I’m a trial lawyer. I bill by the hour. So do the associates who work for me. I have lots of clients, so I can pretty much work, and bill, as much as I want. This needs to be fixed. Yes, you read that correctly.
– Evan Chesler, managing partner of Cravath, Swaine & Moore, writing in Forbes
________________________________



Evan Chesler, a Cravath lifer and the firm’s presiding partner, has become the most recent high-profile lawyer to call for the end of the billable hour. In the upcoming issue of Forbes, in an article called “Kill the Billable Hour,” he writes: “The billable hour makes no sense, not even for lawyers. If you are successful and win a case early on, you put yourself out of work. If you get bogged down in a land war in Asia, you make more money. That is frankly nuts.”

Chesler’s bold prose makes for a good read. Intrigued, we rang him up.

Hi Evan. How’d we get stuck with the billable hour to begin with?

Somewhere, someplace, once upon a time, somebody said to a client, “I’m going to charge you for each hour I spend on your matter.” And that client said, “OK.” And from that a seed was planted, and a tree grew. I believe it’s time to plant new a new seed.

Many have called for the end of the billable hour. Have you seen any indication it could really happen?

Our firm has been doing alternative-billing arrangements. But you have to have an agreement with clients who are interested in doing it. At the end of the day, clients have the power of the purse.

At many firms associate bonuses are tied to billable hours.

That’s just a function of how law firms are doing it now. We don’t have any such quotas here. We don’t pay bonuses based on hours. I read in the papers that some firms do. I suppose that some firms, if they went to this kind of new paradigm, would need to change those metrics.

How would they do it otherwise?

The metrics should have always been: How well is a lawyer doing? How attentive to detail is she? How thoughtful is she? How creative? The good thing about what lawyers do is that educated observers — which is what a partner supervising an associate should be — can measure it. I don?t mean who wins or loses. The thought is that you should be rewarded for success.

In this new paradigm could we see contingency arrangements for corporate lawyers, such as a fee arrangement that rewards the firm for successfully defending company X against a suit?

That’s one of many models. Once people begin to think creatively about this, I have no doubt that the marketplace will foster many variations. A fee component tied to outcome will be one thing people consider.

So what do you think would be the highest hurdle to achieving a billable-hour-free world?

One is inertia. People tend to continue doing what they‘ve always been doing. Change requires the application of force. Another is the difficulty of defining what constitutes success. Because in large, complex cases, that’s not a question with a simple answer. It’s easy to think of it in terms of a jury foreman standing up and announcing who won. But the world is more complicated that that.

So you need to have open communication with clients about expectations and value. What’s this matter worth to the company — in terms of its bottom line, its culture, its reputation in the relative community? For instance, there are matters of principle that don’t necessarily have a big impact on the bottom line. There are matters of reputation — companies want to be considered good corporate citizens. And there are matters that can affect stock price, and creditworthiness with lenders.

Do you think that lawyers – particularly associates – would work less if the billable hour were banished? We’re always hearing about associates who spend more time in the office toward the end of the year in order to hit that 2,000 or 2,400 hour mark.

I don’t know. I never experienced that at Cravath. I’ve always billed what I believed was necessary to get the work done. I’ve never lived in a culture where anybody I knew said, “Gee, it’s October, I’ve got to hit a quota.”

Are there firms where that’s the case? If there are such firms, I’d think that a world in which fees are driven by the quality of the efforts and outcome would probably lead to a more efficient utilization of resources.

The reason we ask is because, in your Forbes article, you write, “Clients have long hated the billable hour, and I understand why. The hours seem to pile up to fill the available space.”

The perception is that the hours fill up to fill the available space. Clients have the sense that however much time is left before a deadline, the hours will simply fill up to fill it. Our view is that you take the time that’s needed to get the job done the right way. I’m always busy, so my incentive has always been to finish each thing as quickly as I could and move to the next matter.

A WSJ front-pager from yesterday, entitled “Housing Push for Hispanics Spawns Wave of Foreclosures,” documents the fated push by low-income housing groups, Hispanic lawmakers and mortgage lenders to increase home ownership for Hispanics. The article explains that, prior to this push, minority borrowers seeking loans were often stopped cold by a practice called red-lining, in which lenders were reluctant to lend within particular geographical areas, often, it appeared, on the basis of race. And then things changed.

“We saw what we refer to in the advocacy community as reverse red-lining,” Aracely Panameno, director of Latino affairs for the Center for Responsible Lending, told the Journal. “Lenders were seeking out those borrowers and charging them through the roof.” In 2005 alone, notes the WSJ, mortgages to Hispanics jumped by 29%, with expensive nonprime mortgages soaring 169%.



Also yesterday: New York AG Andrew Cuomo announced that about 455 black and Latino borrowers will split $665,000 in restitution from mortgage brokers HCI and Consumer One. The settlement is meant to compensate minority borrowers for alleged discriminatory practices regarding fees charged for mortgage-brokerage services.

“The blatant discrimination in this case is as illegal as it is inexcusable,” Cuomo said in a statement. “These customers were charged significantly higher fees for no reason other than being a minority - something that is explicitly against the law in New York State.”

In the statement, Cuomo also announced he’d filed a lawsuit against U.S. Capital Funding in the Eastern District of New York for allegedly engaging in similar discriminatory practices.

An HCI spokesman didn’t immediately have a comment when reached by Dow Jones Newswires on Monday. Spokesmen at Consumer One and U.S. Capital Funding didn’t immediately return phone calls seeking comment.

A statistical analysis by Cuomo’s office and the New York State Banking Department of loans arranged by HCI and Consumer One concluded black and Latino borrowers were charged several thousand dollars more in up-front fees than white customers.

As an example, Cuomo said Latino borrowers who received a single home-mortgage loan through HCI paid on average 55% more in fees, or about $2,680, than their white counterparts. African-American borrowers who received a single home mortgage loan were charged about 46% more in fees, or $2,260, than white customers, he said.

On today’s WSJ opinion page, Northwestern Law’s Steven Calabresi and Arizona State Law’s Michael Saks are calling on the High Court to take up Deltoro v. Florida, a challenge to an earlier Supreme Court case holding that juries of fewer than 12 members are constitutional.

William Bolivar Deltoro was tried by a six-person jury and convicted in 2007 of sexually assaulting his daughter. He was sentenced to life in prison without the possibility of parole. In 47 other states and traditionally in common law, a trial for such a grave offense requires 12 jurors. Deltoro’s trial by six was constitutionally permissible, explain the authors, because, in 1970, the Supreme Court decided that when the Framers used the word “jury” in the Constitution they meant to specify no particular number of jurors. The court held that juries could be as small as six and perhaps even smaller.

This, say Saks and Calabresi, runs contrary to the original meaning of the Constitution, tradition, precedent and empirical evidence showing that juries smaller than 12 don’t perform as well partly because they have a reduced “capacity for cross-sectional representation.”

Eight years after the 1970 case, the authors notes, the Court held unconstitutional Georgia’s attempt to reduce the size of juries to five. There was no consensus on why this was so, but one opinion, by Justice Lewis Powell, was candid enough to say that they were drawing a line based on nothing but their own unexplained say-so.

This morning, as President-elect Obama was announcing key DOJ picks, Griffin Boyette Bell, who served as Jimmy Carter’s first attorney general, from January 1977 to August 1979, passed away. Bell — who’d reportedly been suffering from kidney disease, pancreatic cancer and pneumonia — was 90.

“He was thinking outside the box before there was a box,” Bob Steed, a King & Spalding partner, told the Atlanta Journal-Constitution. The AJC notes that Bell (Georgia Southwestern College, Mercer U. School of Law) spent over six decades at the firm and almost 15 years on the federal bench. Click here for the NYT’s obit.

As AG, Bell reportedly helped rehabilitate the reputation of the Justice Department and push through the Foreign Intelligence Surveillance Act, or FISA, a law increasing judicial oversight of government wiretapping. (We wrote quite a bit about FISA in the first half of ?08.)
As a practicing lawyer, according to the AJC:

[h]is specialty lay in conducting internal, page-turning investigations for big companies in trouble: E.F. Hutton, after its financial scandal; Exxon, after the Exxon Valdez oil spill in Alaska; Dow Corning, after silicone breast implants were linked to health risks.

In 2002, Bell gave this commencement speech at his alma mater, Mercer University’s law school. He said:

In 1835, a young Frenchman by the name of Alexis de Tocqueville came to this country to study our prison system. He stayed for two years and ended up writing Democracy in America, an epic study of our democratic system. He reached many conclusions, and two apply to you.

First, he said that almost every problem that arises in a democracy will eventually be resolved in the court system. This was true then and it is true now.

Second, he said that there was no aristocracy in America, but that the nearest approach to aristocracy was in the lawyer class. His thought was that lawyers occupy an unusual and favored position in our system.

So now that you are about to become aristocrats, I want to give you a short lecture on behavior. We have an ample supply of lawyers in our country, and some of the lawyers overlook the obligation to serve others. They also distort the privilege of practicing law by converting it into a mere occupation. I was taught in law school that a lawyer had ethical obligations well above the morals of the marketplace. . .

One of the big questions in the Madoff case is just how many investors were burned. A statement released today by the court-appointed trustee in the liquidation of Madoff’s investment advisory firm gets at part of the answer.



The WSJ’s Amir Efrati reports that Irving Picard (pictured above), the trustee for Bernard L. Madoff Investment Securities LLC, announced that he mailed claim forms to more than 8,000 potential victims of the alleged Ponzi scheme run by Madoff.

The mailing list of more than 8,000 institutions or individuals who had open accounts at Madoff’s investment-advisory business within the past 12 months is an indication that the number of potential victims is bigger than previously known. And even that tally doesn’t include other investors whose accounts may have been opened but closed earlier, or were customers of “feeder funds” that brought in billions of dollars into the Madoff firm.

Picard will attempt to locate any assets held by the Madoff firm and distribute them among victims of the alleged fraud. The Securities Investor Protection Corp., a securities-industry nonprofit formed to help customers of failed brokerages, can pay out as much as $500,000 per customer for theft of securities from a brokerage, including a maximum of $100,000 on claims for theft of cash.

Update: Since we put up this post on Wednesday, the votes have been coming in. And right now, it’s a spirited race, with Eliot Spitzer in the lead (though not by much). We’re going to encourage you to continue the voting through the weekend and into next week before we make our final announcement. So get those votes in!

Before you close your browsers for the last time in 2008 and head off to well-deserved celebrations, we’re going to call on you one last time, Loyal Law Blog Readers.

After much deliberation (and some spirited argument) we’ve compiled, for your consideration, a list of 10 legal newsmakers (listed below in alphabetical order). Now it’s your turn to vote. Simply click on the button that appears after your selection. And if you’d like to try to sway your fellow readers, there’s always the comment section, too.

See also:

WORLD Law Direct - http://www.worldlawdirect.com/forum/...er-2008-a.html

Photo: AP

In her 2008 State of the Judiciary, New York Court of Appeals Chief Judge Judith Kaye, whose 25 year career on the bench ended Wednesday, called the nearly 11-year salary freeze for New York’s judges a “continuing misery.” In an interview, she told the Law Blog: “You can’t freeze the salary and expect that, as the demands get greater on the courts, you’ll continue to draw the people you need to deal with the problems.”

In his 2008 year-end report, Supreme Court Chief Justice — who in 2006 branded the federal judiciary’s pay freeze a “constitutional crisis” — made nearly the same argument. Over at WashWire, WSJ Supreme Court reporter Jess Bravin reports:

. . . [T]he chief justice chose to unfurl an artifact of Americana in the service of raising judges’ salaries, a delicate topic amid a recession and rising unemployment. The actual Star-Spangled Banner that flew over Fort McHenry during the British attack in 1814 can now be viewed at the Smithsonian’s newly renovated National Museum of American History, he observed. Yet “the stripes are frayed, the canton is worn, and one of its 15 stars has gone missing,” he wrote. Some of those scars came from “pitched battle” — but others “regrettably, from later neglect.”

In case anyone missed the metaphor (American flag=judicial pay), Roberts then shifted to requesting a raise.

“The Judiciary’s needs cannot be postponed indefinitely without damaging its fabric,” he wrote. “Given the Judiciary’s small cost, and its absolutely critical role in protecting the Constitution and rights we enjoy, I must renew the Judiciary’s modest petition: Simply provide cost-of-living increases that have been unfairly denied!”

Federal district judges, notes Bravin, get the same salary as senators and representatives, $169,300. Circuit judges clock in at $179,500, the eight associate justices of the Supreme Court receive $208,100 and Roberts himself earns $217,400.

For more on Roberts’ year-end report, click here for a WaPo report, here for an NYT report and here for an L.A. Times report.

A forthcoming book by legal writing teacher Bryan Garner reportedly lists New York Court of Appeals Chief Judge Judith Kaye among 18 legal writers who are worth emulating.

“Is that not the ultimate compliment for a failed journalist?” Judge Kaye said in an interview. “What would I do with a Pulitzer now?”

The first woman on New York’s Court of Appeals and the state?s longest-serving chief judge, Judge Kaye retires today from the bench after 25 years of service. We spoke to Judge Kaye about what if feels like to be taking off, what prompted her decision to go to law school in the first place and what she’s been up to in the last few weeks.

Hi Chief Judge Kaye. Thank you . . .

Isn’t it too bad that this is the last day people will call me chief judge?

Sure. But doesn’t the honorific remain after you leave the bench?

I guess there will be some people who do that. But it’s silly to say, ‘Hello, former chief judge.’

So why did you want to speak with me today?

Well, after 25 years on the bench and 15 years as the state’s chief judge, this is your last day. How does it feel?

I am experiencing the entire range of emotions. At many times I’m simply devastated. I’ll have to spend the next month in my chambers disassembling 25 years of a life that’s been very precious. Much of the time I’m very cool headed — almost steely — because I’ve known so long that this day is coming.

But I started the day with a kind of journalist’s approach. On Tuesday I’m getting the Dwight Opperman Award [for Judicial Excellence] from the American Judicature Society. He was the CEO of West publishing who took legal research into the computer age. So this morning I called Dwight and interviewed him for my speech. I asked him what the key to his success was. I had an enormous amount of fun. Things like that keep me from reflecting on how painful the day is.

Why is it painful?

Normally, in the month of December I?d have the January cases to prepare. So, already, my life is abnormal. Instead, my law clerks and I have been working on an article about trees and the law for the state bar journal.

Trees and the law? Like trees’ rights?

Mayor Bloomberg has an initiative to plant one million trees in the next ten years–220,000 of those will be sidewalk trees. So we wrote about the law potential as people fall into these tree wells. Will the cause of action be against the sidewalk owner or the city?

What’s the answer?

I didn’t decide because I’ll no longer be a judge. So we just laid out the issues.

It’s a clichéd question. But did you always want to be a lawyer?

No, no. I was the editor of my high school paper and then of my college paper, the Barnard Bulletin. In college I appeared with Bernie Nussbaum, the editor of the Columbia Spectator, on a Mike Wallace show about academic freedom. [Nussbaum, a former White House Counsel under President Clinton, is now a partner at Wachtell Lipton. He represents Judge Kaye in her judicial pay lawsuit.] So after college I wanted to be a journalist.

I worked for the Hudson Dispatch of Union City, New Jersey. In 1958 that was the only place I could find work as a woman. But it was so dismal to be reporting weddings, church socials and women’s club meetings. So I started going to law school at night, thinking that it could advance my journalism career – that I could acquire a credential that would enable me to get off the social page and onto the news side of journalism.

But, after the first exam period, I had done really well and thought I could be a lawyer. A large part of my success in law school was my ability to write a simple sentence. And to know what’s important, to know what should go first and what should go last. I attribute those skills to my journalism career.

You’ve referred to the judicial pay freeze in New York State as a “continuing misery.” You’re the lead plaintiff in the push to win a pay increase for the judiciary. What do you suspect will happen with that?

It’s inconceivable to me that there won’t be some adjustment in the salaries. It’s so wrong and so unfair. There’s no working person who’s had a frozen salary going on 11 years. You can’t freeze the salary and expect that, as the demands get greater on the courts, you’ll continue to draw the people you need to deal with the problems.

The Maryland Court of Appeals just decided to reduce vacation days for the state’s judges – from 27 to 22 — and allow them to buy back leave time. It’s a cost-saving plan that the judiciary apparently backed in order to help fix the state’s budget crisis. How does that strike you?

When we issued our budget we received a request from the governor to reduce it. We only had had a minimal increase, but we did go back and reduce the budget even further. We’re aware we need to be careful.

In the 2008 State of the Judiciary, you declined, in the introduction, to answer the “what next” question because you still had 49 days of service left. Now there’s one day left. Can you tell us what’s next?

Not yet. My next two activities are emptying these chambers, and writing the first paragraph of chapter three of my professional life. Chapter one was law firm life and chapter two was my judge life. Chapter three is going to be more working life, not retirement.

We’ve heard rumors that you might replace Hillary Clinton in the senate.

I’m not thinking yet about my chapter three. You’re still talking to the chief judge, Dan. Have some respect. [Laughter]

Alberto Gonzales needs a publisher for his book for the book he’s writing to set the record straight about his controversial tenure as attorney general. In an interview yesterday with the Wall Street Journal’s Evan Perez, he said he’s writing it if only “for my sons, so at least they know the story.”

“What is it that I did that is so fundamentally wrong, that deserves this kind of response to my service?” Gonzales said during the lunch interview, two blocks from the White House. He said: “for some reason, I am portrayed as the one who is evil in formulating policies that people disagree with. I consider myself a casualty, one of the many casualties of the war on terror.”

Gonzales said he didn’t play a central role in drafting the widely criticized legal opinions that allowed the CIA to use aggressive interrogation techniques on terrorism suspects and expanded the president’s power to hold “unlawful combatants” and terrorism suspects indefinitely. He also said he told the truth to Congress about a classified eavesdropping program authorized by the president, and admitted to making mistakes in handling the U.S. attorney firings while maintaining that he made the right decisions. He says that while he bears responsibility as former Attorney General that “doesn’t absolve other individuals of responsibility.”

In one of his final acts before leaving office, Gonzales denied he was planning to quit, even though he had told the president of his intention to resign. Asked about the misleading comment, he said: “At that point, I didn’t care.”

Illinois Gov. Rod Blagojevich announces his choice of former Ill. AG Roland Burris to fill Barack Obama’s Senate seat, Dec. 30, 2008 in Chicago. (AP/M. Spencer Green)

Earlier today, 50 members of the Senate signed a letter urging Illinois Gov. Rod Blagojevich not to appointment Roland W. Burris, the former attorney general of Illinois, to the Senate. The letter explained: “Please understand that should you decide to ignore the request of the Senate Democratic Caucus and make an appointment we would be forced to exercise our Constitutional authority under Article I, Section 5, to determine whether such a person should be seated.”

Thanks to our Beloved Readers, who weighed in on the likelihood that Blago’s Senate pick will stick, we checked out Powell v. McCormick, a 1969 case, and checked in which Rick Hasen, author of the Election Law Blog.

We asked Hasen if the Powell case might prevent the Senate from keeping Burris out. In the Powell case, Adam Clayton Powell, a representative from Harlem who’d been facing some legal problems, won reelection in 1966. But the House of Representatives voted to exclude him. The High Court held that the proceedings against Powell were intended to exclude and not expel him from the chamber, and that the House had no power to exclude a duly elected member.

Hasen confirmed that the expulsion/exclusion distinction will be important. “If somebody is seated in the Senate and then the Senate wants to remove them, the person is expelled with a two-thirds vote,” Hasen told the Law Blog. “Powell v. McCormick was an attempt to exclude the person – not seat him – and the Supreme Court said it wasn’t permissible.”

So what might the Powell case mean for Mr. Burris’s future in the Senate? It could mean that, once seated, a two-thirds vote could give him the boot. Hasen said: “I think it’s likely that if Burris does get a two-thirds vote for expulsion, then the courts would not interfere with the Senate’s decision to keep him out.”

Tallying the losers in the Madoff scandal has become somewhat of a parlor game. On the legal front, we’ve seen the New York Law School emerge as an alleged victim. But the criminal justice system is reeling, as well.

Earlier this month, the JEHT Foundation — a major financial supporter of the Innocence Project in Texas, among others — announced it would shut its doors in January because its prime donors invested with Madoff. JEHT, according to this Business Week article, is a six-year-old New York City-based philanthropy focused on juvenile and criminal justice, human rights, and election reform.

JEHT provides $125,000 of the Innocence Project’s $200,000 annual budget, the project Chief Counsel Jeff Blackburn recently told the Austin American-Statesman. JEHT also was to provide a grant to help pay for DNA testing in hundreds of cases in Dallas County, where District Attorney Craig Watkins has announced an initiative to use science to find out if inmates have been wrongfully convicted. (See this WSJ profile on Watkins, whom the Dallas Morning News recently named 2008 Texan of the Year.) The Dallas County office got the bulk of that grant — about $400,000 — before JEHT closed its doors, so most of the DNA testing can go forward. But the Innocence Project of Texas will now be hard pressed to expand its work throughout the state, Blackburn told the Law Blog. “Our efforts to raise money from private individuals has just about dried up. Nobody is going to give money to get somebody they don’t know out of prison when they are worried about whether they can pay their own bills. We’re heading into real shaky ground.”

The collapse of JEHT will also hurt the work of Massachusetts attorney Bob Fleischner, who Business Week reports was instrumental in the legal battle to end solitary confinement for Texas’ youth offenders. Fleischner, the assistant director of the Center for Public Representation, recently discovered that JEHT’s three-year, $700,000 grant to support the group’s youth justice work would be discontinued immediately.

Other criminal justice programs that were hit by JEHT’s demise include the Michigan Department of Corrections, which since 2005 has funded programs dedicated to easing inmates’ re-entry to society; and Human Rights First, which, according to this WSJ story, has lost about 8% to 10% off the its revenue as a result of the scandal.



In Rhode Island, Sol Rodriguez, executive director of the Rhode Island Family Life Center, told the Providence Journal that the agency has been granted a total of about $500,000 from JEHT. In Connecticut, the Center for Children’s Advocacy Inc., according to an AP report, says that an $85,000 JEHT grant was frozen. As a result, the center reportedly halted its investigation into mental health services available to children in the state’s juvenile justice system. And in Philadelphia, according to the Inquirer, the Juvenile Law Center had received about $250,000 from JEHT to support operating expenses and appellate work earlier this year.



Now let’s head further west. In Tennessee, Chattanooga Endeavors, a group that provides job assistance for former inmates, was hoping for a $100,000 grant, executive director Tim Dempsey told the Chattanooga Times Free Press. Roger Werholz, the Kansas state secretary of corrections, credits a $4.7 million grant from JEHT with a 45% drop in recidivism over the last decade by helping the state change its approach to offenders. “A lot of what JEHT initially funded has now been built into our budget,” Roger Werholz, the Kansas state secretary of corrections, told BizWeek.

Up in Wisconsin, courts are hurting. According to the Capital Times, the state courts office has canceled a $326,000 study of alternative court programs. Most of that money, which had been pledged by JEHT, was to be used to study the 19 county-level drug, alcohol and mental health programs in the state to determine whether a statewide alternative courts strategy was needed.

Action on the law firm front continues to reflect the tough market conditions. A couple quick items to note:



Heller Files: As expected, following its announcement in September that the firm would disband and dissolve, Heller Ehrman today announced it’s filed for Chapter 11 bankruptcy.

“This is not a result of the firm’s running out of money,” said Peter Benvenutti, chairman of Heller’s dissolution committee. “On the contrary, due to the positive responses received from hundreds of former clients, collection of accounts receivable over the past three months has been strong. And going forward, we expect collection of tens of millions of additional dollars. Nevertheless the Committee’s fiduciary obligations to all creditors required it to file a Chapter 11 Petition at this time.”



Orrick Freezes: A couple weeks ago we asked whether Latham & Watkins’ salary freeze could portend a legal ice age. Today, Orrick also froze over. In an e-mail to the firm, chairman Ralph Baxter said: “After careful consideration, we have decided that associates in the US and Europe, and associates, senior consultants and consultants in Asia, will receive the same salary in 2009 as you received in 2008. . . . We will ensure that our 2009 bonus program gives us additional flexibility to reward outstanding performance and remain competitive in the marketplace.

Last month, we noted a New York Law Journal report in which Baxter, whose firm had recently laid off 40 lawyers, called the current bonus system “not sustainable.”

Is cheerleading a “contact sport”?

Not according to a Wisconsin appellate court, which is good news for the lawsuit brought by ninth-grade cheerleader Brittany Noffke, who reportedly fell while practicing a three-person stunt and suffered a head injury. Noffke, a member of the Holmen High School cheerleading team (Go Vikings!), sued Kevin Bakke, another cheerleader who allegedly failed to properly spot Noffke.

Click here for a report from the Marquette University Law School Faculty blog.

The appellate court ruled that cheerleading is not a contact sport for purposes of a Wisconsin statute, which provides that a participant “in a recreational activity that includes physical contact between persons in a sport involving amateur teams” is liable only for causing injury to another participant by acting “recklessly or with intent to cause injury.” Therefore, the statute did not bar Noffke’s negligence claim against Bakke.

The court concluded, according to the Marquette blog, that, although “the risks and the athleticism involved in cheerleading are comparable to those in contact sports,” cheerleading is not a “contact sport” because “it does not involve physical contact between opponents.”

Huh. Seems reasonable enough to us. Law Blog Readers, any thoughts? (And please keep your comments respectful.)

As the characters in the Watchmen worry over impending nuclear war, the graphic comic has sparked a much smaller skirmish in Hollywood over who owned the rights.



20th Century Fox scored a big copyright win in California federal court on Wednesday when U.S. District Judge Gary A. Feess, in a five-page order, granted Fox’s claim of copyright ownership in Watchmen, a forthcoming flick from Warner Bros. (Pictured, right, is Silk Spectre II, played in the film by Malin Akerman.)

The ruling in favor of Fox, reports the WSJ comes as a surprise, given that the studio appeared to have dropped the project more than a decade ago and was not involved in producing the film. Fox bought the rights to “Watchmen” in the 1980s for one of its top producers, Lawrence Gordon, who helped produce the “Die Hard” franchise. But the studio eventually abandoned its plans to make a film from the graphic novel. Gordon then took the project to Warner Bros. and Legendary Pictures.

“Fox owns a copyright interest consisting of, at the very least, the right to distribute the Watchmen motion picture,” Judge Feess wrote. What form Fox’s rights will take remains to be seen, but Judge Feess said he’ll issue a more detailed order soon. He advised the studios to focus on reaching a settlement or appealing the decision.

(Disclosure: Fox is a unit of News Corp., which also owns Dow Jones & Co., publisher of The Wall Street Journal.)

President Bush giveth, and then he taketh away. And now the question is: Can Isaac Toussie get it back?

The answer: At the very least, Toussie, the Brooklyn real estate developer whose pardon was revoked on Wednesday, just 24 hours after Bush issued it, has a good case.

“There are two types of pardons — conditional and unconditional,” Harold J. Krent, a Con law prof and the dean of Kent College of Law, told the Law Blog today. “Conditional pardons depend on the beneficiary doing certain things, such as leaving the country or the Communist party, or not consorting with undesirables. There, presidents have the right to determine unilaterally whether someone has failed the condition. But, in Toussie’s case, it was an unconditional pardon. So, in my mind, when the pardon vests or becomes final then it’s a legal act that can’t be revoked. That?s going to be a detail question. Did Bush announce the pardon? Was it delivered?”

So what happened in Toussie’s situation? For starters, the pardon was announced in this DOJ press release, put out Tuesday. We’re not sure whether, or how, Toussie received notification. However, in this McClatchy story about Eduviges Duvi Gonzalez-Matsumura, whose name was on the same pardon list with Toussie’s, Gonzalez-Matsumura said that a DOJ official called her on Tuesday with the news of her pardon.

Where is this delivery requirement found? In an 1869 case in the Southern District of New York, called In re De Puy. In his holding, U.S. District Judge Blatchford implied that a pardon became valid upon delivery to the prison warden in charge of the beneficiary.

“I think it could be challenged,” Dan Kobil, a prof at Capital U. Law School, told the LB. “It should be possible for Toussie?s attorneys to go to court for a declaration that the pardon became effective when the warrant was signed and, depending on the facts, when it became communicated to him or when he read it.”

Kobil cited an old Texas case in which he says the governor tried to similarly take back a pardon and the court of appeals ruled that he could not. There, said Kobil, the court reasoned that the governor is given the power to pardon, but not to revoke pardons. “A similar argument could be made here. Once Bush has done it, it?s not as though he’s a king who can turn around and say, ‘You’re a felon again by way of the scepter.’”

Some extraordinary initiatives have been launched in recent times to ensure that the poorest of the world have access to medicines to fight pandemics and life-threatening diseases. One such is UNITAID, an international drug purchase facility that brings together 27 countries to help fight three killer diseases: HIV/AIDS, malaria and tuberculosis. The project was started by France, Brazil, Chile, Norway and the UK and its members are mostly African countries which are the worst victims of these afflictions.

Set up on September 19, 2006, to ensure a stable source of funding, the organisation has taken on board the Gates Foundation and South Korea, and is hoping to extend its reach. India is not part of this initiative although the UNITAID spokeswoman tells me that it is "one of the target countries for membership".

UNITAID has been innovative from the start. To ensure sustainable and predictable resources, it hit upon the idea of levying a solidarity tax on airline tickets. Not all the member-countries have imposed the levy but almost of them are in the process of doing so, each deciding on what's the most feasible rate, given their level of development and the elasticity of demand. Thus, African countries, for the most part, are imposing the tax only on international flights, or on business/first class tickets.

Early this month, UNITAID took a decision that can only be described as momentous. Addressing the intellectual property aspect of access to medicines, the executive board decided in principle to set up a patent pool — a decision that has delighted health activists but is not exactly making the pharmaceutical industry whoop for joy. A patent pool is a mechanism in which various patents held by different entities, such as companies, universities and research institutions are made available to others for production or further development, such as paediatric or fixed-dose formulations. The patent holders are paid a royalty by those using the patents, with the pool managing the negotiations, the licensing arrangements and payments.

Medecins Sans Frontieres (MSF), which has been pushing this idea for some time now, says a patent pool can help speed up the availability of generic versions of new medicines long before the 20-year patent term runs out. For the IPR holder, too, there is an incentive: it would widen the market for their products since drugs produced under licence from the patent pool would be exported to designated countries.

A patent pool has become increasingly critical because the prices of new drugs are way too high for patients in poor countries, specially for antiretrovirals (ATRs) to treat AIDS. MSF pays between $613 and $1,022 for the newer WHO-recommended regimen for first-line AIDS treatment — a seven to 12-fold increase compared to older first-line treatments which are now available for just $87 per patient per year. Increased competition would bring down prices and MSF believes that a patent pool is the best way to do it. UNITAID's budget for the current year is just $361 million, far from adequate for the demand it needs to meet.

One reason why activists are pushing hard for patent pools could be the India factor. Earlier, it was an aggressive push by Indian generic companies that dramatically brought down prices of the older ATRs and turned the country into the ‘pharmacy of the world' as Ellen ‘t Hoen, director of policy at MSF's Access Campaign, once described it. That was before the product patent regime was introduced in India in 2005. Today, it's doubtful if India can continue to play such a role. The takeover of Ranbaxy, the country's largest company, by the Japanese Daiichi Sankyo and the trend of domestic companies entering into restrictive licensing agreements with the global pharma giants has virtually signalled the end of the glory days.

A patent pool is also a better alternative to compulsory licensing which is running into tortuous litigation and retaliatory action from the patent holders. But can a patent pool for drugs become effective? Patent pools by themselves are not a new idea, and were used as early as the 19th century to manufacture sewing machines. In the last century, the concept was used to solve both R&D (upstream) and access (downstream) problems in the manufacturing, metallurgical, paper, electrical, and chemical industries.

Today patent pools are a favoured system in technology sectors that require common standards, such as the MPEG-2, DVD-video, DVD-ROM and radio.

Medicines, though, are trickier terrain. What it requires is more imaginative management. UNITAID may be able to pull it off with some luck and lots of hard work. It is first setting up a task force that will formulate an operational plan for creating the patent pool. It is already looking for the right members for this task force — experts in patent law, legal and business risks, economic analysis, public health and medicines — and is hopeful getting it started in a month's time. They have a delicate and onerous task before them. Millions of people are waiting hopefully at the patent poolside.

By Ms.Bobby Aanand, Metropolitan Jury.

One of the more tabloid-ready suits of 2007 drew to an apparent close today.

Back in April 2007, Richard Snyder, the former chairman and CEO of Simon & Schuster, sued Edgar Bronfman Jr., claiming that Bronfman stiffed him after Snyder helped negotiate Bronfman’s 2003 takeover of Warner Music Group. The causes of action? A potpourri of classic contract claims: unjust enrichment, promissory estoppel and quantum meruit. Here’s past LB coverage.

In April of this year, the Supreme Court of New York County denied Bronfman’s motion to dismiss. Today, the appellate division reversed. Here’s the order.

In a statement, Bronfman’s lawyer, the ever colorful Orin Snyder of Gibson Dunn, said: “We are gratified that the appellate court vindicated Mr. Bronfman . . . Today’s decision confirmed what we have said all along – that Dick Snyder’s claims were nothing more than a work of fiction.”

A call to Richard Snyder’s lawyer, Wilson Sonsini’s Robert Gold, was not immediately returned.

It’s not often that we can hit on law firm attire — partly because, well, there’s not too much to say. Perhaps that’s the very reason Freshfields Bruckhaus Deringer is trying to “smarten up” its lawyers. The company, according to the Daily Mail, has hired image consultants to draw up some sartorial guidelines.

Here’s a few points of their advice, according to the Daily Mail:

• Women at the firm have been advised to wear high heels with skirts rather than trousers to “embrace their femininity.”
• Male employees under 5″ 9″ are advised against wearing double-breasted suits in favor of a leaner single-breasted style.
• Brown shoes and button-down shirts are frowned upon as “too casual”.

A spokesman told the Daily Mail: “It’s basically a session on how to project a professional image within the workplace. “It’s advice rather than a list of do’s and don’ts,” he added.

Any other reason women were advised to wear high heels? Lucinda Slater (no relation), a lawyer-turned-image-consultant and founder of Best Foot Forward, told the Daily Mail: “It helps them stand better and gives them height.”

Another shoe has dropped in the case of fallen lawyer Marc Dreier, who’s alleged to have perpetrated a massive fraud against a group of hedge funds. In a criminal complaint, prosecutors are attempting to tie a former broker, Kosta Kovachev, to the fraud. Kovachev was charged with one count of conspiracy to commit wire fraud.

The complaint alleges, among other things, that Kovachev pretended to be the controller of a realty company to effect a meeting with a hedge fund. (We’ve confirmed that the company was New York-based Solow Realty, though the name is not in the complaint.) Dreier purported to sell promissory notes on behalf of the realty company, but the notes were fictitious, according to the complaint. Federal officials have said that Solow was uninvolved.



Peter Kalikow, March 31, 2005. (AP/Richard Drew)

Dreier and Kovachev have crossed paths before. This 2004 NYT article, which details a legal skirmish between New York real estate competitors Sheldon Solow (owner of Solow Realty) and Peter Kalikow, tells the following story.

Kalikow sued Solow, believing he was responsible for newspaper ads listing more than 400 creditors from Kalikow’s personal bankruptcy proceeding in 1991. The ads suggested that Kalikow had misled the bankruptcy court about the extent of his assets. But the bankruptcy had been settled years before, and there were no outstanding creditors.



Real estate mogul Sheldon Solow, Dec. 5, 2007. (AP/Evan Agostini)

A bankruptcy judge agreed that Kalikow had proved that Solow was the man behind the notices. The judge, according to the Times, said that even a man from Mars would conclude that the ads represented “an affront to the court” and a “somewhat sleazy course of conduct.” He ordered Solow to pay Kalikow’s expenses, and, according to the Times, “practically invited him to pursue claims against Mr. Solow’s law firm before ‘professional or legal tribunals that govern professional conduct.’ ”

At that time, Solow’s law firm was Dreier LLP, according to the Times. And here’s where Dreier and Kovachev come in: At the bottom of the ads was the name of a company, Evergence Capital Advisors, and a telephone number, the Times reported. An investigation revealed that Evergence was a dissolved Florida company that had been headed by Kosta Kovachev, but the phone number led to Dreier LLP. The ad reportedly generated 58 phone calls to Dreier’s firm, according to the Times.

During a subsequent deposition, Dreier acknowledged that Kovachev was his client and that he had a second client involved in the case, Sheldon Solow, according to the Times. A lawyer for Kalikow, Stanley S. Arkin, criticized what he called Solow’s “irrational animus for [Kalikow],” but he reserved his sharpest jab for Dreier. “He was facilitating an angry and vicious assault on his client’s perceived enemy,” Arkin told the Times.

We’ve called a Solow spokesman and are awaiting a response. Mr. Kovachev, who is expected to appear in court today, could not be reached for comment this morning.

It’s hard to know what to make of the post-trial fallout in the case of Senator Ted Stevens (R-Alaska), who in October was found guilty (is that a conviction?) of seven counts of lying on Senate financial documents.



Ted Stevens and his attorney, Brendan Sullivan, leave court in Washington, Oct. 27, 2008, after a guilty verdict was returned by the jury at his trial. (AP/Gerald Herbert)

During trial, prosecutors seemed to bungle the case badly. Then, last month, we noted a report that a witness in the trial had told the judge that he received extensive help from prosecutors prior to taking the stand and would have testified differently had he not been given the assistance.

And now this: The Legal Times reports that an FBI agent is accusing prosecutors of intentionally withholding exculpatory evidence from Stevens’ lawyers and scheming to conceal a witness from the defense team. The whistleblower, whose name was redacted from an eight-page complaint, has worked for the FBI since 2003. The allegations, notes the Legal Times, could substantiate claims by Stevens’ lawyers that the government intentionally withheld evidence favorable to Stevens.

Among the allegations in the whistleblower complaint: the prosecution intentionally redacted FBI reports to make the information mirror what had been given to the Williams & Connolly defense team. The FBI agent also says that a Public Integrity Section prosecutor devised a scheme to relocate a government witness who was under a defense subpoena. In court, Judge Sullivan fumed at the prosecution for moving the witness from D.C. back to Alaska.

“The new whistleblower complaint shows unmistakably that government representatives lied to the court or stood by silently while other members of the prosecution team represented facts to the court that simply were not true,” wrote Williams & Connolly’s Robert Cary in a renewed motion to dismiss.

A sentencing date has not yet been set, but in February Stevens’ lawyers will argue a motion for a new trial.