Legal News

My Space Suicide Case Excluding the Suicide?

In the ‘MySpace suicide’ case, just how important is the ’suicide’ part? It appears that U.S. District Judge George Wu believes it’s not critical, and is leaning toward excluding the evidence of how 13 year-old Megan Meier hanged herself.

“I don’t necessarily think the suicide is relevant to the crime charged,” the U.S. District judge said, according to the AP, adding he thought details of Meier’s death would unfairly prejudice the jury. He said he planned to announce his final decision Friday. The trial is set to kick off next Tuesday.

Exclusion of the suicide would, of course, be a setback to the government. It would also highlight the divergence between the facts and the law. As Dean Steward, the lawyer for defendant Lori Drew, told us last week, the trial will be in two parts: the legal side, such as what the Computer Fraud and Abuse Act means and whether it can be triggered by violating the MySpace terms of service; and the factual side, the tragic death of a 13 year-old girl and the question of who caused it.

The main question being did Drew violate the computer fraud abuse act?

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Federal Judge Slashes Fees After WilmerHale and Wiley Rein Win $90 Million Lawsuit

A relator's attempt to recover legal fees has prompted Chief Judge Royce Lamberth, of the U.S. District Court for the District of Columbia, to issue an opinion lambasting amounts charged by WilmerHale and Wiley Rein, and attaching 74 pages of appendices outlining their billing rates -- and reductions the court is making to them.

Lamberth slashed the fees from the $20 million requested by plaintiff Richard Miller to a little more than $7.5 million.

In 2007, Miller won a $90 million False Claims Act suit against E. Roy Anderson, Harbert Corp., Harbert International Inc., Bill Harbert International Construction Inc., Bilhar International Establishment and Harbert Construction Services.

Lamberth's 95-page opinion includes the detailed billing rate information. It's also laden with footnotes that showcases Lamberth's wit and allows him to detail exactly why the $20 million Miller asked for is unnecessarily high. When Miller tries to say that WilmerHale went out of its way to keep the number of attorneys working on the case as low as possible, Lamberth retorts, "First, to paraphrase [Harbert Corporation's] Opposition, by no rational definition of the term do fifty-two attorneys constitute a 'small' team of lawyers."

Lamberth also dismisses the idea that because some of WilmerHale's associates performed beyond their pay grade, they should be compensated at a rate that identifies their "superior skill levels."
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Judge to Dismiss McAfee Overbilling Suit Against Wilmer Cutler

A judge said he will dismiss McAfee Inc.'s lawsuit against Wilmer, Cutler, Pickering, Hale and Dorr over alleged overbilling, but the anti-virus software maker's fee fights are far from finished.

McAfee had filed suit claiming that WilmerHale had overbilled in its $12 million criminal defense tab for representing former Chief Financial Officer Prabhat Goyal. Judge Michael Schneider of the Eastern District of Texas announced at the end of a 90-minute hearing on Thursday afternoon that he would dismiss the suit, filed on April 8, though an order had not been posted by Friday evening. The decision, which sided with WilmerHale's four arguments to dismiss the case, came during what was supposed to be a scheduling conference.

"Nothing in yesterday's decision affects in any way our resolve to pursue this, and we in fact are even considering an appeal of yesterday's ruling," McAfee spokesman Michael Busselen said.

While the Texas fee fight has been temporarily put to rest, McAfee is still battling suits filed in Delaware by Goyal and another former executive investigated by the government for securities fraud. Goyal alleges that the Santa Clara company stopped paying fees in his appeal of a May 2007 conviction for securities fraud. Former general counsel Kent Roberts, whose criminal trial begins in September, also says the company is not meeting its contractual indemnity obligations to pay the Cooley Godward Kronish lawyers mounting his defense.

Goyal's May 2 complaint alleged that, among other things, McAfee hadn't paid WilmerHale for his defense since September. After the filing, the company paid the firm and filed a motion to dismiss that suit. Goyal's lawyers at Delaware firm Abrams & Laster have filed a response contending that there was more to the suit than unpaid bills.

The attorney for WilmerHale in Texas, Paul Yetter of Houston's Yetter, Warden & Coleman, said Thursday's dismissal of McAfee's lawsuit is important for Goyal's appeal of his conviction.

"The most important point is that the court's ruling allows Mr. Goyal's defense in California to proceed without the huge risk to him of disruption from the Texas case," he said.

In Roberts' June 11 complaint, he alleges McAfee stopped paying his legal fees in October. It says that on Jan. 4, McAfee partially paid several months' worth of past-due invoices, including half of Roberts' fees in a criminal case and 90 percent of his fees in a civil case. After that, the complaint alleges, no more payments were made, and McAfee owed more than $3 million in attorney fees. Calls to Roberts' attorneys at Cooley were not returned on Friday.

Delaware attorney Kenneth Nachbar, who is representing McAfee in both suits, would not comment on the Goyal case, but seemed optimistic on reaching an agreement in the Roberts case. "We always try to resolve things if we can, and my client is reasonable and, if the other side's reasonable, then a settlement can happen," he said.

Bryan Daly, a white-collar criminal defense lawyer with Mayer Brown in Los Angeles who is not involved in any of the McAfee litigation, said that if Roberts and McAfee had entered an indemnity agreement, which the complaint says they had, the company's failure to pay Roberts' legal fees would be "just a straight breach of agreement."

"We understand we have an obligation to advance reasonable fees," McAfee spokesman Busselen said. "Our argument is we believe we have a legitimate dispute about what is reasonable."

The issue of reasonableness is relevant to each of the suits, Busselen said. Though he wasn't able to address why the company sued WilmerHale and not Cooley, he did say several factors were likely at play.

"Our choice of legal tactics is based on a combination of the degree of unreasonableness of situations as well as the openness of the parties to discuss a fair and reasonable settlement," he said.

The fee fights all began after Roberts was replaced by Mark Cochran as McAfee's general counsel last September, a point made in Goyal's complaint. Prior to joining McAfee, Cochran had been the general counsel of Santa Clara's Hyperion Solutions Corp. and had lost against WilmerHale attorneys representing OutlookSoft Corp. in a 2006 patent fight in the Eastern District of Texas.

Cochran was on vacation and unavailable for comment, according to a McAfee receptionist. Goyal will still be represented by WilmerHale, according to the firm's Texas attorney, and calls to the Cooley lawyers representing Roberts and the attorney representing McAfee in the Texas case were not returned in time for publication.
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Iraq Banned From Olympics. Lawsuit to Follow?

A decision today by the the International Olympic Committee to uphold a ban on Iraqi teams at the 2008 Beijing Games exposes a rift in Iraq’s government, and may lead to a lawsuit.

The IOC said the Iraqi government missed the deadline to address accusations of political interference in the country’s National Olympic Committee. ”Clearly we’d very much like to have seen Iraq’s athletes in Beijing,” said IOC spokeswoman Giselle Davies. ”We are very disappointed that the athletes have been so ill-served by their own government’s actions.” Here’s the AP story.

In May, the Iraqi government dissolved the country’s National Olympic Committee, claiming, among other reasons, that it was illegitimate because it lacked a legal quorum. (The AP reports that four members of the committee, including its chief, were kidnapped two years ago and their fates are unknown.) Moreover, a rift may exist between Iraq’s Youth and Sports Ministry, which is dominated by Shiites, and the NOC, which includes several holdovers from the Saddam-era Olympic Committee, run by his eldest son, Odai.

The IOC denounced the dissolution as ‘’serious interference” in what is supposed to be an independent body and demanded the government respect the NOC’s autonomy.

Five Iraqi athletes were expected to compete this year in non-track and field sports — archery, judo, rowing and weightlifting. Their places will be offered to athletes from other countries.

Basil Abdul-Mahdi, an adviser to the Iraqi minister for youth and sport, said the government never had any intention of reversing its decision and the ban was no surprise. He said Iraqi participation in Arab regional competitions would be unaffected. ”We will bring suit to defend our sports rights,” Abdul-Mahdi said.
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Law Firms Held Liable for Fees in 'Tissue of Lies' Patent Suit

A federal judge has ordered a patent holder and his lawyers to pay attorney fees for bringing an infringement suit based on "nothing more than a tissue of lies."

Irving Bauer had sued Romag Fasteners Inc., a manufacturer of magnetic snap closures for handbags, for infringing a 1996 patent on a new type of closure he claimed to have invented.

But Southern District of New York Judge Paul A. Crotty invalidated Bauer's patent last week, finding that it had been issued through iniquitous conduct. Bauer's testimony about his inventorship "bore clear indicia of fabrication," the judge said, adding that he was "convinced beyond a shadow of a doubt" that Bauer was no inventor.

"The Court refused to believe that Bauer, lacking any training or experience in the field, and equipped only with curiosity and pluck, was able to successfully design around the industry standard '294 Patent," Crotty wrote in Advanced Magnetic Closures Inc. v. Rome Fastener Sales Corp., 98 Civ. 7766.

The judge said Bauer had come up with his dubious '773 Patent because the industry had begun to legally design around the '294 Patent, which Bauer had previously acquired.

"[H]e only fraudulently 'conceived' of the idea, after it became apparent that his investment in the '294 Patent was worthless and he needed a viable substitute," Judge Crotty said.

The judge held New York law firm Abelman, Frayne & Schwab, which initially represented Bauer in his suit against Romag, jointly and severally liable for Romag's attorney fees after Feb. 11, 2006. That was the earliest date, the judge said, Abelman Frayne should have realized expert testimony the firm planned to use to support Bauer's claim had been contradicted by testing.

"By persisting with this claim to trial, Abelman counsel played a central role in so unreasonably and unnecessarily multiplying the proceedings so as to give rise to bad faith litigation," the judge said.

Bauer replaced the Abelman firm in August 2007 with David Jaroslawicz of Jaroslawicz & Jaros. The judge held Mr. Jaroslawicz jointly and severally liable for Romag's costs after Oct. 5, 2007, finding he also should have been aware of the deficiencies of Bauer's claims.

Romag's lawyer, Norman Zivin of Cooper & Dunham in New York, said he had previously requested around $1.2 million in attorney fees, though he said the judge would likely modify that amount.

Jeffrey A. Schwab of Abelman Frayne said his firm was "disappointed" in Crotty's decision, which he called "not justified on the law or facts." He said the firm was reviewing its options.

Jaroslawicz did not return a call seeking comment.

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Cuomo Charges Alleged Craigslist Scamsters

Craigslist, the free classifieds site, has come in handy since we moved to Gotham four years ago, though the LB sadly notes that the popular site has taken a bite out of newspapers’ balance sheets over the years. (Also, the LB recently failed to sell a used Playstation 2 slim (with two controllers!) on the no-nonsense site.)

But apparently the site also has been a big headache for thousands of apartment hunters in New York.

How do we know? Earlier today, just a stone’s throw away from LB headquarters, New York Attorney General Andrew Cuomo criminally charged four individuals at New York City apartment broker Innovative Apartments and Screening Services Inc. for using Craigslist to lure thousands of people into paying $200 apiece for credit reports and background checks that were never conducted, and for access to what ended up being non-existent or unavailable apartments.

The scam allegedly bilked around 4,000 people, who responded to Craiglist posts advertising “exclusive” listings for no-fee apartments, out of more than $900,000 over the last three years.

Adding insult to injury, when the complainants tried to obtain a refund, Innovative’s employees allegedly routinely ignored their requests, provided only a partial refund, or issued refund checks that did not clear.
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Ebay Sues Craigslist

Internet Auction Giant eBay filed a lawsuit last month against Craigslist, the online classified site which draws over 20 million unique visitors per month. When news of the lawsuit surfaced, details were unavailable as the lawsuit was not made public. A redacted version has just been released and is available HERE.

According to eBay, the reason behind filing the lawsuit is that Craigslist directors Craig Newmark and Jim Buckmaster (also CEO), have unfairly entered into transactions that diluted eBay’s economic interest in the company by more than 10 percent. EBay alleged that both the directors have breached their fiduciary duties.

EBay claims that its equity in Craigslist has been diluted from 28.4 % to 24.85 %. With less than 25% of the company, eBay can no longer place a director on the Craigslist board.

Five days after the lawsuit was filed, Craigslist (headquarters shown above) fired back at eBay, calling the lawsuit unethical and “smelling of a hostile takeover”. Even in the lawsuit, eBay makes it clear that it would welcome the opportunity to purchase all of Craiglist.

Through its acquisitions, eBay has illustrated that it wants to be in the online classified business in a big way. Last year Kijiji (created and launched by eBay in 2005) was made available in select US cities.

Will David triumph over Goliath or will Goliath end up owning David?

Whether it's directors diluting stock value, unfair competition, breach of contract or employment law problems, Sylvester, Oppenheim and Linde can help you know where you stand and where to go from here. Contact us today. There is never a charge for an initial consultation.
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Retailers Facing Lawsuit For Requesting Personal Information

California's Song-Beverly Credit Card Act prohibits the requesting and recording of personal information in connection with credit card transactions. The statute provides for civil penalties "not to exceed two hundred fifty dollars ($250) for the first violation and one thousand dollars ($1,000) for each subsequent violation . . ." Recently, two new trends in Song-Beverly litigation have emerged: (1) plaintiffs have filed suits against retailers over requests for zip codes; and (2) plaintiffs have sued retailers for requests for personal information during credit card return transactions.

During the past several years many retailers conducting business in California have been sued for requesting personal information such as phone numbers and addresses from purchasers paying with credit cards. The statute defines "personal information" as "information concerning the cardholder, other than information set forth on the credit card, and including, but not limited to, the cardholder's address and telephone number." Cal. Civ. Code § 1747.08(b). Rt cases have expanded the types of conduct plaintiffs have alleged violates Song-Beverly.

First, several plaintiffs have filed lawsuits based on requests for zip codes. In fact, in the last weeks plaintiffs have filed three new class actions in San Diego alleging violations of Song-Beverly based on retailers requests for zip codes during credit card transactions. To date, no published decision has addressed whether a request for a zip code violates Song-Beverly.

Second, many plaintiffs are now suing retailers for requesting personal information during transactions related to the return of merchandise.  A petition is currently pending before the Fourth District Court of Appeal related to such a lawsuit.  A ruling is expected in the next 30 days.
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