Scene:    A gun range. Snappy fires a G31 .357. Bitey watches.

Bitey:    Hey Snaps. Did you ever wonder if people who play video games also own guns? I mean more than other people?

Snappy:    [Pow, pow, pow.]

Bitey:    Good shot! What about mentally ill people? Do lots of them own guns?

Snappy:    [Pah-ya.]

Bitey:    How about people with criminal records? Guns galore?

Snappy:    Hush.

Bitey:    Sorry. But do you know whether or not video game people on average have more mental illness than other folks? Or do violent things? And do mentally ill people commit more acts of violence?

Snappy:    [Rat-tat-tat.]

Bitey:    Okay. Fair enough. But do mentally ill video game players tend to hurt others? Mentally ill gun owners?

Snappy:    [Clacketa-clacketa-clacketa.]

Bitey:    What percentage of guns belong to criminals? Do state gun laws prohibit criminals from owning guns? Possessing guns? Gazing longingly at guns?

Snappy:    I think that I shall never see a weapon lovelier than this Uzi.

Bitey:    She's a beaut, alright! But I wonder what second amendment rights mentally ill people have? Criminals? Mentally ill criminals? Mentally ill people who play video games? Drunk people?

Snappy:    [Fwoosh.]

Bitey:    Do life insurance companies charge gun owners lower premiums? What about liability insurers? Because of gun owners' superb safety record, you know?

Snappy:    [Bang, bang, bang, bang, bang.]

Bitey:    Does the training for getting a permit to conceal a weapon on your person teach you how to shoot in a crowd? Do you learn how to kill (or at least disable) a drunk and angry mentally ill video game player as he wields a semi-automatic assault rifle with a 100-round magazine?

Snappy:    A well Regulated militia.

Bitey:    Does anyone track crimes by people who have secret-carry permits? Misuse of firearms by secret-carry folks? Why not?

Snappy:    Being necessary to the security of a free State.

Bitey:    Why do second-amendment supporters seem mad? Do assault-weapon owners also buy monster pickup trucks and red sports cars? Does the styling of assault weapons serve any useful function for hunters or target-shooters?

Snappy:    The right of the people.

Bitey:    Do people have a right not to fear gun violence by angry second amendment supporters who display assault weapons at public gatherings?

Snappy:    To keep and bear arms.

Bitey:    Why doesn't the second amendment limit the kinds of guns people have the right to keep and bear to the exact types that existed in 1791? And how do premature deaths of people in the homes of gun owners compare with the number in the home of non-gun owners?

Snappy:    Shall not be infringed. [Ka-boom!]

Fade to black.

You've heard of the term, "lawsuit within a lawsuit" or "case within a case", right? It refers to a dispute that requires you to prove Claim A in order to prevail on Claim B.

Examples abound. Think of a tortious interference with contract claim. You have to show not only that the Bad Guy did something to interfere with your contract but also that the something in itself amounted to a separate actionable tort (such as libel, trespass, conversion, or fraud). Some antitrust claims also may subsume torts, as where Party A alleges that Monopolist coerced its dealers into ceasing to do business with Party A. And litigants who renege on settlements assert damages equal to what they would have gotten had they won the lawsuit they didn't actually win because they settled it.

But the classic lawsuit-within-a-lawsuit arises when an erstwhile client charges her former counsel with malpractice in his handling of the ex-client's case. The unhappy litigant can win only if she proves both that the lawyer made a mistake and that she would have won the earlier case but-for the lawyer's error.

The complexity that comes with having two lawsuits in one makes them harder to win than regular ones. A ruling by the U.S. Supreme Court yesterday provides an off-beat illustration of why.

The case arose from a patent infringement lawsuit. The plaintiff in the patent action, Vernon Minton, lost in the trial court because the defendant established a defense — the "on-sale bar" defense, which kills patents that inventors apply for more than a year after they sold or offered to sell a product embodying the invention. Minton's lawyers came up with a new argument in an effort to overcome the summary judgment against him, urging that the evidence showed that he'd offered his invention only for "experimental" purposes rather than commercial ones. But the district court rejected the 12th-hour rescue attempt, and the Federal Circuit held that Minton had waived the defense to the defense.

Minton then sued his lawyers in state court for malpractice. He lost again, this time because the court saw no evidence that supported Minton's "experimental" argument and therefore ruled that Minton would have lost the patent case even if his lawyers had more timely raised the argument.

On appeal, Minton came up with a new tack. He discovered that the court he'd chosen to litigate his malpractice case in didn't have jurisdiction to decide his claims because only federal courts have authority to decide cases "arising under" federal patent law.

The Texas Supreme Court agreed with Minton, but the U.S. Supreme Court went unanimously the other way. Sure, the latter Court held, we'd like to have all patent law issues go through the federal system to help assure consistency and predictability, but Congress didn't require that. It instead provided for "arising under" jurisdiction, and that means "state legal malpractice claims will rarely, if ever, arise under federal patent law for purposes of 28 U.S.C. §1338(a)." Gunn v. Minton, No. 11-1118, slip op. at 6-7 (U.S. Feb. 20, 2013).

The reason? Mainly that the posing of a patent-law issue in a malpractice setting prevents the issue from qualifying as "substantial in the relevant sense." Id. at 8. As the Court observed:

Because of the backward-looking nature of a legal malpractice claim, the question is posed in a merely hypothetical sense: If Minton's lawyers had raised a timely experimental-use argument, would the result in the patent infringement proceeding have been different? No matter how the state courts resolve that hypothetical "case within a case," it will not change the real-world result of the prior federal patent litigation. Minton'a patent will remain invalid.

Id. at 9-10.

 

Blawgletter has noted concerns about awarding money from class action judgments and settlements to non-class members by way of "cy pres" awards. See "Does Cy Pres Have a Prayer?". These payments aim to do the next best thing to paying the funds to the members of the class.

Such efforts become necessary fairly often — in consumer class actions especially — due to the difficulties either of giving actual notice to class members (so that they can file a claim) or of getting proof of what class members paid or lost (so they can get their fair share of the available funds).

Cy pres distributions don't often raise big problems when they account for a small fraction of the money that the class receives as the result of judgment or settlement. But what if the cy pres piece dwarfs the payout to class members?

The Third Circuit ruled on Feb. 19 that district courts should require class counsel to work very hard to get settlement funds to class members. The court thus upset a $35 million settlement that promised to pay class members around $3 million while cy pres beneficiaries would get $18 million and the lawyers $14 million. Try again, the panel said. In re Baby Prods. Antitrust Litig., No. 12-1165 (3d Cir. Feb. 19, 2013).

The court gave class counsel a terrific reason to maximize awards to class members and to minimize cy pres distributions, saying:

Where a district court has reason to believe that counsel has not met its responsibility to seek an award that adequately prioritizes direct benefit to the class, we . . . think it appropriate for the court to decrease the fee award [to class counsel].

Id. at 27.

A "substate" governmental entity that engages in conduct that would usually violate the Sherman Act may escape liablity under the state-action doctrine if the "state" directs "substate" to do the anticompetitive deeds. But the state must "'clearly articulate[] and affirmatively express[]' state policy to displace competition." Fed'l Trade Comm'n v. Phoebe Putney Health Sys., Inc., No. 11-1160, slip op. 8 (U.S. Feb. 19, 2013).

A scheme by a bi-county hospital "authority" in Georgia failed the clear-articulation and affirmative-expression test, the Supreme Court unanimously held today.

The authority had agreed to buy a hospital that accounted for 11 percent of the market for acute-care hospital services in a six-county area and to let an outfit that controlled 75 percent of the market lease its smaller cousin for $1 a year. The Federal Trade Commission sued under the FTC Act to enjoin the transaction. The district court dismissed the FTC's complaint under the state-action doctrine. The Eleventh Circuit affirmed, ruling that the doctrine applied so long as the conduct in question foreseeably resulted from the state law creating the hospital authority.

The Supreme Court reversed. It held (in an opinion by Justice Sotomayor) that the "foreseable result" standard flunked the clear-articulation and clear-expression test:

We have no doubt that Georgia’s hospital authorities differ materially from private corporations that offer hospital services. But nothing in the Law or any other provision of Georgia law clearly articulates a state policy to allow authorities to exercise their general corporate powers, including their acquisition power, without regard to negative effects on competition. The state legislature’s objective of improving access to affordable health care does not logically suggest that the State intended that hospital authorities pursue that end through mergers that create monopolies. Nor do the restrictions imposed on hospital authorities, including the requirement that they operate on a nonprofit basis, reveal such a policy. Particularly in light of our national policy favoring competition, these restrictions should be read to reflect more modest aims.

Id. at 16-17.

AA Logo
Does the new AA logo portend better things for AA customers?

Blawgletter lives near a huge hub for air travel — the Dallas/Fort Worth International Airport — that one carrier, American Airlines, dominates.

As you likely know, AA's parent, AMR, filed for chapter 11 reorganization more than a year ago. The move struck us as an attempt at crash-landing a flying unit that had a glorious past but had come to feature filthy jets, snarky pilots, and surly flight attendants. For that reason, it sent a thrill of hope through customers who, like us, wished for a through cleansing, not only of the debt load but also of the smelly cabins and toxic employee/management attitude.

Guess what? The bankruptcy seemed to do wonders with that toxicity thing, if not the smelliness thing. Leg room a bit more commodious. The pilots didn't mumble as much (or at ear-piercing decibels just as you drifted off for a nap). And the service in the coach cabin got noticeably friendlier, and the snacks on offer tasted somewhat better.

Yes, we rolled our eyes when, a few seconds after AA announced it would buy hundreds of new planes from Boeing and Airbus, the carrier began touting its "most modern" and "newest" fleet — which in fact wouldn't start to arrive for many months and wouldn't build to anything close to newest for years. But we felt less doubtful about a rebranding initiative, which furnished a new and sleeker logo and nicer livery for the incoming jets. And then, on Valentine's Day, AA the US Air said they would join in aviational matrimony to form the biggest domestic carrier in, well, domestica.

You know what took us by surprise? The media coverage. Newspaper people seemed to delight in ridiculing AA's efforts to get better, especially the rebranding effort. We thought: Didn't those folks fly on American planes? Didn't they notice what we saw? Did they really like that stodgy, kind of mean image?

We can say similar things about people who misunderestimate the Supreme Court of Texas. Under Chief Justice Wallace Jefferson, the Court has shown increasing signs of — dare we say it? — balance. More opinions out of the Court strike us as less harsh. More persuasive. Less tendentious.

The Court has a ways to go, in our view. But let's give credit where it's due. It has gotten better.

The example that prompted a mental link between AA and the Court arrived last Friday, the usual day for the Court to issue new opinions (and "Weekly Orders" dealing with petitions for review and other matters). The case raised the question of whether the law that cut back on med-mal cases requires expert reports that address all potential grounds for liability as a prerequisite to moving beyond the pleading stage. The Court — per the Chief Justice himself — ruled that the law doesn't require an all-encompassing report on the front-end and instead permits forward movement if the plaintiff submits an expert report that shows a reasonable basis for at least one theory of liability. Certified EMS, Inc. v. Potts, No. 11-0517 (Tex. Feb. 15, 2013).

A more cynical person might speculate that the Court only a few years ago would have rule 5-4 or 6-3 that the report must not only address all theories that the plaintiff pleaded but also all those that he might have alleged. Not us. We're happy. Yay.

The Second Circuit held on Valentine's Day that cheaters shouldn't prosper.

At least when they sue their old bid-rigging friends for rigging bids so as to punish them for mending their cheating ways. The panel ruled that Gatt Communications lacked standing to sue its erstwhile co-conspirators because, among other things, the harm to Gatt didn't result from injury to competition. Gatt Communications, Inc. v. PMC Assocs., LLC, No. 11-1111-cv (2d Cir. Feb. 14, 2013).

The third judge on the panel would have upheld the killing of the erstwhile bid-rigger's antitrust claim under the doctrine of in pari delicto (equally at fault). But the U.S. Supreme Court has never applied the IPD defense in an antitrust case. That means judge no. 3 wants to create a new way to defeat Sherman Act claims.

Should that view prevail? Nah. Antitrust law boasts more than enough ways to defeat claims. We don't need any more.

Chevron and the Republic of Ecuador have beaten and bloodied each other for two decades now in what seems like just about every U.S. and Ecuadoran court that exists. The fight relates to claims in arbitration that Chevron predecessor Texaco polluted oil fields in Ecuador. Background here. And it has so far resulted in a multi-billion-dollar arbitral award and a court judgment that Ecuador has yet to collect.

The dispute landed before the Fifth Circuit after Ecuador tried to get discovery from an American, John Connor, and his firm, GSI Environmental. The district court denied Ecuador's request for aid in obtaining the discovery on the ground that the arbitral entity didn't qualify, under 28 U.S.C. 1782, as a "foreign or international tribunal" under Fifth Circuit precedent.

The Fifth Circuit reversed on the basis of judicial estoppel. Chevron, the panel pointed out, had over and over again gotten discovery through U.S. courts by claiming that the arbitral entity did constitute an "international tribunal" and therefore could not now deny the entity's status as an IT. Republic of Ecuador v. Connor, No. 12-20123 (5th Cir. Feb. 13, 2013).

Happy Valentine's Day!

Within a large area, we should depend upon the jury to bring to bear what happens and is happening in our culture because judges, more than anybody else, are cut off. We’re generally old. Our children are grown up so we don’t see what’s going on in their world. Our friends are rich and successful. We don’t have to worry about income. We’re out of touch with what’s going on. What is appropriate in the workplace? Can you, as an employee, put your arm around a woman and say how are your kids, how are you feeling? Squeeze her arm, squeeze a man’s arm. Can you touch a child? Can you make an off-color joke and refer to something on TV? I don’t know what’s accepted anymore. You need a jury for that kind of stuff.

Jeffrey Cole & Robert Gettleman, “Judge Jack Weinstein on Life and Law”, Litigation 18 ( Winter 2013).

Clients of Blawgletter's law firm told an outside consultant not long ago that they have "fun" working with our lawyers.

The funny thing? She hadn't asked them whether they enjoyed working with us. They volunteered that they do. Insisted on telling her that. Demanded that she write it down.

That took the interviewer by surprise, she told us. She said she couldn't recall clients using the f-word in talking about lawyers at any other firm.

It didn't feel like a revelation to us. We whose founding partner told The Wall Street Journal last month that he advises the firm's lawyers to behave as "lovers" instead of fighters. You get better results with the other side, he said, if you use sugar instead of vinegar.Jennifer Smith, "Lawyers Behaving Badly Get a Dressing Down from Civility Cops", The Wall Street Journal, Jan. 28, 2013.  Amen to that.

What works in your dealings with the opposing counsel you want to beat on the merits goes double for the client you want to trust and help you. A happy warrior pleases everyone more than a dour and grumpy one.

Don't get the idea that having a sense of humor, smiling now and then, and showing a real interest in your clients' and colleagues' families and paying attention to their daily challenges substitute for preparation, judgment, and execution. They don't.

But what client doesn't want both, we wonder.

What do you think, all you Blawgletterati out there?

The Third Circuit held today that a New Jersey law barring the sale of more than one "handgun" to any person (other than collectors, target-shooters, and others who claim an exemption) doesn't violate the due process rights of people who want to purchase at least two handguns in a month. Ass'n New Jersey Rifle & Pistol Clubs v. Governor of New Jersey, No. 12-1624 (3d Cir. Jan. 30, 2012).

The plaintiffs claimed that the "One Gun Law" deprived them of due process because getting an exemption to buy multiple guns in a month might take too long. They also limited the complaint to the ban as it applied to BB-guns and air rifles.

The panel's brief opinion did not mention recent events.

Expect to see more challenges like this, perhaps the next time under a straight (or straighter) second amendment-type claim.