Jottings By An Employer's Lawyer

Friday, March 31, 2006

The Involuntary Family and Medical Leave Act in the 5th Circuit

What to do with a case that "defies the conventional pattern for FMLA claims?" Or maybe more to the point -- what would that be? In Willis v. Coca Cola Enterprises, Inc. (5th Cir. 3/31/06) pdf, this is what the Court faced:
Willis does not contend that she requested FMLA leave and that CCE then interfered with, restrained, or denied her rights under the Act. ... Rather, Willis asserts that she was placed on “involuntary leave” when her supervisor refused to permit her to return to work until she had gotten a medical release and then, while she was on this mandated FMLA leave, fired her for noncompliance with the leave policy of the company. To complicate matters, CCE denies that it ever placed Willis on involuntary FMLA leave, thereby forcing Willis to assert her FMLA rights from an unusual posture: at the time Willis stopped coming to work, she denied that she needed leave, but now, enmeshed in litigation, Willis asserts that she was on FMLA leave. (emphasis added)
A rather convoluted state of affairs, which caused the court to face a case of first impression in the circuit -- what constitutes involuntary FMLA leave and what are the parties’ rights and obligations pursuant to this type of leave? The short answer seems to be -- no different from a regular FMLA leave.

It is clear that the employer is the one that has the power to designate or not, and the burden is on the employee to provide sufficient information to demonstrate that there is a serious health condition. Here the employee merely told her supervisor that she was out sick, not enough to inform the employer she had a serious health condition. In the court's mind that was not enough, so even though she was on medical leave, she was not on FMLA leave.

After looking how the 6th and 10th circuits had dealt with similar issues, the Court concluded that even in the case of "involuntary leave" the employee still has the obligation to provide sufficient information to alert the employer of the serious health condition. As the Court noted:
This sharing of the informational burden will not work if employees, for the purposes of litigation, can later designate leave as FMLA qualifying without making a proper showing that, at the time they requested leave, they put their employer on notice that FMLA leave was necessary due to a serious medical condition.
Without pausing on a Friday afternoon to puzzle this one through, it sure seems that the Court's opinion took the long way round to get to the answer, which may have been why Judge Reavley concurred only in the judgment.


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Thursday, March 30, 2006

Layoffs - A Problem, Not A Solution

That's the thesis of a new book by NYT economics writer, Louis Uchitelle, The Disposable American. At least as portrayed in the review by Thomas Geoghegan, a labor lawyer and author. What is often the automatic solution to a business problem (or a lagging stock price) -- a layoff of employees -- is really a "wound in triplicate":

It hollows out companies so they can't compete. It hollows out the country by removing middle-class jobs. It hollows out the middle-class employees who are laid off and then too often drop permanently to a demeaning, low-wage way of life.

I will reserve judgment until I have read the book, but it is abundantly clear there is no lack of research materials. Just from the current 1st page of a google news search for "layoffs":
Order is suspended as layoffs continue
GM's losses, layoffs, buyouts: What next?
Layoffs, cuts in Ocean Township school budget
Layoffs coming to Saginaw School District
Mayor Mum on Rumored Layoffs
GM announces white collar layoffs
Camden warns of school layoffs
The same search makes clear it is not just an American phenomenon.

The relationship between employers and employees is in flux and if the book does nothing more than shed light on another aspect of that development, it will be worth reading.

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Monday, March 27, 2006

Nurse Practitioners & PA's More Like Nurses than Doc's Under the FLSA

Nurse Practitioners and Physician's Assistants work under the supervision of doctors and in many cases serve as the primary provider of medical services, particularly in areas that are underserved by physicians. In almost all states, including Texas, they are able to prescribe medicine.

But the question facing the 5th Circuit was whether they were "practicing medicine" as that phrase is used in § 541.3(e) of the white collar regulations. It exempts certain professions from the normal requirement for white collar employees that they be paid on a salary basis in order to be exempt. The so called "salary basis exception" is applicable to:
An employee who is the holder of a valid license or certificate permitting the practice of law or medicine or any of their branches and who is actually engaged in the practice thereof.
Ultimately the case turned on the deference to be given to the DOL's interpretation and for anyone with a case dealing with administrative deference, today's decision is an important one. Belt v. Emcare, Inc. (5th Cir. 3/27/06) [pdf].

For Emcare it has more immediate significance since it was their practice of paying PA's and Nurse Practitioners on an hourly basis that brought the issue before the Court. The Court found the DOL's position was entitled to deference, and the DOL maintained the two jobs needed to be paid on a salaried basis in order to be exempt.

My short hand summary of the case -- for purposes of the professional exemption under the FLSA, at least in the 5th Circuit, treat Nurse Practitioners and PA's like registered nurses, not doctors.


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If You Are Finding It Harder to Negotiate with the Feds

This headline might be the reason why: U.S. fails to collect billions in penalties for wrongdoing; many reasons why. The story that ran in the Austin American Statesman on Sunday was an AP piece by Martha Mendoza and Christopher Sullivan, pointing out that large fines which are often announced by federal officials often go unpaid, or are significantly reduced.

Although there are often legitimate reasons for such reductions, it seems likely that depending on how much heat is generated by this story (and of course it doesn't help that Congress returns this week from recess) some federal officials might be taking a harder negotiating stance when it comes to compliance issues.

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Sunday, March 19, 2006

Employment in the Old World - Lessons from the Brits and French

Although it is easy to remain insular in thinking about employment law related matters, there are more and more signs that is short sighted. Some stories this past week that caught my attention were a post from an interesting blog, Work-related Blogs and News by James Richards, a lecturer at a Scottish university. The post, Mothers face greater discrimination than any other group discusses several U.K. studies showing the difficulties that mothers face in obtaining employment, including a study that mothers face more discrimination than disabled people, Asian women and the elderly.

I have seen similar issues raised in the U.S. In fact, just this morning a comment was posted by Diane Danielson of the H.R. Blog supplementing my post, A Nice Turn of the Phrase - Glass Ceiling or Sticky Floor, to point out a problem that single mothers are facing -- how to deal with promotions requiring relocation that could cause custody battles.

The other ongoing story is rioting in France over a limited version of America's primary principle of employment law -- employment at will. French students are rioting over a looming law that would allow employers to discharge employees under age 26 within their first two years for no reason. Jurist has the story, Protests against new youth labor law spread across France, and makes the point that the hope of the law is to make it easer for the now protesting youth to get jobs.

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Friday, March 17, 2006

Wine Country Verdict Bad News for Sonoma County - $6.5 MDV

It is hard to beat Sonoma County as a place for relaxation and enjoyment of the wine country, but for employers -- that would appear to be another story if this week's jury verdict for a county employee is any indication. After a five week trial, followed by five days of deliberation the end result is -- Sonoma County Will Challenge $6.5 Million Verdict.

George Alberigi, a Medi-Cal eligibility case worker with the county's Human Services Department, claimed he lost his job because of his agoraphobia, which prevented him from having face to face contact with his clients. Apparently he had done his job by dealing with clients on the telephone since 1980, but when he sought a promotion in 2001 he was told it would require face to face contact. Somewhere between there and and 2003 things went off the rail and he filed suit, then subsequently retired due to his disability. How all that equals $1.5 million for lost wages and $5 million for pain and suffering is a little hard to decipher from the news reports.

Even more than most big verdicts, this one sounds as if it may have trouble standing up to further challenge, but it doesn't change the message -- juries take the treatment of employees very seriously. And although description by job title doesn't mean all that much, it is interesting to note how the plaintiff's lawyer, Stephen Murphy characterized the jury:
This wasn't a wild jury. There was a business owner, an insurance adjuster and a paralegal on the jury.
Probably not a view shared by county officials.

Update: May 15, 2006. The trial judge has shaved $4 million from the jury verdict, reducing the award to a still sizeable $2.5. Plaintiff has until this Friday to accept the lowered award or face a new trial on damages. The Court also conditionally granted a new trial finding juror misconduct on the damages. Affidavits indicated that jurors increased the award 40% for attorneys fees and 35% for taxes. The Court still has to award attorneys fees. See California Judge Slices $4 Million Off Award to Agoraphobic Worker, Daily Labor Report ($).


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Wednesday, March 15, 2006

Does Your Training Meet the Mule to a Remote Village Test?

If you are a lawyer and you don't know the name of David Maister, you should. But putting aside all his other contributions for a moment, in his recent blog post, Why Training Is Useless, he suggests the following standard to determine if your training should happen:
If the training were entirely optional and elective, and was only available in a remote village accessible only by a mule, but people still came to the training because they were saying to themselves ‘I have got to learn this – it’s going to be critical for my future’, then, and ONLY then, you will know you have timed your training well. Anything less than that, and you are putting on the training too soon.
If that test were truly applied, my guess is that many corporate training rooms would go quiet for some time to come.

Thanks for the "Know David's name" comment - it's appreciated. But it's not clear whether you agree with my standard, or think I am setting the bar too high. Do you agree or not that many corporate training rooms *should* go quiet for some time to come?
In response to David's question - I clearly agree with his standard.
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Pink Ladies Cabs - A UK Idea That Won't Translate

Although it makes imminent sense in some respects, the idea of a ladies only car service, detailed in Springwise: new business ideas for entrepreneurial minds, does not seem like it would work in the U.S. for legal reasons. The basis for the idea - "In London alone, 10 women are attacked each month after getting into an unlicensed mini-cab. No wonder that many women feel safer taking a taxi driven by a woman."

That idea translates into pink Renault taxi's driven by women for women passengers. For details (in pink of course) check out Pink Ladies. It's a members only service, but still hard for me to see how that works here, just from the employment end. If it's hard for you to see why -- substitute "white" for "women" in the first sentence or think Southwest Airlines and how successful it was with its initial "female only" flight attendants policy.

I have used Pink Ladies in London and the service is great. The driver was very nice and the cars are fantastic. I would recommend them to any woman who travels in london.
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Friday, March 10, 2006

Another MDV for the EEOC - Florida Sexual Harassment Case

Thee EEOC press release, Jury Orders Associated Security to Pay $1.34 Million for Sexual Harassment and Retaliation, gives the basics of the latest MDV following a two day jury trial in Tallahassee.

This time it is for what the EEOC describes as "egregious acts of verbal and physical conduct on the part of one of the company's owners." Plus there was the added attempt at a cover up. More specifically:
The harassment included the company’s owner groping one of the women’s breasts; requesting sex in exchange for money; inviting the women for overnight stays; and frequently requesting oral sex. The EEOC asserted that the women repeatedly rebuffed the owner’s sexually offensive conduct and complained directly to the co-owner of the company; however, the corporate defendant failed to implement corrective action. Further, one of the female victims was the company’s former human resources officer. She testified that the company owner tried to cover up the illegal conduct by ordering her to falsify the personnel records of the claimants who had filed sexual harassment charges with the EEOC.
Not hard to see what made the jury mad.

The verdict is for four women and included $300,000 punitive damage awards for each. That is an interesting amount since it is the maximum allowed for compensatory and punitive damages for companies with 500 or more employees. Under the statute juries are not supposed to be told of the damage caps. Also it appears this may have been a smaller employer which would mean a lower cap. Which makes me think that someone on the jury may have been knowledgeable at least to a certain degree about Title VII, or perhaps it is just a coincidence, or is what the EEOC lawyer asked for.


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An Austin Welcome to SXSW - Music, Film and BLOGGING

The SXSW flood has already started as the coffee shop across the street from my office was packed with folks wearing badges reflecting their registration to one or more aspects of this year's conference. Although originally based on music and film, for a number of years it has had an active interactive segment as well, which in the last two or three years has been heavily (although certainly not exclusively) tilted toward the blogging world. You can get a feel for the conference from the CNET story, Techies get set for Austin's South by Southwest, or go to the conference website itself.

Although Jottings may well be one of the longer continuous running blogs (this July will make 4 years) given the relatively narrow niche of employment law it is certainly not one that features prominently in the blogosphere. Still a welcome to all my fellow travelers in this world. Enjoy your stay.

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Rolling Back the Clock? Not Going to Happen

One of my favorite websites, the aptly titled, has an interesting post about one of more recent attempts to take advantage of the FLSA, Arise, ye prisoners of high-paid brokerage jobs, which details efforts of well compensated stock brokers to pick up a little more spare change by claiming that they were improperly classified as exempt under the wage and hour law, and so should be paid overtime.

The post ends with the plaintive request:
Could we please, please get Congress to revisit the antediluvian FLSA and start preparing to repeal parts of it that make no sense today, or never made sense in the first place?
That thought, and thoughts about other statutes that really don't work well has often crossed my mind. My conclusion -- unlikely. In the 30 years I have been doing this, I have yet to see an employment statute rolled back by Congressional action. Given the nature of modern day politics, I don't think that is going to change.


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A Nice Turn of the Phrase - Glass Ceiling or Sticky Floor

That is the clever title of an interesting article in the Washington Business Journal, Glass ceiling or sticky floor? The real reason women don't make it. The author, Rebecca Shambaugh a leadership and organizational development consultant, suggests that sometimes it is barriers women themselves create that keep them from moving up in the business world. She intends to expound on some of those in continuing columns, but in the first wonders why women who are so good at relationships, don't work harder at building strategic relationships.

A contrarian viewpoint to be sure, but perhaps not to be totally discounted.

A hat tip to Diane Danielson at the HR Blog for the pointer.

Thanks for the "hat tip!" Love to spotlight different ideas (and great turns of phrases). I know Rebecca personally and she raises some good (and sometimes contrarian) points. The following was an additional "sticky floor" issue I pointed out to her in a recent email.

"I did want to add one more sticky floor issue - something I've personally run up against (twice) -- which is the inability for single mothers to relocate for a better job, without having to give up custody of their children. The courts are swinging dramatically in favor of father's rights (which I think is not a bad thing if the father really is involved in the child's life), but with the globalization of companies, many women have had to turn down major promotions for fear of losing custody of their kids (sort of a modern-day Sophie's Choice).
Even if they did win the right to relocate, the legal battle can take up to a year (and cost over $60,000), which deters many women from fighting it. This is going to continue to affect women's ability to take promotions and continue to maintain the gender gap.

I don't have a solution for it and the Father's Rights groups are much more organized and well-funded than women's groups - so I think this is one sticky floor issue that will remain for women with children."
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Wednesday, March 08, 2006

New Weapon Against Departing (and Deleting) Employees

The 7th Circuit today recognizes a federal cause of action against an employee who deletes information from his laptop computer AND makes the deletion undetectable by use of a "secure erasure" program. International Airport Centers, LLC v. Citrin (7th Cir. 3/8/06) [pdf].

The employee had been hired to help his employer identify properties which it might want to acquire. After deciding to go into business for himself (in violation of his employment agreement), he deleted data from his company issued laptop, including both data that the company did not have and data which would have shown the improper conduct he engaged in. He made sure the evidence could not be recovered by loading an erasure program which by writing over the deleted files prevented recovery of the missing data.

The act of loading the erasure program, whether by manual disk or via the internet, was his downfall. Judge Posner finds that act constitutes a "transmission" as defined under the Computer Fraud and Abuse Act, 18 U.S.C. § 1030. More particularly, that section of the Act designed to prevent those who would transmit viruses which damage computers. Although it takes more parsing of the statute to get there, the bottom line is the Court reinstated the employer's suit, reversing the trial court which had found no "transmission" and thus no cause of action.

Suits between employers and departing employees are every day events in almost every jurisdiction, and in today's age of computers, it would be the rare case where at least the possibility for such a secure erasure was not present. My guess is that after today, it is an issue that will gather much more attention.

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Popping the Golden Parachute

Seems to be the latest idea. The NYT story, Lawsuit Contests Pay Package Hewlett Gave to Former Chief, describes a suit filed by two union pension funds challenging the severance package given to former HP CEO Carly Fiorina. This suit may have more foundation as concerns over an earlier severance package, $17 million to Michael Capellas for his seven month tenure as President, led to a shareholder approved policy to limit future severance packages.

This is not the first, nor likely to be the last such suit. Disney shareholders failed in their attempt, but the firm bringing this action is said to be making a specialty of such claims. According to the story:
Grant & Eisenhofer, based in Wilmington, Del., is making executive compensation lawsuits its specialty. The law firm said Siebel Systems had agreed to cancel options worth more than $60 million after the firm filed a lawsuit. The lawyers also said that as part of a settlement, some officers of Lone Star Steakhouse and Saloon agreed to changes in the pricing of their options. The firm said it had cases pending against Cisco Systems, Tyson Foods and the American International Group.
Another manifestation of what seems to be growing unhappiness with oversized executive compensation and perks.

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Tuesday, March 07, 2006

Blogging In the Workplace -- And the Picketline

It was just a matter of time before there was an intersection between blogging and a strike. Thanks to Professor Paul Secunda at the Workplace Prof Blog for his link to Walking The Line, a blog being kept by John Gozzi, a Sikorsky worker, who has been on strike since February 20th. According to a story in the Connecticut Post, which is hosting the blog, the strike came after:
Members of Teamsters Local 1150 voted 2,145-1,019 to reject a new three-year contract that would have given them annual 3.5 percent wage increases and a $2,000 ratification bonus, but would have forced them to pay more for health insurance coverage.
The blog comes replete with picket line pictures. Although just receiving his first strike check of $232, considerably less than he made while working, Mr. Gozzi has not lost his sense of humor:
Today, an attractive lady worked the crowd, a silver dollied tray with brownies in one hand, and flyers in the other. Not from Annie's Edibles but for a "debt-consolidation" company. Entrepreneurship at its best — or worst.
Check it out for an unusual window into a world that most have very little experience with, including the interaction with those who have made the Wall of Shame, the 26 (to date) fellow workers who have crossed the picket line. For more dialogue among the workers be sure and check out the comments.

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First There Were MDV's, Then There Were MMDV's

A little behind in blogging on some MDV (million dollar verdict) cases, so probably just as good to catch up with a couple of multi-million dollar verdicts:

  • The Kansas City Star has the first report, Jury awards Wal-Mart worker $13.9 million, from a case tried last month. Roslyn Campbell was a cashier who found herself arrested by an off duty police officer working for Wal-Mart after an encounter with an angry customer. Two amazing things about the award - First, it was the second million dollar verdict that attorney Kirk Holman received from a Kansas City jury in the last two months. See Jury Awards $6.8 million in harasssment case. Secondly, Ms. Campbell still works at the same Wal-Mart where the incident took place, although now she works as a telephone operator in the back of the store.

  • A Tuscaloosa, Alabama jury last week found that managers of Dollar General were not properly classified under the wage and hour law. The Charlotte Observer tells the story, Family Dollar plans appeal, Court tells company to pay $19.1 million in damages to employees. The case involved 1,400 managers.

Clearly, employment litigation remains a serious business.


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Monday, March 06, 2006

The Employment Claim As a Missing Asset in Bankruptcy - A Judicial Solution

Although not a pure employment law case, the fact pattern faced by the 7th Circuit in Bisek v. Soo Line Railroad (7th Cir. 3/6/06) [pdf], comes up on a recurring basis. Bisek had a FELA claim against his former employer. The employer had offered to settle for $62,000, but that settlement had not occurred. Before settling, Bisek filed a Chapter 7 bankruptcy, but failed to list the FELA claim as an asset.

Although the legal maneuvers are somewhat more complicated, the bottom line question presented to the Court was what should happen to Bisek's cause of action. The district court found Bisek was estopped from pursuing the claim against the employer. Judge Easterbrook was not unsympathetic to what the trial court was attempting to do -- bar the plaintiff from taking advantage of his misrepresentation. Unfortunately, that penalizes the creditors as well as the employee, a result that can be avoided by having the claim pursued by the bankruptcy estate.

To accomplish the lower court's purpose of preventing bankruptcy fraud, Judge Easterbrook's recommended course is much more direct and, I would wager, more likely to assure compliance:
Instead of vaporizing assets that could be used for the creditors’ benefit, district judges should discourage bankruptcy fraud by revoking the debtors’ discharges and referring them to the United States Attorney for potential criminal prosecution. [emphasis added]
If I were in the 7th Circuit, I would consider myself warned.

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Sunday, March 05, 2006

Immigration - Politics v. Pocketbook

Immigration is a hot button issue, with the most vocal being those who want much stricter enforcement. That seems to be where the low hanging political fruit is. On the other side of the debate are employers who are dependent on immigrants for the continued operations of their businesses. A definite pocket book issue. The NYT's story, The Search for Illegal Immigrants Stops at the Workplace, gives some background.

This may be the next area where we see more "criminalization" of business behavior. Although certainly there are times when that may be appropriate, it should be a last resort.

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Friday, March 03, 2006

Not Just Another Burden of Proof Case - This One Is For Disparate Impact

The issue of the allocation of burden of proof in employment discrimination cases has received considerable judicial attention, but most of it has been in disparate treatment cases. Yesterday, the 5th Circuit took on the issue in a disparate impact case. The neutral practice in this case (somewhat reminiscent of the underlying issue in the first disparate impact case, Griggs v. Duke Power) was a written test for storekeeper personnel. The real issue was not the the validity of the test, the Clerical Aptitude Battery, produced by the Edison Electronic Institute, since plaintiffs did not challenge its validity.

What was challenged was the company's raising of the cut-off score from 150 to 180, which both parties (and the Court) agreed resulted in a disparate impact on African American applicants for the positions. The company then introduced evidence of business necessity, which both the district court and 5th Circuit found was met by the following:
MP&L's expert demonstrated that an applicant with a score of 180 on the CAB has almost a 50% chance of developing into an above-average worker, and only a 31% chance of winding up in the bottom third of all workers. On the other hand, an applicant scoring 150 on the CAB is equally likely (at 39%) to develop into an above-average employee or to wind upin thee bottom third of all employees.
The dispute came next -- who had the burden of showing that there was no acceptable alternative to the cut-off point chosen by the company.

That requirement is contained in the revised version of Title VII passed in 1991 in response to the Supreme Court's decision in Ward's Cove. The revised language sets out the allocation of the burden of proof in this manner. An unlawful employment practice based on disparate impact is established when:
(i) a complaining party demonstrates that a respondent uses a particular employment practice that causes a disparate impact on the basis of race, color, religion, sex, or national origin and the respondent fails to demonstrate that the challenged practice is job related . . . and consistent with business necessity; or (ii) the complaining party makes . . . [a] demonstration . . . [of an acceptable] alternative employment practice and the respondent refuses to adopt such alternative employment practice.
Since there was no evidence of an alternative, the answer to the question -- who had the burden -- was outcome determinative.

The district court ruled for the plaintiffs, placing the burden on the defendant. The 5th Circuit reverses and renders, holding that once the defendant has established a business necessity, it is the plaintiff's burden to establish an acceptable alternative practice. IBEW v. Mississippi Power & Light (5th Cir. 3/2/06) [pdf]. Noting the relative lack of attention to this issue, the Court found one other Circuit had held exactly the opposite, 13 years ago. Bradley v. Pizzaco of Neb., Inc., 7 F.3d 79 (8th Cir. 1993). But if you are counting, and the 5th Circuit was, two other Circuits, the 3rd and 11th are on its side in two decisions also decided in the 1990's.

Frequently circuit splits on key issues like the allocation of the burden of proof would be expected to reach the Supreme Court, and this seems to be one of those issues. Maybe this case. If not, given the relative dearth of such cases that are filed it may be awhile. And even when cases go to trial they seem to go at a snail's pace. Here the trial was in 1999 but the district court's opinion did not come till five years later, a lapse the Court noted neither party could explain and which it found "totally unacceptable.

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