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Legal Reality Newsletter 8 October A. D. 2011

8 October A.D. 2011

Excellent study of “choice of law,” from the traditional point of view.


Electrocution case against KBR can be tried in U.S. court, judge rules


Stars and Stripes
Published: October 4, 2011

YOKOTA AIR BASE, Japan — A civil lawsuit brought against KBR by the parents of a U.S. soldier electrocuted in Iraq can go forward in U.S. court, after a federal judge ruled the case should not be governed by Iraqi laws.

Attorneys for the defense contractor had argued that Iraqi laws should apply to the case because Army Staff Sgt. Ryan Maseth’s death in 2008 occurred on a military base in Iraq. But, for the second time in four months, Judge Nora Barry Fischer sided with Maseth’s family, saying U.S. law is applicable because the base was under American control, according to an Associated Press report.

The 24-year-old Maseth, a Green Beret, died in January 2008 while showering at the Radwaniyah Palace Complex in Baghdad, a facility maintained by KBR. A Defense Department investigation concluded that KBR workers failed to properly ground a water pump, which led to his electrocution.

Fischer’s ruling — handed down last month in the U.S. District Court of Western Pennsylvania — means KBR could be found liable and ordered to pay punitive damages to the plaintiffs, Cheryl Harris and Douglas Maseth.

“I’m very pleased. It’s been a long 3½ years,” Harris, Maseth’s mother, told Stars and Stripes from her Pennsylvania home Monday. “KBR is trying to prolong the case and argue everything they can.”

In her ruling, the judge found that KBR’s attorneys were trying to have it both ways. The judge said in a footnote that, in her view, KBR’s litigation strategy “is one that constantly shifts to a point where it eventually takes contradictory positions,” according to the AP report.

Fischer had made the same ruling in June, but KBR lawyers had asked her to reconsider.

She noted that KBR first argued it couldn’t be sued because the Army exercised an “envelope of control” over the contractor and its work at the base, so the judge shouldn’t even have jurisdiction or, at least, KBR shouldn’t bear any ultimate responsibility for anything that went wrong there. But later, the judge said, KBR argued that Iraqi law should hold sway because the country’s laws dictated much of what went on at the base — including the sometimes shoddy construction of Iraqi buildings that were commandeered and used to house soldiers like Maseth, according to the AP.

[advertisement deleted]

Daniel Russell, an attorney for KBR, said Monday the contractor had no immediate comment on the decision, the AP said.

Following a string of other fatal and nonfatal electrical incidents involving U.S. personnel in Iraq, it was Maseth’s death that spurred a DOD investigation into the widespread electrical problems at bases throughout the country. Both KBR employees and military commanders failed to ensure the safety of troops at the base where Maseth was electrocuted in the shower, according to a July 2009 inspector general report.

KBR reported electrical problems at the palace complex to the military before Maseth was killed, yet was never told to fix the problems until after his death, a KBR spokeswoman told USA Today that same month.

The IG report found that electrical shocks were so commonplace that many incidents went unreported and were considered to be just part of duty in Iraq.

Despite the IG’s findings, the Army decided no one should be held criminally liable for Maseth’s electrocution.

While many contractors and government employees “breached their respective duties of care … none of those breaches in and of themselves were the proximate cause of his death,” the Army said in a statement released after the IG report came out.

The Army’s handling of the case disturbs Harris as much as KBR’s failure to take responsibility in the case.

“Soldiers are shocked and shocked and then one is killed, and it’s no one’s fault?” Harris said Monday.

Fischer now must determine whether to apply liability laws from Pennsylvania, Maseth’s home state; Tennessee, where Maseth’s unit was based; or Texas, where KBR is headquartered, AP reported.


What would be very interesting to learn is whether KBR is being paid by the US Gov’t directly, and if so, whether it’s being paid in terms of “dollars” or some other “unit of account.”

To say that a U.S. base means that U.S. law applies is traditional.  Whether it’s really a U.S. base or a U.N. base might matter for some issues.  Whether that would matter for choice of law is a good question, since the U.N. is headquartered in NYC.

Additional choice of law is mentioned at the end of this Stars and Stripes story.  Whether Pennsylvania, Tennessee, or Texas law supplies the rules of decision is going to be another good study.

All of that is in the traditional analysis relevant to choice of law.

The decision this author raises most often is even more foundational than what is involved in that case. In matters relevant to “gotcha agreements” here in the U.S., we have to have 100% confidence in which of the two systems we’re acting.  The original system in the U.S. was founded on the Law of the Land.  The best evidence of such a system is the general circulation of honest weights and measures as the medium of exchange.  In that system, “dollar” was at least generally accepted as being defined in terms of grains of fine silver.  The present system in the U.S. is founded on the Law of the Sea.  The best evidence of such a system is the general circulation of “debt instruments” as the medium of exchange, i.e., “paper,” which this author very commonly labels “funny money.”  In the present system, “dollar” is not defined (as a weight of anything).

We can very readily consider each “choice of law” as that of a totally separate “nation,” where we can equate the original Law of the Land system to Great Britain (from which comes our Common Law) and its Pound Sterling medium of exchange and the present Law of the Sea system to post-WWI Germany and its run-away-inflationary “paper money” system.  This author has no problem, whatsoever, picturing “this state” as a Nazi-communo-fascist “nation-state.”

In “this state,” “man” is god.

In the original place, relative to the land, God is God.

These are very clearly two different choices of law; hence, two different “nations,” with two totally different “money” systems.

At this level of the choice of law analysis, what we’re looking at is the mechanism by which that system functions, and even more significantly, the “evaluation standard” by which commercial agreements are to be reviewed legally/judicially.  A system that operates on a Law of the Land system will apply the “subjective” standard, which allows the parties to get into such questions as “meeting of the minds” and “scope of the agreement,” and the like.  “Everything” that seems “normal” to get into is what goes by the label of the “subjective” standard.  In the present system, which operates under the Law of the Sea, the evaluation standard is the “objective” standard.  What that means, especially in matters in which some governmental entity or agency is a party, is that about the only question that matters is whether the “party to be charged,” i.e., the defendant, “signed” the agreement.  And, where the agreement is treated as a “public” agreement, because its content is found in “statute,” i.e., publicly, the question of signature won’t even come up.  It’ll be verified by a check to some computerized database or other. The “signature or not” question will be rendered admissible via Judicial Notice.  What this allows is the appearance of “law” enforcement, where the reality is “agreement” enforcement.  Where the question of “signature or not” is never mentioned judicially, i.e., is kept quite silent, then the aspect of the relevant line of analysis remains just as silent.

The system is designed this way so that the “governmental” side can employ prosecutors and collections attorneys to whom the full scope of the matter doesn’t have to be taught.  It’s also the case that even the judges don’t have to be taught the full scope of our present reality in order that they make “correct” legal rulings.  If they “knew” they were enforcing agreements, not “law,” how many collections attorneys, prosecutors, and even judges, would want those positions?  If the defendants “knew” they were being held to agreements, not “law,” how many of the defendants would allow themselves to be snookered, hoodwinked, “humbugged,” in the first place?

To be sure, “gotcha agreements” existed under the original system.  What changed, when the silver was finally sucked out of circulation, was the standard by which those “gotcha agreements” were to be evaluated judicially.  Where a “public” agreement need be verified as to “signature only” by merely looking very briefly into the data provided by this or that database, “agreement” enforcement is made to look very much like “law” enforcement, because the reality of the need for the commercial nexus is just never mentioned.  It’s just one more layer of octopus ink in the water to keep the reality from being quite so obvious.  

When the people start using honest weights and measures instead of “funny money,” such that the foundational choice of law is back to the Law of the Land, for matters that should be decided by Law of the Land, the “gotcha agreement” mechanism will still exist.  But, where those exist, such “agreements” will be evaluated by the “subjective” standard rather than by the “objective” standard, which means that the question of whether there truly is an “agreement,” at all, can’t be decided by the mere glance at the information found in the appropriate database.  In other words, “agreement” enforcement will have to look at LOT more like “agreement” enforcement, which means it won’t look much at all like “law” enforcement, which means that the “gotcha agreement” scams will be all the more readily exposed and shut down.

The success of today’s “gotcha agreement” system depends 100% on the choice of law of the “place” called “this state.”  Medium of exchange is not the only indicia of “choice of law,” but it’s a huge one.  Where the governmental system won’t consider an exchange based on an honest system of weights and measures, just know that what they’re saying is that they’re very dependent on the “gotcha agreement” mechanism, which really gets kicked in the head where it’s based on a legit medium of exchange.  Since the present system won’t deal with us using honest weights and measures, about the only “solution” is prevention.

Harmon L. Taylor
Legal Reality
Dallas, Texas

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Fwd: [GATA] Ambrose Evans-Pritchard: German ‘nein’ leaves Italy and Spain in turmoil

Thank you, Harmon …. In this circus, the lion eventually devours everyone, if they don’t have enough sense to get out of there.

 — On Tue, 7/12/11, Legal Reality <> wrote:
From: Legal Reality <>
Subject: Fwd: [GATA] Ambrose Evans-Pritchard: German ‘nein’ leaves Italy and Spain in turmoil
To: “Legal Reality” <>
Date: Tuesday, July 12, 2011, 11:58 AM

12 July A.D. 2011There are multiple stories below.  Key is the recent German decision to refuse to continue to finance Italy and Spain.  The PIIGS nations are feeling the consequences of unpayable debt.

Not healthy for the EU.  Ultimately, it’s probably good for those seeking liberty, for the thumb of the internationalist banking regime may have reached its limit.  We’ll find out plenty soon enough.
To understand “exponential growth” is to understand what had to have been the plan from the beginning by the “lenders.”  Where debt grows exponentially, which is what happens with interest, it is easy to calculate “when” any debt becomes unpayable.
The present “debt ceiling” political football is a fancy spin, i.e., cover story, on the reality that math is pretty solid in basis.  A debt that’s growing exponentially can’t be paid.  To continue to pretend that a “debt ceiling” needs to be raised is to continue to pull the wool over the people’s eyes as to the mathematical reality.  Germany is commercially compelled to act within the boundaries of mathematical reality.  Good for them.
We look forward to the day when the bread and circuses no longer keep the American minds focused away from our financial/mathematical reality.
As a interested voice in East Texas reminds us quite often, that which cannot be paid will not be paid.
Harmon L. Taylor
Legal Reality
Dallas, Texas
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—– Forwarded message —–
From: “Gold Anti-Trust Action Committee” <>
Date: Mon, Jul 11, 2011 3:59 pm
Subject: [GATA] Ambrose Evans-Pritchard: German ‘nein’ leaves Italy and Spain in turmoil

01:59PM ET Monday, July 11, 2011

Ambrose Evans-Pritchard: German ‘nein’ leaves Italy and Spain in turmoil
How awful of those nasty Germans to resent paying for the loose living of others!

* * *

By Ambrose Evans-Pritchard
The Telegraph, London
Monday, July 11, 2011

Italian and Spanish bond yields soared to post-EMU highs in a fresh day of credit turmoil after Germany blocked any meaningful measures to defuse the crisis.
Chancellor Angela Merkel called for more “frugality” in Italy, sticking to her script that Rome can solve its woes with an austerity budget. Her finance minister Wolfgang Schauble said any boost to the EU’s E500 billion (L440 billion) bailout machinery was “out of the question.”

…. Dispatch continues below …


Prophecy (TSXV: PCY) Secures Russian Far East Seaport Allocation
and Updates Ulaan Ovoo Mine Production

Company Press Release, June 14, 2011

VANCOUVER, British Columbia — Prophecy Coal Corp. TSX-V: PCY)(OTCQX: PRPCF)(Frankfurt: 1P2) has arranged with the Port of Sovgavan in the State of Khabarovsk, Russia, so the company will have initial access to port allocation of 25,000 tonnes of coal per month starting this month, potentially expandable to 50,000 tonnes per month, representing 300,000 to 600,000 tonnes annually. Prophecy also will be assigned a coal storage area at the port.

This arrangement provides Prophecy’s Ulaan Ovoo thermal coal mine with immediate access to the Asian seaborne export coal markets. Sovgavan is strategically located on the seaboard of the Russian Far East. The port is privately owned and can accommodate seagoing vessels of up to 160 meters in length, with the depth of loading site of 9.5 meters. The port has loading capacity of 6,000 tonnes per day and direct connections to Trans-Siberian railroads and uncongested Russian state highways.

Securing the port opens Prophecy to a significant number of coal buyers, and the company is placing top priority to conclude rail transport within Russia and coal offtake contracts.

Prophecy’s Ulaan Ovoo mine commenced production in 2011. So far this year the mine has produced 200,000 tonnes of coal, which are being stockpiled. The average quality is 4,200 kcal/kg NAR with 5 percent ash and 0.5 percent sulphur. Those attributes compare favorably to the coal being purchased by local Russian and Mongolian power plants.

For the complete company statement, please visit:

Mr Schauble denied reports that Berlin was ready to empower the fund to purchase Spanish and Italian bonds pre-emptively on the open market, a move seen by experts as vital to halt dangerous contagion to the larger economies.

The market’s verdict on EU foot-dragging was instant and brutal. Yields on 10-year Spanish bonds smashed through the 6pc barrier for the first time since 1997, made worse by warnings from the Castilla-La Mancha region that its deficit had become “extremely serious.”

Italian yields jumped 44 points to 5.7 percent, a level that starts to threaten the sustainability of the country’s finances. Markit’s iTraxx SovX Western Europe, Europe’s sovereign stress gauge, saw the biggest one-day rise ever. “Contagion was the word on everybody’s lips,” said Gavan Nolan, Markit’s credit chief.

EU leaders seem unable to keep pace with the fast-moving events. Eurogroup finance ministers focused yesterday on details of “burden sharing” for banks that lent to Greece, no longer the most urgent matter. A summit of top EU officials ended with no hint of how the crisis could be contained.

“We’ve painted ourselves into a corner. At this point, either someone — Germany, the European Central Bank — has to fundamentally shift position or everything blows up,” an EU official told Reuters.

Berlin has resisted any move to buy or guarantee the bonds of distressed debtors, viewing it as a slippery slope towards a fiscal union and a breach of Germany’s Basic Law. The ECB in turn has refused to buy Spanish and Italian bonds, saying it is the task of EU governments.

The euro tumbled over two cents to under $1.40 against the US dollar. Gold rose to $1,556 an ounce on safe-haven flows. Italy’s stock market led the rout of global bourses, dropping 4 percent despite moves by the regulator Consob to curtail short-selling. Italian bank shares were pummelled again. Unicredit fell 6 percent, and Intesa SanPaulo fell 7 percent. London’s FTSE 100 fell 1 percent, while the Dow was off 1.3 percent in early trading.

Escalating woes in Italy and Spain raise the stakes dramatically. The pair have E6.3 trillion of total debts between them. Jean-Claude Trichet, the ECB president, said Europe is now at “the epicentre of a global problem.”

Yet EU attention remains focused on curbing the rating agencies, a campaign that is turning shrill. Viviane Reding, the EU Justice Commissioner, said the authorities must “smash the cartel of the three US rating agencies.” Fitch is, in fact, French-owned.

Barclays Capital said EU leaders must recognise that Greece is insolvent and prepare for an orderly debt restructuring, perhaps one that shares the pain between private creditors and the EU taxpayer and gives Greece a way out of its trap by easing the debt burden by 60 percent.

Such a move requires back-stop defences to prevent contagion, perhaps by using the EFSF bailout fund to shore up Club Med bond markets. The solution is elegant; what lacks is political will.

Gary Jenkins at Evolution Securities said the EU cannot keep stalling. Italy’s borrowing costs are ratcheting toward the fatal line of 7 percent. “It is worth remembering how quickly bond yields can get out of control by looking at what happened to Greek, Irish and Portuguese 10-year yields. What would keep me awake at night if I was a European finance minister is that we are only about 2 percent from potential disaster,” he said.

* * *

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Golden Phoenix Shareholder Conference Call To Discuss
Start of Gold Production at Mineral Ridge Gold Project

Company Press Release, June 27, 2011

SPARKS, Nevada — Golden Phoenix Minerals, Inc. (GPXM) has scheduled its second quarter 2011 shareholder conference call for Tuesday, July 12. Shareholders are invited to participate in the call, will begin at 1 p.m. Pacific and 4 p.m. Eastern time.

Company management will provide updates on accomplishments in the second quarter and explain how the company’s royalty mining growth strategy is expected to unfold in the second half of the year.

Topics to be updated include the start of gold production at Mineral Ridge, developments on the Vanderbilt Silver and Coyote Fault Gold projects, the Shining Tree and Peru projects, and drilling plans for 2011. Questions from shareholders will be answered as well.

“Thirteen months after closing the joint venture between Golden Phoenix and Scorpio Gold, the Mineral Ridge property has entered gold production,” said Tom Klein, CEO of Golden Phoenix. “Last week both companies completed joint tours of Mineral Ridge. We look forward to providing a complete update on our conference call.”

Participation in the shareholder conference call can be arranged by telephone, webcast, or Skype. To participate, dial 952-356-0015 and enter Conference ID 419582#.

For the company’s full press release, please visit:

Golden Phoenix (GPXM) is a U.S. mining company with international exposure to gold, silver, and strategic metals. The company’s business model combines project generation and royalty mining that offers the potential for exploration upside, coupled with the backing of production and future royalty streams. View company videos here: