The BLT: The Blog of Legal Times

The Morning Wrap

Tough Travel: A fast-moving grass-roots movement designed to change the federal government's policy about full-body X-ray scanners and physical pat-downs may lead to long airport delays, the Washington Post reports.

Korea Conflict: A U.S. aircraft carrier group set off for Korean waters on Wednesday, a day after North Korea rained artillery shells on a South Korean island, in a move likely to enrage Pyongyang and unsettle its ally, China, according to Reuters.

BP's Next Phase: Emergency payments from the $20 billion BP fund came to an end Tuesday, and now the next phase begins: the negotiation of lump-sum final settlements for those affected by the spill, The New York Times reports.

Insider Trading: John Kinnucan’s questioning by the FBI in a broad insider-trading investigation has put the spotlight on money managers and their use of a burgeoning breed of firms selling research and access to industry experts, Bloomberg reports.

Copyright Verdict: SAP AG must pay $1.3 billion to rival Oracle Corp. for copyright infringement, a federal jury ruled Tuesday, following a high-profile court battle between the business-software makers, The Wall Street Journal reports.

Crowell & Moring Donates $675K to Launch Took Crowell Institute for At-Risk Youth

When Eldon “Took” Crowell, the legendary government contracts attorney who led the 1979 schism of Jones Day's Washington office that begot Crowell & Moring, died in May, one of the attributes recalled most often by those who knew him was his work on behalf of at-risk youth in Washington. He was an active supporter of organizations and programs that helped children avoid falling through the cracks.

In honor of that legacy, Crowell & Moring has partnered with the University of the District of Columbia’s David A. Clarke School of Law to launch the Took Crowell Institute for At-Risk Youth. The new institute will be designed to build upon the law school’s Juvenile and Special Education Law Clinic by providing three legal clinics and law reform advocacy programs designed to help at-risk youth receive an education and become productive members of society.

To help launch the institute, Crowell provided the law school with a $675,000 grant in Took Crowell’s memory that will be paid out over six years. “We decided in the wake of Took’s passing that we wanted to have an impact on at-risk children because that was one of the things he was most devoted to,” said Kent Gardiner, chairman of Crowell. “We saw this as a way to address an unmet need in Washington.”

The institute is expected to provide more than 10,000 hours of pro bono representation by law students supervised by attorneys from Crowell and the law school to youth in the community each year. The institute provides for two full-time supervising attorneys to spearhead cases ranging from school discipline matters to Medicaid advocacy. It will be managed by executive director Joseph Tulman, a UDC law professor who focuses on special education and juvenile justice, and overseen by an advisory board that will include Crowell attorneys as well as other community leaders.

Katherine Broderick, dean of the David A. Clarke School of Law, said in a written statement, “The Took Institute will allow us to work with children, the schools, and the justice system to change the trajectory of a child’s life through early intervention. Our hope is that this approach of direct representation and policy advocacy will help the District’s at-risk youth and serve as a model for other communities going forward."

On Nov. 30, the law school will host an induction ceremony to mark the official launch of the institute.

Ethics Group Says DOJ is Withholding Public Records

The anticorruption group Citizens for Responsibility and Ethics in Washington is accusing the U.S. Justice Department of failing to live up to the Obama administration's promises of transparency when it comes to releasing documents.

CREW Chief Counsel Anne Weismann sent a letter to Attorney General Eric Holder Jr. today complaining about the department’s response to its requests under the Freedom of Information Act. The group, known for its willingness to launch ethics complaints against members of Congress, is a frequent filer of such requests.

“Indeed, nearly all of CREW’s FOIA requests are met with resistance and stonewalling on DOJ’s part, and we must often turn to litigation, knowing the courts offer the only possibility of access to important government records,” the three-page letter (PDF) says.

Asked for a response, Justice Department spokeswoman Tracy Schmaler wrote in an e-mail that the department was "one of only a handful of agencies that in FY 2009 both increased the numbers of requests where records were released in full and in part, and decreased the number of requests where records were withheld in full." Click here for the department's "open government plan" and related documents.

Among the records CREW is seeking are those related to prominent criminal investigations, including those of former House Majority Leader Tom DeLay (R-Texas) and of Paul Magliocchetti, founder of the now-defunct lobbying firm PMA Group Inc. The investigation of DeLay has ended, and Magliocchetti pleaded guilty in September to three felony charges.

Last week, CREW's executive director, Melanie Sloan, announced she is leaving the organization to work with a new law and lobbying firm headed by Lanny Davis.

Updated at 4:48 p.m.with Schmaler's comments.

Federal Judge Hits Iran with $44M Judgment in Civil Suit

Adding to an ever-growing list of rulings in a case that has spanned almost 30 years, a federal judge in Washington today entered a nearly $44 million judgment against Iran in litigation that McKesson Corp. brought over its financial interest in an Iranian dairy.

Following the Iranian revolution in 1979, McKesson sued Iran in Washington’s federal trial court over allegations Iran illegally withheld dividends the dairy issued and that Iran expropriated the company’s 31 percent interest in the dairy. The suit has dragged on for 28 years over liability issues. The background’s here.

Today, Judge Richard Leon of the U.S. District Court for the District of Columbia shot down what he called Iran’s attempt to “resuscitate” previously rejected arguments that lawyers for the country—represented by Berliner, Corcoran & Rowe—have made over the years. Leon reinstated an earlier judgment for McKesson and included compound interest.

“Iran’s attempt to relitigate issues, such as its “come to the company” defense that diverted this litigation for a number of years, is simply incredible,” Leon wrote. Earlier, lawyers for Iran had argued that shareholders must “come to the company” to collect dividends. Leon ruled McKesson has causes of action under Iranian law and customary international law.

A lawyer for McKesson, Morgan, Lewis & Bockius partner Mark Bravin in Washington, was not immediately reached for comment this afternoon.

Thomas Corcoran Jr., an attorney representing Iran, said an appeal is likely. The case has reached the U.S. Court of Appeals for the D.C. Circuit five times already, Leon noted in his ruling today.

FTC Warns How to Protect Your Wallet (If Not Your Heart) From Online Dating Scams

Are you looking for love in all the wrong places? The Federal Trade Commission wants to help.

The agency today issued a warning to lovelorn singles on how to avoid online dating scams.

In a typical scenario, the scammer creates a false online profile, gains the trust of a would-be love connection, then asks the person to wire money.

According to the FTC, here are some warning signs that someone you met online could be in it for the money:

• Wanting to leave the dating site immediately and use personal e-mail or IM accounts.

• Claiming instant feelings of love.

• Claiming to be from the United States but currently overseas.

• Planning to visit, but being unable to do so because of a tragic event.

  • Asking for money to pay for travel, visas or other travel documents, medication, a child or other relative’s hospital bills, recovery from a temporary financial setback, or expenses while a big business deal comes through.

  • Making multiple requests for more money.

“Regardless of how convincing the story, the bottom line is this: if you send money to someone you haven't met, the money will be gone, along with the person you thought you knew,” according to the FTC. “Wiring money is the same as sending cash: once it's gone, you can't get it back.”

Sidley Austin is Lobbying for China's Largest Search Engine

Lawyers from Sidley Austin have registered to lobby on behalf of Baidu Inc., marking the Chinese search engine's entry into Washington's influence market.

Baidu is hoping to have a say in the development of what’s known as the Special 301 Report, according to a lobbying registration filed with the U.S. Senate. The report is an annual look at what the U.S. government considers to be unfair trade practices, and it’s written by staff in the Office of the U.S. Trade Representative.

The 2010 Special 301 Report took aim at Baidu directly under a section titled “notorious markets.”

“The U.S. music industry reports that the vast majority of all illegal downloads of music in China are associated with Baidu,” the report (PDF) said. “Baidu is the target of ongoing infringement actions by both domestic and foreign rights holders. Baidu executives continue to deny responsibility for content hosted by other websites. Several rights holders are pursuing legal action in Chinese courts.”

The company is widely described as the dominant search engine in China, accounting for three-quarters or more of the market there. As of July, it was the fourth-largest search provider globally, after Google, Yahoo and Microsoft, according to Reuters.

Listed on the lobbying registration are James Mendenhall, a counsel in Sidley Austin’s Washington office who’s a former general counsel to the USTR, and lawyers in the firm’s Palo Alto, Calif., and Beijing offices. Mendenhall did not immediately return a call requesting comment. The registration was effective Nov. 18 and was posted online this week.

Baidu has not previously registered with a lobbyist or registered to lobby on its own, according to a search of Senate records.

UPDATE: Click here for a profile of Baidu general counsel Victor Liang from Corporate Counsel, a National Law Journal affiliate.

The Morning Wrap

North and South Korea Exchange Fire: Two South Korean soldiers were killed earlier today as dozens of shells fired from the North struck a South Korean island near the countries’ disputed maritime border. South Korean artillery units returned fire after the North’s shells struck South Korea’s Yeonpyeong Island at 2:34 p.m., The New York Times reports. The shelling followed revelations of two new nuclear facilities in the North — a light water reactor under construction and a modern plant for enriching uranium.

The Man Who Knew Too Little: Two senior Afghan officials say that a man purporting to be one of the Taliban's most senior commanders and who attended meetings with Afghan President Hamid Karzai and NATO officials was actually lowly shopkeeper from the Pakistani city of Quetta. The Washington Post reports that the man claimed to be Akthar Mohammad Mansour, the second-ranking Taliban commander after Mohammad Omar, and he met with Karzai and Afghan officials at least twice in recent months to discuss possible peace negotiations, according to the Afghan officials.

Hedge Funds Raided: Government agents raided the offices of three large hedge funds yesterday, signaling that a three-year investigation was shifting into high gear and setting off shock waves in the financial world. The Wall Street Journal reports that in coordinated raids in New York, Connecticut and Massachusetts, FBI agents seized documents at the offices of Level Global Investors, Diamondback Capital Management and Loch Capital Management. The American Lawyer reports that hedge funds, including those not raided thus far, have begun to lawyer up.

Piracy on Trial: The Christian Science Monitor reports that the first piracy trial in the U.S. since the Civil War is nearing a conclusion this week, as Germany's first such trial in hundreds of years opens. The trial in America this month has offered a rare glimpse into the US Navy's counterpiracy operations as well as the murky world of Somali pirates, who have plagued one of the world's busiest shipping lanes for years. Meanwhile, the trial of 10 separate Somali pirates opened in the German city of Hamburg on Monday, the first piracy trial in Germany for some 400 years. The men, between the ages of 17 and 48, stand accused of attacking the MS Taipan 560 miles off the Somali coast, according to Agence France-Presse.

Discrimination Claim Against Office of Special Counsel Tossed Out

A federal judge in Washington has dismissed a complaint filed by a woman whose job was to take complaints from whistleblowers, but who claimed she herself was a victim of retaliation.

U.S. District Judge Richard Leon said the allegations by the woman, Natresha Dawson, are “insufficient to raise an issue for trial.” He granted summary judgment in favor of Dawson’s employer, the U.S. Office of Special Counsel, an independent agency with responsibilities that include protecting federal whistleblowers.

“Dawson has merely presented a number of conclusory statements unsupported by any evidence in the record, aside from her own self-serving affidavits, mischaracterizes evidence contained in the record, and contests facts that are simply immaterial to resolving the defendant’s motion,” Leon wrote in a 15-page opinion entered Friday.

Dawson, who is black, filed her initial complaint with the court in July 2007, alleging discrimination based on race and sex and violations of the Whistleblower Protection Act. She alleged that her supervisor looked at her in a sexual manner and denied her a flexible work schedule, among other things.

Richard Condit of the Government Accountability Project represented Dawson, while Kevin Mikolashek of the U.S. Attorney’s Office for the Eastern District of Virginia represented Acting Special Counsel William Reukauf and his predecessor, Scott Bloch. Neither Condit nor Mikolashek returned calls for comment.

In October 2008, Bloch submitted his resignation after a stormy tenure during which several of his employees alleged retaliation and other wrongdoing by him. Dawson’s complaint, though, does not take aim at Bloch directly. Bloch is awaiting sentencing after pleading guilty to lying to Congress.

Wilmer Announces Succession Plan

After six years at the helm of Wilmer Cutler Pickering Hale and Dorr, co-managing partners William Perlstein and William Lee have announced who will succeed them. As of Jan. 1, 2012, the firm will be led by partners Susan Murley and Robert Novick.

The Am Law Daily reports that Murley chairs the firm's transactional practice; Novick chairs the firm's regulatory and government affairs practice.

As with Perlstein and Lee, the next leaders come from different sides of the firm, which was formed by the 2004 merger of Washington, D.C.-based Wilmer Cutler and Boston-based Hale and Dorr. Boston-based Murley was a partner with predecessor firm Hale and Dorr; Washington, D.C.-based Novick had joined Wilmer Cutler in 2001. But, Lee told The Am Law Daily, there is no rule that Wilmer's co-managing partners must represent each of the predecessor firms. And the firm wasn't set on the exact same management structure. The nominating committee considered other structures, Lee says, including one with a chairman and a managing partner. Ultimately, the committee decided to stick with the current co-managing partners setup.

"At the time of the merger, having co-managing partners was necessary to make the merger work," Lee says. "But we have learned if you have co-leaders working together effectively there are many benefits to the decision making process."

Read The Am Law Daily’s full report here.

DOJ Pick Would Have Taken a Recess Appointment

Dawn Johnsen, a hero to some liberal lawyers and a failed nominee to head the Justice Department's Office of Legal Counsel, says she would have been happy to serve in the job on a temporary basis.

In a speech Friday, Johnsen addressed publicly for the first time the question of a recess appointment by President Barack Obama. The Herald-Times of Bloomington, Ind., reports that Johnsen said she would have accepted such an appointment but that it “wasn’t a possibility.”

Johnsen didn’t specific why a recess appointment wasn’t possible, and she did not return a call today requesting further comment. The White House also did not respond to a request for comment.

“I would have welcomed a recess appointment,” Johnsen said, according to The Herald-Times. “I believe it would be in our nation’s best interest for the president to be able to use that authority in the future when there is unwarranted obstruction by senators who are trying to not even have a vote on a nominee. I do regret that wasn’t a possibility for me, because I would have accepted that, and I’m hopeful in the coming years the president will use his recess appointment power.”

The failure of her nomination and the decision not to appoint her during a congressional recess were major disappointments for liberals because of Johnsen’s views on the legal aspects of antiterrorism policy, such as whether to try suspects in civilian courts. Obama has not named another nominee for the OLC position.

Johnsen, a law professor at Indiana University, Bloomington, told the liberal American Constitution Society in June that she had no regrets about her own advocacy. “One should not live one’s life deciding whether and how to write such briefs based on calculated judgments about possible future political payoffs,” she said.