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Onondaga land claim to be argued in federal court
Lawyer Blog News |
2007/10/11 13:48
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The Onondaga Indian Nation's claim to 4,000 square miles of land running down the middle of the state and comprising some of the largest cities in upstate New York was to be argued in court Thursday.
The central New York tribe filed claim in 2005 to a swath of land up to 40 miles wide running north to south from the St. Lawrence River to the Pennsylvania state line. They argue that New York state illegally took the land from them centuries ago.
New York, among other things, claims the Iroquois tribe waited to long to sue. The state will ask U.S. District Court Judge Lawrence Kahn to dismiss the claim, which includes the cities of Binghamton, Oswego, Syracuse and Watertown.
The Onondagas are not seeking monetary damages and insist they do not want to evict the roughly 875,000 residents of the disputed area. They say they want to spur a cleanup of Onondaga Lake, a waterway sacred to the tribe, and other hazardous waste sites.
"There is no attempt to take people off their land and evict them," tribal attorney Joseph Heath said on the eve of arguments. "Our case is about healing."
Heath said that if tribal leaders get a judgment in their favor, they would hope to sit down with state officials to consider a range of options, such as a lease payment plan or a plan to help the Onondagas buy additional land from willing sellers.
While the Onondagas today maintain an 11-mile-square reservation south of Syracuse, they had been spread over much of what is now central New York centuries ago at the height of the Iroquois Confederacy. |
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Lawsuit accuses Mattel of insider trading
Lawyer Blog News |
2007/10/10 23:49
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| Attorneys for a Michigan pension fund alleged in a shareholder lawsuit filed Wednesday that Mattel Inc. has misled investors by delaying the reporting of defects in its toys to federal regulators. The lawsuit, filed in Delaware's Court of Chancery, also accuses three current members and one former member of Mattel's board of directors of engaging in illegal insider trading by dumping more than $33 million in stock before the company's massive toy recalls this summer. Since August, Mattel has announced three separate recalls of some 21 million toys because of dangers to children from lead paint or from tiny magnets that can be harmful if swallowed. Attorneys representing the Sterling Heights, Mich., police and fire pension fund allege that Mattel knew about the defects for months but failed to report them to the Consumer Product Safety Commission, as required by federal law. They allege that the company has withheld information about its products from the commission for years in order to prop up sales and avoid fines, thereby artificially inflating the value of Mattel's shares and breaching their fiduciary duties to shareholders. Officials with El Segundo, Calif.-based Mattel did not immediately respond to a telephone call and e-mail seeking comment on the lawsuit.
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Supreme Court wary 3rd-party lawsuits
Lawyer Blog News |
2007/10/10 15:09
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The Supreme Court voiced skepticism Tuesday about efforts to allow lawyers, accountants and others who do business with large corporations to be the targets of class-action securities suits. At issue in the high-profile case is whether victims of large-scale corporate fraud can sue third parties that may have played a significant role in the scheme. Think Enron, Global Crossing or any other massive fraud that involved a web of business relationships, where outside experts allegedly signed off on questionable corporate practices.
The Supreme Court and other federal courts have largely frowned on such suits, saying that only the Securities and Exchange Commission has the authority to bring suit against third parties as so-called aiders and abetters. But following the wave of corporate implosions, class-action suits seeking to hold those entities accountable have been on the rise, largely because those outside parties often are the only ones left standing holding any assets. Tuesday, one of those investor class-action cases reached the justices, with several suggesting they are not inclined to allow the suit to go forward.
That's a view that will be welcomed by a range of powerful business groups, including the U.S. Chamber of Commerce and the American Bankers Association. Along with the Bush administration, they warn that making third parties vulnerable to such suits would result in an explosion of securities litigation, damaging American competitiveness in the global marketplace.
The closely watched dispute is one some observers have labeled the "Roe vs. Wade" of securities law, one in which more than 30 friend-of-the-court briefs were filed, and it played to an electric atmosphere in a packed Supreme Court chamber.
While business groups largely lined up one side, such consumer advocates as AARP, the senior citizen lobby, and the Council of Institutional Investors stood with the investor plaintiffs.
"The stakes are enormous," said Jeffrey McFadden, a Washington securities lawyer who attended the arguments.
The case involves Charter Communications Inc., a cable television provider that entered into side deals with Motorola Inc. and Scientific-Atlanta Inc., two makers of set-top cable boxes. In 2000, in a scheme to pump up its revenues, Charter agreed to overpay the vendors for the boxes. The vendors then returned part of the money to Charter in the form of advertising fees, adding about $17 million to Charter's balance sheet.
After the machinations were revealed and Charter's stock price plummeted, investors brought suit against all of the parties. Charter eventually settled, leaving the two vendors in the suit.
Lawyers for the vendors argued that the companies never knew the extent of Charter's scheme to inflate its revenues and that they never made any false representations directly to Charter's shareholders, something required to find a violation of federal securities law.
A Missouri federal court dismissed the case against the vendors and the federal appeals court in St. Louis affirmed, citing Supreme Court precedent that has interpreted federal securities laws to bar private causes of action against third-parties.
Chief Justice John Roberts on Tuesday demonstrated little interest in departing from precedent, saying that Congress had clearly decided who could and could not bring suit under federal securities laws.
"We don't get in this business of implying private rights of actions anymore," Roberts said. "We haven't done it in quite some time."
And Justice Anthony Kennedy seemed to worry that once the door to such suits was opened there would be no end to them -- and that companies would simply stop doing business with publicly traded companies as a result.
"I see no limitations to your proposal," he said to the counsel for the investors, New York lawyer Stanley Grossman.
But Grossman argued that there would be no litigation free-for-all, saying that a requirement that third parties must actively participate in an intentional effort to deceive the public would eliminate most prospective actions.
Among the justices, Ruth Bader Ginsburg appeared most likely to come down on the side of the plaintiff investors. She was critical of the vendors' conduct in the case, saying it was possible they knew about Charter's plans but sat by passively. The scheme "can only work if the vendors are silent. Silence, not speech, is what counts," she said. "They set up Charter to make those statements to swell their revenues, revenues they didn't have."
Ginsburg repeatedly expressed a desire to find some sort of middle ground between barring the suits altogether and elevating third parties to the level of the primary corporate defrauders. She noted that it was unlikely the SEC could ever make fraud victims whole by suing third-parties on its own, since the government is not in a position to distribute large damage awards.
Chicago lawyer Stephen Shapiro, arguing for the defendant companies, said Congress had rewritten the securities laws in the 1990s to allow only for the SEC actions and the court needed to recognize that. |
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Lawyer Pleads Guilty To Racketeering Conspiracy
Lawyer Blog News |
2007/10/09 22:22
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An ex-partner in the New York law firm Milberg Weiss pleaded guilty Tuesday in Los Angeles to a charge stemming from a scheme in which clients secretly were paid kickbacks for serving as named plaintiffs in more that 150 class action lawsuits, prosecutors said. Steven Gary Schulman pleaded guilty to a racketeering conspiracy count.
In a hearing before U.S. District Judge John Walter Friday morning, Schulman acknowledged his role in the scheme.
"Are you pleading guilty because you are in fact guilty?" Walter asked.
"I am," Schulman replied.
Schulman faces a maximum sentence of 20 years in federal prison and a $250,000 fine. He has already agreed to forfeit $1.85 million in proceeds he made from the conspiracy, Assistant U.S. Attorney Richard Robinson said.
Schulman's sentencing hearing is scheduled for 9 a.m. on June 23.
Schulman and his attorneys, Herbert Stern and Gordon Greenberg, had no comment after Tuesday's hearing.
According to an information filed last month by federal prosecutors, Schulman and other Milberg Weiss attorneys made a secret payment arrangement with Howard Vogel to "prepare and file numerous class actions in which Vogel, his relatives and entities that Vogel controlled served as named plaintiffs" for the law firm.
Vogel, who pleaded guilty last year to his role in the scheme, received about $2.5 million in illegal kickbacks from Milberg Weiss, prosecutors said.
The illegal kickbacks were secretly paid by Milberg Weiss to named plaintiffs through various intermediary law firms and lawyers selected by paid plaintiffs, including Howard Vogel of Florida, prosecutors said.
Milberg Weiss received "well over $200 million" in attorneys' fees from more than 150 class action lawsuits over the past 20 years, prosecutors said.
A May 2006 federal grand jury indictment stated that three named plaintiffs received at least $11.3 million in kickbacks, prosecutors said.
By 2003, Schulman knew the firm was secretly paying Vogel a portion of the attorneys' fees that Milberg Weiss obtained in class actions where Vogel served as the lead plaintiff, according to prosecutors.
Schulman, firm co-founder Melvyn Weiss and others concealed the illegal payments from state and federal authorities by making false or misleading statements in documents filed in class action lasuits, prosecutors said.
The scheme's objective was "to provide Milberg Weiss and its partners, including Schulman, with a stable of persons who were ready, willing and able to serve ... as named plaintiffs representing absent class members in class actions," prosecutors said.
Another objective was to ensure that Schulman and other Milberg Weiss lawyers would be named lead counsel in class action lawsuits, prosecutors said.
Schulman also may be disbarred from practicing law in New York, where he is licensed.
Speaking to reporters after today's hearing, Robinson said Schulman may have decided to plead guilty after Walter had denied his numerous motions to dismiss the case.
In May 2006, Schulman was indicted by federal prosecutors for his alleged involvement in the kickback scheme. He resigned from Milberg Weiss in December 2006.
Two other Milberg Weiss partners, David Bershad and William Lerach, have already pleaded guilty to similar charges.
Melvyn Weiss is still facing federal charges for his alleged participation in the kickback arrangements. |
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Supreme Court lets HP lawsuit move forward
Lawyer Blog News |
2007/10/09 22:14
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| The U.S. Supreme Court has denied an appeal by Hewlett-Packard Co. to dismiss a class-action lawsuit against Compaq Computer Corp., which HP acquired in 2002. The lawsuit, filed in 2003 by Oklahoma residents Stephen and Beverly Grider, alleges that Compaq sold them a computer with a defective floppy disk drive. The company did not replace the faulty drive, the Griders alleged. The U.S. Supreme Court on Tuesday refused to intervene in the Oklahoma lawsuit on behalf of HP. The case now goes back to an Oklahoma state court. In 2005, the District Court of Cleveland County, Oklahoma, allowed the Grider lawsuit to become a nationwide class-action lawsuit. HP had appealed that decision. Since 2000, several U.S. residents have filed similar lawsuits against Compaq and HP. The lawsuits alleged that Compaq sold computers with faulty floppy disk controllers, causing data loss or corruption. The Texas Supreme Court in 2005 refused to allow a nationwide class-action lawsuit in a case that had been filed in the state in 2000. HP had argued that the facts in the Oklahoma case were similar. An HP spokesman wasn't immediately available for comment Tuesday. |
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Supreme Court Dismisses Lawsuit Against CIA
Lawyer Blog News |
2007/10/09 22:12
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| The U.S. Supreme Court has refused to review a lawsuit brought by a German man who says he was kidnapped and tortured by agents of the Central Intelligence Agency. VOA National Correspondent Jim Malone has details from Washington. The high court rejected the appeal of Khaled el-Masri without explanation. El-Masri is a German citizen of Lebanese descent who says he was kidnapped by CIA agents in Macedonia in 2003 and then taken to Afghanistan where he was held for months and tortured by his captors. El-Masri was released in 2004 after he says U.S. officials realized he was not involved with terrorism. The Bush administration argued that el-Masri's appeal should be rejected because allowing his lawsuit against the CIA suit to go forward in court would expose state secrets. Lower federal courts sided with the government and the Supreme Court effectively ended the case when it refused to consider it further. El-Masri's case sparked outrage in Germany and mobilized civil and human rights groups on his behalf. Sharon Bradford Franklin is an attorney with the Constitution Project, an organization that seeks to protect civil liberties during the war on terror. "Well, we are very disappointed that the court decided not to take the case," said Franklin. "We really felt that this was an excellent opportunity for the court to revisit the scope of the state secrets privilege." The Supreme Court formally recognized the government's right to protect state secrets in a 1953 ruling that allowed the U.S. military to keep secret the details of a plane crash. The el-Masri case also drew attention to the CIA program of what is called extraordinary rendition in which terror suspects are sent from one country to another for questioning. Human-rights groups have criticized the program and raised questions about the torture of terror suspects. They had hoped the el-Masri case would shed new light on the practice. "The Bush administration has used what is known as the state secrets doctrine liberally to seek dismissals of cases that raise embarrassing issues for the government and perhaps would expose illegal activity," said Jennifer Daskal with Human Rights Watch.
The Supreme Court decision was welcomed at the White House. This is presidential spokeswoman Dana Perino. "This is a country that is facing unprecedented threats that we have not dealt with before in terms of al-Qaida and other terrorists, and I believe that the Justice Department is judicious in applying the state secrets act," said Perino. President Bush has repeatedly defended the administration's policies in the war on terror and just last week again rejected allegations that terror suspects are subject to torture. "This government does not torture people," he said. "We stick to U.S. law and our international obligations." Germany tried to extradite 13 suspected CIA agents to stand trial in the el-Masri case earlier this year but was rebuffed by the United States. |
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