Alfonso Bedoya played Gold Hat in
The Treasure of the Sierra Madre (1948).

Gold Hat, posing as a Federale, replies to a question about his group’s official credentials:

Badges?  We ain’t got no badges.  We don’t need no badges.  I don’t have to show you any stinking badges!

Bedlam ensued.

Barry Barnett

Happy stinkin’ Friday!

The Eighth Circuit today considered how to apply the crime-fraud exception to privilege in the context of a grand jury investigation.  The government sought to pierce the attorney-client and attorney work product privileges on the ground that the client hoodwinked his lawyer into presenting a false explanation of the client’s conduct.  The district court ordered production of most but not all of the relevant documents, allowing the lawyer to withhold those that reflected his opinion work product.

The Eighth Circuit affirmed.  In re Green Grand Jury Proceedings, Nos. 06-3938 & 06-4030 (8th Cir. July 20, 2007).  The court noted that, in civil cases, the party opposing application of the crime-fraud exception has the right to present "countervailing evidence."  Slip op. at 11 (citing In re General Motors Corp.,153 F.3d 714, 716 (8th Cir. 1998); UMG Recording, Inc. v. Bertelsmann AG (In re Napster, Inc. Copyright Litig.), 479 F.3d 1078, 1093 (9th Cir. 2007)).  But the court also observed that a different rule may apply in the grand jury context due to the need to avoid bogging down the process with "mini-trials" on evidentiary questions.

Barry Barnett

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Cosmetic Gallery alleged that suppliers of salon beauty products boycotted it to prevent it from competing with Beauty Bar.  The district court granted the defendants’ motion for summary judgment on the ground that Cosmetic Gallery hadn’t shown an unlawful concert of action among the defendants.  The Third Circuit affirmed.  Cosmetic Gallery, Inc. v. Schoeneman Corp., No. 05-3679 (3d Cir. July 20, 2007).

The decision turned on the plaintiff’s bootlegging ways.  Cosmetic Gallery established a reputation for buying premium salon products — gels, sprays, and such, Blawgletter imagines — outside of normal channels and then reselling them cheap.  Cosmetic Gallery’s practices upset the industry’s goal of quality and volume control, high prices, and cachet and explained why nobody wanted to do business with it.  Nor did Cosmetic Gallery furnish any evidence that the defendants agreed to shun it.

Cosmetic Gallery applies in the summary judgment context statements in Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955 (2007), about requirements for pleading an antitrust conspiracy.  But it doesn’t depart from pre-Twombly law, which demands evidence tending to exclude the possibility of non-conspiratorial, independent action.  Twombly didn’t make a difference.

Barry Barnett

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Now Blawgletter understands the theory by which a president may dismiss U.S. Attorneys who did a terrific job.  As a lawyer who worked in a previous Republican administration explained, "U.S. attorneys are emanations of a president’s will."  The president’s will emits them; they flow from his will and, logically, cease to exist when the presidential will changes to will not.

We do not pretend to grasp all that the emanation theory implies.  But we feel kinda sure that Alberto Gonzales’s Department of Justice will use the theory to justify its inclination not to prosecute the administration’s refusal to answer congressional questions about why good U.S. attorneys lost their jobs.

Way to go, Federalist Society!  Your anti-democratic mumbo jumbo hypotheses totally rock!!

Barry Barnett

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U.S. District Judge John Bates today ousted Valerie Plame’s case against VP Dick Cheney for outing her secret CIA identity. He held that Mr. Cheney and the other defendants outed her, if at all, while performing their official duties.

Louis D. Brandeis (1856-1941).

Justice Brandeis, in the year of his death, said:

We may have democracy, or we may have wealth concentrated in the hands of a few, but we cannot have both.

Barry Barnett

E. pluribus unum.

A shareholder who sues directors and officers for the benefit of the corporation — derivatively — often has to clear a high pleading hurdle.  She must specify why she couldn’t trust the board of directors to decide whether or not the corporation should take action against the wrongdoers, usually because of a conflict of interest — "demand futility", for short.

The Third Circuit held today that such a shareholder sometimes may use information she obtains after filing a derivative lawsuit to amplify her original (and inadequate) demand futility allegations.  The "sometimes" in the case before the court involved discovery that the defendants agreed to provide to the plaintiffs.  Ordinarily, you see, a plaintiff may not try to bolster conclusory allegations of demand futility through compulsory discovery.  In re Merck & Co., Inc. Securities, Deriv. & ERISA Litig., No. 06-2911 (3d Cir. July 18, 2007)

The lawsuit, by the way, involves claims against officers and directors of Merck for letting the company sell VIOXX despite (the plaintiffs assert) knowing of its possible lethality.

Barry Barnett

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Yes, someone made a blog out of this.

See the Business Week article here.

Barry Barnett

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