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California law firm repays excess fees to Nevada
Headline News | 2007/07/09 12:21

A Sacramento, Calif., law firm accused of collecting nearly $100,000 in excess fees for advice relating to a college savings program in Nevada has repaid the money to the state. The Orrick firm sent a check for $95,862 along with a letter dated July 3 disputing the findings by Nevada legislative auditors of the College Savings Plans of Nevada. Advertisement Auditors concluded Orrick was paid $428 per hour for services in 2001-02, although a contract specified a $225 per hour limit, which resulted in nearly $96,000 in excess funds.

“We believe the Legislative Counsel Bureau (LCB) reached erroneous conclusions that could have been corrected by seeking clarification from Orrick before LCB published its audit report,” said the letter from James Houpt.

But the letter went on to say that the law firm considers Nevada to be a valuable client, and the firm's “intent is not to risk that relationship.”

State Treasurer Kate Marshall said the check already has been deposited in a state bank account.

“They respectfully disagreed with the audit, but they also felt it was the right decision for them to make the overpayment identified in the audit,” Marshall told the Las Vegas Review-Journal. “The state of Nevada is a little over $95,000 better off for it.”

As a result of the audit of the college savings program while under the review of then-Treasurer Brian Krolicki, Marshall sent a letter to the firm seeking a response.

Orrick had served as bond counsel to the state at the time the services were rendered for the program. The contract allowed the firm to provide legal services to other state agencies as well. The firm currently does not have any contract to serve as bond counsel with the state.

The treasurer's office is awaiting a response from another firm that did business with the state for the college savings program on a separate issue raised in the audit.

A Georgia consulting firm, GIF Services, was overpaid $300,000, according to the audit released in May.

The audit was sought by legislators after Marshall said in March that it appeared funds for the program were diverted for unauthorized legal expenditures and marketing costs.

The audit also raised the issue of whether Krolicki broke state law by not depositing $6 million in state-earned fees into the state treasury. The audit has been turned over to the attorney general's office for an investigation.

Krolocki, now lieutenant governor, has said he broke no laws in his management of the program during his eight years as treasurer.

The program was established by the 2001 Legislature to allow parents to invest money in mutual funds to build up college funds for their children.

None of the money that parents invested is missing or ended up in an improper account, according to the audit.



Plexus faces two class action suits
Lawyer Blog News | 2007/07/09 11:16

Shareholders of contract manufacturer Plexus have filed two separate class action lawsuits against the Wisconsin-based company. The suits accuse the company and three of its officers of insider trading and inflating the company’s stock price.Plexus has a manufacturing facility in Nampa. The first lawsuit, filed June 25 by Western Pennsylvania Electrical Employees Pension Trust, alleges that Plexus and its officers failed to disclose material facts about the company’s financial performance, which led shareholders to purchase stock at an inflated price.

The complaint alleges that, between January 25, 2006 and July 27, 2006, Plexus failed to disclose that the company’s position in the defense market was weakening and that operations in the United Kingdom would have to be reorganized. Because of this information, Plexus lacked a “reasonable basis” for the positive statements it made during that period about the company’s future growth.

According to the complaint, Plexus “shocked investors” when, on July 27, 2006, the company lowered its earnings outlook for the year, based in part on limited revenue growth. The plaintiff alleges that this news caused shares of the company’s stock to fall $10.71 per share, or approximately 32 percent, to close at $22.89 per share.

The complaint alleges that, in a conference call following the July 26 quarterly report, Dean Foate, president, CEO and chairman of the board of directors, said that fourth quarter revenue outlook was softer than had been previously implied.
Foate and F. Gordon Bitter – chief financial officers – and John Nussbaum, who also served as chairman of the board, are all named individually as defendants.

The complaint alleges that because Foate, Bitter and Nussbaum controlled the contents of the company’s reports to the Securities and Exchange Commission and the public, they had the opportunity to correct the statements. According to the plaintiff, the defendants knew that the statements made by Plexus were “materially false and misleading.” 
The suit also accuses corporate officers and board members of insider trading, alleging that company officers were motivated to misrepresent revenue growth to allow company insiders to “sell 664,666 shares of their personally-held Plexus common stock for gross proceeds in excess of $26.3 million.”

The suit claims that Foate, Bitter and Nussbaum all benefited from selling stock during this period, as well as executive officers Michael Verstegen, Joseph Kronser, Thomas Czajkowski, David Clark, Paul Ehlers, David Rust, Joseph Kaufman, Simon Painter and George Setton and board members Ralf Boer, David Drury and Thomas Prosser.

The second lawsuit, filed June 29 by the Alan M. Ozell Trust, reasserts the accusation that Plexus withheld relevant information that caused the stock price to drop, but does not accuse anyone in the company of insider trading.

Both lawsuits request compensation for all damages in an amount to be proven at trial, as well as costs and expenses.
Plexus issued a statement on June 25 acknowledging that a class action complaint had been filed against the company, though Plexus claimed it had not yet received a copy of the complaint.

“Plexus believes that all of its public statements were correct and properly made; it thus intends to defend itself vigorously in this litigation,” according to the statement.

Angelo Ninivaggi, vice president, general counsel and secretary for Plexus, did not return a call requesting an updated statement.
The law firms of Ademi & O’Reilly, LLP and Lerach Coughlin Stoia Geller Rudman & Robbins LLP are representing the plaintiffs in both cases. The lawsuits were filed in the U.S. District Court for the Eastern District of Wisconsin.



EU bans misleading "sunblock" labels
Legal World News | 2007/07/08 16:11

There is no such thing as 100 percent protection from the sun, the European Union's consumer chief warned holidaymakers on Monday and she banned the words "sunblock" and "100 percent sun protection" on sun cream.

Such labeling is misleading and contributes to thousands of deaths each year, Consumer Protection Commissioner Meglena Kuneva said.

"Consumers need clear, accurate information on sunscreen products so they can make informed choices," she said in a statement.

"There is no such thing as 100 percent protection and we need to reinforce that essential message. This is just one of a number of measures that are necessary for effective protection against the sun."

According to Cancer Research UK, the number of skin cancer cases in that country has more than doubled since the early 1980s with over 2,000 deaths from skin cancer each year.

Under the new rules, which came into force on Monday and will be phased in before the end of the year, the new labels will also include a new UVA logo and standardized terms such as "low," "medium," "high" and "very high" protection.

UVA is the term used for ultraviolet light that can cause chronic conditions such as the appearance of aging and interferes with the human immune system. 

UVB radiation is the cause of sunburn, but damages only the skin's outer layer or epidermis. Although both types of radiation are important contributors to the risk of skin cancer, experts believe UVA plays a bigger role.

The Commission said sunscreen products with only UVB protection may provide a false sense of safety because they do not protect against UVA radiation.

As labels for 2007 have already been printed, around 20 percent of sunscreen products on the shelves will feature the new labels.

"So for the moment consumers are advised to read labels very carefully during this summer," Kuneva said.



Senators lose faith in Bush over Iraq
U.S. Legal News | 2007/07/08 16:10

The trickle of Republican rebellion against President George W.Bush's Iraq policy has turned into a stream with two more previously loyal senators joining the swelling ranks ofcritics.

Lamar Alexander said "it should be clear to the President that there needs to be a new strategy", while Judd Gregg called for a "clear blueprint for how we were going to draw down".

Although they stopped short of backing the Democratic proposals for a fixed timetable of withdrawing US troops from Iraq, their comments came before a week in which the Senate is once again debating funding for the war and the military will deliver an interim progress report on Mr Bush's "surge strategy".

The interim report is believed to conclude that US combat deaths have escalated, violence has spread beyond Baghdad and sectarianism has further polarised Iraq, the Washington Post has reported.

It is also expected to acknowledge tacitly that the Iraqi Government is unlikely to meet any of the political and security goals Mr Bush set for it in January.

"The security progress we're making in Iraq is real," a senior intelligence official in Baghdad was quoted as saying, "but it's only in part of the country and there's not enough political progress to get us over the line in September."

Six Republican senators have now announced they can no longer support Mr Bush's Iraq strategy, and demanded change.

The dissent has been led by senior figures including Richard Lugar and John Warner, the Republican leaders - or "ranking members" - on the Senate foreign and armed forces committees.

Senator Lugar yesterday used a TV interview to explain that his public intervention had been intended as a "reaching-out to the President".

He suggested that remaining opportunities for a centrist "bipartisan consensus" on Iraq were fast disappearing before presidential elections next year in which Democrats are being pushed by activists to call for an immediate withdrawal of troops.

Along with other Republicans who have spoken out in recent days, such as George Voinovich and Pete Domenici, Senator Lugar appears to be advocating measures similar to those of last year's Iraq Study Group report.

That report proposed shifting American troops away from the sectarian conflict between Sunnis and Shi'ites so that a reduced force could concentrate on counter-terrorism and support functions.

"We have to be thoughtful about the safest route for our forces out of Iraq," Senator Lugar said, adding that most ofthe 160,000 US troops stationed in the country could be "redeployed by the middle part of next year".

Moderate Republicans fear that Mr Bush's apparent determination to fight on will lead to a panic pullout that could set off awider conflict across the MiddleEast.

But the White House is urging them to hold the line at least until September, when General David Petraeus will present his assessment of the effectiveness of the 30,000-troop "surge".

Mr Bush has repeatedly said he wants as much time as possible for his 30,000-troop increase to show results.

But the American military is already overstretched, with the Pentagon making troops serve longer in battle zones - and more often - as it tries to sustain the surge.

There is now growing pressure on Mr Bush to pre-empt the September report by setting out a time frame for withdrawing at least some of the troops.

Some Bush aides believe forces are combining against him as the Senate prepares to begin a contentious debate on the defence authorisation bill.

Democrats are gearing up for a new push for a US exit from Iraq amid a surge in bloodshed at the weekend.

With public discontent with the war growing, house Speaker Nancy Pelosi is set to introduce a bill to authorise troop redeployments to start within four months and be completed by April, a formula Mr Bush has blocked once with a presidential veto.

But aides are now believed to be advising Mr Bush that if he wants to forestall more defections, it would be wiser to announce plans for a more narrowly defined mission for US troops that would allow for a staged pullback, The New York Times reported yesterday.

The number of US combat brigades in Iraq is, in any case, scheduled to be reduced from 20 to 15 by this time next year.

Meanwhile, US military sources in Baghdad said fiery Iraqi Shia cleric Moqtada al-Sadr, head of the the Mahdi Army militia insurgency group, has gone back to Iran. Sadr led two uprisings against US forces in 2004 before becoming more involved in mainstream politics.



Roberts court overrules respect for precedent
Attorney Blogs | 2007/07/07 16:19

President Bush has let down his core supporters in so many ways. There's the big federal deficit. The "war on terror" has degenerated into a civil war in Iraq. His failed let-them-stay immigration policy clearly isn't what most in the GOP wanted. Remember the president's promise to set up private Social Security accounts? But in one big way, President Bush has done exactly what the conservative base hoped he'd do if elected and reelected. With the appointments of Chief Justice John Roberts and Associate Justice Samuel Alito, President Bush has turned the U.S. Supreme Court into a force to dismantle progressive policies of the past few decades.

Previously, the Supreme Court had upheld Congress' decision to stem the corrupting influence of big money on political campaigns. Even as the scandals surrounding former Rep. Randy "Duke" Cunningham and lobbyist Jack Abramoff proved that lawmakers were right to be concerned about big-bucks corruption of their own institutions, the Supreme Court this term struck down limits on contributions from corporations and unions - so long as those contributions come in the form of attack ads at least minimally disguised as "issue ads."

Although unions, which often back Democrats, benefit from the ruling, conservative Republicans are particularly thrilled because right-to-life groups have been aggressive in using such attack ads.

Note that Congress had not said such groups could not run attack ads. The law simply required that they be paid for with regulated "hard money" donations and not with unregulated "soft money."

The newly conservative court also took aim at Brown vs. Board of Education. Unlike that unanimous landmark delivered more than a half-century ago, the Roberts court could muster only a bare 5-4 vote to chip away at that important precedent. But the Bush administration's core supporters never have been shy about claiming total power from a slight - or even nonexistent - majority. The Roberts court said schools can't consider race as a factor when trying to rectify racial imbalance in schools. The upshot is that, in too many cases, schools will be unable to rectify racial imbalances. It's a step toward the bad old days of separate but equal.

The Roberts court has a habit of denying it is overturning established precedent even as it blatantly overturns established precedent. Expect, given the court's decision to outlaw a procedure used in mid- and late-term abortions, that other precedents concerning abortion rights will receive the same lack of respect.

The Bush presidency has been, by most methods of reckoning on the left and the right, a disaster. Depending on how long Mr. Bush's backward-looking majority dominates the high court, it could prove to be his biggest disaster, no matter how much his narrow base might celebrate it as his only victory.



Appeals court supports Bush on wiretapping
Lawyer Blog News | 2007/07/07 16:14

A federal appeals court on Friday removed a serious legal challenge to the Bush administration's warrantless wiretapping program, overruling the only judge who held that a controversial surveillance effort by the National Security Agency was unconstitutional. Two members of a three-judge panel of the Cincinnati-based U.S. Court of Appeals ordered the dismissal of a major lawsuit that challenged the wiretapping, which President Bush authorized secretly to eavesdrop on communications involving potential terrorists shortly after the Sept. 11, 2001, attacks.

The court did not rule on the spying program's legality. Instead, the decision found that the American Civil Liberties Union, academics, lawyers and journalists who brought the case did not have standing to sue because they could not demonstrate that they had been direct targets of the clandestine surveillance.

The decision vacates a ruling in the case last August by a U.S. District Court judge in Detroit, who found that the administration's program to monitor private communications violated the Bill of Rights and a 1970s federal law, the Foreign Intelligence Surveillance Act.

Friday's action in the 6th Circuit means that the principal remaining legal challenge to the NSA's Terrorist Surveillance Program is a group of cases pending before a U.S. District Court judge and the U.S. Court of Appeals for the 9th Circuit in California.

The primary issue before that appeals court, differing somewhat from that in

the Michigan case, is whether the administration may claim that a privilege covering state secrets precludes the litigation.
In January, after Democrats gained control of Congress, the administration abruptly shifted its position. Attorney General Alberto Gonzales announced that the surveillance program would start to be overseen by a court established to hear FISA cases.

But administration officials have not described critical details of the new approach, including whether a separate warrant is required for each instance of monitoring. Aides to Bush also have asserted that the president still retains the authority to conduct surveillance without court permission.

Judge Ronald Lee Gilman, a Democratic appointee, disagreed in a dissenting opinion in which he concluded the plaintiffs were entitled to sue because they felt a need to alter their communications after the program was disclosed. Gilman also wrote that the case was not moot because "the president maintains that he has the authority to 'opt out' of the FISA framework at any time," and he agreed with the lower court judge that the program violates federal law.

Administration officials lauded the 6th Circuit's decision. Deputy White House press secretary Tony Fratto called the lower court finding that the program was unconstitutional "wrongly decided." Fratto said the appellate court "properly determined that the plaintiffs had failed to show their claims were entitled to review in federal court."

The ACLU's legal director, Steven Shapiro, said, "As a result of today's decision, the Bush administration has been left free to violate the Foreign Intelligence Surveillance Act, which Congress adopted almost 30 years ago to prevent the executive branch from engaging in precisely this kind of unchecked surveillance."

Shapiro said the ACLU was examining its legal options, including the possibility of an appeal to the Supreme Court.



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