CharonDell argued that it could keep robo-calling a woman's mobile phone with robo-messages about her Dell debt until Hell Froze Over.

The fact that she'd withdrawn her consent (from a Happier Time, no doubt – one that involved getting boxes full of neat computer stuff) didn't matter to the Dellsters.

"Hell hasn't frozen over yet", their lawyers must have urged.

"The underworld remains quite warm", they likely added, noting with a Hint of Skepticism that even a frosty River Styx — or, indeed, one full of bobbing ice cubes — might not suffice.

And the district court agreed!

But not the Third Circuit. The panel thus sent Ms. Gager's case under the Telephone Consumer Protection Act back to the district court. Gager v. Dell Fin'l Services, LLC, No. 12-2823 (3d Cir. Aug. 22, 2013).

People who commit to buy a stock on Day 1 can't complain about misrepresentations that the stock issuer made on Day 2 or later. E.g., APA Excelsior III L.P. v. Premiere Techs., Inc., 476 F.3d 1261, 1267 (11th Cir. 2007). The later lies could not have induced you to buy the shares, the theory goes.

But what if you agree to vote your Company A shares in favor of a deal that, if it goes through, will require you to buy shares in Company B after Company A merged into it?

The Ninth Circuit ruled on Monday that the share owner could sue the issuer of Company B, under section 11 of the Securities Act of 1933, for inflating Company B's income and lowballing its costs, by $120 million and $190 million, respectively. The panel held that a voting agreement that mandated a shareholder to favor a merger between Companies A and B did not make the shareholder "irrevocably bound to exchange his Harbinger shares for Peregrine stock at the time the [false] Registration Statement was filed." Hildes v. Arthur Andersen LLP., No. 11-56592, slip op. 14 (9th Cir. Aug. 19, 2013). Sure, he had to vote for the merger, but he didn't make a deal he had to keep no matter what. But-for the falsities in the Registration Statement, the court concluded, the merger would not have happened, and the shareholder could have walked away from the transaction. That made the district court's dismissal of the case improper.

OctopusOn Aug. 12, the AAntitrust Division of the U.S. Department of Justice joined with the attorneys-general of six states and the District of Columbia to file a lawsuit to stop the merger of AMR, which owns American Airlines, into U.S. Airways. You can see the complaint here.

The filing took Blawgletter by surprise. Living in DFW, which AMR calls home, we've watched and read a lot of cheerleading in the local paper and TV stations about the awesome combo. It reached a crescendo in the last couple of weeks with the vote by stakeholders in the AMR bankruptcy for closing on the deal. We can't recall any warning bells about a possible blocking action by our friends at the Division.

But it looks serious. The Complaint doesn't carp about locking up a measly dozen or so "city-pairs" (a term that antitrust lawyers use for air routes from City A to City B and vice versa). No. Like Davy Crockett, a hero of the Alamo, it goes the whole hog. It says the impending marriage would cause great harm by taking the number of "legacy" air carriers in the U.S. to three from four, making collusion – both the express and tacit kinds — easier to practice and more profitable. It goes on to list an entire 14 pages of city-pairs. And, in a wrong-but-spooky touch, it implies that the merger must "be approved" by the district court before it can go through. Plus the Texas Attorney General, who loves to boast about suing the federal government, has joined the feds in the civil suit.

These people mean business.

Some will wonder, by the way, why the Antitrust Division wants to halt the U.S. Airways-AMR hookup but let Delta and Northwest and Continental and United join forces in 2008 and 2010, respectively, without much of a peep. Well, you have to start somewhere. Stopping the consolidation before the Final Four become the Thuggish Three or even the Terrible Two makes sense.

 

InvestOn the first day of a recent patent infringement trial, the wise judge asked Blawgletter and a lawyer for the other side why the case hadn't settled. "Testosterone?", someone said.

That friendly back-and-forth reminded us of something else that seemed to come from the glands rather than the brain. It took the form of a long tit-for-tat that unfolded in Litigation's spring issue. A fairly senior partner, at a behemoth law firm, traded barbs with a then-current – and now-former – associate of the same gargantuan firm. They worked in the same office. One with fewer than 30 lawyers in it. Awkard.

The partner noted her part in the bloodbath on her web profile. The associate gave his contribution a link to a PDF of it (without, we suspect, copyright okay from the Litigation folks).

These tidbits from "I Don't Feel Your Pain" and "Fire and Ice" will give you a sense of the glandular nature of the writing:

    Partner:    "[D]o realize that being an associate is not a journey of personal discovery".

    Associate:    "[T]here is no neutral arbiter in conflicts between associates and partners."

    Partner:     "The well-rounded life is . . . not something that you can engineer by the time you re 35."

    Associate:    "[P]artners make us feel that we are ingrates when we expect to have" a "personal life".

    Partner:    "If you don't want to make money, do public interest law."

    Associate:    "[W]hy do you treat us like imbeciles without a shred of common sense?"

    Partner:    "It's mind-boggling to me how many times I've heard associates whine pitifully about being jammed up, only to find out they billed 40 or so hours in a week an didn't work on weekends."

    Associate:    "If you want it done exactly your way, just do it."

    Partner:    "If you expect to be entertained, go to the movies."

    Associate:    "Every once in awhile, you might ask what we think."

    Partner:    "I want to be the partner you remember nostalgically when you're looking back on people who made a difference in your life."

    Associate:    "[I]f you treat us decently, why would we want to [steal your clients]?"

We. Could. Go. On.

But let us offer some thoughts about the eternal — and, one would guess, epic – struggle between partners and associates. It has to do with return on (human) capital. Thus:

First things first. An associate needs partner support. The partner has to have reasons to invest in the associate. No one wants to gamble on a loser.

How can the associate inform the partner of those reasons? By showing that the partner has gotten, and will keep getting, a nice return on her wager.

The reasons must include confidence that the associate will hand in superb work on time. If that doesn't happen, little else matters. The reasons should also include any other thing that will help assure the partner of a return on the bet you want her to lay down for you. These will usually include loyalty (to clients, the firm, and the partner), finding and discreetly fixing mistakes (especially hers!), solving problems other than mistakes, asking her advice, and getting along with peers and staff.

The partner ought to give the associate timely and candid feedback. He should grade the associate fairly — which means he must in fact read or watch the associate's output and pay attention to the associate's efforts to make the partner's bet worth his while.

The partner also wants the associate to invest in her, although we doubt many see things that way. An eager and happy associate can make the partner's work ever so much more useful, efficient, and fun.

Investing 101, people!

Derailment
Oops.

The D.C. Circuit today vacated class certification in an antitrust case on behalf of firms that paid fuel surcharges on top of basic charges to freight railroads. In re Rail Freight Fuel Surcharge Antitrust Litig., No. 12-7085 (D.C. Cir. Aug. 9, 2013). The court cited what it called the "propensity toward false positives" of the class's damages model. The panel also relied on Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013), which likewise rejected an antitrust damages model.

Direct buyers of rail freight services may now wish to look at pursuing individual claims. Or they can wait to see what happens on remand. But for now the statute of limitations clock may have started ticking again.

Related articles
D.C. Circuit Voids Class in Freight Rail Antitrust Case

Anyway the retroactive modification of a plan can't be used to diminish damages to which participants have been held entitled, even if the modification is lawful. In effect the defendant is arguing that okay, we screwed our participants unlawfully, but we could have screwed them lawfully, and that’s what we’ve now done by amending the plan, and since the amendment is retroactive it wipes out the claims on which the case is based, mooting the lawsuit.

Ruppert v. Alliant Energy Cash Balance Pension Plan, No. 12-3067, slip op. 6 (7th Cir. Aug. 9, 2013) (Posner, J.); but see Sutherland v. Ernst & Young LLP, No. 12-304-cv (2d Cir. Aug. 9, 2013) (holding that defendant darn well can screw plaintiffs by making their claims too costly to pursue) (following Am. Express Co. v. Italian Colors Restaurant, 133 S. Ct. 2304 (2013)).

Bonus:    "Supreme Court Majority Kills Again".

Dry MaxIn the proverb, the dog in the manger can't benefit from eating the feed he's found in the barn, but he snarls and bites at the other beasts who could digest it and will starve without it. If I can't get a meal, neither can any of you.

The story came to mind last week.

The catalyst took the form of a class action. It had so many problems that the parties decided everyone — the class members, the defendants, and class counsel — should starve a little. 

But the Sixth Circuit, by a 2-1 vote, tossed the pact on the ground that it unduly favored the lawyers. In re Dry Max Pampers Litig., No. 11-4156 (6th Cir. Aug. 2, 2013). The majority did not explain what it believed the parties could have done, as a practical matter, to improve the settlement for the class. They also didn't say why the costs to the defendant of the relief for the class didn't weigh in favor of the settlement, giving the back of their hand by saying that relief that "interferes with the defendant's marketing plans" doesn't count. Id. slip op. 10

The dissenting judge noted that, "[a]lthough the relief offered to the unnamed class members may not be worth much, their claims appear to be worth even less." Id. at 15. He also pointed out that "the majority fashions a new test based largely on dicta from other circuits: if the fee award looks like 'preferential treatment' compared to the class relief, then the settlement is unfair." Id.

The court as dog-in-the-manger. Crappy result.

Tetra PakWhat happens on appeal after the district court struck an expert report that did not exist until after the other side had deposed the expert and moved for summary judgment and the discovery deadline had passed?

The Federal Circuit affirms, silly. Cheese Systems, Inc. v. Tetra Pak Cheese and Power Systems, Inc., No. 12-1463, slip op. at 23 (Fed. Cir. Aug. 6, 2013).

The panel also upheld the district court's rulings on infringement (yes) and invalidity (no).

Chief Judge Leonard Davis of the Eastern District of Texas, by the way, sat on the panel by designation. Blawgletter hopes to see one of his opinions from the sitting soon.

Stolichnaya-Russian-vodka-009When a Russian hands you a shot glass and as you drink down the clear liquid shouts ze vashe zdrovye!, he means to your health!

The vodka won't in fact extend your life, but it could make you giddy for awhile.

Russians may need a drink after last week's thrashing in the Second Circuit. Two entities from the Third Rome claimed rights to enforce "Stolichnaya" trademarks in the U.S. as the "assign" or "legal representative" of the Russian Federation, which they deemed the true owner of the marks. The panel upheld dismissal of the case for lack of standing under section 32(1) of the Lanham Act, 15 U.S.C. 1114(1). The plaintiffs, it noted, did not allege that either of them in fact owned the marks as assignee of the Russian Federation. They didn't even deem themselves exclusive licensees — a status that the court believed would not suffice anyway. Nor did they allege that the Russian Federation could not for some reason sue in its own right, raising the potential for competing lawsuits. Federal Treasury Enterprise Sojuzplodoimport, No. 11-4109-cv (2d Cir. Aug. 5, 2013).

The panel also rejected the plaintiffs' theory that Rule 17(a) allowed them to sue because the Russian Federation had "ratif[ied]" their suit. Noting that section 32(1) of the Lanham Act permits only "a civil action by the registrant" of a trademark to sue, the court concluded that letting the plaintiffs use Rule 17(a) to derive standing from the Russian Federation's "registrant" status would "enlarge" the "substantive" rights under the Lanham Act, in violation of the Rules Enabling Act. Id. slip op. 46 (citing Eden Toys, Inc. v. Floreless Undergarment Co., 697 F.2d 27, 32 n.3 (2d CIr. 1982) (holding that under Copyright Act only "exclusive owner" has right to sue).