June 2008 Archives

Here is the Supreme Court’s Opinion in Exxon v. Baker. The Court held that a punitive damage award three times the amount of compensatory damages was excessive, even to punish one of the world’s largest corporations for one of the worst and most egregious environmental disasters in history.

Alan Milstein

Here is the Supreme Court’s misfire on the Second Amendment. The Court held that a municipality such as the nation’s capital with a murder rate that is a national embarrassment cannot prohibit the purchase of handguns. Talk about blind justice. This is a Court that cares more about the rights of gun owners than victims of gun violence.

Alan Milstein

 Anne Hathaway, The "Get Smart" actress ended her relationship with her boyfriend of four years, Raffaello Follieri last week amid reports that his charity was being probed by the New York Attorney General’s Office.

Yesterday, Follieri was indicted by prosecutors who claim he duped investors in his venture to buy Catholic Church properties in the United States by suggesting he had top Vatican contacts who could help him do business, going so far as to hire two monsignors to travel with him on deal-making trips. Those monsignors purportedly accepted monies in exchange for representing that they were higher Church officials in an effort to bolster Follieri’s fraud. Follieri is charged with multiple counts of fraud and money laundering.

One such fraud involved Follieri using his investors' money to fund an extravagant lifestyle with Hathaway. His “investor” was Ron Burkle, the supermarket magnate and modern day “RatPack” buddy to former President Clinton. Burkle had pursued a civil suit against Follieri earlier this year and recovered about $1.2M, but lost far more. Another investor, Canadian real-estate exec Michael Cooper, also reportedly gave millions to Follieri. Amongst his extravagances were an apartment in Trump Tower in Manhattan, designer and custom clothing and jewels, dentistry for his father (a convicted con-man) and gifts.

Newspaper accounts report that in recent months, Follieri repeatedly "stalled" on paying waiters and bartenders he hired for frequent celebrity-studded parties he threw with Hathaway at another luxurious apartment he rented in the Olympic Towers on Fifth Avenue. It was noted that at those parties, the two monsignors were constant guests.

The New York Archdiocese said they rejected Follieri property purchases because he made lowball offers. Other dioceses said he appeared suspicious to them or failed to follow through on promises in other cases. Follieri is accused of swindling up to $6 million and failed to post the $21 million bail. When arrested, Follieri had a ticket for a flight to Italy and planned to travel to Capri.

John M. Hanamirian

As hundreds of gay couples headed to California to take advantage of  a state declared right to be lawfully wedded, its impact could be felt in a rather unusual forum. The self-confessed mastermind of  the September 11th attacks appeared before a military tribunal last week and asked to be given the death penalty so he could become a “martyr.” Khalid Sheikh Mohammed told Col Ralph Kohlmann, a US military judge, that death was "my wish . . . I am looking to be martyred for a long time. I fought against the Russians [in Afghanistan] for a long time. Now it is maybe from you."

The Pakistan-born Kuwaiti also sang verses from the Koran, denounced the court at the US naval base in Guantanamo Bay, Cuba, as an inquisition and said he would represent himself.

"I will not accept any lawyer if they swear allegiance to the American constitution,” he said.  Why is he so opposed to the Constitution? For this, he had an answer that should sit rather uncomfortably at places like Fox News and the Family Research Council. “I am considering the American constitution evil laws in allowing for same sex marriage and many things that are very bad," he said.

If he thinks it’s bad you know its good.

Alan Milstein

Here is the Supreme Court Opinion in Meacham v. Knolls Atomic Power Laboratory. In a 7 to 1 decision, the Supreme Court, whose ages range fom 53 to 87, made it easier for employees to prove they have suffered discrimination because of their age. The Court held that when older workers are disproportionately affected by an employment decision, the employer bears the burden of explaining why.

          The case involved two dozen workers at an upstate New York federal research laboratory. When the federal government ordered the contractor that runs the lab to reduce its force, the contractor had its managers rate their subordinates on “performance,” “flexibility,” and “critical skills.” The contractor then fired thirty-one employees, all but one over 40, the age at which the age-discrimination law begins to apply. Most of the affected employees joined a suit contending there was no justification for using an evaluation system that had a disparate impact on older workers.

Justice Souter wrote that the ruling might "make it harder and costlier to defend" age discrimination lawsuits, but, with respect to the federal Age Discrimination Act,  "We have to read it the way Congress wrote it."

Alan Milstein

A Florida prison psychologist was sentenced to five years in prison for his role in an inmate personal income tax fraud scheme. In the alleged scheme, the psychologist accessed the Florida Department of Corrections database and obtained the names and other identifying information about other inmates in other prisons. The psychologist then gave that information to the inmates in his own prison and then those prisoners allegedly used that information to prepare and file false federal income tax returns claiming refunds. The total take: $902,000.00.

The IRS, in rapid response, announced a new cooperative effort to combat prison-based tax fraud:

“The prosecution of income tax refund crimes committed by prison inmates is important. …Participants in prison refund scams commit crimes against the nation’s tax systems.”

I am usually a proponent of  expansion of individual rights, but maybe prisoner’s tax returns get codes and any refund claims are picked up for at least a preliminary review at the Service Center where they are processed?

John M. Hanamirian

Here is the Supreme Court Opinion in Boumediene v. Bush.  For all the bluster of those outraged by the ruling and think it will bring the end to life as we know it, the decision actually keeps America true its principles. In his majority opinion, Justice Kennedy simply declared: “The detainees in these cases are entitled to a prompt habeas corpus hearing….The costs of delay can no longer be borne by those who are held in custody.”

Alan Milstein

Here's a Blog that first appeared over at our friends at

With the United States Open ready to begin this week, the man some Europeans think is the quintessential American is making news across the pond in the birthplace of golf. Donald Trump is in Scotland this week testifying before the equivalent of a zoning board and trying to calm the local furor over his plans to build a monstrous golf resort on a pristine piece of Scottish coastline called Aberdeenshire.

In the typical bravado of The Donald, Trump says he plans to build the “world’s greatest golf course,” two of them actually, together with an eight story hotel, 950 timeshare apartments and 500 houses. This is certainly a bit of hyperbole when many would argue the greatest golf course is further down the coast at St. Andrews. Quite a few have been built since the Old Course was finished in 1764.

The local board which originally reviewed Trump’s proposal rejected it because of the impact on a protected environmental site. The chief solicitor at the time, Martin Ford, was then promptly sacked and replaced with someone more sympathetic to development of the site.

Trump claims his motives are not the almighty dollar but to protect the environment and to cherish the memory of his mother who is of Scottish descent. As the poet once said, “Money doesn’t talk, it swears.”

Golf is under some fire lately by the Greens keepers, and I don’t mean the guys who keep the golf courses in tip top shape through the massive use of irrigated water and insecticides. There are about 35,000 golf courses world wide, half of those in the United States, with hundreds more being built each year. Each course uses on average 312,000 gallons of water a day, which comes to about 2200 gallons of water for each golfer for each round. When fresh water is in such short supply, particularly in states like California where the Open is being played, such consumption is difficult to justify. In addition, golf courses apply an average of more than a thousand pounds of pesticides annually or five times more than is used agriculturally, not to mention the amount of chemical fertilizer and weed killer added to the mix.

If you have ever played a course like St. Andrews, or Pine Valley not too far from my office in New Jersey, where the golf is played on a natural landscape, the experience is almost spiritual and far superior to that played on one of those desert monstrosities kept a sickly bright green. Golf needs to stop adding to the environmental problems facing all of us and our children and find the green dead straight ahead.

Alan Milstein

Here is an article I wrote titled “Research Malpractice and the Issue of Incidental Findings,” which just came out in the Summer 2008 issue of “The Journal of Law Medicine and Ethics.”

Alan Milstein

The New York Times

     Senator Chuck Grassley told the Times that, by failing to report this income from the companies who reap hundreds of millions of dollars from their work, the two psychiatrists may have violated university, state and federal rules governing conflicts of interest. Grassley has been conducting hearings on academics who receive grant money from BigPharma and the potential financial conflicts that might arise from such relationships.

         Harvard Spokeswoman Alyssa Kneller told the Times: “The information released by Senator Grassley suggests that, in certain instances, each doctor may have failed to disclose outside income from pharmaceutical companies and other entities that should have been disclosed.” She added that a university conflict committee is reviewing the physicians’ conduct.

        The kinds of studies these psychiatrists and others are conducting on young children is highly questionable. Bloomberg News reported that Dr. Biederman is currently recruiting 4- to6-year-olds with supposed bipolar disorder to test AstraZeneca's antipsychotic, Seroquel, and another group of 6- to 12-year-olds to test Equetro, developed by U.K.-based Shire Ltd.

Alan Milstein 

A New York trial court recently held that emails a doctor sent to his personal lawyer via the computer system owned by his employer hospital were not protected by the attorney-client privilege. The hospital had an email policy mandating that computer and email servers could only be used exclusively for business purposes and warned specifically that employees could not harbor any reasonable expectation of privacy over email sent via that computer system or network. 

That written policy apparently was enough for the court. The doctor/employee, of course, argued that the emails were privileged because they were sent to his attorney in the context of litigation between the doctor and the employer hospital. The court, however, said that the effect of the hospital email policy was to create an environment whereby the employer was "looking over your shoulder" when you are composing email. 

This whole analysis of whether someone harbors a reasonable expectation of privacy or whether it is in itself reasonable to harbor an expectation of privacy all stems from the Fourth Amendment of the United States Constitution in the context of searches and seizures of persons and property. Realistically, an employer should not be able to articulate an email policy as described and then "blow up" the attorney client privilege merely by maintaining that policy. Oftentimes there are no choices. People are at work and they have legal matters to deal with and it is 2008 and email is very often how we communicate. The employer could not intercept a telephone conversation merely by saying that they are "listening in." There is far more involved. In that realm, when the government is conducting a wiretap, a judge must issue an order to do so. In the context of that wiretap, if the listening agents know or come to realize that the person to whom the wiretap is directed is speaking to his attorney, the law requires that they turn off the wiretap device for the pendency of the call. The government can't listen in, but the employer can?

John M. Hanamirian

After four days of deliberations, a Detroit jury acquitted Jeffrey Feiger and his law partner of all charges, then went to a nearby bar to toast the victory with the defendants. “I hope,” said Feiger, “this puts an end to political prosecution in the age of Mr. Bush.” Added Feiger’s attorney, the legendary Gerry Spence, “This is one of the great moments in my life. … This is a nice way to end a career — representing a great lawyer who represents ordinary people.”

         Spence had argued that the prosecution was politically motivated. Ordinarily, a claim of reimbursement of political contributions is handled by the Federal Election Commission as a civil matter. At the trial, the FBI agent in charge of the investigation admitted to a preraid meeting of 80 to 100 agents who fanned out armed to the teeth to raid Feiger’s office and the homes of 40 of his employees. The agent conceded he could not recall such a well attended meeting in any comparable case.

Alan Milstein

Overstock.com, Inc. has filed a lawsuit in the New York Supreme Court  challenging the New York State tax law requiring Internet retailers to collect and pay sales tax on their in-state sales.  The Complaint states that Overstock is seeking a declaration that the New York law is unconstitutional.

For the most part, you need to have some sort of presence within a jurisdiction in order to be subject to tax, even if your presence is just soliciting business within a state that can be enough. The gist of the Complaint filed by Overstock is that Overstock sets up deals with affiliates throughout the country and the world, as do most website retailers, whereby Internet traffic is delivered to Overstock.com.  In exchange for the delivery of that traffic, a fee is paid. The delivered customer now makes a purchase. The delivered customer could be generated from anywhere, but it just so happens he is from New York.  The State of New York says Overstock.com needs to collect sales tax from that sale. Overstock says they did nothing to generate a sale from a New York customer. Specifically, “the statute imposes the burden on Overstock to collect and pay taxes even if the purchase by the New York customer is based on a referral to Overstock’s website that is indirect, or passes through various other websites with whom Overstock has no agreement or connection whatsoever.” Sounds pretty unconstitutional to me, but the problem for Overstock is that if they do not get the tax from Overstock, the ultimate seller, there is no chance whatsoever of ever collecting the tax. The problem for the State, however, is that they and other states continually draft legislation that, in an overbroad manner,  attempts to fix a problem that is not capable of being fixed and so, the legislation is invariably stricken.

We shall see, but the answer seems to be that you cannot rely on historic notions of  state taxation when dealing with Internet retailers.  The states need to get together, apply a blended rate of tax from the rates used in each state, apply the rate to all the Internet sales of a particular retailer, collect the tax and split it equally.

John M. Hanamirian

     

          Well, according to some at his Manhattan Gym, investment banker Stuart Sugarman fit into that crowd. He was on a spinning bike grunting loudly and encouraging himself with shouts of “You go girl” and “Good burn, good burn.” Christopher Carter, not the X Files creator but another Wall Street type, was exercising nearby and reportedly told Mr. Sugarman to quiet down only to be told “Make me!” with an index finger as punctuation. Mr. Carter then lost it, grabbing Mr. Sugarman’s bike, pushing it against a wall, and tilting it. Mr. Sugarman fell from his perch and claimed neck and back injuries.

          The Manhattan District Attorney charged Mr. Carter with a misdemeanor count of assault. At closing arguments, the prosecutor told the jury, Mr. Sugarman probably was not someone “you would want to hang out with regularly.”

          Such advocacy notwithstanding, the New York jury found Mr. Carter not guilty.

Alan Milstein 

The police gave the young woman a breathalyzer and the 17-year-old recorded a .15 percent blood-alcohol level, twice the legal limit. The police report reveals that she told the officer who pulled her over, "I didn't drink! I was kissing a boy who was drunk."

The statement itself was iffy standing alone and got even shakier when the police officer found four full beer bottles under the passenger seat of her car and an empty beer can in her purse.  She was arrested. She pleaded not guilty. That will change. 

John M. Hanamirian