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ANTITRUST Injunction against NCAA enforcing rules dismissed College basketball tournament promoters can’t establish the relevant market in which the National Collegiate Athletic Association’s “two in four” rule allegedly harms them, the 6th U.S. Circuit Court of Appeals ruled on Nov. 15. Worldwide Basketball and Sport Tours Inc. v. National Collegiate Athletic Assn., No. 03-4024. Concerned that the country’s six biggest conferences were taking disproportionate advantage of rules allowing them to play more games each year by participating in certified, early-season tournaments, the NCAA promulgated the “two in four” rule to limit the number of certified tournament events a school can play each year and every four years. Certified tournament promoters sued the NCAA for antitrust violations, claiming that, because the rule hampered their ability to schedule tournaments with the best-known basketball programs, the rule was anti-competitive. An Ohio federal court permanently enjoined the NCAA from enforcing the rule, noting that the relevant market was Division I men’s college basketball together with the appropriate submarket consisting of school-scheduled games. The 6th Circuit reversed, holding that the promoters had not established in what relevant market or submarket the rule restrained trade. There was no evidence regarding the promoters’ competitors and their relation to the NCAA’s product (basketball games). Nor was there evidence on whether the submarket of products was the total number of school-scheduled events, uncertified tournaments or certified tournaments. Full text of the decision BUSINESS LAW Interest rate is legal rate in effect at time of ruling Prejudgment interest should be calculated according to Nev. Rev. Stat. � 92A.340, a specific interest statute that was enacted before a judgment was entered, the Nevada Supreme Court found on Nov. 19. United Ins. Co. of America v. Chapman Industries, No. 39523. When Unicoa Corp. merged with United Insurance Co. of America, dissenting shareholders sued, seeking an appraisal and payment for their shares. Before the trial court entered a final judgment, the Nevada Legislature enacted Nev. Rev. Stat. � 92A.340, which provided a specific interest rate for dissenting shareholder actions. The trial court then entered judgment for the dissenting shareholders but denied them prejudgment interest. The Nevada Supreme Court affirmed the judgment regarding the stock valuation but vacated the lower court’s decision on another ground. On remand, the trial court entered final judgment for the dissenters, calculating prejudgment interest according to Section 99.040, a general interest statute. Reversing the portion of the lower court’s decision regarding prejudgment interest, the Nevada Supreme Court declared that the statutory interest rate in effect when the final judgment was entered was the proper one to use to calculate prejudgment interest. Full text of the decision CIVIL PRACTICE Plaintiff’s petition change to forgo federal claim OK In a case where a defendant had removed a state civil action to federal court, there was no error in a federal district court’s allowing the plaintiff to amend her complaint to remove the federal causes of action, the 4th U.S. Circuit Court of Appeals held on Nov. 16. Harless v. CSX Hotels Inc., No. 03-2433. Before his death, CSX Hotels terminated the employment of Edward Lewis for what it deemed to be excessive absenteeism. On behalf of his estate, Lewis’ daughter, Sarah Harless, sued CSX in state court, alleging age and disability discrimination and retaliation for Lewis’ filing of a workers’ compensation claim. CSX filed a notice of removal, arguing that Harless’ claims were pre-empted by the Labor Management Relations Act. A federal district court twice allowed Harless to amend her complaint to remove any federal claims, and then granted her motion to remand the case to state court. CSX appealed, arguing that the district court had abused its discretion by permitting her repeated amendments for the sole purpose of avoiding federal pre-emption and federal jurisdiction. Affirming, the 4th Circuit distinguished the case from its 1950 decision in Brown v. Eastern States Corp., and held that that there was no error in allowing the amendments, nor in remanding the case. The court said, “Brown is distinguishable from the case at hand. Here, Harless had a substantive and meritorious reason to amend the Complaint other than simply defeating federal jurisdiction. Once the district court found the amendment to be made in good faith, the decision to remand to state court resided within the discretion of the trial court.” Full text of the decision CONSUMER PROTECTION No disclosure, tiny offer breach fair credit law The amount of an “offer” and the size and presentation of disclosures affect whether an unsolicited mailed flyer violates the Fair Credit Reporting Act (FCRA), where the sender used information from a credit reporting agency without the consumer’s authorization, the 7th U.S. Circuit Court of Appeals held on Nov. 19. Cole v. U.S. Capital Inc., No. 03-3331. Oneta Cole received a promotional credit flyer from U.S. Capital Inc. and Gleason Chevrolet, which said she was “pre-approved to participate in an offer,” and that she was eligible for a credit card with a limit of up to $2,000 as well as automotive credit with a limit of up to $19,500, but there were several caveats. The flyer said Cole was chosen based on information from a consumer report from Trans Union LLC. Cole sued, alleging violations of the FCRA, claiming that she had neither requested the materials nor authorized anyone to access her credit report. She said the materials did not qualify as a firm offer of credit as used in the FCRA and that the required disclosures were not made. An Illinois federal court dismissed Cole’s amended complaint. The 7th Circuit reversed and remanded, noting that a firm offer “must have sufficient value for the consumer to justify the absence of the statutory protection of his privacy.” Courts’ considerations must include the entire offer and the effect of all the material conditions, to discern whether it was indeed just a “guise for solicitation.” One important term is the amount of credit to be extended. Here, the only “guaranteed” offer was $300 credit, for the purchase of a car, and even that was subject to a disclaimer. Also, missing terms made it impossible for a court to determine whether the offer had value. Further, the FCRA requires that any person using a consumer report to make a firm offer of credit must provide a “clear and conspicuous” disclosure notice. Full text of the decision CONSTITUTIONAL LAW Right to freedom burden is no due process breach It is not unconstitutional to require insanity acquittees to meet the “clear and convincing” burden of proving their entitlement to release from commitment, nor is it unconstitutional to impose a higher burden of proof on insanity acquittees who have committed more serious crimes, the 10th U.S. Circuit Court of Appeals held on Nov. 16, deciding issues never before addressed in federal court. USA v. Weed, No. 03-5100. Twenty-seven-year-old Jason Weed, who had no prior history of mental illness, shot and killed a postal worker. He and the government stipulated that he was insane at the time of the crime. The judge found him not guilty by reason of insanity and committed him to a mental health institution. At a subsequent commitment hearing, an Oklahoma federal court found that Weed had failed to prove by clear and convincing evidence that his release into the community would not create a substantial risk of danger to others, and committed him to the custody of the U.S. attorney general. Weed appealed. The 10th Circuit affirmed. In construing the federal statute governing commitment of insanity acquittees, 18 U.S.C. 4243 (2000), the court held that the clear and convincing burden of proving entitlement to release doesn’t violate the due process rights of insanity acquittees. The court held that Congress didn’t violate equal protection by imposing a higher burden of proof for release on the class of insanity acquittees who have committed serious crimes, nor had the district court erred in finding that Weed had not met the statutory standard for release. Full text of the decision CRIMINAL PRACTICE Separate machine parts aren’t ‘infernal machine’ A trial court erred in convicting a man for possession of an “infernal machine” where the man possessed only the unassembled components of such a machine, the Massachusetts Supreme Judicial Court held on Nov. 19. Commonwealth v. Carter, No. SJC-09301. Police searched Gregory Carter’s home and discovered C-4 plastic explosive and a separate container with 10 blasting caps. Carter was charged with possession of an infernal machine-”any device for endangering life or doing unusual damage to property, or both, by fire or explosion” in violation of Mass. Gen. Laws ch. 266, � 102A. After a court denied Carter’s motion for a required finding of not guilty, a jury convicted him. Carter appealed, an intermediate appellate court reversed and the commonwealth sought review from the Massachusetts Supreme Judicial Court. Affirming the intermediate appellate court’s reversal of the trial court, the state’s high court held that merely possessing the components of an infernal device did not violate the law. Contrasting the Massachusetts law with similar federal law, the court said, “In this case, to be an infernal machine, the C-4 and blasting cap would have had to be combined, not stored separately. Moreover, unlike two Federal statutes defining a ‘destructive device,’ G.L. c. 266, � 102A does not provide for punishment of a person possessing items that could be assembled into an infernal machine.” Full text of the decision LABOR LAW City can base financing on assent to labor deal A locality may condition a grant of tax increment financing for a public project upon the recipient’s acceptance of a labor neutrality agreement, the 3d U.S. Circuit Court of Appeals ruled on Nov. 15. Hotel Employees & Restaurant Employees Union, Local 57 v. Sage Hospitality Resources, No. 03-4168. As part of its urban redevelopment project, the city of Pittsburgh entered into an agreement with Sage Hospitality to build a hotel. The hotel would receive funding through bonds backed by the incremental rise in property values expected from the hotel’s presence in the area. Receipt of the funds was conditioned on the hotel’s acceptance of a labor neutrality agreement, which included a provision requiring arbitration of disputes. A dispute arose over whether the local Hotel Employees and Restaurant Employees Union (HERE) was the designated collective bargaining representative for the hotel employees. When HERE invoked the arbitration provision of the hotel agreement, Sage argued that the agreement was illegal and void. A Pennsylvania federal court ruled for HERE. The 3d Circuit affirmed. Federal labor law does not pre-empt the conditioning of public financing on certain labor specifications. There is an exception to pre-emption when the proposed funding constitutes market participation, provided that the proposed condition advances or preserves the state’s proprietary interest in a project or transaction as an investor, owner or financier; and the condition is specifically tailored to that interest. Full text of the decision LEGAL PROFESSION Out-of-state client’s state law doesn’t apply to firm A law firm that represented an out-of-state client did not subject itself to personal jurisdiction in the state in which the client resides, the North Dakota Supreme Court held on Nov. 19. Bolinske v. Herd, No. 2004 ND 217. Robert Bolinske, a North Dakota attorney, contacted Thomas Herd, an attorney at a Colorado law firm, to represent a North Dakota couple who had been involved in a car accident in Colorado. In the process of representing the couple, the Colorado firm contacted people in North Dakota at least 168 times by mail and telephone. However, no one from the firm ever traveled to North Dakota, and all legal pleadings and discovery were done in Colorado. After contacting the firm on three occasions to no avail regarding his fee, Bolinske sued in a North Dakota court, which dismissed the case for lack of personal jurisdiction. The North Dakota Supreme Court affirmed. Although the law firm did have a lot of contact with the state of North Dakota, the court determined that the contacts were not directly related to and connected with this lawsuit. Suspension right sanction for attorney’s tax felony A one-year suspension and a public reprimand were the appropriate sanctions for a lawyer who had pleaded guilty to two felony counts of filing false tax returns, although disbarment was “generally the appropriate sanction for such violations,” the Georgia Supreme Court held on Nov. 22. In re Haugabrook, No. S05Y0204. Tyrone Haugabrook pleaded guilty to two felony counts of filing a false tax return in a matter stemming from his failure to report accurately his income for tax years 1993 and 1994. Observing that disbarment was not mandatory when mitigating factors were present, a special master recommended a one-year suspension and a public reprimand. Accepting the special master’s recommendation, the Georgia Supreme Court held that the mitigating factors warranted the reduced penalty. The court said, “This Court does not take lightly Respondent’s felony convictions….However, the Court notes that Respondent has already been punished through the criminal justice system and has accepted responsibility for his mistakes, which did not involve the practice of law. In light of his obvious remorse, his past and present service to his community, the fact that he had no prior disciplinary record, and his willingness to take full responsibility for his actions and the consequences thereof, this Court agrees with the special master that a one-year suspension and a public reprimand…are the appropriate sanctions in this case.” Full text of the decision REAL PROPERTY Refusal to state value won’t halt condemnation Federal jurisdiction over a condemnation suit can’t be defeated by landowners’ refusal to specify the amount they are claiming, the 7th U.S. Circuit Court of Appeals held on Nov. 19. ANR Pipeline Co. v. 62,026 Acres of Land, No. 04-1465. ANR Pipeline Co. got a certificate of public convenience and necessity authorizing it to build a pipeline under property owned by the Davis family, and to enlarge a meter on the Davis’ land. Negotiations to pay for an easement failed, and ANR filed a condemnation suit for the pipeline property, in a Wisconsin federal court. Later, ANR offered the Davis family $4,872. They replied that they would accept $2,900 for the pipeline easement, but would not accept any compensation for the land needed for the valve enlargement because that taking was “outside the scope” of the litigation. The Davises then moved to dismiss the suit because a rarely litigated provision of the Natural Gas Act only allows such suits if the amount claimed by the landowner exceeds $3,000. ANR amended its complaint to include the gate valve land as well. The judge denied the motion to dismiss and held a bench trial at which the Davises did not appear. The judge ordered condemnation for zero compensation. The 7th Circuit affirmed in part, reversed in part and remanded. On the Davises’ appeal, the court said that they “are undoubtedly trying to force ANR to proceed in state court,” where they may get a larger judgment. The circuit court noted that the Davises had rejected the offer of $4,872, “which was well above the jurisdictional minimum, because they wanted more,” which showed that the Davises were “claiming more than $3,000,” as the district court had held. But the circuit court reversed the zero compensation decision, holding that the court should have awarded the Davises the fair market value of $4,872, in exchange for the condemnation that ANR won by default. Full text of the decision TORTS Loss of consortium for adult son’s death denied Only a personal representative has standing to bring a wrongful death suit, the Montana Supreme Court ruled on Nov. 16, denying a mother’s loss of consortium claim for the death of her adult son. Renville v. Fredrickson, No. 03-170. Janice Renville’s adult son, Gary Sorenson, was killed in an automobile accident while a passenger in the car of Sherlee York Fredrickson. Sorenson’s son, Jason, named personal representative of his father’s estate, brought a wrongful death suit against Fredrickson’s estate that was settled. Renville sued Fredrickson’s estate for loss of consortium. The trial court granted the estate’s motion for summary judgment. The Montana Supreme Court affirmed. Under Mont. Code Ann. � 27-1-513, only a personal representative has standing to bring a wrongful death suit. The court found that the personal representative did not bring a claim on behalf of Renville and that multiple lawsuits arising out of the same wrongful death may not be brought. Full text of the decision

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