Here’s a prediction: When historians look back at the legacy of U.S. Supreme Court Justice Antonin Scalia and his conservative colleagues, they will pay close attention to the justices’ reluctance to extend the dominion of U.S. courts beyond our country’s borders. Scalia made that sentiment clear in his 2010 opinion in Morrison v. National Australia Bank, and the court is right now considering the reach of a U.S. law that provides a cause of action for human rights victims in Kiobel v. Royal Dutch Petroleum (Shell). Scalia, who has spoken about the danger of applying rulings from international courts to cases in the United States, believes that the same holds true in reverse: The laws of the United States govern only the United States.
The District of Columbia Circuit Court of Appeals is right now receiving briefs on an interesting question: Does Washington’s 2010 law against so-called SLAPP suits (otherwise known as Strategic Lawsuits Against Public Participation) apply to libel and defamation claims in federal court or only to cases brought in Superior Court for the District of Columbia? Two U.S. district judges in Washington have denied defendants’ motions to assert the anti-SLAPP statute, which holds that in cases arising out of speech on matters of public interest, alleged victims must be able to show that they’re likely to succeed on the merits of their claim. The law, in effect, shifts the way courts decide motions to dismiss, doing away with the assumption that the plaintiffs’ allegations are true. It also restricts discovery, so plaintiffs usually have to show they’re likely to prevail without the benefit of depositions and documents from the other side.
Disgruntled investors, Commissioner Luis Aguilar of the Securities and Exchange Commission feels your pain. In a speech last week at the Securities Enforcement Forum, he acknowledged that he hears a lot of investors asking “why more individuals and entities have not been held accountable” in the five years since the financial crisis. To restore faith in the markets, the commissioner said, the SEC needs to show that it’s on the side of the investing public — and that means doing more “to prove that robust enforcement is the norm and investors and fraudsters should take notice.”
By all accounts, neither Michael Lewis nor Frank Serpico should be concerned about competition from Greg Smith, the erstwhile Goldman Sachs vice president whose supposed tell-all, “Why I Left Goldman Sachs,” was published Monday. I’ve only read the first chapter excerpt that’s been floating around the Internet since last week, but Smith clearly lacks Lewis’s humor and narrative verve, and reviewers who read advance copies of the entire book have said there’s not much substance to his assertions about Goldman’s culture. I suspect that Smith will have a short shelf life as a Wall Street chronicler and whistle-blower.
Last April, as a follow-up to revelations that Wal-Mart had allegedly covered up bribes paid by its Mexican subsidiary, the great Corporate Counsel reporter Sue Reisinger ran a very surprising piece. Despite the scandal engulfing Wal-Mart, defense lawyers told Reisinger that the company may have made a strategically smart decision not to disclose the matter to the government. Smart? Really? Would Wal-Mart’s alleged bribery have blown up into a public relations fiasco that cried out for governmental consequences if the company had quietly admitted the facts to the Securities and Exchange Commission or the Justice Department?
As I read the just-released third-quarter earnings statements of JPMorgan Chase and Wells Fargo, I felt as though I were living in a parallel universe to the banks. Looking for any mention of the New York attorney general’s encompassing $22 billion Martin Act suit against JPMorgan in the bank’s statement? You won’t find it. The only question on the AG’s case that JPMorgan CEO Jamie Dimon fielded in the Friday morning call with analysts was a softball asking whether, as a policy matter, it’s fair to hold the bank responsible for the alleged sins of Bear Stearns when the Fed pushed JPMorgan into the acquisition; Dimon, you will be shocked to hear, agreed that that’s not good policy. No one on the analyst call asked — and the bank didn’t say anything — about Libor liability or about the ongoing securities fraud class action stemming from JPMorgan’s nearly $6 billion chief investment office derivative hedge losses.
The next great turning point in the war for global device domination comes next month, when Motorola faces two trials — one against Apple, the other against Microsoft — that will determine its ability to use its portfolio of standard-essential patents as leverage in IP disputes with its competitors. I’ve been harping on this theme for a while, but trials have a way of sharpening the issues. Both of these cases will be tried to judges, not juries, so we won’t get immediate results. But when U.S. District Judge Barbara Crabb in Madison, Wisconsin, and U.S. District Judge James Robart in Seattle issue rulings, Motorola and its rivals should have a very clear understanding of how valuable Motorola’s patents on essential wireless technology are.
A few months ago, plaintiffs’ lawyers at Robbins Geller Rudman & Dowd created quite a stir when they filed thousands of pages of deposition transcripts and other juicy discovery in an investors’ fraud case against Morgan Stanley, Standard & Poor’s and Moody’s. The documents — exhibits to the investors’ summary judgment motion — included never-before-seen internal communications between Morgan Stanley and the rating agencies as they worked on a structured investment vehicle known as Cheyne, putting on public display the allegedly half-cocked evaluations that Moody’s and S&P performed in 2005, when they were swamped with subprime mortgage-backed financial instruments to rate.
The Founding Fathers spent quite a lot of time thinking about how, and how much, federal judges should be paid. In fact, according to Chief Judge Randall Rader of the Federal Circuit Court of Appeals, writing Friday for a majority of the en banc appeals court in Beer v. United States, the men who wrote the Constitution considered judicial pay to be almost as important to the independence of the judiciary as lifetime tenure. This was no incidental matter either; among the grievances the colonists listed in the Declaration of Independence was King George III’s rein on the judiciary, which he controlled through pay and job security.