Jonathan B. Wilson

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Jonathan Wilson is an Atlanta attorney with more than 19 years of experience guiding growing private and public companies.  He currently serves as the outside general counsel of several companies and is the former general counsel of (NASDAQ: WWWW) and EasyLink Services (NASDAQ: ESIC).  He is also the founding chair of the Renewable Energy Committee of the American Bar Association's Public Utility Section.

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Wednesday, December 27, 2006

Gerald Ford Dies at 93
The 38th President of the United States declared "our long national nightmare is over" when he assumed the Presidency following Richard Nixon's resignation.  Obituaries from MSNBC, CNN, and Fox
7:17 am est 

Tuesday, December 26, 2006

4th Circuit Ruling on Pre-emption under CAN-SPAM
While the case is almost a month old, a few points are worth noting about the Fourth Circuit's opinion in Omega World Travel v. Mummagraphics
As Eric Goldman notes, the most important feature of the case is the Fourth Circuit's holding that the federal CAN-SPAM Act pre-empts the Oklahoma anti-spam statute at issue in this case. 
What most of the commentators have missed, however, is the way in which Judge Wilkinson reaches the pre-emption conclusion for the Fourth Circuit.
Omega World Travel involves a series of eleven commercial emails sent by Omegal to Mummagraphics, whose owner, Mark Mumma, just happens to be an anti-spam activitist who maintains the site
After Mumma received some of the spam sent by Omega, he posted some comments on his various websites that identified Omega as a "spammer".
Omega was the first to file, suing Mumma for defamation and related claims.  Mumma countersued under an Oklahoma anti-spam statute that imposes statutory penalties for commercial email that "misrepresents any information in identifying the point of origin."  Okla. Stat. tit. 15, 776.1A. 
The federal CAN-SPAM Act, of course, does not impose liability on the senders of commercial email on a strict liability basis for inaccurate information in the identity of the sender.  Mumma sued under the Oklahoma statute because it represented the lowest threshhold for liability and the highest potential for a recovery of damages.
The CAN-SPAM Act, however, is supposed to pre-empt all inconsistent state laws, "except to the extent [that the state law] prohibits falsity or deception". 
On its face, Mumma argued, the Oklahoma statute should be outside the scope of pre-emption because it expressly purports to prohibit any misrepresentation in the origin of the email.
The heart of the Fourth Circuit's analysis was in its detailed review of the emails in question.  While they did contain some inaccurate information regarding the originating email account and certain header data, they were "chock full" (in the court's words) of information that accurately identified the sender.  Because the recipient could easily identify the true sender of the emails, any inaccuracy in the header data was "immaterial."
Thus, in the Fourth Circuit's view, the question of pre-emption was whether the CAN-SPAM Act would pre-empt a state law that imposed liability for emails that contained "immaterial" inaccuracies.
The court reasoned that, permitting strict liability statutes like Oklahoma's to stand, would create the "exception that swallowed the rule."  In other words, if states could adopt strict liability penalties for any falsity in a commercial email, the state with the strictest requirements would create a de facto national standard, thereby undercutting CAN-SPAM's express purpose to create its own national standard. 
I am not familiar with any other circuit court decisions articulating a decision on pre-emption with this level of clarity, so it remains to be seen whether the other circuits will follow Judge Wilkinson's reasoning.
3:27 pm est 

Thursday, December 21, 2006

Harry Potter and the Deathly Hollows
J.K. Rowling has announced this title for the seventh (and presumably final) book in the series.
I'm a big fan as Rowling's books have been some of the most entertaining and well-crafting stories for young people to come around in decades. 
Unfortunately, there's still no release date for the final book. 
J.K. Rowling's official site
1:54 pm est 

"Father of All Turkmen" Dead at 66
Saparmurat Niyazov, the President of Tukmenistan for the last 20 years has reportedly died at age 66
Niyazov rose to power as First Secretary of the Communist Party during the era of Soviet rule and became President after Tukmenistan gained its independence.
Niyazov maintained one of the world's few completely totalitarian states in the post-Soviet era, smothering any dissent, controlling the media and maintaining tight control over the flow of information into and out of the control.
Not only was Niyazov a dictator, but he was a crazy one at that.  Among his more bizarre exploits:
  • He renamed all the months of the calendar to honor his family members.
  • He renamed himself "Turkmenbashi" which translates as "Father of all Turkmen".
  • He erected a giant, golden statute of himself, mounted on a motorized pedastal so that the statute rotates.
  • He wrote a book (called the "Book of the Soul") which contains his thoughts on Islam, Turkmenistan and other spiritual matters, which is required reading in all Turkmen elementary schools.
  • He outlawed long hair or beards for men.  Listening to a car radio was also made illegal.

Of particular concern, given Turkmenistan's geographical location and significant mineral wealth, is the transition of the government following the strongman's death. 

With the suppression of dissent during his lifetime and the overwealming cult of personality that characterized his rule, there are few figures within the country that can have a claim to power and no institutions for the transition of power.

Such a power vacuum carries with it the potential for instability or the interference of outside groups in the country's government. 

9:11 am est 

Wednesday, December 20, 2006

Weirdest Christmas Coincidence Ever 2:12 pm est 

Incitement to Genocide
Jeff Jacoby describes the case of Rwanda's Simon Bikindi, a musician whose Hutu songs and raps helped to fuel the 1994 slaughter of nearly 800,000 of the minority Tutsis in that country.  Bikindi is now standing trial for helping to incite those acts of genocide.  His trial has focused on the language of his songs, how frequently they were played during the 100 days of killing and how the Hutu militants were heard singing his songs as they hacked Tutsis to death with machetes.
An interesting case.  While there is an intellectual argument to be made that prosecuting artistic expression (even when it is heinous) carries a potential for abuse in other cases, the applicable international conventions outlawing genocide describe "incitement to genocide" as a crime.  If incitement is a crime, what should it matter if the incitement is accompanied by music?
But if Bikindi's case is obscure, how much more obvious would a case for "incitement" be against Iranian President Mahmoud Ahmadinejad, who numerous written and extemporaneous statements (none of which were accompanied by music) clearly call for the extermination of Jews and the destruction of the state of Israel?
12:58 pm est 

World's Leading Holocaust-Denying Nation, Now a Nuclear Power
Max Boot tears the white sheets off the heads of the Iranian leaders who participated in Iran's recent Holocaust denial conference.  He describes the level of complicity among Arab rulers during the Nazi occupation of North Africa in assisting Hitler with his "final solution" to exterminate the Jews.
As Boot notes, it's pointless to argue with a madman, but Ahmadinejad's antics in trying to rewrite history should only bolster the world's resolve the prevent Iran from acquiring nuclear weapons.
Except that, according to the head lunatic himself, it is now too late and Iran is claiming to be a "nuclear power." 
12:45 pm est 

Tuesday, December 19, 2006

No Duty to Warn that Crack Cocaine is Illegal
Manufacturers of baking soda can breath a sigh of relief.  As Overlawyered reports, a court has dismissed a complaint filed by a pro se plaintiff seeking to establish liability for a manufacturer of baking soda for failing to warn that using baking soda to "cook" crack cocaine is illegal. 
8:54 am est 

Milberg Weiss Disqualified
Mickey Krauss covers a judge's decision to disqualify the firm as class counsel as a result of the firm's indictment for giving kickbacks to class members. 
8:50 am est 

Friday, December 15, 2006

ABA Faults McNulty Memo
ABA Section chairs and other representatives, including Atlanta lawyer and former ABA President Bill Ide, are faulting the McNulty memo for not going far enough.
Most of the critics say that corporate defendants will not be adequately protected, even with the benefit of the McNulty memo, unless Arlen Specter's Attorney-Client Privilege Protection Act is passed. 
10:23 am est 

"Judicial Hellholes" 2006
The American Tort Reform Association has come out with their 2006 "Judicial Hellholes" report.  Among its conclusions: the struggle to improve our litigation system is making progress, but significant challeneges remain. 
9:54 am est 

Wednesday, December 13, 2006

The McNulty Memo
DOJ Attorney Paul McNulty has penned a memo that reverses much of DOJ's policies with respect to the waiver of the attorney-client privilege in corporate investigations. 
The McNulty memo, in effect, relents on many of the positions taken in the infamous Thompson memo that required corporations to waive the privilege in order to avoid prosectution.
The reversal comes just days after Senator Arlen Specter floated the idea of legislation to nullify the Thompson memo and after a handful of courts had found application of DOJ's policies to be unconstitutional. 
Larry Ribstein says that the move is long overdue, but not enough. 
11:26 am est 

Tuesday, December 12, 2006

Borat Defeats Motion for TRO
In an early victory for British comedian Sacha Baron Cohen, a judge in California has reportedly denied the plaintiffs' motion for a temporary restraining order that would have deleted scenes containing the plaintiffs (college students in South Carolina) drinking beer and engaging in embarassing behavior.
While the popular press will describe this as a win for "Borat" it's not a surprising outcome from a legal point of view.
To issue a temporary restraining order that would require the defendant to modify a movie that is already in distribution would require the plaintiffs to have overcome a very high legal hurdle.  If the court had issued the order, it would have been almost without precedent.
But, while the court may not have ordered the scenes deleted from the movie, that does not spell the end of the suit.  Plaintiffs' claims for damages will go forward. 
11:44 am est 

Monday, December 11, 2006

Specter Proposes Attorney-Client Protection Bill
Senator Arlen Specter (R. PA) has introduced a resolution that would require the Department of Justice to back away from its policy of requiring corporate defendants to waive the attorney-client privilege in order to avoid prosecution in certain corporate fraud contexts. 
Although the text of the bill is not yet available through Thomas, has a good summary here.
Specter's bill is long overdue.  By pressuring corporate defendants with the threat of criminal prosecution, the DOJ has in several instances been able to obtain communications protected by the corporate attorney-client privilege for use in prosecuting individuals.
In at least one case this practice was found to be unconstitutional.
Among other problems is the impact that this practice has on corporations' ability to obtain legal advice.
If the officers of a corporation believe that their internal deliberations with counsel might be disclosed in the event of an investigation, they will be reluctant to seek legal advice or disclose all of the potentially-relevant facts to their attorneys. 
The outcome will not be improved legal compliance but the opposite: officers will forgo seeking legal advice and may withhold information from their attorneys.  By not seeking legal advice or withholding information, corporations will not receive the best or most applicable legal advice available and will make decisions that do not reflect a proper appreciation for the legal issues. 
8:14 am est 

Wednesday, December 6, 2006

Christmas Liability
Many people do not realize that they could be sued by party guests who consume alcohol at a party they host party and then become involved in an auto accident. 
This is one of the conclusion reached in a recent survey conducted by Lexis-Nexis and Martindale-Hubbell's
As Ted Frank notes, surveys and articles like this in the popular media are a sad reminder of how ignorant the public is over our lawsuit-rich culture. 
That culture seems to worsen as the rising tide of obesity lawsuits, has now morphed into New York City's new ordinance banning trans fats from restaurants, a landmark that is likely to be copied in other cities
If our society continues to expect its courts and legislators to save individuals from their own choices then the future of individual choice and freedom seems bleak indeed.  
8:30 am est 

Tuesday, December 5, 2006

Snowe and Rockefeller: Call Your Offices
The House Environment and Public Works Committee will hold hearings into the media's "non-stop hyping of "extreme scenarios" and dire climate predictions" associated with climate change.
Apparently the Committee is unaware that Senators Olympia Snowe and Jay Rockefeller have decreed, in their recent letter to ExxonMobil, that "climate change denial" is "inappropriate". 
The hearings are yet another example of why the kind of pressure exerted by Snowe and Rockefeller is not just inappropriate but affirmatively wrong-headed. 
If we're to have a "marketplace of ideas" all of the actors in the market need to be able to speak.  As Larry Ribstein articulates very well, corporations also need the right to speak, even if their views conflict with those of a few Senators. 
If the world of science is united, as Snowe and Rockefeller proclaim, that global warming is being caused by human carbon emissions, they why should anyone fear the speech of some who disagree? 
8:52 am est 

Fun and Games with Asbestos
Kimberly Strassel exposes a side of the asbestos litigation racket that few non-lawyers ever see in today's WSJ
7:16 am est 

Monday, December 4, 2006

More on Sarbox and U.S. Equities Markets
Henry Tang wasn't the only one watching for the recently-released Paulson Report.
Walter Olson penned an op/ed in the London Financial Times and the blogosphere has joined into the debate as well. 
7:53 am est 

Thank You, Mr. Sarbanes and Mr. Oxley
Henry Tang, the Financial Secretary of Hong Kong, thanks the Sarbanes-Oxley Act for propelling Hong Kong ahead of New York in the market for initial public offerings.  The heavy-handed regulation of the Sarbanes-Oxley Act drives up the cost of registering securities in the U.S. and forces companies to look for less-expensive markets in Hong Kong and London. 
7:28 am est 

Saturday, December 2, 2006

Arguments Against Loser Pays - II
Justinian Lane, whose arguments on the loser-pays rule I criticized last week, fires back from his other website, CorpReform, with some additional arguments.
He claims that I misunderstood or mis-characterized his argument when I paraphrased him to say that the loser-pays rule "wouldn't work" unless it was applied in both criminal and civil cases.  Justinian responds, fairly enough, that he said that it wouldn't "be fair" unless it were applied in both contexts.
While it's true that Lane's original argument did talk about "fairness" that doesn't really do much to resolve the argument.
The crux of his argument is that if a civil loser-pays rule is intended to compensate wrongfully-sued defendants, a criminal loser-pays rule should compensate wrongfully-prosecuted defendants and that it would be "fair" for there to be such a rule.  He writes:
The principle behind "loser pays" is that a person who didn't commit a tort shouldn't have to pay the legal costs incurred defending himself in that case. I used a specific example in my article to illustrate the point: If an individual sues me for negligent driving, and I was not negligent, "loser pays" would force the plaintiff to reimburse my legal costs. If I should be refunded those legal costs, why I shouldn't also be refunded my legal costs if I'm prosecuted for drunk driving if I was not in fact drunk? Whether a prosecutor or a plaintiff forced me to spend money makes no difference to my bank account. Either way, I'm forced to spend money to defend myself against false accusations. If I spend myself into bankruptcy in a criminal case and am then acquitted, I'm no better off than a defendant who spends himself into bankruptcy in a civil case who also prevails.
If the purpose of "loser pays" is to compensate a person wrongfully accused, it is only fair to apply that protection to wrongfully-accused criminal defendants.
I am not necessarily opposed to a criminal loser-pays rule, although I think it would create more problems than it would solve and would be a political non-starter.  (Most of those political problems, by the way, would rise out of traditional left-wing concerns -- fairness to lower-income defendants and the like -- that I suspect Lane would eventually find objectionable.  Again, his criminal loser-pays proposal is really a straw man argument).
But even if it were "fair" to have a criminal loser-pays rule, there are many reasons why there doesn't have to be linkage between the civil rule and Lane's proposed criminal rule.
The civil loser-pays rule, as I describe it in my book, is not only that it reimburses a wrongfully-sued party but also that it deters frivolous or non-meritorious suits. 
The chief shortcoming in the U.S. civil litigation system is that many plaintiffs get a "free shot" at the defendant of their choice and that the defendant must pay for the privilege of being found not liable.  Because so many plaintiffs can obtain free or nearly-free legal representation, the system encourages plaintiffs to bring even the weakest claims in the hopes that they will attract a settlement offer from the defendant. 
This structural incentive to litigate creates a drain on the business cycle, increasing the prices of goods and services to consumers.  Ultimately, reforming that inefficiency in the litigation system should create a net economic gain for consumers.
The criminal litigation system is different.  Prosectors don't get paid a percentage based on the convictions they get.  Prosecutors are supposed to be rewarded based on their pursuit of the public's interest in law enforcement.
Thus, at times, prosecutors may spend public funds on pursuing certain types of crimes in order to create a deterrent effect or to realize some other public goal.  (Consider, for example, a prosecutor's decision to enforce anti-prostitution laws in an attempt to clean-up a particular neighborhood: The cost of prosecution may outweigh the economic impact of the particular crime, but be appropriate in light of other perceived public benefits.)
For that reason, a prosecutor should weigh the public's interest in law enforcement when making the decision of whether or not to prosecute a potential criminal defendant.  It would be inappropriate to the public's interest for the prosecutor to include in his calculus the potential cost of refunding the defendant's defense costs. 
Indeed, a criminal loser-pays rule would tend to benefit rich defendants (who can afford to defend themselves and perhaps obtain reimbursement) to the detriment of poorer defendants.  While many argue that this is already a flaw in the current criminal litigation system, adding a criminal loser-pays rule would make it even worse.
But to Lane's central point that a criminal loser-pays rule would be "fair": Maybe or maybe not.  Fairness is not easily suceptible to measurement.  But the "fairness" of the thing is an illusory argument.  There are alot of things about litigation that are unfair.  Fairness is not the touchstone of right and wrong in the litigation context.
What should be the touchstone of right and wrong, apart from the proper application of the civil law, is the maintenance of a system of civil procedure that maximizes benefits and minimizes costs.  A civil loser-pays rule is appropriate, in my view, because it would both increase the net benefit afforded by the civil litigation system and would eliminate some significant costs present in the system.
And this is ultimately why Lane's argument should fail to persuade a careful reader against the civil loser-pays rule. 
Most advocates of the civil loser-pays rule couch their arguments in terms of improving the economic efficiency of the civil litigation system.  Because there is no necessary link between the civil version of the rule and Lane's proposed criminal rule, the flaws Lane would pin onto the criminal rule are simply irrelevant to any consideration of the civil rule.
3:57 pm est 

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Jonathan B. Wilson is an Atlanta attorney at the law firm of Taylor English Duma LLP.  Jonathan B. Wilson provides legal advice to investors, companies and business executives involving corporate law, securities law, SEC matters, intellectual property, website and Internet legal issues, start-ups, limited liability companies, partnerships, 1934 Act matters, outsourcing, strategic alliance agreements, contracts, and other matters of importance to growing private and publicly-traded companies.