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Supreme Court Upholds NY Judicial Elections
Court Watch |
2008/01/16 09:03
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The Supreme Court unanimously upheld New York's unique system of choosing trial judges Wednesday, setting aside critics' concerns that political party bosses control the system. "A political party has a First Amendment right to limit its membership as it wishes and to choose a candidate-selection process that will in its view produce the nominee who best represents its political platform," Justice Antonin Scalia wrote for the court. In New York, primary voters elect convention delegates who choose candidates for the judgeships. Once nominated, those candidates run on the general election ballot. In practice, they frequently have no opposition. Unsuccessful candidates for judgeships and a watchdog group filed a lawsuit challenging the system. A federal district judge and the 2nd U.S. Circuit Court of Appeals agreed that it is very difficult for candidates to get on the ballot if they don't have support of the party leaders. In striking down the system, the two federal courts said judgeship candidates who are not the choice of the party leaders are excluded from elections by an onerous process that violates their First Amendment rights. The high court on Wednesday reversed the lower courts. Scalia said there is nothing unconstitutional about the process. The system's opponents "complain not of the state law, but of the voters' (and their elected delegates') preference for the choices of the party leadership," Scalia said. He said the state legislature is free to return to a primary if it wishes. Justice John Paul Stevens chimed in with a brief opinion distinguishing between a constitutional system and wise public policy, resorting to the words of former Justice Thurgood Marshall. "The Constitution does not prohibit legislatures from enacting stupid laws," Stevens said, quoting Marshall. Critics have said the conventions are patronage-driven affairs in which allies of party leaders are rewarded with judgeships and all others are shut out. The appeals court said that between 1990 and 2002, almost half the state's elections for Supreme Court justice — trial judges in New York's judiciary — were uncontested, calling them "little more than ceremony." The appeals court ordered the state to dispense with the conventions and switch to primary elections until state lawmakers come up with a new plan. Many legal and civics groups have come out in favor of appointing judges in New York. The U.S. Supreme Court previously has ruled that states can decide whether to use conventions or primaries to nominate candidates. States also can choose to have judges appointed rather than elected. Margarita Lopez Torres became the lead plaintiff in the lawsuit after Democratic leaders in Brooklyn blocked her from getting the party's nomination for a Supreme Court judgeship. She said the leaders turned against her shortly after her election as a civil court judge when she would not hire people they recommended. Three years later, Lopez Torres said they offered her a second chance if she would hire a leader's daughter. She refused. The state, the Democratic and Republican parties and the elections board joined to ask the high court to reverse the appeals court ruling. Former New York Mayor Ed Koch was among a diverse group of politicians and legal groups asking the court to uphold the lower court rulings. The state Legislature adopted the nominating conventions 86 years ago. Lawmakers scrapped direct primaries for New York's Supreme Court justices because of the potentially corrupting influence of having prospective judges raising campaign money. Other judges in New York are elected through primaries. The plaintiffs have said the current system leads to cozy relationships among judges, lawyers and politicians. |
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Court Limits Trusts' Tax Deductions
Tax |
2008/01/16 09:02
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The Supreme Court upheld limits Wednesday on income tax deductions for trusts and estates, ruling against the family that created Pepperidge Farm. The court said trusts ordinarily may not deduct the full cost of investment advice on their income tax returns. Those expenses are deductible only when they exceed 2 percent of adjusted gross income, the same limits faced by individual filers, Chief Justice John Roberts said for a unanimous court. The case arose over a relatively small tax dispute, $4,448, involving the income tax return filed by the trust established by the will of Henry A. Rudkin, former chairman and founder of the Pepperidge Farm company. The trust was funded with the proceeds of the sale of Pepperidge Farm to the Campbell Soup Co. The trust had $2.9 million in assets and $625,000 in income in 2000, the year of the disputed return. The trust reported that it spent $22,241 on investment advice and deducted all of it on its tax return. The Internal Revenue Service said the expenses could be deducted only to the extent they exceeded the 2 percent floor. The discrepancy was $4,448. The trust sued in U.S. Tax Court, which ruled for the government. The 2nd U.S. Circuit Court of Appeals affirmed the ruling. |
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Appeal Filed in Kucinich Debate Lawsuit
Court Watch |
2008/01/16 09:00
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The Nevada Supreme Court said Tuesday MSNBC can exclude Democratic presidential hopeful Dennis Kucinich from a candidate debate. Lawyers for NBC Universal Inc., had asked the high court to overturn a lower court order that the cable TV news network include the Ohio congressman or pull the plug on broadcasting the debate Tuesday night with Hillary Rodham Clinton, Barack Obama and John Edwards. An hour before the debate, the state Supreme Court's unanimous order said that blocking the debate unless Kucinich got to participate would be "an unconstitutional prior restraint" on the news network's First Amendment rights. The justices also said the lower court exceeded its jurisdiction by ordering Kucinich's participation even though he first requested and was denied relief from the Federal Communications Commission. "It's a matter of being on stage and answering questions. That's the issue," lawyer Bill McGaha argued for Kucinich during a hearing before four justices in Las Vegas. Three other justices participated by closed-circuit video conference from Carson City. Donald Campbell, a Las Vegas lawyer representing NBC Universal, accused Kucinich of trying to make a jurisdictional "end run" around the FCC and federal courts by suing in Nevada state court to be added to the debate. FCC broadcast rules do not apply to cable TV networks, Campbell said, adding that forcing MSNBC to add Kucinich or not broadcast the debate amounted to prior restraint and would be a "clear and unequivocal" violation of First Amendment press freedom. "Mr. Kucinich's claim ... undermines the wide journalistic freedoms enjoyed by news organizations under the First Amendment," Campbell said in his appeal. Campbell said MSNBC decided to go with the top three candidates after the Iowa and New Hampshire primaries. Kucinich drew less than 2 percent of the Democratic vote in the New Hampshire primary, after attracting little support in the Iowa caucuses. |
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Court limits investor suits against 3rd parties
Breaking Legal News |
2008/01/16 07:02
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In a case born of the accounting scandals that rocked the nation in the first half of the decade the Supreme Court Tuesday limited the ability of defrauded investors to sue accountants, bankers and lawyers who may have helped a company commit the fraud.
The 5-3 decision represents a victory for corporate America, the business lobby and the Bush administration, all of which urged the court to insulate those third parties from so-called "scheme liability," which attempts to reach outside companies who may have contributed to the stock fraud.
"The Supreme Court today handed down a major victory for the U.S. economy and investor welfare," said Stephen Shapiro, the Chicago lawyer who argued the defendants.
The ruling is likely to have a major impact on class-action lawsuits arising from the implosions of Enron Corp. and HealthSouth Corp., among others, making it less likely that those suits will survive. It brought a torrent of criticism from investor advocates and some on Capitol Hill, including Sen. Christopher Dodd (D-Conn.), chairman of the Senate Banking Committee.
The decision, Dodd said, will "protect wrongdoers from the consequences of their actions."
The case involved investors who sued Scientific-Atlanta Inc. and Motorola Inc., vendors for cable company Charter Communications Inc., alleging that the vendors were part of a scheme to misrepresent Charter's revenue and pump up its stock price. When the accounting errors were revealed the stock price plummeted.
The dispute was one some observers labeled the "Roe vs. Wade" of securities law, with more than 30 friend-of-the-court briefs filed. When the case was accepted by the court, speculation mounted on the Bush administration's position. In an unusual move, the White House ignored the advice of the Securities and Exchange Commission, accepting instead the Justice Department's recommendation to side with such groups as the U.S Chamber of Commerce and the National Association of Manufacturers.
Justice Anthony Kennedy, writing for the five-justice majority, said that because the vendors made no specific representations about the health of Charter's finances to Charter's investors the vendors weren't liable under federal securities laws. Only the SEC has the authority to bring such "aid-and-abetter" actions against third parties, the court held.
Jeffrey McFadden, a Washington securities litigator, said, "The court looked at the case in very practical terms: Who were the parties that actually made the statements that deceived someone?"
In October Kennedy voiced concern that siding with the investors would result in an explosion of securities litigation. And on Tuesday he seemed to echo that concern in writing, "Were the implied cause of action to be extended to the practices described here, there would be a risk that federal power would be used to invite litigation beyond the immediate sphere of securities litigation."
Kennedy noted the potential impact on the U.S.economy, saying that "contracting parties might find it necessary to protect against these threats. Overseas firms with no other exposure to our securities laws could be deterred from doing business here."
Shapiro, with Chicago firm Mayer Brown, said the outcome actually benefits most investors because a decision the other way would have driven up the costs of outside legal and financial services.
Along with Kennedy, Justices Antonin Scalia, Clarence Thomas, John Roberts and Samuel Alito formed the majority. Justice Stephen Breyer recused himself from consideration of the case because he owns stock in one of the parties.
Justice John Paul Stevens, with Justices David Souter and Ruth Bader Ginsberg, dissented. Stevens wrote that Charter could not have pulled off the accounting fraud without the vendors' help and that the vendors knew that investors would rely on Charter's inflated stock price as a measure of the company's worth. |
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Transit Panel Urges Gas Tax Increase
Law Center |
2008/01/16 05:07
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Federal gasoline taxes should be increased up to 40 cents per gallon over five years, a divided special commission urged Tuesday in calling for drastic changes to fix aging bridges and roads and reduce traffic deaths. The two-year study by the National Surface Transportation Policy and Revenue Study Commission is the first to propose broad changes after the devastating bridge collapse in Minneapolis last August shone a spotlight on the deteriorating state of the nation's infrastructure. Calling for immediate action, the congressionally created panel warned that "applying patches" is no longer acceptable. It said the nation risks tens of thousands of highway casualties each year and millions of dollars lost in economic growth. "The crisis is now," the report said. The 68-page compilation of findings and recommendations, which were supported by nine of the 12 members on the commission, is expected to re-ignite congressional and political debate over raising gasoline taxes. The gas tax has not been increased since 1993, and recent efforts by Congress to increase it have faltered, over the objections of the Bush administration. The commission was expected to present its findings Thursday to the House Transportation and Infrastructure Committee and to a Senate panel later this month, but House Republican leaders quickly said they would oppose a tax hike. "A dramatic increase in the gas tax does not stand a snowball's chance in hell of passing Congress," said Rep. John Mica, R-Fla., the top Republican on the House Transportation panel. In a 10-page dissent, the commission's chairwoman, Transportation Secretary Mary Peters, and two other members agreed with several aspects of the report but sharply criticized the proposal for higher gasoline taxes. She and the two commissioners are calling instead for sole reliance on tolls and private investment, which Peters said would avoid sending millions of dollars of new tax revenue to Washington that end up as congressional pork. Department spokesman for said the three commissioners opted not to appear at the news conference to avoid a public display of internal division. Under the proposal, the current tax of 18.4 cents per gallon would be increased by 5 cents to 8 cents annually for five years and then indexed to inflation afterward to help fix the infrastructure, expand public transit and highways as well as broaden railway and rural access. The increase is designed to take effect in 2009, after President Bush leaves office. Other sources of revenue could come from tolls, peak-hour "congestion pricing" on highways, freight fees and ticket taxes for passenger rail improvements, the report said. "A failure to act will be catastrophic to this nation," said Jack Schenendorf, the commission's vice chairman. He contended the tax increase would amount to "less than a cost of a candy bar and a fifth of the cost of a cafe latte" for the average U.S. motorist. "We saw what happened with Katrina," he said, referring to the 2005 hurricane which overwhelmed aging levees. "We don't want to see the transportation system to see the same fate of the New Orleans levees." Commissioner Paul Weyrich, a Republican appointee to the commission and chairman of the Free Congress Foundation, said he is philosophically opposed to higher taxes but decided to support it this time in light of the growing transportation problems. The recommendations, if implemented, are expected to cost $225 billion each year for the next 50 years: The commission, established by Congress in 2005, also called for the country to rebuild and expand its rail network to meet a growing demand for alternatives to congested highways and to promote partnerships between the public and private sectors at U.S. ports. Its report comes as state governments and several business groups call on Washington to raise gas taxes to pay for substantial transportation improvements. The Minneapolis bridge collapse, which killed 13 people and injured about 100, also drew new calls for additional spending. "The time is now to work together to find a solution to this complex problem," said John Engler, president and CEO of the National Association of Manufacturers, which is open to a tax increase but isn't formally supporting it. "The U.S. will soon be facing a competitive disadvantage if we don't develop a national plan to improve the quality of our infrastructure system." |
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Role of politically connected law firm questioned
Legal Business |
2008/01/16 03:09
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Atty. Gen. Lisa Madigan's office asked a Cook County judge Tuesday to remove a law firm with close ties to Gov. Rod Blagojevich from the criminal case of a one-time Blagojevich friend charged with stealing $2 million from the state.
Blagojevich's office and Madigan have repeatedly clashed over the governor's use of private law firms to represent state agencies or his administration. Madigan's office argues that only the attorney general has the authority to represent state agencies in court or hire outside firms for that work.
The development is the latest twist in the case of Anita Mahajan, who is facing fraud charges that her firm, K.K. Bio-Science, billed the Department of Children and Family Services for drug tests it did not perform.
Madigan's office argued that the law firm of Meckler, Bulger and Tilson cannot continue to represent the agency's interests in the ongoing criminal case against Mahajan.
Mahajan and her banker husband, Amrish, were personal friends of Blagojevich and his family and financial supporters of his campaign. First Lady Patricia Blagojevich, a real estate agent, received more than $113,000 in commissions from real estate deals involving the Mahajans in 2006.
Cook County Judge James Obbish did not immediately rule on the request from Madigan's office.
Bruce Meckler said lawyers for his firm were in court Tuesday only because Mahajan's lawyer was demanding records from the firm related to its work for DCFS in the Mahajan case last fall.
"We were there representing our law firm, which had been subpoenaed," Meckler said.
Steve Miller, Mahajan's attorney, questioned in court whether the firm was representing DCFS or the governor's office.
Meckler, who has close political ties to Blagojevich, said his firm is not representing the governor's office in this case. The firm has represented the governor's administration in other matters, and the governor appointed Meckler to the board that oversees Navy Pier and McCormick Place. In addition, Meckler's firm has contributed more than $128,000 to Blagojevich's campaign fund. |
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Woman guilty of embezzling law firm funds
Court Watch |
2008/01/16 03:08
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A former office manager for a Columbia law firm pleaded guilty yesterday to stealing almost $706,000 from the company - one of the largest embezzlement cases in county history, according to the state's attorney's office. Christine McClain-Sloane, 41, used company checks to pay for personal expenses for six of the 11 years she worked at Nagle and Zaller PC, the Howard County state's attorney's office said. McClain-Sloane pleaded guilty to two counts of felony theft scheme, and Howard Circuit Judge Diane O. Leasure revoked her bail. Sentencing was scheduled for March 28. The state will ask that McClain-Sloane serve an 18- to 22-year sentence and repay the firm the $705,915, according to the state's attorney's office. After analyzing the firm's financial and bank records, the state determined that from 1998 to 2005, McClain-Sloane wrote nearly 250 fraudulent company checks and made nearly 1,400 unauthorized personal charges to her company credit card, according to the statement of facts by Senior Assistant State's Attorney Lynn M. Marshall. The firm's partners discovered that McClain-Sloane had stolen money after she resigned and moved to Lexington, Ky., in 2005, according to the statement of facts. "This should be a wake-up call to any professionals and business people because what it really is, is a violation of the trust that was given to her," said P. Michael Nagle, founding partner of the firm, yesterday. "It's really very important for businesses to have safeguards in place, which I did not have in place," he said. |
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Class action or a representative action is a form of lawsuit in which a large group of people collectively bring a claim to court and/or in which a class of defendants is being sued. This form of collective lawsuit originated in the United States and is still predominantly a U.S. phenomenon, at least the U.S. variant of it. In the United States federal courts, class actions are governed by Federal Rules of Civil Procedure Rule. Since 1938, many states have adopted rules similar to the FRCP. However, some states like California have civil procedure systems which deviate significantly from the federal rules; the California Codes provide for four separate types of class actions. As a result, there are two separate treatises devoted solely to the complex topic of California class actions. Some states, such as Virginia, do not provide for any class actions, while others, such as New York, limit the types of claims that may be brought as class actions. They can construct your law firm a brand new website, lawyer website templates and help you redesign your existing law firm site to secure your place in the internet. |
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