Elena Kagan: Supreme Court's 112th Justice

The United States Supreme Court began its fall session last week, with Elena Kagan as its newest associate justice. For the first time in its history, the High Court has three sitting female justices. Elena Kagan is the High Court's 112th justice, its fourth female justice, and its eighth Jewish justice. She is the second justice nominated by President Barack Obama to the U.S. Supreme Court. Kagan is the first justice in nearly 40 years to have no prior judicial experience.

Prior to being nominated to her current position, Justice Kagan spent 14 months acting as the United States' 45th Solicitor General. In that position, she had contacts with several federal cases, based on which Justice Kagan has recused herself from 25 of the 51 cases the High Court has taken on for the current term. The High Court has no system of replacing a recused justice on a case, hence, these 25 cases will be heard by only 8 justices. The last justice who needed to recuse himself from hearing cases was Thurgood Marshall in 1967, because he had served as the 32nd U.S. Solicitor General from 1965 to 1967.

Justice Kagan was born in New York City, on the Upper West Side. She attended Princeton University where in 1981 she earned a Bachelor of Arts in history summa cum laude, and was editorial chair of the Daily Princetonian. In 1983, she earned a master of philosophy from Oxford University, and in 1986 she received a Juris Doctor, magna cum laude, from Harvard Law School. After graduating from law school, she clerked for Judge Abner Mikva of the D.C. Circuit, and for Justice Thurgood Marshall at the U.S. Supreme Court. After working in private law practice, Kagan taught at the Chicago Law School, then served as Associate White House Counsel during the Clinton presidency. She then took a teaching position at Harvard Law School and went on to become the school's Dean.

On January 5, 2009, President Obama nominated Kagan to become the United States Solicitor General, and on March 19, 2009, the Senate approved her by a 61-31 vote, making her the first female to hold this position. On May 9, 2010, President Barack Obama nominated Kagan to the U.S. Supreme Court, to fill in the vacancy created by Justice John Paul Stevens' retirement. On July 20, 2010, the Senate Judicial Committee recommended Kagan's confirmation to the full Senate, by a 13-6 vote. On August 5, 2010, members of the Senate confirmed Kagan as an associate justice by a 63-37 vote; a handful of Republicans voted in support of this confirmation. In the past five years, four new justices have been appointed to the High Court. The materials for this blog were gathered from CBS News, Bloomberg, Afro, Wikipedia, Politics Daily, and VOA News. For additional information run a search on Google.

Robin Mashal is a Los Angeles real estate attorney. Mr. Mashal has been admitted to the State Bar of California and the Bar of the United States Supreme Court. He can be reached by phone at (310) 286-2000.

$1.59 Million Court Judgment in Business Fraud Lawsuit

Hong & Mashal, LLP is pleased to announce obtaining a $1.59 Million court judgment in favor of our client in the case of Yu Chung Koo v. Huang Cho Hong, et al., in the Superior Court of State of California, County of Los Angeles, Central Judicial District, Case no. BC 414375. Attorneys Robin Mashal, Peter Y. Hong, and associated attorney Carlos Lloreda, Jr., took the case through an eight-day jury trial. After three days of deliberations, on August 13, 2010, the jury returned a verdict for compensatory damages of $1,500,000, as well as punitive damages for fraud and breach of director’s fiduciary duties against various defendants in the sum of $90,000. On August 30, 2010, the honorable judge Mark V. Mooney, sitting in Department 68 of the Los Angeles Superior Court signed a judgment based on the verdict in the jury trial.

Hong & Mashal LLP initiated this lawsuit on behalf of plaintiff on May 22, 2009. Defendants were uncooperative in the action and Plaintiff's attorneys had to bring several motions to compel proper responses to discovery requests. The parties attended a mediation session per the court's orders, which mediation session was unfruitful. Prior the completion of trial, defendants made a $23,000 settlement offer to Plaintiff. 

Robin Mashal is a California litigation attorney.  He can be reached at (310) 286-2000.

Mattel v. MGA: Barbie and Bratz Duke it Out in the Court of Law

Mattel, Inc. and MGA Entertainment, Inc. have been in a legal battle over ownership rights to Bratz dolls since 2001.

Mattel, Inc., the world's largest toymaker, has been marketing Barbie dolls for nearly half a century. While still employed at Mattel, Carter Bryant came up with some designs that ultimately turned into Bratz dolls. Bryant showed his ideas to some MGA employees and ended up signing a consulting agreement with MGA before he left Mattel's employ. When Mattel learned about MGA's Bratz doll line, and about Bryant's involvement in designing them, Mattel filed suit against MGA. Mattel argued, Bryant had a duty to disclose and assign his sketches and designs to Mattel, under the terms of Bryant's employment agreement with Mattel. The jury found in favor of Mattel and awarded it $10 million in damages for copyright violations. The District Court imposed constructive trust over all trademarks including the terms "Bratz" and "Jade", and further enjoined MGA from producing and marketing most Bratz dolls. MGA appealed the lower court judgment. On July 22, 2010, in MGA Entertainment, Inc. v. Mattel, Inc., No. 09-55673, the Ninth Circuit Court of Appeals reversed a 2008 lower court order which awarded Mattel, Inc. ownership rights to Bratz dolls. The appellate opinion, written by Chief Judge Alex Kozinski, reasoned that Bryant had not designed Bratz dolls at Mattel, but had come up with some sketches and ideas. Bryant's employment agreement with Mattel "could be interpreted to cover ideas, but the text doesn't compel that reading. The district court thus erred in holding that the agreement, by its terms, clearly covered ideas." The court further reasoned that even if MGA miappropriated the names "Bratz" and "Jade", the trademark owed much of its value to "MGA's own development efforts, marketing and investment." The court also vacated the copyright injunction based on a holding that the employment agreement assigned works created outside Bryant's scope of employment. In doing so, the Ninth Circuit stated "the entire case will probably need to be retried." Having prevailed on their appeal to the Ninth Circuit Court of Appeal, the "MGA parties" have now filed counterclaims against Mattel including trade secret misappropriation, Civil RICO, and wrongful injunction. Legal commentators are fascinated by this move, and wonder how the counterclaims will stack up against Mattel's causes of action. MGA Entertainment (Micro-Games America Entertainment) is a privately-held "consumer entertainment products company". The company's founder and CEO, Isaac Larian, controls more than 80% of the company. MGA employs 1,500 employees and had revenues of $2 Billion in 2006. The company is headquartered at 16300 Roscoe Boulevard, in Lake Balboa area of Los Angeles, California. In the past, MGA contemplated an initial public offering of its shares, but did not go through with it due to the pending litigation with Mattel, Inc. The materials for this blog were gathered from various sources including WSJ, Bloomberg articles, JOLT Digest, Law.com article, Wikipedia, MGA's web site, and Mattel's web site. For further information, run a search on Google.

Robin Mashal is a Los Angeles a real estate attorney.  He is the managing shareholder of Century City Law Group, APC. Mr. Mashal has been admitted to the State Bar of California and the Bar of the United States Supreme Court. He can be reached by phone at (310) 286-2000.

Is China's Legal System Unfriendly Towards Foreigners?

The world was shocked last week at the news of a Beijing court sentencing a U.S. geologist to an eight-year jail sentence on charges of spying and collecting state secrets. Xue Feng, a Chinese-born U.S. citizen, had been working in China for IHS Energy, an American consultancy. Feng who was arrested in November 2007, had been tortured with lit cigarettes during his 30-months detention leading to his recent trial behind closed doors. Jon Huntsman, the U.S. Ambassador to China attended the sentencing hearing by the Intermediate People's Court, and afterwards issued a statement calling for Feng's release and return to the United States. Beijing has defended the sentencing saying the case was handled strictly based on law and Feng's legal rights were guaranteed. In March 2010, the Chinese-born Australian national Stern Hu was sentenced to a ten-year jail sentence on charges of bribery and trade secret violations. Both Feng and Hu were sentenced under "trade secret" laws, which secrets the Chinese courts will not clearly define.

In classical Chinese, the word for law is "fa" which means "fair" or "just." The classical Chinese legal system was based on the Confucian philosophy of promoting social control through enstilling virtues and moral standards. Later, under the imperial governments, the Chinese legal system changed and the laws focussed on citizens serving the state. In 1911, the nation underwent a revolution and formed the Republic of China, which adopted legal codes largely influenced by the West. After the communist victory in 1949, the People's Republic of China (PRC) was establised and the Chinese legal system turned towards socialism; the laws and constituion were larged based on those of the Soviet Union. PRC's current Constitution (Zhonghua Renmin Gongheguo Xianfa) was enacted in 1982, which generally provides for a government by the working class under the leadership of the Communist Party. The preamble to this Constitution provides:

"Both the victory in China’s New-Democratic Revolution and the successes in its socialist cause have been achieved by the Chinese people of all nationalities, under the leadership of the Communist Party of China and the guidance of Marxism-Leninism and Mao Zedong Thought, by upholding truth, correcting errors and surmounting numerous difficulties and hardships. The basic task of the nation in the years to come is to concentrate its effort on socialist modernization ..."

PRC's executive branch is comprised of the State Council, the President and the Vice President. PRC's legislative branch is comprised of the National People's Congress. PRC's judicial branch consists of the Basic People's Court, the Intermediate People's Court, the Higher People's Court, and the Supreme People's Court. A litigant is generally allowed on appeal of the judgment, and the appellate court conducts a trial de novo on factual and legal matters. In response to growing demand, in 1992 the PRC issued provisional regulations allowing foreign law firms to establish offices in China; several foreign law firms including the U.S.-based Baker & McKenzie have since opened affiliated offices in China. The materials for this blog were gathered from various sources including articles by The Associated Press, United Press International, lawinfochina.com, A Brief Introduction to the Legal System of China, CIA World Fact Book on China, and Wikiepedia. For more inforation, run a search on Google. Robin Mashal is a Los Angeles business attorney. Mr. Mashal has been admitted to the State Bar of California and the Bar of the United States Supreme Court. He can be reached by phone at (310) 286-2000.

Attachment Lien: How an Unsecured Creditor can be Protected Against a Debtor's Bankruptcy

It is axiomatic that a cash transaction exposes the seller to little risk of loss. And it is easy to require cash payment for small purchases. However, when it comes to large transactions such as real estate purchases or wholesale purchase of goods, there are few purchasers who can afford to pay cash. So, sellers often consider extending credit in order to enable more purchase tranactions to take place. The added volume of transactions comes with its downsides. Sellers need to properly balance out the additional sales volume against the risk of purchaser defaults. Sophisticated sellers factor in the borrower's creditworthiness against the transaction profits, and seek guaranties and security for payment. In a secured transaction, seller seller may take back the collateral if debtor defaults on the payments, or goes bankrupt. But what about sellers who extend credit without taking back a security? What protection do they have when the debtor defaults or is at risk of filing for banktuptcy? In such situations, the creditor may have rush to the court and seek an "attachment lien." Attachment is a prejudgment remedy that allows the creditor, who has followed the statutory requirements and who has established a prima facie claim, to have a lien recorded against real property and/or the debtor's assets seized and held until final adjudication at trial. See, Lorber Industries v. Turbulence, Inc., 175 Cal. App. 3d 532, 535 (1985). If an unsecured creditor succeeds in obtaining an attachment lien, the creditor is placed in very similar situation to a creditor who obtained security at the inception of the transaction. Federal Bankruptcy law recognizes attachment liens issued by state courts under state law. A “prejudgment attachment constitutes a valid and perfected lien which is superior to the rights of the Trustee, notwithstanding that judgment has not been entered.” In re Giordano, 169 B.R. 12, 13 (Bankr. D.R.I. 1994). An unperfected prejudgment attachment lien could be pursued after bankruptcy, and upon judgment, the prejudgment attachment lien would ripen into a vested lien, relating back to the date of attachment. In the Matter of DeLancey, 94 B.R. 311, 314 (Bankr. S.D.N.Y. 1988). See, In re Southern California Plastics, Inc. (Diamant v. Kasparian), 165 F. 3d 1243 (9th Cir. 1999). Obtaining an attachment lien requires proper facts, proper timing, and proper legal skills. If a debtor is going out of business or about to file for bankruptcy, there is often little time to file lawsuit and go through the lengthy motion process to obtain an attachment lien. In emergency situations, a creditor must act promptly and bring an ex parte application for a Right to Attach Order, and promptly perfect the lien by recording the resulting Writ of Attachment. It behooves the creditors to retain experienced business litigaiton attorneys to assist them with these processes. Robin Mashal is a Los Angeles business attorney. Mr. Mashal has been admitted to the State Bar of California and the Bar of the United States Supreme Court. He can be reached by phone at (310) 286-2000.

Is British Petroleum (BP) Operating Responsibly in the United States?

On April 20, 2010, an offshore drilling rig operated by Transocean Ltd. on behalf of BP exploded in the Gulf of Mexico, killing 11 people and causing a large oil spill. The efforts last week to contain the spill using "top kill" method failed; authorities are now looking at a possible containment by August 2010. With nearly a month and half passing, the Deepwater Horizon oil spill continues to expand and and threaten the coasts of Louisiana, Texas, Mississippi, Alabama and Florida. In a news conference this week, Rear Adm. Mary E. Landry of the Coast Guard commented that oil is leaking at the rate of 5,000 barrels per day, which is five times the originally estmiated rate of 1,000 barrels per day. NASA satellites have been able to observe the spread of the oil from the space. The Deepwater Horizon disaster has now surpassed the Exxon-Valdez oil spill, to become the single largest oil spill in the U.S. history.

Rep. Ed Markey (D-Mass.) has charged that BP from the beginning understood the extent of the oil spill, but it attempted to cover up by "lowballing" the numbers. Markey said "without question" the oil spill in the Gulf of Mexico should be considered "criminal." In response, BP has committed up to $500 Million over the next ten years to study the impact of the oil spill in the Gulf of Mexico on the environment and the surrounding wildlife.

The Deepwater Horizon oil spill has not been BP's only legal issue in the recent past. In 2000, BP paid $6.5 Million in civil penalties for illegal disposal of hazardous waste and violating federal drinking water laws, paid $10 Milliion to resolve Clean Air Act case, and its subdiary was hit with a $500,000 criminal fine for failing to report the illegal disposal of hazardous waste in Alaska. In 2005, OSHA fined BP $21 Million for violating OSHA laws. These records caused BP to be placed on Mother Jones magazine's Ten Worst Corporations of 2000, and Multinational Monitor's Ten Worst Corporations of 2005.

BP evolved out of a British oil exploration in Iran. In May 1901, the Shah of Iran granted a concession to William Knox D'Arcy to search for oil. After oil was discovered, on April 14, 1909 the Anglo-Persian Oil Company, Limited was incorporated with an initial capital of Two Million Pounds Sterling. In 1935, the company changed its name to Anglo-Iranian Oil Company, Limited. In 1954 the company changed its name to The British Petroleum Company Limited. In 1980, the company was re-registered as a public company under the name The British Petroleum Company p.l.c. In 1998, the company merged with U.S. oil company Amoco and became BP Amoco p.l.c. In 2001 the company changed its named to BP p.l.c.

BP p.l.c. is currently United Kingdom's largest coporation; the company is listed on the London Stock Exchange (LSE: BP.) and on the New York Stock Exchange (NYSE: BP). It is globally the fourth largest company, and the third largest energy company (with operations in more than 80 countries). BP is one of the six "supermajors", which are "vertically integrated private sector oil exploration, natural gas, and petroleum product marketing companies." BP is the 100th largest contributor to political campaigns in the United States, and has contributed $5 Million in this regard since 1990. BP's retail operations in the United States include AMPM convenient stores and ARCO gas stations.

The materials for this blog were gathered from various sources including The Telegraph, The Washington Post, Politico, Wikipedia, and The New York Times. For more inforation, run a search on Google.

Robin Mashal is a Los Angeles business attorney, and a partner at the law firm of Hong & Mashal LLP. Mr. Mashal has been admitted to the bar of the United States Supreme Court. He can be reached by phone at (310) 286-2000.

SEC Charges Goldman Sachs & Co. with Civil Fraud, and British and German Authorities May Follow Suit

On Friday, April 16, 2010, the Securities and Exchange Commission (SEC) announced bringing civil fraud charges against Goldman Sachs & Co. SEC's complaint alleges that Goldman Sacks sold securities based on risky mortgage investments without disclosing to buyers that hedge fund Paulson & Co. who had influence in the selection of profolio, was betting the securities would fail. Goldman Sachs has denied all charges. SEC's compliant has not charged Paulson & Co. or its billionaire manager John Paulson.

On the news of SEC's charges, shares of Goldman Sachs & Co. fell 12.8 percent, a loss of $12 Billion in market value. The news also impacted the broader markets, putting an end to a six-day U.S. stock market rally, and causing the European markets to slump.

Founded in 1869, Goldman Sachs is currently the largest investment banking firm in the United States. Commentators believe that although Goldman Sachs may be able to defend itself against SEC charges, the damage to the company's image may allow Morgan Stanley, the second position U.S. investment banking firm, and foreign rivals such as Deutsche Bank and UBS to take on a portion of Goldman Sachs' market.

British Prime Minister Gordon Brown, and German government spokesman Ulrich Wilhelm said their governments will seek information from the SEC about Goldman Sachs Group's operations; the investigations may lead into legal action in those jurisdictions.

The materials for this blog were gathered from various sources including The Associated Press, Business Week, and Reuters. For additional information, run a search on Google.

Robin Mashal is a Los Angeles business attorney, and a partner at the law firm of Hong & Mashal LLP. He can be reached by phone at (310) 286-2000.