Although I once delivered a lecture on the argument that Administrative Patent Judges were improperly appointed under the Constitution, like most lawyers my practice rarely touches on Constitutional issues.  But a recent decision of the D.C. Circuit Court of Appeals striking down President Obama's recess appointments because--in the Court's view--the Senate was not in "Recess" has the potential to retroactively invalidate thousands of actions made by U.S. government agencies.  A brief background: while certain Presidential appointments must be confirmed by the Senate, the Constitution provides that the President may make temporary appointments to those positions without Senate confirmation when the Senate is in "Recess."  The argument in this case focused on whether Senate was or was not in "Recess" when President Obama made recess appointments to the National Relations Labor Board in 2012.

What is even more interesting (as pointed out here by John Elwood at The Volokh Conspiracy) is that the D.C. Circuit went on to state in a 2-1 opinion that the recess appointment power is available to the President only if the vacancies in question actually occurred during a recess of the Senate.  This appears to go against almost 200 years of practice as Presidents have made many recess appointments for vacancies that occurred while the Senate was not in recess.  All of a sudden, this arcane dispute between the President and the Congress on the meaning of the word "Recess" calls into question years of government decisions including the recent mortgage rules issues by the Consumer Financial Protection Bureau.

The Supreme Court will likely take this case and give us the last word on this.  Stay tuned!

Limited Liability Companies (LLCs) are a very popular business organization that provide the owners with the advantages of corporate-type limited liability, partnership tax treatment and flexibility in organization.  Every state has a law that allows for the formation of LLCs and while the overall principles tend to be similar, the details vary from state to state.

Last year, my neighboring state of New Jersey became the first state on the East Cost to adopt Revised Uniform Limited Liability Company Act, a model statute published by the The National Conference of Commissioners on Uniform State Laws.  The Revised LLC Act will apply immediately to any LLCs formed in New Jersey on or after March 18, 2013, and will apply to all existing LLCs in New Jersey beginning on April 1, 2014.  The Revised LLC Act has also been adopted in California, District of Columbia, Idaho, Iowa, Nebraska, Utah and Wyoming.

The Revised LLC Act contains a number of substantive innovations concerning the operating agreement, including:

• better delineating the extent to which the operating agreement can define, alter, or even eliminate aspects of fiduciary duty;
• expressly authorizing the operating agreement to relieve members and managers from liability for money damages arising from breach of duty, subject to specific limitations; and
• stating specific rules for applying the statutory phrase “manifestly unreasonable” and thereby providing clear guidance for courts considering whether to invalidate operating agreement provisions that address fiduciary duty and other sensitive matters.

Whatever the underlying law, negotiating and drafting a well-written LLC operating agreement is necessary to properly define the rights and duties of the members and managers to each other and the LLC.

Knowing what kind of IP to obtain is crucial to protecting and profiting from ideas. Last week, I watched the extremely enjoyable film Silly Little Game part of ESPN's 30 for 30 documentary series. The film details the beginning of the modern fantasy league, now a $4 billion industry. In the 1980s, a group of writers and academics met at La Rotisserie Francaise in New York City to form a fantasy baseball league called The Rotisserie League.

About 40 minutes into the film, the original creators of Rotisserie League lament that they never shared in the great financial success that fantasy sports has become. It seems their focus was on the name Rotisserie League and not the idea behind it.  They sent many "cease and desist" letters to others who were using the Rotisserie League name but the copycats eventually figured out that all they had to do was call their version "fantasy" baseball. While hindsight is 20:20, in my view the creators would have been much better off trying to obtain a patent on their idea. This would have given them the right to try to prevent others from using the fantasy sports idea no matter what it was called--a much more profitable right under the circumstances.