REPOST: Obama administration seeks oversight of Texas voting laws

Obama administration will reassert federal power and block state laws that violate the rights of minority voters.This Los Angeles Times article has the complete report. 

Image Source: latimes.com

WASHINGTON — The Obama administration moved aggressively Thursday to reassert federal power and block state laws that allegedly violate the civil rights of minority voters, an authority that the Supreme Court had substantially weakened last month by striking down a portion of the Voting Rights Act.

The announcement by Atty. Gen. Eric H. Holder Jr. made Texas the administration's test case and first target, all but guaranteeing a full-scale political and legal battle with that state's conservative Republican leadership.

The battle comes with big stakes. Immediately in the aftermath of the Supreme Court's decision, several states, particularly in the South, announced plans to reinstate stringent voter ID laws and other practices that administration officials and civil rights groups see as aimed at reducing minority voting.

The consequences in Texas are characteristically large. It is by a wide margin the biggest reliable Republican stronghold left among the states, but it has a rapidly growing number of minority voters who lean toward the Democrats.

Holder said the Justice Department would go to court to seek an order that would once again require Texas to submit all proposed voting-law changes to Washington for advance approval. That practice, known as pre-clearance, had been the law from 1965 until the Supreme Court's ruling for nine Southern states, as well as parts of others, including California and New York.

Texas' plan for redrawing political boundaries after the 2010 census intentionally discriminated against minorities, administration lawyers argue, citing judicial rulings on that point as evidence that the state needs continued federal supervision.

The Texas filing is the department's first legal action in response to the Supreme Court ruling that altered the Voting Rights Act, "but it won't be our last," Holder said in a speech before a meeting of the National Urban League in Philadelphia, hinting at similar actions in other states.

"We plan … to fully utilize the law's remaining sections to ensure that voting rights of all American citizens are protected," he said.

In Texas, Gov. Rick Perry reacted heatedly.

"Once again, the Obama administration is demonstrating utter contempt for our country's system of checks and balances, not to mention the U.S. Constitution," said Perry, a Republican. "This end run around the Supreme Court undermines the will of the people of Texas, and casts unfair aspersions on our state's common-sense efforts to preserve the integrity of our elections process."

Texas Atty. Gen. Greg Abbott, considered the front-runner to succeed Perry as governor, accused the Obama administration of colluding with the state's Democratic Party. "This is an abuse of the Voting Rights Act for partisan, political purposes," he said, "to put Texas elections under their thumb."

Until last month's 5-4 Supreme Court decision, pre-clearance applied automatically to the nine Southern states. The goal was to end the widespread practice of crafting voting laws to prevent blacks — and later Latinos — from registering and casting ballots.

The court ruled that Congress had erred when it last renewed the law because it continued to use outdated voting information from the 1970s to decide which states would be covered by the pre-clearance rules. Although the decision gave Congress the ability to come up with a new coverage formula, there seems little chance of congressional action.

Indeed, the administration's announcement, which immediately triggered a strong rebuke among Republicans in Congress, seemed based in part on the belief that the chance of congressional action was so small that there was little to lose by moving unilaterally.

The new effort will employ a little-used part of the Voting Rights Act that was not affected by the recent high court ruling. Under this provision of the law, the federal government can gain authority over election laws in a state if a court has found practices there to be intentionally discriminatory.

"There is a reason they started with Texas," said Spencer Overton, a professor of law at George Washington University. "It is pretty clear it has been one of the most flagrant violators of the Voting Rights Act."

A panel of federal judges in 2012 found that the state's congressional redistricting map "was enacted with a discriminatory purpose" — undercutting the power of black Democrats and diluting the voting power of a surging Latino population.

"The only explanation Texas offers for this pattern is 'coincidence,'" the court wrote. "But if this is coincidence, it is a striking one indeed. It is difficult to believe that pure chance would lead to such results."

Get access to all types of litigation topics by following this Evan Granowitz Facebook page.

REPOST: JPMorgan settles energy market rigging case for $410 million

The LA Times recently published a report on the JPMorgan energy market rigging case, which was settled with a large penalty that was described by ISO officials as "historic in size and scope."  Read the full report here:

Image source: taxpayer.net

NEW YORK — California electricity customers will share $124 million of a federal settlement withJPMorgan Chase & Co. over allegations it manipulated the state's energy market.

JPMorgan, the nation's largest bank, agreed to pay a total of $410 million to settle allegations by the Federal Energy Regulatory Commission. The deal, which was announced Tuesday, also includes $285 million in civil penalties the bank will pay to the U.S. Treasury.

Ratepayers in the Midcontinent Independent System Operator will receive $1 million to settle charges JPMorgan also manipulated the power market in the Midwest.

Officials with the California Independent System Operator, which runs the state's electricity grid, praised the FERC settlement as a strong deterrent to any firm looking to rig the state's power market.

"Both the ISO and the FERC were on the beat for this conduct, and it worked extremely well for California ratepayers," said Nancy Saracino, the ISO's general counsel.

Saracino said the grid operator would return the $124 million in unjust profits to ratepayers as soon as possible.

"We've gotten every penny back and will be sending it back as soon as it hits our account," she said in a teleconference from the ISO's headquarters in Folsom, near Sacramento.

The settlement contained no admission or denial of wrongdoing by JPMorgan, nor did it name any executives. FERC said the New York company would conduct a "comprehensive assessment" of its policies and practices in the power business.

"We are pleased to put this matter behind us," a JPMorgan spokesman said in a statement. The settlement wouldn't have a "material impact" on earnings because the company previously had set aside reserves to cover the costs, the spokesman added.

FERC's investigation found that JPMorgan manipulated energy markets from September 2010 through November 2012.

The regulator found that JPMorgan engaged in 12 manipulative bidding strategies, which forced grid operators to pay unjust premiums.

California consumer advocates, however, questioned whether JPMorgan had been punished enough. The $410 million "really seems like a very small fine," said Mark Toney, executive director of the Utility Reform Network, a San Francisco group that monitors energy regulation and legislation. "It almost feels like the cost of doing business" for JPMorgan.

But ISO officials called the fine historic in size and scope.

"I wouldn't dismiss the size of the penalty at all," said Eric Hildebrandt, the director of market monitoring.

This month, the energy commission ordered the British bank Barclays, along with four of its traders, to shell out $453 million over allegations they manipulated energy markets, including California's, from 2006 to 2008. Barclays has vowed to fight the order.

FERC Commissioner Tony Clark on Tuesday said the JPMorgan settlement was an "eye-opener" highlighting challenges to regulators.

"In this investigation and others, it has become too common for subjects of an investigation to take steps to obfuscate the true intent of their business strategies as a litigation posture for dealing with their regulators," Clark said in a statement.

 -

 Find more news on noteworthy cases around the nation on this Evan Granowitz Facebook page.

REPOST: Home buyers must perform their own due diligence

This Los Angeles Times article answers a condo buyer’s question regarding a loan taken out by the homeowner association’s board of directors.

Question: Our homeowner association's directors have attorneys telling them they can do whatever they want because they are the board. Distrusting the board, I went to the office to inspect documents and found an agreement dated February 2007 for a loan for more than $3.3 million the board had taken out without the knowledge of owners. I purchased my condominium in 2007 after the loan was taken out. I believe that this obligation should have been disclosed during my purchase.

While in escrow, I had only two weeks to review my condo documents, which stated, among other things, that there was $2.05 million in reserves. That was confirmed by the association's manager. There was no mention of the loan proceeds.

I feel I was deceived in the purchase. Do I have any recourse against the association, the board of directors or real estate agents?

Answer: Boards are not free to do whatever they want. Their attorneys should be telling directors what they can legally do and what they are prohibited by law from doing. Attorneys and boards are limited by the law and by the association's governing documents. Being on the board is not justification for breaking the law, and attorneys can be disbarred for recommending actions that violate the law. That does not mean boards are prohibited from taking loans secured by the common property, but the actions must be authorized by the governing documents.

Those purchasing any property in a common-interest development need to read and understand the association's governing documents and how the restrictions will apply to them long before signing the final papers. Smart buyers perform due diligence well in advance of signing a purchase agreement. Providing those documents well in advance of closing should be a precondition to any sale. Leaving little time for review before the closing of escrow should be a red flag of potential problems at that association. What these documents cannot disclose is how your board will act.

The loan should have appeared in the association's pro forma budget, where a buyer performing due diligence should have discovered it. But it is the buyer's duty to ask for and the seller's duty to disclose that assessment.

Civil Code Section 1368 lists documents buyers are required to receive before closing escrow, whether provided by the association or the seller. The association is not required to voluntarily disclose any loans or even any litigation involving the association. That failure does not make the association, its board or even the real estate agent liable to you. The onus for knowing what questions to ask, and to whom, is on the potential buyer.

The association may seek a separate assessment to pay off the loan, but titleholders may find selling or refinancing, although not prohibited, difficult while loans are outstanding. It is incumbent on buyers to perform their own due diligence before making an offer.

This Evan Granowitz Facebook page has links and updates on corporate litigation-related news and information.

The rigors of the law school investment

Studying law is an investment—and not an easy one at that. First, there are many resources involved in making this investment: money, time, and effort. Second, it is not something that students can easily get away from. The longer one stays invested in law school, the harder it is to get out, especially considering the resources which have already been spent at the time.

Image source: usnews.com

Lately, there have also been questions regarding the practicality of investing one’s resources on law school. The economy, with its ebbs and flows, has drastically affected the employment opportunities of the aspiring lawyer. The current job market for lawyers has come down to a fizzle, owing to the sheer number of licensed lawyers per capita. Unable to find a job and perpetually tethered to their students debts, new lawyers may soon find that all their investments will be met with an uncertain prospect.

Image source: fastweb.com

This is why aspiring lawyers should never take the decision of entering law school lightly, as it might be the largest financial decision they will ever do in their lifetime. Furthermore, its consequences are far-reaching in scope and duration. But as with all other investments, the yields of studying law will ultimately come in time, if one has enough patience to weather the many rigors of the education and employment process.

Image source: npr.org

This Facebook page for Atty. Evan Granowitz contains more updates on matters pertaining to legal education and issues.

REPOST: Oklahoma High Court Logrolls State Tort Reform Law

Oklahoma Supreme Court became the newest state court on the nullification list according to this Forbes.com article.

Image Source: forbes.com

Fifteen years ago, Washington Legal Foundation published a groundbreaking Monograph, “Who Should Make America’s Tort Law: Courts or Legislatures?” Authors Victor Schwartz, Mark Behrens, and Mark Taylor described a growing tension between state legislatures and their passage of laws aimed at curbing abuses in personal injury and other types of “ tort” litigation, and state courts, which asserted their authority to “make” tort law by striking down legislative reform measures. The rulings are based entirely on state constitutional law, so tort reform advocates have no recourse to the U.S. Supreme Court. The practice certainly hasn’t abated, as evidenced by the numerous shorter papers WLF has devoted to this “judicial nullification” in the years since 1997 (examples here, here, and here).

On Tuesday, the Oklahoma Supreme Court became the newest state court on the nullification list, overturning a comprehensive tort reform law because it violated the Oklahoma Constitution’s “single subject” rule (Douglas v. Cox Retirement). Just one of the law’s 90 provisions affected the plaintiff – a requirement for an expert affidavit in personal negligence cases – but she challenged the entire law as unconstitutional “logrolling.” In a twelve-paragraph opinion, the Court ruled that the reform law violated Article 5, § 57 of the Oklahoma Constitution, the single subject rule. In the five-Justice majority’s opinion, the provisions of the bill were dissimilar enough that legislators who supported some but not all of the sections would feel “logrolled” into voting for the entire legislation.

The Court’s opinion defies law and logic. The single subject or purpose of the Oklahoma law, as the dissent put it plainly, was “tort reform.” The vote in the legislature, Justice Winchester wrote, reflected that “the public understood the common themes and purposes embodied in the legislation.” The House vote was 86-13; in the Senate, it was 42-5.

So what’s a state legislature to do under the non-guidance offered by the majority opinion in Douglas? Should it spend its limited time in session trying to pass 90 separate bills or smaller groups of bills, with, as the dissent wrote, “no greater assurance the legislation will pass the single-subject test”? Douglas will have a chilling effect not only on broad-based tort reform, but any other type of comprehensive reform.

So it’s back to the drawing board for the Oklahoma legislature, which will have to devote more taxpayer dollars if they want to craft a fairer civil justice system that will help keep businesses in Oklahoma and attract new ones.


Follow this Evan Granowitz Twitter page for more legal news and updates on ongoing corporate litigations and settlement.

REPOST: In patent dispute, Tesla plays offense

Tesla sues pointSET and denies infringing any of pointSET's patents, says this article.
***

Image Source: Law.com

In-house lawyers at Silicon Valley darling Tesla Motors Inc. have taken a bold stance against patent infringement claims.

Rather than wait to be sued — and apparently without a general counsel in place — Tesla filed a complaint for declaratory judgment after receiving a demand letter from Los Angeles patent holder pointSET.

In a five-page suit filed June 6 in the Northern District of California, a trio of in-house lawyers argue the technology that allows Tesla owners to remotely control the temperatures of their cars doesn't infringe pointSET's patent directly or indirectly, "either literally or under the doctrine of equivalents."

It's an aggressive response to pointSET's letter, sent April 30, that proposes a licensing agreement. Invoking the jargon of a discount retailer, Global IP Law Group associate Nicholas Dudziak wrote, "For a limited time, pointSET is offering a one-time, fully-paid licensing flat fee of $500,000." The letter went on to note that because management wishes to complete licensing arrangements quickly — the passing of pointSET's president and one of its inventors, Jerry Iggulden, has prompted a review of the portfolio ­— it is offering lower fees for timely agreements.

According to a recent analysis by Mark Lemley, director of Stanford Law School's Program in Law, Science and Technology, declaratory judgment actions aren't totally uncommon, as they represent about 7 to 8 percent of all patent suits. But, he said in an email, "Relying on in-house counsel is a lot less common, and a much riskier strategy."

Tesla has not announced the appointment of a GC since Eric Whitaker, now general counsel at SanDisk Corp., left in November 2012. He had been the third GC in as many years when he was named in 2010.

This tangle with pointSET would not be the first time that Tesla has navigated significant hurdles without a general counsel: Following the December 2009 resignation of Jonathan Sobel, a former Yahoo GC who had spent only a few months at Tesla, the company completed its initial public offering before appointing Whitaker.

For this suit, Tesla is relying on a team that includes associate general counsel Jonathan Butler and Steven Cooper, as well as patent counsel Richard Soderberg.

Spokeswoman Alexis Georgeson said no one from the company could comment on the pending litigation.

Tesla's patent strategy has historically focused on building up its patent portfolio. Tesla noted in its spring 2012 investor presentation that it had been awarded more than 50 patents to date and had more than 230 applications pending.

A search of court records indicates this is the company's only IP litigation. Georgeson did not respond to a request to confirm that.

David Berten, partner and founder of Global IP Law Group, said that when he spoke via telephone to the team from Tesla this week, they declined to share their theory of noninfringement.

"Hey, if you've got a good noninfringement argument, we'll withdraw the letter," Berten said in an interview. "Our positions on this are pretty transparent. It's a little bit of a head-scratcher why Tesla decided to do this."

The parties are scheduled to have an initial case management conference before U.S. Magistrate Judge Nathanael Cousins in San Francisco in September.

More pertinent business litigation news can be accessed at this Twitter page for Evan Granowitz.

REPOST: Teva, Sun Pharma to pay $2.15 bln to settle Pfizer patent suit

Teva Pharmaceuticals Industries Ltd and Sun Pharmaceutical Industries Ltd settles a lawsuit against Pfizer and Takeda Pharmaceutical Co Ltd, says this article.
***

Pfizer Inc said Teva Pharmaceuticals Industries Ltd and Sun Pharmaceutical Industries Ltd would pay $2.15 billion to settle a patent infringement lawsuit related to its acid-reflux drug Protonix.

Japan's Takeda Pharmaceutical Co Ltd, Pfizer's partner on the drug, will receive 36 percent or about $774 million from the settlement.

Pfizer won a protracted 10-year legal battle in April 2010 when a New Jersey jury ruled that Teva had infringed the Protonix patent. Teva started selling a generic version of the drug in 2007.

A trial to determine damages began on Monday.

The patent was held by Nycomed - now a Takeda subsidiary. Protonix was licensed to Wyeth, which is now owned by Pfizer.

Israel-based Teva, the world's largest generic drugmaker, will pay $1.6 billion - half this year and the rest by October 2014. India's Sun Pharma will pay $550 million this year.

Teva said in February that it may face legal losses of up to $2.07 billion to resolve the case.

Sun Pharma set aside 5.84 billion rupees, or about $100 million, last November towards potential damages to Pfizer. The company will now have to shell out a further $450 million as final settlement.

"This is not a very positive out-of-court settlement. The agreed amount is way too high for such a settlement," said Daljeet Kohli, head of research at brokerage IndiaNivesh in Mumbai. "It will also restrict Sun's ability to look for acquisitions."

Pfizer's shares were up about 1 percent at $28.66 before the bell, while Teva's U.S.-listed shares were down about 1 percent at $39.51.

Sun Pharma closed little changed at 980.70 rupees, while Takeda's stock closed down 1.4 percent at 4,355 yen.

($1 = 58.4950 Indian rupees)

Evan Granowitz is a civil litigator who was named a Super Lawyers Rising Star in 2009, 2010, and 2011. Visit this website for more information about him and his practice areas.