Commercial Law

The Supreme Court has sided with former Enron CEO Jeffrey Skilling in limiting the use of a federal fraud law that has been a favorite of white-collar crime prosecutors.

In last month's newsletter, we looked at the case of Rodriguez v. Rodriguez, in which the Appellate Division, Second Department, correctly found Supreme Court had erred by distributing the value of a service business and awarding spousal support from the income stream from that business, amounting to impermissible "double dipping." A month later, a different panel of the Second Department came to the opposite conclusion, throwing the issue into confusion.

In divorce, it is sometimes necessary to value shares of a closely held corporation. But there are stocks in privately held companies throughout New York whose shares are not traded on the NYSE or NASDAQ. These companies often have only a handful of shareholders, many of whom are family members or close friends.

A roundup of recent developments.

A recent new statute in New York provided for automatic temporary restraining orders against assets commencing with the filing and service of divorce papers. A number of other states have enacted, or tried to enact, such legislative provisions. However, there are serious constitutional issues that should be addressed.

On Feb. 2 of this year, the Supreme Court of New Jersey held that a foreign manufacturer of an industrial recycling machine is subject to New Jersey's long-arm jurisdiction under the stream-of-commerce theory. This has broad implications.

On April 1, the Third Circuit upheld a June 2009 decision by U.S. District Judge Thomas N. O'Neill Jr. that rejected claims by a mother and her daughter who suffers from Fragile X syndrome, a mutation known to cause a group of serious maladies.

Last month, we discussed the fact that a defendant should be permitted to offer evidence that the plaintiff's injuries could have occurred in the absence of negligence. Conversely, the defendant should not be permitted to offer evidence that might lead a jury to improperly infer that the mere fact that a complication is a known risk of the procedure is evidence that the defendant was not negligent in causing that complication. The discussion concludes herein.