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ANTITRUST Texas court sustains Coke monopoly finding Coca-Cola’s contracts with certain retailers violated Texas law, warranting a $14.6 million judgment and a related injunction, the Texas Court of Appeals, 6th Appellate District, said on July 17. Coca-Cola Co. v. Harmar Bottling Co., No. 06-01-00120-CV. A group of carbonated soft drink bottlers sued Coca-Cola for restraint of trade, monopolistic practices and interference with existing and prospective business relationships. A jury awarded the bottlers $14.6 million in damages. The trial court also issued a seven-year injunction barring Coke from taking certain actions including specifying retailer’s placement of Coke products or requiring particular ratios of display or marketing between Coke’s products and competing soft drink brands. Affirming all but an award of attorney fees (which was remanded for further proceedings), the appeals court said that under the Texas Free Enterprise and Antitrust Act and the Texas Bus. & Com. Code Ann. � 15.04, Coke’s business practices were unlawful because its agreements required retailers to restrict their merchandising and marketing of competing products in what the court deemed an unfair manner. BANKRUPTCY Penniless lawyer can’t discharge student loans a bankrupt attorney cannot discharge or partially discharge his student loans without meeting a three-pronged “undue hardship” test, the 11th U.S. Circuit Court of Appeals held on July 23. In re Cox (Hemar Ins. Co. v. Cox), No. 02-10788. The Georgia lawyer, Ronald Jay Cox, funded his A.A., B.A., J.D. and L.L.M. degrees with student loans totaling more than $114,000. He then established a law practice, which was unsuccessful. Quitting the practice, he took a job with his brother’s landscaping company, where he earned $24,000 per year and applied for bankruptcy protection. He then filed a discharge action, claiming he could not pay off the loans without suffering undue hardship. Rejecting his arguments, the bankruptcy court found that the ex-lawyer did not establish “undue hardship” as contemplated by the Bankruptcy Code � 523(a)(8), because it was unlikely that his current financial situation would be a “permanent condition.” Nonetheless, the court ordered a partial discharge of his loans. His creditors appealed to a Georgia federal court, which reversed, holding that, without undue hardship, student loan debt could not be discharged, even in part. The 11th Circuit affirmed. Having never previously identified the factors for “undue hardship,” the 11th Circuit adopted the test used by the 2d Circuit in its 1987 case, Brunner v. N.Y. State Higher Edu. Services Corp. The Brunner court’s three-pronged test requires the debtor not to be able to maintain a minimal standard of living if forced to repay, that this state of affairs will likely persist for a significant portion of the repayment period and that he has made good-faith efforts to repay the loans. CIVIL PROCEDURE Illness excuses lawyer’s failure to play by rules modifying the dismissal with prejudice of a medical malpractice action, the New Jersey Supreme Court explained on July 24 that an attorney’s illness constituted an extraordinary circumstance sufficient to justify failure to comply with procedural requirements. Tischler v. Watts, No. A-77-01. Four years after suffering complications from a reduction mammoplasty, a patient hired an attorney to sue her plastic surgeon. Under the Affidavit of Merit Statute, which requires the filing of an affidavit by a licensed professional in malpractice actions attesting to deviation from the standard of care, the attorney had another plastic surgeon sign an affidavit. When the patient’s attorney was diagnosed with cancer, the case was transferred to a colleague. The trial court dismissed the case with prejudice after discovering that the affiant’s medical license had been revoked before he signed the affidavit. The Affidavit of Merit Statute allows for dismissal of an action without prejudice where extraordinary circumstances caused the failure to comply with procedural requirements. The state Supreme Court found the patient’s original attorney to be competent and determined that she would have discovered the problematic nature of the affidavit within the statutory time limit had she not been undergoing treatment for cancer. CONSTITUTIONAL LAW Whole Va. appeals court to hear public nudity case granting the prosecution’s request for an en banc rehearing, the Virginia Court of Appeals on July 22 set aside a three-judge panel’s June 10 decision to overturn the nudity convictions of a dancer and managers at a semi-nude dancing establishment. Boyd v. County of Henrico, nos. 0377-02-2, 0380-02-2 and 0381-02-2. Sharon Boyd was a dancer at Gold City Showgirls. Dianna White and Donna White were managers at the club. After Henrico County sheriff’s deputies observed Boyd and others dancing in “pasties” and G-strings, all three women were convicted under the county’s nudity ordinance-Boyd of public nudity, and both managers of aiding and abetting public nudity. Boyd and the Whites appealed, and the appeals court panel reversed the convictions, holding that the county’s nudity ordinance was unconstitutional as a content-based regulation of speech and is also unconstitutionally vague. It also noted that the ordinance could be interpreted as a ban on “contemporary swimwear,” but that authorities had not chosen to prosecute those offenders. The court said, “Though admitting that both were technically violative of the Ordinance, the Commonwealth’s Attorney would permit Jennifer Lopez to wear one famously revealing dress, but prohibit her from wearing another as to which it is difficult to discern a difference. Some of these violations would be prosecuted; others would not.” Penn. upholds law giving school control to mayors a portion of Pennsylvania’s Education Empowerment Act providing for mayoral control of school districts with poor performance does not violate the Pennsylvania Constitution’s prohibition against special legislation, the Pennsylvania Supreme Court said on July 22 . Harrisburg Sch. Dist. v. Zogby, nos. 1 MAP 2002; 2 MAP 2002; 7 MAP 2002; 14 MAP 2002. The state legislature (known as the General Assembly) created a provision providing for expedited mayoral control of poorly performing school districts. Legislators wrote the law so that only the Harrisburg district fit the law’s requirements. After the state’s high court struck down the law as violative of the state’s constitutional prohibition against special legislation “regulating the affairs of counties, cities, townships, wards, boroughs or school districts,” the legislators passed a new, broader version of the law so that other districts could be covered by it. The Harrisburg district and others sued, alleging that the new law still violated the special legislation prohibition as well as equal protection guarantees because it treated Harrisburg differently from other districts. When a trial court invalidated the law, the state appealed. Reversing, the high court held that the new plan differed from the original plan and that it was rationally related to the state’s education objectives. The court said that, although the “restrictions collectively narrow the class of school districts eligible for expedited treatment . . . to a small number, we believe that it was rational for the General Assembly to seek to limit the program’s initial reach to a small group of districts before prescribing the same procedures more generally throughout the state.” California court to hear junk fax class action california law permits private causes of action under the Telephone Consumer Protection Act of 1991 against purveyors of unsolicited fax advertisements, the California Court of Appeal, 2d Appellate District, said on July 22. Kaufman v. ACS Systems Inc., No. B155804, B156082. Two class actions were filed in Los Angeles against companies said to have sent thousands of unsolicited fax ads to them. The plaintiffs said that the faxes violated the act, which imposes a fine of up to $500 and treble damages for each violation. The trial court informally coordinated the cases, in which the defendants argued that the plaintiffs didn’t have a private cause of action under the act, and even if they did, it would be unconstitutional. The trial court ruled that the case could be maintained as a class action, and that the statute wasn’t by itself unconstitutional, but it agreed that California had not specifically agreed to allow such cases to be filed in state court. Affirming the rulings on constitutionality and class action status, the appeals court reversed on the third issue, ruling that California would have to enact a specific statute prohibiting a cause of action under the act. The court agreed that the statute was a constitutional restriction on commercial speech because it was narrowly tailored to advance a compelling state interest: to protect fax owners from having to pay for the paper to print unsolicited faxes and to prevent fax machines from being diverted from other, legitimate uses. The court rejected the argument that newer machines may have more advanced features that would obviate some of the problems because there was no proof of widespread use of those models. CRIMINAL PRACTICE Conviction stands in Web-made ‘teen’ tryst upholding the constitutionality of a statute criminalizing the use of the Internet to facilitate sex with a minor, the 11th U.S. Circuit Court of Appeals upheld on July 25 the conviction of a Florida man who had arranged to meet an undercover Secret Service agent-posing online as a 13-year-old girl-to engage in oral sex. United States v. Panfil, No. 02-15627. Believing he was chatting online with a 13-year-old, Brian Panfil offered to perform oral sex on the “girl,” and the two arranged to meet in a parking lot the next night. Panfil was arrested when he arrived. He initialed copies of the messages he exchanged online and agreed that nothing led him to believe that the person on the other end of the conversation was anything but a 13-year-old. He was later convicted under 18 U.S.C. 2422(b) for using the Web to persuade a minor to engage in illegal sexual activity and sentenced to 33 months in prison. Affirming, the 11th Circuit rejected Panfil’s argument that the statute was unconstitutionally vague and overbroad. The statute did not chill legitimate speech with minors on sexual topics, the court ruled, and the words used in the statute, specifically “entice” and “induce” were terms with plain and ordinary meaning. EMPLOYMENT Sex harassment victim loses punitive award reaching a different conclusion than a previous panel of the court, the 4th U.S. Circuit Court of Appeals, sitting en banc, held on July 18 that an employer was liable for compensatory, but not punitive, damages, where a female employee was sexually harassed at the workplace. Ocheltree v. Scollon Productions Inc., No. 01-1648. Lisa Ocheltree sued her former employer, Scollon Productions Inc., alleging gender discrimination in violation of Title VII of the Civil Rights Act of 1964. Ocheltree alleged that Scollon employees sexually harassed her with inappropriate activities such as lewd comments, performance of simulated sex acts with a company mannequin and display of nude photographs. She alleged further that company management did not respond to her complaints. A jury found for Ocheltree, finding $7,280 in compensatory damages and $400,000 in punitive damages. A district court denied Scallon’s motion for judgment notwithstanding the verdict, and Scollon appealed. A 4th Circuit panel reversed, holding that Scollon’s actions did not violate Title VII. Vacating that panel’s decision and rehearing the case en banc, the court affirmed the trial court’s judgment as to compensatory damages, but reversed as to punitives. Unlike the panel, the full court held that a reasonable jury could have found that Ocheltree had established all four required elements of a Title VII sexual harassment action. As for the punitive award, the court held that Ocheltree had failed to establish that Scollon was legally aware it was violating her federally protected rights. JUVENILE LAW Principal need not read ‘Miranda’ to school kids a middle school vice principal investigating a school-related incident is not an agent of a governmental agency who is required to read children the Miranda rights before talking with them, the Massachusetts Supreme Judicial Court ruled on July 23. Commonwealth v. Ira I., No. SJC-08930. After receiving a report that a child had been assaulted by four of his fellow students shortly after being dropped off by the school bus, the school’s vice principal brought each of the four alleged culprits into his office. Three admitted to being involved and the vice principal had them write out statements. One boy maintained his innocence. Meanwhile, the police, which had been contacted by the victim’s mother, brought the four before juvenile court and tried to introduce the juveniles’ statements. The juvenile court granted the boys’ motion to suppress the statements and to dismiss the charges with prejudice. Reversing, the state’s high court first found that the motion to dismiss was based on the supposed violation of a discovery rule by the prosecutor. The court ruled that the vice principal was not acting as an agent for the prosecution and was therefore not required immediately to turn over the statements made to the principal. Then, ruling that the vice principal’s questioning of the students was not done “under the guise of a governmental agency” for purposes of the Miranda rights, the court said, “It is unrealistic to expect school officials who are responsible for addressing student behavioral issues to refrain from investigating allegations of students’ harming each other, and the mere fact that such officials are in positions of authority over students does not transform every interview of a student into a custodial interrogation.” The vice principal was under no obligation to give Miranda warnings, so the boys’ statements were admissible. LABOR LAW Incoming employer must bargain with extant union upholding a national Labor Relations Board decision, the U.S. Circuit Court for the District of Columbia said on July 25 that an employer acquiring a business whose labor force is subject to a collective bargaining agreement must recognize and bargain with the representative labor union. Community Hospitals of Central California v. NLRB, No. 01-1432. Nurses working for a county medical center comprised most of the members of a labor union bargaining unit. When a private company acquired the medical center, the union demanded that the company bargain with it. After the company refused, the union filed an unfair labor practice charge. An administrative law judge concluded that the company was a successor employee, the nurses were an appropriate bargaining unit and the company did not rely on a good-faith reasonable doubt about the union’s majority status. The NLRB affirmed. Agreeing, the appeals court found that the nurses are doing substantially the same work as they did for their county employer and that the history of representation by the union made them an appropriate bargaining unit. TRUSTS AND ESTATES Testator didn’t mean for illegitimate to inherit affirming a trial court decision, the South Carolina Court of Appeals agreed on July 21 that an illegitimate child was not entitled to take the remainder of her father’s life estate. In the Matter of the Estate of Boynton, No. 3662. Gordon Boynton died in 1954. His will left a life estate in a farm to a beneficiary and the remainder to the beneficiary’s “child or children.” When the beneficiary died, an illegitimate child was his only descendant. The probate court found the illegitimate child to be entitled to the life estate. The circuit court reversed. Applying the law as it existed in 1954, the appeals court determined that Boynton intended to leave the remainder of the life estate only to legitimate children. When the will was made, both the beneficiary and his illegitimate child were alive, yet Boynton did not refer to the illegitimate child by name. The law at that time defined the generic “child” to refer only to legitimate issue.

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