The BLT: The Blog of Legal Times

The Morning Wrap

Chemical Law Reform: The Obama administration yesterday asked Congress to draft a stricter law that would regulate more than 80,000 chemicals in use in the marketplace. Environmental Protection Agency Administrator Lisa Jackson said the current law that governs toxic substances is flawed, the Associated Press reports. She said the public looks to the government to ensure that the risks of using any chemicals have been assessed, but the current, 32-year-old law, “does not allow us to grant them that assurance.”

Health Care: The Senate Finance Committee yesterday rejected two proposals to include a government-run option in the health care bill being floated in Congress. According to the New York Times, all Republicans on the committee and some Democrats voted down the two proposals, introduced by Sens. John Rockefeller, D-W.V, and Charles Schumer, D-N.Y., respectively. The bills were being offered as amendments to a bill proposed earlier this month by Montana Democratic Sen. Max Baucus.

Economic Recovery: The economy performed better than expected the second quarter, reports the Washington Post. The GDP slipped 0.7 percent for the quarter, but the Department of Commerce originally expected a one percent drop. And though 254,000 jobs lost in the private sector in September was more than expected, it was the fewest number of jobs shed in a single month since July 2008. However, small businesses were hit hardest.

Corruption: A federal judge sentenced a former Democratic bundler to 292 months in prison yesterday for illegally funneling money to political candidates and operating a multimillion-dollar Ponzi scheme. Norman Hsu was a prominent fundraiser who donated money to the campaign of Hillary Clinton, among other Democratic politicians, the Wall Street Journal says. In 2007, Clinton's presidential campaign returned $850,000 in funds raised through Hsu.

FCC's Kevin Martin Joins Patton Boggs

Former Federal Communications Chairman Kevin Martin is joining Patton Boggs as co-chair of the firm's telecommunications practice, the firm confirmed tonight. 

Martin, a Bush appointee, stepped down earlier this year and became a senior fellow at the Aspen Institute. 

Martin was not immediately available for comment Tuesday. In a statement, Patton Boggs Managing Partner Stuart Pape praised Martin as a "dynamic addition," and said that "there is a long and distinguished record of former FCC chairs succeeding in private practice. We have every expectation that Kevin will do that and more."

Martin spent eight years at the FCC as the agency dealt with the increasing role of the Internet, and was involved in important decisions about net neutrality and other hotly contested issues. He also advocated for a la carte pricing in the cable industry. 

Patton Boggs partner Jennifer Richter, who will co-chair the telecommunications practice with Martin, said in the statement that she is "thrilled" by Martin's hiring, and he "will be instrumental in helping us and our clients chart our course in this dynamic and rapidly changing industry." 

Lawyers for Former Fannie Mae Executives Ask for Access to Witness

The attorneys for three former Fannie Mae executives were in court today trying to convince a federal judge to let them depose a government official that they argued would help them prove that their clients were victims of biased regulators.

The lawyers are defending allegations by investors that Fannie’s executives harmed their company’s stock price by approving illegal accounting techniques, which later came to light in a report by their regulator. They say the testimony could bolster their argument that Fannie’s regulator at the time, the Office of Federal Housing Enterprise Oversight, made a politically motivated effort to drive down the company’s stock price in order to make it easier to control.

The witness, Corinne Russell, was an employee in OFHEO’s office of external relations. According to lawyers for the former executives — chief executive Franklin Raines, chief financial officer Timothy Howard, and controller Leanne Spencer — Russell was ordered to leak word of the report criticizing Fannie’s accounting practices to the news media, causing its stock value to tumble.

Fannie was forced to restate billions of dollars in earnings after the OFHEO report, which was first released in 2004. Since at least 2007, lawyers for Fannie’s executives have said that OFHEO’s chief was “fatally biased.”

Whether Russell would testify about the role of her office turned controversial last month, when lawyers for OFHEO asked the judge to stop her deposition. They argued it was unnecessary because defense lawyers had already deposed her boss, Peter Brereton.

Today, defense lawyers told Judge Richard Leon of the U.S. District Court for the District of Columbia that Brereton had been a problematic witness, insisting on more than 200 occasions that he could not remember key events or policies.

“What we’re really talking about her are the bona fides of the report,” said Mayer Brown partner David Krakoff, who represents Spencer. “Is the report invalid because it was produced by people who were biased against our client?” Williams & Connolly partner Alex Romain, who represents Raines, and Zuckerman Spaeder partner Eric Delinsky, who represents Howard, made similar arguments.

Duane Morris partner Joseph Aronica, representing OFHEO’s successor, the Federal Housing Finance Agency, said the possible leak was “a figment of [the defense’s] imagination.”

“Let’s get serious,” Aronica said. “Even if there were evidence of a leak, so what? What does this have to do with the essence of what this case is about.”

By the end of the hearing, however, Leon seemed ready to let the deposition move forward.

“If I were Mr. Aronica, I would set aside a little time in my schedule to prepare for a deposition,” he said.

AG Nickles: 'We’re Going to Get These Cases Settled'

D.C. Attorney General Peter Nickles is confident the city will settle two civil cases stemming from the mass arrest of protestors in 2002 in Pershing Park. But at what cost to the city? The numbers being tossed around, Nickles said in court today, are large. And confidential.

The Pershing Park suits are more than seven years old, and Judge Emmet Sullivan of the U.S. District Court for the District of Columbia said today it’s “high time” the cases settle or go to trial.

Still, the judge extended discovery for another six months since the city recently handed over more than 13,000 documents—after discovery had already closed. Critical documents in the litigation are missing or destroyed.

Sullivan is not happy with the way the city has handled the litigation, and he said he will not “forego and forget” penalties against the District that could include contempt proceedings and monetary sanctions. Indeed, Nickles’ office has taken a beating before Sullivan.

“It’s good to be back in your courtroom,” Nickles said today, taking the lectern. Sullivan paused, holding back a smile. “It’s good to have you back,” the judge responded.

The two cases before Sullivan, Nickles said, are a “disaster” and reflect poorly on “all of us.” Sullivan followed up: “Not on the court.” (Click here to read about Nickles' court-ordered declaration, filed last month in the case.)

Nickles, who is now leading the trial team for the District, said there were “two important breakthroughs” in settlement talks and that he expects the city to wrap up the cases by Thanksgiving.

Nickles will personally handle settlement negotiations with the plaintiffs’ lawyers, who include Mara Verheyden-Hilliard of the Partnership for Civil Justice and Professor Jonathan Turley of The George Washington University Law School. “We have to clear calendars and make this a priority,” Verheyden-Hilliard said in court.

When it comes to sanctions, Sullivan said his primary concern is fixing the city’s document retention and production system. The judge said he will “insist and demand” that the city take measures to minimize the potential for mishandling documents in future litigation.

Sullivan said he is not opposed to monetary sanctions against the District. But he said he is keeping in mind that, ultimately, the taxpayers are on the hook for the city’s negligence.

New Cassidy Hire Hails from Lockheed

Cassidy & Associates has hired George Meyers, formerly a business development director at Lockheed Martin, as vice president. Meyers is part of the lobbying firm's federal marketing group. 

The group helps companies apply for contracts with the federal government. 

There are "a lot of companies out there trying to get into the federal market that don’t necessarily understand the federal market," Meyers said, adding, "What seems like something very simple to us, if you haven’t been dealing with the federal government, can seem very complicated."

Before joining Lockheed Martin, Meyers, 46, was director of legislative affairs and business development at a Virginia-based company now known as American Systems. Meyers, who served in the Air Force, has also been the chief lobbyist and chief acquisitions manager for the U.S. Secretary of the Air Force.

John Boylan, the head of Cassidy's federal marketing group, said, "I'm very confident that George is going to add a lot of clients to our portfolio." 

Federal Appeals Court Upholds Mandatory Anthrax Vaccinations

A federal appeals court in Washington today refused to stop mandatory anthrax vaccinations for servicemembers, finding that the vaccine was properly approved.

In an unanimous ruling, a panel of the U.S. Court of Appeals for the D.C. Circuit upheld the dismissal of a suit filed by eight servicemembers who were challenging a Food and Drug Administration order that found the vaccine effective. The plaintiffs also sought to block the Defense Department from administering the vaccine. The plaintiffs did not contest the safety of the vaccine.

A lawyer for the plaintiffs, John Michels Jr., who agued the case on appeal in April, said he was disappointed with the ruling. “We thought we’d put enough evidence in the record,” said Michels, a partner in the Chicago office of Baker & McKenzie who worked on the case with Mark Zaid, a solo practitioner in Washington. “This is just one of these situations where it’s a high bar to challenge a federal executive agency decision.”

The Defense Department in 1998 implemented its Anthrax Vaccine Immunization Program, which required mandatory vaccination for servicemembers who were at risk of exposure to the disease. The program was temporarily suspended between 2000 and 2002 due to a shortage of the vaccine.

In 2004, servicemembers successfully sought a permanent injunction targeting the enforcement of the vaccination program. The FDA in 2005 issued a final order that declared the vaccine to be safe and effective. A D.C. Circuit panel found the final order caused the permanent injunction to dissolve. Additional servicemembers filed suit in 2006 in the U.S. District Court for the District of Columbia. Judge Rosemary Collyer in 2008 dismissed the suit.

At issue in the suit was whether the FDA properly found that the vaccine was effective. The plaintiffs’ lawyers argue that the FDA’s reliance on a particular study could not support a finding of effectiveness against anthrax that is contracted by inhalation. The lawyers for the plaintiffs also said the Defense Department is forcing servicemembers to undergo an unapproved schedule of inoculations.

Circuit Judge Merrick Garland, who wrote the opinion, supported the FDA’s position that the vaccine responds to anthrax in the same way irrespective of how a person contracts the disease. Garland and panel Judges Karen LeCraft Henderson and David Tatel, gave the FDA a “high level” of deference in its scientific judgment. Click here for the court's opinion.

Justice Department attorney Melissa Patterson of the Civil Division appellate staff argued for the Food and Drug Administration.

Judge Sets Hearing on Injunction to Block Voting Machine Merger

Updated

Judge Robert Kugler of the U.S. District Court for the District of New Jersey didn't immediately rule on a request for an injunction that would block the merger of two large voting machine manufacturers, instead setting a hearing for Nov. 12.

Jonathan Rubin, a Washington-based Patton Boggs partner who represents Hart InterCivic Inc., a Texas-based voting-machine manufacturer, had requested a temporary restraining order to stop the merger of the voting division of Ohio-based Diebold, Inc. and Election Systems & Software, Inc.

Sen. Charles Schumer has asked the Justice Department to review the merger, which was completed on Sept. 2 and announced by Diebold and ESS on Sept. 3. Hart says the deal would give ESS 68 percent of the voting-machine market.

ESS is represented by Hogan & Hartson partners Mark Gately and Lauren Colton of the firm's Baltimore office. Diebold is represented by John Majoras of Jones Day's Columbus and Washington offices. Majoras said the company is arguing that Hart hasn't "met the burden that one needs for a preliminary injunction. They don’t have standing to raise the complaint, and they’re unable to sustain the antitrust claim."

Gately said ESS is "extremely happy with the hearing today." Gately also said he and others on the Hogan team have had "some correspondence" and conversations with the Justice Department regarding the merger. 

"We made it absolutely clear...that we’d be happy to meet with them," Gately said.

Linda Singer to Launch State Attorneys General Practice at Cohen Milstein

(Updated 3:21 p.m.)

Former D.C. Attorney General Linda Singer and her former chief of staff Betsy Miller have signed on to plaintiff’s firm Cohen Milstein Sellers & Toll to launch a new public client practice at the firm. Singer will start work at the firm tomorrow as a partner, and Miller will start as counsel.

The new practice will focus on aiding state attorneys general in litigation involving fraudulent mortgage lending, unsafe and deceptive practices in the sale of prescription drugs, and misclassification of independent contractors in violation of state tax and employment laws. The practice will work as outside counsel for state attorneys general’s offices.

For Singer, the move marks her second foray into the world of Washington law firms. In June 2008, she joined Zuckerman Spaeder to co-chair a similar public client practice.

As D.C. attorney general, Singer oversaw the litigation and policy initiatives carried out by her staff of more than 350 lawyers. Singer also petitioned the Supreme Court to uphold D.C.’s ban on handguns in the District. That case,  D.C. v. Heller, marked the first time the justices weighed in on a Second Amendment case in more than 70 years. In a 5-4 decision last year, the court overturned the D.C. law and said the Second Amendment guarantees an individual’s right to bear arms. Singer penned a column for Legal Times in 2008 outlining her objections to the Supreme Court ruling.

In 2007, Singer resigned from her post as D.C. attorney general after 11 months on the job. Singer has not commented on the reasons for her resignation in the past though it has been widely reported to be because of run-ins with now-D.C. Attorney General Peter Nickles.

Miller, who was named one of Washington’s Top 40 Under 40 Rising Legal Stars by The National Law Journal in 2009, specializes in labor law and employment matters. She has previously worked for Jones Day and has served as counsel to the Senate Judiciary Committee. Miller had been working at Crowell & Moring before rejoining Singer at Cohen Milstein.

Update: In a phone interview this afternoon, Singer said her practice is an unusual one that has become more attractive to state attorneys general in the down economy.

"AGs offices, like other state agencies, have been hit with budget cuts, and they have been very interested in using outside counsel to leverage their resources and do the work that states and consumers depend on," Singer said. She added that states have been particularly interested in using outside counsel to help consumers deal with mortgage, health care and labor issues.

Singer said she decided to leave Zuckerman to avoid conflict issues. "It was an amiable parting from a great firm, and the plan is for us to do some work together in the future," she said. "Cohen Milstein seemed like a great choice because it has a great deal of knowledge in the areas of securities, antitrust, and civil rights," she said.

The Morning Wrap

Abortion: Opponents of abortion in Congress are trying to make sure people who might receive federal insurance subsidies to help buy health care won’t be able to spend the money on abortions. Like so much of the health care debate so far, this issue might come down to the Blue Dog Democrats, reports the New York Times. The potential outcome of a vote on the issue is so far too close to call.

Iraq War: America’s not the only country with budget problems; a severe budget crunch is hampering Iraq’s ability to buy billions of dollars worth of American military equipment, like tanks, helicopters and radios, needed to fight the war there. Iraqi officials ordered the gear when oil prices were high, but when gas prices dropped, so did Iraq’s finances. Now, the U.S. government is looking at letting Iraq pay in installments, according to the Wall Street Journal.

2016 Olympics: President Barack Obama has decided to fly to Denmark to appeal to the International Olympic Committee to choose Chicago as the host of the 2016 Olympics. Expected to be in Copenhagen Friday, Obama’s trip marks the first time a U.S. president made such a trip to advocate for a city vying to host the Olympics. And it could be a political gamble, writes the Chicago Tribune; if he falls short, Obama could lose some clout.

Law in the Downturn: While many Big Law firms suffering financially from the recession are retracting, some are planning strategies to grow their firms. Reed Smith, for instance, plans to grow internationally, especially in China, in which business rebounded powerfully, reports the Philadelphia Enquirer. "A lot of U.S. firms are downsizing. People are leaving," Michael Pollack, Reed Smith’s director of global strategy, said. "We're getting a lot of resumes." Other firms, like Cozen O’Conner, plan to grow domestically when capital markets recover.

Jeffrey Lamken Leaving Baker Botts to Launch Boutique Firm

Jeffrey Lamken, a veteran Supreme Court advocate and head of Baker Botts' Supreme Court and appellate practice in D.C. since 2004, is leaving the firm Tuesday to create a boutique firm with a longtime friend Steven Molo, a white collar trial and appellate litigator at Shearman & Sterling in New York. The firm will be called MoloLamken LLP.

"We've had this ambition to be in our own little boutique law firm," said Lamken today. He recalled that when he was at the Kellogg Huber firm years ago, he had joined when it only had seven lawyers. "We want to do something that was that fun, that high-powered." He and Molo will have offices in New York and D.C., and they plan to use alternative fee arrangements to "provide predictability for clients." Lamken says he expects to continue with Supreme Court advocacy.

In fact, Lamken is counsel of record in three cases set for argument this fall: Free Enterprise Fund v. Public Company Accounting Oversight Board (representing the board); NRG Power Marketing v. Maine Public Utilities (for NRG); and Shell Oil Products v. Mac's Shell Service (for Shell.) It's unclear whether the representation will go with Lamken to his new firm.

Lamken is a former law clerk to Justice Sandra Day O'Connor, and served in the solicitor general's office from 1997 to 2004. At that office and since, Lamken has argued 17 cases before the high court. He said his departure from the firm was his own decision. "I love the folks here at Baker Botts, and they've been very kind to me before and after I made this decision," said Lamken.

The news came as a surprise to many of his former colleagues at the SG's office and among high court advocates. "If anyone can pull it off, it's Jeff," said Kannon Shanmugam at Williams & Connolly. "Not only is he a terrific lawyer, but he's very committed and enthusiastic about his work. He'll thrive in this new setting."