Archive for March, 2012

Hood hires Moore for Mississippi BP suit

The cozy dealings between the state of Mississippi and well-connected private lawyers — especially the way the state comes to hire those lawyers on contingency fee to pursue high-ticket suits against outside defendants — have long furnished grist for this site. Now, opening a new chapter, Mississippi AG Jim Hood has hired former AG Michael Moore, like Hood a longtime Overlawyered favorite, to sue BP over the effects of the Transocean oil spill on the state. [AP, YallPolitics] Per YallPolitics, “Interestingly, there is no specific financial arrangement. Moore and Hood contractually agree to work it out later and have fees paid directly by BP to the as yet to be named legal team led by Moore.” When Moore hired later-disgraced Dickie Scruggs to represent Mississippi what was to develop into the most profitable litigation in history — the multistate tobacco caper — the financial details were likewise shrouded in secrecy, and it was later claimed that there was no written agreement.

Universal be not proud

Veoh, like YouTube, pioneered the idea of enabling users to self-post video to the Internet. Then Universal, the entertainment company and owner of many copyrights, began a particularly aggressive campaign of litigation against it. Though Veoh Networks won a judicial decision in its favor, Universal appealed, having also taken the unusual step of suing three Veoh investors personally. In December the Ninth Circuit reaffirmed Veoh’s victory, but in the mean time Veoh had declared bankruptcy. Company founder Dmitry Shapiro recalls:

As you can imagine the lawsuit dramatically impacted our ability to operate the company. The financial drain of millions of dollars going to litigation took away our power to compete, countless hours of executive’s time was spent in dealing with various responsibilities of litigation, and employee morale was deeply impacted with a constant threat of shutdown. Trying to convince new employees to join the company in spite of this was extremely challenging.

By the end, “The company that we had built, that was once valued at over $130 million was gone,” writes Shapiro. Ron Coleman writes:

Under the American Rule, the cost of maintaining a meritorious defense to relentless litigation is prohibitive and what fee-shifting is available favors is applied with sickening asymmetry, virtually always favoring the party to which legal fees mean the least.

According to Eric Goldman, “This case’s real result is that Veoh is legal, but Veoh is dead – killed by rightsowner lawfare that bled it dry.” Mike Masnick points out that Universal is still pursuing its action.

High court rejects medical-method patent

A unanimous Supreme Court has struck down a patent over diagnostic methods in medicine, the latest in a series of controversies over the bounds of patentable subject matter. [Mayo v. Prometheus Labs; Marcia Coyle/NLJ, SCOTUSBlog, Timothy Lee/ArsTechnica] As I noted last fall, my Cato Institute colleagues Ilya Shapiro, Jim Harper and Timothy Lee filed an amicus brief on behalf of the side that prevailed yesterday, arguing against the spread of “a dangerous exception to traditional patent law… the Court should reject medical-diagnostic patents as impermissibly restricting the freedom of thought.”

March 21 roundup

  • Shame on DoJ: “Systematic concealment” of evidence when feds prosecuted Sen. Ted Stevens [WaPo, Caleb Mason/Prawfs] NYT notes feds’ losing streak in Foreign Corrupt Practices Act prosecutions [NYT, our latest]
  • Italy: tax officials stop luxury cars, demand drivers’ most recent tax returns [Secular Right]
  • Pinterest: casual users (perhaps especially casual users) might be opening themselves to copyright liability [DDK Portraits, WSJ Law Blog] And in case you needed a reminder not to publish photos grabbed from random web sources… [Webcopyplus]
  • In new Atlantic special report, Philip K. Howard collects papers on outdated government law and regulation from contributors Robert Litan, Julie Barnes, Mark Warner, Jim Cooper;
  • Institute for Justice sues IRS over its new licensing requirements for tax preparers [Ilya Shapiro and Chaim Gordon/Cato, Paul Caron/TaxProf, Katherine Mangu-Ward, Barton Hinkle]
  • “It is acceptable to refer to all court proceedings as a ‘trial,’ because seriously, you ever sat through one of those things?” [@FakeAPStylebook]
  • Christopher Booker series on child-snatching by UK authorities [Telegraph: first, second, third]

“Wisconsin’s reforms are working”

Sensible changes to the ground rules on labor relations — including the option to go around the union’s monopoly provider of health care insurance — are saving local governments hundreds of millions of dollars. [John Steele Gordon]

P.S. Bill McGurn on public employee unions in the still very unreformed state of New Jersey [Hillsdale “Imprimis”] And: how some public employees “spike” their pensions in California [L.A. Times via Amy Alkon]

Bring back federal common law

Erie Railroad Co. v. Tompkins (1938) was the New Deal-era decision that directed federal courts to apply the law of the states in which they are located, and in so doing abolished a huge body of federal common law. In a new series of posts based on his book The Upside-Down Constitution, Michael Greve argues that Erie was wrongly decided and in practical terms a gigantic mistake that needs correcting. [Liberty and Law]

Bloomberg: no food donations to homeless shelters

“[Glenn] Richter has been collecting food from places like the Ohav Zedek synagogue and bringing it to homeless shelters for more than 20 years, but recently his donation, including a ‘cholent‘ or carrot stew, was turned away because the Bloomberg administration wants to monitor the salt, fat and fiber eaten by the homeless. … Richter said that over the years he’s delivered more than two tons of food to the homeless.” The NYC mayor says he’s not planning to reconsider the recently adopted policy. [CBS-NY] Earlier here (Connecticut), here (N.J.: “retail food establishment”), here, etc.