The American Antitrust Institute has filed an amicus brief in PSKS, Inc. v. Leegin Creative Leather Products, Inc., No. 09-40506 (5th Cir. Aug. 15, 2009).  The brief, AAI Legal Advocacy Director Richard Brunell, argues that the Fifth Circuit ought to shun a full "rule of reason" probe of resale price-fixing claims in favor of a short cut method.  The middle way between rule of reason and per se would allow claims if the plaintiff cites any of the factors the Supreme Court noted in Leegin Creative Leather Products, Inc. v. PSKS, Inc., 551 U.S. 877 (2007).

Blawgletter's partner, Marc M. Seltzer, signed the amicus.  He serves on AAI's Advisory Board.

Feed-icon-14x14 Our feed signed the certificate of service.

Blawgletter has tried in the last few weeks to use words that have just one or two beats.  We hope you will do the same in the next week.

You will find, we think, that short words pack a lot of punch.  You will see as well that you can go on and on and yet not have to write a word with more than one beat.

More, we ask you to type a list of strong but brief words.  We like verbs the best but think well of nouns, too.  Here — we will give you a start:

Go, do, hit, slap, cry, need, feel, cuff, clap, slam, sling, eat, wish, hope, curl, snarl, swing, tough, snip, ache, hurt, slip, snark, part, lie, place, peal, price, please, pulse, beat, eat, greet, treat, seat, bleat, piece, sense, seem, hurl, cast, don, deal, deed, dish, dwell, deem, halt, grin, grasp, cur, cup, crease, charm, chap, choke, slay, sneeze, sip, dip, rip, flip, trip, bat, foul, pitch, dream, moon, craft, draft, drift, shift, smell, quell, spit, steep, bounce, brag, breach, break, brew, bowl, move, love, drove, loathe, coax, bet, call, crawl, creep, box, bless, bog, gripe, grease, goad, grip, quip, ship, top, tip, lift, shop, ship, shape, slope, probe, push, press, grade, gull, grill, fill, spill, pull, punt, pant, rant, faint, bill, bounce, trounce, gleam, grip, and draw.

FeedIcon Our feed likes big words too.  At times.  Just not now.

Snappl 
Note the HFCS (the green stuff).

Blawgletter doesn't imbibe much in the way of your juices — your oranges, your apples, your tutti-fruttis — or of your teas — even orange pekoe and oolong.  And we sure don't drink Snapple®, despite (because of?) its "Made from the Best Stuff on Earth®" boast.  It tastes too sweet for our buds — although we hear good things about the Diet Peach.

News last week that the Third Circuit upheld a false ad claim against Snapple thus prompted a yawn.  But then we saw that the case posed the question of what "natural" on a food product label means.  That'll wake up your granola! 

The plaintiffs say Snapple's "All Natural" tag line hides the fact that its drinks use a kind of fake sugar — high fructose corn syrup — instead of the real deal — good old sucrose, which looks like this:

Sucrose 
Sucrose forms caramel (yummie!) at 367° F.  Can HFCS do that?

We learned, to our wonder, that the feds have NEVER defined "natural" for food label use.  The Food and Drug Administration chose NOT to, giving guidance and writing ugly warning letters instead.

The Third Circuit ruling turned on the FDA's coyness.  Au contraire to Snapple's preemption defense, the panel held, federal law leaves room for state law claims of untrue labeling.  Holk v. Snapple Beverage Corp., No. 08-3060 (3d Cir. Aug. 12, 2009).

Whether using HFCS instead of sugar makes the "All Natural" claim false and, if so, what to do about it will remain for the district court on remand.

FeedIcon The feed icon at left shows the way to joining the Blawgletterati.

Blawgletter toils on cases all across this, the greatest nation on the face of the, Earth.  Some of them pend in, federal courts.  ,Many, of those involve things that, took place in towns far from the court, house where we'll try the lawsuit,,.  And ergo we, often find ourselves, — , , , — or our dear foes, taking proof from strangers who live, in other ,Districts, even (verily,) in ,,other Circuit,s.  ,!

[We now return to normal comma usage.]

We know that the Federal Rules of Civil Procedure say how to ask for the proof in distant locales.  They also tell what to do to resist.  The seeker gets the power to chase the proof by using the nearest federal court to issue subpoenas and orders.  The opposer gets extra options and thus can express her/its/his thoughts about the request for info either to the local judge or to the remote one who presides over the main dispute between the parties.

We mention all this because the Fourth Circuit yesterday grappled with the mischief that can depend from letting two Article III judges vie for top dog status in a multi-District, multi-Circuit fight over a subpoena.

The case doesn't shed a whole lot of light but does manage to point out that the rules seem to Their Honors quite supple to the touch and oh-so-smart to the brain.  The court thus upholds both district judges' rulings — one in the Bay State (First Circuit) and the other in the Old Line State (Fourth) — on whether a men's clothing maker's secret critic could keep her/its/his name out of the lawsuit.  She/it/he couldn't, they said — at least not all the way.  Yet we still don't know her/its/his moniker.  Lefkoe v. Jos. A. Bank Clothiers, Inc., No. 08-2059 (4th Cir. Aug. 13, 2009).

You'll note that all went well because Judge A made a ruling but then said Judge B could change or update it as Judge B saw fit.  Which foresight and kindness avoided an inter-Circuit tussle.

FeedIcon Our feed thanks its lucky stars.

Oliver Cromwell 
Oliver Cromwell (1599-1658) knew how to beseech.

Lawyers who follow the Fifth Circuit will read the title of this post and think plaintiffs lost again.  Why?  Partly because that court deserves its rep for pro-defense outcomes, esp. in smiting class actions.  But also partly due to Blawgletter's use of "stock drop", a phrase that (to some) screams "stick up".

Yet some of you hardy souls will pause.  "Give them a chance", you will say.  "They don't always empathize with policies that favor false negatives."  The little guy sometimes has his day, you insist.

But then you will read the quote that follows, and your crest — alas — will fall:

“[C]lass certification creates insurmountable pressure on defendants to settle, whereas individual trials would not.” [Castano v. Am. Tobacco Co., 84 F.3d 734, 746 (5th Cir. 1996)] (citation omitted). “The risk of facing an all-or-nothing verdict presents too high a risk, even when the probability of an adverse judgment is low.” Id. (citation omitted). This risk is particularly high in securities-fraud class actions, in which the current “class based compensatory damages regime in theory imposes remedies that are so catastrophically large that defendants are unwilling to go to trial even if they believe the chance of being found liable is small.” Janet Cooper Alexander, Rethinking Damages in Securities Class Actions, 48 STAN. L. REV. 1487, 1511 (1996). Some have observed that seeking class certification to force favorable settlements does not benefit small investors but instead resembles a shake-down or "judicial blackmail."

Fener v. Belo Corp., No. 08-10576, slip op. at 5 (5th Cir. Aug. 12, 2009) (footnotes omitted).

Don't get us wrong.  We think the court reached the right outcome:  the plaintiff side didn't show it could prove that false statements caused the price of Belo stock to inflate and then, when the truth outed, take a plunge, leaving people who bought high with losses.

But what purpose, pray, does the court serve by saying that class treatment "creates insurmountable pressure" to settle (it doesn't) and that seeking it "resembles a shake-down or 'judicial blackmail'" (which we suppose every try at winning damages resembles)?

Let us leave that to one side.  What evidence does the court offer?  Quotes from a 1996 case that denied class-wide handling of claims against tobacco companies and from a 1996 law review article on damages? 

No.  Not just that.  The court also cited, in footnotes, two 1991 articles — another law review piece by the very same professor and a The Wall Street Journal op-ed, which the author styled "The Class-Action Shakedown Racket".  Quod erat demonstrandum?

Seriously, folks, judges ought not go around repeating stuff just because it sounds good to them or fits their world view.  We dare to suppose that no member of the Fener panel ever handled a class case as a lawyer through certification — and we repeat the ever.  And can say for sure none did so since 1991, when the newest judge left private (maritime) practice.  So how can they write for the ages that defendants can't surmount settlement pressure, that certifying a class amounts to a crime?

FeedIcon Our feed thinks of Cromwell in his letter to the Church of Scotland.

They came, they saw, they transferred — and centralized.

The Judicial Panel on Multidistrict Litigation met in Portland, Oregon, on July 30.  The orders have begun to flow.

The results so far:

Southern District of Florida

In re Optimal Strategy U.S. Equity Fund Securities Litig., No. 2073

Southern District of New York

In re Citigroup Inc. Securities Litig., MDL No. 2070

In re Federal Home Loan Mortgage Corp. (Freddie Mac) Securities Litig., MDL No. 2072

In re Meridian Funds Group Securities & Employee Retirement Income Security Act (ERISA) Litig., MDL No. 2082

Western District of Washington

In re Park West Galleries, Inc. Marketing and Sales Practices Litig., MDL No. 2076

Feed-icon-14x14 The easy ones go first.

U. S. Circuits 
5 + 11 = Former Fifh Circuit.

The Fifth Circuit once ran from El Paso to Palm Beach Shores.  On October 1, 1981, Congress sliced off Alabama, Georgia, and Florida and donated them to the birthling Eleventh Circuit.  Fourteen of the 26 judges stayed with the old.  The other dozen went with the new.  And, as of March 31, 1982, the court ceded power over the Canal Zone.

The court split again this week but this time without losing pieces. 

The eight-to-eight en banc vote came in a case that dealt with an Orleans Parish DA's fault for a false guilty verdict.  (The 17th member, Judge Dennis, recused himself.)  The DA's office hid a blood test that cleared the defendant.  A New Orleans civil jury found the DA's office held back bad facts per usual and on purpose.  The jurors wrote a $14 million damage award.

A 2-1 panel upheld the judgment against the ex-DA.  The tie at the full Fifth Circuit left the judgment standing.  Thompson v. Connick, No. 07-30443 (5th Cir. Aug. 10, 2009).

Five judges said of the outcome:

At bottom, the dissent seeks to retry this case through the appellate process.  This approach abdicates this court’s duty to uphold a jury’s verdict unless the facts point so strongly in Connick’s favor that no reasonable jury could rule to the contrary. Indeed, the fact that reasonable judges on this court view the evidence differently suggests that these factual disputes were for the jury to resolve.  As the extensive discussion in the panel opinion demonstrates, there was ample evidence to allow the citizens of this New Orleans jury to find for Thompson.  Of course, this is an extraordinary case with extraordinary facts.  Allowing this judgment to stand will not subject municipalities to widespread liability, as a holding that the need for training was “so obvious” and the lack of training “so likely” to create a constitutional violation will apply only in the rare instance.  This is that rare case.  The jury heard substantial evidence that the District Attorney’s Office provided no Brady specific training, despite the known risk of the exact type of systemic nondisclosure that the failure to train caused here.  Acknowledging the proper standard of review and viewing the jury’s verdict in the correct deferential light compels us to uphold the jury’s decision.

Id., slip op. at 40 (emphasis in original and citation omitted).

Blawgletter notes that one of the members of the court, Judge Rhesa Hawkins Barksdale, a West Pointer and native Mississippian, took senior status on August 8.  The move leaves an open seat — likely for a fellow son or daughter of the Magnolia State. 

FeedIcon The dissenters may have empathized more with the DA; the Chief cited "policies".

Deputy Assistant Attorney General Philip Weiser went to the home last week of the world's biggest, baddest high tech seed seller to serve notice that it and other Big Ag firms will soon get a well baby check up.  A not very friendly one.

Mr. Weiser spoke at the 11th annual conference of the Organization for Competitive Markets — a farmers group — in St. Louis, MO.  He titled his remarks "Toward a Competitive Policy Agenda for Agriculture Markets". 

Did DAAG Weiser hint at which Particular Market Segments the Antitrust Division would look?  Yes, yes, he did:

For many farmers and consumer advocates, we understand that there are concerns regarding the levels of concentration in the seed industry–particularly for corn and soybeans. In studying this market, we will evaluate the emerging industry structure, explore whether new entrants are able to introduce innovations, and examine any practices that potentially threaten competition.

Let me mention two other industry segments that will receive attention. First, we recognize that the dairy market has experienced considerable consolidation over the past decade and there are questions about the state of competition in that market. Second, as I noted above, livestock markets, such as the beef market evaluated in the JBS/National merger, are ones where the Division is keeping a close watch. In analyzing developments in these markets, we are cognizant of the fact that competition is frequently local or regional in nature, meaning that the nature and extent of competition-related concerns will differ across different parts of the country and that broad national statistics can be misleading.

Fifteen miles west of the podium, at its Creve Coeur world headquarters, Monsanto may have scowled.  Glowered.  Struck a moue.

FeedIcon Creve means the past participle of break.  You know what coeur means, Frenchy.

A panel of the Second Circuit allowed the bankruptcy sale of Chrysler to Fiat for $2 billion in June.  Yesterday, Their Honors issued the opinion they promised would follow.

On the main issue, the court held that the section 363(b) Sale didn't amount to a "sub rosa" reorganization because it didn't dictate terms of a later reorganization, it did guarantee creditors $2 billion (versus zero to $800 million in a liquidation), and Chrysler's failing health made the company the bankruptcy equivalent of a "melting ice cube" and thus called for action NOW to save as much of the cube as possible.  Indiana State Police Pension Trust v. Chrysler LLC (In re Chrysler LLC), No. 09-2311-bk (2d Cir. Aug. 5, 2009).

The court also backhanded a prime point of hyperventilating creditors, who argued that the Sale unconstitutionally and/or unAmericanally favored Labor over Capital.  The Big Boost in value to New Chrysler over Old Chrysler resulted from things that others chose to give to New but not Old, the panel pointed out:

As Bankruptcy Judge Gonzalez found, all the equity stakes in New Chrysler were entirely attributable to new value — including governmental loans, new technology, and new management — which were not assets of the debtor's estate.

Id., slip op. at 25.

FeedIcon Outa the park.

The U.S. Senate today confirmed the nomination of Judge Sonia Sotomayor to succeed David Souter as an Associate Justice on the Supreme Court. 

The 68-31 tally included nine yea votes by Republican senators and 59 by Democratic and independent ones. 

Senator Edward Kennedy's battle with brain cancer prevented him from participating.

FeedIcon So-to, So-to, So-to, So-to.