Pennsylvania Litigation Lawyer & Attorney : Barley Snyder Law Firm : Serving Lancaster, Reading, York, Chambersburg

This morning, the SCOTUS will hear argument in Leegin Creative Leather Products Inc. v. PSKS, Inc. (06-480).  Leegin is a straightforward case of resale price maintenance.  The plaintiff, Kay's Kloset, is a reseller of Leegin products.  When Leegin discovered Kay's reselling Leegin products at prices other than those Leegin required, Leegin ceased doing business with Kay's.  Kay's brought an antitrust suit.  Because retail price maintenance is per se illegal under the nearly 100-year-old Dr. Miles rule, Kay's naturally prevailed in the trial court and Fifth Circuit.  The SCOTUS agreed to hear Leegin's case.

According to SCOTUSBlog's preview:

Leegin’s main point for doing away with the per se rule for resale price maintenance agreements is that it is based upon an “antiquated common-law rule” against “alienating” the rights of property once sold, and that the Supreme Court for 30 years has been casting aside other per se rules under the antitrust laws.

Leegin's position seems to be that it is "antiquated" to insist on the passage of title to the buyer in connection with a sale of the goods -- i.e., the notion that you actually own what you buy is an anachronism.  Hyperbole aside, the case asks whether resale price maintenance is always anti-competitive such that Dr. Miles' prescription for per se proscription remains indicated (sorry for that).  Leegin argues it does not and that the Court should instead view a seller's post-sale retention of rights -- here, the right to dictate the resale price -- through the lens of the "rule of reason."

Medill's On the Docket has more on the facts and procedural history; the Antitrust Review has more on the law and policy.

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Tony Mauro at the BLT reports that Justice Breyer attended a March 20 "summit" at Georgetown Law focused on the near-exponential growth of electronically-stored records and the burden it is placing on clients (and their counsel) during discovery.  As one might suspect, Breyer was far out of his technological depth and carefully limited himself to stating the obvious:

When Patrick Oot, director of electronic discovery at Verizon, said reviewing documents in a single case cost his company $4 million, Breyer grew concerned. That kind of cost, he said, is “going to drive out of the legal system a lot of people who belong there.”

The BLT also reports on panelists' suggestions for possibly reducing the burdens associated with electronic discovery.  Apparently, the suggestions were along the lines of hoping for "more cooperation between opposing attorneys" and seeking "honest brokers, judicial or otherwise, to better identify what documents need to be searched."  Yes.  And good luck with that.

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We all agree no contemporary means of punishment can satisfy our collective desire for retribution against email spammers.  That said, the spectacle of spammers being tied up in knots by litigation is as satisfying as anything legal can be.  John Leyden of The Register reports:

e360 Insight, the Illinois-based mass mailer suing Spamhaus for calling it a spammer, is being sued in California for spamming.  David Linhardt, individually, and his firm e360 Insight are among the defendants in a lawsuit brought by William Silverstein, an aggrieved spam recipient.  . . . [e360 Insight's] messages violated Federal anti-spam laws and California state laws because they were allegedly sent through compromised machines and with forged headers, offences against the Federal CAN-SPAM Act.

Mr. Silverstein is seeking statutory and punitive damages from e360.  Godspeed, Sir.

Parting Sho[r]t:  Spamhaus, spamming, spammer, spam.  Hmmm.

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At Baker Botts's Sct Today newsletter/blog/publication thingee, Aaron Streett posts a humorous aside on Tuesday's SCOTUS ruling in the Travelers case:

When Chief Justice Roberts testified in his confirmation hearing that he hoped to increase unanimity on the Court, skeptical observers did not realize that he had a secret plan: grant more Ninth Circuit cases. That strategy continued to pay dividends today, as the Court unanimously reversed the CA9 for the sixth time this Term, and the CA9 ran its overall record to 0-9. Only time will tell whether the Ninth Circus can match the 1976 Buccaneers’ 0-14 mark. You may recall that the Bucs’ coach, when asked about the execution of the Tampa Bay offense, responded, “I’m in favor of it.” While no one is proposing execution here (which the CA9 would stay anyway), you have to admit that this is getting kind of ridiculous.

Good stuff.  Even the ostensibly serious part of the discussion is funny.  Well, funnier than mine, at any rate.

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Womble Carlyle's South Carolina Appellate Law Blog highlights an opinion penned by a jurist who, from all appearances, suffers from thesaurophilia:

The cognoscenti of federal preemption jurisprudence bestow panoramic application so as to limit state common law tort actions. We decline to accept this broad-brush federal judicial barricade.

*   *   *
Importantly, scholars on basic conflict preemption principles inculcate in regard to the fundamental elixir of the rule when juxtaposing federal/state constitutional analysis. If a state statute, administrative rule, or common law cause of action conflicts with a federal statute, it is incontestable that the state law has no efficacy. It is pellucid that the Supremacy Clause does not bless unelected federal judges with carte blanche to utilize federal law as a conduit to impose their own views of tort law on the States. Assumptively, we recognize that common law tort actions are historically within the scope of the States’ police powers and are safe from preemption by a federal statute unless Congress reveals a clear and manifest purpose to preempt.

If you are a budding legal writer, take note how the five-dollar words quickly add up to a two-bit piece of writing.  (via the Conspiracy)

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On Tuesday, the SCOTUS unanimously decided that a contract-based claim for attorney's fees is not disallowed under federal bankruptcy law, even where the fees in question were incurred litigating bankruptcy issues in a post-petition setting.  Reversing the Ninth Circuit (ed.: now there's a surprise), the Court concluded the view that "such fees are categorically prohibited . . . finds no support in the Bankruptcy Code."

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This month's edition of the ABA's Litigation News reports ($$$, reg.) on an ABA Ethics Opinion addressing lawyers' mining of metadata.  First things first, defined most broadly, metadata is, quite simply, data about data.  (Wikipedia offers an extended definition).  Defined for present purposes, metadata is information that an electronic document contains apart from substantive content, such as authorship, creation time, editing time, changes made, and a host of additional information that you, as a savvy lawyer, may not want your adversary to see.

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In a truly weird lawsuit, a federal jury in Salt Lake City, Utah has awarded Proctor & Gamble $19.5 million in connection with P&G's Lantham Act claims against Amway Corp. distributors.  The Canton Repository summarizes the strange facts thusly:

[The case] was one of several the company brought over rumors alleging a link with the company’s logo and Satanism.

Rumors had begun circulating as early as 1981 that the company’s logo — a bearded, crescent man-in-moon looking over a field of 13 stars — was a symbol of Satanism.

The company alleged that Amway Corp. distributors revived those rumors in 1995, using a voice mail system to tell thousands of customers that part of Procter & Gamble profits went to satanic cults.

According to the report, the defendant Amway distributors are "shocked" by the verdict and damages award.  Plainly, this is not a case in which the devil gets the hindmost.  (via Fark).  Snopes and UrbanLegends have more on this rather dated calumny.

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The Committee on Rules of Evidence has proposed a brand new hearsay exception (.pdf) for "Written, Adopted or Electronically Recorded Statement[s]."  The new exception -- if adopted by the Pennsylvania Supreme Court -- would except from exclusion as hearsay:

A Statement made at or near the time of the reported acts, events, or conditions, that was written by the declarant, adopted in writing by the declarant, or electronically recorded, provided that the statement is disclosed in a timely manner.

Proposed Rule 803.1(2).  As the Committee concedes, the proposed exception "has no exact counterpart in the Federal Rules of Evidence, or in prior Pennsylvania law."

A proposed comment to the new rule clarifies that the phrase "at or near the time of the reported events" is intended as a narrow window.  Because "[t]he rule is not intended to encourage the creation of statements as a substitute or supplement for the declarant's testimony at trial . . . a statement prepared weeks or more after the reported acts . . . should not generally be treated" as being covered by the exception.

What's the new rule all about?  It appears it is being proposed mainly to address witness intimidation issues that arise in criminal trials, where statements meeting the criteria of proposed Rule 803.1(2) are routinely taken by investigators.  Will the rule have any impact upon civil litigation?  Of course.  As the Committee points out, where a qualifying statement exists, the rule would permit a court to bypass inquiries that normally accompany the admission into evidence of prior written statements, such as inconsistency, insufficient recollection or the scope of a limiting instruction.

Parting Shot:  I'm not sure the new rule provides any increased utility as concerns the witness intimidation issue.  If a witness gives a statement to the police only to testify "I don't remember" at trial (an example offered by the Committee), the statement would be admisssible as a prior inconsistent statement under 803.1(1), no?  What's the point, then?  The Committee suggests it is "to simplify the process for admission of a valuable kind of evidence," but, really, how difficult is it to apply the prior inconsistent statement rule in such circumstances?  Am I missing something?

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Horst Realty manages the Village of Pineford, a rental community in Middletown Borough.  The Borough provides electric service to Borough residents, including residents of Pineford.  In an oversight most of us can identify with, Horst Realty mailed its roughly $124,000 September electric bill payment with insufficient postage.  Because the Borough ultimately received the payment four days late, it assessed Horst Realty a late fee to the tune of about $12,000 and threatened to cut off all electricity to Pineford if the fee was not immediately paid.  Although it reluctantly paid the fee to keep the power on, Horst was not amused.  Instead, the company retained Barley attorney Charles Haws to file suit under the Pennsylvania Utilities Service Tenants Rights Act ("PUSTRA").  It is Horst's position that the ordinance allowing Middleton to charge such late fees is illegal:

[t]he $12,000 doesn't have any reasonable relationship to the costs incurred by the borough due to the lateness of the payment.

Horst further alleges Middletown violated the PUSTRA by failing to provide Pineford residents with notice that they faced possible termination of electrical service.  We'll provides updates on this litigation as events warrant.

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On March 2, the Court of Common Pleas for Monroe County issued a decision dismissing, on Preliminary Objections, an employment-related privacy case for failure to state a claim.  In Adamski v. Johnson, 80 D. & C. 4th 69, an employee sued her employer for invasion of privacy.  In a nutshell, the employee was going to have a surgery but, when her employer asked what type, the employee refused to answer.  Curiosity having been aroused, the employer allegedly "asked [employee's] fellow workers what surgery she was scheduled to receive, 'using the power of the employment relationship to force, coerce and intimidate' the[] employees to disclose [the] information."  The employee further alleged that, not only did the employer learn the concealed information, he also discussed it with others.  Of all the nerve, right? 

Naturally, litigation ensued.

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In the wake of the Enron/Worldcom/Tyco/etc. fiascos, Congress got about the work of reforming the regulation of corporate accounting and reporting practices.  The result is the now well-known Sarbanes-Oxley Act (full text .pdf) (here's a summary).  By way of example only, Sarbanes-Oxley requires:

• [T]hat public companies evaluate and disclose the effectiveness of their internal controls as they relate to financial reporting, and that independent auditors for such companies "attest" (i.e., agree, or qualify) to such disclosure
• Certification of financial reports by chief executive officers and chief financial officers
• Independence, including outright bans on certain types of work for audit clients and pre-certification by the company's Audit Committee of all other non-audit work
• [T]hat companies listed on stock exchanges have fully independent audit committees that oversee the relationship between the company and its auditor

Berkshire-Hathaway spent $24 million on auditing this year, a figure he says would have been closer to $10 million without Sarbanes-Oxley.

Based on Buffett's experience, then, Sarbanes-Oxley imposes a roughly 150% increase in auditing costs.  Granted, Berkshire Hathaway is hardly representative of most other public companies and its substantial investment operations may contribute to its enormous auditing-related compliance cost.  Nevertheless, if a public company -- no matter its size -- hasn't experienced a significant uptick in auditing costs under the Sarbanes-Oxley regime, the company might question whether it is employing best practices when it comes to the nitty gritty of compliance.  With substantial civil and criminal penalties available for violators, Sarbanes-Oxley is not to be trifled with.

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If you are anything like me, when you hear the phrase "custody battle" you first think of two people who used to love each other now locked in a grim struggle over children and, occasionally, pets.  True, but only so far as it goes.  The Superior Court (.pdf) has reminded us that custody battles can also arise in connection with disposition of the dead -- in this case, cremated remains:

The Superior Court has ruled that trial courts have the authority to order the division of cremated remains where the loved ones are in a dispute, in what appeared to be an issue of first impression for the court.

But in the case over the disposition of a divorcing couple’s deceased son’s remains, the court found that the Court of Common Pleas of Schuylkill County had abused its discretion in ordering the division of ashes in Kulp v. Kulp.

As a result, the court remanded the case back to the trial court.

“Given the extremely sensitive nature of this issue, and husband’s opposition to division of the remains, we conclude that the trial court abused its discretion in using its equitable powers to override the desires of one of the next of kin as to the division of son’s remains,” Judge John L. Musmanno wrote for the panel.

. . .

When the trial court ordered that the ashes be placed in two separate urns with each party keeping their urn at the place of their choosing, David Kulp Jr. appealed to the Superior Court.

Hmmm.  Could there be a more clear cut candidate for application of the maxim "Equity is not for the squeamish?"  (h/t How Appealing).  And don't think for a minute this is the only custody battle involving the Dead.  It is not.

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No self-respecting blawg should consider itself complete without first addressing the Lost Maxims of Equity.  In 2002, Eugene Volokh, an unprepossessing UCLA law professor and legal blogger of rather modest esteem, re-discovered nine lost maxims to round out the body of pithy sayings, that, in the aggregate, define law's weak sister, Equity.  See 52 J. of Legal Educ. 619 (2002).

A few of my favorites:

Equity Delights in a Good Practical Joke
Equity, Schmequity
Equity is a Mean Drunk

And, finally, so many cases cry out for strict application of the lost maxim "Equity Abhors a Nudnik," it's a wonder the maxim was ever lost. 

While we're dealing with the lighter side of the law, my friend Dan Solove (GWU Professor of Law, author of The Digital Person and Lancaster County native), offers a humorous rumination on his most widely-read published work.  It's an old piece in one sense but fresh as daisy in every other.

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Lancaster County Coroner, Gary Kirchner, stands accused of giving reporters confidential password information to a county website where official files are maintained.  Although Kirchner was recently charged with unlawful use of a computer and conspiracy, no charges were brought against the reporters believed to have accessed the website.

"It became clear during the investigation that the reporters had been authorized, indeed, invited by the coroner to use his password and user name," said George Werner, attorney for Lancaster Newspapers Inc., publisher of the Intelligencer Journal, Lancaster New Era and Sunday News.

Congratulations to George for successfully navigating these tricky waters on behalf of Lancaster Newspapers Inc.  Last fall, George was instrumental in successfully resisting the Attorney General's efforts to force Lancaster Newspapers' reporters to turn over their computer harddrives in connection with the ongoing investigation.  Well done all 'round.

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