Blawgletter®

Fees for Defending Arbitration Award?

Say you win an arbitration.  The state law you based your claim on calls for the winner to get his or her attorneys' fees.  The loser goes to federal court to vacate the award but loses that gambit, too.  Can you recover your fees for fighting the effort to overturn the arbitration outcome?

Yes, the First Circuit held today under Massachusetts law.  The court ruled that the district court abused its discretion to award fees failing to exercise it.    Janney Montgomery Scott LLC v. Tobin, No. 08-1863 (1st Cir. July 9, 2009).

 Bali Hai will find you.

Quote of the Day: Harvard Law Record

Dear Ms./Mr. My Firm is Too Good For You:

Thank you very much for your recent letter explaining that, despite the fact I am a wonderful person and will likely win the Nobel Prize for Law someday, you were not able to offer me a callback interview and/or a position as a Summer Associate. I regret to inform you that I am unable to accept your refusal to offer me a position as a Summer Associate/callback interview.

This year I have received an unusually large number of rejection letters, making it impossible for me to accept them all. Despite your outstanding experience in rejecting applicants, your refusal does not meet my needs at this time.

Therefore, I shall initiate employment with your firm in May of 2006. Best of luck in rejecting future candidates.

Harvard Law Record, Oct. 13, 2005.

WSJ on Antitrust (Update)

Something, plainly, has roused the worry of dominant firms.  Witness today's WSJ -- that stalwart of bigness and friend of the status quo -- which featured these headlines:

Section 2 of the Sherman Act: Back from the Nearly Dead

Deals of the Day: Obama's Aggressive Antitrust Stance

Video: Day Ahead: Telecoms Under Antitrust Scrutiny

Tech Today: Teen iPhone Hackers, Antitrust Threat for Telecoms, More

Telecoms Face Antitrust Threat

U.S. Revives Section 2 of Antitrust Act

Sports Monopolies Raise Prices for Fans, Limit Opportunities

Blawgletter can't recall a friendly word for the Sherman Act in the pages of the WSJ.  Ever.  Indeed, one of its columnists rails against the criminality of price-fixing, urging that conspiracies that aim to thwart competition more often than not promote it.

But still -- look at all that WSJ ink.  Do the facts justify the dread?

 

UPDATE:  Oops, he -- the columnist -- did it again.

 

 Our feed got lost in the game.

Antitrust Division Presumes "Reverse Payment" Deals Unlawful (Update)

The Antitrust Division at the U.S. Department of Justice yesterday filed a brief that the Second Circuit asked for in a case involving "reverse payments" to settle a patent lawsuit.  RPs let a brand name drug-maker delay or limit competition by a maker of a generic copycat.  The brand name owner -- who also holds a patent that relates somehow to the drug -- sues the mimic for patent infringement but then settles by agreeing to pay the imitator!  Hence the phrase "reverse payment". 

The brief summarized its main thrust this way:

Private agreements that include reverse payments are properly evaluated under the antitrust rule of reason, which takes into account efficiency-related justifications as well as anticompetitive potential. The anticompetitive potential of reverse payments in the Hatch-Waxman context in exchange for the alleged infringer's agreement not to compete and to eschew any challenge to the patent is sufficiently clear that such agreements should be treated as presumptively unlawful under Section 1 of the Sherman Act. Defendants may rebut that presumption by providing a reasonable explanation of the payment, so that there is no reason to find that the settlement does not provide a degree of competition reasonably consistent with the parties' contemporaneous evaluations of their prospects of litigation success.

The brief went on to say that the test doesn't require proof of patent invalidity.  The very fact of the reverse payments raises a presumption of illegality.

Rebut that.

Seventh Circuit Swats Rule 23(f) Appeal; the Class Stands

Today the Seventh Circuit deflected a barrage of darts from an order that certified class treatment of Commodity Exchange Act claims.

The plaintiffs alleged that Pacific Investment Management Company drove up the price of 10-year U.S. Treasury notes.  PIMCO did the deed by buying more than 40 percent of the note inventory.  The cornering strategy hurt the plaintiffs because they'd speculated on the price of the notes -- guessing it would fall -- by selling them short.  The plaintiffs lost $600 million, they said, when they covered the difference between the "short" price -- $100, say -- and the market price on the delivery date -- $150 or so, perhaps.

PIMCO could hardly contain its outrage at the district court's decision to grant class certification.  It insisted that plaintiffs had to, but failed to, show that all class members sustained injury.  Their Honors didn't agree:

Pressed at argument, PIMCO's counsel retreated, conceded or at least seemed to concede that the issue was not jurisdictional, and clarified that his argument was only that the class members lacked "statutory standing."  Then he took back his concession, arguing that if any class member would have no jurisdiction over that class member, who would therefore not be bound by any judgment or settlement and so could bring his own suit for damages.  That is to say that if a plaintiff loses his case, this shows that he had no standing to sue and therefore can start over.  That would be an absurd result, and PIMCO need not fear it.

Kohen v. Pacific Investment Management Co. LLC, No. 08-1075, slip op. at 8-9 (7th Cir. July 7, 2009) (citations, including one involving ex-Governor Blagojevich, omitted).

The court also rebuffed PIMCO's "repeated, indeed obsessive, citations to the Supreme Court's decision in Dura Pharmaceuticals, Inc. v. Broudo, 544 U.S. 336 (2005), a case that does not involve class certification", noting that the tack "suggests desparation."  Id. at 12.

Nor did the panel favor PIMCO's point that the interests of class members could lead them to prefer different arguments about when the effects of PIMCO's illegal conduct ended.  Blawgletter doesn't understand the point and so can only say we agree with the outcome.

Our feed can explain it to you but can't understand it for you.