Brush up on bankruptcy trial skills and local court rules

Consumer bankruptcy filings surged in February, with 76,120 new cases nationwide, more than 10,000 from the year before, reports the American Bankruptcy Institute.

"February's bankruptcy spike - the highest single month since the 2005 law changes - forecasts the start of more to come for the balance of 2008," says ABI Executive Director Samuel J. Gerdano.

This could be good time to check out the Litigation Skills Symposium sponsored by the ABI, and the Tulane University Law School at New Orleans. Space is limited.

Locally, there's an April 11 seminar to review and discuss changes (effective May 5) to the Eastern District of Michigan Local Bankruptcy Rules. Two sessions will available at the Trott Financial Center, 31440 Northwestern Highway, Farmington Hills: business bankruptcy rules from 1 to 2:45 p.m. and consumer bankruptcy rules from 3:15 to 5 p.m. Registration info here. The cost is $35 if you don't have a copy of the new rules, $30 if you do. Helpful hint: download the new rules here.

The seminar is sponsored by Consumer Bankruptcy Association, the Debtor/Creditor Rights Committee of the Business Law Section of the State Bar of Michigan, and Detroit Metropolitan Bar Association - Debtor/Creditor Section.

Business, bankruptcy, litigation and evidence: FBA plans Feb. 6 seminar

The Eastern District of Michigan Chapter of the Federal Bar Association is accepting on-line pre-registrations for a Feb. 6 seminar, "Trial Advocacy: Financial Issues In Commercial Litigation and Business Bankruptcies."

The 8:30 a.m. event at the Theodore Levin U.S. Courthouse in Detroit features two demonstrations: "Financial Issues In Commercial Litigation & Business Bankruptcies" and "Presenting Evidence And Expert Witnesses In Business And Bankruptcy Proceedings."

More information here.

Another side of immunizing med-tech companies from suit

There has been a renewed clamor in Michigan to repeal the state's drug-manufacturer immunity law in the wake of Merck's agreement to a multi-billion dollar settlement of claims that one of its drugs, Vioxx, may have had the troublesome side effect of causing often-fatal heart attacks or strokes.

Michigan's immunity law, conceived and enacted in the hubris resulting from Republican domination of all three branches of the state government in the mid-1990s, gave pharmaceutical manufacturers a free pass on civil liability claims in Michigan courts if the federal Food and Drug Administration approved the complained-of drug.

Legislation to repeal this much-criticized special-interest law - a Detroit Free Press editorial recently labeled it as "easily one of the worst legacies of former Gov. John Engler" - has been stalled in the Michigan Senate for most of this year. And it may stay there longer still.

Today, the U.S. Supreme Court heard oral arguments in Riegel v. Medtronic, (click here for a Dow Jones Newswire report), in which the medical equipment manufacturer proposes a slightly less draconian but nationwide version of legal immunity for med-tech companies.

Medtronic, the world's largest med-tech company, is defending a product liability case filed after the balloon on one of its catheters burst during an angioplasty, which required emergency bypass surgery to save the patient's life. Medtronic is arguing that federal regulation of sophisticated medical equipment pre-empts claims under state law by patients who say such equipment injured them. Both lower courts have agreed with Medtronic's position.

The Dow Jones report suggests that Medtronic's argument got a friendly reception in the Supreme Court as well. But the tenor of oral arguments is not always a reliable predictor of how a case turns out.

Keep your eye on the Medtronic case. It will be powerful medicine, no matter which way the Court goes.

Mail or e-mail? Ingham judge will decide union contract vote issue

A labor pact between Michigan State University and over 1,700 members of the Administrative Professionals Association is on hold until Ingham County Circuit Court Judge Paula Manderfield decides whether APA officials were authorized to conduct a ratification vote by e-mail.

Judge Manderfield enjoined enforcement of the union-approved contract last week after some members complained that APA bylaws require voting by mail, not e-mail.

A hearing is scheduled for Nov. 15. The Lansing State Journal has the story.

Bankruptcy filings soar, conference will cover client issues

From the American Bankruptcy Institute comes word that October consumer bankruptcy filings were the most ever since the Bankruptcy Code was revised two years ago.

Filings increased to 75,975, up 10 percent from the previous month. Chapter 13 filings accounted for almost 40 percent of the total and could go higher if Congress passes legislation that would let consumers use bankruptcy to write down their mortgages to avoid foreclosure, says the ABI.

It's a good time to bone up on the new code, and the ABI and the Detroit Consumer Bankruptcy Association have just the thing: a Nov. 12 conference at the Detroit Marriott Troy designed especially for Michigan-area bankruptcy practitioners.

Program sessions will include: Means Test Calculating; Litigating the Presumption of Abuse under Section 707; Secured Claims in Chapter 7 and 13; Mock Appellate Argument: "Projected" Disposable Income Issue; New Options When Facing Foreclosure; Consumer Case Management for Debtors' and Creditors' Attorneys and a Judges Panel.

Click here for more information and a link to register.

Antitrust claim treated as board game, says judge

From the late 1980s through 2001, if you did your own body work on your car and you needed automotive sandpaper, you had two choices, 3M or NicSand. Now the only choice is 3M.

Sixth Circuit Judge Boyce F. Martin, Jr. thinks that's abrasive.

Most folks with banged-up cars let the bump shop deal with the patching and painting, and the resulting dust and stink. So, there's not a huge do-it-yourself market for automotive sandpaper.

It doesn't make economic sense for retailers to stock both brands. That's why the retailers NicSand and 3M dealt with insisted on annual, exclusive-supplier agreements. The retailers were not adverse to switching suppliers. But to get in, you had to furnish a full line of products, provide all the display equipment, discount the first order and buy the retailer's current inventory of sandpaper.

This worked extremely well for NicSand until 1997, when 3M decided to get serious about improving its one-third market share. One-by-one, over a several-year period, 3M offered the retailers six- or seven-figure incentive payments to stock 3M products on an exclusive, multi-year basis. The retailers told NicSand to come back in a few years and maybe we can talk business then.

When 3M was done, NicSand was out of the automotive sandpaper business, into bankruptcy court seeking reorganization and on the phone to its lawyers to sue 3M for antitrust violations.

The issue in the Sixth Circuit was antitrust standing. Judge Jeffery S. Sutton, writing for an en banc majority, said NicSand didn't have it because 3M's pricing was not predatory and there was no illegal tying (being forced to buy one product to get another product that you really want). The incentive payments were price cuts offered in exchange for getting the retailer's business. And the multi-year contracts? This was no different than buying in bulk to get a discount. What about the exclusive nature of the contracts? This was the retailers' condition, and 3M couldn't be faulted for going along with that.

Judge Martin, in dissent, said the case made him long for the good old days

when monopoly was an evil targeted by Congress and guarded against by the antitrust laws of the United States. Since their enactment, it has been the purpose of the federal antitrust laws to prevent the emergence of entrenched monopoly power and "to perpetuate and preserve, for its own sake and in spite of possible cost," the existence of competition in industry. ... Today, however, the majority treats monopoly more as a board game than as an economic harm to the public.

Judge Martin continued

The majority seeks to characterize this case as one in which one company that had long prospered in a particular niche market became lazy and fell victim to a more vigorous competitor that simply played the game of business more effectively. While NicSand may have once been the dominant competitor, that former status can neither legalize 3M's anticompetitive business practices nor make 3M immune from antitrust suit. Yes, NicSand was 3M's competitor, and yes, it obviously fell prey to 3M's tactics. However, 3M now holds a monopoly over the market, products have been eliminated and prices have correspondingly risen by seventy percent. The question here is whether the tactics 3M employed to attain that status were legal and whether NicSand is an adequate representative of the market's interests in this suit. Contrary to the majority's contentions, at this stage of the case [dismissal on a Rule 12(b)(6) motion with no discovery], it is impossible to conclude that NicSand has failed to meet its burden. The dangers of monopoly are well-recognized in our law ... and I believe the majority has improperly turned a blind eye to them in this case.

The case is NicSand v. 3M.