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State Bar of Arizona Selects Bogutz & Gordon Attorney for CLE Award
Firm News/Arizona | 2008/04/14 20:09
The State Bar of Arizona’s Board of Governors and Continuing Legal Education (CLE) Committee has selected Craig Hunter Wisnom, attorney for Bogutz & Gordon, P.C., as the 2008 recipient for the CLE Award.

The CLE award is given to the State Bar member who has made outstanding contributions to Continuing Legal Education efforts by devoting time and expertise to CLE projects, which may include authoring or editing publications or planning and delivering quality CLE seminars.

Wisnom will be congratulated at the State Bar’s Annual Luncheon on Friday, June 20, 2008, which will be held in conjunction with the Annual State Bar Convention at the Westin La Paloma at 3800 E. Sunrise Drive in Tucson.

A certified specialist in estate and trust law by the State Bar of Arizona, Wisnom has practiced law for 12 years in Arizona in the areas of estate planning, estate and gift taxation, probate and trust administration. He currently serves on the Estate and Trust Advisory Committee, Board of Directors of the Southern Arizona Estate Planners Council. Wisnom is also the past chair of the Probate and Trust Section for the State Bar of Arizona.


Top Law Schools Tighten Hold on NLJ 250 Firms
Legal News | 2008/04/14 15:04
A bigger percentage of students graduating from top law schools in 2007 took jobs at NLJ 250 law firms than those graduating in 2006.

Columbia Law School landed in the No. 1 spot again as the school thatsent the greatest portion of graduates to NLJ 250 law firms, withnearly 75 percent of its students in 2007 taking jobs among thenation's largest law firms. The school ranked No. 1 last year, when69.6 percent of its graduates went to NLJ 250 law firms. Boston CollegeLaw School rounded at the list of the top 20 go-to law schools, with36.8 percent of its 261 juris doctor graduates in 2007 heading forfull-time jobs at NLJ 250 law firms.

All together, the top 20 law schools that NLJ 250 law firms relied onmost to fill their first-year associate ranks sent 54.9 percent oftheir graduates to those firms, compared with 51.6 percent in 2006.

This year's list of go-to schools was compiled from recruiting information that law firms provided on the 2007 NLJ 250, The National Law Journal's annual survey of the nation's largest law firms.

In 2007, the top 20 schools sent 3,511 of their graduates to work asfirst-year associates at NLJ 250 law firms. Total graduates among thoseschools in 2007 equaled 6,395. In 2006, the 20 go-to law schools sent3,561 to NLJ 250 law firms out of 6,902 graduates.

Making a big jump in its percentage of graduates accepting positions atNLJ 250 firms was Northwestern University School of Law. It took theNo. 2 spot, compared with No. 11 the year before. Some 73.5 percent ofits 2007 graduates went to NLJ 250 firms, or 172 graduates out of atotal of 234. The year before, 143 graduates out of 265 went to NLJ 250firms, which equaled 54 percent.



Class Says Lifelock Has Troubling Bosses
Headline News | 2008/04/11 14:41
Lifelock misrepresents and deceptively advertises its "identity theft protection" service, for which it charges $110 a year, a class action claims in Middlesex County Court.

Plaintiffs claim Lifelong does not actually provide the services it offers, that its president Richard Davis dreamed up the idea "while sitting in a jail cell after having been arrested for failing to repay a $16,000 casino marker," and that Lifelock's Chief Marketing Officer and co-founder Robert Maynard is under a lifelong FTC injunction because of misleading infomercials he ran for his own "credit improvement company."

    The complaint adds, "Finally, and perhaps most disturbing ... Maynard himself had engaged in the very type of identity theft his company had set out to eliminate, but stealing his own father's identity."

    Plaintiffs say that whatever services Lifelock does provide its 900,000 subscribers are available elsewhere for free


Class Says Blockbuster Invades Privacy
Top Legal News | 2008/04/10 15:06
     Blockbuster invaded customers' privacy by sending information about their movie rentals to the Facebook Web site, according to a federal class action. Plaintiffs say Blockbuster's cooperation with Facebook's "Beacon" system violates the Videotape Privacy Protection Act, which Congress passed after a newspaper obtained a list of 146 movies Robert Bork or his family had rented, and publicized it during Bork's failed nomination to the Supreme Court.

    Facebook launched Beacon in November 2007, in cooperation with 44 other Web sites, that automatically fed information to Facebook, plaintiffs say. This was not just for social purposes, but was "a core element in the Facebook Ads system for connecting businesses with users," plaintiffs say.

    Blockbuster sent information about movie rentals to Facebook, which added it to members' Facebook profile, "something like this: 'Preston added Lord of the Rings to his queue on Blockbuster.com,'" the complaint states.

    This was an opt-out system, in which users had to check a box to prevent the information from being distributed, plaintiffs say.

    Faced with furious criticism about privacy invasion, Facebook founder Mark Zuckerberg was forced to issue an apology, in December, which is quoted, apparently in full, in this filing. "To this day, however, Facebook still receives personal identifiable information from participating Web site with the Beacon javascript, whether the Facebook member has chosen to distribute their information or not," it claims.

    Plaintiffs say that if users did not check the opt-out box quickly enough, their information would be sent to Facebook, and that along with "a picture of the individual who purchased the movie and a Blockbuster ad." They say that Blockbuster did not notify online customers that this information was being sent to Facebook until "sometime in December 2007. However, the summary is immediately sent to a user's Facebook profile even before the user has a chance to decline the distribution of he/her personal identifiable information - as long as you have not marked the privacy feature telling Blockbuster never to send summaries. To this day, Blockbuster online victims remain unsuspecting victims," the complaint states.

    Blockbuster, which has 64 million "active users," is the 7th most popular site on the Web, the complaint states.

    Represented by lead counsel Jeremy Wilson with The Corea Firm of Dallas, plaintiffs demand $2,500 for each violation of the Videotape Privacy Protection Act, and punitive damages.


Two Attorneys Emerge in Detroit Mayor Case
Top Legal News | 2008/04/09 15:53

Lawyers Kym Worthy and Dan Webb are a pair of ferocious competitors in the courtroom. That's both good news and bad news for the mayor.

Worthy, a prosecutor, and Webb, a defense attorney, have emerged as the legal faces of a text-messaging sex scandal that has embroiled Mayor Kwame Kilpatrick and his former top aide.

Worthy, the first black attorney and first woman to head the Wayne County prosecutor's office, is seeking to prove Kilpatrick lied under oath. Webb is a high-priced litigation gunslinger aiming to keep the mayor out of prison.

Slight of build, the 62-year-old Webb is considered a legal heavyweight in the courtroom, ranked among the nation's top trial lawyers by several publications.

"I hate failing. That's more of my driving force, why I work as hard as I do," he said last week while preparing other cases in San Francisco, Las Vegas and St. Louis.

A big part of Worthy's success is her focus. That's what she preaches to the team of assistant prosecutors preparing for Kilpatrick's next court hearing.

"I spent most of my weekends and holidays here in the library," said Worthy, 52, looking back at her career. "I tried to cross every 'T' and dot every 'I.' Too many things can go wrong in a trial."

Kilpatrick has been besieged since late January, when the Detroit Free Press published excerpts of sexually explicit and embarrassing text messages left on the city-issued pager of his then-Chief of Staff Christine Beatty.

The messages contradict testimony both gave last summer during a whistle-blowers' lawsuit when Kilpatrick and Beatty denied having a romantic relationship in 2002 and 2003. Kilpatrick also is accused of lying under oath about his role in the firing of a top police official.

The text messages also were referenced in a confidential agreement that led to the city settling that lawsuit and a second whistle-blowers' suit for $8.4 million.

After a two-month investigation, Worthy filed multiple felony perjury, misconduct and obstruction of justice charges against Kilpatrick and Beatty. Convictions could send each to prison, and force Kilpatrick from his perch as Detroit mayor.

The embattled mayor is the latest of Webb's high-profile clients. He's represented tobacco giant Philip Morris on racketeering charges and computer giant Microsoft in an antitrust trial.

Former U.S. Attorney Patrick Collins crossed swords with Webb in a six-month corruption trial of former Illinois Gov. George Ryan, who is serving a prison sentence on a fraud and racketeering conviction.

"Dan is a tenacious competitor," said Collins, now a defense attorney. "He's a competition junkie, and I think he loves the action and he's very good at his craft."

Worthy, who moved often while growing up with her military father and earned her law degree from the University of Notre Dame, pursued a law career because of what she didn't see.

"I can only say my father told me I could do anything I wanted," she said. "There were no lawyers in my family. When I watched TV, I didn't see any African American lawyers. They didn't even have black police officers on TV back then."

After two years as a contract worker for the Wayne County prosecutor's office, she was hired on as an assistant prosecutor in 1986. In 1992, an unemployed black steel worker named Malice Green was beaten to death during a confrontation with several white Detroit police officers.

The case put the young, black, female assistant prosecutor on the nation's stage and in the daily glare of cable television. She won second-degree murder convictions against two of the officers.

"She is highly skilled and she could work the courtroom. She prepares as well, if not better, than anybody," Detroit defense attorney Carole Stanyar said.

Webb also is no stranger to the spotlight. He's cross-examined former President Ronald Reagan and won a conviction against U.S. Navy Admiral John Poindexter in the Iran-Contra affair.

Although he would have preferred playing second base for the St. Louis Cardinals, Webb said he discovered his love for law growing up in the small farming community of Bushnell, Ill., about 170 miles southwest of Chicago.

"Somewhere before I got out of high school, I decided I was going to be a trial lawyer come hell or high water," said Webb, who took law classes at night at Loyola University while holding full-time banking jobs.

"I didn't have any money. I was broke," Webb joked. "That's why I worked my way through law school. I knew I didn't want to do banking work."



Discovery Across Borders
Top Legal News | 2008/04/09 15:51

You are a United States company but a global citizen. Your shares are traded on U.S. exchanges. You have sales forces in Europe, manufacturing in Asia, and your eyes on the Middle East. It used to be that only the largest companies had a broad international reach. Now, it seems corporations of all sizes, in order to be competitive, must carefully consider overseas operations. While technology has made transition into the new global economy easier, it also creates special risks.

Imagine the following: You wake up one morning to a flurry of activity in France, where regulators have raided your main sales office seeking documents and information regarding alleged kickbacks to a key customer. You are asked to turn over hard drives, backup tapes and access to your servers. A reporter from Le Monde picks up the story, and by the time the U.S. opens for business there is a story on WSJ.com. Your stock price falls throughout the day; by the end of the week a leading class action law firm has announced the filing of a securities fraud case. The Securities and Exchange Commission (SEC) asks for information about your global sales practices and accounting policies.

Suddenly, you are faced with a swirl of information demands and document preservation obligations. French regulators want to cart your computers away-but the SEC wants the information they contain. American plaintiffs' lawyers will want it as well, and there's no telling whether additional regulators or litigants will become involved.

In today's business, all information is electronic. Paper may have been heavy, hard to store, and time-consuming to review-but it was a tangible thing, easy to inventory, and it tended to be limited in volume, even in the largest cases. More importantly, identifying relevant documents for preservation or production was relatively easy: Either a document was in your possession or custody, or it wasn't, and if it wasn't, either you controlled the people who had it, or you didn't. Electronic communication has led to exponential increases in the amount of data that companies store, and the locations where the information is stored: desktops, laptops, servers, PDAs, BlackBerries™, smart phones, optical drives, thumb drives, iPods™ and more.

Unless you spend a great deal of time talking shop with your IT managers, you probably don't know how many e-mail or file servers your company uses. You probably don't know exactly where your electronic documents are stored, what happens to your e-mails after you delete them, or how frequently your company's servers are backed up to tape. Are you prepared for information discovery across borders? Do you understand how to preserve, collect and analyze data in a way that will meet the requirements of foreign as well as U.S. courts and regulatory bodies? Are you sure?

If you operate internationally, you must be cognizant not only of a patchwork of laws and regulations-many of which could conflict-but also of cultural differences that affect your response to requests for electronic information.

The initial stage in any litigation or regulatory effort is to ensure preservation of relevant materials. But an international scope makes this far more complicated than just issuing a directive to employees to stop deleting e-mails or drafted documents. You need to know where information is located, how it is stored, when it is backed up, and whether backups are rotated or destroyed. Automatic deletion or rotation policies mean that if you do nothing, you may lose files that are subject to a regulatory or litigation request.

Data collection also is far more complicated in an international context than in a purely domestic one. Local laws may prohibit an employer from searching employee e-mail files. As a cultural matter, most Americans are accustomed to the idea that an employee's computer and e-mail account belong to the employer. Outside of the U.S., the cultural understanding is frequently just the opposite: An employee's computer and e-mail account are considered private, and it may be a criminal offense to invade that privacy. Collection of data outside the U.S. may be seen as coercion by an employer, and it may lead to labor union grievances or complaints.

Once the information is collected, getting it reviewed and produced to a U.S. regulator or litigant is also no simple matter. Data privacy and blocking statutes in Europe, Asia and South America may forbid the transfer of personal data outside of their borders to an "unprotected" jurisdiction like the United States-and personal data include names, e-mail addresses and office phone numbers. Indeed, special procedures may be required before individuals outside a company-including the company's outside counsel-may review the data. And local laws may dictate that only data specifically responsive to a request may be exported, requiring counsel to review materials locally rather than shipping them to the U.S. to one centralized location, as is normally done in U.S. litigation

Do not expect, however, any sympathy from U.S. regulators or plaintiffs' lawyers. U.S. regulators are skeptical of data protection laws and may take the view that international companies hide behind them to avoid cooperating with the regulators' investigations. U.S. courts may not be more understanding. The Supreme Court has held that U.S. discovery rules presumptively apply in civil litigation involving an international company, even if producing data in response to a discovery request would be unlawful in the international company's host jurisdiction.



Second Circuit Deals a Severe Blow
Opinions | 2008/04/08 14:37

Last week, the U.S. Court of Appeals for the Second Circuit issued its opinion in McLaughlin v. American Tobacco Co. The decision constituted a major win for Big Tobacco - and a major loss for the plaintiffs.

The theory behind the case - which was a class action -- was simple. The plaintiff class was composed of persons (and the estates of persons) who had smoked lights cigarettes and allegedly suffered harm. The plaintiff class alleged that the tobacco industry has known for years that "light" cigarettes are not safer than regular cigarettes. Therefore, the class argued, the advertisement campaigns for light cigarettes constituted a form of consumer fraud, in which the seller promised one thing (a safer cigarette) and intentionally delivered something else (a cigarette that was not, in fact, safer).

Given this compelling, simple theory, why did the plaintiffs suffer a major loss? In this column, I'll explain the reasons. I'll also consider what that loss might mean for the future of consumer class actions in the Second Circuit.

A Prediction Made by Many Observers, Based on the Oral Argument, Is Now Fulfilled

Last July I wrote a column suggesting that Michael Hausfeld, one of America's greatest plaintiffs' lawyers, had made a crucial error in an oral argument in this case - an error that, I contended, ensured that the Second Circuit would hand him a defeat. In fact, my prediction was confirmed--Hausfeld lost 3-0 before the Second Circuit. Importantly, however, I was far from

the only person who predicted that Hausfeld would lose. To the contrary, it was the conventional wisdom among lawyers observing the case that the Second Circuit would reverse the lower court's decision. After all, the district judge was Jack Weinstein, and his decision was a true Weinstein special--brilliant, iconoclastic, and somewhat inconsistent with precedent.

Hausfeld's major error, as I explained in my prior column, occurred when he told the panel that there was nothing out of the ordinary with Judge Weinstein's decision, and that they would be breaking with twenty years of precedent if they did not affirm the lower court. That statement was, on its face, ridiculous, and it left the two moderates on the panel - Judges Walker and Pooler - nowhere to turn if they were inclined to help the plaintiffs in the case. (The last member of the panel, Judge Winter, was a lost cause from the start.)

Before the argument, it had seemed plausible that the McLaughlin class action might appeal to the sympathies of the two moderates.

Other lawyers have brought lights cases around the country with mixed success. Moreover, since lights cases are fraud cases involving money damages, not personal injury, they should, in theory, have been easier to certify as class actions, since class actions in tobacco have proven impossible to certify when they involved highly individualized questions regarding cancer and other ailments. But this case proved somewhat different.

Overextending the Reach of the "Fraud on the Market" Theory

Hausfeld hit upon the idea of bringing a nationwide class action based on a federal racketeering statute, the Rackeetering-Influenced Corrupt Organizations ("RICO") law. This strategy had the advantage of permitting Hausfeld to consolidate the millions of small-value individual claims into a single, huge, $800 million class action ($2.4 billion, if treble damages were awarded, as RICO allows).

Racketeering law is still the law of fraud, however, and fraud class actions have their own problems. The single most important problem is that fraud typically requires proof of reliance -- that is, proof that it was the defendant's intentional misrepresentation that caused the victim of the scheme to part with his or her money.

Judge Weinstein held that because the advertisement campaigns for light cigarettes were directed towards the public as a whole, the question of class-wide reliance could be solved by simply borrowing the concept of "fraud on the market" from securities fraud. This theory holds that generalized, class-wide reliance can be shown - and individualized reliance need not be shown - if the defendant engaged in "uniform misrepresentations" to which the entire market for a particular product (such as a stock) was exposed.

Hausfeld suggested at last year's oral argument that the Second Circuit had already held in previous cases such as Moore v. PaineWebber, Inc. that generalized proof of reliance could be adopted by the courts where the defendant engaged in "uniform misrepresentations," and that Weinstein had merely applied Moore to the lights case. In my view, this was Hausfeld's biggest error: to claim

that the facts in the "lights" cases were just like the facts in financial fraud cases like Moore. As the Second Circuit noted in its rejection of Hausfeld's argument, it had stated in Moore that generalized proof of reliance would only be appropriate in the absence of "material variation in the kinds or degrees of reliance by the persons to whom" the misrepresentations were addressed.

At oral argument, the panel in the "lights" case was very concerned that the record suggested that smokers had a variety of reasons for buying "lights" cigarettes -- even though the advertising by the tobacco industry had affected the choices of almost all purchasers. The problem was that no one knew how much that advertising mattered to the smokers' overall decision of which cigarettes to buy, and whether to buy cigarettes at all. People may have bought "lights" for non-health-related reasons.

In sum, by saying to the Second Circuit that its previous rulings obliged it to treat a consumer product like cigarettes just like a financial product or a security, Hausfeld may have caused the panel to rule exactly the opposite way from the way he had sought. In the decision last week, the court seemed to suggest that, notwithstanding Moore, plaintiffs would be hard-pressed to be able to come up with cases where circumstantial evidence would be sufficient to permit a presumption of reliance.

As I said earlier, the decertification of the lights class action was not, in itself, a great surprise. The case was always a bit of a gamble. (In fact, the Supreme Court has just granted review in a federal preemption case that might eliminate "lights" litigation entirely.) But did the Second Circuit go further than just decertifying this particular action, to foreshadow doom for similar consumer actions in the future?

Did the Second Circuit Shut the Door on Future, Similar Consumer Class Actions?

Put another way, by overreaching, did Hausfeld provoke the Second Circuit into overreacting, thus producing a decision that shuts the door for future consumer class actions?

I don't think so. It is important to note that the Second Circuit went out of its way to distance itself from the Fifth Circuit's 1996 decision in Castano v. Am. Tobacco Co,. which the Second Circuit described as imposing a "blanket rule" against class certification whenever issues of individual reliance exist.

Furthermore, the phrase "material variation," which the court used to map out the boundary between acceptable and unacceptable class-wide treatment, is not meaningless --- although Hausfeld, in oral argument, seemed to suggest it was.

Rather, "material variation" clearly contemplates that will be some individual differences between the reasons for reliance among the members of a class. Thus, it does not require, for certification, a presumption that all members of the class have identical reasons for acting (as is the case in fraud-on-the-market in the securities context, where investors are presumed to all know about and act on public information).

Consider, for example, a hypothetical consumer fraud claim based on the purchase of word-processing software that fails to work with a certain type of computer, despite contrary representations by the manufacturer on the box. It may be the case that some of the class of consumers who purchased the software did not, in fact, rely on that representation. For example, some of these purchasers might not have owned a computer incompatible with the software until after they bought the software, so the misrepresentation may have been irrelevant to them at the point of purchase.

However, one might assume that, at the point of purchase, all of the purchasers would have placed a value on the full functionality of the software, even if their decision to buy was not motivated by a desire to exploit that functionality. Let's assume - quite realistically, I think -- that functionality with a typical range of computers is part of the core set of elements that consumers expect in a commercial software program. If so, then the fact that some did not actually subjectively respond to the misrepresentation about functionality should not be, even after last week's Second Circuit decision, a bar to class certification. That is because the differences in various class members' reasons for purchasing the software do not vary in any "material" sense, and thus, the hypothetical class proposed by this example should not fail the Second Circuit's "material variation" test.



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