The BLT: The Blog of Legal Times

Photos From This Week's Toyota Hearings

The National Law Journal's photo editor, Diego M. Radzinschi, was at this week's two congressional hearings on Toyota's safety record. Here's what he saw.

Members of the U.S. House Committee on Energy and Commerce (above) are settled in at the dais Tuesday.

Akio Toyoda, the president of the Japanese automaker, testified Wednesday before the House Committee on Oversight and Government Reform. King & Spalding partner Daniel Donovan III, a member of the company's legal team, can be seen between Toyoda and the interpreter.

D.C. Court of Appeals to Consider Consumer Protection Law En Banc

The D.C. Court of Appeals today granted an en banc hearing to consider a key question about Washington’s local consumer protection law: Exactly who can use it to bring a lawsuit?

Lawyers for AOL and several major telephone companies are attempting to reverse two recent rulings by the court, in which it concluded that the D.C. Consumer Protection Procedures Act allows individuals to act as private attorneys general and sue corporations on behalf of the public interest, whether or not they themselves have been injured.

In September, a unanimous three-judge panel ruled in Grayson v. AT&T that U.S House Rep. Alan Grayson (D-Fla.) could continue to pursue a lawsuit arguing that phone companies were illegally holding onto unused balances from pre-paid phone cards, rather than handing the money over to the District. Grayson, represented by Frederick Cooke Jr. of Washington’s Rubin, Winston, Diercks, Harris & Cooke, filed the suit as a plaintiff in 2002 while living in Florida. In a footnote, the court said it wasn’t bound by the standing requirements for Article III federal courts.

In November, another unanimous three-judge panel used the same reasoning to uphold a lawsuit against AOL, in which it was accused of misleading existing users into paying higher rates for their service than new customers. Rubin Winston partners Jeffrey Harris and Walter Diercks represented the plaintiffs in that suit.

In their petition for rehearing, AOL’s lawyers from McGuireWoods, including partner John Wilburn, argued that by allowing “private attorneys general” to bring consumer protection suits, the appeals court was inviting a flood of litigation. “Simply stated, there is too much at stake for the D.C. courts to permit a poorly-analyzed footnote…to completely overhaul modern jurisdictional law,” the defense lawyers wrote.

Of the six judges who signed onto the two decisions, five will sit on the nine-judge en banc panel, meaning a majority have already ruled in favor of the plaintiffs (the sixth judge had senior status). Whether one of the judges is reconsidering his or her stance, or the court intends to deliver a more authoritative reading of the law, remains to be seen.

Today’s order also granted the D.C. Attorney General’s Office permission to participate in the case as an amicus curiae. The District filed its own suit against AT&T in January.

Revenue, Profits Slip at Steptoe & Johnson

Washington-based Steptoe & Johnson saw declines in both revenue and profits in 2009. But firm Chairman Roger Warin said he thought it was a "pretty good year." Last year "was all about simply trying to make it through the rapids," he said.

Steptoe's gross revenue dropped 5%, from $356.4 million to $338.6 million. Revenue per lawyer slid 4.47%, to $807,897. Net profits dropped 4.9%, to $130.17 million. And profits per equity partner decreased 3%, from $904,407 to $877,177.

Warin said Steptoe’s transactional practices were hit hardest by the recession and were much of the reason for lower revenue and profits. “But we actually exceeded our budget for a down year,” he said.

Steptoe’s litigation practices, which make up 56% of the firm’s business, did fairly well last year, Warin said, although intellectual property litigation in particular was down. Steptoe saw an uptick in Foreign Corrupt Practices Act cases, and its white-collar defense practice had its best performance in years, he said.

Steptoe’s regulatory practices, which make up 35% of its business, also stayed busy, Warin said.

The firm represented Seagate Technology and Mitsubishi before the International Trade Commission last year. It also took the lead in getting indictments thrown out against Blackwater security guards charged in the shooting deaths of 17 Iraqi civilians in September 2007.

Stephen Fennell, who chairs the litigation practices, said the firm expected an increase in lender liability litigation after the economy hit the skids. But that work didn’t materialize in 2009. Now “we’re starting to see an increase in that work,” Fennell said.

Steptoe’s headcount dipped slightly, from about 421 to about 419. Likewise, the equity partner ranks dropped 1.96%, from about 151 to about 148. (The firm does not have nonequity partners.) Four new partners brought books of business that added about $15 million to the firm’s revenues, Warin said.

Steptoe also saw a number of departures. Warin put those down, in part, to the “natural attrition in our associate ranks.” Referring to lawyers at all levels, he said, “We saw 2009 as a return to a more healthy level of attrition after 2008, where few people wanted to make a move.”

Steptoe trimmed $11.1 million from its expense budget through several cost-cutting measures, including renegotiating lease agreements for its Phoenix and New York offices and freezing associate salaries. Also, several members of the administrative staff retired. The firm did not lay off any lawyers or staff members, Warin said.

Because the firm’s workload remained down through the first three quarters of 2009, Warin said, the firm deferred the incoming class of associates until 2010. But it began calling some associates into work in the fourth quarter. “The fourth quarter was good for us, and we saw that January 2010 was equally robust,” he said.

The firm posted a 5% increase to its pro bono hours, which Warin attributed to lawyers having more free time.

Revenue Up, Net Profits Down at McGuireWoods

Thanks to a combination of cuts and acquisitions, Richmond-based McGuireWoods managed to finish 2009 up in gross revenue, down in net profits, and up in profits per equity partner.

The firm’s gross revenue grew 6.73%, from $477 million to $509 million. Revenue per lawyer stayed nearly even, dipping .09%, from $595,320 to $594,773.

McGuireWoods’ net profits dropped by 3.03%. But the decrease was offset by a 8.59% cut in the number of equity partners, from 192 to 175, so profits per equity partner rose by a healthy 6.21%, from $754,226 to $801,028.

So what drove revenue higher? Managing Partner Thomas Cabaniss said that McGuireWoods maintained its business with longtime clients, and that its insolvency and restructuring practice had “a fantastic year.” Cabaniss said the firm also got a boost in 2009 from two key mergers: its March 2008 marriage with Charlotte, N.C.-based Helms Mullis & Wicker, which generated its first full year of revenue; and its May 2009 acquisition of London-based Grundberg Mocatta Rakison, which brought 36 additional lawyers to the firm.

The Grundberg merger helped McGuireWoods raise overall headcount to 856 lawyers. The number of nonequity partners also jumped 17.92%, from 212 to 250. Nonequity compensation grew 26.9%, from $65 million to $82.5 million.

Cabaniss said that the firm attempted to “aggressively manage its expenses,” though he declined to point to specific cost saving measures. The firm announced in May that it would cut incoming associate salaries by 10%, from $160,000 to $144,000. Above the Law also reported that the firm froze other associate salaries at 2008 levels and shrank its summer program to eight weeks.

Tracking Justice Stevens' Milestones

Supreme Court Justice John Paul Stevens, who turns 90 on April 20, is closing in on some other major milestones. In about three months, Stevens, who joined the Court in 1975, will pass "the great chief justice" John Marshall in terms of length of service, and a month after that he'll pass Justice Stephen Field's length of tenure as well, lagging behind only William O. Douglas. It would take Stevens about two more years in office to catch up to Douglas's record tenure of 36 years, six months, and 25 days.

All these statistics are now available at the ever-useful Oyez Project, as valuable an online resource on the high court as  can be found. The length-of-service numbers and other data will be updated daily for the nine sitting justices, so you'll be able to track when Stevens leaps ahead of long-serving predecessors.

Northwestern University political scientist Jerry Goldman, founder of the site, added the length-of-service material in part because of Stevens' impending milestones. Goldman laughingly noted that Stevens has on his desk at the Court a signed baseball from Baltimore Orioles player Cal Ripken Jr., who holds the record for most consecutive games played (2,632), having surpassed Lou Gehrig's record of 2,130 consecutive games. (Stevens' baseball, by the way, can be viewed on the Oyez Project's visual tour of the Supreme Court.)

Even if Stevens does not surpass Douglas, Goldman said, coming in second -- as the Lou Gehrig of the Court, as it were -- is "not a bad record to hold."

The stats on Oyez reveal that Stevens is also bumping up to a record held by Justice Oliver Wendell Holmes Jr. as the oldest justice to serve on the Court. When Holmes retired in 1932, he was roughly 90 years and 10 months old.

While all of this is of interest to Supreme Court aficionados, Stevens insists he is not keeping his eye on the record books. "I'm not out to break any records, I can assure you of that," Stevens told C-SPAN in an interview last June.

Footnote: The stats also reveal that the Court's newest justice, Sonia Sotomayor, has already beat out another justice in length of service. She's been on the Court for six months and 15 days, but that's more than Thomas Johnson, who lasted only five months and 10 days, resigning in 1793 after authoring only one opinion.

Malpractice Liability Is a Focus at Health Care Summit

Today's televised "summit" on health care is proving to be a new forum in which Republican lawmakers can press again for limits on medical malpractice awards, and another opportunity for the plaintiffs' bar to play defense.

At the start of the meeting, taking place about a block from the White House, one prominent Republican listed a tort overhaul as one of his party's priorities. Sen. Lamar Alexander (R-Tenn.), who is third in the U.S. Senate’s GOP leadership, said there are too many “junk lawsuits against doctors.”

“In our state, [in] half the counties, pregnant women have to drive to the big city to have prenatal health care or to have their baby, because the medical malpractice suits have driven up the insurance policies so high that doctors leave the rural counties,” Alexander said.

As with the broader health care legislation, medical malpractice proposals have taken a winding path over the past year. In June 2009, President Barack Obama told doctors that “we need to explore a range of ideas” on malpractice liability. The House and Senate then approved differing provisions, both of which fell far short of what doctors and Republicans wanted.

The American Association for Justice, which lobbies for plaintiffs’ lawyers, is writing about today’s summit on a Twitter feed, and it’s focusing on the malpractice debate. The group’s response to Alexander: most lawsuits against doctors that prevail in court are meritorious, according to a 2006 study in the New England Journal of Medicine.

“Also,” the group tweets, “more docs in TN than ever, rising faster than state’s population growth. And they are one of few states without caps [on medical malpractice awards].”

On its own Twitter feed, the U.S. Chamber of Commerce's Institute for Legal Reform touts competing evidence about potential savings from limiting malpractice awards.

Revenue, Profits Tick Up at Wiley Rein

Wiley Rein's revenue and profits showed a small rise in 2009. Gross revenue rose 1 percent, from $198 million in 2008 to $200 million last year, and profits per equity partner rose from $950,000 in 2008 to $965,000, a 1.6 percent increase.

Revenue per lawyer rose to $715,000 from $695,000 in 2008.

Firm managing partner Richard Wiley said the numbers were better than the firm anticipated in a difficult year. "We expected it to go down," he said of gross revenue. "The fact that it went up a little bit was good. We were careful on our expenditures, and therefore, we were able to, I think, come up with a good result for the partners."

Wiley Rein’s practice mix - heavy in communications, international trade, and government contracts - did well despite the recession, Wiley said, especially government contracts. The firm represented JPMorgan Chase Bank in matters tied to the Tribune bankruptcy, and the government contracts practice continues to represent Boeing.

Morning Wrap

'Miranda' Dealt One-Two Punch By High Court: The NLJ's Tony Mauro reports that in decisions issued on Tuesday and Wednesday, the Supreme Court ruled that confessions should be admitted at trial even when police interviewed suspects in circumstances that lower courts viewed as Miranda violations. Read the full report here.

Toyota Hearings: The NLJ's David Ingram, who has been on the Hill all week, has more from the congressional hearings on safety problems with some of Toyota's top-selling cars. Ingram reports here that lawmakers fired questions Wednesday at two Toyota executives about whether the company's lobbyists are too cozy with government regulators and whether those relationships slowed down the response to complaints about the automaker's safety record.

Health Care Summit Not Enough for Dems: The Washington Post reprots that congressional Democrats are looking past the White House's health care summit, which many lawmakers view as little more than political theater. Instead, they are focusing on a final round of intraparty negotiations that are likely to determine the fate of President Obama's top domestic priority.

Killer Whale Killing: The Orlando Sentinel reports that Sea World Orlando knew that the 12,000-pound orca that killed trainer Dawn Brancheau on Wednesday was a particularly dangerous killer whale. The whale, Tilikum, had previously been involved in two other deaths.

Opinions Differ on Future Under Citizens United

On one point, they were unanimous. The five panelists speaking at the National Press Club on Wednesday agreed that the U.S. Supreme Court's recent decision in Citizens United v. Federal Election Commission is unlikely to drastically change the campaign finance landscape in the 2010 election.

On the ruling's long-term implications, their opinions diverged.

James Portnoy, chief counsel for corporate and government affairs with Kraft Foods, said corporations are generally encouraged not to engage in election politics because of the potential to alienate sections of their customer base. He does not expect this to change, even with corporations’ new ability to spend unlimited funds on their own political advertising during campaigns.

The ruling addresses only independent expenditures and has no impact on the limits for how much corporations can donate to political candidates.

“Every time one of these issues comes up, everyone talks like the sky is falling,” Portnoy said.

Monica Youn, a counsel with the Brennan Center for Justice, said the justices ruled on their gut instincts and didn’t appropriately consider studies showing how states become more corrupt with fewer campaign finance restrictions. She said that, though the corrupting effects won’t be immediate, she expects corporations to heavily target individual candidates in future elections.

“The Supreme Court put aside balancing and went to the extreme end of the spectrum....The idea that corporations can’t make their own view known is quite surprising,” Youn said.

Jan Baran, a former general counsel to the Republican National Committee and a partner at Wiley Rein, countered that there is no evidence that fewer campaign restrictions breed corruption, noting that 26 states have no limits on any form of corporate contributions.

Laurence E. Gold, associate general counsel with the AFL-CIO, said the ruling erased a wall between electoral and issue speech that had never really existed. With the ruling, he said unions – as well as nonprofits and smaller corporations – would be able to compete in future elections like never before.

Joseph Sandler, a former general counsel to the Democratic National Committee and a member at Sandler, Reiff & Young, said the ruling will encourage the trend of political parties being marginalized in elections as more voices enter the political fray, citing the ever-growing number of political action committees. However, he added that it is hard to predict the ruling’s implications with any certainty.

“It is not quite the wild wild West that you would expect when you first look at the decision,” Sandler said.

Ending Appellate Silence, Obama Nominates Two for Vacancies

Updated Feb. 25

Ending a months-long drought of federal appellate court nominees, President Barack Obama today nominated a professor at the University of California, Berkeley School of Law, and a federal district judge in Connecticut to fill vacancies in the 9th and 2nd circuits.

Goodwin Liu, a former law clerk to U.S. Supreme Court Justice Ruth Bader Ginsburg who is recognized as an expert on constitutional law and education policy and civil rights, was tapped for a spot on the U.S. Court of Appeals for the 9th Circuit. There are no active Asian-American jurists on any circuit court. Liu, the son of Taiwanese immigrants, served on the education policy and agency review teams of the Obama-Biden transition.

Curt Levey, executive director of the conservative Committee for Justice, said the Liu nomination "will be the most high profile confirmation fight that we have seen under Obama" since the nomination of Sonia Sotomayor to the Supreme Court. Levey said the nomination hearing could be a run-up to a Supreme Court battle, if a high court vacancy opens later this year.

Obama also nominated Judge Robert Chatigny of the U.S. District Court for the District of Connecticut for a spot on the 2nd Circuit. Chatigny, who has served on the federal bench since 1994, was chief judge in Connecticut from 2003 to 2009. He is a 1978 graduate of Georgetown University Law Center. Chatigny was an associate for two years at Williams & Connolly in Washington before returning to Connecticut in 1984.

Williams & Connolly partner Brendan Sullivan Jr. called Chatigny a "fabulous lawyer" and said he will be a "great credit" to the 2nd Circuit. Chief Judge Alvin Thompson of the U.S. District Court for the District of Connecticut praised Chatigny, saying he is an "outstanding choice who will make an excellent contribution to our court of appeals."

Obama said in a statement that Liu and Chatigny "have proven themselves to be not only first-rate legal minds but faithful public servants. It is with full confidence in their ability, integrity, and independence that I nominate them to the bench of the United States Court of Appeals.”

The nominations mark the first since this past November, when Obama nominated two state court judges to fill vacancies on the 4th Circuit. White House officials have said they planned to pick up the pace of judicial nominations. In October, Obama nominated Judge Denny Chin of the U.S. District Court for the Southern District of New York for a slot on the 2nd Circuit.

More after the jump.