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Lawmakers Debate Battlefronts in Economic Crisis
Breaking Legal News | 2009/03/16 09:33

A top economic aide to President Obama defended the administration’s multi-front strategy to tackle a number of economic issues at once, calling it “the right medicine,” while a House GOP leader criticized those plans as a “lack of focus.”

“It is an economic war,” said Christina Romer, chairwoman of the Council of Economic Advisers. “We have inherited a crisis like none since we had the Great Depression. So absolutely, it is something we need to deal with. I think we are.”

Speaking on NBC’s “Meet the Press,” Romer acknowledged, “We haven’t won yet. We have staged a wonderful battle. So we have put in place just a host of programs: the stimulus package, the financial rescue plan, the housing plan. We think it’s the right medicine and we think it will work.”

Romer cited a “focus on fundamentals” by the administration. “The other thing I think is so important, the president has actually said in terms of fundamentals, we need to make changes,” she said. “That’s why he’s focusing on energy, education, getting the budget deficit under control...”

However, House Republican Whip Eric Cantor , R-Va., also appearing on the program, criticized the administration for not targeting the fiscal crisis first.

“I want to believe that we’re going to get out of this mess. I think all Americans do,” he said. “But I’ll tell you, on Friday I met with 25 small-business people in my district, and times our tough. I mean, we know that 650,000 people lost their job last month. If my math is correct, that works out to be about 15 jobs a minute that people are losing. ...

“I think we’re seeing out of the Obama administration is a lack of focus on how to get things going again. If we’re going to get things going again, how can we have a budget that doubles the debt on our children?”

The White House reportedly will announce Monday that it will provide an estimated $10 billion to thaw out credit markets specifically for small businesses.



Consumer watchdog blasts FDA delay on recall
Consumer Rights | 2009/03/13 09:04
A consumer watchdog group scolded the Food and Drug Administration Thursday for taking weeks to evaluate the latest problem with Baxter's drug pumps, which have been plagued by safety issues for years.


In January, Baxter International sent a warning to customers about issues with its Colleague infusion pumps that could cause them to stop pumping and overheat. On Wednesday the company said the FDA classified the announcement as a Class I recall, its most severe warning. The classification applies to problems that can cause "serious adverse health consequences or death."

Public Citizen's Dr. Sidney Wolfe blasted the agency in a letter Thursday for not moving faster.

"Why did it take the FDA 47 days, almost 7 weeks ... to decide that this problem was serious enough to merit being classified as a Class I recall?" Wolfe wrote in a letter to acting FDA Commissioner Dr. Frank Torti.

FDA's classification has limited real-world impact. Baxter's products are not actually being called off the market, but the serious warning is necessary because malfunctions with the devices can be fatal.



Nacchio asks to remain free pending court review
Securities | 2009/03/13 02:04
An attorney for former Qwest CEO Joe Nacchio is asking a federal district court to let Nacchio remain free while he challenges his insider-trading conviction.

Maureen Mahoney says in an emergency motion filed Wednesday in Denver federal court that Nacchio isn't dangerous and won't flee.

Mahoney says she's moving swiftly to seek a Supreme Court review of his case and that the appeal will raise a significant question for the high court to review.

Nacchio was convicted in 2007 on 19 counts of insider trading and sentenced to six years in prison. A three-judge panel of the 10th U.S. Circuit Court of Appeals reversed the conviction, but the full appeals court later reinstated it.

A judge has since ordered him to report to prison by noon March 23.



Star Tribune seeks to abandon union's contract
Bankruptcy | 2009/03/12 08:39
The Star Tribune of Minneapolis returns to bankruptcy court Thursday, a day after seeking permission to void one of its labor contracts to further cut costs.


Lawyers for the newspaper, which filed for Chapter 11 bankruptcy protection in January, told Judge Robert Drain on Wednesday that it needs $3.5 million in concessions from its pressmen union as part of $20 million in total cuts from 10 unions.

"We're at a critical stage," Chief Financial Officer David Montgomery said. "We need to save every dollar we can possibly save to get us through this period and get us to the other side of the recession."

Montgomery said the nation's 15th-largest newspaper had failed to reach an agreement with the pressmen, forcing it to ask the court for the power to cancel the contract.

Drain did not indicate when he would rule. The second of three days of hearings was scheduled for Thursday afternoon in U.S. Bankruptcy Court in New York.

The Star Tribune has sought protection from creditors while it tries to reorganize its businesses and finances. Amid an industrywide decline in advertising revenue, the newspaper is burdened by heavy debt it took on when Avista Capital Partners LP bought it from McClatchy Co. in March 2007.

The cancellation of the contract would affect 116 union employees. The company has not said whether it would take similar action against unions representing another 600 workers. Besides the pressmen, the newspaper's four largest unions represent newsroom employees, drivers and mailroom workers.

As of December, the newspaper had $667 million in debt, $492 million in assets and $27 million in cash. So far, it has skipped $20 million in interest payments to lenders. From early 2007 to the end of last year, the newspaper has cut $50 million in costs.



Court turns down appeal from Infospace founder
Venture Business News | 2009/03/11 08:49
The Supreme Court has refused to allow InfoSpace founder Naveen Jain to sue a stock management company and his former lawyers for allegedly bungling an insider stock trading case that resulted in a $247 million judgment against him.


The high court on Monday refused to hear an appeal from Jain of a decision against him from the Washington state Court of Appeals.

Jain and his wife Anuradha had accused J.P. Morgan Securities, Inc.; its lawyer, Wilson Sonsini Goodrich & Rosati, P.C., and Perkins Coie — which jointly represented Jain and Bellevue, Wash.,-based InfoSpace from 1998 to mid-2003 — of being responsible for language in InfoSpace's initial public offering prospectus that contained errors, which ultimately played a part in the $247 million judgment against Jain.

The Jains settled the lawsuit for $105 million.

The Jains accused the securities professionals of negligence. But lower courts have thrown out the Jains' complaints, saying federal law prohibits lawsuits blaming security companies for risky trades.

InfoSpace was founded by Jain in 1996 as an online e-mail directory, went public two years later and grew into an Internet and wireless services juggernaut. Jain claimed InfoSpace would become the world's first company worth a trillion dollars, but it lost more than $30 billion in shareholder value during the dot-com bust and Jain was fired in late 2002.

The case is Naveen Jain and Anuradha Jain v. J.P. Morgan Securities, Inc.; Wilson Sonsini Goodrich & Rosati, P.C.; and Perkins Coie, 08-838.



Court refuses to expand minority voting rights
Court Watch | 2009/03/11 08:49
The Supreme Court ruled Monday that a part of the Voting Rights Act aimed at helping minorities elect their preferred candidates only applies in electoral districts where minorities make up more than half the population.


The decision could make it harder for some minority candidates to win election and for southern Democrats, in particular, to draw friendly electoral boundaries after the 2010 Census.

The 5-4 decision, with the court's conservatives in the majority, came in the case of a North Carolina plan that sought to preserve the influence of African-American voters even though they made up just 39 percent of the population in a state legislative district.

While not a majority, the black voters were numerous enough to effectively determine the outcome of elections, the state argued in urging the court to extend the civil rights law's provision to the district. The case dealt with the section of the law that bars states from reducing the chance for minorities to "elect representatives of their choice."

But Justice Anthony Kennedy, announcing the court's judgment, said the court would not extend the law to those so-called crossover districts. The 50 percent "rule draws clear lines for courts and legislatures alike," Kennedy said in striking down a North Carolina legislative district.

In 2007, the North Carolina Supreme Court struck down the district, saying the Voting Rights Act applies only to districts with a numerical majority of minority voters. The district also violated a provision of the state constitution keeping district boundaries from crossing county lines, the court said.



Obama backs teacher merit pay, charter schools
Political and Legal | 2009/03/11 08:48
President Barack Obama called for tying teachers' pay to student performance and expanding innovative charter schools Tuesday, embracing ideas that have provoked hostility from members of teachers unions.


He also suggested longer school days — and years — to help American children compete in the world.

In his first major speech on education, Obama said the United States must drastically improve student achievement to regain lost international standing.

"The future belongs to the nation that best educates its citizens," he said. "We have everything we need to be that nation ... and yet, despite resources that are unmatched anywhere in the world, we have let our grades slip, our schools crumble, our teacher quality fall short and other nations outpace us."

His solutions include teacher pay and charter school proposals that have met resistance among members of teachers unions, which constitute an important segment of the Democratic Party.

Obama acknowledged that conflict, saying, "Too many supporters of my party have resisted the idea of rewarding excellence in teaching with extra pay, even though we know it can make a difference in the classroom."

Despite their history on the issues, union leaders publicly welcomed Obama's words, saying it seems clear he wants to include them in his decisions in a way President George W. Bush did not.



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