The Seventh Circuit today affirmed a district court’s ruling on whether a party to an international arbitration missed the deadline for appointing one of three arbitrators.  The parties’ agreement required each side to make its appointment "by" a certain time — within 30 days.  The two arbitrators would then pick the third.  The end of the period came on a Sunday, but one of the parties, Argonaut, waited until Monday to name its appointee.  Too late, the district court held.  The Seventh Circuit agreed.  Certain Underwriters at Lloyd’s London v. Argonaut Ins. Co., No. 06-3395 (7th Cir. Aug. 29, 2007).

Most of the court’s opinion deals with what law applies.  Because the coverage dispute involved an international arbitration agreement, the court chose federal common law.  The panel reasoned that, in the absence of a choice-of-law clause, the "overarching federal concern with the uniformity of treatment of international arbitration agreements requires that the issue before us be resolved by a federal common law rule, rather than by a state rule of decision."  Slip op. at 17.  Under that rule, the court concluded, Argonaut’s appointment came after the cut-off.

Barry Barnett

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On August 24, the day after it dissolved an adminstrative injunction, the D.C. Circuit issued a scheduling order that "deferred" the "briefing in this case . . . pending further order of the Court."  Federal Trade Comm’n v. Whole Foods Market, Inc., No. 07-5276 (D.C. Cir. Aug. 24, 2007). 

Blawgletter doesn’t know the reason for the deferral or what it portends.  But we do note that yesterday Whole Foods announced that it closed its acquisition of Wild Oats.  Count us doubtful that the FTC can now persuade the court to unscramble this organic omelette.

Barry Barnett

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The Foreign Sovereign Immunities Act bars most suits against, well, foreign sovereigns.  The Republic of Lebanon disqualified American Telecom as a bidder on a contract to manage cellular telephone networks in the Cedar Republic.  American Telecom sued Lebanon in federal court.  It based jurisdiction on the FSIA’s "commercial activity" exception to immunity.  But that exception requires that the foreign sovereign’s conduct have a "direct effect" in the U.S.  The disqualification, the Sixth Circuit held today, didn’t qualify as it didn’t directly affect American Telecom in the U.S.  As the loss of bidder status happened overseas, the company felt the impact only indirectly here.  Am. Telecom Co. v. Republic of Lebanon, No. 05-2408 (6th Cir. Aug. 29, 2007).

Barry Barnett

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Blawgletter reported last month on a case in which the trial judge refused to ask potential jurors about their views on tort reform.  It’s happened again — and with the same result.

In Chlopek v. Federal Ins. Co., No. 06-2927 (7th Cir. Aug. 28, 2007), the Chlopeks tried their amputation-of-a-big-toe claim to a jury.  Their counsel requested the judge to ask venirepersons to describe their "perceptions . . . regarding the propriety" of civil damages cases and tort reform.  His Honor demurred, but he did inquire if any potential juror had an opinion about "the commencement of lawsuits, the administration of justice generally, or jury awards which would in any way affect your respective abilities to serve as a fair and impartial juror in this case."  The Chlopeks lost; the Seventh Circuit affirmed.

We have two observations.  First, the case highlights the limitations that usually exist on voir dire in federal court.  Second, plaintiffs lawyers need to do a better job of fashioning the questions that they want the trial judge to ask.  Most federal judges probably recoil when they hear tort reform.  But most probably will also pose questions that may reveal bias but that sound less inflammatory.

The Fifth Circuit today affirmed an interlocutory judgment that held Union Pacific potentially responsible for clean-up of contamination on all contiguous tracts in a former railroad yard.  The plaintiff, Consolidated Companies, bought part of the old yard and used the property for a food warehouse and distribution facility.  Conco later discovered fuel oil and other hazardous substances there.  It sued Union Pacific, as successor to the previous owner, for damages and an injunction requiring Union Pacific to remediate the Conco site as well as the adjoining tracts.  Consolidated Companies Inc. v. Union Pacific R.R. Co., No. 06-30570 (5th Cir. Aug. 28, 2007).

The district court held a bench trial on the issue of whether the Conco and non-Conco land counted as one "facility" for purposes of the federal Resource Conservation Recovery Act and the Louisiana Environmental Quality Act.  The court answered "yes".  The Fifth Circuit affirmed, concluding that the relevant statutes defined "facility" as including tracts contiguous to or adjoining the land of the plaintiff.

Barry Barnett

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The Third Circuit today dissolved an injunction that enjoined defendants from entering into a class action settlement.  The district court issued the injunction after it learned that the defendants might try to settle the case out from under it.  They would do so through settlement of other class litigation involving similar claims against some of the same defendants.  The court held that the enjoining court abused its discretion under the All Writs Act.  Grider v. Keystone Health Plan Central, Inc., Nos. 07-1231, 07-1232 & 07-1270 (3d Cir. Aug. 28, 2007).

The panel explained that the Grider plaintiffs had an adequate remedy at law under Rule 23(e) of the Federal Rules of Civil Procedure.  Rule 23(e) entitles them to object to settlement of the other litigation.  It also emphasized that it saw no evidence of a collusive effort to settle the Grider claims cheap.

The decision points up the challenges of overlapping lawsuits pending in different courts.  The competing class litigation, in Florida, involved post-Grider lawsuits that the Judicial Panel for Multi-district Litigation centralized there for pretrial proceedings.  The Grider case stayed in Pennsylvania because it had reached a more mature state of development before the centralization order.  Direct coordination thus became impossible.

Blawgletter nonetheless expects that the district judges will try to find a way to avoid stepping on each other’s magisterial toes.

Barry Barnett

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Kangkodos
Kang and Kodos hitch-hiking.  Alberto Gonzales plans to go the opposite direction.

Blawgletter gets the impression that the editors at the NY Times penned today’s piece — on the resignation of U.S. Attorney General Alberto Gonzales a few hours after he announced it — between rounds of high fives.  The swiftness, detail, and tone of their bill of particulars suggest deep satisfaction.

With the fetching title "The House Lawyer Departs", the lead editorial commences thus:

Attorney General Alberto Gonzales has finally done something important to advance the cause of justice.  He has resigned.

It doesn’t get any nicer — mentioning as it does the "many scandals Gonzales has left behind", the "craven politics" of his Justice Department, his "frequent" "misstatements and memory lapses", his failure to "stand up for the Constitution and the rule of law", and his sign-off "on the administration’s repugnant, and disastrous, torture policy", among other condign offenses.

Meanwhile, over at Salon.com, Sidney Blumenthal ascribes Fredo’s decision to the earlier flight of "puppet master" Karl Rove.  "When the puppet master departed," he writes, "the puppet collapsed in a heap."  (Mixing metaphors, Blumenthal also suggests that Rove played Michael Corleone to Gonzales’s feckless Fredo.)

Here at Blawgletter, we do not rue the loss of this AG.  No.  We count it a blessing.  But please, dear God, maker of heaven and earth, tell the President to appoint an honest, smart, and fair replacement.  You know — a real lawyer.

Barry Barnett

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Today, the Second Circuit held that the double-jeopardy clause prohibited a second trial of Michael DeGennaro and Frank Borghese on charges that they committed securities, wire, and mail fraud as executives of Symbol Technologies, Inc.  United States v. DeGennaro, No. 06-4195 (2d Cir. Aug. 27, 2007).

The decision stemmed from a jury note that claimed "dead lock" in their deliberations.  Counsel for a third defendant asked for a mistrial.  The lawyers representing Messrs. DeGennaro and Borghese joined but also requested that the judge poll the jurors before dismissing them, explaining that their dead lock might relate only to the other defendant.  Judge Wexler denied the request and declared a mistrial.  Counsel withdrew their conditional request for a mistrial, but His Honor persisted.  He again refused to poll the jury and ordered court personnel to notify the jurors that he’d discharged them.

The Second Circuit held that the court should not have ordered a mistrial and that, having declared it after submission of the case to the jury, the Constitution barred retrial of Messrs. DeGennaro and Borghese.

Blawgletter notes that the jury apparently had decided to acquit them anyway.  They dead locked only on the third defendant.

Barry Barnett

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The Third Circuit today upheld dismissal of securities claims against Exxon Mobil as too late under the three-year statute of repose.  The court ruled that the 2002 enactment of Sarbanes-Oxley didn’t lengthen the repose (or limitations) period for false-proxy claims under section 14(a) of the Securities Exchange Act.  Because the statute of repose period for section 14(a) claims ended before the plaintiffs filed suit, the court affirmed their dismissal.  In re Exxon Mobil Corp. Securities Litig., No. 05-4571 (3d Cir. Aug. 27, 2007).

The court also held that, although section 1658(b) of Sarbanes-Oxley does apply to securities fraud claims under section 10(b) and Rule 10b-5, the statute did not revive claims that expired before enactment.  The three-year repose period ran out four months before Sarbanes-Oxley became law.  The court accordingly pronounced the 10(b) claim dead on arrival, too.

Barry Barnett

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