The BLT: The Blog of Legal Times

Former Croatian Military Official Sues to Remove Sanctions

Ante Gotovina, a retired Croatian military official acquitted of war crimes charges in 2012, is suing the U.S. Department of Treasury to lift economic sanctions against him in place for more than a decade.

The International Criminal Tribunal for the Former Yugoslavia convicted Gotovina of war crimes in connection with a military operation in Croatia in 1995. In 2012, the Appeals Chamber of the tribunal reversed his conviction and set him free.

The U.S. government listed Gotovina as a Specially Designated National in 2003, subjecting him to economic sanctions. After his acquittal, Gotovina asked the Treasury Department's Office of Foreign Assets Control to remove the designation, to no avail, according to the complaint he filed yesterday in the U.S. District Court for the District of Columbia.

The Morning Wrap

Defended: The U.S. Department of Justice is expected this morning to defend the Affordable Care Act's contraceptive mandate in a dispute that reached the U.S. Supreme Court on New Year's Eve. Justice Sonia Sotomayor then granted a temporary injunction in the suit, brought by a group of nuns. She ordered the government to respond by 10 a.m. today.

Licensed: The Recorder reports: "In First for Nation, Undocumented Immigrant to Become Lawyer in California." The Los Angeles Times has coverage here and The New York Times here. The applicant, Sergio Garcia, wrote this op-ed in September for The National Law Journal.

Departed: The New York Times spotlights Gary Gensler's leadership of the Commodity Futures Trading Commission. "Even as Mr. Gensler’s aggressive streak thrust the once-backwater agency into the front lines of reform, it also maddened colleagues and complicated his legacy. And now that his tenure is ending on Friday, the agency has reached an inflection point, prompting Wall Street to hope for a friendlier regulator," The Times reported. Timothy Massad was nominated in November to replace Gensler as chairman.

Paid: The Washington Post reports: "Virginia taxpayers may continue to foot the bill for two private law firms representing Gov. Robert F. McDonnell and his staff in connection with state and federal criminal investigations, even after the governor leaves office Jan. 11." Lawyers from Jones Day and Holland & Knight have advocated for McDonnell.

Court Reverses Sanctions Against Tax Office for Faulty Computer System

The District of Columbia Office of Tax and Revenue's computer system was like something out of "The Terminator," Senior Judge Frank Schwelb of the D.C. Court of Appeals wrote: a machine "defying the will of those who programmed it."

For John and Sara Shuman, the faulty computer system meant years of fighting erroneous notices from the tax office, long after city officials admitted the couple was right. Schwelb had bad news for the Shumans, though—the administrative law judge who ordered the tax office to fix its computer system and imposed sanctions lacked authority to do so.

A three-judge panel today said only a D.C. Superior Court judge could have offered the type of relief the couple sought. In the same breath, though, the court said its opinion should not be read to suggest the tax office's handling of the Shuman's case was "justifiable."

This Week in The National Law Journal

Court Revives Claim to Art: Amanda Bronstad looks at the U.S. Court of Appeals for the Ninth Circuit ruling that breathed new life into a dispute over claims of art taken by the Nazis. "A panel concluded the claims, brought under a California law, did not infringe the federal government's exclusive power to conduct foreign affairs — the so-called foreign affairs doctrine," according to the report.

Second Thoughts on False Claims: Advocates for amending the False Claims Act -- a powerful tool for the U.S. Justice Department -- are pitching reforms on Capitol Hill, Andrew Ramonas reports. Among those lawyers who are pushing for change was a familiar face at the Justice Department: David Ogden, a former deputy attorney general under Eric Holder Jr. "I hope you look at [the FCA amendments] hard, think about them and do the right thing," Ogden said at a recent discussion on the Hill.

Banks Draw Out Their Knives: Legal challenges to the new Volcker Rule appear certain, Jenna Greene reports this week. "When federal financial regulators last week adopted the massive Volcker Rule, it didn't mean their work was finished. If anything, lawyers say the work is just beginning," Greene writes. One lawyer remarks: "The implications [for] banks are so widespread that it is highly likely there will be challenges to the final rule on a number of grounds."

Judge Approves $153 Million Settlement in Fannie Mae Securities Class Action

A Washington federal trial judge today approved a $153 million settlement between Fannie Mae and shareholders who sued the mortgage giant for securities fraud.

U.S. District Judge Richard Leon found the settlement and plan for distributing it among the more than one million class members was "fair, reasonable and adequate." The case is the largest securities class action settlement in the D.C. federal courts since modern securities litigation laws went into effect in 1996.

The order ends nearly a decade of litigation against Fannie Mae and its auditor, KPMG LLP. The class members, led by the Ohio Public Employees Retirement System and the State Teachers Retirement System of Ohio, accused Fannie Mae and KPMG of defrauding shareholders by manipulating earning and violating guidelines known as generally accepted accounting principles.

D.C. Courts Get an 'F' for Judges’ Financial Disclosures

When it comes to disclosing judges' salaries, investments, gifts and other financial information, the District of Columbia recently received a failing grade in a nationwide survey.

The Center for Public Integrity, a nonprofit investigative news organization, gave 41 states plus D.C. an 'F' in a new report released this week on how states handle public financial disclosures by high court judges. The center's grades were based on what information judges were required to disclose, how much of that information was made public and whether judges were held accountable for filing.

The District tied for the lowest score among states that require at least some financial disclosures by judges. Judges in the D.C. Court of Appeals face "fairly extensive" disclosure requirements, the Center for Public Integrity's report noted, but the majority of that information is kept out of the public eye. D.C. Superior Court judges follow the same disclosure rules as their colleagues in the appeals court.

Federal Employees Sue for Damages Over Shutdown

A group of federal employees who worked without pay during the partial government shutdown last month are suing over alleged damages, claiming violations of federal labor law.

The lawsuit accuses the government of violating the Fair Labor Standards Act by not paying employees who worked during the shutdown on their normal pay schedule. Even if they were paid later on, the plaintiffs allege, the government still owes them additional damages under federal law.

The federal workers filed suit Oct. 24 in the U.S. Court of Federal Claims. On Nov. 1, Judge Susan Braden put the case on hold, asking the U.S. Department of Justice to provide information on proposed legislation in Congress dealing with back-pay for federal workers. The case was reassigned to Judge Patricia Campbell-Smith.

Williams & Connolly Seeks Legal Fees in Libel Suit

Updated 9:10 a.m. 10/29/2013

Attorneys from Williams & Connolly and Levine Sullivan Koch & Schulz are seeking more than $200,000 in legal fees and costs for their work fighting a libel suit filed in September 2012 against Foreign Policy magazine and a writer.

Yasser Abbas, the son of Palestinian Authority President Mahmoud Abbas, sued Foreign Policy over a June 2012 article written by Jonathan Schanzer, vice president for research at the Foundation for Defense of Democracies. Schanzer was also a defendant. U.S. District Judge Emmet Sullivan dismissed the case on Sept. 30. Abbas intends to take the fight to the U.S. Court of Appeals for the D.C. Circuit. 

Williams & Connolly partner Kevin Baine, who focuses on First Amendment work, and associates Adam Tarosky and Elise Baumgarten, are seeking $100,481 in legal fees and costs. Levine Sullivan partner Nathan Siegel, an attorney for Schanzer, is asking for $107,174 in fees. Siegel worked on the case with Levine partner Seth Berlin and associate Shaina Jones. (Schanzer had his owner lawyers; he was not an employee of Foreign Policy.)

No Early Injunction in Challenge to Health Care Regulation

A challenge by a group of individuals and businesses to the IRS' enforcement of a provision of the federal health care law survived the government's attempt to dismiss the case, but a judge denied the plaintiffs' bid for an early injunction blocking the regulation at issue.

U.S. District Senior Judge Paul Friedman today denied the government's request to dismiss the case, which was based on an argument that the plaintiffs lacked standing to sue. The judge also denied the plaintiffs' motion for a preliminary injunction, finding they failed to show at this stage of the case they were likely to succeed on the merits or face "irreparable" harm without an immediate order.

Jones Day partner Michael Carvin, the lead attorney for the plaintiffs, declined to say after today's hearing whether the challengers planned to appeal the ruling on the injunction. Carvin said the plaintiffs' priority was getting a final decision from the court on the merits of their claims as quickly as possible.

Court Weighs Injunction for Health Care Law Regulation

A group of individuals and small businesses today asked a federal judge to block the IRS from enforcing a tax credit provision of the Obama administration's health care law. The plaintiffs argue the Internal Revenue Service is expanding the Affordable Care Act's reach in violation of the law’s own language.

At issue are federal tax credits for individuals who would otherwise be exempt from the law because of their low income. At a hearing this morning in Washington federal district court, the challengers, represented by Jones Day's Michael Carvin, said the IRS wrongly interpreted the law to say the tax credits could go to residents in states that did not set up health care exchanges.

The IRS regulation, Carvin said, makes certain individuals in those states—and potentially their employers-subject to the law's penalties for not complying with insurance requirements.