Archive for the ‘Uncategorized’ Category

Jack Thompson faces possible disbarment

Aw, that’s not fair. What would we do for material? “Thompson’s ire [at the alleged evils of videogaming] spread to several law professionals involved in the lawsuits he filed. The disbarment proceedings resulted from separate grievances filed by people claiming that Thompson made false statements and attempted to humiliate, embarrass, harass or intimidate them, according to documents in the [Florida bar disciplinary] case.” (K.C. Jones, ” Grand Theft Auto Critic Faces Misconduct Charges”, InformationWeek, Feb. 6; “Jack Thompson Faces Florida Supreme Court Disciplinary Hearing”, GamePolitics.com, Feb. 3; Billy Berghammer, “Jack Thompson Faces Florida Disciplinary Hearing”, Game Informer, Feb. 5). More: Oct. 30, Oct. 20, and many others.

Update: Indictments in Roberts sex/extortion case still pending

We first covered the case of Ted H. and Mary Schorlemer Roberts Jun. 13, 2004 and Sep. 3, 2005:

According to a story in the San Antonio Express-News, husband-and-wife legal partners Ted H. and Mary Schorlemer Roberts received money in a curious sequence of events. Mary, claiming to seek “no strings” discreet encounters, would seduce men over an Internet dating service. Ted would then write the men (in legal documents sometimes typed by Mary) and notify them that he planned to seek intrusive and public civil discovery to investigate whether the affair brought forward potential causes of action that were flimsy at best; the men would pay tens of thousands of dollars for a release and confidentiality agreement.

Now:

Two San Antonio, Texas, lawyers, married to each other, face a trial on theft charges based on allegations that the wife had sexual liaisons with four men whom the husband subsequently threatened with litigation unless they compensated him for his emotional distress.

You’ll never guess how the Roberts’ lawyer defends them:

[Michael] McCrum contends the state is trying to prosecute his clients for something that civil lawyers do all the time — send demand letters and present petitions they plan to file under Rule 202.

“By stretching statutory words to an unprecedented interpretation, the state seeks to criminalize as “theft the presentment and subsequent settlement of potential claims authorized under the Texas Rules of Civil Procedure,” Mary and Ted Roberts alleged in one of several motions to quash their indictments that Harle dismissed in October 2006. …

[Baker Botts attorney Rod] Phelan says there is “a kernel of truth” in the point that McCrum is making. “The line between extortion or blackmail and making a demand to settle a colorable claim is gray,” he says.

The prosecutor distinguishes the two by noting that Ted Roberts was acting pro se. (Mary Alice Robbins, “Married Lawyers Face Trial for Payment Demands After Wife’s Affairs”, Texas Lawyer, Feb. 6). Note that these are theft, rather than extortion charges, however; a stretch, to be sure, but the prosecutors decided that Texas law does permit extortion in these circumstances. (It does seem rather appalling under the prosecutors’ view that the only thing Roberts needed to accomplish his blackmail is to expand the conspiracy to a third person.) Unfortunately for the extortion victims, their identities were revealed by the indictment and the Texas Lawyer coverage. A job for ReputationDefender?

Overzealous Trademark Enforcement Files: National Pork Board

A breastfeeding activist promotes, inter alia, t-shirts with the slogan “The other white milk.” This has the National Pork Board, with its slogan “The other white meat,” up in arms, and a Faegre & Benson attorney issued a ceast-and-desist letter. The shirt wasn’t a big seller (and CafePress quickly acceded to the threat), so it’s really not about the money, but Jennifer Laycock isn’t happy about the bullying (h/t W.C.).

Chew out your lawyers, get sued for defamation

Firing your lawyers? Be careful what you say about them in doing so. William and Elizabeth Margrabe had grown increasingly dissatisfied with the legal work done on their behalf by the firm of Sexter and Warmflash in a Westchester County, N.Y. lawsuit over the sale of a stake in a family business. In a letter firing the firm, Mr. Margrabe charged that its work was “fraught with missteps, poor legal judgments, failure to protect your client’s rights on repeated occasions, and poor, adversarial, or misleading communications with your clients.” He further accused the attorneys of pursuing their own interests over those of clients in seeking a hasty resolution of some issues, and also of charging a usurious interest rate on its fee. He copied the letter to the new lawyers he had hired to take over the matter.

How did Sexter & Warmflash respond? It sued the Margrabes for $1 million for defamation. Trial court judge Shirley Werner Kornreich ruled that its suit could proceed, and ruled outright in Sexter’s favor on the Margrabes’ liability for the “usurious fee” allegation, but an appeals court reversed, ruling that the Margrabes were protected by a privilege extended to statements made as part of a legal proceeding. (Anthony Lin, “Law Firm’s Defamation Suit Against Former Client Dismissed”, New York Law Journal, Jan. 10).

Milberg Weiss Nortel fee award

Plaintiffs’ attorneys led by Milberg Weiss received only $710/hour for their work transferring $1 billion from current Nortel shareholders to past Nortel shareholders (and, of course, their attorneys) in a securities lawsuit, for a total of $34 million (plus $3.7 million in expenses). They had been seeking nearly three times that amount. While Judge Berman found that the fee request of 5.8 times regular hourly billing rates was excessive, he did not inquire into whether the law firms’ claim of 47,846 hours billed was reasonable. Indicted Milberg Weiss attorney Steven Bershad had been lead counsel until he was voluntarily substituted by another Milberg Weiss attorney shortly after his indictment. (In re: Nortel Networks Corp. Securities Litig., No. 01-cv-1855 (Jan. 29, 2006); David Glovin, Bloomberg, Jan. 29). Update: WSJ Law Blog has the ruling on line.

“100+ All-American Ideas: Stay Out of Court”

Belatedly noted: Reader’s Digest gives us another generous mention (latest in a long series of such) as part of a wider project cataloguing ideas and proposals that could make the country better (Sacha Zimmerman, Reader’s Digest, posted Sept. 14). For another generous mention from the Digest, see Jun. 12, linking to an article by reporter Michael Crowley. And we’ve also been slow to link another good piece from Digest reporter Crowley, on the problems introduced by jury consultants “paid to stack the deck” (Michael Crowley, “Jury Riggers”, Apr. 2006). Sample:

A recent guide published by the Association of Trial Lawyers of America warned lawyers about jurors who may show “personal responsibility bias.” These jurors, the guide said, feel that “people must be accountable for their conduct.” Now there’s a chilling outlook! The guide advises: “The only solution is to exclude them from the jury.” That is, get rid of anyone who might actually care about seeing justice done.

Short ’em, then sue ’em II

According to a WSJ news report, Greenlight Capital, a $4 billion New York hedge fund, has filed a federal False Claims Act lawsuit against Allied Capital Corp., alleging that a subsidiary of Allied known as Business Loan Express LLC, or BLX, “submitted fraudulent loan documents to the Small Business Administration, bilking the U.S. of millions of dollars. Greenlight and James Brickman, an individual working with the fund to bring the suit, are entitled to 25% to 30% of the proceeds if their complaint results in an award.” Aside from the novelty of a hedge fund’s getting into qui tam litigation (perhaps no real surprise, given the proven money-making scope afforded by that bounty-hunter’s statute) the even more noteworthy twist is that Greenlight has also taken a short position in Allied’s stock, so that it will profit if the stock falls independently of whether the litigation results in a successful recovery. (Carol S. Remond, “Greenlight Heads to a Courtroom”, Wall Street Journal, Jan. 29)(sub-only).

We’ve reported at some length previously (here and at Point of Law) about the evidence that plaintiffs and their lawyers sometimes short target companies’ stocks before filing lawsuits, and about the fairly grave implications of that both as a matter of legal/litigation ethics and for the “market integrity” rationale of securities regulation. See, for example, May 5, 2005 and Sept. 14, 2006, as well as (relatedly) Nov. 14, 2006, and at Point of Law, Feb. 6 and Mar. 3, 2006, and this Featured Discussion.