The BLT: The Blog of Legal Times

Obama Nominates DOJ's Civil Rights Chief as Next Labor Secretary

President Barack Obama today nominated Assistant Attorney General Thomas Perez, who has led the Justice Department's Civil Rights Division since 2009, to serve as the next secretary of the U.S. Department of Labor.

At a White House event Monday, Obama touted Perez and the work he did at DOJ, urging the Senate to confirm him as quickly as possible.

"In his current role as the head of the U.S. Justice Department's Civil Rights Division, Tom has fought to open pathways into the workforce for everyone willing to contribute, including people with disabilities, LGBT Americans, and immigrants," Obama said. "Now, while he's tackled plenty of tough issues, Tom has also spent a career as a consensus-builder."

In brief remarks, Perez built on the theme of the necessity of consensus.

In Agency Turf Battle, Appeals Court Voids $30M Fine Against Trader

Federal energy regulators who fined a trader $30 million for allegedly manipulating natural gas markets acted outside of the scope of the commission's authority, a federal appeals court in Washington said today.

A three-judge panel of the U.S. Court of Appeals for the D.C. Circuit ruled unanimously against the Federal Energy Regulatory Commission in a turf dispute with the Commodity Futures Trading Commission over which agency has jurisdiction to police allegations of manipulation in natural gas futures contracts.

In the middle of the tiff: Brian Hunter, the lead natural gas trader at the hedge fund Amaranth who executed deals on contracts on the CFTC-regulated New York Mercantile Exchange. Certain trades in 2006, the appeals court said, caught the attention of federal regulators. Amaranth was a major player in the natural gas market before the company's collapse in 2006.

D.C. Circuit Revives Public Records Suit Over Drone Documents

Updated 4:28 p.m.

The CIA can no longer outright deny the existence of any agency documents related to drone strikes, a federal appeals court in Washington said today in overturning a trial judge's ruling that allowed the intelligence agency to remain silent on whether any such documents are in the files.

Ruling in a high-profile Freedom of Information Act suit, a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit said a trial judge in Washington must now determine whether the contents of any CIA records can be disclosed to the public. The trial judge, Rosemary Collyer, in September 2011 allowed the U.S. Justice Department to end the litigation through its refusal to confirm or deny the existence of any such CIA records.

In the arena of litigation over public records, lawyers following the case said the court's victory was a big one—a strike against the government's insistence that it cannot, in some cases, reveal the mere existence of documents. The American Civil Liberties Union filed the suit in U.S. District Court for the District of Columbia in 2010.

"In this case, the CIA asked the courts to stretch that doctrine too far—to give their imprimatur to a fiction of deniability that no reasonable person would regard as plausible," Chief Judge Merrick Garland wrote for the D.C. Circuit panel.

The Morning Wrap

Investigating: The Washington Post reports today: "A federal grand jury in Miami is investigating Sen. Robert Menendez (D-N.J.), examining his role in advocating for the business interests of a wealthy donor and friend, according to three people aware of the probe."

No letting up: The New York Times spotlights former longtime Manhattan district attorney Robert Morgenthau's latest legal fight: advocating for a death row prisoner in Alabama. “It’s so wrong to say there’s presumption of guilt because he was convicted once — without the newly discovered evidence,” Morgenthau, 93, said. “I just thought that was off the wall.”

Removed: A federal appeals court in Boston has ordered a new trial judge to preside over the prosecution of White Bulger, The National Law Journal reports. The U.S. Court of Appeals for the First Circuit said a "reasonable person" could question the impartiality of the judge, a former top prosecutor in Boston at the time Bulger claims he was granted immunity.

Sued: From today's New York Times: Sexual Harassment Lawsuit Filed Against Prominent Plaintiffs' Lawyer. "In recent years, the law firm Faruqi & Faruqi has given corporate America big headaches, filing a steady stream of shareholder lawsuits against companies related to executive pay as well as mergers and acquisitions. Now, Faruqi & Faruqi has a headache of its own," the report said.

New Rule Approved to Verify D.C. Lawyers' IOLTA Participation

Updated 3/15 at 10:57 a.m.

In a move that would bring the D.C. Bar in line with other states with mandatory bars, the District of Columbia Court of Appeals recently approved a new rule giving the D.C. Bar Foundation authority to periodically check that local attorneys are participating in the Interest on Lawyers' Trust Accounts, or IOLTA, program.

The mandatory program, which collects interest earned on lawyers' trust accounts, helps fund annual grants to local civil legal services organizations through the D.C. Bar Foundation. Katia Garrett, the foundation's executive director, said that having a way to verify participation is considered a best practice in managing IOLTA programs.

"It's really to provide an added level of certainty," she said. Garrett added that by checking, the foundation could make sure that the accounts reported by lawyers matched bank records.

DOJ Inspector General Report Finds 'Polarization and Mistrust' in Voting Section

An extensive U.S. Justice Department internal watchdog report assessing the enforcement of voting rights laws found deep polarization and mistrust among career and political lawyers in a special section of the Civil Rights Division, harming the functioning of the unit.

But the 258-page Office of the Inspector General report, released today, didn't find evidence that lawyers in the Voting Section based enforcement decisions on race or partisan leanings. The section's lawyers examine a variety of issues, including redistricting cases and disputes over voter identification measures. A copy of the report is here.

"We believe that the high partisan stakes associated with some of the statutes that the Voting Section enforces have contributed to polarization and mistrust within the Section," the report, issued by Inspector General Michael Horowitz, said. The OIG review included 100,000 pages of documents and interviews with more than 135 people, including Attorney General Eric Holder Jr.

Judge Sentences Longtime D.C. Defense Lawyer to 63 Months in Prison

Updated 5:58 p.m.

Calling a defense lawyer's crime "truly unconscionable," a federal judge in Washington today sentenced a longtime Washington attorney to more than five years in prison for his role in a scheme to manufacture evidence to dupe jurors in a drug trial.

The defense lawyer, Charles Daum, who had practiced law in the District of Columbia for three decades, will serve 63 months behind bars for a plot that included staged photographs and perjured testimony.

Daum was convicted at a bench trial last year that featured a series of jail recordings and testimony from cooperators—including Daum's client, whom the defense lawyer blamed for creating and executing the plot. Daum was indicted in 2011.

U.S. District Judge Gladys Kessler today called Daum's scheme "shocking" and said it threatened public confidence in the integrity of the judicial system. Kessler said her sentencing decision should serve as a deterrent for any lawyer "who may think of cutting a corner, not telling quite the truth to a judge."

Convicted Lobbyist Asks Full D.C. Circuit to Review Prosecution

Earlier this year, in upholding the conviction of prominent former lobbyist Kevin Ring, a federal appeals court in Washington called the distinction between legal lobbying and criminal conduct "subtle." The court went on to say that the line "spells the difference between honest politics and criminal corruption."

The three-judge panel of the U.S. Court of Appeals for the D.C. Circuit that heard Ring's case was unanimous in its late January ruling in the high-profile prosecution, which flowed from the Jack Abramoff lobbying scandal in Washington. Still, the judges said "this case is nothing if not close."

Ring's lawyers at Miller & Chevalier on Monday asked the full D.C. Circuit to review the panel decision, arguing that the ruling conflicts with U.S. Supreme Court precedent and decisions in other federal appellate courts. Ring's petition is here.

Miller white-collar defense partners Timothy O'Toole and Andrew Wise said the panel opinion incorrectly resolved two issues of "exceptional importance"—the role of campaign contributions in an honest services case and whether such a prosecution requires proof of a bribery agreement.

FEC: Larry Craig Misused Campaign Funds for Personal Legal Expenses

A federal judge in Washington today expressed doubt that former U.S. Senator Larry Craig properly used campaign money when he spent hundreds of thousands of dollars on personal legal expenses following his arrest in 2007 in a sex sting at an airport in Minnesota.

The Federal Election Commission in June 2012 sued Craig in U.S. District Court for the District of Columbia, saying the $200,000 he spent was not an "ordinary and necessary" expense incurred as part of his duty as a senator. The FEC wants Craig to repay the money and also pay a penalty. Craig was a senator from Idaho from 1991 to 2009.

Andrew Herman of Washington's Brand Law Group, representing Craig and his U.S. senate campaign committee, argued today at a hearing in the case that Craig had authority to use privately raised campaign funds in connection to expenses that arose while he was on official travel as a senator.

Herman rooted his argument in a January 2007 election commission advisory opinion that addressed a retired congressman's use of funds to pay legal bills associated with a U.S. Justice Department criminal investigation. Herman said the FEC "has buyer's remorse with this opinion." Jackson seemed incredulous, however.

The Morning Wrap

In custody: A son-in-law of Osama bin Laden is in federal custody and expected to make his first appearance today in Manhattan federal district court on charges he conspired to kill Americans. The capture has renewed debate over whether terror defendants should be tried in federal civilian courts or in military tribunals.

Tossed: From The National Law Journal today: Years after a lawyer handles a client's securities filing, he learns that a third-party left out a key provision. In the interim, the attorney has jumped firms. Is the attorney's new law firm liable? Not according to U.S. District Judge Mariana Pfaelzer, who dismissed with prejudice a lawsuit filed by Impac Secured Assets Corp. against SNR Denton."

Quitting time: "U.S. Bankruptcy Judge Martin Glenn will no longer be holding his usual hearings after hours in his Manhattan courtroom because of the billions of dollars in congressionally mandated federal spending cuts that took effect this month," Bloomberg reports. “As long as sequestration lasts, 5 p.m. will be the stop time,” Glenn recently told lawyers.