LAW BLOG NEWSLETTER
from The Wall Street Journal Online
July 31, 2009 -- 6:30 p.m.
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TODAY'S POSTS
- Denver Doozy: Tenth Circuit Orders New Sentence, Fine, for Nacchio
- On Petitions and Secrecy: The Latest First Amendment Craze
- Is the Holder DOJ Shifting Course on Pornography Prosecutions?
- UBS, Feds, Swiss Reach Deal in Huge Tax Case; Names Likely to Follow
- Mikva on U of I Scandal: 'Illinois Has Carried it to an Extreme.'
- A Beantown Headscratcher: Nesson's Client Admits to Infringement
- 'Natural-Born' Killer? Mulling a Constitutional Amendment
- Profs Giving Gonzo Chilly Welcome in Steamy Lubbock
- Supreme Challenge? Judge Calls Out Scalia Over Heller Language
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Denver Doozy: Tenth Circuit Orders New Sentence, Fine, for Nacchio
My oh my, how fortunes have changed for Joe Nacchio. Last month, the Supreme Court punted on a decision on whether or not to hear his case - leading folks to wonder think maybe, just maybe, the court was inclined to grant cert on the case and take a fresh look at his insider-trading conviction.
Now this news: the Tenth Circuit has ordered a shorter sentence for the ex-Qwest CEO, saying his six-year term for insider trading was too long. Nacchio's sentence could be cut to less than three and-a-half years.
But wait, there's more. The court also ruled that the lower-court judge, Edward Nottingham, had erred in ordering the former executive to forfeit $52 million, the gross proceeds from selling his Qwest stock. The appellate judges ordered a new trial judge to redetermine the correct amount of proceeds from his insider trading that Nacchio will have to forfeit to the government.
Click here and here for stories from the Denver Post, respectively. Click here for the 10th Circuit opinion.
Nacchio and his lawyers argued in his appeal that he should have received a sentence ranging from 41 months to 51 months because his actual gain on the illegal insider trades was $1.8 million. The district court based its initial sentence on a gain of $28 million.
Nacchio began serving his 72-month sentence in April.
See and Post Comments: http://blogs.wsj.com/law/2009/07/31/denver-doozy-tenth-circuit-orders-new-sentence-fine-for-nacchio?mod=djemWEB&reflink=djemWEB&reflink=djemWLB
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On Petitions and Secrecy: The Latest First Amendment Craze
Say you feel strongly about a given issue. You sign a petition in support of that issue. Do you then have an expectation that your signing that petition will be kept from the eyes of the public? Do you have a First Amendment right to keep that information from being publicly disseminated?
It's an issue that recently played out in regard to separate issues in Tennessee and California. In both instances, courts ruled that the petition-signers did not have a First Amendment right to keep their signatures private. In a ruling Jan. 29 on a request for a preliminary injunction to block release of the names of signers in support of Proposition 8, the ballot measure banning same-sex marriage, U.S. District Judge Morrison England Jr. said advocates failed to show a direct connection to violent reaction, and that "if ever there needs to be sunshine on a political issue, it's with a ballot measure."
The issue is currently playing out in Washington State - where it could possibly be headed to a conclusion different from those reached in Tennessee and California.
Click here for the story, from the Seattle Times. On Wednesday, a federal judge in Tacoma temporarily blocked release of the names and addresses of those who signed petitions for Referendum 71, which would repeal a recent law giving gay couples new marriagelike benefits.
A consortium of religious conservative organizations, Protect Marriage Washington on Saturday submitted 138,500 signatures to the secretary of state seeking to qualify Referendum 71 for the November ballot. The organization then sued to block release of the names on constitutional grounds, claiming state disclosure law "chills free speech . . . particularly when it is reasonably probable that those exercising their First Amendment rights would be subjected to threats and harassment."
U.S. District Judge Benjamin H. Settle on Wednesday afternoon granted a temporary restraining order requested by Protect Marriage Washington to stop the Secretary of State's Office from making the signers' names public. The order will remain in place until a hearing set for Sept. 3.
In his order, Judge Settle referred to the strength of the referendum backers' case, writing that they "have sufficiently demonstrated a reasonable likelihood of success on the merits" of their First Amendment claim, and "a reasonable likelihood of irreparable harm if the names are released."
Tom Lang, director of knowthyneighbor.org, which hopes to post the names on that Web site, said he was intensely disappointed, saying the state had failed to defend its own public-disclosure law in court. "All this information belongs to the public," Lang said. "We should not have to ask for it to be made public or wait for a court decision."
LBers, any thoughts on this?
See and Post Comments: http://blogs.wsj.com/law/2009/07/31/on-petitions-and-secrecy-the-latest-first-amendment-craze?mod=djemWEB&reflink=djemWEB&reflink=djemWLB
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Is the Holder DOJ Shifting Course on Pornography Prosecutions?
So far, Eric Holder's Justice Department has gotten more attention for aligning itself with the Bush administration's department on certain issues (like extraordinary rendition), than it has for any abrupt change in direction.
But according to a Politico story out Friday, a recent under-the-radar move in a Montana case could signal that the Obama administration is looking to push away from its predecessor's approach to pornography prosecutions.
Explains writer Josh Gerstein:
The Justice Department issued a press release Friday evening announcing that Barry Goldman, 58, of Jersey City was indicted by a New Jersey federal grand jury for shipping what prosecutors said were obscene DVDs to Virginia and Montana. Goldman allegedly operated a web-based business called the "Torture Portal."
The press release didn't mention that Goldman was indicted by a federal grand jury in Montana last August for some of the same shipments, which he unwittingly made to the FBI. Nor was it mentioned that Justice Department prosecutors challenged a federal judge's ruling transferring the case to New Jersey-before abruptly dropping the fight in May and agreeing to the transfer.
So why is a simple change in venue all that significant? Venue "is everything in obscenity cases. It's the whole ball of wax," said Larry Walters, an adult-industry defense lawyer, to Politico. Gerstein explains that since a 1973 Supreme Court decision, Miller v. California, required juries to assess "contemporary community standards" in obscenity cases, the venue for such prosecutions has become a pivotal issue.
And for that reason, the move could be significant. "This is a substantial change of position," said Louis Sirkin, an attorney who has represented many in the pornography industry, including Hustler publisher Larry Flynt. "The new administration has come in there and made a new determination. . . . It certainly is different than what we have seen in the past."
That said, at least one thing hasn't changed: the existence of an Obscenity Prosecution Task Force, set up by AG Alberto Gonzales in 2005, as well as the person heading that task force, Brent Ward, who served as a U.S. attorney in the Reagan Administration.
Since Obama's inauguration, prosecutors have pressed on with pending obscenity cases and accepted guilty pleas in one high-profile prosecution brought in Pittsburgh. However, there have been no announcements of new adult obscenity indictments, a trend that Justice Department officials declined to discuss, though they did note that federal prosecutions for child pornography have continued apace.
See and Post Comments: http://blogs.wsj.com/law/2009/07/31/is-the-holder-doj-shifting-course-on-pornography-prosecutions?mod=djemWEB&reflink=djemWEB&reflink=djemWLB
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UBS, Feds, Swiss Reach Deal in Huge Tax Case; Names Likely to Follow
This just in: In a major break in a massive tax-evasion investigation, UBS AG and the governments of Switzerland and the U.S. have reached a settlement that could force UBS to turn over identities of thousands of account holders, a Justice Department attorney told a U.S. District Court judge Friday morning. Click here for the WSJ story; Here for the NYT story; here, here and here for previous LB coverage.
Stuart Gibson, a Justice Department tax division attorney, didn't detail the settlement in a conference call with Judge Alan Gold that included lawyers for UBS and the Swiss government.
A hearing scheduled for Monday in Miami was postponed until Aug. 10, at which point more details are expected to be released. The judge scheduled another conference call with parties in the case for next Friday.
The Internal Revenue Service has demanded the identities of 52,000 U.S. account holders at UBS. UBS and the Swiss government have claimed that turning over those names would violate Swiss bank secrecy provisions.
The settlement is the second break in the government's case against UBS. The case has pierced the veil of decades of Swiss private banking. In February, UBS agreed to a $780 million criminal settlement and said it would turn over some 250 names. In a parallel civil case, the IRS has been seeking for a year the identities of UBS account holders who allegedly received aid from UBS in evading taxes.
The settlement is expected to result in UBS turning over account information, though likely not as many as 52,000 accounts. UBS and the Swiss government, which has been heavily involved in the settlement talks, are expected to cite violations of Swiss law as reasons why UBS can turn over the names and still not break Swiss bank-secrecy laws. Swiss laws don't provide confidentiality if people engage in fraudulent activities such as setting up accounts with shell companies that lack business substance.
Some 7,000 accounts are expected to be the focus of the settlement because they are tied to offshore companies and trusts that are susceptible to fraud.
See and Post Comments: http://blogs.wsj.com/law/2009/07/31/ubs-feds-swiss-reach-deal-in-huge-tax-case-names-likely-to-follow?mod=djemWEB&reflink=djemWEB&reflink=djemWLB
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Mikva on U of I Scandal: 'Illinois Has Carried it to an Extreme.'
Looks like the University of Illinois admissions scandal could have some significant fallout.
Former federal judge Abner Mikva, the chairman of a state panel investigating the university's practices, said Thursday he will ask his fellow commissioners to recommend that the school's entire board of trustees resign because of the scandal.
Already, trustee Lawrence Eppley resigned this week and called on his fellow board members to do the same. Click here for the story, from the Chicago Tribune.
We've written about the situation before, click here, here and here. The basic allegation: that the school gave preferential admissions treatment to hundreds of applicants - aspiring undergraduates, graduate students and law students - who had help from insiders, including former Illinois Governor Rod Blagojevich.
According to the Trib, Mikva said that after reviewing more than 5,000 pages of documents and hearing from nearly three dozen witnesses, it's clear the university had a flawed admissions process. He also said the evidence suggests that no other public university has an an institutionalized "clout system" like Illinois's. Said Mikva: "Unfortunately, as in other cases, Illinois has carried it to an extreme."
See and Post Comments: http://blogs.wsj.com/law/2009/07/31/mikva-on-u-of-i-admissions-scandal-illinois-has-carried-it-to-an-extreme?mod=djemWEB&reflink=djemWEB&reflink=djemWLB
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A Beantown Headscratcher: Nesson's Client Admits to Infringement
Just when we thought the allegedly illegal downloading case taking place up in Boston couldn't get any stranger, it did. The BU graduate student being sued by the recording industry for illegally downloading music online admitted on Thursday from the witness stand that he infringed on the copyrights of the 30 songs at issue in the federal case.
Huh. We're guessing that might have a slightly bigger impact on the case than defense lawyer Charlie Nesson's demonstrative opening argument. Click here for the story, from the Boston Globe.
The defendant, Joel Tenenbaum, is one of more than 18,000 recipients of letters from the Recording Industry Association of America in recent years demanding payment for illegal file-sharing, but is only the second to challenge a lawsuit in federal court.
"On the stand today, are you now admitting liability for downloading and distributing all 30 songs?'' asked Timothy Reynolds, a lawyer for the four record labels that filed suit.
"Yes,'' said Tenenbaum.
And that single word set things into motion. According to the Globe report, the recording industry asked Judge Nancy Gertner to rule that Tenenbaum was liable for copyright infringement and to move directly to the damages phase of the trial. Gertner is expected to rule this morning on the industry's request.
According to the Globe's account, the concession came at the end of some other rather provocative testimony. Tenenbaum unapologetically admitted downloading more than 800 songs from 1999 to at least 2007. While "smiling often," he reportedly explained that he grew up in a family that loves and plays music, and that file-sharing networks made it easy for him to get the songs he liked for free, including those by Nirvana, Green Day, the Ramones, and Aerosmith.
He also matter-of-factly admitted lying about downloading in sworn statements to the record labels and falsely blaming others who he said might have had access to his computer in Providence, including his two sisters, friends, and house guests.
If it sounds like Tenebaum's lawyer, the oft-described "eccentric-but-brilliant" Harvard Law professor Charlie Nesson might be struggling a bit, you'd be right, at least according to the Globe's writeup: "Nesson has struggled throughout the four-day trial to make his points, drawing countless objections from the plaintiffs and warnings from Gertner to ask simple questions, stay within appropriate boundaries, and avoid making arguments."
We're guessing that Nesson's strategy is still one based on a theory akin to jury-nullification: that despite the concession, the jury will award no or low damages, despite the statutory damage amounts laid out by the copyright law.
See and Post Comments: http://blogs.wsj.com/law/2009/07/31/a-beantown-headscratcher-nessons-client-admits-to-infringement?mod=djemWEB&reflink=djemWEB&reflink=djemWLB
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'Natural-Born' Killer? Mulling a Constitutional Amendment
No person except a natural born Citizen, or a Citizen of the United States, at the time of the Adoption of this Constitution, shall be eligible to the Office of President; neither shall any Person be eligible to that Office who shall not have attained to the Age of thirty-five Years, and been fourteen Years a Resident within the United States.
U.S. Constitution, Article II, Sec. 1
The above portion of the great document has gotten a lot of airplay in recent months and weeks, what with the 1) speculation from some that President Obama is not a "natural born citizen" and 2) the countermovement against that speculation, which led to the invention of the derisive "birthers" neologism about three weeks ago.
Rather than delve into the heart of the controversy, we'd prefer to ask a broader question: has the "natural born Citizen" requirement for president outlived its usefulness? Should it be repealed?
A law professor at Temple, Peter Spiro, argues in the Philadelphia Inquirer on Thursday that the answer should be yes.
For starters, writes Spiro, the requirement is outdated:
The natural-born provision is an artifact of a time when one's birthplace was fraught with consequences. In the feudal conception of natural law, one was born into the protection of a territory's sovereign, for which one was thought to owe an indissoluble duty of allegiance. . . .
Today, birthplace is hardly so meaningful. Many more individuals are being born outside the United States to U.S. citizen parents (often with dual citizenship), and others are naturalizing at an early age and maturing as Americans in every sense. Notions of perpetual allegiance dissipated long ago.
Furthermore, writes Spiro, the requirement draws distinctions that are largely arbitrary:
Foreign-born adopted children are extended citizenship automatically upon admission into the United States with their new parents. Can any of the thousands who have moved here as infants from China, Korea, Guatemala, or Romania grow up to be president? . . .
And then there are the more than 15 million naturalized Americans who more clearly fall short of being natural-born citizens - among whom Obama might have been counted if the details of his mother's life were a little different. For them, the presidential eligibility clause represents sanctified discrimination, a kind of asterisk next to the principle that they enjoy equality with other citizens.
Constitutional amendments ain't easy to pass. But, writes Spiro, a natural-born killer movement would be likely to garner at least some bi-partisan support. After all, efforts to repeal the requirement were earlier this decade initiated by Republicans enticed by the prospect of an Arnold Schwarzenegger presidency. Utah Republican Orrin Hatch introduced the "Equal Opportunity to Govern Amendment" in 2003, and it enjoyed bipartisan support, including that of Michigan's Canadian-born Democratic governor, Jennifer Granholm.
LB Readers, let's hear your thoughts on this.
See and Post Comments: http://blogs.wsj.com/law/2009/07/30/natural-born-killer-mulling-a-constitutional-amendment?mod=djemWEB&reflink=djemWEB&reflink=djemWLB
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Profs Giving Gonzo Chilly Welcome in Steamy Lubbock
You've got to hand it to Alberto Gonzales; the man sure does know how to attract controversy.
The latest: the former U.S. attorney general appears to be on some sort of collision course with faculty members at Texas Tech University, where he's slated to teach in the fall. Click here for an LB post on Gonzo's Lubbock move, from earlier this month.
Last week, Gonzo told a Texas television station that he was busy preparing the syllabus for his political-science class, called "Contemporary Issues in the Executive Branch." According to this writeup, from KCBD in Lubbock, Gonzales said he planned to play an important role in minority recruitment and retention at Texas Tech. He said:
People will see that Texas Tech has attracted someone of a high profile Hispanic who has had some very unique opportunities and experiences and a Hispanic who believes in the Tech mission and hopefully Hispanics will say well if Al Gonzales is interested in Texas Tech maybe I should give Texas Tech a second look.
Well, now comes word that a bunch of professors down at Texas Tech don't like the idea of Gonzo teaching at their school. Some 70 professors have ginned up and signed a petition protesting the notion. According to this story, from the Daily Toreador, Texas Tech's newspaper, the petition reads:
Gonzales's appointment is a troubling example of a 'celebrity hire. It is unclear what Gonzales has done that makes him deserving of employment at Texas Tech. Does he have a noteworthy academic record? Does he have a record of publishing in law reviews? Was his service to his country particularly distinguished?
The petition specifically calls out the school's chancellor, Kent Hance, who reportedly largely orchestrated the Gonzo hire. Hance has not responded to a variety of requests for comment.
Gonzales, however, has said the petition isn't holding him back, telling the Toreador:
We live in a country where, in the academic world, people can express publicly their approval and disapproval of various issues," he said. "What I'm focused on, is demonstrating that I'm serious about this teaching responsibility. I'm also serious about promoting diversity within Texas Tech. I hope that people will treat me fair and give me an opportunity to demonstrate that.
See and Post Comments: http://blogs.wsj.com/law/2009/07/30/profs-giving-gonzo-chilly-welcome-in-steamy-lubbock?mod=djemWEB&reflink=djemWEB&reflink=djemWLB
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Supreme Challenge? Judge Calls Out Scalia Over Heller Language
Anyone who follows the Supreme Court could have predicted that the Supreme Court's Heller opinion from 2008, in which the court found that Washington D.C.'s gun control law ran afoul of the Second Amendment, would give lower courts, lawyers and legal academics much to chew on in years to come.
Already, for instance, courts have wrestled over whether the ruling would apply to the states - a potentially significant barrier to those looking to extend Heller's reach throughout the land.
But it seems a Tenth Circuit judge, Timothy Tymkovich, a George W. Bush appointee, has stumbled over what might be viewed as a loose thread in the opinion itself - and he penned his thoughts in a concurring opinion filed on Tuesday.
Let's explain. In one part of the majority opinion in Heller, Justice Scalia stated the following piece of dicta, that "...nothing in our opinion should be taken to cast doubt on longstanding prohibitions on the possession of firearms by felons..."
Why would Scalia write such a line? According to Scotusblog, "he may have needed to put in a cautionary word to hold his five-Justice majority - an indication to make the decision seem somewhat less sweeping."
The Tenth Circuit case involved an individual in Oklahoma City who was arrested in 2007 while driving with a suspended driver's license. During the search of the car, the police found a loaded firearm. The defendant was charged with the federal crime of being a felon in possession of a firearm, described by Scotusblog as "a specific crime that the Heller dictum would seem to have left unaffected by the Second Amendment declaration of a personal right of self-defense with a gun."
The Tenth Circuit upheld the possession conviction, rejecting the defendant's Heller-based argument, relying heavily on Justice Scalia's dicta.
In any event, Judge Tymkovich called into question this language in his concurrence on Tuesday.
"I write," wrote Tymkovich, to express concern that the dictum inhibits lower courts from exploring the contours of Heller and its application to firearm restrictions."
Tymkovich continues:
Knowing the meaning of the Second Amendment right and having identified its individual nature, the issue becomes what limits the government may place on the right. Indeed, this is where the Second Amendment rubber meets the road. The restrictive firearm ownership and licensing laws at issue in Heller violated the right, the Court found. . . . But what about other laws? For example, the broad scope of [the felony possession law] which permanently disqualifies all felons from possessing firearms-would conflict with the "core" self-defense right embodied in the Second Amendment. Non-violent felons, for example, certainly have the same right to self-defense in their homes as non-felons.
. . .
Rather than seriously wrestling with how to apply this new Second Amendment rule, therefore, courts will continue to simply reference the applicable Heller dictum and move on. And in light of the Supreme Court's clear direction, this is perhaps how it should be. After all, "our job as a federal appellate court is to follow the Supreme Court's directions, not pick and choose among them as if ordering from a menu." . . . I nevertheless wonder whether Second Amendment law would have been better served if the regulations Heller addressed in dicta had been left to later cases.
Wow. Them's some pretty serious words to throw up the ladder at the Supreme Court.
In any event, according to Scotublog:
lawyers involved in the case said Wednesday that they plan a further challenge to the Circuit's ruling, either by asking for en banc review by the Circuit, or taking the case on to the Supreme Court - a choice they have not yet made.
Huh. Is it possible we could see a review of Heller (or at least one section of it) back on the Supreme Court's docket before long? (For more on this, check out Eugene Volokh's take over at Volokh Conspiracy.)
See and Post Comments: http://blogs.wsj.com/law/2009/07/30/supreme-challenge-judge-calls-out-scalia-over-heller-language?mod=djemWEB&reflink=djemWEB&reflink=djemWLB
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LAW VIDEO
A summer session that started so promisingly for House Democrats is ending with a whole lot more uncertainty. After failing to push through reform on health care and energy, Democrats leave for their summer break as a party divided. White House Correspondent Jonathan Weisman reports.
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TOP LAW NEWS
U.K.-based investment fund Hermitage Capital Management is seeking help from U.S. courts in gathering evidence of an alleged $230 million tax fraud in Russia.
http://online.wsj.com/article/SB124899758859795455.html?mod=djemWEB&reflink=djemWEB
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UBS, the Swiss government, and the U.S. have reached a settlement that could force UBS to turn over identities of thousands of account holders.
http://online.wsj.com/article/SB124904498531396803.html?mod=djemWEB&reflink=djemWEB
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Illinois Attorney General Lisa Madigan sued Wells Fargo, alleging the lender illegally discriminated against minority borrowers.
http://online.wsj.com/article/SB124906504187697487.html?mod=djemWEB&reflink=djemWEB
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Jeffry and Barbara Picower, alleged to have made $5.1 billion from investing with Bernard Madoff, responded to a lawsuit by a court-appointed trustee that said evidence suggested "complicity" by them in Madoff's fraud.
http://online.wsj.com/article/SB124907353589097737.html?mod=djemWEB&reflink=djemWEB
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An appeals court ordered a new sentence for Joseph Nacchio, the former Qwest CEO, saying he was improperly sentenced to six years for insider trading.
http://online.wsj.com/article/SB124906818438497419.html?mod=djemWEB&reflink=djemWEB
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Hoboken's mayor resigned a week after vowing to stay in office and fight federal corruption charges against him.
http://online.wsj.com/article/SB124905654310097183.html?mod=djemWEB&reflink=djemWEB
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