Say you bought a cell phone.  Suppose the outfit that sold it to you said you'd get it for "free".  Say also the seller — let's call it AT&T — billed you 7.75 percent of what the phone would've cost if you'd purchased it at retail.  How would you feel about the freeness of the phone?

Not so good, Blawgletter guesses.  And yet the seller — which we must still refer to as AT&T — insists it did nothing wrong.

Alright.  Fine.  Okie dokie.

But AT&T takes things further.  It also adds to its contracts with customers like you a clause that bars you from suing on behalf of anyone else.  The attempt has worked in some states but seldom in federal court.

Which fact seems to have persuaded AT&T to add a sweetener, at least in the Golden State.  If you, the California customer, convince the arbitrator to award more than AT&T offered in settlement, you get a smacking $7,500.  But the district court and Ninth Circuit didn't accept the AT&T argument.  The latter said, in holding the class ban unconscionable under state law:

The $7,500 premium is available only if AT&T does not make a settlement offer to the aggrieved customer in a sum equal to or higher than is ultimately awarded in arbitration, and before an arbitrator is selected.  This means that if a customer files for arbitration against AT&T, predictably AT&T will simply pay the face value of the claim before the selection of an arbitrator to avoid potentially paying $7,500.  Thus, the maximum gain to a customer for the hassle of arbitratng a $30.22 dispute is still just $30.22. . . . As a result, aggrieved customers will predictably no file claims — even if the odds are that after the letter-writing and arbitrator choosing they will get a $30.22 offer — thereby "greatly reduc[ing] the aggregate liability" AT&T faces for allegedly mulcting small sums of money from many consumers.

Laster v. AT&T Mobility LLC, No. 08-56394, at 14397-98 (9th Cir. Oct. 27, 2009).

FeedIcon Our feed admires the brevity of Circuit Judge Bea.

The U.S. Supreme Court will hear arguments in a pair of key civil cases on November 2.  One involves a claim to recover "excessive" fees under the Investment Company Act of 1940, Jones v. Harris Assocs., No. 08-586; and the other concerns states' ability to bar class actions asserting state law claims in federal court, Shady Grove Orthopedic Assoc. v. Allstate Ins. Co., No. 08-1008.  The cases strike Blawgletter as leading indicators of how far the Court will go this Term in cutting back civil claims.  We'll listen with interest on Monday.

May lenders to an Argentine consortium that won a concession to furnish sewer and water in Buenos Aires enforce choice of forum clauses against an outfit that succeeded to the concession after the first one went belly up?  Perhaps, the Second Circuit held yesterday.

In Aguas Lenders Recovery Group LLC v. Suez, S.A., No. 08-1589-cv (2d Cir. Oct. 23, 2009), a collection of lenders formed the Aguas Lenders Recovery Group and used ALRG to sue Agua y Saneamientos Argentios, S. A., to recover money that the lenders loaned years before to the original concession-holder, Aguas Argentinas, S.A.  ALRG alleged that Agua & Saneamientos owed the funds as the "successor" to Aguas Argentinas.  The district court dismissed under the forum non conveniens doctrine, which allows U.S. courts to require plaintiffs to bring suit in another country.

The Second Circuit reversed.  The panel wrote that the successor theory, if viable, would bind Aguas y Saneamientos to the contracts between Aguas Argentinas and the lenders.  That included the clauses that called for venue in New York and waived any forum non defense to suit in New York.  The court remanded the case for a ruling on whether New York or Argentine law applies and whether Agua y Saneamientos counts as Aguas Argetinas's legal successor.

Matt Damon 
Matt Damon gives his all for his craft.

Blawgletter treasures the cinema.  Watching film makes us giddy.  Plus we adore any celluloid through which light can project flickering images, upon a screen or picture tube, of Matt Damon.  

You thus may imagine our joy at seeing he who played Will Hunting . . . James Francis Ryan . . . Jason Bourne . . . and Linus Caldwell last weekend at The Angelika.  Only this time Lord Damon gained 30 plus pounds in the name of portraying the lysine price-fixing, and Sherman Act section 1-violating, bad guy Mark Whitacre, a bipolar executive at Archer Daniels Midland, the former Supermarket to the World, at least on public television.

You may also guess at our chagrin that The Informant! director Steven Soderbergh and script-writer Scott Z. Burns chose not to include a lecture on how price-fixing hurts consumers.  And why the antitrust-phobic decision in Twombly will cost people who buy commodities — all of us — tens and maybe hundreds of billions of dollars.  But we digress.

At the risk of spoiling the surprise ending, we will tell you that Whitacre's felonious ways seem to owe a big debt to the fact that he lies a great deal.  The movie struck us in fact as a journey into the pathology of a man who can't tell the difference between truth and fiction . . . or at least cares nothing about it.

The Informant! doesn't actually end with a surprise.  We regret any misunderstanding.  Except that, in addition to fixing prices with competitors, Whitacre stole $11.5 million from ADM.  That fact seems less surprising after you've seen the movie.  Which we recommend.

FeedIcon Happy Friday!

Do people who bought stock at, say, $75 a share and who sell it at, oh, $80 per deserve our concern?  Even if the company whose shares rose in value lied about something important, causing the price to dip before recovering?

The Seventh Circuit today said ix-nay on the orry-way but did it in terms of whether the district court abused its discretion in dismissing the securities fraud complaint "with prejudice".  No, the panel ruled.  Fannon v. Guidant Corp., No. 08-2429 (7th Cir. Oct. 21, 2009).

Imagine that.

But what strikes Blawgletter as interesting — a low hurdle, we admit — arises from how the court explained why a dismissal with prejudice fell within the district court's discretion.  Because the trial judge "gave the plaintiffs about a year to review and investigate the case, and then to file a consolidated complaint",  id., slip op. at 11, "[t]he district court was entitled to view this case as one in which the plaintiffs had, as a practical matter, a number of opportunities to craft a complaint that complied with the standards of the PSLRA", id. at 12-13.  "It was therefore entitled to bring this litigation to a close with a dismissal with prejudice."  Id. at 13.

So:  "about a year to review and investigate the case" — without discovery! — makes dismissal with prejudice an okay thing.

Imagine that.

The Judicial Panel on Multidistrict Litigation ordered today that its seven members will gather for the next argument session on November 19 in Cambridge, Massachusetts.  Their Honors will hear from lawyers in, by Blawgletter's count, 16 potential MDL matters.

By the way, we confess to error in guessing the Panel would head south for this gathering.  You can't get a whole lot farther north in the lower 48 than the Ames Courtroom at Harvard Law School.

Further by the way, the numbers have come in for the last set of MDL cases.  By circuit and district court:

First Circuit

None

Second Circuit

Southern District of New York (2)
Western District of New York

Third Circuit

District of New Jersey

Fourth Circuit

District of Maryland

Fifth Circuit

Northern District of Texas (2)

Sixth Circuit

None

Seventh Circuit

Southern District of Illinois

Eighth Circuit

District of Minnesota
Western District of Missouri

Ninth Circuit

District of Arizona
Central District of California
Southern District of California

Tenth Circuit

None

Eleventh Circuit

Northern District of Alabama
Northern District of Georgia (2)

D.C. Circuit

None

Bituminous Coal 
A lump of bituminous coal.

Thomas Hobbes wrote awhile back that, in the state of nature, "the life of man" tends toward the "solitary, poor, nasty, brutish, and short."

Kentuckian Merle Travis translated the Hobbesian view into the brief candle of a bituminous miner.  Travis sang:

You load sixteen tons [of hard coal], what do you get?  Another day older and deeper in debt.  Saint Peter, don't you call me 'cause I can't go.  I owe my soul to the company store.

Merle Travis, "Sixteen Tons" (1946).

Update:  "Tennessee" Ernie Ford made "Sixteen Tons" nationally famous in 1955.  His recording sold 2,000,000 units within two months after its release. 

FeedIcon Our feed still believes that David Hume could out-consume Schopenhauer and Hegel.

HurricaneKatrina 
Hurricane Katrina hit Louisiana and Mississippi on August 29, 2005.

On September 23, Blawgletter reported that the Second Circuit revived a complaint that tied CO2 emissions to global warming under a public nuisance claim. 

Last Friday, the Fifth Circuit reached the same result in a case arising from Hurricane Katrina.  A class of Mississippi property owners alleged in Comer v. Murphy Oil USA, No. 07-60756 (5th Cir. Oct. 16, 2009), that carbon dioxide warmed the globe and made Katrina extra fierce.  Of the Yankee court's decision, the panel said:

The Second Circuit Court of Appeals recently [held] that the case was justiciable. . . . Although we arrived at our own decision independenlty, the Second Circuit's reasoning is fully consistent with ours, particularly in its careful analysis of whether the case requires the court to address any specific issue that is constitutionally committed to another branch of government.

Id., slip op. at 29 n.15.  One judge wrote that, ihho, the complaint didn't state a viable claim and that he would, if he had his way, affirm dismissal on that ground.

Feed-icon-14x14 Our feed has calm in its eye.

DDAVP
DDAVP tablets help manage a form of diabetes.

Antitrust law seldom gets a boost in the federal courts any more.  Their Honors seem more afraid of the risk that ruling for the plaintiff hurts competition than of the danger that killing a case encourages anticompetitive conduct and deprive consumers of any remedy for it.  Fear of "false positives" beats worry about "false negatives".

The Second Circuit went against the trend last week.  In Meijer, Inc. v. Ferring B.V. (In re DDAVP Direct Purchaser Antitrust Litig.), No. 06-5525-cv (2d Cir. Oct. 16, 2009), the 3-0 panel upheld claims that the maker of an antidiuretic drug used an invalid patent to suppress competition from generic substitutes.  The court concluded that direct buyers of DDAVP (desmopressin acetate) had standing to sue under Sherman Act section 2, which bars monopolization and attempts to monopolize, and stated a viable section 2 claim.

The panel also dealt with a curious jurisdictional issue.  If an appeal raises a purely patent law issue, the Federal Circuit and only the Federal Circuit has authority to decide it.  The DDAVP panel noted that a key part of the monopolization claim — that Ferring misused an invalid patent — turned on patent validity, a core patent law issue.  But that didn't matter, the court held, because a sliver of the case didn't require proof of invalidity.  That piece asserted delay in getting generics to market due to Ferring's failure to withdraw a delay-causing petition with the Food and Drug Administration.