CA Court to Rule Over Gay Marriage Ban
Headline Legal News | 2009/03/04 17:38
The California Supreme Court may reveal Thursday whether it intends to uphold Proposition 8, and if so, whether an estimated 18,000 same-sex marriages will remain valid, during a high-stakes televised session that has sparked plans for demonstrations throughout the state.

By now, the court already has drafted a decision on the case, with an author and at least three other justices willing to sign it. Oral arguments sometimes result in changes to the draft, but rarely do they change the majority position. The ruling is due in 90 days.

Chief Justice Ronald M. George, who wrote the historic May 15, 2008, decision that gave same-sex couples the right to marry, will be the one to watch during the hearing because he is often in the majority and usually writes the rulings in the most controversial cases.

Most legal analysts expect that the court will garner enough votes to uphold existing marriages but not enough to overturn Proposition 8. The dissenters in May's 4-3 marriage ruling said the decision should be left to the voters.

One conservative constitutional scholar has said that the court could both affirm its historic May 15 ruling giving gays equality and uphold Proposition 8 by requiring the state to use a term other than "marriage" and apply it to all couples, gay and straight.

"The alternatives are for the court to accept Proposition 8 and authorize the people to rewrite the Constitution in a way that undermines a basic principle of equality," said Pepperdine law professor Douglas Kmiec. If the court overturns Proposition 8, "that is the short course toward impeachment."

The court is under intense pressure. Opponents of gay marriage have threatened to mount a campaign to boot justices who vote to overturn the initiative. The last time voters ousted state high court justices was in 1986, when then-Chief Justice Rose Bird and two colleagues lost a retention election.

On the other side, the Legislature has passed two resolutions opposing Proposition 8, and protests are being planned statewide to urge the court to throw out the measure.

Thousands are expected to descend Thursday on the San Francisco Civic Center to watch the hearing live on a giant outdoor screen, just steps from the courtroom where the justices will be prodding lawyers in a jammed courtroom.

"It is one of the most important cases in the history of the California Supreme Court," said Mark Rosenbaum, legal director of the ACLU of Southern California. "The core tenet of our constitutional democracy is that fundamental rights of historically disadvantaged minorities are not dependent on the whim of the majority."

The challenges to the initiative are based on novel legal theories. Gay rights lawyers argue that the measure was an illegal constitutional revision, rather than a more limited amendment. The court has struck down constitutional amendments passed by voters as impermissible revisions only twice in its history, and there are relatively few precedents on the subject.

"While no case forecloses the revision argument, there is no case that really supports it, and most of the cases mildly cut against it," said UC Davis law professor Vikram Amar.

Upholding existing same-sex marriages would be a lower hurdle for the court, Amar and other scholars said.

"There is enough ambiguity in Prop. 8 that the court could easily interpret the measure as not applying to existing marriages," Amar said. "That is a legally plausible interpretation, and it is so clearly the just interpretation that I think getting four votes for that seems easier."

State Atty. Gen. Jerry Brown's office will ask the court to uphold the marriages and strike down the initiative as an illegal repeal of an inalienable right without compelling justification. Brown's argument is even more novel than the revision challenge, which his office said had no merit.

The Proposition 8 case has attracted more friend-of-the-court briefs than the marriage dispute that led to last year's historic ruling -- the previous record-holder. Most of the outside groups that have weighed in have asked the court to overturn the initiative.

Pepperdine's Kmiec said replacing the word "marriage" with another term would both leave intact the court's May 15 ruling and deter a recall campaign that could damage the court as an institution. He said couples could still marry in their religious communities.

That would "restore a religious meaning to a word that is a religious word," he said. Kmiec, a Catholic, said he reluctantly voted for Proposition 8 "because of the instructions of my faith community" but felt "entirely unsatisfied" with the outcome.

"I am not sure Ron George wants to be remembered as the chief justice who denied the principle of fundamental equality," the law professor said. "It is not a legacy we should ask anyone to live with, and it is wholly unnecessary."

George, a moderate Republican, is considered a swing vote on the court and, until the marriage decision, was widely regarded as cautious. Scholars have said the marriage ruling would be pivotal to his legacy on the court.

"It is difficult to imagine, although obviously plausible, that the majority of justices who ruled in the marriage cases would so quickly endorse an undermining of at least a significant portion of their ruling," said Kate Kendell, executive director of the San Francisco-based National Center for Lesbian Rights.

Pepperdine law school Dean Kenneth Starr, hired by the Proposition 8 campaign, will urge the court to uphold the measure and declare that existing same-sex marriages are no longer valid. Benefits, such as inheritance, acquired by couples during their marriages would not be taken away, but couples would have to register as domestic partners to protect their future rights.

"The people ultimately decided," Starr wrote in his final brief in the case. "Under our system of constitutional government, that is the end of the matter."


US Demands 52,000 IDs from Swiss Banks
Headline Legal News | 2009/02/20 17:34
The United States filed for an injunction Thursday against Swiss bank USB AG, asking it to disclose the identities of the bank's nearly 52,000 American customers with Swiss accounts. The complaint claims that an estimated $14.8 billion in assets was hidden in these secret accounts as of the mid-2000s.
The United States says the Swiss bank marketed its services to wealthy U.S. citizens and helped set up dummy offshore companies to make it easier for them to duck taxes on income from the accounts.
The lawsuit, in Miami Federal Court, alleges that the bank trained its agents to avoid U.S. detection, and sent them to the United States to meet with U.S. clients nearly 4,000 times per year, in violation of federal law.
"This action sends a strong signal to taxpayers hiding their money offshore," said IRS Commissioner Doug Shulman, who urges taxpayers to come forward under the IRS' voluntary disclosure process.


Media Giants Forcing Smaller Guys Out
Headline Legal News | 2009/02/10 17:54
A magazine wholesaler claims industry giants - including The News Group and Time Inc. - are colluding to drive it out of business, and already have destroyed "the only other non-colluding wholesaler in the market," which went out of business last week. In its federal antitrust complaint, Source Interlink Cos. claims 10 monopolist conspirators have cut it off from People, Sports Illustrated, Time, Entertainment Weekly and other major mags, threatening Source's 8,000 employees.
Source sued these defendants: American Media, Bauer Publishing Co., Curtis Circulation Co., Distribution Services Inc., Hachette Filipacchi Media US, Hudson News Co., Kable Distribution Services, The News Group, Time Inc., and Time/Warner Retail Sales & Marketing.
"if defendants' schemes are not stopped, Source's entire business, including its good will, reputation, 8,000-employee work force and customer base, will be destroyed," the complaint states. "Indeed, defendants already have succeeded in destroying Anderson, the only other non-colluding wholesaler in the market, by also recently cutting it off from all supplies of the publishers' magazines. Anderson announced on Feb. 7, 2009, that it had no recourse but to cease normal business activities immediately."
Source demands a restraining order and injunction "to enjoin defendants from continuing their collusive anti-competitive scheme - in clear violation of Section 1 of the Sherman Act, 15 U.S.C. § 1, and common law - to attack, disparage and destroy Source's business. Emergency relief is necessary to prevent the imminent irreparable harm - the destruction of Source's business and the monopolization of the United States wholesale magazine distribution market - that the misconduct of defendants, major magazine publishers, their distributors, and two of the only four major wholesalers in the United States, will, if not restrained, doubtless cause."
Source claims the defendants have "cut Source off from People, Sports Illustrated, Entertainment Weekly, Time and other major magazines; spread disparaging rumors about Source and its financial condition to its customers, employees and others in the industry; encouraged Source's customers to cease doing with it through, among other things, such false rumors; sought to coerce Source into selling its distribution facilities to defendants at fire sale prices; and raided Source's employees and sought to steal the intellectual property that those employees used to run its business. ...
"Defendants' indisputable goal is to destroy Source's business so that defendants - through Hudson and News Group, the two remaining wholesalers - will monopolize the wholesale market and use that monopoly power to shift to retailers and consumers - and away from publishers - the entire financial burden resulting from worsening market conditions and publisher-induced inefficiencies in the distribution system."
Source is represented by Marc Kasowitz with Kasowitz, Benson & Torres.


Wrongfully convicted, man can't sue prosecutor
Headline Legal News | 2009/01/27 22:32
The Supreme Court says a man who was wrongly convicted and spent 24 years in prison may not sue the former Los Angeles district attorney and his chief deputy for violating his civil rights.

The justices, ruling unanimously Monday, say decisions of supervising prosecutors, like the actions of prosecutors at trial, are shielded from civil lawsuits.

In this case, Thomas Goldstein was convicted of a 1979 murder on the strength of a jailhouse informant's testimony that Goldstein had confessed to the crime. The informant testified he received no benefit in return, but evidence that came to light later suggested he had struck a deal to get a lighter sentence.

Goldstein sued former District Attorney John K. Van de Kamp and his former chief deputy, Curt Livesay, claiming that as managers they had a policy of relying on jailhouse informants even though it sometimes led to false evidence.

In this case, the federal appeals court in San Francisco said Van de Kamp and Livesay did not enjoy the absolute immunity from lawsuits that is given to prosecutors because they were acting as administrators, not prosecutors, in failing to put in place a system that would allow information about informants to be shared in their office.

The case is Van de Kamp v. Goldstein, 07-854.



ACLU Challenges Gov't Secrecy in the False Claims Act
Headline Legal News | 2009/01/20 17:11
The federal government has been defrauded of billions of dollars in hundreds of cases it has sealed under the False Claims Act, the ACLU claims in Federal Court. "The result of the secrecy provisions is that the federal court system is home to an entire secret docket of cases that is inaccessible to the public and the press," including more than 60 such cases in Iraq, according to the complaint.
    The ACLU claims Congress inserted unconstitutional secrecy amendments into the Act in 1986.
    Joining the ACLU as plaintiffs are OMB Watch and the Government Accountability Project.
    The plaintiffs "challenge the constitutionality of the secrecy provisions in the FCA, specifically §§ 3730(b)(2) and (b)(3) (together, the 'FCA secrecy provisions'). The FCA secrecy provisions are unconstitutional on their face. Plaintiffs seek a declaration that they violate the public's First Amendment rights."
    The plaintiffs sued Attorney General Michael Mukasey and Fernando Galindo, "the Clerk of the Court in the United States District Court, Eastern District of Virginia. The Clerk of the Court is the officer of the court that seals the complaints as required by the statute challenged in this case."
    According to the complaint, Congress enacted the False Claims Act in 1863 to "combat rampant fraud in Civil War contracts." It was substantially amended only twice. The 1943 amendments were to prohibit "so-called parasitic actions," in which individuals filed qui tam actions "based entirely on public allegations found in criminal indictments against World War II contractors. ... The Act was amended such that jurisdiction over FCA claims was barred if the claims were based on information in the government's possession.
    "In 1986, as a result of a decline in FCA suits, Congress amended the FCA to encourage private individuals to bring more FCA suits. The legislation increased incentives, financial and otherwise, for private individuals to bring suits on behalf of the government. Congress also set out to right a number of overly restrictive court interpretations of the FCA that were making it difficult for whistleblowers to succeed in FCA suits. Finally, to encourage more whistleblowers to file FCA suits, Congress enacted an anti-retaliation provision to protect whistleblowers from reprisal for initiating or aiding an FCA disclosure and lawsuit.
    "As part of the amendments in 1986, Congress enacted the secrecy provisions at issue. Thus, for the first 123 years of the existence of the FCA, qui tarn complaints were not filed under seal and were accessible to the public. Only in the last 22 years have all FCA qui tarn complaints filed by relators been automatically placed under seal and inaccessible to the public.
    "When the secrecy provisions were being debated before the Senate Judiciary Committee, DOJ argued that the secrecy provisions were needed to prevent the potential defendant from being tipped off that there might be a parallel criminal investigation. 1986 U.S.C.C.A.N. at 5288-89. DOJ stated that the FCA civil suit 'might overlap with allegations already under criminal investigation.' Id. at 5289 (emphasis added). Thus, neither DOJ nor any other entity expected that every FCA case would be accompanied by a parallel criminal investigation. Even if an ongoing criminal investigation alone was a sufficient governmental interest, not every case should be subjected to secrecy. ...
    "The mandatory secrecy provision requires the Clerk of the Court to seal the complaint upon its filing. Neither the relator nor the government is required to show that there is a compelling need to deny the public access to this information. The mandatory secrecy provision prohibits a court from making an individualized, case-by-case determination as to whether the sealing of the complaint serves a compelling interest and is narrowly tailored.
"During this time, the public has no knowledge that a civil action has been filed in federal court alleging that the U.S. government has been defrauded. Nor does the public have any other means of acquiring this knowledge or accessing information relating to these cases because the relator is gagged from speaking about the case. ...
    "The secrecy extension provision does not define "good cause," nor is the term defined elsewhere in the FCA statute. 31 U.S.C. § 373O(b)(3). The secrecy extension provision does not require that the relator or the government demonstrate a compelling need for the action to remain inaccessible to the public, or that keeping the complaint under seal is narrowly tailored to that need. The secrecy extension provision therefore permits the complaint to remain under seal for an indefinite period of time."
    As a result, the FCA secrecy provisions hide allegations of fraud from the public, including more than 60 allegations of fraud in the Iraq war, the complaint states. Many of these allegations are against politically connected giants such as Halliburton and Kellogg, Brown & Root.
    "According to DOJ, as of July 2007, there were approximately 1,000 qui tarn cases that were under seal pending the government's decision on whether to intervene. The average length of time between when an FCA case is filed and when the government notifies the court of its election to intervene is approximately 13 months. FCA cases, however, are usually sealed for much longer period of time than 13 months. Cases typically remain sealed for 2 to 3 years, and have been sealed for as long as 9 years.
    "The FCA secrecy scheme has hidden from public purview allegations of military contractor fraud in the Iraq War. (See, e.g., David Rose, The People vs. the Profiteers, Vanity Fair November 2007, asserting that military contractor fraud is rampant but unknown to the public at large because the allegations remain under seal).
    "Although the exact number of Iraq contractor fraud cases under seal remains unknown, there is evidence that more than a handful of these cases exist. Stuart Bowen, the Special Inspector General for Iraqi reconstruction, reports on Iraq reconstruction issues to the Pentagon and State Department. In 2006, Mr. Bowen reported that he knew of 79 sealed FCA Iraq contractor fraud cases, some of which have multiple plaintiffs. Id. As of August 2007, allegedly 66 remained under seal."


Hollywood Firm Dreier Trying to Sever Ties
Headline Legal News | 2009/01/07 17:07
A top Hollywood law firm is quietly but doggedly trying to sever ties with its New York owner in the wake of his arrest on financial fraud charges.

Santa Monica-based Dreier Stein, the 40-attorney outpost of Dreier Llp. and home to well-known entertainment litigator Stanton "Larry" Stein, spent the holidays in expedited meetings with potential new merger partners on both coasts.

The goal, Stein said, is to split from firm principal and accused swindler Marc Dreier before the end of January.

"We're listening to offers," said Stein, who reps such industry clients as Lionsgate, Jennifer Love Hewitt and David Duchovny. "We've done nothing wrong, and we need to get out from under the burden of Dreier."

Dreier, who opened the West Coast outpost of his 250-lawyer firm in January 2007 via a pricey deal with Stein's entertainment litigation and corporate boutique, has been held in a Manhattan jail since early December on charges of bilking some of New York's top investors to the tune of $380 million.

Among other colorful and bizarre tactics, Dreier is accused of impersonating lawyers and hawking fake promissory notes to hedge funds.

The arrest has plunged the once high-flying Dreier firm into bankruptcy and put some of Hollywood's most prolific lawyers in play.

Stein's group of 20 talent-side litigators, which includes Michael Plonsker, Yakub Hazzard and Mark Passin, has handled recent cases for Marvel Entertainment and Eva Longoria and repped Rob Lowe in his battle against a former nanny.

In December, the firm, whose full name is Dreier Stein Kahan Browne Woods George, went to trial against AMPAS on behalf of the estate of Mary Pickford over the effort by Pickford's heirs to auction off her Oscar for 1929's "Coquette."

Stein said he and his partners are cooperating with the court-ordered receiver that is collecting the firm's income and approving its expenses while he scrambles to find another home. He would not confirm the names of suitors, but top contenders include Los Angeles' Liner Yankelevitz Sunshine & Regenstreif, which itself boasts a strong entertainment practice, as well as New York-based Mintz Levin Cohn Ferris Glovsky & Popeo, Washington-based Buchanan Ingersoll & Rooney and international firms Troutman Sanders and Kramer Levin Naftalis & Frankel.


Holocaust Survivors' Class Action Dismissed
Headline Legal News | 2009/01/05 17:01
A federal judge dismissed Holocaust survivors' class-action claim that the Republic of France and its railroad company stole thousands of Jews' property as they were being deported to Nazi-run concentration camps. "(T)he court concludes that the bounds of its jurisdiction are not coterminous with the moral force of Plaintiffs' claims,' U.S. District Judge Richard Sullivan wrote.      Judge Sullivan ruled: "(T)he Court finds that it lacks subject matter jurisdiction to adjudicate Plaintiffs' claims under the Foreign Sovereign Immunities Act ... and that, even if jurisdiction were proper, the case presents serious justiciability issues that make abstention appropriate. Accordingly, Defendants' motions to dismiss are granted."
    Suing for the class of Holocaust deportees and their heirs, Lead plaintiff Mathilde Freund sued The Republic of France, the Société Nationale des Chemins de Fer Français, and the Caisses des Dépôts et Consignations.
    Plaintiffs' lead counsel was Harriet Tamen. France's lead counsel was Jeremy Goldman Epstein with Shearman & Sterling.


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