LAW BLOG NEWSLETTER
from The Wall Street Journal Online
December 30, 2008 -- 6:17 p.m. EST
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TODAY'S POSTS
- What Must the Senate Do to Keep Blago's Appointment Out?
- Lobbyist Hits NYT With Defamation Suit over McCain Article
- Madoff Scandal Threatens Country's Criminal Justice Organizations
- Blago to Tap Former Illinois AG to Fill Obama's Senate Seat
- A Q&A With Divorce Lawyer Lee Rosen: 'People Are Frustrated'
- Is the Rocket Docket of Eastern Texas Under Siege (Again)?
- Madoff Civil Case Moving Swiftly; The $50 Billion Question
- Hurricane Victims Denied Class Status in Housing Suits
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What Must the Senate Do to Keep Blago's Appointment Out?
Illinois Gov. Rod Blagojevich announces his choice of former Ill. AG Roland Burris to fill Barack Obama's Senate seat, Dec. 30, 2008 in Chicago. (AP/M. Spencer Green) Earlier today, 50 members of the Senate signed a letter urging Illinois Gov. Rod Blagojevich not to appointment Roland W. Burris, the former attorney general of Illinois, to the Senate. The letter explained: "Please understand that should you decide to ignore the request of the Senate Democratic Caucus and make an appointment we would be forced to exercise our Constitutional authority under Article I, Section 5, to determine whether such a person should be seated."
Thanks to our Beloved Readers, who weighed in on the likelihood that Blago's Senate pick will stick, we checked out Powell v. McCormick, a 1969 case, and checked in which Rick Hasen, author of the Election Law Blog.
We asked Hasen if the Powell case might prevent the Senate from keeping Burris out. In the Powell case, Adam Clayton Powell, a representative from Harlem who'd been facing some legal problems, won reelection in 1966. But the House of Representatives voted to exclude him. The High Court held that the proceedings against Powell were intended to exclude and not expel him from the chamber, and that the House had no power to exclude a duly elected member.
Hasen confirmed that the expulsion/exclusion distinction will be important. "If somebody is seated in the Senate and then the Senate wants to remove them, the person is expelled with a two-thirds vote," Hasen told the Law Blog. "Powell v. McCormick was an attempt to exclude the person not seat him and the Supreme Court said it wasnt permissible."
So what might the Powell case mean for Mr. Burris's future in the Senate? It could mean that, once seated, a two-thirds vote could give him the boot. Hasen said: "I think its likely that if Burris does get a two-thirds vote for expulsion, then the courts would not interfere with the Senates decision to keep him out."
See and Post Comments: http://blogs.wsj.com/law/2008/12/30/what-must-the-senate-do-to-keep-blagos-appointment-out?mod=djemWLB&reflink=djemWLB&reflink=djemWLB
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Lobbyist Hits NYT With Defamation Suit over McCain Article
Vicki Iseman, in a 2004 photo at an awards dinner in Washington. Photo: AP Remember Vicki Iseman? For those who don't, she's the Beltway lobbyist who showed up in this February New York Times article about Presidential candidate John McCain. The article alleged McCain aides asked Iseman in 1999 to stop spending time with the Arizona senator after becoming convinced Iseman and McCain were having a romantic affair.
Both Iseman and McCain denied the existence of an affair, denials the Times included in its piece. But Iseman apparently felt she wasn't given a fair shake. On Tuesday she filed a defamation suit against the Times and several of its reporters and editors.
The suit, filed in federal court in Richmond, requests damages of $27 million. It claims the article defamed Iseman by alleging that "through the literal words . . . and by implication," the couple had had an inappropriate romantic relationship while Iseman was lobbying on behalf of telecommunications clients while McCain was chair of the Senate Commerce Committee. The complaint further alleges that the article "exploited an alleged personal and social friendship with Senator McCain to obtain favorable legislative outcomes for her clients, engaging in 'inappropriate' behavior that constituted a conflict of interest . . . ."
In an email, a spokeswoman for the Times stated: "We fully stand behind the article. We continue to believe it to be true and accurate, and that we will prevail. As we said at the time, it was an important piece that raised questions about a presidential contender and the perception that he had been engaged in conflicts of interest."
The suit was brought by W. Coleman Allen, Jr. of (get this!) Allen, Allen, Allen & Allen in Richmond and Washington & Lee's Rodney Smolla .
See and Post Comments: http://blogs.wsj.com/law/2008/12/30/lobbyist-hits-nyt-with-defamation-suit-over-mccain-article?mod=djemWLB&reflink=djemWLB&reflink=djemWLB
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Madoff Scandal Threatens Country's Criminal Justice Organizations
Tallying the losers in the Madoff scandal has become somewhat of a parlor game. On the legal front, we've seen the New York Law School emerge as an alleged victim. But the criminal justice system is reeling, as well.
Earlier this month, the JEHT Foundation a major financial supporter of the Innocence Project in Texas, among others announced it would shut its doors in January because its prime donors invested with Madoff. JEHT, according to this Business Week article, is a six-year-old New York City-based philanthropy focused on juvenile and criminal justice, human rights, and election reform.
JEHT provides $125,000 of the Innocence Project's $200,000 annual budget, the project Chief Counsel Jeff Blackburn recently told the Austin American-Statesman. JEHT also was to provide a grant to help pay for DNA testing in hundreds of cases in Dallas County, where District Attorney Craig Watkins has announced an initiative to use science to find out if inmates have been wrongfully convicted. (See this WSJ profile on Watkins, whom the Dallas Morning News recently named 2008 Texan of the Year.) The Dallas County office got the bulk of that grant -- about $400,000 -- before JEHT closed its doors, so most of the DNA testing can go forward. But the Innocence Project of Texas will now be hard pressed to expand its work throughout the state, Blackburn told the Law Blog. "Our efforts to raise money from private individuals has just about dried up. Nobody is going to give money to get somebody they dont know out of prison when they are worried about whether they can pay their own bills. Were heading into real shaky ground."
The collapse of JEHT will also hurt the work of Massachusetts attorney Bob Fleischner, who Business Week reports was instrumental in the legal battle to end solitary confinement for Texas' youth offenders. Fleischner, the assistant director of the Center for Public Representation, recently discovered that JEHT's three-year, $700,000 grant to support the group's youth justice work would be discontinued immediately.
Other criminal justice programs that were hit by JEHT's demise include the Michigan Department of Corrections, which since 2005 has funded programs dedicated to easing inmates' re-entry to society; and Human Rights First, which, according to this WSJ story, has lost about 8% to 10% off the its revenue as a result of the scandal.
In Rhode Island, Sol Rodriguez, executive director of the Rhode Island Family Life Center, told the Providence Journal that the agency has been granted a total of about $500,000 from JEHT. In Connecticut, the Center for Children's Advocacy Inc., according to an AP report, says that an $85,000 JEHT grant was frozen. As a result, the center reportedly halted its investigation into mental health services available to children in the state's juvenile justice system. And in Philadelphia, according to the Inquirer, the Juvenile Law Center had received about $250,000 from JEHT to support operating expenses and appellate work earlier this year.
Now let's head further west. In Tennessee, Chattanooga Endeavors, a group that provides job assistance for former inmates, was hoping for a $100,000 grant from JEHT, executive director Tim Dempsey told the Chattanooga Times Free Press. Roger Werholz, the Kansas state secretary of corrections, credits a $4.7 million grant from JEHT with a 45% drop in recidivism over the last decade by helping the state change its approach to offenders. "A lot of what JEHT initially funded has now been built into our budget," Roger Werholz, the Kansas state secretary of corrections, told BizWeek.
Up in Wisconsin, courts are hurting. According to the Capital Times, the state courts office has canceled a $326,000 study of alternative court programs. Most of that money, which had been pledged by JEHT, was to be used to study the 19 county-level drug, alcohol and mental health programs in the state to determine whether a statewide alternative courts strategy was needed.
See and Post Comments: http://blogs.wsj.com/law/2008/12/30/madoff-scandal-threatens-countrys-criminal-justice-organizations?mod=djemWLB&reflink=djemWLB&reflink=djemWLB
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Blago to Tap Former Illinois AG to Fill Obama's Senate Seat
Illinois' embattled Gov., Rod Blagojevich, plans to name Roland W. Burris, the former attorney general of Illinois, to fill Barack Obama's Senate seat.
Burris, according to this Web bio, is a senior counsel at Gonzalez, Saggio & Harlan. He focuses on business transactions, consumer affairs, estate planning, wills, trusts, and probate. Before Gonzalez Saggio, he was of counsel with Burris, Wright, Slaughter & Tom and with Buford & Peters. He was also the managing partner at Jones, Ware & Grenard. He's an adjunct professor in the master of public administration program at Southern Illinois University. From 1985 to 1989, Burris, 71, served as vice-chairman of the Democratic National Committee.
The WSJ notes that the move would represent an about-face for the governor. On Dec. 18, his criminal-defense lawyer, Ed Genson, said the governor would not appoint someone to fill the vacant seat. "[Senate majority leader] Harry Reid said that they're not going to accept anybody he picks," Genson said at the time. "Why would he do that?"
Sen. Reid, a Democrat from Nevada, said earlier this month that he backed efforts to circumvent the process allowing Blago to make the appointment. He said, "it is clear that anyone Gov. Blagojevich appoints to the Senate will fairly or unfairly be tainted by questions of impropriety" and that a different process must be put in place.
See and Post Comments: http://blogs.wsj.com/law/2008/12/30/blago-to-tap-former-illinois-ag-to-fill-obamas-senate-seat?mod=djemWLB&reflink=djemWLB&reflink=djemWLB
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A Q&A With Divorce Lawyer Lee Rosen: 'People Are Frustrated'
In today's NYT front-pager -- "In Housing Fall, Breaking Up Is Harder to Do" -- several divorce lawyers attest to the conundrum confronting disaffected spouses looking for a divorce: As home values plummet at their fastest pace on record many couples are choosing to remain married because they can't afford to divide their assets in this market.
For more on how the economy is affecting divorce lawyers, we called up North Carolina-based Lee Rosen, whose firm's Web site, he tells us, is the leading site for family law in North Carolina. (It is pretty impressive. Check out the blog, cleverly titled "Kramer Vs.")
Hi, Lee. Thanks for chatting with us. So what are you seeing on the divorce front?
When you look at it from a national standpoint, you see a lot of people getting divorced but still living together.
Like "War of the Roses."
Exactly. Someone will live upstairs and the other downstairs. You have people trying to drive the other spouse berserk so theyll pack up and leave.
What would normally happen, in a typical case, is that somebody would take the house and buy the other spouse out. But with this level of uncertainty, people are hesitant to invest more in a house thats plummeting in value.
Also, a fair number of our divorce cases are stuck because they're waiting on the house to sell. Thats usually the number one or number two asset in a marriage. (Sometimes a retirement plan is worth more.) We also have people who already moved out, assuming the house would sell and it hasnt. So now theyre paying for the house in addition to rent.
What's going on in North Carolina?
In North Carolina you can't get a divorce without having lived apart for one year. I think our situation is pretty consistent with the national scene. Things are slower for us than they have been this time of year.
The traffic on our site is way up about 30%. Normally, our revenues track pretty closely with our Web site traffic. There's almost always a perfect correlation. But in the last two or three months, weve seen a big gap develop in those numbers.
What do you make of that?
I think people are frustrated. Theyre stuck and feel they dont have options economically, so theyre sitting tight. But it doesnt mean they dont want out of the marriage. They just cant take action right now.
Here's another piece of data. We have another site called Stay Happily Married. It has podcasts with marriage counselors, that sort of thing. In the last quarter, the traffic has doubled each month. Normally, December is slow for everything. But this December we doubled our traffic over November for that site. So that says to me that people are desperate to find ways to make their marriage work.
That all sounds pretty stressful.
Sure, add to that the risk of losing your job. Peoples heads are exploding. Some want to adjust things that are already in place -- such as alimony or child support -- because of a change in their income status. In Charlotte, for instance, there have been many layoffs in the banking industry. And in Raleigh, IT people are starting to get laid off.
So what do you advise?
What were largely doing is giving people time to see how things shake out. They might be employed again in 30 days, so we dont want them to spend legal fees prematurely.
Divorce rates typically rise in January. Do you expect to see that trend continue as we move into 2009?
Itll be very interesting. Over two decades weve studied the increase in January. Data shows that January is about 20% busier than an average month, and that December is about 20% slower than an average month. But for us, December was pretty normal this year in terms of the number of people coming in to meet with us. On the other hand, December was much slower than usual in terms of the number of people actually moving forward with a divorce. So in January I'll be surprised if we dont get the normal bump in people coming into talk to us, but I question whether theyll actually go forward. Because once they get all the numbers and then apply those numbers to their lives, they'll reconsider and decide this just isnt the right time.
For most people, divorce is the biggest financial decision theyll ever make because theyre talking about dividing all their assets and moving half of them away. Its hard to avoid that general mood out there right now about being cautious.
One more thing. Your firm bio says you're a distant cousin of William Shatner. Seriously?
Yeah. The only time I met him was when I was one year old. We lived in Miami, and my parents drove across the country to California.
Do you watch Shatner as Denny Crane on "Boston Legal"?
I like that show. And I do think that those little conversations that go on at the end between Alan and Denny are useful. At work I meet men all the time who have trouble communicating. That's why they're seeing us, because they have difficulty with relationships. But Denny allows himself to connect at a deeper level with other men, and to have a relationship that, while it may be somewhat peculiar, has a lot of emotional value.
Thanks, Lee. Enjoy the holidays.
You too. Thanks.
See and Post Comments: http://blogs.wsj.com/law/2008/12/30/a-qa-with-divorce-lawyer-lee-rosen-people-are-frustrated?mod=djemWLB&reflink=djemWLB&reflink=djemWLB
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Is the Rocket Docket of Eastern Texas Under Siege (Again)?
For over a year now, the Law Blog has been asking (here and here, for instance) whether the winds are changing in plaintiff-friendly Marshall, Texas -- a/k/a the rocket-docket that is the Eastern District of Texas.
Yes, it's civil procedure day at the Law Blog. First Rule 23, now venue: The U.S. Court of Appeals for the Federal Circuit issued a writ of mandamus yesterday that, according to the Recorder, will make it easier for defendants in patent cases to spring themselves from the "oftentimes inescapable" Eastern District of Texas.
The court ruled that Eastern District Judge John Ward "clearly abused" his discretion when he denied TS Tech Co.'s motion to transfer its patent fight with auto seat maker Lear Corp. to a more convenient venue in Ohio. Lear sued TS Tech in 2007 for infringing a patent on headrest assemblies. Ward denied the motion, saying that because the headrests were sold in the area, the citizens of the Eastern District had a "substantial interest" in having the case tried locally.
But the Federal Circuit disagreed: "The vehicles containing TS Tech's allegedly infringing headrest assemblies were sold throughout the United States, and thus the citizens of the Eastern District of Texas have no more or less of a meaningful connection to this case than any other venue," wrote Judge Randall Radar.
The ruling, notes the Recorder, bolsters a 5th Circuit order from May that took Judge Ward to task for refusing to transfer a products liability case against Volkswagen, known as Volkswagen II, out of the district.
See and Post Comments: http://blogs.wsj.com/law/2008/12/30/is-the-rocket-docket-of-eastern-texas-under-siege-again?mod=djemWLB&reflink=djemWLB&reflink=djemWLB
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Madoff Civil Case Moving Swiftly; The $50 Billion Question
Beginning tomorrow, Manhattan federal judge Louis Stanton will preside over three big issues in the civil case against Bernie Madoff, accused of running a $50 billion Ponzi scheme. According to stories in the New York Times and Bloomberg, here they are:
Broaden SIPC protection? Judge Stanton is being urged to extend protection offered by the Securities Investor Protection Corporation beyond direct investors to those who invested in so-called feeder funds that, in turn, invested with Madoff. In a letter reportedly sent to the court by Daniel R. Goldenson, an indirect investor, Goldenson acknowledged that a strict reading of the SIPC guidelines would not treat him as a customer. But in this devastating case we feel it is appropriate to broaden investors eligibility beyond direct investments, he wrote.
Stephen P. Harbeck, the president of SIPC, told the Times that he couldn't predict whether the judge would follow Goldensons suggestion. The key step now, he said, is for affected investors to submit their claims, so that they are on the record as the legal issues are worked out.
The $50 billion question: Just how many assets do Madoff and his firm have left? Stanton established tomorrow as the deadline for Madoff to provide federal securities regulators with a full accounting of his and his firms assets from real estate to art works to bank accounts.
Trustee to send first communication to Madoff customers: Irving Picard, the trustee working for SIPC who recently moved to Baker Hostetler, will send out the first notices to Madoff customers by Jan. 9. That's faster than expected, notes the Times, and will speed up the day when the legal issue of SIPC coverage can be considered in court. On Tuesday, there will be a hearing in New York bankruptcy court on Picard's request for $28 million to cover the salaries and benefits of employees continuing to work at the Madoff revenue-producing trading business.
Photo: AP
See and Post Comments: http://blogs.wsj.com/law/2008/12/30/madoff-civil-case-moving-swiftly-the-50-billion-question?mod=djemWLB&reflink=djemWLB&reflink=djemWLB
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Hurricane Victims Denied Class Status in Housing Suits
Jim 'Hawk' Herring in his FEMA trailer in the New Orleans area in February. Hundreds of lawsuits have been filed against the government and manufacturers over the past three years. (AP) Judge Kurt Englehardt gave Rule 23 junkies a lot to chew on yesterday. In this thick 50-page opinion, the Eastern District of Louisiana judge denied class certification to thousands of victims of hurricanes Katrina and Rita. They were seeking damages for alleged exposure to formaldehyde while living in emergency housing provided by FEMA.
Here's a WSJ report.
Englehardt found that the number of plaintiffs and multiple defendants, as well as varying state laws and legal issues related to trailer types and differing formaldehyde levels, made it impossible for the cases to be consolidated, notes the WSJ.
The victims' claims and the types of housing received "vary greatly on an individual basis and require an individualized assessment," he wrote. "No class representative can be said to adequately represent the interests of all."
"We're looking forward to putting before a jury some good, instructive bellwether cases," Gerald Meunier, a New Orleans attorney who was one of those seeking class-action status, told the WSJ. "We'll see what they do with those, and we'll know more about how to conclude all of the other litigation."
At court hearings earlier this year, defense lawyers argued that many trailers came with instructions notifying occupants to ventilate their trailers frequently to reduce the buildup of chemicals within the units. Plaintiffs' attorneys countered with assertions by toxicologists that formaldehyde wouldn't be completely eliminated by simply airing out a trailer.
See and Post Comments: http://blogs.wsj.com/law/2008/12/30/hurricane-victims-denied-class-status-in-housing-suits?mod=djemWLB&reflink=djemWLB&reflink=djemWLB
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LAW VIDEO
WSJ's Nathan Koppel looks at the fall of a major litigator now in jail and accused of selling bogus paper.
http://online.wsj.com/video/inside-the-marc-dreier-scandal/C8D95D60-B5F5-4A6F-9ED6-54EDC3FB7046.html?mod=djemWLB&reflink=djemWLB
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