The BLT: The Blog of Legal Times

Art Company Claims LivingSocial Stole Its Business Model

A new lawsuit against LivingSocial is accusing the online daily deal juggernaut of partnering with a company in Washington to offer a promotional deal for painting classes, only to turn around and steal the company's business model and offer classes of its own.

Seed Works Inc., which offers class under the name Uncork'd Art, organizes painting classes where participants are also treated to music and wine. The company is suing LivingSocial, which is based in Washington, for fraud, misrepresentation, breach of contract, unfair trade and other claims to the tune of $1.5 million.

According to the complaint (PDF), which was filed May 4 in District of Columbia Superior Court, Uncork'd Art staff contacted LivingSocial in March 2011 about offering promotional deals for Uncork'd Art’s classes. During these negotiations, the company claims LivingSocial representatives "implicitly communicated" that LivingSocial wouldn't try to compete with Uncork'd Art in the future.

D.C. to Pay $20K in Faulty Breathalyzer Cases

The District of Columbia will pay $20,000 to resolve cases brought by four plaintiffs who sued over the city's incorrectly calibrated breath test machines. Sixteen other cases are still pending, though, either because the plaintiffs rejected the city's offer or never received one.

City officials announced in 2010 that its breath test machines were incorrectly calibrated, causing blood alcohol readings that were too high by as much as 30 percent. More than 20 people arrested for drunk driving filed suit against the city in U.S. District Court for the District of Columbia and District of Columbia Superior Court.

Four of the federal court plaintiffs notified U.S. District Judge Rosemary Collyer yesterday that they had accepted offers of judgment from the city in amounts ranging from $2,000 to $8,000. In making the offer, the city wrote that it would continue to "deny culpability and/or liability." There are six cases still pending in federal court and 10 cases pending in Superior Court; several cases were dismissed because the plaintiffs failed to have their drunk driving convictions overturned or otherwise resolved in their favor.

Physical Evidence Spotlighted at Roger Clemens Perjury Trial

Updated 5:04 p.m.

At the Roger Clemens perjury trial, the jurors don't have mere memories and statements from witnesses to mull over. They also have physical evidence.

Today at trial in Washington, jurors got to see the needles and cotton balls and glass vials that prosecutors hope will leave a lasting impression with the panel members when they deliberate weeks down the road.

Brian McNamee, Clemens’ former strength coach, provided in 2008 a host of items to a U.S. Internal Revenue Service agent who had investigated the money trail associated with the distribution of steroids by the Bay Area Laboratory Cooperative, known as Balco.

That agent, Jeff Novitzky, who is now working for the U.S. Food and Drug Administration as a criminal investigator, resumed his testimony Thursday in Washington’s federal trial court, where Clemens is charged with lying to Congress when he denied ever taking performance enhancing drugs.

D.C. Appeals Court Weighs Warrantless Car Searches

The District of Columbia Court of Appeals heard arguments this morning on when it's still lawful for local police to search a car without a warrant after making a lawful arrest.

The U.S. Supreme Court tried to limit those types of searches in its 2009 decision in Arizona v. Gant. The high court did carve out some exceptions, though, which included searches where police have "reason to believe" they might find evidence of the crime.

The D.C. appeals court is being asked to decide what the standard should be for "reason to believe," and whether there could be types of crimes - in this case, driving under the influence - where it's generally assumed that warrantless searches are reasonable.

DOJ Urges D.C. Circuit to Support Cigarette Graphic Warning Labels

The U.S. Justice Department is hopeful a federal appeals court in Washington will strike down the injunction blocking the enforcement of new rules requiring cigarette packages to carry graphic warning labels.

A three-judge panel of the U.S. Court of Appeals for the D.C. Circuit heard the dispute today, examining the line between government anti-smoking advocacy and factual health warnings for consumers.

The proposed labels depict images of the real-life harms of smoking. U.S. District Judge Richard Leon in Washington found the FDA rules infringed the First Amendment rights of tobacco companies.

Last month, a federal appeals court in Cincinnati upheld the graphic warning labels, setting up the potential for a split among circuit courts. The D.C. Circuit did not immediately rule this morning.

DOJ attorney Mark Stern, arguing today for the U.S. Food and Drug Administration, said the images are narrowly tailored to inform consumers about the dangers of smoking. He called the images accurate.

“This didn’t come out of the blue,” Stern said, noting that other countries have adopted similar regulations.

Judge Janice Rogers Brown, who heard the case with Judge Judith Rogers and Senior Judge A. Raymond Randolph, said that “America is the only one that has a First Amendment to worry about.”

Brown continued: “I don’t really understand where this stops. It seems to me that there is nothing that the government can’t compel the seller of a disfavored product to put on their product if they think it’s for the public good.”

Lawyers' Committee Bake-Off Raises Thousands for D.C. Schools

When cooking for a panel of professional chefs, one thing is certain: there's a good chance they will be able to taste it if any packaged, pre-made ingredients are used — and they won't be thrilled.

Such was the downfall of several desserts entered in this year's Cooking for Kids Bake Sale and Taste-Off, a fundraiser for the District of Columbia's public schools held Monday by the Washington Lawyers' Committee for Civil Rights and Urban Affairs. The entries were prepared by employees of 13 D.C.-area law offices.

Now in its 12th year, the event is one way the Lawyers' Committee helps facilitate connections between Washington law offices and the schools they assist through its D.C. Public School Partnership Program. More than 30 of the city's public schools are paired with a law firm, which provide a myriad of services including tutoring help and donations of equipment.

The group is expecting record bake-off results, said Lawyers' Committee Executive Director Rod Boggs said in a statement. “With only 4 of the 14 participating firms reporting to date, early returns show that we have raised nearly $5,000 so far for D.C. public schools," he said. "Last year, we raised a total of $6,000, so we expect to achieve record results when all the returns are in for this year.”

Whether it was fruit pie filling from a can or a boxed cake mix, judges' noses wrinkled at any hint of a store-bought ingredient. In fact, most of the day's winners were found in some of the simplest entries, renditions of classic desserts that weren't overly sweet or inventive.

"This is almost as much sweets as I eat in a month," said one judge, Frank Ruta, owner and chef of Palena restaurant in Washington's Cleveland Park neighborhood. He then wondered aloud how he would deal with the late-afternoon sugar rush.

Taking the top spots this year were a lemon poppy seed cake made by Regina Miller, a legal secretary with Beveridge & Diamond; thumbprint jam coconut cookies created by Perkins Coie legal secretary Cynthia Herron; and a tuxedo brownie tart, baked by McDermott Will & Emery secretarial coordinator Evelyn Bond.

D.C. Attorney General: Drunk Driving Convictions Up

Despite ongoing problems with the city's breath test machines, District of Columbia Attorney General Irvin Nathan testified yesterday that convictions for impaired driving were up in fiscal year 2011.

Nathan, appearing before the District of Columbia Council Committee on the Judiciary for an annual performance oversight hearing, said that until the breath test system is fixed, his office has been using urine-based testing results and remains "vigilant in prosecuting" those cases.

"What it means is that the Metropolitan Police Department and other agencies are being vigilant in arresting people who are perceived to be driving under the influence, and when we get those cases, we’re prosecuting them…as best we can," he said.

The police department stopped suing the Intoxilyzer machines after officials announced in early 2010 that they were incorrectly calibrated, causing blood alcohol readings that were too high by about 30 percent. The news sparked litigation challenging convictions and whistleblower lawsuits within the police department.

In fiscal year 2011, which ended Sept. 30, there were 1,161 convictions for impaired driving, an increase of 24 percent from the 940 convictions in fiscal year 2010.

Committee Chairman Phil Mendelson (D-At Large) expressed surprise at the numbers, especially since arrests for impaired driving were down. Nathan said that the arrest data is for the calendar year, not the fiscal year, which accounts for some of the difference, and also that cases don’t always resolve the same year a person is arrested.

D.C. Judge Greenlights Whistleblower Suit Over Breath Test Machines

The legal saga over the city's faulty breath test machines continues, with a District of Columbia Superior Court judge ruling that three police officers can proceed in their whistleblower lawsuit against the city.

The officers had made hundreds of drunk driving arrests before city officials announced in early 2010 that the Intoxilzyer machines were incorrectly calibrated, causing blood alcohol readings that were too high by about 30 percent. In the complaint (PDF), filed in September, the officers claimed they faced unlawful retaliation for speaking out about the scope and history of the problem.

On Feb. 1, Judge Todd Edelman issued an order (PDF)dismissing police Chief Cathy Lanier and D.C. Attorney General Irvin Nathan as individual defendants, but otherwise the bulk of the lawsuit survived motions to dismiss. Edelman published an opinion (PDF) yesterday explaining his decision.

The officers accused city attorneys of telling them to keep quiet about how long they had suspected problems with the machines, and then launching an investigation into the officers’ conduct when they refused to obey. They also alleged that a police department supervisor denied them access to training opportunities, again in retaliation for speaking about the city’s handling of the machines.

The complaint alleged two violations of the D.C. Whistleblower Protection Act. The defendants included the city, the Office of the Attorney General and the Metropolitan Police Department, as well as individuals in the two departments. In December, those parties filed motions to dismiss.

The Morning Wrap

Avoiding: The Securities and Exchange Commission has allowed Wall Street's biggest firms to avoid punishment targeted specifically for fraud cases, The New York Times reports. The agency has repeatedly granted exemptions to laws and regulations that serve as a deterrent to fraud.

Twitter Tiff: A dispute in California federal district court is brewing over ownership of a Twitter account. The National Law Journal reports the ownership question--between an employee and his former company--remains unresolved. But a federal magistrate judge is allowing the company's legal claims to the account to move forward. The company, PhoneDog, sued the former employer for, among other things, alleged misappropriation of trade secrets.

Banned: The U.S. Senate overwhelmingly passed legislation that bans insider trading among members of Congress. The new law would prohibit lawmakers from trading stocks based on information the member of Congress learned on Capitol Hill. The Washington Post has coverage here.

Blocked: The U.S. Court of Appeals for the 9th Circuit has overturned a judge's ruling to unseal the video recording of the Proposition 8 trial. California's The Recorder has the story here. The appeals court said the trial judge had promised the recording of the proceedings would be used only in chambers.

Charged: Federal prosecutors have charged Switzerland's oldest bank on allegations it helped Americans hide more than a billion dollars in secret accounts, The Wall Street Journal reports. The prosecution of Wegelin & Co. is the first time prosecutors have charged a foreign bank, rather than account holders, in a tax evasion case.

Game Face: The New York Giants face the Patriots of New England on Sunday in Indianapolis for Super Bowl XLVI (46). If you are more into the ads than the action, The Wall Street Journal has this look at the crop of Super Bowl commercials. Perhaps to the delight of the Federal Communications Commission, Madonna, who is scheduled to perform during halftime, has promised "there will be no wardrobe malfunctions."

Two Former FDA Officials Join Steptoe & Johnson's D.C. Office

Two former U.S. Food and Drug Administration officials have joined Steptoe & Johnson’s Washington office, the firm announced Monday.

Mitchell Cheeseman, former Acting Director of the FDA’s Office of Food Additive Safety, and Ralph Simmons, a senior policy analyst and Cheeseman’s senior advisor, have joined as managing director and partner, respectively. The pair boost the food safety practice of the firm’s environmental practice group.

In his previous role as acting director, Cheeseman set policy for approval of food ingredients and food contact substances, according to a press release.

As Cheeseman’s senior advisor, Simmons helped develop and implement FDA regulation and policy. Before joining the FDA, Simmons counseled major U.S. food producers and food packaging manufacturers in private practice.

“Mitch and Ralph bring a terrific combination of legal, regulatory, and scientific expertise to Steptoe’s growing food safety practice,” Roger Warin, chair of Steptoe, said in a statement.