The Am Law Litigation Daily: November 19, 2008

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November 19, 2008 9:00 AM

The Am Law Litigation Daily: November 19, 2008

Posted by Dimitra Kessenides

Edited by Andrew Longstreth and Alison Frankel

REGULATORY
Newsweek Source: Obama to Tap Holder as AG
We're not the kind of people to say we told you so, but this spring (before there was a Litigation Daily) the Litigation Daily wrote a cover story for the June issue of The American Lawyer. The cover featured a close-up photo of Eric Holder and a question: Is He the Next AG? Newsweek reported yesterday that the answer appears to be, "Yes, he is." The magazine's Michael Isikoff cites two legal sources close to the presidential transition team who say that President-Elect Obama has chosen the 57-year-old Covington & Burling partner to become the first African American AG.

It's not a done deal. Holder still has to be formally vetted, but, according to Newsweek, Obama has offered Holder the job and Holder has accepted. The Associated Press reported late yesterday afternoon that Obama aides are already making the rounds at the Senate, asking Republican senators whether Holder--who served as deputy attorney general in the Clinton Justice Department--will win confirmation.

Holder was an early Obama supporter, despite his ties to the Clinton administration. The two met soon after Obama was elected to the U.S. Senate in 2004, at a dinner party hosted by Ann Walker Marchant, a niece of Washington, D.C., insider Vernon Jordan. Holder was immediately impressed. "I think we share a world view," he told The American Lawyer. "[Obama] is not defined by his race. He's proud of it, cognizant of the pernicious effect that race has had in our history, but not defined by it."

During the campaign, Holder held a variety of roles, providing strategic advice, acting as a surrogate, and helping with fund-raising. He also led Obama's vice presidential search committee, along with Caroline Kennedy.

At confirmation hearings for the AG post, Holder will probably have to relive an episode that previously brought him before the Senate Judiciary Committee: the Marc Rich pardon. During the last hours of the Clinton administration, Holder signed off on the pardon of the fugitive financier, whose ex-wife turned out to be a major Clinton donor. Critics charged that Holder should have consulted with the line prosecutors on Rich's case and questioned Holder's dealings with Rich's lawyer, onetime White House counsel Jack Quinn. Holder had told Quinn, then a partner at Arnold & Porter and a close friend of Vice President Al Gore, that he wanted to become attorney general if Gore was elected president. "It is without doubt the darkest moment in Eric Holder's professional life," Holder's former chief of staff Kevin Olsen told The American Lawyer. (Here's a transcript of the Judiciary Committee's hearing on the Rich pardon, including Holder's testimony.)

If Holder is confirmed as attorney general, he'll also have to spend time away from his wife and young children, which was a strain on his family when he served as Janet Reno's deputy. During the campaign Holder was repeatedly asked about the possibility of becoming AG. He usually downplayed it, emphasizing his family commitments. "I got to tell you, that's going to be up to the president," he told one radio talk show host. "And I will not be the president. I will also tell you that I'm married to a wonderful woman who is a doctor. Her name is Sharon Malone. And Sharon Malone tells me that I'm not going anywhere except back to my law firm. So I think President Obama is going to have to talk to Sharon, and she's a pretty formidable person."

But deep down, Holder wanted the job. And not even his wife would stand in his way. Over the summer, The American Lawyer called Malone and asked her point-blank if she would allow Obama to recruit her husband. "Of course," she said.

EMPLOYMENT
Ex-IBM Employee Responds to Noncompete Suit
We've mentioned more than once that these are boom times for employment litigation. For more evidence, check out a story CNET ran yesterday on a talent war between IBM and Apple. In October, IBM sued Mark Papermaster, a onetime employee who left Big Blue to run Apple's iPhone group. IBM claims that Papermaster violated a noncompete agreement he signed in 2006.

IBM isn't playing around. It has brought in Cravath, Swaine & Moore presiding partner Evan Chesler and partner Stephen Madsen to litigate the case. IBM's complaint, filed in the Southern District of New York, alleges that when Papermaster became part of IBM's Integration and Values Team in 2006, he gained access to "confidential information concerning the company's strategic plans, marketing plans, and long-term business opportunities [that] is carefully guarded and is not made accessible to the public or IBM's competitors, and is disclosed to IBM employees on a strict 'need to know' basis." IBM claims that when Papermaster signed the noncompete agreement, he agreed not to work for a competitor for one year after leaving IBM.

Papermaster, who is represented by Latham & Watkins partners Blair Connelly and Timothy Hardwicke, filed his response and counterclaim last week. His lawyers claim that IBM and Apple are not significant competitors and that the noncompete agreement is "unreasonably broad."

The case could turn on what factors Judge Kenneth Karas decides to consider when determining the potential harm to IBM. "What always happens in these cases is that every company in the world thinks that everything it does is a trade secret," Baker Hostetler partner John Siegal told CNET. "Under the scrutiny of a judge, that gets winnowed down to real specifics, such as whether the guy was engaged in activities and has knowledge of things that would give Apple an advantage in unfair competition."

Yesterday, Judge Karas set a trial date for the case in early February.

IP
Samsung Sued Four Times in One Day
A prominent New York litigator reminded us at lunch yesterday that IP litigation tends to increase during tough times. When profits are hard to come by, he explained, companies suddenly see more clearly than ever the value in their technology--and try even harder to extract revenue from it. We don't know if that's the explanation for the four patent infringement suits filed against Samsung on Monday, but we suspect the onslaught is more than just bad luck.

In one of the new suits, Spansion is claming that Samsung has infringed six of its patents for "flash memory" chips, which are used in consumer technology products including computers, cell phones, and cameras. That suit, filed in Delaware federal court by King & Spalding partner Ethan Horwitz, seeks to recover treble damages on $30 billion in revenues for allegedly infringing products. Spansion is also suing Samsung at the International Trade Commission, where it's seeking to block importation of those products.

Meanwhile, Bill Lee of Wilmer Cutler Pickering Hale and Dorr, not one to be left out of a good old-fashioned IP fight, filed a patent infringement suit against Samsung in Rochester, New York, federal district court on behalf of Eastman Kodak. Kodak alleges misappropriation of its camera-phone technology. Like Spansion, Kodak also filed a second suit at the ITC, seeking to block Samsung imports.

It's unclear who will represent Samsung in either the Spansion or Kodak cases. The Am Law Daily reports that Sheppard Mullin Richter & Hampton partner James McGinnis, who has frequently represented the company in the past, won't be handling either matter. Another suspect for the assignment, Weil, Gotshal & Manges partner Matthew Powers, did not respond to The Am Law Daily for comment.

The Monday massacre continues Samsung's run of bad IP news. On October 31 the company lost a $59.3 million verdict in an infringement case brought by Pioneer in federal district court in East Texas.

MASS TORTS
Sixth Circuit Ducks Fight over $625 Million in Remaining Tobacco Fees
It's not quite federal bailout money, but $625 million is still a large chunk of change. That's what is left over from the great tobacco settlement of the late 1990s between the states and the cigarette makers, and The National Law Journal is reporting that it will be the subject of lawyers' squabbling for the foreseeable future.

Last week the Sixth Circuit punted on the question of what share a group of five Florida plaintiffs firms deserve from that big pot of money. Back when the original settlement was struck, those firms made a deal with investors, essentially selling their future fees at a reduced price to the investors in order to get their money up front. The question now is whether the same terms of sale apply to the leftover funds. The appellate panel declined to decide the question and sent the case back to the district court for reconsideration.

John Devault III of Bedel, Dittmar, DeVault, Pillans & Coxe, who represented the five Florida firms, Told the National Law Journal he was "extremely pleased" with the ruling. His clients are Terrell Hogan; Fonvielle Lewis Foote & Messer; The Law Office of W.C. Gentry; The Maher Law Firm; and Nance, Cacciatore, Hamilton, Barger, Nance & Cacciatore.

Thomas Hill of Kegler, Brown, Hill & Ritter represented the investors who bought the Florida firms' fees, and Deutsche Bank, the trustee of the pledged fees. "I'm confident the trial court will find that the contract language includes sale by Florida counsel of the entirety of the fee award, including the supplements," Hill told The National Law Journal.

FIRMS
He'll Get the Best of Both Worlds: Mark Lanier's Christmas Party Musical Guest Is Miley Cyrus
This time of year, The American Lawyer's offices are always abuzz with anticipation. What will the invitation to Mark Lanier's annual Christmas extravaganza look like? (The bar was especially high this year; we so treasure the snow globe that came with last year's invite that we brought it with us downtown when our offices moved.) And, of course, there's the even more important question of who will entertain the famed Houston trial lawyer and the small army of guests he invites to enjoy barbecue and carnival games in his vast backyard. In the past, Lanier has hosted Bill Cosby, Al Green, Diana Ross, Reba McEntire, and Dolly Parton. Over the summer, he told us that Bono and Céline Dion were possibilities for this year. That would have been an easy choice, at least for us.

Yesterday the suspense was finally over. We received our invitation--alas, no snowglobe--and opened it to find a pop-up image of Miley Cyrus, a.k.a. "Hannah Montana" of Disney Channel fame. (Here's a photo of Lanier's invitation, courtesy of Texas Lawyer.) As Lanier told us over the summer, this year's party will also strive to help children in Guatemala. He and his wife, Becky, are asking party attendees to bring school supplies to send to the country, whose vice president is buddies with Lanier. We have to confess we were a bit disappointed that Bono won't be following in the footsteps of Supreme Court justice Antonin Scalia, but we know a 14-year-old girl who's pushing hard for us to book plane tickets to Houston to see Miley's show. We just might!

Life is good for Lanier right now. We told you last week about the new case he's filed against Nintendo (and about his hunting trip with Scalia). During that conversation he also mentioned that his beloved Texas Tech football team is undefeated and ranked number two in the country. And it just so happens that Tech's eccentric coach, Pepperdine School of Law graduate Mike Leach, is one of Lanier's pals.

"I told him if he goes undefeated, I'll let him do one of my closing arguments," Lanier told us. Go Red Raiders!

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