Chiefjusticeroberts_1 Gecko_1
Does Chief Justice Roberts, left, not know the Gecko?

Blawgletter skimmed the transcript of the oral argument yesterday in GEICO General Ins. Co. v. Edo in search of any mention of the GEICO Gecko, who speaks with an Aussie/New Zeelander accent.  None appeared.  Chief Justice Roberts even asked at one point "[w]ho’s GEICO?"  So much for cultural literacy. 

For a quick summary of the issues in the case, go here.

Counsel for respondent Edo, Scott Shorr, did say something about a "red herring".  But these fish, regardless of color, belong to a class (Actinopterygii) completely different from the Gecko’s (Reptilia) within the Vertebrata subphylum.

The GEICO Gecko had no comment.

Update:  When asking "[w]ho’s GEICO?", the Chief Justice didn’t mean that he doesn’t know the company’s identity.  He instead wanted to understand who, within the corporate structure, represented the true GEICO.  We know the answer, of course.  It rhymes with jecko.

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Partnershakinghands

Can inviting someone to become a law firm partner give her or him god-like qualities? 

Put Blawgletter down as dubious, thinking as it does that genuine modesty never hurt any truly great lawyer.  Confidence without humility doesn’t make anybody, including and maybe especially trial lawyers, more effective.  And elevation to equity ownership has never yet conferred immortality.

You read it here first.

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Vikingship
Vikings discover Chicago World’s Fair in 1893 — before
global warming took hold.

Norse explorer Leif Ericsson’s dad, Norse explorer Eric the Red, may have discovered Greenland for Europe, but the semi-autonomous island now belongs to Denmark.  And, according to an article today in the newspaper of record, it keeps shrinking.

The cause?  Rising temperatures, the article notes, liquify glaciers and pack ice, revealing true coastal profiles and sometimes turning peninsulas into islets or even archipelagos:

“We are already in a new era of geography,” said the Arctic explorer Will Steger. “This phenomenon — of an island all of a sudden appearing out of nowhere and the ice melting around it — is a real common phenomenon now.”

Yikes!

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Gecko

Did insurance company GEICO wilfully violate the Fair Credit Reporting Act by relying on "creative lawyering that provides indefensible answers" relating to the proper use of credit reports in setting premiums?  The Ninth Circuit said yes, and the U.S. Supreme Court heard arguments in the case this morning.  More information here

The GEICO Gecko (in street clothes, above) had no comment.  And, having no lizard in this fight, Blawgletter will keep quiet too.

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Mlk

On this day of remembrance, Blawgletter recommends to all a partner’s book about an epochal speech by the great American we honor — Drew D. Hansen, The Dream:  Martin Luther King, Jr., and the Speech that Inspired a Nation (Ecco 2005).

Blawgletter also gets chills from another MLK speech.  At the end of his march from Selma to Montgomery in 1965, Dr. King spoke on the steps of the Alabama State Capitol.  He said:

"I know some of you are asking today, ‘How long will it take?’
"I come to say to you this afternoon, however difficult the moment, however frustrating the hour, it will not be long, because truth pressed to earth will rise again.
"How long? Not long, because no lie can live forever.
"How long? Not long, because you will reap what you sow.
"How long? Not long, because the arm of the moral universe is long, and it bends toward justice."

Yes.  The arm of the moral universe bends toward justice.  Amen.

Diggingmachine
World’s largest digging machine.

If you find yourself in a hole, stop digging. 

Insiders who keep shoveling after a company sinks into insolvency may find themselves defendants in a case under a deepening insolvency theory (hypothesis, really).  Digger-defendants usually include officers, directors, and auditors who enable a company to keep losing money.

Courts have lately shown little joy with the deepening insolvency hypothesis.  The Third Circuit tried to bury it in In re CitX Corp., Inc., 448 F.3d 672 (3d Cir. 2006).  Some courts respectfully disagree, e.g., In re Greater Southeast Community Hosp. Corp. I, 353 B.R. 324 (Bankr. D.D.C. 2006), but the trend — for now — favors the excavators.

Yet deepening insolvency has a compelling logic.  Once a company no longer can pay its debts, the interests of equity holders become irrelevant.  Insiders should focus on maximizing repayments to creditors and ought not embark on some bold plan to revive the value of equity.

Blawgletter suspects that judicial hostility to deepening insolvency elides the shift in insiders’ legal loyalties once the company crosses into insolvency.  The business judgment rule still may protect their decisions, but, my goodness, investing even more of other people’s resources in a failing enterprise instead of cutting losses strikes Blawgletter as a pretty clear sign of recklessness.

Your thoughts, please.

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Satan

In associate evaluations at Blawgletter’s law firm this year, any variation of attention to detail signaled promotion and a nice bonus.  Inefficiency implied trouble.  Efficient attention to detail thus spelled lawyerly success, at least at Blawgletter’s firm.

How does a business trial lawyer find the right balance between mastery of details and efficiency?

In Blink (2005), which Blawgletter loves, Malcolm Gladwell explains humans’ awesome ability to make accurate snap judgments — the most efficient use of details possible.  But Gladwell also emphasizes how often people form wrong first impressions and then don’t question what they want to believe.

Lawyers by training and temperament tend to avoid emotional assessments.  The best ones also can judge when they know enough details — neither too little nor too much — to make a sound decision.  How to find the sweet spot?

Blawgletter wonders whether attitude towards details makes a difference.  It imagines that Mr. Gladwell would agree with master architect Mies van der Rohe, who liked to say that "God is in the details."  H. Ross Perot, on the other hand, said "the devil is in the details."

Where do details reside — with God or Satan?  Next to the Almighty or Beelzebub?  In Heaven or Hell?  And does one’s belief regarding location predict one’s efficiency in mastering details?

Please advise.  Soon.  And keep it short, if you don’t mind.

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Gitmo

Yesterday, the deputy assistant secretary of defense for detainee affairs, Charles D. "Cully" Stimson, suggested a way to expedite legal proceedings for detainees at Guantanamo Bay, Cuba.  Paying clients should fire the detainees’ lawyers, many of them from major U.S. law firms.

Huh?

Mr. Stimson implied that law firms’ pro bono work for detainees reflects a lack of patriotism and shows insensitivity to the losses that companies suffered as a result of the 9/11 attacks.  "I think, quite honestly, when corporate CEOs see that those firms are representing the very terrorists who hit their bottom line back in 2001, those CEOs are going to make those law firms choose between representing terrorists or representing reputable firms." 

Mr. Stimson, a lawyer, also hinted that some law firms may receive payments from terrorists or sympathizers while pretending to do the work for free.  "Some will maintain that they are doing it out of the goodness of their heart, that they’re doing it pro bono, and I suspect they are; others are receiving moneys from who knows where, and I’d be curious to have them explain that."

What explains Mr. Stimson’s scorn towards lawyers who represent terror suspects for free?  His birth into wealth and privilege?  His legal education at George Mason?  That he’s never practiced outside government?  That Donald Rumsfeld chose him?  Or did Cully just forget to take his meds?

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Ftcstatue
Statue outside FTC headquarters in Washington, DC

Lisa Watson sued Philip Morris in Arkansas state court for advertising "light" cigarettes as low in tar and nicotine.  The tobacco titan removed Ms. Watson’s case to federal court, arguing that its advertisements complied with federal regulations and that the company therefore "act[ed] under a federal officer" for purposes of a statute authorizing removal of actions against, um, federal officers and people "acting under" them.  See the cert. petition — courtesy of www.scotusblog.com — right here.

Blawgletter will go way out on a limb here just before 5:00 p.m. Central on a Friday and predict that Ms. Watson will have her day in Arkansas state court.  Nary a one of the fine people who work at the FTC would say a business "acts under" him or her simply by following FTC regulations.  Blawgletter bets a nickel that the Justices will see things the same way.

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Shermanantitrust_1

Blawgletter just came across a working paper about a favorite subject — Statistics on Modern Private International Cartels, 1990-2005.  The authors, John M. Connor and C. Gustav Helmers, wrote the paper for Purdue University’s Department of Agricultural Economics.  Go here to read the paper for your own self.

Professor Connor and Ph.D. candidate Helmers studied 283 "hard-core cartels."  Among their key findings:

  • The cartels affected sales of $2.1 trillion in real 2005 terms.
  • Total overcharges worldwide exceeded $200 billion.
  • Overcharge rates ran at a median of 24 percent in North America and the European Union.
  • In the U.S. and Canada, private lawsuits recouped 43 percent of all recoveries from international cartels — more than double the 17 percent that government enforcement actions obtained.

The authors also conclude — in line with Blawgletter’s suspicions — that median U.S. fines against cartels dropped from a high of $2 billion per year at the end of the Clinton administration to $1 billion since.  And that cartels remain quite profitable.  Hmm.

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