Blawgletter won the honor to host Blawg Review #201, which debuts March 2.  How did the laurel fall to us?  Three words:  Texas Independence Day.

The Lone Star state declared itself free of Mexican hegemony 173 years ago come Monday at Washington-on-the Brazos.  (Yes, such a place does exist.)  The Texas Revolution had started on October 2, 1835, and it ended a bit over six months later, with the Battle of San Jacinto, in which Sam Houston's Texian troops surprised and then massacred the much larger Mexican force under Santa Anna.  The battle lasted 18 minutes.

But we digress.

Blawg Review lists future hosts by date (always a Monday) as well as "available" dates.  The editors of Blawg Review showed March 2 as one of the available ones and sweetened the bait (for us at least) by noting that it falls on that glorious day in the late winter of 1836.

Now we need your help, dear and loyal readers.  Please email barrycbarnett@gmail.com with links to blawg posts you've found especially (1) cogent, (2) useful, (3) funny, (4) pompous, (5) sexy, (6) Texas-centric, or (7) otherwise Blawg Review #201-worthy.  Did we mention sexy?

Don't concern yourself with whether or not your recommendations have nothing to do with the state that proclaims "Friendship" its motto, the mockingbird the state bird, and the bluebonnet the state flower.  Texas Independence Day may furnish the theme, but please trust us when we say we'll figure out a way to fit in any truly good stuff, regardless of its subject matter.

God bless you, and God bless the United States of America.  But especially Texas.

Y'all come!

FeedIcon And, within Texas, Nacogdoches.

Joseph P. Nacchio, ex-CEO of Qwest Communications, caught a break last year when a Tenth Circuit panel tossed his conviction on charges he traded on inside information.  The panel voted 2-1 to send the case back for a new trial on the ground that the trial judge improperly excluded testimony about Nacchio's trading patterns.  The evidence, Nacchio argued, would have given an innocent explanation for the timing of his $52 million in Qwest stock sales.

The full court decided to consider the appeal.  Yesterday, it vacated the reversal and affirmed the conviction.  United States v. Nacchio, No. 07-1311 (10th Cir. Feb. 25, 2009) (en banc)

Blawgletter notes the small irony that the trial judge, Edward Nottingham, resigned last year after the Tenth Circuit investigated allegations that he did things like getting blind drunk in public and cavorting with prostitutes.

FeedIcon Our feed sometimes feels groovy.  Like now.

The online version of Fortune has an article about an unusual continuing legal education class – "Madoff 101:  Total Immersion for Lawyers". 

Senior Editor Roger Parloff includes this bit:

Those who sustained particularly heavy losses and who can afford to bring their own individual cases usually prefer to do so, rather than joining class actions. In an individual suit the plaintiff exercises more control over his suit and can pay his attorney only hourly fees rather than a contingent fee amounting to a healthy percentage – usually 25% or more – of the entire recovery.

Blawgletter concurs in part and dissents in part.

People who lost a bundle to Madoff, Stanford, and their ilk often do opt to hire their own counsel to prosecute claims against culpable participants, aiders, and abetters outside of a class action.

But a Great Many don't go for shelling out "only hourly fees", which could cost hundreds of thousands, instead of a contingent fee, which comes out of a recovery by judgment or settlement.  Some may like a hybrid arrangement — lower hourly rates plus a lower contingent fee percentage — best.

Besides, the hourly fee must die.

FeedIcon Our feed runs circles.  We don't know around what.

TomToles 
Tom Toles cartoons for The Washington Journal.

I'll not only rescue your cat, but I'll get her a job, reduce her energy use, send her to college, get her affordable health care, decrease her debt, and end her war with the neighborhood dog.  But let's start with the rescue.

Tom Toles, Feb. 26, 2009, The Washington Post (cartoon depicting Barack Obama as fireman preparing to deploy ladder on kitty retrieval-from-tree mission).

FeedIcon Our feed laughs best.

____________________________________

Bonus Toles quote (in cartoon showing Bobby Jindal as ship captain):  "Do you realize how much lifeboats cost?"

The U.S. Supreme Court continued its streak of handing victories to antitrust defendants today as it dealt a death blow to "price squeeze" claims.  Pacific Bell Telephone Co. v. linkLine Communications, Inc., No. 07-512 (U.S. Feb. 25, 2009).

The plaintiffs provided digital subscriber line (DSL) service at retail,  But, because they didn't have their own network, they bought access to the equipment necessary to furnish the service from an outfit that did, Pacific Bell, which did business as AT&T.  These networkless DSL suppliers accused AT&T of violating Sherman Act section 2, which deems unlawful any single-firm conduct that unreasonably restrains trade by monopolizing or trying to monopolize a market.  They said, among other things, that AT&T "squeezed" them into penury by charging them a too-high wholesale price for network access while billing a too-low retail price to AT&T DSL customers.  The poor fellows couldn't make a profit!

The 5-4 majority held that the district court and Ninth Circuit both erred in concluding that the price-squeezees stated a viable antitrust claim.  "In Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398, 410 (2004)," Chief Justice Roberts noted for the Court, "we held that a firm with no antitrust duty to deal with its rivals at all is under no obligation to provide those rivals with a 'sufficient' level of service."  linkLine, slip op. at 3.  As AT&T likewise lacked an "antitrust duty" to deal with plaintiffs, it could deal with him however it pleased antitrust-wise, including by charging them confiscatory prices for network access.

On the retail end of the price squeeze, the Court observed, precedents foreclosed antitrust scrutiny of low prices unless they fell below an appropriate measure of cost.  Thus the Court said it said in Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 222-24 (1993).  linkLine, slip op. at 4.  The competing DSL merchants hadn't alleged below-cost pricing to retail customers and thus couldn't complain about that pincer of the squeezing unit either.

The majority dispatched the price squeeze theory in a few pages and might've stopped there.  But it went on to share ruminations on "[i]nstitutional concerns" about courts' regulating markets and the absence of a "safe harbor" for pricing behavior of aspiring monopolists.  linkLine, slip op. at 12 & 13.

Justices Breyer, Ginsburg, Souter, and Stevens concurred in the judgment only.  They noted that the plaintiffs conceded error on the price squeeze claim and asked only for a remand to consider a new "predatory pricing" claim.  And they criticized the majority for needlessly answering "hypothetical questions".

Blawgletter suspects that the tag line for linkLine will come on a neat three-word package:  "no antitrust duty", a phrase that doesn't appear in Trinko or any other Court decision.  No duty to do this, no duty to do that.  And we imagine that The Current Majority will not decide a single case in which they conclude that a section 2 defendant violated any "antitrust duty" whatever.

Feed-icon-14x14 Our feed will match any rival's price!

The Third Circuit today reversed dismissal of a New Jersey-only class action alleging that American Express violated the New Jersey Consumer Fraud Act by misrepresenting its "cash back" promotion for holders of the Amex Blue Card.  The district court tossed the case on the ground that the card member agreement, which provided for application of Utah law, required individual arbitration of the claims.  The Third Circuit held that:

  • The federal Arbitration Act doesn't pre-empt state law unconscionability principles;
  • Controlling New Jersey case law might bar enforcement of the no-class-arbitration clause as unconscionable and preclude application of contrary Utah law; and
  • The district court on remand should consider whether "the claims at issue are of such a low value as effectively to preclude relief if decided individually".

Homa v. Am. Express Co., No. 07-2921 (3d Cir. Feb. 24, 2009).

For a list of other recent cases that held likewise, lookie here.

Feed-icon-14x14 Arbitration uber alles?

The Bloomberg media empire keeps growing.

Now Bloomberg offers a variety of law reports.  You can access the current issues via links here:

Antitrust & Trade Monthly February 2009
Asia Pacific Law Bi-monthly Jan/Feb 2009
Banking & Finance Monthly February 2009
Bankruptcy Weekly February 17, 2009
Class Actions Monthly February 2009
Corporate Law Weekly February 17, 2009
Director & Officer Liability Monthly February 2009
Employee Benefits Bi-weekly February 9, 2009
Environmental Law Quarterly Fall 2008
European Law Monthly February 2009
Executive Compensation Monthly February 2009
Health Law Monthly February 2009
Immigration Law Monthly February 2009
Insurance Law Weekly February 17, 2009
Intellectual Property Weekly February 17, 2009
Labor & Employment Weekly February 17, 2009
Litigation Weekly February 17, 2009
Mergers & Acquisitions Bi-weekly February 17, 2009
Privacy & Information Monthly February 2009
Real & Personal Property Quarterly Fall 2008
Risk & Compliance Monthly February 2009
Securities Law Weekly February 17, 2009
Sustainable Energy Monthly February 2009

"Professional" reports provide links to source material but cost a subscription fee.  Of course.

Feed-icon-14x14 Our feed likes free stuff.

SanDiegoCourthouse 
Edward J. Schwartz U.S. Courthouse, San Diego, California. 

The Judicial Panel on Multidistrict Litigation has set a whopping nine matters on its docket for March 26, when Their Honors will assemble in San Diego to hear arguments that sometimes last 30 seconds.

The case list includes a couple of interesting-looking matters:

MDL No. 2027 — In re Satyam Computer Services, Ltd., Securities Litig.

MDL No. 2029 — In re Online DVD Rental Antitrust Litig.

Feed-icon-14x14 Talk fast — but clearly!

The Treasury Department has taken a shine to administering "stress tests" on financial institutions.  The exams will reveal the true state of their health — or lack of it.  Thus saith The New York Times.

You don't have to read between the lines to sense the skepticism:

Bank executives reached over the weekend said that the tests might not produce information that is very different from what regulators already know about the banks. The Federal Reserve already has hundreds of examiners on site at the largest banks, monitoring their businesses.

The article also points to "critics" who say that, despite billions in write-downs, "the major institutions still carry trillions of dollars in additional toxic assets and are too damaged to resume normal lending."

Blawgletter doubts that the results of stress tests will convince anyone.  The incentive to fudge — and thus to save billions inbailout loot — looks too powerful.  Unless of course the outcome reveals what Paul Krugman calls the banks' "zombiehood".

[The process reminds us of our system of deciding whether a federal judge should decline to handle a case on the ground that reasonable people might question his or her impartiality.  The judge himself/herself rules on the issue, subject to rare and deferential review.  But maybe that will change after the Supreme Court issues its opinion in Caperton v. Massey, which it hears next Tuesday.  Article here.]

We'd much rather see an item-by-item accounting of the banks' assets and liabilities than a report that gives the banks a low but passing grade.  Even without the names of the counterparties, the list would add some clarity to a blurry picture. 

At least then we'd know some actual facts.

FeedIcon Happy Monday!