A daily look at legal news and the business of law:
Fraud Trial Shows Corporate Looting Taken to the Next Level
Move over, Dennis Koslowski. The former Tyco (TYC) CEO who spent wads of company cash on ludicrous personal luxuries like a $15,000 dog umbrella stand, a $6,000 shower curtain, a $6,300 sewing basket and a $2 million birthday party, is no longer the face of over-the-top siphoning from the corporate piggy bank.
The New York Times reports that David H. Brooks, former chairman and CEO of body-armor maker DHB Industries, used company cash to pay for a $100,000 American Flag belt buckle and a multimillion dollar bat mitzvah for his daughter. (Turns out Aerosmith and 50 Cent apparently do bat mitzvahs if the price is right.) Brooks also used company funds to pay for his wife's plastic surgery, his employees' prostitutes, and his son's porn videos, among many other not-so-legitimate business expenses. Of course these items were chump change compared to the $190 million stock fraud Brooks is accused of. The best detail in the Times piece has to be Brooks's obsession with acquiring a "memory-erasing" pill to dose the company's CFO with, presumably so she couldn't destroy him with her testimony -- which she just did, since the pill he obsessed about exists only in his mind.
Lawsuit Over Vitaminwater Claims Goes Forward
A lawsuit brought by the Center for Science in the Public Interest claiming Coca Cola's (KO) claims that its vitaminwater beverage has health benefits are false and misleading survived a motion to dismiss. Apparently, asserting that one flavor promotes "healthy, pain-free functioning of joints" while another helps "optimal functioning of the immune system" isn't standard advertising puffery, and plaintiffs will get the chance to prove their claims in court, reports AmLaw Litigation Daily.
Univision Pays $1 Million to Settle DOJ Payola Suit
A division of Univision Communications will pay $1 million and plead guilty to fraud to settle a suit and administrative action brought by the Department of Justice based on a classic payola fraud. Univision was involved in paying radio stations to play its music more often that they otherwise would have, an illegal marketing tradition that dates back to the early days of rock 'n' roll.
Be Free, iPhone Users
It's good news that the Library of Congress has eliminated one of two legal weapons Apple could wield to punish iPhone owners who exercise that most basic of privileges of ownership: Using one's property as the owner sees fit rather than as the seller prefers. Nonetheless, it's also true that Apple never sued anyone for jailbreaking a phone, and still retains contract claims against any iPhone owner who does. Still, CNet reports that pursuing contract claims doesn't make sense for Apple to sue: The damages in any one case would be too small to justify the effort. The more meaningful legal weapon was the one eliminated by the Library of Congress, which would have allowed an injunction and punitive damages.
Irritated Judge Issues Bold Anti-Free Speech Ruling
The Blog of the Legal Times reports that Judge Judith Bartnoff, upset that court filings that should have been sealed accidentally weren't and were lawfully obtained by the National Law Journal, said she didn't care if she was turning 80 years of First Amendment precedent on its head: She issued a restraining order forbidding the magazine from publishing the name of the government agency investigating POM Wonderful because maintaining the integrity of her docket was too important. As the Am Law Litigation Daily put it:
Note to future seekers of restraining orders against news outlets: Don't bother with those ineffective national security arguments. Go straight to maintaining the integrity of judicial filing systems.
And in the Business of Law...
• Dewey LeBoeuf is scaling back its summer hiring for 2011 by eliminating small programs at its Chicago, Los Angeles and Houston offices, reports Above the Law. Meanwhile,ATLreports that Pepper Hamilton's 2010 summer associates got good news: All of them were offered jobs for next year. Of course, as all the deferred associates -- some of whom were ultimately not hired -- discovered, a job offer isn't a job. So it's a little early for those summers to start relying on those promised paychecks.
• Speaking of a lack of job protection, the safest jobs in the legal profession -- professorships -- took a small step toward job insecurity, reports the National Legal Journal. The American Bar Association has announced that it doesn't think law schools need to offer tenure. They simply need to guarantee what tenure is supposed to protect: academic freedom. Not surprisingly, a lot of law professors are irate about the announcement.