Reuters published an interesting interview with Judge Rakoff this afternoon. He discussed, among other topics, his 2002 decision invalidating the federal death penalty, which he suspected could be (and was) overturned, and baseball. Judge Rakoff said: “I am a huge fan of the Yankees, although I am now arguably the savior of the Mets” — referring to his presiding over the suit brougt by the Madoff Trustee against the Mets owners.
Judge Sullivan issued an opinion yesterday with his findings and conclusions after a breach of contract bench trial in which Merrill Lynch Capital Advisors sued its swap counterparty and a guarantor for $146 million. The principal question at trial was whether the individuals signing the contracts had the authority to do so.
Judge Castel Dismisses Securities Fraud Claims Against Bank of America Relating to Countrywide Acquisition
In an opinion released this afternoon, Judge Castel dismissed claims that Bank of America committed securities fraud by describing its due diligence on Countrywide as “extensive” and by allegedly failing to disclose the full litigation and regulatory exposure of Countrywide at the time of the acquisition. Judge Castel concluded that “plaintiff offers only a retrospective critique of BofA’s analysis concerning Countrywide’s exposure.” The word “hindsight” appears six times in the opinion.
Judge Nathan has scheduled a conference for May 17 in anticipation of a preliminary injunction hearing addressing the legality of a novel technology, developed by a company called Aereo, for watching TV broadcasts over the internet. Broadcasters sued Aereo for (among other things) violating their exclusive rights under the copyright laws to the public distribution of their works.
Aereo claims that any distribution is purely private (not public) because each subscriber rents a unique remote, miniature antenna and can decide whether and when to make his or her own unique copy of the broadcast to be stored on Aereo’ s remote DVR system for playback on the subscriber’s own internet enabled device.
An Italian bank that provided $180 million in credit protection on a CDO called “Pyxis” alleges in a complaint filed on April 6 that the U.S. hedge fund Magnetar and others conspired to secretly place risky assets into Pyxis so that Magnetar could bet against the CDO and profit from its collapse. According to a Pulitzer-winning article by ProPublica in April 2010, this practice was widespread and known in the industry as ”The Magnetar Trade.”
In June 2011, JP Morgan paid $153.6 million to settle SEC allegations that it helped Magnetar with a “Magnetar Trade.” Goldman Sachs paid $550 million in July 2010 to settle similar allegations relating to a different hedge fund.
The case is before Judge Sweet.
Judge Rakoff Appoints Retired Judge Turned Investor as Co-Lead Plaintiff in Securities Fraud Class Action
In an order Monday, Judge Rakoff appointed retired California judge Jeffrey Tauber to be one of two co-lead plaintiffs in a securities fraud class action against (among others) a hedge fund that allegedly bought stock in Sigma Designs, Inc. while in possession of inside information about strong company performance. Judge Rakoff observed that Judge Tauber has “significant legal credentials and impressed the Court at the hearing as someone who will supervise his attorneys closely.” Judge Tauber, like any other judge, will surely have no problem keeping a close watch on the lawyers.
Judge Tauber is an unusal securities fraud victim. He bought over 22,000 shares of Sigma Designs, Inc. stock in July and August 2007 for around $31-33 per share, and sold it two months later for around $52 per share. (See here.) That’s about a $400,000 profit in 60 days — not bad for a judge. He and other sellers were allegedly defrauded because the hedge fund defendant bought shares knowing that Sigma Designs, Inc. would beat earnings expectations.
The price stock of Sigma Designs, Inc. peaked shorty after Judge Tauber sold and now trades at under $5 per share (see here). In other words, being the victim of securities fraud seems to have worked out all right in this case.
Westlaw and Lexis Ask Judge Rakoff to Limit Class Action to Plaintiffs Who Have Registered Legal Briefs as Copyrighted
Two lawyers filed a class action claiming that Westlaw and Lexis infringe the copyrights of lawyers when legal briefs are made available online. Today, Westlaw and Lexis moved to dismiss with respect to the subclass of plaintiffs who (probably like most lawyers) have not registered their briefs as copyrighted.
The motions, which are here (Westlaw) and here (Lexis), are short and raise a single point: the Copyright Act allows only holders of registered copyrights to sue for infringement. 17 U.S.C. § 411(a). One would normally expect two defendants with a single common defense to file a joint brief, but, for Westlaw and Lexis, that would require deciding whose database to cite for unpublished cases.
The underlying case appears to raise interesting and novel legal issues, as explained in this blog post, and this letter from a lawyer complaining about the California Supreme Court’s practice of sharing briefs with Lexis.
The case is before Judge Rakoff.
Don’t expect to push back a trial date before Judge Baer. His model scheduling order states that the month the parties choose for trial will “rarely if ever be changed.” When parties to a securities class action asked to extend the discovery deadlines by 45 days, Judge Baer’s endorsement yesterday reminded them of this rule: “I will extend discovery . . . but let me caution you again that the month you chose for trial never changes.”