Containership
Builders risk insurance evolved from
maritime cargo coverage.  Who knew?

The Seventh Circuit held yesterday that a "builders risk" policy doesn’t constitute "fire insurance" under Michigan law.  Hunt Construction Group, Inc. v. Allianz Global Risks U.S. Ins. Co., No. 06-4335 (7th Cir. Oct. 1, 2007).  The distinction mattered because claims under a fire insurance policy carry a one-year limitation period, which Hunt Construction missed.

The case arose out of Hunt’s contract to build a major terminal facility at Detroit’s airport for Northwest Airlines.  Heavy rainfall delayed construction, forcing Hunt to pay penalties and incur other losses on the project.  The company asked its builders risk carrier, Allianz, to pay for the damages, but Allianz refused.  When Hunt sued, Allianz convinced the district court that, because the policy included coverage for losses from fire, the one-year limitations period applied to Hunt’s claim for construction delays.

The Seventh Circuit reversed.  Per Judge Posner, the court traced the lineage of builders risk insurance to its origins in coverage for cargo losses at sea.  The precursor evolved into "inland marine" insurance — at first for cargo traveling over land — and then into protection against losses to building projects, which serves as a "terminus for cargo" consisting of bricks, mortar, and other construction materials.  A second line started with fire insurance, which later turned into "all risks" coverage (such as homeowner policies).

The history persuaded the court that Michigan didn’t intend the short limitations period for "fire insurance" to apply to a line that grew out of a different strand — sea cargo coverage.

Barry Barnett

Feedicon Our feed learns something new every day.

Saddamhussein
Saddam Hussein knew Oscar Wyatt Jr.

The WSJ reports that octogenarian Oscar Wyatt Jr. pleaded guilty today to paying surcharges in return for contracts to buy Iraqi oil under the United Nations’s oil-for-food program.  The deal calls for the oilman from Houston to spend 18 to 24 months in prison and forfeit $11 million.

According to the Federal Trade Commission, El Paso Energy bought a company that Mr. Wyatt founded, the Coastal Corporation, in 2001 for $16 billion.

The UN’s oil-for-food program lasted from 1996 until 2003.  The plea arrangement ended a criminal trial in New York against Mr. Wyatt.

Barry Barnett

Feedicon14x14_3 Join our subscribe-for-feed program.

The Eleventh Circuit today upheld dismissal of a qui tam case.  United States ex rel. McElmurray v. Consolidated Gov’t of Augusta-Richmond County, No. 06-16493 (11th Cir. Oct. 1, 2007).

The relators alleged that a municipal wastewater plant in Augusta, Georgia, violated its permits by discharging filthy effluent onto their neighboring land.  As the relators found out through discovery in their own civil lawsuits, Augusta lied about permit compliance in order to get federal loans.  The district court dismissed the case under Rule 12(b)(1).  The Eleventh Circuit held that the relators didn’t qualify as an "original source" of information regarding the fraud because civil discovery counts as "public disclosure" and because they didn’t base their claims entirely on non-public sources.

Blawgletter finds the Eleventh Circuit rule way too stingy.  The relators brought the Augustan fraud to light not by Googling government files but by suffering contamination to their land and tracing it back to its financial source in Washington, DC.

But, as we pointed out in July, a large majority of the courts of appeals apply the Eleventh Circuit’s harsh standard.  The Supreme Court — or Congress — will have to heal the split.

Barry Barnett

Feedicon14x14_2 Our feed never splits.

The U.S. Supreme Court starts its 2007 Term tomorrow.  Linda Greenhouse at the NYT provides an overview.  Jess Bravin at the WSJ does likewise.  Both focus on Justice Kennedy’s pivotal vote.

Ms. Greenhouse and Mr. Bravin don’t highlight the bidness cases before the Court.  But Blawgletter did and even updated the list.

Barry Barnett

Feedicon_2 Stay current with our high voltage feed.

The Federal Circuit revived a patent infringement case last Friday.  The court held that IpVenture solely owned the patent-in-suit.  An old agreement "to assign" all inventions to Hewlett-Packard hadn’t effected a present assignment.  Plus H-P disclaimed any interest in the patent.  IpVenture therefore did have standing to bring the case and didn’t have to join H-P as a party.  IpVenture, Inc. v. ProStar Computer, Inc., Nos. 06-1012 & 06-1081 (Fed. Cir. Sept. 28, 2007) (reversing dismissal).

Barry Barnett

Feedicon Our feed stands and delivers.

Lupins
A field of lovely lovely lupins.

The WSJ Law Blog calls these California general counsel moves musical chairs in techland: 

  • Lou Lupin left Qualcomm (San Diego).  Donald Rosenberg departed Apple (Cupertino).  Daniel Cooperman exited Oracle (Redwood Shores).
  • Mr. Rosenberg replaced Mr. Lupin at Qualcomm.  Mr. Cooperman took Mr. Rosenberg’s Apple spot.  And Oracle’s own Dorian E. Daley succeeded Mr. Cooperman.

All of which leaves only Mr. Lupin without a place to sit.

These developments recalled to Blawgletter a Monty Python sketch that featured the highwayman Dennis Moore.  Mr. Moore steals lupins from rich people and gives them to peasants.  But later he starts taking valuables and does such a fine job that the wealthy become the poor and vice versa.

Which raises the question:  What accounts for the flowering mobility of general counsel?  Have they become more valuable?  More accountable? 

Barry Barnett

Feedicon14x14 The Blawgletter feed works out for you.

Schoolbus
Front view of a yellow dog.

Blawgletter has poked fun at the Department of Justice’s Antitrust Division — most recently announcing that the Division disbanded itself because its "voluntary compliance" program had worked so well.

But how can you parody something that seems to parody itself?  Just today, for example, the Division trumpeted its forcing a school bus company to give up a contract to sell yellow dogs to the Anchorage School District. 

Zowie!

Barry Barnett

Feedicon14x14 Our feed wishes you a terrific fall weekend. 

Ernesthemingway
Ernest Hemingway (1899-1961) nicknamed himself.

In 1952, Papa put these words in the mind of Cuban fisherman Santiago as he struggled with a great Marlin:

I do not understand these things, he thought.  But it is good that we do not have to try to kill the sun or the moon or the stars.  It is enough to live on the sea and kill our true brothers.

The Old Man and the Sea at 75 (Scribner).

Barry Barnett

Feedicon_2 Our feed thinks pretty thoughts.