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Legal news from Wednesday, October 24, 2012




US sues Bank of America for $1 billion in mortgage fraud case
Jerry Votava on October 24, 2012 4:11 PM ET

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[JURIST] US Attorney Preet Bharara [official profile] on Wednesday filed a $1 billion civil lawsuit [complaint, PDF] against Bank of America (BOA) [corporate website; JURIST news archive] claiming the bank committed fraud in residential mortgages. The claim was filed in the US District Court for the Southern District of New York (SDNY) [official website] and alleges [press release] that Countrywide Financial, a home mortgage originator subsequently purchased by BOA, initiated a program to originate residential mortgages with increased speed that required little substantive information from the borrowers and were thus faulty. After minimal quality checking, these loans were then sold to the government-sponsored entities Freddie Mac and Fannie Mae [corporate websites], which suffered financial losses when the borrowers defaulted on their loans. They allege that this program was called "Hustle" and was continued after the acquisition by BOA.

BOA has faced significant legal pressure recently. In September BOA settled [JURIST report] a $2.43 billion class action lawsuit with investors over their $18.5 billion acquisition of Merrill Lynch. In July BOA agreed to pay $375 million [JURIST report] in a settlement with bond insurer Syncora Guarantee [corporate website] over claims that Syncora was misled into insuring toxic mortgage-backed securities of BOA-owned Countrywide Financial Corporation [NYT backgrounder]. Also that month a federal judge rejected [JURIST report] a motion by BOA to dismiss a shareholder lawsuit alleging BOA's purposeful concealment of the bank's exposure to billions of dollars in loan repurchase claims and its problematic reliance on an electronic loan registry. In December BOA reached a $315 million settlement of claims brought by investors alleging they were misled with respect to mortgage-backed investments, and a $335 million settlement [JURIST reports] with the Department of Justice, relating to discriminatory lending practices.




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Dutch court rules Samsung did not infringe Apple patent
Jerry Votava on October 24, 2012 2:38 PM ET

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[JURIST] The Dutch Rechtbank 's-Gravenhage [official website, in Dutch] court ruled Wednesday that Samsung Electronics did not infringe on a software patent held by Apple [corporate websites]. Apple brought the suit alleging Samsung infringed on their patent [EP 2098498] concerning methods for user input and data manipulation through a "multi-touch" touch screen with their Galaxy line of smartphones and tablets running the Android operating system [official website]. The court undertook a detailed explanation of the property protected by Apple's patent and a description of methods used by Android in the allegedly infringing actions. The court held that Samsung and Android's implementation differed from the Apple patent, and thus found that Samsung did not infringe.

Apple and Samsung have been embroiled in continuous patent litigation in courts around the world. Some commentators have noted that this legal strategy has been an effort to influence the marketplace from the courtroom [JURIST op-ed]. October has seen a number of rulings in various cases. Earlier this month a UK court ruled that Samsung did not infringe [JURIST report] on an Apple design patent. Also Apple appealed a Tokyo District Court ruling [JURIST report] which dismissed Apple's claim that Samsung had infringed on its patents. Finally the US Court of Appeals for the Federal Circuit reversed an injunction [JURIST report] issued by the US District Court for the Northern District of California against Samsung in an ongoing patent dispute with Apple.




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New York top court will not hear challenge to same-sex marriage law
Keith Herting on October 24, 2012 11:04 AM ET

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[JURIST] New York's highest court said Tuesday that it will not hear a challenge to the state's Marriage Equality Act (MEA) [text, PDF], effectively dispelling the last viable threat to same sex marriages in the state. The New York Court of Appeals [official website] announced it will not hear [order list, PDF] a challenge to the law brought by the conservative group New Yorkers for Constitutional Freedoms (NYCF) [advocacy group]. NYCF had challenged the law by claiming that closed-door meetings between gay rights advocates and state senators were contrary to the state's Open Meetings Law (OML) [text]. New York Governor Andrew Cuomo [official website] issued a statement welcoming [text] the court's decision:
New York State has served as a beacon for progressive ideals and this statute is a clear reminder of what this State stands for: equality and justice for all. With the Court's decision, same-sex couples no longer have to worry that their right to marry could be legally challenged in this State. The freedom to marry in this State is secure for generations to come.
The procedural challenge to the law had already been dismissed [opinion, PDF] by the lower New York Fourth Appellate Division for the Supreme Court [official website] in June [JURIST report].

This is the latest development in the ongoing same-sex marriage [JURIST backgrounder] debate. Last week the US Court of Appeals for the Second Circuit [official website] struck down [JURIST report] Section 3 of the Defense of Marriage Act (DOMA) [text], which defines marriage as between a man and a woman. Last month the US Department of Justice filed petitions in the US Supreme Court asking it to consider two additional challenges to DOMA [JURIST report]. In July a lesbian couple filed a lawsuit in the US District Court for the Central District of California in a DOMA challenge that seeks to achieve for gay and lesbian couples the same federal immigration rights afforded to heterosexual couples [JURIST report] under the Immigration and Nationality Act [materials].




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Uruguay president signs bill legalizing abortion
Matthew Pomy on October 24, 2012 10:57 AM ET

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[JURIST] Uruguay President Jose Mujica [official profile, in Spanish] on Tuesday signed a bill [text, in Spanish] legalizing abortion. The bill provides no restrictions on abortion in the first 12 weeks of pregnancy. After the first 12 weeks it provides that women must go before a medical panel and go through a five-day "reflection" period before undergoing the procedure. This makes Uruguay only the second Latin American Country to legalize abortion. Conservative opposition is reportedly considering attempting to remove the law [Focus report] through a referendum.

Abortion is a controversial issue among predominantly Roman Catholic Latin-American countries. In April the Brazilian Supreme Court [official website, in Portuguese] overturned a ban [JURIST report against aborting brain-damaged fetuses. In March the Supreme Court of Argentina [official website, in Spanish] ruled that rape victims cannot be prosecuted [JURIST report] for seeking abortions. Last year Mexico's Supreme Court [official website, in Spanish] failed to overturn [JURIST report] an amendment that stated life begins at conception, effectively banning abortions in Mexico's northern Baja California state. In 2008 Uruguay's then-president vetoed a law that was passed [JURIST reports] by the legislature decriminalizing abortion. Guyana legalized abortion in 1995.




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Supreme Court allows stay of execution for mentally ill Florida man
Keith Herting on October 24, 2012 10:00 AM ET

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[JURIST] The US Supreme Court [official website] opted Tuesday not to act [text, PDF] on a request to vacate a last-minute stay of execution order issued by the US Court of Appeals for the Eleventh Circuit [official website], meaning the execution will not be carried out at least until next month. The determination not to act on this most recent order to stay the execution concluded a series of contradictory last-minute orders volleyed between the courts regarding the execution of 64-year-old John Errol Ferguson, which had been scheduled to take place on Tuesday evening. The request to vacate the stay of execution came from the state of Florida which had appealed to the high court after the Eleventh Circuit issued a last-minute stay. Prior to that order, the Eleventh Circuit had overturned a lower-court stay of execution [JURIST reports] before finally delaying the execution so that it could hear motions in the case.

The question at issue is whether Ferguson, who was convicted in the 1970s of eight killings in south Florida, has the mental competency to be executed. Ferguson is a paranoid schizophrenic who suffers from psychotic delusions that he is the "prince of God." In September Florida Governor Rick Scott [official website] signed a death warrant [text] for Ferguson, setting his execution date for Tuesday. Also in September, following the issuance of the death warrant, Ferguson's lawyers argued that he is not mentally competent to be executed, Scott temporarily stayed the execution [text, PDF] and appointed three psychiatrists to examine Ferguson. The psychiatrists issued a joint report declaring Ferguson to be sane for execution and Scott subsequently lifted the stay.




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Supreme Court rejects challenge of Montana political contribution limits
Maureen Cosgrove on October 24, 2012 9:57 AM ET

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[JURIST] The US Supreme Court [official website] on Tuesday rejected [order, PDF] a challenge to limits on the political contributions that donors can make to candidates running for Montana state offices. Montana's campaign finance law [MCA § 13-37-216] limits the individual contributions to gubernatorial and lieutenant governor candidates to $500 and contributions to candidates for other statewide offices to $250. Earlier this month, the US Court of Appeals for the Ninth Circuit [official website] temporarily stayed an injunction [JURIST reports] that blocked Montana's campaign finance law. The Supreme Court's order leaves the Ninth Circuit's decision intact. After the challengers—including state Republican committees, donors and candidates—appealed to the Supreme Court, the justices did not ask for a response [SCOTUSblog report] from the state of Montana before ruling on the matter.

In June the Supreme Court struck down [JURIST report] Montana's century-old campaign finance law known as the 1912 Corrupt Practices Act [PPL backgrounder] as invalid under the Supreme Court's 2010 ruling in Citizens United v. Federal Election Commission [JURIST report]. The Supreme Court's decision overturned a ruling [JURIST report] by the Montana Supreme Court [official website] that upheld the Corrupt Practices Act.




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Federal appeals court blocks Indiana abortion funding bill
Matthew Pomy on October 24, 2012 9:52 AM ET

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[JURIST] The US Court of Appeals for the Seventh Circuit [official website] on Tuesday upheld [opinion, PDF] an injunction [JURIST report] on an Indiana law [text] that would block Medicaid funding for abortion providers. The court found that the law, which would block federal and state funding to all "entities which perform abortions," violated the Medicaid statute [text] because it unjustifiably limited patient choice of health care providers. Even though federal and state funding may not be used for abortions after the Hyde Amendment [backgrounder, PDF], Indiana lawmakers sought to remove all support to entities that provide abortions regardless of the source of the funding. Planned Parenthood of Indiana [advocacy website] argued that not only did the bill violate the statute but that it was also unconstitutional. While the court rejected the constitutional claim, it held that:
Although Indiana has broad authority to exclude unqualified providers from its Medicaid program, the State does not have plenary authority to exclude a class of providers for any reason—more particularly, for a reason unrelated to provider qualifications. ... The defunding law excludes Planned Parenthood from Medicaid for a reason unrelated to its fitness to provide medical services, violating its patients' statutory right to obtain medical care from the qualified provider of their choice.
The injunction allows Planned Parenthood to continue serving its Medicaid patients pending a reversal on appeal. The ruling was welcomed by the American Civil Liberties Union, while Indiana Attorney General Greg Zoeller said his office is reviewing the opinion [press releases] to determine how to proceed.

Reproductive rights [JURIST backgrounder] remain a controversial issue across the US, with similar law being passed in other states. Last week a federal judge blocked a similar bill [JURIST report] that would have defunded Planned Parenthood in Arizona. Planned Parenthood in Texas asked a federal district court last month to reconsider its August ruling that upheld a Texas defunding statute [JURIST reports]. In July, the Center for Reproductive Rights [advocacy website] released a report detailing all of the abortion laws passed in 2012.




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Russia lawmakers expand treason definition
Maureen Cosgrove on October 24, 2012 9:19 AM ET

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[JURIST] The Russian State Duma [official website, in Russian] passed a bill on Tuesday that expands the definition of high treason. Treason was previously defined as espionage or assistance to a foreign state that damages Russia's external security. The bill, which was passed by the lower house, expands the definition to include acts that compromise Russia's constitutional order, sovereignty and territorial and state integrity. The maximum penalty for treason—up to 20 years in prison—remains unchanged. Critics of the legislation say the wording is overly broad [AP report] and that it may have a chilling effect on civil activism. The bill will now proceed to the upper house of parliament for a vote before it can be signed into law by Russian President Vladimir Putin [official website; JURIST news archive].

The Russian government has been cracking down on dissent in recent months. Members of Russian feminist rock band Pussy Riot [RASPI background; JURIST news archive] were given two-year prison sentences after they were convicted [JURIST report] in August of hooliganism in connection with "guerrilla performance" of a protest song in February at the altar of downtown Moscow's Christ the Savior Cathedral. Since the beginning of the trial [JURIST report], the group's lawyers and human rights groups have said the charges were politically motivated by Putin to discredit his opposition. In July Putin signed a bill into the law that re-criminalizes slander and libel in the country after signing into law [JURIST reports] a bill that labels all non-governmental organizations (NGOs) that receive foreign funding as "foreign agents" and requires them to register with the Justice Ministry just a week earlier.




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