Source: http://news.feedzilla.com/en_us/stories/law/video/392636052?client_source=feed&format=rss
Thursday, August 28, 2014
India supreme court rules coal mining licenses illegal
[JURIST] The Supreme Court of India [official website] ruled [judgement, PDF] Monday that all coal mining licenses awarded between 1993 and 2010 are illegal. The court found that the licenses failed to comply with the Mines and Minerals (Development and Regulation) Act of 1957 [text, PDF]; Section 3(3)(a)(iii) of the Coal Mines (Nationalisation) Act of 1973 [text]; the principle of trusteeship of natural resources, arbitrariness, lack of transparency, lack of objectivity and non-application of mind; and allotment tainted with mala...
Source: http://jurist.org/paperchase/2014/08/jurist-in-2012-the-justice.php
Cull, Baby, Cull - Modern Trends in Data Collection and Analysis
Despite all the attention that e-discovery has received over the last decade, it is still a relatively new part of the litigation process. For those lawyers who were never exposed to e-discovery in law school or their formative years, the systems and products involving data collection and analysis can be overwhelming and complex. How much do lawyers need to know about information governance, data collection, data analysis, managed document review, and electronically stored information (ESI)? Alternately, for those data collection practitioners who are already intricately involved in the culling and analysis, how is the technology and process changing?
In this episode of Digital Detectives, Sharon Nelson and John Simek interview e-discovery solutions expert Aaron Lawlor about what is involved with ESI and data collection, current trends in data analysis, and future advances in technology and process. Lawlor urges every litigator to become experienced with the state and federal rules involving e-discovery in order to better serve their clients. He explains the process of research and documentation of key players in the case, and then collecting, analyzing, and refining any relevant information before presenting to the counsel. In order to facilitate this process, lawyers and data collectors narrow the data set early by a process of visualizing connections and communication mapping. It is important, Lawlor says, for every lawyer to become familiar with e-discovery and data collection, since it is an increasingly important source of information.
Aaron Lawlor is the senior director of Global Legal Solutions at UnitedLex Corporation. He has spent the past decade addressing his clients' e-discovery needs, first as an attorney at Am Law 100 firm, then as the cofounder of a boutique consulting and managed document review company. His company was acquired by UnitedLex in 2013 and, in his current role, he partners with in-house and outside council to implement value-driven e-discovery solutions.
Special thanks to our sponsor, Digital WarRoom.
In this episode of Digital Detectives, Sharon Nelson and John Simek interview e-discovery solutions expert Aaron Lawlor about what is involved with ESI and data collection, current trends in data analysis, and future advances in technology and process. Lawlor urges every litigator to become experienced with the state and federal rules involving e-discovery in order to better serve their clients. He explains the process of research and documentation of key players in the case, and then collecting, analyzing, and refining any relevant information before presenting to the counsel. In order to facilitate this process, lawyers and data collectors narrow the data set early by a process of visualizing connections and communication mapping. It is important, Lawlor says, for every lawyer to become familiar with e-discovery and data collection, since it is an increasingly important source of information.
Aaron Lawlor is the senior director of Global Legal Solutions at UnitedLex Corporation. He has spent the past decade addressing his clients' e-discovery needs, first as an attorney at Am Law 100 firm, then as the cofounder of a boutique consulting and managed document review company. His company was acquired by UnitedLex in 2013 and, in his current role, he partners with in-house and outside council to implement value-driven e-discovery solutions.
Special thanks to our sponsor, Digital WarRoom.
Location, Location, Location – No, Not Real Estate … Tweeting
Everyone has heard the old saying about real estate – location, location, location. If you didn’t think that this applies to tweeting, you will now. As reported by The Arab Times:
The Misdemeanor Court sentenced a Twitter user to two months in prison with hard labor and temporary compensation for insulting a poet. Attorney Hussein Al-Asfour, lawyer for the plaintiff, pointed out in court that the accused tweeted statements deemed offensive to the poet; especially since the tweets were about the latter’s personal life. The accused posted the offensive tweets again after the plaintiff announced his plan to contest the parliamentary elections. During investigations, the defendant refuted the allegation that he tweeted the offensive statements; claiming another person used his account. However, when the complaint was referred to the Electronic Crimes Department, it was found out the accused owns the account and he posted the insulting statements repeatedly. Taking these circumstances into consideration, Al-Asfour asked the court to impose the harshest penalty on the accused.
Yikes.
Source: http://rss.justia.com/~r/LegalJuiceCom/~3/cB_aLNBUOF0/sfadf.html
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Fla. High Court Asked to Settle Gay Marriage Question
The Second District Court of Appeal asked the Florida Supreme Court to settle the question due to "great public importance" in the divorce case of a same-sex couple.
Source: http://www.law.com/jsp/article.jsp?id=1202668234216&rss=newswire
Wednesday, August 27, 2014
LawBiz® Legal Pad: Ethical Considerations in Collecting Your Fee
Ed discusses managing a client’s fee expectations.
Source: http://feeds.lexblog.com/~r/LawBizBlog/~3/SRAhfeThnVI/
Delaware Court of Chancery Rejects Indemnification Sleight of Hand
In Branin v. Stein Roe Inv. Counsel, LLC, C.A. 8481-VCN, 2014 WL 2961084 (Del. Ch. June 30, 2014), the Delaware Court of Chancery held that a vested right to indemnification may not be rescinded by a subsequent amendment to the governing corporate document.
Francis S. Branin Jr. (“Branin”) owned and managed the investment management firm Brundage, Story & Rose, which was sold to Bessemer Trust, N.A. (“Bessemer”) in 2000. Nearly two years later, Branin left Bessemer and was hired by Stein Roe Investment Counsel LLC (“SRIC”), taking former clients with him. Bessemer proceeded to sue Branin under New York’s Mohawk Doctrine, which refers to an implied covenant imposed on the seller of a business that prevents the seller from approaching former customers and attempting to regain their patronage after the seller has purported to transfer the sold business’ goodwill to the purchaser. As a result of the legal claim by Bessemer, Branin sought indemnification under the directors and officers indemnification provisions of the operating agreement of SRIC (the “Operating Agreement”).
The Operating Agreement in effect when Branin was hired by SRIC provided that, “each member, manager or employee of [SRIC] shall be entitled to indemnification from [SRIC]for any loss, damage or claim by reason of any act or omission performed or omitted by such Person in good faith on behalf of [SRIC]” (the “Original Indemnification”). Following the lawsuit by Bessemer, SRIC adopted an amendment to the Operating Agreement to exclude from the indemnification provision claims for damages incurred as a result of a “breach of any agreement, express or implied, entered into by such Person with one or more outside parties prior to such Person’s association with the [SRIC]” (the “Amended Indemnification”). The issue before the Court hearing Branin’s claim against SRIC was which version of the Operating Agreement should govern.
Under Delaware law, limited liability companies have the ability to indemnify members and managers and have significant freedom to define, limit and amend these rights. Therefore, the issue is not whether SRIC was within its rights to amend the Original Indemnification to exclude certain types of claims, but rather when Branin’s right to indemnification (pursuant to the Original Indemnification) became a vested interest. The Court looked to the terms of the Original Indemnification, which covered a “claim” and determined that, without more, the right to indemnification would be triggered by the initial occurrence of a “claim.” The Court concluded that Branin established the right to pursue a claim for indemnification under the Original Indemnification, agreeing with the examined case law that “generally protects indemnitees and looks to the operating agreement in place when the events giving rise to the claim accrued or when the lawsuit involving the claim was filed.” (emphasis added) See Branin at page 19. The Court held that once a right to indemnification vests, it may not thereafter be rescinded by an amendment to the operating agreement. See Branin at page 18.
The Court, however, reinforced the concept that the terms of the agreement will govern and chose to not grant Branin’s motion for judgment on the pleadings, as there was a question of fact regarding whether Branin had satisfied all of the requirements of the Original Indemnification clause in the Operating Agreement. In this case, the full text of the Original Indemnification included the requirements that a potential indemnitee have acted “in good faith on behalf of [SRIC] and, as applicable, in a manner reasonably believed to be within the scope of the authority conferred on [him] by this agreement.” Therefore, Branin must still prove that he acted in good faith and within the scope of his authority in order to have a successful indemnification claim.
Although this case concerns a limited liability company and not a corporation, the concepts and reasoning behind the Court’s decision will likely be applied to claims under indemnification provisions of by-laws in the same way as it was applied to operating agreements here. For this reason, it is important for all companies to note that while the specific restrictions and carve-outs of an indemnification provision will be applied to the facts of a claim, such indemnification provision may not be amended in order to avoid liability if the right to indemnification has already vested pursuant to the terms of such indemnification provision.
For questions or additional information, please contact Ariel Yehezkel (212-634-3064), Thomas Michael (212-634-3055) or your usual Sheppard Mullin contact.
What You Should Consider When Starting A Solo Law Practice
When starting a solo or small practice, a lawyer has to consider many new business details that were unnecessary while working for a larger firm. How do taxes differ for sole proprietorships versus other entity types? What are the necessary business or trust accounts for each individual lawyer? What is the most important thing to consider when paying taxes and acquiring insurance? Any lawyer who is starting a solo practice, confused by the options and information available, can make costly mistakes.
In this episode of New Solo, Adriana Linares interviews Reba Nance and Bill Gibson, two experts in the field of law practice management, about what steps lawyers can take in the beginning of their solo practice to optimize their chance of success. Nance recommends several bank accounts with clear paper trails that are reconciled regularly, acquiring malpractice insurance even if the state does not require it, and not taking shortcuts when pressured by clients. Gibson encourages lawyers who have newly gone solo to seek help and talk to a CPA, pay taxes and automate their payroll systems, and not overlook general liability and workers comp insurance. Both practice management experts highly advise any lawyer to carefully read the professional conduct rules and ethical regulations of each state. Starting a new practice is difficult; no lawyer should be afraid to ask for help.
Reba Nance is a law practice and risk management manager of the Colorado Bar Association. In addition to being a frequent presenter on topics such as legal technology and malpractice prevention, she is the first female chair of the ABA tech show.
Bill Gibson has practiced personal injury litigation in Portland, OR since 1979. Working as a full-time neutral since 2000, he has also written several books on law practice management including one of the latest ABA books called Flying Solo.
Special thanks to our sponsor, Solo Practice University.
In this episode of New Solo, Adriana Linares interviews Reba Nance and Bill Gibson, two experts in the field of law practice management, about what steps lawyers can take in the beginning of their solo practice to optimize their chance of success. Nance recommends several bank accounts with clear paper trails that are reconciled regularly, acquiring malpractice insurance even if the state does not require it, and not taking shortcuts when pressured by clients. Gibson encourages lawyers who have newly gone solo to seek help and talk to a CPA, pay taxes and automate their payroll systems, and not overlook general liability and workers comp insurance. Both practice management experts highly advise any lawyer to carefully read the professional conduct rules and ethical regulations of each state. Starting a new practice is difficult; no lawyer should be afraid to ask for help.
Reba Nance is a law practice and risk management manager of the Colorado Bar Association. In addition to being a frequent presenter on topics such as legal technology and malpractice prevention, she is the first female chair of the ABA tech show.
Bill Gibson has practiced personal injury litigation in Portland, OR since 1979. Working as a full-time neutral since 2000, he has also written several books on law practice management including one of the latest ABA books called Flying Solo.
Special thanks to our sponsor, Solo Practice University.
Source: http://legaltalknetwork.com/podcasts/new-solo/2014/07/consider-starting-solo-law-practice
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Protip: Don't Screw With Old Folks
A squad of 18 deputies in Cook County were very aggressive in trying to collect money from deadbeat dads, using whatever methods they needed to bring these culprits to justice. When they put a gun to 77-year-old Merien Macon's head, however, they messed with the wrong person. From the Chicago Tribune:
© 2007-13 Simple Justice NY LLC. This feed is for personal, non-commercial & Newstex use only. The use of this feed on any other website is a copyright violation. If this feed is not via RSS reader or Newstex, it infringes the copyright.
When the unit arrived at the Macons' home, two weeks before Merien's arrest, officers had two outstanding warrants for couple's son, Derrick Macon, then 50, including one for child support. Officers insisted they be allowed into the home, William Macon said.
Because the officers did not have a search warrant, William Macon refused, he said.
William Macon, 83 years old, wasn't to be easily pushed. You gotta love tough old birds. And before anyone gets all bent out of shape about his "derelict" deadbeat son, it turns out that while the team knew all about the outstanding warrants for child support, they somehow missed the order holding that he wasn't the father of the child. But let's not have facts impair a good story.
When the deputies saw Merien drive up to the back of the home, they approached with guns drawn — one pointed at her head as she sat in the car — and pressed her about her son's whereabouts, according to the lawsuit.
"I was really surprised when they walked up with their guns," Merien Macon, a retired clerical worker, said last week. "I was scared. I was shocked. I was surprised."
Macon, who had dropped off her son earlier, told them she didn't know where he was and she did not want to answer questions, [Macon's lawyer, Elizabeth] Kaveny said.
And so the deputies, duly chastised by their overly violent conduct frightening a nice old woman, apologized profusely and left her in peace outraged by her refusal to do as they commanded, decided to teach an old woman a lesson.
At that point, Merien Macon became upset and told the officers she would not speak to them. The officers handcuffed, frisked and arrested Merien Macon on a charge of obstruction of justice.
The officers then took her to a nearby parking lot, where they gave her a phone and told her to call her son and find out where he was.
Merien's husband, William, a retired electrician, called that "a hostage situation," attempting to trade off his wife for his son. The sheriff's office claimed that was not at all the case, and they were just being thoughtful.
The sheriff's office denied attempting to pressure Macon to call her son and said she was moved to the parking lot because her husband had become upset and neighbors were starting to gather.
They didn't want to upset old William by forcing him to watch her cuffed, frisked and with guns pointed at his wife's head. A very sensitive gesture in law enforcement, likely to win a medal at some point.
The Macons sued for what was done to Merien.
Merien Macon was charged with felony obstruction of justice, leading her to file a lawsuit against Sheriff Tom Dart and the officers involved. A Cook County jury recently sided with her, awarding Macon $327,500 and agreeing with her husband that what happened that afternoon went too far.
Frankly, that's a very healthy award, give that most plaintiffs in her situation could hope for a fraction of that at best. But then, picture a jury hearing the testimony in this case, looking at the 77-year-old woman and her loving 83-year-old husband, and pondering the cuffs on her wrists, the hands on her body, the gun at her head, all over a mistaken child support warrant. It doesn't get more sympathetic than this.
"I've seen this type of thing over and over and over," William Macon said. "But when it happens to you it becomes more personal."
Truth. Unless you happen to be knowledgeable about your rights, have the guts to assert them with a gun pointed at your head and, purely by happenstance, a couple of cool codgers, chances aren't good you would end up with a verdict of this magnitude. This makes it an exceptionally good reason to both applaud the Macons, and to care a whole lot about when things like this happen "over and over and over." Because next time it could be you, and it will, without question, become "more personal."
H/T Spencer Neal
© 2007-13 Simple Justice NY LLC. This feed is for personal, non-commercial & Newstex use only. The use of this feed on any other website is a copyright violation. If this feed is not via RSS reader or Newstex, it infringes the copyright.
Source: http://blog.simplejustice.us/2013/07/13/protip-dont-screw-with-old-folks.aspx?ref=rss
Thousands of Electronic Case Files Lost in Transition
The federal judiciary is trimming back some of its offerings in a widely used database of electronic court documents.
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An Interesting Way To Smuggle Opiates Into Jail
Regular Juice readers know about the various ways people smuggle things into jail, many of which are NSFW. This is a new one on The Juice. As reported by the Pinellas County Sheriff’s Office (Florida):
Deputies have arrested a Trinity woman after she concealed suboxone strips behind stamps on envelopes and mailed them to two inmates at the Pinellas County. The inmates in turn distributed and sold the controlled substance to other Pinellas County Jail inmates. Since the investigation began on August 1, 2013, deputies intercepted a total of 11 pieces of mail containing the opiate.
Pretty clever. Suboxone is also known as “heroin in a breath strip.” These folks had quite a business going, what with each stamp selling for $20. You can read more, and see the mug shot of smuggler here.
Source: http://rss.justia.com/~r/LegalJuiceCom/~3/5LAGg48K9eY/dfdfg.html
Tuesday, August 26, 2014
Delaware Court of Chancery Underscores Heightened Pleading Standard Necessary to Support a Claim for Breach of Fiduciary Duty In Connection With a Merger
In Houseman v. Sagerman, C.A. No. 8898-VCG, 2014 WL 1478511 (Del. Ch. Apr. 16, 2014), the Delaware Court of Chancery (Glasscock, V.C.) granted, in part, a motion to dismiss filed by certain directors and the financial advisor of Universata, Inc. (“Universata” or the “Company”) arising out of the Company’s merger with HealthPort Technologies, LLC (“HealthPort”). The Court’s analysis serves as a reminder that a stockholder plaintiff must plead an “extreme set of facts” to support a claim for breach of fiduciary duty against a corporation’s directors arising out of allegations that the directors breached their duty of loyalty as a result of the process used to approve a strategic transaction. Although the allegations suggested that Universata’s board of directors (the “Board”) did not conduct a “perfect” process, plaintiffs did not plead facts sufficient to show that the Board “utterly failed to undertake any action to obtain the best price for stockholders.” As a result, the Court dismissed plaintiffs’ claim for breach of fiduciary duty.
Universata was a Delaware corporation focused on providing services with respect to medical records for hospitals and clinics. In 2006, plaintiffs sold a previous business known as Med-Legal, Inc. to Universata and obtained shares in the Company and put rights to those shares whereby a director of the Company, Thomas Whittington, committed to repurchase plaintiffs’ shares pursuant to the put rights.
In 2010, HealthPort approached Universata regarding a potential acquisition. In response to HealthPort’s indication of interest, the Board consulted with its legal advisors and with KeyBanc Capital Markets, Inc. (“KeyBanc”), which it hired as its financial advisor. Due to expense, the Board limited KeyBanc’s engagement to assisting in diligence and identifying additional parties with an interest in acquiring the Company. Notably, the Board did not request that KeyBanc prepare a fairness opinion on the proposed transaction.
In May 2011, the Board approved an Agreement and Plan of Merger between Universata and HealthPort. As a result of the merger, the stockholders of Universata would receive $1.02 per share. In addition the stockholders of Universata would receive stock in a new corporation known as “TechCo” created to hold a patent previously held by Universata. At the meeting approving the merger, KeyBanc advisors informally gave the opinion that the merger price was within the range of reasonableness. Because the directors who approved the merger collectively held a majority ownership interest in the Company, the Board did not solicit a stockholder vote to approve the transaction. Nevertheless, at the same time as the Board approved the merger, it amended a previous equity incentive plan to treat all outstanding stock options like outstanding shares upon a change in control. In addition, the Board voted to vest all outstanding “in the money” warrants for the purchase of shares in the Company.
Plaintiffs, who were a director of the Company and his wife, approved the letter of intent with HealthPort, but did not vote or execute a consent in favor of the merger. Two years after the merger closed, plaintiffs filed a verified complaint against certain directors of Universata and against KeyBanc asserting causes of action for (i) breach of fiduciary duty against the director defendants; (ii) an accounting against director Whittington; (iii) quasi-appraisal against Universata and the director defendants; (iv) aiding and abetting a breach of fiduciary duty against KeyBanc; and (v) for failing to obtain consideration for alleged “litigation assets.” Defendants moved to dismiss.
The Chancery Court denied defendants’ motion to dismiss the accounting claim. With respect to the other claims, the Court granted, in part, and denied, in part, defendants’ motion to dismiss.
Plaintiffs’ breach of fiduciary duty claim was premised on the allegation that the director defendants acted in bad faith by “knowingly and completely fail[ing] to undertake their responsibilities” to maximize shareholder value. Nevertheless, the Court noted that the directors satisfied their duty of loyalty by acting on the advice of legal counsel and hiring KeyBanc as their financial advisor. Moreover, the directors were entitled to decide that the expense of obtaining a fairness opinion outweighed its benefits. The allegations in the complaint showed that Board considered bids from several interested parties, negotiated with HealthPort regarding the deal terms, and ultimately obtained from HealthPort “everything that [the Board] felt [it] could get.” Plaintiffs failed to allege any facts to show that the directors had a motive to act in “bad faith.” To the contrary, the Court observed, the directors had a personal financial interest in obtaining the best deal possible, in alignment with the company’s public stockholders. Accordingly, the Court granted defendants’ motion to dismiss plaintiffs’ cause of action for breach of fiduciary duty.
The Court also dismissed the cause of action for aiding and abetting breach of fiduciary duty against KeyBanc. It found that there were no allegations that KeyBanc actively concealed information from the Board. In addition, KeyBanc did not aid or abet the Board’s alleged breach of fiduciary duty as a result of providing “limited services.” Boiled to its essence, plaintiffs were arguing that “an investment bank must provide all or none of the financial services it offers in valuing and marketing a company.” The Court disagreed and recognized that “Revlon makes clear that there is no single way to sell a company — no single financial service is required.” Accordingly, the Court dismissed plaintiffs’ aiding and abetting a breach of fiduciary duty claim.
The decision in Houseman confirms that stockholders face a high pleading burden when challenging a disinterested board’s decision to approve a strategic transaction. Although the Court recognized that the Board’s process was “less than optimal,” plaintiffs’ allegations could state a claim only for a violation of the fiduciary duty of care. The board’s decision to proceed with the transaction despite several procedural deficiencies did not amount to an “extreme set of facts” sufficient to support a claim for breach of the duty of loyalty.
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What Monkey Selfies, Elephant Art, Catchphrases and DNA Have in Common
The U.S. Copyright Office this week unveiled a draft of its latest administrative manual, a 1,222-page guide for agency staff, applicants, courts, lawyers and scholars or anybody who has a question about copyright procedures and practices but was too afraid to ask.
Burwell v. Hobby Lobby: Religion, Contraception, and Regulation
The Supreme Court's recent decision in Burwell v. Hobby Lobby invokes passionate debates and fiery discourse. At the spearhead of exchange are questions about reproductive, First Amendment, and healthcare rights. On this episode of Lawyer 2 Lawyer, host Bob Ambrogi brings light to these issues along with Emily Martin from the National Women's Law Center and Elizabeth Slattery from the Heritage Foundation. Together they discuss the application of the Religious Freedom Restoration Act vs. invoking a Constitutional argument centered around the First Amendment. Tune in to learn more about the 4 debated methods of contraception, Justice Ginsburg's dissent, and religious rights of corporations.
Emily Martin is the Vice President and General Counsel at the National Women's Law Center, where she undertakes cross-cutting projects addressing women's health, economic security, and education and employment opportunities. Prior to joining the Center, Ms. Martin served as Deputy Director of the Women's Rights Project at the American Civil Liberties Union and served as a law clerk for Senior Judge Wilfred Feinberg of the U.S. Court of Appeals for the Second Circuit and Judge T.S. Ellis, III, of the Eastern District of Virginia. She has served as Vice President and President of the Fair Housing Justice Center, a non-profit organization in New York City.
Elizabeth Slattery is a senior legal policy analyst in The Heritage Foundation's Edwin Meese III Center for Legal and Judicial Studies. She researches a variety of issues such as the rule of law, the First Amendment, civil rights and equal protection, and the scope of constitutional provisions. Ms. Slattery also studies and writes about cases before the Supreme Court, judicial nominations, and the proper role of the courts. She manages the Meese Center's appellate advocacy programs, including moot court sessions to prepare litigators for oral argument before the Supreme Court. Ms. Slattery's analysis and commentary have appeared in The Washington Times and The Washington Examiner, as well as outlets including National Review Online, The Daily Signal, The Daily Caller and U.S. News and World Report.
Special thanks to our sponsor, Clio.
Emily Martin is the Vice President and General Counsel at the National Women's Law Center, where she undertakes cross-cutting projects addressing women's health, economic security, and education and employment opportunities. Prior to joining the Center, Ms. Martin served as Deputy Director of the Women's Rights Project at the American Civil Liberties Union and served as a law clerk for Senior Judge Wilfred Feinberg of the U.S. Court of Appeals for the Second Circuit and Judge T.S. Ellis, III, of the Eastern District of Virginia. She has served as Vice President and President of the Fair Housing Justice Center, a non-profit organization in New York City.
Elizabeth Slattery is a senior legal policy analyst in The Heritage Foundation's Edwin Meese III Center for Legal and Judicial Studies. She researches a variety of issues such as the rule of law, the First Amendment, civil rights and equal protection, and the scope of constitutional provisions. Ms. Slattery also studies and writes about cases before the Supreme Court, judicial nominations, and the proper role of the courts. She manages the Meese Center's appellate advocacy programs, including moot court sessions to prepare litigators for oral argument before the Supreme Court. Ms. Slattery's analysis and commentary have appeared in The Washington Times and The Washington Examiner, as well as outlets including National Review Online, The Daily Signal, The Daily Caller and U.S. News and World Report.
Special thanks to our sponsor, Clio.
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Federal judge rules Florida same-sex marriage ban unconstitutional
[JURIST] A judge for the US District Court for the Northern District of Florida [official website] ruled [opinion, PDF] Thursday that Florida's ban on same-sax marriage is unconstitutional and the state must recognize same-sex couples that were lawfully married in other states. The combined cases of Brenner v. Scott and Grimsley v. Scott involve 22 plaintiffs that currently reside in Florida, including nine same-sex couples who were lawfully married in other states, the surviving spouse of a same-sex couple married...
LawBiz® Legal Pad: What Are Clients Looking For Anyway?
Ed talks about lawyers who provide solutions and who communicate effectively and often with their clients.
Source: http://feeds.lexblog.com/~r/LawBizBlog/~3/phF8NiBJ0pc/
LawBiz® Legal Pad: Tips for Increased Revenue
Ed offers 5 ways to increase your law firm’s revenue.
1. Emphasize collections.
2. Hire lateral lawyers to meet specific demands, a new practice area, a new need.
3. Leverage technology.
4. Create a cooperative compensation model that emphasizes the law firm as an institution.
5. Outsource functions that are better done by others. Delegate.
Source: http://feeds.lexblog.com/~r/LawBizBlog/~3/2cO-Ajtv738/
North Carolina judge rules private school voucher program unconstitutional
[JURIST] A North Carolina judge ruled [video] Thursday that North Carolina's school voucher program, known as Opportunity Scholarships [official website] is unconstitutional. Judge Robert Hobgood of the Wake County Superior Court specifically ruled that the program violates article 1 section 15 and article 9 section 2(1) of the North Carolina constitution [text], ordering a permanent injunction against the Opportunity Scholarships program. Hobgood said:The plaintiffs—public schools grades K through 12 and the taxpayers of North Carolina—will suffer irreparable harm if the...
Monday, August 25, 2014
Dry Times: How to Deal with the Impact of California’s Drought on Critical Commercial Agreements
On January 17, 2014, California Governor Jerry Brown declared a “State of Emergency” in California due to the severity of drought conditions across the State. Since then, the California drought continues to be severe and unprecedented in recent years, and is taking a pervasive toll on California residents, businesses, farm land, foliage and wildlife. Despite recent rainfall, local water districts and the State have called for voluntary, and in some locales, mandatory reduction in consumption of water. After considering the severe human toll, anyone doing business with an entity located in California (or other western states experiencing similar drought conditions) that requires water for any business purpose, particularly farmers in Northern and Central California where there are fewer alternative sources of water, must be concerned about inventory and the impact of the drought on its supply chain. Can my California contract counterparty fulfill its obligations to produce sufficient quantities of produce, dairy products, steel, flowers, honey, etc., to meet my contract needs? Waiting for a delivery that never arrives, is delayed or arrives in lower quantity or, worse yet, quality, is not a viable option. The key is to be prepared to find an alternative supplier so that production goals can be timely met. Successful navigation of these issues requires careful contract drafting and contemplation in advance of new agreements, and critical analysis of existing contracts. This article highlights the pertinent legal mechanisms at work and options for your business.
Section 2-609 of the Uniform Commercial Code (the “UCC”) follows the longstanding common law derived principle of allowing the concerned recipient of supplies to demand adequate assurance of its supplier’s ability to perform. The law adopted in most states provides that “when reasonable grounds for insecurity arise with respect to the performance of either party the other may in writing demand adequate assurance of due performance and until he receives such assurance may if commercially reasonable suspend any performance for which he has not already received the agreed return.” For purposes of Section 2-609, “reasonableness” will be “determined according to commercial standards” between merchants. A failure by the recipient of a justified demand for adequate assurance to provide such assurances within a reasonable time, not to exceed thirty days, will be treated as a repudiation of the contract.
The key for those seeking assurances of performance is to describe with as much specificity as possible the reasonable grounds for “insecurity.” In the case of the drought, one does not have to look far to find news articles describing the historic drought in significant detail and showing the hardest hit regions. The form of the demand need not be a formal lawyers’ letter, but can be a friendly request to a good, long term vendor asking for assurances that product of the quality and quantity the recipient has come to expect will continue to be delivered within the time expected. Setting a reasonable time frame for a response to the demand is also important and will depend upon the imminence of the need for or expected receipt of goods.
The form and clarity of the response will be key and is often heavily litigated. Anything short of a prompt promise by a supplier to meet delivery and production obligations is a red flag and may be grounds for termination of an existing contract to purchase goods from that supplier; however, an unjustified early termination of contract rights is a breach, so a party considering terminating a supplier under an agreed contract should consider the risks of termination, particularly where the supplier is attempting to retain the right to supply. Further, before demanding adequate assurance, the recipient may wish to investigate an alternative supply chain in case the response is insufficient and goods need to be reordered from another source.
Significantly, a supplier in dire financial straits that ends up in bankruptcy may still be the recipient of a demand for adequate assurance of its ability to perform. Indeed, asking a debtor in bankruptcy for adequate assurance of its ability to perform its contractual obligations is a prudent business approach, though the ability of the non-debtor contract party to terminate is limited (proceeding by motion before the bankruptcy court to terminate is often the appropriate option if adequate assurance is not received or if a debtor confirms that it cannot perform).
Where a contract calls not just for supplies but for services, contract parties should look beyond the UCC to the Restatement (Second) of Contracts (“Restatement”). Section 251 of the Restatement provides in part that “where reasonable grounds arise to believe that the obligor will commit a breach by non-performance that would of itself give the obligee a claim for damages for total breach,” then the “obligee may demand adequate assurance of due performance and may, if reasonable, suspend any performance for which he has not already received the agreed exchange until he receives such assurance.” In the Restatement, as in the UCC, failure to provide such assurance within a reasonable time is treated as a repudiation of the contract.
From the other perspective, a supplier who fears that it will be unable to meet the terms of its contract to supply goods in sufficient quantity, quality, or price, particularly where the costs of producing have markedly increased due to the impact of the drought, may attempt to invoke a claim of force majeure. Many contracts have a force majeure provision that excuses performance (or non-performance) upon the occurrence of events such as (i) acts of God (e.g., severe droughts and storms) and (ii) man-made events (e.g., wars or certain acts of governments). Employee strikes may also be viewed as a basis for a finding of force majeure in some contracts.
For the purposes of California law, the California Supreme Court gave the definitive definition of a force majeure in Pacific Vegetable Oil Corp. v. C. S. T., Ltd., 29 Cal. 2d 228 (1946). The Court explained that “‘Force majeure,’ or the Latin expression ‘vis major,’ is not necessarily limited to the equivalent of an act of God. The test is whether under the particular circumstances there was such an insuperable interference occurring without the party’s intervention as could not have been prevented by the exercise of prudence, diligence and care.” Id. at 238.
Additionally, acts of God can be involved in related “impossibility” scenarios. For example, in Squillante v. California Lands, Inc., 5 Cal. App. 2d 89 (1935), the California Court of Appeal excused a grower from having to deliver a full quantity of grapes under an excuse of impossibility due to drought conditions. There, the contract stipulated a certain quality and variety of grape. The drought made it impossible for that grower to grow grapes of the sufficient quality and variety, and therefore the court held that the grower could not be compelled to perform impossibilities and that it could not be held liable in damages for its failure to comply with the contract because the failure resulted from no fault of its own. (The court also stressed the importance of the “grower” not being a “dealer” of grapes, in that they suggest that a dealer may not have been so excused.) While this case dates from 1935, it is apparently still good law.
The scenarios above do not address the situation where a supplier is not necessarily prevented from supplying, but the cost of supplying increases so significantly higher than anticipated, that performance under the contract becomes commercially “impracticable.” While related to the concepts of force majeure and impossibility, impracticability is a distinct problem. Section 2-615 of the UCC provides that, absent a supplier assuming a greater obligation, “delay in delivery or non-delivery in whole or in part by a seller . . . is not a breach of his duty under a contract for sale if performance as agreed has been made impracticable by the occurrence of a contingency the non-occurrence of which was a basic assumption on which the contract was made or by compliance in good faith with any applicable foreign or domestic governmental regulation or order whether or not it later proves to be invalid.”
A successful defense of impracticability also requires that seller “notify the buyer seasonably that there will be delay or non-delivery,” and, in the case of reduced or limited capacity to perform, that the seller then allocate production and deliveries among his customers in a “fair and reasonable” manner.
In the Official Comments to UCC Section 2-615, the American Law Institute explained that generally, “increased cost alone does not excuse performance unless the rise in cost is due to some unforeseen contingency which alters the essential nature of the performance. Neither is a rise or a collapse in the market in itself a justification, for that is exactly the type of business risk which business contracts made at fixed prices are intended to cover. But a severe shortage of raw materials or of supplies due to a contingency such as war, embargo, local crop failure, unforeseen shutdown of major sources of supply or the like, which either causes a marked increase in cost or altogether prevents the seller from securing supplies necessary to his performance, is within the contemplation of this section” (emphasis added).
Whether a defense of impracticability rests on the increased cost resulting from shortages of water or other inputs affected by the drought, or from a governmental regulation or order limiting access to water, impracticability clearly represents an intractable problem absent clear contract drafting and advice. Contract drafters have several tools at their disposal to more clearly delineate the parties’ risk allocation. For example, properly constructed force majeure clauses should address the risk of supervening events expressly in the agreement. Additionally, “hell or high water” provisions make it clear the parties’ intend to implacably bind themselves despite any contingencies.
When problems raising impossibility, force majeure, or impracticability issues arise, the key will be managing expectations. If buyers suspect there are delays or other issues on the horizon, they should not hesitate to seek adequate assurances of performance from their suppliers. Likewise, if there are substantial additional costs or problems in maintaining the quality or quantity or the timing of supply, suppliers should notify their buyers as soon as practicable to adequately manage the relationship in the near term and maintain the relationship as the drought subsides and production gets back on track.
Think ahead when drafting important supply contracts. Read your contracts closely when a problem arises and reach out to counterparties early to address potential problems before they arise or worsen.
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This Week on Legal Talk Network (7/14/14)
Hello. This is Laurence Colletti for This Week on Legal Talk Network. On Monday, Sharon Nelson and Jim Calloway from the Digital Edge talk to expert Tom Spahn about the ethics involved when a law firm breaks up or a lawyer wants to leave. Here's a preview- On Wednesday, The Legal Toolkit's Jared Correa continues our Special Report series from the MASS LOMAP 4th Annual Super-Marketing Conference and interviews Joyce Brafford from NCBA on how to manage social media to improve client relationships. Thursday, Heidi Alexander returns to the conference to speak to Kelli Proia from Lawducate about the how to run and market your law firm like a regular business. And on Friday, we finish the week with The Kennedy-Mighell Report - our hosts Dennis Kennedy and Tom Mighell discussing the new 3rd edition of Tom's book "iPad in One Hour for Lawyers" - what's happening with the iPad now and what to expect in the future. So tune in. It's all right here . . . This Week on Legal Talk Network.
Source: http://traffic.libsyn.com/sr/This_Week_on_LTN_7-14_Audio_Only.mp3
BofA Deal Marks End Of an Era
With Bank of America Corp.'s $16.7 billion settlement over the marketing and sale of subprime residential mortgage-backed securities, prosecutors closed out the largest remaining government enforcement actions stemming from the financial crisis.
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Delaware Court of Chancery Underscores Heightened Pleading Standard Necessary to Support a Claim for Breach of Fiduciary Duty In Connection With a Merger
In Houseman v. Sagerman, C.A. No. 8898-VCG, 2014 WL 1478511 (Del. Ch. Apr. 16, 2014), the Delaware Court of Chancery (Glasscock, V.C.) granted, in part, a motion to dismiss filed by certain directors and the financial advisor of Universata, Inc. (“Universata” or the “Company”) arising out of the Company’s merger with HealthPort Technologies, LLC (“HealthPort”). The Court’s analysis serves as a reminder that a stockholder plaintiff must plead an “extreme set of facts” to support a claim for breach of fiduciary duty against a corporation’s directors arising out of allegations that the directors breached their duty of loyalty as a result of the process used to approve a strategic transaction. Although the allegations suggested that Universata’s board of directors (the “Board”) did not conduct a “perfect” process, plaintiffs did not plead facts sufficient to show that the Board “utterly failed to undertake any action to obtain the best price for stockholders.” As a result, the Court dismissed plaintiffs’ claim for breach of fiduciary duty.
Universata was a Delaware corporation focused on providing services with respect to medical records for hospitals and clinics. In 2006, plaintiffs sold a previous business known as Med-Legal, Inc. to Universata and obtained shares in the Company and put rights to those shares whereby a director of the Company, Thomas Whittington, committed to repurchase plaintiffs’ shares pursuant to the put rights.
In 2010, HealthPort approached Universata regarding a potential acquisition. In response to HealthPort’s indication of interest, the Board consulted with its legal advisors and with KeyBanc Capital Markets, Inc. (“KeyBanc”), which it hired as its financial advisor. Due to expense, the Board limited KeyBanc’s engagement to assisting in diligence and identifying additional parties with an interest in acquiring the Company. Notably, the Board did not request that KeyBanc prepare a fairness opinion on the proposed transaction.
In May 2011, the Board approved an Agreement and Plan of Merger between Universata and HealthPort. As a result of the merger, the stockholders of Universata would receive $1.02 per share. In addition the stockholders of Universata would receive stock in a new corporation known as “TechCo” created to hold a patent previously held by Universata. At the meeting approving the merger, KeyBanc advisors informally gave the opinion that the merger price was within the range of reasonableness. Because the directors who approved the merger collectively held a majority ownership interest in the Company, the Board did not solicit a stockholder vote to approve the transaction. Nevertheless, at the same time as the Board approved the merger, it amended a previous equity incentive plan to treat all outstanding stock options like outstanding shares upon a change in control. In addition, the Board voted to vest all outstanding “in the money” warrants for the purchase of shares in the Company.
Plaintiffs, who were a director of the Company and his wife, approved the letter of intent with HealthPort, but did not vote or execute a consent in favor of the merger. Two years after the merger closed, plaintiffs filed a verified complaint against certain directors of Universata and against KeyBanc asserting causes of action for (i) breach of fiduciary duty against the director defendants; (ii) an accounting against director Whittington; (iii) quasi-appraisal against Universata and the director defendants; (iv) aiding and abetting a breach of fiduciary duty against KeyBanc; and (v) for failing to obtain consideration for alleged “litigation assets.” Defendants moved to dismiss.
The Chancery Court denied defendants’ motion to dismiss the accounting claim. With respect to the other claims, the Court granted, in part, and denied, in part, defendants’ motion to dismiss.
Plaintiffs’ breach of fiduciary duty claim was premised on the allegation that the director defendants acted in bad faith by “knowingly and completely fail[ing] to undertake their responsibilities” to maximize shareholder value. Nevertheless, the Court noted that the directors satisfied their duty of loyalty by acting on the advice of legal counsel and hiring KeyBanc as their financial advisor. Moreover, the directors were entitled to decide that the expense of obtaining a fairness opinion outweighed its benefits. The allegations in the complaint showed that Board considered bids from several interested parties, negotiated with HealthPort regarding the deal terms, and ultimately obtained from HealthPort “everything that [the Board] felt [it] could get.” Plaintiffs failed to allege any facts to show that the directors had a motive to act in “bad faith.” To the contrary, the Court observed, the directors had a personal financial interest in obtaining the best deal possible, in alignment with the company’s public stockholders. Accordingly, the Court granted defendants’ motion to dismiss plaintiffs’ cause of action for breach of fiduciary duty.
The Court also dismissed the cause of action for aiding and abetting breach of fiduciary duty against KeyBanc. It found that there were no allegations that KeyBanc actively concealed information from the Board. In addition, KeyBanc did not aid or abet the Board’s alleged breach of fiduciary duty as a result of providing “limited services.” Boiled to its essence, plaintiffs were arguing that “an investment bank must provide all or none of the financial services it offers in valuing and marketing a company.” The Court disagreed and recognized that “Revlon makes clear that there is no single way to sell a company — no single financial service is required.” Accordingly, the Court dismissed plaintiffs’ aiding and abetting a breach of fiduciary duty claim.
The decision in Houseman confirms that stockholders face a high pleading burden when challenging a disinterested board’s decision to approve a strategic transaction. Although the Court recognized that the Board’s process was “less than optimal,” plaintiffs’ allegations could state a claim only for a violation of the fiduciary duty of care. The board’s decision to proceed with the transaction despite several procedural deficiencies did not amount to an “extreme set of facts” sufficient to support a claim for breach of the duty of loyalty.
32-Year-Old Man Busted For Possession Of Alcohol While Under The Legal Age?
How is it possible for a 32-year-old man to get busted for underage drinking? Here’s how: Commit the crime [allegedly] when you are underage, then let a few years go by. Doh! As reported by The Hunterdon County Democrat (New Jersey):
Patrolman Tim McGuire stopped on Route 513 by the Route 78 interchange to help with a disabled vehicle Monday around 7:30 p.m.
Ummm … Thanks Officer, but I’m good?
A computer check on the license of driver Philip Rowles, of Ridley Park, Pa., turned up two arrest warrants issued by Camden City Municipal Court and Woolwich Joint Court in Gloucester County, police said. One warrant was for failing to appear on a previous traffic summons for driving without insurance, the other for possession of alcohol by a person while under the legal age.
Once again reinforcing the notion that, if you just ignore your troubles, they’ll go away! Poof! Here’s the source.
Source: http://rss.justia.com/~r/LegalJuiceCom/~3/i0l2L9QQRwE/zcvx.html
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U.S. Supreme Court Decision Gives More Latitude to Defeat Securities Fraud Class Action Lawsuits Prior to Class Certification
In Halliburton Co. v. Erica P. John Fund, Inc., No. 13-317, __ S Ct. __, 2014 WL 2807181 (U.S. June 23, 2014), the United States Supreme Court refused to overturn the landmark decision Basic v. Levinson, but ruled that securities class action defendants may rebut the fraud-on-the-market presumption of investor reliance before the class certification stage by demonstrating lack of price impact.
Plaintiff alleged that Halliburton Co. (“Halliburton”) and its CEO made a series of public misstatements concerning the company’s liabilities and revenues and the cost savings expected from a recent merger. These misstatements purportedly inflated Halliburton’s stock price. According to plaintiff, when Halliburton eventually revealed the truth, the stock price fell, injuring plaintiff and other investors who purchased at the allegedly inflated prices. Plaintiff, on behalf of a putative class, asserted claims against Halliburton and its CEO for violations of Section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b), and Securities & Exchange Commission Rule 10b-5, 17 C.F.R. § 240.10b-5, promulgated thereunder.
Plaintiff moved for class certification under Rule 23 of the Federal Rules of Civil Procedure, seeking to satisfy Rule 23(b)(3)’s requirement that common questions predominate by invoking the fraud-on-the-market presumption of reliance. That presumption, when it applies, allows for common proof of reliance on the theory that investors rely upon the integrity of a stock’s trading price and, when the stock trades in an efficient market, such price reflects all public information, including any alleged material misstatements. See Basic, Inc. v. Levinson, 485 U.S. 224, 241-42 (1988).
The district court initially denied plaintiff’s class certification motion, and the Fifth Circuit affirmed. But the Supreme Court vacated that judgment, concluding that securities fraud plaintiffs need not prove loss causation – a causal connection between the defendants’ alleged misrepresentations and the plaintiffs’ economic losses – at the class certification stage in order to invoke Basic’s presumption of reliance.
On remand, Halliburton argued that class certification was nevertheless improper because the evidence presented also showed that the alleged misrepresentations did not actually affect its stock price. According to Halliburton, by demonstrating the absence of so-called “price impact,” it had rebutted the Basic presumption of investor reliance. The district court disagreed and certified the class. The Fifth Circuit affirmed, finding that Halliburton could use price impact evidence to rebut the Basic presumption only at trial, not at the class certification stage.
Two issues were presented to the Supreme Court the second time around. First, whether the Court should overrule or modify Basic’s presumption of reliance. And, second, if not, whether defendants should nonetheless be afforded an opportunity in securities class action cases to rebut the presumption at the class certification stage, by showing a lack of price impact.
With respect to the first issue, the Supreme Court declined to overturn or modify Basic. The Court found that none of the arguments that Halliburton presented so discredited the Basic decision to constitute a “special justification” for overruling it. The Court remarked that Basic’s presumption of reliance was not inconsistent with recent decisions more strictly construing the Rule 10b-5 cause of action, including Stoneridge Investment Partners, LLC v. Scientific Atlanta, Inc., 552 U.S. 148 (2008), or decisions governing class action certification, including Wal-Mart Stores, Inc. v. Dukes, 564 U.S. ___ (2011), which require plaintiffs to prove, not merely plead, that the proposed class satisfies each requirement of Rule 23.
The Court also declined to modify the prerequisites for invoking the fraud-on-the-market presumption by requiring plaintiffs to have to prove “price impact” at the class certification stage.
But, in the final part of its majority opinion, the Court dealt a blow to securities fraud class action lawsuits. The Court agreed with Halliburton that defendants must be afforded the opportunity to rebut the fraud-on-the-market presumption “before class certification” with evidence of a lack of price impact. The Court found there is no reason to prohibit a defendant from presenting evidence showing that an alleged misrepresentation did not actually affect the stock’s price and, consequently, that the Basic presumption does not apply.
Notably, Justice Thomas, submitted an opinion concurring in judgment (joined by Justices Scalia and Alito), but voicing the opinion that Basic should be overruled. The opinion suggested that economic realities and the Supreme Court’s subsequent jurisprudence have undermined the foundations of the Basic presumption, rendering it obsolete. Citing Stoneridge, Justice Thomas opined that “Basic should be overruled in favor of the straightforward rule that ‘[r]eliance by the plaintiff upon the defendant’s deceptive acts’—actual reliance, not the fictional ‘fraud-on-the-market’ version— ‘is an essential element of the §10(b) private cause of action.’”
While the majority Supreme Court opinion did not do away with the Basic presumption, it did open the door for securities fraud defendants to defeat class-wide showing of reliance at an earlier stage. That the Supreme Court ruled that defendants must be given an opportunity “before class certification” to defeat the presumption with evidence of lack of price impact, and did not say “at the class certification stage” is curious. Perhaps, going forward, defendants may be afforded the opportunity to demonstrate lack of price impact at the earliest stages of a case, including possibly the pleadings stage.
CMS Medicare Set-Aside Review and Approval Process
The Medicare Set-Aside Review Process dates all the way back way back to 1980, when The Medicare Secondary Payer Act was enacted. Fast forward to 2014, where the Insurance industry is still waiting for promised improvements. Ringler Radio host, Larry Cohen along with colleague, Tom Blackwell, Vice President and Program Director of Ringler Medicare Solutions, Inc. (RMS), take a look at CMS Medicare Set-Aside Review, the approval process and whether it is still relevant.
Source: http://traffic.libsyn.com/ringler/RR_051514_CMS-MSA.mp3
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Location, Location, Location – No, Not Real Estate … Tweeting
Everyone has heard the old saying about real estate – location, location, location. If you didn’t think that this applies to tweeting, you will now. As reported by The Arab Times:
The Misdemeanor Court sentenced a Twitter user to two months in prison with hard labor and temporary compensation for insulting a poet. Attorney Hussein Al-Asfour, lawyer for the plaintiff, pointed out in court that the accused tweeted statements deemed offensive to the poet; especially since the tweets were about the latter’s personal life. The accused posted the offensive tweets again after the plaintiff announced his plan to contest the parliamentary elections. During investigations, the defendant refuted the allegation that he tweeted the offensive statements; claiming another person used his account. However, when the complaint was referred to the Electronic Crimes Department, it was found out the accused owns the account and he posted the insulting statements repeatedly. Taking these circumstances into consideration, Al-Asfour asked the court to impose the harshest penalty on the accused.
Yikes.
Source: http://rss.justia.com/~r/LegalJuiceCom/~3/cB_aLNBUOF0/sfadf.html
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