The BLT: The Blog of Legal Times

Justices Appear Skeptical of Private Contempt Prosecutions

In a case being closely watched by advocates for domestic abuse victims, several Supreme Court justices on Wednesday expressed serious discomfort with a District of Columbia law that lets the victims themselves bring criminal prosecutions to enforce restraining orders.

During oral argument in Robertson v. United States ex rel. Watson, at least four justices wondered aloud about the protections afforded to criminal defendants facing such charges.

Justice Antonin Scalia compared the District’s system to tearing down the Department of Education and replacing it with a private corporation. “No good, right?” Scalia asked at the end of his analogy.

New Jersey Telemarketers Hit with Largest Consumer Protection Fine in FTC History

New Jersey telemarketers have agreed to pay a record $18.8 million fine for violating a Federal Trade Commission order - the largest FTC penalty ever in a consumer protection case.

The defendants - Civic Development Group, CDG Management and owners Scott Pasch and David Keezer - misled consumers "to believe that they were donating directly to legitimate charities serving police, firefighters, and veterans, when in fact only a small slice of the donations actually went to these charities," according to the FTC, which announced the settlement today.

The case was filed on the FTC’s behalf by the U.S. Department of Justice in the U.S. District Court for the District of New Jersey.

“This scheme packed a one-two punch: it deceived the people who donated, and it siphoned much-needed funds from police, firefighters, and veterans groups,” said David Vladeck, director of the FTC’s Bureau of Consumer Protection in a statement. “The court’s final settlement order packs a one-two punch of its own: a record-breaking financial penalty for violating an FTC order and a lifetime ban on soliciting charitable donations.”

The defendants did not admit to the allegations in the complaint. To pay the fine, they are ordered to turn over assets to a liquidator. These include a pair of $2 million homes, paintings by Picasso and Van Gogh valued collectively at $1.4 million, a guitar collection valued at $800,000, $270,000 in proceeds from a recently sold wine collection, jewelry valued at $117,000, three Mercedes, two Bentleys, a Range Rover, and a Cadillac Escalade.

The FTC first sued Civic Development Group in 1998 for allegedly misleading consumers in solicitations by claiming donations would be used locally to buy bullet-proof vests and provide death benefits for deceased officers’ family members. The defendants were barred from misrepresenting the purpose for which charitable contributions would be used

In 2007, the Justice Department filed a second complaint referred by the FTC, which alleged that the defendants had violated the prior FTC order.

The telemarketers allegedly told consumers they worked directly for the charities, which received “100 percent” of the donations collected. But the charities received only 10% to 15% of the money, and the balance went to Civic Development Group, the complaint alleged.

Pasch and the companies were represented by Matthew Oliver of Lowenstein Sandler in Roseland, N.J. Oliver could not be immediately reached for comment.

Keezer was represented by Edward Dauber of Newark, N.J.’s Greenberg Dauber Epstein & Tucker. Dauber also could not be reached for comment.

FTC lawyers on the case included James Kohm, Robert Kaye, Matthew Wilshire and Willard Tom. Justice Department attorneys on the case included Office of Consumer Litigation lawyers Eugene Thirolf, Kenneth Jost, Mark Josephs, and Roger Gural, Civil Divison head Tony West, as well as Assistant U.S. Attorney Daniel Gibbons and U.S. Attorney Paul Fishman of New Jersey.

New Front Opens in Dispute Between ABA, FTC

The American Bar Association and the Federal Trade Commission have been battling for a year over whether regulations designed to prevent identity theft should apply to lawyers. Now, they're tangling again over regulations aimed at mortgage fraud.

At the heart of the disputes is what role, if any, the federal government should have in regulating the legal profession, especially as the government steps up efforts to protect consumers.

In the latest round, the FTC announced a proposed rule in February that would affect for-profit companies that try to prevent home foreclosure by helping consumers renegotiate mortgage loans. The rule, which is laid out across 32 pages of the Federal Register, would bar the collection of advance fees and impose recordkeeping requirements, among other regulations. Click here (PDF) for the full language.

The rule would exempt lawyers in some cases, but the ABA says the exemptions are too narrow. In an 11-page letter to the FTC, Thomas Susman, the ABA’s chief Washington lobbyist, writes that the rule as written could drive lawyers out of the mortgage-modification business and, as a result, harm consumers. The ABA wants a broader exemption for lawyers and their nonlawyer employees.

“With fewer lawyers available to represent consumer debtors, many more of these consumers will be forced to retain nonlawyer, for-profit [mortgage assistance companies] who, unlike licensed attorneys, are not subject to the strict ethical standards, supervision, and disciplinary authority of the state courts,” Susman writes. Click here (PDF) for the letter.

The ABA sent its letter March 29, which was the deadline to submit written comments on the proposed rule.

Lawyers Must Advise Clients on Deportation, Supreme Court Rules

In a decision that one justice called "a major upheaval in Sixth Amendment law," the Supreme Court today ruled that lawyers have a constitutional obligation to advise clients of the collateral immigration consequences of a guilty plea in a criminal case.

The ruling came in Padilla v. Kentucky, which was eagerly awaited by bar leaders who have focused attention on the professional obligation of lawyers to alert clients about the growing array of consequences that flow from pleading or being found guilty. We wrote about the issue here last fall.

Justice John Paul Stevens, who wrote for the 7-2 majority, cited "the weight of prevailing professional norms" in finding that lawyers must give accurate advice about deportation consequences of criminal proceedings as part of the Sixth Amendment right to counsel, especially when the immigration law is "succinct, clear. and explicit."

In the case before the Court Jose Padilla, a legal permanent resident from Honduras  (unrelated to the Jose Padilla involved in past terrorism rulings) pleaded guilty to drug distribution charges in Kentucky after his lawyer advised him not to worry about deportation because he had lived in the U.S. for 40 years. The erroneous advise exposed him to near-certain deportation, and he claimed ineffective assistance of counsel.

Justice Samuel Alito Jr. wrote a concurrence joined by Chief Justice John Roberts Jr. calling the ruling a Sixth Amendment upheaval and arguing for a more limited obligation on the part of lawyers. Justice Antonin Scalia, joined by Justice Clarence Thomas, wrote a sharp dissent, arguing that the majority had used "a sledge where a tack hammer is needed."

Reaction is beginning to roll in to a decision whose ramifications may grow in coming months and years. Elizabeth Wydra of the Constitutional Accountability Center, which filed a brief on the side of Padilla, called the ruling "a resounding victory for the Constitution." She added, "As Justice Stevens so eloquently explained in his majority opinion, it is the Court’s responsibility under the Constitution to ensure that no criminal defendant—whether a citizen or not—is left to the mercies of incompetent counsel."

Check back later here and at nlj.com for more on today's landmark decision and other Supreme Court action.

UPDATE: Our fuller story on the Padilla decision is here,  Meanwhile, American Bar Association President Carolyn Lamm issued this statement about the ruling:

"Today’s ruling by the Supreme Court of the United States underscores how significantly our nation’s immigration laws have changed in recent years and how dramatic the impact of those changes are when noncitizens are accused of crimes. As Associate Justice John Paul Stevens said in the majority opinion, 'The importance of accurate legal advice for noncitizens accused of crimes has never been more important.' It rightly places the burden on criminal defense lawyers to understand that pleading guilty to certain crimes will result in deportation, and acknowledges that deportation can be an even more important penalty 'than any potential jail sentence' to a noncitizen. As the court also noted, the American Bar Association standards reflect the prevailing norms of practice and the intersection of modern criminal prosecutions and immigration law. We will to continue, and even redouble our efforts, to make sure that defense lawyers have the tools they need to fulfill their Constitutionally mandated role and our system ensures due process and access to justice as recommended by the ABA report on Reforming the Immigration System: Proposals to Promote Independence, Fairness, Efficiency, and Professionalism in the Adjudication of Removal Cases."

Colorado Lawyer Settles Discrimination Suit Over Dog for $50K

Updated 12:40 p.m.

A Colorado Springs lawyer who refused to allow a veterinarian and her service dog to enter his law office for a scheduled deposition in a civil action has agreed to pay $50,000 to settle a federal discrimination suit.

The Justice Department's Civil Rights Division filed a complaint (.pdf) in the U.S. District Court for the District of Colorado last November against Patric LeHouillier of LeHouillier & Associates. The suit alleged LeHouillier violated the Americans with Disabilities Act when he refused to allow the woman and her dog—and the woman’s lawyer—to enter the LeHouillier law office in December 2006.

LeHouillier demanded the veterinarian, Joan Murnane, prove her dog, an Australian shepherd, was a certified service dog. According to the suit, LeHouillier was not satisfied after reviewing a letter documenting Murnane’s need for the dog. LeHouillier feared the dog would soil recently installed carpeting, according to the Justice Department complaint. LeHouillier's attorney said in a statement that no documentation of the dog's certification was provided.

Murnane’s attorney, J. Ronald Voss, had earlier offered to hold the deposition at his office about two blocks away, according to the complaint. Justice Department attorneys said LeHouillier rejected the offer to relocate the deposition. LeHouillier's counsel said the deposition was held the same day in the office of Murnane's attorney.

In a consent decree (.pdf), signed March 29, LeHouillier denied he violated the ADA. LeHouillier’s attorney, James Miletich of McConnell Fleischner Houghtaling & Craigmile in Denver, issued a statement that said LeHouillier settled the suit for economic reasons and that he continues to believe the government's position is wrong.

"Unfortunately, the expense involved in defending against the ADA claim would have easily surpassed the monetary demand made by the government," the statement (.pdf) said. "The resources available to the government would have forced Mr. LeHouillier to incur substantial expenses in defending the claim. Consequently, an economic decision was made to resolve the claim."

LeHouillier will pay $30,000 in damages to Murnane; $10,000 to her husband, who was also denied entry; and $10,000 to the government in a civil penalty. Trial attorney William Lynch of the department’s Disability Rights Section signed the consent decree for the government.

As part of the agreement, LeHouillier must also prominently display a sign—“printed in dark bold letters, in a font 26 points or larger in size, on a contrasting white background—that says “Service Animals Welcome."

“For almost two decades, the ADA has ensured that individuals with disabilities are guaranteed full and equal access to public accommodations, both large and small," Assistant Attorney General Thomas Perez of the Civil Rights Division said in a statement. “The Justice Department is unrelenting in eradicat[ing] discrimination against people with disabilities and ensuring that owners and operators of public accommodations recognize their obligations to provide equal access.”

Was Justice Kennedy Criticizing Obama Policy?

The dialogue between Supreme Court justices and the Obama administration continues. During oral argument Tuesday in Dillon v. United States, Justice Anthony Kennedy pursued a line of questions that would be hard to interpret as other than critical of Obama administration policy (and the policy of previous administrations too) on commutations and pardons.

The case asks whether federal sentencing judges can reduce the prison terms of defendants like Percy Dillon by an amount greater than what the U.S. Sentencing Commission called for when it reduced the sentences for certain crack cocaine offenders in 2007. The justices were struggling with whether reducing his sentence would be a resentencing, a modification of the first sentence, or even something akin to a commutation. 

In the background was information about Dillon himself, who turned out to be a model prisoner who developed African-American studies programs in prison and other outreach efforts to help fellow inmates and at-risk young people choose a path other than crime.  That apparently led Kennedy to launch this dialogue with Leondra Kruger, assistant to the solicitor general:

KENNEDY: Does the Justice Department ever make recommendations that prisoners like this have their sentence commuted?

KRUGER: I am not aware of the answer to that, Justice Kennedy. It's certainly true that evidence of that type of rehabilitation factored into the government's recommendation in this case that Petitioner -

KENNEDY: And isn't the population of prisoners in the Federal prisons about 185,000 now?

KRUGER: I think -

KENNEDY: I think it is. And how many commutations last year? None. How many commutations the year before? Five. Does this show that something is not working in the system? 185,000 prisoners? I think that is the number.

KRUGER: I -- I'm not prepared to speak to that question today, Justice Kennedy.

We asked Margaret Love, a D.C. solo practitioner who was the pardon attorney in both the George H.W. Bush and Clinton administrations, and specializes in the area, her reaction to Kennedy's comments.

"I think the point Justice Kennedy was making was that, if it turns out that the law provides no relief in a case as apparently appealing as Mr. Dillon's, shouldn't the Department of Justice recommend clemency to the president?" Love said. "The fact that there are so many prisoners and so few grants of clemency (5 in the last two years) suggests that 'something is not working in the system.'"

Love also noted that Kennedy is a longtime critic of mandatory minimum sentences and of the growth in prison populations nationwide. Love was the reporter for Justice Kennedy's American Bar Association commission that looked at the criminal justice system in 2004 and concluded that it relies too heavily on incarceration. She recalled that in a 2003 speech to the ABA, Justice Kennedy criticized mandatory minimum sentences as "unwise and unjust," and bemoaned the fact that pardons have “become infrequent,” and that the pardon process had been "drained of its moral force." Kennedy said, "A people confident in its laws and institutions should not be ashamed of mercy."

For more on the pardon power, and on Obama's non-use of it, check out this remarkable blog.

The Morning Wrap

Fighting Fraud: The U.S. Attorney's Office in New York is launching a new unit in the civil division to focus on exclusively on litigation in pursuit of complex frauds, The New York Law Journal reports. U.S. Attorney Preet S. Bharara said the six-person civil frauds unit will be a complement to criminal prosecutions for bank, mortgage and other frauds, including False Claims Act cases. "Criminal enforcement is not the be all and end all of changing behavior and getting people to comply with the law," Bharara said. "The civil hammer is a pretty big hammer too."

Supreme Court Toss Up: The investment industry and critics alike are both claiming victory in yesterday's U.S. Supreme Court ruling in a dispute about adviser fees in Jones v. Harris Associates, The National Law Journal reports. The disagreement over the decision portends more litigation over alleged excessive fees flowing from investment advisers. A New York Times piece on the case is here.

Lawyer Sentenced: A former Arnold & Porter tax partner was sentenced Tuesday to three years of probation for marketing false tax shelters, The New York Law Journal reports via law.com. Peter Cinquegrani pleaded guilty in 2008 in the U.S. District Court for the Southern District of New York to crimes that included conspiracy to commit tax fraud and aiding and abetting tax evasion. The presiding judge considered the impact a prison sentence would have as a deterrence for lawyers but decided to reward Cinquegrani for his cooperation with prosecutors.

Falling Short: The Justice Department needs to ramp up its effort to combat identity theft, including better coordination in the department and more leadership, the Office of the Inspector General said in a report published yesterday. The department, according to the report, isn't complying with many of the recommendations an identity theft task force made during the second Bush administration. Click here for The BLT write-up.

Shooting into a Crowd: At least nine people were injured, including four fatally, during a shooting in Southeast Washington on Tuesday night that marked one of the District's deadliest bursts of violence in years, The Washington Post reports. Three people are in custody following a police chase into Maryland.

Inspector General Report Faults DOJ Identity Theft Efforts

The U.S. Department of Justice is falling short in its efforts to combat identity theft, according to a report released on Tuesday by the department's Office of the Inspector General. The report said the department isn't complying with many of the recommendations of then-President George W. Bush’s identity theft task force.

The report found that DOJ had not even assigned an official to oversee the implementing of those recommendations, released in April 2007, and that it lacked a clear overall strategy.

"This lack of a coordinator responsible for the DOJ's identity theft efforts has led to an uncoordinated, and sometimes nonexistent, approach by DOJ components to address identity theft," the report stated.

Yet Jason Weinstein, deputy assistant attorney general for the department’s Criminal Division, suggested that identity theft is the nation’s fastest growing crime when he testified before Congress in June 2009. He said more than 10 million Americans a year are affected by identity theft.

The 2007 task force had recommended gathering more comprehensive data on identity theft, designating coordinators in each of the U.S. attorney’s offices, increasing the use of interagency task forces and working groups, reevaluating the monetary thresholds for identify theft prosecutions and encouraging more state prosecutions.

The inspector general’s report criticized DOJ’s data collection, noting that the FBI stopped collecting comprehensive data on identity theft in 2007.

The report also found that DOJ’s efforts focus too much on prosecutions, as opposed to assistance to victims of identity theft.

When the inspector general requested data on the number of prosecutions, it was warned that the numbers may not be complete because of incomplete reporting from the U.S. attorney’s offices. DOJ said it charged 769 people with identity theft and convicted 432 in 2009, compared to 744 and 365, respectively, in 2007. Identity theft became a federal crime with the passage of the Identity Theft and Assumption Deterrence Act of 1998.

As for the U.S. attorney’s offices, the report found that only 36 of the 94 offices managed identity theft task forces or working groups, five were in the process of forming them and 18 participated in task forces or working groups run by other agencies. Just 40 of the 94 offices had reevaluated their monetary thresholds.

The report also found that the process of notifying identity theft victims of their rights under federal law was still not widely understood within the department. There was “confusion among DOJ investigators, prosecutors, and victim specialists regarding their responsibilities to identity and notify victims.”

Federal Judge Calls For Investigation of Missing Pershing Park Evidence

Calling the District of Columbia's alleged destruction of evidence in a long-running civil suit against the city "very troubling," a federal district judge in Washington today appointed a magistrate judge to find out what's happened to missing video, audio and paper files.

The suit in the U.S. District Court for the District of Columbia stems from the arrest of one group of student journalists and an observer in 2002 in Pershing Park in Northwest Washington at a protest against the International Monetary Fund and the World Bank. The city has already agreed to settle a related class action for about $8.25 million, which includes about $2.5 million in attorney fees and costs.

In the pending case, which is scheduled for trial in October, lawyers for the plaintiffs today squabbled with District government attorneys over whether the city still has video shot by police from rooftops and other locations at the time of the protest.

Judge Emmett Sullivan tapped Magistrate Judge John Facciola to examine the alleged destruction of evidence, including the missing video, in both the pending suit and the suit the city agreed to settle. Sullivan granted Facciola the authority to call upon experts for the investigation. The judge expects Facciola to make any recommendation he deems necessary to the court.

“The court’s never been reluctant to get to the bottom of what happened here,” Sullivan said from the bench. He also said, “We’re going to get to the bottom of this.”

On the other hand, Sullivan said he is reluctant at this point to refer the dispute to the Justice Department for a criminal investigation. But he said he is open to that possibility. “I’m not ruling that out at all,” he said.

Monique Pressley of the D.C. Attorney General’s Office said the city also wants to know what’s become of the missing video files. Pressley said the District is actively looking for those files. “To the extent that videotapes exist, we want them,” Pressley said in court. She rejected the notion the city intentionally destroyed the tapes.

The plaintiffs’ co-lead counsel, professor Jonathan Turley of George Washington University Law School, said the plaintiffs have asked for years for the city to produce any video. Turley, who represents the four plaintiffs along with Bryan Cave partner Daniel Schwartz, accused the city of destroying or altering a “great library” of videotaped evidence.

In the suit that the city has agreed to settle, Mara Verheyden-Hilliard and Carl Messineo of Washington's Partnership for Civil Justice represent the class. Messineo said after the hearing that he is pleased with Sullivan's planned appointment of Facciola.

The plaintiffs want to add a spoliation claim to the suit, a request that Sullivan has not ruled on. The city’s lawyers are opposed to allowing the plaintiffs to amend the complaint. Turley argued today that an amended complaint is necessary because an adverse ruling against the government could serve to deter future destruction of evidence.

Sullivan is giving a lawyers for both sides a chance to respond in writing to the appointment of a special master. The responses are due in the coming weeks.

Kramer Seeks Re-Appointment as D.C. Federal Public Defender

The U.S. Court of Appeals for the D.C. Circuit is accepting applications for the position of federal public defender for the District of Columbia.

The current head of the federal public defender's office, A.J. Kramer, has applied for re-appointment to the four-year position. His current term ends Sept. 22, 2010. Kramer has held the job since the creation of the Office of the Federal Public Defender for the District of Columbia in 1991.

Though Kramer was the only applicant during the last application process in 2006, the court encourages other people to apply.

“We are trying to get the word out as much as possible,” Deputy Circuit Executive Steven Gallagher said.

Applications are screened by the D.C. Circuit’s Criminal Justice Act Panel Committee, which consists of Chief Judge David Sentelle, Judge Janice Rogers Brown, Zuckerman Spaeder partner Francis Carter and Kirkland & Ellis partner Michael Williams.

Kramer also regularly sits on the committee, but will not for this process.

The applications are then passed to the U.S. District Court for the District of Columbia for a recommendation. The D.C. Circuit then picks the federal public defender.

The position’s salary is $155,000. Applications are due by 5 p.m., April 19.