With a single ruling this week, U.S. District Judge James Robart of Seattle federal court may have fundamentally altered the balance of power between Motorola Mobility and the leading opponents of Motorola’s soon-to-be-parent Google, Microsoft and Apple.
Litigation is frequently likened to poker, but there’s actually a big difference. Poker ends with a winner and a loser. In litigation, there’s a third option: settlement. In the overwhelming majority of cases, lawyers and their clients eventually conclude that it’s more sensible to compromise than to test your hand with winner-take-all stakes.
The newly-filed Justice Department complaint against Apple and five major publishers is an incalculable boon to Hagens Berman Sobol Shapiro and Cohen Milstein Sellers & Toll, the firms that won the intense competition to lead the multidistrict e-books antitrust class action. There hasn’t yet been discovery in the class action, which the defendants have moved to dismiss or send to arbitration, so the specific details in the Antitrust Division’s complaint, including emails and meetings between Apple and publishing executives, are powerful evidence of the conspiracy the class action alleges. The Justice Deparment’s same-day settlement with Hachette Books, Simon & Shuster, and Harper Collins also increases the likelihood that those publishers will also move to resolve the class action and improves the class’s case against Apple and the remaining publishers, Macmillan and Penguin.
The eminent white-collar defense boutique Brune & Richard has spent the last few months in the uncomfortable and unaccustomed position of defending itself. The firm is under scrutiny for its decision not to disclose the results of its pretrial research on prospective jurors until a month after the verdict, when it joined other defense counsel in requesting a new trial based on juror misconduct. This is a cautionary tale. The facts of this particular ethical pickle are so specific as to be almost unbelievable, but the issues raised in the Brune & Richard case are going to become increasingly universal as Internet jury research becomes the rule rather than the exception: How much must lawyers tell judges about their findings? And what are the implications for the jury system if lawyers are required to report mere suspicions about a prospective juror’s past?
Distressed debt investors don’t have much credence as victims. These are, after all, hedge funds that buy up bonds in or near default, typically at a steep discount, in the hope they’ll be able to boost the value of the debt through the bankruptcy process or litigation in U.S. courts. Right now, for instance, distressed bond funds are preparing for battle over billions of dollars worth of Greek sovereign debt that they snatched up in anticipation of that country’s default in March. Distressed debt funds quite literally feed off the flesh of moribund companies and foreign economies, which is why they’re frequently called vulture funds. Vultures flanked by crafty lawyers aren’t entitled to a whole lot of sympathy.
I was surprised back in June 2010 when U.S. District Judge Louis Stanton of federal court in Manhattan granted summary judgment to YouTube and Google in a pair of copyright infringement actions by Viacom and soccer’s Premier League. The case record, after all, was replete with email evidence suggesting that YouTube executives salted their site with videos they knew were illegal, even after they’d received notice that the videos infringed copyrights. YouTube, meanwhile, had alleged that Viacom secretly uploaded its own videos to the site to entrap YouTube. Either way, it seemed to me that the factual allegations demanded an airing, but Stanton instead ruled that YouTube was protected under the safe harbor provisions of the Digital Millennium Copyright Act because (among other things), it had insufficient knowledge of specifically infringing material. The decision was regarded as a boon to Internet content-sharing sites and a powerful endorsement of the DMCA’s safe harbor protection.
Beth Kaswan of Scott + Scott has the fervor of a pioneer when she talks about the implications of U.S. District Judge William Pauley‘s ruling Tuesday that her client, a Chicago police officers’ pension fund, can proceed with some claims that Bank of New York Mellon violated its duty to Countrywide mortgage-backed securities investors under the federal Trust Indenture Act. “Judge Pauley is the first judge to say the Trust Indenture Act, in existence since 1939, does apply in this type of circumstance to mortgage-backed securities,” Kaswan told me Wednesday. “That means investors can sue trustees, even if they can’t cobble together 25 percent” of the voting rights in any particular trust — a prerequisite to suing under the pooling and servicing agreements governing most MBS trusts.
In a really smart piece last month, my Reuters pal Dan Levine wrote that Steve Jobs’ promise to kill Google’s Android operating system has not been fulfilled. Instead, wrote Levine and co-author Poornima Gupta, Apple’s patent war against Android users Motorola, Samsung, and HTC had become “a costly global war of attrition.” Both sides have won skirmishes, but no battle has been decisive. The Reuters story quoted Judge Richard Posner of the 7th Circuit Court of Appeals, who is overseeing a Motorola case in U.S. District Court in Chicago. “You’re not going to shut down the smartphone,” Posner told Apple’s lawyer. “[And] they’re not going to shut down the iPhone.”
George Fountas, an out-of-work accountant from Lynn, Massachusetts, profoundly mistrusts the healthcare system. Get him started, and he’ll reel off stories about how death rates decline when doctors go on strike and burial societies are the biggest fans of hospitals. Before 2007, according to Fountas, he had never paid a penny for healthcare coverage. He saw no reason why he should start, despite a then-new law in Massachusetts that said he’d be subject to a fine if he refused to join a health insurance plan. He refused to join a health plan, and refused to report that information on his 2007 tax return.