The Work
June 17, 2008 10:08 AM
THE AM LAW LITIGATION DAILY: June 17, 2008
Posted by Jonathan Thrope
Edited by Andrew Longstreth
WHITE
COLLAR
Milberg
Settles Kickback Case For $75 Million
Finally. After
nine long years, the government's pursuit of Milberg Weiss appears to be over.
In a settlement reached yesterday with prosecutors over allegations of kickbacks
paid to lead plaintiffs in class actions, Milberg
won't plead guilty but will have to pay $75 million in fines, according to
The New York Law Journal. Interestingly, the story notes that the
firm--decimated by the guilty pleas of three one-time name partners, as well as
defections of other key rainmakers--will pay the fine in installments through
2012. The payments could be accelerated, however, if Milberg somehow regains its
former dominance and produces more than $40 million in revenue in a single
quarter or $120 million over four quarters.
Bad
News Bears
Yesterday The
Wall Street Journal reported that after a year-long investigation, prosecutors
in the Eastern District of New York are considering criminal charges against
Ralph Cioffi and Matthew Tannin, managers of two collapsed Bear Stearns hedge
funds. As surely as smoke signals fire, prospective indictment means defense
lawyers. We've heard that Cioffi has hired Edward Little of Hughes Hubbard, a
white-collar veteran who recently represented one-time Westar Energy executive
Douglas Lake. Tannin is relying on Brune & Richard partners Susan Brune and
Nina Beattie. Brune is a former Manhattan AUSA; Beattie previously worked at the
New York Capital Defender Office (and is the daughter of Simpson Thacher
chairman Richard Beattie). Barry Berke of Kramer Levin represents Bear Stearns.
In happier Bear Stearns news, members of the investment bank's legal
department are beginning to find new places of employment. The Am Law Daily has
a
rundown on where some of the Bears have landed.
Alaska
Bribe Probe Pays Off for Williams & Connolly, Akin Gump
Alaska Senator
Ted Stevens and Representative Don Young went big when they chose attorneys to
represent them in a pair of wide-ranging federal corruption probes. Stevens,
whose lavish home was raided last year by investigators looking for evidence
that an oil service company had paid for renovations, hired Brendan Sullivan,
Jr., of Williams & Connolly. Young, who has been tied to the Jack Abramoff
scandal, has John Dowd of Akin Gump.
How much does help like that cost?
Therein lies a (short) tale. According to the Anchorage Daily News (via The Am
Law Daily), Young is paying his legal bills through a campaign account, which
means he has to report them monthly. So far, he's paid Akin Gump a little more
than $988,000. By contrast, Stevens' financial disclosure filings indicate that
he owes Williams & Connolly only $15,000-$50,000. But don't assume that
Brendan Sullivan is either much cheaper or much more efficient than John Dowd:
Stevens isn't using campaign funds, so he didn't have to disclose what he's
already paid Williams & Connolly, only what he still owes. The Am Law Daily
has a full
explanation of the legal troubles (and legal fees) of the Alaska delegation.
ON
TRIAL
Roll
Tide: Opening Arguments Expected Today In Alabama's Suit Against Novartis and
GlaxoSmithKline
By now the
pharmaceutical industry knows the name of Alabama Attorney General Troy King.
The ambitious young Republican has sued more than 70 drug companies for
allegedly overcharging the state's Medicaid system--and has already won a $215
million jury verdict against AstraZeneca Pharmaceuticals in Montgomery Circuit
Court. (Last week, AstraZeneca's lawyer, Kimberly Harris of Davis Polk, asked
the judge to throw out the verdict against the drug maker, arguing that the
state had not proved its case and that the $175 million punitive damages award
was more than allowed by law.) Today, the state is expected to offer opening
arguments in its case against Novartis and GlaxoSmithKline, which face the same
allegations--and the same Montgomery jury pool--as AstraZeneca. Novartis will
have Saul Morgenstern of Kaye Scholer and Harlan Prater of Lightfoot, Franklin
& White. Glaxo is relying on solo practitioner Don Jones and Chilton Varner
of King & Spalding.
AG King has high-powered help of his own,
though. He's adopted the popular paradigm of outsourcing state work to
plaintiffs counsel, hiring senior partner Jere Beasley of Beasley, Allen, the
firm that negotiated the national Vioxx class action settlement with Merck. Is
Beasley the heir to the mass tort throne now that Dickie Scruggs is on his way
to prison? An AP story makes the case.
SECURITIES
Scrushy
Deposed In Securities Fraud Case
Let's stay in
Alabama a little bit longer. The AP reports that beleaguered
former HeatlhSouth CEO Richard Scrushy was in Birmingham yesterday, answering
questions from HealthSouth shareholders who have sued him for fraud in a
securities class action. For Scrushy that meant a trip back to sweet home
Alabama from a federal prison in Texas where he's serving a seven-year sentence
for his role in a bribery scheme. (He was acquitted of criminal fraud charges
for the alleged fraud at HeathSouth in 2005.) Scrushy's lawyer, Jim Parkman,
said he
hoped the deposition would be wrapped up by today, though it's hard to
imagine that Scrushy is in a big hurry.
APPELLATE
Supreme
Court Leaves Corporate America Hanging
The Supreme
Court issued a couple of rulings (one in the area of tax and the other in
immigration) but they weren't the blockbusters Big Business is waiting for. The
justices won't return to the bench until next Thursday, which means that it will
be at least another week before there's a ruling in Exxon Shipping v. Baker, an
important punitive damages case that should resolve, at long last, payouts for
the Exxon Valdez oil spill.
Here's the
wrap-up on yesterday's rulings from Supreme Court maven Tony Mauro of Legal
Times.
Mauro also reports that the
Court agreed to review a case against former Attorney General John Ashcroft,
which seems destined to set critical precedent in the arena of personal
liability for government officials.
Chabad
Wins Appeal in Sacred Text Case Against Russia
The U.S. Court
of Appeals for the District of Columbia issued an opinion on Friday that allows
the umbrella organization for one of the largest Orthodox Jewish movements in
the world to pursue claims in a federal court against the Russian Federation in
an effort to recover allegedly stolen sacred texts. Read
the opinion in Chabad v. Russian Federation here.
The plaintiff in
the case, Agudas Chasidei Chabad of the United States, claims that during the
October Revolution of 1917, in violation of international law, Russia's
Bolshevik government stole part of Chabad's painstakingly assembled trove of
religious books, manuscripts, and documents. More of Chabad's sacred texts were
allegedly stolen from a Nazi-controlled castle in Poland in September 1945.
Chabad engaged in a 70-year battle to regain possession of its library and
archive, but the federal district court dismissed most of its claims on foreign
sovereign immunity grounds. On appeal the circuit court reinstated those claims.
Nathan Lewin of Lewin & Lewis argued for Chabad, which was also represented
by Bingham McCutchen partners Seth Gerber, Marshall Grossman, and David Salmons;
as well as Alyza D. Lewin of Lewin & Lewin and William Bradford Reynolds of
Howrey. Representing the Russian Federation were Squire Sanders attorneys James
Broderick, Jr. and Donald Bucklin.
CONSUMER
Time
Warner Cable Settlement Notice Sent
Five bucks, a
couple months of free cable, or two--count 'em: two!--free movies on demand.
Those are among the options that are available to class members in the proposed
settlement of a class action against Time Warner Cable for its alleged
unauthorized sale of subscribers' personal information. And
that's actually supposed to be an improvement for the class over an earlier
settlement rejected by New York federal district judge I. Leo Glasser,
according to a notice sent to potential class members (those who subscribed to
Time Warner between January 1994 and December 1998).
As is often the
case, the plaintiffs lawyers appear to be asking Judge Glasser to approve a deal
that's better for them than for class members. Time Warner Cable, represented by
Jonathan Their and David Montone of Cahill Gordon, has agreed to pay $5 million
to class counsel--a roster of firms that includes Hagens Berman Sobol Shapiro;
Cuneo Gilbert & LaDuca; Kirby McInerney and the Law Office of James
Beaulaurier. With that kind of dough, they can splurge on premium cable.
MASS
TORTS
Class
Notice Sent In $24 Million Pet Food Recall Settlement
And while
we're on the subject of fees for class action plaintiffs lawyers, let's look at
the $6 million in fees and reimbursements that the lawyers
in the tainted pet food settlement told potential class members they will
seek. (Their notice to class members said they'd ask for "no more than $6
million," which usually means no less, either.)
For a big-time mass tort,
$6 million doesn't sound like much, but it's actually a full 25 percent of the
total $24 million in the settlement fund, a bigger slice of the pie than the 10
or 15 percent that class actions lawyers typically take (though less, of course,
than the standard 33-to-40 percent contingency fee). The settlement received
preliminary approval from New Jersey Federal District Judge Noel Hillman last
month. The lawyers seeking to be fed at the pet food trough will include: Lisa
Rodriguez of Trujillo Rodriguez & Richards; Kenneth Wexler of Wexler
Toriseva Wallace; Sherrie Sherrie Savett of Berger & Montague; William Audet
of Audet & Partners; Scott Kamber of Kamber Edelson; Stuart Davidson of
Couglin Stoia Geller Rudman & Robbins; and Stuart Berman of Hagens Berman
Sobol Shapiro.
EMPLOYMENT
Objections
Made In Morgan Discrimination Case
The Recorder
reports that not
everybody likes the $16 million settlement between Morgan Stanley and
African-American retail brokers who alleged racial discrimination at the
bank. In February, San Francisco Federal District Judge Thelton Henderson
gave preliminary approval to the settlement, but after a hearing yesterday, the
deal appears in doubt. Linda Friedman, an attorney who represents 30 brokers,
claimed that class counsel--Altshuler Berzon and Lieff Cabraser--negotiated a
deal with Morgan's lawyers from Morgan, Lewis before finding a lead plaintiff or
consulting class members. The "lawyer-driven" settlement, Friedman claimed, has
led to the deal's inadequate diversity measures and a proposed diversity
monitor--Wilson Sonsini Goodrich & Rosati partner Fred Alvarez--who would
lack real power.
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