Story Originally Appeared in DealB%k
The prison sentence of Jeffrey K. Skilling, the former chief executive of Enron who spearheaded the pervasive fraud that destroyed the energy company, was reduced by 10 years on Friday after a federal judge approved a deal between his lawyers and prosecutors.
Judge Simeon T. Lake III of Federal District Court in Houston, who oversaw Mr. Skilling’s trial in 2006, signed off on an agreement that will decrease his 24-year sentence to 14 years.
The reduction was driven in part by a 2009 appeals court ruling that ordered a recalculation of Mr. Skilling’s sentence because of a mistake made by the judge in interpreting the federal sentencing guidelines.
Mr. Skilling, 59, who has been serving his sentence at a federal prison in Colorado, appeared in court on Friday wearing an olive-drab prison uniform and a salt-and-pepper beard, and looking bulkier than he did during his days as a corporate chieftain.
He will now exit prison as early as 2017. There is no parole in the federal criminal justice system, but Mr. Skilling will most likely receive the standard 15 percent sentence reduction for good behavior and a one-year reduction for completing an alcohol-abuse treatment program.
“We are relieved that Jeff can now look forward a day when he can come home to his family and friends,” said Daniel M. Petrocelli, Mr. Skilling’s lead lawyer.
In exchange for his reduced sentence, Mr. Skilling gave up about $42 million, all of which will be distributed to victims of Enron’s fraud. He also agreed not to pursue any further legal appeals, including a claim that would have accused the prosecution team of misconduct.
“The sentence handed down today ends years of litigation, imposes significant punishment upon the defendant and precludes him from ever challenging his conviction or sentence,” Mythili Raman, the acting assistant attorney general, said in a statement.
Several Enron victims wrote letters to the court protesting Mr. Skilling’s proposed reduced sentence. On Friday, Andrew Stoltmann, a lawyer who represented several victims, criticized the Justice Department for agreeing to the reduction and said it was unacceptable coming on the heels of the lack of prosecutions arising out of the financial crisis.
“By entering into this early release agreement, a clear message will be sent to corporate C.E.O.’s that if you get caught with the hand in the cookie jar, you will get little more than a slap on the wrist,” Mr. Stoltmann said.
Mr. Skilling’s legal team mounted a zealous appeal, seeking to overturn his conviction on a variety of legal grounds. Last year, they said that Mr. Skilling would seek a new trial based on recently discovered evidence.
The case also made its way to the Supreme Court, which in 2010 questioned the use of the “theft of honest services” law that helped convict Mr. Skilling, finding it unconstitutionally vague. But a federal appeals court ruled that there was overwhelming evidence of his guilt, so his conviction was not tainted by the use of that legal theory.
Mr. Skilling, a former consultant at McKinsey & Company, joined Enron in 1990 and led its transformation from a sleepy pipeline operator to a global energy-trading colossus. He also played a central role in the accounting schemes that masked its debts and weak finances from shareholders and regulators.
The fall of Enron, which at its peak was one of the country’s most admired businesses, cost shareholders billions of dollars and its employees their retirement savings. Its demise ushered in a wave of prosecutions that rooted out accounting fraud at once-highflying companies like WorldCom, HealthSouth and Adelphia Communications.
Prosecutors tried Mr. Skilling alongside Kenneth L. Lay, Enron’s chairman, who was also found guilty in the fraud. Mr. Lay died about a month after the trial, and his conviction was vacated.
During Mr. Skilling’s time in prison, his parents and his 20-year-old son have died.
Monday, June 24, 2013
3 blockbusters among Supreme Court's last cases
Story Originally Appeared on The Detroit News
The Supreme Court has 11 cases, including the term’s highest profile matters, to resolve before the justices take off for summer vacations, teaching assignments and international travel.
The court is meeting Monday for its last scheduled session, but will add days until all the cases are disposed of.
A look at some of the cases:
Gay Marriage
Actually two cases. One is a challenge to California’s constitutional ban on same-sex marriage. The other is an attack on a provision of federal law that prevents legally married gay couples from receiving a range of tax, health and pension benefits.
Affirmative action
A white woman denied admission to the University of Texas seeks to overturn the school’s consideration of race among many factors in filling the last quarter of its freshman classes. A broad ruling could end the use of race in college admissions nationwide.
Voting rights
A suburb of Birmingham, Ala., wants the court to end the nearly 50-year-old requirement for some state and local governments, mainly in the South and with a history of discrimination in voting, to get the advance approval of any changes in the way they hold elections.
Native American adoption
A wrenching dispute over who gets custody of Native American girl, her biological father or the adoptive couple who cared for her until she was 2. The case involves the interpretation of a 1978 law intended to prevent American Indian children from being taken from their homes and typically placed with non-Indian adoptive or foster parents.
Generic Drugs
The industry is asking the Supreme Court to extend protections that makers of generic drugs have from state court lawsuits if federal officials have approved the design of the brand-name version the generic drug copied.
Private Property
A Florida property owner wants compensation, under the Constitution’s requirement that the government must pay if it takes your property, for a local government’s refusal to issue a development permit.
Workplace discrimination
Two cases test different aspects of federal law barring discrimination on the basis of race. In one, the court has to decide what level of responsibility it takes to be considered a worker’s supervisor in a discrimination complaint. The other asks whether an employer’s action can be considered retaliation against an employee who complains of racial harassment if retaliation was a motivating factor, or must it be the only factor.
The Supreme Court has 11 cases, including the term’s highest profile matters, to resolve before the justices take off for summer vacations, teaching assignments and international travel.
The court is meeting Monday for its last scheduled session, but will add days until all the cases are disposed of.
A look at some of the cases:
Gay Marriage
Actually two cases. One is a challenge to California’s constitutional ban on same-sex marriage. The other is an attack on a provision of federal law that prevents legally married gay couples from receiving a range of tax, health and pension benefits.
Affirmative action
A white woman denied admission to the University of Texas seeks to overturn the school’s consideration of race among many factors in filling the last quarter of its freshman classes. A broad ruling could end the use of race in college admissions nationwide.
Voting rights
A suburb of Birmingham, Ala., wants the court to end the nearly 50-year-old requirement for some state and local governments, mainly in the South and with a history of discrimination in voting, to get the advance approval of any changes in the way they hold elections.
Native American adoption
A wrenching dispute over who gets custody of Native American girl, her biological father or the adoptive couple who cared for her until she was 2. The case involves the interpretation of a 1978 law intended to prevent American Indian children from being taken from their homes and typically placed with non-Indian adoptive or foster parents.
Generic Drugs
The industry is asking the Supreme Court to extend protections that makers of generic drugs have from state court lawsuits if federal officials have approved the design of the brand-name version the generic drug copied.
Private Property
A Florida property owner wants compensation, under the Constitution’s requirement that the government must pay if it takes your property, for a local government’s refusal to issue a development permit.
Workplace discrimination
Two cases test different aspects of federal law barring discrimination on the basis of race. In one, the court has to decide what level of responsibility it takes to be considered a worker’s supervisor in a discrimination complaint. The other asks whether an employer’s action can be considered retaliation against an employee who complains of racial harassment if retaliation was a motivating factor, or must it be the only factor.
Friday, June 21, 2013
3 more Flying J Pilot execs plead guilty in fraud case
Story Appeared in USA TODAY
Number of plea deals in federal probe now stands at five.
NASHVILLE -- Three more Pilot Flying J employees pleaded guilty on Tuesday in a scheme to defraud trucking companies out of rebates as a federal investigation continues to unfold into the country's largest truck stop company.
One of the employees was a sales manager who helped set up a training session to teach others how to carry out the fraud. Another was a sales manager who was secretly recorded bragging about his role in shorting customers. A third was an account representative based in Knoxville who helped handle the reductions.
Jay Stinnett, senior regional sales manager for Pilot who helped set up the training, faces up to 20 years in federal prison and a $150,000 fine and restitution
Regional sales manager Kevin Clark faces up to five years in prison and a $250,000 fine. Clark and Stinnett, along with account representative Holly Radford, all pleaded guilty to conspiracy to commit mail fraud.
With those agreements in place, the federal government has garnered five total plea deals since its investigation became made public when agents raided the Pilot's Knoxville headquarters April 15.
The affidavit filed by the U.S. Attorney's Office in April made clear that investigators have top Pilot executives in their crosshairs, but just how far up the corporate ladder the rebate scheme went remains unclear.
Pilot is led by CEO Jimmy Haslam, who is the lead owner of the Cleveland Browns and whose brother is Gov. Bill Haslam. The company, started by their father, is the source of wealth for the Haslam family.
The rebate scheme involved Pilot executives singling out trucking companies and manually reducing the fuel rebates they were owed on diesel purchases. They chose customers that they thought would not catch the discrepency.
Clark and Stinnett participated in conversations recorded by an FBI informant where they discussed the rebate scheme. In one recording, Stinnett and Vice President of Sales John Freeman seek approval from Pilot's president Mark Hazelwood to teach breakout sessions on the "manual rebate" program. Stinnett was also present at what appears to be a key Florida meeting recorded by the FBI informant, who worked for Pilot, in which top sales executives discuss with Hazelwood a two-tier pricing scheme.
No charges have been brought against Freeman or Hazelwood yet.
At the Feb. 18 meeting in Florida, Freeman is recorded saying he wished Pilot had a two-tier pricing scheme – one for sophisticated clients and a separate one for those that wouldn't notice their rebates were being reduced.
"Have a set of racks for those companies that don't close-watch, don't optimize, and then another set of racks where you have to get in that optimizing close-watch game," Freeman said according to the transcript in the affidavit.
Stinnett responded to Freeman by asking, "Why don't we do that?"
Later in the same conversation, Hazelwood is recorded as saying, "Sure. Customer A, Customer B. Customer A looks at every orifice you have, Customer B doesn't even know you have an orifice," according to the transcript in the FBI affidavit.
The affidavit also describes Clark, who was based in Missouri, being directed by Freeman to change the discount owed Schrock Trucking's without alerting the company.
Three weeks ago northeast regional sales manager Arnold Ralenkotter and account representative Ashley Judd became the first executives to reach plea deals.
Pilot spokesman Tom Ingram said the company was "disappointed in the actions of these employees towards our customer."
"We assure our customers that our five-step plan to correct any wrongdoing and to make certain these actions do not happen again is ongoing, and that our customers' confidence in the vast majority of our 23,000 team members nationwide remains well-placed," he said.
WBIR-TV in Knoxville contributed to this story.
Number of plea deals in federal probe now stands at five.
NASHVILLE -- Three more Pilot Flying J employees pleaded guilty on Tuesday in a scheme to defraud trucking companies out of rebates as a federal investigation continues to unfold into the country's largest truck stop company.
One of the employees was a sales manager who helped set up a training session to teach others how to carry out the fraud. Another was a sales manager who was secretly recorded bragging about his role in shorting customers. A third was an account representative based in Knoxville who helped handle the reductions.
Jay Stinnett, senior regional sales manager for Pilot who helped set up the training, faces up to 20 years in federal prison and a $150,000 fine and restitution
Regional sales manager Kevin Clark faces up to five years in prison and a $250,000 fine. Clark and Stinnett, along with account representative Holly Radford, all pleaded guilty to conspiracy to commit mail fraud.
With those agreements in place, the federal government has garnered five total plea deals since its investigation became made public when agents raided the Pilot's Knoxville headquarters April 15.
The affidavit filed by the U.S. Attorney's Office in April made clear that investigators have top Pilot executives in their crosshairs, but just how far up the corporate ladder the rebate scheme went remains unclear.
Pilot is led by CEO Jimmy Haslam, who is the lead owner of the Cleveland Browns and whose brother is Gov. Bill Haslam. The company, started by their father, is the source of wealth for the Haslam family.
The rebate scheme involved Pilot executives singling out trucking companies and manually reducing the fuel rebates they were owed on diesel purchases. They chose customers that they thought would not catch the discrepency.
Clark and Stinnett participated in conversations recorded by an FBI informant where they discussed the rebate scheme. In one recording, Stinnett and Vice President of Sales John Freeman seek approval from Pilot's president Mark Hazelwood to teach breakout sessions on the "manual rebate" program. Stinnett was also present at what appears to be a key Florida meeting recorded by the FBI informant, who worked for Pilot, in which top sales executives discuss with Hazelwood a two-tier pricing scheme.
No charges have been brought against Freeman or Hazelwood yet.
At the Feb. 18 meeting in Florida, Freeman is recorded saying he wished Pilot had a two-tier pricing scheme – one for sophisticated clients and a separate one for those that wouldn't notice their rebates were being reduced.
"Have a set of racks for those companies that don't close-watch, don't optimize, and then another set of racks where you have to get in that optimizing close-watch game," Freeman said according to the transcript in the affidavit.
Stinnett responded to Freeman by asking, "Why don't we do that?"
Later in the same conversation, Hazelwood is recorded as saying, "Sure. Customer A, Customer B. Customer A looks at every orifice you have, Customer B doesn't even know you have an orifice," according to the transcript in the FBI affidavit.
The affidavit also describes Clark, who was based in Missouri, being directed by Freeman to change the discount owed Schrock Trucking's without alerting the company.
Three weeks ago northeast regional sales manager Arnold Ralenkotter and account representative Ashley Judd became the first executives to reach plea deals.
Pilot spokesman Tom Ingram said the company was "disappointed in the actions of these employees towards our customer."
"We assure our customers that our five-step plan to correct any wrongdoing and to make certain these actions do not happen again is ongoing, and that our customers' confidence in the vast majority of our 23,000 team members nationwide remains well-placed," he said.
WBIR-TV in Knoxville contributed to this story.
Tuesday, June 18, 2013
Judge revives Dexia lawsuit vs. JPMorgan over mortgage claims
Story Originally Appeared in Fox Business
A federal judge has revived a closely watched lawsuit accusing JPMorgan Chase & Co of misleading Belgian-French bank Dexia SA into buying more than $1.6 billion of troubled mortgage debt.
Citing a recent federal appeals court decision, U.S. District Judge Jed Rakoff in Manhattan said he had lacked jurisdiction when he threw out much of the lawsuit on April 2. That ruling dismissed claims for all but $5.7 million of the roughly $774 million of damages that Dexia sought.
In his new ruling, the judge directed that the Dexia case be moved to the New York state court where it was originally filed.
Dexia and JPMorgan representatives did not immediately respond to requests for comment.
The lawsuit is one of many accusing banks of trying to boost profit by packaging low-quality mortgages into seemingly safe securities, while hiding the risks or failing to ensure that the loans were underwritten properly.
Dexia alleged it was fraudulently misled about the quality of 65 residential mortgage-backed securities certificates it bought from 51 offerings between 2005 and 2007 by JPMorgan, Bear Stearns Cos and Washington Mutual Inc. JPMorgan bought Bear and most of WaMu in 2008.
The case gained notoriety after emails and other materials were disclosed that suggested that the defendant banks had been selling RMBS they knew were toxic.
JPMorgan argued that all of the alleged misstatements in Dexia's complaint were located in a prospectus or prospectus supplement, and that there was no showing that alleged fraud caused any of the alleged losses.
The case is Dexia SA/NV et al v. Bear Stearns & Co et al, U.S. District Court, Southern District of New York, No. 12-04761.
(Reporting by Jonathan Stempel in New York. Editing by Andre Grenon)
A federal judge has revived a closely watched lawsuit accusing JPMorgan Chase & Co of misleading Belgian-French bank Dexia SA into buying more than $1.6 billion of troubled mortgage debt.
Citing a recent federal appeals court decision, U.S. District Judge Jed Rakoff in Manhattan said he had lacked jurisdiction when he threw out much of the lawsuit on April 2. That ruling dismissed claims for all but $5.7 million of the roughly $774 million of damages that Dexia sought.
In his new ruling, the judge directed that the Dexia case be moved to the New York state court where it was originally filed.
Dexia and JPMorgan representatives did not immediately respond to requests for comment.
The lawsuit is one of many accusing banks of trying to boost profit by packaging low-quality mortgages into seemingly safe securities, while hiding the risks or failing to ensure that the loans were underwritten properly.
Dexia alleged it was fraudulently misled about the quality of 65 residential mortgage-backed securities certificates it bought from 51 offerings between 2005 and 2007 by JPMorgan, Bear Stearns Cos and Washington Mutual Inc. JPMorgan bought Bear and most of WaMu in 2008.
The case gained notoriety after emails and other materials were disclosed that suggested that the defendant banks had been selling RMBS they knew were toxic.
JPMorgan argued that all of the alleged misstatements in Dexia's complaint were located in a prospectus or prospectus supplement, and that there was no showing that alleged fraud caused any of the alleged losses.
The case is Dexia SA/NV et al v. Bear Stearns & Co et al, U.S. District Court, Southern District of New York, No. 12-04761.
(Reporting by Jonathan Stempel in New York. Editing by Andre Grenon)
Negligence Is Debated in Jackson Death Case
Story Originally Appeared in The New York Times
LOS ANGELES — After only two weeks of testimony, no side has a clear advantage in the civil trial pitting the mother of Michael Jackson against A.E.G. Live, the promoter of his attempted comeback concerts, over the question of who was responsible for Jackson’s death.
But both sides have chosen the same weapons: Jackson himself, his problems with drugs and the wrenching details of his last days. What’s most surprising is that even with so much written and revealed about Jackson since his death four years ago, there is still more to learn.
Marvin S. Putnam, A.E.G.’s lead lawyer, promised in his opening statement that the case would reveal “ugly stuff” about Jackson’s private life. And witnesses called by lawyers for Jackson’s 83-year-old mother, Katherine, have testified at length about Jackson’s addiction to medications, his physical deterioration and his belief that he was talking to God.
The case hinges on the fairly limited questions of whether A.E.G. hired Dr. Conrad Murray, the physician who administered the powerful anesthetic that killed Jackson in June 2009, and if it was negligent in doing so. Dr. Murray was convicted of involuntary manslaughter in a separate criminal trial in 2011 and is serving a four-year prison sentence.
Lawyers for Mrs. Jackson have said that they may seek up to $5 billion in damages. But the greater risk for both A.E.G. and the Jackson family is the potential damage to their reputations as the details of Jackson’s life and final days are revealed, in perhaps even greater detail than at Dr. Murray’s criminal trial.
“It’s all downside for A.E.G.,” said Bill Werde, the editorial director of Billboard magazine. “And this trial affects A.E.G., as well as the touring and broader music industry. Every time people see headlines about these incredibly sad details of Michael Jackson’s life, it makes this seem to be an uncaring business that exploits stars, even to their peril.”
Witnesses last week included two women who had worked for Jackson for decades, both describing him as a sensitive artistic genius haunted by physical pain. One, Karen Faye, his makeup artist since the early 1980s, said that Jackson became more dependent on prescription drugs over the course of his career.
The other woman, the choreographer Alif Sankey, tearfully recounted how, less than a week before Jackson died, she had begged Kenny Ortega, the director of “This Is It,” Jackson’s attempted comeback concerts, to take him to the hospital after Jackson appeared ill and said that God was speaking to him.
“I had a very strong feeling that Michael was dying,” Ms. Sankey said. As she testified, the only other sound audible in the small courtroom was the tapping of journalists on their laptops.
On Monday another choreographer on “This Is It,” Stacy Walker, who was called by lawyers for A.E.G., testified that she saw no signs that Jackson was in bad shape before he died.
“I just never in a million years thought he would leave us, or pass away,” Ms. Walker said, according to a report by The Associated Press.
The evidence in the case has included e-mails from A.E.G. executives which the Jackson lawyers say show that the company was acting as Dr. Murray’s employer. One message, sent to Mr. Ortega less than two weeks before Jackson’s death, says of Dr. Murray: “We want to remind him that it is A.E.G., not M. J., who is paying his salary. We want to remind him what is expected of him.”
A.E.G., a global sports and entertainment company controlled by the billionaire Philip F. Anschutz, denies that it hired Dr. Murray, saying that he had been selected by Jackson and that his $150,000-a-month salary was to come out of Jackson’s earnings for the tour.
What damage the case could cost Jackson’s reputation — and his valuable estate — is unclear. The estate has flourished, even though his faults and indiscretions have already been widely publicized, and some entertainment and estate experts say that the details revealed in this trial are likely to elicit more sympathy for Jackson, not less.
“I don’t think this will negatively impact Jackson’s earning potential through music or consumer product licensing at all,” said Martin Cribbs, who has represented the estates of Einstein and Gandhi. “What truly separates a legend from just a star is when their body of work supersedes who they were as an individual.”
In a court filing last May, the estate said that it had had gross earnings of $475 million since Jackson’s death.
Jackson got more headlines last week when a choreographer, Wade Robson, said that Jackson had sexually abused him as a child. Lawyers for the Jackson estate — which is not a party to the A.E.G. case — immediately excoriated Mr. Robson’s claims as “outrageous and pathetic,” and Mr. Putnam told reporters that the claims were irrelevant to the current Jackson civil suit.
Also this week, a California state attorney filed a response to an appeal by Dr. Murray, whose lawyers have argued that the judge in the case made legal errors in not sequestering the jury and not allowing jurors to hear evidence about Jackson’s troubled finances. In the filing on Monday, Supervising Deputy Attorney General Victoria B. Wilson wrote that there were no errors, and that Dr. Murray’s lawyers had forfeited opportunities to object to the judge’s rulings, according to The A.P.
By the standards of Los Angeles celebrity trials, the Jackson suit seems a quiet affair. The judge, Yvette M. Palazuelos, has banned cameras, and the 45 seats in the courtroom are occupied mostly by lawyers and reporters. A daily lottery for the two or three seats guaranteed for the public draws the same small circle of Jackson superfans. There was one notable guest: Judge Lance A. Ito, who presided over O. J. Simpson’s murder trial in 1995, sat briefly in the gallery last week.
But the trial, which is expected to last at least three months, will draw more attention as potential witnesses include stars like Diana Ross and Quincy Jones, who may testify to Jackson’s professional drive or his physical condition.
LOS ANGELES — After only two weeks of testimony, no side has a clear advantage in the civil trial pitting the mother of Michael Jackson against A.E.G. Live, the promoter of his attempted comeback concerts, over the question of who was responsible for Jackson’s death.
But both sides have chosen the same weapons: Jackson himself, his problems with drugs and the wrenching details of his last days. What’s most surprising is that even with so much written and revealed about Jackson since his death four years ago, there is still more to learn.
Marvin S. Putnam, A.E.G.’s lead lawyer, promised in his opening statement that the case would reveal “ugly stuff” about Jackson’s private life. And witnesses called by lawyers for Jackson’s 83-year-old mother, Katherine, have testified at length about Jackson’s addiction to medications, his physical deterioration and his belief that he was talking to God.
The case hinges on the fairly limited questions of whether A.E.G. hired Dr. Conrad Murray, the physician who administered the powerful anesthetic that killed Jackson in June 2009, and if it was negligent in doing so. Dr. Murray was convicted of involuntary manslaughter in a separate criminal trial in 2011 and is serving a four-year prison sentence.
Lawyers for Mrs. Jackson have said that they may seek up to $5 billion in damages. But the greater risk for both A.E.G. and the Jackson family is the potential damage to their reputations as the details of Jackson’s life and final days are revealed, in perhaps even greater detail than at Dr. Murray’s criminal trial.
“It’s all downside for A.E.G.,” said Bill Werde, the editorial director of Billboard magazine. “And this trial affects A.E.G., as well as the touring and broader music industry. Every time people see headlines about these incredibly sad details of Michael Jackson’s life, it makes this seem to be an uncaring business that exploits stars, even to their peril.”
Witnesses last week included two women who had worked for Jackson for decades, both describing him as a sensitive artistic genius haunted by physical pain. One, Karen Faye, his makeup artist since the early 1980s, said that Jackson became more dependent on prescription drugs over the course of his career.
The other woman, the choreographer Alif Sankey, tearfully recounted how, less than a week before Jackson died, she had begged Kenny Ortega, the director of “This Is It,” Jackson’s attempted comeback concerts, to take him to the hospital after Jackson appeared ill and said that God was speaking to him.
“I had a very strong feeling that Michael was dying,” Ms. Sankey said. As she testified, the only other sound audible in the small courtroom was the tapping of journalists on their laptops.
On Monday another choreographer on “This Is It,” Stacy Walker, who was called by lawyers for A.E.G., testified that she saw no signs that Jackson was in bad shape before he died.
“I just never in a million years thought he would leave us, or pass away,” Ms. Walker said, according to a report by The Associated Press.
The evidence in the case has included e-mails from A.E.G. executives which the Jackson lawyers say show that the company was acting as Dr. Murray’s employer. One message, sent to Mr. Ortega less than two weeks before Jackson’s death, says of Dr. Murray: “We want to remind him that it is A.E.G., not M. J., who is paying his salary. We want to remind him what is expected of him.”
A.E.G., a global sports and entertainment company controlled by the billionaire Philip F. Anschutz, denies that it hired Dr. Murray, saying that he had been selected by Jackson and that his $150,000-a-month salary was to come out of Jackson’s earnings for the tour.
What damage the case could cost Jackson’s reputation — and his valuable estate — is unclear. The estate has flourished, even though his faults and indiscretions have already been widely publicized, and some entertainment and estate experts say that the details revealed in this trial are likely to elicit more sympathy for Jackson, not less.
“I don’t think this will negatively impact Jackson’s earning potential through music or consumer product licensing at all,” said Martin Cribbs, who has represented the estates of Einstein and Gandhi. “What truly separates a legend from just a star is when their body of work supersedes who they were as an individual.”
In a court filing last May, the estate said that it had had gross earnings of $475 million since Jackson’s death.
Jackson got more headlines last week when a choreographer, Wade Robson, said that Jackson had sexually abused him as a child. Lawyers for the Jackson estate — which is not a party to the A.E.G. case — immediately excoriated Mr. Robson’s claims as “outrageous and pathetic,” and Mr. Putnam told reporters that the claims were irrelevant to the current Jackson civil suit.
Also this week, a California state attorney filed a response to an appeal by Dr. Murray, whose lawyers have argued that the judge in the case made legal errors in not sequestering the jury and not allowing jurors to hear evidence about Jackson’s troubled finances. In the filing on Monday, Supervising Deputy Attorney General Victoria B. Wilson wrote that there were no errors, and that Dr. Murray’s lawyers had forfeited opportunities to object to the judge’s rulings, according to The A.P.
By the standards of Los Angeles celebrity trials, the Jackson suit seems a quiet affair. The judge, Yvette M. Palazuelos, has banned cameras, and the 45 seats in the courtroom are occupied mostly by lawyers and reporters. A daily lottery for the two or three seats guaranteed for the public draws the same small circle of Jackson superfans. There was one notable guest: Judge Lance A. Ito, who presided over O. J. Simpson’s murder trial in 1995, sat briefly in the gallery last week.
But the trial, which is expected to last at least three months, will draw more attention as potential witnesses include stars like Diana Ross and Quincy Jones, who may testify to Jackson’s professional drive or his physical condition.
O.J. returns to Vegas court in bid for new trial
Story Originally Appeared in USA TODAY
O.J. Simpson's former lawyer's work is expected to again draw withering criticism Tuesday in a Las Vegas courtroom where the imprisoned former football star and his new attorneys are trying to convince a Nevada judge that Simpson deserves a new trial.
The 65-year-old Simpson arrived in court Monday in shackles and prison clothing — grayer and heavier than when he was hauled off to prison in 2008 to serve a minimum nine-year sentence. But he briefly flashed a smile for family members and friends in the second row.
The focus on the first day of the five-day hearing was on promises and performance by Simpson's Miami-based lawyer Yale Galanter during the 2008 trial and conviction that got Simpson nine to 33 years in prison for armed robbery and kidnapping for a hotel room confrontation with two sports memorabilia dealers.
Galanter's trial co-counsel, Gabriel Grasso, testified that Galanter took money for himself, didn't pay Grasso, and refused to pay for experts to analyze crucial audio recordings that helped convict Simpson.
"Hey Gabe. Wanna be famous?" Grasso recalled Galanter asking as the two embarked on a relationship that has since deteriorated into lawsuits over a handshake agreement represent Simpson and split an expected $750,000 in legal fees one-third for Grasso and two-thirds for Galanter.
Grasso said he was only paid $15,000 while the weight of pretrial work fell to him.
He said Galanter kept telling him that he didn't have money to hire investigators or an expert to analyze crucial audio recordings that were later played for the Simpson jury.
"I don't think it was in Mr. Simpson's best interest," Grasso testified." In a case of this magnitude, we had no help. The state had a jury consultant. Did we? No."
Galanter is expected to take the witness stand on Friday. He declined comment Monday.
Attorneys for the state, H. Leon Simon and Leah Beverly, are expected to cross-examine Grasso on Tuesday.
Simpson attorney Patricia Palm played a videotape of Galanter telling the trial judge he wouldn't oppose the use of the recordings because, "We looked at them. We had experts look at every word. We had maybe six or seven words we objected to."
Grasso said there were no experts. Instead, Grasso listened to all of the tapes with a computer program set up by his 15-year-old son — sometimes while watching his son's soccer games.
Grasso also recalled his answer when Simpson asked him if he was going to get a chance to testify.
"Hell yes!" Galanter said he responded.
But Galanter blocked the move, Grasso said, and Simpson never told his own story to the jury.
Simpson is scheduled to testify for the first time in the case on Wednesday.
Grasso said that while Galanter told him he'd talk with Simpson about a proposed plea deal, he never told Grasso why he rejected it. Grasso said he didn't know if Simpson was even told.
Simpson, who will be 70 before he is eligible for parole, maintains that he wasn't.
Grasso said he believed Simpson never saw guns in the cramped hotel room where Simpson and five other men confronted two collectibles dealers and a man who arranged the meeting.
Simpson maintained he was trying to recover personal items stolen from him after his acquittal in 1995 in the Los Angeles slaying his wife and her friend.
Simpson was later found liable for damages in a civil wrongful death lawsuit and ordered to pay $33.5 million to the families of Nicole Brown Simpson and Ronald Goldman.
O.J. Simpson's former lawyer's work is expected to again draw withering criticism Tuesday in a Las Vegas courtroom where the imprisoned former football star and his new attorneys are trying to convince a Nevada judge that Simpson deserves a new trial.
The 65-year-old Simpson arrived in court Monday in shackles and prison clothing — grayer and heavier than when he was hauled off to prison in 2008 to serve a minimum nine-year sentence. But he briefly flashed a smile for family members and friends in the second row.
The focus on the first day of the five-day hearing was on promises and performance by Simpson's Miami-based lawyer Yale Galanter during the 2008 trial and conviction that got Simpson nine to 33 years in prison for armed robbery and kidnapping for a hotel room confrontation with two sports memorabilia dealers.
Galanter's trial co-counsel, Gabriel Grasso, testified that Galanter took money for himself, didn't pay Grasso, and refused to pay for experts to analyze crucial audio recordings that helped convict Simpson.
"Hey Gabe. Wanna be famous?" Grasso recalled Galanter asking as the two embarked on a relationship that has since deteriorated into lawsuits over a handshake agreement represent Simpson and split an expected $750,000 in legal fees one-third for Grasso and two-thirds for Galanter.
Grasso said he was only paid $15,000 while the weight of pretrial work fell to him.
He said Galanter kept telling him that he didn't have money to hire investigators or an expert to analyze crucial audio recordings that were later played for the Simpson jury.
"I don't think it was in Mr. Simpson's best interest," Grasso testified." In a case of this magnitude, we had no help. The state had a jury consultant. Did we? No."
Galanter is expected to take the witness stand on Friday. He declined comment Monday.
Attorneys for the state, H. Leon Simon and Leah Beverly, are expected to cross-examine Grasso on Tuesday.
Simpson attorney Patricia Palm played a videotape of Galanter telling the trial judge he wouldn't oppose the use of the recordings because, "We looked at them. We had experts look at every word. We had maybe six or seven words we objected to."
Grasso said there were no experts. Instead, Grasso listened to all of the tapes with a computer program set up by his 15-year-old son — sometimes while watching his son's soccer games.
Grasso also recalled his answer when Simpson asked him if he was going to get a chance to testify.
"Hell yes!" Galanter said he responded.
But Galanter blocked the move, Grasso said, and Simpson never told his own story to the jury.
Simpson is scheduled to testify for the first time in the case on Wednesday.
Grasso said that while Galanter told him he'd talk with Simpson about a proposed plea deal, he never told Grasso why he rejected it. Grasso said he didn't know if Simpson was even told.
Simpson, who will be 70 before he is eligible for parole, maintains that he wasn't.
Grasso said he believed Simpson never saw guns in the cramped hotel room where Simpson and five other men confronted two collectibles dealers and a man who arranged the meeting.
Simpson maintained he was trying to recover personal items stolen from him after his acquittal in 1995 in the Los Angeles slaying his wife and her friend.
Simpson was later found liable for damages in a civil wrongful death lawsuit and ordered to pay $33.5 million to the families of Nicole Brown Simpson and Ronald Goldman.
Hospitals and doctors should be required to carry medical malpractice insurance
Story Originally Appeared in the Chicago Tribune
Corporations, hospitals and insurance companies have fought for more than two decades to chip away at Americans' right to enter a courtroom and seek damages for medical negligence. The most publicized of these efforts has taken the form of capping the damages that patients can collect.
Now there's another effort to limit medical negligence claims. It has the effect of preventing an injured patient from filing a lawsuit at all.
Hospitals and doctors are simply "going bare" — in other words, not carrying medical malpractice insurance. Hospitals and doctors will often set up a corporation, forgo the purchase of malpractice insurance, and if the corporation is sued, file for bankruptcy and set up a new corporation.
In Illinois, although a driver must have insurance to get behind the wheel, a hospital that cares for thousands of patients is not required to have insurance.
In one case, in 2007, a 21-year-old woman had a baby at a South Side hospital, St. Bernard. Due to a lack of oxygenated blood, the baby's brain was damaged. We sued St. Bernard on behalf of the child, alleging negligence. The hospital said that it had no malpractice insurance to cover the claim. Now, the young mother and her baby must go through life without enough money for proper care. (St. Bernard says the infant was treated appropriately and it has done what it can to resolve the matter.)
Hospitals and doctors that choose to go bare often claim they cannot afford to pay high insurance premiums while at the same time caring for their patients. Insurance companies blame the high premiums on large verdicts that they allegedly pay out. Yet, the blame for the inflation of premiums in Illinois must be placed on the insurance companies. It has been proved that even where insurance companies have had to pay out large jury verdicts or settlements, increased premiums do not correlate with the increase or decrease in payouts during any given year.
Every hospital in Illinois should be required to carry a minimum of $5 million in liability coverage. A small tax could be charged on those hospitals that can afford the coverage, which could be used to supplement the payments of hospitals that cannot afford it. This would allow all hospitals to have some insurance coverage while motivating hospitals to press insurance companies to lower premiums.
The solutions are not complicated, yet they require action soon. This reform will not come without pressure from all parties — the doctors and hospitals that buy insurance, the Illinois legislature and trial lawyers.
Deratany and MacIver are lawyers at the Deratany Firm in downtown Chicago.
Corporations, hospitals and insurance companies have fought for more than two decades to chip away at Americans' right to enter a courtroom and seek damages for medical negligence. The most publicized of these efforts has taken the form of capping the damages that patients can collect.
Now there's another effort to limit medical negligence claims. It has the effect of preventing an injured patient from filing a lawsuit at all.
Hospitals and doctors are simply "going bare" — in other words, not carrying medical malpractice insurance. Hospitals and doctors will often set up a corporation, forgo the purchase of malpractice insurance, and if the corporation is sued, file for bankruptcy and set up a new corporation.
In Illinois, although a driver must have insurance to get behind the wheel, a hospital that cares for thousands of patients is not required to have insurance.
In one case, in 2007, a 21-year-old woman had a baby at a South Side hospital, St. Bernard. Due to a lack of oxygenated blood, the baby's brain was damaged. We sued St. Bernard on behalf of the child, alleging negligence. The hospital said that it had no malpractice insurance to cover the claim. Now, the young mother and her baby must go through life without enough money for proper care. (St. Bernard says the infant was treated appropriately and it has done what it can to resolve the matter.)
Hospitals and doctors that choose to go bare often claim they cannot afford to pay high insurance premiums while at the same time caring for their patients. Insurance companies blame the high premiums on large verdicts that they allegedly pay out. Yet, the blame for the inflation of premiums in Illinois must be placed on the insurance companies. It has been proved that even where insurance companies have had to pay out large jury verdicts or settlements, increased premiums do not correlate with the increase or decrease in payouts during any given year.
Every hospital in Illinois should be required to carry a minimum of $5 million in liability coverage. A small tax could be charged on those hospitals that can afford the coverage, which could be used to supplement the payments of hospitals that cannot afford it. This would allow all hospitals to have some insurance coverage while motivating hospitals to press insurance companies to lower premiums.
The solutions are not complicated, yet they require action soon. This reform will not come without pressure from all parties — the doctors and hospitals that buy insurance, the Illinois legislature and trial lawyers.
Deratany and MacIver are lawyers at the Deratany Firm in downtown Chicago.
Judge tells female lawyers what to wea
Story Originally Appeared in USA TODAY
"I have advised some women attorneys that a jacket with sleeves below the elbow is appropriate or a professional dress equivalent," the letter reads. "Your personal appearance in court is a reflection upon the entire legal profession."
News of the soon-to-be-published letter spread quickly. Many female attorneys, including Nashville-based Karla Miller, who handles some Rutherford cases, heard chatter that Taylor's rules include mandatory pantyhose — an accusation Taylor denies.
By way of explanation, Taylor said: "They're usually behind the podium. I only see their upper bodies."
Miller said she was "slightly offended" by the judge's move but understood his motivation.
"The bigger picture is: Some ladies are dressing in a manner that should be bothersome to other lady lawyers who strive to be professional," she said.
Murfreesboro attorney Michelle Blaylock-Howser responded to the dustup with a shrug. If men are held to a standard, she said, women can be, too.
Blaylock-Howser often sees female attorneys sporting sleeveless shirts, which she said should be out of bounds in the courtroom. Once, a Nashville attorney came to court wearing a dressy blouse and sweatpants, she said.
"How we got off those standards is beyond me," Blaylock-Howser said.
According to image and brand consultant Mila Grigg, who works with more than 100 attorneys in Middle Tennessee, personal fashion choices clashing with professional decorum are especially pronounced with the millennial generation who, as she says, "have a different standard for what professional looks like."
"I've never met an attorney who has broke the rules on purpose," Grigg said. "They'll say, 'Oh, I can't wear that? What should I be wearing?' "
Singling out women, though, is unfair, Grigg said, since men violate professional fashion etiquette just are often as women.
"Well-fitted suits for men and women is one way to express your personal brand," she said. "And you can always showcase your personality through color."
Attorney Lisa Eischeid said Judge Taylor is an equal opportunity wardrobe conservative. She recalls one instance where he found a male attorney in contempt of court for appearing without a blazer. Taylor confirmed the story, adding that he also made the attorney donate to charity.
"Someone needs to tell women that sundresses are not proper in the courtroom," said Eischeid, who has worn a business suit throughout the 23 years she has been a lawyer. "But it can be a delicate issue."
The courtroom is in no rush to abandon its old-fashioned protocols, attorney Miller said, though perhaps it is a blessing in disguise.
"Here's the thing — we're girls, we like making fashion statements," Miller said. "It's about individualism. Maybe the courtroom is not a place to show your individualism via fashion."
"I have advised some women attorneys that a jacket with sleeves below the elbow is appropriate or a professional dress equivalent," the letter reads. "Your personal appearance in court is a reflection upon the entire legal profession."
News of the soon-to-be-published letter spread quickly. Many female attorneys, including Nashville-based Karla Miller, who handles some Rutherford cases, heard chatter that Taylor's rules include mandatory pantyhose — an accusation Taylor denies.
By way of explanation, Taylor said: "They're usually behind the podium. I only see their upper bodies."
Miller said she was "slightly offended" by the judge's move but understood his motivation.
"The bigger picture is: Some ladies are dressing in a manner that should be bothersome to other lady lawyers who strive to be professional," she said.
Murfreesboro attorney Michelle Blaylock-Howser responded to the dustup with a shrug. If men are held to a standard, she said, women can be, too.
Blaylock-Howser often sees female attorneys sporting sleeveless shirts, which she said should be out of bounds in the courtroom. Once, a Nashville attorney came to court wearing a dressy blouse and sweatpants, she said.
"How we got off those standards is beyond me," Blaylock-Howser said.
According to image and brand consultant Mila Grigg, who works with more than 100 attorneys in Middle Tennessee, personal fashion choices clashing with professional decorum are especially pronounced with the millennial generation who, as she says, "have a different standard for what professional looks like."
"I've never met an attorney who has broke the rules on purpose," Grigg said. "They'll say, 'Oh, I can't wear that? What should I be wearing?' "
Singling out women, though, is unfair, Grigg said, since men violate professional fashion etiquette just are often as women.
"Well-fitted suits for men and women is one way to express your personal brand," she said. "And you can always showcase your personality through color."
Attorney Lisa Eischeid said Judge Taylor is an equal opportunity wardrobe conservative. She recalls one instance where he found a male attorney in contempt of court for appearing without a blazer. Taylor confirmed the story, adding that he also made the attorney donate to charity.
"Someone needs to tell women that sundresses are not proper in the courtroom," said Eischeid, who has worn a business suit throughout the 23 years she has been a lawyer. "But it can be a delicate issue."
The courtroom is in no rush to abandon its old-fashioned protocols, attorney Miller said, though perhaps it is a blessing in disguise.
"Here's the thing — we're girls, we like making fashion statements," Miller said. "It's about individualism. Maybe the courtroom is not a place to show your individualism via fashion."
Judge orders Google to release data to FBI
Story Originally Appeared in USA TODAY
A federal judge has ordered Google to comply with FBI warrantless demands for customer data.
U.S. District Court Judge Susan Illston on Tuesday rejected Google's argument that the so-called "National Security Letters" the company received from the FBI were unconstitutional and unnecessary.
Illston ordered Google to comply with the secret demands even though she found the same letter requests unconstitutional in March in a separate case filed by the Electronic Frontier Foundation.
In a four-page May 20 order in the Google case obtained by the The Associated Press Friday, the judge acknowledged the conflicting rulings.
Google could appeal Illston's decision. The company declined comment Friday.
The Google ruling legally is on hold until the 9th U.S. Circuit Court of Appeals can decide the matter. But until then, Judge Illston said the Mountain View, Calif.-based company would have to comply with the FBI's request for data unless the company can show the federal law enforcement agency didn't follow proper procedures in making its demands for customer data in the 19 letters Google is challenging.
After receiving sworn statements from two top-ranking FBI officials, Illston said she was satisfied that 17 of the 19 letters were issued properly. She wanted more information on two other letters.
The letters, along with the recent seizure of reporters' phone records by President Obama's administration, have prompted widespread complaints of government privacy violations in the name of national security.
In 2007, the Justice Department's inspector general found widespread violations in the FBI's use of the letters, including demands without proper authorization and information obtained in non-emergency circumstances.
The FBI has tightened oversight of the system. The agency made 16,511 National Security Letter requests for information regarding 7,201 people in 2011, the latest data available.
In March, Illston found that the FBI's demand that letter request recipients refrain from telling anyone — including customers — that they had received the requests was a violation of free speech rights.
"We are disappointed that the same judge who declared these letters unconstitutional is now requiring compliance with them," Kurt Opsah, an EFF attorney, said Friday.
Opsah said it could be many months before the appeals court rules on the constitutionality of the letter requests, which the FBI sends to telecommunication companies, Internet service providers, banks and others durring war-on-terror investigations.
The letter requests are used to collect unlimited kinds of sensitive, private information, such as financial and phone records. It is unclear from the judge's May 20 ruling what types of information the government is seeking to obtain or who the government is targeting in its letter request to Google.
Illston's order omits any mention of Google or that the proceedings have been closed to the public.
But the judge said "the petitioner" was involved in a similar case filed on April 22 in New York federal court. That's how the AP determined Illston was ruling about Google on May 20.
Public records show that on April 22, the federal government filed a "petition to enforce National Security Letters" against the Internet giant after it declined to cooperate with government demands.
A federal judge has ordered Google to comply with FBI warrantless demands for customer data.
U.S. District Court Judge Susan Illston on Tuesday rejected Google's argument that the so-called "National Security Letters" the company received from the FBI were unconstitutional and unnecessary.
Illston ordered Google to comply with the secret demands even though she found the same letter requests unconstitutional in March in a separate case filed by the Electronic Frontier Foundation.
In a four-page May 20 order in the Google case obtained by the The Associated Press Friday, the judge acknowledged the conflicting rulings.
Google could appeal Illston's decision. The company declined comment Friday.
The Google ruling legally is on hold until the 9th U.S. Circuit Court of Appeals can decide the matter. But until then, Judge Illston said the Mountain View, Calif.-based company would have to comply with the FBI's request for data unless the company can show the federal law enforcement agency didn't follow proper procedures in making its demands for customer data in the 19 letters Google is challenging.
After receiving sworn statements from two top-ranking FBI officials, Illston said she was satisfied that 17 of the 19 letters were issued properly. She wanted more information on two other letters.
The letters, along with the recent seizure of reporters' phone records by President Obama's administration, have prompted widespread complaints of government privacy violations in the name of national security.
In 2007, the Justice Department's inspector general found widespread violations in the FBI's use of the letters, including demands without proper authorization and information obtained in non-emergency circumstances.
The FBI has tightened oversight of the system. The agency made 16,511 National Security Letter requests for information regarding 7,201 people in 2011, the latest data available.
In March, Illston found that the FBI's demand that letter request recipients refrain from telling anyone — including customers — that they had received the requests was a violation of free speech rights.
"We are disappointed that the same judge who declared these letters unconstitutional is now requiring compliance with them," Kurt Opsah, an EFF attorney, said Friday.
Opsah said it could be many months before the appeals court rules on the constitutionality of the letter requests, which the FBI sends to telecommunication companies, Internet service providers, banks and others durring war-on-terror investigations.
The letter requests are used to collect unlimited kinds of sensitive, private information, such as financial and phone records. It is unclear from the judge's May 20 ruling what types of information the government is seeking to obtain or who the government is targeting in its letter request to Google.
Illston's order omits any mention of Google or that the proceedings have been closed to the public.
But the judge said "the petitioner" was involved in a similar case filed on April 22 in New York federal court. That's how the AP determined Illston was ruling about Google on May 20.
Public records show that on April 22, the federal government filed a "petition to enforce National Security Letters" against the Internet giant after it declined to cooperate with government demands.
Eurozone unemployment hits another record high
Story Originally Appeared in USA TODAY
Unemployment across the 17 European Union countries that use the euro has hit another record high, the latest in a series of ignominious landmarks for the ailing single currency zone.
Eurostat, the EU's statistics office, says Friday that unemployment rose to 12.2% in April from the previous record of 12.1% the month before. Another 95,000 people joined the ranks of the unemployed, taking the total to 19.38 million.
The figures mask big disparities among countries. While over one in four people are unemployed in Greece and Spain, Germany's rate is down at 5.4%.
Eurostat also says inflation in the eurozone rose to 1.4% in the year to May from 1.2% the previous month. Still, inflation is below the European Central Bank's target.
European stocks fell in early trading. Britain's FTSE 100 fell 0.9% to 6,599.76. Germany's DAX lost 0.9% to 8,323.05. France's CAC-40 declined 1.1% to 3,952.50.
Wall Street also appeared headed for losses. Dow Jones industrial futures shed 0.5% to 15,237. S&P 500 futures dropped 0.6% to 1,643.40.
In currencies, the euro was down at $1.2996 from $1.3043. The dollar fell to 100.40.
Unemployment across the 17 European Union countries that use the euro has hit another record high, the latest in a series of ignominious landmarks for the ailing single currency zone.
Eurostat, the EU's statistics office, says Friday that unemployment rose to 12.2% in April from the previous record of 12.1% the month before. Another 95,000 people joined the ranks of the unemployed, taking the total to 19.38 million.
The figures mask big disparities among countries. While over one in four people are unemployed in Greece and Spain, Germany's rate is down at 5.4%.
Eurostat also says inflation in the eurozone rose to 1.4% in the year to May from 1.2% the previous month. Still, inflation is below the European Central Bank's target.
European stocks fell in early trading. Britain's FTSE 100 fell 0.9% to 6,599.76. Germany's DAX lost 0.9% to 8,323.05. France's CAC-40 declined 1.1% to 3,952.50.
Wall Street also appeared headed for losses. Dow Jones industrial futures shed 0.5% to 15,237. S&P 500 futures dropped 0.6% to 1,643.40.
In currencies, the euro was down at $1.2996 from $1.3043. The dollar fell to 100.40.
Groups protest cigarette campaign
Story Originally Appeared on USA TODAY
The American Heart Association, American Lung Association and several other health groups are asking at least two state attorneys to investigate a new Camel cigarette ad campaign.
The group says the Camel Crush cigarette ads ran in 24 magazines that target young people and may violate the Tobacco Master Settlement Agreement. The landmark agreement, among other measures, prohibits cigarette makers from targeting kids.
Reynolds American Inc. spokesman Richard Smith said that the company, which owns the Camel brand, believes the ads are in full compliance with the settlement. Additionally, he said the company reviews the readership data and analyzes the editorial content of the publications it advertises in to ensure it is focused largely on adults; it only advertises in magazines whose adult readership is 85% or higher.
The ad, which the health groups say appeared in magazines such as Sports Illustrated and People, promotes the company's Camel Crush brand, which a capsule in the cigarette's filter to release menthol flavor.
It is not the first time the Winston-Salem, N.C. company has faced criticism for its advertising.
Reynolds was widely criticized for years for using its Joe Camel cartoon character as a means to make smoking more attractive to kids. It has faced several lawsuits over a number of its ads.
R.J. Reynolds Tobacco Co. decided in 2007 to suspend its print ads for Camel cigarettes under intense criticism for its advertising. The company continued to advertise other Camel products such as its smokeless and dissolvable tobaccos.
The company said that it believes the marketing of tobacco products should not be targeted to minors and that the cigarettes are made for and marketed to adult tobacco consumers.
While print ads for tobacco are banned in a number of countries, they are legal in the United States. Tobacco advertising is already banned from the radio, television and billboards. Tobacco companies instead have relied on direct marketing and other methods to promote their products.
Menthol flavored cigarettes have also come in for scrutiny. Critics say they appeal to kids because the flavor masks the harsh taste of tobacco smoke. The U.S. Food and Drug Administration is studying the effects of menthol flavoring in cigarettes on public health.
The American Heart Association, American Lung Association and several other health groups are asking at least two state attorneys to investigate a new Camel cigarette ad campaign.
The group says the Camel Crush cigarette ads ran in 24 magazines that target young people and may violate the Tobacco Master Settlement Agreement. The landmark agreement, among other measures, prohibits cigarette makers from targeting kids.
Reynolds American Inc. spokesman Richard Smith said that the company, which owns the Camel brand, believes the ads are in full compliance with the settlement. Additionally, he said the company reviews the readership data and analyzes the editorial content of the publications it advertises in to ensure it is focused largely on adults; it only advertises in magazines whose adult readership is 85% or higher.
The ad, which the health groups say appeared in magazines such as Sports Illustrated and People, promotes the company's Camel Crush brand, which a capsule in the cigarette's filter to release menthol flavor.
It is not the first time the Winston-Salem, N.C. company has faced criticism for its advertising.
Reynolds was widely criticized for years for using its Joe Camel cartoon character as a means to make smoking more attractive to kids. It has faced several lawsuits over a number of its ads.
R.J. Reynolds Tobacco Co. decided in 2007 to suspend its print ads for Camel cigarettes under intense criticism for its advertising. The company continued to advertise other Camel products such as its smokeless and dissolvable tobaccos.
The company said that it believes the marketing of tobacco products should not be targeted to minors and that the cigarettes are made for and marketed to adult tobacco consumers.
While print ads for tobacco are banned in a number of countries, they are legal in the United States. Tobacco advertising is already banned from the radio, television and billboards. Tobacco companies instead have relied on direct marketing and other methods to promote their products.
Menthol flavored cigarettes have also come in for scrutiny. Critics say they appeal to kids because the flavor masks the harsh taste of tobacco smoke. The U.S. Food and Drug Administration is studying the effects of menthol flavoring in cigarettes on public health.
Kellogg reaches settlement over Mini-Wheats claim
Story Originally Appeared in The Detroit News
New York — Kellogg has agreed to pay $4 million to settle a class-action lawsuit over the marketing claims it made for Frosted Mini-Wheats.
The company, which also makes Frosted Flakes, Eggo waffles and Pop Tarts, was sued for saying that the cereal improved children’s attentiveness, memory and other cognitive functions.
Kellogg says in a statement that the ad campaign in question ran about four years ago and that it has since adjusted its messaging to incorporate guidelines set by the Federal Trade Commission. The company, based in Battle Creek, also noted that is “has a long history of responsible advertising.”
On its website, Kellogg now says that Frosted Mini-Wheats are full of fiber and that they “fill you up first thing and help keep you focused all morning.”
If approved by the court, the law firm representing consumers says the settlement will result in cash refunds for up to three boxes of cereal purchased during the time of the advertising in question. People may seek reimbursement of up to $5 per box, with a maximum of $15 per customer, according to the settlement.
Kellogg Co. said customers can visit www.cerealsettlement.com to submit a claim for a refund. The claims are for boxes of Frosted Mini-Wheats purchased from Jan. 28, 2009 to Oct. 1, 2009.
New York — Kellogg has agreed to pay $4 million to settle a class-action lawsuit over the marketing claims it made for Frosted Mini-Wheats.
The company, which also makes Frosted Flakes, Eggo waffles and Pop Tarts, was sued for saying that the cereal improved children’s attentiveness, memory and other cognitive functions.
Kellogg says in a statement that the ad campaign in question ran about four years ago and that it has since adjusted its messaging to incorporate guidelines set by the Federal Trade Commission. The company, based in Battle Creek, also noted that is “has a long history of responsible advertising.”
On its website, Kellogg now says that Frosted Mini-Wheats are full of fiber and that they “fill you up first thing and help keep you focused all morning.”
If approved by the court, the law firm representing consumers says the settlement will result in cash refunds for up to three boxes of cereal purchased during the time of the advertising in question. People may seek reimbursement of up to $5 per box, with a maximum of $15 per customer, according to the settlement.
Kellogg Co. said customers can visit www.cerealsettlement.com to submit a claim for a refund. The claims are for boxes of Frosted Mini-Wheats purchased from Jan. 28, 2009 to Oct. 1, 2009.
Derek Boogaard's family sues NHL
Story Originally Appeared on ESPN
A Chicago law firm has filed a wrongful death lawsuit against the NHL on behalf of the family of Derek Boogaard, who died in 2011 at the age of 28.
In the lawsuit, the family says the league is responsible for the brain damage that Boogaard, a defenseman who played for the Minnesota Wild and New York Rangers, suffered during six seasons as an enforcer, as well as his addiction to prescription painkillers.
Boogaard died of an accidental overdose of prescription drugs and alcohol on May 13, 2011. He was found to have chronic traumatic encephalopathy, a degenerative brain ailment that is caused by repeated blows to the head and can be diagnosed only after death.
The New York Times reported on Sunday that the suit had been filed.
According to the lawsuit, filed Friday in the Circuit Court of Cook County, the league acted negligently in his death, especially regarding the use of painkillers.
The NHL, which declined to comment, has not been officially served with the suit, multiple sources confirmed to ESPNNewYork.com, but will have a deadline within which to respond once that happens. After that, there is expected to be a "discovery" process that could take months or even years.
The lawsuit alleges the NHL breached its duty to keep Boogaard "reasonably safe" and to "refrain from causing addiction to controlled substances."
William Gibbs, of the Chicago-based law firm Corboy and Demetrio and who is representing the Boogaard family, said the suit essentially claims the league failed Boogaard, a player with a known substance-abuse problem.
"The NHL picks Derek because he's huge -- 6-7, 270 pounds, and tenacious -- to be a fighter," Gibbs said during a telephone interview with ESPNNewYork.com. "The fighting that he is engaged in takes its toll on both his body and mind.
"Regarding the toll that it takes on his body, team doctors prescribe amazing amounts of prescription pain pills that they know are highly addictive. He becomes addicted and when the family then expresses concern about his addiction, the NHL says to them, 'We will take care of this, we've got the best system to deal with this.' And as we can tell, that system didn't work."
The defendants named in the lawsuit include the NHL, the NHL Board of Governors and league commissioner Gary Bettman. Gibbs could not say whether there will be additional lawsuits filed.
"Our focus is on a league level that the dispensing of pain pills can only really be controlled or seen from the eyes of leagues, and so they should be the ones to have a proper mechanism in place," Gibbs said.
Gibbs said he expected the NHL to respond to the suit in the next 30 or 45 days.
The suit details the prescriptions Boogaard received -- more than 40, for a total of 1,201 painkillers from the Wild medical staff during the 2008-09 season, and more than 17 prescriptions for a total of 366 pills from the Rangers' staff during the 2010-11 season.
Boogaard sought treatment through the NHL's substance abuse and behavioral health program multiple times for an addiction to painkillers. He was never funneled into Stage 2 or 3 of the multitiered program, despite additional transgressions that should have earned him a suspension without pay.
According to postmortem toxicology reports, Boogaard had a blood-alcohol level of .18 (the legal limit in most states is .08) as well as oxycodone in his system.
"Instead of having something with meat to it, the league just kinda turned a blind eye to the relapse and gave, I think, him a false sense of feeling that this addiction was not a big deal when in fact it was a very, very big deal," Gibbs said.
Boogaard also received injections of Toradol on at least 13 occasions. The lawsuit alleges Boogaard was not told of the risks between the "potent analgesic" and the risk of CTE.
"The way that professional sports deals with players' pain is a major issue, on both the medication front and the injection front," Gibbs said.
Though the jurisdiction does not allow Boogaard's estate representatives to put a specific dollar amount on damages they are seeking, the lawsuit is "demanding judgment against defendant, NHL, for a sum in excess of the minimum jurisdictional limit for the Law Division of the Circuit Court of Cook County."
Known as one of the league's toughest fighters, Boogaard played 277 NHL games, scored three goals and racked up 589 penalty minutes.
Boogaard's family filed a lawsuit against the NHL Players' Association in September 2012, seeking $9.8 million in damages, but it was dismissed this spring. The family said the union, after expressing interest in helping pursue a case against the league, missed a deadline for filing a grievance. A judge ruled the family waited too long to act and dismissed the case.
ESPN sports business analyst Andrew Brandt and The Associated Press contributed to this report.
A Chicago law firm has filed a wrongful death lawsuit against the NHL on behalf of the family of Derek Boogaard, who died in 2011 at the age of 28.
In the lawsuit, the family says the league is responsible for the brain damage that Boogaard, a defenseman who played for the Minnesota Wild and New York Rangers, suffered during six seasons as an enforcer, as well as his addiction to prescription painkillers.
Boogaard died of an accidental overdose of prescription drugs and alcohol on May 13, 2011. He was found to have chronic traumatic encephalopathy, a degenerative brain ailment that is caused by repeated blows to the head and can be diagnosed only after death.
The New York Times reported on Sunday that the suit had been filed.
According to the lawsuit, filed Friday in the Circuit Court of Cook County, the league acted negligently in his death, especially regarding the use of painkillers.
The NHL, which declined to comment, has not been officially served with the suit, multiple sources confirmed to ESPNNewYork.com, but will have a deadline within which to respond once that happens. After that, there is expected to be a "discovery" process that could take months or even years.
The lawsuit alleges the NHL breached its duty to keep Boogaard "reasonably safe" and to "refrain from causing addiction to controlled substances."
William Gibbs, of the Chicago-based law firm Corboy and Demetrio and who is representing the Boogaard family, said the suit essentially claims the league failed Boogaard, a player with a known substance-abuse problem.
"The NHL picks Derek because he's huge -- 6-7, 270 pounds, and tenacious -- to be a fighter," Gibbs said during a telephone interview with ESPNNewYork.com. "The fighting that he is engaged in takes its toll on both his body and mind.
"Regarding the toll that it takes on his body, team doctors prescribe amazing amounts of prescription pain pills that they know are highly addictive. He becomes addicted and when the family then expresses concern about his addiction, the NHL says to them, 'We will take care of this, we've got the best system to deal with this.' And as we can tell, that system didn't work."
The defendants named in the lawsuit include the NHL, the NHL Board of Governors and league commissioner Gary Bettman. Gibbs could not say whether there will be additional lawsuits filed.
"Our focus is on a league level that the dispensing of pain pills can only really be controlled or seen from the eyes of leagues, and so they should be the ones to have a proper mechanism in place," Gibbs said.
Gibbs said he expected the NHL to respond to the suit in the next 30 or 45 days.
The suit details the prescriptions Boogaard received -- more than 40, for a total of 1,201 painkillers from the Wild medical staff during the 2008-09 season, and more than 17 prescriptions for a total of 366 pills from the Rangers' staff during the 2010-11 season.
Boogaard sought treatment through the NHL's substance abuse and behavioral health program multiple times for an addiction to painkillers. He was never funneled into Stage 2 or 3 of the multitiered program, despite additional transgressions that should have earned him a suspension without pay.
According to postmortem toxicology reports, Boogaard had a blood-alcohol level of .18 (the legal limit in most states is .08) as well as oxycodone in his system.
"Instead of having something with meat to it, the league just kinda turned a blind eye to the relapse and gave, I think, him a false sense of feeling that this addiction was not a big deal when in fact it was a very, very big deal," Gibbs said.
Boogaard also received injections of Toradol on at least 13 occasions. The lawsuit alleges Boogaard was not told of the risks between the "potent analgesic" and the risk of CTE.
"The way that professional sports deals with players' pain is a major issue, on both the medication front and the injection front," Gibbs said.
Though the jurisdiction does not allow Boogaard's estate representatives to put a specific dollar amount on damages they are seeking, the lawsuit is "demanding judgment against defendant, NHL, for a sum in excess of the minimum jurisdictional limit for the Law Division of the Circuit Court of Cook County."
Known as one of the league's toughest fighters, Boogaard played 277 NHL games, scored three goals and racked up 589 penalty minutes.
Boogaard's family filed a lawsuit against the NHL Players' Association in September 2012, seeking $9.8 million in damages, but it was dismissed this spring. The family said the union, after expressing interest in helping pursue a case against the league, missed a deadline for filing a grievance. A judge ruled the family waited too long to act and dismissed the case.
ESPN sports business analyst Andrew Brandt and The Associated Press contributed to this report.
Dell Accuses Hitachi in Suit of Price-Fixing Conspiracy
Story Appeared on Bloomberg News
Dell Inc. (DELL), the world’s third-largest personal computer maker, accused at least six makers of optical disk drives including Hitachi Ltd. (6501) of conspiring to fix prices of their products from 2004 to 2010.
Disk-drive makers rigged bids, shared confidential information about pricing, sales and production and agreed to set prices for their products sold in the U.S., Dell said in a complaint filed in federal court in Austin, Texas.
Dell paid inflated prices for optical disk drives as a result and seeks triple damages for the overcharges under antitrust laws, according to the complaint. Dell accuses the companies in the complaint of breach of contract and violations of U.S. antitrust law.
Optical drives go into Blu-ray and DVD players, used with computers and televisions. Hitachi-LG Data Storage Inc. agreed to plead guilty and pay a $21.1 million fine for bid-rigging and price-fixing optical disk drives, the Justice Department said in 2011.
Hitachi-LG conspired with other companies from June 2004 through September 2009 to rig bids and fix prices for optical drives to be sold to Dell, Hewlett-Packard Co. (HPQ) and Microsoft Corp. (MSFT), according to the Justice Department. The U.S. began investigating optical disk drive makers in 2009, and the Hitachi-LG charges were the first in the probe. Hitachi-LG is a joint venture of Tokyo-based Hitachi Ltd. and Seoul-based LG Electronics Inc. (066570)
Guilty Pleas
Dell said in its complaint that four Hitachi-LG executives, including two who were in charge of the Dell account, pleaded guilty to participating in the optical disk drive price-fixing conspiracy.
Other defendants in Dell’s lawsuit include Amsterdam-based Koninklijke Philips Electronics NV (PHIA), Taipei-based BenQ Corp., Suwon, South Korea-based Samsung Electronics (005930) Co., Tokyo-based Sony Corp. (6758) and Toshiba Corp. (6502), also based in Tokyo.
Billionaire Carl Icahn and his partner Southeastern Asset Management Inc. have offered $12 a share in cash or additional Dell stock to investors to take over the company, based in Round Rock, Texas.
Icahn’s deal would maintain Dell as a publicly traded company. The payout would dilute existing Dell shares, which Icahn said would have a value of at least $1.65 apiece. That compares with $13.65 a share in cash offered by Dell founder and Chief Executive Officer Michael Dell and Silver Lake Management LLC.
“We have not yet received any information about the case,” Qisda Corp., the Taiwanese owner of BenQ, said in an e-mailed response to Bloomberg News today. “BenQ/Qisda did not discuss and agree on prices with other optical drive makers.”
Atsushi Ido, a spokesman for Toshiba, declined to comment on the complaint. Sari Kamiya, a Sony spokeswoman, also declined to comment, saying the company hasn’t seen the complaint.
Representatives of Hitachi-LG, Samsung and Hitachi didn’t immediately respond to phone calls seeking comment on the lawsuit.
The case is Dell Inc. v. Hitachi-LG Data Storage Inc., 13-00393, U.S. District Court, Western District of Texas (Austin).
Dell Inc. (DELL), the world’s third-largest personal computer maker, accused at least six makers of optical disk drives including Hitachi Ltd. (6501) of conspiring to fix prices of their products from 2004 to 2010.
Disk-drive makers rigged bids, shared confidential information about pricing, sales and production and agreed to set prices for their products sold in the U.S., Dell said in a complaint filed in federal court in Austin, Texas.
Dell paid inflated prices for optical disk drives as a result and seeks triple damages for the overcharges under antitrust laws, according to the complaint. Dell accuses the companies in the complaint of breach of contract and violations of U.S. antitrust law.
Optical drives go into Blu-ray and DVD players, used with computers and televisions. Hitachi-LG Data Storage Inc. agreed to plead guilty and pay a $21.1 million fine for bid-rigging and price-fixing optical disk drives, the Justice Department said in 2011.
Hitachi-LG conspired with other companies from June 2004 through September 2009 to rig bids and fix prices for optical drives to be sold to Dell, Hewlett-Packard Co. (HPQ) and Microsoft Corp. (MSFT), according to the Justice Department. The U.S. began investigating optical disk drive makers in 2009, and the Hitachi-LG charges were the first in the probe. Hitachi-LG is a joint venture of Tokyo-based Hitachi Ltd. and Seoul-based LG Electronics Inc. (066570)
Guilty Pleas
Dell said in its complaint that four Hitachi-LG executives, including two who were in charge of the Dell account, pleaded guilty to participating in the optical disk drive price-fixing conspiracy.
Other defendants in Dell’s lawsuit include Amsterdam-based Koninklijke Philips Electronics NV (PHIA), Taipei-based BenQ Corp., Suwon, South Korea-based Samsung Electronics (005930) Co., Tokyo-based Sony Corp. (6758) and Toshiba Corp. (6502), also based in Tokyo.
Billionaire Carl Icahn and his partner Southeastern Asset Management Inc. have offered $12 a share in cash or additional Dell stock to investors to take over the company, based in Round Rock, Texas.
Icahn’s deal would maintain Dell as a publicly traded company. The payout would dilute existing Dell shares, which Icahn said would have a value of at least $1.65 apiece. That compares with $13.65 a share in cash offered by Dell founder and Chief Executive Officer Michael Dell and Silver Lake Management LLC.
“We have not yet received any information about the case,” Qisda Corp., the Taiwanese owner of BenQ, said in an e-mailed response to Bloomberg News today. “BenQ/Qisda did not discuss and agree on prices with other optical drive makers.”
Atsushi Ido, a spokesman for Toshiba, declined to comment on the complaint. Sari Kamiya, a Sony spokeswoman, also declined to comment, saying the company hasn’t seen the complaint.
Representatives of Hitachi-LG, Samsung and Hitachi didn’t immediately respond to phone calls seeking comment on the lawsuit.
The case is Dell Inc. v. Hitachi-LG Data Storage Inc., 13-00393, U.S. District Court, Western District of Texas (Austin).
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