Lucent-Alcatel won a $1.53B verdict against Microsoft for infringing MP3 player patents.  But it lost it all on Microsoft’s motions for judgment as matter of law and new trial.  Lucent Technologies Inc. v. Gateway Inc., No. 02CV2060 (S.D. Cal. Aug. 6, 2007).  LA Times story here.

The order, available on the court’s PACER site, bars L-A’s claim under one patent (no infringement) and makes liability almost impossible under the other (Microsoft already has a license to use it).  Plus the court tossed the damages award as insupportable. 

Barry Barnett

Our feed lifts you up.

The Fifth Circuit today tossed two kinds of insurance coverage cases arising from hurricanes in 2005.  One involved damage to refrigerators and freezers from post-storm putrefaction of their contents.  Arias-Benn v. State Farm Fire & Cas. Ins. Co., No. 06-30771 (5th Cir. Aug. 6, 2007).   The other dealt with exclusion of "flood" damage from homeowner policies.  Chauvin v. State Farm Fire & Cas. Co., No. 06-30946 (5th Cir. Aug. 6, 2007).

The twin decisions accord with another one by the same court last week.

Barry Barnett

Feedicon14x14 We don’t need no stinkin’ insurance.

The Fourth Circuit held last Friday that a participant in an insolvent pension plan doesn’t lose standing to sue when the government takes it over.  Wilmington Shipping Co. v. New England Life Ins. Co., No. 06-2052 (4th Cir Aug. 3, 2007).

Peter Brown Ruffin, Jr., alleged that he lost benefits from his employer’s plan as a result of New England Life’s poor plan management.  (NEL invested most plan assets in real estate — bad real estate!)  NEL won summary judgment on the ground that Ruffin lacked standing.  But the Fourth Circuit reversed, holding that the takeover of the plan by the Pension Benefit Guaranty Corporation didn’t deprive Ruffin of his right to sue under section 502(a)(2) of ERISA.

Amen.

Barry Barnett

Feedicon We wonder if anyone has ever named a child Erisa.  Let’s hope not.

Blawgletter once had a pyramid scheme case.  A high-level schemer loved to tell marks how many millionaires belonged to the group.  Dozens, right?  But under oath she admitted that anyone who made $1 million over a lifetime qualified.  So, $40k per year x 25 years and — bingo — welcome to the millionaire club.

We thought of her when we read a NYT story today about Silicon Valleyers whose net worth tops a million bucks.  The point:  they don’t feel rich.  And they envy people who have more dough.  But they feel bad about it.

With T-bill rates hovering at 4.76 percent, even $10 million yields a risk-free return of less than $500,000 a year.  Who can live on that?

Barry Barnett

Feedicon14x14 We kid.

The Federal Circuit today reiterated the peril of pre-suit peace talks with people you suspect of infringing your patent.  They can sue you, where they want and when they want, even in the midst of happy settlement discussions.  Sony Electronics, Inc. v. Guardian Media Technologies, Ltd., 06-1363 (Fed. Cir. Aug. 3, 2007) (following MedImmune, Inc. v. Genentech, Inc., 127 S. Ct. 764 (2007)).

Don’t say Blawgletter didn’t warn you!  Because we did.  And do it again right now.

Barry Barnett

Gain speed with our feed.

Leland Edwards signed a Dispute Resolution Agreement before going to work in a Virgin Islands factory.  The DRA entitled his employer to bring claims against him in court but required him to arbitrate any claims for personal injury.  The district court held the one-way arbitration clause unconscionable under Virgin Islands law.  The Third Circuit reversed:

Where, as here, an arbitration provision requires only one side to submit its claims (personal injury or otherwise) to arbitration, but does not alter or limit the rights and remedies available to that party in the arbitral forum, it cannot be said that the parties’ agreement is substantively unconsionable under the rationale of Gilmer[ v. Inerstate/Johnson Lane Corp., 500 U.S. 20 (1991)].

Edwards v. HOVENSA, LLC, No. 06-4601 (3d Cir. Aug. 2, 2007).

Harsh.

Barry Barnett

Happy Friday!

Hurricanekatrina

The Fifth Circuit held today that insurance policies excluding "flood" damage barred claims for destruction of homes by Hurricane Katrina — even if the flooding resulted from faulty construction or maintence of the New Orleans canal system.  In re Katrina Canal Breaches Litig., No. 07-31119 (5th Cir. Aug. 2, 2007).

Barry Barnett

Feedicon14x14_2 Oh my.

Yesterday, the Fourth Circuit affirmed a judgment that exonerated ERISA retirement plan fiduciaries for offering company stock as an investment option.  The bankruptcy of U.S. Airways wiped out the value of the stock.  The district court found after a bench trial that fiduciaries acted prudently in the face of turmoil and uncertainty during the post-9/11 era.  DiFelice v. U.S. Airways, Inc., No. 06-1892 (4th Cir. Aug. 1, 2007).

Blawgletter recalls that the trial victory in DiFelice warmed the cockles of defendants in other ERISA stock fund cases.  But we figure that the Fourth Circuit’s opinion will give them a chill or two.  The court held, for example, that:

  • The "safe harbor" under section 404(c) has a narrow scope.  "[A]lthough section 404(c) does limit a fiduciary’s liability for losses that occur when participants make poor choices from a satisfactory menu of options, it does not insulate a fiduciary from liability for assembling an imprudent menu in the first instance."  Slip op. at 8 n.3.
  • Insider trading or efforts to prop up the stock’s value would support a breach of loyalty finding.  Slip op. at 15.
  • "[A] fiduciary must initially determine, and continue to monitor, the prudence of each investment option available to plan participants. . . . [A] fiduciary cannot free himself from his duty to act as a prudent man simply by arguing that other funds, which individuals may or may not elect to combine with a company stock fund, could theoretically, in combination, create a prudent portflio."  Slip op. at 17 (emphasis in original) (footnote omitted).

Barry Barnett