A federal judge threw out an investor's lawsuit that claimed Bank of America's 2008 acquisition of home loan giant Countrywide Financial amounted to a fraud on creditors, the Daily Journal reports.

U.S. District Court Judge Mariana Pfaelzer dismissed with prejudice plaintiffs' claim of successor liability and fraudulent conveyance, ruling that Bank of America is not liable for judgments made against Countrywide.

She described plaintiff's argument that the deal was structured to defraud "maddeningly circular."

The decision saves BofA from having to make payments as investors chase Countrywide for billions of dollars for alleged fraud.

The dismissal could have an impact beyond the plaintiff Allstate Insurance Co. More than a dozen similar cases-a significant percentage of the Countrywide buyout litigation--are in Pfaelzer's court, and other courts could cite her ruling.

Plaintiffs lawyers also may have to review their settlement options.

Tommy Gunn and Luscious Lopez, as well as other porn film performers, must now wear condoms if they shoot films in the City of Los Angeles, according to an ordinance passed by the city council and signed into law by Mayor Antonio Villaraigosa in January.

The first of its kind in the nation, the ordinance affects L.A.'s San Fernando Valley, the capital of the multibillion-dollar porn industry. Porn film producers oppose the law, claiming that adult performances that use condoms do not market as well as unprotected sex.

The ordinance doesn't apply to film shoots in certified sound stages that don't require permits. For now, porn film studios, which often use private homes in San Fernando Valley, can choose to film in the county's other 87 cities or in its unincorporated parts.

A pro-condom initiative got on the ballot for a special election in June but the City Council, certain of voter approval for the measure, passed the ordinance to avoid spending $4 million on the special vote.

AIDS prevention groups are gathering signatures to put a countywide measure on the ballot for November, but they also want to put pressure on the L.A. County Board of Supervisors to pass its own law mandating condom use in the adult film industry.

Municipal governments also won a small victory when the California Public Utilities Commission recently decided to allow individual PG&E customers to choose analog power meters instead of Smart Meters, the Daily Journal reports.

The commission also agreed to consider a new process by which local governments and other groups also could be allowed to opt out of the new Smart Meter, an issue it previously sidestepped.

Smart Meters digitally monitor customers' power usage and send the data to utilities via radio antennas.

PG&E started installing the new meters in 2006, but some customers complained that the gadgets could be causing health problems because of the radio antennas.

The CPUC decision allows individuals to opt out but pay additional fees to use analog meters. It's not yet clear how a communal opt-out would be paid for.

It's also not yet clear how to accommodate customers who wish to use Smart Meters in municipalities that opt out of them.

The America Invents Act's switch from a first-to-invent to a first-to-file patent claim system favor biotech companies with deep pockets but sets back struggling startups because it forces the latter to put their resources behind patent filings earlier in the R&D process, reports the Daily Journal.

This also means biotech startups with limited funds will have to defend the validity of their patents and bear those legal costs sooner than in the previous first-to-invent system. Venture capitalists could, as a result, end up investing less seed capital in biotech startups than they used to.

Already, investment in startups and novel drug prospects is waning as venture capitalist are wary of medicines and medical devices that require hundreds of millions of dollars to develop and bring though clinical testing and a lengthy US Food and Drug Administration approval process.

A proposed class-action settlement reached in a Louisiana court could compensate thousands whose homes were allegedly ruined by contaminated drywall imported from China, the New York Times reports.

Knauf Plasterboard Tianjin, a Chinese affiliate of Germany's Knauf Gips KG, would give cash settlements or pay to replace the drywall in affected homes. Some plaintiffs lawyers said the settlement cost could reach $1 billion.

Thousands of lawsuits were filed against KPT and other Chinese makers of drywall installed during the mid-2000 building boom when domestic drywall supply ran short.

Homeowners, many in Southern states, complained of rotten-egg odors and sulfuric acid that corroded pipes and electrical wiring. Some 5,200 plaintiffs alleged their homes contained the affected drywall, and about half provided evidence.

The settlement does not cover homebuilders, insurance firms, and suppliers that used KPT drywall and spent money to provide remedies on their own. KPT has reached reimbursement agreements with top homebuilders and is still negotiating with other parties.

A Los Angeles federal judge on January 13 dismissed a shareholder class action lawsuit against American Apparel that accused the clothing company of hiding the risks it faced by hiring a largely immigrant work force, the Daily Journal reported.

U.S. District Judge Margaret Morrow said that plaintiffs failed to allege that the company made false statements to investors on the effect of an immigration raid to its productivity, and failed to show that the company made false statements about its accounting practices, which is the subject of a Securities and Exchange Commission investigation. Plaintiffs, however, prevailed on its claim that the company made false statements about its efforts to follow immigration laws.

Morrow gave the plaintiffs 45 days to amend their complaint.

California's much heralded effort to reduce greenhouse gas emissions to 1990 levels by 2020 suffered a blow when U.S. District Court Judge ruled it unconstitutional and issued a preliminary injunction sought by ethanol producers. The California Air Resources Board issued the rule in 2009 rewarding marketable credits to fuel producers and distributors that emit less greenhouse gases. Those who exceed emission limits must buy the credits in order to be in the state market, raising their costs.

Judge Lawrence J. O'Neill of the district court in Fresno stated in three separate rulings that the rule discriminates against out-of-state fuel producers and tries to regulate actions-including farming methods and use of coal-fired electricity-that lie outside California's boundaries.

Ethanol producers, truckers and refiners sued separately against the regulation, claiming it would make Californians pay the highest fuel prices in the country.

The air resources board said it would appeal O'Neill's decision, arguing that while the Constitution gives Congress the power to control interstate commerce, California's Clean Air Act grants the state special power to regulate pollution and protects it from claims of interference in interstate commerce.

Nearly a quarter of the UC Irvine School of Law's 2012 graduates have obtained clerkships, a higher percentage than Harvard, reports the Daily Journal.

Of UCI's 58 graduates 14, or 24 percent, landed clerkships as of the end of last year, 11 of them with federal district judges or circuit court judges. Two of the remaining three will work for U.S. bankruptcy judges and the third with an Alaska Supreme Court justice.

The number of clerkships could rise as judges were still interviewing more graduates.

According to US News and World Report statistics, the only law schools to beat UCI's 24 percent rate are Yale and Stanford.

UCI administrators attribute the school's early success to the small size of the initial class whose members all received full scholarships, the prestige of dean and founder Erwin Chemerinsky, and the interest stirred by his "experimental" law school.

Senator Diane Feinstein inserted two sentences in 1,221-page spending bill signed by President Obama last December, easing the sale of Central Valley water.

Feinstein said her action was a sensible way to move water around the state, but opponents saw it as helping the Kern Water Bank, Westlands Water District, and some well-connected agricultural interests, reported the Miami Herald.

The earmark lifts several environmental restrictions on the transfer of the federal Central Valley Project (CVP) water, which is provided at subsidized rates via a network of dams and canals stretching from Redding to Bakersfield.

The Central Valley Project Act of 1992 limited the sale of subsidized water by irrigation districts in order to prevent speculation.

As a result of Feinstein's action, customers like the Kern Water Bank could now buy federally subsidized CVP water and then sell it at a profit to urban consumers and developers in Southern California, charged the Restore the Delta Newsletter.

Feinstein argued that she wanted "more flexibility" in water distribution, but opponents like the Sierra Club said her measure would seriously worsen conflict over California water use.

Intense lobbying by for-profit colleges has diluted the Obama administration's promised regulatory plan to tightly control the flow of federal aid to the $30-billion industry.

According to the New York Times, the colleges spent $16 million on marshalling top Democrats - including Richard A. Gephardt, former House majority leader and John Breaux, the former Louisiana senator - with close ties to the White House in strategizing and pleading the industry's case.

Federal investigations found that for-profit college recruiters often lured students - most of them veterans, low-income people, and minorities - into enrolling and seeking federal student aid, but the colleges often failed to deliver promised training for jobs, leaving students with huge college debts.

The White House vowed to end the abuse by imposing tough rules hitching billions of dollars in student aid to formulas that measure student debt burdens and income after graduation. Colleges would risk losing federal aid altogether if their students weren't earning enough to start paying back their loans.

But the industry's backers reportedly met several times with White House and top Department of Education officials, despite the president's vow to curtail the inordinate influence of lobbyists.

A former education official who helped shape the original regulations to be imposed on the for-profits schools to make sure they adequately train students for jobs, said the lobbying helped water down the plan.

California's Supreme Court upheld the Legislature's dissolution of 400 redevelopment agencies in order to use $1.7 billion from the agencies to help bridge the state budget gap.

The high court also struck down a companion measure that would have allowed the agencies to continue by paying a part of their funds to the state. Chief Justice Tani Cantil-Sakauye dissented in part in the 6-1 ruling, writing that the majority went too far by also nixing the companion measure, the Daily Journal reported.

Redevelopment agencies had sued, claiming that the bills signed into law as part of the state budget, violated Proposition 22, which prohibits the state from dipping into local funds.

Some experts say the Legislature could still preserve the agencies while balancing the budget by reforming how the agencies are funded.

The agencies will dissolve by February 1, but they will be allowed to meet existing obligations, and their assets will be handed to "successor agencies." Details of the process have yet to be clarified.

What will happen to enforceable obligations to investors and localities is not clear. Lawyers expect lawsuits to result from the uncertainty.

U.S. District Judge A. Howard Matz last November tossed bribery convictions against a Southern California company and its two top executives, potentially undermining the U.S. justice department's effort to ramp up prosecutions under the Foreign Corrupt Practices Act (FCPA), the Daily Journal reported.

In a case seen as a litmus test for other FCPA, cases Matz found pervasive prosecutorial misconduct, dismissed the indictments, and vacated the convictions against Lindsay Manufacturing Co., its CEO Keith Lindsay and CFO Steve K. Lee. The case marked the first trial of a corporation under the statute and one of a few that reached a judge and a jury.

The court stated that, among other misconduct, the government team allowed a key FBI agent to testify untruthfully before the grand jury, improperly reviewed e-mail communications between one defendant and her lawyer, and inserted material falsehoods into affidavits in support of applications for search warrants and seizure warrants.

A federal appellate court ruled on December 14 that California overtime pay laws apply to out-of-state residents working here, the Daily Journal reported. The ruling was expected, after the state supreme court unanimously reached the same conclusion last June.

Oracle in 2003 changed its practice of exempting all of its instructors who work in many states from overtime pay when it faced a class-action lawsuit for overtime pay violations under state and federal law. But Oracle continued to face overtime claims from three instructors who live in Colorado and Arizona.

The 9th Circuit initially sided with the plaintiffs in November 2008 (Sullivan v. Oracle 547 F.3d 1177 (9th Cir. 2008)) but withdrew that ruling and asked the California Supreme Court to interpret state law (See 557 F.3d 979 (9th Cir. 2009)).

Once the state supreme court ruled against Oracle (51 Cal. 4th 1191 (2011)), the 9th U.S. Circuit Court of Appeals reversed the trial court?s previous grant of summary judgment to Oracle, holding that the company should have followed California law in paying out-of-state employees to work in the state (2011 WL 6156942).

Federal prosecutors are cracking down on medicinal marijuana dispensaries in California and several other states, after the Department of Justice issued a memo in late June clarifying that while individual medicinal pot users and their caregivers should not be the focus of prosecutions, "caregivers" do not include dispensaries. State laws conflict with federal law, which does not recognize any legal use of marijuana. Federal agents from the FBI, DEA, IRS, and the EPA have launched raids on growers and dispensaries in 16 states and Washington, DC. In California, State Sen. Mark Leno and Assm. Tom Ammiano (both D-San Francisco) called on federal authorities to stop the raids and hold consultations with states. Call off the dogs and let's sit down, Leno said.