Can you name anything less attractive than than someone’s claiming justification for an opinion with something along the lines of I told you so?

Blawgletter can’t, off the top of our head, either. And yet we now juxtapose our post about the need to dismantle Fannie Mae and Freddie Mac and the following WSJ quotation of ex-Federal Reserve chair Allen Greenspan:

They [Congress] should have wiped out the shareholders, nationalized the institutions with legislation that they are to be reconstituted — with necessary taxpayer support to make them financially viable — as five or 10 individual privately held units.

Feedicon14x14 Even a blind hog occasionally finds an acorn.

Blawgletter once again learned something new today.  The Federal Circuit — as it often does — furnished the instruction.

You’ve probably Googled your way to Wikipedia articles, right?  And in the process you’ve likely also viewed images and listened to music that someone has granted an "open license" that permits people to use within limits.  The Wikipedia item on a non-profit that encourages such licenses, Creative Commons, says:

The Creative Commons licenses enable copyright holders to grant some or all of their rights to the public while retaining others through a variety of licensing and contract schemes including dedication to the public domain or open content licensing terms. The intention is to avoid the problems current copyright laws create for the sharing of information.

The same thing happens with software.

In Jacobsen v. Katzer, No. 08-1001 (Fed. Cir. Aug. 13, 2008), the court considered whether violation of an open source license may entitle the copyright owner to sue for a preliminary injunction.  The copyright owner/open source licensor, Robert Jacobsen, authored software that allows users to program "decoder chips" in model train sets.  (The opinion doesn’t say, but we assume that the programming can make your locomotive do fancy stuff that it won’t do out of the box.  The JMRI webpage for the program, DecoderPro, doesn’t shed a lot more light.)  Jacobsen alleged that Matthew Katzer and Kamind Associates, developers of commercial software, violated "conditions" on the license, which required licensees to put in their software (among other things) JMRI copyright notices, references to a file that set forth the terms of the license, and a description of how the user had changed the DecoderPro software.  The district court deemed the restrictions mere "covenants", which entitled Jacobsen to damages for breach but not to more splendiferous relief under the Copyright Act for infringement.

The Federal Circuit reversed.  It noted that open source licenses don’t earn royalties but that they nonetheless may confer important economic benefits on the copyright owner.  These benefits include improvement of the work through others’ (gratis) contributions and enhancement of the licensor’s professional reputation.  The court also pointed out that, while a "covenant" implicates contract law, a "condition" on a license of a copyrightable work summons the protections of the Copyright Act. 

Arriving at the heart of the matter, the court emphasized that the license itself described its "intent" as "to state the conditions under which a Package may be copied" and that it used the universal code words for creating a condition — the old chestnut of transaction lawyers, "provided that".  The court thus vacated the order denying a preliminary injunction and remanded the case for consideration of the remaining requirements for preliminary equitable relief.

Feedicon14x14 Mmmm.  Chestnuts.

Wilsons
The Wilsons sued over her outing as a CIA agent.

A 2-1 panel of the D.C. Circuit today upheld an order dismissing the claims of Valerie Plame Wilson and her husband against Vice President Richard B. Cheney, former Senior Advisor to the President Karl C. Rove, former Assistant to the President and Chief of Staff to the Vice President I. Lewis "Scooter" Libby, Jr., and ex-Deputy Secretary of State Richard L. Armitage. 

The claims arose out of disclosure of her status as a covert operative for the Central Intelligence Agency in a July 14, 2003, column in The Washington Post and other papers by Robert Novak.  The majority held that the potential partial availability of remedies under the Privacy Act and considerations of national security, among other things, precluded recognition of a constitutional cause of action under Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388 (1971).  The court also concluded that the political question doctrine didn’t apply and affirmed dismissal of common law tort claims.   Wilson v. Libby, No. 07-5257 (D.C. Cir. Aug. 12, 2008).

The panel consisted of Chief Judge Sentelle and Circuit Judges Henderson and Rogers.  The Chief Judge wrote the majority opinion, and Circuit Judge Rogers authored a dissent on the Bivens issue.

The Washington Post published an Associated Press article.  Took ’em long enough.

Feedicon14x14 Our feed has no comment.  And will continue not having a comment.  On. This. Subject.  Only.

Today, the Ninth Circuit reversed the dismissal of a securities fraud complaint for failure to plead "loss causation" adequately under Dura Pharmaceuticals, Inc. v. Broudo, 544 U.S. 336 (2005).  The putative class of Gilead Sciences shareholders alleged that a decline in sales growth resulted from issuance of a Food and Drug Administration "warning letter" and that disclosure of the drop three months later pushed down the market price of Gilead Sciences shares. 

Under Bell Atl. Co. v. Twombly, 127 S. Ct. 1955 (2007), the Ninth Circuit observed in reversing, "[a] limited temporal gap between the time a misrepresentation is publicly revealed and the subsequent decline in stock value does not render a plaintiff’s theory of loss causation per se implausible."  Hartman v. Gilead Sciences, Inc. (In re Gilead Scences Securities Litig.), No. 06-16185 (9th Cir. Aug. 11, 2008).

Feedicon14x14_2 Presumably Gilead made some kind of balm.

On August 7, the Judicial Panel on Multidistrict Litigation issued a Transfer Order centralizing three nationwide class actions that comprise In re Countrywide Financial Corp. Mortgage Lending Practices Litig., MDL No. 1974, in the Western District of Kentucky.  "All actions share factual questions relating to whether Countrywide engaged in discriminatory residential lending practices, including the imposition of discretionary fees/charges, which increased the cost of financing and resulted in higher loans for minority borrowers than similarly situated non-minority borrowers."  Transfer Order at 1.  The Chairman of the Panel, John G. Heyburn II, will preside over pretrial proceedings in Countrywide.  Chief Judge Heyburn took no part in the Panel’s consideration of the transfer motion.

The Transfer Order looks like the first one to come out of the Panel’s July 31st session.  Many will follow.

Feedicon14x14 Btw, nobody asked for W.D. Ky.

An ever-alert member of the Blawgletterati, Jeff Seely, today forwarded a link to a WSJ — no, a NYT — article about the horrible risk of taking a case to trial. 

The linkage prompted Blawgletter to have a look at Jonathan D. Glater’s piece, "Study Finds Settling Is Better Than Going to Trial", where Mr. Glater notes that "mistakes were made more often in cases in which lawyers are typically paid a share of whatever is won at trial."  He observes that plaintiffs frequently reject settlement offers exceeding what a jury later awards them and also points out the now-common psychological understanding that people (defendants) hate to pay money more than they (plaintiffs) enjoy winning it.

We suspect a couple of things.  First, that the reference to contingent fee cases — all of them in New York state courts — relates mostly to personal injury lawsuits and not to commercial disputes, in which rationality plays a greater role.  And, second, that the plaintiff-side mistakes in going to trial result mainly from contingent fee clients’ (costless) incentive to roll the dice at their lawyers’ expense; also, to a lesser extent, the hourly lawyers’ incentive to keep billing.

We look ahead to reading the forthcoming paper in the Journal of Empirical Legal Studies.  It should come forth in the September issue.

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Homeforeclosure
Too many foreclosures = big losses at Fannie Mae.

On a day when Fannie Mae reported a $2.3 billion quarterly loss, the D.C. Circuit delivered some good news for mortgage lending behemoth’s directors.  The court upheld dismissal of a derivative case against them on the ground that the complaint didn’t adequately allege "demand futility".  Pirelli Armstrong Tire Corp. Retiree Medical Benefits Trust v. Raines, No. 07-7108 (Aug. 8, 2008) (applying Delaware law).

The plaintiffs alleged that insiders breached fiduciary duties to Fannie Mae by ignoring accounting irregularities and okaying a more than $31 million severance package for two top executives.  The derivative complaint, which asserted claims on behalf of Fannie Mae itself, alleged that no majority group of the 13 directors had the "independence" from the wrongdoers necessary to authorize legal action against them in the company’s name.  The court studied the complaint but found it didn’t rebut the strong presumption of independence.

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