October 23, 2008 9:20 AM

The Am Law Litigation Daily: Oct. 23, 2008

Posted by Joe Phalon

Manatt Wins $370 Million Verdict for ICO Global Against Boeing

Barry Lee and Robert Zeavin of Manatt, Phelps & Phillips had to wait for three long weeks as a Los Angeles state court jury deliberated the question of whether Boeing had violated its contract to build and launch 12 satellites for their client, ICO Global Communications.

The phone finally rang on Monday, and the news was good indeed: The jury found for ICO, ordering Boeing's satellite subsidiary to pay $370.6 million to the Virginia company that cell phone pioneer Craig McCaw saved from collapse in 2000. When the Am Law Daily caught up with Zeavin on Wednesday he was still basking in the win. "I've never had a jury out this long," he said, laughing. "Ten days was my record. Waiting 21 days felt like the the Bataan Death Match."

The verdict does not include punitive damages, which will be the subject of a hearing next Tuesday, the Manatt lawyers said. Judge Emilie Elias of Los Angeles County Superior Court also has yet to determine how much interest to tack on to the $370.6 verdict, which is already the third-largest jury award of 2008, according to Bloomberg.

In a statement, Boeing, which was represented at trial by Brad Brian of Munger, Tolles & Olson, said the company has "significant grounds for appeal" because of "fundamental errors" in jury instructions and in the judge's interaction with the jury deliberations. Brian did not immediately respond to messages seeking comment.

The contract at issue was signed by ICO and Hughes Electronics in the mid-1990s. Boeing assumed the contract after it purchased Hughes in 2000, but only built and launched two of the 12 satellites. After ICO terminated the deal in 2004, Boeing sought a declaratory judgment, claiming that ICO's termination released Boeing from any additional responsibilities under the contract. ICO countersued, claiming it nixed the deal because Boeing was trying to drive ICO out of the satellite business by demanding an additional $400 million to finish the 10 satellites ICO was owed under the Hughes contract.

--Zach Lowe

NYU Law Prof Arthur Miller Joins Milberg

The beleaguered plaintiffs firm Milberg announced yesterday that renowned law professor Arthur Miller has joined the firm as special counsel. Miller will head Milberg's appellate practice and maintain his post as professor at New York University School of Law.

We spoke with the irrepressible 74-year old yesterday. Here's some of what he told us.

Litigation Daily: How and why Milberg?

Miller: Many, many years ago I got to know Mel Weiss. First he was a panelist of mine on those interactive seminars I do for PBS, etc. And then he called me in on a case for an appeal. We just got to be very good friends. And then I was at Harvard and he [said] whenever I'm in New York and need an office, he said come here. And over time, the friendship expanded. And the friendship with the people around here expanded. I became part of an extended family, you could say.

I have always deeply believed in the importance of using litigation on behalf of individuals and groups who would otherwise not be represented. And that's why the class action is a particularly interesting procedural vehicle for me. Especially since I teach procedure. So I've really enjoyed being able to exist in the real world a little bit. And it helps my scholarship and it helps my teaching.

LD: And why now?

Miller: I guess the tipping point, in that sense, has been this economic catastrophe that we're going through. And having some sense that a lot of misconduct has been going on in the financial community for some time. And the belief that if I really do care about what the Yalies would call distributive justice, [Milberg] is a good place to be--to try and see if there's some way to rectify [corporate wrongdoing] through compensation or through procedural reforms and oversight and new forms of regulation, this a firm on the cutting edge of that.

LD: Will you be doing mainly securities class action work?

Miller: I don't know. I think it's time, and I think a number of people around here think it's time--and obviously I don't speak for them---to broaden the base. Right now securities litigation is a tough sale because of the PSLRA and some of the judicial constructions of the PSLRA. I think it's a weird, weird world in which we live--in which people point to the Tellabs decision, which I argued, as the only plaintiffs victory in half a dozen years. And I view it as sort of a stalemate.

So securities litigation, I suspect there'll be a lot of it. Whether the courts will loosen up, whether Congress might consider some lightening of the pleading burden, I don't know. But I would sure as hell like to be in the mix.

LD: Do you feel comfortable with the firm's financial footing?

Miller: What do I know? I'm a kid with my nose pressed against the glass. What I sense is that this gang can exist for two to three years--maybe longer--on what's coming, what already exists. They do seem to have already begun a revival. They do seem to have some new opportunities. If I gauge it right, there are people here who, like flowers in the spring, are coming back to light now that the past is the past.

LD: Did the criminal probe into the firm play into your decision-making?

Miller: Of course it played into my mind. I'm too dumb to be scared off. As I said, the past is the past. And forgive me, I'm naïve I suppose, but I don't believe in guilt by association. As a couple of courts have recognized, there is no one here affiliated with that past.

LD: Best of luck.

Miller: I hope we can do some good. I know there's money on the table for some people, but I'm pissed off. I'm pissed off at how we've been dragged down economically.

Let the Disclosure Begin! Quinn and Milbank File Applications in Lehman Bankruptcy

Given the state of the economy, the firms that win plum assignments in the Lehman bankruptcy are in an enviable position, with a nice, steady source of revenue. Bloomberg ran a story yesterday speculating that professional fees in the bankruptcy could reach $1.4 billion, topping the $757 million paid to law firms, accountants, and other experts in the Enron Chapter 11.

But to win a share of those fees, law firms have to pay a price, albeit a small one, in the form of public exposure of things they'd rather keep quiet, like client lists and billing rates. On Tuesday, we got a double dose of disclosure from the firms representing the Lehman creditors. Milbank, Tweed, Hadley & McCoy filed its formal application to represent the Official Committee of Unsecured Creditors and Quinn Emanuel Urquhart Oliver & Hedges applied to serve as special counsel to the committee in the event Milbank has a conflict. Milbank and Quinn disclosed, among other things, all of their connections to Lehman. They also stated their hourly rates: Top partners at both firms charge $950 an hour, which seems to be the going rate these days for star partners.

For an example of just how thorough these disclosures can be, check out Milbank's statement on its connection to Lehman and interested parties. "Two Milbank associates' siblings are associates at [Lehman's bankruptcy counsel Weil Gotshal & Manges]; a Milbank associate's husband is an associate at Weil; [and] a Milbank associate's domestic partner is an associate at Weil." (Of course, after the John Gellene criminal case, Milbank knows all too well the importance of thorough disclosure.)

Interestingly, Milbank notes that it had represented Lehman "on various matters from time to time" in the past. But on Sunday, September 14, 2008--the day before Lehman filed for bankruptcy--"a senior partner of the firm spoke to a senior in-house counsel at Lehman and requested and received a waiver for Milbank to represent creditors of Lehman," according to Milbank's filing.

We breezed through Quinn's application, too. Nothing too revealing there, although we did find one passage in which the firm disclosed that AIG, Morgan Stanley, IBM, Northrup Grumman, Occidental Oil and Gas, and Elliott Associates each represented more than one percent of Quinn Emanuel's revenues in 2006, 2007, or 2008.

Miami Federal Judge to Hear Arguments in Human Rights Case Against Former Bolivian President and Defense Minister

It's not every day that the onetime head of state and defense minister of a foreign country appear in American courts to answer for actions they took in their home country. But on Friday, Miami federal district court judge Adalberto Jordan will hear oral arguments to dismiss a case against Bolivia's former highest-ranking government officials.

Former president Gonzalo Sanchez de Lozada and former defense minister Jose Carlos Sanchez Berzain, who both now reside in the U.S., were sued last year by families of victims killed amidst 2003 protests in Bolivia. The plaintiffs allege that the two men orchestrated the use of deadly military force that left 67 dead and 400 injured.

Representing the families at Friday's arguments will be lawyers from the Harvard Law School International Human Rights Clinic, the Center for Constitutional Rights, and Akin Gump Strauss Hauer & Feld. Yesterday we caught up with Akin Gump's Steven Schulman, who was on his way to the airport to catch a flight to Miami.

To our surprise, Schulman downplayed the larger significance of the case (though he noted that it's very important to the plaintiffs). He called it a "bread and butter alien tort statute" case. "This will not result in any expansion of the alien tort statute," said Schulman, who heads Akin Gump's pro bono practice. In fact, he said, the plaintiffs were forced to pursue justice in the U.S. when Sanchez de Lozada and Sanchez Berzain moved to this country. "[The defendants] refuse to return to Bolivia to face any trials in Bolivia," Schulman said.

Both former officials, who have denied the allegations, are represented by Williams & Connolly attorneys Howard Gutman and Gregory Craig (who happens to be a foreign policy adviser to Senator Barack Obama). Gutman declined to comment when we called him, but he's expected to argue that an act of state by foreign officials doesn't belong in a U.S. court and that plaintiffs have failed to state a proper cause of action under the Alien Tort Claims Act.

Fresh Off Its Big Win For Wesley Snipes, A Midwest Boutique Heads to Hollywood

When a jury acquitted actor Wesley Snipes in February, The New York Times said it was "the fourth major case in which the Justice Department failed to win convictions against prominent tax deniers." Turns out that three of those four defendants--including Snipes--were represented by a little known, iconoclastic, Milwaukee-based boutique called the Bernhoft Law firm.

Never heard of it? Neither had we. But as Portfolio reports in its November issue, the firm--led by Robert Barnes and Robert Bernhoft--is going Hollywood. Literally. Following the Snipes victory, the Bernhoft Law Firm has set up a two-room office on the Pacific Coast Highway, with the intention of attracting entertainment-executive clients. The two Bobs believe they have the right stuff. To date, their firm has won an astonishing 50 percent of its tax felony cases. Barnes told Portfolio that within 18 months, he expects Hollywood clients to account for half the firm's business. Both he and Barnes believe Hollywood will be attracted to their mercenary/outsider approach.

Still, it's uphill challenge. The two Bobs will have to penetrate a town that thrives on personal relationships. So far, they're trying to do it with humor. One of their print ads reads, "Just because you're rich, doesn't mean you're guilty." During closing arguments at the Snipes trial, Bernhoft told the jury, ""Crazy ain't a crime," adding, "If it were, half of Hollywood would be in prison."

Portfolio reports that the Bernhoft Law Firm will soon have a chance to make a splash in its new hometown. The firm was recently hired to represent Girls Gone Wild creator Joe Francis, who has been indicted for felony tax evasion. The trial is set to take place in Los Angeles in spring 2009.

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