The BLT: The Blog of Legal Times

Murtha: PMA Had Good Lobbyists

The House ethics committee issued a report Friday clearing seven lawmakers who were under investigation in a probe tied to earmarks for clients of defunct lobbying firm PMA Group.

The lawmakers cleared in the report include the late Rep. John Murtha (D-Pa.), who until his death headed a key defense appropriations subcommittee. The investigation into PMA Group had cast a cloud on the powerful lawmaker's reputation; PMA Group was headed by former Murtha aide Paul Magliocchetti, Murtha died earlier this month.

As part of its report, the committee included a summary of an interview Murtha had with the Office of Congressional Ethics. The summary shows that Murtha stood by PMA after news of an FBI raid on the firm's offices prompted committee staff and Rep. David Obey (D-Wis.), who chairs the appropriations committee, to suggest removing earmarks for PMA clients. "Representative Murtha would not," notes the report. It goes on to say that "The Congressman explained that the appropriations process can't work without a good lobbyist, and PMA had as good lobbyists as you can find."

Murtha said PMA hired people who knew the issues, and Magliocchetti specifically "was smarter than the average lobbyist and understood what was important to Members." For instance, he brought Murtha projects that would create jobs in his district.

Murtha said he had not spoken with Magliocchetti since "shortly after" the FBI raided PMA's offices, but the summary does not say what the two men discussed in that conversation. Murtha said he had a personal relationship with another former PMA lobbyist, Dan Cunningham, but the two had never spoken about the FBI raid.

And Murtha told OCE that he knew companies believed campaign contributions could help them get earmarks, but "he often did not even recognize the individuals who attend his fundraisers."

D.C. Pays At Least $1.53 Million to Private Lawyers in Pershing Park Cases

On Feb. 19, the private defense attorney representing one of the police officials in the Pershing Park mass arrest cases filed his latest motion for fees and costs from the District of Columbia. As usual, it was a consent motion, meaning there was no challenge from the D.C. Attorney General’s Office. The total requested: $50,427.

Since then, the BLT has surveyed the requests for fees and costs made by the lawyers for former Metropolitan Police Chief Charles Ramsey and Assistant Chief Peter Newsham available on public dockets. The grand total: $1.53 million.

Newsham, who has stated that he ordered the 2002 round-up of IMF / World Bank protestors which led to the suit, has been represented since the beginning of the case by Deso & Buckley partner Robert Deso. In billing requests dating back to Oct. 2003, the firm has received $767,000 in fees and costs. According to one itemized billing statement from 2005, Deso charged as much as $300 and hour.

Former police chief Ramsey, who plaintiffs have alleged was in fact responsible for round-up order, has been represented individually in the case since 2005 by Vinson & Elkins partner Mark Tuohey. For work dating back to December 2006, the firm has received $764,000.

D.C. Deputy Attorney General George Valentine of the Civil Litigation Division declined to comment on the circumstances under which the District government will or will not pay for a police official’s private legal fees.

Tuohey, whose firm has not posted any information about rates on the docket, said that he was charging less than half his normal hourly rate.

“It’s been a discount from the very beginning,” he said.

Judge Walton Says No to Preliminary Injunction Against Copyright Royalty Board

The Copyright Royalty Board will not come to a shuddering halt any time in the immediate future. On Feb. 24, the U.S. District Court for the District of Columbia rejected a motion for a preliminary injunction sought by the Web radio outfit Live365, which is challenging the board’s constitutionality based on the process by which members of the three-judge panel are appointed.

The Librarian of Congress appoints the three judges on the board, which determine the rates and terms for statutory copyright licenses.

Live365 filed the motion for a preliminary injunction Sept. 2 in an attempt to halt the board’s Webcasting III proceedings, which will determine royalty rates from 2011 to 2015.

As Live365 sees it, the three judges’ relative independence and wide-ranging authority to direct billions of dollars between broadcasters and copyright holders through their decisions makes them “principal officers,” as opposed to “inferior officers.” Under the appointments clause of the U.S. Constitution, principal officers must be appointed by the president.

In addition, Live365 argues the appointments are unconstitutional even if the judges are inferior officers because the Librarian of Congress is a member of the legislative, not executive, branch.

In his 32-page opinion, Senior U.S. District Judge Reggie Walton rejected a preliminary injunction because, among other reasons, he did not find that Live365 was likely to prevail on the merits of either of its arguments.

However, Walton acknowledged concerns raised by Judge Brett Kavanaugh of the U.S. Court of Appeals for the D.C. Circuit in a separate case in July 2008. Walton wrote that the appointments clause is murky, concluding that it has “essentially created a gray area where cases will inevitably fall due to the case-by-case analysis lower courts are required to conduct as a result of the limited guidance the Framers of the Constitution provide.”

Walton also rejected a motion to dismiss for lack of subject matter jurisdiction by the royalty board, which argued that the case should have gone straight to the D.C. Circuit.

Although appeals of the royalty board’s decisions go directly to the appeals court, Walton wrote that this case belonged in the district court because it was a facial challenge to the board’s authority.

Cobell Settlement Deadline Extended, Again

For the second time, the Justice Department and the lawyers representing a class of Indians in a long-running federal suit in Washington have agreed to push back the deadline needed to secure congressional authorization for a $1.41 billion settlement.

The original deadline for congressional approval of the settlement was Dec. 31. But Congress failed to act, and so the deadline was extended to Feb. 28.

Now, the lawyers have agreed to a new deadline: April 16. The Justice Department issued this statement: “In order for the agreement to remain valid after its existing February 28, 2010 legislative enactment deadline, the parties have agreed to extend that deadline through Friday, April 16, 2010.”

Kilpatrick Stockton partner Keith Harper in Washington, a lawyer for lead plaintiff Elouise Cobell, was not immediately reached for comment this afternoon. D.C. solo practitioner Dennis Gingold declined to comment about the extension. Neither extension required court approval.

The Cobell settlement, announced at a press conference in early December, requires Congress to pass legislation authorizing payment to the plaintiffs. Justice and Interior department officials, and the plaintiffs lawyers, too, have urged Congress to act swiftly on the legislation. By April, the plaintiffs lawyers had hoped to be close to final approval on the deal in the U.S. District Court for the District of Columbia.

The settlement would end the 13-year-old case, which demands an accounting of the government’s handling of accounts set up for the collection and dispersal of billions of dollars in payments flowing from natural resources on Indian land.

The plaintiffs lawyers have agreed to a cap of $100 million in legal fees. Judge James Robertson, who is presiding over the Cobell case, has the final say on fees. A petition for certiorari, which the plaintiffs filed just days after the settlement was announced, is pending in the U.S. Supreme Court.

DOJ Defends Document Request Targeting Deloitte

The U.S. Department of Justice has turned to a federal appeals court in Washington in the hope of forcing the accounting firm Deloitte LLC to turn over tax-related documents that government lawyers say are not protected by the work product privilege.

DOJ Tax Division lawyer Judith Hagley made the government's pitch today before a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit. Chief Judge David Sentelle and Judges Thomas Griffith and Janice Rogers Brown made up the panel.

Last year, U.S. District Judge Richard Leon of the District of Columbia ruled for Deloitte and Dow Chemical Co., which asserted privilege over the documents the Justice Department is seeking via subpoena. As part of a civil tax suit in federal district court in Louisiana, the government is seeking certain documents that Dow turned over to Deloitte during the firm’s audit of the company.

Hagley today argued that the work product privilege does not apply to the documents Dow turned over to Deloitte because the documents were prepared during what Hagley said was the ordinary course of business—and not prepared for litigation purposes.

“Are you looking for anything other than the attorney’s opinion in these documents?” Sentelle asked Hagley several times during the hearing. “What you want here is the attorney’s opinion. Isn’t that precisely what the attorney work product privilege is designed to protect—the attorney’s opinion?”

Deloitte’s lawyers at Sidley Austin, including partner Michael Warden, did not argue today. Warden said in court papers in October that Deloitte was not participating as a party in the appeal because Dow is the party asserting a privilege over the requested documents.

A lawyer for Dow, Bingham McCutchen partner Hartman Blanchard Jr., said today that Dow believed the documents it turned over to Deloitte would remain confidential. Blanchard said companies should not be punished for making candid disclosures during the course of an audit.

Hagley and Blanchard said neither side was opposed to having the case returned to the trial court to allow Leon to inspect the disputed records in camera.

FTC Files Notice of Appeal in 'Red Flags' Case

The Federal Trade Commission will appeal a ruling from October that stripped the agency of its authority to enforce new anti-fraud rules against lawyers.

The so-called "Red Flags" regulations are designed to prevent identity theft, and the FTC argues that the regulations must apply to all “creditors” in order to comply with federal law. The agency includes lawyers in its definition of “creditors” because lawyers frequently begin working for a client on credit, accepting payment some time later.

But the American Bar Association disputes that interpretation, citing a 2005 decision by the U.S. Court of Appeals for the D.C. Circuit that ended another attempt by the FTC to impose regulations on lawyers. The ABA also says the “Red Flags” rules would be costly for the operation of law firms nationwide.

In October, Judge Reggie Walton of the U.S. District Court for the District of Columbia sided with the ABA, saying the law in question is too vague to infer federal regulation of the legal profession. Steven Krane, a partner in the New York office of Proskauer Rose, is heading up a pro bono team that represents the ABA.

The FTC’s notice of appeal to the D.C. Circuit came in a filing Thursday. John Daly, deputy general counsel for litigation at the FTC, is representing the agency.

Senator Blasts NBC for Restricting Access to Olympics on the Internet

Sen. Herb Kohl (D-Wis.) sent a sharply-worded letter to NBC President Jeff Zucker today complaining about the network's policy of only allowing pay TV subscribers to view full coverage of the Olympics on the Internet.

The policy, wrote Kohl, who chairs the Senate subcommittee that oversees antitrust, is particularly troubling given NBC’s pending merger with cable giant Comcast Corp.

“I fear that that this practice of locking up certain content only for pay-TV subscribers may be a preview of what is to come with respect to TV programming shown on the Internet, particularly in the context of the proposed Comcast/NBC Universal merger,” he wrote.

In order to access live coverage and full-event replays on NBC’s website NBCOlympics.com, users must register with the web site and then provide information about their cable, satellite or IPTV provider.

“A consumer who has no such subscription will be unable to register, and therefore is unable to access the abundance of Olympic video content available on NBCOlympics.com,” Kohl wrote. “This requirement of being of pay TV subscriber leaves Olympic fans who do not have pay TV service, or who have service with provider that has not partnered with NBC, in the dark with no way to view the sporting events that they look forward to every four years at the Winter Olympics.”

Kohl directed NBC to answer four questions:

1) Does this policy of requiring a pay TV subscription apply to content that is aired for free over-the-air on the broadcast network, and, if so, why?

2) Why has NBC not sought to charge consumers directly for accessing Olympic content on its Internet web site, rather than requiring a pay TV subscription?

3) Has NBC received any payments from pay TV companies to support NBCOlympics.com and, if so, has that influenced NBC’s requirement that consumers subscribe to a pay TV service?

4) Are customers of all cable, satellite TV, and other pay TV subscription services eligible to register for access to NBCOlympics.com, and, if not, how did NBC decide which pay TV services’ customers are eligible to register?

NBC antitrust counsel William Baer, a partner at Arnold & Porter, could not be immediately reached for comment.

The $30 billion merger between Comcast, the nation’s largest cable provider, and NBC Universal was announced in December and is currently being reviewed by the Justice Department.

NBC’s Zucker and Comcast CEO Brian Roberts appeared before the House Judiciary Committee yesterday to discuss the merger.

In joint written testimony, they said the combination of the two companies Internet properties “poses no threat to competition.…. Even if one restricts the analysis to “professional” online video content, the combined entity will still have a small share and face many competitors.”

They added that the post-merger company “will succeed by competing vigorously and fairly.”

Former Icahn Lobbyist Joins Sonnenschein

Former Icahn Associates lobbyist James Williams has joined Sonneschein Nath & Rosenthal as a senior managing director in the public law and policy strategies group.

Williams, 42, a former Senate staffer who has worked for Vice President Joe Biden, Sen. Charles Scumer (D-N.Y.) and Sen. Dick Durbin (D-Ill.), said he plans to work on banking, tax and financial services issues, and with clients who need representation before the House Ways and Means and Senate Finance committees. He is not a lawyer.

Sonnenschein was "the best firm from a client perspective," said Williams, who worked with Sonnenschein as a client while at Icahn Associates.

Mike McNamara, who chairs the firm's public law and policy strategies group, said Williams' expertise in financial services issues complements Sonnenschein's existing team. He said the public policy practice is "in an aggressive growth mode," and looking to continue growing in financial services and energy.

Revenue and Profits Down at Dickstein

Like many other large Washington firms, Dickstein Shapiro was down on gross revenue and net profits in 2009, but managed to pull off higher profits per equity partner.

The firm’s gross revenue dipped 4.78%, from $312 million to $297 million, while net profits slid 5.17%, from $80.7 million to $76.5 million. But with the number of equity partners down 11.17%, individual profits were up 6.76%, from $985,357 to $1.05 million.

Dickstein Chairman Michael Nannes said the firm’s core practices, including insurance coverage, intellectual property and business litigation, stayed strong through the year. But transactional practices dependent on credit flow dropped off.

IP practice head Gary Hoffman pointed to a large settlement between Dr. Bruce Saffran and Boston Scientific in a patent case in which Dickstein won Saffran an initial $501 million judgment. He said the firm also generated significant work representing insurance company Geico in a trademark suit against Gecko Trading, as well as in several patent cases involving Arbitron.

Insurance practice head Kirk Paisich noted that the firm had collected more than $800 million in 2009 for San Diego Gas and Electric on insurance claims related to California’s wildfires. The firm also won a $48.5 million judgment this year for Sempra Energy, after a favorable verdict in 2008. The case is set for appeal.

Two equity partners, Barry Fleishman and Erica Dominitz, left the insurance practice in 2009 to join Kilpatrick Stockton. In January of this year, 13 lawyers, including partner Robin Cohen, left the practice for Kasowitz Benson Torres & Friedman (those departures are not reflected in the 2009 statistics). The firm’s web site now lists 67 lawyers in the group.

“We added some exceptional attorneys in 2009. We also had some departures of colleagues whom we wish well,” Nannes said of the losses.

While Dickstein’s equity ranks thinned in 2009, its stable of nonequity partners inched up by 1.5%. Nonequity compensation swelled 8.08%, to an average of $525,000 per partner.

Nannes said that the firm had managed significant budget savings. “Our greatest cost savings were achieved by our absence of debt and an avoidance of all interest expense, as well as from reductions in personnel,” he said. “As a result of the market, we also realized an exceptional cost savings when we relocated and built out our New York office in July.”

According to Above the Law, the firm also announced two rounds of associate layoffs, one in January 2009, and a second in November, when the firm said it was cutting 3% of associates and counsel. It also froze 2009 associate salaries at 2008 levels.

Srinivasan's Star Rising at the Supreme Court

This Tuesday was already shaping up as a good day for Sri Srinivasan, partner at O'Melveny & Myers in Washington. It was his birthday, his 43rd to be precise. A little after 10 a.m., his day got even better, with news that he had won a 9-0 victory for client Hertz in a major business case, Hertz Corp. v. Friend.

Srinivasan had managed to convince the Court to adopt a definition of "principal place of business" that only one lower court had embraced. It's a crucial issue in determining where a company can be sued, and it had seemed during oral argument last November that he had convinced the Court. But no one was sure. "Every circuit but the 7th had rejected it, but Sri made it look easy," said O'Melveny appellate chair Walter Dellinger, former acting solicitor general.

Srinivasan's calm, confident manner will put him in good stead as well on Monday March 1, when he argues on behalf of former Enron exec Jeffrey Skilling in another challenge to the federal "honest services" fraud statute, and a claim that the local hostility toward Enron should have led the judge to move Skilling's trial from Houston.

When the Court granted review in Skilling's case last October, his longtime lawyer Dan Petrocelli, also of O'Melveny, said, "my immediate feeling was that I'd argue the case myself." But Petrocelli was in the midst of a protracted trial, and he and Dellinger decided that "Sri is the best guy to do it. He's one of the best appellate advocates in the country, and he has the energy and enthusiasm to really commit himself to the representation." Client Skilling, who currently resides at the federal prison in Englewood, Colorado, is also "extremely pleased" with the choice, said Petrocelli. Srinivasan met Skilling in a prison visit last month and had a "very lengthy discussion" said Petrocelli, who added that Skilling is "heavily involved in the case, down to wanting to understand every footnote."

A former clerk to Justice Sandra Day O'Connor, Srinivasan is a veteran of the SG's office, where he worked between his earlier and current gig at O'Melveny. Srinivasan was a Bristow Fellow at the SG's office under Dellinger, and was Dellinger's first hire when he went to O'Melveny. "The one reason I got him," recalled Dellnger, "was that I offered him my ticket to the Duke at Carolina basketball game if he came. He did, and he went. He is huge fan."

Actually, Srinivasan is more than a basketball fan; he still plays a few times a week. A native of India, Srinivasan grew up in what he described as the "basketball-crazy" town of Lawrence, Kansas. Both of his parents worked at the University of Kansas. He was an all-state point guard at Lawrence High School, where a teammate was the famed Danny Manning, a top player for the University of Kansas Jayhawks who went on to star in the National Basketball Association and is now assistant coach for the  Jayhawks. Dellinger said of Srinivasan, "He's a terrific advocate, and he has a deadly jump shot."

Srinivasan also grew up with another star of the Supreme Court bar: Kannon Shanmugam of Williams & Connolly. Shanmugam, 37, was younger but knew Srinivasan and his family as "the other Indian family in town. We've been friends forever. I try to trail in Sri's wake." Shanmugam is also a Jayhawks fan, and they shared another experience that sparked their interest in the law: they interned, while undergraduates, for 10th Circuit judge Deanell Tacha, who has chambers in Lawrence.

“I could have told you when they were in high school that they’d be terrific lawyers,” said Tacha. "They both had analytical minds and both had the ability to take very difficult concepts and get to the numb of the issue." What's more, she said, to this day "Sri and Kannon can both be spotted at more than a few Jayhawks games."

(Photo by Diego Radzinschi.)