Vallejo, CA Declares Itself Bankrupt
Legal Topics | 2008/05/08 15:52

The Vallejo City Council has voted unanimously to declare the city bankrupt. The council cited falling property values and tax receipts and a $16 million budget deficit for the fiscal year that begins in July. Residents of Vallejo, a town of 120,000 in Santa Clara County, have a median income of $56,505.

    Vallejo, 25 miles northeast of San Francisco, is the largest city in California to declare itself bankrupt, and the first major metropolitan area to do so since Orange County filed for bankruptcy in 1994 after a series of bungled investments.

    "With Orange County there were identifiable bad guys," John Quigley, an economics profession at UC-Berkeley, told The New York Times. "This is different. Near as one can tell, this is more of a low-level infection everywhere."

    Proposition 13 caps property taxes in California, and the Vallejo City Council was unable to wring salary concessions from its public employees, whose salaries account for 80 percent of the city budget.



Taxpayers Challenge $7.4 Billion Prison Bond
Areas of Focus | 2008/05/07 16:02
The State of California illegally approved issuance of $7.4 billion in "lease-revenue bonds" to build facilities for 53,000 more state and county prisoners, Californians United for a Responsible Budget claims in Superior Court.

Plaintiffs CURB and individual taxpayers claim AB 900, signed into law in 2007, violates the state constitution because it was not approved by voters and is deceptively and illegally described as a revenue bond.

The lawsuit comes as California faces an annual budget deficit of nearly $20 billion. A similar budget deficit led to the recall of Gov. Gray Davis and his replacement by Gov. Arnold Schwarzenegger, a defendant in this case.

"Article XVI, Section 1 of the California Constitution requires voter approval for all long-term debts greater than $300,000. However, the state contends that the AB 900 bonds do not require voter approval because they are secured only by 'lease' payments. This lawsuit contends the opposite: namely, that the $7.4 billion in lease-revenue bonds in AB 900 are actual debts that will further impair the credit of the state, and that require voter approval before they can be incurred," the complaint states.

"A revenue bond is backed by the future revenue stream created by a given construction project. For example, a revenue bond allows a cit or the state to build a tool bridge or a convention center and then to repay the debt with user fees generated by the project. ... Prisons, however, do not generate revenue. ... Under the lease-revenue bond transactions at issue here, the state will not receive any funds from the operation of the new prison facilities financed by the bonds, but will instead incur substantial additional costs - in excess of $1.4 billion each year. ...

"In the past, the state itself clearly recognized that bonds used to finance prison construction had to satisfy the constitutional requirement of voter approval. Until 1996, the state routinely used general obligation bonds to finance prisons and submitted proposed prison expansion projects to the voters. However, the last two times that state did so, in 1990 and again in 1996, the voters rejected the prison bonds. The state has not submitted any of its prison expansion plans to the voters since 1996."


Federal judge rejects Katrina damage immunity bid
Legal Topics | 2008/05/06 16:14

Judge Stanwood R. Duval Jr. of the US Eastern District of Louisiana ruled again Friday that the US Army Corps of Engineers cannot claim immunity from suit in connection with damages suffered by plaintiffs by virtue of alleged defects in the Mississippi River-Gulf Outlet (MRGO). Duval said that the outlet was a shipping channel and not a flood control outlet in connection with which the Corps would have been properly immune in tort. He rejected the Corps' argument that the MRGO was nonetheless part of a larger flood control system in the New Orleans area.

Duval made a similar ruling in February 2007 in the context of an earlier motion to dismiss. Three months before Hurricane Katrina struck New Orleans, an expert at the LSU Hurricane Center predicted that the MRGO could amplify storm surges by 20-40 percent. After Katrina, the center determined through computer modeling that the presence of the MRGO also increased the speed of the surge, causing an even greater detrimental effect.



N.Y. Judge Files $10 Million Defamation Suit
Headline Legal News | 2008/05/05 16:06

A Brooklyn judge has filed an unusual $10 million defamation suit against attorney Ravi Batra and the New York Daily News.

The suit, Martin v. Daily News, 100053/08, filed earlier this year in Manhattan Supreme Court by Justice Larry D. Martin, alleges that Batra was the source of two Daily News columns and related blog postings falsely accusing the judge of improperly presiding over a case involving a lawyer who had defended him before the New York State Commission on Judicial Conduct.

Martin maintains that Batra "requested and urged" Daily News columnist Errol Louis to publish "defamatory statements" about him. He claims the articles were "outrageous, grossly irresponsible, malicious and evinced a complete and utter indifference" to his "rights and reputation."

Both Batra and the Daily News have filed motions to dismiss.

On Jan. 28, 2007, Louis wrote that the "complicated world of judicial corruption in Brooklyn -- a snakepit filled with bribery and back-room political deals" -- was on the verge of being "blown wide open."

He cited an action brought by Batra, relating to Singer v. Riskin, 015812/01, an ongoing multimillion-dollar real estate dispute between Batra's clients, Martin and Grace Riskin, and Ted Singer. That dispute has spawned 11 lawsuits.

In November 2006, Batra filed Riskin v. Karp, 34131/06, on behalf of his clients against attorney Jerome M. Karp. The suit alleges Karp represented Singer "in secret" in Riskin v. Belinda, 048555/98, a mortgage foreclosure action and offshoot of Singer v. Riskin.

Batra alleged that Karp's failure to disclose his representation of Singer in Belinda, over which Martin presided, created an undisclosed conflict since Karp had served as the judge's attorney before the judicial conduct commission.

The commission, in a determination issued in December 2001 and modified in June 2002, admonished Martin for sending ex parte letters seeking favorable consideration on behalf of defendants awaiting sentencing in other courts.

In an interview, Batra called Martin's pending action "a frivolous lawsuit [that] ill serves one who sits on the noble bench."

The suit is before Supreme Court Justice Martin J. Schulman.



Mothers May Sue Gerber Over Sugary Fruit Snacks
Legal Topics | 2008/05/02 16:21

The 9th Circuit allowed two mothers to pursue their class action accusing Gerber Products Co. of deceptively dressing up sugar-loaded gummy treats as healthy snacks for toddlers.

The mothers claimed Gerber falsely touts its Gerber Fruit Juice Snacks as "nutritious" and "made with real fruit juice," and displays images of oranges, peaches, strawberries and cherries on the packaging. But a quick look at the label reveals the main ingredients are corn syrup and sugar, and the only fruit juice is concentrated white grape juice.

They also took issue with Gerber calling the saccharine product a "snack," saying "candy," "sweet" or "treat" was more appropriate. Gerber later changed the name to Fruit Juice Treats, but denied that the lawsuit had anything to do with the change.

A federal judge dismissed the case last year, ruling that a reasonable consumer could see through the packaging "puffery" by simply reading the ingredients.

But the appellate court found that on-the-go parents should not have to scour ingredient lists for labeling discrepancies.

"We do not ... think that a busy parent walking through the aisles of a grocery store should be expected to verify that the representations on the front of the box are confirmed in the ingredient list," Judge Pregerson wrote.

"We do not think that the FDA requires an ingredient list so that manufacturers can mislead consumers and then rely on the ingredient list to correct those misinterpretations and provide a shield for liability for the deception."



Class Claims Wells Fargo Forecloses Illegally
Areas of Focus | 2008/05/01 15:43
Wells Fargo Home Mortgage illegally forecloses on homes by falsely accusing homebuyers who have filed for Chapter 13 bankruptcy of being delinquent on their mortgages, by falsely inflated amounts, by assessing "hundreds of millions of dollars" for illicit fees and debts that were already paid, and by ignoring and abusing the bankruptcy code and court orders, a class action claims in Federal Court.

"Wells Fargo's policies and practices are particularly deceptive," the complaint states, "insofar as they involve the (1) intentional concealment of the fact that Wells Fargo has not properly accounted for debtors' bankruptcy plans and payments, (2) deceptive demands for payment of debts that are not owed but are presented to the debtors as actually owed and (3) intentional concealment of added fees and expenses when in fact federal bankruptcy law requires Wells Fargo to make application for such fees and expenses to the bankruptcy court.

"These polices and practices are not the result of neglect or indifference but are deliberately unfair, oppressive, malicious and unconscionable. Such misconduct has been documented in this case and throughout the United States. In formulating and executing these policies, Well Fargo has shown its complete disrespect and disdain for the Code and its evident belief that it is above the law."


Court Revives Suit Over New Year's Party Arrests
Areas of Focus | 2008/04/30 16:02

The 11th Circuit reinstated their lawsuit over the events that led deputies to arrest and Taser the lead guitarist for the rock band Rush and his son during a 2003 New Year's Eve party at a Ritz-Carlton Hotel in Florida, after the father-son duo made a scene at the black-tie affair.

A three-judge panel allowed Alexander Zivojinovich, known as "Alex Lifeson," to proceed with his claim that Ritz-Carlton employees exaggerated the rowdy party behavior of his son, Justin, causing three Collier County sheriff's deputies to use excessive force trying to eject the pair from the party.

Alex, Justin and Justin's wife attended a black-tie New Year's Eve party at the Ritz in Naples, Fla. Justin began "dancing boisterously" and "circled the floor undulating his arms, danced with four women simultaneously, and eventually shoved apart a couple who were dancing and, without asking, began to dance with the woman," the ruling states. He then hopped on stage, commandeered the band's microphone and took an exaggerated bow that another guest described as "mooning the band with his clothes on." Alex joined his son on stage and "tapped a conga drum in time with the music for about 10 seconds," the court wrote.

Ritz night-shift manager Frank Barner radioed front-desk employee Azure Sorrell and told her to call the sheriff's office to report the disorderly guests. He also called to make sure it got the message.

The Zivojinovichs claimed that Barner and Sorrell lied to the dispatcher, saying Justin and Alex were "just basically trashing the place ... jumping on furniture, ripping things apart."

Barner also told police that Justin "started yelling profanities, screaming, yelling and carrying on" when Barner told him to settle down, the lawsuit claimed, though Barner had not yet spoken to Justin.

Three deputies arrived and took Justin to a service hallway outside the ballroom to find out what happened. Alex and Justin's wife, Michelle, followed. The deputies eventually tried to escort Justin and Alex out of the hotel, but Justin resisted, leading deputies to tackle him to the ground and Taser him. When Alex tried to block Justin from harm, a deputy punched Alex in the face and broke his nose. He was also Tasered in the scuffle. All three Zivojinovichs - Justin, Alex and Michelle - were arrested and charged with resisting an officer, though the charge against Michelle was later dropped.

The Zivojinovichs sued the three deputies for use of excessive force, and accused the Ritz and Barner of negligence.

The appellate judges held that Ritz had a right to eject the guests, but ruled that the hotel's employees had a duty to tell police the truth. Their alleged lies "knowingly put Justin at a greater risk of physical injury."

But the court affirmed summary judgment for the deputies after concluding that they used a reasonable amount of force, despite Tasering Alex and Justin.



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