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.

Karl Kleppinger Jr.’s family was one of the first to sue over deaths and injuries suffered by the 126 crew members who were on the rig when it blew out while drilling a well for BP Plc off the Louisiana coast. The explosion caused the largest offshore oil spill in U.S. history, with more than 4.1 million barrels of oil spewing into the Gulf of Mexico.

Bloomberg News reports:

“The Kleppingers have settled all of their claims arising out of the death of Karl Kleppinger Jr. against any current or possible defendants,” Steve Gordon, the family’s maritime lawyer, said today in an interview. “The Kleppingers’ claim against BP has concluded.”

The settlement was posted today in the docket of the New Orleans federal court handling suits arising from the explosion. Transocean attorneys and Gordon submitted a court filing asking for dismissal of the suit because of the settlement.

Gordon declined to disclose the amount of the settlement or who would be paying it. The claims are resolved “against all parties they sued or could have sued,” he said.

“The terms are confidential,” Ellen Barry, a Transocean spokeswoman, said in a phone interview today.

Kleppinger was a floor hand on the rig when it exploded.

Closed Chapter

“The Kleppingers have tried to close a very terrible chapter in their lives,” said Gordon, maritime lawyer of Gordon, Elias & Seely LLP in Houston. “It is time to move on.” Gordon also represents Transocean employees who were injured in the explosion. Those cases remain pending, he said.

The Kleppinger suit, filed in Texas state court, was removed to federal court in New Orleans and combined with hundreds of others seeking compensation for injuries and economic damages from the explosion and spill.

Daren Beaudo, a spokesman for BP, declined to comment on the settlement.

The case is In Re: Oil spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico on April 20, 2010, 2:10-md-2179, U.S. District Court, Eastern District of Louisiana (New Orleans).

To contact the reporters on this story: Margaret Cronin Fisk in Southfield, Michigan, at mcfisk@bloomberg.net; Laurel Brubaker Calkins in Houston at laurel@calkins.us.com.

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.

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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.

Florida Attorney General Bill McCollum lawsuit against Obamacare can proceed says Florida judge.

U.S. District Judge Roger Vinson in Pensacola today allowed portions of the claims by 20 states to go forward, as he forecast he would after a day of oral arguments last month. The requirement to purchase health insurance is “simply without prior precedent,” Vinson wrote, allowing the suit to proceed.

“People have no choice and there is no way to avoid it,” Vinson wrote in the 65-page decision. “Those who fall under the individual mandate either comply with it, or they are penalized.”

Vinson previously scheduled arguments for Dec. 16 on whether the law, signed by Obama in March, is constitutional.

The judge threw out Florida’s claims that the law interferes with the state’s sovereignty as an employer and that the individual mandate violated the right to due process of law.

The focus of efforts to undo what the administration considers a key legislative achievement now shifts to Richmond, Virginia, where a similar lawsuit by the state survived a bid for dismissal in April. A judge there scheduled an Oct. 18 hearing on the law’s constitutionality.

The states contend that the requirement that all Americans buy health insurance exceeds the constitutional power of Congress.

Government’s Argument

The government counters that the mandate is covered by its authority to regulate interstate commerce, since billions of dollars a year in unpaid medical bills are absorbed by the market.

Joining Florida in the suit were Alabama, Alaska, Arizona, Colorado, Georgia, Idaho, Indiana, Louisiana, Michigan, Mississippi, Nebraska, Nevada, North Dakota, Pennsylvania, South Carolina, South Dakota, Texas, Utah and Washington. The National Federation of Independent Business, a small-business lobbying group, also joined.

The Florida and Virginia suits were filed within minutes of Obama’s signing the legislation.

Besides its effect on individuals, the legislation puts an unconstitutional burden on state budgets by expanding Medicaid, the federal-state program that provides health care for the poor, the states say.

Defining Activity

In a Sept. 14 hearing, Vinson questioned whether people who don’t buy health insurance can be considered actively participating in commerce and taxed for it. The U.S. previously claimed that the possibility of being injured and unable to pay medical bills is enough to draw a link between commerce and taxation.

“They are attempting to take inactivity and are making it activity,” said Randy Barnett, a constitutional-law professor at the Georgetown University Law Center said in an interview before the ruling. “The question of whether something is activity, and you don’t make inactivity into activity by saying is has an effect.”

The case is State of Florida v. U.S. Department of Health and Human Services, 10-cv-00091, U.S. District Court, Northern District of Florida (Pensacola).

The Supreme Court Justices of the United States are John G. Roberts (Chief Justice), John Paul Stevens, Antonin Scalia, Anthony Kennedy, Clarence Thomas, Ruth Bader Ginsburg, Stephen Breyer, Samuel Alito, Sonia Sotomayor. UPI/Gary Fabiano/PoolUPI/Gary Fabiano/Pool

The high court in a 7-2 judgment reversed a lower court decision that said Congress overstepped its authority in allowing indefinite detentions of considered “sexually dangerous.”

“The statute is a ‘necessary and proper’ means of exercising the federal authority that permits Congress to create federal criminal laws, to punish their violation, to imprison violators, to provide appropriately for those imprisoned and to maintain the security of those who are not imprisoned but who may be affected by the federal imprisonment of others,” said Justice Stephen Breyer, writing the majority opinion.

Five federal prisoners had brought the case. Lead challenger Graydon Comstock was six days before he was to finish a sentence in November 2006 for possession of child pornography when he was certified by the attorney general as “sexually dangerous.” Since then Comstock has been confined at a federal prison in North Carolina

President George W. Bush in 2006 signed the Adam Walsh Child Protection and Safety Act, which authorized the civil commitment of sexually dangerous federal inmates.

The act, named after the son of “America’s Most Wanted” television host John Walsh, was challenged by four men who served prison terms ranging from three to eight years for possession of child pornography or sexual abuse of a minor. Their confinement was supposed to end more than two years ago, but prison officials said there would be a risk of sexually violent conduct or child molestation if they were released.

A fifth man who also was part of the legal challenge was charged with child sex abuse, but declared incompetent to stand trial.

The 4th U.S. Circuit Court of Appeals in Richmond, Va., ruled last year that Congress overstepped its authority when it enacted a law allowing the government to hold indefinitely people who are considered “sexually dangerous.”

Stephen Breyer

Writing for the majority, Justice Stephen Breyer said Congress’ ability to control the release of dangerous prisoners stems from its broad power under the Constitution to enact laws governing prisons. He added that Congress has long been involved in mental health care for federal prisoners, including their civil commitment.

Most broadly, the court said the power to confine inmates whose sentences have ended arises from Congress’ authority in the Constitution to make laws “necessary and proper” to carry out its powers.

Breyer noted that the law has been applied to only a small fraction of prisoners. He referred to a statement by Solicitor General Elena Kagan at January oral arguments that 105 individuals have been subject to the law, out of more than 188,000 federal inmates.

Elena Kagan

Kagan had argued that the federal government was trying to fill a gap left by the states. “The federal government has mentally ill, seriously dangerous persons in its custody,” Kagan had argued. “It knows that those persons, if released, will commit serious sexual offenses, and it knows too that states are not often in a position to deal with those dangers.”

Kagan was appealing a decision by the U.S. Court of Appeals for the Fourth Circuit, based in Richmond, that said Congress had overstepped its power in the 2006 law authorizing civil commitment of certain prisoners.

But “we conclude that the Constitution grants Congress legislative power sufficient to enact” this law, Breyer said.

Dissenting Monday were Justices Antonin Scalia and Clarence Thomas.

Clarence Thomas

Justice Clarence Thomas dissented, saying Congress can only pass laws that deal with the federal powers listed in the Constitution.

Nothing in the Constitution “expressly delegates to Congress the power to enact a civil commitment regime for sexually dangerous persons, nor does any other provision in the Constitution vest Congress or the other branches of the federal government with such a power,” Thomas said.

Thomas was joined in part on his dissent by Justice Antonin Scalia.

Chief Justice John Roberts last year granted an administration request to block the release of up to 77 inmates at a federal prison in North Carolina. These were people whose prison terms for sex offenses were ending. The justice’s order was designed to allow time for the high court to consider the administration’s appeal.

The Adam Walsh Child Protection and Safety Act also establishes a national sex offender registry, increases punishments for some federal crimes against children and strengthens child pornography protections. Those provisions are not being challenged.

State laws allowing civil commitments of sex offenders also are unaffected.

Initially, the law firm contemplated filing a possible Temporary Restraining Order (TRO) in the Transocean Deepwater Horizon explosion that took place on April 20, 2010. A TRO is filed for many reasons – one of which would be to preserve evidence or not to cause spoliation of evidence…

Since an ongoing investigation of great magnitude is already being conducted by The Coast Guard and the Minerals Management Service on possible causes of the explosion, the law firm of Gordon, Elias & Seely, LLP, state that it is foolish to either stop or interfere in this ongoing investigation and filing a TRO would only be done for sensationalism.

Men suffered great fear and mental anguish

So far, based upon the investigation of Gordon, Elias & Seely, LLP, they have determined that there were a series of explosions prior to the main explosion. This means that the people that may have died in the main explosion suffered great, great fear and mental anguish. This further means that the families of these great workers that gave their lives to Transocean have a very large monetary Jones Act claim for what is called conscious pain and suffering. These are very important facts that apparently have been attempted to be suppressed by Transocean and British Petroleum (BP) that will be revealed in the Coast Guard investigation.

Workers are remembered

At 11 am, April, 26,2010, the rigs in the Gulf ceased work, heads bowed, and the whistles blew in remembrance of those who worked on the rig.

Transocean Deepwater Horizon sinking into The Gulf Of Mexico on April 22, 2010

Todd Elias, a Houston maritime lawyer, who is representing Tracy Kleppinger, the wife of worker Karl Kleppinger Jr. of Natchez, Miss., said his client was told by rig owner Transocean Ltd. that her husband Karl Kleppinger, Jr is considered deceased. Attorney, Steve Gordon, said the company has sent grievers to be with Tracy Kleppinger. 

“Right now we’re trying to find anybody who has any information, anybody who might have seen him and what happened,” said R. Todd Elias, the family’s attorney. “The family would like to have some information about what happened to him, and so far Transocean isn’t telling us anything. They just tell us they don’t know.”

In response, the law firm of Gordon, Elias and Seely LLP., has filed a wrongful death lawsuit Friday afternoon in Harris County, Texas, against Transocean and BP, which leased the rig.

Carolyn Kemp, the grandmother of missing worker Wyatt Kemp of Jonesville, La., also said today that Kemp’s family had been informed that he was dead.

At a news conference Friday afternoon, a vice president of Transocean, Adrian Rose, confirmed that the company has been calling next of kin but denied that loved ones have been told the workers are deceased.

“We can’t be definitive yet, not until search and rescue efforts are completed,” Rose said.

The U.S. Coast Guard said Friday it has suspended the active search for 11 missing crew members of the Transocean Ltd.

None of the 11 missing crew have been found and remain missing to this date.

On April 22, 2010, the Deepwater Horizon sank to the bottom of the Gulf of Mexico

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.
…

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.