ValuePlays

The following is courtesy of Jane Genova’s Law and More, the leading Lead Paint Litigation blog in existence.

Companies effected Sherwin Williams (SHW), DuPont (DD) and NL Industries (NL)

These are excerpts from Lexis Nexis Mealey’s Litigation Report, Volume 16, Issue #11, September 2007. Documents associated with the legal matters discussed are available from Mealey’s or by contacting James Cordrey, Editor, Lexis Nexis Legal News, James.cordrey@lexisnexis.com, 610-205-1125.

DISTRICT OF COLUMBIA ATTORNEY GENERAL SUES LANDLORDS

On August 16, Linda Singer, Attorney General for the District of Columbia, filed the last of 12 lawsuits in D.C. Superior Court against landlords for failure to abate lead-based paint hazards. These sought injunctive relief. Those health hazards had been discovered during Health Department inspections.

Enforcing laws against landlords has been what the former lead paint industry has been advocating for about two decades. Most states and cities already have those laws on the books. However, they are frequently not enforced. It could be effective for tort reformers to create a formal study of what factors mitigate against enforcement.

SANTA CLARA COUNTY, CALIFORNIA CONTINGENCY ARGUMENTS CONTINUE

Santa Clara County, which is appealing Judge Jack Komar’s April 4th ruling against the use of contingency in public nuisance litigation, argues that federal law doesn’t mandate that government attorneys be absolutely neutral, even in criminal matters. It goes further in contending that attorneys participating in public nuisance should be held to the same standard as a criminal prosecutor. According to California law, it claims, criminal prosecutors are not recused, absent showing actual bias which could deprive defendant of a fair trial.

In addition, the county on August 14 filed an opposition to defendant ARCO’s request for judicial notice. The county contends that ARCO failed to follow rules of procedure in doing so.

Meanwhile, amicus curiae briefs are being filed by organizations supporting Judge Komar’s ruling. Those organizations include the U.S. Chamber of Commerce, the American Tort Reform Association and, most recently, the American Chemistry Council. Essentially the amici argue that contingency arrangements with government entities are “suspect,” unconstitutional and violate legal ethics. In addition, those arrangements often cause conflicts of interest, excessive fees and a “revolving door” which reduces the public’s faith in government.

Since California is a trend-setting state which has an activist attorney general Jerry Brown this contingency battle is being closely watched. If the plaintiff wins its appeal then the door is opened for other public nuisance litigation, such as global warming, to move forward on a contingency basis.

OHIO SUPREME COURT AMENDS AUGUST 1 RULING ON “117,” ALLOWING FILING OF REFERENDUM AGAINST EXTENSION OF PUBLIC NUISANCE TO LEAD-PAINT LITIGATION

A divided Ohio Supreme Court allowed opponents of “117” to try to obtain enough signatures on a petition to put the matter to the voters in 2008 as a referendum. The deadline for those signatures in October 30th. If voters eventually say no to this tort-reform measure, then the former lead-paint industry can be sued by the state for causing a public nuisance. This could again give momentum to such suits in other states and cities. The “117” opponents are positioning their campaign as one for consumer rights.

CITY OF MILWAUKEE PRESENTS ORAL ARGUMENTS FOR CHANGE OF DEFENSE VERDICT OR NEW TRIAL

On September 6th, the plaintiff City of Milwaukee gave oral arguments that the defense verdict should be changed or a new trial granted. One primary argument focused on jury instructions. Defendant NL Industries (NL), of course, argued against this, contending that the court properly instructed the jury that Milawukee was required to prove that its conduct was intentional and unreasonable.

A decision is anticipated by the end of September. If the judge does not grant the city’s request, sources say an appeal is certain.

This litigation, though, is small doings compared to the upcoming “Thomas” trial which can set traditional liability concepts on their ear. All business, not only the former lead paint industry, is watching how this plays out. Opening arguments start October 4. A combination of Wisconsin Supreme Court rulings and Governor Doyle’s veto of tort reform had made this state as potentially a hot zone for anti-business litigation as California. Some contend “Thomas” could be more significant in its implications for business as well as the lead paint industry than has been the infamous Rhode Island Lead Paint Trial II.

Other items from Mealey’s Lead Litigation Report will be discussed in later posts on this blog. I wish to thank James Cordrey, Editor of LexisNexis Legal News, for this information. He can be reached at James.Cordrey@lexisnexus.com or 610-205-1125.

– Adam Warner is rapidly creating the number one “Best of The Blogsphere” column out there with his “Doing it Bloggystyle” aggregation at Minyanville.com . I read it every time he publishes and recommend you do too. He also has his own blog here.

– Jim Kingsland has a great article here

– Slavery’s effect on Africa

– Eric Chesire has a great take on McDonald’s with links to some very informative sites, great job Eric

“There is only one reason insiders buy shares, they think the price is going up..” Peter Lynch

Novogen (NVGN)= $3,377,000

AnnTaylor Stores (ANN)= $1,081,000

Brookfield Homes (BHS)= $985,000

Global Cash Access Holdings (GCA)= $922,000

Dominion Resources (D)= $850,000

“Today’s announcement is one of many more to come”. Andrew Liveris

Here are the key traits from Smartrax:

Durability.
-Combining multiple genes in a single package helps ensure sustainable insect protection and weed control year after year:
-Combined modes of action for insect protection guard against the development of insect resistance
-Combined herbicide tolerant traits that offer multiple modes of action for weed control

Performance.
-The complementary nature of the trait platforms converge to offer superior, season-long performance to farmers, notably:
-Enhanced control of a broader spectrum of above-and below-ground insects
-Most comprehensive protection against established and emerging secondary pests
-The industry’s best weed control system

US Corn Market Goal

Dow (DOW) looks to become the #3 US corn player with this deal. Currently they have 1% of the US market and Monsanto (MON) has 25% currently. DuPont’s (DD) Pioneer is #2 with 10%. For Dow to become #3, this would take their market share from the current 1% to well over 5% of the US market (minimum 4.5 million acres of corn planting based on 2007 planting figures). Liveris did say he “has no doubt” Dow Agro has the ability to “be better than #3”.

Dow did say they “are disproportionally strong in our technology vs our market share in the seed business.” They expect this agreement with change that. Dow said “this will be the ultimate technology in corn.”

Dow sees no competitors coming to market with anything similar before them.

Liveris was asked about Q3 earnings for the company as a whole and did touch on it. His answer was rather “cautiously optimistic” as he said. He did say that US energy policy is hurting the US competitive position in the world. There is enough natural gas off the US shore to power the US economy for 100 years yet current policies prohibits it’s extraction.

Wonder why jobs are going overseas?

A full PDF. of the presentation is available here

UPGRADES

FTD Group FTD Matrix Research Buy » Strong Buy
Unilever PLC UL Lehman Brothers Underweight » Equal-weight
Gateway GTW Citigroup Sell » Hold
MeadWestvaco MWV Credit Suisse Neutral » Outperform
Prudential PRU Credit Suisse Neutral » Outperform
Merck MRK Banc of America Sec Neutral » Buy
Thornburg Mortg TMA Piper Jaffray Underperform » Market Perform
Infineon IFX Lehman Brothers Equal-weight » Overweight
Thornburg Mortg TMA Deutsche Securities Sell » Hold

DOWNGRADES

Syntax-Brillian BRLC Canaccord Adams Buy » Hold
American Community Bancshares ACBA Stifel Nicolaus Buy » Hold
Syntax-Brillian BRLC Collins Stewart Buy » Market Perform
STMicroelectronics STM Lehman Brothers Overweight » Underweight
PepsiAmericas PAS HSBC Securities Neutral » Underweight
Buckeye Tech BKI Citigroup Buy » Hold
Biogen Idec BIIB UBS Neutral » Sell

FRIDAY’S PICKS

Jeff Macke recommended shorting General Motors (GM). Open $33.29

Guy Adami said buy the Short Dow30 ETF (DOG). Open 59.46

Karen Finerman said buy ConocoPhillips (COP). Open $85.11

Pete Najarian liked Sun Microsystems (JAVA) Open $5.80

THURSDAY’S RESULTS

Jeff Macke recommended Short Dow30 ProShares (DOG) as a bet against The Dow. Open $59.92 Close $59.46 Loss $.46

Guy Adami likes Zimmer Holdings (ZMH). Open $81.02 Close $82.49 Gain $1.47

Karen Finerman prefers Johnson & Johnson (JNJ). Open $62.51 Close $63.11 Gain $.60

Pete Najarian says St. Jude Medical (STJ) is a buy. Open $46.83 Close $45.94 Loss $.89

Since my tracking began on 6/21 (1-1 means one up pick and one down pick and no results from my vacation weeks)

Guy Adami= 22-15 Gain $40.01
Eric Bolling= 10-11 Loss $14.01
John Najarian= 13-3 Gain $15.54
Jeff Macke= 26-20 Gain $7.78
Pete Najarian= 15-13 Gain $22.46
Tim Seymore= 3-2 Loss $.49
Karen Finerman= 8-3 Gain $4.54
Stacey Briere-Gilbert= 2-0 Gain $1.61

– Absolutely, no free rides…

– Goldman goes bargain hunting

– Very Interesting take on YouTube’s impact on Google

– More folks who see through the fog out there

– Like I said

Please read Donald Luskin’s op-ed here. For those who do wish to leave, it is reprinted below.

“What would the Maestro do?”; As nervous markets hang on every word of Federal Reserve Chairman Ben Bernanke, trying to divine whether he will lower interest rates in response to the current turmoil in credit markets, comparisons to his illustrious predecessor Alan Greenspan are inevitable.

Such comparisons can also be invidious, and shouldn’t influence what Mr. Bernanke does now. Mr. Greenspan is fondly remembered for his role in stewarding markets through the stock crash of 1987, the Long Term Capital Management crisis of 1998, the collapse of the tech bubble in early 2001, and the aftermath of the terrorist attacks of September 2001. Today he enjoys a reputation for having moved swiftly and decisively — "pre-emptively" it is often said now — to help the markets out of those crises.

But the truth is quite different. Mr. Greenspan is fortunate indeed to be remembered as such a decisive leader, because in fact his reactions to some of those crises were quite tardy, and were seen by most market participants at the time as being too little, too late.

Let’s look at the Long Term Capital Management crisis of 1998, an event in many ways analogous to today’s situation. Then the markets were thrown into turmoil by emerging market currency devaluations and Russia’s default on its sovereign debt, much as markets have recently been rocked by defaults in subprime mortgages. As a consequence, then as now, the solvency of hedge funds and the investment banks that sponsored them were threatened.

By the time LTCM had collapsed — and had to be bailed out by a private consortium of banks brought together by the New York Fed’s William McDonough, not Mr. Greenspan — the S&P 500 had already fallen by almost 20%, and staged a modest recovery from there. Mr. Greenspan had done precisely nothing with interest rates.

The Federal Open Market Committee made a 25 basis-point rate cut the day after the LTCM bailout was announced in late September. Markets were not impressed. Credit markets remained frozen much as they have been in the current crisis, and stocks fell to new lows over the first 10 days of October.

Laurence Meyer, a Federal Reserve Board governor at the time, recalls in his 2004 book, A Term at the Fed, that "Rather than calming the markets, the small size of the rate cut raised doubts that the Fed appreciated the severity of the problem . . . Greenspan was now under attack."

In mid-October, Mr. Greenspan cut rates another 25 basis points in a surprise inter-meeting move. According to Bob Woodward in his Greenspan biography Maestro, Mr. Greenspan was reluctant to make that move but was pressured by Mr. McDonough and then Fed Vice Chairman Alice Rivlin.

By the end of 1998 there was another 25 basis-point cut at a regular FOMC meeting, the market turmoil passed and Mr. Greenspan ended up on the cover of Time as chairman of the "Committee to Save the World." That’s how he’s remembered today.

Mr. Greenspan is also remembered for cutting interest rates aggressively as the tech bubble burst in early 2001, starting on Jan. 3 with a surprise inter-meeting cut of 50 basis points. In his book, Mr. Meyer writes that Mr. Greenspan "had decided that the Fed should be seen making a deliberately anticipatory move — one that would not be viewed as a late response to a rapidly deteriorating situation."

Alan Greenspan got his wish in terms of how history would remember him, but the reality is that the economy had already rolled over. By the time Mr. Greenspan made his "anticipatory" cut, the S&P 500 had already fallen almost 16% from its highs the previous September.

And when the cut was announced, the relief in the markets was fleeting. Stocks stabilized for several weeks, but fell to new lows in mid-February. They were destined to fall nearly an additional 40% from there, despite no less than 11 more rate cuts — with even more to come after stocks bottomed in late 2002. So much for "anticipatory."

Mr. Greenspan indeed did cut rates quickly in the aftermath of the stock crash of 1987 and the terrorist attacks of September 2001. That’s because both those extraordinary and highly public events were seen by the Fed as being very likely to depress overall economic activity, not because distressed markets themselves needed to be bailed out.

To help the markets in those crises, the Fed opened its checkbook to provide the liquidity necessary for transactions to clear and credit to endure despite the chaos. That’s precisely what Mr. Bernanke has already done in the present turmoil, both through a very high volume of ordinary open market transactions and a liberalized discount-window lending policy.

In that sense, Mr. Bernanke has already acted more pre-emptively than Mr. Greenspan did in 1998, and similarly to the way Mr. Greenspan did in 1987 and September 2001. And he has done so despite the fact that, judging by the stock market’s sturdy performance through the current turmoil — now down only about 5% from all-time highs — today’s crisis is less threatening than those earlier ones.

It’s noteworthy that the enormous volume of Fed open-market operations in the fed funds markets over the last month has been completed at the current rate target of 5.25%. This suggests that no lower rate is required to meet the needs of the banking system. And the discount window has scarcely been used at all, which suggests that the system is not in quite the state of distress that has been advertised.

So why would Mr. Bernanke cut the fed funds rate, unless he became convinced that the overall economy was highly likely to be damaged by the present market turmoil? That was the call Mr. Greenspan made quickly after the 1987 crash and the 2001 attacks, and slowly in 1998 and early 2001. Where’s the evidence to support Mr. Bernanke making such a call today? Almost all the evidence is that the economy is remarkably robust, credit crisis or no credit crisis, housing slowdown or no housing slowdown.

Yes, we’ve had one disappointing jobs report. But with jobs at a level historically regarded as "full employment," must we hurry to cut rates? By historical standards, rates are already low. Since the 1970s, no easing cycle, and no recession, has ever begun when the real funds rate was as low as it is today.

Yet Mr. Bernanke remains under tremendous pressure from markets to cut rates. The prices observed in short-term fixed-income and interest-rate futures markets clearly imply that the markets expect a cut — and the balance of pundit commentary is calling for one.

If the principled case can be made that a robust economy is significantly at risk, then Mr. Bernanke should do what the markets and the pundits demand — provided that he sees a rate cut as consistent with his mission to preserve price stability.

But the idea that he must act immediately, in order to be seen as a worthy successor to the "Maestro," is unfair to Mr. Bernanke and too generous to Mr. Greenspan. The current Fed chief deserves our admiration for having acted quickly and appropriately so far, and resisted the temptation to over-react.