LexMonitor | Recent Posts

UN delays release of controversial DRC 'genocide report'

Thu, 02 Sep 2010 16:14:48 GMT

[JURIST] The UN announced Thursday that it will delay the release of a report [UN News Centre report] that accuses Rwandan forces of committing acts of genocide in neighboring Democratic Republic of Congo (DRC) [BBC backgrounder; JURIST news archive] during the years following the 1994 Rwandan genocide [BBC backgrounder; JURIST news archive]. According to a statement by the UN Office for the High Commissioner for Human Rights (OHCHR) [official website], the report will be released on October 1 to allow time for commentary opposing the alleged findings. UN High Commissioner for Human Rights Navi Pillay [official profile] said that she...[JURIST] The UN announced Thursday that it will delay the release of a report [UN News Centre report] that accuses Rwandan forces of committing acts of genocide in neighboring Democratic Republic of Congo (DRC) [BBC backgrounder; JURIST news archive] during the years following the 1994 Rwandan genocide [BBC backgrounder; JURIST news archive]. According to a statement by the UN Office for the High Commissioner for Human Rights (OHCHR) [official website], the report will be released on October 1 to allow time for commentary opposing the alleged findings. UN High Commissioner for Human Rights Navi Pillay [official profile] said that she...

The Future of the WTO

Thu, 02 Sep 2010 17:38:47 GMT

Some big names will weigh in on this weighty issue at a conference in DC, on Sep. 23: The Future of the WTO A conference presented by American University Washington College of Law, the Emerging Dynamic Global Economies (EDGE) Network,...

Some big names will weigh in on this weighty issue at a conference in DC, on Sep. 23:

The Future of the WTO

A conference presented by American University Washington College of Law, the Emerging Dynamic Global Economies (EDGE) Network, and the German Marshall Fund (GMF)

Is the WTO ready to meet the challenges of 21st Century? What impact will the economic crisis have on the WTO? Are reforms needed to the WTO decision making and dispute settlement mechanisms to make the organization more legitimate, accountable and effective? How can greater coherence in international economic policy making between the Bretton Woods institutions and the WTO be facilitated? Will the “success” of the WTO dispute settlement mechanism be maintained in the face of new, complex challenges such as climate change, energy and financial crises? This distinguished panel will address these and other important issues.

Moderator: Professor Padideh Ala’i, American University Washington College of Law

Panelists: Jennifer A. Hillman, Member, WTO Appellate Body; Senior Transatlantic Fellow, German Marshall Fund

Professor John H. Jackson, University Professor, Georgetown University Law Center; Director, Institute of International Economic Law (IIEL)

Ambassador Julio Lacarte Muró, former Chair and Member, WTO Appellate Body; former Ambassador, Government of Uruguay; former Chair, Uruguay Round Negotiations

Jeffrey J. Schott, Senior Research Fellow, Peterson Institute for International Economics

Professor Debra P. Steger, Associate Professor, University of Ottawa; Director, EDGE Network; Senior Fellow,Centre for International Governance Innovation (CIGI)

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Followed by a Book Reception from 6:00 - 7:30 p.m. Redesigning the WTO for the Twenty-first Century, edited by Debra Steger

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Thursday, September 23, 2010
4:00 – 6:00 p.m.
American University Washington College of Law
4801 Massachusetts Avenue NW, Washington DC, Room 603

More details here: http://www.wcl.american.edu/secle/fall/2010/20100923.cfm

Doleful Dole Dodger Discovered

bystander@hotmail.co.uk (bystander@hotmail.co.uk) — Thu, 02 Sep 2010 17:37:35 GMT

This report, apart from the cheat's profession, is of a pretty common crime that most magistrates see a few times a year. Guidelines steer us towards fines in most cases (often the offender has little cash anyway), but a feature of recent years has been the prosecution's refusal to apply for an order to repay the money. Every court has to consider compensation in every relevant case, but a DSS (as was) prosecutor explained to me, as kindly as possible, that the Department is far better at recovering money than the clumsy courts' system. That makes sense when you think about it as virtually everyone gets some sort of benefits throughout their lives, even if it's only the state pension, so money can be recovered from that in due course.

Dead Zone? Direct Claims by Creditors of a California Corporation May Not Lie Against Management Based on Management's Allegedly Shifting Duties When Corporation Is in the Zone of Insolvency or Even Insolvent

updates@antitrustlawblog.com (Sheppard Mullin) — Wed, 25 Aug 2010 12:38:22 GMT

The California Court of Appeal recently rejected the argument that directors and officers owe fiduciary duties to the company's creditors when the company is in the so-called "zone of insolvency," or is even clearly insolvent. In Berg & Berg Enterprises, LLC v. John Boyle, et al., 100 Cal. Rptr. 3d 875 (Cal. Ct. App. 6th Dist. Oct. 29, 2009), the California court expounded that "there is no broad, paramount fiduciary duty of due care or loyalty that directors of an insolvent corporation owe the corporation's creditors solely because of a state of insolvency." Id. at 893-94. The court was even much less inclined to find that directors owed such duties when the corporation is not clearly insolvent but on the brink of insolvency, and held that "there is no fiduciary duty prescribed under California law that is owed to creditors by directors of a corporation solely by virtue of its operating in the 'zone' or 'vicinity' of insolvency." Id. at 893.

It is well settled that directors and officers of a solvent company owe fiduciary duties to act with honesty, loyalty and good faith to the company's shareholders, since the shareholders are the owners of the company and its residual risk bearers. So long as the company remains solvent, the company's obligations to its creditors are governed simply by their contractual arrangement.

When the company becomes insolvent, some courts outside of California have held that management's duties shift to the company's creditors. See, e.g., Geyer v. Ingersoll Publ’ns Comp., 621 A.2d 784, 787 (Del. Ch. 1992) ("When the insolvency exception does arise, it creates fiduciary duties for directors for the benefit of creditors."). The rationale for this shift in the fiduciary duties is that when a company is insolvent, creditors' contract claims are affected by management's decisions in a way they are not outside of insolvency. At the same time, shareholders' interests become essentially worthless. While there are no California cases specifically recognizing this shift, some courts have found it to be an application of the "trust fund doctrine" recognized by the California courts. Under that doctrine, which is typically limited to situations where officers or directors divert, dissipate, or unduly risk corporate assets, an insolvent company's assets are said to be managed as though held in trust for the benefit of its creditors.

Beginning in the 1990's, courts outside of California began to suggest that management's fiduciary duties are owed to creditors not only when insolvency ensues, but also when the company is still technically solvent but within what has been termed as the "zone" or "vicinity" of insolvency. The catalyst for this trend was Chancellor Allen's statement in an unpublished decision in Delaware in 1991. See Credit Lyonnais Bank Nederland, N.V. v. Pathe Communications Corp., No. 12150, 1991 Del. Ch. LEXIS 215, *108 (Del. Ch. Dec. 30, 1991) ("At least where a corporation is operating in the vicinity of insolvency, a board of directors is not merely the agent of the residue risk bearers, but owes its duty to the corporate enterprise."). Chancellor Allen expanded on this statement in his now-famous footnote 55, outlining a hypothetical situation in which a board of directors' best course of action would be one that neither stockholders, creditors nor any particular group would prefer, but rather one that would best serve the "community of interests" represented by the corporation. Id. at *108 n.55. Chancellor Allen noted that "the possibility of insolvency can do curious things to incentives, exposing creditors to risks of opportunistic behavior and creating complexities for directors." Id. The proponents of expanding the zone-of-insolvency theory have relied on this footnote to argue that, once the company teeters on the brink of insolvency, the pool of those to whom directors owe their fiduciary duties expands to include the company's creditors.

This concept of a "zone of insolvency" has caused no small amount of consternation among practitioners, judges and commentators alike. For example, how does a company know when it is in the dreaded "zone"? See Prod. Res. Group, L.L.C. v. NCT Group, Inc., 863 A.2d 772, 790 (Del. Ch. 2004) ("[I]t is not always easy to determine whether a company even meets the test for solvency.").

In 2007, the Delaware Supreme Court brought much-needed clarity to this issue, and significantly limited creditors' ability to bring zone-of-insolvency-type claims against the management of Delaware companies, when it announced that "no direct claim for breach of fiduciary duties may be asserted by the creditors of a solvent corporation that is operating in the zone of insolvency." North American Catholic Educ. Programming Found., Inc. v. Gheewalla, 930 A.2d 92, 101 (Del. 2007).

In California, until the decision in Berg, no published opinion had addressed the issue of whether California law recognizes claims for breach of management's fiduciary duties to creditors either when the company is insolvent or in the zone of insolvency. In Berg, the California Court of Appeal made it clear that such claims cannot lie against the management of a California company.

The Berg Decision

Berg, the largest creditor of a California corporation based in Cupertino, Pluris, Inc. (“Pluris”), sued the directors of Pluris after Pluris had experienced financial difficulties and entered into an assignment for the benefit of its creditors ("ABC") under sections 493.010 and 1802 of the California Code of Civil Procedure.

Berg alleged that prior to the ABC, Pluris and a Berg-related entity were involved in a litigation regarding a lease repudiated by Pluris. The litigation was later settled when Pluris, which was experiencing financial distress, informed Berg that it was in the process of securing outside financing to continue operations and that such financing was conditioned on the settlement of its dispute with Berg. Pluris and the Berg-related entity agreed to a settlement of the litigation that assigned the claim of the Berg-related entity to Berg, making him Pluris' largest creditor. Berg allegedly informed Pluris at the time that, in case Pluris was unable to obtain the financing, Berg had a plan to derive value from Pluris’ net operating losses by reorganizing under the Bankruptcy Code or exploring other alternatives.

Eventually, Pluris could not secure sufficient outside financing, and its directors entered into the ABC instead of pursuing Berg’s plan.

The Trial Court

After several amendments to his complaint, the essence of Berg's claim was that the Pluris directors owed their fiduciary duty to Berg and the other creditors because the company was either insolvent or operating in the "zone of insolvency" at the time the ABC was accomplished. Berg alleged that Pluris' directors breached this duty when they approved the ABC transaction and did not pursue Berg's plan or alternative options that may have preserved the value of Pluris' $50 million net operating loss.

The directors demurred, and the trial court ultimately sustained the demurrer without leave to amend. In its dismissal of Berg's complaint, the trial court relied on a decision by the United States District Court for the Northern District of California interpreting California law. CarrAmerica Realty Corp. v. nVIDIA Corp., Case No. 05-00428, 2006 U.S. Dist. LEXIS 75399 (N.D. Cal. September 29, 2006). The CarrAmerica court had concluded that the trust fund doctrine governs the duties of management of an insolvent corporation in California. The court stated that the scope of this doctrine is limited to cases where directors or officers have "diverted, dissipated, or unduly risked the insolvent corporation's assets" necessary to satisfy' creditors' claims. Such conduct involves self-dealing or prohibited preferential treatment of certain creditors. As such, since Berg failed to point to such misconduct by Pluris' directors, Berg's allegations failed to state a cognizable claim under California law.

On Appeal

The Court of Appeal affirmed the trial court's decision and approved the lower court's reliance on CarrAmerica. In effect, according to the Berg court, under California law, the company's insolvency does not create new duties on part of the directors who continue to be bound by their obligation to refrain from engaging in misconduct, self-dealing or preferential transfers to creditors.

According to the court, there was no misconduct on the part of Pluris' directors when they approved the ABC, which the court described as "a recognized statutory alternative to liquidation through bankruptcy," instead of "investigating, exploring or pursuing a bankruptcy reorganization." Such other alternatives described by Berg were "inherently speculative," the costs and risks of which "would not have been eliminated by discussions with Carl Berg or anyone else."

Further, the court held that even assuming that Berg's complaint pled a cognizable claim, the Pluris' directors would not be liable on alternative grounds. The Court found that the directors would be insulated from liability pursuant to the business judgment rule that immunizes directors when they acted in good faith in what they believed to be the company's best interest and without the presence of conflict of interest. According to the court, Berg made merely conclusory allegations that, without more, failed to rebut the presumption afforded by the business judgment rule.

Closing Thoughts

While the Berg decision is very favorable to directors of California corporations, the Supreme Court of California is yet to opine on the issue, and other appellate courts may hold differently in the future. In addition, a different set of circumstances facing directors charting the troubled waters of insolvency may yield a different result. Lastly, while there have been no California cases holding that directors owed their fiduciary duties to the company's creditors, directors of California companies have been found liable for breaches of fiduciary duties owed to the corporation and its shareholders when their decision to file bankruptcy harmed the value of the company's shares and when they did not consider other alternatives to bankruptcy. See, e.g., Davis v. Yageo Corporation, 481 F.3d 661 (9th Cir. 2007) (directors liable as the bankruptcy filing was a breach of fiduciary duty designed to enable the majority shareholder to acquire the corporation’s assets at less than fair value). Therefore, it remains important for California directors to continue to exercise diligence in weighing the options available to them when their company is insolvent and in considering the impact of these alternatives on all the company's constituencies, including its shareholders and creditors.

Authored By:

Robert Sahyan
(415) 774-3146
rsahyan@sheppardmullin.com

What Are the Top 5 SEO Ranking Factors?

Thu, 02 Sep 2010 17:15:05 GMT

We're often asked by law firm marketers to advise on the top factors to focus on to optimize a website or blog for search engine visibility. Sorry to say, but there's no secret formula or silver bullet, and any self-professed...

SEOMoz, a leading provider of SEO tools and resources, polls the top SEO experts around the world every two years to obtain their insights into the top positive (and negative) factors for search engine optimization. The 2009 report, which surveyed 72 experts, identifies the top five positive factors.

Keyword Focused Anchor Text from External Links (ranked "very important" by 73% of experts) (note: this factor refers to links to your site or blog from third parties where the links are comprised of keywords relevant to your website or blog, or even better to the page to which they link)
External Link Popularity (ranked "very important" by 71% of experts) (note: refers to the overall quantity and quality of inbound links - low quality links would be those from sites that have nothing to do with the content on your site - e.g., if a law firm gets a link from the website of a laundromat - worse, if the third party site is a "link farm" - then a link from them would be highly negative)
Diversity of Link Sources (ranked "very important" by 67% of experts) (note: refers to variety of links from many unique root domains)
Keyword Use Anywhere in the Title Tag (ranked "very important" by 66% of experts) (note: refers to populating your meta title tags with relevant keywords - should be different for each page of the site)
Trustworthiness of the Domain (ranked "very important" by 66% of experts )(note: refers to trustworthiness of the domains linking to you)(i.e. better to get a link from Amazon than from Joe's Discount Books).

Other positive factors (along with comments from the SEO experts polled) are included in the report.

The report also highlights "negative" factors - i.e., things you should not be doing or you risk harming your search engine visibility, or even getting blacklisted.

Click here for the full 2009 Search Engine Ranking Factors report

We recommend that law firm marketers read the report so at least they will be knowledgeable about SEO factors when talking to vendors. SEOMoz even offers a service where you can sign up for a month and ask any SEO question to a team of experts.

That said, while there's a strong consensus concerning the top positive and negative SEO factors, executing design and deployment of a law firm website or attorney blog incorporating those factors is a different story. In particular, law firms will want to work with a vendor that offers software designed to take advantage of the top positive SEO factors (e.g., customizable meta title and description tags, search-engine friendly URL's, self-service site updates, etc.).

New York Nanny Protection Law Passes

Thu, 02 Sep 2010 18:18:39 GMT

New York just passed an employee rights law that protects nannies and other domestic workers. It is the first of its kind. It protects nannies, caregivers, housekeepers and other in-home workers from sexual harssment, race discrimination and most all other forms of discrimination. It also gives them the right to overtime pay and the right to one day off per week. There is a detailed explanation of this law at Littlerlaw.com by Steven A. Fuchs.

Before this law passed, many domestic workers were unprotected because the employment discrimination and overtime pay laws only applied to larger employers. Small family operations were not covered, this left domestic workers unprotected. The New York City Administrative Code, for example, does not apply to any operation that has less than four employees.

In the past, at our law firm, we would hear stories of sexual harassment and other employer abuses involving domestic workers, but there was nothing we could do other than suggest that they call the police. In one case I remember, a domestic worker had photographs of her boss, a wealthy designer, walking around the house in the nude and engaged in highly illegal workplace behavior. Where is that case now? Wow, too bad this new law did not exist then. Now there is a solid law that protects against this kind of abuse.

Also, I think that domestic workers are more vulnerable to sexual harassment and abuse because they often work in close quarters with their employer. If problems develop, there is no one to turn to for help. There is no human resources department and before this law, there was no protection other than the criminal laws. This is a much needed new law.

Schools Use Technology to Track Exact Whereabouts of Buses and Each Child

Thu, 02 Sep 2010 16:38:50 GMT

Back in my day, we had to walk to school barefoot, in the snow -- uphill both ways. That made our feet cold. Then the kids started riding on those newfangled "buses," which seemed like a good thing until parents realized there was a 45-minute period when they did not know the exact whereabouts of their children. Now even that problem has been solved, thanks to GPS technology and identification cards that are now issued to all elementary school bus riders in places like Palos Heights, Ill. The Chicago Tribune reports (via Consumerist) that in Palos Heights, school officials have assigned ID tags to 400 students in preschool through 5th grade. Each child clips the card to their book bag, and the card/child is then "logged in" upon boarding the bus. This "allows a transportation supervisor sitting miles away to track when and where each student in Palos Heights School District 128 stepped on and off the bus." The location of the bus itself is also known to the transportation supervisor through GPS technology. The combination of the students' ID cards and the buses' GPS system allows: transportation director Barbara Lynch [to] check when a student boards or exits a...

Thursday's Three Burning Legal Questions

Thu, 02 Sep 2010 17:10:56 GMT

Here are today's three burning legal questions, along with the answers provided by the blogosphere. 1) Question: My wife pronounces the name of our home state as "Ne-VAH-dah," while I say it as "Ne-VAD-a." Who is right? Answer: You are, of course, but please reassure your wife that the Nevada Legislature has "submitted a bill draft request for the 2011 legislative session for a resolution that asserts while the preferred pronunciation of the state's name is 'Ne-VAD-a,' pronouncing it 'Ne-VAH-da' is also acceptable." (Lowering the Bar, Nevada Legislator Proposes Bill on How to Pronounce "Nevada") 2) Question: Darn these airport security scanner machines! Why do they keep beeping when I walk through with no metal on me? Should I try the machine over here to the side where you go through horizontally? Answer: Sir, that is for baggage only! (Consumerist, Man Passes Self Through Airport X-Ray) 3) Question: I'm being kidnapped, but my foolish captors forgot to take my cell phone -- I can call 911 and have the police apprehend them! Ha! Answer: Before you make the call, make sure that your "captors" aren't actually police officers giving you a ride home because you are too drunk to drive...

HTML5 Video - Oh the possibilities!

Thu, 02 Sep 2010 16:06:09 GMT

Normally, we here at ATLB try and bring you legal issues relevant to the Austin tech world, but I recently stumbled across and my first interactive, multi-window HTML5 video, and despite the lack of legal issues, I had an overwhelming desire to share it. Showcased as a "Chrome Experience," Google and Chris Milk teamed up with the band Arcade Fire to produce an extremely creative music video to the song, "We used to wait" (a great track). The site, The Wilderness Downtown, provides a look into the future of not just music videos, but a videos across the board. An interactive multi-window experience allows the user to connect with the music, the story of the video, and provides some serious nostalgia for someone who hasn't been home in awhile (my then teary-eyed girlfriend can attest to that).

I look forward to the next generation of videos and the creative music and film directors that will no doubt utilize this new format. I can already hear myself 6 months from now, "I can't believe I was so amazed by that Arcade Fire video."

Ninth Circuit Limits Labor Law Antitrust Exemption

Thu, 02 Sep 2010 17:08:57 GMT

In State of California v. Safeway, Inc. (“California v. Safeway”), the United States Court of Appeals for the Ninth Circuit answered the question of whether a profit sharing agreement that would ordinarily violate the antitrust laws was excused from compliance under the nonstatutory labor exemption. The Court found such an agreement was not excused from exemption, because it was not needed to make the collective bargaining process work. Instead, it constituted “an economic weapon used by the employers in their efforts to prevail in a labor dispute.”

Price-fixing agreements are generally illegal under the Sherman Act, with the exemption of collective bargaining of labor unions. Although Congress has never enacted such an explicit statutory antitrust exemption for employers, the Supreme Court has found that such a parallel exemption is implicit in the collective bargaining regime.

In California v. Safeway, however, the Ninth Circuit ruled that this implicit employer exemption has a limited scope and only applies where the agreement plays a traditional role in collective bargaining and is needed to make the collective bargaining process work.

The case arose out of the bitter 2003-2004 Southern California grocery workers strike against Safeway, Albertson’s, and Ralph’s/Kroger. In order to prevent the labor union from adopting a challenging bargaining strategy, the employers not only agreed to bargain as a group, but also to “share profits” during the strike.

California filed a lawsuit against Safeway, et al., alleging that the profit sharing agreement violated Section 1 of the Sherman Act. The trial court denied defendants’ motion for summary judgment based on the nonstatutory labor exemption and held that the implied antitrust exemption for employers only extends to agreements “needed to make the collective-bargaining process work.” Therefore, agreements to split profits, allocate market shares, or engage in other conduct that is not directly related to bargaining itself stretches the nonstatutory labor exemption too far.

The Court of Appeals for the Ninth Circuit affirmed this ruling.

Regarding violation of § 1 of the Sherman Act, the Ninth Circuit stated that it does not feel entirely comfortable to apply a strict per se approach to this case, because unlike previous cases in which the United States Supreme Court has found per se violation of § 1, in this case defendants’ profit sharing was for a short period of time and defendants were not the only firms of their kind, operating in the relevant market.

However, the Court held that profit sharing agreement violated § 1 of the Sherman Act, because defendants did not demonstrate how their agreement had any “precompetitive effects.” Defendants asserted that their agreement served a precompetitive purpose by reducing the labor costs and increasing their chances of winning the labor dispute. The Court found the defendants’ argument unpersuasive, reasoning that “[r]educing workers’ wages and benefits is hardly an objective that would justify a violation of our antitrust laws or a benefit so substantial to the public as to overcome the deleterious consequences of anticompetitive conduct.”

The Court then proceeded to address defendants’ principal contention that since they entered into this agreement in anticipation of a labor dispute, they have not violated antitrust laws, given the applicability of the nonstatutory labor exemption.

Summarizing the history of antitrust and labor laws and their potential conflicts, the Court mentioned the logic behind nonstatutory labor exemption, “it would be difficult, if not impossible, to require groups of employers and employees to bargain together, but at the same time to forbid them to make among themselves and with each other any of the competition-restricting agreements potentially necessary to make the process work or its results mutually acceptable” (citing Brown v. Pro Football, Inc., 518 U.S. 231, 237 (1996)).

The Court asserted that “[n]ot every restraint on competition that employers and employees might impose through the collective bargaining process is immune from antitrust review.” An exemption from the antitrust law is appropriate, where “the conduct at issue plays such a traditional role in collective bargaining.” The Court found such a traditional role presents in cases where questions are “ordinarily resolved by, or even susceptible to resolution by, the application of labor law principles” and where agreements are “needed to make the collective bargaining process work.”

The Court found that defendants’ profit sharing conduct does not play a traditional role in collective bargaining, neither is it needed to make the collective bargaining process work. On the contrary, “defendants seek an exemption in order to permit them to engage in unlawful conduct in order to help them defeat their employees’ collective bargaining representatives who are engaging in perfectly lawful conduct,” the Court concluded. Accordingly, agreements to split profits, allocate market shares, or engage in other conduct that is not directly related to bargaining itself will fall outside the exemption.

Parva Fattahi
(202) 589-1834
pfatahi@dbmlawgroup.com

TI and Tameka Arrested - If It's Sizzurp, Where's The Drug Company Responsibility?

bryantsq@hotmail.com (Bryant Esquenazi) — Thu, 02 Sep 2010 16:32:43 GMT

TMZ is reporting that TI and wife Tameka "Tiny" Cottle may have been sippin on Sizzurp when they were arrested last night for felony drug possession by Los Angeles police. Here in Miami Beach, we all remember that T.I. and Tiny just got married here in Miami Beach on July 30th.

TI and his bride Tiny succeeded in having a secret wedding ceremony at the Miami Beach Courthouse, away from the prying paparazzi. For a couple that reportedly had been together for 7 years, after one month's time as husband-and-wife, it sure seems like a horrible honeymoon story to be busted on felony charges. Wouldn't wish that on anyone, right? Especially when Grammy-winning rapper T.I. is one of the stars of the no. 1 movie in the country right now (Takers).

So, what's Sizzrup?

TMZ has pictures of T.I.'s car at the site of the bust. TMZ points out the styro cups. And that's a clue to Sizzrup here. It's a beverage made from any number of Sizzrup recipes easily found on the web: take a Jolly Rancher, traditionally put it in a Styrofoam glass along with the fruit-flavored soda of your choice and (here's the key ingredient) some Promethazine w/Codeine syrup.

Promethazine is sold only with a doctor's prescription, under a number of names: Pentazine®,Phenadoz®, Phenergan®, Promacot®, and Promethegan®. Promethazine combined with codeine is available (again by prescription only) as Pentazine® VC (Codeine, Phenylephrine, Promethazine), Pentazine® with Codeine (containing Codeine, Promethazine), Phenergan® VC with Codeine (Codeine, Phenylephrine, Promethazine), Phenergan® with Codeine (Codeine, Promethazine), and Prometh with Codeine (Codeine, Guaifenesin, Promethazine).

Promethazine seems like a good thing, at first glance. It's supposed to help relieve allergy symptoms. However, it's got a long and scary list of side effects (serious stuff like seizures and not breathing) and an overdose can be deadly.

Promethazine is another Popular Prescription Drug that can kill people.

So, here's the question: assuming arguendo that T.I. and Tiny were drinking some Sizzrup when they were arrested, sure it's a criminal case and they'll have to deal with prosecutors and the accompanying media frenzy. But their case is a bit different than Paris Hilton's recent felony bust for cocaine. Sizzrup, again assuming that TMZ knows its stuff, is the use of a prescription drug for other than its intended use.

Sure, T.I. and Tiny aren't being reported to be sick or injured. That's good. But think about Anna Nicole Smith. And consider the death of actor Chris Penn, which has been tied to injesting a combination of Promethazine and codeine - as well as the death of Underground Kingz rapper Pimp C in 2007 whose death purported was directly connected to Sizzrup.

Misuse of Prescription Drugs Creates a Huge Danger in this Country, When are the Drug Companies Going to Take Responsibilty for Their Products?

Sure, drugs get warning labels. Sure, everyone is supposed to know that they are assuming a big risk (death) when they take drugs outside of a doctor's oversight and guidance. However, prescription drugs are right there on TV being sold alongside cars and computers.

This in the face of the reality that the number of prescription drug overdoses presenting at Emergency Rooms across the country is rising to epidemic proportions.

Drug companies are making gazillions of dollars selling this stuff, and isn't it about time that they started being a bit more responsible for their products? Like when they're known to be a part of a fun party drink called Sizzrup, with recipes available online?????

Traumatic Brain Injury a "Disease" not an "Event"

Thu, 02 Sep 2010 17:39:04 GMT

Traumatic Brain Injury Claims

New research published in this months issue of the Journal of Neurotrauma advocates treating traumatic brain injury as a chronic disease process, rather than an isolated event.

As a brain injury lawyer, I wholeheartedly agree with the conclusions reached in the article.

Brain Injury the Beginning of a Process

The authors of the study, Brent E. Masel and Douglas S. DeWitt from the Univesity of Texas Department of Neurology state that:

The purpose of this article is to encourage the classification of traumatic brain injury (TBI) as the beginning of a chronic disease process, rather than an event or final outcome. Head trauma is the beginning of an ongoing, perhaps lifelong, process that impacts multiple organ systems and may be disease causative and accelerative.

The authors review how a brain injury is often the start of a degenerative process that may cause further injury, even death, months or years after the initial trauma. The conclusions reached by the authors no doubt will be supported by brain injury survivors, their family's and those that advocate for survivors.

Chronic traumatic brain injury disease should be reimbursed and managed on a par with all other chronic diseases. Only then will the individuals with this condition get the medical surveillance, support, and treatment they so richly deserve. Only then will brain-injury research receive the funding it requires. Only then will we be able to truly talk about a cure.

FDCPA Fee-Shifting Applies To Appellate Proceedings, Tenth Circuit Holds

Thu, 02 Sep 2010 16:07:46 GMT

In Anchondo v. Anderson, Crenshaw & Associates, L.L.C, --- F.3d ---, 2010 WL 3261155 (10th Cir. Aug. 16, 2010), the Tenth Circuit held that, like that of the Truth in Lending Act (TLA), the Fair Debt Collection Practices Act’s (FDCPA) fee-shifting provision encompasses appellate...

Guest blogger: Salmonella victim Barb Pruitt urges Senate to act food safety legislation

Thu, 02 Sep 2010 15:43:05 GMT

Nobody can speak more authoritatively about the risks of foodpoisoning than those who have succumbed to severe illness in large outbreaks, and had there lives permanently changed as a result. Barb Pruitt will not be in Washington DC next week to speak with key senators and staffers on the importance of new food safety legislation, but hers is certainly a voice that needs to be heard as well.

A little background first. Barb was infected by Salmonella typhimurium in an 2009 outbreak ultimately linked to lettuce from Salinas valley California. Barb's illness very quickly became life-threatening because the bacteria caused the tissues in her gastrointestinal tract to die, leading to a perforation of her small intestine that allowed the bacteria to escape into her bloodstream. She ultimately had to be life-flighted to a major medical center, where she underwent emergency surgery to remove approximately four feet of her small intestine. She has spent over a month in the hospital, and has endured constant, severe gastrointesinal problems ever since as a result of her inability to properly digest foods due to the loss of her small intestine. Barb's problems, including multiple days a week where she suffers 15-20 bouts of diarrhea, are permanent.

Senator Harry Reid, who has spoken with food safety victims in the past seeking passage of the Food Safety Modernization Act, and every other senator and staffer who can help get the bill, S 510, to the floor for a vote, need to know about Barb. Her illness was caused by a product, lettuce, that is regulated by the FDA; and its certainly possible that earlier action on the Food Safety Modernization Act would have helped to prevent her life from being permanently changed. At the very least, action on S 510 now will help others avoid what Barb has gone through.

Barb Pruitt's Statement to the Senate:

First, let me make it clear that I have no authority or expertise in the field of foodborne illnesses, however; I am a survivor of Salmonella poisoning and can speak from experience. I speak for ALL that have experienced, could experience, or have died from food poisoning. In addition, I speak for those that are left disabled for life, such as me, due to the inadequacies and failures within our food industries. I choose to be the voice for us all.

If I were to personally stand before you today, I would implore you to please pursue the vote for the Food Safety Modernization Act. The Act will enable increased authority for the FDA and food regulations will be more effective. What I like best is that the Act would require preventative programs. It is clear that the regulations we currently have in place are not followed nor are they effective. The Food Safety Modernization Act would provide necessary modification of and improved regulations. Food poisoning is preventable, let us enforce it.

As citizens, we should not be fearful of the food that we consume. We are hard working Americans who spend our hard working money on life’s necessities - FOOD. We should NOT under any circumstances fear the consumption of our food; we assume and TRUST that our food is prepared with quality and that it is SAFE. No one ever assumes that their next bite of food may sicken them or worse yet kill them, leaving families destroyed and experiencing financial devastation with medical bills.

The failure in our system is that producers focus on quantity rather than quality. They have the ability to focus on quantity rather than quality because our current structured food regulations are failing. We have the power to change that. We must stand together and apply strict regulations and by all means ENFORCE them. We have to give authority where necessary to preserve human life and quality of life.

When a food product is produced and sent to the public, when tainted, millions of unsuspecting people may be facing a death sentence or lifetime disabilities. It is not like a piece of clothing that has been sewn incorrectly so therefore it is sold at a discount store. This is food we are talking about. Our food, more often than not, is not tested for quality until it is consumed by the public. There is no taking it back once it has been eaten and someone falls prey to illness.

Every case of foodborne illness is a case of a failure in our food industry reguations and a lack of regard for human life as producers are able to ignore current regulations and push for quantity rather than quality. It is sad that we have come to the point of actually having to babysit our food supply, not only on a local level but worldwide; we must also be strict with our incoming food as well. All food must be produced with the mindset that EVERY human life is valuable.

I urgently ask you to please vote on this Act and pass it. Stronger regulations, increased involvement from authorities, and preventative programs are a necessity. I know I am but only one voice, but I hope that I am ultimately a strong, and unfortunately very experienced, voice.

Half a Billion Eggs Later, Egg Producers Continue to Blame, Mislead Consumers

Thu, 02 Sep 2010 16:15:53 GMT

Here's what egg producers had to say after one of their largest, Wright County Egg, poisoned thousands with Salmonella in conjunction with a recall of half a billion eggs: it's your fault. It is a stunning position to take in light of FDA findings from an inspection of Wright County Egg facilities in Galt, Iowa, as listed in pleadings filed on behalf of Marler Clark clients in Federal District Court in Iowa this week. Here are some "highlights," with further listings at Marlerblog and the FDA:

Chicken manure located in the manure pits below the egg laying operations was observed to be approximately 4 feet high to 8 feet high at [multiple]locations. The outside access doors to the manure pits at these locations had been pushed out by the weight of the manure, leaving open access to wildlife or domesticated animals.
Un-baited, unsealed holes appearing to be rodent burrows located along the second floor baseboards were observed.
Dark liquid which appeared to be manure was observed seeping through the concrete foundation to the outside of the laying houses at [multiple] locations.
Standing water approximately 3 inches deep was observed at the southeast corner of the manure pit located inside Layer 1 – House 13.
Un-caged birds (chickens having escaped) were observed in the egg laying operations in contact with the egg laying birds at Layer 3 – Houses 9 and 16. The un-caged birds were using the manure, which was approximately 8 feet high, to access the egg laying area.
Layer 3 – House 11, the house entrance door to access both House 11 and 12 was blocked with excessive amounts of manure in the manure pits.
There were between 2 to 5 live mice observed inside the egg laying Houses 1, 2, 3, 5, 7, 9, 10, 11, and 14.
Live and dead flies too numerous to count were observed at [multiple] locations inside the egg laying houses. The live flies were on and around egg belts, feed, shell eggs and walkways in the different sections of each egg laying area. In addition, live and dead maggots too numerous to count were observed on the manure pit floor located in Layer 2 – House 7.

The egg industry's position took a well-deserved beating from several critics, including Seattle University School of Law Professor Catherine O'Neill. O'Neill likened the industry's tactics to those employed by environmental polluters who, rather than contain or limit their environmental destruction, ask those who are affronted by it to alter their behavior, a practice she calls "risk avoidance."

The arguments raised by O'Neill and others are further strengthened by a story today in the Wall Street Journal. Alicia Mundy and Bill Tomson report today on consumers' misplaced reliance on the USDA "Grade A" stamp on eggs:

To some shoppers, the meaning of the "USDA Grade A" shield on egg cartons seems pretty obvious.
"It means that the rabbi's blessed this as kosher, right?" said Stephen Potter, an early-morning shopper at a Safeway store in Alexandria, Va.

"It means they've been checked. It's the quality seal. They're safe," suggested Susan Hergenrather, who was cruising the aisles at a Harris Teeter supermarket.

Wrong and wrong. The mark on the carton just means that the U.S. Department of Agriculture had a "grader" at an egg-packing facility who checked the eggs' size and color and made sure the shells weren't cracked, a USDA official said. Consumers "misunderstand" the shield, he said.

Marking the eggs "Grade A" is not mandatory, but likely allows producers to charge more for eggs. But, contrary to public perception, it does not signify any inspection with respect to human pathogens, "the USDA isn't looking for bacteria such as salmonella in the egg or the hen," according to USDA officials quoted in the article. Mundy and Tomson explain:

The egg side is different from the meat side at the USDA, where inspection programs are mandatory and the inspectors' job includes looking for sanitation problems. "The USDA mark of inspection is only applied to meat products after inspectors in the plant have confirmed its safety and wholesomeness," said Brian Mabry, a department spokesman.

So consumers, remember, its not the egg producers job to maintain sanitation at their own, basically unregulated facilities. They expect you to their job. But they won't mention that, and don't put warnings or cooking instructions on their products, outside of a misleading government stamp. And if you get sick, remember, it's your own fault.

Certification Process for EHRs Underway

Thu, 02 Sep 2010 17:17:27 GMT

This week the Office of the National Coordinator for Health Information Technology (“ONC”) announced that the Certification Commission for Health Information Technology (“CCHIT”) and the Drummond Group, Inc. (“DGI”) were the first technology review bodies authorized to test and certify EHR systems for compliance with the "meaningful use" rules. This means that EHR vendors can begin to have their products certified.

This announcement is of special import to health care providers who intend to implement EHR systems in order to qualify for Medicare and Medicaid incentives – and avoid the eventual penalties for failing to do so that take effect in 2015. Specifically, it is not enough for a provider to implement an EHR system – the technology platform used must be “certified” in order to ensure accurate transfer and exchange of information from provider to provider.

With the initial two ONC-ATCBs now named, EHR vendors can apply to them for certification of their products. By purchasing certified products, providers can be assured that the products support achievement of meaningful use objectives.

CMS is also working to create an online system for providers to register and attest (i.e., demonstrate use of for the HER incentive programs. The first incentive payments are targeted to be made in May 2011. Meanwhile, ONC is also carrying out new programs of technical assistance and training for the use of EHRs, especially for smaller hospitals and physician practices.

For more information, visit the ONC website.

Many Continue To Discover Their Name Has Been Placed On The Child Abuse Central Index, Even When The Claims Turn Out To Be Unsubstantiated.

Thu, 02 Sep 2010 17:59:19 GMT

The Child Abuse Central Index (CACI) was created by the Legislature in 1965 as a tool for state and local agencies to help protect the health and safety of California’s children. Although the idea of protecting California’s children by establishing an index of known abusers is theoretically a good idea, the resulting outcome has been that many are listed on the index based on unsubstantiated claims against them.

Recent court decisions have mandated those who are placed on the index, must be given notice and an opportunity to have a hearing to remove name from the child abuse central index. Although this safeguard has ensured many to be excluded from the index, that otherwise would be listed, many feel that the safeguards and standards are insufficient.

Perhaps the most common criticism of CACI is the standard required to be placed on the index. For purposes of CACI, a person will be kept on the list if the child abuse claims are either deemed substantiated or inconclusive.

Most agree that if the claims are found to be substantiated, the inclusion of that person on CACI is warranted. However a fervent criticism comes from those that oppose listing people on the index when the claims against are found unsubstantiated. In those cases, the person will remain on CACI.

If you or a loved one has been placed on the Child Abuse Central Index, it is imperative that you hire an aggressive, experienced criminal defense firm. Hiring an experienced Orange County criminal defense law firm will ensure your rights are protected. The attorneys at Wallin & Klarich have been helping people for over 30 years.

Please feel free to contact Wallin & Klarich to discuss your case. You can reach us 24 hours a day, 7 days a week at 888-749-0034 or go to our website at www.wklaw.com for more information.

The Juvenile Justice System Tries To Rehabilitate Youth Rather Than To Punish Them

Thu, 02 Sep 2010 18:08:44 GMT

Both the juvenile and adult justice system in California have the shared goal of public safety. However, this is one of the few goals both systems have in common. The adult justice system has the goal of punishment of offenders, where as the juvenile justice system has the goal of treatment and rehabilitation of juvenile offenders.

The goal of treatment and rehabilitation, in lieu of punishment in juvenile proceedings is evident by the wide array of programs aimed at addressing behavioral problems of juveniles. The juvenile courts often allow its offenders to complete diversion or treatment programs as part of their rehabilitation. If an offender is allowed to complete a diversion program, the court may dismiss the underlying offense against the juvenile.

Although the adult justice system also has a number of diversion related programs, these programs are offered much less, and under more stringent circumstances than they are offered in the juvenile justice system.

If you or a loved one has been arrested, it is imperative that you hire an aggressive, experienced Los Angeles Juvenile Criminal Defense Lawyer. Hiring an experienced criminal defense law firm can greatly increase your chances of keeping your freedom. The attorneys at Wallin & Klarich have been helping people for over 30 years.

Please feel free to contact Wallin & Klarich to discuss your case. You can reach us 24 hours a day, 7 days a week at 888-749-0034 or go to our website at www.wklaw.com for more information.

Court Reduces Continuing Charges and Expenses From Net Profits When a Business Resumed Partial Operations After a Loss - Understanding Business Interruption Claims, Part 35

Sun, 22 Aug 2010 10:30:51 GMT

The Fifth Circuit Court of Appeals recently issued a 21-page opinion in the case of Consolidated Companies, Inc. v. Lexington Insurance Company, No. 09-30178, ___ F. 3d ___ (5th Cir. August 17, 2010). The opinion is dense, to say the least, but it resolves an issue that sometimes can make or break a settlement in business interruption claims.

Consolidated Companies, Inc. (“Conco”), a food and food-related products distributor, sustained damages to one of its warehouses and equipment as a result of Hurricane Katrina. Conco was able to resume partial operations within ten (10) days of the hurricane, however, it took the company 15 months to resume its pre-loss operations. During those 15 months, Conco earned $205,840,489 in revenues and incurred $205,561,483 in expenses, netting a mere $279,006.

Lexington advanced $3 million under the policy and offered an additional $247,070 in final payment of the claim. Conco rejected the additional $247,070 and filed suit sounding in breach of contract and bad-faith alleging it had a business interruption loss in excess of $19 million (of which $12,308,522 were charges and expenses).

After a trial, the jury awarded $19,586,239 in business interruption, $2.5 million in bad faith damages, and an additional $5,365,797.50 in statutory penalties. Lexington appealed on several grounds, including whether the trial court erred in not instructing the jury to offset the charges and expenses ($12,308,522 ) from the calculated net income. Lexington prevailed, and the award on the business loss was therefore adjusted.

At issue before the Court was the following policy language:

If such loss occurs during the term of this policy, it shall be adjusted on the basis of the actual loss sustained by the Insured, during the period of restoration, consisting of the net profit (or loss) which is thereby prevented from being earned and of all charges and expenses (excluding ordinary payroll), but only to the extent that they must necessarily continue during the interruption of business, and only to the extent to which they would have been incurred had no loss occurred.

* * * *

1) RESUMPTION OF OPERATIONS: It is a condition of this insurance that if the insured could reduce the loss resulting from the interruption of business,

(a) by a complete or partial resumption of operations, or

(b) by making use of other available stock, merchandise or location

such reduction will be taken into account in arriving at the amount of loss hereunder, but only to the extent that the business interruption loss covered under this policy is thereby reduced.

As defined in the policy, the “actual loss” consists of the net profit or loss which the business interruption prevents from being earned. The term “charges and expenses” is further defined as expenses that would have been incurred without the loss and have to continue during the business interruption.

Conco argued that the charges and expenses incurred during the period of restoration are recoverable in addition to the lost profits, as calculated under the “actual loss” provision. The trial court agreed with Conco by finding that the “actual loss” provision was ambiguous and resolved the issue in favor of the insured. However, the appellate court disagreed, finding that the “Resumption of Operations” subparagraph resolved the question in favor of Lexington.

In an acrobatic effort to make a difficult issue simple, the Court wrote:

As a condition of coverage, operations had to be resumed “if the insured could reduce the loss resulting from the interruption of business” by such a resumption. The policy states that “such reduction will be taken into account in arriving at the amount of loss hereunder, but only to the extent that the business interruption loss covered under this policy is thereby reduced.”

This clause does not elaborate on what the “loss resulting from the interruption of business” means. Meaning is found in the general section immediately before the “Resumption of Operations” subparagraph. There, “actual loss” from an interruption of business is said to consist of the net profit that the interruption prevented the insured from earning plus “all charges and expenses (excluding ordinary payroll), but only to the extent that they must necessarily continue during the interruption of business, and only to the extent to which they would have been incurred had no loss occurred.” Three paragraphs later, the policy addresses the effect of the insured's resuming operations: “if the insured could reduce the loss resulting from this interruption of business ... by a complete or partial resumption of operations ... such reduction will be taken into account in arriving at the amount of loss.” (emphasis added). This is the same “loss” that is defined as being expected net profit plus charges and expenses. There is no ambiguity.

Therefore, when a partial resumption in operations reduces the “actual loss,” i.e., anticipatable profits and unavoidable costs, so substantially as to create some profit, all charges and expenses have, by definition, been covered by income. The only recovery in such an event is for the diminished profit.

Taking the actual dollar amounts presented in this case, we repeat that Conco earned $205,840,489 in revenues and incurred $205,561,483 in expenses for a net profit of $279,006. The charges and expenses for which the policy would pay had there been no resumption of operations was shown to be $12,308,522. As the policy requires, those expenses are ones that “necessarily continue during the interruption of business, and only to the extent to which they would have been incurred had no loss occurred.” Thus, they are not independent of the costs that are incurred during usual operations, but are a subset of them. Consequently, the roughly $12 million in expenses must be part of the $205 million in expenses that were incurred during resumed operations. All expenses were recouped from the income of the business and are not a “loss” to be compensated under the policy.

It is hard to understand how $12 million can just disappear in a few sentences, but insurance law abhors windfalls on any side. Unfortunately, since the “actual loss” was reduced by $12 million, the court of appeals also reduced the bad-faith damages, because the jury based its bad-faith findings mostly on the failure to pay the $12 million.

For a copy of the complete opinion, click here.

Basic Claim Step Advice For Hurricane Earl Policyholders

Thu, 02 Sep 2010 16:52:02 GMT

Tina Nicholson is based in our Houston office. She wrote a very basic article "Steps For Handling an Insurance Claim" for the Hotel World Network. With Hurricane Earl winds beating the mid-Atlantic coast, her tips may be helpful for many policyholders:

Contact your insurance company immediately to notify it of the claim. The first contact will likely be a telephone call, but follow that up in writing. In some states, you are only entitled to certain legal rights if you notify the insurance company of the claim in writing.
Read your insurance policy carefully to determine exactly what your policy does and does not cover. For example, if your policy covers water damage but not mold damage, then you will need to emphasize to the insurance adjuster that your carpet is wet, rather than saying it "smells moldy.”
Document the damage with lots of photographs. Photograph every room and each item that is damaged. After the property is cleaned up and repaired, the insurance company may dispute the extent of the damage and you will need proof.
Hire reputable contractors for the repairs. Avoid “restoration” companies, particularly if they tell you they will only charge you what the insurance company pays. That situation can result in the restoration company getting the bulk of your insurance check and leaving you with a lot of out-of-pocket expenses.
Keep track of the amount of time your employees spend on clean-up or repairs. The insurance company may reimburse you for the cost of its time.
Provide the insurance company with all of the documentation it requests. If you fail to cooperate with the insurance company, you could jeopardize your insurance claim.
Document all contacts with the insurance company, including names, telephone numbers and conversations. It is common for a policyholder to receive conflicting information from the insurance company. The adjuster who says the company will pay for your loss may be overruled at the home office.
If your claim is not paid quickly and fairly, contact an attorney experienced in property insurance claims to determine your rights. Many states require the insurance company to pay your attorney fees if you have to take legal action to obtain full payment on your insurance claim.

Policyholders who are in the path of high wind events should require their insurers to closely inspect for the subtle damages caused by hurricanes. Many catastrophe adjusters do not have the time, experience, training, time or motivation to find these types of damage. The more thorough the examination of the structure following a loss, the better the chance of finding damage which often is overlooked until it causes other portions of the building to break down far sooner than the designed life expectancy.

Nichholson's tip to keep track of everything said and done by the adjusters and representatives of the insurance company can be crucial. Often, multiple adjusters will be assigned to a loss. Agreements and discussions are often forgotten or lost. Our strong suggestion is for the policyholder to carefully note every interaction with the insurance company by time and date.

Take many videos and photographs of obvious damage to your property and neighboring properties. Documenting the "war zone" scenario often found following a storm prevents any argument later by the insurer that the storm was not as bad as the policyholder suggests. Insurers that want to minimize damage payments often have few photographs of very badly damaged structures or devastated areas. Those same insurers will take many photographs of areas with little damage.

This observation is not meant for most of the adjusters who are trying to do a great job in getting benefits to policyholders, but you don't know what breed of adjuster you will be assigned. Safe is better than sorry.