Talk about cutting a backlog.

The Supreme Court of Texas issued rulings in 19 cases this week, setting a record for the year if not for all time. The oldest case, City of Dallas v. Albert, No. 07-0824 (Tex. Aug. 26, 2011), started its Supreme Court journey in April 2007 — four years and four months ago.

The one that most caught Blawgletter's eye dealt with a quirk of Texas procedure — the nonsuit. The right to nonsuit means a party can dismiss his/her/its claims whether the other side or the judge wants him/her/it to or not.

The case involved a contract that entitled the "prevailing party" in a lawsuit to "reasonable attorney's fees". Plaintiffs nonsuited, without prejudice, on the same day they filed a response to the defendants' motion for summary judgment. The trial court awarded defendants almost $30,000 in attorneys' fees.

The Court held that "a defendant may be a prevailing party when a plaintiff nonsuits without prejudice if the trial court determines, on the defendant’s motion, that the nonsuit was taken to avoid an unfavorable ruling on the merits." Epps v. Fowler, No. 10-0283, slip op. at 11-12 (Tex. Aug. 26, 2011).

The theory? That barring a fee award in all instances of nonsuits without prejudice "would enhance the possibility that plaintiffs who pursue frivolous claims suffer no consequences and fail to reward defendants whose efforts cause their opponents to yield the playing field." Id. at 12.

The dissent urges that the rule reflects the majority's policy judgment instead of the parties' intent.

Blawgletter concurs. Failing to get a good ruling on the merits because the other side nonsuits at the last minute doesn't feel like "prevailing" to us. And even if it did we think the Court should change the nonsuit rule by, well, changing it instead of saying it reads "prevailing" to mean something that few Texas lawyers would have thought it means in light of the long-standing tradition of viewing the right to nonsuit as just about absolute.

The Third Circuit today affirmed a class certification order in an antitrust case.

The case, Behrend v. Comcast Corp., No. 10-2865 (3d Cir. Aug. 23, 2011), involves claims that Comcast violated sections 1 and 2 of the Sherman Act and that the antitrust violations allowed Comcast to overcharge Philadelphia cable subscribers.

The court's 2-1 majority opinion rejects Comcast's attacks on the district court's order recertifying the Philadelphia class under the rigorous standards the Third Circuit articulated in In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305 (3d Cir. 2008). The panel rules that plaintiffs carried their burden of showing they can prove "common impact" of the antitrust violations on class members and class members' damages with class-wide evidence. The dissenting judge disagreed with the conclusion on damages but concurred on common impact.

The decision will return the case to U.S. District Judge John R. Padova.

[Note: We argued the case for the plaintiff class in January of this year.]

*  *  *  *

If you enjoy Blawgletter, you might think about proposing us for the ABA's Blawg 100 list. See ABA Blawg 100 here.

Some people think most class actions exist to reward the lawyers, not the members of the class. Blawgletter doesn't think that, but some people do.

And then a case like In re Bluetooth Headset Products Liability Litig., No. 09-56683 (9th Cir. Aug. 19, 2011), comes along. It likely didn't start as a platform for class counsel to earn a fee out of whack with benefits to the class as a whole, but it does seem to have turned out that way.

The plaintiffs in Bluetooth Headset claimed loss of hearing as a result of using the defendants' products at loud settings. The parties settled. The deal called for defendants to disclose hearing safety facts, to pay $100,000 to hearing-loss nonprofits, to cover as much as $1.2 million in costs to provide notice of the settlement to class members, and to remit up to $800,000 in fees plus $50,000 in expenses to class counsel. The district court okayed the pact and awarded the full $850,000 to the lawyers.

The Ninth Circuit vacated the district court's orders. The panel held that the fee award so dwarfed the (indirect) relief for the class that it called for closer study by the district court. That the defendants agreed not to challenge the fee award unless it exceeded $800,000 and that the award amounted to far more than the Ninth Circuit's "benchmark" of 25 percent of total benefits to the class made the settlement and the award at least suspect. The court remanded the case so that the district court could do a more searching review of class counsel's fee request in light of the (modest) results they achieved and a harder look at the terms of the settlement.

We suspect that on remand the district court will solve the problems by cutting the fee to around 25 percent of the total cost of the deal to the defendants. That would include the $1.2 million in notice costs, $850,000 in fees and expenses, the $100,000 cy pres award, the $12,000 awards to class representatives, and the value (if any) of the safety disclosures. Call it $550,000. We'll see.

Mark Twain said the difference between the right word and almost the right word means the difference between "lightning" and "lightning bug".

Tell that to the Andersons of Mountrial County, North Dakota. The family lost a case because "drilling" doesn't mean the same thing as "drilling operations".

On May 3, 2004 and May 10, 2004, they granted mineral leases for five-year terms to what became Hess Corporation. Hess won a fight with the Andersons because the courts held that, under North Dakota law, Hess's "drilling operations" just before the five years expired kept the leases alive until Hess's actual "drilling" struck paydirt.

The leases all said that they wouldn't end so long as Hess conducted "drilling or reworking operations" on the Andersons' lands, which had become subject to a "pooling" unit. The Andersons urged that "drilling" didn't go with "operations" — that the "drilling or reworking operations" covered actual "drilling" or "reworking operations" but not "drilling operations". The Eighth Circuit disagreed. It affirmed summary judgment for Hess because the record showed, without dispute, that Hess had started getting ready to drill before May 10, 2009, although it began the actual drilling after May 10. Anderson v. Hess Corp., No. 10-3116 (8th Cir. Aug. 15, 2011).

Because the leases contained a "Pugh clause", production from the Hess well on one of the leases kept all the leases in the pooling unit alive.

We . . . refuse to abdicate our constitutional duty when Congress has acted beyond its enumerated Commerce Clause power in mandating that Americans, from cradle to grave, purchase an insurance product from a private company.

Florida v. United States Dept. of Health & Human Services, No. 11-11021 (11th Cir. Aug. 12, 2011) (Dubina, C.J.) (striking down key section of healthcare reform law on grounds it did more than commerce clause allowed and that tax power didn't permit section because Congress didn't invoke it).

With the U.S. Supreme Court making the test for class actions tougher, you may see a short-term increase in denials of class treatment. You may as a result also witness a surge in class members' filing cases where they assert the now-dead class claims on an individual basis.

But what if — as often happens — the statute of limitations has run while the class action case lived? Can the class members' lawsuits proceed anyway?

Since American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974), federal courts have answered yes — so long as the class and individual claims arose under federal law. Does the same rule apply to state law claims?

The Second Circuit last week joined the Fifth and Ninth Circuits in holding that state law, and not American Pipe, governs the question of whether a class action stops a state statute of limitations from running. Casey v. Merck & Co., Inc., No. 10-1137-cv (2d Cir. Aug. 5, 2011). The panel also ruled that the state whose law applied to the plaintiffs' claims hadn't spoken clearly on whether it would permit American Pipe-style tolling. The court therefore certified questions to the Supreme Court of Virginia.

Do you wonder what you could do if someone targets your company with a torrent of calls and emails? Wonder no more. You can sue under the Computer Fraud and Abuse Act, 18 U.S.C. § 1030, which creates both criminal penalties and a civil cause of action.

So held the Sixth Circuit in Pulte Homes, Inc. v. Laborers' Int'l Union of N. Am., No. 09-2245 (6th Cir. Aug. 2, 2011).

Due to a dispute over firings by Pulte, a home-builder, a union complained to the National Labor Relations Board. It also got members to make lots of calls to Pulte and send a great many emails to some of its execs:

LIUNA . . . bombarded Pulte's sales offices and three of its executives with thousands of phone calls and e-mails. To generate a high volume of calls, LIUNA both hired an auto-dialing service and requested its members to call Pulte. It also encouraged its members, through postings on its website, to "fight back" by using LIUNA's server to send e-mails to specific Pulte executives. Most of the calls and e-mails concerned Pulte's purported unfair labor practices, though some communications included threats and obscene language.

Yet it was the volume of the communications, and not their content, that injured Pulte. The calls clogged access to Pulte's voicemail system, prevented its customers from reaching its sales offices and representatives, and even forced one Pulte employee to turn off her business cell phone. The e-mails wreaked more havoc: they overloaded Pulte's system, which limits the number of e-mails in an inbox; and this, in turn, stalled normal business operations because Pulte's employees could not access business-related e-mails of send e-mails to customers and vendors.

Pulte Homes, slip op. at 2-3.

The district court tossed Pulte's "transmission" claim under section 1030(a)(5)(A) of CFAA on the ground that the union didn't "intentionally cause damage" to a "protected computer". The Sixth Circuit begged to differ, ruling that "a transmission that weakens a sound computer system — or, similarly, one that diminishes a plaintiff's ability to use data or a system — causes damage." Id. at 7.

You may not think of tying up phone lines or a computer network as "damage", but CFAA defines it that way. See 18 U.S.C. § 1030(e)(8) (providing that "any impairment to the integrity or availability of data, a program, a system, or information" counts as "damage").

David Boies said:

Sometimes when things are going well, you think they'll go on forever. Not everything bad you do hurts you, and not everything good you do helps you.

He had in mind a "serious" goof he made in the feds' antitrust case against Microsoft during the 1990s. He said he had deposed Bill Gates for two days and asked for a third, this one a week later. That, he said, "gave [Gates] an opportunity to go back and correct." But "[h]e didn't do that — sometimes you get lucky and your mistakes don't hurt you."

Which leaves Blawgletter scratching our head. The writer of the feature asked Boies to tell about how he'd messed up in the recent past. Boies harked back more than a decade. The example he chose — grilling the Richest Guy in the World — let him highlight a big shot moment in a high profile case that he won. And the flub Cost Him Nothing!

Now we get it.