Do you read the law blogs on Blawgletter's Blawgroll?  (You can see it on the left-hand side . . . a little lower . . . a bit more . . . there!)

Today we checked out Ernie the Attorney (by the fabulous Ernest Svenson) and saw a rave review of Ross Fishman and his marketing blog — which he calls Ross Fishman's Marketing Blog.  We looked at RFMG and liked what we saw.  We think you will, too.

By a chance of litigation, the documents have been moved from outside the grasp of the grand jury to within its grasp.  No authority forbids the government from closing its grip on what lies within the jurisdiction of the grand jury.

In re Grand Jury Subpoenas, No. 10-15758, slip op. at 19638 (9th Cir. Dec. 7, 2010) (Noonan, J.) (holding that feds could get law firms' copies of documents they got from overseas in private antitrust litigation against makers of flat-panel liquid crystal displays).

You may recall, as Blawgletter fondly does, a Simpsons episode featuring a monorail that an itinerant huckster — Lyle Lanley — convinced the good people of Springfield to buy for $3 million.  The money came from a fine the town assessed against power plant owner C. Montgomery Burns for dumping nuclear waste. 

The decision to invest in public transportation ended — as it so often does — in near-tragedy.  The train careened out of control on its inaugural run, almost ending the comic career of Homer Simpson, who stopped it just in time.

The memory of Marge v. The Monorail came back to us this afternoon as we read the Ninth Circuit's short and sweet opinion in what we may call Seattle v. The Monorail Advisor Whose Allegedly Bad Advice Caused The Seattle Monorail to Catch Fire in 2004.  The panel cited the answer by the Supreme Court of Washington to the panel's question on tort liability — something about Party A (the monorail operator), Party B (the monorail owner), and Party C (the advisor) and whether Party A could sue Party C for negligence despite having no contract with Party C.  The Washington court said yes, and the Ninth Circuit said fine in Affiliated FM Ins. Co. v. LTK Consulting Services, Inc., No. 07-35696 (9th Cir. Dec. 7, 2010).  The case returns to the district court to see whether the consultant/advisor breached its tort duty and, if so, how many millions does it owe Party A.

Conan O'Brien, btw, wrote the script.  For the Simpsons show.  Not Affiliated FM Ins. Co.

The U.S. Supreme Court today granted review of a Ninth Circuit ruling that allowed a class of California women to pursue sex discrimination claims against Walmart.  Order List, Dec. 6, 2010, at 2.

The Ninth Circuit held en banc that the case could move ahead as a class action under Rule 23(b)(2) on the women's claims for injunctive, declaratory, and back pay relief.  The 6-5 court also sent the case back to the district court for a decision on whether the class's claims for punitive damages could proceed on a class basis under Rule 23(b)(2) or 23(b)(3).  Dukes v. Wal-Mart Stores, Inc., 603 F.3d 571 (9th Cir. 2010) (en banc).

The Court's ruling in Dukes will likely settle a split in the courts of appeals over whether and when courts may certify class actions that seek money together with injunctive or declaratory relief.  Some circuit courts, such as the Second and the Ninth, tend to hold that even a claim for big monetary relief can fit within the Rule 23(b)(2) framework so long as the class also seeks serious injunctive and declaratory relief.  Other circuits, notably the Fifth, almost categorically disallow classes where the plaintiffs ask for any cash other than as purely incidental relief.

Blawgletter enjoys the writings of Richard Posner, he of the Seventh Circuit.  Last week he pounded out another work that caught our notice.  And in it he came back to a common theme — the badness, whether as plaintiff or defendant, of using a lawsuit as a tool to raise your rival's costs.

The case involved the question of whether the plaintiff's loss on summary judgment qualified the case as "exceptional" for purposes of awarding fees, or not, under 15 U.S.C. § 1117(a), a part of the Lanham Act, which deals with misuse of trademarks and false advertising.

Judge Posner surveyed the circuits and found a "jumble" around what they saw as exceptional.  Nightingale Home Healthcare, Inc. v. Anodyne Therapy, LLC, No. 10-2327, slip op. at 5 (7th Cir. Nov. 23, 2010).  From first principles he divined the True Test:

[A] case under the Lanham Act is "exceptional," in the sense of warranting an award of reasonable attorneys' fees to the winning party, if the losing party was the plaintiff and was guilty of abuse of process in suing, or if the losing party was the defendant and had no defense yet persisted in the trademark infringement or false advertising for which he was being sued, in order to impose costs on his opponent.

This approach captures the concerns that underlie the various tests and offers a pathway through the semantic jungle.  It can account for most of the case outcomes in the various circuits with the exception of those that make it easier for prevailing defendants to obtain attorneys' fees than prevailing plaintiffs.  The usual rule, notably in civil rights cases, is the reverse:  a prevailing plaintiff is presummptively entitled to an award of attorney's fees, while a prevailing defendant is entitled to such an award only if the plaintiff's suit was frivolous. . . . But those are cases in which the plaintiff is an individual and the defendant is a corporation or other institution, implying an asymmetry of resources for litigation.  Plaintiffs and defendants in Lanham Act cases usually are symmetrically situated:  they are businesses.  Of course they may be very different in size, but this is not a reason for a general rule favoring prevailing plaintiffs or prevailing defendants, for there is no correlation between the size of a party and which side of the litigation he's on.  Big businesses sue big and small businesses for trademark infringement and false advertising, and small businesses sue big and small businesses for the same torts.  Disparity in size will often be relevant in evaluating the legitimacy of the suit or defense, but it is as likely to favor the defendant as the plaintiff.

Id. at 10-11 (citations omitted).

The defendant's name, Anodyne, by the way, means something that relieves pain.

A panel of the Fourth Circuit joined sister circuits today in holding that courts "of" a state differ in a basic way from courts "in" the state. 

A contract clause that speaks of the courts "of" the Commonwealth of Virginia means Virginia state courts and Virginia state courts only, the panel ruled; courts "of" a state do not include federal courts that merely sit "in" the state.  FindWhere Holdings, Inc. v. Systems Environment Optimization, LLC, No. 09-2155 (4th Cir. Nov. 29, 2010).

The panel affirmed remand of the case to the Commonwealth court from which it came on the strength of the parties' forum selection clause.

No doubt it mattered that the case didn't involve claims over which federal courts have exclusive jurisdiction (e.g., patent, copyright, Sherman Act).

Since 1982, California law has required contingent fee agreements between a lawyer and a "plaintiff" to meet certain tests. 

Ten years after the law took effect, a California court of appeals held that the law doesn't apply "outside the litigation context."  Franklin v. Appell, 8 Cal. App. 4th 875, 892 (Cal. App. 1992) (involving real estate transactions).

Two years after Franklin v. Appell, the Golden State's legislature changed "plaintiff" in most places to "client".  See California Business and Professions Code § 6147.

See the train coming?

A California lawyer complied with the statute in two of his fee agreements with clients — almost.  One related to tax matters, the second concerned investments.  Both provided for a "success fee" on top of a monthly stipend.  But neither document included, as section 6147(a)(4) required, "a statement that the [contingent] fee is not set by law but is negotiable between attorney and client."

The Second District Court of Appeal held yesterday that section 6147 barred the lawyer from recovering the success fees.  Arnall v. Superior Court of Los Angeles County, No. B225264 (Cal. App. Nov. 22, 2010).  It directed the trial court to grant summary adjudication to the lawyer's (former) clients on the point.

The lawyer may now receive a "reasonable fee".

May a working interest owner in an offshore oil and gas lease avoid paying a share of the cost of decommissioning a platform that the lessee used to produce from the lease?  If you had a Farmout Agreement like the one between predecessors in interest — the PIIs — of Apache Corporation and W&T Offshore, the Fifth Circuit held last week, you surely may.

The PII of W&T held an oil and gas lease covering a block in the Gulf of Mexico.  The PII of Apache wanted to drill one or more wells on the lease.  To accomplish what they both desired, their PIIs entered into a 1979 Farmout Agreement, which gave the farmee (now Apache) the right to earn an assignment of the leasehold interest of the farmor (now W&T) by timely starting a test well and producing from it. 

The contract allowed W&T to keep an 8.33 percent overriding royalty interest in the test well and any later development wells.  But it also granted W&T two options to convert the royalty into a 33.3 percent working interest.

The first option gave W&T a conversion right as to the test well only.  The second one concerned development wells.  Both entitled Apache to recover certain costs for the privilege of conversion.

The problem arose after Hurricane Ivan damaged an offshore platform that Apache had used to produce oil and gas from wells it had drilled in the lease block.  Federal law obliged Apache, as owner of the platform, to bear the expense of decommissioning the platform.  And, since W&T had opted to become a working interest owner under the second option, Apache claimed that W&T had to pay its share of the decommission costs.  W&T disagreed.  Apache sued but lost on summery judgment in the district court.

The Fifth Circuit affirmed.  The panel's ruling focused on the option language in the Farmout Agreement.  The first option sprang to life at "such time as" Apache "recovered out of the proceeds of production from" the test well "the proportionate costs of drilling, testing, completing, equipping and operating the well, including" part of "the platform costs".  The second option arose if, "prior to payout of the first producing well," Apache chose to drill a second (development) well.  It entitled W&T to "elect to participate in the drilling of such well" and provided that, if W&T so elected, W&T "shall convert its overriding royalty to a 33 1/3 percent working interest in said lease . . . and shall be responsible for its proportionate share of platform costs".

The court held that "platform costs" in both options meant the same thing.  Under the first option, the court reasoned, "platform costs" couldn't refer to (future) decommissioning costs:

[I]f the term "platform costs" included the future expenses of decommissioning the Block 151 platform, W&T's election point to convert its royalty interest in the first well would not occur until after Apache had decommissioned the well.  That is, under Apache's construction, decommission costs would not be recoverable until after the platform had been decommissioned, and once the platform had been decommissioned, it would be impossible to recover such expenses out of the proceeds of a well that is no longer operational.  This construction is nonsensical.  It would be pointless for [W&T] to convert its overriding royalty interest into a working interest following the decommissioning of the Block 151 platform.  Where there is no production, there are no royalties, regardless of the percentage.

Apache Corp. v. W&T Offshore, Inc., No. 09-31122, slip op. at 8 (5th Cir. Nov.16, 2010) (applying Louisiana law).  The panel's equating of "platform costs" in the first option with the same term in the second one meant that the latter "includes only fixed, startup costs of constructing a well, not speculative operational expenses, which are outside the scope of costs contemplated by the [option] election-point provisions."  Id. at 9-10 (footnote omitted).

You write well.  Will copying your judge's writing style boost your chances of persuading him or her?  Blawgletter doubts it will.

Judges, like lawyers, vary in the quality of their prose.  Rulings on merely routine matters may plod along; few decisions justify a judge's best work.  And, even in the most momentous opinions, only the finest judicial stylists can produce work that truly sparkles.

But writers of any description can tell good from bad.  They like the good stuff better.  Use the good stuff, in your own style.  The judges will thank you.