The NYT leads today with a piece — disturbing to Blawgletter — on the high cost of paying in advance for a debit card.  It cites examples like these:

The MiCash Prepaid MasterCard docks cardholders a $9.95 activation fee. Like many competitors, it then charges numerous recurring fees, including $1.75 for each A.T.M. withdrawal, $1 for each A.T.M. balance inquiry, 50 cents for each purchase, $4 for monthly maintenance, $2 for inactivity after 60 days and $1 for a call to customer service.

The Millennium Advantage Prepaid MasterCard goes further, listing an application fee of up to $99. The Silver Prepaid MasterCard advertises that it does not charge for overdrafts as many debit cards do, but it gives itself the option of charging a $25 shortage fee if customers exceed their balance.

“It’s a very expensive way to bank,” said Jean Ann Fox, director of financial services at the Consumer Federation of America.

We suspect that the gouging of people who fall for the allure of a hyper-costly debit card has a lot to do with federal pre-emption of state consumer protection laws.  Banks can trump unfair and deceptive trade practices statutes by citing federal rules. 

Should we either fix the federal rules to protect people against predatory debit card practices or remove their pre-emptive effect so that state laws can again do the job?

Supreme Court 2009
Their latest portrait.

The U.S. Supreme Court started its October Term 2009 a day ago — although Their Honors did rehear a big case on September 9.

If you've waited the summer long to see how the Court would deal with your cert. petition, your mandamus application, your request for a writ of prohibition, your plea for habeas corpus relief, or even your motion to file an exhibit out of time or under seal, October 5 likely quenched your thirst.  Yesterday's Order List went on for just shy of 91 pages — and disposed of around 2,000 cases.

FTC Statue
A painting of Man Controlling Trade at FTC headquarters. 

The Federal Trade Commission has given fresh advice on what it deems false plugs for goods and labor.

And the agency's new Guides Concerning the Use of Endorsements and Testimonials in Advertising for the first time covers weblogs!

The FTC's press release for the up-to-date GCUETA, in part, says:

The revised Guides . . . add new examples to illustrate the long standing principle that “material connections” (sometimes payments or free products) between advertisers and endorsers – connections that consumers would not expect – must be disclosed. These examples address what constitutes an endorsement when the message is conveyed by bloggers or other “word-of-mouth” marketers. The revised Guides specify that while decisions will be reached on a case-by-case basis, the post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement. Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service.

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Leland Stanford 
Leland Stanford Junior (1824-93).

The Federal Circuit ruled last week that the Leland Stanford Junior University doesn't own rights in patents (involving methods to check effectiveness of HIV treatments) and therefore can't sue drug-maker Roche for infringement. 

The inventor, Mark Holodniy, signed contracts with both the Junior University (in 1988) and Roche's predecessor-in-interest (in the following year).  But, while the Stanford instrument said that Holodniy hereby "agree[s] to assign" patent rights, the latter said he "do[es] hereby assign" them.  Title vested in Roche, the court held, because a promise to assign doesn't effect a current transfer.  Board of Trustees of Leland Stanford Junior University v. Roche Molecular Systems, Inc., 08-1509 (Fed. Cir. Sept. 30, 2009).

The panel went on to rule that Roche waited too long to sue Stanford (by way of counterclaim) for a judgment declaring that Roche owns the patents.  A slide show that Stanford made to Roche in 2000 deemed Stanford the patent owner.  Under California law, the court ruled, that started the four-year limitations period on Roche's claim of ownership.  Time expired before Roche counterclaimed five years later.  Id., slip op. at 22-24.

What does it all mean?  That Stanford and Roche spent years and burned through millions to achieve a tie?  Not quite.  As a practical matter, Roche got a lot.  It beat an infringement claim and won the ownership fight.  It also overturned an invalidity ruling (nominally in its favor) that would've destroyed the value of patents, which it now owns and can try to enforce against others.

How much good the last part will do Roche will have to await events.  Having urged invalidity in the Stanford case, Roche faces a hard time changing its position should it choose to assert the patents against others.

Judge Buchmeyer 
Jerry Buchmeyer (1933-2009) — lawyer, judge, humorist, family man.

Jerry Buchmeyer, 76, passed away on September 21.  Blawgletter — along with a great many others — will miss him.

Judge Buchmeyer aimed for an ideal in which lawyers got along with and, yes, even liked each other.  He coaxed attorneys to squint to see their opponents' humanity and to act decently.  He didn't always use humor but often did, and to good effect.

A memorial service for Judge Buchmeyer will commence at 4:00 p.m. today at the Belo Mansion, 2101 Ross Avenue, in downtown Dallas.  An article from The Dallas Morning News follows:

When friends and family of retired U.S. District Judge Jerry Buchmeyer gather for his memorial service Friday, spirited memories and laughter promise to be at the top of the docket.

In a 1991 order – which he wrote on the back of a blank check and gave to a law clerk – Buchmeyer left these instructions: "I want an 'Irish Wake' celebration. At Belo of course."

The service is at 4 p.m., and, as the judge directed, it will be at the Belo Mansion. Buchmeyer died Sept. 21 of natural causes.

Buchmeyer penned his wishes after attending a fellow judge's services, which he felt were too somber.

"He was telling all the family that he wanted us to gather people around and tell the funny, memorable stories about him, not necessarily wax on in a boring, labored way," said his son, Jon Paul Buchmeyer of New York.

"I didn't feel like we needed to go over his four big iconic cases and have speakers from those areas. It was more important to remember the man as a funny, humorous, engaging person."

In addition to his children and grandchildren, the memorial service will include members of Buchmeyer's informal family – his former law clerks, who still gather from across the country to hold Dallas reunions.

"There's going to be plenty of laughter, and that's how he would have wanted it," said former clerk Toni Nguyen, now assistant general counsel for Belo Corp., the parent company of WFAA-TV (Channel 8) and former owner of The Dallas Morning News.

"I don't think he was into the somber mood."

State Sen. Wendy Davis, who clerked for the judge with Nguyen in 1993-94, remembers him for his humor – and incredible humanity.

She recalled his agony in having to apply mandatory sentencing guidelines to a 19-year-old facing 40 years in prison for his third robbery conviction

"The judge stayed up all night trying to find a way outside the guidelines, because he didn't feel that was an appropriate sentence," Davis said. The teenager "was a good kid who had been caught up with the wrong people at the wrong place at the wrong time."

"When he sentenced him, he sat on the bench and just cried."

Davis later drew on her clerkship lessons when she was a Fort Worth City Council member. She remembers being confronted by irate homeowners who were opposed to public-housing residents being relocated to their neighborhood.

"I always had him in my mind and in my heart when I was facing the criticism I faced and the personal difficulties I faced as a result of that decision," Davis said.

Buchmeyer isn't an easy man to capture in words, said former clerk Meg Penrose, a law professor at Texas Wesleyan University in Fort Worth.

"It's really hard to describe him with any one word, story or adjective," said Penrose. "This is a man who had led such a rich, rich life."

President Bill Clinton had considered elevating Buchmeyer to the U.S. 5th Circuit of Appeals, but the judge was happy in Dallas, Penrose said.

"He didn't want to do that because one of the things he liked about being a trial judge was being able to reach the right decision based on the law and affect individuals in such a rich way," she said.

Despite the claims of those who didn't always agree with his rulings, Buchmeyer did not legislate from the bench, said longtime friend and fellow attorney Louis Weber of Dallas.

"He was always following the law. He just was a liberal in most of his thinking, and, therefore, some people considered that legislating even though he wasn't doing it," Weber said.

Few people have known Buchmeyer longer than Frank Finn of Dallas, who remembers the judge arriving at the law firm of Thompson & Knight in 1958.

"I was somewhat jealous of this newly arrived little guy, who was just smart as hell," Finn recalled.

"He did beautiful work. He was careful, very thoughtful, but he was also very quiet. He didn't make waves."

President Jimmy Carter appointed Buchmeyer to the federal bench in 1979.

"He wanted to be a federal judge and he was a damn good one," Finn said. "I didn't agree with him politically. I admired him, however for his legal acumen."

But most of all, Nguyen said, Buchmeyer will be remembered for how he treated people.

"He showed all of us not just how to be a great legal scholar and a good lawyer," she said, "but how to be a good person."

MetLife Building 
Blawgletter visited this building in a hurricane.

Class plaintiffs waited almost a decade — and within six weeks of trial – before asking the district court to delete the main defense firm from the counsel of record list.  The district court, we'd all guess, denied the motion.  It likely also scolded the lawyers for pushing such a diaphonously dilatory and pusillanimous ploy.

But no.  The district court GRANTED the motion.  Yowza.

The Second Circuit set things aright.  It first busted the district court's ruling that the firm had once represented the plaintiffs, who consisted of Metropolitan Life Insurance policyholders.  Debevoise & Plimpton didn't act as lawyers for the policyholders, the court ruled, just because MetLife took the "mutual" (rather than "stock") form and the policyholders benefited as owners from the firm's advice.  "[T]his does not distinguish a mutual insurance company from any other corporation."  Murray v. Metropolitan Life Ins. Co., No. 09-3716-cv, slip op. at 10 (2d Cir. Sept. 29, 2009).

The panel next addressed an ethical rule that prohibits a lawyer from acting as witness and advocate at the same time and imputes the lawyer's disability to the entire firm also.  Sure, Debevoise lawyers might need to testify, but so what?  The plaintiffs pointed to no testimony that would really hurt MetLife.  Id. at 15-17.  Plus, none of the Debevoise witnesses would serve as trial counsel.  That mattered because "the concerns motivating Rule 3.7 are attenuated where, as here, the 'advocate' is not someone who will be trying the case to the jury."  Id. at 17.  The views of MetLife's in-house lawyers also cut against DQ:  "We are reluctant to conclude that MetLife, a sophisticated client with sophisticated in-house counsel, has a radically defective understanding of the case after nine years of litigation."  Id. at 18.

Blawgletter recalls a bunch of occasions when we could have, but didn't, ask for DQ of counsel for the other side.  Many times, you prefer what you have to what you might get.  Lots of the other times, you can make more trouble for your opponent by letting its lawyers try to walk the line between bad guy and advocate for the bad guy.  Only in rare cases ought you to demand DQ.  Murray, we feel sure, lacked the rarity.

The Antitrust Division said in May that it thought the Supreme Court shouldn't take the case — you know, the one that let the National Football League get away with conspiring to halt competition for fan headgear sales.  The Court grabbed it anyway. 

Today, the AD said vacate and remand.  Will the Justices see things the agency's way this time?

Blawgletter won't hold our breath.  The Roberts Court seems to get an endorphin rush each time it opens a new way for dominant firms to escape antitrust liability.  We called the Decision Below "silly" – mainly because the Seventh Circuit declared the opposite outcome "silly".

Vermont Law School Professor Michael McCann's approach in "American Needle v. NFL:  An Opportunity to Reshape Sports Law" (forthcoming in Yale L.J.) (downloadable here) looks interesting:  "[T]he Supreme Court should reverse American Needle and encourage Congress to engage its ultimate authority over statutory antitrust law" by granting narrow exemptions for sports leagues like the NFL.

Update:  The American Antitrust Institute and the Consumer Federation of America filed a joint amicus brief.  They summarize their points thus:

1. Single-entity treatment under Copperweld requires that an entity be controlled by those with legal and economic incentives to act for the interests of the entity as a whole.  Sports leagues and join ventures that are controlled by independent economic actors, like the NFL, are not single entities. The Seventh Circuit’s holding that the NFL is a single entity because it produces a product for which cooperation is essential is inconsistent with NCAA and numerous other cases that treat the degree of integration of a joint venture as a rationale for applying the rule of reason, not exemption from § 1 of the Sherman Act. The Seventh Circuit’s extension of immunity beyond the production of football games to unnecessary and anticompetitive restraints on related activities is also inconsistent with the well settled framework for analyzing restraints related to an efficiency-enhancing integration. Even if the NFL were a single entity when collectively licensing the teams’ logos, the agreement not to license outside the venture would be subject to scrutiny under § 1.

2. Extending Copperweld to sports leagues and other highly integrated joint ventures would open a huge gap in the enforcement of the antitrust laws. It would permit the leagues to engage in anticompetitive conduct, and undermine enforcement against unnecessary and anticompetitive restraints by otherwise legitimate joint ventures in many industries. including those targeted by ongoing initiatives of the Justice Department and FTC.

3. There is no basis for immunizing sports leagues or other joint ventures because of the expense and supposed chilling effect of the rule of reason. Congress has repeatedly rejected the type of broad immunity respondents seek here. Rather, it has enacted narrow immunities for sports leagues and joint ventures in other industries that would be superfluous under respondents’ reading of Copperweld, and has otherwise rejected immunity even for extremely valuable joint ventures engaged in research and development and standard setting.

Boy howdy, those judges in the Tenth Circuit sure do know their antitrust!  Yeeeeehiiiii!

That court mystified Blawgletter earlier this year in a like case.  See "Authentic Ski Resort Gibberish; Tenth Circuit Boots Antitrust Claim".

The new ruling surprises us less, for it draws on verbal hijinks the Supreme Court performed a mere seven days after the ski resort decision came out.  See "Squeeze This! — Supremes Find No "Antitrust Duty" Not to Thwart Dependent Competitor".

In Four Corners Nephrology Assocs., P.C. v. Mercy Medical Center of Durango, No. 08-1231 (10th Cir. Sept. 29, 2009), a Unanimous Panel held that a nephrologist — a kidney specialist — couldn't prove two pieces of his antitrust claim against a hospital.  The doctor alleged that a Four Corners medical center – which we infer faced zero competition in the area – monopolized the local nephrology market by refusing to let him practice his medicine within its walls.  The claim failed, the court held, both because the dominant medical supplier had "no antitrust duty to share its facilities" and because the plaintiff suffered no "antitrust injury".

The second point would've done the case in by itself and strikes us as sound.  Dr. Bevan didn't want to compete so much as to get his piece of the Mercy nephrology monopoly.

But the first point — about "no antitrust duty" — looks troubling to us.  As we said when the Supremes decided linkLine on February 25:

Blawgletter suspects that the tag line for linkLine will come in a neat three-word package:  "no antitrust duty", a phrase that doesn't appear in Trinko or any other Court decision.  No duty to do this, no duty to do that.  And we imagine that The Current Majority will not decide a single case in which they conclude that a section 2 defendant violated any "antitrust duty" whatever.

The Tenth Circuit don't deserve blame for parroting the linkLine "no antitrust duty" formula — just for doing it unnecessarily.

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Zoladex 
Zoladex® suppresses sex hormones.

AstraZeneca told people it got an average wholesale price of $X for its Zoladex® drug when it in fact received a far lower AWP due to discounts and rebates.  The falsely high AWP let Zoladex® fetch more money per dose, enriching doctors who charged the AWP but got discounts and rebates that cut their actual cost by a large margin.

What to do?  If you paid more than you should have, you bring a class action.  You allege that AstraZeneca cheated Massachusetts payors and thus ran afoul of the Commonwealth's General Laws Chapter 93A.  And, by golly, you win at trial.

The First Circuit yesterday affirmed in all respects.  The court deemed AstraZeneca's conduct wrongful under Chapter 93A because it fooled payors into shelling out more than they would have if they'd known and expected a big spread between the public AWP and the AWP after the rebates and cuts.  Their Honors also rejected AZ's preemption and Daubert forays.  Blue Cross Blue Shield of Massachusetts v. AstraZeneca Pharmaceuticals LP, No. 08-1056 (1st Cir. Sept. 23, 2009).*

But the part that got Blawgletter's blood pumping related to AstraZeneca's attack on the class aspects of the case.  The trial court, AZ argued, should've let the drug-maker show that some class members didn't care and would've paid the same price even if they knew the size of the spread — which manner of trying the case would've put a big strain on class treatment.  AZ also said the trial court shouldn't have let the plaintiffs show "aggregate damages" of around $13 million.  The First Circuit nixed both points.

On the first one, the panel said that "it would quickly undermine the class-action mechanism were we to find that a district court presiding over a class action lawsuit errs every time it allows for proof in the aggregate."  Id.  As for the second point, the court noted that "[t]he use of aggregate damages calculations is well established in federal court and implied by the very existence of the class action mechanism itself."  Id.  "[T]he imprecision, if any, [in toting up class-wide damages] was negligible."  Id.

Feed-icon-14x14 Hooray!

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*  Note that the First Circuit does two things that make its opinions hard to get to online:  It doesn't use pages (just a stream of html); and it doesn't give each opinion its own URL, making direct access by hyperlink impossible.

Kivalina
Blawgletter's firm represents Kivalina, Alaska.

Blawgletter can make a fair guess why Connecticut v. Am. Elec. Power Co., Inc., No. 05-5104-cv (2d Cir. Sept. 21, 2009), came out after Associate Justice Sonia Sotomayor cleared the Senate last month.  Had it preceded the event — and had Her Honor joined with her colleagues in the opinion — it would have made a loud buzzing sound in the Senate chamber.  And the buzz would have come from the cutting of a wide swath for global warming cases through the U.S. judiciary primeval.

New York City, several states, and three land trusts sued six power companies for burning fossil fuels and thus flinging carbon dioxide in big amounts into the air.  They alleged that the extra CO2 warmed the globe, setting in train climate change like you've never seen — smaller snowpacks in the Sierra Nevadas plus all this:

[I]ncreased illnesses and deaths caused by intensified and prolonged heat waves; increased smog, with a concomitant increase in residents’ respiratory problems; significant beach erosion; accelerated sea level rise and the subsequent inundation of coastal land and damage to coastal infrastructure; salinization of marshes and water supplies; lowered Great Lakes water levels, and impaired shipping, recreational use, and hydropower generation; more droughts and floods, resulting in property damage; increased wildfires, particularly in California; and the widespread disruption of ecosystems, which would seriously harm hardwood forests and reduce biodiversity.

Am. Elec. Power, slip op. at 9.

The two-judge panel rebuffed every thunderbolt the power titans hurled at the complaint — non-justiciable political question, standing, failure to state a claim for federal common law nuisance, and displacement of the claim by other federal law.

We can only guess why the opinion took over three years after oral argument (on June 7, 2006) to emerge.  Better late than never.

Feed-icon-14x14 The result doesn't shock our feed.