (For much more on this topic from a lawyer who argued for tort claimants in Chrysler, go to this blog by Steve Jakubowski.) When I mentioned the Cub's possible use of chapter 11 to a friend ( a Brooklyn native), the response was brilliant:
"It is the bottom of the 8th in a crucial game against the Cardinals. Cards lead 4 to 3. There are 2 outs. Cubs have the bases loaded with Derek Lee at bat. The count is 2 and 0. Would you need bankruptcy court approval to put "on" the take sign ?"
"Should the committee approve the proposed sale, Tribune plans to have the Cubs seek bankruptcy protection in a quick process that could last anywhere from a few days to several weeks, according to several sources. (All agree that the idea of a one-day bankruptcy procedure, which has been floated in some news stories, is unrealistic). The Chapter 11 process would clean up the team's books in preparation for a sale." (emphasis added)
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Some uses of chapter 11 create constitutional and bankruptcy law issues because the bankruptcy court orders/injunctions approving the asset sales or a plan purport to cut off present or future state law claims and other property rights held by some persons or entities. (For much more on this topic from a lawyer who argued for tort claimants in Chrysler, go to this blog by Steve Jakubowski.) When I mentioned the Cub's possible use of chapter 11 to a friend ( a Brooklyn native), the response was brilliant:
"It is the bottom of the 8th in a crucial game against the Cardinals. Cards lead 4 to 3. There are 2 outs. Cubs have the bases loaded with Derek Lee at bat. The count is 2 and 0. Would you need bankruptcy court approval to put "on" the take sign ?"
Tuesday, July 14, 2009
Suits Against Sovereigns - Class Action Filed Against the Commonwealth of Antigua and Barbuda for Aiding and Abetting the Stanford Ponzi Scheme
Here is an excerpt fron this blog post by Kevin LaCroix at The D + O Diary:
"The Latest Stanford Financial Group Lawsuit: According to a July 13, 2009 Bloomberg article (here), Stanford Group investors have filed a class actoin lawsuit in the Southern District of Texas against The Commonwealth of Antigua and Barbuda, alleging that the Caribbean nation helped the financier engineer a massive fraud. The complaint (here) , purports to be filed on behalf of all individuals and investors who were customers of Stanford International Bank as of February 16, 2009, alleges violations of and seeks to recover damages under RICO.
I have added this latest lawsuit to my running register of all Stanford Group-related litigation, which can be accessed here."
Set out below are two paragraphs from the Complaint:
"3. Antigua is sovereign, but not above the law. It became a full partner in Stanford’s fraud, and reaped enormous financial benefits from the scheme. Stanford stuffed Antigua’s coffers – and its officials’ pockets – with money stolen from unsuspecting customers throughout the United States, Canada, Central America, South America, and elsewhere. Antigua worked tirelessly to protect and nurture Stanford’s criminal enterprise and, in return, eagerly accepted its share of criminally-procured funds.
4. As described more fully below, Stanford’s massive fraud would not have been possible without the active, knowing, and essential assistance of Antigua. Antigua: (i) provided a safe haven for Stanford to operate; (ii) provided essential assistance in Stanford’s efforts to portray itself to Plaintiffs and other members of the Class as a legitimate provider of financial services; (iii) participated with Stanford in a variety of commercial activities in Antigua that provided a pretext for the transfer of criminal proceeds from Stanford to Antigua; (iv) provided false and fraudulent information to the Securities and Exchange Commission ("SEC") and other regulators in order to thwart the SEC’s investigations into Stanford; and (v) shared in the criminal proceeds of the conspiracy, all or substantially all of which were stolen from the Plaintiffs and other members of the Class. "
"The Latest Stanford Financial Group Lawsuit: According to a July 13, 2009 Bloomberg article (here), Stanford Group investors have filed a class actoin lawsuit in the Southern District of Texas against The Commonwealth of Antigua and Barbuda, alleging that the Caribbean nation helped the financier engineer a massive fraud. The complaint (here) , purports to be filed on behalf of all individuals and investors who were customers of Stanford International Bank as of February 16, 2009, alleges violations of and seeks to recover damages under RICO.
I have added this latest lawsuit to my running register of all Stanford Group-related litigation, which can be accessed here."
Set out below are two paragraphs from the Complaint:
"3. Antigua is sovereign, but not above the law. It became a full partner in Stanford’s fraud, and reaped enormous financial benefits from the scheme. Stanford stuffed Antigua’s coffers – and its officials’ pockets – with money stolen from unsuspecting customers throughout the United States, Canada, Central America, South America, and elsewhere. Antigua worked tirelessly to protect and nurture Stanford’s criminal enterprise and, in return, eagerly accepted its share of criminally-procured funds.
4. As described more fully below, Stanford’s massive fraud would not have been possible without the active, knowing, and essential assistance of Antigua. Antigua: (i) provided a safe haven for Stanford to operate; (ii) provided essential assistance in Stanford’s efforts to portray itself to Plaintiffs and other members of the Class as a legitimate provider of financial services; (iii) participated with Stanford in a variety of commercial activities in Antigua that provided a pretext for the transfer of criminal proceeds from Stanford to Antigua; (iv) provided false and fraudulent information to the Securities and Exchange Commission ("SEC") and other regulators in order to thwart the SEC’s investigations into Stanford; and (v) shared in the criminal proceeds of the conspiracy, all or substantially all of which were stolen from the Plaintiffs and other members of the Class. "
Update - Due Process Denials Via Time Limits on Depositions in Asbestos Cases
Update of July 14 to May 7 post reposted below: The National Law Journal includes a July 13 article updating on the case below. The update is that some defendants sought interlocutor appellate review of the trial judge's order in which he "reluctantly" declined to bar a deposition transcript created under the circumstances described below. Thus far, review has been declined by California's intermediate appellate court and by the California Supreme Court. The defendants, however, will continue to press the issue through other appeals and when it arises in other cases.
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May 7 post
More and more legal news outlets have picked up on some parts of the asbestos litigation gamesmanship. Walter Olson's Pointoflaw uses the humorous (for lawyers) title "Asbestos: The Texas- California Two-Step" to link back to a California blog article (from Cal Biz Lit) that links to and quotes from a California trial judge's opinion (available here in full text) sharply criticizing the Waters & Kraus plaintiff's firm for its litigation tactics. Specifically, Judge Munoz criticized the firm for at least 10 times filing cases in Texas and then refiling in California after the plaintiff has been deposed in Texas. The same opinion was picked up in Legal News Line and today by law.com via the National Law Journal, and the ABA Journal online.
Why do plaintiff's play that game? Because it helps the plaintiff avoid meaningful scrutiny in depositions. How/why is that true? Because some states, including Texas and Illinois, have rules that limit depositions to six hours. Specifically, as Judge Munoz explained in his opinion:
"Plaintiff's law firm, which is a multi-state firm, has, in at least nine other cases, filed cases in Texas which were then dismissed after the plaintiffs' deposition had been take."
The reason for this procedure is apparently because under Texas law the deposition is severely limited to six hours per side. Additionally, under Texas law the failure to mention the defendant's product is a basis for summary judgment. The law in this state is to the contrary."
"It is the court's opinion that the filing of the Texas action was deliberately done to prevent the defendants from having adequate discovery and to prevent the filing of motions for summary judgment because of the California rule requiring specific questions about product identification."
Judge Munoz is correct that the tactic can and often does prevent a meaningful defense. Why is that - shouldn't six hours be enough? No, not even close in many cases. Why? Because in many cases, the plaintiff sues dozens of defendants and makes claims involving alleged "exposure" at dozens or hundreds of job sites. For example, the plaintiffs often are tradesmen (say an electrician or a pipefitter) who worked for a business that serviced dozens of businesses large and small (for example, stand alone power plants and power generating facilities at factories or refineries). That person may well have worked at dozen or more facilities a year, and may well claim that he was "exposed" to asbestos at each such site. In that situation, the defense lawyers need to carefully depose the witness to prove that in fact there was no actual inhalation of fibers from a specific job site. That proof is gathered by asking about the specifics of the work at the job site.
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May 7 post
More and more legal news outlets have picked up on some parts of the asbestos litigation gamesmanship. Walter Olson's Pointoflaw uses the humorous (for lawyers) title "Asbestos: The Texas- California Two-Step" to link back to a California blog article (from Cal Biz Lit) that links to and quotes from a California trial judge's opinion (available here in full text) sharply criticizing the Waters & Kraus plaintiff's firm for its litigation tactics. Specifically, Judge Munoz criticized the firm for at least 10 times filing cases in Texas and then refiling in California after the plaintiff has been deposed in Texas. The same opinion was picked up in Legal News Line and today by law.com via the National Law Journal, and the ABA Journal online.
Why do plaintiff's play that game? Because it helps the plaintiff avoid meaningful scrutiny in depositions. How/why is that true? Because some states, including Texas and Illinois, have rules that limit depositions to six hours. Specifically, as Judge Munoz explained in his opinion:
"Plaintiff's law firm, which is a multi-state firm, has, in at least nine other cases, filed cases in Texas which were then dismissed after the plaintiffs' deposition had been take."
The reason for this procedure is apparently because under Texas law the deposition is severely limited to six hours per side. Additionally, under Texas law the failure to mention the defendant's product is a basis for summary judgment. The law in this state is to the contrary."
"It is the court's opinion that the filing of the Texas action was deliberately done to prevent the defendants from having adequate discovery and to prevent the filing of motions for summary judgment because of the California rule requiring specific questions about product identification."
Judge Munoz is correct that the tactic can and often does prevent a meaningful defense. Why is that - shouldn't six hours be enough? No, not even close in many cases. Why? Because in many cases, the plaintiff sues dozens of defendants and makes claims involving alleged "exposure" at dozens or hundreds of job sites. For example, the plaintiffs often are tradesmen (say an electrician or a pipefitter) who worked for a business that serviced dozens of businesses large and small (for example, stand alone power plants and power generating facilities at factories or refineries). That person may well have worked at dozen or more facilities a year, and may well claim that he was "exposed" to asbestos at each such site. In that situation, the defense lawyers need to carefully depose the witness to prove that in fact there was no actual inhalation of fibers from a specific job site. That proof is gathered by asking about the specifics of the work at the job site.
For example, in a typical deposition, the defense lawyer may be given a job site list from the plaintiff. The lead lawyer taking the deposition will then say: "I see you have listed the Acme Manufacturing Plant as a job site at which you claim you were exposed to asbestos. Please tell me about why you think you were exposed there?
The plaintiff may well respond: "I think I was exposed at the XYZ company because I brought in electric lines to a circuit breaker, and there were big pumps about 30 feet away from me. I assume the pumps contained gaskets that contained asbestos, and I assume the pipes leading in and out of the pumps were insulated with asbestos."
Once that testimony is on the record, then the defense lawyer for the gasket company needs to question witness in detail to find out the specifics of the pumps (who made them, what he knows about them) and then needs to take testimony to prove that in fact there was no actual "exposure" because, for example, 1) the plaintiff never touched the pump, and 2) the gaskets, if any are inside the pump, and the pumps were operating at the time of the plaintiff's work, so that fluid was flowing through the pumps and therefore any gaskets were wet and incapable of releasing a respirable asbestos fiber. Doing that takes time, but it has to be done if the company wants to obtain summary judgment when that "exposure" (or a few like that) are the only basis for potential liability. So, for a plaintiff with a long job site history, the deposition process may take literally several days if the testimony is to be taken well so that defense lawyers can make a record that proves up a solid defense for trial for each defendant in the position of the gaskety company. The plaintiff's lawyers, however, seek to limit the depositions to six hours to avoid the strong defenses, and of course will say it's their job to zealously represent their clients.
Isn't this all silly - shouldn't the plaintiff refrain from putting at issue job sites and alleged "exposures" where realistic lawyers who know their science also know that there was no actual inhalation at all of asbestos fibers or no meaningful inhalation? Yes, but that's not what happening in the tort system. Instead, the problem is that some but not all plaintiff's lawyers are pursing the "any fiber fiber counts" theory, supported by a small cadre of experts who will testify to their opinion that "any and all fibers add to the risk. "' Some courts have rejected that theory, but others let it go to the jury and others do not yet have concrete appellate case law. For much more detail on the "any fiber" or "every fiber" theory, the experts, and the case law, look to Mark Behren's very recent article "What's New in Asbestos Litigation" at pages 528-531.
The deposition time problem is made worse by the plaintiff's who claims that the pump maker should be held liable for failing to warn the plaintiff about the insulation that someone else installed over the pipes that connect to the pump . That legal theory also is popular in asbestos litigation today - for more specifics on the theory and the rulings to date, once again see Mark's article, but this time at pages 542-545. Here, though, the point is not to debate the merit of the legal theory. The point instead is to explain that because of that theory, the pump maker's lawyer needs to spend time questioning the witness about the insulation in some detail. E.g. does he know the age of the insulation (in the US, it won't have asbestos if it ws installed after about 1973, absent unusual facts), does he "know" if it contained asbestos (the answer should be no), was the insulation ripped or torn (properly jacketed insulation does not release fibers) , was anyone working on the insulation (could release fibers), did he touch the insulation (he probably did not but that's needed for the summary judgment motion). The result is that a six hour time limit often times denies a defendant its due process right to a meaningful opportunity to gather evidence and have a meaningful trial.
Some but not all plaintiff's lawyers typically will respond in at least two ways. First, they will say that some defendants send to depositions some ill-prepared defense lawyers who ask stupid questions because some insurers and some clients are too short-sighted to pay for well-trained lawyers who know their facts and science. That complaint is sometimes valid. Indeed, I've seen it happen. But that's NOT the fault of the well-prepared gasket company lawyer who must be accorded the due process chance to gather meaningful evidence to protect her client. The remedy instead is for the plaintiff's lawyer to bring a motion for protective order specific to that lawyer or defendant.
Second, plaintiff's lawyers will complain that some defendants play their own asbestos litigation games, such as removing cases to federal court just before trial of a dying mesothelioma victim, with the result being the loss of the trial date and the plaintiff's death before the trial is rescheduled. I'm told that has in fact occurred. But, once again, that's not the fault of all defendants and it's not relevant to the question of deposition time limits.
Finally, some will say that the problem is that the plaintiff came in and hired counsel just before death and there is not enough time. That can happen, but it's getting harder and harder to justify or believe that excuse in this age of non-stop mesothelioma ads online and on tv. And, in any event, when counsel was hired does not control the number of hours needed for deposition.
What steps would help to end this game. There is no one answer. One step would be an asbestos case-management order that automatically grants an extension of the deposition time in any case involving more than 5 defendants and 10 job sites. Another good step would be to have an activist trial judge who understands the science and the law, and who will take calls from depositions to block time-wasting by anyone, and who will ensure that each defendant receives a meaningful opportunity to prepare its defense.
Monday, July 13, 2009
Chicago Cubs to Follow GM and Chrysler in Using Chapter 11 - Just Another Tool for Managing/Ending Liabilities ?
The following item from Crain's Chicago Business speaks for itself as to today's use of chapter 11 to manage/resolve risks and "liabilities." In some instances, though, the table is being set for constitutional law battles ahead on just how much a bankruptcy judge can do to alter rights arising under state law or the law of other nations.
http://www.chicagobusiness.com/cgi-bin/news.pl?id=34725&ba=1
Cubs may file for bankruptcy protection to speed sale: report
By: Todd J. Behme July 13, 2009
(Crain’s) — Tribune Co. may file for Chapter 11 bankruptcy protection for the Chicago Cubs to smooth the sale of the team, according to a report.
A short bankruptcy would be a legal move to prevent the Cubs from having any liability related to the bankruptcy case of Tribune, which filed for Chapter 11 protection in December, Bloomberg News said, citing four unnamed sources familiar with the matter.
Spokesman for Tribune, Major League Baseball and Tom Ricketts declined to comment to Bloomberg. The Ricketts family reportedly has reached a deal with Tribune to buy the team.
It’s possible the team could be sold without a bankruptcy protection filing, the sources told Bloomberg.
A Chapter 11 filing could ensure that the team isn’t tangled up with Tribune’s creditors, Michael J. Cramer, an assistant professor of sports management at New York University and who formerly was president of the Texas Rangers, told Bloomberg.
“This would make sense for Major League Baseball,” he told the news service. “They would like to see that asset be stand-alone, very clean, not tied up in other issues.”
A filing by the Cubs would be meant to provide for quick selling of the team assets, the sources told Bloomberg.
Filing for bankruptcy protection would not mean that the Cubs are having financial problems, Gregory A. Cross, head of the bankruptcy practice at law firm Venable LLP, told Bloomberg.
“You do not have to be insolvent to be in bankruptcy,” Mr. Cross, who is not involved in the matter, told Bloomberg. “All you need is a legitimate business reason.”
http://www.chicagobusiness.com/cgi-bin/news.pl?id=34725&ba=1
Cubs may file for bankruptcy protection to speed sale: report
By: Todd J. Behme July 13, 2009
(Crain’s) — Tribune Co. may file for Chapter 11 bankruptcy protection for the Chicago Cubs to smooth the sale of the team, according to a report.
A short bankruptcy would be a legal move to prevent the Cubs from having any liability related to the bankruptcy case of Tribune, which filed for Chapter 11 protection in December, Bloomberg News said, citing four unnamed sources familiar with the matter.
Spokesman for Tribune, Major League Baseball and Tom Ricketts declined to comment to Bloomberg. The Ricketts family reportedly has reached a deal with Tribune to buy the team.
It’s possible the team could be sold without a bankruptcy protection filing, the sources told Bloomberg.
A Chapter 11 filing could ensure that the team isn’t tangled up with Tribune’s creditors, Michael J. Cramer, an assistant professor of sports management at New York University and who formerly was president of the Texas Rangers, told Bloomberg.
“This would make sense for Major League Baseball,” he told the news service. “They would like to see that asset be stand-alone, very clean, not tied up in other issues.”
A filing by the Cubs would be meant to provide for quick selling of the team assets, the sources told Bloomberg.
Filing for bankruptcy protection would not mean that the Cubs are having financial problems, Gregory A. Cross, head of the bankruptcy practice at law firm Venable LLP, told Bloomberg.
“You do not have to be insolvent to be in bankruptcy,” Mr. Cross, who is not involved in the matter, told Bloomberg. “All you need is a legitimate business reason.”
Sunday, July 12, 2009
Tort Litigation Industry - What the the Plaintiff's Side Is Talking About
PointofLaw (Walter Olson) has a post here with a link to the online convention brochure for the the American Association for Justice, which is the trade association for the plaintiff's bar in the US. It's well worth reading to see what's ahead. For example, there are entries indicating panels or presentations aimed at increasing sophisticated issues at all levels of the claiming process and international issues:
1) tips on following insurance back to include reinsurance,
2) tips on delaing with ERISA, subrogation and the "make whole" doctrine;
3) an international practice section focused on Mexico, Canada, England and the US;
4) the "resort tort" litigation group; and
5) a review of tort reform in Canada. which the brochure calls "tort recovery restrictions."
In general, it seems inevitable that itigation as an industry will keep growing because:
1) non-US countries such as the UK and Australia increasingly treat treat law as the business it is and are allowing outside investment in litigation and law firms ,
2) litigation funding is booming thanks to investors that include insurance companies seeking better ROI, and
3) science is finding more and more "bad things" out in the world, ranging from endocrine disruptors to the cancer rate rising materially around the world.
1) tips on following insurance back to include reinsurance,
2) tips on delaing with ERISA, subrogation and the "make whole" doctrine;
3) an international practice section focused on Mexico, Canada, England and the US;
4) the "resort tort" litigation group; and
5) a review of tort reform in Canada. which the brochure calls "tort recovery restrictions."
In general, it seems inevitable that itigation as an industry will keep growing because:
1) non-US countries such as the UK and Australia increasingly treat treat law as the business it is and are allowing outside investment in litigation and law firms ,
2) litigation funding is booming thanks to investors that include insurance companies seeking better ROI, and
3) science is finding more and more "bad things" out in the world, ranging from endocrine disruptors to the cancer rate rising materially around the world.
Empiric Data on the European Court of Justice - References from National Judges to the ECJ
The world plainly is growing smaller and is more subject to empiric evaluation. To me, those are great trends for many reasons, including my preference for facts instead of hearsay and anecdote. So, I follow the Empirical Legal Studies blog. The following post is germane for lawyers around the world seeking to better understand the activities of the European Court of Justice.
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from Empirical Legal Studies by Jason Czarnezki
Alec Stone Sweet and Thomas Brunell have posted three data bases, on the activities of the European Court of Justice, and the adjudication of EU law, under Articles 226 (infringement proceedings - brought by the Commission against a Member State), 230 (annulment actions in administrative law brought by individuals and companies against the EU), and 234 (preliminary references from national judges to the ECJ). They collected these data over the course of 12 years, and they are unavailable outside of the Court, which does not provide public access to them. The home for these data is the Robert Schuman Centre, the European University Institute. The datesets, accompanying codebooks, and papers providing summary analyses of the data can be found here: http://www.eu-newgov.org/datalists/deliverables_detail.asp?Project_ID=26. Since 1996, scholars have used these data in a wide variety of research projects, including doctoral dissertations, books, articles in economics, law, sociology, and political science.
_______________________________________________________________
from Empirical Legal Studies by Jason Czarnezki
Alec Stone Sweet and Thomas Brunell have posted three data bases, on the activities of the European Court of Justice, and the adjudication of EU law, under Articles 226 (infringement proceedings - brought by the Commission against a Member State), 230 (annulment actions in administrative law brought by individuals and companies against the EU), and 234 (preliminary references from national judges to the ECJ). They collected these data over the course of 12 years, and they are unavailable outside of the Court, which does not provide public access to them. The home for these data is the Robert Schuman Centre, the European University Institute. The datesets, accompanying codebooks, and papers providing summary analyses of the data can be found here: http://www.eu-newgov.org/datalists/deliverables_detail.asp?Project_ID=26. Since 1996, scholars have used these data in a wide variety of research projects, including doctoral dissertations, books, articles in economics, law, sociology, and political science.
Does the Engagement Ring Have to Be Returned When the Marriage Does Not Happen - Illinois Appellate Court Says Yes
Hard to resist posting on this classic law school issue, even if not really a tort. The article below is excerpted from the Chicago Daily Law Bulletin's story on a June 26, 2009 Illinois appellate court opinion.
http://www.chicagolawbulletin.com/case/get_story_text.cfm?id=100004556
"Plaintiff James Carroll filed a two-count replevin action against defendant Alison Curry after their romantic relationship ended. Count 1 sought the recovery of an engagement ring and Count 2 sought to recover other items of personal property, including a plasma television and audio equipment.
The record showed that the plaintiff proposed marriage to the defendant in late April 2000 and at that time, he gave her a ring he purchased specifically for the proposal. The defendant accepted the proposal, the two became engaged and some months later the plaintiff moved into the defendant's residence. On Nov. 16, 2005, the parties' relationship ended after the defendant accused the plaintiff of infidelity and ordered him to leave her home.
The trial court in April 2007 granted the plaintiff's motion for summary judgment on Count 1. The trial court said that the appropriate analytical framework for the case lay in contract principles and that "fault" was not a consideration in the determination as to whether the plaintiff was entitled to the return of the ring.
The appeals court affirmed. The court said that replevin is a strict statutory proceeding and that the statute must be followed precisely. The primary purpose of the replevin statute is to test the right of possession of personal property and place the successful party in possession of the property, the appeals court said.
In this case, the appeals court said that the evidence showed that the plaintiff was entitled to possession of the ring because there was no dispute that the plaintiff alone purchased the ring or that he gave the ring to the defendant for the explicit purpose of proposing marriage.
"Thus it is undisputed that the ring was a give in contemplation of marriage. Gifts given in contemplation of marriage are deemed conditional on the subsequent marriage of the parties and the party who fails to perform on the condition of the give has no right to property acquired under such pretenses," the appeals court said.
"Given that the parties in this case did not marry and that defendant intended to terminate the engagement when she ordered plaintiff to leave her home, clearly the condition attached to the gift of the engagement ring was not fulfilled. The record reflects that plaintiff established his right of possession," the appeals court said.
In addition, the appeals court said that the plaintiff established that the defendant wrongfully detained the ring and that her continued possession of the ring constituted wrongful detention for purposes of the replevin statute. The appeals court rejected the defendant's contention that because the plaintiff breached his promise of fidelity and caused the engagement breakup, she was entitled to keep the ring.
James B. Carroll v. Alison E. Curry, No. 2-07-0812. Justice Susan F. Hutchinson wrote the court's opinion with Presiding Justice Kathryn E. Zenoff and Justice Donald C. Hudson concurring. Released June 26."
http://www.chicagolawbulletin.com/case/get_story_text.cfm?id=100004556
"Plaintiff James Carroll filed a two-count replevin action against defendant Alison Curry after their romantic relationship ended. Count 1 sought the recovery of an engagement ring and Count 2 sought to recover other items of personal property, including a plasma television and audio equipment.
The record showed that the plaintiff proposed marriage to the defendant in late April 2000 and at that time, he gave her a ring he purchased specifically for the proposal. The defendant accepted the proposal, the two became engaged and some months later the plaintiff moved into the defendant's residence. On Nov. 16, 2005, the parties' relationship ended after the defendant accused the plaintiff of infidelity and ordered him to leave her home.
The trial court in April 2007 granted the plaintiff's motion for summary judgment on Count 1. The trial court said that the appropriate analytical framework for the case lay in contract principles and that "fault" was not a consideration in the determination as to whether the plaintiff was entitled to the return of the ring.
The appeals court affirmed. The court said that replevin is a strict statutory proceeding and that the statute must be followed precisely. The primary purpose of the replevin statute is to test the right of possession of personal property and place the successful party in possession of the property, the appeals court said.
In this case, the appeals court said that the evidence showed that the plaintiff was entitled to possession of the ring because there was no dispute that the plaintiff alone purchased the ring or that he gave the ring to the defendant for the explicit purpose of proposing marriage.
"Thus it is undisputed that the ring was a give in contemplation of marriage. Gifts given in contemplation of marriage are deemed conditional on the subsequent marriage of the parties and the party who fails to perform on the condition of the give has no right to property acquired under such pretenses," the appeals court said.
"Given that the parties in this case did not marry and that defendant intended to terminate the engagement when she ordered plaintiff to leave her home, clearly the condition attached to the gift of the engagement ring was not fulfilled. The record reflects that plaintiff established his right of possession," the appeals court said.
In addition, the appeals court said that the plaintiff established that the defendant wrongfully detained the ring and that her continued possession of the ring constituted wrongful detention for purposes of the replevin statute. The appeals court rejected the defendant's contention that because the plaintiff breached his promise of fidelity and caused the engagement breakup, she was entitled to keep the ring.
James B. Carroll v. Alison E. Curry, No. 2-07-0812. Justice Susan F. Hutchinson wrote the court's opinion with Presiding Justice Kathryn E. Zenoff and Justice Donald C. Hudson concurring. Released June 26."
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