The BLT: The Blog of Legal Times

D.C. Circuit Warns Defendants: Mind Your Language

An appeals court in Washington today offered up guidance to defendants who are displeased with a judge's decision: Watch what you say.

Drawing a line between an insult and obstruction of justice, a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit today refused to void a man’s contempt conviction for blurting out an expletive in an apparent momentary expression of displeasure with the court.

The appeals said the outburst—the defendant uttered “F--k, y’all” in open court—is enough to sustain a contempt conviction. The comment was directed at Judge Henry Kennedy Jr. of Washington’s federal trial court.

Much of the contempt case is under seal, and the lawyers involved in the case have declined to provide an explanation. The appellate court opinion today did not identify the name of the defendant.

The man’s appellate lawyer, Tony Axam Jr. of the federal public defender’s office, argued the expletive alone was not enough to justify a contempt conviction. The defendant’s outburst, Axam argued at a recent hearing, did not interfere with the administration of justice.

Axam said the remark came at the conclusion of a hearing at which Kennedy sentenced the defendant to three years of prison for violating his supervised release in a cocaine distribution case. His arrest and conviction for second-degree murder—the man was sentenced last year to 26 years in prison—violated the terms of his release in the drug case.

During the revocation hearing, the man, according to the appeals court, “repeatedly attempted to interrupt” the judge. After Kennedy imposed the three-year term, the man offered up his two-word profane summation of his thought on what just happened.

The appellate panel—judges Karen LeCraft Henderson, Douglas Ginsburg and Brett Kavanaugh—today rejected the argument that obstruction of justice cannot occur after a court proceeding has concluded.

“Misbehavior in the courtroom, at any time, carries the potential to obstruct justice,” Henderson wrote in the six-page opinion.

The appeals court did cut the man a slight break, for what it’s worth.

On top of the three-year term, Kennedy imposed an additional year for the criminal contempt conviction. The appeals court today reduced that sentence to six months, saying Kennedy did not have the power to sentence the man to more than six months without a jury trial.

American Association of Bank Directors to FDIC: Directors Have Right to Retain Documents

The American Association of Bank Directors has issued a letter to the Federal Deposit Insurance Corp., urging the FDIC to clarify its policy about whether bank directors are allowed to retain bank documents after the agency takes over a failed bank as receiver.

The Dec. 22 letter is signed by Buckley Sandler partner David Baris, who serves as executive director of the AABD, a nonprofit organization that works on behalf of bank directors. It says that the FDIC’s policy that bank directors have no right to possess such records is “shortsighted and counterproductive” because it effectively prevents directors from defending the actions they took while at the failed bank.

The policy is at the heart of two suits involving the FDIC and law firms that advised clients to retain records after their banks were put into a receivership.

In November, the FDIC sued Bryan Cave in federal court in Atlanta, charging the firm with failing to hand over records related to the collapse last month of Overland Park, Kan.-based Hillcrest Bank. According to the FDIC’s complaint, the bank regulator, as receiver for Hillcrest, claims it has brought the action against Bryan Cave in order to obtain documents that were in the firm's possession and to stop the potential destruction of those records. The Am Law Daily reported on that case here.

McKenna Long & Aldridge filed suit against the FDIC not long after the Bryan Cave case, claiming that the agency’s policy is unlawful. That case, which was filed in the U.S. District Court for the Northern District of Georgia, seeks a declaratory judgment against the FDIC, which McKenna asserts cannot require it to relinquish copies of board meeting minutes, loan files and reports from four failed banks. The National Law Journal reported on McKenna’s suit here.

Baris writes in the AABD’s letter that the FDIC should clarify its policy and assert that it supports the right of bank directors to the bank records they need to defend against FDIC suits or those filed by others.

“[The policy] will deter qualified persons from accepting positions as bank directors and will motivate currently serving directors to resign,” Baris writes.

In an interview, Baris said that the first time the AABD became aware of the FDIC’s policy was in the agency’s complaint filed in the Bryan Cave case. Since then, the AABD has been receiving calls from bank directors across the country who are concerned about the policy, he said.

“I can’t think of any other industry that would face similar requirements for directors of corporations,” Baris said. “Directors should be able to explain to the FDIC why a lawsuit isn’t appropriate. And the FDIC should be able to receive informed explanations of the circumstances, as well. This would be in everyone’s best interest.”

Baris said that in many cases, the questions put to bank directors involve decisions that were made five or 10 years before the bank failed, and it would be “impossible” for directors to simply remember their thought process at the time of a given decision.

“It also affects how law firms advise their clients in these situations,” Baris said. “The FDIC needs to clarify or amend it’s policy so bank directors know how to appropriately respond.”

Baris said the FDIC has not yet responded to the letter. FDIC spokeswoman LaJuan Williams-Young declined to comment on the letter.

ABA: State Convictions Should Require Unanimous Verdicts

The American Bar Association has weighed in on a criminal case out of Louisiana in which the defendant was convicted of attempted second-degree murder by a divided jury.

The ABA’s Dec. 27 amicus brief in support of a writ of certiorari in Troy Barbour v. State of Louisiana argues that the justices should reconsider the court’s 1972 opinion in Apodaca v. Oregon, which held that the Constitution does not require unanimous jury verdicts for state criminal convictions.

The ABA argues that reconsideration is necessary because one of the concurring justices in Apodaca cited the association’s 1968 Standards for Criminal Justice as supporting his conclusion that states could use non-unanimous criminal juries. But, the ABA notes, the standards were amended in 1976, based on intervening research, to state that jury verdicts should be unanimous in all criminal trials.

The ABA says research has continued to show that non-unanimous jury verdicts in criminal trials “fail to foster thorough jury deliberation, attention to minority viewpoints or community confidence in jury verdicts.” In its brief, the ABA requests that the court conclude that criminal defendants in state jury trials should have the same right to a unanimous jury verdict as criminal defendants in federal jury trials.

The brief is signed by Stephen Zack, president of the ABA; Lisa Blatt, a former assistant to the solicitor general who is now a partner at Arnold & Porter; Anthony Franze, counsel to Arnold & Porter; and Victor Rortvedt, an Arnold & Porter associate.

Businesses Seek Government Support in Major Patent Case

Move cautiously—that’s the message recently sent by more than 170 business organizations and research groups to the attorney general and acting solicitor general as the government considers its position in the biggest patent case of the Supreme Court term.

In a letter concerning Microsoft v. i4i, the organizations said, “We are greatly concerned that a reversal of the lower court’s decision in this case could seriously weaken the presumption of validity that attaches to millions of patents in force in the United States today, thereby undermining longstanding investment-backed reliance interests that are critical for domestic job creation and economic growth, and for U.S. technological leadership internationally.”

Microsoft is challenging the U.S. Court of Appeals for the Federal Circuit’s interpretation that the presumption of patent validity, contained in 35 U.S.C. 282, requires that a person challenging the validity of a patent prove its invalidity by clear and convincing evidence. The software giant says the statute contains no particular standard of proof and the Federal Circuit adheres to its policy even when the invalidity defense is based on prior-art evidence that the Patent and Trademark Office never saw or considered in issuing the patent.

The justices on Nov. 29 agreed to hear arguments in the challenge.

“Permitting infringers to invalidate patents on a lower standard of evidence, as is now proposed in the Microsoft v. i4i case, could thus frustrate decades of settled expectations under which large investments were made in reliance on patents that were believed to carry a strong presumption of validity. Shifting the law to a weaker presumption of validity could also deeply affect the prospective investment and product development decisions of innovative businesses, affect public-private technology transfer, and profoundly change the behavior of patent applicants and litigants,” said the letter to Attorney General Eric Holder and Acting Solicitor General Neal Katyal.

The patent at issue—U.S. Patent No. 5,787,449 (the " ’449 Patent")—relates to a technology called markup languages. As Microsoft describes it in its petition, a markup language is a way of indicating how text should be displayed—which words are in boldface, for example, or what should be centered, or where line breaks should appear.

The invention claimed by the ’449 Patent is an improved method for editing markup-language documents by storing the document’s content separately from its metacodes.

The case, likely to be heard in late April, involves high stakes for all parties. Microsoft, which lost in the lower court, was assessed damages of roughly $240 million, and a permanent injunction was issued against its Word program.

The letter was signed by the Biotechnology Industry Organization, including such companies as Amgen, Genentech, Tessera; drug companies such as Eli Lilly & Co., Johnson & Johnson, and GlaxoSmithKline; research organizations, including Regents of the University of California and Research Corporation Technologies, and other companies such as 3M, BP America and Proctor & Gamble.

The letter signers ask Holder and Katyal to “carefully consider” the implications for American innovation and job creation as they develop any position the government may take in the case. “We also would urge you to seek input from a wide range of stakeholders across the U.S. economy and from within the U.S. Government to ensure that any such position will help preserve and promote innovation across the broad spectrum of the American economy.” The letter can be found here.

Foley & Lardner Tapped in Squabble Between Two Defense Contractors

Kratos Defense Engineering Solutions, a San Diego-based defense contractor, says that a competing contractor has poached two of its employees in violation of non-compete agreements signed by both parties. Kratos, which is seeking an injunction barring NES Associates from engaging in unfair competition, has turned to Foley & Lardner partner Michael Lockerby, who chairs the firm’s litigation practice in Washington.

The dispute is between Kratos, which provides weapons systems technology to the Department of Defense, and NES, a Glen Allen, Va., contractor that provides similar systems to the federal government and which was spun off from Kratos in 2005.

Lockerby writes in Kratos’ Dec. 23 complaint, filed in the U.S. District Court for the Eastern District of Virginia, that his client acquired JMA Associates in 2005 at a cost of $34 million. At the time of that transaction, JMA was headed by Andrew Gomer, who received $6.6 million when the deal closed and a bonus of more than $570,000. According to the complaint, Gomer signed an employment agreement with Kratos that prohibited him from competing with or disparaging Kratos.

Twelve months later, Gomer resigned from Kratos and formed NES. The complaint says that in 2006, Gomer signed two additional noncompete agreements with Kratos and extended them with an additional agreement in 2008, which allegedly remains in effect.

Despite those agreements, Kratos contends, Gomer solicited two of Kratos’ employees, Vikram Khemani and Michael Donahue, to join NES. Kratos alleges that the additions of Khemani and Donahue were motivated by Gomer’s desire to misappropriate trade secrets. Kratos contends that it has already lost “key employees, federal government contracts, and customers” as a result of NES’ conduct.

“Kratos faces injury to current and prospective customer relationships—primarily within DoD—that is incalculable because, once damaged or lost, the customer relationships in question will not generate future contract awards, referrals, and revenue,” Lockerby writes.

The complaint, which names NES, Gomer, Khemani and Donahue as defendants, alleges unfair competition in violation of the Lanham Act, misappropriation of trade secrets, tortuous interference with contract and business relations, tortuous interference with prospective economic advantage, violation of the Virginia business conspiracy statute and breach of contract.

Kratos has asked that a federal judge enjoin NES from engaging in unfair competition or misappropriating trade secrets. Kratos is also seeking unnamed compensatory, punitive and treble damages, as well as attorneys’ fees.

No attorneys have yet entered an appearance on behalf of NES.

The Morning Wrap

U.S. Embassy in London Targeted: Reuters reports that the U.S. embassy in London was among the targets of a group of men arrested last week in Britain and charged with conspiracy to cause explosions and preparing acts of terrorism. Twelve men were arrested Dec. 20 in what British police said were counter-terrorism raids essential to protect the public from the threat of attack.

Americans Admire Hillary Clinton, Obama: According to a new poll by USA Today/Gallup, Americans say they most admired President Barack Obama and Secretary of State Hillary Clinton in 2010. Politico reports that Obama is Americans’ most admired man for the third consecutive year, getting 22 percent of the vote in the poll, which surveyed 1,019 adults from Dec. 10 throught Dec. 12. Clinton is the most admired woman, getting the nod from 17 percent of those surveyed.

Obama: Vick Deserved a Second Chance: Obama phoned the the owner of the Philadelphia Eagles to praise the team for giving a second chance to quarterback Michael Vick. Vick is again a National Football League star 19 months after leaving prison for his role in a horrific dogfighting ring that killed pit bulls by electrocution, hanging and drowning, The Washington Post reports.

Sotomayor Guides Court’s Liberal Wing: Three months into Justice Sonia Sotomayor's second year at the Supreme Court, The New York Times reports that she has dispelled the fear on the left that her background as a prosecutor would align her with the court’s more conservative members on criminal justice issues. And she has displayed a quality that is alert to the humanity of the people whose cases make their way to the Supreme Court, reports The Times.

The Best In Legal Writing, 2010

The Green Bag, billed as an entertaining journal of law, today announced the results of its annual "exemplary legal writing" contest, and none of the winners are among the nine justices of the Supreme Court.

To be fair, none of the justices were nominated in the main category of "court opinions," but four were candidates in the "concurrences and dissents" category.

Instead, the winners were: Judges Frank Easterbrook and Diane Wood of the U.S. Court of Appeals for the 7th Circuit for their majority and dissenting opinions in Bodum USA v. La Cafetiere, a "trade dress" decision that delved into French law; the 9th Circuit's Alex Kozinski; federal trial judges John Gleeson (Eastern District of New York) and John Kane (District of Colorado); and Minnesota appellate judge Kevin Ross.

Kozinski won for a heated dissent in United States v. Pineda-Moreno, a Fourth Amendment search case in which Kozinski declared, "1984 may have come a bit later than predicted, but it's here at last."

Ross won for his decision in Minnesota v. Wiggins, a novel case testing the constitutionality of a police search in which the officer ordered a suspect to raise his hands overhead, then pulled up his pants, which had dropped to knee level. In the process, the officer felt a gun in the suspect's pocket and made an arrest. Even given the "baggy-pants fashion trend," the judge wrote, the officer was justified in hitching them up from knee-level for the sake of decency.

In the non-judicial category of books, Harvard Law School dean Martha Minow won for her book In Brown's Wake, as did Jack Rakove for Revolutionaries: A New History of the Invention of America, and John Langbein, Renee Lerner and Bruce Smith for History of the Common Law: The Development of Anglo-American Legal Institutions.

Journalistic offerings that won included Jeffrey Toobin's New Yorker profile of Justice Stephen Breyer, Without a Paddle; Jeffrey Rosen's New Republic article Roberts versus Roberts; and Nina Totenberg's NPR tribute to Justice Ruth Bader Ginsburg's late husband Martin. The full list of winners has been posted on Green Bag's main Web page. (Disclosure: The author of this post is one of the large number of unpaid judges for this contest.)

Fannie Mae Taps McKenna for Suit Against D.C. Landlord Company

McKenna Long & Aldridge is representing the Federal National Mortgage Association, known as Fannie Mae, in a lawsuit against MWM Carver Terrace, alleging that the company, which owns an apartment community in Northeast Washington, is behind on more than $180,000 in loan payments.

According to Fannie Mae's Dec. 23 complaint, Carver Terrace took out a $9.6 million loan in August 2007, which was to be paid back in monthly payments of $59,922.91, including interest. The complaint, which is signed by McKenna partner John McJunkin and J. David Folds, who is counsel to the firm, contends that after Carver Terrace was slapped with an $85,000 lien by District Electrical Services and a $292,000 judgment in favor of Sitetec Inc. in 2009, Carver Terrace began failing to meet its loan obligations. Carver Terrace failed to make payments in September, October and November, the complaint alleges.

The complaint names Carver Terrace; Myrl Mulligan, the guarantor of Carver Terrace's loan; District Electrical Service; and Sitetec Inc., a construction services company, as defendants. It estimates that the total amount due under the terms of the loan is $8.3 million.

McJunkin asks that a judgment be granted in favor of Fannie Mae for the entire amount of the loan. It also requests that Judge Rosemary Collyer of the U.S. District Court for the District of Columbia issue an injunction against Carver Terrace that appoints a receiver for the loan and enjoin Carver Terrace from collecting rent or other funds from the property without written consent from Fannie Mae. The complaint, which Fannie Mae argues does not preclude it from foreclosing on the property, also seeks attorneys' fees.

No lawyers have entered an appearance on behalf of Carver Terrace or any of the other defendants.

Judge Saris Is New Sentencing Commission Chair

The leadership baton is passing at the U.S. Sentencing Commission.

The U.S. Senate late last week unanimously confirmed U.S. District Judge Patti Saris of Massachusetts as the commission’s new chair. She succeeds U.S. District Judge William Sessions III of Vermont.

Saris was nominated to the post last April by President Barack Obama. She will be joined by Commissioner Dabney Friedrich of Maryland, who also was confirmed on Dec. 23 to a second term.

"The Commission plays a critical role in the development and implementation of national sentencing policy, and I look forward to working on a guidelines system that is reflective of the principles of sentencing established by Congress," said Saris in a formal statement after her confirmation.

Saris, a Clinton appointee and a Harvard Law graduate, has served as a district judge for the District of

 Massachusetts since 1994. Before joining the ranks of federal judges, she was an associate justice for the Massachusetts Superior Court from 1989 to 1993. Saris, however, was no stranger to the federal court system before becoming a district judge. From 1986 to 1989, she served as a federal magistrate judge for the U.S. District Court for the District of Massachusetts. She also was an attorney in the U.S. Department of Justice Civil Division from 1982 to 1986, and held the position of chief of the civil division, Office of the U. S. Attorney for Massachusetts, from 1984 to 1986. From 1979 until 1981, Saris served as staff counsel to the United States Senate Committee on the Judiciary.

Friedrich, a graduate of Yale Law School, has served on the commission since 2006, following her appointment by President George W. Bush. Before joining the commission, she served as an associate counsel at the White House. In 2002-2003, she was counsel to Sen. Orrin Hatch (R-Utah) during his chairmanship of the Senate Judiciary Committee. From 1995 until 2002, Friedrich was an assistant U.S. attorney in San Diego.

The Commission is composed of seven voting members and two nonvoting ex-officio members. No more than four commissioners may be members of the same political party, and at least three must be federal judges. Commissioner terms run for six years and a commissioner may serve no more than two full terms.

This Week in The National Law Journal

This week's issue of The National Law Journal contains our annual Year in Review. From oil spills to POM Wonderful, this year's edition is soaked with a fascinating look back at 2010.

Tony Mauro has a comprehensive look at the Supreme Court during the past year. Highlights include President Obama's State of the Union rebuke of the justices for their decision in Citizens United and Justice Samuel Alito's reaction to those remarks. Also, there was that news of the high court adding a new member in now-Justice Elena Kagen.

Amanda Bronstad reports on the prevalence of multidistrict litigation. The cases were so phenomenally large that they generated significant political interest, with the Obama administration and various government oversight departments getting actively involved. And, for once, a pharmaceutical manufacturer was not the primary target.

Jenna Green reports on a story that many Washington law firms are all too familiar with--the lag in regulatory work under the Obama administration. Despite the expected upticks, regulatory work was slow to arrive at Washington law firms due to slow starts by federal agencies and Congress to enact or enforce new regulatory reforms. As R. Bruce McLean, chairman of Akin Gump Strauss Hauer & Feld put it. "We had visions of sugarplums." It didn't quite turn out that way.

Mike Scarcella has a timeline of POM Wonderful's litigation onslaught in 2010. In Washington, what began as a fee dispute between POM and Hogan Lovells over $666,000 in allegedly unpaid fees turned into a nationally publicized prior restraint fight with The National Law Journal at the center of it. The companies also launched suits against several competitors in California.

Bronstad and Sheri Qualters have a second timeline, looking at the long march for gay rights. Gay rights activists saw renewed, and ultimately successful, efforts to repeal the federal Don't Ask, Don't Tell policy. They also saw court victories in California and other states involving marriage between same-sex couples.

In Inadmissible, doing more for legal aid; arguing Cobell legal fees; cheers and whistles for Lerner nom; Chevron bogs down Patton Boggs with conflict of interest accusation; Nathan named new AG; Bendinger and Cowie say farewell to Howrey; and Georgetown's new national security degree program