The BLT: The Blog of Legal Times

Arizona Law Penalizing Employers Who Hire Illegal Workers Is Preempted, Says Solicitor General

The Obama Administration late Friday urged the U.S. Supreme Court to find that Arizona’s law penalizing employers who hire illegal immigrants is preempted by federal law.

The Court asked for the views of the Office of Solicitor General last November. The case, already controversial within the nation’s business community, drew increased attention as speculation heightened that Solicitor General Elena Kagan was a leading contender to fill a potential Supreme Court vacancy. Political and academic observers viewed the government’s response as a possible window into how it would regard Arizona’s most recent law authorizing police to arrest suspected illegal immigrants as well as into Kagan’s own views.

However, Acting Solicitor General Neal Katyal, responded to the Court’s invitation. He urged the justices to hear Chamber of Commerce of the United States v. Candelaria and to reverse a ruling in March 2009 by the U.S. Court of Appeals for the 9th Circuit which upheld the controversial state law.

The Chamber of Commerce filed a petition for Supreme Court review asking the justices to answer three questions: whether the Arizona, which imposes sanctions on employers who hire unauthorized immigrants, is invalid under the federal Immigration Reform and Control Act; whether the state law, which requires all employers to participate in a federal electronic employment verification system, is preempted a federal law that specifically makes that system voluntary; and whether the law is impliedly preempted because it undermines the “comprehensive scheme” that Congress created to regulate the employment of immigrants.

Katyal urged the justices to answer the first question only. He noted that states and localities throughout the country have enacted—and are continuing to consider and enact—statutes and ordinances regulating the employment of unauthorized workers.

He said the employer sanctions “disrupt a careful balance that Congress struck nearly 25 years ago between two interests of the highest importance: ensuring that employers do not undermine enforcement of immigration laws by hiring unauthorized workers, while also ensuring that employers not discriminate against racial and ethnic minorities legally in the country.”

The Court’s review of the other two questions, he said, was not necessary. He explained that the E-Verify question may soon be overtaken by events because Congress would be reviewing program in 2012. In addition, he said, federal law appears to make participation voluntary and would thus bar a state law mandating participating.

The Court is expected to make a decision on whether to hear the case before it ends the current term.

Senators Weigh in on Military Funeral Case

More than 40 senators have signed on to an amicus brief supporting the right of families to keep protesters away from military funerals.

The brief, filed today, argues that two federal statutes are indirectly at stake in a case expected to be argued before the Supreme Court in its next term. Albert Snyder, the father of a Marine who died in Iraq, is seeking damages from Kansas preacher Fred Phelps, who organized a protest during the funeral of Snyder’s son.

Those joining the brief include Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.). At a news conference today with Snyder and advocates for veterans, Reid said lawmakers have an interest in the case because of their responsibility to aid soldiers and veterans.

“As we speak, we have hundreds of thousands of them now facing danger, whether it’s in Afghanistan or Iraq of the Korean peninsula,” Reid said. “We have a responsibility to take care of them, in the best way we can.”

Walter Dellinger, the head of O’Melveny & Myers’ appellate practice, wrote the brief with O’Melveny partner Jonathan Hacker and three associates. Dellinger said he took on the task at Reid’s request.

“There are two competing principles in this case — we all acknowledge that — freedom of speech and safeguarding private moments of private citizens,” said Dellinger, who joined Reid and Snyder at the news conference. “What this brief does is explain that those two principles can be reconciled.”

Click here (PDF) for a copy.

Congress Shouldn't Raise Liability Limits on BP, Says Chamber's Donohue

The president of the U.S. Chamber of Commerce said Congress shouldn't raise liability limits retroactively in the wake of the BP oil spill, calling it "not right."

“It’s generally not the practice of this country to change the laws after the game,” Chamber President and CEO Thomas Donohue said at a wide-ranging breakfast with reporters sponsored by The Christian Science Monitor today. He added, "My own view is, it's not right."

Donohue said the Chamber "may choose to be more engaged in the other thing that I was just talking about, and that is how do we dig more gas and oil."

A spokesman for the Chamber later said in an e-mail that if legislation moves forward “to undo quite a bit of prior legal reform victories such as the Class Action Fairness Act,” the Chamber and its Institute for Legal Reform would likely jump into the fray.

Donohue also talked about legislation that would override the Supreme Court's controversial campaign finance ruling in the Citizens United case, calling it "fundamentally unconstitutional" and predicting the legislation, dubbed the DISCLOSE Act, "won’t happen." The bill is pending in the House and Senate.

The Chamber has made no secret of its dislike of the legislation, a response to the Court's 5-4 decision in Citizens United v. Federal Election Commission. That decision struck down limits on corporate spending in elections and sparked a firestorm of criticism.

Donohue said the legislation—which is sponsored by Rep. Chris Van Hollen (D-Md.), the chairman of the Democratic Congressional Campaign Committee, and Sen. Chuck Schumer (D-N.Y.)—"is targeted directly at those people who might not be supported by the head of the House campaign committee and by Schumer, the former head of the Senate campaign committee.”

FTC Postpones 'Red Flags' Identity Theft Rule

Under pressure from Congress, the Federal Trade Commission has agreed to postpone enforcement of its "Red Flags" rule that requires lawyers, doctors and other professionals to develop written identity theft prevention programs.

Both the American Bar Association and the American Medical Association have sued the agency, arguing that imposing the identity theft rule requirements on their members is arbitrary, capricious and has no legally supportable basis.

The rule was developed under the Fair and Accurate Credit Transactions Act, in which Congress directed the FTC and other agencies to develop regulations requiring “creditors” and “financial institutions” to address the risk of identity theft.

The FTC considers lawyers and other professionals to be creditors under the act, and required them to implement written identity theft prevention programs to detect the warning signs — or "red flags" — of identity theft in their day-to-day operations.

Last August, the ABA, represented pro bono by Proskauer Rose, filed suit in U.S. District Court for the District of Columbia challenging the rule’s application to lawyers.

In October, Judge Reggie Walton backed the ABA, saying the FTC had over-reached and that applying the rule to lawyers was unreasonable.

The FTC in February said it would appeal the decision.

Last week, the American Medical Association sued the FTC in U.S. District Court here, arguing the rule should not apply to physicians either. Sidley Austin’s Frank Volpe is representing the AMA.

Today the FTC announced that “as the request of several members of Congress,” it would delay enforcement of the rule until the end of the year.

“Congress needs to fix the unintended consequences of the legislation establishing the Red Flags Rule – and to fix this problem quickly. We appreciate the efforts of Congressmen Barney Frank and John Adler for getting a clarifying measure passed in the House, and hope action in the Senate will be swift,” FTC Chairman Jon Leibowitz said in a statement. “As an agency we’re charged with enforcing the law, and endless extensions delay enforcement.”

House Passes $1B Settlements for Indians, Black Farmers

The U.S. House of Representatives voted today for a jobs-and-tax package that includes approval of two $1 billion-plus settlements for American Indians and black farmers.

The 215-204 vote is a major breakthrough for the settlements, which would serve to end two long-running court cases. Supporters had been working for months to overcome objections, including over the amount to be awarded in attorney fees, without making much progress.

But the settlements still need Senate approval. That won’t happen until the week of June 7 at the earliest, because senators have left Washington for a week-long Memorial Day recess.

Senior Judge James Robertson of the U.S. District Court for the District of Columbia had been hinting at a confrontation with lawmakers if they did not act. In an April 8 hearing, Robertson extended a deadline for the $1.41 billion Cobell settlement until the end of May and said he would invite members of Congress to a hearing if they had not acted by then. That case involves lost royalty funds flowing from the use of natural resources on Indian land.

The Cobell parties have agreed to another extension, this time until June 15. Kilpatrick Stockton co-managing partner William Dorris, a lead attorney for Cobell plaintiffs, said the parties in the litigation can mutually agree to extend the settlement deadline without judicial approval, and that they are notifying Robertson.

“It’s taken some time to get this before Congress. Needless to say, we are appreciative of the House leadership and many others in the House,” Dorris said. “We start the long weekend on an upbeat note.”

D.C. solo practitioner Dennis Gingold, another lead attorney for the Cobell plaintiffs, also said he was pleased with the House vote. “They got it done,” he said.

A spokeswoman for the U.S. Department of Justice, which is a party to the Cobell case, said the department "remains fully committed" to implementing the settlement.

Three weeks ago, Senate Majority Leader Harry Reid (D-Nev.) tried unsuccessfully to attach the settlements to disaster-relief legislation.

Updated at 3:22 p.m. Mike Scarcella contributed to this report.

FBI's Paul Tiao Nominated for Labor Department Inspector General

Justice Department career prosecutor Paul Tiao, who has been serving as special counsel to FBI Director Robert Mueller III, was nominated Thursday to be the Labor Department inspector general, the White House said.

Tiao, an assistant U.S. attorney in Maryland since 2002, has served as special counsel to Mueller since March 2009. The White House said Tiao has advised Mueller “on a wide range of legal and policy matters in the national security and criminal arenas.”

Tiao’s background also includes stints as a trial attorney in the Justice Department’s Civil Rights Division and as counsel to the Senate Judiciary Committee between 2007 and 2008. From 2000 to 2002, Tiao was an associate in the Washington office of Wilmer Cutler Pickering Hale and Dorr.

The Labor Department inspector general has an “external” responsibility in addition to reviewing the integrity of department programs. The inspector general’s office conducts criminal racketeering investigations in areas such as employee benefit plans and internal union affairs.

Deputy Inspector General Daniel Petrole had served as the acting inspector general at Labor. The previous inspector general, Gordon Heddell, was sworn in as the inspector general for the Defense Department in July 2009. Heddell had been Labor’s inspector general since 2001.

Arent Fox Lands Securities Expert From Dewey

Mark Radke, a onetime chief of staff to the chairman of the Securities and Exchange Commission, has joined Arent Fox as a partner in Washington. Previously, he was a partner at Dewey & LeBoeuf.

Radke’s practice focuses on SEC enforcement issues, with a focus on corporate financial reporting and accounting fraud. He advises clients in state and federal criminal and civil cases, inquiries by self-regulatory organizations, and overseas regulatory actions.

From 2001 to 2003, Radke served as SEC Chairman Harvey Pitt’s chief of staff, during which time he helped shape the Sarbanes-Oxley Act of 2002 and the SEC rules implementing the act.

In a statement, Arent Fox managing partner William Charyk called Radke’s securities enforcement practice “a superb complement to our firm’s international trade, health care, intellectual property, FCPA and white collar defense practices.”

Radke was not immediately available for comment.

Obama Calls in Lawyer for Sestak Questions

In a memo written by White House Counsel Robert Bauer, the Obama administration broke its silence today on whether someone offered a job to U.S. Senate candidate Joe Sestak to keep him from running against incumbent Sen. Arlen Specter (D-Pa.).

Bauer writes in the two-page memo that former President Bill Clinton, acting at the request of White House Chief of Staff Rahm Emanuel, discussed the possibility of an unpaid advisory job with Sestak. Under the proposal described by Bauer, Sestak, a Democratic congressman, would have run for reelection and not challenged Specter, but Sestak declined.

Before joining the White House in December, Bauer was the longtime head of the election law practice at Perkins Coie, and his memo argues that a president and his staff have legitimate interests as the leaders of his political party.

“There have been numerous, reported instances in the past when prior Administrations — both Democratic and Republican, and motivated by the same goals — discussed alternative paths to service for qualified individuals also considering campaigns for public office,” Bauer writes. “Such discussions are fully consistent with the relevant law and ethical requirements.”

Before today, Press Secretary Robert Gibbs and Senior Adviser David Axelrod had been speaking for the White House on questions about the job offer, though they had been declining to give details. Click here (PDF) for a copy of Bauer’s two-page memo.

Rep. Darrell Issa (R-Calif.), who has called for a Justice Department special prosecutor to investigate the matter, said in a statement that Clinton and Sestak still have questions to answer.

“The White House has admitted today to coordinating an arrangement that would represent an illegal quid pro quo, as federal law prohibits directly or indirectly offering any position or appointment, paid or unpaid, in exchange for favors connected with an election,” Issa said.

Court Deals Uighurs Another Setback In Quest for Release Into U.S.

A three-judge panel of the U.S. Court of Appeals for the D.C. Circuit today rejected another attempt by five Chinese Muslim detainees at Guantanamo Bay to be released into the United States. 

 In Kiyemba v. Obama, the panel, in a per curiam opinion, reinstated a 2009 circuit court decision which held that it is within “the exclusive power of the political branches to decide which aliens may, and which aliens may not, enter the United States, and on what terms.”



The U.S. Supreme Court in March had vacated that 2009 decision and ordered the circuit court to take another look at the case in light of new developments surrounding the government’s efforts to relocate the five men, members of an ethnic minority known as Uighurs.



Of the 17 Uighurs originally seeking release, 12 have accepted resettlement offers: four in Bermuda, six in Palau, and two in Switzerland. The five remaining detainees have received and rejected three offers.



The three-judge panel declined to remand the case to the district court for an evidentiary hearing on whether any of the resettlement offers was “appropriate.” The panel noted that in 2009, only the executive branch had opposed the prisoners’ release into the United States.



“Since then, the Legislative Branch has spoken,” the panel wrote. “In seven separate enactments – five of which remain in force today – Congress has prohibited the expenditure of any funds to bring any Guantanamo detainee to the United States.”



Two of the panel members—Judges Karen LeCraft Henderson and A. Raymond Randolph--- rejected the Uighurs’ arguments that those statutes violate the Suspension Clause and are illegal bills of attainders. 

 “But the statutes suspend nothing: petitioners never had a constitutional right to be brought to this country and released,” wrote the two judges. “The statutory restrictions, which apply to all Guantanamo detainees, are not legislative punishments; they deprive petitioners of no right they already possessed.”



Judge Judith Rogers, concurring in the judgment, said the 2009 opinion was “overbroad” and its reinstatement was unnecessary to decide this case on remand from the Supreme Court. It also was unnecessary, she said, to decide the Suspension Clause and bill of attainder issues. 

 “Petitioners have received offers of resettlement abroad in countries determined by the United States to be `appropriate’ for their resettlement,” she wrote. “As a result, petitioners hold the keys to their release from Guantanamo: All they must do is register their consent. The habeas court thus is no longer confronted with the choice between either releasing petitioners into the continental United States or dooming them to indefinite detention at Guantanamo.”



The Uighurs’ counsel, Sabin Willett, partner in Boston’s Bingham McCutchen, was not immediately available for comment. It is not known yet whether the case will return to the Supreme Court.


Senate Extends Criminal Antitrust Amnesty Law

The U.S. Senate passed legislation yesterday extending the Antitrust Criminal Penalties Enforcement and Reform Act of 2004 by 10 years.

The law provides for a leniency program that gives cartel members or price-fixers an incentive to come forward and self-report their violations. The program offers possible amnesty to the first member of an antitrust conspiracy that admits its conduct and fully cooperates with investigators.

"This 10-year extension will offer the Department of Justice Antitrust Division the resources and authority necessary to protect consumers from price-fixing cartels,” Sen. Herb Kohl (D – Wis.), chair of the Antitrust Subcommittee, said in a statement. “The program has proven successful in uncovering and punishing price-fixing crimes, and it is my hope that this extension will usher in another decade of detection and prosecution.”

Since the law was passed in 2004, the Antitrust Division has uncovered numerous cartel cases through its leniency program, including an investigation into price fixing on international air cargo rates and passenger fuels surcharges. That case so far has yielded over a billion dollars in criminal fines.

Another major case involves price fixing of TFT-LCD flat panels, which are used in television sets and computer monitors. That case has yielded more than $800 million in fines since 2008.

In FY2004, before the passage of the law, criminal antitrust fines totaled only $350 million.

The law also limits the civil liability of leniency participants to the actual damages caused by that company rather than triple the damages caused by the entire conspiracy, which is typical in civil antitrust lawsuits.

According to Kohl’s office, the law “makes it more likely that criminal antitrust violations will be reported and, as a result, consumers will be able to identify and recover their losses from paying illegally inflated prices. The policy also requires participants to cooperate with plaintiffs in any follow-on civil lawsuits.”

The Senate approved the House version of the bill, which was passed and sent to the Senate on Monday. The law was due to expire in June.