Stalled congressional action on greenhouse gas legislation has not stopped prominent law firms from taking the lead in helping companies navigate the legal, public policy and business implications related to climate change.

Businesses face state and regional and -- in some cases -- international emissions restrictions. They seek legal advice on everything from verifying energy credits to addressing Securities and Exchange Commission disclosure requirements, according to Robert McKinstry, the partner in charge of the Climate Change and Sustainability Initiative at Ballard Spahr Andrews & Ingersoll.

Last spring, multinational law firm Skadden, Arps, Slate, Meagher & Flom debuted a new climate practice group made up of nearly two dozen attorneys. Akin Gump Strauss Hauer & Feld, Vinson & Elkins and other high-profile firms have also announced the formation of specific groups to advise clients on a host of new legal questions related to the hot-button topic.

More...

Law Firms Prep Clients for Climate Policy Implications - NYTimes.com

This weekend, as you head to the parking lot of Lambeau Field–or some other storied stadium–to roast your brats, glance down at the label on your jersey. Is it made by Reebok? If so, you should know that $70 jersey is the point of contention in a suit before the Supreme Court this session and that the case could have implications far beyond who gets the NFL’s apparel license.

Matthew Futterman, who covers sports business for the Journal, kindly joins us to explain why:

American Needle, Inc. is filing papers Friday with the Court in its dispute with the NFL, which started back in 2000 when the NFL signed an exclusive apparel licensing deal with Reebok International, now a unit of Adidas AG. American Needle, which had individual licensing deals with NFL teams, sued, arguing the NFL’s exclusive deal with Reebok violated antitrust rules. The NFL holds the position that it is a single entity with 32 teams that compete with each other in football but not in business, where the teams collectively compete with other sports and forms of entertainment.

The 7th Circuit, based in Chicago, ruled in the NFL’s favor last year, prompting American Needle to appeal to the Supreme Court. Seeing a chance for a victory that could make a statement, as opposed to, say, a lucky win by a field goal, the NFL joined that request, hoping that it could get a wide-ranging ruling that could become the law of the land and exempt it from an array of potential antitrust litigation. The NHL and the NBA voiced their own support for a ruling. (Major League Baseball has an exemption from antitrust law).

As a result, there is much tension in sports labor circles.

“If the Supreme Court rules that the leagues are exempt from section one of the Sherman Antitrust [Act] for all operations, it could have a major effect,” said Jeff Kessler, counsel to the players unions for both the NFL and the NBA. “Right now, no one knows what the Supreme Court will do.”

The Sports Broadcasting Act already allows the leagues to negotiate national television deals on behalf of their teams. The unions want the court to issue a narrow ruling on how the leagues conduct their business in areas like marketing and licensing and leave labor alone.

At a meeting with reporters last month, the lead lawyer for the NFL, Jeff Pash, spoke of the American Needle case in narrow terms. He was careful not to suggest that the league is hoping a sympathetic ruling from the court could give it leverage in ongoing negotiations with the Players Association. The current CBA expires after next season and the two sides have made little progress toward a new agreement.

Additional exemptions from anti-trust laws don’t usually bode well for labor peace. “You look at the period of baseball until the passing of the Curt Flood Act in 1998, and what you kept seeing were labor stoppages,” Kessler said referring to legislation that protected baseball players under antitrust laws in labor. “Since that passed, they haven’t had any stoppages.”

Photo: AP

Court affirms use of chemical terrorism law against Lansdale woman

It's said that if something looks like a duck, walks like a duck, and quacks like a duck, the odds are it's a duck.
Not always. And sometimes imitation carries its own hazards, as Carol-Anne Bond learned yesterday when a federal appeals court affirmed - under a federal chemical-terrorism law - her conviction for trying to poison her romantic rival.

Bond, 38, of Lansdale, was arrested by federal authorities in June 2007 and charged under a 1998 chemical-weapons law for applying highly toxic chemicals on the mailbox, car door, and front house door of a close friend and romantic rival, Myrlinda Haynes. Haynes had had a baby fathered by Bond's husband, Clifford.

Bond's attorney, Robert E. Goldman, had argued that Bond's messy personal situation did not justify federal charges under the Chemical Weapons Convention Implementation Act of 1998.

The law, he said, was meant to prosecute terrorists - not scorned spouses.

More...

Court affirms use of chemical terrorism law against Lansdale woman | Philadelphia Inquirer | 09/18/2009

Whether health-care legislation is constitutional: a topic so nice, we blogged it twice . . . in one week!

Our earlier post focused on a column that ran in the WSJ’s opinion pages earlier this week, written by former New Jersey state judge Andrew Napolitano. Napolitano’s argument: that the constitution’s Commerce Clause doesn’t afford Congress the power to regulate health care. Reaction to Napolitano’s argument was pointed and swift, both on this blog and elsewhere in the Web-o-sphere.

For one reason or another, the folks at the WSJ’s editorial page have decided to give the topic another go. The argument was elucidated this time in a piece out Friday by David Rivkin and Lee Casey, two former lawyers from the Bush I administration, both of whom now work at Baker & Hostetler in D.C. and often team up to write at the National Review and elsewhere.

Rivkin and Casey’s argument is a bit more, well, narrowly tailored (to borrow from the language of con-law lawyers) than is Napolitano’s. Their point: that the requirement in the plan laid out by Max Baucus (D-MT) (pictured) that every American have health insurance makes current proposals unconstitutional. Not just unconstitutional, mind you, but “profoundly unconstitutional” (emphasis ours).

On the requirement, Rivkin and Casey state that such a requirement “is the only way to fund universal coverage without raising substantial new taxes. In effect, this mandate would be one more giant, cross-generational subsidy—imposed on generations who are already stuck with the bill for the federal government’s prior spending sprees.”

The authors say that while the Supreme Court has “construe[d] the commerce power broadly . . . there are important limits.” In response, write Rivkin and Casey, “health-care legislation backers have, in response, “framed the mandate as a “tax” rather than a regulation.” The authors continue:

Taxation can favor one industry or course of action over another, but a “tax” that falls exclusively on anyone who is uninsured is a penalty beyond Congress’s authority. If the rule were otherwise, Congress could evade all constitutional limits by “taxing” anyone who doesn’t follow an order of any kind—whether to obtain health-care insurance, or to join a health club, or exercise regularly, or even eat your vegetables.
. . .
Since the 1930s, the Supreme Court has been reluctant to invalidate “regulatory” taxes. However, a tax that is so clearly a penalty for failing to comply with requirements otherwise beyond Congress’s constitutional power will present the question whether there are any limits on Congress’s power to regulate individual Americans. The Supreme Court has never accepted such a proposition, and it is unlikely to accept it now, even in an area as important as health care.

LBers, now that you’ve gone and gotten yourselves all versed up on the Constitution’s Article I, Sec 8., let’s keep the conversation going. Are the health-care reformers on shaky ground on this point, or does the Constitution allow such regulation?

Keep pressure in Fiji’s junta, says International Bar Association

September 18, 2009

Chris Merritt, Legal affairs editor | September 18, 2009

Article from: The Australian

THE International Bar Association has urged the international community to maintain pressure on Fiji’s military rulers to return that country to democratic rule.

IBA president Fernando Pelaez-Pier said it was desirable to maintain pressure on Fiji’s rulers because experience had shown that this had improved the quality of governance in countries such as Zimbabwe.

Mr Pelaez-Pier, who is visiting Perth for the Australian legal convention, also warned that while foreign lawyers and judges would need to make their own decisions about whether to accept public office in Fiji, he would not accept such a role. But if the Fiji authorities indicated they wished to recruit foreign lawyers and judges to rebuild the democratic system of government “in my opinion they should do it”.

“But if it is just to support what they are doing, this violation of the basic principles of human rights and civil rights, I would strongly reject it,” he said.

“They should support an administration that supports basic principles of human rights and civil rights that support the independence of the judiciary.”

Mr Pelaez-Pier said he would never accept an offer of judicial office from Fiji’s military rulers if it meant taking the place of one of the judicial officers who were dismissed from office in the constitutional upheaval of April 10. “I personally would never accept that,” he said.

The remarks by the IBA president are at odds with the decision of Fiji’s chief justice Anthony Gates, who startled the profession in May by accepting reappointment to the bench from the regime that overthrew Fiji’s Constitution.

Justice Gates, who holds British and Australian citizenship, returned to the bench six weeks after President Josefa Iloilo abrogated the Constitution and issued a presidential decree that has been criticised for offering weak guarantees of judicial independence.

Mr Pelaez-Pier, who is based in Caracas, Venezuela, also defended a report by the IBA’s human rights institute that has been severely criticised by Fiji’s sacked judges.

Before they were sacked, the judges had accused the IBA of making a series of fundamental errors in a report that had warned about the threat to the rule of law.

The report had relied on “a few disgruntled lawyers”, was biased and riddled with half-truths and spin, they said.

Mr Pelaez-Pier said the institute was an independent arm of the IBA and he had no reason to doubt the veracity of its findings on Fiji.

“It is natural that those affected by the report will criticise the report,” he said.

Posted by rawfijinews

Let us open this post about judicial pay with a personal anecdote, if you’ll indulge us, LBers:

Back during our second and third years of law school, we landed several interviews for federal clerkships. One required us to buy a plane ticket, at our own expense, and fly a good distance to a mid-sized city and spring for a night in a hotel.

The day of the scheduled interview, we showed up in our (cheap) suit and (only) tie only to find the chambers deserted, save for a lonely secretary in sweat pants. She explained that the judge and the other clerks had departed early prior to a holiday weekend. She also explained that the judge had already hired his clerks for the following year. Really sorry for the mixup, she said, but there was nothing she could do.

Upon our return to campus, we sent off a firm but respectful letter to this judge, requesting that he reimburse us our expenses. About a week later, the judge called. He was apologetic, but declined to take us up on our offer. He explained that he couldn’t afford to reimburse us. He’d taken a “huge” paycut from a law firm relatively recently to join the federal bench, he told us, and was struggling to put his two daughters through college. Times were surprisingly tough, he said, his voice wavering.

While we had half a mind to tell him that it wasn’t like we, having already amassed a hefty amount in student loans, could afford to fly around the country to attend canceled interviews, we didn’t. He had flatly disarmed us with his slightly confessional tale of his financial straits, and we came away feeling sympathy for him, somehow. When, in a follow-up letter, he offered to reimburse us half, we almost felt guilty accepting.

Why do we bring this up? We were reminded of our little saga today while reading the news that a federal judge in California, Stephen G. Larson, was stepping down from the bench because he could no longer afford to stay on. Larson, who sits in Riverside, Calif., has a big family — seven children. Click here for the NLJ story; here for a post from Above the Law.

“The costs associated with raising our family are increasing significantly, while our salary remains stagnant and, in terms of purchasing power, is actually declining,” said Larson, in a prepared statement. “The short of it is that I know I must place my family’s interest, particularly the future of my children, ahead of my own fervent desire to remain a federal judge.”

Kashmir Hill and David Lat over at ATL ask the reasonable question, it seems to us:

Is $169,300 [the salary for federal district court judges] not enough for Larson to support his family, even with seven children? On the one hand, it’s way more than the average American earns; on the other hand, it’s way less than what Biglaw partners (or even many associates) earn.

LBers, what do you think? Of course, it’s unreasonable, in all likelihood, to expect that federal judges should make what the average BigLaw partner makes. But it also strikes us as unfortunate that the federal bench should lose Larson, who presided over the recent dispute between Mattel and MGA Entertainment over the rights to the Bratz doll (and, incidentally, a judge we’ve heard to be exceptionally hard-working) over financial issues. We’d love to hear your thoughts.

Did Justice Sonia Sotomayor, in a singular remark during her first Supreme Court appearance last week, signal the direction she might want to take the court if left to her own devices?

Jess Bravin, writing for the WSJ’s Law Journal column on Thursday, raises the question.

The issue largely concerns a comment Sotomayor made last week during the Citizen’s United case. During arguments in the case, the court’s majority conservatives seemed persuaded that corporations have broad First Amendment rights and that recent precedents upholding limits on corporate political spending should be overruled. (Click here for an LB Q&A with Bravin from last week after the arguments.)

But Justice Sotomayor suggested the majority might have it all wrong — and that instead the court should reconsider the 19th century rulings that first afforded corporations the same rights people have.

Judges “created corporations as persons, gave birth to corporations as persons,” she said. “There could be an argument made that that was the court’s error to start with…[imbuing] a creature of state law with human characteristics.”

After a confirmation process that revealed little of her legal philosophy, writes Bravin, the remark offered an early hint of the direction Justice Sotomayor might want to take the court.

“Progressives who think that corporations already have an unduly large influence on policy in the United States have to feel reassured that this was one of [her] first questions,” said Douglas Kendall, president of the liberal Constitutional Accountability Center.

“I don’t want to draw too much from one comment,” says Todd Gaziano, director of the Center for Legal and Judicial Studies at the conservative Heritage Foundation. But it “doesn’t give me a lot of confidence that she respects the corporate form and the type of rights that it should be afforded.”

For centuries, corporations have been considered beings apart from their human owners, yet sharing with them some attributes, such as the right to make contracts and own property. Originally, corporations were a relatively rare form of organization. But today, it’s “just complete confusion” over which rights corporations can claim, says Prof. William Simon of Columbia Law School.

In any event, on today’s court, the direction Justice Sotomayor suggested is unlikely to prevail. During arguments, the court’s conservative justices seem to view corporate political spending as beneficial to the democratic process. “Corporations have lots of knowledge about environment, transportation issues, and you are silencing them during the election,” Justice Anthony Kennedy said during arguments last week.

But Justice Sotomayor may have found a like mind in Justice Ruth Bader Ginsburg, who, evoking the Declaration of Independence, said during the Citizens United case: “A corporation, after all, is not endowed by its creator with inalienable rights.”

Let’s quickly get you up to speed on the afternoon’s legal news, before releasing you from our clutches for the day.

Hu to Lead SEC Division: The SEC is establishing a new division to help the agency better identify risks and trends in financial markets. And Wednesday, the SEC named University of Texas law professor Henry Hu (pictured) to head the new department, called the Division of Risk, Strategy, and Financial Innovation. (Reuters, BLT Blog)

A Skype Suit: A company owned by Skype’s founders filed a copyright suit against Skype, a move that could complicate the $2 billion deal by eBay Inc. to sell the online communications company to a group of investors. Joltid Ltd., owned by Skype’s founders Janus Friis and Niklas Zennstrom, filed suit Wednesday in federal court in San Francisco, requesting an injunction against Skype and statutory damages for copyright infringements. (WSJ). Repping the plaintiffs: lawyers from Hennigan Bennett & Dorman in Los Angeles. No word, yet, on who’s repping Skype.

Blago Blames Fitzgerald: Former Illinois Gov. Rod Blagojevich blamed federal prosecutor Patrick Fitzgerald for the recent suicide of his friend Christopher Kelly. He likened the attorney’s tactics to those used by a Soviet spy service in an interview with the Washington Times’ American Morning News on Tuesday. (Washington Times)

We need no grabby lead or snarky rhetorical question to kick off this post, LBers. In fact, we’re going to play it as straight as we know how. The very subject reveals why: whether a law banning the sale of “marital aids” — our preferred euphemism for those devices more commonly known as “sex toys” — is legal.

Here’s the deal: Last week, the Alabama Supreme Court, in a 7-2 decision, upheld a state anti-obscenity law which bans the sale of marital aids within a certain distance of homes, churches, schools and day-care centers. In its ruling, the court said public morality was a legal reason to regulate sales. The marital-aids purveyor who filed the challenge, a Hoover, Ala., store called Love Stuff, had argued that the ban violated the right to privacy of Alabama residents. Click here for a copy of the opinion; here for coverage from the Birmingham News. (Hat tip: ABA Journal.)

“Public morality can still serve as a legitimate rational basis for regulating commercial activity, which is not a private activity,” Associate Justice Michael F. Bolin wrote in the majority opinion.

According to the Birmingham News, a lower court judge had earlier ruled for the store, saying a part of the state law was unconstitutionally vague. But the earlier ruling also rejected Love Stuff’s request to declare a ban on sales of marital aids flatly unconstitutional. Lawyers for Love Stuff filed an appeal, leading to Friday’s state high court decision.

Could the U.S. Supreme Court be the next tribunal to weigh in on the issue? Maybe. Love Stuff attorney Amy L. Herring said a high-court appeal might make sense given the split in the circuits on such laws. “It’s been an issue in the Southeast because no one else has a problem with this,” Herring said.

A sex toy case at the Supreme Court? Eugene Volokh, writing over at the Volokh Conspiracy, thinks it could happen. (Click here for a link to a variety of posts from Volokh on the issue, going back several years.)

Writes Volokh:

It’s quite possible that the issue will now go to the Supreme Court. There was already a split on whether such statutes are constitutional in the wake of Lawrence v. Texas. . . . But presumably the losers in the Alabama case will likely ask for review, and the split creates a decent chance of the Court’s agreeing to hear the case.

Volokh’s post goes even farther, predicting not only that the Supreme Court will agree to hear the case, but that the court will uphold such laws by a 6-3 vote. Writes Volokh:

The vote will be at least 6-3, because even some of the liberals on the Court — especially Justice Breyer — and moderate conservative Justice Kennedy will think that the courts’ power to recognize unenumerated rights should be saved for rights (e.g., abortion, contraception, sexual intimacy, parental rights, right to refuse medical treatment, right to live with close family members, and the like) that are more important in most of their exercisers’ lives. And this is so even though the government’s arguments for the practical benefits of the law seem comparatively weak, or as to the supposed immorality of the conduct, largely conclusory. The majority on the Court will likely conclude that such conclusory moral arguments are adequate except when something more important to most people’s lives is at stake (since probably no Justice accepts the libertarian constitutionalist notion that a broadranging liberty to do what one pleases so long as it doesn’t directly enough hurt others is itself so important that it should be recognized as a constitutional right).

Prosecutors and police on Tuesday pressed Maryland lawmakers to make it easier to put gang members convicted of crimes behind bars for longer sentences, saying a 2-year-old state statute aimed at doing so had proven all but useless.

Lawmakers, including House Speaker Michael E. Busch (D-Anne Arundel) who sat in on the hearing and asked an usually large number of questions, probed law enforcement officers for specifics on how the Maryland Gang Prosecution Act had failed.

They also seemed split on whether changes were needed. Del. Victor R. Ramirez (D-Prince George's) and others questioning if more draconian sentencing guidelines could inadvertently snare less violent teenagers charged as gang co-conspirators. And House Judiciary Committee Chairman Del. Joseph F. Vallario, Jr. (D-Prince George's), said the legislature did not want to get so specific in setting sentences that it risked undercutting judges' prerogative to order prison terms best fitting circumstances of crimes.

In the course of the hearing, Montgomery County State's Attorney John McCarthy also released some interesting statistics about gang activity:

Last year, Montgomery County prosecuted 524 cases against gang members. In the county, there are now roughly 40 active gangs, and some 1,600 identified gang members, he said.

So far this year, suspects arrested in five of the county's 10 homicides have been gang members.

Who knows, maybe Allen Stanford will emerge from his current troubles in a year or so happy, healthy and largely unscathed by the legal system’s slings and arrows. But for now, the hole into which he’s sliding seems ever-deepening.

When we last left our favorite resident of the Joe Corley Detention facility in Conroe, Texas, (here), questions loomed. The morning Stanford was slated to attend a hearing over his legal representation, he was rushed to the hospital to treat a racing pulse.

We got information on his medical status — turns out, he has a non-life threatening aneurysm in his leg.

And Tuesday, we got a little more information on the situation with Stanford’s lawyers. A federal judge in Houston allowed high-flying lawyer Dick DeGuerin to withdraw as Stanford’s lawyer and appointed him an attorney from the federal public defenders office, Michael Sokolow. Click here for the story, from the Houston Chronicle.

DeGuerin took on the Stanford matter about seven months ago in the hope of getting paid at some point down the line. But he never did. Stanford’s assets have been frozen, and his insurance company is reportedly refusing to pay.

Marjorie Meyers, the head of the federal public defender office in Houston, said she expects to ask the judge, David Hittner, to add private criminal defense attorney Kent Schaffer to the case as well.

Schaffer is a longtime criminal defense attorney in Houston with a federal and state practice who has handled numerous high-profile trials and has represented U.S. Rep. Craig Washington, Oscar Wyatt author Clifford Irving and late Houston Astros star Ken Caminiti.

Lawyers from the firm Patton Boggs were also in court, according to the Chron, but had no role in the hearing. That firm still has a pending motion asking to be heard on whether they might represent Stanford if he gets the money to pay him.

For those looking for a bit more information on the notion of asset freezes and lawyer-payments, check out this WSJ article from April.

At the time, Wayne State law professor Peter Henning said these situations highlight a clash of competing important principles. “On the one hand, people like the idea that defendants have lawyers when they’re accused of something,” he said. “On the other, you don’t want the thief to use money from the bank robbery to pay his lawyer. The question is how do you reconcile those?”

Sonia Sotomayor’s voting record on the Supreme Court may ultimately reveal itself to be left of the man she replaced, David Souter. But at least for the immediate future, that fact isn’t likely to give much solace to lawyers on the political left. Although Justice Anthony Kennedy might “cross the aisle” from time to time, he’s more often than not casting his vote with the four more conservative justices.

So, perhaps a bit like Republicans in Congress, for left-leaning Supreme Court advocates, it’s time to hunker down and play defense.

How does that happen? Rick Hasen, an election-law specialist at Loyola Law School, has a piece in Slate on Tuesday which maps out the key strategic points that the liberals might use to try to minimize their losses.

In any event, Hasen’s advice to lawyers who might be thinking about taking a loser of a case case up to the Supremes:

Stay out of the Supreme Court. Do this, Hasen, suggests, even if you lose in the lower court. Case in point, writes Hasen:

In 2007, for example, Justice Richard Posner wrote an abysmal opinion for a 7th Circuit panel upholding Indiana’s strict voter identification law against a constitutional challenge. Judge Posner’s opinion belittled the value of the right to vote, and the dissent called the Indiana law “a not-too-thinly-veiled attempt to discourage election-day turnout by certain folks believed to skew Democratic.” The plaintiffs, the ACLU, and others appealed the case to the Supreme Court. Seeing Posner’s language, and hoping that Justice Anthony Kennedy would join the more liberal justices on the Supreme Court in outrage over the partisanship surrounding these laws, I urged the court to take the case. What a mistake! The court affirmed the 7th Circuit, making the bad law apply to the entire country, and not just a part of it.

Go Narrow: Hasen encourages the left to try to pick off one of the five conservative justices to issue a narrower opinion. “If the left has to litigate a case in the Supreme Court, the name of the game is trying to peel off at least one justice from the bloc of five conservatives—Roberts, Kennedy, Samuel Alito, Antonin Scalia, and Clarence Thomas.” If, continues, Hasen, the target is Chief Justice Roberts, you appeal to the institutional value of judicial minimalism and moderation and to avoiding controversial 5-4 rulings that could damage the reputation of the court. “If liberals are appealing to another conservative member of the court, then the key is to show how a narrower ruling would further that particular justice’s values, interests, or earlier rulings.”

Pray: More pointedly, that is, pray the liberal justices on the court can weaken conservative opinions from the inside.

Concludes Hasen:

Losing at the Supreme Court is seldom an occasion for celebration. But you can bet that if the Supreme Court decides that Citizens United wins its corporate spending limits challenge on narrow statutory grounds—and not in a broad constitutional reversal of precedent upholding corporate spending limits—there will be a lot of high-fives among supporters of campaign finance reform, from Elena Kagan on down.

A Florida law enforcement report has found no credible evidence that a teenager's father threatened to kill her for converting from Islam to Christianity.

The 17-year-old girl, Rifqa Bary, ran away from her family in Columbus, Ohio, in July and took refuge in the home of the Rev. Blake Lorenz with the Global Revolution Church in Orlando, Florida. The girl was moved into foster care under the supervision of Florida's Department of Children and Family after she said in a sworn affidavit that her Muslim father threatened her.

An investigative report by the Florida Department of Law Enforcement was released Monday after a juvenile court seal order expired.

"Our investigation has provided no clear evidence of criminal activity," said the state report.

Investigators stated they could not find any evidence to support a history of abuse. A teacher at the girl's high school told investigators she had no reports or evidence of abuse.



Rifqa Bary, 17, says a mosque told her family to "deal with the situation" of her Christian conversion.

Manhattan federal judge Jed Rakoff excoriated the SEC and Bank of America in his opinion issued Monday, in which he refused to sign off on the parties’ proposed $33 million settlement. That, for us media types, was a lot of fun.

But what happens now?

On paper, it’s rather straightforward: the SEC will take its charges against BofA to trial, slated for Feb. 1 of next years.

But it’s all a bit awkward now, no? For starters, it’s sort of hard to believe that the SEC and BofA can, after thinking they’d kissed and made up, start fighting again, just like that.

Indeed, the SEC has few options — and none of them are all that good, says Wayne State’s Peter Henning, to Bloomberg. The SEC could try the case. But that’s risky: what if the bank actually has strong defenses? It could file a new lawsuit against individual executives or lawyers. But that too is dicey. The SEC has already said it lacked sufficient evidence to do so. Of course, the SEC could dismiss the case altogether — and decide simply to endure the public outcry that would likely follow.

“In a sense, the SEC has painted itself into a corner,” said Henning to Bloomberg.

Tamar Frankel, a professor at Boston University School of Law, told Bloomberg that a settlement with different terms may eventually be acceptable to Rakoff. One possibility is that Bank of America could agree to recover all or part of the bonuses paid Merrill Lynch executives, she said.

But to Anthony Sabino, a business-law professor at St. John’s University in New York, it seems clear that Rakoff wants BofA, or its executives, to pay a steeper price. “The judge’s not-so-implicit message is that he wants people named and he wants those people to pay the penalties,” “The bottom line is that there have been very pertinent and important questions asked and the answers have not been very forthcoming.”

Interestingly, in the NYT article out Tuesday, some questioned the wisdom of going forward with the case at all. Writes the Times’s Zachery Kouwe:

Some analysts argued the case itself was irrelevant given that Bank of America’s takeover of Merrill had increased the bank’s profits, resulting in a surge in its stock price.

The deal also saved Merrill from impending collapse and arguably prevented a greater financial calamity from unfolding in the immediate aftermath of the Lehman Brothers bankruptcy.

“I’m having a difficult time understanding who was harmed here,” said Richard X. Bove, a banking analyst with Rochdale Securities. “Why is this company being put into court over a series of events that benefited the nation, its economy, its financial system, the shareholders of Bank of America and the bank itself.”

Petrobras sees new oil law by next spring

Petrobras CEO Jose Sergio Gabrielli said on Monday he expects Brazil's Congress to approve the country's oil reform proposal as early as February or March next year.

"In an optimistic view, we can't see having these bills approved until February or March," he told a presentation in New York.

Gabrielli said he expects no changes to any existing oil concessions in Brazil as a result of the new law and added that Petrobras' new capitalization could occur within 30 to 45 days after the law is approved

Source: Reuters

Gay marriage supporters are moving to repeal a law that denies federal benefits to same-sex couples, but there's little chance of a vote this year.

Repeal legislation to be introduced Tuesday has at least 76 House sponsors. A spokesman for the lead sponsor, Democratic Rep. Jerrold Nadler of New York, acknowledged that repealing the Defense of Marriage Act was not a priority for movement anytime soon.

The 1996 law bars federal recognition of gay unions, including the granting of Social Security survivor payments and other government benefits to couples. The law even bars same-sex couples from receiving the benefits in states that have legalized their marriage.

President Barack Obama pledged as a candidate to work for repeal. Last month, the president insisted he still wants to scrap what he calls a discriminatory federal marriage law, even though his administration angered gay rights activists by defending it in court.

Ilan Kayatsky, spokesman for Nadler, said the repeal was being introduced now primarily "to gain support and momentum and educate people." Nadler chairs a Judiciary subcommittee that would consider a repeal.

Just a little more old-fashioned housekeeping to attend to today, LBers. Last week, we wrote about an interesting ruling up in Connecticut state court involving a suit between a hedge fund, Pursuit Partners, and UBS. Now, we’ve received a provocative response from UBS as well as a bit more information on the lawyers carrying the water for the plaintiff.

To recap, briefly: Pursuit Partners claims that in mid-2007, UBS sold it investment-grade debt securities without disclosing that they were about to be downgraded. In October, Moody’s downgraded billions of dollars worth of securities, including those Pursuit bought. A few months later, Pursuit’s securities defaulted and it lost its entire investment.

Pursuit sued UBS, and last week, Connecticut state judge John F. Blawie ordered UBS to set aside $35.5 million to cover a potential judgment against it in the case. In his opinion, Judge Blawie cited evidence that UBS employees referred to the securities as “crap” and “vomit.” Click here for the WSJ story.

Since then, however, the WSJ has landed a response from UBS, which counters the “crap” and “vomit” allegations with one of its own, which is equally colorful. According to a UBS spokesperson:

Pursuit Partners is a sophisticated investor whose own evidence demonstrated that Pursuit was fully aware that it was purchasing troubled securities at deep discounts in the summer of 2007. . . . Pursuit itself described these investments in unflattering terms. In email correspondence with their UBS client relationship manager, a Pursuit principal described the collateral underlying some of of these securities as “s—.” Any suggestion that Pursuit was unaware of the risks it was assuming in purchasing these investments is unsupported by Pursuit’s own emails and evidence.

. . .

Pursuit substantially reduced its claim during the preliminary hearing, from more than $100 million to $35 million. The Court found no probable cause for Pursuit’s core allegations, which related to alleged misrepresentations about the structure of the investments. UBS is confident that it will prevail on the merits of the remaining claims.

Wow. So we’ve got that covered — these securities were — all seem to agree — lousy.

In any event, upon Judge Blawie’s ruling, we were intrigued to find out that while UBS is represented by the venerable Williams & Connolly, Pursuit is repped by a firm we hadn’t heard of — Denver-based Burg Simpson Eldredge Hersh & Jardine. To get a little more on the firm beyond what the Web site tells us (flashy graphics!), we checked in with one of the founders and name-partners, Michael Burg, to find out who the heck they are (Denver?!), and how they got this potentially lucrative piece of work.

Burg said the 40-lawyer firm is a “boutique litigation firm” that mostly handles plaintiffs’ work, but does some defense-side work as well. It has offices in a rather eclectic constellation of cities: Denver, Cody, Wyo., Phoenix and Cincinnati, and practices not only in areas typically associated with the trial bar — product liability, medical-malpractice, etc. — but in commercial litigation as well. Former Sen. Alan Simpson (R-Wy) is a partner at the firm.

Burg says the case came to them after Pursuit had gone to a handful of New York firms “that had conflicts.” We asked Burg if this seemed like a David v. Goliath situation, and he hedged. “I do,” he said, “but as we say out here, it’s not like it’s our first rodeo.” (After we received the UBS statement, we placed another call to Burg for his reaction, but have yet to hear back.)

It can be a challenge to keep up with the minute-by-minute minutiae of a long-running murder investigation and prosecution — and we definitely haven’t done that in regard to the tragic situation involving Robert Wone, who was murdered in a Washington, D.C., townhouse on the night of Aug. 2, 2006.

But we’ll try to give you the bigger developments, as we get them — and today, we have a couple. (In any event, for perhaps the best coverage of the situation, check out the Who Murdered Robert Wone? blog.)

The very brief background:

Wone, pictured, was murdered a little over three years ago while visiting friends in a tony section of Dupont Circle, in Washington, D.C. At the time, he was the newly installed general counsel at Radio Free Asia. Wone, who seemed a soft-spoken and well-liked type, left behind a wife. He was 32. Over two years passed before any criminal charges were filed - and then only conspiracy, obstruction of justice and tampering charges were brought against the three housemates Joe Price, Victor Zaborsky and Dylan Ward. For background on the murder and ensuing investigation, click here, here, here and here for LB posts, and here and here for a pair of Washington Post stories from June.

Two developments to report out today. For starters, the BLT blog has reported that, while federal prosecutors are convinced that Wone was injected with a drug before he was fatally stabbed, they may never get a chance to tell jurors the injection theory.

At a status hearing in the case on Friday, D.C. Superior Court Judge Frederick Weisberg said that he is “most reluctant” to let prosecutors argue that Wone was injected with a paralytic drug if the government is unable to put up more evidence to support the theory.

Assistant U.S. Attorney Patrick Martin, a lead prosecutor in the case, said the government has all the evidence it needs: needle marks on Wone’s body and no evidence that Wone was restrained or that he fought back. That Wone didn’t put up a fight or even clutch his chest, prosecutors say, is a sign that he couldn’t move when he was stabbed.

The second development comes courtesy of the Robert Wone blog referred to above.

Write the authors:

As the AUSA, FBI and defense teams wrestle it out over potential biologic evidence and high-tech testing, an old-school statement by the first responding MPD officer on the scene the night of August 2nd may shed new light on what the housemates knew, and their explanation(s) of the events that evening.

Unreported so far, MPD officer Diane Durham’s statement of Joe Price’s first narrative of the evening’s events presents a starkly different story of what he would later relate. Starkly.

Police officer Diane Durham, in her statement taken August 3rd at 6am by officer G. Russell Brown, relates the following:

“He said they heard someone scream and ran downstairs to see. said the victim was at the patio door bleeding, they opened the door, took him upstairs and laid him on the bed.”

Price’s interrogation statement in the affidavit . . . differs significantly.


“…when he arrived at the guest room he found Robert Wone laying in bed already having been stabbed.”

The plot thickens. Trial on the obstruction, conspiracy and tampering charges are scheduled to begin next May. Additionally, Wone’s widow, Kathy, has sued the three housemates for wrongful death. She is requesting $20 million in the suit, which is being handled by Covington & Burling’s Benjamin Razi.

The Danny Pang case took a turn for the tragic over the weekend. Pang, a 42-year-old Southern California businessman accused of a large fraud by federal securities regulators, died over the weekend in a Newport Beach, Calif., hospital after being rushed from his nearby home by paramedics. Click here for the WSJ story; here and here for the LAT’s.

An autopsy was done on Sunday; A coroner spokesman said a cause of death wouldn’t be given until the results of toxicology tests are known, which usually takes two to three months. He said there wasn’t evidence of foul play.

A neighbor said he saw police remove four or five small bags of evidence from the Pang house. Sgt. Evan Sailor, a spokesman for the Newport Beach police, said procedures call for an investigation if authorities suspect suicide or foul play. Sailor said the police hadn’t found evidence of foul play but didn’t know if Pang’s death was due to natural causes or was self-induced.

A front-page WSJ article in April raised questions about Pang’s business activities as well as past educational and employment claims. A former president of the firm Mr. Pang headed — Private Equity Management Group Inc. in Irvine, Calif. — told the Journal that the Taiwanese immigrant had admitted to him that part of the enterprise involved a Ponzi scheme. Click here, here, here for earlier LB posts about Pang, following the initial WSJ story.

Two weeks after the Journal story appeared, the SEC filed suit against Pang in Santa Ana, Calif., federal court. The SEC suit alleged that Pang defrauded investors, mostly in Taiwan, of hundreds of millions of dollars. The SEC said Pang told investors he would produce profits by buying life-insurance policies at a discount. The SEC alleged the insurance policies didn’t generate enough profit to cover costs or meet the promised investor returns. Instead, some investors were paid from money obtained from new investors, the SEC said.

A federal judge froze Pang’s assets and appointed a receiver. In late April, federal prosecutors charged him with illegally structuring cash transactions to avoid reporting requirements. Pang pleaded not guilty and was confined to his Newport Beach home by a judge.

A statement released by Pang’s family said they were “shocked and saddened by Danny’s sudden and tragic passing. Danny was a wonderful husband, loving father, and honest businessman. For the past five months, Danny was subjected to a relentless attack of innuendo and false allegations, and was denied any opportunity to defend himself.”

Reporters Would Have to Disclose Information in Special Cases

The Senate Judiciary Committee this week will take up a new version of a reporter shield law.

The bipartisan-backed legislation, which establishes a qualified privilege for reporters to withhold the names of confidential sources who provide information under promise of confidentiality, has been the subject of intensive lobbying by media companies for years. The companies were reacting to an increase in the number of subpoenas to reporters during the Bush administration, including the highly publicized case involving disclosure of the identity of Valerie Plame Wilson, a covert CIA officer.

Though a similar bill passed the House on March 31, as it had in 2007, the shield legislation has had trouble gaining traction in the Senate, due mainly to Republican opposition. Former president George W. Bush as well as the Justice Department under his administration also opposed the legislation.

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