OTHERWISE: Candor to the tribunal: SEC, Citigroup and Judge Rakoff

OTHERWISE: Candor to the tribunal: SEC, Citigroup and Judge Rakoff:

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Fund will be created to reimburse plaintiff attorneys working on BP litigation | NOLA.com

Fund will be created to reimburse plaintiff attorneys working on BP litigation | NOLA.com:

U.S. District Judge Carl Barbier has granted a hotly contested motion to create a fund that could eventually reimburse plaintiff attorneys for their work in the Gulf of Mexico oil spill litigation over the objections of several parties to the case.

Barbier's order does not actually award "common benefit fees," or the amount of money that the committee of plaintiff attorneys pressing the case for the benefit of all claimants would get to compensate them for their time and expenses.
Rather, it sets up a fund that would ultimately pay such fees, should they be awarded, and requires defendants and states in the case to begin holding back a percentage of any settlements as contributions to the fund.

A percentage of settlements reached through the Gulf Coast Claims Facility, the $20 billion fund administered by Washington mediator Kenneth Feinberg, will also be required to be contributed to the fund.

The order is HERE
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Feinberg Adjusts Payment Methodology to Fishermen Due to Uncertainty : Louisiana Seafood News

BP's claim administrator Kenneth Feinberg has doubled the offer of permanent damages offered in the Gulf Oil spill cases: from 2 times the 2010 loss to four times the 2010 season loss. Louisiana Seafood News - GWC

Feinberg Adjusts Payment Methodology to Fishermen Due to Uncertainty : Louisiana Seafood News:

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Doing the Math on Louisiana’s 2011 Shrimp Season : Louisiana Seafood News

Doing the Math on Louisiana’s 2011 Shrimp Season : Louisiana Seafood News:

A look at the numbers from a shrimp boat captain's perspective. - GWC

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Bullet train crash: 54 punished - china Daily

Wenzhou train crash 'due to designfailures'|Society|chinadaily.com.cn:

"BEIJING - Design flaws, sloppy management and the mishandling of a lightning strike that crippled equipment were behind a bullet train crash in July that killed 40 people, an investigation has found.

A total of 54 people, held accountable for the fatal crash, will face punishment, an executive meeting of the State Council said on Wednesday.

On July 23 a bullet train rammed into another stranded on the track after being hit by lightning near the coastal city of Wenzhou in East China's Zhejiang province.

There were "serious design flaws" in the control equipment used at Wenzhou South Railway Station, the report released on Wednesday said.

The equipment was designed by the Beijing National Railway Research and Design Institute of Signals and Communication, a subsidiary of the China Railway Signal and Communication Corp.

Investigators believe that the design defects occurred because of the institute's sloppy management and the corporation's failure to fulfill its duty."

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Record $285 ml fee award is Strine's message to plaintiffs' bar

From the Chancery Court in Delaware the message is: bring hard cases, do well, get paid well. - GWC

Record $285 ml fee award is Strine's message to plaintiffs' bar:

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As Second Circuit Holds Citi Case, Rakoff Slams the SEC - Law Blog - WSJ

The SEC has asked the 2d Circuit Court of Appeals for a stay pending appeal from the rejection of its settlement agreement with Citigroup Global Securities, and apparently has gotten it - at least until January 17.   District Judge Jed Rakoff - who rejected the proposed settlement - ordered SEC to proceed to a June trial, consolidating the action with an SEC negligence claim against individual - based on the same occurrences.

Rakoff denied the stay and explained that the SEC cannot show irreparable harm from being forced to proceed to trial in a case it had agreed to settle. Joe Palazzolo explains and provides links to key documents. - GWC

As Second Circuit Holds Citi Case, Rakoff Slams the SEC - Law Blog - WSJ:

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Judges Cancel Case Assignment Experiment - Law Blog - WSJ

Is this the `Rakoff Rule'?

OTHERWISE: Judges Cancel Case Assignment Experiment - Law Blog - WSJ:

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Judges Cancel Case Assignment Experiment - Law Blog - WSJ

Is this the `Rakoff Rule'?

OTHERWISE: Judges Cancel Case Assignment Experiment - Law Blog - WSJ:

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Federal judge blocks portions of South Carolina immigration law - Jurist

Confederate flag over So.Carolina capitol

[JURIST] A judge for the US District Court for the District of South Carolina [official website] on Thursday blocked [order, PDF] portions of South Carolina's controversialimmigration law [SB 20]. The legislation requires police officers to check a suspect's immigration status during a lawful stop, seizure, detention or arrest if they believe the person may be in the country illegally and requires businesses to participate in the E-Verify [official website] system.

 

It was challenged by a coalition of civil rights groupsand the US Department of Justice (DOJ) [JURIST reports], which both argued that it is unconstitutional, invites racial profiling and interferes with federal law. Judge Richard Gergel blocked the provision that requires police to check immigration status, finding, "[t]his state-mandated scrutiny is without consideration of federal enforcement priorities and unquestionably vastly expands the persons targeted for immigration enforcement action. He also blocked the provision that outlaws harboring or transporting an illegal immigrant, finding a likelihood of irreparable harm. The law was set to take effect January 1.JURIST - Paper Chase: Federal judge blocks portions of South Carolina immigration law:

The New York Times report is HERE
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Firm hired to evaluate Ken Feinberg's oil spill claims process | NOLA.com

Despite the campaign rhetoric that the Obama administration is committed to excessive regulation, it finds itself without an established mechanism to govern or assess the response by BP to its statutory obligation to pay compensation for both interim and permanent losses to those who suffered losses due to the Gulf oil spill which damaged natural resources and led to widespread economic dislocations.   The Times-Picayune reports: - GWC

The U.S. Department of Justice on Wednesday selected a New York consulting and investigations firm to evaluate Kenneth Feinberg's oil spill claims process. Assistant U.S. Attorney General Thomas Perrelli sent a letter Wednesday to BDO Consulting's offices in New York and Houston urging the firm to immediately begin its review and report its findings by March.

Houma Courier archive, via APKenneth Feinberg at a meeting in Lafourche Parish in March.

"Where it has performed well, the people of the Gulf deserve to know that they have been fairly served," Perrelli wrote, referring to the Feinberg-run Gulf Coast Claims Facility. "Where it has fallen short, we must take appropriate steps to ensure that victims of the oil spill are fairly treated and properly compensated."

Feinberg has welcomed the independent evaluation and already agreed to pay for it. That caused Perrelli to warn BDO that it must stay "fully independent" from the GCCF. "While Mr. Feinberg has agreed that the GCCF will pay the costs associated with the review, your work will be overseen and directed by the Department of Justice," the letter said.

Firm hired to evaluate Ken Feinberg's oil spill claims process | NOLA.com:


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PrawfsBlawg: Cavazos v Smith I

PrawfsBlawg: Cavazos v Smith I:

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Law Blog Expert Panel: Ex-Federal Judges on Rakoff's Rejection of Citi Pact - Law Blog - WSJ

Three judges weigh in on Judge Rakoff's rejection of the settlement between SEC and Citigroup.  Following the WSJ's idea of balance they are: 1) Wrong.  2) Understandable but problematic (better left to legislative processes).  3) Within the judge's discretion under the Federal Rules of Civil Procedure, R. 23.
Law Blog Expert Panel: Ex-Federal Judges on Rakoff's Rejection of Citi Pact - Law Blog - WSJ:
A fourth approach is the laudatory one taken by the New Jersey Law Journal Editorial Board:

The Securities and Exchange Commission is tasked with the responsibility to investigate unlawful conduct of corporate America. If it is determined that regulated businesses have engaged in unlawful activity that has caused or contributed to the current depressed national economy, then they have a job to do.On Oct. 19, the SEC filed two lawsuits in the Southern District of New York: one accusing Citigroup Global Markets Inc. of a substantial securities fraud and the other accusing an identified employee of involvement in that fraud. Based on four years of accumulated information, the SEC asserted that in early 2007, when the market for mortgage-backed securities was beginning to weaken, Citigroup created a billion-dollar fund that allowed it to dump questionable assets on misinformed investors by representing that the fund's assets were attractive investments. Citigroup included within the portfolio a substantial percentage of negatively projected assets and had taken a short position in the very assets that it helped select, the SEC contended.

While the suit against Citigroup alleged negligence, the suit against the individual employee set forth that Citigroup actually knew that placing the liabilities of the fund would be difficult if it disclosed to potential investors its intention to use the fund to short a hand-picked set of poorly rated assets.Contemporaneously with the filing of those complaints, the SEC presented to District Judge Jed Rakoff a proposed consent judgment, represented to be the settlement between the SEC and Citigroup, not the individual employee.

The economic terms of the settlement were that Citigroup was to disgorge $160 million in net profits realized from the transaction, plus $30 million in interest, and to pay a civil penalty of $95 million, for a total of $285 million. When put into perspective, this sum of money is very small. Citigroup made a $3.8 billion profit in the third quarter of 2011 alone. The investors, meanwhile, lost more than $700 million.

The settlement provided that Citigroup would neither admit nor deny any of the allegations of the complaint and was enjoined from violating the securities law in the future.Private parties have the right to enter into settlement agreements, whether or not they are fair and reasonable. But Rakoff refused to approve this settlement between a governmental agency and a regulated corporation without being provided any proven or admitted facts upon which he could exercise some independent judgment.***

It appears to have been the government's and Citigroup's intention to walk into court and have their agreement rubber-stamped. Rakoff recognized that substantial deference was due the SEC but correctly observed that he had to exercise independent judgment to determine the settlement to be fair, reasonable, adequate and in the public interest. The government took the extraordinary position that the SEC is the sole determiner of what is in the public interest regarding consent judgments in its cases. But as Rakoff pointed out, that is not the law.

Rakoff needed some knowledge of the underlying facts to avoid being a "mere handmaiden to a settlement privately negotiated on the basis of unknown facts, while the public is deprived of ever knowing the truth in a matter of obvious public importance." He was critical of a consent agreement wherein there was no admission of the underlying allegations. Not only did the settlement bring no benefit to the defrauded investors; the consent judgment would have absolutely no evidentiary value in any claim or suit an investor might thereafter lodge.

Many judges would have acquiesced and approved the settlement. The SEC claims it is devoted to the protection of the investors as well as to assisting them in the recovery of their losses. That appeared a fiction to Rakoff, who stated that "in any case like this that touches on the transparency of financial markets whose gyrations have so depressed our economy and debilitated our lives, there is an overriding public interest in knowing the truth." Instead of approving the consent judgment, he consolidated both cases for trial next July.Rakoff's decision underscores the need for an independent judiciary. Our compliments to the court.

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The National Academy of Sciences has issued its Report on the Deepwater Horizon BP Oil Spill: Macondo Well-Deepwater Horizon Blowout:Lessons for Offshore Drilling Safety 
Authored by the Committee for Analysis of Causes of the Deepwater Horizon Explosion, Fire, and Oil Spill to Identify Measures to Prevent Similar Accidents to the Future -  National Academy of Engineering and National Research Council, it concludes that their were failures across the board.  The press release accompanying issuance declares:

Despite challenging geological conditions, alternative techniques and processes were available that could have been used to prepare the exploratory Macondo well safely for "temporary abandonment" -- sealing it until the necessary infrastructure could be installed to support hydrocarbon production, the report says. In addition, several signs of an impending blowout were missed by management and crew, resulting in a failure to take action in a timely manner. And despite numerous past warnings of potential failures of blowout preventer (BOP) systems, both industry and regulators had a "misplaced trust" in the ability of these systems to act as fail-safe mechanisms in the event of a well blowout.

BOP systems commonly in use -- including the system used by the Deepwater Horizon -- are neither designed nor tested to operate in the dynamic conditions that occurred during the accident. BOP systems should be redesigned, rigorously tested, and maintained to operate reliably, the report says. Proper training in the use of these systems in the event of an emergency is also essential. And while BOP systems are being improved, industry should ensure timely access to demonstrated capping and containment systems that can be rapidly deployed during a future blowout.  

 BP did not assert the $75 million cap on damages in the Oil Pollution Act - because it elected not to contest the issue of whether it had been reckless.  This report suggests that decision was wise.

S 1400 the Gulf Coast Restore Act

from a fact sheet supporting S.1400.  Introduced by Sen. Mary Landrieu (D-LA), in July 2011 the Resources and Ecosystems Sustainability, Tourist Opportunities, and Revived Economies of the Gulf Coast States Act of 2011 (RESTORE Act) is described below:

CRS Summary
Senate Report

What the RESTORE Act Does


Under current law, BP and others responsible
for last year’s oil spill will pay a Clean Water
Act (CWA) penalty for each barrel of oil spilled
into the Gulf.
Without action from Congress, those penalties
will go to unrelated federal spending, instead
of repairing the area damaged by the spill.
BP’s fines belong in the Gulf, where the
damage was done.
Two official reports on the spill – one
conducted by Navy Secretary and former
Mississippi Governor Ray Mabus, the other
from the bipartisan National Commission on
the Deepwater Horizon Oil Spill and Offshore
Drilling – recommended that CWA penalties
be dedicated to Gulf Coast restoration.

The RESTORE Act creates an essential
framework to manage and finance the
Gulf Coast recovery. Using 80% of the CWA
penalties from the Gulf oil disaster, the
RESTORE Act establishes a trust account to
restore both the economic and environmental
health of the Gulf Coast.


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S.E.C. Sues 6 Former Top Fannie and Freddie Executives - NYTimes.com

S.E.C. Sues 6 Former Top Fannie and Freddie Executives - NYTimes.com: "The Securities and Exchange Commission has brought civil actions against six former top executives at the mortgage giants Fannie Mae and Freddie Mac, saying that the executives did not adequately disclose their firms’ exposure to risky mortgages in the run-up to the financial crisis."
The complaints SEC v. Mudd, Dellavecchia and Lund

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BP to Get $250 Million in Gulf of Mexico Oil Spill Settlement - NYTimes.com

$250 million settlement in design defect claim by BP against the designer of the blowout preventer. - GWC
BP to Get $250 Million in Gulf of Mexico Oil Spill Settlement - NYTimes.com: "LONDON — The British oil company BP said Friday that Cameron International, one of its contractors in the oil well that burst last year in the Gulf of Mexico, had agreed to pay $250 million to settle claims related to the ensuing spill.
Cameron, based in Houston, designed and manufactured the so-called blowout preventer on the drilling rig, which failed to stop the oil from spilling. The settlement, which is BP’s fourth so far with companies that worked on some parts of the well, was not an admission of liability by either party, BP said."
BP and others in the industry pressed to cut safety testing.  Design defect issues are discussed in this article from the Christian Science Monitor.

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Deserted - death on the border

SEC files Notice of Appeal from Rakoff Rejection of Settlement

Robert Khuzami,  Director of Enforcement at the SEC issued today a statement and notice of appeal from the decision of Judge Jed Rakoff rejecting the SEC's proposed settlement with Citigroup.  The SEC Director said, in part:

The court’s new standard is at odds with decades of court decisions that have upheld similar settlements by federal and state agencies across the country. In fact, courts have routinely approved settlements in which a defendant does not admit or even expressly denies liability, exactly because of the benefits that settlements provide.

Arizona Sheriff’s Office Unfairly Targeted Latinos, Justice Department Says - NYTimes.com

Sheriff Joe Arpaio

Arizona Sheriff’s Office Unfairly Targeted Latinos, Justice Department Says - NYTimes.com:
by Marc Lacey
We have peeled the onion to its core,” said Thomas E. Perez, the assistant attorney general for civil rights...
"After an investigation that lasted more than two years, the civil rights division of the Justice Department said the sheriff’s office has “a pervasive culture of discriminatory bias against Latinos” that “reaches the highest levels of the agency.” The department interfered with the inquiry, the government said, prompting a lawsuit that eventually led Mr. Arpaio and his deputies to cooperate."

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Human Rights Watch accuses Alabama of violating constitution | Law | guardian.co.uk

Human Rights Watch accuses Alabama of violating constitution | Law | guardian.co.uk:

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Arizona v. United States : SCOTUSblog

The Supreme Court yesterday granted Arizona's petition for certification of the Ninth Circuit ruling sharply limiting enforcement of the state's controversial law addressed to undocumented aliens.

Arizona v. United States : SCOTUSblog

The four provisions at issue are:

** A requirement that police in making any stop or arrest to try to determine the individual’s legal right to be in the U.S., if the officer has a “reasonable suspicion” of illegality. If arrested, the individual cannot be released until his legal status is verified by the federal government. That is the law’s Section 2(B).

** A provision making it a crime under state law for an individual to intentionally fail to obtain and carry legal immigrant papers with him while in Arizona (Section 3).

** A provision making it a misdemeanor for an undocumented immigrant to apply for a job, publicly solicit a job, or actually work in Arizona (Section 5[C]).

** And, a provision that allows police to arrest without a warrant any person for whom the officer has “probable cause to believe” that the individual has committed any crime, anywhere, that would make that individual subject to being deported (Section 6).

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OTHERWISE: Newt Gingrich - overturning Marbury v. Madison and judicial review

OTHERWISE: Newt Gingrich - overturning Marbury v. Madison and judicial review:

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Health care schedule set : SCOTUSblog

Health care schedule set : SCOTUSblog:

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Derek Boogaard - A Boy Learns to Brawl - NYTimes.com

To what level of violence do hockey players consent? in high school? college? the NHL? international play? Should it matter?  The compelling story of Dereke Boogard - an "enforcer" on NHL teams, who died of a drug overdose with evidence of brain damage due to head trauma. - GWC

Derek Boogaard - A Boy Learns to Brawl - NYTimes.com:

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The Toxic Legacy of Raybestos-Manhattan Continues

Workers' Compensation: The Toxic Legacy of Raybestos-Manhattan Continues: "The epic toxic legacy of asbestos brake manufacturer, Raybestos-Manhattan Inc., a/k/a Manhattan Rubber and Raymark, continues as waste from its former plants plagues present communities. Raybestos had several production plants in the US including Connecticut, South Carolina and Passaic, New Jersey.

Asbestos, labeled the "miracle mineral," was a known carcinogen and linked to: asbestosis, lung cancer and mesothelioma, a rare and fatal cancer. The company with knowledge of that information, as revealed in the famous "Sumner Simpson papers," ignored the available science and continued to manufacturer asbestos products including: bowling balls, radiator hoses and brake linings, as well as other products.

While the Raybestos is no longer producing asbestos products, the plants sites continue to be a problem to the communities as a toxic legacy continues."

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