The BLT: The Blog of Legal Times

Former Chamber of Commerce Counsel Joins Dinsmore & Shohl in D.C.

The former senior counsel and regulatory committee executive for the U.S. Chamber of Commerce has joined Dinsmore & Shohl in its Washington office, the firm announced Monday.

Reed Rubinstein has returned to private practice as a partner in Dinsmore’s corporate department. Rubinstein, who spent about 18 months with the Chamber, was previously a shareholder at Greenberg Traurig.

In an interview, Rubinstein said that the quality of the Dinsmore’s attorneys and management were contributing factors in his decision to join the firm. Moreover, the firm, he said, has several high-profile clients, including Proctor & Gamble.

At the Chamber, Rubinstein worked on environmental, technology and regulatory matters. He will continue his focus on regulatory work with a renewed emphasis on federal advocacy.

“An advocacy practice has three legs — litigation, lobbying and regulatory interface,” Rubinstein said. “In the last three to four years, we have seen substantial expansion of the EPA regulatory agenda, the passage of the health care bill and Dodd-Frank.”

DLA Piper Signs Lobbying Contract with Target of Venezuelan President Chavez

Updated 4:51 p.m.

DLA Piper on Friday notified Congress it is lobbying for a wealthy businessman who is suing the government of Venezuelan President Hugo Chavez in federal district court in south Florida after it seized a bank he controlled, as well as the financial institution's shares in an opposition television network.

The firm is advocating for former Banco Federal CA president and Globovision director Nelson Mezerhane on "[i]nternational trade and investment issues," according to a lobbying registration report. DLA Piper partner Ignacio Sanchez, who is handling the account, said the firm has been talking with members of Congress about press freedom in Latin America and sharing Mezerhane's story with them.

Mezerhane claims in his suit filed in November that the Venezuelan government’s takeover of his bank and its 20 percent stake in Globovision in 2010 was politically motivated. Globovision is currently the nation’s only anti-Chavez television network. Mezerhane is seeking $1 billion in damages.

The Venezuelan government has alleged that Banco Federal had financial irregularities, prompting the government takeover of the bank. Venezuelan authorities in 2010 also issued a warrant for Mezerhane’s arrest. Chavez has called Mezerhane a "monopolist," an "oligarch" and an "enemy of the revolution," according to The Associated Press.

Mezerhane currently resides in the United States, seeking political asylum. He paid Cardenas Partners $120,000 to lobby last year for him on obtaining asylum, according to congressional records.

Senators Ask Feds to Investigate Employer Requests for Social Media Passwords

Updated 3:25 p.m.

Two U.S. senators are asking the Department of Justice to investigate whether companies are breaking the law if they ask potential employees to provide their user names and passwords to social networking and email sites like Facebook.

Sen. Charles Schumer (D-N.Y.) and Sen. Richard Blumenthal (D-Conn.) announced Monday that they wrote letters about the issue to Attorney General Eric Holder Jr., as well as the Equal Employment Opportunity Commission, in response to recent media stories.

In the letter to Holder, the senators say that two courts have found that supervisors may be subject to civil liability under the Stored Communication Act when they request employee login credentials and access otherwise private information with those credentials.

“Although these cases involved current employees, the courts’ reasoning does not clearly distinguish between employees and applicants,” the letter states. “Given Facebook terms of service and the civil case law, we strongly urge the Department to investigate and issue a legal opinion as to whether requesting and using prospective employees’ social network password violates current federal law.”

In the letter to the EEOC, the senators touched on possible unlawful discriminatory hiring practices if the social sites are used to see personal communications, religious views, national origin, family history, gender, marital status, and age.

“If employers asked for some of this information directly, it would violate federal anti-discrimination law,” the letter states. “We are concerned that collecting this sensitive information under the guise of a background check may simply be a pretext for discrimination.”

The DOJ and the EEOC both said the agencies would review the letter once the agency received it, but had no further comment.

The issue became a hot topic after an Associated Press article last month described the experience of one Seattle man who refused to turn over his password and withdrew his application for a job. The article also indicated that “other job candidates are confronting the same question from prospective employers, and some of them cannot afford to say no.”

FTC Guidelines Give Consumers More Control Over Online Data Collected About Them

Proclaiming itself "the nation's chief privacy policy and enforcement agency," the Federal Trade Commission today released a 72-page final report establishing best practices for protecting consumer privacy in the digital era.

The report, which mirrors many provisions of the "Consumer Privacy Bill of Rights" released by the White House with the FTC last month, is intended to give consumers more choice and control over the information that is collected about them online and how it is used, including a Do Not Track option.

“Simply put, your computer is your property; no one has the right to put anything on it that you don’t want,” said FTC chairman Jon Leibowitz speaking at a press conference this morning.

He applauded ongoing industry efforts to put in place the foundations of a Do Not Track system allowing people to opt out of third-party tracking, calling it “the right thing to do.” But he also warned, “If Do Not Track has not come to fruition by the end of the year... there will be a lot of support for the notion of Do Not Track [legislation] in Congress.”

Reed Smith associate Amy Mushahwar, who specializes in data privacy and security and is based in Washington, said it was “a very positive sign,” that the FTC is continuing to work with industry on the the issue.

“We agree with the FTC that industry's self regulatory efforts concerning the development of a Do Not Track browser standard have come a long way during the past year, and we also agree with the FTC that the significant progress already made by the Digital Advertising Alliance will likely obviate the need for legislation on this issue,” she said via email.

The FTC report urged Congress to enact legislation addressing data security and data brokers — “companies that, without the consent or even knowledge of most consumers, collect and traffic in the data we leave behind as we travel through virtual and brick-and-mortar worlds,” Leibowitz said, as well as baseline privacy legislation.

The three basic privacy principles outlined in the report are “privacy by design,” where basic privacy protections are incorporated into products as they are developed; consumer choice over how personal data is used; and transparency — giving better explanations of how data is used.

The report comes after an initial draft that was released in December 2010 and prompted more than 450 comments. To alleviate burdens on small businesses, the final report’s provisions will not apply to companies that collect but do not transfer non-sensitive data from fewer than 5,000 consumers a year.

FTC Commissioner J. Thomas Rosch voted against the final report. He objected that the report evaluates information gathering practices under the “unfair” prong of the FTC’s authority under Section 5 of the FTC Act, and not whether the practices are deceptive. Unfairness “is an elastic and elusive concept,” he wrote. “What is ‘unfair’ is in the eye of the beholder.”

Rosch, a Republican who was previously a partner at Latham & Watkins, also questioned the motivations behind the major browser firms’ willingness to enact Do Not Track, wondering “to what extent those major browser firms will act strategically and opportunistically (to use privacy to protect their own entrenched interests).”

He also questioned whether industry and consumer groups will be able to agree what Do Not Track even means. “It may be that the firms professing an interest in self-regulation are really talking about a ‘Do Not Target’ mechanism, which would only prevent a firm from serving targeted ads, rather than a ‘Do Not Track’ mechanism, which would prevent the collection of consumer data altogether,” he wrote.

While the report is presented as recommendations for best practices, Rosch continued, “I am concerned that the language of the report indicates otherwise, and broadly hints at the prospect of enforcement.”

New Black Panther Party Chairman Loses Attorney Fee Fight

Malik Zulu Shabazz, chairman of the New Black Panther Party, has lost his bid to recover $2,500 in attorney fees stemming from a federal investigation into the group's activities during the 2008 presidential election.

A federal magistrate judge issued an order Friday denying Shabazz's request for fees.

The U.S. Commission on Civil Rights subpoenaed Shabazz to testify two years ago in a now-closed inquiry into how the U.S. Department of Justice responded to allegations that two men affiliated with the party made threatening comments and gestures to voters at a Philadelphia polling place in 2008.

In April 2010, the commission – an independent, bipartisan body appointed by Congress and the president – filed a petition in U.S. District Court for the District of Columbia to enforce the subpoena after Shabazz failed to respond or appear for the deposition.

Shabazz, an attorney and member of the D.C. Bar since 1998, fought back, claiming he never received the subpoena. The process server had filed an affidavit saying he delivered the subpoena to a 5-foot-10-inch, 170-pound man who identified himself as Shabazz.

Shabazz, represented by Washington solo practitioner Gregory Lattimer, challenged the petition, saying there was no way the person who received the subpoena was Shabazz, who Lattimer said is 6 feet 5 inches and 230 pounds.

He also rejected the substance of the subpoena, accusing the commission of engaging in a “political witch hunt.” Shabazz asked for attorney fees as a form of sanctions against the government.

DOJ To Receive $17.2M Foreign Bribery Penalty From Device Maker

Medical device maker Biomet Inc. has agreed to pay a $17.2 million criminal penalty in a foreign bribery case, the U.S. Justice Department said today.

Biomet, represented by Kirkland & Ellis and Ropes & Gray, entered a deferred prosecution agreement (PDF) with federal prosecutors. The Indiana-based company also settled with the U.S. Securities and Exchange, agreeing to pay $4.4 million in disgorgement and $1.1 million in prejudgment interest.

The U.S. Securities and Exchange Commission said subsidiaries and agents of Biomet bribed public doctors in Argentina, Brazil and China for nearly a decade.

“Biomet’s misconduct came to light because of the government’s proactive investigation of bribery within the medical device industry,” Kara Novaco Brockmeyer, chief of the SEC enforcement division’s Foreign Corrupt Practices Act unit, said in a statement. “A company’s compliance and internal audit should be the first line of defense against corruption, not part of the problem.”

Kirkland’s Laurence Urgenson, a white-collar defense partner in the firm’s Washington office, and Asheesh Goel, a Ropes & Gray securities partner, declined to comment this afternoon on the deal reach with prosecutors and securities regulators. A Biomet spokesman was not immediately reached for comment.

Justice Department lawyers, including Kathleen Hamann, a Fraud Section trial attorney, said in court papers that Biomet and its subsidiaries made unlawful payments from 2000 to 2008 to public health care providers to secure business. DOJ said more than $1.5 million in direct and indirect corrupt payments were made during that time.

The criminal prosecution is part of a wider bribery investigation involving medical device companies. Johnson & Johnson, in addition to Smith & Nephew Inc., also paid criminal penalties and entered deferred prosecution agreements.

Justices Hear Jurisdictional Arguments in Historic Health Care Case

By Tony Mauro

On the first of three historic days of oral argument, the Supreme Court appeared reluctant to find that the challenges to the Affordable Care Act are premature or should be dismissed.

The justices heard 90 minutes of argument on whether an 1867 law that requires individuals to pay a tax before they can challenge it applies to the health care law. The arguments ended about 11:40 a.m. Monday.

Covington & Burling partner Robert Long argued that the provision of the law that requires people to pay a penalty if they don't buy insurance "has all the indicia of a tax." But several justices pointed out that the health care law does not use the word "tax," suggesting that they don't believe the Anti-Injunction Act applies.

Justices seemed more receptive to the argument by Solicitor General Donald Verrilli Jr. that the penalty is not a tax, and that the justices can proceed to rule on the constitutionality of the health care law. Those arguments will take place on Tuesday and Wednesday.

The courtroom was packed with members of the Supreme Court bar and the general public, as well as more than 100 reporters from around the world. Outside the high court, more than 100 protesters on both sides of the health care issue demonstrated in the hopes of influencing the Court and public opinion.

For continuing updates and background on the arguments, visit our health care hub at www.nlj.com/healthcare.

Former U.S. Attorney in Washington Moves From O’Melveny to Cadwalader

Updated 3:23 p.m.

Former U.S. Attorney for the District of Columbia Kenneth Wainstein has left O’Melveny & Myers for Cadwalader, Wickersham & Taft, the latter firm announced Monday.

Wainstein joins the D.C. office Cadwalader as a partner in the firm's white collar defense and corporate investigations practices. He previously served as general counsel of the FBI and chief of staff to FBI Director Robert Mueller. Among his other posts, Wainstein was an assistant attorney general for national security at the Department of Justice, and served as an assistant to the president for homeland security and counterterrorism. Wainstein was appointed as U.S. Attorney in D.C. in 2004 and served until 2006.

“His high profile service to our country makes him a distinguished addition to our team and allows us to provide clients with unique insight and counsel,” W. Christopher White, Cadwalader chairman, said in a written statement.

In private practice, Wainstein focused on corporate internal investigations and civil and criminal proceedings.

In an interview Wainstein said that his working relationships with Michael Horowitz and others at the firm were factors in his decision to move. He joins about 40 other white-collar Cadwalader attorneys in Washington.

“There has been a lot of increased enforcement and that is becoming a reality,” Wainstein said. “The white collar practice in general is more active and that’s not going to go away.”

He will continue to represent many of his old clients, including former Washington Wizards point and shooting guard Gilbert Arenas and Assistant U.S. Attorney Joseph W. Bottini, one of the prosecutors accused of professional misconduct in the Ted Stevens case. Wainstein said that both firms handled the move in a professional manner.

“The firms have been very good about ensuring total coordination with the idea that we do whatever is best for the client,” Wainstein said.

Photo by The National Law Journal's Diego M. Radzinschi.

This Week in The National Law Journal

The NLJ 250: Our annual survey of the biggest U.S. firms by headcount, shows that, on the whole, large firms added attorneys again last year. But the increases weren't universal. Check out this year's list and several related features.

The sleeper issue: Tony Mauro explores the final issue expected to come before the U.S. Supreme Court during this week's arguments over the Affordable Care Act - a challenge to the law's provisions on Medicaid.

One law, indivisible — or is it?: Marcia Coyle takes a look at arguments surrounding whether the entire Affordable Care Act should fall if the justices find the individual mandate is unconstitutional.

D.C. lobbyists take on water: The largest irrigation district in the United States is bulking up on lawyer-lobbyists in Washington for a battle pitting agribusiness against an array of environmental groups. Andrew Ramonas has the story.

U.S. trips in Rwanda prosecution: Jason McClure reports on efforts by the U.S. Department of Justice and Immigration and Customs Enforcement to prosecute and deport U.S. residents suspected of involvement in Rwanda's 100-day slaughter, 18 years after it ended.

The Morning Wrap

New Heart: Former Vice President Dick Cheney on Saturday received a heart transplant at a Virginia hospital, The Associated Press reports. Cheney, who has had five heart attacks, waited more than 20 months for the transplant. He doesn't know the donor's identity.

Santorum Victory: Presidential candidate Rick Santorum edged out Mitt Romney in the Louisiana Republican presidential primary on Saturday, Politico reports. With 98 percent of precincts reporting, Santorum received 49 percent of the vote, while Romney secured 27 percent of the vote.

'I am Trayvon Martin': Nearly 1,500 demonstrators gathered at Freedom Plaza in Washington on Saturday to rally in support of black Florida teenager Trayvon Martin, who was fatally shot last month, The Washington Post reports. George Zimmerman, whose father is white and mother is Hispanic, has said he shot the unarmed teenager in self-defense. “I am Trayvon Martin,” young men chanted at the rally.

New Lawyers: Womble Carlyle Sandridge & Rice has dropped former Democratic presidential candidate John Edwards as a client, The Am Law Daily reports. Attorneys from Smith Moore Leatherwood in North Carolina now will represent Edwards whose trial on charges that he violated federal campaign finance laws begins next month.

Urban Climber: An unidentified 31-year-old man tried to scale The New York Times Building in New York on Saturday, The New York Times reports. The man, who appeared to be mentally unstable, made it to the fifth floor of the 52-story building.