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Legal news from Tuesday, March 22, 2011




Supreme Court hears arguments on retaliation protection, attorney's fees
Andrea Bottorff on March 22, 2011 2:49 PM ET

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[JURIST] The US Supreme Court [official website, JURIST news archive] heard oral arguments [day call, PDF; merit briefs] Tuesday in Borough of Duryea v. Guarnieri [oral argument transcript; JURIST report] on whether state and local government employees may sue their employers for retaliation under the Petition Clause [FAC backgrounder] of the First Amendment when they petition the government on matters of private concern. The US Court of Appeals for the Third Circuit ruled [opinion, PDF] that government employees can sue their employers for retaliation under the First Amendment. The ruling contradicted decisions by all 10 other federal circuits and four state supreme courts. Counsel for the respondent Guarnieri said that the Petition Clause does not distinguish between a petition based on public concern and a personal "grievance." Counsel for the petitioner Borough of Duryea argued that disregarding the First Amendment's public concern requirement [FAC backgrounder] "would constitutionalize, under the Petition Clause, large parts of the law of public employee discipline, and thereby grant to public employees a broad constitutional employment right that private employees do not enjoy."

In Fox v. Vice [oral arguments transcript, PDF; JURIST report], the court heard arguments [day call, PDF; merit briefs] on whether federal statute 42 USC § 1988 [text] permits the court to award defendants attorney's fees based on an action dismissing a claim when the plaintiff also asserts non-frivolous claims. The court will also consider if it is improper to award defendants the full amount of attorney's fees incurred while defending non-frivolous claims along with a frivolous claim. The US Court of Appeals for the Fifth Circuit affirmed [opinion, PDF] the granting of attorney's fees. Counsel for the petitioner Fox argued that the lower court decision violates Congress' intention "to protect defendants from the lying or the vexatious plaintiff who shouldn't be in court at all." Counsel for the respondent Vice argued that the federal statute rightly allows for defendants to receive attorney's fees from plaintiffs, even if the plaintiff wins the case, if the plaintiff filed any frivolous claims.




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Germany prosecutor requests 6-year sentence for alleged Nazi guard
John Paul Putney on March 22, 2011 2:10 PM ET

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[JURIST] Germany prosecutors called Tuesday for a six-year sentence in the trial of John Demjanjuk [NNDB profile, JURIST news archive], accused of having helped to murder 27,900 Jews at the Sobibor death camp during his time as a guard there. The Ukrainian-born Demjanjuk, now 90 years old, was allegedly among Soviet prisoners-of-war recruited to work at the death camps by the SS [BBC report]. Demjanjuk, however, has denied the charges against him and insisted he was a prisoner-of-war [AP report] for most of the remainder of the conflict. The prosecution requested conviction on all 27,900 counts of accomplice to murder, which carries a maximum sentence of 15 years. Germany disallows consecutive sentencing, and the prosecutor requested only six years because of Demjanjuk's advanced age and because he was already jailed for eight years in Israel [AFP report] before his conviction was overturned [JURIST archives] by the Israeli Supreme Court. A verdict is expected sometime in May.

Demjanjuk's trial, which began in November 2009, has been marked by extensive delay. In addition, the Spanish National Court [official website, in Spanish] announced in January that it is seeking the extradition of Demjanjuk [JURIST report] so he can stand trial on charges relating to his alleged involvement with the Flossenburg [HRP backgrounder] concentration camp where 60 Spanish citizens were killed during World War II. Last May, a German court denied a motion to dismiss the charges [JURIST report] filed by the defense, which argued there was a lack of credible evidence. The court rejected the argument, saying they found the evidence against Demjanjuk to be strong. In October 2009, Demjanjuk was found fit to stand trial after the court rejected appeals relating to his health [JURIST reports], although the court has limited hearings to no more than two 90-minute sessions per day. Demjanjuk fought a lengthy legal battle over his alleged involvement with Nazi death camps during World War II. He was deported to Germany after the US Supreme Court [official website] denied his stay of deportation [JURIST report].




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California court delays implementation of cap-and-trade program
Ashley Hileman on March 22, 2011 1:19 PM ET

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[JURIST] The San Francisco Superior Court [official website] notified parties Monday of a ruling that acts to delay the implementation of a cap-and-trade program by requiring California's Air Resources Board (ARB) [official website] to further analyze alternatives. While the court's Friday decision does not officially preclude the ARB from adopting or implementing the program in the future, it could delay the process as the ARB will now have to conduct additional research [San Francisco Chronicle Report] on other available options and report back as to why the cap-and-trade program is superior as well as invite public comment on the issue. The suit against the ARB was brought by the Center on Race, Poverty and the Environment [advocacy website], an environmental justice group that is representing other similar grassroots groups. Collectively, they argue that cap-and-trade programs, which establish limits on greenhouse gas emissions [JURIST news archive], are still inadequate because they allow major emitters to buy credits from others instead of actually reducing their own emissions, ultimately endangering communities often composed of poor minorities.

The proposed cap-and-trade program is a major part of Assembly Bill 32 (AB 32) [text, PDF; official backgrounder]. In December, the ARB approved measures [JURIST report] for the cap-and-trade program, which would provide incentives to companies and factories that decrease their greenhouse gas emissions. The provisions include a permit system in which companies are allotted a quota of greenhouse emissions. If a company does not use all of its quota, it can sell to a company that is going to exceed its quota. Companies that exceed their quota can purchase "offsets" from companies involved in activities that lessen greenhouse emissions, like forestry. The program is reportedly the first of this type in the country. Supporters of the bill in California say they felt compelled to enact AB 32 after Congress failed to approve greenhouse gas reduction legislation. They hope they other states will follow suit. AB 32 was first signed into law [JURIST report] by former California governor Arnold Schwarzenegger in 2006.




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Supreme Court rules on anti-retaliation statute language
Maureen Cosgrove on March 22, 2011 12:27 PM ET

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[JURIST] The US Supreme Court [official website; JURIST news archive] on Tuesday ruled [opinion, PDF] 6-2 in Kasten v. Saint-Gobain Performance Plastics Corp. [Cornell LII backgrounder; JURIST report] that the language "filed any complaint" of the Fair Labor Standards Act (FLSA) [text, PDF] refers to both oral and written complaints. Kasten brought an anti-retaliation suit against the respondent under the FLSA anti-retaliation provision [29 USC § 215(a)(3) text] arguing he was wrongfully discharged from employment for orally complaining to company officials about the location of timeclocks at the facility. The FLSA prohibits employers from terminating employment based on complaints "filed" by employees. Kasten verbally communicated his grievances about the location of the timeclocks to human resource managers, in compliance with the company's employee policy handbook. Saint-Gobain argued that the FLSA was not designed to protect employees only, but was established to ensure that employers had fair notice of employee grievances. The court pointed out that other similar statutes have been interpreted to include oral statements, and administrators and legislators have consistently held that similar language is meant to include oral complaints. Justice Stephen Breyer, writing for the majority, also considered policy reasons supporting its interpretation of the contested language:
Why would Congress want to limit the enforcement scheme's effectiveness by inhibiting use of the Act's complaint procedure by those who would find it difficult to reduce their complaints to writing, particularly illiterate, less educated, or overworked workers? ... To limit the scope of the antiretaliation provision to the filing of written complaints would also take needed flexibility from those charged with the Act's enforcement. It could prevent Government agencies from using hotlines, interviews, and other oral methods of receiving complaints. And insofar as the antiretaliation provision covers complaints made to employers [...], it would discourage the use of desirable informal workplace grievance procedures to secure compliance with the Act.
The court ultimately vacated and remanded the case. Justice Antonin Scalia, joined by Justice Clarence Thomas, filed a dissent arguing that the statutory language does not apply to intra-company complaints in the first place.

Saint-Gobain initially claimed that, because the anti-retaliation provision applies only to complaints filed with the government, it is exempt from suit since Kasten's complaints were directed to a private employer. The Supreme Court refused to address this argument because, though Saint-Gobain raised and ultimately lost this argument in the lower courts, the company did not address the issue in its response to Kasten's petition for certiorari. Justices Scalia and Thomas disagreed with the majority, suggesting that the court has previously permitted parties to defend a judgment on grounds not raised in the brief in opposition when doing so is "predicate to an intelligent resolution of the question presented, and therefore fairly included therein." In an earlier suit brought by Kasten, the US District Court for the Western District of Wisconsin [official website] held [opinion, PDF] that Saint-Gobain violated the FLSA by placing timeclocks in a location that prevented workers from receiving credit for time they spent dressing in work-related protective gear.




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Ukraine prosecutor investigating former president's role in journalist murder
Sarah Posner on March 22, 2011 12:22 PM ET

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[JURIST] Ukrainian state prosecutors announced a criminal investigation Tuesday against former president Leonid Kuchma [BBC profile] for his alleged involvement in the 2000 murder of opposition journalist Heorhiy Gongadze. The criminal investigation is based on Kuchma's suspected abuse of power [BBC report] and illegal orders, which led to the journalist's murder. Gongadze was an outspoken critic of Kuchma, who was then implicated in the murder [JURIST report] through secret recordings, but denied any involvement.

In 2000, Gongadze was kidnapped by ex-police officers, beaten, strangled, beheaded and buried. Following Gongadze's murder, in 2008, three former police officers were convicted and sentenced to jail [JURIST report] by a Ukrainian court for their roles in carrying out the murder. Mykola Protasov was sentenced to 13 years, while Valeriy Kostenko and Oleksandr Popovych each received a 12-year sentence. In 2006, the trial of the former police officers began [JURIST report], but those who ordered the murder had not been found. In 2005, the commission investigating the murder said that the voices of Kuchma, Parliament speaker Volodymyr Lytvyn and other officials were heard on recordings where they were allegedly conspiring against Gongadze. The inquiry also accused Kuchma of ordering Gongadze's kidnapping and murder.




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Supreme Court allows suit against Zicam maker to proceed
Zach Zagger on March 22, 2011 11:36 AM ET

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[JURIST] The US Supreme Court [official website; JURIST news archive] on Tuesday ruled [opinion, PDF] that a shareholder class action suit can continue against Matrixx Initiatives [corporate website], the maker of Zicam Cold Remedy, for failure to disclose harmful side effects that were not statistically significant. The shareholders alleged that Matrixx failed to disclose reports of a possible link between the active ingredient in Zicam and loss of smell and that, in light of these reports, had made misleading statements to the public about Zicam's possible side effects. The unanimous opinion by Justice Sonia Sotomayor in Matrixx Initiatives, Inc. v. Siracusano [Cornell LII backgrounder] held that the respondents representing the shareholders had stated a claim under § 10(b) of the Securities Exchange Act of 1934 and Exchange Commission Rule 10b-5 [texts] for employment of a manipulative or deceptive device. These laws require that the shareholders allege that Matrixx intentionally disclosed material information to investors. Matrixx claimed that the link between Zicam and loss of smell was not material because it was not statistically significant. The Supreme Court did not agree with such a bright-line rule:
Although in many cases reasonable investors would not consider reports of adverse events to be material information, respondents have alleged facts plausibly suggesting that reasonable investors would have viewed these particular reports as material. Respondents have also alleged facts giving rise to a strong inference that Matrixx acted with the required state of mind.
The court reasoned that oftentimes medical experts and the Food and Drug Administration rely on less than statistically significant data to prove causation and that a reasonable investor may be inclined to do the same. Matrixx also argued that that the shareholders did not allege facts sufficient to prove the scienter requirement. However, the court held the shareholders met their burden because, assuming the alleged facts to be true, there was a cogent and compelling inference that Matrixx withheld disclosure to prevent harmful impacts on the marketing of Zicam.

The decision upholds the US Court of Appeals for the Ninth Circuit [official website] ruling [opinion, PDF] in favor of the shareholders. Counsel for Matrixx had argued during oral argument [JURIST report] that the reports do not establish any reliable facts about the drug and that a duty to report these results would unfairly affect the company. Matrixx claimed that, absent evidence that "the company has knowledge of facts establishing a reliable basis for inferring that the drug itself is the cause of the reported event," neither the materiality nor scienter requirements of the securities laws were violated.




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Israel ex-president sentenced to 7 years on rape conviction
Matt Glenn on March 22, 2011 9:08 AM ET

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[JURIST] The Tel Aviv District Court [official website, in Hebrew] sentenced former Israeli president Moshe Katsav [BBC backgrounder; JURIST news archive] to seven years in prison Tuesday for sexually assaulting three women. The court convicted Katsav [JURIST report] in December, finding that he had assaulted a female employee of the Department of Tourism during his time as minister and two women at the President's Residence during his time as president. Katsav must also serve two years of probation [Haaretz report] and pay a total of 125,000 NIS ( USD $35,500) to his victims. The judge reading the sentence cited Katsav's pattern of repeated abuse [Jerusalem Post report] as a reason for the long sentence. In a minority opinion, one judge argued that Katsav should face only four years in prison. Katsav has continued to maintain his innocence, and his lawyer said he will appeal the sentence [Jerusalem Post report], which is scheduled to begin May 8. Katsav is the highest ranking Israeli official ever sentenced to jail.

Katsav was initially indicted on rape charges [JURIST report] in 2009 for allegedly assaulting female employees in the 1990's. In 2008, Katsav rejected a plea agreement [JURIST report] that would have permitted him to plead guilty to lesser charges of indecent assault, sexual harassment and obstruction of justice in exchange for a suspended sentence and the dropping of rape charges. The plea deal had been criticized [JURIST report] by women's and civil rights activists, prompting five separate petitions to overturn the agreement.




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Germany court rules Google Street View legal
Maureen Cosgrove on March 22, 2011 8:44 AM ET

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[JURIST] A Berlin high court has ruled [judgment, in German; press release, in German] that Google's Street View mapping service is legal in Germany. Last year, a woman sued Google [corporate website; JURIST news archive] alleging that photos posted on Google Street View of the woman, her family and the front of her house violated her property and privacy rights. The court held last week that, because the photos were taken from the street, Google did not violate her property rights. Furthermore, the court found no further violations because Germans can opt out of the service, and Google blurs faces and license plates in the posted images. The ruling was narrowly focused on property rights [DW report], ignoring larger data protection issues the company is currently confronting. The high court's ruling cannot be appealed.

Google has recently faced a number of allegations from the international community related to violating privacy laws by capturing personal data through Google Street View cars, used for its Google Maps service. Most recently, the French National Commission of Information Technology and Liberty (CNIL) [official website, in French] fined Google 100,000 euros (USD $141,300) this week for violating French data privacy laws [press release, in French; JURIST report]. In November, the UK Information Commissioner's Office [official website] found that Google had committed a "significant breach" [JURIST report] of the Data Protection Act [text] and required that Google delete the payload data it collected in the UK and implement employee training on privacy principles, security awareness and the Data Protection Act. Other countries, including Canada, Australia and Spain [JURIST reports], have launched similar investigations into the privacy breach. The US Federal Trade Commission (FTC) [official website] ended its inquiry [JURIST report] into Google's data collection through Street View cars after Google assured the FTC that it did not use any of the collected data and announced that it was committed to compliance with privacy laws [text], instituting new training on privacy principles and appointing a new director of privacy.




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