Blawgletter’s bestest buddy from Boston Latin taught us a little joke — "semper ubi sub ubi".  Semper means always, ubi means where, and sub means under.  Hence:  Always where under where.  Get it?

Sub silentio signifies "under silence".  So our title above means to convey that the Sixth Circuit today decided an ERISA question now pending before the Supreme Court but didn’t note the question’s pendency.

The issue, as we have reported, concerns standing under ERISA to sue on behalf of a pension plan.  Section 502(a)(2) of the statute provides that plan beneficiaries, among others, may bring such a suit; but some defendants have persuaded a few courts that the section doesn’t mean what it says.  Au contraire.  The wrongdoing, they contended, must affect all plan participants and beneficiaries in pretty much the exact same way before 502(a)(2) applies.  The Supreme Court heard argument in the case last month.  LaRue v. DeWolff, Boberg & Assocs., Inc., No. 06-856 (U.S.).

Today’s Sixth Circuit decision rejected the defense argument.  The panel said:

To hold that plaintiffs are barred from seeking relief pursuant to § 502(a)(2) merely because they may derive an indirect benefit from relief going to a plan would have the effect of precluding the vast majority of § 502(a)(2) suits.  Such a rule would prevent all beneficiaries aside from those lacking any financial interest in a plan from bringing a § 502(a)(2) action.

Because the district court held otherwise, the court reversed the summary judgment for defendants and remanded for further proceedings.  Pfahler v. Nat’l Latex Products Co., Nos. 06-3677 & 06-3678 (6th Cir. Dec. 14, 2007).

We expect the same result in LaRue.

Barry Barnett

Our feed semper ubis sub ubi.

Blawgletter enjoys Sue Shellenbarger’s Work & Family column in the WSJ.  Today, she writes about an area in which our profession totally rocks — clinical depression.  She calls it "Even Lawyers Get the Blues:  Opening Up About Depression".  Kudos to her!

Also to the Oklahoma City lawyer, Dan Lukasik, who tossed caution to the wind and fessed up to the reality that lawyers suffer depression at almost three times the rate of the general population.

Heavens to Betsy, you might ask — what could possibly depress people who have so much going for them money-wise, prestige-wise, and other-wise?

The question recalls to us a report of an interview with James Joyce, author of the unfathomable and (to us) impenetrable yet awesomely great Ulysses, in which the questioner wants to know what the author meant by such-and-such.  Joyce answers along the lines of: Once God and I knew what I meant.  Now, God only knows.

We suspect that people with great creative gifts — a group that includes the best lawyers — feel the pain of birthing innovative ideas.  Imagine, therefore, the agony of rejection — a common experience for lawyers.  Which experience in many cases may lead to the dullness of depression.

Thank you, Sue and Dan, for shining light on the subject.  We suspect that many will benefit.

Barry Barnett

Our feed aims to cheer you up.

The Sixth Circuit today tossed a summary judgment on the ground that the district court lacked subject matter jurisdiction.  The decision turned on the requirement, under 28 U.S.C. 1332(a)(2), for "complete diversity" in suits that include "alien" parties.  The case before the court involved one alien plaintiff (a Grand Cayman Islands corporation) and two alien defendants (a South Korean company and natural person).  The district court granted the defendants’ motion for summary judgment, but because it didn’t have jurisdiction of the subject matter the ruling didn’t count. Peninsula Asset Mgmt. (Cayman) Ltd. v. Hankook Tire Co., Ltd., No. 07-3028 (6th Cir. Dec. 13, 2007).

Barry Barnett

If at first you don’t succeed, try playing second.

The Third Circuit yesterday denied a petition by Comcast Corporation for discretionary review of an order certifying a class of cable subscribers in the Chicago metropolitan area.  The court previously declined to question the same district judge’s earlier certification of a Philadelphia-area subscriber class.

The case involves claims that Comcast violated sections 1 and 2 of the Sherman Act by, among other things, swapping for and acquiring dominant positions in and around Boston, Chicago, and Philadelphia.  The conduct enabled Comcast to raise prices for non-basic cable subscribers above a competitive level, according to the complaints.

The district court also held earlier that the class plaintiffs’ complaints adequately alleged antitrust violations even under the new pleading standard of Bell Atlantic Co. v. Twombly, 127 S. Ct. 1955 (2007).

Barry Barnett

Our feed expects a trial in early 2009.

A hood latch assembly.  Can you see any price-fixing on it?

A trial court in Toronto, Canada, has certified a class action against E.I. duPont Canada for fixing prices on engineering resins that go into automobile hood latches, dashboards, and other plastic parts.  Apparently nothing quite like that has ever happened in a Great White North court ere now. 

On December 5, 2007, Justice Alexandra Hoy, of the Ontario Superior Court of Justice, issued her "Order (Certification)".  Her Honor had written a 37-page "Reasons for Decision" about two months earlier.  So the decision came as less of a shock to duPont than you might expect.  Axiom Plastics Inc. v. E. I. duPont Canada Co., No. 05-cv-302358 (Ont. Sup. Ct. Just.).

As near as Blawgletter can tell, the case proceeds on the hypothesis that the Canadian branch of duPont bribed auto makers (like GM and Ford) to require duPont resins in plastic parts for their cars.  The deal had the effect of forcing parts manufacturers like Axiom to use only duPont resins and thus gave duPont power to gouge them price-wise.  The proceeds of which gouging then went in part to the auto makers.

Will that fly?  Who knows?  But on first hearing it sounds hard.

Barry Barnett

Our feed has a thing for hard cases.  So we have that going for us.

I. Lewis "Scooter" Libby, Jr., no longer challenges his conviction of perjury and obstruction of justice, per the NYT today.

According to the D.C. Circuit’s PACER docket in Mr. Libby’s appeal, the court extended the deadline for the opening brief until December 11, 2007 — tomorrow.  United States v. Libby, No. 07-3068 (D.C. Cir.).  So that probably explains why we hear today that Mr. Libby will not proceed.

No word on whether Mr. Libby plans to request a full pardon — in addition to the partial one that kept him out of prison.

Barry Barnett

No word, but we do have a prediction.

Did torturing 9/11 mastermind Khalid Sheikh Mohammed produce good information — or just a good feeling?

Newspapers and politicians condemn the on-purpose deep-sixing in 2005 of tapes showing interrogation of terrorist suspects.  Their reason?  The world now will never know whether Central Intelligence Agency questioners used torture but will assume they did.

Blawgletter says:  of course they tortured those guys!  If the tapes still existed, they would absolutely show genuine torturing of flesh-and-blood terrorists.  Actual torture.  Real terrorists.  And some substantial part of the U.S. would feel perfectly fine about that.

But we wish the CIA hadn’t buried the evidence not because the tapes would prove torture.  No.  We would have liked Americans to see use of the "techniques" so that they could judge for themselves whether barbarity elicits reliable information. 

So put us down as suspecting that the CIA burned the tapes less to hide proof of torture and more to destroy yet another demonstration of its incompetence.

Barry Barnett

No logic was tortured in the writing of this post.

With much carnage already evident, the subprime mortgage fiasco looks likely to claim more victims in coming months.  Why?  Because loans that featured low introductory or "teaser" interest rates set millions of time bombs ticking towards the day when rates would "reset" at much higher levels, leaving defaults, foreclosures, and homelessness in their wake and adding billions of dollars more in losses to the subprime portfolios of investors who bought bundles of the risky loans from Wall Street.

The situation calls for action, and Blawgletter applauds folks — like Treasury Secretary Henry Paulson — who want to head off further damage.  Mr. Paulson has a "market-based" plan.  Sounds good.  It aims to give borrowers and investors relief and to do so by rewriting terms of the contracts between them.  Hmm.  The scheme would thus give "servicing" firms, which collect payments and otherwise enforce the mortgages, flexibility to ignore rate increases if they think doing so would avoid default.  With the result that borrowers keep their homes and investors lose less.  That seems downright magical. 

We’ve pointed out that the plan has, uh, legal problems.  The servicing firms don’t have clear legal authority to waive the investors’ right to collect interest per the strict terms of the mortgage loan agreements.  Their flexibility indeed depends on whether granting grace en masse instead of on the traditional loan by loan basis counts as the "industry standard" despite the fact that it doesn’t even exist yet.  So the Paulson solution could easily self-destruct without achieving any practical good.

(The NYT would fix the problem by passing a federal law overriding the contracts between borrowers and investors and immunizing servicers from lawsuits.  That strikes us as an honest yet even worse way to go.)

But something else bothers us more than a clever-but-late-and-probably-defective-anyway approach.  The feds to date have done little to nothing to assure compensation to victims, punishment to wrongdoers, and prevention of future abuses.  You’d think that the Department of Justice would at least investigate the accounting firms, commercial and investment banks, and ratings firms that played an essential — and extremely lucrative — role in making the subprime fiasco possible.  You’d hope that the U.S. government would implement safeguards against excesses down the road.  You might even imagine the feds would encourage meritorious civil lawsuits.

Right.

What should we make of governmental kudos for a "market-based" plan that likely won’t work and in any event addresses only a small fraction of a problem that resulted from regulators’ letting the "market" do whatever it damn well pleased?  Harvard bankruptcy professor Elizabeth Warren says that the Paulson plan changes nothing.  But "the administration’s subprime mortgage plan is the bank lobby’s dream" because it will "sandbag" pending proposals to allow bankruptcy judges to modify mortgage terms.  By Jove, we think she’s got it.

Barry Barnett

Adam Smith spoke of the invisible hand — not the magical pretend hand.