The BLT: The Blog of Legal Times

Settlement Approved in Metro Crash Case as Others Proceed to Trial

A federal judge in Washington has approved a settlement in one of two remaining wrongful death claims in litigation over a deadly Metro rail crash in 2009. The settlement comes as two personal injury cases related to the crash move toward a trial later this month.

According to notices filed Friday, U.S. District Judge Reggie Walton approved a settlement between the family of Ana Fernandez, who was killed in the crash, and the four defendants – the Washington Metropolitan Area Transit Authority and three companies that supplied parts of the rail system, Alstom Signaling Inc., Ansaldo STS USA Inc. and ARINC Inc. The terms of the settlement are confidential.

The June 22, 2009 crash at the Fort Totten station in Northeast Washington killed nine people and wounded dozens. Eight of the wrongful death cases filed against Metro and the private defendants have now settled. The last one, filed by the family of Lavonda King, is still pending. Trials in the King and Fernandez cases were supposed to begin in March, but Walton postponed it after finding that media reports about the case and public statements made by counsel and parties had "poisoned" the jury pool.

BuckleySandler Seeking Arbitration in Fee Dispute With Ex-Pennsylvania State Senator

Former Pennsylvania State Senator Vincent Fumo is serving 61 months in prison on convictions for fraud and obstructing justice. He's now facing new legal action in Washington, this time brought by his former attorneys at BuckleySandler.

On October 31, the firm filed a motion (PDF) in District of Columbia Superior Court to compel arbitration, accusing Fumo of failing to honor the terms of their representation agreement to submit fee disputes to arbitration. According to the motion, Fumo owes the firm more than $400,000 in fees.

In the motion, the firm claims that Fumo did not respond to requests for payment and then denied ever agreeing to arbitration. In an affidavit submitted with the motion, BuckleySandler partner Samuel Buffone said that the firm made several attempts to reach Fumo and his lawyers about resolving the situation, to no avail.

Former D.C. Council Chair Pleads to Avoid Jail for Fraud Conviction

Kwame Brown, the former D.C. Council chair who pleaded guilty to bank fraud this year, indicated in a court filing (PDF) today that he is ready to accept responsibility for his crime. But, according to the filing, he doesn't think that should mean jail time.

Brown is scheduled for sentencing before U.S. District Judge Richard Leon on November 13. The U.S. attorney's office, in a sentencing memorandum (PDF) also filed today, asked for a sentence that would include six days of incarceration, arguing that it would reflect the "seriousness" of the crime. Brown has asked that any jail time be suspended.

Bank fraud alone is a major crime, prosecutors wrote, but they noted that Brown's situation was compounded by his position at the time as an elected official and the fact that he committed the fraud to buy a "luxury item" – in this case, a boat. "Although there is never an excuse for committing bank fraud, doing so to purchase a recreational vehicle is shameless," they said.

UBS Whistleblower Sues Schertler & Onorato for Malpractice

Updated Nov. 5 at 11:27 a.m.

A former UBS AG banker who blew the whistle on his ex-employer's activities filed a lawsuit yesterday for legal malpractice against his former attorneys at Washington's Schertler & Onorato.

Bradley Birkenfeld worked at UBS from 2001 until he resigned in 2005. Beginning in 2007, Birkenfeld cooperated with federal prosecutors investigating allegations that UBS helped clients evade U.S. taxes. UBS was eventually fined $780 million, and the U.S. Internal Revenue Service approved a $104 million whistleblower award for Birkenfeld in August.

In the complaint (PDF) Birkenfeld filed yesterday in District of Columbia Superior Court, however, he accused his former lawyers at Schertler & Onorato of botching the whistleblower process and costing him a potentially larger award. He also accused the firm of failing to take steps that could have prevented his subsequent arrest and conviction on a charge of defrauding the United States.

Legal Ethics Committee Weighs In On Disclosures By In-House Counsel

In-house lawyers suing their employers or clients for discrimination or a retaliatory firing can't disclose any confidences or secrets, unless they're defending against a counterclaim or affirmative defense, according to a new opinion from the D.C. Bar Legal Ethics Committee.

According to an opinion published online last week by the committee, the D.C. Bar Rules of Professional Conduct don't allow in-house lawyers to disclose confidences – information protected by attorney-client privilege – or secrets – information gleaned that a client has asked to keep secret or that would harm a client – in making a claim.

But the committee found that the rules do allow in-house lawyers to make those disclosures if the employer or client being sued calls into question the lawyer's conduct.

Real Estate Experts and Lawyers Predict Eastward Shift of D.C. Firms

McDermott Will & Emery's new office near the U.S. Capitol and Covington & Burling's upcoming move east to the new CityCenter DC site are harbingers of things to come, a panel of D.C. real estate experts, lawyers and business community representatives agreed this morning.

The discussion, which was hosted by McDermott, explored the role that law firms play in the local economy, from real estate and jobs to pro bono work and civic engagement. According to data that Bobby Burchfield, co-partner-in-charge of McDermott’s D.C. office, cited from the U.S. Bureau of Economic Analysis in his remarks, the legal industry is the second largest contributor to the city's gross domestic product, second only to the federal government.

Barbara Lang, president and chief executive officer of the D.C. Chamber of Commerce, grouped the legal industry's major contributions to the city into three categories: real estate, taxable income and pro bono work supporting local nonprofits. She noted the "huge impact" law firms have on real estate, but lamented that the city can't tax the income of D.C.-based lawyers who live outside the city.

FTC Settles with Equifax Over Sale of Mortgage Payment Information

A major consumer credit reporting agency has reached a $393,000 settlement with the Federal Trade Commission to resolve claims that it improperly sold information about consumers who didn't make their mortgage payments on time, the FTC announced on Wednesday.

Equifax Information Services LLC sold more than 17,000 lists of consumer data to Direct Lending Source Inc. and other companies, according to the FTC. Direct Lending Source then sold some of the lists to businesses that used the information to target consumers in financial distress, the FTC alleges. The company agreed to a $1.2 million settlement with the FTC.

Tim Klein, an Equifax spokesman, said his company "did not and [does] not admit to any wrongdoing" as part of the settlement. Equifax severed its ties with Direct Lending and its affiliates in the summer of 2011, he added.

Former D.C. Council Chair Earns Judge's Ire for Probation Violations

Updated 10/15/12 at 9:42 a.m.

Just five weeks away from sentencing on a bank fraud charge, former D.C. Council Chair Kwame Brown earned a Washington federal judge's ire today for violating the terms of his release by failing to call in to the Pretrial Services Agency three times.

Brown apologized at this morning's hearing, saying he knew there was no excuse for his actions. But U.S. District Judge Richard Leon said that Brown's conduct didn't seem to reflect such sentiments. "Your apology is a little late in the game," Leon said.

Leon told Brown that given his upcoming sentencing hearing, "this is not the way to position yourself most favorably." He ordered Brown to report in-person to the Pretrial Services Agency each week, as opposed to by phone, and gave Brown a curfew from 11 p.m. to 6:30 a.m.

Report Takes Former SEC Inspector General to Task for Allegedly Inappropriate Friendships

Updated 4:33 p.m., 10/9/12

In a June 2011 National Law Journal profile of former Securities and Exchange Commission Inspector General H. David Kotz, Bernard Madoff Ponzi scheme whistleblower Harry Markopolos spoke glowingly about Kotz.

"When he got to [the SEC], it was a mess," Markopolos said. "It's a totally different agency now, in large part because of his efforts. I had lost my faith in government. But he was unflagging. Nothing deterred him or his team. He restored my faith."

Now, the U.S. Postal Service Office of the Inspector General has alleged that the two men were "very good" friends -- and that the friendship may been inappropriate, depending on when it began.

The Postal Service IG report, recently obtained by Reuters through a Freedom of Information Act request, claimed Kotz had engaged in several conflicts of interest while serving as the top SEC internal watchdog.

Financial Disclosure Information from Members of Congress Now Online

Tracking the financial interests of members of Congress just got a bit easier.

Financial disclosure forms went online this week for senators and representatives, as well as candidates for the House and Senate, as required under a new law aimed at stopping congressional insider trading.

Reports now made available online include information about the source, type, amount, or value of the incomes of members of Congress and candidates, including investments and jobs outside their work for the government.

The House had published those reports online since 2008 for members, but records for senators and candidates were previously only available in paper form on Capitol Hill, according to the Center for Responsive Politics, a group that tracks money in politics.