The BLT: The Blog of Legal Times

DOJ Demands $225K Payment From Film Distributor

Updated 7:08 p.m.

On Oct. 15, 2008, the Smithsonian Institution wired $300,000 to a company for the licensing and exhibition of the film, "Dinosaurs: Giants of Patagonia."

The very next day, the company received a $300,000 check from the Smithsonian for the same invoice. Mistake? That's what the government maintains.

The Justice Department wants the extra money returned. Alleging unjust enrichment, prosecutors this week sued Fort Lauderdale-based Comet Distribution Ltd. in Washington federal district court to force the return of the overpayment.

DOJ lawyers said the Comet president promised to refund the government its extra money but has failed to do so. The suit (PDF) said Comet has returned $75,000 of the extra $300,000, leaving a $225,000 debt to the government.

Justice Department lawyers said in the suit that the government is seeking “a debt owed to the United States for an overpayment mistakenly paid” to Comet. The suit does not explain how the Smithsonian paid twice on the same invoice.

Comet and the Smithsonian entered into a 50-year contract (PDF) that included a $600,000 licensing fee, to be paid in two installments—one by March 2008 and the other by October 2008. The suit indicates the Smithsonian made a double-payment in October 2008.

A Comet official was not immediately reached for comment this afternoon. Court records do not show that Comet has retained counsel.

Assistant U.S. Attorney Judith Kidwell, who filed the suit on behalf of the United States, declined to comment. A Smithsonian spokesperson was not immediately reached for comment this afternoon.

Woman's Suit Over MTV's 'Real World' Videos Survives Legal Hurdle

A woman featured on MTV's "The Real World" who claims she was drunk when she signed an agreement with the show's producers won a victory in federal court here today when a judge refused to hand the case over to an arbitrator.

The woman, Golzar Amirmotazedi of Bethesda, who was a non-cast member of the show, is suing MTV Networks and its parent, Viacom Inc., for airing video last year that allegedly humiliated her. Her suit [.pdf] in Washington’s federal trial court claims invasion of privacy and emotional distress. She is seeking more than $5 million in compensatory and punitive damages.

Lawyers for Viacom allege Amirmotazedi was not intoxicated when she signed a four-page agreement that said an arbitrator would decide any dispute. The agreement covers the terms of entry into “The Real World” group house in addition to a person’s appearance on the show itself.

After a night of drinking with the show’s cast at a midtown bar called The Sign of the Whale, Amirmotazedi signed the document before walking into “The Real World” guest house near Dupont Circle in Northwest Washington. She alleges she was later kicked out of the house because she refused to have sex with one of the men living there, according to the suit.

Senior Judge Gladys Kessler today denied Viacom’s request to let an arbitrator decide whether Amirmotazedi’s intoxication defense has merit. Voluntary intoxication, Kessler said, under District law, is a “type of mental capacity defense that permits an individual to avoid a contract if she was so intoxicated at the time of formation that she could not understand the terms and conditions of the agreement.”

The lawyers in the case dispute the events that led up to Amirmotazedi’s signing of the arbitration agreement.

Amirmotazedi’s attorneys, Jason Ehrenberg and Michael Tilghman II of Washington’s Bailey & Ehrenberg, claim cast members “fed her” eight to 10 drinks. Amirmotazedi said she has no recollection of signing the four-page arbitration agreement due to her heavy intoxication.

Lawyers for Viacom, represented by Washington’s Levine Sullivan Koch & Schulz, argue Amirmotazedi was not drunk at the time she signed the agreement. The TV program has a policy of prohibiting intoxicated people into the group house, according to Viacom’s attorneys, who include Levine Sullivan partner Michael Sullivan.

Viacom’s lawyers said an arbitrator, not a judge, should first decide the merits of Amirmotazedi’s intoxication defense. Click here for Viacom’s motion to compel arbitration.

Sullivan said this afternoon he is reviewing the opinion. He declined to comment immediately on the next steps. It was not immediately known whether Viacom planned to ask the U.S. Court of Appeals for the D.C. Circuit to review whether Kessler got it wrong.

Ehrenberg said this afternoon Kessler’s ruling is "significant from the standpoint that there is not a lot of case law that discusses” the legal issues that surfaced in Amirmotazedi’s suit.

“It’s an important case because we think someone was taken advantage of, quite frankly,” Ehrenberg said. “This is a case where this one individual appeared she was too intoxicated to consent” to signing a contract.

Kessler's ruling, Ehrenberg said, could "provide some protection for young people who get into these situations” on reality television programming. A status conference in the case is scheduled for later this month.

Dannon Agrees to Drop Claims of Activia’s ‘Irregularity’ Benefits

Jamie Lee Curtis is going to have to change her selling point when advertising Activia yogurt.

According to the terms of a settlement between Federal Trade Commission and Dannon Company Inc., Activia can no longer be advertised as helping to relieve digestive “irregularity” unless the company discloses the amount of the product that must be consumed in order to receive those benefits. Dannon is also required to pay $21 million to resolve the state-level investigations opened by 39 state attorneys general.

The settlement, which was announced today, requires Dannon to drop claims about some of the health benefits offered by its Activia Yogurt and DanActive dairy drink product because the FTC deemed those claims to be “deceptive” and “exaggerated.”

The two products, which are among Dannon’s most successful, contain beneficial bacteria known as probiotics. As part of a national advertising campaign featuring Curtis, the actress who starred in the “Halloween” series and “Trading Places,” Dannon claimed that one daily serving of Activia could relieve irregularity and help with “slow intestinal transit time.” In advertisements for its DanActive product, Dannon claimed that the product could help prevent colds and flu.

In television, Internet, print ads and on the product’s packaging, Dannon also claimed that there was scientific proof to back up those claims.

But according to the FTC, Dannon failed to substantiate those claims and was thus exaggerating the health benefits of those two products. The FTC also alleged that the health claims for Activia and DanActive were proven false by clinical tests.

The FTC contends that it actually takes three daily servings of Activia to help relieve irregularity.

The settlement bars Dannon from making any claims about cold and flu benefits for its products unless those claims are approved by the Food and Drug Administration. The company cannot make any claims about treating irregularity with fewer than three servings of a yogurt product a day unless those claims are verified by two clinical trials.

In a prepared statement, FTC Chairman Jon Leibowitz said, “These types of misleading claims are enough to give consumers indigestion. Consumers want, and are entitled to, accurate information when it comes to their health. Companies like Dannon shouldn’t exaggerate the strength of scientific support for their products.”

Morning Wrap

Remembering Chandra Levy: As the trial of her murder suspect begins, the story of D.C. intern Chandra Levy still fascinates. The Washington Post has the story.

Maine Man: Via law.com, here is an interview with the Maine lawyer who helped disclose the "robo-signing" foreclosure scandal.

12 Angry Men, One Justice: Fordham University School of Law asked Justice Sonia Sotomayor to pick a law-related movie for its law film festival. She chose Sidney Lumet's "12 Angry Men," attended the screening, and spoke afterward.

They Know Who You Are: If you use Farmville or other annoying or not-so-annoying Facebook apps, advertisers and data miners may know more about you than you thought, The Wall Street Journal reports.

Securities Lawyers Mixed on ‘Wall Street 2’

According to four prominent securities lawyers, Oliver Stone’s latest film, Wall Street 2: Money Never Sleeps, may be a decent movie, but it took the wrong message away from the economic collapse of 2008.

The original Wall Street is perhaps best known for its villain, the iconic Gordon Gekko, who once proclaimed, “Greed is good.” In the sequel, which picks up roughly 20 years after the end of the first movie, Gekko, played again by Michael Douglas, has just gotten out of prison when he meets Jake Moore (Shia LaBeouf), a young stock trader who is about to marry Gekko’s daughter.

When Moore’s firm, Keller Zabel Investments, goes belly up thanks to rumors of instability spread by a competing trader named Bretton James (Josh Brolin), he asks Gekko to help orchestrate a way to get back at James. Gekko appears to have reformed since getting out of prison—but then again, it’s Gordon Gekko. The rest of the story proceeds against the backdrop of the economic collapse.

During a discussion following a screening of the movie on Friday night, Harvey Pitt, who served as chairman of the Securities and Exchange Commission during the attacks of Sept. 11, 2001, and is now CEO of Kalorama Partners, said that while he enjoyed parts of Wall Street 2, it unfairly argues that the proper remedy for the crisis is to send a handful of securities traders to prison.

“The issue is not whether people’s bets one way or the other were illegal. The issue was how their conduct conformed to existing requirements of fiduciary duty once it became clear that these markets were uncontrollable. Unfortunately, a lot of people were in the position to stop these things but that didn’t happen,” said Pitt, who represented Ivan Boesky, the real-life inspiration for Gekko.

Morning Wrap

Prosecutors Misbehaving: A major USA TODAY investigation published yesterday examined hundreds of cases of prosecutors hiding exculpatory evidence or lying to judges and jurors. 

Enforcing Deadlines: A New Jersey judge, fed up with a law firm's disregard for filing deadlines, is imposing a $500-a-day fine for late briefs and says court personnel will no longer call the firm with polite reminders. The New Jersey Law Journal tells the story.

Virginia Executes Lewis: Teresa Lewis sang, prayed, and laughed on her final day before being executed in Virginia Thursday night, according to her lawyer James Rocap. The Washington Post had this report.  

'Outlaw' Should be Outlawed: Dahlia Lithwick, writing in Slate, weighs in on NBC's faux Supreme Court drama "Outlaw." She says "it is so terrible it makes your face hurt." Our similar take on the show is here.  

Eddie Fisher Dead at 82: Eddie Fisher, a music icon in the 1950s, and a serial husband of movie stars, including Elizabeth Taylor, died in Berkeley Wednesday night.

States Join Media Groups In Briefs Opposing California's Violent Video Game Ban

Nine states and Puerto Rico joined to file a brief with the Supreme Court late Friday night urging the justices not to uphold a California law that bans the sale or rental of violent video games to minors.

Rhode Island Attorney General Patrick Lynch, supported by lawyers from Irell & Manella in Los Angeles, submitted the brief in the case Schwarzenegger v. Entertainment Merchants Association & Entertainment Software Association on behalf of his state and Arkansas, Georgia, Nebraska, North Dakota, Oklahoma, Puerto Rico, South Carolina, Utah, and Washington. In addition to raising the "specter of censorship," the states agreed that California's law if replicated would waste scarce law enforcement resources and provide support for a Twinkie-style defense argument that "the video game made me do it" for accused criminals.

"The road to unconstitutional and unwise over-regulation is paved with good intentions," the brief states. "Though it fixes nothing, it raises the specter of censorship for any media that finds itself at the center of a politically charged societal debate. This Court has consistently recognized that the Constitution blocks entry to this slippery slope.”

The brief adds, “The law enforcement cost outstrips the questionable benefit of having the government itself dictate and enforce another minimum age requirement in retail stores.” Furthermore, Lynch wrote, "California’s statute legiti-mizes the off-loading of personal responsibility on to a video game.

We wrote about the intense lobbying of states by the video game industry in this story. Both Lynch and Utah Attorney General Mark Shurtleff have received campaign donations from the industry, which generates $10 billion in annual sales. One indicator of the industry's clout is that only 11 states joined in a brief supporting California's law -- an unusually low number given the political appeal of a law claiming to protect minors.

Also filing a brief in support of the video game industry today was the Motion Picture Association of America and other movie industry entities. They assert that upholding the California law and creating a new exception to First Amendment protection would have a "dramatic chilling effect" on filmmakers too. Williams & Connolly D.C. partner Kannon Shanmugam wrote the MPAA brief.

“If the Court’s reasoning is not confined to the particular medium of video games, state and local governments could attempt to impose similar restrictions on depictions of violence in other media, including motion pictures," the brief states. "Such restrictions would have an obvious chilling effect, particularly given the inherent amorphousness of restrictions of that type and the potential for a patchwork of nationwide regulation.”

A brief for the American Booksellers Foundation for Free Expression also makes the point that "to be insulated from depictions and descriptions of violence, one would have to be insulated from the great works of religion, history, art, literature, and culture." The author of the brief is Michael Bamberger, partner in the New York office of Sonnenschein Nath & Rosenthal. He cites numerous violent passages from the Bible and adds that Shakespeare's Macbeth "drips with blood." The case is set for argument at the high court on Nov. 2.

Porn Actress Wants Real Name Kept Secret in Obscenity Trial

Her name is Lorelei Lee, and she’s a porn actress.

Lorelei Lee, of course, is a stage name. Just like Traci Lords and Kayla Kleevage. Lee starred in one of the films—“Jay Sin’s Milk Nymphos”—that is the centerpiece of the government’s prosecution of adult film producer John Stagliano.

Stagliano’s lawyers want to call Lee as a defense witness in federal district court in Washington, but there’s a problem: Lee doesn’t want to provide her real name.

Lee’s lawyer, Carmen Hernandez, a solo practitioner in Maryland, filed court papers today in the U.S. District Court for the District of Columbia asking for a protective order to allow her to testify using her stage name. Click here for the papers.

Hernandez said Lee needs protection, but the attorney didn’t disclose in court documents the basis for the request other than saying that confidentiality will protect Lee from “explicit threats of danger.” The attorney said more information would be provided in a closed door hearing in the chambers of Judge Richard Leon. Hernandez was not immediately reached for comment.

In court papers, Hernandez argues that a trial judge has the authority to allow a witness to testify under a pseudonym as long as opposing counsel has enough information to allow effective cross examination. The government, according to Hernandez, has already been provided Lee’s real name.

“Permitting the witness to testify under her professional stage name will not interfere with the government’s ability to cross examine the witness or to impeach [her],” Hernandez said. “Rather, the use of a pseudonym merely shields the identity of a witness from the press and the public.”

Prosecutors are opposed to Lee’s request, according to Hernandez. But the government did not immediately file a response. Leon did not rule by this afternoon. Stagliano’s trial, which began Tuesday with opening statements, continues Thursday.

In Obscenity Case, Washington Courtroom is Silent

Updated July 14

Judge Richard Leon of federal district court in Washington had a warning: anybody under 18 had to leave the courtroom immediately. Several court security officers checked IDs. Outside the courtroom, on the sixth floor of the trial court in downtown, there was a cadre of officers guarding the door.

Today marked the opening of the government’s obscenity case against adult film producer John Stagliano and two of his companies, including Evil Angel Productions Inc. Stagliano was indicted in the U.S. District Court for the District of Columbia in 2008 on charges of producing two films that prosecutors allege have no artistic and scientific value.

The prosecution, the first obscenity case in Washington in more than 20 years, according to DOJ statistics, drew a crowd that included at least one adult movie director and one actress, Aurora Snow, who is writing about the case from a performer’s perspective. Law clerks and interns made up a portion of the audience.

Little is known about the jurors—eight women and six men, including two alternates—who must apply the “community standard” of Washington to decide whether Stagliano’s videos appeal to the "prurient interest." The jurors are also tasked with assessing whether the movies lack serious artistic or scientific value.

Leon conducted jury selection behind closed doors, and the judge has not allowed the public to see the jury questionnaire that prospective panelists filled out last week. Justice Department lawyers and attorneys for Stagliano debated the substance of the questions. Leon has described the questionnaire as “sensitive.” Pamela Satterfield, a Criminal Division trial attorney, said in court one of the questions was “way too detailed.”

This afternoon, the government showed the jurors a 50-minute clip of one of the two movies that are the centerpiece of the prosecution. The clip from a three-hour movie called “Jay Sin’s Milk Nymphos,” was displayed on two flat screen TVs, each facing the jurors from the opposite sides of the jury box.

The public could see only one screen, and some seats had better angles than others. There was no audio in the courtroom. The room was silent save for shuffling papers and air blowing through a duct.

Leon kept tight control, giving jurors headsets. He allowed two headsets to be used by the press. Leon said in court, before the movies were played, he was taking a “highly unusual step” in giving headsets to journalists who are covering the trial. He encouraged the press to share the headsets. Reporters did just that.

As the movie played, jurors for the most part kept their eyes trained on the screens. There was very little note-taking during the playing of the movie. Jurors kept their headsets on.

Leon today ruled that the defense attorneys will not be allowed to play the videos in their entirety, as the defense lawyers had asked. Last week, the judge ruled that Stagliano’s lawyers will not be allowed to call a medical expert and a film expert to testify about the scientific and artistic value of the movies.

In court, Stagliano was sitting between defense attorneys H. Louis Sirkin, lead counsel for John Stagliano Inc. and Paul Cambria Jr., lead counsel for Stagliano. A solo practitioner, Allan Gelbard, represents Evil Angel Productions. Davis Wright Tremaine partner Robert Corn-Revere is local counsel.

In opening statements earlier today, Cambria urged jurors to look at the world of 2010 and not the world of 1955. “Things have changed,” he said. When considering the so-called “community standard,” Cambria of Buffalo's Lipsitz Green Scime Cambria played up the fact the District is a diverse community.

Stagliano, an outspoken critic of government prosecution of obscenity cases, faces up to 32 years in prison if he is convicted on all seven counts. Trial resumes Wednesday.

Staff writer Julio Menache contributed to this report.

Actor Laurence Fishburne Thanked by D.C. Bar Foundation

Last night, Laurence Fishburne became the first actor to be honored by the D.C. Bar Foundation. Fishburne is the star of the one-man show "Thurgood," based on the life of Supreme Court Justice Thurgood Marshall.

At a reception after Sunday night's performance at the Kennedy Center, Marna Tucker, vice president of the foundation, presented Fishburne with a framed set of first-day Thurgood Marshall stamps.

Noticeably tired after finishing up his second performance of the day, Fishburne told the crowd of more than 200 people at the reception that before he took the role in ”Thurgood,” Marshall was “just a fact to me.”

“Doing this play I learned everything that you learned tonight,” Fishburne said. “Everything you heard I did not know.”

The play looks at Marshall’s legendary life and career, from his early schooling through the years fighting segregation in court, the twice-argued Brown v. Board of Education, and how President Lyndon Johnson put him on the Supreme Court.

Fishburne thanked the lawyers in the crowd for continuing to “use the law the way Marshall teaches us.” He said, “I hope that if my work inspires you to remember why you got involved in this crazy business of law to begin with, then I’ve done my job and hopefully you can go out and continue to do yours.”

Also speaking at the June 13 reception was John Payton, head of the NAACP Legal Defense Fund—a job that had once been held by Marshall himself. Payton called the play “sensationally inspiring” and said it should serve as a reminder that “things only get changed because of the impact of people.”

Marshall’s widow, Cecilia Marshall, and other members of the late justice’s family were in attendance.

The reception was sponsored by seven law firms—Arnold & Porter; Banner & Witcoff; Cohen Milstein Sellers & Toll; Finnegan, Henderson, Farabow, Garrett & Dunner; McDermott Will & Emery; Sutherland Asbill & Brennan; and Venable—as well as 13 of Marshall’s law clerks, SunTrust Bank, and The National Law Journal/Legal Times.

Nine of the former clerks were able to attend, including Kevin Baine, a partner at Williams & Connolly; Susan Low Bloch, Sheryll Cashin, a professor at Georgetown University Law Center; Mark Tushnet, a professor at Harvard law School; Kenneth Simons, a professor at Boston University School of Law; Ira Feinberg, a partner at Hogan Lovells; and Robert Weiner, associate deputy attorney general at the Justice Department.