The BLT: The Blog of Legal Times

D.C. Judge Dismisses Patton Boggs' Suit Against Chevron

Updated 5:26 p.m.

A federal judge today declined to hear a dispute between Patton Boggs and Chevron Corp. over whether the firm can continue to represent plaintiffs' interests in actions against the oil giant.

Patton Boggs filed suit against Chevron Corp. in U.S. District Court for the District of Columbia in November seeking a declaration that the law firm's work on behalf of Ecuadoran plaintiffs did not run afoul of professional conduct standards.

U.S. District Judge Henry Kennedy Jr., in his ruling (PDF), said the trial and appellate judges presiding over actions between Patton Boggs and Chevron are capable of determining whether there's a conflict of interest.

Kennedy called the litigation between Patton Boggs and Chevron “the latest chapter in a sprawling dispute” between the oil company and various parties in Ecuador that are suing over environmental damage. Chevron’s lawyers allege misconduct in the proceedings in Lago Agrio, Ecuador.

In the United States, Patton Boggs is advocating for the plaintiffs in pending, related civil actions in federal and appellate courts. Earlier coverage of the Chevron litigation involving Ecuador is here.

The dispute between Patton Boggs and Chevron in federal district court in Washington centers on the firm’s acquisition of the lobbying and consulting shop the Breaux Lott Leadership Group last July. The Breaux Lott Group—led by former U.S. Senators John Breaux and Trent Lott—had earlier advocated for Chevron in the dispute in Ecuador.

Kennedy said Chevron refused to waive any potential conflict of interest stemming from the law firm’s acquisition of the lobbying shop.

Last November, Patton Boggs made an appearance for the Ecuadoran plaintiffs in an action pending in the U.S. Court of Appeals for the 2nd Circuit. Chevron’s lawyers at Gibson, Dunn & Crutcher told Patton Boggs that its appearance “constitutes a conflict of interest that could result in disqualification.”

That same month, Patton Boggs filed court papers in Washington federal district court in an attempt to get a declaration that its plaintiffs’ work did not pose a conflict. Chevron’s lawyers urged Kennedy to dismiss the civil action, saying Washington federal district court is not the right venue and that the dispute is not “ripe.”

Kennedy said today in his ruling that whether Chevron’s letter to Patton Boggs marks a credible threat of litigation is a “close question.” The letter, the judge said, “does not support the relief that Patton Boggs requests here.”

The propriety of Patton Boggs’ involvement in litigation against Chevron in federal district and appellate courts is governed by the professional conduct rules of the jurisdictions in which the cases are pending, Kennedy said.

The judge said he would have to examine the law in every jurisdiction—potentially every state—in which Chevron might seek to disqualify Patton Boggs. “This fact is fatal to Patton Boggs’ argument that its suit is ripe,” Kennedy said.

Federal judges who are presiding over cases featuring Patton Boggs and Chevron’s lawyers “are perfectly capable” of resolving the firm’s ethical dilemma, Kennedy said today.

“For this Court to inform all other federal courts that Patton Boggs is qualified to represent the Lago Agrio plaintiffs before those courts would be incredibly intrusive,” Kennedy said.

Patton Boggs partner Charles Talisman in Washington, who serves as the firm's general counsel, was not immediately reached for comment this afternoon on Kennedy's decision.

The Gibson team representing Chevron in the Washington action included partners Thomas Hungar and Theodore Boutrous Jr. Hungar and Boutrous serve as co-chairs of the firm's appellate and constitutional law practice group.

"We are pleased that the district court so swiftly dismissed this frivolous and misguided lawsuit," Boutrous said. "As the court found, in bringing these claims, 'Patton Boggs misunderstands the law.'"

Patton Boggs partner James Tyrrell, Jr. managing partner of the firm's New York and New Jersey offices, said in a statement this evening: “We are disappointed with the Court’s conclusion that Chevron’s threat to disqualify Patton Boggs from its representation of the Ecuadorian plaintiffs is not ripe for judicial resolution in the District of Columbia."

Tyrrell said the firm "acted promptly to resolve this question in a single forum where the lobbying work had been performed rather than in the multiple federal courts in which Chevron initiated discovery proceedings."

Lawyers in Roger Clemens Case Fight Over Documents

Responding to criticism from Roger Clemens' lawyers, federal prosecutors say the government has no obligation to hand over documents that are not in the possession of the United States Attorney's Office.

Clemens' defense team, led by Russell Hardin Jr. of Houston, allege the government has outsourced, to third parties, its obligation to turn over favorable information that may help Clemens fight charges of perjury and obstruction. Prosecutors on Friday denied the charge (PDF).

Clemens is trying to squeeze documents from DLA Piper—which investigated drug use in baseball—and the House oversight committee. In 2008, the committee held hearings on DLA Piper’s 407-page report—named after former DLA Piper chairman George Mitchell—examining performance enhancing drug use in baseball. Clemens’ defense team is exploring inconsistencies among possible government witnesses.

DLA Piper, citing the work product doctrine, is refusing to turn over 20 documents, including certain memos and interview notes. Lawyers for the House committee argue there’s a constitutional protection against the forced disclosure of congressional investigative documents. House lawyers said in court papers (PDF) filed Friday that Clemens is "simply fishing" for information.

An assistant U.S. attorney, Steven Durham, the lead Clemens prosecutor, said DLA Piper has not turned over any of the disputed 20 documents to the government and that the government cannot “pierce” the law firm's assertion that the attorney work product doctrine shields the documents from disclosure.

DLA Piper, Durham said, is not a government agency. Prosecutors, he said, have no access to the firm’s files. Durham, however, said the government asked the firm to search its files for any potentially favorable information “in an attempt to meet all of its discovery obligations and in an abundance of caution.”

The U.S. Attorney’s Office declined to take a position on the merits of DLA Piper’s work product doctrine argument and the government took no position on the House’s assertion of the speech or debate privilege.

Durham said the government has given Clemens’ lawyers substantial information for use in the preparation of his defense.

U.S. District Judge Reggie Walton has scheduled a hearing for Thursday in Washington federal district court.

FTC Clerk Pleads Guilty to Stealing More Than $218K

Updated 3:44 p.m.

A Federal Trade Commission employee pleaded guilty this week in Washington federal district court to stealing more than $218,000 from the agency in unauthorized purchases of electronics.

The defendant, Harold Hughes, a clerk who ordered office supplies, pleaded guilty to theft Tuesday in U.S. District Court for the District of Columbia. Judge Richard Leon set sentencing for July 13. Hughes, 58, faces up to ten years in prison. He is on administrative leave from the commission.

Prosecutors alleged Hughes used FTC money to buy laptop computers, DVD players and televisions. Hughes, according to the government, kept for personal use some of the electronics and sold the bulk of the items for below-retail price.

Prosecutors, led by Assistant U.S. Attorney Bryan Seeley, said Hughes initially shipped the electronics to the FTC headquarters. Later, he is accused of ordering the delivery of electronics to his house in Virginia. The total loss to the FTC was about $218,636.

The U.S. Attorney’s Office for the District of Columbia said Hughes, a supply clerk from February 2009 to December 2010, has agreed to pay full restitution to the government.

Hughes' supervisors reported suspicious activity to the FTC Inspector General's office, which began examining invoices and shipping records. One of the things that caught the eye of the supervisors was a FedEx damage claim Hughes filed on a shipment overseas, said Cynthia Hogue, chief investigator and counsel to Inspector General John Seeba. Hughes needed a supervisor to cash a check for him.

Hogue said it didn't take long to unravel the scheme. "We knew something was amiss," she said. Hughes was sending packages to apartments and houses and private businesses. Recipients of the electronics included FTC employees and contract workers. The IG has an ongoing investigation, and some employees are on leave and some contractors have been removed, Hogue said.

Hughes took steps to hide his actions, Hogue said. But if supervisors had been more probing of purchase card statements, "this would have been uncovered sooner," Hogue said this afternoon. Hogue said there was only "cursory oversight" of Hughes.

Hughes’ court-appointed attorney, Nathan Silver II, a solo practitioner in Bethesda, said this afternoon that "Mr. Hughes took responsibility for his conduct" while working at the commission.

Clemens' Lawyers Charge DLA Piper With Playing a 'Game'

The lawyers for Roger Clemens accuse the law firm DLA Piper of unfairly clinging to documents that the attorneys claim are critical to the former baseball star's defense on obstruction and perjury charges in Washington federal district court.

At the center of the subpoena dispute is the work DLA Piper attorneys performed in investigating and publishing a report on the use of performance enhancing drugs in Major League Baseball. Former DLA Piper chairman George Mitchell was the lead attorney for the firm in the inquiry.

Last month, DLA Piper lawyers said in court papers in the Clemens case that the attorney work product doctrine protects much of the information that the defense lawyers maintain they are entitled to review. Clemens’ lawyers, including Russell Hardin Jr. of Houston, served a subpoena on the firm in February.

In papers (PDF) filed last night, Clemens’ lawyers said DLA Piper had complete independence from Major League Baseball, its player’s association and from Congress. DLA Piper published its report in December 2007, naming 89 baseball players alleged to have used steroids or other performance-enhancing drugs.

“Yet now, when one of those players is being prosecuted for contradicting under oath DLA Piper’s finding, and, by implication, the accuracy of the report, the authors of the report want to conceal information about critical witnesses based on the ‘attorney work product doctrine,’” Clemens’ lawyers said. “This case may be about a baseball player, but that is no reason for DLA Piper to treat it like a game.”

The Clemens defense team, which also includes Michael Attanasio of Cooley LLP in San Diego, demanded that DLA Piper produce notes, interview summaries and memos related to three people: Jose Canseco, Brian McNamee and Kirk Radomski. DLA Piper wants to hold onto documents that include an e-mail summarizing a telephone call with Canseco, eight sets of handwritten and typed notes and ten memos.

In support of the subpoena, Clemens’ attorneys said DLA Piper was not serving as any party’s representative when the documents were created and that the documents were not prepared in anticipation of litigation or for trial.

Clemens’ attorneys argue DLA Piper had no “adversary” when it generated the documents and therefore cannot shield them under a “zone of privacy” position. DLA Piper and Major League Baseball “intended to disclose the details of the investigation to the public long before it was completed,” Clemens’ defense attorneys said yesterday.

Hardin and Attanasio said DLA Piper documents “almost certainly will contain exculpatory facts and information” and may help Clemens impeach key witnesses at trial. The defense attorneys said they are concerned that prosecutors “outsourced” constitutional duties to DLA Piper.

Clemens, who was indicted last August, isn’t just fighting DLA Piper for documents. His attorneys also want the House of Representatives oversight committee to turn over information related to the February 2008 congressional hearing on the Mitchell Report.

The committee has refused to turn over any documents, citing the general immunity that legislative activity enjoys from the speech or debate clause. Clemens’ attorneys said in court papers (PDF) filed last night that the protection is not absolute.

“The speech or debate clause has finite limits and does not confer an absolute privilege on Congress to withhold information from a criminal proceeding,” Clemens’ attorneys said. “The primary purpose of the clause is to preclude civil or criminal suits that seek to hold legislators liable for legislative activities.”

Judge Reggie Walton of U.S. District Court for the District of Columbia said DLA Piper and the House will have until April 15 to respond to Clemens’ lawyers concerns. Walton set a hearing for April 21.

DOJ Avoids Taking Position in Greenberg Traurig Restitution Dispute

The Justice Department will not get between Greenberg Traurig and a former Jack Abramoff business partner as the two sides fight over tens of millions of dollars in restitution rooted in a fraud scheme.

Lawyers for Greenberg Traurig want Michael Scanlon, who worked closely with Abramoff, to pay the firm nearly $17.7 million to cover the firm's losses for compensating victims of a kickback scheme that targeted a group of Native-American tribes. Abramoff and Scanlon orchestrated the fraud.

The firm, represented by Williams & Connolly, said it settled actual or threatened litigation with the tribes. Scanlon’s lawyers maintain Greenberg Traurig knew about fees Scanlon was paying to Abramoff, a lobbyist for the firm. Greenberg Traurig is not an innocent third party and should therefore be denied restitution, said a lawyer for Scanlon, Ropes & Gray partner Stephen Braga.

DOJ prosecutors Mary Butler, a Public Integrity Section senior trial attorney, and Nathaniel Edmonds, an assistant chief in the Fraud Section, said in court papers filed this afternoon in Washington's federal trial court that the dispute raises novel legal questions.

The government is not eager to step between Scanlon and Greenberg Traurig, taking one side over the other. Indeed, that won’t happen. The Justice Department said it’s already done its part—securing a restitution order as part of Scanlon’s sentencing last month.

“This collateral proceeding, however, may require the government to go beyond its usual role and advocate about the involvement of GT in the underlying criminal conduct in a manner that is extremely atypical,” prosecutors said in court papers filed Thursday afternoon. “Because the government did not seek criminal charges against or designate GT as an unindicted co-conspirator, the government submits that it should not now be required to take a position regarding GT’s involvement in the offenses and whether the facts would rise to the level of GT’s criminal culpability, and, thus, impact GT’s ability to collect funds from Scanlon.”

Prosecutors said there is no clear authority for ordering a defendant to pay the full amount of restitution after all victims have already been paid. The DOJ's filing is here (PDF).

Greenberg Traurig’s lawyers said in recent court papers that Scanlon should not be allowed to keep profits from a criminal scheme. DOJ lawyers said the issue of whether a defendant in Scanlon’s position would keep that money has not been litigated any circuit court.

If Greenberg Traurig is not entitled to compensation, Scanlon’s restitution would be capped at $2.5 million, payment for two tribes’ uncompensated losses.

Chief Judge Royce Lamberth of the U.S. District Court for the District of Columbia is presiding over the restitution flap. Lamberth has not decided whether to hold a hearing.

Greenberg Traurig Restitution Fight Picks Up in D.C. Court

Greenberg Traurig should not be allowed to collect tens of millions of dollars from former Jack Abramoff business associate Michael Scanlon, who pleaded guilty to participating in a scheme that defrauded a group of Native American tribes, a lawyer for Scanlon said today.

Scanlon's defense attorneys last month first raised a potential objection to Greenberg’s demand that Scanlon, a former public relations specialist in Washington, pay more than $17 million to cover the firm’s losses in compensating victims of the scheme.

Today, the defense lawyers urged a judge to determine that Scanlon can pursue his objection. If the judge agrees, Scanlon still has to show that Greenberg is liable and therefore blocked from receiving restitution.

Greenberg, represented by Williams & Connolly, has settled actual and threatened litigation stemming from a lucrative kickback scheme in which Scanlon and Abramoff participated. Judge Ellen Segal Huvelle of Washington’s federal trial court last month sentenced Scanlon to 20 months in prison.

In sentencing Scanlon, Huvelle also ordered him to pay Greenberg for its losses unless he can establish that Greenberg is not entitled to compensation because of the firm’s liability in the conduct for which Scanlon pleaded guilty.

The Justice Department has not taken a position on whether Greenberg is entitled to compensation from Scanlon.

Greenberg’s lawyers said in court papers last month that Greenberg did not condone or support Scanlon’s “reprehensible misconduct.” No federal law allows Scanlon to keep money derived from his crimes, the firm’s attorneys said.

Scanlon’s defense attorneys, including Ropes & Gray partner Stephen Braga, said in court papers (PDF) filed today that Greenberg, a third-party that is potentially liable in the fraud scheme, is not entitled to reimbursement. Braga said the issue is a novel one in District of Columbia courts.

Last month, Huvelle, a former Williams & Connolly partner, said another judge will be assigned to hear the dispute because of her prior employment at the firm representing Greenberg. A new judge was not immediately assigned today.

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.

Morning Wrap

Prop 8 Case Returns: The California Supreme Court has agreed to decide the crucial standing question in the litigation over Proposition 8, which sought to ban gay marriage. At issue is whether the supporters of the initiative have standing to defend it when the state won't, according to our sibling publication The Recorder and this article in the San Francisco Chronicle.

'Watson' Wins at Jeopardy: It was machine over man in this week's Jeopardy episodes, with IBM's 'Watson' computer beating two previous human champions at the game. The New York Times reports it wasn't just Watson's artificial intelligence that carried the day; the computer could hit the buzzer in 10 milliseconds when it was confident of the answer, making it almost impossible for humans to beat.

Breyer in Florida: Supreme Court Justice Stephen Breyer, in a talk in West Palm Beach, Florida, fielded questions on issues ranging from Wikileaks to Bush v. Gore. On the question of Supreme Court appointments, AP reported that Breyer said any president who thinks an appointee will always decide the way the president wants "should have his head examined."

Jailhouse Lawyer: A New York man who spent 15 years seeking and winning exoneration from murder charges has sued his prosecutors and police for $150 million in damages. The New York Law Journal has the story.

Former House Transportation Staffer Convicted in Lobbying Scandal

A former House of Representatives staff member who accepted a paid trip to a World Series game from a lobbyist caught up in the Jack Abramoff investigation was found guilty today in a public corruption case in Washington.

The jury found Fraser Verrusio guilty of conspiring to accept an illegal gratuity, accepting an illegal gratuity and making a false statement in failing to report gifts on his 2003 financial disclosure statement, the Justice Department said.

Judge Richard Roberts presided over the 10-day trial in the U.S. District Court for the District of Columbia. The jury deliberated for three days. Verrusio was a former policy director at the House Transportation and Infrastructure Committee.

“Accepting gifts from lobbyists and then lying about those gifts on financial disclosure forms is simply not acceptable,” Principal Deputy Assistant Attorney General Mythili Raman said in a formal statement.

The assistant director of the FBI’s Washington field office, James McJunkin, said that Verrusio’s crime “cuts against the thousands of government workers who live their lives by the ethical code they pledged to uphold.”

Verrusio’s lawyers, a defense team that included Katten Muchin Rosenman partners Joshua Berman and Glen Donath in Washington, declined to comment on the verdict.

The prosecution team, which included Justin Shur, deputy chief of the DOJ’s Public Integrity Section, presented evidence at trial that Verrusio accepted the World Series trip with the understanding he would provide official assistance to a lobbyist’s client. The trip to New York City included round-trip airfare, lodging and a steak dinner, according to DOJ.

Sentencing is scheduled for May 6. The conspiracy and false statement charges each carry a maximum prison of five years behind bars.

DOJ officials said 20 lobbyists and public officials have either pleaded guilty or been convicted at trial tied the investigation of the lobbying activity of Jack Abramoff and his associates. In the Verrusio case, a lobbyist who helped arrange the World Series trip worked with Abramoff.

Roger Clemens Waives Defense Attorney Conflict

Former baseball star Roger Clemens today agreed to keep a lead attorney on his defense team even though the lawyer’s potential conflict of interest will restrict what he can say in court proceedings and share with another lawyer on the case.

The lead attorney, Rusty Hardin, simultaneously represented Clemens and Andy Pettitte for a brief period in 2007, prior to the publication of the so-called “Mitchell Report” that examined steroid use in Major League Baseball.

Pettitte is a government witness who is expected to testify that Clemens once told him about his use of performance enhancing drugs. Federal prosecutors in Washington notified the trial judge, Reggie Walton, about the potential defense attorney conflict of interest. Walton convened the lawyers in court this afternoon to discuss the issue.

Hardin told Walton that he does not recall giving Pettitte advice during the week or so that he and Pettitte shared an attorney-client relationship.

Co-counsel Michael Attanasio, vice chairman of Cooley LLP's litigation department, was retained specifically to get around any conflict of interest, Hardin said in court. He said he has not shared with Attanasio any information that Pettitte provided. Attanasio is expected to cross-examine Pettitte if the Clemens case goes to trial. (Prosecutors said today they are seeking an affidavit from Pettitte regarding his waiver of any conflict.)

Standing between Hardin and Attanasio, Clemens told Walton he knows he’s entitled to conflict-free counsel. Walton went on to describe a hypothetical scenario in which Hardin would not be able to use certain information that Pettitte provided—or omitted—to challenge his credibility. Clemens, dressed in a black suit with a black tie, said he understood. Asked whether he waived the potential conflict, Clemens said, “That is correct, your honor.”

The hearing was short and drama free. As the proceeding was wrapping up, Walton spoke up from the bench to tell the lawyers about a recent conversation that he said needed to be put on the record in an abundance of caution.

Walton also told the lawyers in the case about a chat he had a couple of months ago with former baseball outfielder Ken Griffey Sr., with whom Walton said he used to play ball. During a homecoming event in Pennsylvania, Griffey told Walton that Clemens is a “good guy.” Walton declined to speak about the Clemens case with Griffey.

In court today, Walton said he doesn’t think Griffey was trying to influence his handling of the case. Hardin and the prosecutors said they have no problem with Walton remaining as the presiding judge.