May a lawyer compel a client to arbitrate a dispute over the lawyer's services?

In upper right-hand corner of the United States, yes. Bezio v. Draeger, No. 13-1910 (1st Cir. Dec. 16, 2013) (applying Maine law).

In the upper left-hand corner, no. Smith v. JEM Group, Inc., No. 11-35964 (9th Cir. Dec. 12, 2013) (applying Washington law).

Bonus:    

May lawyers in a class action case waive their right to federal court review of an arbitration award relating to a fee dispute under section 10 of the federal Arbitration Act? No. Burton v. Class Counsel, No. 11-17718 (9th Cir. Dec. 17, 2013).

Big DataThe expense of a big document case lies mainly in the looking for, the sifting through, and the analysis of your client's, and the other side's, megabytes and terabytes of ESI — "electronically stored information", in the words of Rule 26 of the Federal Rules of Civil Procedure.

You'd like to shift that burden to your opponent, right? You think you should have a right to do that if you've won, correct? You suspect that the Constitution, perhaps something in penumbras and emanations of the Bill of Rights, entitles you to tack that on to the honking loss you just tattoed across your adversary's forehead, huh?

Dream on, the Federal Circuit ruled on Friday the 13th.

The panel held that 28 U.S.C 1920 limits the taxing of those court costs that concern ESI to the expense of "making copies". Nothing but copy-making. Although the court did allow that you can get the extra dollars you spent on making fancy copies if the losing side asked you for the info that made fancy stuff (e.g., imaging) necessary. CBT Flint Partners, LLC v. Return Path, Inc., No. 13-1036 (Fed. Cir. Dec. 13, 2013).

The case involved a patent infringement claim that the plaintiff CBT lost on summary judgment. The district court had ruled the patent invalid for indefiniteness and then awarded the defendants Return Path and Cisco more than $300,000 in e-discovery "costs". The Federal Circuit vacated the award and sent the case back. The opinion brims with advice on what ESI expenses count as section 1920 costs and which don't. Blawgletter says check it out.

BedbugThe Fourth Circuit ruled that Rent-a-Center (RAC) won't have to answer in court for leasing a trundle bed full of bedbugs to Christine and Antwan Seney.

The vermin had bitten the Seneys' son, for whom they'd gotten the trundle, and when RAC retrieved the rental its movers dragged the bed through the Seneys' home, spreading the critters to the entire abode.

The district court granted RAC's motion to compel arbitration under a clause in the rental contract. Affirming, the Fourth Circuit held that a Federal Trade Commission ban on "pre-dispute" arbitration applied only to breach of warranty claims relating to the sale of goods, not to leases. Seney v. Rent-a-Center, Inc., No. 13-1064 (4th Cir. Dec. 11, 2013).

But in the course of getting there, the panel raised a question that points to a way around the deluge of pro-arbitration and anti-class rulings that have poured out of the U.S. Supreme Court in recent years. The parties's arguments, the court noted, "expose an important tension between major doctrines of statutory construction." Id. slip op. at 8. The panel explained:

In Shearson/American Express, Inc. v. McMahon, the Supreme Court instructed courts to evaluate the arbitrability of statutory rights in light of the liberal “federal policy favoring arbitration.”  482 U.S. 220, 226 (1987).  McMahon established that if a statute is silent with respect to arbitration, courts should presume its permissibility.  Id. at 226–27.  McMahon, however, did not address whether agencies should also presume the permissibility of arbitration.  The FTC, the agency that promulgated regulations interpreting the MMWA, did not employ a pro-arbitration presumption.  See 40 Fed. Reg. at 60,210.  Rather, as explained above, it concluded that pre-dispute binding arbitration was impermissible under the Act.  16 C.F.R. § 703.5(j).  Pursuant to the Supreme Court’s directive in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., that interpretation, if reasonable, should control.  467 U.S. 837, 842–43 (1984).

Id. at 8-9. Although the court concluded that it need not decide "whether agencies" — like courts — "should also presume the permissibility of arbitration", the suggestion that courts may have to defer to agencies' interpretation of their statutory authority to ban arbitration strikes Blawgletter as bold. It for sure runs counter to the Supreme Court's late leanings.

It also seems to conflict with a recent ruling by the Fifth Circuit on whether the National Labor Relations Board could prohibit employers from forcing employees to waive class or collective treatment of labor disputes. D. R. Horton, Inc. v. NLRB, No. 12-60031 (5th Cir. Dec. 3, 2013) (striking down Board's conclusion that employer violated National Labor Relations Act by mandating that employees enter into arbitration agreement that waived right to pursue collective or class action). The Fifth Circuit appears to have given no deference to the NLRB's construction of the National Labor Relations Act and instead applied the pro-arbitration presumption that the Seney panel questioned.

How courts reconcile these strands should prove interesting.

Nelson Rohlihlahla Mandela (1918-2013) died today.

A lawyer, Mr. Mandela worked mightily for many years against apartheid.

He spent from 1962 through 1990 in a South African prison.

His country released him at the age of 71.

He served as President of South Africa from 1994 through 1999.

He has remained a symbol of fighting injustice — and overcoming it — ever since.

Aristotle wrote:

Particularly in political oratory, . . . it adds much to an orator's influence that his own character should look right and that he should be thought to entertain the right feelings towards his hearers. . . . That the orator's own character should look right is particularly important in political speaking.

There are three things which inspire confidence in the orator's own character — the three, namely, that induce us to believe a thing apart from any proof of it: good sense, good moral character, and goodwill.

Character — Aristotle's ethos — stood head and shoulders above the two other elements of persuasion — pathos (emotion) and logos (logic).

You can't think of Nelson Mandela without thinking of character and the moral authority it brings. He persuaded many simply by standing before them and saying what he believed.

He had a great gift.

So did we.

Rest in peace.

A contract dispute over building a child-development center at Fort Hood, in central Texas, today spawned a ruling that will bring joy to firms that put forum-choice clauses in their contracts in hopes of making lawsuits too costly to pursue.

The agreement between Atlantic Marine Construction Company and J-Crew Management, Inc., stated that all disputes between the parties "shall be litigated in the Circuit Court for the City of Norfolk, Virginia, or the United States District  Court for the Eastern District of Virginia, Norfolk Division." The district court, which sat in the district that includes Fort Hood, denied Atlantic Marine's motion to dismiss the case for "wrong" or "improper" venue under 28 U.S.C. § 1406(a) or Rule 12(b)(3) or to transfer it to the Eastern District of Virginia "[f]or the convenience of the parties and witnesses, in the interest of justice" under 28 U.S.C. § 1404(a). The Fifth Circuit affirmed.

The Court, by a 9-0 vote, ruled that federal judges must almost always enforce the parties' choice of forum. As Justice Samuel Alito wrote for the unanimous justices:

When the parties have agreed to a valid forum-selection clause, a district court should ordinarily transfer the case to the forum specified in that clause. Only in extraordinary circumstances unrelated to the convenience of the parties should a §1404(a) motion be denied.

Atl. Marine Construction Co., Inc. v. United States District  Court for the Western District of Texas, No. 12-929, slip op. at 11 (U.S. Dec. 3, 2013).

The Court also clarified, as a matter of procedure, that section 1404(a) provides a proper way to enforce a forum-choice clause even where the district court has venue. Section 1406(a) and Rule 12(b)(3), by contrast, require "wrong" or "improper" venue — a situation that did not exist in the case before the Court — and therefore couldn't serve as a vehicle for transferring or dismissing the case.

The Court added that the doctrine of forum non conveniens affords a way to enforce a forum-choice clause that calls for litigation in a state or foreign court rather than a federal one.

And Their Honors even reached the question of what conflict of laws rules will apply in the transferee court. Its own, the Court ruled — not those of the transferor court.

The decision continues a strong trend in which the Court has made suing more difficult for the weak. As Justice Elena Kagan noted not long ago:

I think the Court is doing some big things regarding how civil litigation is conducted in America and things which really affect the ability of people without a lot of money to bring lawsuits to vindicate their legal rights, that are changing our litigation system in ways that I think are unfortunate and are not supported by the law that's out there. I wish that that got more attention.

Elena Kagan, Harvard Law Today at 3 (Nov. 2013). 

The-Platters

Herb Reed Enterprises (HRE) claimed that Larry Marshak infringed HRE's trademark rights in "The Platters", a name and mark that relate to a singing group whose hey-day spanned the second half of the 1950s.

The band split up in the 1960s. But nostalgia for "The Great Pretender", "Smoke Gets in Your Eyes", and "Only You" has lived on. And groups using "Platters" in their names have sprung forth and sung their hearts out for the half-century that has ensued.

The district court granted HRE a preliminary injunction, but it didn't make findings in support of its conclusion on the "irreparable harm" requirement for injunctive relief. Old cases held that trademark infringement in itself raises a presumption of harm that defies repair — injury to reputation, loss of sales, damage to relationships, and the like.

The Ninth Circuit ruled that the old cases no longer hold sway. It cited Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7 (2008), and eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006), as making clear that "the landscape for benchmarking irreparable harm has changed". Herb Reed Enterprises, LLC v. Florida Entertainment Mgmt., Inc., No. 12-16868, slip op. at 17 (9th Cir. Dec. 2, 2013). No longer may courts presume the harm that dare not call itself repairable. No. "Those seeking injunctive relief must proffer evidence sufficient to establish a likelihood of irreparable harm." Id. at 21.

Blawgletter observes that you may use hearsay and other non-"admissible evidence" to get a preliminary injunction. Id. at 20 n.5. "Due to the urgency of obtaining a preliminary injunction at a point when there has been limited factual development, the rules of evidence do not apply strictly to preliminary injunction proceedings." Id.

How about in class certification proceedings, eh?

The D.C. Circuit ruled that Esquire's not-very-good effort to make fun of a "birther" book didn't count as libel. Farah v. Esquire Magazine, No. 12-7055 (D.C. Cir. Nov. 26, 2013).

The case dealt with a post on "The Politics Blog" by Esquire writer Mark Warren. The item claimed that President Obama's release of a copy of his long-form birth certificate from the Aloha State had prompted the publisher of Where's the Birth Certificate? The Case that Barack Obama is not Eligible to be President to yank the book from shelves and turn the copies into pulp. The publisher, Joseph Farah, and author, Jerome Corsi, sued Esquire for libel. The district court dismissed the case.

Affirming, the D.C. Circuit noted that the first amendment permits a libel claim only for false and defamatory statements of "actual facts". Farah, slip op. at 11. Satire, the panel pointed out, may purport to state facts but in truth bends or hyperbolizes them. That "reasonable readers would take the fictitious blog post literally" for awhile at least didn't matter. "[I]t is the nature of satire that not everyone 'gets it' immediately." Id. at 14. A headline in The Onion — "Error Found on Internet" — comes to mind.

Nor did the weakness of the effort at humor deprive the post of constitutional protection. "[P]oorly executed or not, the reasonable reader would have to suspend virtually all that he or she knew to be true of Farah's and Corsi's views on the issue of President Obama's eligibility to serve in order to conclude the story was reporting the facts." Id. at 18.

Oddly — or not — Judge Janice Rogers Brown didn't join Judge Judith Rogers's opinion. Judge Brown opted instead to concur in the judgment only without saying why.

Law Firm X goes belly-up. Its partners flee. They take the hourly cases that they brought in at Law Firm X with them to their new homes at Law Firm Y and Law Firm Z, among other attorney shops. Does what remains of Law Firm X — its estate in bankruptcy — have any right to billings that the other firms receive from the post-flight work that the new firms perform on Law Firm X's old hourly cases?

Maybe, the Second Circuit held in Geron v. Seyfarth Shaw LLP (In re Thelen LLP), No. 12-4138-bk (2d Cir. Nov. 15, 2013). The panel ruled that New York law provides a clear answer for contingent-fee cases (the old firm retains the right to the "value" of the case at the time it departs the firm) but not for hourly ones. Noting that hourly cases do have value in the sense that you expect them to produce hourly billings into the future, the court asked the New York Court of Appeals to step in to resolve the question.

Blawgletter sees no compelling reason to treat contingent and hourly cases differently for these purposes. Flat-fee cases and hybrids would seem to fall in the middle. And applying a different rule for hourly cases would seem to assure a muddle for those in-between categories.

On Nov. 4, Chief Justice John Roberts attached a "statement" to the Court's long list of orders in which it mainly denied review with respect to dozens and dozens of cases.

The statement related to something the Court hasn't addressed before — a challenge to a class action settlement that featured "cy pres" relief. 

Cy pres — French for "as near as" – provides money or other benefits to persons other than members of the class in the class action. The Chief Justice concluded:

I agree with this Court’s decision to deny the petition for certiorari. Marek’s challenge is focused on the particular features of the specific settlement at issue. Granting review of this case might not have afforded the Court an opportunity to address more fundamental concerns surrounding the use of such remedies in class action litigation, including when, if ever, such relief should be considered; how to assess its fairness as a general matter; whether new entities may be established as part of such relief; if not, how existing entities should be selected; what the respective roles of the judge and parties are in shaping a remedy; how closely the goals of any enlisted organization must correspond to the interests of the class; and so on. This Court has not previously addressed any of these issues. Cy pres remedies, however, are a growing feature of class action settlements. See Redish, Julian, & Zyontz, Cy Pres Relief and the Pathologies of the Modern Class Action: A Normative and Empirical Analysis, 62 Fla. L. Rev. 617, 653–656 (2010). In a suitable case, this Court may need to clarify the limits on the use of such remedies.

Marek v. Lane, No. 13-136 (U.S. Nov. 4, 2013), on cert. pet. from Lane v. Facebook, Inc., 696 F.3d 811 (9th Cir. 2012).

Will we see a cy pres case on the Court's docket soon?

The Court has shown a Great Deal of interest in class action issues over the last several years. The Chief Justice's statement shows that he, at least, hasn't tired of the subject.

Blawgletter guesses yes.

DNA SequenceDrug giants Sanofi and Pfizer each claimed that it had first dibs on patenting a segment of DNA (deoxyribonucleic acid).

Who did have first dibs turned on the date when each of them not only isolated the DNA sequence but also "appreciated" what it had isolated. Sanofi-Aventis v. Pfizer Inc., No. 12-1345, slip op. 9 (Fed. Cir. Nov. 5, 2013) (affirming ruling that Pfizer's invention had priority over Sanofi's).

You have to get that you invented something. Eureka!