Archive for June, 2011

Two New Articles On “Morrison v. National Australia Bank”

June 29, 2011

Readers may be interested in two new articles posted on SSRN analyzing the U.S. Supreme Court decision in Morrison v. National Australia Bank [pdf], which held that U.S. law prohibiting securities fraud does not apply to investment deals occurring outside the country, even if those investment deals have a domestic effect.

The first by Linda Silberman (New York University School of Law) is entitled “Morrison v. National Australia Bank: Implications for Global Securities Class Actions”, Swiss Yearbook of Private International Law 2010/NYU School of Law, Public Law Research Paper No. 11-41. The abstract reads:

The recent U.S. Supreme Court decision in Morrison v. National Australia Bank has had a significant impact on the extraterritorial reach of the U.S. Securities Laws as well as a limitating global class actions. Other countries have begun to fill a perceived gap with respect to such class actions, as the recent Converium case in the Netherlands and the Imax decision in Canada illustrate. In addition to thosse developments, the article discusses various post-Morrison developments in the United States, including the recent Dodd-Frank legislation, the possibility of bringing claims in the United States under foreign law, lower court interpretations of Morrison, including off-exchange case law. The author concludes with a call for increased regulatory cooperation as well as the need for an international treaty.

The second by Michelle K. Fiechter is entitled “Extraterritorial Application of the Alien Tort Statute: The Effect of Morrison v. National Bank of Australia, Ltd. on Future Litigation” , Iowa Law Review, Vol. 97, No. 2, 2011. The abstract reads:

In Morrison v. National Bank of Australia, Ltd., the Supreme Court issued an opinion holding that when addressing issues of prescriptive jurisdiction, courts are to presume that Congress only writes laws for domestic application. This Note takes a look at the Alien Tort Statute, a statute that courts have been applying extraterritorially since 1789. This Note addresses what effect, if any, the Morrison decision will have on ATS litigation. Because the presumption against extraterritoriality is a rebuttable one, this Note argues that the context in which the First Congress enacted the Alien Tort Statute provides enough evidence to overcome the presumption of domestic application. Therefore, Morrison will have little, if any, effect on the future of the ATS.

UPDATED: A Brave New World

June 27, 2011
1052(Brave New World)

Image by danielweiresq via Flickr

O wonder! How many goodly creatures are there here! How beauteous mankind is! O brave new world! That has such people in it!
Miranda’s speech in Shakespeare’s The Tempest, Act V, Scene I

“There’s always soma to calm your anger, to reconcile you to your enemies, to make you patient and long-suffering. In the past you could only accomplish these things by making a great effort and after years of hard moral training. Now, you swallow two or three half-gramme tablets, and there you are. Anybody can be virtuous now. You can carry at least half your morality about in a bottle. Christianity without tears-that’s what soma is.”

Aldous Huxley, Brave New World, Ch. 17

In  “Got Twitter? What’s Your Influence Score“, Stephanie Rosenbloom of the  New York Times paints a dismal future when she writes,

IMAGINE a world in which we are assigned a number that indicates how influential we are. This number would help determine whether you receive a job, a hotel-room upgrade or free samples at the supermarket. If your influence score is low, you don’t get the promotion, the suite or the complimentary cookies.

This is not science fiction.

It’s happening to millions of social network users. If you have a Facebook, Twitter or LinkedIn account, you are already being judged – or will be soon. Companies with names like Klout, PeerIndex and Twitter Grader are in the process of scoring millions, eventually billions, of people on their level of influence – or in the lingo, rating “influencers.” Yet the companies are not simply looking at the number of followers or friends you’ve amassed. Rather, they are beginning to measure influence in more nuanced ways, and posting their judgments – in the form of a score – online.

To some, it’s an inspiring tool – one that’s encouraging the democratization of influence. No longer must you be a celebrity, a politician or a media personality to be considered influential. Social scoring can also help build a personal brand. To critics, social scoring is a brave new technoworld, where your rating could help determine how well you are treated by everyone with whom you interact.

Is this all there is? Are we now all resigned to a social media caste system where our digital selves are to be rated, traded, bartered, exchanged and sold?

For many lawyers, both old and new, borrowed and blue, the siren song of social media and its chorus of empty promises and get-rich-quick-or-die-tryin’ American Idolatry is too much to resist. The heart is willing, but the bank account is weak. The rocky shoals do not portend any risks. There’s only smooth sailing ahead. Professionalism and Ethics—the Scylla and Charybdis of Lawyering—are best avoided altogether on this epic voyage.

I read Brave New World as a high school student in Grade 10 English class.

At the time, in the unbridled optimism of my youth, Huxley’s dystopia was fanciful science-fiction. Nothing more, Nothing less. While George Orwell’s classic, 1984 has permeated the collective psyche, contorted by many into a convenient metaphor for totalitarianism and class conflict, it was Huxley’s novel that somehow remained imprinted into my sub-conscious. Brave New World inhabited the dark recesses of my mind, waiting patiently, like a crow hovering over freshly killed prey, to feast on a developing cynicism, eventually calcified, when Life’s inevitable disappointments and illusory achievements cumulatively took their toll.

Eighteen years ago I became a lawyer. It was my high school history teacher, Mr. Evans, whom I fondly remember suggesting that I should consider becoming a journalist or a lawyer.I thank him for the inspiration, but today, I feel old. Not chronologically, just existentially old. As though all the years I have spent learning, listening, working, trying to become a better lawyer, and thus, a better human being, have sped by like a freight train—the days, the months, the years—clipping past like dilapidated railway cars, quickly fading into the distance.

What is the point of writing about the Law, practicing the Law, living and breathing the Law, when all that was noble in our profession has been compromised, commodified, compartmentalized? What is the point?

Of course, lawyers need and want clients. Clients need and want lawyers. It is a symbiotic relationship, but a relationship where the client’s needs always must come first. We all need and want to be respected by our peers. Few of us are independently wealthy. We pay our bills and taxes. We deserve to make a living. Yet, is everything fungible, even your ethics? Are you willing to do anything to get a high Klout or Peer Index score, amass Twitter followers and Facebook friends? All at the expense of your clients and your profession?

Before his downfall a man’s heart is proud, but humility comes before honor. Proverbs 18:12

What is the point in exposing the hypocrites; the liars; the egregiously incompetent; the unintegrious? Have you even asked yourself these questions? Do you care, or are you surfeit with the soma of self-promotion and self-congratulation, masquerading as self-actualization?

Where are all the lawyers? Where are the next Scott Greenfields, the Brian Tannebaums, the Mark Bennetts to take up the fight against the banality of it all?

I leave you with a final thought from Huxley’s Brave New World:

“The Gods are just. No doubt. But their code of law is dictated, in the last resort, by the people who organize society; providence takes its cue from men.”
- Aldous Huxley, Brave New World, Ch. 17

UPDATE: Many thanks to George Wallace, partner in the Pasadena, California, law firm of Wallace, Brown & Schwartz and author of the excellent A Fool in the Forest Blog and Declarations and Exclusions Blog,  for his comment and providing a link to a wonderful cartoon that visualizes the  thesis from Neil Postman’s 1985 book “Amusing Ourselves To Death: Public Discourse in the Age of Show business”: http://www.recombinantrecords.net/docs/2009-05-Amusing-Ourselves-to-Death.html 

Zamir and Ritov on “Loss Aversion, Omission Bias, and the Burden of Proof in Civil Litigation”

June 24, 2011

Eyal Zamir (Hebrew University of Jerusalem – Faculty of Law)

and  Ilana Ritov (Hebrew University of Jerusalem – School of Education)

have posted “Loss Aversion, Omission Bias, and the Burden of Proof in Civil Litigation”. Here’s the abstract:

The basic rule in civil litigation is that the plaintiff carries the burden of proof and the general standard of proof is preponderance of the evidence. The plaintiff prevails if she establishes her case with a probability exceeding 0.5. Drawing on insights from behavioral economics and new experimental findings, this paper makes the following arguments: 1. Since litigants tend to take the status quo as the pertinent reference point, erroneous dismissal of a claim is likely to be perceived as denying the plaintiff deserved gains, and erroneous acceptance of a claim perceived as inflicting undeserved losses on the defendant. Loss aversion thus provides a powerful justification for placing the burden of proof on the plaintiff; 2. Ceteris paribus, inasmuch as the law strives to minimize the total costs of erroneous judicial decisions, loss aversion calls for setting the standard of proof considerably higher than 51%; 3. Notwithstanding the formal rule of 51%, behavioral insights and experimental findings lend support to the hypothesis that the actual standard of proof in civil litigation is higher than 51%. This phenomenon is possibly due to factfinders’ omission bias. Burden of proof is not a mere tiebreaker; it sets a reference point and creates a default effect.

A copy of the paper is available for download from SSRN here.

FURTHER UPDATED: Lord Black’s libel claim settled, SCC’s reserved decision now moot

June 24, 2011
Mug shot of Conrad Black.

Image via Wikipedia

As Conrad Black (a.k.a. Lord Black of Crossharbour) awaits the outcome  today of his resentencing hearing before U.S. Federal Court judge Amy St. Eve, who presided over Black’s original trial in 2007, another interesting development merits consideration.

According to various news sources, including The Canadian Press (via CTV News) :

Disgraced media mogul Conrad Black, who has seen his fortune nearly wiped out in his ongoing legal saga, will receive a handsome settlement for a series of libel suits.

His lawyer, David Jenkins said Thursday — the eve of his re-entering hearing — that Black has settled some libel-related lawsuits against his former associates at Hollinger International Inc. and the man who wrote the report that helped send him to jail.

“Hollinger International’s successor company, Sun Times Media Group, attached a substantial value to the libel action in the settlement figure that will be paid to Mr. Black,” Jenkins said in a statement.

Details of the settlement are not being disclosed until the settlements are granted approval in Delaware and Illinois.

Readers may recall Black’s libel action was the subject of a jurisdiction motion that ended up in the Ontario Court of Appeal:  Black v. Breeden, 2010 ONCA 547 and was discussed in my previous posts here and here. More recently, the Supreme Court of Canada granted leave and the appeal was argued on March 21, 2011: Richard C. Breeden, et al. v. Conrad Black, et al. (Ontario) (Civil) (By Leave) 33900 with the Court’s decision currently under reserve.

Given that the litigation has now settled (pending formal approval), the Supreme Court of Canada’s much anticipated decision is now moot. It is likely that Black’s counsel will soon file a Discontinuance under Rule 93 of the Rules of the Supreme Court of Canada, SOR/2002-156 as amended by SOR/2006-203, SOR/2011-74. All is not lost, however, as the  Supreme Court of Canada has also heard arguments on March 25, 2011 and reserved its decision in Les éditions Écosociété Inc., et al. v. Banro Corporation (Civil by Leave) 33819, which provides a welcome opportunity for the Court to clarify the law of jurisdiction in internet defamation or cyberlibel cases.

Stay tuned.

UPDATE #1:


“U.S. Judge Amy St. Eve sentenced Black to 3 1/2 years in prison, but prosecutors say he will be given credit for the about two years he already had served. The resentencing came after an appeals court decision last year.” via Business Week: Read more

“Having already spent 29 months in jail, and with additional credit for good behaviour, Black is now expected to spend between eight and 13 more months behind bars. He can appeal the ruling, but it was unclear Friday whether he would.” via Winnipeg Free Press: Read More

According to the SCC Case Information Docket (and as I predicted):

Proceedings
Date Proceeding Filed By
(if applicable)
2011-06-22 Correspondence received from, Mr. Cherniak re: settlement underway, with cc. to all parties (sent to the Court June 23/11) Conrad Black

The National Post reports today on a dispute over the opposing characterizations of the terms of the pending out-of-court civil settlements (not yet memorialized) reached between Conrad Black and Chicago Newspaper Liquidation Corp (CNCL), the company formerly known as Hollinger and Sun-Media Inc.:

“Under the tentative settlement, neither Chicago Newspaper Liquidation Corp, nor the defendants in the defamation actions are paying anything to Mr. Black,” a New York-based lawyer who asked not to be named told the National Post.

According to the preliminary deals, Lord Black will receive money “from insurance proceeds that have been in dispute, as will the company,” the source explained. “Mr. Black will be dismissing and releasing all of his claims in his defamation actions, and neither the company nor the people he sued for defamation are paying him a penny.”

And apparently, there will be no apologies or regrets by anyone.

Not so, says the former media baron. During his 25-minute speech to Chicago Judge Amy St. Eve during his resentencing on June 24, Lord Black declared, “My libel suit, and several other lawsuits around this case, are being settled, including a sizeable payment to me on the libel claim.”

Viroforce Systems Inc. v. R&D Capital Inc.: Is the “strong cause” test discretionary?

June 23, 2011

In Viroforce Systems Inc. v. R&D Capital Inc., 2011 BCCA 260 (CanLII), the British Columbia Court of Appeal has expressly endorsed Justice Laskin’s analytical approach to consent-based jurisdiction in Momentus.ca Corp. v. Canadian American Assn. of Professional Baseball Ltd., 2010 ONCA 722 (CanLII),2010 ONCA 722 at paras. 35 to 39, 325 D.L.R. (4th) 685, leave to appeal granted [2010] S.C.C.A. No. 473. (more…)


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