Recently my partner Joseph Laferrera has given a series of presentations and webinars on the controversial new Massachusetts data security regulations. Information on his upcoming webinar with Ntirety (a database administrator and client of our firm), on April 2, 2009 at 10:00 a.m., is available at this link.
A copy of the slides Joe is using now (they change often, based on developments), is on scribed.com, here:
“We will sell to no man … Justice” Magna Carta (1297)
“If you think aficionados of a living Constitution want to bring you flexibility, think again. You think the death penalty is a good idea? Persuade your fellow citizens to adopt it. You want a right to abortion? Persuade your fellow citizens and enact it. That’s flexibility.” Supreme Court Justice Antonin Scalia
“In civilized life, law floats in a sea of ethics” Former Supreme Court Justice Earl Warren
…. “nor shall any State deprive any person of life, liberty, or property, without due process of law” … Fourteenth Amendment to the United States Constitution
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Should the Supreme Court extend the Due Process Clause of the Fourteenth Amendment to create a constitutional right to a fair tribunal in the state courts? That’s the issue facing the Court in Caperton v. A.T. Massey Coal Co., which was argued before the Court last week.
The facts are straightforward – in fact, John Grisham adapted them for his novel The Appeal.
Justice Brent D. Benjamin, Supreme Court West Virginia
Caperton won a $50 million judgment against the A.T. Massey Coal Co. in state court in West Virginia in 2002. Unhappy with this outcome, the Massey CEO, Don Blankenship, authorized an appeal to the West Virginia Supreme Court of Appeals (the highest state court in West Virginia). But Blankenship believed that one of the judges on that court was anti-business, and he realized that there would be a judicial election in time to unseat that judge before the appeal was heard. Blankenship helped raise several million dollars in support of the candidate he endorsed, Brent Benjamin. That’s a lot of money for a judicial election in West Virginia, and no surprise, Benjamin won. And, now-“Justice” Benjamin was the “swing vote” in a 3-2 decision that ruled in favor of Massey Coal, overturning the $50 million judgment. During the proceedings Caperton repeatedly asked Justice Benjamin to withdraw from the case based on conflict of interest (or, as lawyers prefer to say, “recuse himself”), but Benjamin, who had sole say on this issue, refused.
Caperton appealed to the federal courts, claiming that he had been denied due process under the 14th Amendment to the U.S. Constitution when Justice Benjamin refused to withdraw from the panel deciding the case. In response, Massey argued (as it had below) that campaign contributions alone were not enough where the contributions had gone to Benjamin’s campaign fund (not to Benjamin personally), and there was no evidence that Justice Benjamin had any “actual” bias.
This is a difficult case for the Court, because the facts are so one-sided in favor of Capterton. Would you like a judge sitting on your case, knowing that his election was probably due to the other side’s overwhelming financial support? This is a classic example of a situation where “hard cases make bad law.” Yet, if the Court accepts Capterton’s argument it may open the floodgates to challenges to judges in state courts throughout the country. As in so many constitutional cases decided by the Court, the question is where to draw the line for the guidance of the lower courts, and how to avoid opening a Pandora’s box of litigation the issue.
It’s easy to think of situations that might face the courts if the Supreme Court rules in favor of Caperton, and several of the Supreme Court judges (Roberts and Scalia), did just this during oral argument. What if the contribution had been made by members of a trade group that had an interest in ongoing litigation? How few members would the trade group have to have before constitutional problems arose? How much contribution money is too much?
More fundamentally, what basis is there to conclude that the Constitution authorizes the federal courts to sit in judgment on judicial disqualification proceedings in the state courts? Does the Constitution empower the federal courts to guard against abuses of this nature by state court judges? What judicial “standard” (or test) should the court create to be applied in future cases? Isn’t this something the states are better left to regulate themselves? Won’t the political process itself eliminate judges who can be bought? After all, the case involving Judge Benjamin has received massive amounts of adverse publicity, and by now, Justice Benjamin may regret his decision not to have recused himself from this case.
The transcript of oral argument (linked below), is quite entertaining. This a “hot bench,” and Ted Olsen, arguing for Capterton, barely got one sentence into his argument before being challenged by Justice Scalia who (with some help from Chief Justice Roberts) had him under attack throughout his argument. It’s not surprising that these two “conservative” justices were hostile to the new due process rights which Mr. Olsen was advocating. The outcome of this case will be of great interest, regardless of the ruling.
In In re Lewis Ferguson, a March 6, 2009 decision from the Court of Appeals for the Federal Circuit, the applicant sought to patent “a marketing paradigm for bringing products to market.” After the application was denied by the various levels of the Patent Office bureaucracy for lack of patentable subject matter, the applicant appealed. The CAFC court quoted this claim from the application as an example:
A paradigm for marketing software, comprising:
a marketing company that markets software from a plurality of different independent and autonomous software companies, and carries out and pays for operations associated with marketing of software for all of said different independent and autonomous software companies, in return for a contingent share of a total income stream from marketing of the software from all of said software companies, while allowing all of said software companies to retain their autonomy.
Novel and nonobvious? It may just be me, but if this isn’t a distribution system that’s been implemented a million times, I’ll be damned.
The CAFC didn’t like it either, but they didn’t even get that far. Relying on In re Bilski, 545 F.3d 943 (Fed. Cir. 2008) (en banc), the Court observed:
Applicants’ method claims are not tied to any particular machine or apparatus. Although Applicants argue that the method claims are tied to the use of a shared marketing force, a marketing force is not a machine or apparatus. As this court recently stated . . . a machine is a “‘concrete thing, consisting of parts, or of certain devices and combination of devices.’ This ‘includes every mechanical device or combination of mechanical powers and devices to perform some function and produce a certain effect or result.’” . . . . Applicants’ method claims are not tied to any concrete parts, devices, or combination of devices.
Nor do Applicants’ methods, as claimed, transform any article into a different state or thing. At best it can be said that Applicants’ methods are directed to organizing business or legal relationships in the structuring of a sales force (or marketing company). But as this court stated in Bilski, “[p]urported transformations or manipulations simply of public or private legal obligations or relationships, business risks, or other such abstractions cannot meet the test because they are not physical objects or substances, and they are not representative of physical objects or substances.”…
Applicants do assert, however, that “[a] company is a physical thing, and as such analogous to a machine.” But the paradigm claims do not recite “a concrete thing, consisting of parts, or of certain devices and combination of devices,” . . . and as Applicants conceded during oral argument, “you cannot touch the company.”
Of course, Bilski is seeking to appeal the CAFC’s decision to the Supreme Court. If the appeal is accepted all bets are off on the “machine or transformation” test established by the CAFC in Bilski and applied here.
The redoubtable Seventh Circuit Appeals Court Judge Richard Posner (“the most cited legal scholar of all time”; “probably the greatest living American jurist”), isn’t afraid to call it as he sees it, and given Posner’s brains, experience, and economic cred as an antitrust expert, he may be more credible than your average, run-of-the-mill economist (“economists exist to make astrologers look good”).
The world’s banking system collapsed last fall, was placed on life support at a cost of some trillions of dollars, and remains comatose. We may be too close to the event to grasp its enormity. A vocabulary rich only in euphemisms calls what has happened to the economy a “recession.” We are well beyond that. We are in the midst of the biggest economic crisis since the Great Depression of the 1930’s. It began as a recession — that is true — in December 2007, though it was not so gentle a downturn that it should have taken almost a year for economists to agree that a recession had begun then. (Economists have become a lagging indicator of our economic troubles.)
The word itself is taboo in respectable circles, reflecting a kind of magical thinking: if we don’t call the economic crisis a “depression,” it can’t be one. But no one who has lived through the modest downturns in the American economy of recent decades could think them comparable to the present situation. It is the gravity of the economic downturn, the radicalism of the government’s responses, and the pervading sense of crisis that mark what the economy is going through as a depression.
Ouch.
Apparently Freakenomics got an advance copy of the book, and was able to post these quotes.
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