Legal Briefing: When Free Speech Becomes Theft of 'Hot News'
Shoo, Fly! Judge Tells Market News Website to Stop Stealing Research
Theflyonthewall.com, a market news organization, stole from Barclays (BCS), Merrill Lynch (BAC) and Morgan Stanley (MS) when it published excerpts from their analysts' research almost as soon as that research was released, according to a ruling from U.S. District Judge Denise Cote on March 18. The precise terms are "misappropriating hot news" and copyright infringement rather than theft, but it amounts to the same thing.
Judge Cote granted an injunction preventing theflyonthewall.com from reporting any such research until the banks had a chance to solicit trades from their customers based on the information. The banks had requested a four-hour blackout period, but Cotes decided half that time was long enough -- two hours being an age in Wall Street time. What's striking about the decision is that theflyonthewall, which contributes content to AOL's BloggingStocks, says it only took its reports from public sources; if that was really true, and the information was already in the public domain, where was the theft? Bloomberg has a good overview here.
Apparently, Judge Cote was not happy with theflyonthewall.com at trial. According to American Lawyer, theflyonthewall.com took a contrary position on this same issue in its own lawsuit against another news organization -- and nothing screams bad faith louder than taking position A with one judge when it serves your interests, then telling another judge that position A is wrong when it doesn't.
Moreover, the organization's president was apparently a lousy witness. Cote noted: "He frequently contradicted himself ... His unreliability appeared attributable to both his lack of attention and care in making statements, which tended to be rushed, and his motive to escape liability." Theflyonthewall.com will appeal.
9/11 Settlement Rejected
Federal Judge Alvin K. Hellerstein rejected the proposed settlement between New York City and 10,000 Ground Zero workers concerned about health effects from the dust and smoke from the site. Calling the settlement unfair and "not enough", the judge focused on how much the lawyers were getting (lots) and on how complicated the formula was for deciding which plaintiff got how much coupled with how little time plaintiffs had to decide whether or not to participate in the settlement. The judge worried plaintiffs couldn't know before deciding how much they might get, and noted the answer could range from a few thousand dollars to a full million, enough of a difference to perhaps change a mind. In the end, the judge wants control of the process so he can ensure fairness.
Jury Duty: It's Not for Everyone
As the ABA Journalnotes, getting out of jury duty is not easy anymore. Unless, that is, you're an Imperial Wizard of the Knights of the Ku Klux Klan. After Railton Loy received his jury duty notice, he called the court and told them as a KKK leader, he could only be fair to white defendants. The judge immediately excused him. Loy noted that if he'd had to show up at court, he would have arrived in full uniform, white hood and all.
Lawyer Facing Repeat Charges of Coming On to Clients
The Connecticut Law Tribunereports that three years after the end of his suspension for making unwanted sexual advances on some of his female clients (who happened to be domestic violence victims), attorney Ira S. Mayo is facing new charges from two clients. While Mayo has contested the new charges with some success, he definitely violated an order stemming from the first suspension forbidding him from being alone with female clients in his office, or from representing domestic violence victims. The disciplinary committee is considering whether Mayo will keep his law license.
And in the Business of Law...
The National Law Journalreports that Encyclopaedia Britannica sued Dickstein Shapiro for malpractice, for allegedly botching patent applications. Britannica is seeking $250 million in damages.
If you work for Covington & Burling, I hope you work in New York or California; according to Above the Law, the D.C. associates' wallets are hurting.