Blawgletter thought we’d never see the day.  The WSJ cribbing our content?  Say it ain’t so.

Yesterday, we asked:  "How can the government rewrite the terms of debt securities to force the investors in those securities to accept lower interest payments from the borrowers?"

Today, the WSJ editors worry that "government is compelling investors who now own these mortgages (the banks having sold them as bundled securities) to take less money".

Yesterday, we suggested that "[p]erhaps the trust indentures (or whatever the Wall Street folks call the things) allow those who have the job of enforcing the mortgages some flexibility in how they maximize the return to investors."

Today, the editors at the Journal note that some the "Pooling and Servicing Agreements" allow flexibility to "modify loan terms if this is consistent with ‘standard industry practice.’"

Yesterday, we supposed that the absence of flexible language might give rise to "yet another species of subprime litigation — this one for breach of contract or fiduciary duty against the servicers who let borrowers get away with not paying according to the terms of their mortgages."

Today, the WSJ folks say that "[w]e trust everyone is prepared to fight that out in court, maybe for years to come, because the lawsuits are going to test that ‘standard’ practice claim."

The scarier thought isn’t that the Journalistas swiped our ideas.  It’s that we seem to agree on something.

Barry Barnett

Can you say yikes?  Sure.  We knew you could.

Blawgletter’s senior partner in Seattle, Parker Folse, reminded us today about a new Federal Rule of Civil Procedure — Rule 5.2 — and "comprehensive style amendments" to Rules 1-86 and the Illustrative Civil Forms.  The addition and changes took effect a few days ago, on December 1, 2007.

Rule 5.2 protects certain kinds of private information from disclosure in court filings.

You can check out the sleek, stylish, and pizzazy revisions in all their minty freshness here.

Links to just about anything you’d like to know about the subject matter appear on this page at the U.S. Courts website.

We understand that The Honorable Lee H. Rosenthal spearheaded the effort.  And a terrific job she did.

Barry Barnett

Our feed loves rules — the sleeker the better.

As the feds get ready to announce a rescue plan for subprime mortgage borrowers, Blawgletter has a question:  How can the government rewrite the terms of debt securities to force the investors in those securities to accept lower interest payments from the borrowers?

The plan calls for a five-year moratorium on interest rate increases for certain subprime borrowers.  The mortgages provide for "resets" of the rates periodically, including when the introductory rate expires.  Investors bought securities for which the mortgages provide collateral and serve as the source of interest income.  The scheme would halt the resetting of rates and therefore deprive the investors of the larger income stream that higher rates would bring — assuming of course that the borrowers don’t default.

That last bit — the assumption — may provide the answer.  The rescue plan aims to avoid defaults that would otherwise occur.  Perhaps the trust indentures (or whatever the Wall Street folks call the things) allow those who have the job of enforcing the mortgages some flexibility in how they maximize the return to investors.

If not, we may see yet another species of subprime litigation — this one for breach of contract or fiduciary duty against the servicers who let borrowers get away with not paying according to the terms of their mortgages.

Barry Barnett

Our feed has no just debts.

Blawgletter’s award-winning sister publication, Barnett’s Notes on Commercial Litigation, has come out with a brand spanking new issue.  The subject matter?  Thank you for asking; the list follows.

1. Top 10 Things to Know About Recognizing and Referring the Big Case.   Learn to spot diamonds in the rough.  Also which gemologists to consult.

2. Did You Know?  Do contingent fee lawyers suffer from "a gross conflict of interests" when they represent governmental entities?  The Wall Street Journal says yes.  They wish. 

3. This Price-Fixing Case Looks Pretty Sweet.  Canada probes chocolate bar makers.

4. Witness, Prepare Thyself — to Get to Know Me!   Bond.  Witness bond.

5.  Hot Lunch.  Right-sizing civil litigation — by letting juries decide.

6.  Objecting Only When Necessary.  Cartoon.

7.  Blawgletter® Roundup.  Links to favorite recent posts.

8.  Links & Info.  Er, links and info — what else?

Barry Barnett

Our feed wishes you a rainbow day.

The Seventh Circuit today affirmed summary judgment against Top Tobacco, which accused Zig-Zag of infringing Top’s trademark for roll-your-own smokes.  The court compared pictures of the Top and Zig-Zag demon weed canisters and concluded that nobody in his right mind would confuse the one with the other.  The presence of the word "top" on the Zig-Zag label — "Top-Fresh Canister" — didn’t dissuade Their Honors from their visual conviction.  Top Tobacco, L.P. v. N. Atl. Operating Co., Inc., No. 07-1244 (7th Cir. Dec. 4, 2007).

The court, helpfully, included the pix in the opinion.

Barry Barnett

Groucho Marx springs to our feed’s mind.

"When I think about you, I touch myself."

In a statement today, responding to a consensus double-aught spy report that Iran quit trying to develop nuclear weapons in 2003, national security adviser Stephen J. Hadley stated:

Today’s National Intelligence Estimate offers some positive news.  It confirms that we were right to be worried about Iran seeking to develop nuclear weapons.

No, Blawgletter did not make this up.

Barry Barnett

Our feed secretly wishes that it had made it up.  Of course we did make up the photo caption.  As far as you know.

If you and your defense client enjoy isolation, then by all means let the plaintiffs’ lawyers do this to you.

U.S. District Judge Phyllis J. Hamilton last week rejected a challenge to a judgment-sharing agreement.  Makers of dynamic random access memory chips entered into the agreement in connection with the ongoing price-fixing litigation against them.  The California Attorney General challenged the agreement as inhibiting settlement.  Not so, Her Honor held.  Lookie here (subscription necessary).  California v. Infineon Technologies AG, No. 06-cv-04333-pjh (N.D. Cal. Nov. 29, 2007).

Blawgletter concurs.  The DRAM judgment-sharing agreement does make settlement harder in the sense that it gives the defendants big incentives to hang together rather than separately.  But it does so in a rational and not the least bit illegal way. 

Each party to a judgment-sharing agreement promises to contribute money, in proportion to its "sharing percentage", to any judgment that befalls any other party or parties to the agreement.  Each may also vow to try to get a global settlement and, failing that, to require the settlement agreement to reduce the non-settling defendants’ liability by the settling defendant’s sharing percentage (rather than just by the amount of the settlement defendant’s payment).  Other provisions may go into the agreement also, but the judgment-sharing part furnishes the essential glue for the pact.

The genius of judgment sharing lies in the cohesion it enforces among defendants.  It thus combats the plaintiffs’ ability, in a typical price-fixing case, to encourage Defendant A to settle early by offering a discount from its likely share of any damages award.  Defendant A — possibly the guiltiest of them all — likes the idea of getting out cheap.  The remaining defendants still face joint and several liability for actual damages times three minus the early settlement amount (not actual damages minus the early settlement amount times three).  A judgment-sharing agreement takes the early-settlement-for-cheap option away.

Why don’t defendants routinely enter into judgment-sharing agreements in antitrust cases?  We guess in part because defense counsel don’t normally evaluate relative culpability early on.  The lawyers instead default to the ’tain’t so defense (even when their clients have pleaded guilty!), beguiling themselves with the notion that they’ll do something brilliant (or dumb luck will happen) to turn the tide.  Meanwhile, vigorously and separately representing their own clients will keep the lights on at the office and groceries in the pantry at home.

So, instead of the defendants forming a coherent group, they each proceed amidst a thundering defendant herd — in it but not of it.  Fully individual in its pristine and courageous glory.  Without the protection of the group.  And therefore susceptible to separation — of the involuntary kind.

Barry Barnett

Our feed encourages our clients to judgment-share, our opponents not to.

I think the problem here may be more of a question of getting rid of the bad Internets and keeping the good Internets.  You know, ’cause I think we can all agree, there’re just too many Internets.

Barry Barnett

Our feed uses only good Internets.  Except in emergencies.  Like now.