The BLT: The Blog of Legal Times

Baker Botts Adds Partner to its Energy Practice in Washington

Updated 5:51 p.m.

Baker Botts has expanded its energy practice, with the addition of a lateral partner to its D.C. office, the firm announced Wednesday.

Elaine Walsh, formerly a partner at Kirkland & Ellis, focuses her practice on transactional and regulatory issues. On the transactional side, Walsh has represented clients on issues related to renewable and fossil fuel power project development and financing, power purchase and tolling agreements and energy trading activities. Walsh’s regulatory work focuses on the electric power sector.

“I think it’s an outstanding platform to practice energy,” Walsh said of her move to Baker Botts. She said in an interview that she plans to continue her transactional and regulatory work mix with her new firm.

Last year, Walsh represented NRG Energy in its acquisition of Energy Plus Holdings. The deal was cemented in September.

“Elaine’s transactional and regulatory representation on behalf of energy clients is well-respected throughout the industry, and we are pleased that she decided to join Baker Botts,” managing partner Walt Smith said in a written statement.

D.C. Circuit Upholds SEC's Permanent Bar Against Investment Adviser

A federal appeals court in Washington has refused to erase a U.S. Securities and Exchange Commission order permanently barring a lawyer from associating with an investment adviser or an investment company.

The U.S. Court of Appeals for the D.C. Circuit said in a judgment (PDF) published this week that the commission didn’t step out of line when it issued its permanent bar in 1998 against John G. Black, who managed about $345 million for clients.

The appeals court, which heard argument earlier this month, said in its ruling that the commission “applied its multi-factor test and determined that the public interest did not support lifting the bar.”

Black spent 30-plus years as an investment adviser, working primarily with school districts in Pennsylvania to invest the proceeds of municipal bonds. Black in 1989 founded Devon Capital Management. He was pro se in the D.C. Circuit.

The SEC in 1997 filed a civil complaint against Black, alleging, among other things, he violated antifraud provisions of federal securities laws, including misrepresenting the value of assets that secured clients’ investments. The complaint alleged Black lost about $71 million for the school district. He was also accused of using $2 million in client funds for personal and business expenses.

Black, without admitting or denying the allegations, consented to the permanent bar a year later. He agreed to disgorge more than $3.6 million and to pay a civil penalty of $500,000.

A team from Crowell & Moring, including Susan Hoffman and Jennifer Devery, participated as appointed amicus counsel in support of Black in his appellate challenge of the SEC’s order in 2010, which denied vacating the permanent bar. (Hoffman is the public service partner at Crowell, supervising the firm’s pro bono work.)

The Crowell team, which also included counsel Michael Carolan, said the SEC has ignored the centerpiece of Black’s argument in support of lifting the permanent bar. Since the financial crisis began in 2008, the law has changed over how the fair value of an investment may be represented.

Former DOJ Cyber Crimes Official Joins Kroll's Washington Office

Updated 5:31 p.m.

The former chief of the Justice Department's computer crime and intellectual property section, Michael DuBose, has joined the Washington office of Kroll, the risk consulting company announced Tuesday. During his time with DOJ, DuBose supervised 40 federal prosecutors and handled investigations involving computer network intrusions, intellectual phishing schemes, botnets, hacktivist groups, copyright piracy, theft of trade secrets and large-scale data breaches.

DuBose's title at Kroll is managing director and cyber investigations practice leader. In an interview Tuesday, we asked him about his time at DOJ, and his thoughts about joining Kroll.

What types of prosecutions and investigations did you handle at the DOJ?
When I started at [the computer crime section], I was a senior trial attorney and cut my teeth on prosecutions starting with Operation Buccaneer, FastLink and Site Down. It took coordination with 11 countries simultaneously and set a standard in wares prosecution. I became chief of the section under which we did investigations into the king of spam Alan Ralsky, and the prosecution of Albert Gonzalez for one of the largest credit card thefts and data breaches in history.

How does your past work prepare you for what you’ll be doing at Kroll?
I’ve been working with victims of cyber crimes for many years. My experience will translate well to meet the needs of our clients both in cyber crime and intellectual property crime. Understanding the global threat and the types of techniques, understanding how law enforcement operates, understanding many of the concerns for victims and having worked with investigators, I think will translate to the benefit of Kroll’s clients.

Why Kroll and not a traditional law firm?
It’s different in many ways. Kroll stood out to me, most immediately because of its global reach. You don’t have to have been involved with cyber or intellectual property crime to understand that it is global in nature. Kroll has the broadest international reach. Couple that with its tremendous reputation for all areas of investigation and also its capacity in digital forensics, it seems like a unique opportunity. The reality is that these problems are global in scope. The problems facing clients are not purely legal. Kroll is able to address a broad range of problems and needs. It also allows me to keep a hand in the operational aspects of these investigations.

What’s the scope of Kroll's Washington office?
What sometimes happens in this area, is you often have individuals who are very good at traditional investigation and you have others who are experts in computer forensics. Rarely do you get those two skill sets in one. I hope to draw on Kroll and pull on its 52 offices in 29 countries, while helping to build a team [of] individuals with the technical expertise and boots-on-the-ground expertise. That includes following the money, [and] doing the interview when trade secrets are stolen.

What are the companies targeted by computer crime?
Targets are not only financial services but also small-to-medium size businesses. In some ways, you take your victims as you find them. Their pain and their loss are no less important. A lot of the criminal activity is migrating as large corporations and businesses get better at securing their data.

The Morning Wrap

Backing Down: Virginia Gov. Robert F. McDonnell is backing off his unconditional support for a bill requiring women to have an ultrasound before an abortion, The Washington Post reports.

Tax Plan: President Barack Obama is proposing to cut the corporate tax rate from 35 percent to 28 percent and wants an even lower effective rate for manufacturers. In turn, corporations would have to give up dozens of loopholes and subsidies, the Associated Press reports.

iPad Battle: Apple Inc. defended itself in court in China against allegations that it does not own rights to the iPad trademark there, a challenge that threatens to prevent the company from selling one of its most popular products in one of its fastest growing markets, The New York Times reports.

More Trouble for DSK: Former IMF chief Dominique Strauss-Kahn spent the night in a seven-square-meter cell before French police questioned him for a second day on Wednesday over what he knew about prostitutes that friends brought to him, Reuters reports.

Godfather Suit: Paramount Corp. has sued Anthony Puzo, the executor of the estate of author Mario Puzo, to prevent the publication of new sequel novels to “The Godfather” Bloomberg reports.

Three IP Partners Jump to SNR Denton's D.C. Office

SNR Denton's Washington office today picked up a five-lawyer intellectual property group, including three new partners, which is primarily focused on chemical and other science-related fields.

Martin Bruehs, Charles Bruton and Scott Cummings joined the firm's intellectual property and technology practice as partners, along with associates Gary Mangels and Rajesh Noronha. The team made the move from the D.C. office of Buchanan Ingersoll & Rooney, where they practiced together for nearly seven years.

In an interview Tuesday, Bruehs pointed to SNR Denton's international presence as a main reason behind the move.

"SNR has a very robust patent prosecution practice for a general litigation firm," Bruehs said, adding that he feels there is "a strong interest in growing the patent practice" at the firm.

All three partners served as the chair of a branch of Buchanan's intellectual property practice. Bruehs led the chemical, pharmaceutical and biotech patent practice and will continue his leadership role as chair of SNR Denton's chemical patent practice. Additionally, Bruton was chair of the intellectual property litigation practice and Cummings served as chair of the materials science practice group at Buchanan.

Rob Hanson, head of SNR Denton's intellectual property and technology practice who operates out of the Dallas office, said Tuesday that the firm's international operations have been a draw, especially in the rapidly globalizing business and legal arenas. Hanson said the addition of a team of six new attorneys to the intellectual property practice, which he estimated is currently home to roughly 15 attorneys, highlights their value to the firm.

"This is a real growth area that they're in, and these guys are real stars in that area," Hanson said.

By Rob Stigile

Harry McPherson, Former Presidential Adviser and Esteemed D.C. Lawyer, Dies at 82

Updated 4:54 p.m.

Harry McPherson, a former DLA Piper senior counsel and adviser to President Lyndon Johnson, died Thursday in Bethesda, Md. He was 82.

McPherson, who left the firm in 2010, had bone cancer. A former member of DLA Piper's regulatory and government affairs practice and a 2008 American Lawyer Lifetime Achievement Award winner, he had clients that included media companies, foreign governments and tobacco manufacturers.

“We’ve lost one of the most decent human beings that has inhabited this area,” said DLA Piper partner Berl Bernhard, who had been friends with McPherson for more than 50 years.

McPherson in 1969 joined what became Verner, Liipfert, Bernhard, McPherson and Hand as a partner. He helped Verner, Liipfert grow from an 11-lawyer outfit to a 200-attorney firm and become a lobbying powerhouse before it merged with DLA Piper in 2002.

Along the way, McPherson worked on several high profile matters, including the 1998 settlement between tobacco manufacturers and 46 states over lawsuits concerning smoking-related illnesses. Representing several major tobacco companies, he helped negotiate a deal that limited nicotine levels in cigarettes, brought antismoking organizations about $250 billion and gave his clients some immunity from class action suits.

McPherson also advocated on behalf of countries that included Ethiopia. After Ethiopia’s contested 2005 election, he called on Congress not to sanction the country for cracking down on demonstrators. In addition, McPherson helped start a program to place Northwestern University School of Law professors at Ethiopia's underfunded Addis Ababa University School of Law.

“Harry is right up there with the best and the finest of them all,” said DLA Piper partner Lawrence Levinson, who first worked with McPherson at the White House.

McPherson came to Washington to work for then-Sen. Lyndon Johnson in 1956, after he graduated from the University of Texas School of Law. He started as assistant general counsel for the Senate Democratic Policy Committee, which had Johnson as its chairman at the time. He ascended in 1961 to general counsel of the panel, a post he held for two years. While working in the Senate, he helped write legislation that became the Civil Rights Act of 1957, which looked to eliminate voting barriers for African Americans.

After stints as deputy undersecretary of the Army for international affairs and assistant secretary of state for educational and cultural affairs, he came to the White House in 1965, to serve as an aide to Johnson.

McPherson, who was at the White House until 1969, was a top adviser to Johnson and became the president’s chief speechwriter in 1966. He helped write speeches that included Johnson’s 1968 televised address in which the president said he would stop bombing in North Vietnam and not seek reelection. In 1972, McPherson published a memoir about his time with Johnson titled A Political Education.

McPherson in 1999 told the legal publication Bar Report that he had “no regrets” with his life.

“I’ve had good fortune throughout most of my life,” he said. “I’m married to a woman I love, and I have great kids. I’m lucky to have done the things that I’ve done and to be still at it today.”

He is survived by his second wife, Patricia DeGroot, and their son, Samuel McPherson. Survivors also include Coco McPherson and Peter McPherson, his children from his marriage to Clayton Read. That marriage ended in divorce.

A memorial service is scheduled for March 2 at St. John’s Church in Washington.

At DOJ's Request, Judge Dismisses FCPA Sting Case

A Washington federal judge this afternoon dismissed a high-profile foreign bribery prosecution as he questioned the government’s litigation tactics and legal theories underpinning the case.

The conspiracy prosecution lodged against 22 individuals in Washington’s federal trial court marked the largest-ever Foreign Corrupt Practices Act case against individuals.

Two earlier trials ended in deadlocked panels; three businessmen were acquitted in January, two years after their arrest at a military and law enforcement equipment show in Las Vegas. DOJ heralded the prosecution as part of a new era of FCPA enforcement.

“This appears to be the end of a long and sad day in the annals of white-collar enforcement,” U.S. District Judge Richard Leon said in court this afternoon, several hours after prosecutors asked him to dismiss the case with prejudice. “Unlike take-down day in Las Vegas, there will be no front page story in The New York Times.”

Leon said he is hopeful the Justice Department takes the opportunity to learn from the botched prosecution. “I, for one, hope this very long and I’m sure very expensive ordeal will be a true learning experience for both the department and the FBI as they regroup to investigate and prosecute FCPA cases,” Leon said.

Metro Crash Plaintiffs Fight Motion to Exclude Photos, Testimony at Trial

Victims and their families in a deadly Metro rail crash are pushing back against the agency's recent motion to keep photographs of the crash scene and other evidence out of an upcoming trial on damages.

The Washington Metropolitan Area Transit Authority, along with three other defendants, notified U.S. District Judge Reggie Walton last week that they planned to admit liability in the 2009 crash, which killed nine people and injured dozens more.

Most plaintiffs have settled, including the families of seven of the nine people killed. Trials on damages for four remaining plaintiffs – two of whom were injured, and the families of two women who were killed – are scheduled to begin in March.

Last week, the defendants filed a motion (PDF) to exclude evidence on liability, photographs of the accident scene and autopsies, and “unlimited” testimony from first-responders and the family members of the two women killed. Besides Metro, the other defendants are Metro rail system equipment manufacturers and suppliers: Alstom Signaling Inc., Ansaldo STS USA Inc., and ARINC Inc.

In a response (PDF) brief filed yesterday, the plaintiffs argued that photographs of the crash scene and of victims’ autopsies are relevant, because they show the extent of the victims’ suffering to the jury.

“The photos help show the collapsing of the train and the conscious fright, pain, and anguish endured by the decedents prior to their death,” the plaintiffs argued in their joint response.

Former Employee Benefits Agency Official Joins Drinker Biddle in D.C.

A former official with the Employee Benefits Security Administration has joined Drinker Biddle & Reath’s Washington office, the firm announced Tuesday.

Bradford Campbell, formerly of counsel at Schiff Hardin, has joined Drinker as counsel in its employee benefits and executive compensation practice group. He focuses his practice on Employee Retirement Income Security Act litigation, including Title 1 issues, fiduciary conduct and prohibited transactions.

Before joining Schiff Hardin, Campbell was assistant secretary of labor for the Employee Benefits Security Administration. During his post, Campbell helped implement changes related to the Pension Protection Act, namely allowing employees to automatically enroll for pension plans. He also worked to improve disclosure of 401k fees by service providers.

“I initiated several fee transparency regulations, initiated while I was assistant secretary and finalized during the Obama administration,” Campbell said during an interview.

He also advises clients on regulation, a part of his practice that he said he wants to expand at Drinker. This includes helping clients deal with pending regulation and response during comment periods.

D.C. Circuit Rejects Suit Over Gitmo Detainees' Deaths

A federal appeals court in Washington today rejected a suit that demanded the government pay damages to the representatives of two Guantanamo Bay detainees who died in custody.

The U.S. Court of Appeals for the D.C. Circuit unanimously upheld the dismissal of the suit. But the appeals court did not reach the merits of the case, filed in U.S. District Court for the District of Columbia in January 2009.

Rather, a three-judge panel said the trial judge, Ellen Segal Huvelle, did not have jurisdiction to hear the dispute in the first place. Huvelle ruled for the Justice Department in February 2010. Huvelle's opinion is here.

Pardiss Kebriaei of the Center for Constitutional Rights, in New York, who represented the estates of the detainees, was not immediately reached for comment this afternoon. The Justice Department's Robert Loeb argued in the D.C. Circuit for the federal defendants.

Yasser Al-Zahrani Jr., a citizen of Saudi Arabia, and Salah Ali Abdullah Ahmed Al-Salami Jr. of Yemen, were detained as alleged enemy combatants beginning in early 2002. Both men, in addition to a third person also in custody, died in June 2006.

The cause of death of Al-Zahrani and Al-Salami is in dispute in the litigation, the appeals court said. A Naval criminal investigator attributed the death to suicide by hanging.

Lawyers for the estates of the two former detainees question the circumstances surrounding the deaths. The complaint sought damages for “prolonged arbitrary detention, torture and cruel treatment.”

D.C. Circuit Chief Judge David Sentelle, writing for the appellate panel, said the Military Commissions Act of 2006 bars any suit relating to detention, transfer and treatment that is not a habeas corpus action.

Sentelle, sitting with senior circuit judges Stephen Williams and A. Raymond Randolph, said the suit “rather plainly constitutes an action other than habeas corpus” brought against the United States.

“This ends the litigation and requires that we affirm the dismissal of the action,” Sentelle wrote.