January 6, 2009 9:00 AM

The Am Law Litigation Daily: January 6, 2009

Posted by Dimitra Kessenides

Edited by Andrew Longstreth

EDITOR'S NOTE
Check Out The Am Law Litigation Daily Online
The Litigation Daily is throwing a house-warming party. Since we launched in June, we've come to you via e-mail, but we haven't had a home of our own on the Web. That's no longer the case. We'll still be sending our newsletter to your inbox every morning, but we now also have our own shiny new Web site. At the Litigation Daily Online, you'll find the morning newsletter, plus breaking litigation news that we'll post throughout the day. And, as they say in the TV ads, that's not all! We've also archived all our previous Litigation Daily items, which we've sorted by practice area. We're really excited about the site and hope you'll visit us soon.

APPELLATE
Obama's SG Pick Is Hailed by the Supreme Court Bar
Harvard Law School dean Elena Kagan--President-elect Barack Obama's choice for solicitor general--is drawing rave reviews from the not-always-easy-to-please veterans of the appellate bar, according to Tony Mauro of Legal Times. "Absolutely superb--I have unbounded admiration for her," Laurence Tribe told Mauro. "She transformed an almost dysfunctional institution into the best law school in the world." (Tribe happens to be a professor at said law school.)

Former SG Seth Waxman of Wilmer Cutler Pickering Hale and Dorr is also a fan. "I'm terrifically excited that President-elect Obama has chosen Elena--a good friend and former colleague," Waxman said. "The country is long overdue for a woman to serve in that important position, and Elena has all the skill to be a marvelous SG."

In addition to her tenure at Harvard Law School, where she's been the dean since 2003, Kagan's bio includes stints at Williams & Connolly, University of Chicago Law School, and the Clinton White House, where she held a succession of jobs including deputy director of the Domestic Policy Council.

Mauro notes that Kagan has never argued before the Supreme Court, but her colleagues say that hole in her resume won't hurt her. "She certainly has a lot of experience persuading some independent thinkers," Patricia Millett, who served in the SG's office until 2007 before joining Akin Gump Strauss Hauer & Feld, told Mauro. "Many solicitors general have come to that position without experience, and it wasn't held against them."

Obama also named several other prominent litigators to Justice Department posts: David Ogden of Wilmer Cutler Pickering Hale and Dorr as deputy attorney general; Tom Perrelli of Jenner & Block as associate attorney general; and Dawn Johnsen of Indiana University School of Law as assistant attorney general for the Office of Legal Counsel.

SECURITIES / APPELLATE
New York Appellate Court Dismisses Hedge Fund Suit Against JPMorgan
The holiday season was not a happy one for hedge funds in litigation. You'll recall that on December 1, the Eighth Circuit ruled against a group of hedge funds seeking accelerated payment on bonds issued by UnitedHealth Group. Then on December 23, a panel from the New York Appellate Division, First Department, dismissed a case against JPMorgan Chase, which had been sued by the hedge fund Racepoint Partners for its role as the indenture trustee of Enron notes.

Enron? Yep, apparently there's still Enron litigation kicking around out there, six years after the Big E went belly up. Racepoint Partners and other vulturous investors bought up Enron notes after the company filed for bankruptcy, and then brought breach of contract and fiduciary duty claims against JPMorgan. In November 2007, the New York state trial court denied JPMorgan's motion to dismiss. But the appeals court, in reversing the lower court's ruling, disagreed with Racepoint's interpretation of a section of the indenture agreement, which required Enron to file its SEC reports with JPMorgan. "Contrary to the plaintiffs' contentions," the appellate panel concluded, "[the agreement] did not require Enron to file with the indenture trustee financial statements the contents of which comply with federal securities law."

JPMorgan is represented by Simpson, Thacher & Bartlett attorneys Tom Rice, David Woll, Alan Turner, Janet Gochman, Chris Kelly, Amanda Hector, Devin Ryan, and Brittania Stewart. Here's their winning brief.

Bartlit Beck Herman Palenchar & Scott, The American Lawyer's Litigation Boutique of the Year, represents Racepoint. (Even the best don't win them all.) We e-mailed Bartlit partner J.B. Heaton but didn't hear back.

REGULATORY
Are SEC Lawyers a Bunch of Patsies?
By now you've probably heard about the searing Sunday New York Times op-ed by Michael Lewis and David Einhorn, in which the best-selling writer and the hedge fund president apportion blame for the epic collapse on Wall Street.

"Our financial catastrophe, like Bernard Madoff's pyramid scheme, required all sorts of important, plugged-in people to sacrifice our collective long-term interests for short-term gain," they wrote. And among the important people they hold accountable are the lawyers in the enforcement division at the SEC, whom they accuse of currying favor with the Wall Street companies they eventually want to work for. "It's not hard to see why the SEC behaves as it does," Lewis and Einhorn asserted. "If you work for the enforcement division of the SEC, you probably know in the back of your mind, and in the front too, that if you maintain good relations with Wall Street you might soon be paid huge sums of money to be employed by it."

That's a pretty big dis. But is true? In a retort to the op-ed in Compliance Week, Bruce Carton says no way. Carton's not exactly a disinterested observer: He's a veteran of the enforcement division that Lewis and Einhorn criticized. But he argues that bringing high-profile cases--not taking a dive for potential employers--is the best way to jump start a career. "If you look at the press releases for people hired out of the SEC to the private sector, they inevitably state something like, 'Mr. Jones played a significant role in the case against WorldCom,'" Carton wrote. "They do not say, 'Mr. Jones successfully did nothing in his five years at the SEC and did not roil markets.'"

And for another perspective on how Madoff's shenanigans got past the SEC, check out Allan Sloan's take at Fortune.com. According to Sloan, regulators routinely miss gargantuan frauds because they're not looking for them. "You're likely to get caught if you run a few inches outside the baseline, because regulators are set up to catch that," wrote Sloan. "But run so far that you're playing on a whole different ball field? You can get away with that if you're enough of a financiopath, and your luck holds."

FIRMS
Milberg Seeks Redemption in Madoff Litigation
No doubt the Madoff meltdown has been a reputation-wrecker for a lot of people. But for the Milberg firm, the scandal might be just the opposite: a chance to rehabilitate its image. Crain's New York reports that Milberg, which is teaming up with Seeger Weiss (where Mel Weiss's son, Stephen, is a name partner) in Madoff litigation, has signed up 100 Madoff investors. That's the largest group assembled by any firm so far, with losses of $1.5-2 billion.

Although Milberg has shrunk by 30 percent, from about 150 lawyers to 100, the firm is still one of the biggest plaintiffs shops around. According to Crain's, Milberg fields an impressive investigative team, consisting of 12 former FBI investigators and forensic accountants. Steven Bursey, who heads the group, told Crain's he is pursuing international leads into Bernard Madoff's "inner circle," but declined to reveal anything else.

In other Madoff news, at a bail hearing yesterday prosecutors sought to put the man behind bars, arguing that Madoff violated an asset-freeze agreement when he disposed of "very valuable jewelry" after his arrest. According to Bloomberg, Madoff's lawyer, Ira Sorkin of Dickstein Shapiro, said the items--which include cuff links, watches, a pin, and a pair of mittens--were innocently sent to relatives because they were heirlooms. "There was no attempt by Mr. Madoff or Mrs. Madoff to violate the terms of bail," Sorkin told Manhattan federal magistrate judge Ronald Ellis.

Judge Ellis declined to rule on the prosecutors' request and instead asked for briefing from each side.

SPORTS
Texas Tech Coach: How Football Is Like Litigation
The last time we spoke to trial lawyer Mark Lanier, he was boasting about the Texas Tech football team, which was riding high after its defeat of then top-ranked University of Texas. Lanier told us that he had promised the Red Raiders' coach, Pepperdine Law School graduate Mike Leach, that Leach could handle one of Lanier's closing arguments if Texas Tech finished the season undefeated (last item).

Well, the University of Oklahoma put an end to that pipe dream (go Sooners!), and the Red Raiders went on to lose two of their last three games. But don't think that Leach's legal training has been wasted. Leach told Texas Lawyer last month that coaching football is a lot like being a lawyer. "I think I use my law degree every day, and I really do, because football is a lot like preparing for trial," said Leach. "In both, you never have enough time. There is always more that you could feature, more that you could research. You have to pick out key things, and the key things that are going to feature [for] your side. Preparing for a game is very similar to trial planning. You review videos instead of books and then at the end of the week, instead of a trial, there is a game."

Before he got into coaching, Leach envisioned a career as a product liability lawyer, or so he told 60 Minutes reporter Scott Pelfrey, who profiled him Sunday. Maybe if he ever gets tired of stalking the sidelines, Lanier can bring him aboard.

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