The BLT: The Blog of Legal Times

Record Companies, RIAA Prevail in Copyright Trial

By Sheri Qualters

BOSTON - A jury in a high-profile federal copyright infringement trial here ordered a Boston University graduate student to pay $675,000 to several record companies for illegally downloading and distributing 30 of their songs.

Joel Tenenbaum appeared stoic as the jury announced that each of the 30 counts of willful infringement would cost him $22,500. The tab— while steep — is far less than the $4.5 million that the companies could have received had the jury imposed the maximum per-song damages allowed under law. Copyright law allows for damages of $750 to $30,000 for each copyright infringement and up to $150,000 for each willful infringement.

Tenenbaum said he was happy the verdict wasn’t in the millions and “not displeased with the jury given how the trial went.”

Tenenbaum’s attorney, Harvard Law School professor Charles Nesson, whose case has faced several setbacks in recent weeks, closed his eyes just before the jury read the verdict. Nesson said he expects to appeal the judgment – and contends that U.S. District Judge Nancy Gertner’s ruling that Tenenbaum couldn't cite fair use, or the legal use of copyrighted works under certain circumstances, is “vulnerable.” That ruling was issued the morning jury selection began.

“It’s not a fair verdict because the jury never got to consider the fairness issue,” Nesson said. “We had a pretty darn good argument.”

Four Lawyers Nominated For U.S. Attorney Slots

Three private practitioners and one federal prosecutor were nominated as U.S. attorneys today.

McGuire Woods partner Timothy Heaphy, who has offices in Washington and in Richmond, was tapped by President Obama for the U.S. attorney for the Western District of Virginia.

McDonald Carano Wilson partner Daniel Bogden was nominated for U.S. attorney for the District of Nevada. Deborah Gilg, name partner of Gilg, Kruger & Troia, was the president’s pick for U.S. attorney for the District of Nebraska. Assistant U.S. Attorney Peter Neronha was selected for U.S. attorney for the District of Rhode Island.

“These fine men and women have demonstrated the extensive knowledge of the law and deep commitment to public service Americans deserve from their United States Attorneys,” President Obama said in a statement.

D.C. Circuit Vacates Sanctions Order Against Lawyer

A federal appeals court in Washington today tossed a sanctions order against a lawyer who paid $3,000 for alleged improper statements in a pleading in an age discrimination lawsuit.

Magistrate Judge John Facciola of U.S. District Court for the District of Columbia ordered the sanction in 2006 against attorney John Karl Jr. of Washington’s McDonald & Karl. Facciola found that certain statements made in a response to a motion for summary judgment were “classic examples of inferences disguised as statements of fact” that violated Rule 11 of the Federal Rules of Civil Procedure. Click here for Facciola's opinion.

Today, the U.S. Court of Appeals for the D.C. Circuit vacated the sanctions order. Karl was not immediately reached for comment today. Stephen Leckar, a lawyer in Washington who argued for him in U.S. District Court for the District of Columbia, praised today’s appellate ruling.

“I’m sure Judge Facciola didn’t take any joy in writing that opinion, and I’m sure John Karl didn’t take any joy being on the receiving end of it,” said Leckar, special counsel at Washington's Shainis & Peltzman. Leckar called the appellate court opinion, written by Judge Merrick Garland, “masterful.”

Garland wrote that Facciola used an incorrect legal premise to impose sanctions.

“To take the magistrate judge’s example: If an attorney has evidence that a man “walked into a room with a wet umbrella” at a certain time, the attorney does have ‘evidentiary support’ for the ‘factual contention’ that ‘it was raining’ at that time," Garland wrote. "He may not have proof by a preponderance, but he certainly has ‘support.’"

Supreme Court Appoints Advocate to Argue Immigration Case

As we reported here last year, one of the little-known paths a lawyer can take to achieving the goal of arguing before the Supreme Court comes when a party decides it no longer wants to argue in favor of or against a lower court decision that is on appeal. When that happens, half the case falls away, so to speak. The Supreme Court, if it still wants an airing of the issue at stake, then appoints a lawyer -- almost always a former law clerk to a justice -- to advance the now-orphaned argument.

It happens rarely, once every year or so, and it happened again yesterday. The Court issued an order Thursday appointing Amanda Leiter, a professor at Catholic University's Columbus School of Law and former clerk to Justice John Paul Stevens, to argue in favor of the decision below in an immigration case, Kucana v. Holder. Ordinarily, since the U.S. government is the respondent, the solicitor general's office would be making that argument. But Solicitor General Elena Kagan in her brief in the case, agreed with petitioner Agron Kucana, an Albanian facing deportation, that the U.S. Court of Appeals for the 7th Circuit was wrong. With no one supporting the 7th Circuit, the Court appointed Leiter.

At issue is whether the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 stripped federal courts of jurisdiction to review the Board of Immigration Appeals' denial of an immigrant's motion to reopen proceedings. "It's an important case," said Sidley Austin partner Jeffrey Green, author of a brief in the case on behalf of immigration advocacy groups. "You ought to be able to reopen a case when something new falls in your lap."

In the case before the Court, Kucana sought to reopen his removal proceedings based on changes in the political conditions in Albania that he claimed would make him eligible for asylum. But the immigration judge and Board of Imigration Appeals rejected the motion, and the 7th Circuit dismissed Kucana's petition, finding that the court had no jurisdiction to review such appeals.

But the SG's brief argues that in fact, the law limiting judicial review of certain immigration matters does not extend to appeals of the board's denial of motions to reopen. Is this a new position taken by the Obama Justice Department, switching from the Bush era? Not really, said Green. "The government never took the harsh jurisdictional view on this issue."

Leiter, who was a litigator at the Natural Resources Defense Council before entering academia, teaches administrative law. In addition to her law degree from Harvard, she holds degrees in oceanography and civil engineering. She could not be reached for comment.

KBR Sued by Subcontractor

Global engineering and construction firm KBR is being sued by a former subcontractor, which claims it is still owed payment for work it did four years ago in Iraq.

Iraqi American Development Corp., a subsidiary of Nevada-based Iraqi American Media, filed its $14 million suit Tuesday at the U.S. District Court for the District of Columbia. According to the complaint, KBR, then a Halliburton subsidiary, hired the company in 2004 to rewire Iraq’s Presidential Palace.

The subcontractor brought in more than 125 workers for the project, which was scheduled to finish in 2004. But according to the complaint, problems began almost immediately. Because of KBR’s “pending financial situation” (it was placed under Chapter 11 bankruptcy protection in 2003, and didn’t emerge until 2005), it was unable to obtain a necessary letter of credit to pay for equipment and materials, leaving the subcontractor to cover the costs. The complaint also alleges that KBR failed to make work areas available or to provide adequate security, and missed monthly payments. The resulting delays set the project’s end date back to November 2005.

At that point, the complaint states that KBR let the contract expire, confiscated the subcontractor’s equipment, computers and records used in the project and finished a minimal amount of work itself.

The complaint states that in 2007 KBR agreed to pay the full $14 million owed on the original contract. It has yet to make the full payment, the complaint says, and has not compensated the subcontractor for its extra costs.

Neither KBR nor the subcontractor’s attorney, Sheppard Mullin Richter & Hampton partner John Fornaciari, returned calls for comment. No lawyers have entered an appearance for KBR.

KBR has had its fair share of legal travails over recent years. In February, the company pleaded guilty to bribing Nigeran officials. It has been sued by female employees claming sexual abuse, families former workers who say they were illegally trafficked to Iraq, and soldiers who say it served them spoiled food.

UPDATE: August 5

A KBR spokesman said the company has not been served with the complaint and therefore cannot comment on the details of the suit.

Obama Awards Medal of Freedom to O'Connor

President Obama has awarded the presidential Medal of Freedom to retired Supreme Court Justice Sandra Day O'Connor and 15 other luminaries from around the world. It's billed as the highest civilian honor the president can bestow. The 16 awardees are a diverse group, ranging from Anglican Archbishop Desmond Tutu to the late New York congressman Jack Kemp, from actor Sidney Poitier to the late gay rights advocate Harvey Milk.

In announcing the award Thursday, Obama said, “These outstanding men and women represent an incredible diversity of backgrounds. Their tremendous accomplishments span fields from science to sports, from fine arts to foreign affairs. Yet they share one overarching trait: Each has been an agent of change. Each saw an imperfect world and set about improving it, often overcoming great obstacles along the way. Their relentless devotion to breaking down barriers and lifting up their fellow citizens sets a standard to which we all should strive. It is my great honor to award them the Medal of Freedom.” The awards will be presented at a ceremony August 12.

Obama noted in the announcement that O'Connor was the first woman ever to sit on the United States Supreme Court. She was appointed by President Reagan in 1981 and retired in 2006. 

O'Connor, 79, could not be reached for comment on the award today, but U.S. Rep. Harry Mitchell (D-Ariz.) issued a statement congratulating his "fellow Arizonan" Justice O'Connor. "Her lifetime of public service has certainly made her a deserving recipient of this prestigious award," Mitchell said.

Federal Judge to D.C.: 'There will be significant prices to pay'

U.S. District Judge Emmet Sullivan blasted the District of Columbia Attorney General’s Office at a hearing earlier this week, calling the city’s mishandling of a high-profile suit alleging false arrest the “civil counterpart” of the Justice Department’s botched prosecution of Ted Stevens. The judge used the phrase “sad commentary” seven times and promised “painful” sanctions. Ouch.

Sullivan directed D.C. Attorney General Peter Nickles to submit an affidavit within two weeks addressing a “pattern of shortcomings” and “discovery abuses” in the seven-year-long litigation in which two groups of plaintiffs were swept up by city police in a mass arrest of bystanders at Pershing Park in 2002 amid a demonstration against the International Monetary Fund and the World Bank. One suit was filed against the federal government, and the other targets D.C.

The plaintiffs have charged that the city has destroyed or lost critical police department documents, and city lawyers acknowledge that key pieces of evidence are missing. Lawyers for the city failed to turn over to the plaintiffs other documents in a timely manner. “It raises serious questions about when, if ever, can anyone trust their government,” Sullivan said in court, according to a transcript of the hearing.

That criticism is not sitting well with Nickles. “I don’t think that was a statement that should have been made. That doesn’t do anyone any good,” Nickles, a former Covington & Burling partner, said in an interview. Nickles remarked that he is sure Sullivan is a “great judge” but the question about trust, he said, went too far.

Nickles blamed a poor document management system for the city’s inability to track down and timely produce certain police records from the mass arrest of nearly 400 people. Nickles said he doesn’t think there was any intentional destruction of documents. “Our document management system is not up to the document management system I knew at Covington,” Nickles said. He is urging city leaders dedicate more funding for document management in agencies across the city “so we can keep up with the large private law firms" in class action cases.

“There are probably missing documents. When you deal with tens of thousand of documents, that happens,” Nickles said.

Mara Verheyden-Hilliard, a lawyer for one group of plaintiffs, said in court that she doesn’t think the government can blame a lack of resources for the missing documents. For instance, she said, information was deleted from audio tapes the city provided to the plaintiffs.

Verheyden-Hilliard said the “city has engaged in a practice of really a war of attrition and scorched earth litigation in this case. They have drawn it out and drawn it out and at the same time destroyed and lost the critical fundamental evidence to what went on.”

Sullivan, who is contemplating an independent investigation of the city’s bungling of the case, is urging District lawyers to settle the litigation.

“The mayor needs to get involved and tell his city government to settle this case. That’s what should happen,” the judge said in court. “It starts at the top, because this is about the city government and about its abysmal involvement in this case. And that’s a very appropriate word, abysmal. This is outrageous.”

Sullivan said it’s “really unfortunate that the citizens of the District of Columbia have to pay for these types of shenanigans, and that’s putting it mildly.” He said the D.C. Attorney General’s Office “is going to pay the price.”

Obama Picks Union Lawyers for Merit Systems Board

President Barack Obama has chosen two lawyers with extensive experience representing government employees to lead the Merit Systems Protection Board, which rules on disputes between federal agencies and their employees.

The White House says that Obama intends to nominate Susan Grundmann and Anne Wagner to the three-member board, designating Grundmann as chairwoman and Wagner as vice chairwoman.

Grundmann has been general counsel since 2002 to the National Federal of Federal Employees, a union that represents 100,000 federal workers. She's represented the union before the U.S. Court of Appeals for the D.C. Circuit and in disputes or negotiations with the Homeland Security and Defense departments, the White House says. Grundmann (American University, Georgetown Law) previously was general counsel to the National Air Traffic Controllers Association.

Wagner is general counsel of the Personnel Appeals Board of the Government Accountability Office, prosecuting violations of federal employment law. She previously served a five-year term on the Personnel Appeals Board, which has similar functions as the Merit Systems Protection Board but for GAO employees only. Wagner (Notre Dame, George Washington Law) spent nearly 20 years as a lawyer for the American Federation of Government Employees, the largest union for federal workers with 600,000 federal and District members.

Neither of the two current members of the Merit Systems Protection Board has similar experience representing unions. Chairman Neil McPhie was a longtime employee in Virginia state government, while Mary Rose held various positions in the Bush administration dealing with personnel. McPhie is due to leave the board when his successor is confirmed. Rose's term ends in 2011.

The positions require Senate confirmation.

The Morning Wrap

Rove Testifies, and Talks: The Washington Post and The New York Times have dueling stories on Karl Rove's involvement in the firing of U.S. attorneys. Rove finished his behind-closed-doors testimony Thursday with investigators from the House Judiciary Committee, freeing up the newspapers to run quotes from an interview they conducted weeks ago. The Post reports that interviews and e-mails show "a greater role than previously understood." But, reports The Times, "Mr. Rove said he played only a peripheral role in the removal of the prosecutors."

Associates Survey: The American Lawyer's annual survey of midlevel associates is out — and, as expected, there is not a lot of happiness. Click here for the intro from Law.com. Associate morale plummeted to the lowest level in the five years the question has been asked, while a third of associates saw a drop-off in their workload. Other disappointments mentioned were pay cuts and a lack of transparency on layoffs and on firm finances.

Chuggin' Along: Increased regulation of the railroad industry is gaining steam, The Wall Street Journal reports. President Barack Obama's nominee to head the Surface Transportation Board — Daniel Elliott III, former associate general counsel at a railroad union — said Wednesday he would be "proactive" in addressing alleged pricing abuses. Legislation is also moving forward to empower the Justice Department to look at the industry.

Time-Barred?: The Associated Press reports on a federal appeals court ruling Thursday that said the Supreme Court should weigh in on the conviction of a reputed Ku Klux Klansman. The case involves James Ford Seale, 73, who was convicted in 2007 of abducting two 19-year-old friends who authorities said were beaten, weighted down and thrown, possibly still alive, into a Mississippi River backwater in 1964.

State Judge in Mississippi Pleads Guilty to Obstruction

A state court judge in Mississippi who pleaded guilty today to one count of obstruction of justice--for lying to an FBI agent--will serve an 18-month prison sentence, federal prosecutors say. He accepted the plea deal in exchange for the dismissal of other charges, which included fraud and conspiracy.

Judge Bobby DeLaughter, 55, has been a circuit court judge in Hinds County, Mississippi, since 2002. Circuit court judges preside over felony prosecutions and civil cases with no limit on damages.

DeLaughter, a former state prosecutor who had aspirations to the federal bench, pleaded guilty in the U.S. District Court for the Northern District of Mississippi before Senior Judge Glen Davidson. DeLaughter’s lawyer, Thomas Durkin of Durkin & Roberts in Chicago, was not immediately reached for comment this evening.

An indictment filed in January 2009 accused DeLaughter of improperly handling a suit involving asbestos litigation and millions of dollars in attorney fees, court records show, and then of lying about his role in the scheme during an interview with an FBI agent. Click here for the indictment and
here
for the plea agreement.

“At the heart of our democracy is an independent judiciary, free from outside influence or corruption. When that is compromised, we must take steps to restore the community’s faith in the judicial system,” U.S. Attorney Jim Greenlee said in a statement. “I would hope that most view this prosecution as such a cleansing step.”