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November 6, 2008 9:00 AM

The Am Law Litigation Daily: November 6, 2008

Posted by Ed Shanahan

Edited by Andrew Longstreth

REGULATORY
Time for Dems to Dust Off Their Resumes--the Obama Administration Is Now Hiring

The president-elect has reportedly picked former Clintonite Rahm Emanuel to be his chief of staff. And we're betting on key Obama campaign advisers Greg Craig of Williams & Connolly and Eric Holder of Covington & Burling to end up with coveted posts in the eventual administration, assuming they want to leave their firms.

But who's going to be an Obama FCC commissioner or FTC chairman? Solicitor general? SEC chairman? Legal Times reports that in Washington, where lawyers' careers can be made or broken with appointments like these, the guessing games have already begun.

It's hard to believe that names have already surfaced for the job of FDA chief counsel, but apparently they have. Sheldon Bradshaw, the Hunton & Williams partner who held the job in the second half of the Bush administration, told Legal Times that Scott Lassman at Wilmer Cutler Pickering Hale and Dorr was a possible pick. "That was very nice of him to say," Lassman said when Legal Times called to convey the news. "I think it'd be a very fun job, very challenging, but no one's given me a call."

For the SEC, a string of names made the Legal Times list: John Olson at Gibson, Dunn & Crutcher, New Jersey governor Jon Corzine, former acting chair of the SEC Mary Schapiro, and, atop everyone's list, Columbia Law School professor Harvey Goldschmid (even though, Legal Times notes, Goldschmid gave only $2,300 to the Obama campaign). For solicitor general, Legal Times says that a number of women have been mentioned, which would be a first. Among the names are Quinn Emanuel Urquhart Oliver & Hedges partner Kathleen Sullivan and Morrison & Foerster partner Beth Brinkmann.

If your taste runs more to black robes, there are still plenty of open federal judgeships that will not be filled until President Obama takes office. Howard Bashman of How Appealing pointed us to the current vacancies, as well as judgeships that will soon be open. Time to make sure your U.S. senators know your name!

WHITE-COLLAR
Federal Prosecutors: Meet Jonathan Polkes

Given all the noise coming from the government about its criminal investigations of companies that played a role in the credit crisis, we're a little surprised we haven't seen more indictments. We've heard about how prosecutors are beefing up their white-collar units and setting aside old turf wars to target bad guys. But to date, the government has come up with only one major case: the June 19 indictments in the Eastern District of New York against former Bear Stearns fund managers Ralph Cioffi and Matthew Tannin.

If more are to come, Weil, Gotshal & Manges partner Jonathan Polkes will likely be near the action. Polkes is representing not one, not two, but three companies that have drawn scrutiny from the Justice Department: Lehman Brothers, Washington Mutual, and American International Group. When we called to ask him how he scored these plum assignments, Polkes confirmed his representation of the companies but declined to comment further.

Polkes, a former federal prosecutor in Brooklyn, came to Weil three-and-a-half years ago from Cadwalader, Wickersham & Taft. He now coheads Weil's investigations and criminal defense group. All good things to know if you're looking for a referral.

APPELLATE
Maryland Appeals Court Orders Breakaway Church to Surrender $40 Million in Real Estate Assets

When dogma disputes create turmoil, big churches can be big business for litigators. Just ask any number of Am Law 100 firms that have represented them in disputes with their former congregations. In February, for instance, The American Lawyer reported on a major battle between the Episcopal Church and 11 breakaway congregations. With millions of dollars of real estate assets at stake, the rival churches laid out the money to hire firms like Winston & Strawn, Goodwin Procter, and Troutman Sanders.

For ten years, a similar dispute has embroiled the African Methodist Episcopal Zion Church, represented by Carr Maloney, and a breakaway, 250,000-member megachurch called From the Heart Church Ministries, which is represented by Arnold & Porter. In 2006 a Maryland circuit court judge ordered From the Heart to return almost $40 million of property to African Methodist. Last week, the Maryland Court of Special Appeals affirmed the lower court's ruling.

Before it broke from the AME Zion Church in 1999, From the Heart Church Ministries was called Full Gospel AME Zion Church. When it decided to break ranks with the mother church, From the Heart sued to keep its property, including three sanctuaries, houses, and a large tract of land. The AME Zion countersued, and the two churches have been in litigation ever since. In ruling for AME Zion, the Maryland appellate judges pointed to the once-close affiliation between the old church and From the Heart's founder, Reverend John Cherry. "From the Heart used 'AME Zion' in its name, followed the customs and polity of the denomination, and accepted the pastorate of ministers appointed by the bishop of AME Zion," the judges wrote.

Thomas McCally of Carr Maloney, who represents the AME Zion Church, told us Maryland's decision confirms a "church's right to govern itself as it chooses by its own polity and practice."

The Washington Post reported that that although the appeals court ordered From the Heart to turn over its real estate assets, it also affirmed the lower court ruling that the breakaway church could retain personal assets, like its Learjet. (Like we said, big churches are big business.) We called Philip Horton of Arnold & Porter, who represents From the Heart, but didn't hear back.

WHITE-COLLAR
Stevens Juror Speaks to Legal Times, Compares Brendan Sullivan to Evil Simpsons Character

Alaska senator Ted Stevens may have been able to sway Alaska's voters--who appear to have reelected the Senate's longest-serving Republican less than two weeks after a federal jury in Washington, D.C., found him guilty of public corruption--but he flopped on the witness stand, according to Legal Times's interview with a juror from the Stevens trial.

Colleen Walsh, a.k.a. Juror No. 11, discussed the jury's deliberations, her assessment of the lawyers for both sides, and Stevens's performance on the stand. The juror suggested--as many trial observers had guessed--that Stevens didn't help himself by testifying. Walsh told the Legal Times that the senator was a sympathetic character at the defense table, where he appeared "kind of hunched over and small." It was a different story when he took the stand. Jurors were put off by his angry outbursts.

Said Walsh: "We were all like, 'Why is he testifying?'"

And what about the well-publicized discovery gaffes made by prosecutors? Walsh told Legal Times that jurors discussed the government's mistakes only briefly, and they played no role in their decision. "We were told to focus on the facts," Walsh said.

Another fun fact that Walsh shared with Legal Times: She gave nicknames to some of the key players. Stevens was "Salmmy," for reasons Walsh hasn't yet disclosed on her blog (where the full list of nicknames appears). Lead prosecutor Brenda Morris was "Rosie Perez," the motor-mouthed actress known for playing feisty women. Stevens's lead lawyer, Williams & Connolly partner Brendan Sullivan, Jr., was "Mr. Burns," a powerful but nasty character on The Simpsons. (Sullivan probably won't appreciate the comparison.) "It's soo true," Walsh wrote. "I was always waiting for him to say, 'Release the hounds!'"

SECURITIES
Shareholders Sue AIG Board over Government Bailout

Talk about kicking a company when it's down. Bloomberg reports that shareholders of American International Group have filed a suit against the company's board in Delaware Chancery Court. The shareholders allege that AIG violated their rights when it gave up a majority stake to the government in exchange for its billions of dollars in bailout money.

"All AIG shareholders stand to be disenfranchised and diluted out of existence as a result of the conduct of AIG's board of directors," the complaint alleges.

We've seen similar suits filed against boards of companies that have come under pressure to accept government bailouts. All of them leave us wondering how plaintiffs will answer the obvious question: What choice did those boards have? After all, the shareholders of AIG wouldn't fare very well in Chapter 11, either. We called the plaintiffs lawyer who filed the AIG suit, Andre Bouchard of Bouchard, Margules & Friedlander in Wilmington, but he declined to comment. AIG, according to Bloomberg, hasn't yet seen the suit.

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