I've been wondering what, as a practical matter, prompted Roman Polanski's arrest 32 years after he fled the U.S. This article from today's ABA Journal, entitled "Roman Polanski's Lawyers Reportedly Provoked His Arrest" (click here), may provide an answer. The article states that, in a suit filed in a California appeals court to overturn Mr. Polanski's conviction, the lawyers asserted, "'no effort' has been made to extradite Polanski. The filing claimed prosecutors were seeking to benefit by their own inaction by arguing the effort to overturn the plea could not be pursued without Polanski's presence." The assertion "led prosecutors to look for a new opportunity to extradite the director. He was arrested at an airport in Zurich on Saturday as he entered Switzerland to receive an award at a film festival." The story hasn't played out yet, but this may be a situation where Mr. Polanski and his attorneys should have let sleeping dogs lie.

As a side note, it's fascinating how this case has split commentators into two camps, those who think the arrest is warranted (for example, here) and those who think it's not (for example, here). For whatever it's worth, I find it difficult to feel sorry for Mr. Polanski.

Tags: Criminal Law, Appeals

Today's Wall Street Journal includes a brief preview of the U.S. Supreme Court's new term (click here).

Tags: Supreme Court of the United States

Today's New York Times contains an article about the size of the U.S. Supreme Court's docket (click here), which is about half of what it was in the early 1980's, although the reasons aren't clear. "A couple of weeks ago, the Supreme Court advocacy clinic at Yale Law School held a conference to explore the mystery of the court’s shrinking docket. Law professors presented data, theories and speculation. Expensive lawyers told rueful stories about can’t-miss cases that somehow did not make the cut. . . . The most striking possible explanation came from David R. Stras, a researcher at the University of Minnesota Law School. A crop of five new justices who joined the court starting in 1986, he found, voted to hear cases far less often than the justices they replaced."

Tags: Supreme Court of the United States

Today's Wall Street Journal includes an article about 15 business that have been identified as the "Top Small Workplaces" for 2009 (click here). "For the third year in a row, The Wall Street Journal teamed up with Winning Workplaces, an Evanston, Ill., nonprofit that helps small and midsize companies create better work environments, to identify 15 small employers who have built some of the most exemplary, innovative workplaces." Employee retention, having a team-based culture, and transparency are three themes that jumped out at me.

Tags: Small Business, Management

Tech Crunch reports today (click here) on a service called Trademarkia (click here), which lets "you search all U.S. trademarks filed since 1870, including dead marks. The company has scans of all the marks and returns results in a very appealing visual grid. You can search by company, theme, product category, or even filing attorney. Companies can also file a trademark with the U.S. Patent and Trademark Office through the site. . . . Trademarkia is a great resource for anyone researching trademarks, companies getting ready to file a trademark, or even product and brand logo designers. It operates much like a domain registrar like GoDaddy. Instead of searching for available domain URLs, you search for trademarks, and if they are available, you can register them for a fee."

Tags: Intellectual Property, Trademarks

Yesterday's New York Times includes an article (click here) about a series of lectures by Harvard professor Michael J. Sandel called "Justice: What's the Right Thing to Do?" The lectures will be shown on public television stations across the country and are available through Boston station WGBH's website (click here). They are based on a "wildly popular" course that Prof. Sandel has taught for almost 30 years. A new book accompanies the broadcasts, for which "[e]ach 50-minute class was edited down to 30 minutes; two are shown in each television episode." The article quotes Prof. Sandel, “'[i]n a way, the book and the course try to model what public discourse would be like if it were more morally ambitious than it is. . . . The title is ‘Justice,’ but in a way its subject is citizenship.' Mr. Sandel emphasizes that 'the aim is not to try to persuade students, but to equip them to become politically minded citizens.'”

At this writing, the show isn't listed on the WOSU website (click here).

Tags: Ethics, Moral philosophy

Today's Columbus Dispatch contains a helpful article (click here) that explains the two proposed Ohio gambling plans that have been in the news recently.

For a link to a copy of the the LetOhioVote.org opinion that's referenced in the article, click here. Like the Ohio Grocers Assn. case discussed in previous posts (for example, here), it was a 6-1 decision, with Justice Pfeifer in dissent. The majority held that the video-lottery-terminal ("VLT") provisions in the state's 2010-2011 biennial budget are subject to referendum under the Ohio Constitution. Under the Ohio Constitution, certain matters are not subject to referendum (click here), but the majority held that these exceptions did not apply to the VLT provisions at issue.

In dissent, Justice Pfeifer wrote, "[t]his case is truly one of first impression. Here, for the first time, this court is analyzing the state's biennial budget bill for the purpose of determining citizens' right to seek referendum." (¶57). He also wrote, "the exceptions . . . allow the legislature to budget without the uncertainty that referendum brings to the legislative process. Free from the threat of referendum, obligations and the means to fulfill those obligations are preserved with predictability. The exemption from referendum allows the state to make good on its liabilities; without it, the budget could remain in limbo for over a year, leaving the state unable to pay its 'current expenses.' " (¶62).

The Dispatch article states that the decision "potentially creates a hole of nearly $1 billion" in the state budget, and that Governor Strickland is "considering his options."

Tags: Ohio Constitution, Ohio Government, Supreme Court of Ohio, Mandamus

Here's a link to an excellent podcast by a British law professor, Richard Susskind, concerning the future of the legal profession (click here). Many of the concepts apply to the United States. Clocking in at roughly a half hour, it's a worthwhile listen for lawyers and non-lawyers alike.

Hat tip to Ernest Svenson.

Tags: Practice of law

Today's Wall Street Journal contains a piece (click here) about how some small- and medium-sized businesses are hiring consultants as Chief Financial Officers, instead of hiring them as employees. "The payment structure varies. Some are on project-oriented deals, such as developing financial projections, assisting with raising capital or completing a business plan. Some are on-going in nature and can be based on an hourly or flat monthly fee."

Tags: Small Business

The Wall Street Journal's Law Blog has an interesting piece (click here) about a federal lawsuit filed earlier this week that seeks an order that the U.S. House of Representatives increase its size, from 435 members to roughly double that number. "On Thursday, a group called Apportionment.us filed suit in federal district court for the Northern District of Mississippi on behalf of five people, one resident from each of the following states: Montana, Delaware, Mississippi, South Dakota, and Utah. The quintet’s complaint: that their votes carry far less weight in the House of Representatives than do those from residents of other states, like Rhode Island and Iowa. . . .The group alleges this is the case because the population variance between the most under-represented congressional district in the nation and most over-represented district exceeds 80%. For example, according to the complaint, Montana has one representative for every approximately 905,000 people while its neighbor to the south, Wyoming, has one representative for approximately every 495,000 people."

Tags: Federal Constitutional Law, United States Congress

Following up on yesterday's post, I've read through the Supreme Court of Ohio's Ohio Grocers Assn. opinion (click here), issued yesterday, and the case is as much about the question whether the Court should presume that statutes are constitutional as about the relevant constitutional language (Ohio Constitution, Article XII, Sections 3(C) and 13) itself. The majority presumes that the statutes implementing the Commercial Activity Tax ("CAT") are constitutional and relies heavily on that presumption in its opinion.

In contrast, the dissent (Pfeifer, J.) states, "[t]his court in answering the question before us is burdened by a questionable legal principle, which requires us to presume that any statute enacted by the General Assembly is constitutional. This court has not seriously looked at this presumption in decades. The presumption has taken on a life of its own apart from whatever merits ever precipitated its institution." (¶69). The dissent also states, "[g]iven the obvious supremacy of the Constitution, a better rule of construction would be to resolve all doubts in favor of the applicability of the Constitution." (¶75).

My own conclusion is that the constitutional language at issue was open to more than one interpretation and simply wasn't clear, as applied to the CAT. In such cases, courts will sometimes employ rules of construction, to "break the tie." In this case, in the Court's majority opinion, the rule that statutes are presumed to be constitutional tilted the balance toward holding that the CAT is constitutional. The dissent raises an important question, however, as to whether that presumption still makes sense.

There's a good post at Ernie the Attorney's blog today (click here), in which he suggests that, at the Rule 26(f) conference in a civil case in federal court, the parties agree to serving pleadings and notices by email, consistent with FRCP 5(b)(2)(E) (click here).

Tags: Federal Rules of Civil Procedure

Following up on my August 19 and September 2 posts (click here and here), it didn't take long for the Supreme Court of Ohio to render a decision in Ohio Grocers Assn. v. Levin, Ohio Tax Commr. (Case No. 2008-2018), which involves the constitutionality, under Ohio's constitution, of applying Ohio’s Commercial Activity Tax (“CAT”) to grocery stores. Oral argument in the case took place on September 1. The Court ruled, in a 6-1 decision, that the CAT is constitutional. (Click here). I look forward to reading the opinion. (Click here).

Tags: Supreme Court of Ohio, Taxation, Ohio Revised Code, Ohio Constitution

Today's Wall Street Journal contains a thought-provoking piece (click here) concerning the extent to which corporations should be treated as natural persons. The starting point for the article is a comment that U.S. Supreme Court Justice Sotomayor made during arguments last week in a campaign finance case, Citizens United v. Federal Election Commission, Docket No. 08-205.

Tags: Supreme Court of the United States, Federal Constitutional Law, Corporations

On Monday, a group of Native Americans filed a petition for certiorari in the U.S. Supreme Court. They seek review of a decision by the United States Court of Appeals for the D.C. Circuit that rejected their claim, on the basis of a laches defense, that trademarks registered by the Washington Redskins pro football team that incorporate the term "redskins" should be cancelled. (Click here for the story and here for the petition for certiorari.) The case is styled Harjo v. Pro-Football, Inc., No. 09A122. Pro-Football, Inc. is the team's corporate name.

The Native Americans argue in the petition that the marks, which the team registered between 1967 and 1990, "should never have been registered and . . . were therefore void ab initio, justifying immediate cancellation. Section 14(3) of the [Lanham] Act provides for cancellation of a registration 'at any time,' if the subject mark was registered 'contrary to the provisions' of Section 2(a) of the Act. 15 U.S.C. § 1064(3). Pursuant to Section 2(a), no mark shall be registered if it consists of or comprises 'matter which may disparage . . . persons, living or dead, . . . or bring them into contempt, or disrepute . . . .' 15 U.S.C. § 1052(a)." (Petition at p. 3).

The Native Americans prevailed at the Trademark Trial and Appeal Board in 1999, but the U.S. District Court for the District of Columbia reversed on the basis of laches, and, after a remand, the D.C. Circuit affirmed. The D.C. Circuit's opinion states, laches is "an equitable defense that applies where there is '(1) lack of diligence by the party against whom the defense is asserted, and (2) prejudice to the party asserting the defense.'"

In the petition, the Native Americans assert that there is a split among circuits on the question of whether laches applies to trademark cancellation petitions. (Petition at 8). The petition cites a Third Circuit opinion that then-Judge (now Supreme Court Justice) Alito wrote in which, according to the petitioners, the court "held that a counterclaim brought under Section 14(3) of the Act was not time-barred" by the doctrine of laches because of the statute's use of the words "at any time." (Id.) Not surprisingly, the cert petition relies heavily on that opinion.

For the most part, I grew up in the Washington, D.C. area, and I've been a fan of the team for a long time, but it's tough for me to see how the term "redskins" isn't disparaging. Whether a court will ever reach that question, however, remains to be seen.

Tags: Supreme Court of the United States, Laches

From the Wall Street Journal: "In the broadest, most-comprehensive survey yet of how occupation affects happiness, business owners outrank 10 other occupational groups in overall well-being, based on the landmark survey of 100,826 working adults set for release today [September 15, 2009]. Defined as self-employed store or factory owners, plumbers and so on, business owners surpassed 10 other occupational groups on a composite measure of six criteria of contentment, including emotional and physical health, job satisfaction, healthy behavior, access to basic needs and self-reports of overall life quality." Control and flexibility are cited as keys to job satisfaction. (Click here and here.)

Tags: General Interest

Today's Wall Street Journal contains a short but interesting piece about former U.S. Supreme Court Justice O'Connor's views on judicial elections (she's against them). In November, she will be attending a judicial selection forum in Columbus concerning the selection process for Justices of the Supreme Court of Ohio (click here for more detail).

Tags: Supreme Court of the United States, Supreme Court of Ohio

Following up on yesterday's post (click here) about a lawyer getting in trouble for comments posted online, the New York Times has an article today (click here) along the same lines. The NYT article mentions the principle that an attorney is an "officer of the court," which lawyers are taught in professional responsibility class in law school but which some lawyers forget. More than that, though, it's a matter of common sense.

Tags: Legal Ethics, Technology

As a lawyer with a blog, it's a good idea (some might say common sense) not to talk about your clients, your cases, and the judges in front of whom you appear, as a former assistant public defender in Illinois allegedly did. Click here for the story from the ABA Journal. If the allegations in the disciplinary complaint are accurate, her first mistake was not telling her boss that she was blogging. Hat tip to Ernest Svenson, aka Ernie the Attorney.

Tags: Legal Ethics, Technology

Like most people in this country, I suppose, I remember exactly where I was on the morning of September 11, 2001. I was on a plane, getting ready to fly from Phoenix to Cleveland with a colleague. Before we left the gate, we were asked to leave the plane, though we weren't told why. I walked back into the airport and, on one of the TVs in the gate area, saw footage of the towers getting hit.

That day made no sense. It doesn't make any more sense to me now.

Liquidated damages provisions are fairly common in commercial agreements, but I suspect that, many times, parties don’t pay much attention to the question whether the provisions would be enforceable in a particular transaction if a dispute were to arise.

A liquidated damages provision is “[a] contractual provision that determines in advance the measure of damages if a party breaches the agreement.” Black’s Law Dictionary (8th ed. 2004), at 949-950. It might, for example, specify that the breaching party will pay to the nonbreaching party a fixed dollar amount in the event of a default. Or, it might take the form of a monetary cap on the breaching party’s damages.

A liquidated damages provision (which is also sometimes referred to as a stipulated damages provision) is appropriate when the non-breaching party’s actual damages would be difficult to estimate at the time of contracting. If the provision acts as a penalty, however, it will be unenforceable on public policy grounds, “[b]ecause the sole purpose of contract damages is to compensate the nonbreaching party for losses suffered as a result of the breach[.]” Lake Ridge Academy v. Carney (1993), 66 Ohio St.3d 376, 381, 613 N.E.2d 183. “Thus, when a stipulated damages provision is challenged, the court must step back and examine it in light of what the parties knew at the time the contract was formed and in light of an estimate of the actual damages caused by the breach. If the provision was reasonable at the time of formation and it bears a reasonable (not necessarily exact) relation to actual damages, the provision will be enforced.” 66 Ohio St.3d at 382. In Ohio, a liquidated damages provision will be upheld if it meets the following test:

Where the parties have agreed on the amount of damages, ascertained by estimation and adjustment, and have expressed this agreement in clear and unambiguous terms, the amount so fixed should be treated as liquidated damages and not as a penalty, if the damages would be (1) uncertain as to amount and difficult of proof, and if (2) the contract as a whole is not so manifestly unconscionable, unreasonable, and disproportionate in amount as to justify the conclusion that it does not express the true intention of the parties, and if (3) the contract is consistent with the conclusion that it was the intention of the parties that damages in the amount stated should follow the breach thereof.

Samson Sales, Inc. v. Honeywell, Inc. (1984), 12 Ohio St.3d 27, 465 N.E.2d 392 (syllabus) (holding that $50 cap on liability in burglar alarm contract was unenforceable); see also Midamco, L.P. v. Fashion Bug of Solon, Inc. (1996), 116 Ohio App.3d 854, 857-858, 689 N.E.2d 605 (collecting cases in which liquidated damages provisions were held unenforceable).

The party that seeks to benefit from a liquidated damages provision should obviously avoid using the term “penalty” to describe the damages. See, e.g., Wright v. Bassinger, Mahoning App. No. 01CA81, 2003-Ohio-2377 (holding that a liquidated damages provision that specified a five percent “penalty” was unenforceable). That party should also be able to demonstrate that the parties arrived at the method of calculating the amount of the specified damages in a reasonable manner. Id. at ¶20. It may also make sense to provide affirmatively in the contract (to the extent that circumstances permit) that actual damages would be uncertain as to amount and difficult of proof, that each party understands the liquidated damages provision and has had access to counsel in connection with reviewing and negotiating the terms of the contract, that the provision is the result of arm’s length negotiations, that the specified damages are “proportionate in amount compared to the value of services under” the contract (Republic Services of Ohio Hauling, L.L.C. v. Pepper Pike Properties, Inc., Cuyahoga App. No. 81525, 2003-Ohio-1348, at ¶41) and “proportional to the anticipated ‘harm’ from the ‘breach’ of the contract” (Westbrock v. W. Ohio Health Care Corp. (2000), 137 Ohio App.3d 304, 323, 738 N.E.2d 799), that the parties intend “to provide for liquidated damages in the specified amount” (Young v. Int’l Bhd. of Locomotive Engineers (1996), 114 Ohio App.3d 499, 509, 683 N.E.2d 420), and that the parties intend the damages to serve merely as compensation, and not as a penalty.

Tags: Contracts, Liquidated Damages

This morning, I noticed this piece in The Washington Post about former San Francisco 49ers coach Bill Walsh’s philosophy of leadership. The piece states, “[g]reat leadership, for him, started with a particular code of conduct. He told me, ‘I believe that an organization is not an inert tool like a shovel, but an organic entity that must have a code of conduct, a high standard of performance in actions and attitudes.’ . . . The Bill Walsh code of conduct -- those ‘standards’ -- started with a simple mantra: ‘Treat people right.’” The 49ers won three Super Bowls under Walsh, who was part of the Pro Football Hall of Fame’s Class of 1993. It’s good to know that someone with that philosophy was so successful.

Tags: Management

The ABA Journal reports here that there’s a new cyberlaw blog, called “Cyberlaw Cases.” The blog, which started on August 31, 2009, reports on “the top 10 pending cases in the United States concerning Internet, software and database issues.” The blog defines “cyberlaw” as follows: “Broadly speaking, cyberlaw is law affecting networked information environments. This includes the Internet, most software and web services, databases, and most other information systems. It also includes the social, political, and economic aspects of these systems.” It looks good. It includes in-depth discussions of each of the cases and citations and links to related cases and articles.

Tags: Cyberlaw

Sometimes, a business can run into big public relations problems by enforcing contract rights. This week, The Washington Post has run stories about how the Washington Redskins have been suing some fans for breach of contract. Click here and here. Today’s Post includes a scathing piece by columnist Thomas Boswell, entitled “A Public Distrust.” Boswell states, “the team has taken the bad faith prize for mean and greedy business practices toward its own fans,” and “[t]he Redskins have a right to enforce contracts. But that doesn't make it right.” Boswell’s also states, “[if ticket buyers with multiyear contracts suffer from economic hard times, the Redskins do not emulate at least nine other NFL teams, as well as local franchises such as the Capitals, and simply cancel the tickets and sell them to someone else. Nope. Despite a ‘waiting list’ they claim is 160,000 long, the Redskins sue some of their own fans for the money and, at times, even resell the tickets.” One wonders whether enforcing contract rights in this case is worth the hit the team is taking on the public relations front.

Update: click here.

Tags: Contracts

Today’s Wall Street Journal reports on a federal district court decision in the Southern District of New York on Wednesday this week in which “U.S. District Judge Shira Scheindlin ruled . . . in a 68-page opinion that the ratings of certain securities -- those that were distributed to a limited number of investors -- don't deserve the same free-speech protection as more general ratings of corporate bonds that were widely disseminated.” According to the article, “[t]he judge's decision is one of the first to interpret the extent to which the firms can expect First Amendment protection for their ratings of certain securities, which have been the focus of much litigation since the credit crisis.”

Tags: Securities, Federal Constitutional Law

Today’s Wall Street Journal has an interesting story about a potentially very important case concerning restrictions on corporate campaign spending, which the U.S. Supreme Court has set for (re)argument on September 9, 2009. Citizens United v. Federal Election Commission, Docket No. 08-205.

Tags: Supreme Court of the United States, Federal Constitutional Law

Last month, I had a post about a recent Ohio Supreme Court case, Olympic Holding Co., L.L.C v. Ace Ltd. (2009), 122 Ohio St.3d 89, 2009-Ohio-2057, in which the Court rejected a claim that promissory estoppel removed an agreement from the statute of frauds in the context of negotiations between sophisticated business entities concerning a proposed five-year agreement. The Eighth District Court of Appeals has issued an opinion in which it relied on the Olympic Holding case, holding that promissory estoppel did not remove a case from the statute of frauds in a transaction involving a proposed sale of real estate. Seaman v. Fannie Mae, Cuyahoga App. No. 92751, 2009-Ohio-4030 (affirming motion to dismiss under Civ. R. 12(B)(6)). In Seaman, the plaintiffs-appellants alleged that Fannie Mae “represented to appellants that the price and terms were agreed and instructed appellants to execute the purchase agreement attached to the complaint and to pay the earnest money to appellee,” and that they detrimentally relied on the promise “‘by paying the earnest money, foregoing the purchase of other properties and spending time and resources on the purchase of the subject property.’” Fannie Mae never signed the agreement. The Eighth District unanimously held, “[i]n most negotiations for transactions included within the statute of frauds, the parties contemplate that the contract will be reduced to writing. If a written agreement is contemplated, reliance upon statements made before an agreement is signed will be unreasonable as a matter of law, particularly when sophisticated business parties are involved in the negotiations.” (emphasis added).

Tags: Contracts, Statute of Frauds

Today’s Columbus Dispatch includes a brief recap of yesterday’s oral argument in Ohio Grocers Assn. et al. v. Levin, Ohio Tax Commr., which concerns the constitutionality of Ohio’s Commercial Activity Tax (Chapter 5751 of the Ohio Revised Code) as applied to food sales. Ohio’s Constitution prohibits the imposition of excise and sales taxes on food. See Article XII, Section 3(C) and Section 13. For the Cleveland Plain Dealer’s take, click here.

Tags: Supreme Court of Ohio, Taxation

Black’s Law Dictionary (8th ed. 2004) defines the term “indemnification” as “[t]he action of compensating for loss or damage sustained.” Id. at 783. In business contracts, the parties can provide for indemnification, to make whole the party that suffers a loss arising out of certain events. Indemnification can be one-way or reciprocal. A few days ago, Ken Adams posted a good piece that sets forth some general principles about when it’s appropriate to use (and not to use) indemnification provisions in a contract.

Tags: Contracts

Today’s Wall Street Journal contains a good article about steps that a small company can take to prevent hackers from infecting the company’s website, which can lead to blacklisting by search engines. The comments to the article are worth reading, too.

Tags: Small Business, Internet

According to this useful article, “the IRS estimates that $68 billion of the annual $345 billion tax gap for 2001 (the spread between what the government should collect and what it actually collected) was due to sole proprietors. This group of taxpayers underreported their income by 57 percent. The other part of the tax gap from this group came from overstating deductions as well as some who did not file any returns.” The article states, “the IRS is focusing on sole proprietors to make sure that all income is being properly reported and that claimed deductions are within the limits allowed by law,” and sets forth a list of “some key audit issues” and suggestions as to “what can be done to avoid problems.”

Tags: Small Business, Taxation