Federal Prosecutors Seeking Biglaw Bills as Part of Probe

The Atlanta Journal-Constitution reports that federal prosecutors have requested records to determine if there was a financial relationship between a former Atlanta city attorney and the private law firm that guided the city’s response to numerous federal grand jury subpoenas.

The firm, Paul Hastings LLP, has earned millions over the past decade handling some of the city’s most sensitive matters for both former Mayor Kasim Reed and his successor, Keisha Lance Bottoms, according to the AJC’s Stephen Deere.

The review focuses on whether there were payments from the firm to Cathy Hampton, the city’s former top lawyer.

Read the Journal-Constitution article.



Anatomy of a Prosecutorial Meltdown

A prosecutor in Lancaster County, Pennsylvania, finds himself embroiled in a legal scorched earth conflict against his county commissioners — a fight that started when he used $21,000 in asset forfeiture funds to lease a car.

Above the Law traces the conflict between the commissioners and Lancaster District Attorney Craig Stedman.

Along the way, Stedman doubled down after commissioners said they would have leased him a vehicle through proper channels if he’d asked for one, but that using the forfeited funds to get a car on his own violated protocol, writes Above the Law senior editor Joe Patrice.

Stedman sued the commissioners, and they responded by blocking the use of county funds for the lawsuit. Stedman turned over documents, but the records didn’t include receipts documenting what specific seized items were sold and what items were bought with the proceeds.

Read the Above the Law article.



Alleged Phony Lawyer Arrested For Creating Fake Website With Cravath Bios

HandcuffsThe U.S. Department of Justice has reported that a Tennessee man was charged for allegedly creating a fake website for a six-lawyer New York City law firm, so he could dupe people into paying him for legal services.

John Lambert, 23, was charged with wire fraud and wire fraud conspiracy. Lambert allegedly held himself out as a lawyer using a website that cut and pasted lawyer biographies from Cravath, Swaine & Moore, according to a report by the ABA Journal.

The criminal complaint says that Lambert and a co-conspirator, non-lawyers who allegedly created a fake law firm, collected more than $50,000 in payments through a PayPal account.

Read the ABA Journal article.




Attorney Suspended From Federal Court in Chicago for a Year for Bizarre Antics

Attorney Joel Brodsky, best known for representing convicted wife killer Drew Peterson, has been suspended from practicing in federal court in Chicago for one year stemming from his scorched-earth tactics in a mundane lawsuit, reports the Chicago Tribune.

A panel of federal judges found that Brodsky violated the rules of professional conduct in the civil case involving a used vehicle.

“Brodsky’s bizarre antics in the case — all but accusing a witness of inventing a son and saying his rival attorney was running a ‘criminal enterprise’ — had already garnered him a stiff $50,000 fine and an order to undergo anger management training,” writes Jason Meisner.

Read the article.



Revenge of the Robocall Recipients: Jury Finds Marketer ViSalus Liable for 1.8 Million Calls

The outcome of a three-day class action trial accusing the nutritional supplement marketer ViSalus of violating the Telephone Consumer Protection Act hinged on the testimony of the named plaintiff, reports Reuters.

Jurors heard Lori Wakefield testify about four automated calls from ViSalus on her home phone line, according to Reuters’ Alison Frankel.

Jurors believed Wakefield and found that the calls violated the TCPA, and that the class Wakefield represents had received a grand total of 1.85 million improper robocalls. Their verdict exposes ViSalus to statutory damages of about $925 million, which could be trebled.

Read the Reuters article.



Technology Service Provider Contracts with Banks

Bank sign

Image by Mark Moz

The Federal Deposit Insurance Corporation has issued a Financial Institution Letter identifying gaps, particularly involving business continuity and incident response risks, that some examiners had noted in their review of contracts between banks and technology services vendors, points out Ropes & Gray in a client alert.

“These gaps may require banks to take additional steps to mitigate the risks that arise from them,” the authors write. “The FDIC took the opportunity to reiterate regulatory requirements for these contracts, noting that banks remain ultimately responsible when contracts do not adequately address certain risks. Cybersecurity threats remain at or near the top of risks of concern to federal banking regulators.”

Read the article.



Trump’s Sister Retires, Highlighting Judge Misconduct Loophole

Maryanne Trump Barry’s quiet retirement earlier this year from a federal appeals court short-circuited a judicial ethics investigation, allowing the president’s older sister to dodge potentially serious consequences such as loss of full retirement benefits, reports Bloomberg Law.

The former Third Circuit judge faced the civil probe into whether she and her siblings, including her brother Donald, benefited from alleged tax schemes linked to her late father, according to Bloomberg’s Melissa Heelan Stanzione. Four complaints of judicial misconduct were filed in October of 2018. At the time, Barry, now 82, was semi-retired and not hearing cases.

“The treatment of her case is not without recent precedent, and raises questions about a loophole in the conduct code for federal judges that allows them to avoid scrutiny by stepping down,” writes Stanzione.

Read the Bloomberg Law article.



Former SeaWorld Associate GC Pleads Guilty to Insider Trading

SeaWorld Entertainment’s former associate general counsel, who was fired last October, pleaded guilty Tuesday to a federal charge of insider trading that allowed him to make nearly $65,000 from a stock sale last year, The San Diego Union-Tribune reports.

Paul B. Powers, 60, entered his plea before a U.S. district judge in Florida. Sentencing has not yet been determined, writes the Union-Tribune‘s Lori Weisberg.

The U.S. Securities and Exchange Commission said that it had also charged Powers with insider trading based on confidential information he received that SeaWorld’s revenue would be better than anticipated for the second quarter of 2018.

Read the Union-Tribune article.



NY Lawyer Gets Four-Month Suspension for Aggressive Behavior

Bloomberg Law is reporting that a New York real estate lawyer was suspended for four months and ordered to undergo up to one year of counseling for aggressive litigation techniques.

Adam L. Bailey drew the sanction because he failed to apologize for his actions and because he had twice previously been admonished by the state attorney grievance committee for “excessively aggressive behavior while representing a client.”

Bailey’s conduct violated several state professional conduct rules, including threatening criminal charges solely to obtain an advantage in a civil matter and conduct that adversely reflects on counsel’s fitness as a lawyer, the court said.

Read the Bloomberg Law article.



A Judge Angered a Politically Connected Law Firm, Then Quickly Lost Her Job

Lawyers at Pond Lehocky Stern Giordano had a beef with a Philadelphia workers compensation judge who ruled against them, so they told a member of the governor’s staff that the judge was romantically involved with a local workers’ comp lawyer.

Three months later, Judge Andrea McCormick was out of a job, reports The Inquirer of Philadelphia.

“State investigators say they responded to Pond Lehocky’s complaint by pulling eight years of McCormick emails and determined that she had violated multiple policies: using her work computer to make online purchases and exchange personal photos, and sharing court decisions before they were officially posted online, among other alleged offenses,” writes the Inquirer‘s William Bender.

“We never asked for anyone to be terminated,” Pond Lehocky partner David Stern said in an email.

Read the Inquirer article.




Hospital’s Ex-GC Sues Former Employer and Two Board Members

The former general counsel for the South Florida Hospital District has sued the district and two of its board members, claiming they fired her in retaliation for trying to stop them from violating the law, reports the South Florida Sun-Sentinel.

Reporter Cindy Krischer Goodman of the Sun-Sentinel explains:

Kimarie Stratos claims the district’s board of commissioners wrongly fired her in September after eight years on the job. In her lawsuit, she alleges her termination happened in retaliation for repeatedly reporting Sunshine Act violations, as well as objections to releasing confidential medical information, wasting of public funds, and other actions by board members. By firing her, she alleges the district has violated the Florida Whistle Blowers Act.

Read the Sun-Sentinel article.



San Antonio Bans Chick-fil-A From Its Airport, Sparking Controversy

The San Antonio city council recently voted to exclude Chick-fil-A from its list of airport vendors based on the company’s views on the LGBTQ community. Since then, Texas Attorney General Ken Paxton has opened an investigation into whether the city violated state law and asked the U.S. Secretary of Transportation to explore whether the city violated federal law, according to a post on the website of Androvett Legal Media & Marketing.

“On the one hand, you have the city of San Antonio running a business – the airport, and related restaurants – as opposed to a ‘traditional’ government function like a public park,” said Dallas attorney David Coale of Lynn Pinker Cox & Hurst. “In that setting, the city has a clear interest in anti-discrimination policy as well as an interest in its overall image.”

But, Coale says Chick-fil-A has two related arguments that bolster its case against removal from the airport. “One, it has a right to engage in political advocacy outside of this business setting, and two, that advocacy has nothing to do with the operation of the airport. The city’s legitimate and powerful interests in running its airport the right way is just not in play.”

“So, in sum, the City starts out ahead, but Chick-fil-A could catch up if it shows that this decision was based solely on its unrelated speech rather than a standard contract-procurement process.”

Coale also adds that the underlying issue is the broader question of “unconstitutional conditions.”

“Can the government do indirectly what it cannot do directly? The government clearly cannot ban Chick-fil-A from giving to groups with certain policy views about gay rights. Can it discourage Chick-fil-A from doing so by putting strings on its government contracts? That’s a complex area of law without a lot of clear, general answers.

“The 55-mph speed limit is the most famous example of this issue – Congress cannot directly set speed limits on state highways because, by definition, they don’t involve interstate commerce. But it could condition federal highway funds on states changing their local speed limits to 55 mph.”

Pepper Hamilton Ordered to Turn Over Baylor Investigation Materials to Plaintiffs’ Attorneys

A U.S. district judge has ordered Pepper Hamilton LLP to turn over materials tied to the law firm’s 2015-16 investigation that led Baylor University regents to report the school had fundamentally failed in its Title IX implementation duties, reports the Waco Tribune-Herald.

“The significance is we are continuing to get to the bottom of who, what, where and when in regard to the failures at Baylor,” said Jim Dunnam, a Waco attorney who represent the 15 plaintiffs.

Plaintiffs’ lawyers had filed for a subpoena in March 2017 seeking materials from Pepper Hamilton and in June filed a motion to compel the firm to comply, but the firm did not respond to the request, according to the Tribune-Herald‘s Phillip Ericksen.

Read the Tribune-Herald article.



Whistleblowing General Counsel Gets $1.87 Million Payday

The Houston Chronicle reports that the former general counsel of the Houston Housing Authority won $1.87 million in a lawsuit against the agency after she accused it of retaliation.

“Karen Miniex, the former general counsel for the agency, alleged her boss at the housing agency retaliated against her after she investigated fraud in the agency’s voucher program targeted at veterans,” according to the report. “The trial was held before U.S. District Judge Nancy F. Atlas.”

A statement from the agency said an appeal is being considered, should the judge uphold the jury’s verdict.

Read the Houston Chronicle article.



Federal Judge Sets April 4 Hearing for Elon Musk Contempt Case

A federal judge in New York will hear oral arguments next week in a lawsuit brought by the US Securities and Exchange Commission that seeks to hold Tesla CEO Elon Musk in contempt for violating a settlement deal, according to a CNN report.

Judge Alison Nathan will consider the SEC’s request that Musk be held in contempt for violating a settlement agreement reached last year, which required he get pre-approval for social media posts about the electric car company, writes CNN’s Victoria Cavaliere.

Musk tweeted on Feb. 19 that Tesla would produce “around 500k [cars] in 2019.” Hours later, he posted a follow-up tweet indicating that the company will actually deliver just 400,000 cars this year.

Although Musk corrected his mistake, regulators said he had “once again published inaccurate and material information about Tesla to his over 24 million Twitter followers,” according to court papers.

Read the CNN article.



Energy Market Manipulation Remains a Hot Issue at FERC

The Federal Energy Regulatory Commission is continuing to aggressively investigate and bring enforcement action against companies that engage in energy market manipulation, reports WilmerHale in its 10-in-10 Hot Topics in Energy Series.

These investigations and proceedings mirror Commodity Futures Trading Commission (CFTC) action on financial market manipulation in the energy area.

“As the recent Powhatan and Silkman decisions indicate, the body of case law defining FERC’s enforcement authority continues to develop. Regulated companies should be aware that the statute of limitations in market manipulation cases will likely be read permissively. A strong internal compliance program, coupled with self-reporting in appropriate instances, can help reduce risk,” according to the article’s authors.

Read the article.



Biglaw Firm Sued for Role in $1.36B Grocery Chain Buyout

Cravath, Swaine & Moore is being sued by a former public shareholder of a grocery chain in a class action that alleges the firm breached its fiduciary duty by providing tainted advice that directed the grocer toward a buyer, private equity group Apollo Global Management, reports Bloomberg Law.

In the complaint, the former shareholder claims Cravath crafted a “false and misleading” U.S. Securities and Exchange Commission filing relating to the 2016 $1.36 billion leveraged buyout of The Fresh Market by Apollo.

The complaint alleges Cravath drafted the SEC filing “to procure stockholder approval and cover up prior wrongdoing,” and in doing so, pocketed $5.5 million in fees in what amounted to “a sham sale process.”

Read the Bloomberg article.



Webinar: Obtaining Software Patents Using New Patent Office Guidance

Intellectual property IPFitch, Even, Tabin & Flannery LLP will present a free webinar, “Back on Track?: Obtaining Software Patents Using New Patent Office Guidance,” featuring Fitch Even attorneys Timothy R. Baumann and George N. Dandalides.

The event will be on Wednesday, March 20, 2019, at 9 am PDT / 10 am MDT / 11 am CDT / 12 noon EDT. It also will be available as an on-demand webinar after presentation.

Obtaining patents for software-related inventions has become more difficult in recent years, in the U.S. and throughout the world. However, recently released USPTO guidance addressing patent eligibility under 35 U.S.C. § 101 and § 112, among other developments, offers some amount of much-needed clarity and direction.

During this webinar, presenters will share information and insights on:
• USPTO’s 2019 Revised Patent Subject Matter Eligibility Guidance
• USPTO’s 2019 Guidance on Examining Computer-Implemented Functional Claim Limitations
• How to use the recent guidance fruitfully, including claim-drafting strategies and evaluation of example claims
• Drafting strategies for filing software patent applications in foreign jurisdictions
• What the future may hold for software patentability

Register for the webinar.



Hackers Shut Down Boston Legal System for Weeks, Seeking Payment in Bitcoin

A cyberattack on the agency overseeing Boston public defenders has caused a weekslong slowdown, disabling e-mail systems, delaying some hearings, and hanging up payments for the private attorneys who represent clients, reports The Boston Globe.

“The Committee for Public Counsel Services has been cleaning up for two weeks after a ransomware attack locked up its servers, with the culprits demanding that a ransom be paid in bitcoin,” writes the Globe‘s Andy Rosen. “The agency refused to pay, because it has backup files it can use to restore the system.”

A similar attack hit the Jackson County, Georgia, government internal network recently, forcing most of the systems offline, according to ZDNet. In that case, the county paid $400,000 to cyber-criminals week to get rid of the ransomware infection and regain access to its IT systems.

Read the Globe article.



Ruling Allows Sandy Hook Case to Go Forward: A Path Around Federal Protection for Gun Makers?

Image by Mitch Barrie

The Connecticut Supreme Court Thursday narrowly reversed a ruling by a lower court judge dismissing a lawsuit by the families of victims of the Sandy Hook shooting against Remington Arms Company, allowing the case to proceed, reports the Hartford Courant.

The decision that remanded the landmark gun case back to Bridgeport Superior Court possibly created a path that other mass shooting victims can follow to get around the federal Protection of Lawful Commerce in Arms Act, known as PLCAA, which has protected the manufacturers of the AR-15 assault rifle from lawsuits, writes the Courtan‘s Dave Altimari.

He explains:

The ruling paves the way for the families to subpoena internal documents on how the gun companies have marketed the AR-15, which has become the weapon of choice for mass shooters. The gun manufacturers have closely guarded information on how they market the assault weapons.

Read the Courant article.