U.S. District Judge Roger Vinson ruled Congress overstepped its bounds by instituting the individual mandate, but also said the entire law was unconstitutional since the individual mandate is not “severable.” Vinson ruled that as a result of the unconstitutionality of the “individual mandate” that requires people to buy insurance, the entire law must be declared void. Vinson did not go as far as to issue an injunction blocking the law from being implemented.

“I must reluctantly conclude that Congress exceeded the bounds of its authority in passing the act with the individual mandate. That is not to say, of course, that Congress is without power to address the problems and inequities in our health care system. The health care market is more than one-sixth of the national economy, and without doubt Congress has the power to reform andregulate this market. That has not been disputed in this case. The principal dispute has been about how Congress chose to exercise that power here,” Vinson wrote.

“While the individual mandate was clearly ‘necessary and essential’ to the act as drafted, it is not ‘necessary and essential’ to health care reform in general,” he continued. “Because the individual mandate is unconstitutional and not severable, the entire act must be declared void.”

The decision will likely face an immediate filing by the federal government for a stay, and the case is undoubtedly headed to the Supreme Court.

Virginia Republican Attorney General Kenneth Cuccinelli filed a separate lawsuit in defense of a new state law that prohibits the government from forcing state residents to buy health insurance. However, the key issue was his claim that the federal law’s requirement that citizens buy health insurance or pay a penalty is unconstitutional.

Judge Henry E. Hudson ruled for the state’s claim that the requirement for people to purchase health care exceeds the power of Congress under the Constitution’s Commerce Clause.

Hudson’s eagerly awaited decision invalidates the requirement that all Americans purchase health insurance by 2014 or face a federal fine. Hudson’s decision is the first striking down part of the controversial legislation.

“It is not the effect on individuals that is presently at issue — it is the authority of Congress to compel anyone to purchase health insurance,” wrote Hudson who was appointed to the federal bench in 2002 by President George W. Bush. “An enactment that exceeds the power of Congress to adopt adversely affects everyone in every application.”

The Obama administration is likely to appeal Monday’s ruling to the Richmond-based Fourth Circuit U.S. Court of Appeals. It is widely expected that no matter the outcome before that court, the case will ultimately go before the Supreme Court, perhaps by this time next year.

In his ruling, Hudson wrote that he is severing that portion of the law, known as Section 1501, but is not granting an injunction against the entire law.

But Section 1501 is the portion of the law that collects most of the money that is supposed to flow into the system from millions of additional participants. Without it, the law’s execution could be severely compromised and could rock the foundation of other provisions in the legislation.

The lawsuit is just one of nearly two dozen challenges filed in federal courts across the country. Another high-profile suit filed in Florida and joined by 20 states and the National Federation of Independent Businesses will go before Judge Roger Vinson on Thursday.

While the individual mandate to buy insurance is just one part of Obamacare, it is definitely a crucial aspect to it, since the requirement that everyone be part of it is what ensures a sufficiently diversified risk pool.

Administration officials told reporters last week that a negative ruling would have virtually no impact on the law’s implementation, noting that its two major provisions—the coverage mandate and the creation of new insurance markets—don’t take effect until 2014.

The central issue in Virginia’s lawsuit was whether the federal government has the power under the constitution to impose the insurance requirement. The Justice Department said the mandate is a proper exercise of the government’s authority under the Commerce Clause.

Cuccinelli argued that while the government can regulate economic activity that substantially affects interstate commerce, the decision not to buy insurance amounts to economic inactivity that is beyond the government’s reach.

The central issue in Virginia’s lawsuit was whether the federal government has the power under the constitution to impose the insurance requirement. The Justice Department said the mandate is a proper exercise of the government’s authority under the Commerce Clause.

Blue Nile loses 60.1 Million Claim against Yehuda Diamond Company

Yehuda Diamond, based in New York, has earned widespread industry and consumer loyalty for its successful competition with Blue Nile and other online jewelers, favoring consumers not only with lower prices but also with unsurpassed expert face-to-face service and full Federal Trade Commission-compliant disclosure…

The suit [No. C-07-2017 TSZ], brought by Blue Nile and heard last month in U.S. District Court for the  Western District of Washington, involved Blue Nile’s efforts to prevent Yehuda Diamond from comparing the  price and appearance of its clarity enhanced diamonds to those natural untreated diamonds sold by Blue Nile.

Yehuda Diamond has consistently contended, even before Blue Nile filed the lawsuit against it in December 2007, that Yehuda Diamond’s price comparisons are in the best interest of consumers.  After 4-1/2 hours of deliberations, the jury agreed, dismissing both Blue Nile’s federal and state claims that Yehuda Diamond had engaged in false or misleading advertising.

Blue Nile, which has brought multiple lawsuits against smaller competitors over the past decade, had petitioned the jury to award it exemplary damages of $60,161,834.64, based on alleged actual damages of $20,053,944.88.

“This is a momentous victory for all consumers and for free-market competition,” says Dror Yehuda, president of Yehuda Diamonds.

“In essence, the jury told Blue Nile that it can’t use its massive size and legal muscle to prevent consumers from learning about lower-priced, quality alternatives to Blue Nile diamonds,” explains Mr. Yehuda.  “In recent years, Blue Nile has preferred to fight its competitors in the courtroom than in the marketplace.”

Mr. Yehuda said that given the jury’s rulings in support of Yehuda Diamond, he has asked his attorneys to petition the judge in the case, the Honorable Thomas S. Zilly, to require Blue Nile to pay Yehuda Diamond’s legal fees. Yehuda Diamond is represented by Pearl Cohen Zedek Latzer LLP, a Manhattan-based law firm.

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Administrator mistake costs PepsiCo $1.26 Billion in default judgment

Charles Joyce and James Voigt sued PepsiCo in April plus two of its distributors, alleging they had misappropriated trade secrets from confidential discussions the plaintiffs had with the distributors in 1981 about selling purified water. The information was illicitly passed to PepsiCo, which used it to develop and sell Aquafina bottled water, the plaintiffs allege in the case filed in the Circuit Court of Jefferson County before Judge Jacqueline Erwin.
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In court documents, PepsiCo argues it was improperly served with the Wisconsin lawsuit in North Carolina, but also asks the court to excuse the corporate bureaucracy that buried a legal document for weeks. While plaintiffs say they served the lawsuit in June on PepsiCo’s registered agent in North Carolina, where the company is incorporated, PepsiCo says its law department at the company’s Purchase, N.Y.-based headquarters was not notified until September.

“The bottom line is there was a defect in the process for us, but also for” the plaintiffs, said PepsiCo spokesman Joe Jacuzzi, who called the case “highly dubious.”

In seeking to dismiss the case, PepsiCo argues that the statute of limitations should preclude the lawsuit, brought 15 years after the company started selling Aquafina and more than two decades after the alleged confidential talks. Moreover, “the $1.26 billion judgment that has been entered is unprecedented in size and justice requires that PepsiCo have a chance to defend itself,” the company said.

The lead plaintiffs lawyer, David Van Dyke of Chicago-based Cassiday Schade, said Wisconsin courts have been “pretty clear that they don’t like” vacating default judgments. “There is a possibly that a judge may say we’re going to litigate the damages aspect of it,” Van Dyke said. Read full story

Complaint lodged against Bernie Madoff in New York Supreme Court by California Law Firm

Attorneys who interviewed Madoff in jail in July used information obtained from him to file a series of claims against major banks and accountancy firms, in an action that also throws light on Madoff’s life behind bars…

The 272-page complaint was lodged with the New York Supreme Court by the Californian law firm Cotchett, Pitre & McCarthy.

According to the document submitted to the court: “Madoff now shares a cell with a 21-year-old inmate convicted of drug crimes. Madoff sleeps in the lower bunk and he eats pizza cooked by an inmate convicted of child molestation.”

The document describes how Madoff’s recreation time “consists of walking around the prison track at night”.

“He now spends time with former Colombo crime family boss Carmine Persico and Jonathan Pollard, who was convicted of spying for Israel,” the complaint said. “Most of his fellow inmates are in prison for drug crimes or sex crimes and Madoff will spend the rest of his life in prison with them.”

The legal action was brought by Cotchett, Pitre & McCarthy on behalf of Jay Wexler, a New York resident who invested in Rye Select Broad Market Prime Fund, a fund managed by Tremont Group, the hedge fund business of Massachusetts Mutual Life Insurance.

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TiVo Inc. has sued AT&T Inc. and Verizon Communications Inc. for patent infringement, regarding the ability to pause and rewind live TV.

TiVo Inc. (Nasdaq: TIVO) today filed complaints in the United States District Court, Eastern District of Texas against AT&T Inc. and Verizon Communications, Inc. for infringement of the following three TiVo patents U.S. Patent Nos. 6,233,389 B1 (”Multimedia Time Warping System”), 7,529,465 B2 (”System for Time Shifting Multimedia Content Streams”), and 7,493,015 B1 (”Automatic Playback Overshoot Correction System”). The complaints seek damages for past infringement and a permanent injunction, similar to that issued by the United States District Court, Eastern District of Texas against DISH/EchoStar…

TiVo CEO Tom Rogers said, “There are multichannel operators who compete with us through the unauthorized use of our intellectual property,” He added that while there were talks, “business agreements have not been reached.”

AT&T declined to comment. Verizon said it hasn’t seen the lawsuit yet and can’t comment.

TiVo received a setback Wednesday in a similar patent lawsuit against Dish Network Corp. and sister firm EchoStar Corp. The U.S. Patent and Trademark Office ruled that the re-examination of TiVo’s patent that’s the subject of litigation may continue.

TiVo had asked the agency to vacate Dish’s request to look anew at the patents.

TiVo sued Dish in 2004, alleging that Dish infringed on its DVR technology. Dish lost. While the case was on appeal, Dish designed a modified software that it downloaded to customers’ DVRs. But TiVo said the workaround software still infringed on its patent and asked the district court for a permanent injunction. TiVo prevailed but Dish appealed the ruling.

Find patent attorneys and information at Locate a Lawyer.

“I greeted Bush with this hand eight years ago; I want to be your friend,” Chavez told Obama, according to a Venezuelan presidential press office statement.

Chavez, a staunch ally of Cuba, had became one of the Bush’s administrations most strident critics. In March, he called Obama at best an “ignoramus” after the U.S. leader said Chavez obstructed progress in Latin America.

 Ties between Washington and Caracas have frayed under Chavez, who often accuses U.S. officials of trying to topple him. Chavez expelled the U.S. envoy to Caracas in September in a dispute over U.S. activities in Venezuelan ally Bolivia.

 Former soldier Chavez says socialist revolution can counter U.S. free-market policies in South America and he has become a standard-bearer for anti-U.S. sentiment in the region. But Washington has branded him a threat to regional stability. (Reporting by Patrick Markey; Editing by Eric Walsh)

The filing, anticipated for months, comes as cash-strapped consumers turn away from shopping as a favorite pastime and the role of the mall in American culture is losing its charm.

No One Wants To File For Bankruptcy But It May Be The Smartest Choice…

The real estate investment trust amassed $27 billion in debt during an ill-timed acquisition spree that turned the Chicago-based company with Iowa roots into the nation’s second-largest shopping mall company, behind Simon Property Group Inc.

But, the sudden downturn in the retail industry and the tight credit markets hurt General Growth’s attempt to restructure its debt and, after months of winning extensions, the company ultimately failed to convince enough debt holders to give it more to time.

General Growth said it intends to continue operating all of its shopping centers during the bankruptcy process. Those in Southern California include the Burbank Town Center, Fallbrook Center in West Hills, Northridge Fashion Center and the SouthBay Pavilion in Carson.

“While the retail environment didn’t help them, what did them in is they used way too much debt,” said Jim Sullivan, managing director of Green Street Advisors, a real estate investment research company in Newport Beach, Calif.

The bankruptcy filing could take two different paths, Sullivan said. General Growth could remain largely intact and restructure its debt in court. Or the mall operator cold be forced sell scores of malls, allowing its rivals to acquire trophy shopping centers–such as Tysons Galleria in McLean, Va., Faneuil Hall in Boston, Water Tower Place in Chicago and the South Street Seaport in Manhattan–on the cheap and the closing of less desirable malls.

Bankruptcy by the real estate investment trust had been widely anticipated since the fall, when the company warned it might have to seek protection if it didn’t get lenders to rework its debt terms. Efforts to negotiate with its unsecured and secured creditors ultimately fell short late last month.

“While we have worked tirelessly in the past several months to address our maturing debts, the collapse of the credit markets has made it impossible for us to refinance maturing debt outside of Chapter 11,” Chief Executive Adam Metz said in a statement.

Chapter 11 protection typically allows a company to hold off creditors and operate as normal while it develops a financial reorganization plan.

The company had about $29.6 billion in assets and more than $27 billion in liabilities as of Dec. 31, according to documents filed with the U.S. Bankruptcy Court in Manhattan.

The company noted that some subsidiaries, including its third-party management business and joint ventures, were not part of the bankruptcy petition. General Growth has a stake in more than 200 malls across 44 states. It included 158 of those shopping centers in the bankruptcy filing.

General Growth said it intends to reorganize with the aim of cutting its corporate debt and extending the terms of its mortgage maturities.

The company said it received a financing commitment from Pershing Square Capital Management LP of about $375 million that General Growth expects to use to operate during the bankruptcy process. Activist investor William Ackman runs Pershing Square, a New York hedge fund that has been building a stake in General Growth in recent months.

John Bucksbaum, a second-generation member of the family that founded the company, stepped down as chief executive late last year in the wake of an escalating crisis. The prominent Chicago family, which had much of its wealth tied up in the company, has seen billions of dollars of its fortune erased.

smjones@tribune.com

Associated Press contributed to this report