The National Law Journal's L.A. Legal Pad

Tech companies looking to courts for relief from patent case damages

Oracle, Apple Inc., Yahoo, Intel Corp. and several others are throwing their weight behind Microsoft Corp. as it tries to persuade the U.S. Court of Appeals for the Federal Circuit to overturn a $500 million jury verdict for infringing on a Lucent patent. That case was decided in 2007 in a Southern District of California federal court before Judge Rudi Brewster. In friend of the court briefs filed this month, the tech companies are urging the court to rein in the "entire market value rule." The rule allows the calculation of damages based on the whole product, even if just one feature is infringed.

Microsoft got hit with $500 million in damages because the act of creating a new appointment in the calendar function of the company's e-mail product, Outlook, infringed on a Lucent patent. The damages were calculated by taking a percentage of Outlook sales, and to a lesser degree, the sales of other Microsoft products with similar functions.

"We think that [the entire market value rule] is one of the doctrinal rules that has been misapplied, and it's an important target for us because it's a rule that often justifies excessive damages," said Robert Merges, a University of California at Berkeley School of Law professor who helped pen an amicus curiae brief for Yahoo, Intel and others. "It's been applied fairly loosely."

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Two San Diego Superior Court judges retiring next week

William Kennedy and Michael Wellington, two of San Diego's more experienced Superior Court judges, will retire next week. 

Kennedy, 78, was appointed by then-Gov. George Deukmejian in July 1983 after serving as U.S. Attorney for the Southern District of California and Assistant San Diego District Attorney. Wellington, 63, has spent most of his nearly 20-year judicial career in the criminal courts, but also handled juvenile dependency and delinquency cases, as well served the mental health department.

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Heller claims am-Bush partly responsible for Chapter 11 filing

Defunct Heller Ehrman filed for Chapter 11 bankruptcy protection on Sunday, putting a stay on at least five suits filed against the firm since it announced on Sept. 26 that it would dissolve. According to a memo sent from the firm's dissolution committee to former Heller employees, the decision to file for bankruptcy protection was driven by its San Francisco landlord, 333 Bush Associates, which sought and received a writ of attachment on Dec. 19, making it a secured creditor to the tune of $48 million. A lack of cooperation from the firm's banks, Bank of America and Citibank, was also blamed.

Two banks are short $6 million, a San Francisco landlord is looking at $30 million less than a court said it was owed, and the finger pointing has begun.  Track it here.

Sonar settlement seen as victory by both sides

The Navy and several environmental groups settled a lawsuit that challenged the Navy's use of sonar around the globe as dangerous to whales and other marine mammals, the two sides said Saturday.

The Navy said the settlement, reached Friday but not announced for 24 hours, does not require any additional protective measures for whales beyond those it had agreed to in 2005. Nor does it require that additional funds be spent on marine mammal research beyond the $14.75 million the Navy has already earmarked for the next three years. But the Navy also said the deal requires it to continue to research how sonar affects whales and other marine mammals.

The case is separate from one the U.S. Supreme Court decided last month, in which the majority said the Navy could not be unduly required to protect whales.

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Nine South Bay projects halted by emissions ruling

A Los Angeles Superior Court judgment issued last month has blocked at least nine modernization projects at public and private facilities in the South Bay, including planned upgrades at two public facilities - the Palos Verdes Landfill and the Terminal Island Sewage Treatment Plant - as well as the installation of new equipment at the local sites of seven companies. The South Bay projects are among dozens so far that have been affected by the sweeping court ruling, which was appealed earlier this month.

The ruling, which invalidated the process used by the South Coast Air Quality Management District to give out emissions credits for new equipment, could affect hundreds and even thousands more public and private projects that need those credits in the coming year, district officials said.

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Al Meyerhoff, famed labor lawyer, dies at 61

Al Meyerhoff, a prominent environmental and labor lawyer whose landmark cases included the 2002 settlement of a class-action lawsuit against some of America's biggest clothing retailers that alleged sweatshop abuses on the island of Saipan, died December 21st of complications related to cancer at Cedars-Sinai Medical Center in Los Angeles.

The lawsuit filed on behalf of 30,000 immigrant Saipan workers alleged a pattern of long hours, low pay and other objectionable working conditions in garment factories that produce more than $1 billion of clothing annually for U.S. stores. Recruited mainly from nearby Asian nations, workers toiled in what Meyerhoff called "indentured servitude." The $20-million out-of-court settlement of the suit known as Doe vs. the Gap involved more than 20 major U.S. retailers.

More than a month ago, Meyerhoff learned that a rare blood disorder that had been diagnosed a year ago had turned into leukemia.

Read full obituary here.

Post-Pellicano/Christensen convictions, wiretap civil suits abound

The criminal wiretapping convictions of private investigator Anthony Pellicano and lawyer Terry Christensen have re-energized related civil lawsuits filed against five Los Angeles law firms, including Christensen's former firm.

At least 15 lawsuits related to Pellicano, who was convicted last summer on charges related to illegal wiretapping, have been consolidated in Los Angeles Superior Court. Much of the litigation has been on hold pending completion of two criminal trials against Pellicano, who was sentenced on Dec. 15 to 15 years in federal prison. Christensen, who also was convicted, was sentenced last month to three years in prison.

In recent weeks, lawsuits involving Pellicano have moved forward. Some defendants are lawyers and law firms.

Read the full story here.

Writ of attachment may mean bankruptcy on horizon for Heller

A San Francisco landlord for defunct Heller Ehrman won a key court ruling earlier this month that means bankruptcy is now likely, according to attorneys who have dealt with similar cases.

San Francisco Superior Court granted the landlord, 333 Bush Associates, a writ of attachment for $48 million on Dec. 19. The move makes the landlord a secured creditor, freezes a portion of Heller's assets for the landlord, and leaves other unsecured creditors at a disadvantage, essentially waiting in line behind the landlord for dibs on leftover assets.

If within 90 days Heller files for bankruptcy -- or if three of its creditors force it into bankruptcy -- then the writ is automatically stayed. That would make the landlord an unsecured creditor once more and put all unsecured creditors on an equal footing. Peter Benvenutti, a member of Heller's dissolution committee and now a partner at Jones Day, said negotiations are continuing with the landlord.

Read the full story here.

Buchalter Nemer adds new litigation shareholder

Buchalter Nemer announced that Michael L. Meeks is joining the Firm as a Shareholder in Orange County today. Mr. Meeks’ practice encompasses commercial litigation, intellectual property litigation and financial institutions litigation. Meeks has successfully defended numerous clients in high-stakes litigation and under a number of federal statutes including the Fair Credit Reporting Act, the Fair Debt Collection Practices Act and California’s Identity Theft statute. Meeks’ practice also includes arbitrations before the Financial Industry Regulatory Authority, Inc. (FINRA) on behalf of securities broker dealers and others.

Buchalter Nemer has added eleven associates since October of this year, with more joining the firm in January.

Trend shows outside counsel being left outside as budget cuts increase

Demonstrating a trend that has significant implications for law firms, a growing number of California companies are under pressure to control costs and handle more work in house, where they can come closer to paying wholesale rather than retail for legal services. According to a 2008 survey of chief legal officers, conducted by consulting firm Altman Weil, general counsels are planning to decrease their use of outside firms, which typically constitute the largest expense of any corporate legal department. Correspondingly, chief legal officers plan to increase law department staffing over the next 12 months, according to the survey, which was conducted this past May and June.

Specifically, the survey reports that 49 percent of legal departments plan to hire additional lawyers in the next year, up from the 40 percent who said they planned on new hiring in the last survey. At the same time, 26 percent of law departments will decrease their outside counsel, up significantly from 16 percent in last year's survey. Only eight percent of CLOs plan to increase their use of outside counsel, down from 18 percent. Not surprisingly, CLOs cited cost control as their top concern over the next three to five years.

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