Thursday, September 30, 2010

Hallmark, Paris Hilton settle 'That's Hot' Lawsuit

USA Today

Hallmark Cards says a greeting card using Paris Hilton's "that's hot" catch phrase and image was meant as a parody. But the celebrity socialite apparently didn't appreciate the humor.

The Kansas City-based greeting card giant and the hotel heiress have reached a settlement in a 3-year-old lawsuit over the card, a company spokeswoman said Tuesday.

The deal was sealed, and Hallmark spokeswoman Julie O'Dell declined to provide details. Messages left with Hilton's attorney were not immediately returned.

Hilton's lawsuit had sought a half-million dollars.

"All I can say is we did settle," O'Dell said. "We were able to reach a mutually acceptable conclusion."

Hilton's attorneys had said the company misappropriated Hilton's image and her catch phrase, which she trademarked in 2007, months before the lawsuit was filed against Hallmark.

Hallmark attorneys had argued that using Hilton's face on top of a cartoonish image was "transformative," meaning the image had been changed enough that it became Hallmark's own expression, the Kansas City Star reported. The company said the card warranted a "public interest" defense.

But that argument was rejected last year by an appellate court because a birthday card "does not publish or report information," according to the ruling.

O'Dell said it was unclear whether the settlement would change how Hallmark decides which cards to sell.

"Our card decisions are based on consumers and the kind of product they want at any time," she said. "One of our goals is to stay with the times, stay relevant. When we feel we can do that, especially in our humor lines, we probably will."

Wednesday, September 29, 2010

Virginia Bankers Score Rare Victory against Federal Prosecutors

USA Today

Richard Holland Jr. beat the government — twice.

First he was acquitted in a criminal conspiracy case brought by federal prosecutors. Then he forced the Justice Department to help cover his legal bills.

Neither victory made up for nearly eight years of anguish he suffered when he and his father were investigated and prosecuted for allegedly hiding evidence that the small bank they ran in this rural area had made some improper loans.

Nor did the wins cover all of the Hollands' legal bills, even though they got $912,000 under the Hyde Amendment, a law that requires the Justice Department to reimburse such costs for wrongly prosecuted defendants. "We found out the law doesn't repay everything," Holland said.

Hyde Amendment cases are rare, and victories are even rarer. A USA TODAY investigation found just 13 successful cases filed by top attorneys out of 92 filed since the law's 1997 enactment. The Hollands were among the first defendants to win reimbursement.

The case against the Hollands began with a 1990 Federal Deposit Insurance Corp. review of loans to Holland's father, prominent state Sen. Richard Holland Sr., by the family-led Farmers Bank. The review ended in a settlement, but the FDIC began a new investigation in 1991.

The probe concluded the bank had exceeded lending limits on a few loans to developers, and the FDIC urged federal prosecutors to pursue criminal charges. In 1997, the Hollands were charged with hiding evidence about the loans.

The younger Holland, 58, felt compelled to stop teaching Sunday school for the seven months before the 1998 trial. He readied his family for the worst, telling them he faced prison.

In contrast with the long investigation, the Hollands' trial ended abruptly. After the government presented its case and before any witnesses testified for the defense, U.S. District Judge Henry Coke Morgan stopped the trial and acquitted the Hollands. It was the first time the judge had ever pre-empted a jury. "There's no credible evidence … that either of these defendants are criminals," Morgan told jurors. In a written order, he called the case "all smoke and no gun."

Federal prosecutors, the FDIC lawyer and the Justice Department declined to comment.

The elder Holland returned to the state Senate to a standing ovation. His son resumed his Sunday school duties.

Their lawyers filed the repayment claim. Morgan ordered the government to pay, saying "the lack of evidence of criminal intent was so obvious" that the prosecution had been "vexatious" and amounted to harassment. Under the Hyde Amendment, defendants must show a prosecution was vexatious, frivolous or in bad faith to qualify for compensation.

The money — $500,000 less than the Hollands' total legal bills — went to the bank, which had loaned them funds to pay their lawyers pending the trial outcome. Because the case dealt with their official duties, and they were acquitted, the bank did not require repayment of the rest of the loan.

The elder Holland lost a battle with cancer even before an appeals court upheld the Hyde Amendment ruling. His wife had died earlier during the probe. The younger Holland said the compensation didn't make up for the way the case darkened his parents' last days and clouded his own life.

"It was a bittersweet victory," he said. Unlike the prosecutors, he added, he faced the "risk of losing everything."

Study: New Texting Laws have not reduced Crashes

Associated Press

A new study from the insurance industry finds texting while driving laws have had no immediate benefit in reducing crashes.

The study done by a branch of the Insurance Institute for Highway Safety looked at crash data from four states with texting bans. It found that in three of the states - California, Louisiana, Minnesota - crashes actually increased.

Institute spokesman Russ Rader says the increase might be the result of drivers moving their phones down, of out public view, while they text and thus looking away from the road longer.

U.S. Secretary of Transportation Ray LaHood criticized the report as misleading. He says the bans are important in helping stop deaths from distracted driving, but states must enforce them and people must obey them.

Report: US would make Internet Wiretaps Easier

Associated Press

The Obama administration is pushing to make it easier for the government to tap into internet and e-mail communications. But the plan has already drawn condemnation from privacy groups and communications firms may be wary of its costs and scope.

Frustrated by sophisticated and often encrypted phone and e-mail technologies, U.S. officials say that law enforcement needs to improve its ability to eavesdrop on conversations involving terrorism, crimes or other public safety issues.

Critics worry the changes are an unnecessary invasion of privacy and would only make citizens and businesses more vulnerable to identity theft and espionage.

The new regulations that would be sent to Congress next year would affect American and foreign companies that provide communications services inside the U.S. It would require service providers to make the plain text of encrypted conversations - over the phone, computer or e-mail - readily available to law enforcement, according to federal officials and analysts.

The mandate would likely require companies to add backdoors or other changes to the systems that would allow a wiretap to capture an unscrambled version of a conversation.

Those affected by the changes would include online services and networking sites such as Facebook and Skype, as well as phone systems that deliver encrypted e-mail such as BlackBerry.

"The way we communicate has changed dramatically since 1994, but telecommunications law has not kept up. This gap between reality and the law has created a significant national security and public safety problem," said Valerie E. Caproni, the FBI's General Counsel.

She said the changes would not expand law enforcement authority and would involve legally authorized intercepts on calls or e-mails sent by terrorists or other criminals. The changes would allow companies to respond quickly to wiretap requests from local, state and federal authorities.

The New York Times first reported Monday about White House plans to submit the new bill next year.

Law enforcement is already able to monitor regular telephone conversations.

"In the old days, the technology was simple to wiretap," said cybersecurity expert James Lewis, a senior fellow at the Center for Strategic and International Studies. "As technologies have gotten better and faster and bigger, it's harder and harder for law enforcement to intercept communications."

Lewis said law enforcement officials have long been pushing for the expanded access. He said the technology is available to make the changes and allow authorities to tap into conversations encrypted by communications companies as they move from one person to another.

Communications companies, he said, may have concerns about the costs of modifying their systems or software to allow the intercepts. The government may have to provide some funding aid.

Companies may also balk if the government tries to tell them how to alter their systems.

But Lewis said many companies are already providing similar capabilities to law enforcement in other countries in Europe and the Middle East.

Wiretapping is vital for law enforcement agencies, said Lewis, because "it provides crucial evidence that wins a lot of their convictions. As technology changes, as the Internet changes, they have to keep up or they'll lose an important tool in their arsenal."

Civil rights and privacy groups were quick to condemn the plan, warning that the administration faces an uphill battle.

"This is a shortsighted and ill-conceived power grab by some in the administration," said Marc Rotenberg, executive director of the Washington-based Electronic Privacy Information Center. "The balance has swung radically toward enhanced law enforcement powers. For them to argue that it's still not enough is just unbelievable. It's breathtaking in its hubris."

He said that over the past 15 years - particularly since the Sept. 11, 2001, terror attacks - the standards for warrants have been lowered. And he said law enforcement has many new technologies, ranging from biometric tracking to DNA databases, to enhance its information gathering.

Christopher Calabrese, legislative counsel for the American Civil Liberties Union, said that mandating that all communications software be accessible to the government is a "huge privacy invasion."

"Under the guise of a technical fix, the government looks to be taking one more step toward conducting easy dragnet collection of Americans' most private communications," Calabrese said. "This proposal will create even more security risks by mandating that our communications have a 'backdoor' for government use and will make our online interactions even more vulnerable."

Tuesday, September 28, 2010

More Lawsuits Targeting For-Profit Colleges

USA Today

Disgruntled students, employees and shareholders have filed a flurry of lawsuits against for-profit colleges since a federal investigation last month found deceptive practices at 15 campuses.

The Government Accountability Office report was released Aug. 4, and class-action lawsuits have now been filed in California, Colorado, Arkansas and Utah by former students and employees, who argue in most cases that a school lied to them or misled them.

Some companies, including the University of Phoenix and Westwood College, closed campuses or launched internal investigations after the release of the report, which found that admissions officials in four cases encouraged applicants to commit fraud by lying on financial aid forms.

Shareholders have filed class-action lawsuits against at least five schools, noting the effect of the report on stock prices and citing securities fraud.

Lawsuits alleging deception at for-profit colleges are not new. Last year, the parent companies of the University of Phoenix and Westwood agreed to pay the federal government millions of dollars each to settle separate false-claims lawsuits. In both cases, the schools admitted no wrongdoing.

John McKernan, chairman of Education Management Corp., which operates about 95 schools in 31 states, including Argosy University, says lawsuits are part of the territory. "Statistically, the bigger you get, the more (complaints) you're going to have."

Tampa lawyer Jillian Estes, whose law firms have represented students in several class-action suits against for-profits, including Westwood College, says she hopes the federal scrutiny will bolster students' cases.

"We've been trying to raise this flag for so long," she says. "It helps for judges to realize this isn't just some kids who are a little unhappy, but a nationwide systemic problem." Westwood in March sued Estes and her law firm for defamation.

A Texas agency has threatened to revoke or deny one company's licenses to operate three for-profit campuses there. One college received a similar warning in Wisconsin.

Still, tens of thousands of students say for-profit colleges are their best option. An unprecedented 91,000 public comments were submitted in response to a proposal that would deny federal student aid to for-profit colleges whose graduates don't earn enough to pay back student loans. The Education Department estimates one-third or more came from students worried that their college would close if the proposal is adopted.

Monday, September 27, 2010

U.S. Delays For-Profit College Rule on Student Aid After 90,000 Comments


U.S. Department of Education Secretary Arne Duncan delayed publishing a rule that could hamper for-profit colleges’ access to federal financial aid after receiving 90,000 comments and letters.

The department will postpone the publication of the rule to early 2011 from Nov. 1 to review public comments and host several meetings and hearings, Duncan said in an interview yesterday. The proposal, called gainful employment, requires for-profit colleges to show their programs improve job prospects or lose eligibility for funds. The rule remains scheduled to take effect in July, 2012, he said.

“We have 90,000 comments and we want to do it justice,” Duncan said. “We’re going to read every single one.”

The proposal has provoked a letter-writing campaign from for-profit colleges and opposition from at least 80 members of Congress. The Education Department says the rule is necessary to ensure taxpayer money isn’t wasted and that graduates aren’t saddled with debt for programs that don’t improve their job prospects. For-profit colleges say the regulation would hurt low-income students.

“We’re very pleased that the secretary has delayed the rule,” said Harris Miller, president and chief executive officer of the Career College Association, a Washington-based industry group in a telephone interview. “We’re also glad to see that the department is willing to have further dialogue with stakeholders.”

‘Misleading Folks’

Lobbying by for-profit colleges “is putting incredible pressure on policy makers,” said Sarah Flanagan, vice president of the National Association of Independent Colleges and Universities in Washington, which represents private nonprofit institutions. “It simply shows that many of these colleges wouldn’t have been able to meet the gainful employment test.”

For-profit colleges are an important part of the U.S. education system, Duncan said.

“If folks are producing a great education and making a dollar from that, I don’t have a problem,” Duncan said. “Where they are misleading folks, we have a problem.”

The Education Department will still issue 13 other rules on or about Nov. 1 intended to protect students at for-profit colleges, the agency said in a statement. For-profit colleges will be required to provide applicants with information on graduation and job placement rates. The department also will strengthen sanctions against colleges whose recruiters mislead students, according to the statement.

Circumventing Law

If the gainful employment rule were in place today, about 5 percent of all for-profit college programs would no longer be eligible for federal student aid, according to Education Department estimates.

Duncan is concerned that for-profit colleges are getting around a 1992 law that caps at 90 percent the proportion of revenue they can receive from federal aid, he said.

While the law was intended to ensure that for-profit colleges enroll students who are paying out of their own pockets, some of those colleges are recruiting veterans and active-duty military whose federal benefits don’t count toward the ceiling.

For-profit colleges should have “some skin in the game beyond our dollars,” Duncan said. “You want some viability beyond what’s coming from the federal government.”

An index of 12 education companies including Phoenix-based Apollo Group Inc., the biggest company in the sector by enrollment, has declined 17 percent in the 12 months ended Sept. 24.

Republican Plans

Speaking in a separate interview for Bloomberg Television’s “Political Capital with Al Hunt,” Duncan said the Republicans’ plans to cut federal spending “would be a blow” to efforts to improve the nation’s education system through programs such as the $4.35 billion “Race to the Top” initiative.

“It’s not something that I can begin to support,” Duncan said on the program that airs this weekend.

House Republicans, who polls show making gains in the Nov. 2 elections, announced a governing agenda Sept. 23 that would roll back non-security discretionary spending.

“We have to continue to invest, and so that would not be helpful,” Duncan said.

Duncan said his confidence in the benefits of merit pay wasn’t shaken by a Vanderbilt University study that found students of middle-school math teachers offered bonuses didn’t do better than those who had teachers who weren’t eligible for extra money.

The study “didn’t look at how these kinds of resources help bring the next generation of talent into public education,” Duncan said. “The big thing it didn’t talk about is how you get your hardest working, your most committed teachers to go to underserved communities.”

Sunday, September 26, 2010

Suit Against Sallie Mae Proceeds

The Wall Street Journal

SLM Corp., which is better known as Sallie Mae, and its chief executive must defend a shareholder lawsuit over alleged misstatements about the company's financial health, a federal judge has ruled.

The lawsuit, which is seeking class-action status, claimed Sallie Mae misled the investing public about its financial performance in order to inflate its share price.

The alleged misleading statements related to the company's private-loan portfolio and its underwriting standards for those loans, which aren't backed by the federal government.

The lawsuit also claims the company inflated its profits through inadequate loan-loss reserves. Those inflated profits were reported between January 2007 and November 2007.

Separately, U.S. District Judge William Pauley III in Manhattan also dismissed a similar lawsuit brought on behalf of participants in Sallie Mae's 401(k) plan.

The lawsuit claimed Sallie Mae's stock was an imprudent investment between January 2007 and September 2009, in part because of its expansion of private loans to students who attend nontraditional or for-profit schools.

A Sallie Mae spokeswoman didn't immediately to a request for comment late Friday.

Californians Split on Suspending Global Warming Law

USA Today

Most California voters says global warming is a significant issue but they are closely divided on a November ballot measure that would suspend the state's pioneering law to combat it, according to a new Los Angeles Times/University of Southern California poll.

California's global warming law, the most sweeping in the nation, requires greenhouse gas emissions by power plants, factories and vehicles be slashed to 1990 levels by the end of the decade. Proposition 23 would suspend the 2006 law until the state's unemployment rate drops to 5.5% for an entire year. Unemployment is now more than 12%, and California rarely has a yearlong level below 5.5%.

More than two-thirds of likely voters surveyed said global warming is a "very important" or "somewhat important" issue to them, but only 40% favor the ballot measure and 38% oppose it, reports the Los Angeles Times. One-fifth have yet to take a position. The Times says a ballot initiative with less than 50% support at this point of a campaign typically has trouble, because undecided voters often end up voting no.

Proposition 23 is backed by business groups and out-of-state oil companies, including Koch Industries, Valero Energy Corp. and Tesoro Corp. It's opposed by GOP Gov. Arnold Schwarzenegger, who signed the greenhouse gas bill into law.

The survey of 1,511 registered voters, including 887 considered likely voters, was conducted for The Times and the University of Southern California College of Letters, Arts & Sciences between September 15 and 22, the story says. It was done by two national survey research firms, the Democratic firm of Greenberg Quinlan Rosner and the Republican firm American Viewpoint. For the likely voter segment, the margin of error is plus or minus 3.3 percentage points.

Saturday, September 25, 2010

59 Cab Drivers Face Charges

The Wall Street Journal

Taxi drive Jordan Feldman is taken into custody by police officers on charges of fraud at the Manhattan Supreme Court in New York, Wednesday, September 22, 2010. Manhattan District Attorney Cyrus Vance announced the arrest of dozens of taxi drivers that committed fraud against passengers during a press conference.

Nearly five-dozen cab drivers were accused by the Manhattan district attorney's office of overcharging customers in a long-running scheme that involved preying on people they suspected were tourists.

Manhattan District Attorney Cyrus Vance announced the charges Wednesday, saying 45 of the 59 drivers face felony charges, including one who allegedly overcharged his passengers 5,127 times and raked in more than $11,000 in fraudulent profits.

The drivers are accused of changing a setting on their taxi meters to show that trips within the five boroughs were actually outside city limits, thereby doubling the rate charged.

When the New York City Taxi and Limousine Commission first announced its investigation in March, it claimed that as many as 35,558 cab drivers were alleged to have committed the offense at least once, and that more than $8.3 million in fraudulent charges were collected over a two-year period.

On Wednesday, Mr. Vance said those charged with flipping the switch to illegally charge customers did so only about 77,000 times combined, racking up more than $235,000.

City officials said that in total about 2,000 of the 48,000 or so licensed cab drivers have faced some sort of disciplinary action, including having their licenses revoked or being fined. Those charged criminally flipped the switch to the higher rate at least 300 times each.

The case first made news in March, when the TLC said it was investigating drivers for using the higher rate, known as Rate Code 4. Officials were tipped off by a customer who complained, and the TLC then proceeded to use global positioning systems and other technology inside the cabs to investigate the scheme.

David Yassky, chairman of the TLC, said it appeared the majority of the fraudulent trips were charged to those making trips to the airport, Grand Central Terminal and Times Square, alleging the drivers focused on those most likely to be tourists.

"The entire taxi system, which is a jewel of the city…depends upon trust," Mr. Yassky said. "We are determined to protect the integrity of the taxi."

Mr. Yassky also said new technology placed in every taxi since May should spell the end of this particular scheme, as passengers will now be alerted by a beep and a message when a driver has flipped the meter to the rural rate.

The New York Taxi Workers Alliance in a statement raised questions about why the defendants were being charged now and why 21 of them were led to report Wednesday morning to the TLC headquarters, where they were arrested.

In a Manhattan courtroom late Wednesday, many of the defendants were brought in chained together in groups of 10 to be arraigned on two counts each of scheming to defraud.

The first defendant to be arraigned, Joseph Kastner, pleaded not guilty and was released from custody after a judge rejected the prosecutors' request to have bail set at $10,000.

Mr. Kastner allegedly overcharged passengers nearly 4,000 times and made more than $7,000 on the scheme. His lawyer said he denies all the allegations made in the indictment.

Friday, September 24, 2010

Banks Pressed on Sour Home Loans

The Wall Street Journal
Investors in Pool of Securities Seek to Force Lenders to Buy Back or Modify Problem Mortgages

Big U.S. banks are facing legal pressure to make up for losses tied to pools of soured low-end mortgage loans.

In the latest effort, a group of investors in 2,300 mortgage securities worth roughly $500 billion is seeking to force several banks that originated or are now servicing faulty subprime-mortgage loans to repurchase or modify them.

The move follows other similar efforts. Bond and mortgage insurers, hard hit in the housing crisis, have filed lawsuits accusing lenders and banks of sticking them with flawed loans marred by poor underwriting and faulty appraisals.

Federal Home Loan Banks in Pittsburgh, Seattle and San Francisco have sued Wall Street banks, seeking to force them to buy back mortgage-backed bonds. In July, the Federal Housing Finance Agency issued 64 subpoenas to obtain information about loans underpinning securities sold to mortgage

The banks and lenders are fighting these efforts, saying they aren't responsible for the housing crash.

And the outcome is far from certain and could depend on potentially contentious negotiations and litigation that could drag out for years.

In any case, analysts say the efforts could force banks to disclose difficult-to-obtain information about the loans, such as how poorly they might have been originated or are being managed.

That data could be used to force banks to repurchase as much as $133 billion in souring home loans, according to Compass Point Research & Trading, a Washington, D.C., boutique investment bank.

The legal efforts focus on the contractual duties of lenders known as "representations and warranties," which can at times require them to repurchase loans or modify them so borrowers can keep paying monthly mortgage bills, which maintains value for mortgage securities tied to the loans.
The Trustees' Roles

At issue are the roles of trustees and loan servicers. Trustees are little-known administrators inside banks responsible for overseeing loan pools, or securitizations, on behalf of investors. Loan servicers handle day-to-day management of loans, including deciding how and whether to modify the terms of a loan. Both are charged with oversight of pools that hold thousands of loans.

If a trustee, for example, discovers that a borrower lied when getting a loan, the trustee or loan servicer is responsible for forcing the originating bank to repurchase the loan on behalf of mortgage investors. Trustees enforce warranties made by loan originators when they sell loans to a trust, and oversee loan-servicing firms.

But some loan-servicing units reside inside the same banks that originated or underwrote the loans or securities. This sets up a potential conflict of interest because a loan-servicing arm would have to force another department or affiliate inside a bank to take back a problem loan.

In a letter to the trust departments of several large banks, Talcott Franklin, a Dallas lawyer representing the investors holding 2,300 mortgage bonds, claims the loan-servicing units too infrequently modify poor-performing home loans underpinning mortgage securities or replace them with better loans.

"This is of great concern to the pension funds, bank and credit-union depositors, mutual fund holders, 401(k) holders, endowments, state and local governments and taxpayers who depend on the performance of these investments," the letter says.

U.S. Bancorp, Bank of America Corp., Bank of New York Mellon Corp., and Wells Fargo & Co. received the letter from Mr. Franklin, while Deutsche Bank AG didn't, according to people familiar with the situation. The banks either declined to comment or didn't return requests for comment on the letter.

In a statement, a spokeswoman for Wells Fargo said the bank has "an established track record of responding to all legitimate verified bondholder inquiries in a timely manner."

A key first step in the legal fights is obtaining the loan files that will detail how the loans were originated and what is being done now to salvage investors' money.

If the investor maneuver is successful in getting the loan information, "this will lead to similar actions taken by a larger set of bondholders," said Chris Gamaitoni, a Compass Point senior analyst. "We believe that once loan files are acquired, that the breaches of reps and warranties will be relatively clear."

In an Aug. 17 report, Compass Point said the litigation makes common claims: "A significant portion of the underlying loans failed to comply with the underwriting guidelines or other reps and warranties, and thus misrepresentations and material omissions were made in connection with the sale of" residential mortgage-bond securities.

In recent weeks, some of the banks have begun early-stage talks with Mr. Franklin to provide data about the loans underpinning the securities, such as loan documents and how the loan has been serviced. Separately, Mr. Franklin hopes to persuade the trustees to take increased steps to deal with souring loans, such as forcing loan sellers to repurchase the loans or requiring loan servicers to improve loan servicing.

In the past, complaints by mortgage-security investors went unheeded. But because Mr. Franklin now represents enough investors to meet certain legal thresholds—he, for example, represents 50% or more of the voting rights of 900 mortgage securities—his clients could fire a trustee, demand changes in the way a mortgage bond is managed or ultimately file a suit on behalf of a huge group of bondholders.

In the letter, Mr. Franklin said that in some trusts where the lender and servicer sit inside the same bank, the number of recent repurchases by the lender is zero, even though the default rate for the loan pool is 25%.
'That's Just Not Right'

Some investors "had no idea that their money was being invested in mortgage-backed securities," said Mr. Franklin. "And yet somehow these people are now the ones being punished, and that's just not right."

To keep track of the securities his clients own and protect his clients' confidential holdings, Mr. Franklin uses a software system he designed with a college friend, who consults on how to design large databases. Mr. Franklin calls it the "Tranche" program, a reference to the French word for slice or layer. Mortgage securities are chopped into tranches based on risk and return.

His clients' information is coded and Mr. Franklin keeps a secret code book as a reference. Mr. Franklin said the system is important because it lets him know when his clients in a specific deal have amassed enough voting power.

In the other cases, bond insurer MBIA Inc. sued Credit Suisse Group in New York state court in December over a $900 million loan pool, a large portion of which MBIA agreed to cover. MBIA said it had relied on Credit Suisse to vet the quality of the loans.

In January, Ambac Assurance Corp., the bond-insurance unit of Ambac Financial Group Inc., sued a Credit Suisse unit in New York state court, alleging that it made "false and misleading" representations about home-equity lines of credit backing bonds that the insurer guaranteed in 2007.

A Credit Suisse spokesman said the claims are without merit and the bank will defend itself against the claims.

Separately, American International Group Inc. is analyzing mortgage deals it insured before it imploded in 2008. Chief Executive Robert Benmosche told investors in May that the company will take "appropriate action" if it finds it was harmed by the transactions.

NY Mets' Francisco Rodriguez charged with Contempt of Court


New York Mets closer Francisco Rodriguez surrendered to authorities Wednesday morning and was charged with criminal contempt for the text messages he sent his girlfriend in violation of a court order of protection.

Rodriguez was arraigned in Queens County Criminal Court at 11:37 a.m. ET in front of Judge Ira H. Margulis. The charge carries a maximum one-year sentence, and Margulis issued an additional order of protection for Daian Pena, who is the mother of his twins.

Rodriguez's attorney, Christopher Booth, said his client has not seen the children since his initial Sept. 7 court date.

Rodriguez, who was wearing a black T-shirt and blue jeans Wednesday, was freed on a $7,500 bond and ordered to return to court on Oct. 7.

"An order of protection is a mandate of the Court that provides additional legal protection under the law for victims and witnesses," Queens district attorney Richard A. Brown said in a statement. "It is not simply a piece of paper. When a defendant willfully violates a provision of a protective order -- such as initiating communication with a protected party -- he will be held accountable for his actions and charged with criminal contempt."

The 28-year-old reliever had been accused of grabbing Pena's father, 53-year-old Carlos Pena, hauling him into a tunnel near the family lounge beneath the team's new ballpark and hitting him in the face after a game Aug. 11.

Rodriguez was told to keep away from Carlos Pena and his daughter. But a week after he appeared in court, he sent her two text messages and kept going, sending 56 in all. Assistant District Attorney Scott Kessler said Rodriguez understood he wasn't supposed to contact her, and he mentioned a previous case where he was accused of assaulting her in Venezuela.

"He's not naive or loving. He's manipulative and controlling," Kessler said.

Pena never responded to the messages, which included 17 sent in one day alone, Kessler said.

The messages got progressively angrier. "Thank you for sinking me turning your back, take good care of my children ... and now I see that your were with me because of the money to see that your family ..." he wrote in the final message Aug. 23, according to Kessler.

Rodriguez could be jailed if he has any further communication with Pena. The restraining order is in place for six months.

Booth said of the latest charges: "The district attorney took another opportunity to put Mr. Rodriguez in jail."

The four-time All-Star has agreed to undergo anger-management counseling.

Kessler had asked for bail to be set at $25,000. He said that Rodriguez had previously violated an order of protection issued in Venezuela in 2005, stemming from an incident in which Rodriguez allegedly assaulted Pena. Kessler said Pena was hospitalized after the incident.

Rodriguez played for the Angels in 2005, and the team said the news came as a surprise.

"We were not aware of anything like that. Today was the first we heard of that situation," Angels VP for communications Tim Mead said.

In the courtroom, Booth said: "We're not here to litigate that matter."

Outside of court, Booth characterized the incident as "dated."

"The 2005 incident, I have no comment on other than to say it is dated, it is old and there is no comparison between the Venezuelan [justice] system and our own," Booth said.

The Mets declined comment when asked if they were aware of the 2005 incident in Venezuela.

"It's an ongoing criminal investigation. We're referring all questions to the district attorney's office," a team spokesman said.

After his initial September arrest, Rodriguez was put on the disqualified list by the Mets, costing him $3 million of his $11.5 million salary this year. He was also put on the restricted list for two days immediately after the incident. He returned but pitched in one game before it was revealed he had injured his hand in the fight and that he required surgery.

The Mets also converted Rodriguez's contract to non-guaranteed, giving the team the ability to release the reliever in the early part of spring training next year for 30 days' termination pay.

The players' union filed a grievance against the Mets and the commissioner's office protesting how the team has handled the Rodriguez case. The Major League Baseball Players Association challenged the decision to place the right-handed closer on the disqualified list and the Mets' effort to convert his contract.

A union source told last week that Rodriguez's ongoing court proceedings would not affect the timing of the hearings between the MLBPA and the Mets.

As he left the courthouse Wednesday, Rodriguez was asked repeatedly if he plans to play for the Mets in 2011, but he declined to comment as he got into a black SUV and departed.

His lawyer said he wants to stay, however.

"He wants to play with the Mets," Booth said. "He wants to stay with the Mets and he wants to help them win a world championship."

As for whether he will be ready to pitch, Booth said: "He had surgery. Everything is going well... We think he is going to heal completely."

Although negotiations have taken place between lawyers for both parties, nothing has been resolved.

"What I can say is that Mr. Rodriguez will not allow this situation to turn into somebody's meal ticket for the rest of their lives, so to the extent that anyone is thinking that's the case, that's not going to happen," Booth said.

Thursday, September 23, 2010

Thailand's Bid for High-Speed Internet Stalled

Associated Press

Thailand's bid to catch up with neighboring countries on advanced telecommunications technology has stalled after a court Thursday ruled to suspend a bidding process for 3G licenses.

The ruling means more delays for bringing the fastest Internet technology to Thailand, which is one of the only countries in Southeast Asia without third-generation capabilities. Poorer neighbors such as Cambodia and Laos already have 3G, which allows faster upload and download speeds.

The Supreme Administrative Court upheld a lower court's injunction against a much-awaited 3G mobile license auction organized by the National Telecommunications Commission, saying the agency did not have the authority to put the licenses up for bidding.

The court also dismissed an argument from the commission, which said the absence of 3G network would hinder the performance of state agencies and other public service providers.

The auction must now wait until the Constitutional Court determines if the National Telecommunications Commission has the authority to hold the sale - or until Parliament moves to set up a new regulator. The auction was originally scheduled for Monday.

State-run CAT Telecoms Plc. had initially appealed to the Central Administrative Court to block the auction, saying its interests would be damaged and the country's telecoms regulator had no authority to offer the licenses. CAT Telecoms objects to the sale of the licenses to private firms because it says 3G customers will be able to use the 2G network the company currently provides to its customers but wouldn't be paying for it - their fees would be going to their 3G provider, instead.

CAT Telecom argued the National Telecommunications Commission cannot sell the licenses because it was formed under Thailand's 1997 constitution, which was replaced after the 2006 coup. The new Constitution, approved in 2007, requires a new independent body to regulate the mobile phone network frequency.

"The NTC must put on hold the 3G license auction until this court case is over," said the judge. Should the auction go on, it would "lead to more damage and would be difficult to solve afterward."

Until the new auction takes place, the court ordered the commission to return the auction deposits, of 1.28 billion baht ($41.6 million) each, to the three bidders, Advanced Info Service Pcl., Total Access Communication Pcl., and True Corp Pcl.

Prime Minister Abhisit Vejjajiva said Wednesday his government wanted to see 3G services available in Thailand as soon as possible.

Wednesday, September 22, 2010

Toyota Motor Settles Suit Tied to Fatal San Diego Crash


Toyota Motor Corp. said it settled a suit with relatives of four people killed in a San Diego accident that prompted the Japanese automaker to recall vehicles on concern they might suddenly accelerate.

“Through mutual respect and cooperation we were able to resolve this matter without the need for litigation,” Toyota said in an e-mailed statement last night, without disclosing the terms of the settlement.

Toyota President Akio Toyoda, in remarks to Congress in February, apologized to the family of Mark Saylor, the California Highway Patrol officer who was killed along with his wife, daughter and brother-in-law in a Lexus that sped out of control in August 2009. Investigators identified floor mats as a probable cause of that accident.

“Especially, I would like to extend my condolences to the members of the Saylor family, for the accident in San Diego,” Toyoda said in front of a U.S. House Committee on Feb. 23. “I would like to send my prayers again, and I will do everything in my power to ensure that such a tragedy never happens again.”

The accident occurred near San Diego on Aug. 28, 2009 while Saylor was driving a 2009 ES 350 loaned to him by a local Lexus dealership, the company said. Following the accident, Toyota on Sept. 30, 2009, announced plans for its biggest ever recall in the U.S., covering 3.8 million vehicles, for floor mats that could slip out of position and jam gas pedals.

Toyota has recalled about 8 million vehicles worldwide to fix sticky pedals and misshapen floor mats linked to unintended sudden acceleration. Plaintiff lawyers have said the cars’ electronic throttle system caused the problems, an allegation that Toyota has denied.

The U.S. National Highway Traffic Safety Administration said in May that Toyota vehicles in unintended acceleration crashes may be linked to 89 deaths since 2000.

"Don't Ask, Don't Tell" Repeal Effort: Lame Duck Vote to Come?


The Republican-led filibuster of legislation to allow for repeal of the "don't ask, don't tell" policy banning gays from serving openly in the military is already prompting gay rights advocates to consider their next move.

And while the issue will continue to be litigated in the courts, advocates have not given up on the legislative process: The Servicemembers Legal Defense Network, which is dedicated to ending the policy, is now pushing for another vote following the midterm elections, where, it says, there is a "slim shot" of passage.

"We now have no choice but to look to the lame duck session where we'll have a slim shot," the group said in a statement after the vote. "The Senate absolutely must schedule a vote in December when cooler heads and common sense are more likely to prevail once midterm elections are behind us."

"We lost because of the political maneuvering dictated by the mid-term elections," the group added. "Let's be clear: Opponents to repealing 'Don't Ask, Don't Tell' did not have the votes to strike those provisions from the bill. Instead, they had the votes for delay. Time is the enemy here."

Republican Sen. Susan Collins, who had been seen as a potential 60th vote to break a filibuster to advance the legislation, said she was voting against advancing the legislation not out of support for the "Don't Ask, Don't Tell" policy but because she did not feel Republicans had been given enough opportunity to offer amendments.

A spokesman for Senate Majority Leader Harry Reid, who only allowed Republicans the chance to put forth one amendment on repealing the policy, said before the vote that Reid would be open to more debate in the lame-duck session following the midterm elections.

It's not clear, however, that the 60-vote threshold would be achieved even if more debate wins over Collins. That's because two Democrats -- Sens. Blanche Lincoln and Mark Pryor of Arkansas - also supported the filibuster. (Reid voted with them, but only so that he could bring the bill back to the floor at a later date under Senate rules.)

The "Don't Ask, Don't Tell" repeal provision was attached to the defense authorization bill, which the Senate will likely move to pass one way or another before the end of the year. It now falls to Reid to decide whether to again attach the repeal provision to the bill next time he brings it to the floor. (The same is true of another controversial provision, the DREAM Act.)

Republicans, who expect to pick up seats in both the House and Senate in the midterms, have pushed Democrats not to pass any legislation during the lame duck session, suggesting that doing so would be acting against the will of the American people.

According to CBS News polling, however, most Americans support allowing gay men and women to serve openly.

In a statement after the vote, the National Gay and Lesbian Task Force said "politicians are playing politics with people's lives."

"Seventy-eight percent of Americans support ending 'Don't Ask, Don't Tell' and countless others believe that young people should be provided a path to citizenship in the country they love and have always called home," the group said. "Today's Senate vote mocks those ideals. The senators who led and supported the filibuster effort should be ashamed."

But Family Research Council President Tony Perkins called the vote "a victory for the men and women who serve our nation in uniform."

"At least for now they will not be used to advance a radical social agenda," he said in a statement.

Senator Joe Lieberman (I-CT) said in a statement that "this is a cause whose time has come." He went on to suggest the issue would again come up for a vote before the year is out.

"I remain confident that we will repeal this policy that is unjust and discriminatory and counter both to our national values and our national security," he said. "We didn't win today, but we can win this fight this year."

Monday, September 20, 2010

Jury Finds LA Actor Guilty of Attempted Murder

Associated Press

An actor who appeared in the film "The 40-Year-Old Virgin" was convicted Thursday of the attempted premeditated murder of his ex-girlfriend in a knife attack.

San Diego County jurors also found Shelley Malil guilty of assault with a deadly weapon for stabbing Kendra Beebe more than 20 times during a quarrel at her San Marcos home in 2008. He was acquitted of residential burglary.

Beebe, 37, sobbed and hugged her best childhood friend, who stood beside her at Vista Superior Court when the verdict was read.

"I feel a sense of relief, but I have to be honest there is never a win in a situation like this," Beebe said. "I was afraid because he was an actor that the people might believe his bad theatrics. I am pleased to see the justice system did its job properly."

She said her body is covered in scars but she has been able to return to her favorite sport, surfing.

Malil - who played Haziz, a co-worker of Steve Carell's character in "The 40-Year-Old Virgin - faces 16 years to life in prison. He faced 21 years before being acquitted of residential burglary for entering the woman's home.

Defense attorney Matthew Roberts told jurors in his closing arguments there was no doubt Malil went too far when he picked up the kitchen knife after finding Beebe on her patio with another man, but that Malil never intended to kill Beebe.

He said the two had a tumultuous relationship and described her as a violent drama queen who manipulated men and tried to make them jealous.

Deputy District Attorney Keith Watanabe countered that Malil, 45, brought the knife to the home and did not grab it in the heat of the moment. He showed jurors photographs of deep wounds on the victim's face, neck and torso and told them they did not have to determine a motive.

Watanabe said Beebe was lucky to be alive and accused the defense of trying to taint the image of Beebe so the jury would acquit the actor.

"We had a smart, intelligent jury, and they reached the right verdict," Watanabe told The Associated Press after the verdict. "There was a mountain of evidence that he was guilty. He certainly won't be winning an Oscar for his performance in the courtroom. The jury did not believe his story."

The defense attorney left the courtroom without comment. Police escorted Malil to the San Diego County jail, where he will remain held without bond until his Nov. 18 sentencing.

The judge excused one juror after she sent him a note stating that she could not be impartial. The note read: "I believe in karma and believe that the victim deserved this because of her immoral lifestyle."

After the alternate was seated and the deliberations started over Thursday afternoon, the jury reached the verdict in 3½ hours.

U.S. Tech Probe Nears End

The Wall Street Journal

Several of the U.S.'s largest technology companies are in advanced talks with the Justice Department to avoid a court battle over whether they colluded to hold down wages by agreeing not to poach each other's employees.

The companies, which include Google Inc., Apple Inc., Intel Corp., Adobe Systems Inc., Intuit Inc. and Walt Disney Co. unit Pixar Animation, are in the final stages of negotiations with the government, according to people familiar with the matter.

The talks are still fluid, these people said, with some companies more willing to settle to avoid an antitrust case than others. If negotiations falter, both sides could be headed for a defining court battle that could help decide the legality of such arrangements throughout the U.S. economy.

Still, there are powerful incentives for both sides to settle the potential civil case before it reaches that stage.

The Justice Department would have to convince a court not just that such accords existed, but that workers had suffered significant harm as a result.

The companies may not want to take a chance in court. If the government wins, it could open the floodgates for private claimants, even a class action by employees. A settlement would allow the Justice Department to halt the practice, without the companies having to admit to any legal violations.

Spokespeople for Google, Apple, Intel, Adobe and Intuit all declined to comment. Pixar had no immediate comment. A Justice Department spokeswoman also declined to comment.

The Justice Department's probe of hiring practices could reach beyond Silicon Valley.

During the course of its more than year-long investigation, the agency has uncovered evidence of such agreements in other sectors, according to the people familiar with the matter.

A settlement with tech companies—or a court fight—could therefore help determine what kinds of agreements are acceptable in other industries as well.

At stake are dueling visions of how far companies should be able to go in agreeing to limit the kind of headhunting that can help valuable employees increase their compensation.

The companies have argued to the government that there's nothing anticompetitive about the no-poaching agreements. They say they must be able to offer each other assurances that they won't lure away each others' star employees if they are to collaborate on key innovations that ultimately benefit the consumer such as improved Google SEO.

Some economists believe that banning such agreements could harm Silicon Valley's open, collaborative model.

"The effect of the lawsuit would be to reduce innovation because companies would worry about exposing their employees to each other," said Paul Rubin, an economics professor at Emory University, who isn't involved in the case.

For the Justice Department, such agreements amount to an effort by companies to limit competition for talent, harming employees' ability to get the best jobs and wages and reducing the incentives for people to enter professions in high demand, according to people familiar with the matter.

The government could argue that the agreements constitute an effort by companies to fix the price of labor, and are therefore just as harmful as price-fixing or bid-rigging—automatic violations of antitrust law.

"In a free market economy, you want the best people getting the best positions, and presumably all the rewards that come with that," said Spencer Waller, a law professor at Loyola University Chicago, who has no connection to the case. "This agreement, if the government has the facts, suggests that market for talent is being depressed by collusion."

The agreements under investigation varied in their scope and details, according to the people familiar with the matter. In conversations with the Justice Department, some companies have maintained they didn't have agreements not to hire each others' employees, only agreements not to "cold-call" partners' employees.

However, people familiar with the matter say the Justice Department believes that cold-calling is an important way in which people are hired in the sector. Even if the employees don't end up moving, their employer often has to sweeten their pay and conditions to make sure they stay.

After more than a year of investigation, the Justice Department antitrust division has concluded that many of these agreements have harmed people's ability to get better jobs or improve their conditions.

But proving that in court may be tricky, some antitrust lawyers said.

During the course of the investigation, more than a dozen tech companies have been questioned by the Justice Department, people familiar with the matter said. Those include Yahoo Inc., Genentech Inc. and IAC/InterActiveCorp.

However, some companies said they are no longer in the government's cross-hairs. "After a thorough investigation, the [Justice Department] antitrust division has advised IBM that it will not pursue a case against IBM," an International Business Machines Corp. spokesman said.

Microsoft Corp. also said it is no longer a target of the investigation. A Genentech spokeswoman said the Justice Deparment had relieved the biotech firm of the obligation to hold on to relevant information.

A Yahoo spokeswoman said the company fully cooperated in the investigation and believed its responses were sufficient. IAC didn't respond to requests for comment.

The agency has decided not to pursue charges against companies that had what it believes were legitimate reasons for agreeing not to poach each other's employees, said people familiar with the matter. Instead, it's focusing on cases in which it believes the non-solicit agreement extended well beyond the scope of any collaboration.

Friday, September 17, 2010

Grim Photos Dominate Connecticut Home-Invasion Trial

Associated Press

Prosecutors showed jurors grim photos Thursday of rope used to tie up victims, ripped clothing and ransacked rooms in a suburban home invasion that began with the suspects trailing a mother and her two girls at a supermarket and ended with their deaths.

Dr. William Petit, the sole survivor, who was beaten and tied up in the basement but escaped before the fire was set, hung his head at times as prosecutors showed photo after photo of burned staircases and hallways and images of his childrens' badly torn and burned clothing.

Petit had sobbed during Wednesday's testimony as photos of his daughters' bodies were shown at the trial of Steven Hayes, one of two suspects charged with murder, sexual assault and other crimes in the deaths of Jennifer Hawke-Petit and her daughters on July 23, 2007.

The photos included images of rope used to tie up the victims; ripped shorts and other belongings of 17-year-old Hayley and 11-year-old Michaela; ransacked rooms; and melted containers that prosecutors said contained accelerants used by Hayes and Joshua Komisarjevsky to destroy evidence with a fire.

Prosecutors say Komisarjevsky saw Hawke-Petit and her daughters as they shopped for groceries and followed them to their home in the affluent bedroom community of Cheshire. He returned later with Hayes, authorities say, and together they severely beat William Petit, now 53, and killed his wife and daughters.

Komisarjevsky is awaiting trial. They both face the possibility of the death penalty if convicted.

State Police Sgt. Karen Gabianelli took the stand in New Haven Superior Court, leading prosecutors through photos displayed on a screen before the jury. On Wednesday, prosecutors showed photos of the bodies of the victims as they were found by police and firefighters.

In all the bedrooms, jewelry was removed, Gabianelli said.

"It looked like it had been gone through pretty well," she said.

In another bedroom where clothes were strewn about, she said, "The closet was pretty well gone through, too."

Hayes and Komisarjevsky were paroled burglars at the time of the invasion.

Prosecutors showed photos of a pickup truck they say Hayes drove. Photos show the interior containing a knapsack belonging to the 17-year-old along with jewelry, including a string of pearls stored in a plastic bag.

Superior Court Judge Jon Blue ended the session after defense lawyer Thomas Ullmann said his client had "medical issues" and unspecified information related to security. Earlier, Ullmann said Hayes had seizure-like symptoms and urinated on himself Wednesday night.

Goats on the Roof and a Stable of Lawyers

The Wall Street Journal

Having Trademarked the Ungulate Look, Restaurateur Butts Heads With Imitators

Lars Johnson is proud of his restaurant's Swedish-meatball sandwich and pickled herring. But the signature offering at his Al Johnson's Swedish Restaurant isn't on the menu; it's the goats grazing on the grass-covered roof.

Any other business thinking of putting goats on the roof will have Mr. Johnson's lawyers to contend with.

Some patrons drive from afar to eat at the restaurant and see the goats that have been going up on Al Johnson's roof since 1973. The restaurant 14 years ago trademarked the right to put goats on a roof to attract customers to a business. "The restaurant is one of the top-grossing in Wisconsin, and I'm sure the goats have helped," says Mr. Johnson, who manages the family-owned restaurant.

So when a tourist spot 750 miles away decided to deploy a rooftop-caprine population, Mr. Johnson made a federal case of it.

Last year, he discovered that Tiger Mountain Market in Rabun County, Ga., had been grazing goats on its grass roof since 2007. Putting goats on the roof wasn't illegal. The violation, Al Johnson's alleged in a lawsuit in the U.S. District Court for the Northern District of Georgia, was that Tiger Mountain used the animals to woo business.

The suit declared: "Notwithstanding Al Johnson's Restaurant's prior, continuous and extensive use of the Goats on the Roof Trade Dress"—a type of trademark—"defendant Tiger Mountain Market opened a grocery store and gift shop in buildings with grass on the roofs and allows goats to climb on the roofs of its buildings."

Al Johnson's "demanded that Defendant cease and desist such conduct, but Defendant has willfully continued to offer food services from buildings with goats on the roof," the suit continued.

Danny Benson, the offending market's owner, says that "legally we could fight it, because it is ridiculous." But it would have been too expensive to fight, he says. He considered replacing his goats with pigs before deciding their heft and tendency to "root around" would pose a danger to people below.

Earlier this year, Mr. Benson agreed to pay Al Johnson's a fee for the right to use roof goats as a marketing tool in Georgia, South Carolina, North Carolina and Tennessee.

Al Johnson's is on constant lookout for other cloven-hooved intellectual-property violations. Mr. Johnson says the restaurant's Milwaukee law firm has sent letters to other alleged offenders, such as a gift shop in Wisconsin with a fake goat on its roof. It removed the ersatz ungulate.

In July, Virginia news outlets reported that goats on a hillside routinely hopped onto a platform under a billboard advertising two International House of Pancakes restaurants. Drivers pulled over to snap pictures, and one IHOP manager was quoted saying he enjoyed the publicity. Mr. Johnson says his lawyer is monitoring the situation in case "they take it a step further." Lisa Hodges, who manages one of the restaurants, says she doesn't plan to intentionally use the goats for marketing. "We can't help it that they climb up there," she says.

Any business that sells food and uses goats to lure customers may be violating the trademark, says Lori Meddings, the restaurant's lawyer. "The standard is, is there a likelihood of confusion?" she says.

Al Johnson, Lars's late father, opened the Swedish restaurant with a partner in 1949 in a former grocery store in this tourist town on Lake Michigan. In 1973, he imported a wooden building from Norway to replace the old structure, and covered it with a traditional sod roof.

Al Johnson's best friend, Winky Larson, brought him a goat named Oscar as a gag gift that year, the Johnson family says. Someone then put Oscar on the roof, where he attracted passersby, inspiring the family to accumulate a herd.

Two decades later, the business was booming. Summer tourists packed the restaurant, says Mr. Johnson, making it one of the largest U.S. importers of lingonberries. The family in 1996 registered the "Goats on the Roof" trademark. Mr. Johnson, whose father died in June, recalls his lawyer telling him: "Lars, you have something very valuable here."

The goat value was clear on a recent Saturday morning at Al Johnson's. Diners ate Swedish pancakes and meatballs as a red pickup arrived with four bleating passengers: Buckshot, Charlotte, Copper and Flipper.

Mr. Johnson's 15-year-old son, Bjorn, guided the goats up a staircase onto the roof. A herd of tourists congregated below.

The young Mr. Johnson said he worries that a goat will fall into a group of observers, as Buckshot did last year after stretching too far to munch on a cedar tree. Nobody was harmed, and the goat appeared to have fully recovered as he chewed a reporter's shirttail.

Inside the gift shop filled with goat-theme merchandise, Jim Miller, a 67-year-old tourist from Racine, Wis., was softly singing "The Lonely Goatherd" from "The Sound of Music."

The Al Johnson's goat trademark doesn't apply beyond U.S. borders, where roof goats also have marketing cachet.

The Goats on the Roof Coffee Shop in Northumberland, England, opened in July with the help of a government grant. "It's such a unique selling point," says Nina Remnant, proprietor of the cafe, which advertises Bagot goats on its roof.

British Columbia appears to be a hotbed of goat-roofed businesses. The Old Country Market in Coombs, British Columbia, has had the critters on its peaked roof since the 1970s. The market calls itself the "Home of the Goats on the Roof."

Arthur Urie, the market's general manager, says he considered trademarking "goats on the roof" in Canada but decided not to. He isn't concerned about the other roof-goated businesses, he says, because his has "a lot more to offer than what's on the roof."

As for Al Johnson's, he adds, "our goats are bigger than their goats."

Thursday, September 16, 2010

Survey: Law Firms Planning to Expand in Q4

Tampa Bay Biz Journal

More law firms are planning to hire in the fourth quarter, according to Robert Half Legal.

The staffing firm found that 29 percent of lawyers interviewed plan to add legal jobs, while 6 percent expect declines.

Most of the respondents (88 percent) said they were at least somewhat confident in their firm’s ability to expand in last quarter of the year.

"As the economy regains its footing, legal organizations continue to make strategic hires to support active practice groups," said Charles Volkert, executive director of Robert Half Legal, in a news release. "Law firms, in particular, are expanding their legal teams to improve service offerings and meet client demands."

The Business Journal recently reported that the Gunster law firm is among a few Florida practices that have reported growth. The firm, which has offices in Miami, Fort Lauderdale and West Palm Beach, is looking to enter the Tampa and Orlando markets.

The survey found that the area of law expected to experience the most growth is bankruptcy/foreclosure (24 percent), followed by litigation (18 percent) and health care (17 percent).

The majority (95 percent) of respondents identified lawyers as the type of full-time legal position they intend to add, followed by legal secretaries/assistants (36 percent) and paralegals (26 percent).

The Robert Half survey is based on interviews with 100 lawyers at firms with 20 or more employees and 100 corporate lawyers at companies with 1,000 or more employees.

U.S. Won't Seek Retrial in Enron Case

The Wall Street Journal

In the latest twist in the government's multi-year prosecution of the Enron Corp. scandal, the Justice Department moved Wednesday to drop charges against a former Merrill Lynch & Co. official days before a scheduled retrial involving the only criminal case brought against Wall Street figures in the alleged misdeeds at the onetime energy giant Enron Corp. .

The Justice Department asked a federal judge in Houston to drop fraud and conspiracy charges against James A. Brown, a former Merrill official who along with three former brokerage-firm colleagues was convicted in 2004 in connection with a 1999 deal known as the "Nigerian barge transaction."

A Justice Department spokeswoman declined to comment.

At the 2004 trial, prosecutors alleged that Enron's sale of an interest in three power-producing barges, located off the coast of Nigeria, to Merrill was a sham that allowed the energy company to illegally book a profit. Prosecutors said the deal wasn't legitimate because Enron had promised to take Merrill out of the deal within six months at a predetermined profit. This guarantee meant that Merrill was never at risk, so Enron couldn't legally treat the deal as a sale. The four Merrill defendants, who went to prison in 2005, maintained they did nothing illegal.

The barge case was widely viewed as an effort by the government to send a message to the financial community about acceptable and unacceptable conduct in helping major corporations structure their finances. It was also viewed as an early test case for the Justice Department's Enron Task Force, which eventually secured more than a dozen guilty pleas from former Enron officials. Its work culminated in the 2006 fraud and conspiracy convictions of former Enron chairman Kenneth Lay and former president Jeffrey Skilling. Mr. Lay died shortly after of heart-related problems and Mr. Skilling is still appealing his conviction and 24-year prison sentence.

But some of the government's trial-court success on Enron has unraveled in the appellate courts. In 2006, for example, the Fifth Circuit U.S. Court of Appeals overturned the fraud and conspiracy convictions of Mr. Brown and the other defendants from Merrill, which was purchased in January 2009 by Bank of America Corp. The appellate court upheld Mr. Brown's conviction for perjury and obstruction of justice in connection with the Enron investigation. As a result of the appellate ruling, Mr. Brown and the three other Merrill defendants were released from prison at various points in 2006.

In 2007, the government moved to put Mr. Brown back in prison, arguing that his roughly twelve months of incarceration wasn't long enough to satisfy his perjury and obstruction convictions. A year earlier, the government hadn't opposed Mr. Brown's release. U.S. District Judge Ewing Werlein Jr., who has presided over the barge case, denied the government's request.

The government has resolved its disputes with the other Merrill defendants, including in one case dismissing the remaining charges. However, it pressed on against Mr. Brown.

In recent months, his attorneys and prosecutors have made numerous court filings in anticipation of the retrial, which Judge Werlein had scheduled for Monday. Mr. Brown's attorneys contended in court filings that all charges should be thrown out for prosecutorial misconduct. The filings argued that the government withheld key exculpatory evidence from the defense before the 2004 trial. Such failure violates the law, the defense argued. However, Judge Werlein ruled in favor of the government, which argued that it had turned over all necessary material before the 2004 trial.

On Friday, the Justice Department unexpectedly asked Judge Werlein to postpone the trial. A government filing argued that Mr. Brown's continued efforts to appeal his perjury and obstruction convictions might eventually force the government to add those counts back into the case. Any trial should be postponed until all possible charges could be handled at once, the filing said.

Mr. Brown's attorneys vehemently opposed a continuance. In a filing, they said they had recently contacted key government witnesses from the 2004 trial, who told them they hadn't heard from the government—in one case for years. Such lack of preparation "suggests that the government has been using the court to run an outrageous 'bluff'….for the improper purpose of continuing to harass and persecute Brown and threaten his liberty," the filing said.

Wednesday, September 15, 2010

Another Trial Run for Cameras in Federal Courts

USA Today

Some federal trials could be televised under a plan approved Tuesday by the U.S. Judicial Conference.

The conference — the policymaking arm of the U.S. judiciary — voted for a pilot project that would allow video recordings of civil trials. Proceedings would be recorded only if the participants in the case consent. The faces of jurors would not be recorded.

The plan, which was approved in a closed meeting Tuesday, would not affect the Supreme Court, which has been the subject of bipartisan criticism in Congress for keeping its proceedings off-camera. During Senate Judiciary Committee hearings for Supreme Court nominee Elena Kagan in June, several senators, including Herb Kohl, D-Wis., and John Cornyn, R-Texas, said the high court would benefit from televised proceedings.

U.S. Appeals Court Judge David Sentelle of Washington, D.C., said the project arose from interest among judges who wanted to try broadcasting trials. He said the conference was also responding to interest among members of Congress who have pushed to open courtrooms to television broadcasts.

The 27-member conference sets policy only for the lower trial and appeals courts, not the Supreme Court.

Sen. Arlen Specter, D-Pa., lead sponsor of a bill to televise Supreme Court hearings, said Tuesday that the pilot project fails to address "the real core" issue of the closed federal judiciary.

"The core problem is that the Supreme Court of the United States decides all the cutting-edge questions of the day," he said, stressing that people would be best informed about the U.S. judicial system by seeing how its highest court operates.

Every state allows its courts to broadcast some trials. Federal courts generally ban cameras.

Sentelle, who offered only the sketchiest of details, noted that the U.S. judiciary had tried and abandoned a similar pilot project in the 1990s. He said judges now wanted "to retest the waters."

Sentelle said he did not know when the project would begin, whether video would be put up on court websites, nor how the recordings would be released to the public. Participating courts, not outside media, would record the proceedings.

Sentelle had no recorded vote but said that after "significant" debate, approval was "overwhelming."

Tuesday, September 14, 2010

Opponents Present Case Against Obama's Health Care Law in 20-State Lawsuit

The Washington Post

Twenty states are squaring off against the Obama administration on Tuesday in a lawsuit seeking to nullify the sweeping new health-care law.

The suit - originally filed by Florida Attorney General Bill McCollum (R) and the Republican attorneys general of 12 other states within hours of the law's adoption last March - quickly became the most prominent of several pending legal challenges as seven more states signed on. Two individuals and the National Federation of Independent Business, a small-business association that lobbied vigorously against the law, have also joined. (Virginia has filed a separate lawsuit that awaits a judge's decision on whether it can move forward.) The lawyers will make their case before a federal judge in Pensacola, Fla.

In addition to Florida, the states now party to the multi-state suit are South Carolina, Nebraska, Texas, Utah, Louisiana, Alabama, Michigan, Colorado, Pennsylvania, Washington, Idaho, South Dakota, Indiana, North Dakota, Mississippi, Arizona, Nevada, Georgia and Alaska.

Technically, Tuesday's oral arguments presented to Judge Roger Vinson of the U.S. District Court for the Northern District of Florida will be limited to the government's argument that the case should be dismissed because neither the states nor the other parties have standing to pursue it. But the lawyers are also bound to clash over the question at the heart of the suit: Does the new health-care law violate the Constitution?

In particular the states argue that Congress exceeded its constitutional authority by requiring that virtually all Americans obtain health insurance or pay a tax penalty.

For instance, although the Constitution grants Congress power to regulate interstate commerce, attorneys for the states argued in legal briefs that the failure to buy insurance in the first place is a form of "inactivity" that "by its nature cannot be deemed to be in commerce."

Indeed, "to do so would arm Congress with unbridled top-down control over virtually every aspect of persons' lives." And the attorneys contend there is absolutely no legal precedent for regulating such "inactivity."

The Obama administration has countered that because "virtually everyone at some point needs medical services," choosing not to purchase insurance is merely a decision on whether to pay for those services in advance through insurance, or later, out of pocket. Either way it's an economic decision that falls within the scope of the commerce the law seeks to regulate.

The administration further argues that because the uninsured generally cannot be turned away from emergency rooms, they often end up passing on a substantial share of the cost of their care to third parties - hospitals and local governments, for example. Americans who wait until they are older and sicker to get insurance also end driving up premiums for everyone else by skewing the risk pool toward the unhealthy.

Unless the risk is spread evenly, it would also be impossible for insurers to comply with the law's requirements that they cease practices such as discriminating against people with preexisting conditions. So the administration argues that the requirement that everyone obtain minimum insurance "forms an essential part of a comprehensive interrelated regulatory scheme" well within the scope of Congress's power.

Also at issue is the law's expansion of the eligibility requirements for Medicaid to include low-income individuals on top of the poorest of the poor. Although the federal government will initially fund the entire cost of the newly eligible, by 2020 states will have to foot 10 percent of the bill - an amount that Florida predicts will reach more than $1 billion annually.

Medicaid is a voluntary program. If states don't wish to spend the extra money necessary to expand coverage, they can simply pull out. However, the states argue that because doing so would force them to give up a huge cash infusion from the federal government and leave millions of their poorest citizens without insurance, the government has them over a barrel. Therefore, they are effectively being coerced to increase their spending - a violation of their sovereignty under the Constitution.

Administration attorneys have countered that this line of reasoning would make it impossible for Congress to make any changes to Medicaid - and they point to court decisions that have upheld such changes in the past.

The courtroom drama comes as polls suggest Americans remain profoundly ambivalent about the health-care law.

But efforts to overturn the law might also be politically fraught: Notwithstanding his highly publicized leadership role in the suit, McCollum's bid for Florida's governorship was cut short in GOP primaries last month.

Monday, September 13, 2010

On Google and the Law: The Scrutiny Continues

The Wall Street Journal

Every move you make, I’ll be watching you.

Sting sang those lines back in 1983, but the sentiment could well apply to the current relationship between Google and regulators all over the world. Google remains the 800-pound gorilla in the search-engine space, and it will continue, it seems, to be watched very very carerfully.

The weekend was chock full of Google news.

Trouble in Texas? For starters, Greg Abbott, the Texas attorney general, is conducting an antitrust review of Google’s core search-engine business, a sign of widening government scrutiny of the Web giant.

Texas’s top prosecutor has inquired about allegations by several small companies that Google unfairly demoted their rankings in search results or the placement of their advertisements on the search engine, Google said Friday.

The Internet giant disputed the allegations, which have been reported previously, tracing them to three companies with ties to rival Microsoft. Click here for the story, from the WSJ’s Amir Efrati and Thomas Catan.

A Payout over Buzz:
On Friday, it was also revealed that Google has agreed to pay $8.5 million to settle a private class-action lawsuit that alleged its Buzz social networking service violated users’ privacy. Click here for that story, also from Amir Efrati.

Seven users of Gmail had alleged that Google violated privacy law in February by exposing their email contacts to users of Google Buzz, which is built into Gmail and borrows elements of Twitter and Facebook by allowing users to share comments, photos, videos, and Web links with other users who “follow,” or track their updates.

Most of the money will help fund organizations focused on Internet privacy policy or privacy education, with slightly over $2 million going to plaintiffs’ attorneys.

DOJ Looking Hard at ITA Deal: Finally, Efrati and Catan reported on Monday that the Justice Department is looking hard at Google’s proposed purchase of ITA Software Inc., which powers the Web’s most popular airline-ticket search and booking sites, said people familiar with the department’s review.

Justice antitrust authorities are focusing on two potential areas of concern: whether rivals would continue to have access to ITA’s data and whether Google would unfairly steer Web searchers to its own travel services.

ITA software is used by flight-comparison sites including, and, among others, as well as by Bing, the Internet-search engine owned by Microsoft Corp.