TheFlyonTheWall: A Judicial Paradox?

January 2012

Lawyers crave structure. Give them a cause of action that has several well-defined elements and you can keep them occupied for days on end, arguing about each prong. If you number the elements so they can converse in code, so much the better. But a legal theory with obscure architecture gives most of them conniptions. If you are one of "those" lawyers, you probably don’t like the Second Circuit decision in Barclay's Capital, Inc. v, Inc., 650 F.3d 876 (2d Cir. 2011). Addressing the "hot news misappropriation" tort spawned by International News Service v. Associated Press, 248 U.S. 215 (1918), the court rejected a claim by several investment banks that an online news service was tortiously misappropriating the plaintiffs' stock buy and sell recommendations, which were shared on a limited basis with preferred clients, by republishing them before the banks were able to reap the economic benefit of those recommendations. Along the way, the court "held" that the five-part test for hot news misappropriation articulated in National Basketball Association v. Motorola, Inc., 105 F. 3d 841 (2d Cir. 1997), was actually dictum. The quotation marks in the previous sentence are used advisedly.

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