The BLT: The Blog of Legal Times

Video Game Rental Company Says U.S. Postal Service Playing Favorites

A federal appeals court in Washington today revived a company's challenge of the alleged preferential treatment that the U.S. Postal Service gives to Netflix for rates and service terms.

The challenger, GameFly, which rents and sells video games to customers, asked the Postal Service for the same treatment that it provides Netflix, the movie rental company, when it comes to rates and service terms for sending DVDs through the mail.

DVD mailers, the U.S. Court of Appeals for the D.C. Circuit said today, tend to jam the Postal Service's automated, high-speed letter-sorting equipment. The machines, the court said, sometime break DVDs. That's a problem for GameFly, however, and not Netflix, whose DVD mailers are manually handled. Netflix isn’t charged extra for the service, the court said.

"The Postal Service has saved Netflix—apparently its biggest DVD mailer customer—from this crippling otherwise industry-wide problem by diverting Netflix mail from the automated letter stream, shifting it to specially designated trays and containers, hand culling it, and hand processing it," Chief Judge David Sentelle wrote today in the D.C. Circuit ruling. The opinion is here.

D.C. Judge Sides with J.P. Morgan in Spat Over Redacted Emails

Updated 2:58 p.m.

A federal magistrate judge in Washington has ruled against federal energy regulators, saying J.P. Morgan doesn't have to produce 25 unredacted emails in an investigation about manipulation in power markets.

Lawyers for the Federal Energy Regulatory Commission turned to Washington's federal trial court this summer to seek the enforcement of an administrative subpoena. The attorneys challenged J.P. Morgan Ventures Energy Corp.'s assertion of attorney-client privilege.

Magistrate Judge Deborah Robinson said she inspected, in chambers, the redacted portions of the 25 emails in dispute. In a ruling published Thursday evening, Robinson said the attorney-client privilege shields the information from disclosure. Her ruling is here.

Lawyers from the firms Sutherland Asbill & Brennan and Skadden, Arps, Slate, Meagher & Flom represent the bank. Skadden partners Michele Roberts and William Scherman are among the lawyers who represent the bank.

DOJ, House Lawyers to Meet for Settlement Talks Over Fast and Furious Documents

The U.S. Justice Department and House Republicans will continue to try to reach an agreement, short of a decision from a federal judge, over the disclosure of additional information about the controversial gun trafficking investigation Operation Fast and Furious.

Ian Gershengorn, a top DOJ lawyer in the Civil Division, and House general counsel Kerry Kircher said the two sides will meet soon to try to craft a settlement over the documents in dispute. President Barack Obama in June asserted executive privilege over certain documents, keeping the information out of reach from House Republicans.

House lawyers are contesting the merits of the privilege, arguing that DOJ should not be allowed to hide information from Congress after it has obtained a valid subpoena. Kircher said in recent court papers that a ruling in favor of DOJ would mark an unwarranted expansion of executive privilege.

McDermott Adds Team of Arbitration Attorneys

McDermott, Will & Emery has added a pair of international arbitration partners to its firm, including one in Washington.

Lisa Richman and Sabine Konrad join McDermott as partners in the firm's Washington and Frankfurt offices, respectively. The team was previously with K&L Gates in Washington.

The focus of Richman's practice is international commercial and investment arbitration. She has represented corporations and corporate officers. She is fluent in German and English, and also speaks Spanish and French.

Her Frankfurt-based colleague, Konrad, focuses on cross-border disputes on matters related to commercial arbitration and public law.

DOJ's Lanny Breuer Touts New FCPA Resource Guide

Lanny Breuer is taking the government's new anti-corruption resource guide on a roadshow today, speaking at legal events in the Washington area just days after the publication of a much-anticipated memo that clarifies the scope of enforcement of the Foreign Corrupt Practices Act.

This morning Breuer was in National Harbor, Md., to address the American Conference Institute's annual conference on corruption. Breuer this afternoon is scheduled to participate in a panel discussion at the Federalist Society convention in Washington.

Breuer was supposed to address the American Conference Institute yesterday. But the announcement of BP's guilty pleas in the Deepwater Horizon explosion and oil spill trumped his speech. Breuer didn’t mention BP's fines and penalty today in his prepared remarks. F. Joseph Warin of Gibson, Dunn & Crutcher, a lawyer for BP in the criminal case, introduced Breuer today at the conference.

But back to the FCPA. Breuer dedicated the start of his remarks to a description of DOJ's overall anti-corruption fight. Breuer, the assistant attorney general in charge of the Criminal Division, said the department has more than doubled the number of prosecutors working to enforce foreign bribery laws.

DOJ, SEC Provide Updated Foreign Bribery Enforcement Guidance

Federal prosecutors and securities regulators today unveiled the government's much-anticipated guidance for foreign-bribery enforcement, intending to provide companies and individuals a clearer picture of the conduct the government wants to thwart.

Top U.S. Justice Department and U.S. Securities and Exchange Commission officials prepared the 120-page Foreign Corrupt Practices Act (FCPA) guide, addressing, among other things, the definition of a foreign official, proper and improper gifts and the "hallmarks" of effective corporate compliance.

"Corruption is a global problem," the guide says in an opening passage. "In the three decades since Congress enacted the FCPA, the extent of corporate bribery has become clearer and its ramifications in a trans¬national economy starker." Click here for a copy of the guidance.

Former D.C. Council Chairman Sentenced to Day in Jail

Updated 3:29 p.m.

Federal prosecutors had asked for six days in jail, served on weekends, as punishment for a once rising-star in the Washington political community. In the end, Kwame Brown, a former chairman of the District of Columbia Council, will spend the afternoon in federal custody—about six hours in all.

Rejecting probation as stand-alone reprimand, U.S. District Judge Richard Leon today told Brown, who pleaded guilty to a bank fraud charge, he will remain in custody until 5:30 p.m. Leon also ordered Brown to serve six months of home detention and to spend two years on supervised release. Brown must complete 480 hours of community service.

Brown was sentenced this morning in U.S. District Court for the District of Columbia in downtown Washington. He will be transported this afternoon across the street to D.C. Superior Court, where he has a pending campaign finance violation. The case against Brown was the latest in a series of recent prosecutions against local officials brought by the office of U.S. Attorney Ronald Machen Jr.

Today in federal court, in a crowded courtroom, Brown spoke briefly about his fall from grace—about his personal disappointment, the embarrassment in the community, the lost opportunities. Brown admitted falsifying information on bank loans. In one instance, he overstated his income to buy a luxury boat.

After 17 Years, Court Oversight Ends for D.C. Special Ed Services

For 17 years, the District of Columbia has answered to a federal judge when it came to the state of transportation services for students with special needs. That court oversight expired yesterday, in light of an agreement reached by the plaintiffs and city officials.

The case, known as Petties v. D.C., is one of six remaining class actions filed against the District in recent decades over how officials have provided services and cared for some of its most vulnerable residents, including children with special needs. Although the parties agreed to end court oversight, the case will remain active until after a December 19 fairness hearing on the proposed agreement (PDF) reached by the plaintiffs and the city.

The agreement and pending dismissal is a big win for the city, especially Attorney General Irvin Nathan. Exiting court supervision in the consent decree cases, which officials say are expensive, time-consuming and antithetical to local autonomy, has been among Nathan's top priorities since taking office in 2011. In February, a federal judge ended more than three decades of court oversight in another consent decree case involving the city's mental health system, known as the Dixon case.

DOJ Defends Controversial Military Detention Provision

As presidential election returns rolled in Tuesday night, the U.S. Justice Department filed its opening brief defending a controversial military detention provision that a trial judge in Manhattan declared unconstitutional earlier this year.

The suit, filed in Manhattan federal district court by a group of journalists and activists, challenges a section of the National Defense Authorization Act that DOJ lawyers said reaffirms presidential detention authority under the Authorization for Use of Military Force, or AUMF. That authorization was passed in response to the Sept. 11 terror attacks.

Government lawyers said in the papers filed last night in the U.S. Court of Appeals for the Second Circuit that the plaintiffs "are in no danger whatsoever of being subject to capture and detention by the U.S. military." The provision in question allows the detention of people who "substantially supported" al-Qaeda or "associated forces."

"The district court nonetheless issued an extraordinary and sweeping injunction at their behest," DOJ lawyer August Flentje of the Civil Division said in the brief filed last night. Flentje said the trial judge, Katherine Forrest of U.S. District Court for the Southern District of New York, "entered a sweeping and permanent injunction against the president."

The Morning Wrap

In plain sight: The Wall Street Journal today examines the role the CIA played in the collection of intelligence and provision of security in Benghazi. "The U.S. effort in Benghazi was at its heart a CIA operation, according to officials briefed on the intelligence. Of the more than 30 American officials evacuated from Benghazi following the deadly assault, only seven worked for the State Department," the WSJ report said. From The New York Times today: "C.I.A. Played Major Role Fighting Militants in Libya."

Going back: The U.S. Supreme Court is weighing whether a ruling addressing lawyers and their warning to clients about deportation should apply retroactively to thousands of people, The New York Times reports. Justice Samuel Alito Jr. predicted in 2010 that the court's ruling then "would lead to much confusion and needless litigation."

Mobilizing: "Days after Superstorm Sandy rumbled through the metropolitan area, leaving chaos in its wake, bar groups have begun mobilizing pro bono assistance for those affected by the disaster." The New York Law Journal has the story here.

Trafficking: From The Washington Post, a piece on the methamphetamine trade in Iran: "Even as Western sanctions ravage their economy, some Iranians are reaping a cash harvest from an unexpected source: a booming illicit drug industry that law enforcement officials say is producing record quantities of a powerful synthetic drug."