Reuters blog archive
from Alison Frankel:
In the last few months, the victims of supposed overseas human rights atrocities have begun to feel the impact of the U.S. Supreme Court's ruling last April in Kiobel v. Royal Dutch Petroleum. As you know, the Supreme Court held that Alien Tort Statute cases cannot proceed in U.S. courts unless they have a significant connection to the United States. As a result, ATS claims by foreign citizens accusing international corporations of abetting torture and murder on foreign soil have since been dismissed against Daimler, Arab Bank, Rio Tinto and KBR. Some ATS cases have survived post-Kiobel scrutiny, as my friend Michael Goldhaber reported for The American Lawyer in August, and alleged victims can still assert claims under Other U.S. laws that specifically apply to conduct abroad. But without a doubt, Kiobel has extinguished the jurisdiction of U.S. courts over a wide swath of human rights litigation.
New York state courts, on the other hand, are ready and willing to hear the cases. Or, at least, that's the implication of a comprehensive decision Tuesday by the state Appellate Division, First Department, that permits 50 Israeli citizens to proceed with claims that Bank of China is liable under Israeli law for facilitating bombings and rocket attacks in Israel by Hamas and Palestine Islamic Jihad. The state appeals court expressly broke with the 2nd Circuit Court of Appeals in holding that Israeli law should apply to the alleged victims' claims because that's where they were injured, rejecting the 2nd Circuit's 2012 decision in a parallel terror-finance case that the laws of the defendant's home jurisdiction should apply because those courts have the greatest interest in regulating the defendant's conduct.
According to Robert Tolchin of The Berkman Law Office, who represents the plaintiffs in both the 2nd Circuit and New York state-court cases, the Appellate Division's ruling opens the door to claims in New York courts by foreigners asserting the laws of their own countries against international defendants. "The Supreme Court in Kiobel knocked out the Alien Tort Statute, but here comes New York negligence law," he said.
Bank of China and its lawyers at Patton Boggs had argued that New York isn't the proper forum for a case pitting Israelis against a Chinese bank, particularly because most of the alleged conduct took place in China. The bank also said that under the laws of New York or China, it is not liable to the alleged victims of its customers' wrongful actions. It argued that if Israeli law conflicts, the appeals court must apply New York or Chinese law.
from Alison Frankel:
In 2012, five African-American Detroit homeowners and a Michigan legal services group asserted a notably creative legal theory in a class action against Morgan Stanley. Their lawyers at Lieff Cabraser Heimann & Bernstein and the American Civil Liberties Union acknowledged that Morgan Stanley didn't write the supposedly predatory mortgages that victimized African-American borrowers in Detroit. Those housing-bubble mortgages were originated by New Century, a notorious subprime lender that went under in 2007. But the suit argued that New Century was writing loans to feed Morgan Stanley's securitization machine. Because Morgan Stanley wanted to bundle certain types of subprime loans into its mortgage-backed securities, the theory went, its policies guided New Century's predatory practices. So according to the homeowners' suit, Morgan Stanley was actually responsible for the disparate impact of New Century's discriminatory lending.
Morgan Stanley seemed downright incredulous at the audacity of the suit. Its lawyers at Wilmer Cutler Pickering Hale and Dorr moved to dismiss the class action, stacking up argument after argument about flaws in the homeowners' legal theory. They're pretty good arguments, too. The overarching theme of the bank's defense is that New Century, not Morgan Stanley, is responsible for the loans it wrote. Morgan Stanley didn't even buy the mortgages of four of the five homeowners who are name plaintiffs in the suit, the motion says, so how can its securitization policies be to blame?
from The Edgy Optimist:
For months, we’ve been told that the impending implementation of the Affordable Care Act (aka Obamacare) will lead to soaring healthcare costs and more expensive premiums. That narrative has taken hold, even for those who otherwise support the suite of reforms. And that’s why the recent front-page article in the New York Times, reporting that premiums in New York State may actually fall 50 percent or more, came as such a surprise.
Only a few weeks prior, the Wall Street Journal announced that “Healthy consumers could see insurance rates double or even triple when they look for individual coverage under the federal health law later this year.” Their analysis did acknowledge that ailing individuals could see rates fall, but the driving point was one that has been made ad infinitum by critics of the reforms: costs will soar.
from Alison Frankel:
Last spring, when U.S. District Judge Naomi Reice Buchwald of Manhattan decimated the consolidated private litigation over banks' manipulation of the London Interbank Offered Rate, the only claims that remained upright in the rubble of her ruling were those brought under the Commodity Exchange Act, which makes tampering with the price of exchange-traded commodities or futures illegal. Buchwald's opinion cited a plethora of Manhattan federal court decisions that permitted victims of futures price manipulation to move forward with their suits, including three consolidated class actions involving rigged prices for oil futures. I suspect we're going to be hearing a lot more about those cases over the next several months. Even as the class action bar tries to persuade the 2nd Circuit Court of Appeals to reinstate the Libor antitrust claims that Buchwald dismissed, plaintiffs lawyers are gearing up for the next big litigation: claims that BP, Royal Dutch Shell, Statoil and other unidentified conspirators violated commodity and antitrust laws by reporting false prices for North Sea Brent crude oil to the price-setting agency Platts.
Lowey Dannenberg Cohen & Hart filed the first class action, in federal court in Manhattan, on May 22, just days after investigators from the European Commission raided oil company offices in a probe of alleged collusion to distort prices for crude oil and biofuels during the half-hour window in which Platts sets prices. Five more class actions have since hit the docket in Manhattan and one in federal court in Louisiana, all naming BP, Statoil and Shell as defendants. (EC investigators also collected information from Platts, a division of McGraw Hill, but it has not been targeted in the private suits.) Last Thursday, Lowey Dannenberg petitioned the Judicial Panel on Multidistrict Litigation to consolidate the cases before U.S. District Judge Andrew Carter, who's been assigned to oversee all of the New York filings.
from Photographers' Blog:
New York City, NY
By Darren Ornitz
Having lived in New York for eight years, Times Square is nowhere near the top of my list of places to photograph. In fact, it’s probably close to dead last. Just the other day however, I got an assignment to roam the chaotic streets trying to find a feature story. Walking through the revolving doors of the Thomson Reuters building, I wondered where I would even begin. While something exciting could happen at any moment, the chances of running into Elmo getting arrested seemed improbable.
After only a few blocks I found myself wedged between a family trying to take photographs of the apparently fascinating Nasdaq building and a bunch of men screaming at me while waving pamphlets in my face about how much fun I’d have sitting on top of a red bus in the middle of bumper to bumper traffic touring the city.
from Full Focus:
Robert Burck, better known as the original 'Naked Cowboy', started performing in Time Square in 1998 and claims to make up to $150,000 a year in tips alone. Photographer Darren Ornitz spent time with Burck and his troupe. Read Darren's personal account here.
from Alison Frankel:
To say that the hearing to evaluate Bank of America's proposed $8.5 billion breach of contract settlement with investors in Countrywide mortgage-backed securities got off to a slow start would be something of an understatement. In a courtroom so crowded that New York State Supreme Court Justice Barbara Kapnick repeatedly admonished observers to clear a path to the door, the judge heard hours of pretrial motions, many on issues she regarded as already settled. In particular, objectors to the settlement - led by AIG, several Federal Home Loan Banks and other assorted pension and investment funds - told Kapnick that they should not be forced to proceed with opening statements until they've had a chance to take depositions based on privileged communications between Bank of New York Mellon, the Countrywide MBS trustee, and its lawyers at Mayer Brown. Kapnick ordered the documents produced late last month, and AIG counsel Daniel Reilly of Reilly Pozner said it wouldn't be fair to begin a hearing to determine whether BNY Mellon made a reasonable decision to agree to the $8.5 billion settlement - which resolves potential claims by 530 trusts that Countrywide breached representations and warranties about underlying mortgage loans - until objectors have quizzed witnesses on the confidential material.
Kathy Patrick of Gibbs & Bruns, who represents BlackRock, Pimco, MetLife and other major institutional investors that negotiated the deal with BofA and BNY Mellon, said the objectors just wanted to delay Kapnick's final reckoning of the settlement, which is being evaluated in a special proceeding under New York trust law. Reilly, who argued unsuccessfully last week for a stay of the case while the state appeals court considers whether it should be heard by a jury, insisted that he just wants the proceeding to be fair. Judge Kapnick, meanwhile, seemed preoccupied with getting the actual hearing under way. "I am trying to make this go ahead," she told the objectors at one stage. "I am not going to reopen a point we spent an inordinate amount of time arguing about," she said at another. "At some point, you have to get going with this."
This week, New York Governor Andrew Cuomo unveiled his proposal to create a Financial Restructuring Board to help distressed local governments manage their finances. One of the key features is an alternative binding arbitration process for unions and municipalities to resolve contract issues more rapidly. New York has an unusual employee provision that leaves all previous contract terms in place if municipalities and unions fail to reach an agreement. This provision could prevent old contracts from festering with rich wage increases and swelling employee and pension costs. Governor Cuomo said in a press release:
Growing retirement costs, declining populations, decreasing property values, and the recent fiscal crisis have all contributed to the difficult financial issues facing localities today…The Financial Restructuring Board will bring together state and local officials to help localities make tough decisions and solve this crisis now instead of kicking the can down the road.
from Photographers' Blog:
New York City, NY
By Shannon Stapleton
Every time I have to cover a story related to the September 11th attacks on the World Trade Center I always hope that I will be able to forget that day and the so many lives affected by the tragedy.
Today was not different. It's a beautiful spring day and being down near the Ground Zero site was probably the last place I wanted to be. But covering one of the last pieces being hoisted onto One World Trade Center did provide a glimmer of closure.
from Full Focus:
Opened on February 2, 1913, when trains were a luxurious means of traveling across America, the iconic New York landmark Grand Central Station, with its Beaux-Arts facade is an architectural gem. It is also the Big Apple's second-most-popular tourist attraction, after Times Square.