The BLT: The Blog of Legal Times

Morning Wrap

Inside Trader: After lengthy deliberations, a Manhattan jury found hedge fund mogul Raj Rajaratnam guilty on all counts of conspiracy and securities fraud. He faces upwards of 15 years in prison, according to this story in sibling publication New York Law Journal.

Demjanjuk Guilty: In the latest chapter of a 30-year legal battle, a German court has just found John Demjanjuk guilty for the role he played in a Nazi death camp during the Holocaust. The 91-year-old former Ohio auto worker was sentenced to five years in prison, MSNBC reports.

Revolving Door: FCC commissioner Meredith Baker is leaving the commission to become a lobbyist for Comcast, just four months after voting to approve Comcast's merger with NBC Universal. The New York Times has the story here.

McCain on Torture: Former presidential candidate Sen. John McCain, also a former prisoner of war, writes today in The Washington Post that the capture and death of Osama bin Laden should not be used as vindication or justification for the use of torture in questioning detainees. "This is a moral debate. It is about who we are," the Arizona Republican wrote.

E-mails at the Heart of Suit Against MSNBC Personality Ed Schultz

A breach of contract lawsuit filed yesterday against MSNBC host Ed Schultz aims to prove that a series of e-mails between Schultz and an aggrieved NBC employee over the development of Schultz's television career constituted a binding contract.

Schultz, the host of MSNBC's "The Ed Show," is being sued by NBC broadcast engineer Michael Queen in U.S. District Court for the District of Columbia. Queen claims (PDF) that he came up with the idea for Schultz to move from radio to television and worked with him to secure a deal, only to have Schultz renege on promises to pay him 25 percent of the profits.

As Queen notes in his complaint, however, the two never signed a formal contract. Instead, Queen is arguing that a series of e-mails the two exchanged, along with verbal agreements, constituted the terms.

Schultz’s attorney, Los Angeles-based solo practitioner Jeffrey Landa, said in a phone interview today that the e-mails have nothing to do with Schultz’s MSNBC show, and that he plans to file cross-claims against Queen for what Landa claims is ongoing harassment. Landa said Queen initially misrepresented his identity to Schultz, and that Queen only worked with Schultz on the idea for a local Sunday morning talk show, not the MSNBC program.

“They’ve been threatening lawsuits for almost three years now,” Landa said. “We’re going to aggressively defend this case. We’re not going to settle.”

James Holm, a producer for Schultz’s radio show, referred a request for comment to Landa.

Queen is being represented by Charlottesville, Va.-based attorney Mark Lane and Washington attorney Frazer Walton Jr., both solo practitioners. Lane, in a phone interview this afternoon, said the e-mails show that Schultz had promised to pay Queen at the very least as his agent, and at the most as a partner in putting the show together.

“It is true that Mr. Schultz…never signed a contract,” Lane said. “That was the problem. He kept on agreeing, over and over, to the terms…email after email. But he wouldn’t sign anything.”

According to Queen’s complaint, the two first met in 2007, when Queen presented Schultz with his idea for a television show. Queen says he worked with Schultz on the concept and pitched the idea to various network executives, but ultimately was turned down. He also notes that he served partly as Schultz’s agent, in one case helping Schultz find a home in Washington.

From 2007 to 2009, Queen claims he exchanged a series of e-mails with Schultz that confirmed he would be paid 25 percent of profits if Schultz got his television show. In March 2009, Queen states that MSNBC reached out to Schultz directly to offer him a show. After that point, Schultz cut off all contact, according to the complaint.

The case is before U.S. District Judge Beryl Howell.

50 Years Later, Minow Reflects on 'Vast Wasteland' Speech

Fifty years ago yesterday, then-Federal Communications Commission chairman Newton Minow gave a speech that still stands as possibly the best use of the government bully pulpit in modern history. Then a young newcomer in the Kennedy administration, Minow challenged audience members at the National Association of Broadcasters convention to spend an entire day watching their station, from sign-on to sign-off. "I can assure you," he said, "that what you will observe is a vast wasteland."

Though Minow later said he wanted "public interest" to be the words remembered from the speech, it became known as the "vast wasteland" speech that ushered in an era of public broadcasting and expansion of news coverage on broadcast television.

Last night at the National Press Club, Minow, 85 and still senior counsel at Sidley Austin in Chicago, spoke about the speech and shared the stage with current FCC chair Julius Genachowski. The event was co-sponsored by the Global Media Institute at George Washington University, and was aired by C-SPAN, which archived the footage here.

In introducing Minow, Genachowski said the speech is "as relevant today as it was 50 years ago" and told Minow, "you continue to inspire us every day." Genachowski said more than once that "the world has changed" since Minow's tenure, but he shares the same goal of maximizing choices as the media landscape has expanded to include the Internet and mobile devices.

Genachowski presented Minow with a compilation, drawn from FCC files, of some of the 4,000 letters the agency received after the speech.

Minow recalled with a laugh that one of the letters he received asked him, "what time does the vast wasteland go on?" And he said that his original text ended the famous sentence with "of junk," though he decided not to use that phrase. FCC staffers advised him to delete "vast wasteland" as well, but he refused.

Moderator Frank Sesno asked Minow the inevitable question: whether he sees the current media landscape as a vast wasteland. Minow said no, also confessing that "I happen to be a television junkie." In his speech, Minow wanted broadcasters to expand choices, and that has been accomplished, he said last night. "No matter what your interest is, you have a channel."

Defamation Suit Against CBS Goes to D.C. Circuit

Lawyers who allege in a suit that the CBS program "60 Minutes" contained defamatory comments about a Georgia poultry farm's alleged connection with terrorist financing want a federal appeals court in Washington to overturn the dismissal of the suit.

Last month, Judge Rosemary Collyer of U.S. District Court for the District of Columbia dismissed the suit Mar-Jac Poultry brought against CBS and a woman featured on the show, Rita Katz, a self-described terrorist hunter. Katz, a professional researcher, has fed tips to federal authorities about alleged terrorist financing.

On the CBS program, which aired in May 2003, Katz used a fictitious name and appeared in disguise. The poultry farm’s name is not mentioned on the broadcast but its name is displayed. Mar-Jac’s suit against CBS and Katz in Washington federal district court has been pending since 2003.

In her ruling in March granting summary judgment for CBS and Katz, Collyer said “no reasonable jury could find that Ms. Katz’s statements about laundering money through misreporting dead chickens were anything but rank speculation, surmise or hyperbole, engendered, perhaps, by her thrill at being involved in an undercover capacity.”

Mar-Jac’s lawyers, who have filed an appeal in the U.S. Court of Appeals for the D.C. Circuit, said they don’t think the CBS program’s producers and the show’s viewers “thought 60 Minutes was broadcasting ‘rank speculation’ or ‘hyperbole.’”

“To the contrary, the program has a reputation for broadcasting facts,” said Nancy Luque of Washington’s Luque Marino, the firm that represents Mar-Jac.“This finding by the court poses a dilemma for CBS: can the network let this judgment about one of its premier news program stand?”

A lawyer for CBS, Lee Levine of Washington’s Levine Sullivan Koch & Schulz, was not immediately reached for comment this morning about the appeal. The D.C. Circuit has not said whether it will hear the case.

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.

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.

Alito Opposition Still Haunts 9th Circuit Nominee

Republican senators said today they have no plans to forgive Goodwin Liu for his 2006 testimony against the confirmation of Justice Samuel Alito Jr., adding to Liu's own steep climb toward a federal judgeship.

Liu, a prominent liberal law professor, has twice told senators he regrets the testimony. Most recently, in response to a question from Sen. Tom Coburn (R-Okla.) during a March 2 confirmation hearing, Liu said it was “a case of poor judgment.” But Coburn said today he still opposes Liu for a seat on the U.S. Court of Appeals for the 9th Circuit.

“We all make mistakes in life, but it doesn’t change the fact that there are consequences for what we’ve done,” Coburn said during a meeting of the Senate Judiciary Committee.

First-year Sen. Mike Lee (R-Utah), who twice clerked for Alito, said Liu’s comments were “offensive” and an “unfair personal attack on a dedicated public servant.” He questioned why Liu didn’t renounce them before his own nomination in February 2010. “It was then, and so far as I know only then, that he offered any apology for his criticism of Justice Alito,” Lee said.

The committee sent Liu’s nomination to the full Senate on a party-line vote for the third time in a year, though there’s no guarantee he will ever receive a final confirmation vote. None of the Senate’s 48 Republicans has said he will support Liu. Senate rules require 60 senators to break a filibuster.

“I think there’s a definite possibility of a filibuster because of the extraordinary circumstances posed by this nomination,” said Sen. Jon Kyl (R-Ariz.), the No. 2 Senate Republican, after the committee meeting. The phrase “extraordinary circumstances” echoes a 2005 compromise regarding judicial filibusters, and Kyl added, “If any nominee meets that test, this one does.”

Democrats said the objections to Liu’s judicial philosophy are unfounded and pointed to his academic record, including a Rhodes scholarship, as well as his tenured professorship at the University of California, Berkeley. Some prominent Republican lawyers, including former solicitor general Kenneth Starr, have endorsed Liu’s nomination.

“There’s fear on the other side, that this man may be so good that one day he may end up on the Supreme Court, and therefore you have to stop him before he gets to the circuit court,” said Sen. Dianne Feinstein (D-Calif.). “This is a brilliant man. He should be confirmed.”

Kyl said during the committee meeting that his reason for opposing Liu is not that Liu might be a future Supreme Court nominee. But he said “it wouldn’t be the first time that it was a reason,” citing the failed Republican circuit nomination of Miguel Estrada, a Gibson, Dunn & Crutcher partner who has been mentioned as a Supreme Court nominee. Democrats repeatedly filibustered Estrada.

Without debate, the Judiciary Committee unanimously endorsed four district court nominees. They included two nominees for the Southern District of New York: J. Paul Oetken, senior vice president and associate general counsel at Cablevision Systems Corp., and Paul Engelmayer, head of the New York office of Wilmer Cutler Pickering Hale and Dorr.

The committee also gave its approval to legislation that would allow federal judges to open up their courtrooms to radio and television coverage. A similar bill won committee approval last year before dying in the full Senate.

Updated at 12:23 p.m.

Two Firms Sign Up to Lobby for Public Television

Amid the threat of funding cuts by Congress, the nation's local public television stations have bulked up their lobbying presence in Washington.

J. Keith Kennedy, a senior public policy adviser at Baker, Donelson, Bearman, Caldwell & Berkowitz, registered this week to lobby on behalf of the Association of Public Television Stations. Kennedy, the managing director of the law firm’s Washington office, is a former Republican staff director for the Senate Appropriations Committee.

Lobbying shop Quinn Gillespie & Associates is also working with the television stations, an association spokeswoman said. Though a registration has not yet been filed, according to a search of Senate records, the spokeswoman said the team includes John Feehery, who is a former aide to then-Speaker Dennis Hastert (R-Ill.), and Marc Lampkin, who was general counsel to Speaker John Boehner (R-Ohio) when Boehner was chairman of the House Republican Conference.

The television stations’ trade group started talking to the two firms in January, the spokeswoman said. The lobbying registration for Baker, Donelson was effective as of March 16 — a day before the House voted, 228-192, for a Republican-led proposal to cut off funding for NPR.

Though the March 17 vote didn’t directly threaten public television, a coalition of its stations and NPR strongly condemned the action in a statement.

“The only result would be the loss of thousands of jobs in this industry, the closing or severe restriction of hundreds of local stations serving small-town and rural America which depend on federal funds for 30 to 100 percent of their annual budgets, including program acquisition, and the loss of vital information for millions of Americans,” the statement read.

The trade group has been registered with Pauley Management Inc., based in Florida, since 2005, but lobbying reports show no activity by the firm since 2008. Others who have lobbied for the stations in recent years include Paul, Hastings, Janofsky & Walker.

The Podesta Group has been registered to lobby for NPR since 2007.

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.

Senators Introduce Sunshine in the Courtroom Act

Sens. Chuck Grassley (R-Iowa), Charles Schumer (D-N.Y.) and Patrick Leahy (D-Vt.) have introduced legislation to permit federal and appellate judges to allow the use of cameras in the courtroom.

“The judicial branch of our federal government is a mystery to many Americans. Cameras in courtrooms would help lift the veil of secrecy and contribute to greater public understanding of the judicial system,” Grassley said in a written statement.

The Sunshine in the Courtroom Act doesn’t require federal court judges to allow cameras but instead gives them discretion to permit cameras or other electronic media access if they see fit. The bill directs the Judicial Conference of the United States, the principal policy-making entity for the federal courts, to draft non-binding guidelines for judges to refer to when making a decision regarding media coverage of a particular trial.

The bill includes safeguards that would allow witnesses who are not parties in the case to request their image and voice to be obscured during testimony. The bill instructs the Judicial Conference to issue mandatory guidelines for obscuring vulnerable witnesses, such as undercover officers and crime victims, if revealing their identity would threaten their safety, the security of the court or future or ongoing law enforcement operations.

Media coverage of jurors would be prohibited, as well as the broadcast of any conference that is not part of the official record of the proceedings.

A three-year sunset provision has been included in the bill to provide Congress with a mechanism to study the effects of the legislation. The bill has bipartisan support and is co-sponsored by Sens. John Cornyn (R-Texas), Richard Durbin (D-Ill.), Lindsey Graham (R-S.C.) and Amy Klobuchar (D-Minn.)