Thursday, February 23, 2017

Breaking: Kenilworth Takes A Pre-Tax $2.9 Billion Charge -- On HCV Prodrug Candidate Acquired From Idenix...

Ouch. Even though it is only $1.9 billion on an after tax basis, this is a profound disappointment. Coupled to the loss in California's USDC, of last summer, this acquisition looks entirely. . . "-vincible". And yes, that will leave a mark -- as there may still be additional write downs in the Idenix acquired-asset base.

More in a moment, including graphics [now done baking, at right!] -- but here is the just filed SEC Form 8-K text:

. . . .On February 17, 2017, Merck determined that it will record an intangible asset impairment charge related to the research program for MK-3682, uprifosbuvir, a nucleotide prodrug in clinical development that is being evaluated for the treatment of hepatitis C virus (HCV) infection. Uprifosbuvir was obtained in connection with the 2014 acquisition of Idenix Pharmaceuticals, Inc.

The Company determined that recent changes to the product profile, as well as changes to its expectations for pricing and the market opportunity, taken together constituted a triggering event that required the Company to evaluate the uprifosbuvir intangible asset for impairment. Utilizing market participant assumptions, and considering different scenarios, the Company concluded that its best estimate of the current fair value of the intangible asset related to uprifosbuvir was $240 million, resulting in the recognition of a pre-tax impairment charge of $2.9 billion ($1.9 billion after taxes), which will be reflected in the Company’s 2016 results. Merck’s previously reported fourth-quarter 2016 generally accepted accounting principles (GAAP) diluted earnings per share (EPS) were reduced from $0.42 to a loss of $0.22, and full-year 2016 GAAP EPS were reduced from $2.04 to $1.41, reflecting the impact of the impairment charge, partially offset by other adjustments which increased GAAP EPS for both the fourth and full year of 2016 by $0.04. The Company’s previously reported fourth quarter and full year non-GAAP EPS remain unchanged.

The Company continues to evaluate options with respect to the uprifosbuvir clinical development program and will monitor the remaining $240 million intangible asset for further impairment. . . .

Now you know. Try to slow down, and breathe a bit -- it will pass. . . . I promise it will -- smile. Onward, on a rainy, cold evening.


The Latest Motions -- In Mr. Shkreli's Felony Fraud Trial In Brooklyn -- Are Increasingly... Salacious.

And so, ported over from another of my properties, as of one week ago -- here is a searing preview of Mr. Greebel's evidence (Mr. Shkreli's former corporate counsel, while at Retrophin) against Mr. Shkreli's defense of "advice of counsel":

A pair of dueling motions to sever were filed last Friday afternoon.

In truth, they aren't dueling at all -- as to the propriety of severance. Both argue it is clearly appropriate. And (as I've long-predicted) the able Judge Matsumoto in Brooklyn will grant the severance.

The motions are widely divergent, however, on the critical issue of which of the defendants was the "mastermind" -- of the allegedly fraudulent schemes that led to their nearly simultaneous arrests, and eight count felony indictments in Manhattan, in December of 2015. For pure salacious details, I recommend reading Mr. Greebel's first -- it is a weighty 44 page PDF file.

At the bottom, I've linked Mr. Shkreli's -- it makes for far less interesting reading. [And separately, I should note that Mr. Shkreli harshly criticized Cooley and Akin Gump (without providing any evidence as to why he thinks poorly of them), in his Facebook posts of about ten days ago. Cooley of course, represents Retrophin. Do your own math.]

In any event, here's a bit -- from Mr. Greebel's (there is much salacious detail in the filing I am not repeating here -- read it yourselves):

. . . .In light of the mutually antagonistic defenses of Mr. Greebel and Mr. Shkreli, there will be no realistic way for a jury to find both defendants not guilty. In order to believe Mr. Greebel’s core defense, the jury will have to disbelieve Mr. Shkreli’s core defense; and, in order to believe Mr. Shkreli’s core defense, the jury will have to disbelieve Mr. Greebel’s core defense. The opposing defenses of Mr. Greebel and Mr. Shkreli go far beyond mere “finger pointing.” Mr. Greebel’s defenses require him to offer evidence at trial of Mr. Shkreli’s lies, material omissions, and deception. In a joint trial, that will turn Mr. Greebel’s counsel into another prosecutor of Mr. Shkreli. . . .

Mr. Greebel will be offering into evidence certain post-arrest statements made by Mr. Shkreli that exculpate Mr. Greebel, but inculpate Mr. Shkreli. And the government and Mr. Shkreli will likely attempt to keep them out of evidence altogether. Moreover, Mr. Greebel will likely be moving to preclude the admission of certain testimonial statements of Mr. Shkreli to law enforcement and the SEC that would not be admissible as evidence in a separate trial against Mr. Greebel. . . .

As demonstrated below, Mr. Shkreli’s post-arrest conduct has been nothing short of bizarre and, in the absence of a severance, will present a serious risk of depriving Mr. Greebel of a fair trial. According to his own stated intentions, as corroborated by his well-publicized post-arrest actions, Mr. Shkreli is purposely creating a circus-like atmosphere pursuant to an improper and prejudicial plan to disrupt the trial and achieve jury nullification along the lines of, in Mr. Shkreli’s own words, “OJ Simpson [and] Casey Anthony.” As the trial approaches and gets underway, and both the government and Mr. Greebel attack Mr. Shkreli’s story, it is a near certainty that Mr. Shkreli will take actions and make statements to destroy the integrity of the court proceedings to detract from the applicable evidence and the law. . . .

Mr. Greebel’s core defense will be based, in substantial part, on the following arguments that are antithetical to Mr. Shkreli’s defense: (1) Mr. Shkreli lied to Mr. Greebel and other attorneys at Katten Muchin; (2) Mr. Shkreli failed to disclose material information to Mr. Greebel and other attorneys at Katten Muchin; (3) Mr. Shkreli misrepresented on multiple occasions to third-parties that Mr. Greebel had offered or provided certain advice when in fact Mr. Greebel provided the opposite advice; (4) Mr. Shkreli misrepresented to others that he had obtained certain legal advice from Mr. Greebel when, in fact, Mr. Shkreli had not conferred with Mr. Greebel at all; (5) Mr. Shkreli deceived Mr. Greebel and other attorneys at Katten Muchin and misused them as pawns in fraudulent schemes unbeknownst to them; and (6) Mr. Shkreli has a long-term, pattern and practice of blaming others, including Mr. Greebel, for his own misconduct. . . ."

Charming. I do not know -- and cannot discern -- whether Mr. Greebel acted in a culpable manner here; I will await a jury decision on that score -- but I will now say that Mr. Greebel's legal team is almost certainly talking about a plea deal, from time to time -- with the AUSAs. That would be a death-knell to Mr. Shkreli's chances of avoiding prison time, in my experienced opinion.

Here is Martin's motion to sever -- some 23 pages.

Enjoy. Do read both -- for a full picture. Personally, I think it says as much about the counsel, as it does about the one counseled. I think snap reactions often belie deeper wounds. . . . Onward. Mr. Shkreli will go to trial (alone) in late June, and he will see time in a federal prison -- mark my words.


Wednesday, February 22, 2017

A Potential Human Anti-Viral Science Coup: Zika Vaccine Candidate Now In Human Trials...

This indeed is another hopeful sign -- a public/private collaboration (with US and UK partners, as well) has resulted in the development of a broad range vaccine candidate for mosquito-born viral diseases -- including, of course Zika.

As of yesterday, that vaccine candidate is in human trials in Bethesda, Maryland -- in a study being run by the US NIH. Here's a bit, from Medical Xpress:

. . . .The National Institute of Allergy and Infectious Diseases (NIAID), part of the National Institutes of Health (NIH), has launched a Phase 1 clinical trial to test an investigational vaccine intended to provide broad protection against a range of mosquito-transmitted diseases, such as Zika, malaria, West Nile fever and dengue fever, and to hinder the ability of mosquitoes to transmit such infections.

The study, which is being conducted at the NIH Clinical Center in Bethesda, Maryland, will examine the experimental vaccine's safety and ability to generate an immune response. . . .

I wish you all -- of good will -- nothing but the best, in all things. Do treat others as you would wish to be treated. . . smile. With this candidate, we are all our brothers' and sisters' keepers. . . . regardless of geopolitical borders.


BREAKING: Three (Of Seven) Likely Habitable Worlds -- In One Distant Solar System Called Trappist 1 -- Just Uncovered, Per NASA...

[I guess that graphic should refer to the plural case. Smile -- no time to fix it, this day. It will stay as is until late tonight.] The assembled astrophysicists are saying it is no longer "if" -- but when -- we will prove a liquid water-world (or several of them!), in the habitable zone, in a single faraway system.

In fact, later in the webcast, it was revealed that all seven could potentially harbor life. Even so, three look highly likely -- and when Webb comes online, we may be able to detect the spectral signatures of an organics-ladened haze around one or more. That would be. . . jaw-slacking.

NASA webcast has concluded is underway now. . . .

. . . .More soon late tonight, but the so-called Trappist Seven are warm rocky worlds, that orbit a sun less bright than ours -- and they are only 39 light years away from us, in the constellation we call Aquarius. . . .

Be excellent to one another -- far and near.


Tuesday, February 21, 2017

Told Ya' So! Petitioners In 17-CV-480 (USDC, NYED) Get Their Nationwide "Miranda-Style" Disclosure Order -- From Federal Courts In Brooklyn, Tonight...

Well -- that didn't take very long (just as I said yesterday morning). On a day that saw Mr. Trump begin to implement new federal rules related to immigration and deportation (entirely separate from these Muslim banning, and now, court enjoined executive orders) -- the able US District Court Judge Amon, sitting in Brooklyn tonight ordered the Trump Administration to furnish a complete list of those held under the orders by this Thursday at 5 PM EST, latest.

This, my friends, is how the system of ordered liberty works. Here's tonight's concluding paragraph, from the order:

. . . .Accordingly, Respondents are ordered to provide Petitioners, by February 23, 2017 at 5:00 PM, with a list of all individuals with refugee applications approved by U.S. Citizenship and Immigration Services as part of the U.S. Refugee Admissions Program, holders of valid immigrant and non-immigrant visas, and other individuals from Iraq, Syria, Iran, Sudan, Libya, Somalia, and Yemen legally authorized to enter the United States (i.e. putative class members) who, at any time during the period from 9:37 PM on January 28, 2017 until 11:59 PM on January 29, 2017, were being held, including being processed, by U.S. Customs and Border Protection pursuant to the EO. Ordered by Judge Carol Bagley Amon on 2/21/2017. . . .

I would expect entirely new federal lawsuits will be filed in the next day or two (by the ACLU and FAIR, among others), on those other new rule changes -- as at least to my eye, they seem infirm from a constitutional "due process" point of view. People already here in America -- even those who the government alleges are undocumented, entirely -- have earned some notice and opportunity to be heard rights -- under our Fourteenth Amendment. That is, in the words of the Supremes -- to all of these people, "at least some process is. . . due."

Mr. Trump's changes announced today look to fall well-short of that standard, to my experienced eye. And so. . . "see you in court, Mr. Trump" (again!). . . I am all smiles tonight. . . despite his venial attacks on people with little clout.


Fast Fred Hassan Protégé Bob Bertolini Added To BMS Board -- In Deal With Activist Investor

All the longer term readers will recall the name. He was CFO of legacy Schering-Plough, until 2010 -- pre-closing of the bust-up (by Merck). Then he was CFO at Bausch + Lomb. But in between, he was added to the boards of some hedge-fund hectored pharma companies. The graphic at right conveys his "travelling salesman's" pedigree -- at least in part. But do know that Fast Fred chose him for his pliability, in my estimation. The more things change, the more they stay. . . the same, it seems.

Here is the early morning bit, from Reuters:

. . . .Bristol-Myers Squibb Co said on Tuesday it appointed three directors to its board in a deal with activist investor Jana Partners LLC.

Bob Bertolini, former Bausch & Lomb CFO, Matthew Emmens, former Vertex Pharmaceuticals Inc CEO, and Theodore Samuels, who is on the boards of Perrigo and, have been added to the board.

Bristol-Myers, which also announced a $2 billion accelerated share repurchase program, said the appointments would temporarily increase the size of the board to 14. . . .

Net, net -- the stock buy-back at least will be good for longer term BMS stockholders. Now you know. Onward, on a eerily gray 65 degree Chicago day. . . smiling just the same, for the world is chock full of new science wonders -- and celestial joys. . . .


Monday, February 20, 2017

More News -- On Recently-Uncovered Exo-Planets -- At NASA, Come 1 PM EST Wednesday...

I will tune in -- for the NASA-cast Wednesday afternoon results -- due to be published in a new Nature scholarly paper. . . but those few media folks hyping it as new evidence of extra-terrestrial life are likely. . . off the mark.

Here is the NASA release, from earlier today:

. . . .NASA will hold a news conference at 1 p.m. EST Wednesday, Feb. 22, to present new findings on planets that orbit stars other than our sun, known as exoplanets. The event will air live on NASA Television and the agency's website.

Details of these findings are embargoed by the journal Nature until 1 p.m.

Limited seating is available in the NASA TV studio for media who would like to attend in person at the agency’s Headquarters at 300 E Street SW in Washington. Media unable to attend in person may ask questions by telephone. To attend in person or participate by phone, media must send an email with their name, affiliation and telephone number to Dwayne Brown at by noon Feb. 22.

Media and the public also may ask questions during the briefing on Twitter using the hashtag #askNASA.

The briefing participants are:

· Thomas Zurbuchen, associate administrator of the Science Mission Directorate at NASA Headquarters in Washington

· Michael Gillon, astronomer at the University of Liege in Belgium

· Sean Carey, manager of NASA's Spitzer Science Center at Caltech/IPAC, Pasadena, California

· Nikole Lewis, astronomer at the Space Telescope Science Institute in Baltimore

· Sara Seager, professor of planetary science and physics at Massachusetts Institute of Technology, Cambridge

A Reddit AMA (Ask Me Anything) about exoplanets will be held following the briefing at 3 p.m. with scientists available to answer questions in English and Spanish. . . .

Now you know -- and I should note that Dr. Seager is a renown expert in, among other things, how to identify bio signatures in exoplanet atmospheres. So. . . who is out there, oh you twisty copper-colored denizens of the Cosmos? Who indeed? Smile. . . . [Ahem. It is highly unlikely that life has been observed.]


Meanwhile, In Brooklyn, This Morning... Of Miranda-Style Rights...

The plaintiffs have requested that the federal trial level courts in Brooklyn order Mr. Trump to both inform all aggrieved parties of their US constitutional, statutory and regulatory rights -- and provide the lawyers for plaintiffs with contact details for each person refused entry since the date of the executive order -- so that the status of each of those persons may be evaluated, regardless of where they have been sent off to, by Mr. Trump's agents. [Sort of a Miranda warning, for all affected persons, if you will.]

I predict the plaintiffs will win the vast bulk of this motion. And, here is the full filing, from just this morning -- and a bit:

. . . .[T]here is significant evidence of systemic coercion, and many if not most or nearly all of the individuals who were excluded want at least the opportunity to return — as evident by the many individuals who have already returned despite the ordeal they suffered during their initial exclusion. See Dkt. 53-1 at 15-17 (describing government’s coercive tactics outlined in declarations of removed individuals).

Petitioners obviously do not argue that any class member must come back; but the government can and should facilitate the identification of class members and their return if they wish. . . .

For the balance of the day, since I am off-grid with a client -- I've revised my masthead to reflect what science looks like, on "a day without immigrants". President Washington certainly would agree -- our 240 years of shared history is. . . almost to a person, immigrants' history. Here endeth the sermon.


Sunday, February 19, 2017

As 45 Readies Yet Another Meaningless, Show-Boating, Impotent Anti-Immigrant Order...

Please watch this. Please do -- it is very short -- and makes a cogent, and powerfully poignant counterpoint:

. . . .Diane Von Furstenberg: I am an immigrant, and America has been very good to me. . . .

We Americans are better than this, Mr. Trump -- we all are. Stop with all the hateful (but ultimately impotent) show-boating -- this new one, too will be stricken in the courts. Do mark my words. And I bid all of good will -- all good Americans, documented and not so -- a good night -- all us of the huddled masses -- whose progenitors yearned to breathe free. . . .


Saturday, February 18, 2017

Juno Mission Update: Orbiter To Stay In Safer, More Distant Orbital Loop

To be clear -- NASA will complete all the expected science at Jupiter, but will do so over a loner time frame.

Due to the valve glitch we discussed earlier, it will be safer for the spacecraft not to trim its orbit -- in short, not to fire its engines -- until the final dip, some years from now.

There appears to be some real concern about funding for the later stages of the mission -- under the new Administration -- since the longer orbital period will entail a multi-years-longer ground-based crew allocation. So some of the later passes may become mission extender budget items. Here's the full release -- and a bit -- form the agency that gave us Hidden Figures:

. . . .NASA’s Juno mission to Jupiter, which has been in orbit around the gas giant since July 4, 2016, will remain in its current 53-day orbit for the remainder of the mission. This will allow Juno to accomplish its science goals, while avoiding the risk of a previously-planned engine firing that would have reduced the spacecraft’s orbital period to 14 days.

“Juno is healthy, its science instruments are fully operational, and the data and images we’ve received are nothing short of amazing,” said Thomas Zurbuchen, associate administrator for NASA’s Science Mission Directorate in Washington. “The decision to forego the burn is the right thing to do – preserving a valuable asset so that Juno can continue its exciting journey of discovery.”

Juno has successfully orbited Jupiter four times since arriving at the giant planet, with the most recent orbit completed on Feb. 2. Its next close flyby of Jupiter will be March 27. . . .

Smiling, as I too twist through a clear, bright and copper colored celestial-flight focused morning -- preparing a huge winter bar-b-que. . . [but of course, there is no such thing as climate change. . . on a 70 degree February Saturday in Chicago. Wow. Just. . . wow.]


Thursday, February 16, 2017

Newly-Launched Merck Digital Arm -- Ilúm -- Looks To Reduce In-Hospital Sepsis Costs

This is technically just an unincorporated operating group within mother Merck, apparently, but the recently-launched Ilúm Health Solutions (pretentious accent on the "u" included!) does have a laudable goal.

Sepsis infections represent (on a per patient basis) the most expensive in-patient non-surgical treated condition (at $21,000 per patient estimated average) most general providers face. This is due to the more than occasionally spotty early-diagnosis, and drug treatment protocols -- which tend to vary across hospitals -- especially away from large metropolitan teaching-hospital settings.

This Ilúm group of software tools (piloted in a hospital in Metairie, Louisiana -- just northwest of New Orleans), using existing legacy hospital IT data sets -- will seek to alleviate that set of unfortunate circumstances -- by more completely standardizing anti-microbial and anti-biotic protocols, and driving compliance with follow-up monitoring of the patients -- across the entire hospital, when any likely-septic patient is admitted. Here's a bit of the release:

. . . .ILÚM Insight™ – ID leverages data within existing hospital IT systems to promote optimal decision making and appropriate use of antimicrobials through its clinical decision support (CDS) system and Command Center (an intuitive data dashboard). These solutions enable case monitoring and prioritization—on an individual and aggregate level based on disease state—and promote early recognition of infectious diseases, appropriate interventions, and adherence to evidence-based clinical pathways. They also provide automated outcomes reporting that is configured to hospital-specific initiatives to track quality program performance.

In 2015, ILÚM initiated a collaboration with East Jefferson General Hospital (EJGH), a 424-bed general medical and surgical hospital in Metairie, La., to pilot ILÚM’s CDS system with an initial focus on improving the impact of the hospital’s quality program for sepsis care improvement. Sepsis is a potentially life-threatening complication of an infection, resulting in 750,000 deaths in the United States and more than $20 billion in aggregate costs annually, with studies demonstrating that hospitals spend approximately $34,000 caring for each patient with severe sepsis. . . .

Now you know. I might also observe that this is the "software push" -- to help drive appropriate use of the Cubist-acquired (Cubicin® -- now also available in generic form) line of antibiotics, into wider use, inside providers across the nation.

Note: blog coverage will become spotty starting this evening, and lasting through the weekend, as I make airport runs around 6 PM EST. Onward.


Wednesday, February 15, 2017

Federal Propecia®/Proscar® MDL Bellwether Trials: Schedule Update

The first bellwether case -- in the first tranche of Propecia®/Proscar® trials -- in New York's Eastern District (Brooklyn) federal MDL remains on track, for a March 2018 trial date. That's the abidingly-consistent narrative line, here.

But in the intervening weeks since my last update, one more case was dismissed by the plaintiff -- and now a replacement case (called Case Z here) has been picked, as of last night. A note on nomenclature, then -- I'll endeavor to redact all case names from all my future additional reporting -- out of respect for the limited remaining privacy interests of the plaintiffs. Many names are listed in actual court pleadings and orders, but I'll strive to omit them unless absolutely required for clarity. Here's the adjusted schedule -- in amended Procedural Order 15:

. . . .On or before February 15, 2017, Merck will disclose in writing the identities of its experts as required by Fed. R. Civ. P. 26(a)(2)(A) and will serve the reports and other materials as required by Fed. R. Civ. P. 26(a)(2)(B), for [Case H], [Case D], and [Case J], including case specific reports. . . .

On or before March 15, 2017, plaintiffs will disclose rebuttals expert reports for [Case H], [Case D], and [Case J], if any. . . .

On or before May 15, 2017, plaintiffs will disclose in writing the identities of their experts as required by Fed. R. Civ. P. 26(a)(2)(A) and will serve the reports and other materials as required by Fed. R. Civ. P. 26(a)(2)(B), for [Case Z], including case specific reports. . . .

On or before June 15, 2017, Merck will disclose in writing the identities of its experts as required by Fed. R. Civ. P. 26(a)(2)(A) and will serve the reports and other materials as required by Fed. R. Civ. P. 26(a)(2)(B), for [Case Z], including case specific reports. . . .

Case Z is the newest replacement bellwether case -- and so it is on a slightly extended time track, as to getting discovery completed. Now you know, with a busy off-grid end of week looming, come Thursday night through Sunday night (and likely sublime celestial events, come Saturday night) -- fireworks, as she loved grilled Gengis Khan Mongolian ribs, and fireworks. . . for it is to be unusually warm here, that night. Smile. . . . Onward. Ever, onward.


Tuesday, February 14, 2017

Some Mixed Clinical Trials News, Out Of Kenilworth Tonight...

At least some parts/arms of the company's ongoing Alzheimer’s BACE1 inhibiting candidate studies have seen new enrollment ended -- i.e., have been halted for futility.

But Merck is continuing other parts, and announced decent results in an unrelated HIV-1 candidate Phase III study, tonight. Here's the materially important bit (the rest ought not move Kenilworth's stock much either way, on the NYSE, in the morning tomorrow):

. . . .Merck. . . announced that it will be stopping protocol 017, also known as the EPOCH study, a Phase 2/3 study evaluating verubecestat, an investigational small molecule inhibitor of the beta-site amyloid precursor protein cleaving enzyme 1 (BACE1), in people with mild-to-moderate Alzheimer’s disease (AD). Merck is stopping the study following the recommendation of the external Data Monitoring Committee (eDMC), which assessed overall benefit/risk during a recent interim safety analysis, and determined that there was "virtually no chance of finding a positive clinical effect." The eDMC noted that safety signals observed in the study "are not sufficient to warrant stopping study 017," and recommended that protocol 019, also known as APECS, which is evaluating verubecestat in people with prodromal Alzheimer’s disease, continue unchanged. Results from protocol 019 are expected in February 2019. Results from EPOCH will be analyzed and presented at an upcoming scientific meeting. . . .

Our prior November 4, 2016 (smile) backgrounder here. Now you know -- onward, for some sweet silly fun. . . .


Trivial Disclosures Dept.: Capital World Investors Upped Merck Stake Slightly In 2016 -- To 5.1 Per Cent Of All Outstandings

As the year-end large holder (north of 5 per cent) SEC reports continue to emerge -- at the EDGAR filing window, we see (via an overnight Schedule 13G) that long term holder Capital World Investors (and affiliates) upped its stake in Merck modestly during 2016, compared to declines at year end of 2013, 2014 and 2015:

. . . .Amount Owned (12/31/2016):

141,332,476 Shares (5.1%). . .

Now you know. Onward.


Monday, February 13, 2017

Just Read This Memorandum Opinion -- Top To Bottom

More good news for believers in our system of ordered liberty -- in Alexandria, Virginia tonight -- in Judge Brinkema's US District (trial level) courtroom, the following very cogent 22 page opinion (and a related order) was entered, against Mr. Trump's would-be Muslim Ban.

It is a preliminary injunction -- and so now there are. . . two. Now you know. Nothing more really need be said, though I think 45 is likely to appeal.

This is an early Valentine's present to all who believe in our First Amendment's Free Exercise Clause. In view of this opinion, Mr. Trump's appeals won't ultimately matter -- his whole initiative here. . . is now a dead letter.


[U] No Surprise Here: Mr. Trump Wants To "Stay/Stop" The Effect Of Any Preliminary Injunction, In Seattle's Federal Trial Courts...

UPDATED @ 8 PM EST -- Well as I guessed, Judge Robart has ruled against 45, again. ". . .I'm not persuaded that call for en banc review by one judge. . . ought to interfere with moving this case forward" Judge Robart ruled from the bench this afternoon -- Pacific time. So discovery will be permitted to both parties, very shortly. Though in truth, there is little more the plaintiffs need provide to the lawyers for Mr. Trump. The lawyers for the States (acting in the name of the banned people), however -- they are now allowed to ask LOTS of questions, of Mr. Trump -- and under oath, of Mr. Bannon as well, as the draftsman (likely by submitting written interrogatories). [End, updated portion.]

However, on the black letter law -- and the federal rules of civil procedure's policy of efficient decision-making at the trial court level, I think 45 will lose. Again.

The lawyers for the States of Washington and Minnesota -- the folks who essentially won, on what was characterized as a quasi-preliminary injunction in the Ninth Circuit, last week -- against the Muslim Ban taking effect anywhere in the nation, would understandably like to proceed to promptly take more discovery of the Trump administration (presumably regarding intent and motive), here.

For their part, 45's lawyers are pinning their hopes on an en banc review (though they look to be well short of the required votes for that rehearing) at the Ninth Circuit -- or so they just said. By brief.

So they would like Judge Robart to stop all proceedings in Seattle's federal District trial court. That outcome would be unusual, to say the least. The Ninth Circuit's order was clear and direct. So Judge Robart could easily order 45 to start producing the documents he relied upon, in making the executive determination that these seven countries (and no others) should have been banned. [We have seen how the reporters at the New York Times, and the Washington Post and, even more completely, my buddies at have shredded the justifications offered by Mr. Miller just yesterday on the Sunday talk shows.] The Trump team's order -- revised or otherwise -- is in deep trouble here, in my experienced opinion.] Here's a genuinely brief bit of the brief (heh!) from the plaintiffs -- filed a few minutes ago in Seattle:

. . . .The States favor expeditious proceedings in this Court. Proceeding directly to discovery, including a prompt Rule 26(f) conference by the parties, will not interfere with the case on appeal. To the contrary, it will allow this Court to consider the merits of the case in an efficient manner. Given the gravity of the States’ constitutional allegations, Defendants’ stated national security concerns, and the public interests at stake, the States respectfully submit that discovery should proceed without delay. . . .

As detailed above, the Ninth Circuit has determined that the February 3 Order operates as a preliminary injunction. In light of that conclusion, the parties should now begin discovery so that the Court may determine the merits of the States’ claims. . . .

I will update this after 8 PM EST tonight, if/when a minute order is entered from the 6 PM status hearing, before the eminently capable Judge Robart. Onward -- now, stay healthy, and feel better -- all you lil' buckaroos!

UPDATED: Valentine's Day 3 PM EST: The able Judge Robart's minute order is here -- in full -- so discovery will now commence, primarily against 45:

. . . .The court concludes that the Ninth Circuit has construed the court's TRO (Dkt. # [52]) as an appealable preliminary injunction and that further briefing or the submission of evidence concerning a preliminary injunction would not be appropriate in this court during the pendency of Defendants' appeal. However, the court ORDERS the parties to continue with other aspects of this litigation in accordance with the Federal Rules of Civil Procedure and this court's Local Civil Rules. If issues or motions subsequently arise that either party believes are inextricably bound up with the injunctive order, the court will address those motions or issues on a case-by-case basis in accordance with the case law set forth above. Finally, the court VACATES the briefing schedule set forth in its February 7, 2017, order. . . .


Sunday, February 12, 2017

Resurfacing The Infrastructure Bonds Measure -- From As Early As 2012 -- For Tax-Advantaged Repatriation Of Overseas Parked Corporate Cash...

On an otherwise quiet, luminous and clear early Sunday morning, we will remind all our readers that we long thought, and now think, this measure makes solid sense.

We have referred to this in the past as "the Colorado compromise" bill. That's one of our backgrounders on it. It is believed that if enacted, it would create a path for some of the estimated $1.8 trillion of overseas earnings to return to our shores and further stimulate our economy while ensuring high quality American jobs will be created in the process.

Specifically, then:

. . . .SEC. 966. Foreign earnings exclusion for purchase of infrastructure bonds.

(a) Exclusion. — In the case of a corporation which is a United States shareholder and for which the election under this section is in effect for the taxable year, gross income does not include an amount equal to the qualified cash dividend amount.

(b) Qualified cash dividend amount.—For purposes of this section, the term ‘qualified cash dividend amount’ means an amount of the cash dividends which are received during a taxable year by such shareholder from controlled foreign corporations equal to—

(1) the multiplier determined under section 2(d)(5) of the Partnership to Build America Act of 2015 for such shareholder, multiplied by

(2) the face amount of qualified infrastructure bonds acquired at its original issue (directly or through an underwriter) by such shareholder. . . .

Essentially a very good (but candidly -- as so many are -- imperfect) idea. Now, will 45 have the vision to support it? I am uncertain -- but Merck is approaching $82 billion in parked overseas cash, now. [Apple's euro-based horde is multiples larger than Merck's -- or Pfizer's.] So the time is ripe, after 45's meetings with big pharma -- and Mr. Frazier -- last week. Certainly repatriation was discussed.


Saturday, February 11, 2017

Up Next, Out West -- In Seattle's Federal District Courthouse -- A Busy Monday Ahead.

I think this is an exclusive -- so please credit it.

Judge Robart has asked for genuinely short briefs (heh!) from each side, on whether the Ninth Circuit decision of Thursday should be treated as having converted his court's TRO ruling into a preliminary injunction ruling, such that no additional work would be needed at the trial court level, for the able judge to promptly rule on a preliminary injunction. He's given the parties until Monday to weigh in, with an eight page limit.

. . . .MINUTE ORDER by Judge James L. Robart

At Defendants' request, the court held a telephone conference concerning the Order Regarding the State of Washington's February 9, 2017, Letter ("Order"). . . .

During the telephone conference, Defendants asked the court for additional time to respond to the court's Order. The court heard from counsel for both Plaintiffs and Defendants on this issue.

The court GRANTS Defendants' request and MODIFIES its Order as follows:

(1) Plaintiffs and Defendants shall each file a separate memorandum no later than 12:00 p.m., Pacific Standard Time ("PST") on Monday, February 13, 2017.

(2) Each side's memorandum shall discuss whether the Ninth Circuit has construed the court's temporary restraining order ("TRO") (TRO (Dkt. # [52])) as a preliminary injunction, such that additional briefing and possible evidence on a motion for preliminary injunction is no longer required in the district court, see Washington v. Trump, No. 17-35105, slip op. at 7-8, Dkt. # 134 (9th Cir. 2017) ("[W]e believe. . . that the TRO should be considered to have the qualities of a reviewable preliminary injunction."); or whether the parties should submit additional briefing and evidence in the district court concerning the issue of a preliminary injunction, see Fed. R. Civ. P. 65(b)(3).

(3) The parties shall limit the length of their memoranda to eight pages.

(4) The court RESCHEDULES the telephonic hearing previously set at 11:00 a.m., PST, on Monday, February 13, 2017 (see Order at 2), to 3:00 p.m., PST, on Monday, February 13, 2017. . . .

Now you know. My take? He is likely to enter a preliminary injunction (with nation-wide effect) by late Tuesday -- unless Mr. Trump signs a now threatened new order, on Monday. Then, the parties would almost certainly agree that this litigation is to be stayed (with the TRO intact, indefinitely -- while the challenges to 45's forthcoming new order are litigated). Now you know -- with more celestial events afoot this evening -- and a sweet baby-girl, in tow, for a sleep-over. . . . smile. . . .


Not Quite O/T: Weekend Fare -- The Infantile "Logic" Of A Sitting President Edition, On Immigration

Um. . . Nope. I can't hold my tongue. I too shall #persist. Nor shall I lay rest to my keyboard; I shall #resist.

This morning, 45 tweeted a pure non-sequitur, because he read it in the Washington Times (a far right rag -- I'll provide no link -- because there are serious problems with the rag's calculations). But let us play along -- let's pretend the claim is fully-verifiable. Even in that fake news world -- danger should not be presumed.

Mr. Trump is apparently blissfully unaware that many hundreds of thousands of regular, law-abiding people (scientists, engineers, teachers, translators and students) from these seven countries have jobs, class-room work, and families here -- and they are concerned that he will "re-ban" them all, once again -- as early as Monday. So they are coming here, in droves. There is little doubt that the vast majority are law abiding. But he resorts to the most odious and pernicious bigotry -- in his fear-mongering tweets, this morning. Here is his 140 odd characters -- of excrement:

. . . .Our legal system is broken! "77% of refugees allowed into U.S. since travel reprieve hail from seven suspect countries." (WT) SO DANGEROUS!. . . .

Mr. Trump labels entire countries of origin "suspect" now. It apparently hasn't dawned on him that statistically we each have a greater risk of being shot to death by a TODDLER, with a hand-gun, in present-day America (thanks, NRA!) -- than being killed in a foreign sourced terror attack.

So -- do bring on your shiny, newly revamped order on Monday, sir. We will see it slapped down, in the courts, as well. This is what the peoples' government -- by checks, and balances -- looks like, Mr. President.

Get used to it: now that you've openly and repeatedly articulated a prohibited motive for all/any of your "immigration" orders, the Judiciary will find against those same orders, on Constitutional grounds (Amendments One, Five, and Fourteen -- to be precise).


Friday, February 10, 2017

A New Wrinkle In The Ninth Circuit: Exclusive Content. Must Credit.

It seems one of the other able appellate jurists has requested a vote of the 29 judges be taken -- on whether to hold an en banc rehearing of the Trump stay request. [It is highly unlikely that enough "rehearing" votes can be mustered to carry that notion -- a majority of 29, or 15 or more.] Even so, the parties have been ordered tonight to submit no more than 14,000 words each, on whether the case should be reheard en banc. Wild.

. . . .THOMAS, Chief Judge and En Banc Coordinator:

A judge on this Court has made a sua sponte request that a vote be taken as to whether the order issued by the three judge motions panel on February 9, 2017, should be reconsidered en banc. A sua sponte en banc call having been made, the parties are instructed to file simultaneous briefs setting forth their respective positions on whether this matter should be reconsidered en banc. The briefs should be filed on or before 11:00 a.m., Pacific time, on Thursday, February 16. The supplemental briefs shall be filed electronically and consist of no more than 14,000 words. See General Order 5.4(c)(3). . . .

An en banc hearing would involve more than 20 judges sitting at once. Is this more sand in 45's gears? I think so. And the White House tonight is saying it may drop its Ninth Circuit appeal altogether. The RNC is saying the White House may not. Nutty, but my experienced take is that the Muslim Ban. . . is no more.