The BLT: The Blog of Legal Times

In Annual Report, Roberts Defends Supreme Court Ethics Procedures

Chief Justice John Roberts Jr., in his year-end report on the state of the federal judiciary, today offered a vigorous defense of the Supreme Court's handling of ethical issues. He also said he has "complete confidence in the capability of my colleagues to determine when recusal is warranted."

Though he said he was not specifically addressing "ongoing debates" about justices' ethics, Roberts was clearly responding to recent calls for applying the judicial code of conduct for lower courts to Supreme Court justices. Those proposals have been triggered by criticism from both ends of the political spectrum of Justices Elena Kagan and Clarence Thomas for participating in the upcoming cases challenging the constitutionality of the Affordable Care Act. Critics have pointed out that justices have no rules governing their recusal actions, and no one reviews their decisions to stay in or bow out of a case.

Roberts' discussion of Supreme Court ethics was extraordinary, taking up all but the final two paragraphs of his 12-page report. He usually touches on several topics facing the federal judiciary in general, rather than focusing on the high court. His report on the workload of the federal courts this year is in an appendix.

In an illuminating opening section, Roberts drew a connection between the "Black Sox Scandal" that hit major league baseball in 1920 and the early formation of ethics rules for federal judges. Team owners, seeking to restore confidence in baseball, chose Chicago federal judge Kenesaw Mountain Landis as baseball commissioner. Landis resigned his judgeship to take the job, but Roberts said controversy over whether he should resign led the American Bar Association to create a commission on judicial ethics, headed by Chief Justice William Howard Taft. That eventually resulted in adoption of ethical canons and a code of conduct created by the Judicial Conference.

But Roberts stressed that under the structure of the Constitution, the Judicial Conference has no formal jurisdiction over the Supreme Court. In Article III, the Constitution created "one Supreme Court" explicitly, but said Congress could create inferior courts as it sees fit. Congress created the appeals and district courts, and it also established the Judicial Conference to set policy for those courts. As a result, Roberts said, the Judicial Conference and its committees "have no mandate to prescribe rules or standards for any other body." Nonetheless, Roberts said, Supreme Court justices consult the conference's code of conduct, as well as other sources including their colleagues and the Court's own legal office.

Roberts also said that Congress has directed justices and judges alike to file financial disclosure reports and imposed limits on gifts and outside income. "The Court has never addressed whether Congress may impose those requirements on the Supreme Court," Roberts added. "The justices nevertheless comply with those provisions." He said the Court in 1991 adopted an "internal resolution" agreeing to follow Judicial Conference regulations.

As for recusals, Roberts said justices follow the "same general principles" used by lower court judges, but are also influenced by the "unique circumstances" of the Supreme Court. He explained that when lower court judges recuse themselves, they are easily replaced by other judges, and their decisions can be reviewed by a higher court. But at the Supreme Court, when a justice is recused, no one else can replace him or her, and Roberts said the Court "must sit without its full membership. A justice cannot withdraw from a case as a matter of convenience or simply to avoid controversy."

In addition, Roberts suggested it would be inappropriate for justices to pass on whether a colleague should or should not recuse. He wrote, "It would create an undesirable situation in which the Court could affect the outcome of a case by selecting who among its members may participate."

In expressing his confidence in his colleagues to recuse when warranted, Roberts said, "They are jurists of exceptional integrity and experience whose character and fitness have been examined through a rigorous appointment and confirmation process ... We are all committed to the common interest in preserving the Court's vital role as an impartial tribunal governed by the rule of law." He also wrote that "at the end of the day, no compilation of ethical rules can guarantee integrity. Judges must exercise both constant vigilance and good judgment to fulfill the obligations they have have all taken since the beginning of the Republic."

Roberts ended his report by expressing gratitude to federal court judges and staff "for their selfless commitment to public service in the face of demanding dockets and tightened budgets." He also thanked Congress for its "careful consideration of the judiciary's financial needs."

Alston & Bird Signs on to Lobby for Iowa Renewable Energy Company

Lobbyists from the D.C. office of Alston & Bird have signed on to represent the Ames, Iowa-based Renewable Energy Group, according to a congressional lobbying registration filing made this week.

Former U.S. Rep. Earl Pomeroy (D-N.D.) and Bob Siggins, Pomeroy’s former chief of staff on the Hill, are listed on the form as the two lead Alston lobbyists on the account.

According to its Web site, the company is the nation’s largest biodiesel producer with a nationwide distribution system. The company focuses on converting natural fats, oils and greases into biodiesel.

According to Siggins, the renewable group is looking to bolster its presence in Washington. Siggins said he and Pomeroy will be advocating on behalf of U.S. Department of Agriculture farm programs that provide tax credits and other incentives for the use of renewable fuels. Siggins said they’ll lobbying Congress and executive branch agencies.

According to a 2008 National Law Journal story, Alston has been making a concerted push in recent years to build its alternative energy practice.

Heller Attorneys Awarded $1.1M in Fees, One-Third of Their Request

It took six years for the attorneys for Dick Heller to win the D.C. resident, and all Washington residents, the right to possess handguns in their homes. The U.S. Supreme Court made its landmark decision in District of Columbia v. Heller in 2008.

It’s taken another three years for those attorneys, after a lengthy court fight with the District of Columbia, to be awarded their attorney fees.

In a ruling released Friday, U.S. District Judge Emmet Sullivan in Washington awarded Heller’s attorneys, led by Alan Gura of Alexandria, Va.’s Gura & Possessky, just over $1.1 million—about one-third of what they had requested.

Gura and his team had requested about $3.1 million in fees. By contrast, the District of Columbia had argued that Heller’s attorneys merited just over $840,000.

Sullivan noted in his 65-page ruling that lawyers for the city had claimed Gura’s team shouldn’t be allowed to “enrich themselves at the expense of the taxpayers” in a time of financial crisis. The judge made it known that he, too, was cognizant of the issue.

“Sensitive to the fact that the fees in this case will be paid by the taxpayers, this Court is left with the difficult task of closely scrutinizing plaintiff’s fee petition to determine what is fair, reasonable, and just compensation for the legal services of plaintiff’s attorneys,” Sullivan wrote.

The bulk of Sullivan’s ruling is dedicated to detailing the intricacies of how to determine fair and appropriate legal fees. The judge wrote he must make three separate determinations, including what constitutes a “reasonable hourly rate” for plaintiff’s counsel; the number of hours expended on the litigation; and whether the plaintiff had offered evidence that this was a such rare case that a special enhancement is appropriate.

Sullivan said determining the lawyers’ hourly rates alone was difficult, as three of the six attorneys on the case—Clark Neily III of the Institute for Justice, and Robert Levy and Gene Healy with the Cato Institute—work for nonprofit groups. And the other three, including Gura, Laura Possessky and Thomas Huff, do not have standard, fixed hourly rates, in part because they charge lower rates to clients who otherwise couldn’t afford them.

Both sides argued to Sullivan that various matrixes and formulas should be used to determine the correct hourly rate. The plaintiffs’ team concluded that the rates should be $589 per hour for all of the attorneys except Huff, who had less experience. They argued Huff should be compensated at a rate of $361 per hour.

Sullivan called those rates “extraordinary” and not appropriate for this case. “[T]he Court is unwilling to award the high rates requested by plaintiff absent specific evidence that those rates are, indeed, the prevailing market rates for attorneys engaged in complex federal litigation outside of the District of Columbia’s largest law firms,” Sullivan wrote.

Regarding number of hours worked, the plaintiff’s attorneys claimed they worked 3,270 hours over six years. Criticizing three of the attorneys—Neily, Levy and Healy—for “unacceptable” timekeeping practices, among other reasons, Sullivan found that only 2,877 hours had been “properly billed” to defendants.

Finally, Sullivan concluded that no fee enhancement would be warranted, despite the attorneys’ assertions that they had provided “superior” legal performance, and that the awards had been delayed.

In a joint written statement, Gura and Neily, on behalf of the rest of their team said, “We appreciate Judge Sullivan's remarkably thorough opinion in which he substantially rejected the District's attempts to cut by nearly half the number of billable hours reasonably expended by Plaintiff's counsel in obtaining an unprecedented ruling from the Supreme Court that the Second Amendment protects an individual right to keep and bear arms.”

Gura and Neily added that they “respectfully” disagreed with Sullivan's determination of the hourly rates calculated in this case, which they submitted was based on an outdated U.S. Attorney’s Office Fee Matrix.

“As has become increasingly apparent in recent years, that matrix bears little if any relationship to prevailing hourly rates for complex litigation in the Washington, D.C. market,” the attorneys wrote, “nor do we believe the rates provided in the USAO matrix accurately reflect the exceptional quality of the legal work performed by Plaintiff's counsel in securing this historic win. We have not yet decided how to proceed and are considering various options.”

D.C. Attorney General Irvin Nathan in a statement “commended” Judge Sullivan for reducing the “outlandish” fee request of the plaintiffs’ team.

D.C. Lawyer Dedicates Himself to Film Preservation

It’s not every day that a D.C. copyright attorney appears in a well-received documentary. But for Eric Schwartz, a partner in the D.C. office of Mitchell Silberberg & Knupp, it makes perfect sense.

Schwartz is passionate about the movies, and has found a way to merge his legal work with his advocacy of film preservation.

The movie he appears in is called “These Amazing Shadows,” which during the past several months has been screened at a couple of theaters in Washington, including the West End Cinema and the Library of Congress.

The film has since made its way to public TV, and is set to air on Maryland Public Television on Jan. 1, at 10:30 p.m.

The film is about The National Film Registry, which is the group of films selected for preservation by the Library of Congress.

Schwartz began work on the issue in the late 1980s as an attorney with the U.S. Copyright Office. While there, he co-authored a paper on the colorization and alterations of films. Eventually, this work—bolstered by much political wrangling on Capitol Hill and elsewhere in Washington—helped to form the National Film Preservation Foundation, which receives private donations for its preservation work.

According to a recent Washington Post story, in its 14 years of existence, the foundation has helped preserve more than 1,800 films that had deteriorated in archives around the country, and abroad.

“Films are recordings of American history and culture,” Schwartz said in an interview. “Preserving them is important.”

The Morning Wrap

Facing Charges: Federal prosecutors are preparing to file the first criminal charges against BP employees stemming from the 2010 Deepwater Horizon accident, The Wall Street Journal writes.

Volunteer Army: As the Iowa GOP presidential caucuses close in, Texas Rep. Ron Paul's young supporters are being told to shave, dress "business casual" and cover up their tattoos before talking to voters, according to The New York Times.

Tightening Belts: The Pentagon has eliminated 27 jobs for generals and admirals since March, the first such high-ranking DOD reduction since the aftermath of the Cold War, The Washington Post writes.

New Life: The suit filed by a woman who had been turned down for a job with the University of Iowa College of Law allegedly because of her politics has been revived in the 8th U.S. Circuit Court of Appeals, according to The Wall Street Journal. The woman, Teresa Wagner, claims she was denied the job because of her conservative political views.

Bankruptcy Courts Trying Out Online Chats

They might be more than a decade late to the technology, but some federal courts are attempting to take advantage of online chats to answer questions from those who use the courts.

Several U.S. bankruptcy courts are inviting people with questions to join them in online chats. The bankruptcy court in Arizona was the first offer information via online chat, prompting court officials in New Mexico and Nevada to follow suit, according to an article released this week by the Administrative Office of the U.S. Courts.

In the article, posted on the AO's Web site, Arizona Bankruptcy Clerk of Court Brian Karth said: "The court started live chat several years ago, as a result of a strategic plan initiative to better inform and educate the public.”

"I was surprised at the number of attorneys who use our live chat to ask questions," said Karth. "This has been particularly true in the past two years as many real estate lawyers expand into the field of bankruptcy law and have questions as inexperienced practitioners. They said it was more convenient than waiting on the phone for someone to answer a question—they could work while they waited for a reply."

According to the article, the Arizona bankruptcy court last month averaged 12 live chats per day, with a high per day of 25. And the average chat lasts nearly nine minutes.

No word on whether the bankruptcy court in Washington plans to follow suit. Court officials in D.C. couldn't be reached late Wednesday.

FTC Files Amicus Brief in Monks’ Challenge to Louisiana Funeral Directors Act

The Federal Trade Commission has filed an amicus brief in a case involving challenges to the Louisiana Embalming and Funeral Directors Act. The agency concluded that restraints on third-party casket sales are at odds with the FTC’s funeral rules, which promote competition and fair business practices in the industry.

The underlying case involves the Benedictine monks of St. Joseph Abbey. For generations, according to the FTC’s recently filed brief, the monks had constructed simple wooden caskets to bury their dead. Public interest grew after two bishops also were buried in the caskets, prompting the monks to starts a business.

Under the Louisiana law, the Abbey, located north of New Orleans, would have to become a licensed funeral establishment to avoid the state’s glare, according the FTC’s interpretation.

The monks, asking for a judgment declaring the Louisiana act unconstitutional, hope to continue to sell hand-made caskets to the general public without the threats of fines or even prosecution from the state.

The FTC’s brief makes it clear that the agency finds the Louisiana act flawed because it restricts competition. Because of this, the agency says the state runs afoul of its funeral rules.

“The [state law] denies Louisiana consumers the benefits of competition that consumers in many other states currently derive from alternative forms of casket retailing,” FTC staff attorney Ruthanne Deutsch wrote in the Dec. 16 brief, on behalf of General Counsel Willard Tom and Deputy GC John Daly. “The [state law] precludes, for example, casket retail stores and the opportunity to purchase from in-state sellers of caskets that are able to cater to particular market niches and offer highly personalized or individually-crafted caskets.”

The FTC first began investigating funeral practices in 1972, according to the agency brief. Its findings of unfair and deceptive practices led to what’s known as the funeral rule being adopted in 1984. At its essence, according to the brief, the rule “promotes competition and deters deceptive or unfair practices by mandating that, at the outset of discussions on funeral arrangements, funeral providers disclose itemized prices for funeral goods and services, so consumers have the information they need to comparison shop.”

The agency felt compelled to get involved in the case, which currently sits in the U.S. Court of Appeals for the 5th Circuit: “Restraints on casket sales by independent retailers, such as [state law]’s licensing requirements, do not further the purposes of the Funeral Rule. On the contrary, they insulate funeral directors from the very competition that the Rule seeks to promote.”

But the agency, while eager to make sure its point of view was known, filed its amicus on behalf of neither party in the underlying case. An FTC spokesman declined to comment beyond what was said in the agency’s legal brief and press release.

A representative of the Louisiana State Board of Embalmers and Funeral Directors, the defendant in the case, could not be reached.

Scott Bullock with the Arlington, Va.-based Institute for Justice, which represents the monks in the case, said the FTC position buttresses the position of the Abbey. The FTC brief says clearly that the Louisiana law "is not in the interest of consumers," he said.

Institute lawyers Darpana Sheth and Jeff Rowes are also working on the case.

Big Settlement Reached with El Al in Antitrust Case Against Airlines

Four law firms, including D.C.’s Hausfeld, have announced the latest settlement in a massive antitrust case against major airlines that has yielded almost $500 million in settlement awards to date.

The case involves allegations made in 2006 by freight forwarders and companies that ship goods by air, against more than two dozen airlines. The plaintiffs, who are seeking class certification, allege the defendants conspired to unlawfully fix the prices of airfreight shipping services, including cargo shipments made to, from and within the United States. The plaintiffs allege the price fixing took the form of artificially inflated surcharges.

In the most recent settlement, reached earlier this week, the plaintiffs won $15.8 million from El Al Israel Airlines. As part of the settlement, El Al has agreed to cooperate in the ongoing case against the remaining defendants, according to a Hausfeld press release.

“The settlement with El Al is an excellent result for the US class,” said Michael Hausfeld, chairman of the firm, in a statement. “We will continue our efforts to pursue recoveries for the huge number of victims of this cartel both in the U.S. and around the world.”

The El Al settlement was the 16th in the case, which is being handled out of the Eastern District of New York. Other settlements have included $89.5 million with British Airways, and $85 million with Lufthansa. In total, settlements so far have amounted to $478 million.

In addition to Hausfeld, the attorneys at his firm involved in the case are partners Brent Landau, Hilary Scherrer and William Butterfield, and associate Melinda Coolidge. All but Landau work out of the firm’s D.C. office.

The other co-lead counsel firms in case are Labaton Sucharow; Levin, Fishbein, Sedran & Berman; and Kaplan Fox & Kilsheimer.

In an interview, Landau noted that criminal investigations stemming from the same set of allegations are ongoing, and some guilty pleas have been reached. He said the high number of settlements was a result of the strong plaintiffs’ case. The number of members of the proposed plaintiffs’ class, he said, totals in the thousands.

When asked about legal fees, Landau said hearings haven’t been held yet in many of the settled cases. But in one example, he noted that in the case involving Air France, KLM and Martin Air, attorneys split 25% of the $87 million settlement.

The Morning Wrap

Vacant Posts: President Obama said he'll be nominating two men to fill the vacant seats on the Federal Reserve's board, according to The New York Times. The candidates are Harvard economist Jeremy Stein and Jerome Powell, a former private equity executive.

Fighting Back: As the Iowa caucuses draw near, Republican co-front-runner Newt Gingrich attacked his rivals, The Washington Post reports. Former House speaker Gingrich, former Massachusetts Gov. Mitt Romney and the remaining candidates will be barnstorming the state this week.

Happier New Year: Two plaintiffs law firms recently got word that they'll be receiving $300 million in legal fees for their work on a takeover deal, The Wall Street Journal reports. The awards have lawyers chattering about whether the Delaware Court of Chancery has become overly friendly to plaintiffs.

Healthier Families: Publicly funded programs allowed more than 1.2 million children to gain health insurance since 2008, according to The Washington Post. The Obama administration plans to announce today that this is in part because of the efforts of states to make sure that children who are eligible for health care programs are actually signed up.

Alston’s Kaleda Appointed to Serve on ERISA Advisory Council

A Washington-based lawyer at Alston & Bird was among those appointed by U.S. Secretary of Labor Hilda Solis to a three-year term on an council that advises her on matters pertaining to the Employee Retirement Income Security Act, the agency announced.

The job of the 2012 Advisory Council on Employee Welfare and Pension Benefit Plans—known as the ERISA Advisory Council—is to advise Solis on a range of enforcement and regulatory matters relating to employee benefits.

Alston partner David Kaleda will be one of 15 members of the council. Five new names, including his, were announced late last week.

Each council member is supposed to represent a different constituency on the council; Kaleda’s job is to present the point of view of “corporate trust,” according to a Labor Department press release.

According to Kaleda’s page on Alston & Bird’s Web site, a significant portion of his practice is focused on “advising plan fiduciaries and services providers on the structuring of products and the provision of services to ERISA-governed plans and other arrangements subject to ERISA and the Internal Revenue Code.”

Kaleda is a member of the American Society of Pension Professionals and Actuaries, as well as the American Bar Association’s joint committee on employee benefits.

Kaleda said in a brief interview that he was looking forward to be able to present the points of view of employers and financial services groups to the council and Solis. “I’m happy to have the opportunity,” he said.