Does a class action judgment that released "any and all claims" against a defendant bar all class members' claims in a separate class action against that defendant?

The Ninth Circuit today held that enforcing such a release would violate the class members' due process rights.  The first class case involved claims that Sprint improperly charged telephone customers federal regulatory fees.  The second one alleged that Sprint shouldn't have passed through a Washington state tax.  The panel pointed to the lack of adequate representation in the first case of the interests of class members with respect to state tax and the differing factual predicates of the federal and state charges.  Hesse v. Sprint Corp., No. 08-35235 (9th Cir. Mar. 10, 2010).

The Antitrust Division in the U.S. Department of Justice told Blue Cross Blue Shield of Michigan that the AD would sue to stop BCBS from buying its main competitor in Lansing, Physicians Health Plan of Mid-Michigan.  On Monday, BCBS called the merger off, according to the Antitrust Division.

Christine Varney, who heads the Antitrust Division, said the deal would have added a 20 percent market share to BCBS's 70 percent and "would have resulted in higher prices, fewer choices, and a reduction in the quality of commercial health insurance plans purchased by Lansing area residents and their employers" and given BCBS "the ability to control physician reimbursement rates in a manner that could harm the quality of health care delivered to consumers."

So far, the Antitrust Division under Ms. Varney has mostly okayed mergers but only after putting conditions on the approval.  In January 2010, for example, the AD allowed Ticketmaster to purchase Live Nation while requiring Ticketmaster to accept restrictions on its future conduct.

The Second Circuit held today that plaintiffs who alleged a securities fraud claim against Omnicom Group lacked proof of "loss causation" — an often fatal flaw in such cases.  The panel affirmed summary judgment for the defendants.

Plaintiffs pointed to an expert's opinion that a disclosure in June 2002 prompted Omnicom's stock price to drop.  The announcement revealed that an outside director, who served as head of the Audit Committee, had resigned.  The expert opined that the Audit Committee chair's quitting made the market realize — at long last — that bad events in May 2001 hurt the company worse than they suspected.

The panel's ruling turned on its disbelief that the June 2002 event disclosed anything the market didn't already know.  It said:

The generalized investor reaction of concern causing a temporary share price decline in June 2002 is far too tenuously connected — indeed, by a metaphoric thread — to the Seneca transaction to support liability. The securities laws require disclosure that is adequate to allow investors to make judgments about a company’s intrinsic value. Firms are not required by the securities laws to speculate about distant, ambiguous, and perhaps idiosyncratic reactions by the press or even by directors. To hold otherwise would expose companies and their shareholders to potentially expansive liabilities for events later alleged to be frauds, the facts of which were known to the investing public at the time but did not affect share price, and thus did no damage at that time to investors. A rule of liability leading to such losses would undermine the very investor confidence that the securities laws were intended to support.

New Orleans Employees' Retirement System v. Omnicom Group, Inc. (In re Omnicom Group, Inc. Securities Litig.), No. 08-0612-cv, slip op. at 26 (2d Cir. Mar. 9, 2010).

Confirmations in 2010

                 March 04, 2010
William M. Conley, of Wisconsin, to be United States District Judge for the
Western District of Wisconsin.








                 March 02, 2010
Barbara Milano Keenan, of Virginia, to be United States Circuit Judge for the
Fourth Circuit.




                February 09, 2010
Joseph A. Greenaway, Jr., of New Jersey, to be United States Circuit Judge for the
Third Circuit.




                January 25, 2010
Rosanna Malouf Peterson, of Washington, to be United States District Judge for the
Eastern District of Washington.
January 20, 2010
Beverly Baldwin Martin, of Georgia, to be United States Circuit Judge for the
Eleventh Circuit





Pending in Judiciary Committee








Mar 03, 10   PN1497  The Judiciary
Scott M. Matheson, Jr., of Utah, to be United States Circuit Judge for
the Tenth Circuit.




Feb 24, 10   PN1474  The Judiciary

Sharon Johnson Coleman, of Illinois, to be United States District

Judge for the Northern District of Illinois.

Feb 24, 10   PN1473  The Judiciary

Gary Scott Feinerman, of Illinois, to be United States District Judge

for the Northern District of Illinois.

Feb 24, 10   PN1472  The Judiciary

William Joseph Martinez, of Colorado, to be United States District

Judge for the District of Colorado.

Feb 24, 10   PN1471  The Judiciary

Goodwin Liu, of California, to be United States Circuit Judge for the

Ninth Circuit.

Feb 24, 10   PN1470  The Judiciary

Robert Neil Chatigny, of Connecticut, to be United States Circuit

Judge for the Second Circuit.

Feb 04, 10   PN1436  The Judiciary

Josephine Staton Tucker, of California, to be United States District

Judge for the Central District of California.

Feb 04, 10   PN1435  The Judiciary

Marc T. Treadwell, of Georgia, to be United States District Judge for

the Middle District of Georgia.

Feb 04, 10   PN1434  The Judiciary

Mark A. Goldsmith, of Michigan, to be United States District Judge for

the Eastern District of Michigan.

Feb 04, 10   PN1433  The Judiciary

Elizabeth Erny Foote, of Louisiana, to be United States District Judge

for the Western District of Louisiana.

Jan 20, 10   PN1365  The Judiciary

Jane E. Magnus-Stinson, of Indiana, to be United States District Judge

for the Southern District of Indiana.

Dec 22, 09   PN1321  The Judiciary

Richard Mark Gergel, of South Carolina, to be United States District

Judge for the District of South Carolina.

Dec 22, 09   PN1320  The Judiciary

J. Michelle Childs, of South Carolina, to be United States District

Judge for the District of South Carolina.

Oct 29, 09   PN1129  The Judiciary

Brian Anthony Jackson, of Louisiana, to be United States District

Judge for the Middle District of Louisiana.

Five years ago, Congress clamped down on small-time debtors by passing the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.  The Act helped the consumer credit industry.  No longer could people wipe out credit card and other debt by filing for liquidation under Chapter 7.  They'd instead have to go under Chapter 13, which would force them to repay some of their obligations before getting a "fresh start" via the bankruptcy process.

Today, the U.S. Supreme Court upheld BAPCPA sections that limit the advice that "debt relief agencies" may give debtor clients and that mandate ad content.  The Court ruled that lawyers and law firms fall within the class of "debt relief agencies" under section 101(12A) when they aim to provide help that may involve a bankruptcy filing.  It also held that section 526(a)(4) bars debt relief agencies, including lawyers, from advising consumer debtors to "load up" on debt "in contemplation of" wiping out the debt in bankruptcy.  And it concluded that free speech rights don't trump section 528's call for debt relief agencies to state in advertisements their status as professionals who help people with bankruptcies, apparently to prevent ads that mislead consumers into believing that their debts would magically disappear.   Milavetz, Gallop & Milavetz, P.A. v. United States, No. 08-1189 (U.S. Mar. 8, 2010).

The Federal Circuit, 2-1, affirmed an order holding EchoStar in contempt for violating a permanent injunction.  The injunction issued after TiVo won a patent infringement case against EchoStar.  The majority agreed with the district court that EchoStar's post-judgment redesign efforts didn't go far enough.  TiVo, Inc. v. EchoStar Corp., No. 09-1374 (Fed. Cir. Mar. 4, 2010).  

The chair of the U.S. Judicial Panel on Multidistrict Litigation, John G. Heyburn (W.D. Ky.), gave an interview last month in The Third Branch:  Newsletter of the Federal Courts.  He talked about how the Panel promotes efficient litigation management.  But most lawyers will want to know his thoughts on the "primary criteria" for choosing a particular district courts to send cases to.  He said:

Selecting the "right" transferee judge is critically important, because the success of an MDL largely turns on the work of that judge and the parties.  Typically, the Panel seeks a judge with some existing knowledge of the involved cases or the issues presented.  Ultimately, however, the willingness and motivation of a judge to undertake the often substantial additional responsibilities of an MDL are the most important attributes.  

The selection of an appropriate transferee district is usually of lesser importance.  The location of the transferee court can be significant, where a particular district is convenient to likely discovery needs, related grand jury proceedings, or ongoing state court litigation involving the same parties and subject matter.

Among other criteria, the Panel considers the location of the involved actions, and particularly that of the most advanced action, and the existence of a qui tam action based on the same factual allegations.  If a significant number of plaintiffs and defendants favor a particular district, the Panel will also take that into consideration, although it is generally not dispositive.

Judge Heyburn also mentioned that the Panel expects this year to look into whether its "centralization decisions may have the (unintended) tendency of benefitting certain groups of lawyers over others".

The Seventh Circuit today turned back Whirlpool's effort to stop the hand-over of documents it claimed fell within its attorney-client privilege.  The panel noted that, in Mohawk Indus., Inc. v. Carpenter, 130 S. Ct. 599 (2009) (post here), the Court barred appeals from pretrial orders that breached a claim of privilege.  The panel also concluded that Whirlpool hadn't met the tough test for granting extraordinary mandamus relief:

The district court carefully considered Whirlpool's arguments that communications between its counsel and outside advertising agencies should be protected by the attorney-client privilege, either because agency staff functioned as de facto Whirlpool employees or because the agencies and Whirlpool shared a common legal interest.  And the cases Whirlpool cites, most of them from district courts, fail to establish that the district court's rejection of Whirlpool's position was patently erroneous or usurpative in character — in other words, a serious error.  Without that, mandamus is inappropriate, regardless of whether Whirlpool has any other opportunities for appellate review, such as refusing to turn over the documents and then using the ensuing sanctions under Fed. R. Civ. P. 37(b)(2) as the basis of an appeal.

LG Electronics USA, Inc. v. Whirlpool Corp., 09-3777, slip op. at 3-4 (7th Cir. Mar. 3, 2010) (per curiam).

Blawgletter thinks the panel got the result right, mainly because Whirlpool's grounds for privilege strike us as thin.  Imagine Mad Men serving as "de facto employees" of Kodak or sharing a legal interest with Conrad Hilton in making ads 100 percent truthful.  We think not.

Blawgletter long thought that you had to jump through a Copyright Office hoop before you could sue someone for using a copy of your “works” – cartoons you drew, paintings you painted, etchings you etched, and stuff you wrote. You had to get the CO to "register" your at-least-a-little-bit-original and in-a-tangible-medium output. 

We knew that the Copyright Act section that called for registration held the awesome power of barring federal courts from hearing infringement claims.  We believed that section 411(a) did its magic by making the act of registering a barrier to federal court jurisdiction – the authority to rule on the merits of a claim.

Until today.  The U.S. Supreme Court wised us up.  It held, 5-0-3, that section 411(a) erects not a jurisdictional barrier but a “claim-processing” one.  Reed Elsevier, Inc. v. Muchnick, No. 08-103 (U.S. Mar. 2, 2010).

The difference mattered because the case involved a class action settlement of infringement claims.  The class included authors who hadn’t satisfied section 411(a).  If the registration requirement restricted jurisdiction, the district court might have lacked power to okay the deal as to the non-registering class members.

The Court declined to say what effect a jurisdictional problem would have had on the settlement or whether registration counts as a “mandatory precondition to suit that . . . district court may or should enforce sua sponte by dismissing  copyright infringement claims involving unregistered works.”  It remanded the case “for proceedings consistent with this opinion.”  Id. at 16.

Justice Ginsburg concurred in part and in the judgment, and Justices Breyer and Stevens agreed with her.

The contract, after saying the parties "shall" arbitrate any dispute, adds:

Nothing in this clause shall prejudice Syntel or PowerShare's right to seek injunctive relief or any other equitable/legal relief or remedies available under law.

Does that mean Syntel or PowerShare can run to court?  Because it allows "any . . . equitable/legal relief or remedies available under law."  Which must include trial by jury.  Right?

No.  PowerShare, Inc. v. Syntel, Inc., No. 09-1625 (1st Cir. Mar. 1, 2010).

Blawgletter observes that sentences like the one on which the appeal turned sometimes aim to give the parties the option of asking a court to grant interim relief like a temporary restraining order or preliminary injunction.  But this one plainly didn't go that way.  It just said, as the First Circuit held, the arbitrator has power to do whatever the dispute calls for.

We also take this moment to apologize to the First Circuit for griping about the way it displays opinions.  We hadn't noticed that the court makes all opinions available in three formats — html, WordPerfect, and pdf.  (We used the pdf link this time.)  Sorry, First Circuit!