Kentuckians Fed Up With a Fungus Sue Whiskey Makers - NYTimes.com

Baudoinia, a newly identified type of fungus. Is it a nuisance?

Kentuckians Fed Up With a Fungus Sue Whiskey Makers - NYTimes.com:

In 2007, researchers published a scientific study about Baudoinia, a newly identified type of fungus. Naturally occurring, Baudoinia germinates on ethanol, the colorless alcohol that can evaporate during fermentation, making the area around whiskey-aging warehouses a prime breeding ground.

News of this whiskey fungus soon rippled across spirit-producing communities from Cognac to Canada — a mystery solved, and an opportunity found.

In June, home and business owners in and around Louisville, part of the Kentucky Bourbon Trail, filed class-action lawsuits in federal and circuit courts against five major distilleries, charging property damage and negligence. In September, with the help of lawyers in Britain, the plaintiffs’ Louisville lawyer, William F. McMurry, plans to bring a similar suit in Scotland, where the fungus is so rampant that it almost seems like part of the architecture.

"Some people say the distilleries were there before you were."

“Every distillery that we’ve tested has had it, as far as I know,” said James Scott, the University of Toronto mycologist who helped identify and name Baudoinia. So far, there is no evidence that whiskey fungus, which has lived in the environment for eons (Dr. Scott estimated it developed in the Cretaceous period), causes health problems in humans or animals, though it may impede plant growth by obstructing light when it covers leaves.

Mostly, though, it can just look nasty.

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Citigroup in $590 Million Settlement of Subprime Lawsuit - NYTimes.com

No liability admitted, of course. - GWC
Citigroup in $590 Million Settlement of Subprime Lawsuit - NYTimes.com: "Citigroup said on Wednesday that it had agreed to pay $590 million to settle a class action lawsuit brought by shareholders who contended that they had been misled about the bank’s exposure to subprime mortgage debt on the eve of the financial crisis.

The shareholder lawsuit, originally filed in November 2007, alleged that former officers and directors of Citigroup had “concealed the company’s failure to write down impaired securities containing subprime debt” at a time when the collapse in the mortgage market made it apparent that banks including Citi would be adversely impacted. In late 2007, Citigroup wrote down billions of dollars on collateralized debt obligations tied to subprime debt, and reported a fourth-quarter loss of $9.83 billion that year."
Update: More details from Bloomberg

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Before Gunfire in Colorado Theater, Hints of ‘Bad News’ About James Holmes - NYTimes.com

James Holmes

Prof. Lynne Fenton, M.D.

 James Holmes sent a package to his psychiatrist not long before the dreadful shooting at the movie theater. His defense lawyers have demanded its return as a privileged communication between patient and physician.  Some assert that it reported his plans.  The police report that four months before the June 12 events he said he would kill people "when his life is over".  State laws often  require reporting a "serious" threat to others, as this article from the American Journal of Psychiatry discusses..  In Colorado Colo. Rev. Stat. § 13-21-117 provides that confidentiality of communications shall be maintained 

except where the patient has communicated to the mental health care provider a serious threat of imminent physical violence against a specific person or persons. When there is a duty to warn and protect under the circumstances specified above, the duty shall be discharged by the mental health care provider making reasonable and timely efforts to notify any person or persons specifically threatened, as well as notifying an appropriate law enforcement agency or by taking other appropriate action including, but not limited to, hospitalizing the patient.

Holmes doctor notified a police "threat assessment team". Did James Holmes's psychiatrist Dr. Fenton do enough?  Is there a supportable claim against her by the victims of her patient who killed 12 and wounded 58  in the Dark Knight rises movie theater massacre?  What about the police who apparently inaccurately assessed the threat? - GWC
Before Gunfire in Colorado Theater, Hints of ‘Bad News’ About James Holmes - NYTimes.com: by Erica Goode, et al.

 "At one point, his psychiatrist, Dr. Lynne Fenton, grew concerned enough that she alerted at least one member of the university’s threat assessment team that he might be dangerous, an official with knowledge of the investigation said, and asked the campus police to find out if he had a criminal record. He did not. But the official said that nothing Mr. Holmes disclosed to Dr. Fenton rose to the threshold set by Colorado law to hospitalize someone involuntarily."

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Graphic Tobacco Warnings Stricken - Supreme Court Next Stop

Taking freedom too far, the United States Court of Appeals for the D.C. Circuit handed R.J. Reynolds a major victory.  The FDA, despite statutory authority, may not compel cigarette packages to carry graphic warnings.  You've seen them: the man blowing smoke through the hole in his throat, etc.  The majority opinion in R.J. Reynolds v. FDA embraces the view of the five tobacco companies who assail the Family Smoking Prevention and Tobacco Control Act (2009) arguing:

“[B]y effectively shouting well-understood information to consumers,” they explain, “FDA is communicating an ideological message, a point of view on how people should live their lives: that the risks from smoking outweigh the pleasure that smokers derive from it, and that smokers make bad personal decisions, and should stop smoking.”  In effect, the graphic images are not warnings, but admonitions: “[D]on’t buy or use this product.”

Viewing the images as compelled speech the majority declares

These inflammatory images and the provocatively-named hotline cannot rationally be viewed as pure attempts to convey information to consumers.  They are unabashed attempts to evoke emotion (and perhaps embarrassment) and browbeat consumers into quitting.

 Such"speech" cannot be compelled under the First Amendment in the two judges' view.  The dissent embraces the "less exacting scrutiny" standard of  Zauderer v. Office of Disciplinary Council of the Supreme Court of Ohio, 471 U.S. 626, 650–51 (1985):

Because the warning labels present factually accurate information and address misleading commercial speech, as in the district court, the tobacco companies sought injunctive relief and challenged the label warning requirement under the First Amendment and the Administrative Procedure Act (“APA”). ... Zauderer scrutiny applies, and the government need show only that the warning label requirement is reasonably related to its stated and substantial interest in effectively conveying this information to consumers.

But in Discount Tobacco City v. U.S.  the United States Court of Appeals for the 6th Circuit has upheld (2-1)  the Act's graphical requirements at 15 U.S.C. 1333 because it compels only statements of fact:

whether a disclosure is scrutinized under Zauderer turns on whether the disclosure conveys factual information or an opinion, not on whether the disclosure emotionally affects its audience or incites controversy. Because graphics can present factual information regarding the health risks of using tobacco, because this information alleviates the possibility of consumer confusion, the Act’s graphic-warning requirement is constitutional under Zauderer.

Because there is now a firmly developed conflict between Circuit Courts of Appeals, the Supreme Court, in exercise of its supervisory authority.  The Act preempts all state warning requirements.

Pro football player injury covered by workers compensation: Maryland Court of Appeals

Thomas Tupa, in his playing days

Overturning thirty year old precedent the Court of Appeals of Maryland has ruled that former Redskins punter Thomas Tupa is entitled to workers compensation.  The state high court, in Pro-Football, Inc/ t/a Washington Redskins v. Tupa overruled a 1983 decision in Rowe v. Baltimore Colts in which it had held that an injury must be unusual to be compensable.


The Rowe court had written 

“On the other hand, a professional football player is engaged in an occupation in which physical contact with others is not only expected, commonplace, and usual, but is a requirement.”

The Court in Tupa's case  found no support for that requirement in the statute.  Judge John Eldridge embraced the scathing language of the treatise Larson's workers compensation, which rejects the minority rule that professional footballers' injuries are not covered by workers compensation:

“And why is doing the job itself not covered? Because everyone
knows it is fraught with danger.  As well, then, tell the coal miner
– whose occupation is far more dangerous – that he or she is
covered, so long as the miner does not go down into the mine . . . .
The books are full of cases in which compensation is denied a
covered worker because he or she was not doing the job at the time.
But never before because he or she was doing the job....To say that
football injuries are not accidental because of the probability of
injury is, if one looks more closely, no more than to say that any
activity with a high risk factor should be ruled noncompensable.”

The case is a modest step forward.  Other questions remain for sport: why aren't college scholarship athletes considered employees entitled to workers compensation?  And should professional players be able to sue for brain injuries on the ground that they were defrauded by their employers and the NFL's suppression of data about the risks of traumatic brain injury?

Notice of Proposed Rulemaking: Medicare Secondary Payer and Future Medicals

Advance Notice of Proposed Rulemaking, June 15, 2012
Medicare Programs: Medicare Secondary Payer and Future Medicals:
A. CMS Proposed General Rule

    If an individual or Medicare beneficiary obtains a ``settlement'' 
and has received, reasonably anticipates receiving, or should have 
reasonably anticipated receiving Medicare covered and otherwise 
reimbursable items and services after the date of ``settlement,'' he or 
she is required to satisfy Medicare's interest with respect to ``future 
medicals'' related to his or her ``settlement'' using any one of the 
following options outlined later in this ANPRM.

Public comments

American Association for Justice (plaintiffs' lawyers organization) opposes the proposed  rule:

AAJ Opposes CMS Proposed Rulemaking on Medicare Repayment System
Rulemaking would create further delay for seniors and severely sick or injured
Washington, DC—The American Association for Justice (AAJ) submitted comments to the Centers for Medicare and Medicaid Services (CMS) in opposition to the proposed rulemaking on future medical requirements in the Medicare Secondary Payer (MSP) system. MSP is a process to ensure Medicare is reimbursed for medical bills that are the responsibility of another party – such as an insurer or negligent party. The current proposal rulemaking would create further delays in the MSP system for both seniors and beneficiaries who are severely sick or injured.AAJ continues to support the Strengthening Medicare and Repaying Taxpayers (SMART) Act, which was introduced in the U.S. House of Representatives (H.R. 1063) on March 14, 2011 and currently has 132 bipartisan cosponsors.  The Senate companion bill (S. 1718) was introduced on October 18, 2011 and currently has 19 bipartisan cosponsors. AAJ released a MSP primer detailing the lengthy delays and inconsistencies of the current system, which can be found here.

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TTAB Affirms PTO Refusal to Register Patented Design

Trademark protection is forever, so it is important to police its boundaries.  Patenting a design increases one's chance of "acquiring distinctiveness" and therefore recognition in the market: your design's look signals the source to buyers.  But patents expire, and the purpose of utility patent law is to increase the public domain (that's why terms are limited).  And trademark law is intended to inform consumers and protect compeitive freedom.  So we don't want to let people do an end around the term limits and the pro-competitive purpose by registering their designs - which protects them so long as they continue to market it.  the Trademark Trial and Appeal Board discusses these issues lucidly in In Re Adams Mfg.  John L. Welch at TTABlog discusses the issues.--The TTABlog®: TTAB Affirms Functionality Refusal of Plastic Suction Cup Configuration:

A Way Around Morrison?: Dismissal Denied in Short-Sellers' State Court Suit Against Porsche : The D & O Diary

A Way Around Morrison?: Dismissal Denied in Short-Sellers' State Court Suit Against Porsche : The D & O Diary: "The U.S. Supreme Court’s decision in Morrison v. National Australia Bank presents significant obstacles for claimants who want to pursue securities claims against non-U.S. companies in the U.S courts, as the short sellers who tried to sue Porsche in the Southern District of New York found out—their prior federal court securities suit was dismissed on the basis of Morrison.   However, the short-sellers’ state court common law claims will now be going forward, as a result of a recent New York state court decision that may suggest one way that litigants may be able to avoid Morrison’s constraints."



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S.E.C. and Justice Dept. End Mortgage Investigations Into Goldman - NYTimes.com

Subprime CDO swaps criminal investigation ends.  Some things are outrageous and socially irresponsible but legal.  - GWC
S.E.C. and Justice Dept. End Mortgage Investigations Into Goldman - NYTimes.com:
by Ben Protess and Azam Ahmed

"Federal authorities ended two investigations into the actions of Goldman Sachs during the financial crisis, handing a quiet victory to the bank after years of public scrutiny.
In a statement late Thursday, the Justice Department said there was “not a viable basis to bring a criminal prosecution” against Goldman or its employees after a Congressional committee asked prosecutors to examine if the bank had been involved with any illegal acts related to several mortgage deals."

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The Court at the Olympics - Title IX and implied causes of action - Linda Greenhouse NYTimes.com

Linda Greenhouse does her characteristically nice job discussing the Supreme Court and Civil Rights Act Title IX jurisprudence: the body of decisions beginning with Cannon v. U. Chicago (1979) which allow women student athletes to bring suit for gender discrimination against their schools.  The Court there asked if Title IX's broad language implied a Congressional intent to allow a private right of action for failure to provide equal opportunities for women  to participate in school athletics.  Justice Stevens begins with four factors to glean intent where Congress is silent:

(1) whether the statute was enacted for the benefit of a special class of which the plaintiff is a member, (2) whether there is any indication of legislative intent to create a private remedy, (3) whether implication of such a remedy is consistent with the underlying purposes of the legislative scheme, and (4) whether implying a federal remedy is inappropriate because the subject matter involves an area basically of concern to the States.

The Court found that the similarity to the Civil Rights Act of 1964 (which did allow a private action) was key.  Title IX provides at 20 U.S.C. 1681:

"No person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving Federal financial assistance. . . . 

 Greenhouse points out that in Alexander v. Sandoval (2001) Justice Antonin Scalia announced the end of an expansionary era: rejecting a claimed private right of action implied in Title VI [barring race and national origina discrimination in any federally-aided program].  Like title IX it makes no express provision for a private right of action but authorizes "rules, regulations, and orders of general applicability".
Justice Scalia, with his characteristically  snide rhetoric wrote  “Having sworn off the habit of venturing beyond Congress’s intent, we will not accept respondents’ invitation to have one last drink.”  
Justice John Paul Stevens was appalled at the assault calling it “unfounded by our precedent and hostile to decades of settled expectations.”
The Court at the Olympics - NYTimes.com:
by Linda Greenhouse

Many people are celebrating the achievements of American women at the London Olympics, where women exceed men in the number of athletes on the United States team and have walked away with an impressive number of gold medals. And many have noted the connection between the women’s historic success and the 40th anniversary of Title IX, which President Richard M. Nixon signed into law on June 23, 1972.

There’s another player that deserves some recognition at this celebratory moment: the Supreme Court. By endorsing a broad interpretation of Title IX at crucial moments over the years, the court has played a critical role in making that law the powerful force for women’s advancement (most famously in athletics, but not limited to the playing field) that it is today....

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No emotional distress claim for witnessing death of pet: NJ Supreme court

The New Jersey Supreme Court has refused to expand its landmark emotional distress precedent to include emotional distress damages for witnessing the death of a pet.  In McDougall v. Lamm the court - 5-0 - held:

[W]e do not question plaintiff's argument that, for many people, their pets are not merely property. That alone, however, cannot support a cause of action for emotional distress damages. Instead, that value is recognized through the precedents that permit the measure of recovery for the loss of the pet to exceed its replacement value and to include the intrinsic value of the pet. Plaintiff's [$5,000] damage award in this matter, as an illustration, appropriately exceeded even the highest cost that she estimated would be needed to replace the dog with another one.

McDougall was walking her dog when a large dog belonging to defendant Lamm ran out, grabbed plaintiff's dog by the neck, and picked it up and shook it several times before dropping it, causing the death of plaintiff's dog. Plaintiff alleged that defendant was negligent in maintaining her dog and demanded compensatory damages. McDougall also alleged that, as a result of witnessing the dog's death, she suffered significant emotional distress for which she demanded damages. The trial court dismissed the emotional-distress claim, observing that the law categorizes dogs as a form of personal property and there is no cause of action in New Jersey that permits an emotional-distress claim based on property loss.

Missouri high court blocks cap on tort damages

In Watts v. Cox Medical Centers the Missouri Supreme Court has stricken the statutory cap on non-economic damages in tort cases.  The statutes limited pain and suffering damages to $350,000 and compelled periodic payments over a fifty year schedule at interest of .026%.  The cap violates the state constitutional right to trial by jury which preserves the common law, the court held.
h/t Torts Prof Blog
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