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Monthly Archives: November 2008

Law firm challenges proposed advertising restrictions

A Louisana law firm is challenging that state’s new rules governing lawyer advertising scheduled to take effect on April 1, 2009. Wolfe Law Group, L.L.C. filed a suit in federal court challenging the constitutionality of Louisiana’s new advertising rules, which are some of the most aggressive in the nation. Wolfe Law Group’s suit argues that the rules go too far and restrict an attorney’s right to freely speak about its trade. To view the complaint, click here.

According to a letter sent to Wolfe Law Group’s colleagues and clients, “the new rules would stifle our firm’s ability to continue talking with you about the legal profession, the construction industry and the evolution of construction law across the nation.” Wolfe Law Group argues that the new rules effectively prevent a lawyer from advertising its services through online mediums, such as Google’s Adwords, as the rules also restrict an attorney’s ability to engage in discourse with colleagues, clients and the public through online bulletin boards, blogs, twitter, and other online communities and forums.

The law firm that practices in the area of construction law out of its offices in New Orleans, Louisiana and Seattle, Washington, is actively engaged in the Internet marketplace, posting daily on sites like wolfelaw.com, Twitter, Facebook, Avvo.com, and similar web 2.0 services. The suit argues that Louisiana’s new advertising rules would subject each of the firm’s posts to an “evaluation” by the Louisiana State Bar Association, with an evaluation fee of $175.00.

The firm launched a blog titled “Blogging is Speaking,” which can be viewed by clicking here. It also provides information on the cause on Facebook which can be viewed by clicking here.

Ravech & Roy, P.C. employs many of these web 2.0 services at issue in Louisiana. We host a website at ravechroy.com, this blog, a twitter site, an avvo site, a jdsupra site, a linked-in site, and a Facebook page. Each of these mediums is used as a way to communicate with clients and others to enable them to make an informed choice about their lawyer, and to provide a service to the public. Restrictions on these services would not only violate the First Amendment, but would also restrict the public’s right to access information.

We applaud our Louisiana brothers for taking on this challenge and fighting to preserve, protect and defend the First Amendment. Indeed, that is the job of a lawyer as set forth in the oath we take. By statute, whoever is admitted as an attorney shall, in open court, take and subscribe the oaths to support the Constitution of the United States and of the Commonwealth. G.L. c. 221, § 38.


Bankruptcies sapping value of gift cards

Several years ago, in one of our client newsletters, we warned people about expiration dates which sapped the value of gift cards. Last year, we reported on a settlement reached by the Federal Trade Commission with Kmart about fees it was charging on gift card users (See Gift card settlement). Today, we have to warn you about gift cards that lose their value when a company goes bankrupt.

As reported in today’s Boston Globe, there’s a new realization that holding a gift card from a troubled retailer is like having a bank account without FDIC insurance. Already some big retailers, including Sharper Image and Bombay Co., have filed for bankruptcy protection, leaving gift card holders with millions of dollars of what the Bankruptcy Court considers unsecured debt. In 2008, gift card holders could lose more than $75 million just from store and restaurant closings, said Brian Riley, senior analyst at Tower Group, a consulting company. Tower’s research on gift cards can be viewed by clicking here.

Consumer groups are worried about how little shoppers are protected when spending all that money. In September, a coalition of organizations asked the Federal Trade Commission to protect shoppers from losing money on gift cards when retailers file for bankruptcy protection. FTC spokesman Mitchell J. Katz said the agency had received the petition “and we are determining what our response will be.” In the meantime, the FTC has issued a consumer alert on gift cards which can be viewed by clicking here.

These concerns have many people wondering whether giving gift cards is the way to go. From the experiences with expiration dates, hidden fees, and now the threat of lost value associated with bankruptcies, it may be that gift cards are simply not worth the risk. Hopefully, a solution can be worked out between gift card sellers and the FTC so that consumers will be protected. We will keep you posted.

To read the full Boston Globe report, click here.

Supreme Court hears argument in Wyeth v. Levine

The Wyeth v. Levine case was argued before the United States Supreme Court yesterday. The American Association for Justice (AAJ) provided this synopsis of the press reporting on the oral arguments:

Wyeth v. Levine went before the Supreme Court on Monday. The case was heavily covered, with articles appearing in national newspapers and on all four wire services. A number of papers described the court as divided and predicted that the case will be decided on narrow grounds.

In an article on the front page of its Business section, the Washington Post (11/4, D1, Markon) reports that Diana Levine’s suit against Wyeth is “one of the most hotly contested cases of the Supreme Court’s term. The justices yesterday debated Wyeth’s contention — which is supported by the Bush administration — that the lawsuit should be thrown out because federal law preempts such state court claims.” There were “divisions within the conservative bloc on the court.” Justice Samuel A. Alito Jr. questioned how the [Food and Drug Administration] (FDA) approved a drug “as ‘safe and effective’ when ‘you have the risk of gangrene.'” Also, “Justice Anthony M. Kennedy disputed Wyeth’s contention that it could not have followed the Vermont law under which Levine sued without violating the federal law that regulates drug labeling.” However, “Justice Antonin Scalia grilled Levine’s attorney intensively, scowling at him.” There is “an intensifying national debate over ‘preemption,'” and “Levine’s lawsuit struck a particular nerve, with both sides mounting intensive media campaigns before yesterday’s argument.”

The New York Times (11/4, A20, Lipak) reports that this “was supposed to be the term’s blockbuster business case,” but the argument “quickly turned into a search for limiting principles.” According to the Times, “Several justices appeared open to the idea that preemption could follow from the FDA’s approval of a drug label — but only if drug companies remained subject to lawsuits if they failed to disclose new information about potential risks,” and “other justices seemed prepared to allow preemption — but only if the drug agency had considered the particular risk before approving the label.” The Times adds, “Given the justices’ interest in those refinements, the court seemed unlikely to rule broadly on the larger issues in the case: whether the agency and other federal regulators set minimum safety standards that states are free to augment or whether they make judgments about the optimal balance between risks and benefits that states must follow.”

The AP (11/3, Sherman) added, “Several justices indicated that if the U.S. Food and Drug Administration had clear information about the risks of Wyeth Pharmaceuticals’ anti-nausea drug Phenergan, and approved its warning label anyway, then Wyeth probably would prevail in its court fight against Diana Levine of Vermont.” However, “there was considerable skepticism among the justices — and disagreement between the opposing lawyers — that the FDA had a clear picture of the disastrous consequences of improperly giving Phenergan by” IV push.

The Wall Street Journal (11/4, A3, Bravin) notes, “Several Supreme Court justices expressed skepticism with arguments given Monday by business interests hoping for wide immunity from lawsuits over federally regulated products.” Also, “several justices seemed to be searching for a moderate position, whereby private lawsuits might be permitted in extraordinary circumstances. The justices seemed disinclined to permit private lawsuits to simply re-evaluate data that the FDA had fully considered.”

USA Today (11/4, Biskupic, Appleby) points out that “much of the give-and-take centered on what happened in Levine’s case. A majority of the justices did not tip their hand, although they emphasized different issues.” While “Justices Ruth Bader Ginsburg and Samuel Alito raised questions of patient safety and the adequacy of FDA review of the drug label,” both “Chief Justice John Roberts and Justice Antonin Scalia focused on drugmakers’ ability to meet federal requirements without further demands from the states.” Another USA Today (11/4, Biskupic) article reports, “A majority of the justices did not tip their hand during the hour of oral arguments. Many suggested a key question may be how the FDA had handled any attempt by Wyeth to change its label to made clear the dangers from the particular administration used on Levine.”

The Legal Times (11/3, Mauro) reported, “The Supreme Court appeared torn” during the argument, and “the case could be decided narrowly, giving little guidance about broader preemption issues beyond the area of drug labeling.” In contrast, McClatchy (11/3, Doyle) reported, “several justices appeared ready to declare that federal regulations preempted certain state lawsuits. That would be a major victory for the drug company.” CongressDaily (11/3, Edney) also reports that Levine’s lawyers “faced hefty skepticism from justices.”

The Los Angeles Times (11/4, Savage) reports, “If the court agrees with the administration, congressional Democrats have said, they will seek to revise the law and restore consumers’ right to sue.” The Kiplinger Letter (11/4, Craver) reports, “Lawmakers have already taken action to help remedy the issue. In reauthorization legislation for the Consumer Product Safety Commission, Congress nullified the preemption language by inserting a section that preserves the right of consumers to seek restitution from those who caused them harm.” During President Bush’s administration, “over 60 proposed or final regulations put out by government agencies include language aimed at shielding companies from product liability claims. Les Weisbrod, president of the American Association for Justice, said, “In effect the Bush administration has made the safety of Americans secondary to corporate profits.”

In the Health blog on the Wall Street Journal (11/3), Sarah Rubenstein wrote, “what happens in tomorrow’s presidential election may be every bit as important as what the Supremes say about Wyeth v. Levine,” because “a Wyeth victory in court could be offset by an Obama presidential victory and a Democratic Congress.”

Dow Jones Newswires (11/3, Favole) and NPR (11/3, Totenberg) also cover this story. Dan Slater, in the Law blog of the Wall Street Journal (11/3), and Sarah Rubenstein, in a separate Health blog posting on the Wall Street Journal (11/3) website, also cover this story.

Sen. Leahy argues Levine should prevail. In the Congress blog on The Hill (11/3), Sen. Patrick Leahy (D-Vt.), chairman of the Senate Judiciary Committee, wrote that “every American consumer will have a stake in the outcome” of this case. “The justices’ ruling in Ms. Levine’s case will affect the millions of Americans who use prescription drugs and may suffer avoidable injuries.” Meanwhile, “the Bush Administration is taking the drug companies’ side against consumers, putting corporate profits above all else.” However, “corporate accountability and the right of American citizens to seek justice in their state courts hang in the balance.” Should the Court overturn “the Vermont jury’s decision, even the most misleading, inaccurate or insufficient drug label, if okayed by the FDA, will immunize a company from virtually all attempts by injured consumers like Ms. Levine to receive compensation.”

WSJournal argues Levine victory would stop drug innovation. The Wall Street Journal (11/4) editorializes that the “drug-approval system…balances the risks of treatments against the risk of not being treated at all. And a jury, faced with a single sympathetic plaintiff, is in no position to rule on the correctness of those FDA judgments.” The Journal adds, “it amounts to double jeopardy to say, even if you” go through the approval process and correctly label the drug, “that you can still get sued if something goes wrong because someone else made a mistake. If a known and disclosed medical risk can still lead to a law suit, drug companies can literally be sued for anything.” The Journal concludes, “if we want state juries second-guessing the FDA at every turn, let’s pass a law in broad daylight so everyone knows whom to blame when drug innovation stops cold.”