The Sixth Circuit today reversed a district court’s granting of post-answer, voluntary dismissals under Rule 41(a)(2) without prejudice.  The defendants wanted the dismissals with prejudice plus attorneys’ fees.  The court of appeals held that the district court erred in failing to explain why it declined to attach conditions to the dismissals.  Bridgeport Music, Inc. v. Universal-MCA Music Publishing, Inc., No. 05-5719 (6th Cir. Mar. 30, 2007).

Barry Barnett

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Today, the Second Circuit upheld a district court’s refusal to dismiss claims to recover more than $100 million that once belonged to two Yugoslavian banks operating in New York. 

After civil unrest roiled former Yugoslavia, the U.S. government responded in 1992 by freezing the banks’ assets.  A decade later, and with federal permission, the New York banking superintendent seized the assets with a view to distributing them through state court proceedings.  Meanwhile, back in Yugoslavia, the authorities commenced their own insolvency proceedings to resolve claims to the banks’ assets.  They also filed a bankruptcy petition in the Southern District of New York to aid the Yugoslavian proceedings.  (The U.S. Bankruptcy Code authorizes such petitions.)  In the S.D.N.Y. case, the Empire State’s banking superintendent asserted sovereign immunity under the eleventh amendment.  The district judge declined to dismiss, holding that the case fell within the exception of Ex parte Young, 209 U.S. 123 (1908), to sovereign immunity.

The Second Circuit affirmed, agreeing that the Ex parte Young did indeed apply because the Yugoslav authorities (1) asserted a non-frivolous claim of an ongoing violation of federal (bankruptcy) law and (2) sought prospective relief (in the form of a turnover order).  In re Deposit Ins. Agency, No. 04-4997 & 04-4999 (2d Cir. Mar. 29, 2007). 

For international bankruptcy law and eleventh amendment mavens, the opinion will seem as manna from heaven.  Blawgletter will post a link to the opinion in the morning.  You may in the meantime retrieve it directly from the Second Circuit website.

Barry Barnett

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Take a deep breath.  The Federal Circuit held today that a patent holder may disclaim any right to patent protection beyond a certain date without losing the right to seek an extension of the date on the ground that regulatory delays prevented marketing of the invention.  In the case before it, Merck & Co. filed a "terminal disclaimer" in which it agreed to give up patent protection for a glaucoma drug after June 30, 2004.  Merck later requested an extension of the period because the Food and Drug Administration took several years to approve the drug for sale.  The Patent and Trademark Office granted the extension.  The Federal Circuit concluded that the terminal disclaimer didn’t prevent Merck from requesting and receiving the later expiration date.  Merck & Co., Inc. v. Hi-Tech Pharmacal Co., Inc. , No. 06-1401 (Fed. Cir. Mar. 29, 2007).

Got it?  You may now resume normal breathing.

Barry Barnett

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Sit right back, and you’ll hear a tale . . . .

It started last October, when Blawgletter — as Your Editor of the Susman Godfrey L.L.P. newsletter, Barnett’s Notes on Commercial Litigation — challenged readers to cite any pre-September 1986 publication of the phrase "eat what you kill" in the sense of tying a lawyer’s compensation to his performance.  The dare cited an American Lawyer article that quoted Blawgletter using that very phrase. 

The WSJ’s Law Blog responded by asking "Did Barry Barnett Invent the Phrase ‘Eat What You Kill?’"  Barnett’s Notes rejoined with an update that identified a partner’s citation to Shakespeare’s Henry V, in which the Constable of France says that the dauphin "will eat all [the English soldiers] he kills" at the impending Battle of Agincourt.

But, just this week, we hear from Maxwell S. Kennerly, of The Beasley Firm in Philadelphia, about a 1982 use of the phrase, apparently in the exact sense that Blawgletter intended three years later.  Mr. Kennerly backs up his revelation with a "tinyurl" link to a Google blurb on the International Encyclopedia of Comparative Law.  The blurb includes this:  "Other firms adopted an ‘eat what you kill’ system without profit sharing to reward individual productivity . . . ."

Hmmm.

Barry Barnett

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This morning, lawyers in Tellabs, Inc. v. Makor Issues & Rights, Ltd., No. 06-484 (U.S.) argued about the appropriate standard for pleading a securities fraud case under the Private Securities Litigation Reform Act of 1995.  Click here for the transcript.

Update — Blawgletter impressions:

• The case seems to pivot on the question of whether Congress, by requiring that a securities fraud complaint allege facts that raise a "strong inference" of fraudulent intent, toughened the pleading standard beyond the preponderance of the evidence test at trial. 
• The idea that a harder test applies at the motion to dismiss stage than at trial troubles some of the justices, particularly Justice Beyer, who as much as said that the dichotomy creates a conflict with the seventh amendment right to trial by jury.
• The Chief Justice and Justice Scalia lean to approving a higher standard for motions to dismiss than for later stages.
• Justices Stevens, Ginsberg, and — to a lesser extent — Beyer lean to letting the district judge read the whole complaint and decide whether, drawing inferences favorable to the plaintiff, it raises a strong inference of scienter.
• Justice Alito questioned whether the "strong inference" test applies to summary judgment as well as to a motion to dismiss.
• Justice Thomas, per usual, said nothing.
• Justices Kennedy and Souter provide the swing votes.

Barry Barnett

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A cartoon from Barnett’s Notes.

The Sixth Circuit considered a case today that illustrates a trial lawyer indulging her dislike of opposing counsel.

Anna Mayday sued the Saginaw Public Library after she lost her job in the genealogy and history division.  She alleged age discrimination and violation of the Family and Medical Leave Act.  A jury poured her out.

On appeal, Ms. Mayday argued that trial counsel for the library poisoned the jury by making improper statements about Ms. Mayday’s lawyer.  These included that "I have to sit back and just bite my knuckles" and that "it’s like nails on a chalkboard" while listening to opposing counsel.  The district court had none of it, and the Sixth Circuit agreed, noting that "it is likely that [library counsel’s] demeanor and tactics negatively influenced her own client’s case as much as they might have Mayday’s."  Mayday v. Public Libraries of Saginaw, No. 05-2637 (6th Cir. Mar. 28, 2007).

Blawgletter can imagine situations that may justify reminding jurors of bad behavior by opposing counsel.  But let’s not personalize it.  Channel those feelings; don’t indulge them.

Barry Barnett

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Objector Koehler wanted two bites.

May a lead class plaintiff object to a class action settlement as inadequate, lose, and later sue class counsel for getting an inadequate settlement?  Unsurprisingly, the Eighth Circuit today held that he may not, concluding that the district court’s approval of the settlement as fair, adequate, and reasonable precluded the lead plaintiff from establishing otherwise.  Koehler v. Brody , No. 06-2537 & 06-2746 (8th Cir. Mar. 27, 2007).

Barry Barnett

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See the transcript of the oral argument this morning in Credit Suisse First Boston (USA), LLC v. Billing, No. 05-1157 (U.S.) here.

Blawgletter has now read the transcript and offers these impressions:

• The plaintiffs’ lawyer said "no" about a gillion times.  That usually doesn’t bode well.
• The plaintiffs had better hope Justice Scalia doesn’t write the majority opinion.
• Justice Breyer asked several questions but had trouble articulating a coherent one.  Assuming that he represents a swing vote, that doesn’t look good for the plaintiffs either.
• A couple or three of Their Honors noted concerns that the plaintiffs’ case (a) attempts an end run around federal limits on securities lawsuits and (b) would expose Wall Street to lots of discovery, automatic treble damages, and a temptation to settle.  Also not a good sign for plaintiffs.
• The Solicitor General seemed to support a middle way between killing antitrust cases that implicate securities laws and leaving them alone.  If the plaintiffs live to fight another day, Blawgletter suspects that they will have the SG to thank.

Barry Barnett

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