The great Irish poet William Butler Yeats (1865-1939).

Yeats wrote The Second Coming just after the Great War, in 1919:

Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.

The poem ends with:

And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born?

To Blawgletter, the scorchingest part of Yeats’s white hot words comes at the last of the first stanza:  "The best lack all conviction, while the worst/Are full of passionate intensity."  Damn scary, that.

Barry Barnett

Our feed cares.

$2,250,000,000 = one extra spicy meatball.

CNBC reports that Visa tentatively agreed to pay American Express $2.25 billion to settle claim that Visa and MasterCard violated the Sherman Act by colluding to prohibit their respective member banks from issuing American Express cards.  The pact calls for Visa to pay half now and half over three or four years.  It comes on the eve of an initial public offering by Visa. 

MasterCard went public last year.  No word on whether it’ll settle, too.

Barry Barnett

Join our feed for spicy meatball updates.

The WSJ opines today that bills in Congress would support "more class-action lawsuits" by banning arbitration clauses in consumer contracts.  Sorry, but Blawgletter just doesn’t see the argument. 

Lawyers who represent consumers like arbitration — for disputes that involve enough money to justify the expense.  But lots of companies try to put a double-whammy on consumers.  They not only require arbitration but also prohibit aggregation of claims, whether through joinder of multiple claimants or class certification.  The non-aggregation provision makes low-dollar consumer disputes impossible to pursue on an economic basis.  The companies end up granting themselves effective immunity, no matter how egregious and profitable their misdeeds.

So we ask:  which do you prefer, WSJ — aggregate/class arbitration or aggregate/class lawsuits?  The former gives all the benefits of arbitration while preserving the effectiveness of consumers’ remedies.  Or do the remedies’ effectiveness not matter?

Barry Barnett

Our feed believes in arbitration.

The Fifth Circuit today stuck with decisions against homeowner insurance coverage for storm surge damage from Hurricane Katrina.  That left issues regarding the burden of proof on "open peril" and "named peril" coverage issues.  But the parties entered into a "High-Low Agreement" during the appeal, guaranteeing the plaintiffs a minimum payment if they lost and a bigger one if they won.  The court deemed the burden-assignment questions "not relevant to the case and controversy at issue in this court" and therefore declined to reach them.  Tuepker v. State Farm Fire & Cas. Co., No. 06-61075 (5th Cir. Nov. 6, 2007) (applying Mississippi law).

Barry Barnett

Our feed reaches all issues, whether high or low.

General Musharraf ordered his forces to beat and jail protesting lawyers.

Blawgletter can’t recall writing an open letter before, but the courageousness of judges and lawyers in Pakistan impelled us to compose our first.

To President George W. Bush, Secretary of State Condoleezza Rice, and Attorney General-Elect Michael B. Mukasey:

In the British Empire’s American colonies, the King of England suspended laws, fired judges, and ignored court judgments. He put citizens in jail, ransacked their homes, read their private papers, and shot public protesters. He was a tyrant.

History repeats itself today in another fomer British colony, Pakistan, where a modern King George III assumed the powers of the crown on Saturday. Unlike other countries in the Middle East, including Iraq and Afghanistan, Pakistan has fragile but longstanding democratic traditions, including an independent judiciary. But its President, General Pervez Musharraf, dissolved the Supreme Court after learning that the justices were about to void his third term as President, ruling him ineligible for election while acting as the military chief. The general also suspended the Constitution and delayed elections indefinitely. Plus he ordered his security forces to threaten, detain, and beat up the thousands of Pakistani lawyers who have taken to the streets to object. The gendarmes followed Musharraf’s directive with gusto — cracking lawyers’ heads and putting judges under house arrest.

American lawyers, like our Pakistani counterparts, draw wills, close home purchases, defend against traffic tickets, and counsel businesses and families. Many represent companies and individuals in disputes. But all of us know a threat to the rule of law when we see it. And we see a big one in Pakistan.

Our brave colleagues in Pakistan are fighting to save a democracy. They are trying to rally the Pakistani people against despotism. They are telling the powerful that the rule of law is so precious and so fundamental to democracy that they will risk their careers, their freedom, and their lives to protest its subversion.

We can only hope we would be so brave. Can we do more?

Yes. We can, and do, urge our President, Secretary of State, and Attorney General-Elect to say plainly that the United States condemns General Musharraf’s acts and demands an immediate restoration of constitutional democracy. Release the judges, restore them to their benches, and obey the courts’ lawful decrees. Reinstate the Pakistani Constitution. Allow peaceful protests. And proceed with elections, on schedule, in January 2008.

Our own fidelity to the rule of law requires at least that.

If you agree with our sentiments, please send your own email — with some, all, or none of our text, as you choose — to president@whitehouse.gov and askdoj@usdoj.gov.  Sorry, we don’t have an email address for the State Department.

Barry Barnett

Our feed subscribes to the rule of law.

The Conference hosts an e-discovery seminar March 13-14 in San Diego.

Blawgletter sees ads about e-discovery twice, thrice, and more each working day.  The offers range from  people who say they can teach you how to do it to folks who want to do it for you to outfits that tell horror stories about judges who got the idea you did it wrong.  We ignore them.  All of them.

Why?  Because we know where to get cutting-edge guidance on all things e-discovery.  The not-for-profit Sedona Conference publishes guidelines and best practices that you can get online for free.  Just go here to download such gems as:

• The Sedona Conference Best Practices Commentary on Search & Retrieval Methods
• The Sedona Conference Commentary on Email Management
• The Sedona Conference Commentary on Legal Holds
• The Sedona Principles Governing Electronic Document Production
• Navigating the Vendor Proposal Process:  Best Practices for the Selection of Electronic Discovery Vendors

The Conference has an impressive Advisory Board.  It includes, by our count, 10 federal trial judges and a balance of practicing lawyers.

Discovery would go a lot more smoothly and predictably if all of us followed the Conference’s advice.

Barry Barnett

Yes, we went to a discovery conference today.

The Ninth Circuit held today that an internet provender of perfumes violated the Lanham Act by incorporating the "eBay" trademark in its name, PerfumeBay.  Perfumebay.com Inc. v. eBay Inc., No. 05-56794 (9th Cir. Nov. 5, 2007).

Huh.  Blawgletter confesses that at first we thought eBay would lose this one.  PerfumeBay doesn’t look much like eBay to us.  But the decision started making sense as we kept reading.  eBay sells lots of goods online, and it relies on search engines — especially Google and Yahoo — to return results that direct shoppers to the eBay website.  A search for "perfume eBay" produced both "PerfumeBay" and "eBay" — strong evidence that, in the internet context, PerfumeBay would likely confuse consumers into thinking it had an affiliation with eBay.

Barry Barnett

Our feed doesn’t need perfume, thank you very much.

Blawgletter recently listed the types of commercial litigation that we expected to come out of the still-embiggening subprime mortgage mess.  We included:

Securities fraud.  Buyers of stock or bonds whose price fell after disclosure of problem investments in subprime mortgages (either the mortgages themselves or loans to fund the mortgages), subprime mortgage firms (stock), or subprime mortgage bonds.

We didn’t have particular firms in mind, but now we do — and the collection includes banking behemoths Merrill Lynch and Citigroup.  After reporting $5 billion and then $7.9 billion in losses last month, Merrill fired its CEO and now has drawn a securities class action lawsuit against it (courtesy of Chitwood Harley Harnes in Atlanta).  The complaint alleges that Merrill hid its exposure to "collateralized debt obligations" involving subprime loans and that the worst news may not have come out yet. 

The same story pretty much applies to Citigroup, which lately disclosed big hits on its CDO portfolio and whose CEO quit before the board could show him the door.  According to the WSJ, the company will soon announce another $8 billion in losses on "mortgage-related securities."  We haven’t seen any securities fraud cases yet, but they will come.

We don’t feel too sorry for Merrill, Citigroup, or the other big boys and girls who put too many eggs in the subprime basket.  The subprime business looked great as long as you didn’t take any risk that the borrowers wouldn’t repay their loans.  (A Wall Streeter who did subprime securitizations agreed with us last year.  He underscored the point by making sure we knew that he worked for a "moving company" and not a "warehouse".)  A Day of Reckoning looked inevitable.  The question was — who’d be holding the bag when the Day arrived?

Looks like Wall Street got more than its fair share.  Firms didn’t content themselves with billions in fees for packaging subprime loans into securities and selling the securitizations to investors.  No.  They also put their own money into the subprime debt. 

Hubris — or greed?  Take your pick.

Barry Barnett

Our feed uses 100 percent U.S. prime.