The BLT: The Blog of Legal Times

Guantánamo Lawyers Challenge Government's New Detainee Guidelines

Defense lawyers representing several Guantánamo detainees are challenging the Obama administration’s new definition for enemy combatants, arguing that the president’s retooled formula is still too broad and violates traditional laws of war.

On March 13, Justice Department lawyers filed papers outlining the new standards they would use to decide who the government could and could not detain in the war on terror. The revamped guidelines did away with the term “enemy combatant” while slightly narrowing the definition of who could be held. And whereas the Bush administration argued that the president had inherent constitutional authority to detain suspected militants and terrorists indefinitely, the Obama White House says the power comes exclusively from the Authorization for the Use of Military Force in Afghanistan, which Congress passed in 2001.

In their Friday filing , the detainees’ lawyers — a group that included Peter Ellis of Boston’s Foley Hoag, Shayana Kadidal of the Center for Constitutional Rights, and Paul Leder of Washington’s Richards Kibbe & Orbe — argue that the president is still overstepping his legal bounds. They point out that the AUMF says nothing explicit about detention powers, and that the Supreme Court, in cases such as Hamdi v. Rumsfeld (2004), has chosen to apply a narrow reading of the resolution.

Full House for Supreme Court Arguments on Asbestos

It may not have been the most high-profile case of the term, but the arguments before the Supreme Court this morning in Travelers Indemnity Co. v. Bailey and the consolidated case Common Law Settlement Counsel v. Bailey packed the Supreme Court's lawyers' section with insurance and bankruptcy law practitioners among others. Even former New York Gov. Mario Cuomo, now of counsel at Wilkie Farr & Gallagher, was in the audience, though he was sitting in the public section, not the area reserved for members of the Supreme Court bar. (We're not sure if that was his choice, or if the lawyers' section was full.)

The case revisits the long-running asbestos litigation, beginning with the 1986 settlement that was reached with the bankrupt Johns-Manville Corporation to handle claims by those injured by exposure to asbestos. It has been touted -- including before the justices today -- as a model of success for compensating 660,000 claimants with more than $2.8 billion in payouts. Insurers contributed to the fund, and in return got immunity from the bankruptcy court from future claims related to their policies with asbestos makers.

But plaintiffs' lawyers later found other grounds on which to sue insurers including Travelers Indemnity. Travelers objected, asserting that the new claims were barred by the bankruptcy court's immunity order. After mediation conducted by Cuomo, Travelers agreed to fund a new $500 million trust for the new plaintiffs, in return for clarification that it would then be immune from still more claims. But some other plaintiffs who were not part of the new settlement objected, and last year the U.S. Court of Appeals for the 2nd Circuit ruled in the plaintiffs' favor, finding that the bankruptcy court lacked the power to immunize Travelers from the other claims. That set the stage for today's hearing.

The arguments before the Supreme Court were lively. Justice Ruth Bader Ginsburg was the most aggressive questioner, asking the lawyer for Travelers, Simpson Thacher & Bartlett partner Barry Ostrager, upward of 20 questions during his 30 minutes at the lectern, and calling it a "most mysterious case." She even scolded Ostrager mildly for beginning to answer her question before she had asked it. (If Ginsburg's March 17 announcement about her schedule for cancer chemotherapy still holds, she may have had her first treatment last Friday. If so, it did not affect her energy level or questioning during argument.) 

Most justices seemed sympathetic toward Travelers, with Justice John Paul Stevens wondering what more the plaintiffs could possibly expect out of the company. "The fact that they defended cases certainly was proper for them as an insurance company," said Stevens. "This is a mysterious case to me.' Stevens also labeled the settlement program a success.

More than once, Justice Stephen Breyer also expressed concern that if the new claims are allowed against Travelers, other insurers would be reluctant to contribute to similar settlement funds in the future.  "I can't imagine an insurance company in its right mind going into that when in fact all these suits are still open," Breyer told New York University School of Law professor Samuel Issacharoff, who represented the plaintiffs against Travelers. Issacharoff replied that Travelers had agreed to the settlement not knowing if it would receive protection from future claims.

A preview of the case from AmLaw's Litigation Daily appears here.

Hogan Hires Privacy Lawyer

Hogan & Hartson will add Christopher Wolf as a partner in its Washington office Wednesday in its privacy and antitrust, competition, and consumer protection practices. Wolf joins Hogan from Proskauer Rose where he worked as a litigation partner in the firm's D.C. office since 1989.

With Hogan, Wolf, along with Hogan partners Lynda Marshall and Marcy Wilder, will co-chair the firm's 45-lawyer privacy group -- significantly more than the 12-lawyer privacy group he chaired at Proskauer. His move to Hogan comes about four months after he founded the Future of Privacy Forum -- a non-profit think tank that focuses on new privacy and data security issues. According to Wolf in a November interview with The Am Law Daily, Proskauer supported Wolf, but AT&T Corp., a Proskauer client, provided Wolf with the "seed" money to start the group. Wolf says he has since secured other corporate sponsors, but declined to name them. At Hogan, he will continue working with the forum daily.

Wolf has been involved in several high-profile privacy cases, including his representation of CIA officer Valerie Plame and her husband Joseph Wilson in a civil suit after her status with the CIA was disclosed to journalists. Plame and Wilson are no longer clients of Wolf's, and he declined to say whether any current clients would follow him to Hogan.

The addition of Wolf comes just after Hogan recently lost two high-profile lawyers to the Obama administration. In January, Obama nominated former partner Christine Varney to serve as assistant attorney general for the antitrust division in the Department of Justice. More recently, in February, Homeland Security secretary Janet Napolitano appointed former partner Mary Ellen Callahan to serve as the chief privacy officer of Homeland Security.

"It was a difficult decision leaving Proskauer and I have the highest regard for that firm." says Wolf, who was approached by Hogan to join the firm. "Hogan offered a stronger platform for my practice and given the recent departures, there was a need for additional leadership."

Wolf's ties to Hogan began more than 100 years ago. Before Wolf joined the private sector in 1982 with Arnold & Porter, Wolf was a law clerk for U.S. District Judge Aubrey Robinson. On his last day, Judge Robinson gave Wolf a photo of the D.C. bench and bar from 1907. More recently, upon closer examination while packing his things at Proskauer, two men in the photo jumped out at Wolf -- his grandfather Alexander Wolf and Hogan & Hartson founder Frank Hogan.

Christopher Wolf says: "I guess Wolf and Hogan are back together again."

Citi Unveils 2009 First Quarter Managing Partner Index

With dissolutions, layoffs, and salary freezes making headlines, when will law firms be able to thrive once again? Managing partners say not soon.

Today, Citi Private Bank Law Watch released its executive summary of its first quarter 2009 managing partner confidence index. Law firm managing partners’ confidence in the financial health of their firms continued declining, as client demand keeps shrinking and expenses keep growing.

According to the survey, the end to the tough times for firms is not coming any time soon. Of the roughly 120 managing partners surveyed from mostly Am Law 100 and Am Law 200 firms, 64 percent believe legal business will drop even more over the next six months. The survey says firms should not expect major profit growth over the next year, as profits, if there are any, will likely not exceed 5 percent. The majority of managing partners believe revenue will stay flat or decline.

Through the first quarter of 2009, insolvency and restructuring practices have been the driving practices at law firms, while litigation – which was a highly anticipated practice with the down economy – has been slow given in-house counsel feeling pressure from their companies to tighten their belts.

In addition to clients scaling back their use of law firms, an uptick in expenses has also put pressure on firm profit margins. Over the next year, managing partners say expenses will likely grow by about about 5 to 10 percent with lawyer compensation significantly driving that growth. Managing partners, however, are also now pointing to non-lawyer compensation as a factor hiking up expenses.

Not surprisingly, plans to expand are not common. Only 8 percent of those who responded say they expect to open a new office in 2009.

Fried Frank Lays Off 99, Adjusts Incoming and Summer Associate Schedules

Fried, Frank, Harris, Shriver & Jacobson announced via a firmwide e-mail this morning that it is laying off 41 associates and 58 administrative staff, according to a firm spokeswoman. The legal blog Above the Law first reported the cuts, and the Fried Frank spokeswoman Paula Zirinsky confirmed the authenticity of the e-mail that appeared on the blog.

The layoffs will affect Fried Frank's New York and Washington offices. The spokeswoman would not break down how many people in each office were affected.

According to the e-mail sent by Fried Frank partners Valerie Jacob and Justin Spendlove, the firm will also push back its start date for incoming associates to Jan. 28, 2010, and offer a $10,000 stipend. Incoming associates will also have the option to defer their start date until the fall of 2010 and receive a stipend of $70,000 and benefits if they take a job in a public service legal position before starting at the firm.

Fried Frank also announced it will shorten its summer program by two weeks to a 10 week program.

The Am Law Daily has more information here.

This Week in Legal Times

A Civil Debate: A lineup of major civil rights cases is set to dominate the Supreme Court’s April calendar, reports Tony Mauro. The four arguments include a challenge to an important section of the Voting Rights Act and a reverse discrimination suit. Chief Justice John Roberts Jr. had hoped to keep the court’s spring schedule light this year. Better luck next time.

Trial Lawyers on Offense: “The plaintiffs bar is in its best position on Capitol Hill in almost two decades,” David Ingram writes this week. With Democrats running the Congress and the White House, trial lawyers are looking to cash in their campaign donations for a long legislative wish list. Bills banning mandatory arbitration clauses for consumers, allowing military personnel to sue their doctors for malpractice, and ending federal pre-emption on suits over medical devices should all see play in Congress.

All Aboard!: Paley Rothman partner Arthur Blitz has fulfilled a boyhood dream by building a 450-foot model train track that snakes around his backyard in Potomac, Md. He and his wife have created an entire small village, complete with a general store named after themselves. Imagine Shining Time Station, but without George Carlin…or Ringo. Jeff Jeffrey reports.

An Organic Mess: Whole Foods’ bid to purchase rival organic grocer Wild Oats unexpectedly turned into a “food fight of epic proportions” when the FTC stepped in, explains Jenna Greene in the lead article of Legal Times’ quarterly litigation special. Whole Foods eventually settled, and the merger went through, but it’s not completely clear who came out the winner. Many believe that the case resulted in an opinion from the Court of Appeals for the D.C. Circuit will make it too easy for the FTC to effectively block future mergers.

The Morning Wrap

The Talented Mr. Magliocchetti: On Sunday the New York Times profiled troubled lobbyist Paul Magliocchetti, whose PMA Group is closing shop next week following reports that federal prosecutors raided his home and office. The article details Magliocchetti’s relationship to Democratic Rep. Jack Murtha, as well as some of the lobbyist’s more colorful tricks of the trade. Suddenly, a lot of congressional staffers are regretting their free dinners.

Somebody’s Hiring: In sunnier lobbying news, the Washington Post reports that even with the economy in a tail spin, business is booming on K Street. For that, we can thank to the stimulus package. More than 2,000 cities, companies and associations have hired lobbyists since the Nov. elections, and firms like Holland & Knight have had to add registered lobbyists to keep up with the workload.

Ousted: General Motors chief executive Rick Wagoner resigned on Sunday under pressure from the Obama administration, which is pushing the company to pursue a more aggressive reorganization plan. The White House has been unhappy with the company’s proposals for revamping itself, and wants bigger concessions from management, labor and creditors. Check out the WSJ for coverage.

A Hell(er) of a Time: The estate of Heller Ehrman and its creditors are suing the defunct firm’s former banks for the $50 million it paid them in the months leading to its collapse. The Recorder writes that it’s unclear whether the banks ever secured their loans, which could make the difference in whether they get to keep the money. So far, the judge seems undecided.

Crackdown: Sure, this financial crisis has been painful for everyone, but it still isn’t often that you hear the words “mortgage fraud” and “dominatrix” uttered side by side. Unless, apparently, you’re in New York. A group there that included several lawyers allegedly used a Manhattan S&M club to recruit straw buyers for a $50 million mortgage-related scheme. One of the lawyers is now challenging the warrant that allowed federal prosecutors to raid his office, the New York Law Journal reports.

Skadden Sees Layoffs and Departures in D.C.

The Washington office of Skadden, Arps, Slate, Meagher & Flom is a little lighter. 

The firm cut 25 staff positions in the office for economic reasons this week, according to D.C. head Michael Rogan. No lawyers were included in those cuts, but they coincided with the departure of nine associates and two staff attorneys who left for new financial services boutique BuckleySandler, co-founded earlier this month by Andrew Sandler, formerly head of Skadden’s consumer financial services enforcement and litigation group. 

Sandler initially brought only former Skadden partner Benjamin Klubes with him when BuckleySandler opened March 20. He says the new additions are people who have practiced with him for as long as 19 years. Seven remain associates, one is now counsel, and two remain staff attorneys;  former Skadden associate Jonice Gray Tucker is a partner. 

Tucker, who worked with Sandler and Klubes for eight years at Skadden, points out that nine of the new recruits are women and many, including herself, have small children or are about to start families. She says they were attracted to the new firm's commitment to work-life balance. In response, Rogan says Skadden provides a good environment for women, and says he's unsure how "a high-power practice," such as Sandler's, will be different. 

Sandler partnered with Buckley Kolar to form the new firm. He says nearly all of his clients are coming with him. Another staff lawyer with Skadden and one lawyer currently with the federal government will join BuckleySandler next month, he says. The firm now has about 50 lawyers, and Sandler says there may be more hiring on the horizon.

Prosecution Requests Time Extension in Wone Case

The prosecution in the Wone case missed a deadline this month and are now asking a judge for a little extra time to file a response.

It remains unknown—publicly at least—why the March 13 deadline came and went with nary a peep on the docket from the prosecution. And the government's filing this week doesn’t shed any more light on what happened.

Glenn Kirschner, the chief prosecutor in the case against Joseph Price, Victor Zaborsky, and Dylan Ward—the men are charged with obstruction of justice, conspiracy, and evidence tampering—filed a motion Tuesday asking for an extension of time to respond to a defense request for a bill of particulars. The defense lawyers say the motion should be considered conceded because the government failed to respond.

In the government's motion, Kirschner recites the timeline of the case, starting with August 2, 2006, when prosecutors say Wone was restrained, sexually assaulted, and fatally stabbed in the home of Price and Zaborsky near Dupont Circle. Nobody has been charged with murder in the case.

Gibson, Dunn & Crutcher Cuts 36 Staff

A spokeswoman for Gibson, Dunn & Crutcher confirmed that the firm has laid off 36 staff members across its nine U.S. offices.

The firm would not say how many people were affected in its Washington office. According to Gibson Dunn's Web site, there are 142 lawyers in Washington, and more than 750 worldwide.

The firm did not respond to questions beyond providing a brief statement that attributes the cuts to "the challenging market environment that has affected our clients and the demand for legal services."

The layoffs were first reported on Above the Law.

Here is the firm's statement:

Due to the challenging market environment that has affected our clients and the demand for legal services, Gibson, Dunn & Crutcher has reduced its staff positions by 36 across the Firm's nine U.S. offices.  While this is a modest reduction in staff relative to many peer firms, it was nonetheless made reluctantly and with great regret.  Now, more than ever, however, we must take appropriate steps to serve our clients in the most cost-efficient manner.