August 17, 2011 nº 1,079 - Vol. 9

"When reality has requirements that are at odds with idealism, idealism loses every time."


Read Migalhas LatinoAmérica in Spanish every Tuesday and Thursday. Visit the website at


  • Top News

US tobacco firms sue over labels

Five tobacco companies have sued the US FDA - Food and Drug Administration over a new law that would force them to place graphic health warnings on their cigarette packets. The firms argue the plan violates their constitutional right to free speech, as it requires firms to promote the government's anti-smoking message. The FDA has not commented on the lawsuit. RJ Reynolds Tobacco, Lorillard Tobacco, Commonwealth Brands, Liggett Group and Santa Fe Natural Tobacco said they filed their suit against the FDA late on Tuesday in an effort to delay enforcement of the new law. In their 41-page complaint, the five companies say the new labels would illegally force them to make consumers "depressed, discouraged and afraid" to buy their products. "The government can require warnings which are straightforward and essentially uncontroversial, but they can't require a cigarette pack to serve as a mini-billboard for the government's anti-smoking campaign," Floyd Abrams, a lawyer representing the cigarette makers, said. He added that the new labels would violate the companies' free-speech rights under the first amendment to the constitution. The 2009 Family Smoking Prevention and Tobacco Control Act requires such labels to cover the top half of the front and back sides of cigarette packages and 20% of the printed advertising. More than 220,000 people in the US are expected to be diagnosed with lung cancer in 2011, according to the American Cancer Society. Tobacco use is estimated to be responsible for 443,000 deaths in the US each year.

Eleventh Circuit rules individual health care mandate unconstitutional

The US Court of Appeals for the Eleventh Circuit ruled 2-1 Friday that the individual mandate in the PPACA - Patient Protection and Affordable Care Act is unconstitutional. Although the decision in the US District Court for the Northern District of Florida rejected the entirety of the law, the Eleventh Circuit judges upheld the law without the mandate. The opinion stated that Congress had exceeded its authority under the Commerce Clause, calling it a "wholly novel and potentially unbounded assertion of congressional authority." They also agreed with the defendants that the Tenth Amendment powers reserved to the states were usurped by Congress: "Congress cannot directly compel a state to act, nor can Congress hinge the state's right to regulate in an area that the state has a constitutional right to regulate on the state's participation in a federal program. Either act is clearly unconstitutionally coercive."

Bankruptcy practices brace for European defaults

A lot of companies that had their debts coming due in 2011 and 2012 refinanced and pushed that out to 2013 and 2014.The day that one of those major countries actually defaults and the banks start pulling back to protect their own liquidity, is the day that the credit dries up for the rest of the world. The difference between a company restructuring and one refinancing has more to do with where the credit markets are when their debt comes due when with how they're operating. There are a lot of firms that when they think about restructuring, they just think about Chapter 11. Those practices have been shrinking, and for the next 18 months they will continue to stay small. Those who think of restructuring more as a business transaction will stay busy all the time. A restructuring practice should stay the same size in a good economy or a bad economy give or take five or ten percent.

Cut the law firms, keep the lawyers

Companies used to depend on elite law firms to train new lawyers they could bring in-house years down the road. Now, some are just doing it themselves, hiring directly from law-school campuses rather than recruiting lawyers who had previously spent a few years at a major firm. These companies are growing weary of paying high hourly rates for inexperienced law-firm associates.

Due Diligence for business clients

Last month Georgetown Law CLE & Lex Mercator offered a lecture focused on "What business clients want from their lawyers". This free one-hour lecture will focus on some strategies to better serve business clients. It was very popular, so we offering it again this week!

Here are a several good reasons to attend:

  • The traditional relationship between law firms and the business community is changing. Companies are working on smaller margins, and they want more from their law firms.
  • Andrew Sherman is a leading transactional lawyer who works exclusively with business clients, and he teaches a course on this topic at Georgetown Law School and Georgetown Business School.
  • You'll get some good insight and enjoy yourself.
  • It's free (I think I already told you that).

You and your colleagues are invited. If you missed it last month, make sure to catch it this week. Make sure to reserve your spot by clicking here. You can attend the lecture live from your home, office, or wherever you are.

Visit our new 'Magic Eye' page and boost your career

Migalhas International, with the support of executive search firms, brings the best career and professional development opportunities to its readers. We call this service the "Magic Eye". Click here to go to our special webpage and find your next lease on life.

Letter to the editor

Sir, I want to talk about a breakthrough for the eradication of female genital mutilation. The Kurdistan Regional Government passed a law banning the practice offending the human rights of girls and women victims, Human Rights Watch has pressed the government of Kurdistan for more than one year to make the practice illegal. This is an important step, but there is still much to press other governments to become aware of the brutal and inhuman crime that is female genital mutilation can not be rooted in any religious practice. C.S. Claudia Sinibaldi is a law graduate with post-graduate degree in politics and international relations, and a frquent commentator in Migalhas International.

  • Crumbs

1 - Holdout law schools to accept military recruiters - click here.

2 - Cleary, Wachtell lead on Google's $12.5bn Motorola buy - click here.

3 - Technology offers 50 ways to leave your lawyer - click here.

4 - SEC said to scrutinize S&P's math, possible leak of U.S. rating downgrade - click here.

5 - Obama's Health Care Reform law comes under fire with latest court ruling - click here.

6 - Jordan mulls constitutional reform to weaken king, boost protections - click here.


100% Migalhas:


  • MiMIC Journal

Biden in China amid debt concerns

US Vice-President Joe Biden is visiting China, with talks likely to focus on addressing concerns over his country's budget deficit. China is the US government's biggest foreign creditor, holding $1tn of debt, and has called on it to do more to reduce its budget deficit.

China backs HK as yuan trade hub

China has pledged to expand options for yuan-denominated investments from Hong Kong. Vice Premier Li Keqiang said Beijing will soon allow foreign investors to buy up to 20 billion yuan ($3.1bn) worth of mainland securities using yuan. Beijing has been trying to promote the yuan as a global currency.


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  • Historia Verdadera


La compañía canadiense Dubai Mineral venderá a su par Solway Group el proyecto de explotación de níquel en Izabal, Guatemala, por aproximadamente US$170 mlls.


La firma china Goldwind Global construirá el proyecto de generación eólica Villonaco, en Loja, Ecuador, por un valor de US$ 34 mlls.


La brasileña Gerdau Aza, la mayor siderúrgica de América Latina, dijo el martes que estudia invertir unos US$ 240 mlls en Chile hasta el 2015 para elevar su capacidad de producción y abastecimiento de acero en ese país. (Presione aquí)

  • Brief News

Franco-German leaders call for 'true euro economic governance'

The French and German leaders have called for "true economic governance" for the eurozone in response to the euro debt crisis. Merkel and Sarkozy urged much closer economic and fiscal policy in the eurozone. They also advocated a tax on financial transactions to raise more revenues. Markets reacted negatively to the conference, with some investors saying that they were expecting bigger announcements. George Soros has backed "eurobonds" - joint debts of the 17 eurozone members - to solve the eurozone debt crisis. He said if European leaders fail to keep the euro together, there would be a "really serious global calamity".

Warren Buffett demands to pay more tax

Warren Buffett has called for Congress to make him and his "mega-rich friends" pay more income tax. In a piece in the New York Times newspaper, the billionaire investor and philanthropist said the rich should do more to help plug the deficit. He called for a tax rise for those earning more than $1m, and a higher rate for those on over $10m. In a rebuttal of arguments made by Republicans, he said tax rises would not hurt investment or jobs in the US. He told Congress to "stop coddling the super-rich".

What's behind the hefty motorola breakup fee

Google proved itself willing to pay up for Motorola Mobility Holdings, agreeing to buy the cellphone maker for $12.5bn, a 63.5% premium. Google executives confirmed Monday that the focus was on patents when the company agreed to buy the company. But the search engine giant was also willing to offer a significant reverse termination fee to guarantee that it was committed to the deal. Google's deal contained a $2.5bn reverse breakup fee. That's roughly 20% of the purchase price. Subtract Motorola's $3bn in cash on hand from the purchase price, and the fee constitutes an eye-popping 26% of Google's total consideration. That is well above normal. Reverse termination fees usually run 4% to 10% of any given transaction. Neither side is concerned about antitrust risk in this deal. Because it represents vertical integration instead of horizontal consolidation — meaning that it isn't putting together two direct competitors, as in the T-Mobile takeover — the two companies think the merger should pass regulatory muster.

Musing on the prospects of a Microsoft counterbid for Motorola

Analysts seem to think that one of Google's biggest rivals — Microsoft— may step up to the plate anyway, driven by the patent war roiling the smartphone world. Microsoft has already sued Motorola for intellectual property violations in its line of Android-based smartphones. Microsoft has already won concessions from another Android handset maker, HTC, and is pursuing claims against Samsung. It is unclear where exactly Motorola's own skirmish with Microsoft stood as of the Google deal announcement on Monday.

The quiet revolution in the death penalty debate

There are 58 people on federal death row in Terre Haute, Ind. But for now none appears likely to face the ultimate punishment, at least not on Obama's watch. The Justice Department is reviewing its lethal injection protocols because of a shortage of a key drug. While that study is underway, authorities have backed away from setting execution dates. Over the last few years, a quiet revolution has overtaken the death penalty debate. Like many trends, this one started in the states and moved to the federal level. "It's fair to say that the federal government seeks the death penalty less often now than it did five or 10 years ago, but that's simply part of a national trend," says Bruck, a law professor at Washington and Lee University.

Tax policy change would bring cash piles abroad back home

JPMorgan Chase estimated that 519 American multinational corporations had $1.37 trillion outside the United States. The problem is particularly acute among technology companies, which historically tend to hoard cash because of the cyclical nature of their business. Tax policy is driving much of this trend. For multinational corporations, cash earned abroad cannot easily be remitted to the United States. If it is paid back to the United States, it is subject to a dividend tax that can rise to as much as 35%. Companies are loath to pay this tax because while they can offset it with taxes paid abroad, the companies still end up paying a relatively high tax rate. Yet it is not just a tax issue. Many United States companies want to keep cash abroad to focus on high-growth regions for investments and acquisitions.

Ecuador police to take polygraph

Police officers in Ecuador will be subject to lie detector tests under new anti-corruption measures, the police chief says.

Petrobras profit jumps by a third

Brazilian state-owned oil company Petrobras reports a 32% jump in its second-quarter net income thanks to investment gains.

Brazil judge known for jailing corrupt officials, killed

Brazilian judge Patricia Acioli, known for taking a hard-line against corrupt officials and militia death squads, was shot and killed on Thursday outside of her home by two masked men on motorbikes. Investigators revealed that at least twelve people are suspected of being involved in the attack, where at least sixteen bullets were fired into the judge's car. After receiving numerous death threats, Acioli had requested but failed to receive police protection. Chief justice Cezar Peluso of the country's high court condemned the execution and asked for urgent intervention by the Federal Police.

Cristina Fernandez wins primary

Argentine President Cristina Fernandez de Kirchner looks on course to win a second term in office after beating rivals in a primary election on Sunday. Battling for second place were former President Eduardo Duhalde and Radical Party Senator Ricardo Alfonsin.

Mubarak trial resumes, live TV broadcasts to end

The corruption and murder trial of former Egyptian president Hosni Mubarak resumed on Monday. Mubarak is on trial for murder, attempted killing of protesters and other charges related to general abuse of power stemming from his response to pro-democracy demonstrations in Egypt earlier this year. Presiding Judge Ahmed Rifaat decided to end live TV broadcasts of subsequent proceedings amid protests from the families of victims and praise from several courtroom lawyers who opposed the broadcasts.

Trial of former Egypt interior minister adjourned as defense counsel silenced

An Egyptian criminal court on Sunday adjourned the trial of former interior minister Habib el-Adly. Judge Ahmed Rifaat ordered four recesses in the first three hours of the morning's proceedings in response to conduct by defense counsel that he believed was disruptive and disorganized. Defense counsel was never able to present its case in the course of the session. The trial is set to resume September 5.

Cellular shutdown raises questions of free speech

San Francisco's subway shut off cellphone service to thwart protesters, inciting a legal controversy. First Amendment scholars say they can't remember a time when a public agency in the U.S. moved to disrupt wireless traffic in quite that way, while Bay Area Rapid Transit officials say they had to protect riders' safety.

Hungary urged to revoke church law

Sixteen Hungarian churches have appealed to the country's Constitutional Court seeking to block a controversial church law that purportedly violates the separation of church and state. The "Law on the Right to Freedom of Conscience and Religion, and on Churches, Religions and Religious Community," passed by the Hungarian Parliament in a 254-43 vote on July 12, grants formal recognition to only 14 of 358 religious organizations in Hungary. The law recognizes predominant religious denominations including Reformed, Roman Catholic, Lutheran and Orthodox, along with a few Jewish organizations. The excluded groups will automatically lose their registration status on January 1, 2012, thereby losing financial support and tax breaks from the government.

Lawmakers introduce anti-foreign law legislation

The Michigan House of Representatives on Monday introduced a bill that would ban Sharia law and other laws deemed "foreign." The bill, introduced by Representative Dave Agema (R), seeks to limit the enforcement and application of "foreign laws that would impair constitutional rights." Contractual provisions or agreements that provide for the choice of foreign law to govern disputes would be amended to ensure the constitutional rights of the parties are protected, and be considered void otherwise. Though the bill does not expressly mention Islamic Sharia law, Muslim advocates suggest that bill was introduced to ban the Islamic legal code. Dawud Walid, head of the Michigan branch of the CAIR - Council on American-Islamic Relations, said Michigan has been falsely accused of having a sharia-controlled government and condemned "fear mongering" about Sharia law.

Court upholds Merrill Lynch executive conviction in Enron affair

A federal appeals court on Friday upheld the conviction of ex-Merrill Lynch executive James Brown stemming from his role in the Enron fraud scandal. Brown was indicted on five counts in 2003 stemming from a 1999 transaction in which Merrill took a $28m equity interest in a facility of barge-mounted power generators on the Nigerian coast along with Enron. The transaction, in which Merrill paid Enron $7m and loaned $21m more was ultimately exposed as a "sham sale" designed only to "allow Enron to artificially enhance its fourth-quarter earnings to meet forecasts." Brown served as the director in charge of Merrill's Strategic Asset and Lease Finance group at the time.

Leaked 'rape' report sparks new Strauss-Kahn furor

Opposing lawyers disputed the meaning of a medical report that said "rape" caused injuries sustained by the woman who has accused former IMF chief Dominique Strauss-Kahn of sexual assault.

Madoff trustee's loss calculation method upheld

Irving Picard argues that investor losses should be the amount deposited into the Madoff firm less any withdrawals, rather than the amount shown on their account statements; the court agrees.

Fired lawyer sues N.Y. firm for $77m

A junior attorney at a New York law firm who was fired after boasting about his "superior legal mind" and angering his colleagues has filed a $77m lawsuit against his former employer. Gregory Berry, a former first-year associate at Kasowitz Benson Torres & Friedman, accused the firm of unethical behavior and lying about its work culture in a lawsuit filed on Monday in Manhattan state Supreme Court.

  • Daily Press Review

Details to be revealed on Hariri murder
Al Jazeera, Doha, Qatar

Syria: Crackdown in Latakia has ended
Haaretz, Liberal daily, Tel Aviv, Israel

'Cairo sets date for trial of alleged Mossad spies'
JPost, Conservative, Jerusalem, Israel

Some riot sentences 'too severe'
BBC News, Centrist newscaster, London, England

NATO cites 'significant advances' in Libya
CNN International, London, England

20 missing as Nepal boat capsizes
Daily Express, Conservative tabloid, London, England

Bride's horror as she sees husband Ian Redmond savaged by shark off Seychelles beach
Daily Mail, Conservative daily, London, England

The Only Way Is Essex: Sam Faiers steps out in sparkling sequined dress
Daily Mail, Conservative daily, London, England

Images of 'normal' life in Tripoli
EuroNews, International news, Ecully Cedex, France

SOMALIA: Refugees face stark choice between safety and food aid
France 24, Issy-les-Moulineaux, France

HTC sues Apple in patent infringement dispute
Hurriyet Daily News, (Liberal, English-language), Istanbul, Turkey

Collar 'bomb' ordeal victim hails arrest
Independent The, London, England

Siberian football team facing extinction
Moscow News The, Independent, Moscow, Russia

UK riots: Home Secretary considering new general curfew powers
Telegraph The, Conservative daily, London, England

Hugh Fearnley-Whittingstall needs rescue after fishing trip goes wrong
Telegraph The, Celebrity news, London, England

Weng: Charter change on the cards
Bangkok Post, Independent, Bangkok, Thailand

Fitch keeps US rating at AAA, outlook stable
China Post, English-language daily, Taipei, Taiwan

Leukemia Strikes Near Contaminated U.S. Base
Chosun Ilbo, Conservative daily, Seoul, South Korea

Sydney bomb threat schoolgirl relieved at arrest
Hindustan Times, New Delhi, India

'6th Schedule areas have failed'
India Times, Conservative daily, New Delhi, India

Rising superpower floats an aircraft carrier
Japan Times, Independent centrist, Tokyo, Japan

Al-Jazeera bureau chief arrested by Israel
New Zealand Herald, Conservative daily, Auckland, New Zealand

Google unveils new search feature, catalog shopping app
People's Daily Online, English-language, Beijing, China

NZ's lost penguin to hitch home on research ship
Straits Times, Pro-government, Singapore

The tale of the email trail
Sydney Morning Herald, Centrist daily, Sydney, Australia

China appeals to US to focus on economic recovery
Taiwan News, English-language daily, Taipei, Taiwan

China appeals to US to focus on economic recovery
The Economic Times, Business, Mumbai, India

NDP confirms Layton to miss September caucus
Canadian Broadcasting Centre, Toronto, Ontario

China launches anti-terror campaign in restive west region of Xinjiang
Globe and Mail The, Centrist daily, Toronto, Canada

ASIC examines Australian consumer drive
International Business Times, Business news organization, New York, U.S

COLOMBIA: Grassroots Rural Movement Unites Behind Call for Peace Talks
IPS Latin America, International cooperative of journalists, Rome, Italy

French-German euro zone plan fails to inspire Wall St
Reuters, Business News, New York, U.S

Afghan cleaner shot dead inside NATO HQ
Reuters, World News, New York, U.S

Will fasting slow down Muslim Olympians?
Toronto Star, Toronto, Ontario

Zimbabwe ex-army boss Mujuru dies
BBC News, Centrist newscaster, London, England


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