Friday, August 5, 2011

Lawyer John O'Brien, Formerly at Sullivan & Cromwell, Pleads Guilty To Four Misdemeanors

Ex-Sullivan & Cromwell Partner Admits Failing to Pay $2.8 Million in Taxes
NYLJ, Aug. 5, 2011

SUMMARY

John J. O'Brien, 48, a mergers and acquisitions specialist who left Sullivan & Cromwell in 2009, pleaded guilty to four misdemeanors before Southern District Magistrate Judge Henry B. Pitman, conceding he failed to pay taxes in 2005 and 2007, and failed to file income tax returns in 2004 and 2006. Mr. O'Brien's voice shook as he allocuted for the court and said, "I plead guilty, your honor." Mr. O'Brien's range under the advisory U.S. Sentencing Guidelines is three years and one month to three years and 10 months.

Story

Former Sullivan & Cromwell partner John J. O'Brien admitted yesterday to failing to pay more than $2.8 million in personal income taxes on profits he earned at the firm.

Mr. O'Brien, 48, a mergers and acquisitions specialist who left the firm in 2009, pleaded guilty to four misdemeanors before Southern District Magistrate Judge Henry B. Pitman, conceding he failed to pay taxes in 2005 and 2007, and failed to file income tax returns in 2004 and 2006.

Mr. O'Brien's voice shook as he allocuted for the court and said, "I plead guilty, your honor."

Magistrate Judge Pitman said yesterday that Mr. O'Brien's range under the advisory U.S. Sentencing Guidelines is three years and one month to three years and 10 months. Mr. O'Brien is scheduled to be sentenced on Nov. 16.

His admissions were made pursuant to a plea agreement reached between Mr. O'Brien's lawyer, solo practitioner Russell T. Neufeld, and Southern District Assistant U.S. Attorney Stanley J. Okula. Under the plea agreement, Mr. O'Brien is obligated to pay not less than $2.8 million in restitution.

A criminal information released yesterday revealed that Mr. O'Brien earned partnership income of $10.8 million between 2001 and 2008. But instead of paying his taxes, the information states, Mr. O'Brien sprung for the purchase of a weekend home, several trips abroad and a $3 million investment in a rare books business.

Mr. Neufeld and Mr. Okula explained to the court that Mr. O'Brien had already began paying back the Internal Revenue Service once the investigation into tax problems began over a year ago. To date, Mr. Neufeld said his client has paid back more than $800,000.

Inquiring into the defendant's finances, Magistrate Judge Pitman asked, "Is the government satisfied there isn't a chunk of cash sitting out there somewhere?"

Mr. Okula said the government did not believe that to be the case.

Mr. O'Brien was released on a promise to post a $100,000 personal recognizance bond.

He was the second lawyer from a major law firm to be charged with violating the Internal Revenue Code in the past month.

In July, former Kirkland & Ellis senior partner Theodore L. Freedman pleaded not guilty to four counts of income tax fraud found on allegations he misrepresented more than $2 million in partnership income from the firm.

Mr. Freedman, a bankruptcy specialist who left the firm in 2010, stands accused of cheating the IRS out of more than $1 million, including $542,358 in expenses for a non-existent sole proprietorship law practice.

John O'Brien
Mark Hamblett can be contacted at mhamblett@alm.com.

Ex-Wall Street Lawyer O’Brien Pleads Guilty to Failure to Pay U.S. Taxes

Thursday, August 4, 2011

New House Ethics Committee Report Search Tool

Daniel SchumanAug. 4, 2011, 9:30 a.m.
LINK
The House Ethics Committee is responsible for investigating and making recommendations on the enforcement of House ethics rules. In an nod towards transparency, its reports and statements are published online -- but they are virtually unusable. The Committee publishes documents in an unsearchable PDF format, spreads them out over of 24 pages, and gives them impenetrable titles like "Statement of the Chairman and Ranking Minority Member." Search engines (like Google) cannot see the documents, and only the most patient will click on each link to see what's inside.

We've taken all 120+ documents, made them searchable, and published them online in a database. Now every document from December 1998 until July 2011 can be searched -- at once. It's easy to find the 20 documents that refer to Rep. Rangel, or the 15 documents that refer to (former) Rep. DeLay, or anything else that you're looking for. The web tool DocumentCloud has made this all possible.

The search isn't perfect, of course. We had to use optical character recognition technology to transform the PDF into a searchable format, so there's a number of transcription errors. It would be better if the committee posted the documents in a searchable format, or even better, in an open format. The committee should also publish an index that links to all relevant documents for each matter, and include a description for each document of what it contains. Until then, our House Ethics Committee search tool will be an invaluable tool for anyone monitoring the House Ethics process.

We'd be remiss if we didn't give the House Ethics Committee kudos for at least publishing these documents online. One look at the Senate Ethics Committee website makes clear that things could be much worse.

Daniel Schuman
Director
Advisory Committee on Transparency
Policy Counsel
The Sunlight Foundation
o: 202-742-1520 x 273
c: 202-713-5795
@danielschuman

Bernard v Proskauer Rose, LLP


Bernard v Proskauer Rose, LLP
2011 NY Slip Op 06184
Decided on August 4, 2011
Appellate Division, First Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.

Decided on August 4, 2011 
Andrias, J.P., Friedman, Catterson, Renwick, DeGrasse, JJ.
4030 103456/09 
[*1]Russel S. Bernard, Plaintiff-Appellant, 
v
Proskauer Rose, LLP, et al., Defendants-Respondents.

Antoni Albus, LLP, Los Angeles, CA (John Antoni of the Bar of 
the State of California, admitted pro hac vice, of counsel), and 
Simon & Partners LLP, New York (Kenneth C. Murphy of 
counsel), for appellant. 
Proskauer Rose LLP, New York (Charles S. Sims of counsel), 
for respondents. 

Order, Supreme Court, New York County (Richard B. Lowe, III, J.), entered October 21, 2009, which granted defendants' motion to dismiss the complaint for failure to state a claim under CPLR 3211(a)(7), unanimously affirmed, with costs.

In this action for legal malpractice, breach of fiduciary duty and breach of contract, plaintiff alleges that defendants Proskauer Rose, LLP (Proskauer) and Michael Album (Album), a partner at Proskauer, failed to adequately advise him regarding his departure from Oaktree Capital Management, L.P. (OCM), a real estate investment hedge fund. Plaintiff alleges that as a result of defendants' negligence he was sued in arbitration by OCM and sustained damages in the amount of $51.5 million, including forfeited incentive fees, compensatory damages paid to OCM, and legal fees.

The following facts are undisputed: In 1995, plaintiff was employed by OCM to develop, manage, and market certain real estate funds. In early 2005, OCM began preparations for a new real estate fund (ROF IV), which, despite being his direct responsibility, plaintiff failed to develop and promote for OCM.

In October 2005, plaintiff made an offer in OCM's name to purchase 60 Main Street, a real estate investment opportunity he first learned of in November 2004. The offer was made without OCM's knowledge or permission, and plaintiff furnished OCM's financial information in support. In November 2005, plaintiff entered into a purchase agreement for the 60 Main Street property in the name of one of his own entities, Westport Property Management, LLC.

On or about November 1, 2005, plaintiff decided to leave OCM. Album, a partner in Proskauer's Employee Benefits and Executive Compensation Group retained by plaintiff in October 2004, began discussions with OCM's general counsel for plaintiff's departure. On November 18, while discussions were ongoing, plaintiff resigned in writing as an employee and principal "effective immediately" and gave 120 days notice of his resignation as a member of OCM. On December 1, 2005, plaintiff issued a press release announcing the formation of Westport

On December 12, 2005, the Executive Committee of OCM voted to expel plaintiff as a [*2]member due to his "abrupt departure and his announcement of the formation of a competing entity," and refused to pay him any incentive fees. Plaintiff initiated arbitration against OCM for recovery of fees he was purportedly owed and other damages. During arbitration, OCM learned of plaintiff's misconduct with regard to ROF IV and 60 Main Street and on November 7, 2006, expelled plaintiff as a member on these independent grounds. OCM counterclaimed for damages on the grounds that plaintiff breached his contractual and fiduciary duties, and misappropriated confidential financial information

In the interim arbitration award, which was incorporated into the final arbitration award issued July 12, 2007, the arbitrator concluded that OCM was "substantially harmed" by the delayed launch of ROF IV and the loss of an investment opportunity in 60 Main Street. The arbitrator further found that although plaintiff had resigned, his justifiable expulsion as a member due to his "gross negligence and willful misconduct" was the equivalent of a termination for cause, precluding recovery of incentive fees from OCM. Accordingly, the arbitrator awarded OCM $12,325,250 in compensatory damages for one year of lost ROF IV fees, and $6,740,289 in legal fees [FN1]. On March 21, 2008, the Superior Court of the State of California, County of Los Angeles (Kenneth Freeman, J.) granted OCM's petition to confirm the arbitration. That judgment was affirmed on February 22, 2010 in Oaktree Capital Mgt., LP v Bernard (182 Cal App 4th 60 [2d Dist 2010]).

On March 12, 2009, plaintiff initiated this action alleging, inter alia, that defendants failed to adequately advise him of the risks associated with his departure from OCM to start his own real estate investment firm. In his amended complaint, plaintiff alleges that in October 2004, he contemplated leaving OCM and retained defendants in order to "improve compensation levels [for his] group, and if that could not be done, he wanted to leave [OCM]." Plaintiff claims that he explained to defendants that he wanted to preserve his rights to substantial incentive fees and avoid any liability to OCM due to his resignation. Although plaintiff does not allege that he told defendants about the 60 Main Street opportunity, or that they advised him to purchase the property for Westport, he claims that he informed defendants that he "occasionally purchased properties for his own account, a fact known by OCM.

Plaintiff does not allege that defendants provided him with any guidance with regard to ROF IV until August 2005, when defendants presented him with a "Draft Action Plan" outlining three alternative strategies for exiting OCM. Plaintiff alleges that under the exit plan urged by defendants, he was advised to continue to manage certain funds, but to "refuse to work on and develop" ROF IV

Plaintiff claims that defendants' recommendation in August 2005 to stop work on ROF IV and resign in November led to his expulsion and termination for cause, and resulting losses. He alleges that it was Album who told him to resign in the middle of negotiations, start his new venture (i.e., Westport), and issue the press release announcing the formation of the Westport entity. He contends that had he not resigned, OCM might not have litigated against him for breach of fiduciary duty and he might have avoided his subsequent losses. [*3

On April 1, 2009, defendants moved to dismiss the complaint. Relying on specific findings made at arbitration, the motion court granted the motion pursuant to CPLR 3211(a)(7) on the ground that plaintiff failed to state a cause of action

On appeal, plaintiff argues that the motion court, inter alia, erred in relying upon the final arbitration award, and erroneously dismissed the complaint when issues of fact remained. For the reasons set forth below, we find that, contrary to plaintiff's contention, the motion court properly applied arbitral findings to plaintiff's malpractice claim and all factual issues were resolved as a matter of law (
West 64th St., LLC v Axis U.S. Ins., 63 AD3d 471 [2009]).

It is well settled that prior arbitration awards may be given preclusive effect in a subsequent judicial action (CPLR 3211[a][5]; Matter of Metro-North Commuter R.R.Co. v New York State Exec. Dept. Div. of Human Rights, 271 AD2d 256, 257 [2000]). Because mutuality of parties is not required, a defendant may preclude a plaintiff from relitigating an issue resolved against that plaintiff in an earlier arbitration with a different defendant (see B.R. DeWitt, Inc. v Hall, 19 NY2d 141 [1967]; Prospect Owners Corp. v Tudor Realty Services Corp., 260 AD2d 299 [1999] citing Corto v Lefrak, 203 AD2d 94 [1994], lv dismissed 86 NY2d 774 [1995]; 
see e.g. Spasiano v Provident Mut. Life Ins. Co., 2 AD3d 1466 [2003]; Samhammer v Home Mut. Ins. Co. of Binghamton, 120 AD2d 59 [1986]). Thus, collateral estoppel arising out of arbitral findings may be applied offensively to bar the legal malpractice claim in this case (see e.g. GUS Consulting Gmb v Chadbourne & Parke LLP, 74 AD3d 677[2010]).

Here, the arbitrator found that plaintiff's dilatory conduct with regard to ROF IV, self-dealing with regard to the 60 Main Street opportunity, and misappropriation of OCM's financial information constituted breaches of his fiduciary and contractual duties. The arbitrator specifically found that "[b]eginning in early 2005" plaintiff was "stalling the launch of [ROF] IV so that he could deflect possible investment sources to the new entity he was forming." The arbitrator found that during the summer of 2005, plaintiff formed Westport Capital Partners, LLC, and began collecting OCM information to take with him to his new venture. He requested a list of all of his contacts at OCM and copies of quarterly investment letters, and obtained detailed information about OCM investments made by specific investors.

Relying on the arbitrator's factual findings, the motion court determined that plaintiff's course of misconduct began well before any purported advice received by plaintiff from defendants in August 2005. The court observed that there was no indication that "defendants knew of, or advised plaintiff to purchase 60 Main Street" for Westport, or to "collect[] OCM's financial information for his personal use." The motion court concluded that these activities, which the arbitrator found to be breaches of fiduciary duty and/or contractual duty, would have resulted in his justifiable expulsion regardless of his resignation.

The factual findings and issues resolved by the arbitrator establish that it was plaintiff's own misconduct prior to and apart from any advice from defendants that led to his termination for cause. The plaintiff had a full and fair opportunity to litigate these facts and issues at arbitration, and the application of collateral estoppel precludes him from relitigating them in this malpractice action (see e.g. GUS Consulting Gmb, 74 AD3d 678-679; 
Fajemirokun v Dresdner Kleinwort Wasserstein Ltd., 27 AD3d 320 [2006], lv denied 7 NY3d 705 [2006]).

Because the arbitral findings establish as a matter of law that defendants were not the cause of plaintiff's losses, the motion court properly dismissed plaintiff's complaint (
see Tydings v Greenfield, Stein & Senior, LLP, 43 AD3d 680, 682 [2007],affd 11 NY3d 195 [2008]). Plaintiff's claim that had he not resigned, he may have been able to hide his fraudulent activities, [*4]continue to collect fees, and reach an agreement with OCM is purely speculative and does not raise a triable issue of fact (see AmBase Corp. v Davis Polk & Wardwell, 8 NY3d 428, 434-436 [2007]; GUS Consulting Gmb, 74 AD3d at 679; Phillips-Smith Speciality Retail Group II v Parker Chapin Flattau & Klimpl, 265 AD2d 208, 210 [1999], lv denied 94 NY2d 759 [2000]).

Plaintiff's causes of action for breach of fiduciary duty and breach of contract were also properly dismissed by the motion court as duplicative, since they arose from the same facts as the legal malpractice claim and allege similar damages (see InKine Pharm. Co. v Coleman, 305 AD2d 151, 152 [2003]).

We have considered plaintiff's remaining arguments and find them unavailing.
THIS CONSTITUTES THE DECISION AND ORDER 
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
ENTERED: AUGUST 4, 2011
DEPUTY CLERK
Footnotes
Footnote 1:Although the interim award ordered plaintiff to disclose all information necessary for OCM to decide whether to purchase the 60 Main Street property, plaintiff divested himself of controlling interest in Westport, thereby "thwart[ing]" any potential remedy with regard to 60 Main Street. 

Wednesday, July 27, 2011

Three Clinical Counselors at Daytop Village in Queens Are Charged With Insurance Fraud

DA: Daytop Counselors Filed False Reports

North Country Gazette, 26 of July , 2011 at 4:09 pm

QUEENS—Three clinical counselors at Daytop Village in Far Rockaway, which provides substance abuse treatment to adults and teens, have been charged with insurance fraud, conspiracy and other crimes for allegedly filing false progress reports with the courts on behalf of a patient in exchange for his obtaining for them what they believed to be stolen merchandise.

Kasheen Bolden, 40, of Brooklyn, Claudette Fickling, 60, of Long Island, and Miguel Aviles, 46, of New Jersey, are variously charged with third degree insurance fraud, first-degree offering a false instrument for filing, first- and second-degree falsifying business records, third-degree criminal possession of stolen property, fifth-degree conspiracy, fourth-degree criminal facilitation, fifth-degree attempted criminal possession of stolen property and attempted petit larceny.

If convicted, the defendants each face up to seven years in prison.

Prosecutors said that the three defendants were employed as clinical counselors at Daytop Village’s Adult Intake and Assessment Unit, located at 316 Beach 65th St. in Far Rockaway, Queens. An individual who is sent to Daytop by any Criminal, County, Supreme or District Court in the State of New York initially goes to the Far Rockaway location for assessment and treatment by clinical counselors. Progress reports are then filed with the New York State Unified Court System.

According to the charges, between May 2010 and this month, Bolden, Fickling and Aviles provided unauthorized benefits to a patient – such as not having to stay at the facility, attend therapy sessions or take mandatory urine tests – and filed false progress reports with the court on his behalf in exchange for his obtaining for them what they believed to be stolen merchandise – such as laundry detergent, tools and computers.

Officials said the investigation was continuing. 7-26-11

Monday, July 18, 2011

Judges Need Pay REDUCTION Rather Than Pay RAISES







At the end of the NY Times article re-posted below, we read:
In the filings, the formulas and calculations are stitched together with arguments. So far,
the most ardent — and the wordiest— is the one by the judicial associations, which runs
247 pages. “When someone finds out that you are a judge,” it said, “and you have
not had a raise in over 12 years, most people say, ‘That’s crazy.’
We the public say: "It's crazy that Judges pay no attention to facts or law and make
decisions based on who is paying more behind closed doors. Stop pay raises until the
judicial system is once again under the rule of law and common sense.
Also read Elena Sassower's excellent review of the problem:
July 17, 2011

Commission to Set Raises for Judges in New York State Is Flooded With Suggestions


What is the price of administering justice?
That may sound like an existential question. But for a state panel beginning its task of setting salaries for New York’s judges, the issue is less of soaring philosophical debate than of convoluted calculations.
Would $220,836 be the proper salary for a judge who now earns $136,700, as one argument filed with the commission suggested? What about $195,754?
The seven members of the commission indicated last week in their first meeting that they thought their summer math-immersion course would put an end to one of the longest-running arguments in Albany, where state judges, numbering more than 1,200, have been lodging complaints about their pay for years.
The panel, the Judicial Compensation Commission, was created last year after the Legislature had failed for 12 years to agree on a raise for judges. Its decision, due in August, is to have the force of law unless overturned by the Legislature and the governor.
William C. Thompson Jr., the panel’s chairman and a former New York City comptroller, told the commissioners that they should assume that their conclusion “on the level of compensation for judges is going to be the level of compensation.”
The commission will hold its first — and probably only — public hearing on Wednesday in Albany. As a result, its members, appointed by the governor, legislative leaders and the state’s chief judge, are being inundated with formulas and charts.
The suggestions include every manner of numerical calculation, with most using as a point of reference the current $136,700 salary of State Supreme Court justices, who handle a wide range of cases, including murder cases and malpractice trials, and whose pay would have risen 41 percent if they had received raises to keep pace with inflation, according to one filing.
Each interest group had its own math. The New York City Bar Association argued that given how expensive it is to live in New York City, Supreme Court justices would have to earn $212,000 to be paid in line with the salaries of other big-city judges across the country.
The New York County Lawyers’ Association did another calculation: a $60,000 raise “would increase the state budget by less than 55 one-thousandths of one percent.”
Not to be outdone, a coalition of 12 judges’ organizations put forth 50 facts justifying a big raise, including salaries in New York City’s Sanitation Department: 50 employees in the department earn more than almost all New York judges and nearly as much as the state’s chief judge, Jonathan Lippman.
Judge Lippman makes $156,000; an intermediate appeals judge makes $144,000; a criminal court judge makes $125,600. The commissioners said they would keep in place the comparative differences for the various levels of the courts.
One commission member, Mark S. Mulholland, a Long Island lawyer, said in an interview that there were numbers of formulas that people were using to make their cases.
But he insisted he was not overwhelmed by numbers as lawyers sometimes are. “I actually did well in math,” he said.
Officials at the state’s Office of Court Administration presented the commissioners with their own ways of looking at the numbers, including a comparison of New York’s judicial salaries with the salaries of judges in other states. New York came in dead last.
The court administrators suggested setting the salary for a State Supreme Court justice between $192,000 and $220,000, a range seemingly intended to give the commission ample leeway to grant a big raise. If, for example, the commission chose a salary less than $192,000, it could appear fiscally responsible even as it doled out raises of 30 percent or so.
For much of the past dozen years, the discussion of judicial salaries has not drawn much passion. But with the commission tackling the issue at a time of state budget problems, the idea of increasing any state salaries is not popular.
State Senator John J. Bonacic, a Republican who is chairman of the Judiciary Committee, said in an interview that a raise to $220,000 for judges “may not be consistent with the tough environment that’s going on right now.” He said that in some areas of the state “if a vacancy occurred, you would have lawyers lining up for Supreme Court at the current salary.”
In the media and on the Internet, the prospect of a big judicial raise is beginning to draw fiery comments. Judges deserve a raise, “but 62 percent in one shot?” The New York Post asked in an editorial last week after the court administration officials had filed their submission. “No way,” the paper commented.
David Bookstaver, the spokesman for the court system, said the proposal offered the commission a range of salary possibilities based on factors set forth in the law. As for the criticism, Mr. Bookstaver called it “a mischaracterization of our submission.”
During the panel’s meeting last week, three of the seven commissioners appeared ready to grant judges a large raise quickly, two did not suggest views and two said the size of any raise had to be limited by the state’s fiscal troubles. “How much can the state afford?” asked Bill Mulrow, who was appointed by Gov. Andrew M. Cuomo.
In the filings, the formulas and calculations are stitched together with arguments. So far, the most ardent — and the wordiest— is the one by the judicial associations, which runs 247 pages. “When someone finds out that you are a judge,” it said, “and you have not had a raise in over 12 years, most people say, ‘That’s crazy.’ ”

Wednesday, July 13, 2011

Plaintiffs Seek Removal of Judge Lewis Kaplan From Their Case

Judge Lewis A. Kaplan
Ecuadorans in Chevron Lawsuit Seek Kaplan's Recusal for Bias
Mark Hamblett, NY Law Journal, 04-28-2011
Lawyers seeking to enforce an $18 billion environmental damages judgment against Chevron in Ecuador have asked Southern District Judge Lewis A. Kaplan to recuse himself.

In the latest salvo in what has become a worldwide legal and public relations battle, two attorneys allege that Judge Kaplan has expressed "prejudicial and untenable conclusions without a trial or an evidentiary hearing" and has "lost all semblance of impartiality" in the case.

Judge Kaplan in March issued a preliminary injunction blocking enforcement of the $18 billion judgment, finding merit in Chevron's claims that the judgment may have been procured through fraud.

The recusal motion was filed by New York attorney Julio C. Gomez and New Orleans attorney Carlos A. Zelaya, who represent two Ecuadorian plaintiffs who prevailed in Ecuador but were named by Chevron in a racketeering suit the oil company brought against attorney Steven Donziger (pictured below).

Mr. Donziger led the charge for plaintiffs in Ecuador in the so-called Lago Agrio litigation that climaxed on Feb. 14 when an Ecuadorian court ordered the $18 billion award for environmental contamination caused by Chevron's predecessor oil company in Ecuador, Texaco, from 1964 to 1992.

The award is now being appealed in Ecuador.


Chevron's racketeering suit, Chevron Corp. v. Donziger, 11-cv-691, filed by Randy Mastro of Gibson Dunn & Crutcher, alleges that Mr. Donziger conspired with others to corrupt the judicial system in Ecuador and win billions of dollars in damages from the company.

Mr. Donziger himself had filed an earlier motion asking Judge Kaplan to get off the case (NYLJ, March 3). In that motion, which the judge denied, Mr. Donzinger claimed Chevron manipulated the court's case assignment system to get before Judge Kaplan and that the suit should have been assigned instead to Judge Jed S. Rakoff, who nine years ago dismissed the initial action brought in the Southern District against Chevron on the basis of forum non conveniens. That ruling led the plaintiffs to bring suit in Ecuador.

Judge Kaplan become embroiled in the fight between the oil company and the Ecuadorian plaintiffs in 2010, when Chevron filed discovery motions under USC §1782, seeking to derail the expected damages award against it. Chevron sought to enforce subpoenas of Mr. Donziger and others to glean information it claimed would show the award was the result of fraud.

Judge Kaplan has since issued a series of rulings in Chevron's favor, first in the discovery litigation and then in the racketeering case.

On May 6, 2010, he ordered documentary filmmaker Joseph Berlinger to turn over outtakes of "Crude," a film about the litigation the judge said was solicited by Mr. Donziger (NYLJ, May 7, 2010). The judge then directed Mr. Donziger to turn over documents and e-mails, and appear for a deposition in two orders issued on Oct. 20 and Nov. 30, 2010.

After Chevron filed the racketeering case on Feb. 1, Judge Kaplan, on Feb. 8, less than one week before the $18 billion Lago Agrio award was announced, issued a temporary restraining order blocking enforcement of any award (NYLJ, Feb 9).

The judge cited a memo by Patton Boggs, one of the firms hired by the Ecuadorian plaintiffs to help enforce the judgment. He said the memo, code-named "Invictus," outlines a deliberate strategy to "cause as much disruption as possible" by launching simultaneous actions against Chevron in courts throughout the world and the use of maritime attachments to "coerce" a settlement.

Judge Kaplan said there was evidence that Ecuador does not provide impartial tribunals that comport with due process and the judgment may have been procured by fraud.

The judge followed the restraining order with a preliminary injunction on March 7, when he held that Chevron was likely to prevail at trial on its claim the judgment was neither recognizable nor enforceable.

Judge Kaplan went on to deny the Ecuadorian plaintiffs a stay of that ruling pending appeal. On April 22, Patton Boggs, along with Messrs. Gomez and Zelaya, filed papers with the U.S. Court of Appeals for the Second Circuit, asking for a stay of the preliminary injunction pending an expedited appeal.

Patton Boggs, led by James E. Tyrrell Jr., claims in Naranjo v. Chevron Corp., 11-1150-cv, that Judge Kaplan lacked the authority to issue the injunction, calling it "unprecedented preliminary relief of extraordinary scope."

Mr. Tyrrell also alleges that the injunction prevents the Ecuadorian plaintiffs from speaking with counsel about potential enforcement actions in other countries.

In a related skirmish before Judge Kaplan, Mr. Mastro filed a sanctions motion against Patton Boggs and two other law firms in January for purporting to represent 48 Lago Agrio plaintiffs without authorization. Mr. Mastro claims that Mr. Donziger confirmed at a recent deposition that the firms have not executed retainer agreements with the plaintiffs, a claim the plaintiffs' firms dispute.

In an April 7 letter to Judge Kaplan, Mr. Mastro states that Mr. Tyrrell has not appeared before the judge in the racketeering case, but has now appeared before the Second Circuit in a piece of "gamesmanship" to avoid both appearing before Judge Kaplan and being sanctioned.

Mr. Tyrrell said yesterday, "it is not appropriate for me to comment on why individual lawyers representing Lago Agrio plaintiffs appear in different actions."

Patton Boggs, Motley Rice and other firms are engaged in litigation in 20 different actions in 16 courts in the United States.

Judge's 'Jaded View'?

The latest recusal motion by Messrs. Gomez and Zelaya faulted Judge Kaplan for his "jaded view" of the Ecuadorian proceedings and a "profound disrespect for the Ecuadorian judicial system."

"The court accepted without question Chevron's description of the Lago Agrio litigation as an entrepreneurial scheme engineered by counsel 'to hit Chevron as hard as they can,'" the lawyers for the Ecuadorian clients state in their motion.

The attorneys claim the judge is prejudiced against their case and has "engaged in a pattern of inequitable and overly harsh treatment of defendants, more than sufficient to create the appearance of bias."

They quote the judge as saying during a hearing that he understood "that Chevron never did business in Ecuador…that Texaco was out of Ecuador for years before they acquired Texaco…and that Texaco has been out of Ecuador for 19 years and that whatever happened since 1992 has been on the watch of the Ecuadorian-owned oil company."

They also charge that the judge, "propelled by his conviction that the Ecuadorian plaintiffs are engaged in an elaborate hoax," went on to "invite Chevron to bring this action."

Mr. Mastro yesterday called the recusal motion "meritless."

"All Judge Kaplan has done is make rulings based on uncontroverted evidence and every time he's been affirmed by the Second Circuit, most recently with the appellate court going out of its way to praise his handling of these matters," Mr. Mastro said.

Mark Hamblett can be contacted at mhamblett@alm.com.








Office of Court Administration Wants a 41% Jump in Pay For Judges

Of course the OCA wants to raise the pay of judges. How else can the people that run the court system make sure that all decisions go the way they want? The black robes are not allowed to look at facts or the law, and must receive proper compensation.
Here is the 2011 compensation report that becomes law on August 29, 2011 if the state legislature does not oppose it:

2011 Commission on Judicial Compensation

Before you read the Law Jounal on this ugly current scam, read the postings of Elena Sassower on her blog
"Center For Judicial Accountability"

New York State Office of Court Administration Wants A 41% Pay Raise For Judges
NY Law Journal
LINK
Parentadvocates.org
LINK

A report submitted by Chief Administrative Judge Ann Pfau presented several scenarios to the state's Special Commission on Judicial Compensation for a salary of between $192,000 and $220,000 for Supreme Court justices, who now make $136,700. The top end would constitute a 41 percent raise. Urging the commission to shun "half measures," the Office of Court Administration said that the panel should recommend a raise that eliminates much of the current pay shortfall in one big step despite the state's fiscal condition.
Court administrators yesterday urged "an immediate and substantial" salary increase for 1,200 state judges who have not had a raise since January 1999.
A report submitted by Chief Administrative Judge Ann Pfau presented several scenarios to the state's Special Commission on Judicial Compensation for a salary of between $192,000 and $220,000 for Supreme Court justices, who now make $136,700. The top end would constitute a 41 percent raise.
Urging the commission to shun "half measures," the Office of Court Administration said that the panel should recommend a raise that eliminates much of the current pay shortfall in one big step despite the state's fiscal condition.
The seven-member commission, which held its first meeting yesterday, is scheduled to report its conclusions to the governor and Legislature by Aug. 29 for the fiscal year that begins April 1, 2012. Unless the Legislature acts to block its recommendations, they will automatically become law. (See the law establishing the pay commission.)

"I do think this is a thoughtful analysis of what has come before to help develop alternatives for the commission to consider," Judge Pfau said in an interview.

However, the comments of commission members seemed to suggest that the current economic climate could be a major sticking point in determining how much judges will receive.
One of Chief Judge Jonathan Lippman's two choices to the panel, Kathryn S. Wylde, CEO of the Partnership of New York City, questioned how much of a role the economy should play in the commission's choices.
"It is a brick in terms of the overall state budget," she said.
But William Thompson Jr., the former New York City comptroller who was picked by Governor Andrew M. Cuomo to chair the commission, responded that the panel "can't fully ignore the state's condition."
In fact, the economy is one of the factors the law creating the commission directs it to consider. Moreover, the panel begins its deliberations as Mr. Cuomo has been battling public employee unions for concessions over the past several months that could avoid layoffs. And the courts already have been forced by budget cuts to lay off several hundred workers.
Judge Pfau's report laid out several reasons why the state's fiscal condition should not block a major raise.
First, it notes that the state has repeatedly deferred a raise. Had it acted in a more timely fashion, there would be no need for a large adjustment now, the report argues.
Moreover, it says that every $10,000 statewide increase in judicial salaries constitutes an increase in the state budget of only 9/1,000ths of 1 percent.
Finally, it observes that the establishment of the commission marks the first real opportunity to consider salaries in a non-political manner, using rational, objective and predictable criteria.
Mr. Thompson indicated at yesterday's meeting that he would like to come to a final decision on compensation weeks ahead of a late-August deadline.
"I think the recommendations we make are going to be the levels of compensation," Mr. Thompson said.
The panel will hold a public hearing at 11 a.m. on July 20 in Albany where individuals will have three minutes and organizations seven minutes to present their views. The venue has not yet been announced.
Commission member Mark Mulholland of Ruskin Moscou Faltischek in Uniondale called information on the purchasing power of judicial salaries "a critical starting point," later adding it was necessary to consider the amount of money lost through inflation as salaries stayed the same.
Robert Fiske Jr., senior counsel at Davis Polk & Wardwell, said the submissions of both the OCA and the Coalition of New York State Judicial Associations, an alliance of 12 judicial associations that proposed a 41 percent raise, offered "a very thorough analysis of the relevant factors."
William Mulrow, senior managing director at Blackstone, said it would be important to consider how much of an increase the state could afford.
James Tallon Jr., president of the United Hospital Fund of New York and a former Democratic assemblyman, said the panel should look at the "totality" of the state's compensation of other public employees in leadership and executive positions.
Richard Cotton, executive vice president and general counsel of NBC-Universal, said he would like to hear the perspective of the business community, and to know the number of judges who have left the bench for the private sector due to lower pay.
In an interview, Mr. Thompson called commission members "an informed group of people interested in working hard and coming to a conclusion."
In addition to the commission members, about a dozen others attended the meeting, which was held at the midtown Manhattan offices of the Empire State Development Corporation. Bronx Acting Supreme Court Justice Lizbeth Gonzalez, the president of the Association of Judges of Hispanic Heritage, was among the attendees.
"It appears that the body respects who we are as judges and understands the gravity of our financial circumstances, given the fact we received no pay raise or cost of living increase for more than 12 years," she said.
Brooklyn Family Court Judge Daniel Turbow, another attendee, said after the meeting that he was "encouraged and impressed" by the proceedings.
Judge Turbow, who is the president of the New York City Family Court Judges Association, said the commission "has a clear understanding of the harm that's befallen the judiciary in many ways by reason of the failure to get a salary increase."
The coalition of judicial groups conceded that it would take a "brave" decision by the commission to advocate for its proposed increase. But the groups argued in a 247-page submission that New York's economy is getting somewhat better and that the Judiciary has endured enough sacrifices since its last raise.
The groups told the commission that Supreme Court justices have lost more than $345,000 in buying power to inflation since 1999.
Albany Family Court Judge Dennis Duggan was the chief author of the alliance's recommendations.
"We are looking at (the pay commission) as sort of our jury," he said. "We are presenting our case. The jury will have to make a decision and put aside extraneous things, such as politics. We are confident, based on the evidence, they will give us a significant raise."
Andrew Keshner and Joel Stashenko can be contacted at akeshner@alm.com and jstashenko@alm.com, respectively.

Commissioners
Special Commission on Judicial Compensation

William Thompson Jr., chair, chief administrative officer/senior managing director at Siebert Brandford Shank & Co. and chair of the Battery Park City Authority. From 2002 to 2009, he served as New York City comptroller.

Richard Cotton, executive vice president/general counsel of NBC-Universal and chair of the U.S. Chamber of Commerce Coalition against Counterfeiting and Piracy.

Robert Fiske Jr., senior counsel at Davis Polk & Wardwell.

Mark Mulholland, managing partner at Ruskin Moscou Faltischek.

William Mulrow, senior managing director at Blackstone and chair of Sterling Suffolk Racecourse LLC.

James Tallon Jr., president of the United Hospital Fund of New York and chair of The Commonwealth Fund as well as the Kaiser Commission on Medicaid and the Uninsured.

Kathryn S. Wylde, president/CEO of the nonprofit Partnership for New York City and deputy chair of the board of the Federal Reserve Bank of New York.

SOURCE: http://www.judicialcompensation.ny.gov/

Saturday, July 9, 2011

New York State Supreme Court, Manhattan, Goes Paperless

"E-Courts" is a very good idea if the only people who filed lawsuits were large lawfirms. Pro se litigants must opt-out, and no one is telling these people that this is the case. So, try to find papers in your case if you are a pro se. You will not see most, all, or some, because the case is e-filed.

Unfair.

New York State Supreme Court, NYC
July 7, 2011
Amid Stacks of Paper, ‘E-Court’ Is Finally in Session
By , NY Times

The Manhattan courthouse is famous for its clean architectural lines and grand outdoor staircase leading to Foley Square. But inside is a Dickensian maze of dark wood and battered cabinets. And paper. Tons of paper. Piles, boxes, and rooms packed with summonses, exhibits and briefs.



So much paper. More than two million pieces in 80,000 new civil suits a year, with some 360,000 more files in the basement. Lawyers sometimes use hand-trucks to wheel in new stacks of documents.
“We’ve run out of space to put the paper,” said Edward M. Kvarantan, one of the court clerks, while at the next table another clerk sorted through the latest piles to arrive at the court, at 60 Centre Street, where big civil suits are handled. When the file cabinets filled up, Mr. Kvarantan said, “we began to put the files on top of the cabinets, but it didn’t look very good.”       
The digital revolution has now, finally, and perhaps improbably, made it here to this courthouse, State Supreme Court in Manhattan, whose staircase is featured so often on television that some people would not be faulted for thinking it is a stage set for “Law & Order.”

The court is the setting for the first full “e-court” in the state and is part of efforts by more than a dozen court systems nationally to move toward a paperless future that has come slowly to state courts, where old habits die hard. (Federal courts, and much of the rest of the world, have been online for more than a decade.)       
For the past year, New York State has for the first time been requiring lawyers in about 6,000 cases dealing with commercial disputes in the Manhattan courthouse to “e-file” their cases over the Internet. Clerks and judges then process the documents from the first gripe, through the spiteful arguments and on to the final rulings, all the while providing full public access — and all, at least theoretically, paperlessly.

Some courts in Westchester and Rockland Counties have followed Manhattan’s pilot project to require mandatory electronic filing over the last year. And last month the Legislature authorized a wide expansion of electronic courts to a broad array of civil cases and to courts in every borough and several upstate counties. New York is not yet handling criminal cases electronically.

All of which has made this old-style court something of a pioneer. “We have momentum to really eliminate the paper,” said Jeffrey Carucci, the first deputy chief clerk of the Manhattan court.

From his base in the Centre Street courthouse, Mr. Carucci, 49, coordinates the statewide program to expand the electronic court to other courthouses. The whole project could be complete, he said, in 20 years. Having e-courts statewide, court officials say, will mean half a billion fewer pieces of paper annually.

“It’s a tremendous cultural change,” Mr. Carucci said.

Mr. Carucci recalled that some lawyers seemed to require persuasion to believe that their computer could actually accomplish the act of filing a document at the courthouse that used to require a personal visit to a scratched counter. He said he explained patiently, “E-filing is not just putting it out into cyberspace; it was actually filing,” in court.

There are skeptics. Though the law does permit courts to require electronic filing in certain cases, it also provides that people can opt out for specified reasons, including that they do not know how to use a computer. In the 5,745 commercial cases in which electronic filing has been required for the last year, court officials say, only 30 people have filed the necessary opt-out form (paper that goes into yet another file).

A Manhattan lawyer, Louis P. Giordano, said his firm uses computers but decided to stick with paper in a recent case. He said he worried about whether the courts had “really gotten the kinks out.”

“Things occasionally get botched in state court,” Mr. Giordano said. “In state court I do not want to be that guinea pig.”

The other day the future could be glimpsed in 60 Centre Street’s Courtroom 130, a cavernous brownish room that looked as if it were a backdrop in an old Edward G. Robinson movie.

Courtroom 130 is the palace of paper. Every weekday morning, court is in session. But there is no judge. Instead, clerks call a list of cases and lawyers line up with their piles of documents. The purpose of the exercise is the collection, collation and preparation of paper from all participants to a case for the day when it will be needed by a judge.

But in the back, at a desk with computer screens, sits Michael P. D. Kenny, the court clerk of the future. Mr. Kenny handles the electronic cases, a task that is supposed to involve key strokes and e-mail rather than lines and piles.

It has worked somewhat, Mr. Kenny said, as he prepared his cases for the next day. But what was that he was working on? It looked suspiciously like piles of paper.

He sheepishly explained that some judges have specified that the electronic court is all well and good but that when it comes to their cases, they want the paper printed out.

“It’s taking them a little while,” he said as he straightened a pile. “This moving forward,” he added, “it’s like taking baby steps.”

But some judges say paperlessness has won them over even in cases in which it is not required.
In his robing room off another big courtroom where he handles contract disputes, personal injury claims and other civil cases, Justice Paul G. Feinman said there were many benefits to the electronic court. One benefit, he said, was that he has worked on cases in any number of places with Internet access, including his mother’s house, his living room and Fire Island without having to haul pounds of documents with him.

Among its many bells and whistles, the court’s computer program automatically notifies all lawyers to a case when a document is filed by any participant. One result, Justice Feinman said, is that the age-old practice of bickering among lawyers about whether they received a copy of this or that is becoming a thing of the past.

Justice Feinman has become something of an antipaper zealot. “Papers collect,” he said. “They get full of dust. They get coffee stains.” He noted with evident disgust that the judges received a memorandum not long ago advising that they should avoid keeping piles of paper on courthouse floors. Bedbugs, the memo asserted, do not confine themselves to beds.

Justice Feinman was warming to the topic as he extolled the benefits of the e-court. “I do have fewer paper cuts since we went into this,” he said.


 

School Construction Authority loses in Appellate Division, First Department




Matter of Bronx Comm. for Toxic Free Schools v New York City School Constr. Auth.
2011 NY Slip Op 05853
Decided on July 7, 2011
Appellate Division, First Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.

Decided on July 7, 2011
Gonzalez, P.J., Tom, Andrias, Moskowitz, Freedman, JJ. 5055- 13800/07 5056
[*1]In re Bronx Committee for Toxic Free Schools, et al., Petitioners-Respondents,

v

New York City School Construction Authority, et al., Respondents-Appellants.

Michael A. Cardozo, Corporation Counsel, New York (Janet L.
Zaleon of counsel), for appellants.
Weil, Gotshal & Manges, LLP, New York (Christopher D.
Barraza and David R. Berz of counsel), for respondents.

Order, Supreme Court, Bronx County (Patricia Anne Williams, J.), entered October 28, 2008, which, to the extent appealed from as limited by the briefs, granted the petition to direct respondent School Construction Authority (SCA) to prepare a supplemental environmental impact statement (EIS) pursuant to the State Environmental Quality Review Act (SEQRA) (ECL 8-0101 et seq.) with respect to long-term maintenance and monitoring of measures for the remediation of contaminated soil and groundwater at the Mott Haven School Campus site, unanimously affirmed, without costs. Order, same court and Justice, entered on or about November 18, 2009, which granted respondents' motion for renewal and reargument and adhered to the original determination, unanimously affirmed, without costs.

Respondents' contentions notwithstanding, the long-term monitoring measures, developed and implemented in their entirety after the final EIS was issued in October 2006, constituted "changes proposed for the project" (6 NYCRR 617.9[a][7][i][a]). Given, among other things, the Department of Environmental Conservation's July 2006 directive to SCA to develop a site management plan, which by definition under the applicable Brownfield Cleanup Program (see ECL tit 14) regulations includes a long-term monitoring plan (see 6 NYCRR 375-1.2[at]; 375-1.6[c][iv]), it is evident that information about long-term monitoring measures was of sufficient "importance and relevance" to warrant the preparation of a supplemental EIS (6 NYCRR § 617.9[a][7][ii][a]).

By failing to make any mention of the need for long-term monitoring in the initial EIS, SCA frustrated the purpose of SEQRA, which is to subject agency actions with environmental impact to public scrutiny (see Environmental Conservation Law § 8-0109; 6 NYCRR 617.1[c]). Indeed, there is no record evidence that SCA took the requisite "hard look" at the issue of long-term maintenance and monitoring of remediation measures until 2008, when it issued its final site management plan (see Matter of Riverkeeper, Inc. v Planning Bd. of Town of Southeast, 9
[*2]NY3d 219, 231-232 [2007]). This constitutes a failure of the agency's obligations under SEQRA (see Matter of Pyramid Co. of Watertown v Planning Bd. of Town of Watertown, 24 AD3d 1312 [2005], lv dismissed 7 NY3d 803 [2006]; Matter of Penfield Panorama Area Community v Town of Penfield Planning Bd., 253 AD2d 342, 349 [1999]).

Nor does the fact that SCA was acting under the Brownfield Cleanup Program (BCP) shield the remediation measures from SEQRA scrutiny. BCP remediation measures that "commit the . . . agency to specific future uses or actions" are subject to SEQRA review (6 NYCRR 375-3.11[b][1][i]). The final site management plan provided that the Mott Haven School Campus site could be used for a school campus only, thus committing SCA to a specific site use. In any event, the BCP remediation measures applied only to the BCP area, whereas most of the site was not subject to the BCP and nonetheless was subject to SEQRA review.

Respondents contend that, because SCA was relying on BCP procedures, it could appropriately defer consideration of long-term monitoring measures until the completion of remediation. As noted, however, SCA's participation in the BCP did not exempt the project's environmental impacts from SEQRA scrutiny, and under SEQRA it was impermissible for SCA to omit a known remediation issue from the EIS with the idea of taking up that issue at a later date (see Penfield, 253 AD2d at 349).

We reject respondents' contention, raised in their motion for renewal and reargument, that SCA's development of the final site management plan (SMP), which entailed circulation of a draft for public comment, obviates any need for a supplemental EIS. The SMP is not a supplemental EIS, and respondents have not established that the development of the SMP followed the procedures for the preparation of a supplemental EIS. Since SEQRA procedures must be strictly complied with (see Matter of King v Saratoga County Bd. of Supervisors, 89 NY2d 341, 347 [1996]), SCA's issuance of the final SMP did not cure the deficiencies in the final EIS.

THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
ENTERED: JULY 7, 2011
CLERK


Saturday, July 2, 2011

Judicial Watch Asks Congress To Review Supreme Court Justice Elena Kagan's Role in Obamacare

From the Desk of Judicial Watch President Tom Fitton:
Congress Urges Review of Kagan Obamacare Role in Response to JW Disclosures
Judicial Watch
LINK
Back in May I told you that JW had uncovered explosive documents from the Obama Department of Justice (DOJ) indicating Supreme Court Justice Elena Kagan was heavily involved in crafting a defense for Obamacare while she served as Solicitor General. The documents appear to contradict Kagan’s contention that she was merely an uninvolved bystander. Well, now Congress has joined the effort to get to the truth in the matter, calling for a full investigation.

According to today’s The Washington Times:

Forty-nine Republican members of Congress have asked the House Judiciary Committee to “promptly investigate” Supreme Court Justice Elena Kagan’s role in preparing a legal defense for President Obama’s health care law when she served as solicitor general.

In a letter to committee Chairman Lamar Smith, Texas Republican, and the panel’s ranking Democrat, John Conyers Jr. of Michigan, the lawmakers said that “contradictory to her 2010 confirmation testimony before the Senate Judiciary Committee,” recently released Justice Department documents show that Justice Kagan “actively participated with her Obama administration colleagues in formulating a defense” for the law.

Here’s a copy of the letter that was issued from the congressional office of Rep. John Fleming, who is also a physician, by the way. The letter states: “This revelation raises serious questions about Justice Kagan’s ability to exercise objectivity in any case relevant to [Obamacare] that comes before the U.S. Supreme Court.”

Of course, the “Justice Department documents” referenced in the Washington Times report and in a release issued by Rep. Fleming’s office announcing the letter were disclosed through Judicial Watch. We are very glad to have played a role in helping to focus congressional attention on this crucial issue.

How crucial?

In one of the new emails, Kagan’s Deputy Solicitor General urged her to attend a healthcare litigation meeting, calling the legal fight over Obamacare, “litigation of singular importance.”

(Judicial Watch’s lawsuit has been consolidated with a similar FOIA lawsuit that had been first filed against the DOJ by the Media Research Center. The lawsuits are now both before the U.S. District Court for the District of Columbia. The documents were first produced in the Media Research litigation.)

The U.S. Supreme Court will ultimately settle the issue regarding whether or not Obama’s socialist healthcare overhaul will be the law of the land. Everyone knows it. And if Elena Kagan is forced to recuse herself from hearing the case that will be one fewer dependably liberal vote on the Supreme Court for Obamacare.

Since I covered our document discovery in May, I won’t re-publish all of the document excerpts we discovered. For a complete review, please click here.

This action by 49 members of Congress is further testament to the importance of Judicial Watch’s work and is a prime example of your Judicial Watch’s leading watchdog role. When it comes to uncovering the truth and holding our Washington public officials (on the courts and in elected office) accountable to the rule of law, it often wouldn’t get done but for Judicial Watch.

Documents Raise Questions about Kagan’s Role in Obamacare Defense

If Obamacare reaches the U.S. Supreme Court, which it surely will, one key question may determine whether or not the president’s socialist healthcare takeover will remain the law of the land: Will Supreme Court Justice Elena Kagan recuse herself from the case?

Kagan has said she was not involved in Department of Justice (DOJ) preparations for legal challenges to Obamacare. Moreover, the Supreme Court justice did not recuse herself from the High Court decision in April 2011 not to “fast-track” for Supreme Court review Virginia’s lawsuit challenging Obamacare.

But documents obtained by Judicial Watch as result of a Freedom of Information Act (FOIA) lawsuit suggest that Kagan helped coordinate the Obama administration’s legal strategy to defend Obamacare.

(Judicial Watch’s lawsuit has been consolidated with a similar FOIA lawsuit that had been first filed against the DOJ by the Media Research Center. The lawsuits are now both before the U.S. District Court for the District of Columbia. The documents referenced in this release were first produced in the Media Research litigation.)

According to a January 8, 2010, email from Neal Katyal, former Deputy Solicitor General (and current Acting Solicitor General) to Brian Hauck, Senior Counsel to Associate Attorney General Thomas Perrelli, Kagan was involved in the strategy to defend Obamacare from the very beginning:

Subject: Re: Health Care Defense:

Brian, Elena would definitely like OSG [Office of Solicitor General] to be involved in this set of issues…we will bring in Elena as needed. [The “set of issues” refers to another email calling for assembling a group to figure out “how to defend against the…health care proposals that are pending.”]

On March 21, 2010, Katyal urged Kagan to attend a health care litigation meeting that was evidently organized by the Obama White House: “This is the first I’ve heard of this. I think you should go, no? I will, regardless, but feel like this is litigation of singular importance.”

In another email exchange that took place on January 8, 2010, Katyal’s DOJ colleague Brian Hauck asked Katyal about putting together a group to discuss challenges to Obamacare. “Could you figure out the right person or people for that?” Hauck asked. “Absolutely right on. Let’s crush them,” Katyal responded. “I’ll speak with Elena and designate someone.”

However, following the May 10, 2010, announcement that President Obama would nominate Kagan to the U.S. Supreme Court, Katyal’s position changed significantly as he began to suggest that Kagan had been “walled off” from Obamacare discussions.

For example, the documents included the following May 17, 2010, exchange between Kagan, Katyal and Tracy Schmaler, a DOJ spokesperson:

Shmaler to Katyal, Subject HCR [Health Care Reform] litigation: “Has Elena been involved in any of that to the extent SG [Solicitor General’s] office was consulted?...

Katyal to Schmaler: “No she has never been involved in any of it. I’ve run it for the office, and have never discussed the issues with her one bit.”

Katyal (forwarded to Kagan): “This is what I told Tracy about Health Care.”

Kagan to Schmaler: “This needs to be coordinated. Tracy you should not say anything about this before talking to me.”

Included among the documents is a Vaughn index, a privilege log which describes records that are being withheld in whole or in part by the Justice Department. The index provides further evidence of Kagan’s involvement in Obamacare-related discussions.

For example, Kagan was included in an email chain (March 17–18, 2010) in which the following subject was discussed: “on what categories of legal arguments may arise and should be prepared in the anticipated lawsuit.” The subject of the email was “Health Care.” Another email chain on March 21, 2010, entitled “Health care litigation meeting,” references an “internal government meeting regarding the expected litigation.” Kagan is both author and recipient in the chain.

The index also references a series of email exchanges on May 17, 2010, between Kagan and Obama White House lawyers and staff regarding Kagan’s “draft answer” to potential questions about recusal during the Supreme Court confirmation process. The White House officials involved include: Susan Davies, Associate White House Counsel; Daniel Meltzer, then-Principal Deputy White House Counsel; Cynthia Hogan, Counsel to the Vice President; and Ronald Klain, then-Chief of Staff for Vice President Biden. The DOJ is refusing to produce this draft answer.

The Vaughn index also describes a March 24, 2010, email exchange between Associate Attorney General Beth Brinkmann and Michael Dreeben, Kagan’s Deputy Solicitor General, with the subject header, “Health Care Challenges:” “…I had a national conference call with the Civil Chiefs. A memo also went out the day before. I am forwarding right after this. Let’s discuss if you have more ideas about what to do.”

So let’s sum up. Kagan instructs her office “to be involved” in crafting the Obama administration’s defense of health care reform legislation, which is certainly consistent with her former responsibilities as Solicitor General. As documented in the emails and Vaughn index, she was constantly kept apprised of ongoing litigation strategy discussions. As recently as March 2010, Kagan’s top deputy urged her to attend a high level briefing on Obamacare litigation, without a hint that it might be inappropriate.

Then the president nominates Kagan to the Supreme Court in May 2010, and all of the sudden she knows nothing about the Obama administration’s legal strategy for defending Obamacare? Moreover, Kagan scolds a Justice Department spokesperson for not clearing all sound bites over the matter through her personally.

So what does the law say about these kinds of judicial conflicts of interest? What is the standard for recusal? As reported by CNS News:

In the questionnaire she filled out for the Senate Judiciary Committee during her confirmation process, Kagan said she would abide by the “letter and spirit” of 28 U.S.C. 455 in deciding whether she felt compelled to recuse herself as a Supreme Court Justice from any case that came before the High Court.

According to the law, a “justice … shall disqualify himself in any proceeding in which his impartiality might be reasonably questioned.” It further says any justice “shall also disqualify himself … [w]here he has served in governmental employment and in such capacity participated as counsel, adviser or material witness concerning the proceedings or expressed an opinion concerning the merits of the particular case in controversy.”

Any reasonable person would read these documents and come to this conclusion: Elena Kagan helped coordinate the Obama administration’s defense of Obamacare. And as long as the DOJ continues to withhold key documents, the American people won’t know for sure whether her involvement would warrant her recusal from any Obamacare litigation that comes before the High Court.

What Did Kagan Tell Her Deputy About Winning the Health-Care Case? DOJ Won’t Say
Tuesday, April 26, 2011
By Terence P. Jeffrey
LINK
(CNSNews.com) - To an ordinary American it might seem like an obvious question with an obvious answer.

When Solicitor General Elena Kagan--whose job was to defend the administration’s position in federal court cases--assigned her top deputy to handle the anticipated legal challenges to the health-care bill that President Barack Obama was pushing through Congress in 2010 did she indicate to that deputy that the administration should defeat those challenges?

Common sense might say: Of course.

But if the common sense answer were in fact the true answer, then the plain sense of the law governing recusals by Supreme Court justices would seem to require Kagan to recuse herself from judging the legal challenges to President Obama’s health-care law.

In the questionnaire she filled out for the Senate Judiciary Committee during her confirmation process, Kagan said she would abide by the “letter and spirit” of 28 U.S.C. 455 in determining whether she needed to recuse herself from any case as a Supreme Court justice.

This law says that any “justice … shall disqualify himself in any proceeding in which his impartiality might be reasonably questioned.” It further says any justice “shall also disqualify himself … [w]here he has served in governmental employment and in such capacity participated as counsel, adviser or material witness concerning the proceedings or expressed an opinion concerning the merits of the particular case in controversy.”

If Kagan indicated to the subordinate she assigned to handle the health care case that the administration should win it, might it not then be reasonable to question her “impartiality” when that case comes before her on the Supreme Court?

If Kagan discussed the “merits” of the health care case with the subordinate she assigned to it, would it not be in keeping with the “letter” of the law--not to mention with its spirit--for her to recuse herself?

But Kagan told the Senate Judiciary Committee, in writing, that she never was asked and never offered her views on the underlying legal or constitutional issues related to any proposed health care legislation--including the health-care reform law signed by President Obama--and that she never was asked nor offered her views on the underlying legal or constitutional issues related to potential litigation resulting from any proposed health care legislation.

The Justice Department will not respond to similar questions CNSNews.com has posed to Acting Solicitor General Neal Katyal--citing as its reason for not answering ongoing litigation over a CNSNews.com Freedom of Information Act (FOIA) request that seeks records relevant to whether Kagan ought to rescuse herself from the health-care case.

On Jan. 8, 2010, then-Solicitor General Kagan personally assigned Katyal, then the principal deputy solicitor general, to be the person in the Office of the Solicitor General (OSG) to handle the expected legal challenges to the health care bill. That same day Katyal had indicated in an email to DOJ colleague Brian Hauck—who worked in the associate attorney general’s office—that he hoped they would “crush” the legal challenges to the health-care bill.

Katyal also wrote Hauck that day that “Elena would definitely like OSG to be involved in this set of issues” regarding the expected health-care litigation and that Katyal would “bring in Elena as needed.”

Katyal has now signed legal briefs representing the Obama administration in the lawsuits brought against Obama’s health-care law by Florida and Virginia.

Among the questions CNSNews.com has put to Katyal that the Justice Department will not answer are:

--“Did you personally speak at any time that day [when Kagan assigned him to handle the expected legal challenges to the health-care bill] to Solicitor General Kagan about what the Justice Department viewed as the inevitable challenges to the health-care proposal or the department’s need to plan to defend against them?”

--“If you did speak to Solicitor General Kagan that day about the inevitable challenges to the health care proposal or the Justice Department’s need to start planning the administration’s defense against them, what did you say to her and what did she say to you?”

--“How did you know on that day that Solicitor General Kagan ‘definitely’ wanted her office involved in planning the administration’s treatment of the ‘set of issues’ involved in the inevitable challenges to the health-care proposal?”

--“Did you follow through on your statement in the email to Brian Hauck and ‘bring Elena in as needed’ in planning the administration’s treatment of the ‘set of issues’ involved the administration’s defense against the inevitable challenges to the health care proposals?”

--“Did you ever in any way communicate to Solicitor General Kagan, as you did to Brian Hauck in your Jan. 8, 2010 email, your desire to ‘crush’ or otherwise defeat the challenges to the health-care proposal? If so, how did Solicitor General Kagan respond?”

--“Did Solicitor General Kagan ever communicate to you a desire on her part for the administration to succeed in its defense against challenges to the health-care proposals?”

--“Did Solicitor General Kagan ever communicate to you a desire on her part for the administration to fail in its defense against challenges to the health-care proposals?”

--“Did you at any time communicate to your colleagues or subordinates in the Solicitor General’s office, or persons elsewhere in the administration, about what Solicitor General Kagan wanted them to do, or would like to see happen, in regard to legal challenges to the health-care proposals?”

The bases for these questions are facts revealed in a series of internal Justice Department emails the department released last month to CNSNews.com in partial response to the FOIA request CNSNews.com had filed in May 2010.

On Dec. 24, 2009, the Senate passed the health-care bill that President Obama later signed. A week later, the New York Times published an article reporting that Florida Attorney General Bill McCollum was considering a lawsuit to challenge the bill if it became law and that there were “nearly a dozen other states who have also threatened to sue over the mandate.”

On Jan. 8, 2010, Brian Hauck, senior counsel to Associate Attorney General Tom Perrelli, emailed Neal Katyal, principal deputy solicitor general, to tell him that Perrelli wanted “to put together a group to get thinking about how to defend against the inevitable challenges to the health care proposals that are pending.” On receiving that email, Katyal immediately emailed back to Hauck, saying: “Absolutely right on. Let’s crush them. I’ll speak to [Solicitor General] Elena [Kagan] and designate someone.”

Katyal, who was Kagan’s top subordinate, then forwarded Hauck’s email to Kagan and said, “I am happy to do this if you are ok with it.” He also offered his colleague Deputy Solicitor General Ed Kneedler as a possible candidate for handling the health-care issue, or the two of them together.

Kagan instantly assigned Katyal. “You should do it,” she said by return email.
Neal Katyal

That email exchange took place at about 11:00 am on a workday. About two hours later, shortly after 1:00 pm, Katyal emailed again to Hauck in the associate attorney general’s office ostensibly to inform him of his boss, Elena Kagan’s, determinations.

“Brian,” Katyal wrote, “Elena would definitely like OSG to be involved in this set of issues. I will handle this myself, along with an Assistant from my office [name redacted] and will bring in Elena as needed.”

At this time, Kagan’s job as solicitor general was to represent the administration’s position in federal court. Her boss, President Barack Obama, had just seen his signature legislation, the health-care bill, squeak through the Senate. States were already threatening law suits to stop it. Kagan, according to the questionnaire she filled out for the Senate Judiciary Committee, would not be informed by the White House until March 5, 2010 that the president wanted to consider her for a possible Supreme Court vacancy.

On March 23, the day President Obama signed the health-care law, Florida and Virginia filed suit against it in federal court. Supreme Court Justice John Paul Stevens, whom Kagan would eventually replace, did not announce his retirement, or formally inform President Obama of it, until more than two weeks later on April 9, 2010. And Obama did not inform Kagan he wanted to nominate her to replace Stevens until May 9, 2010, publicly making the announcement of her nomination the next day.

On Jan. 8, when Kagan assigned her deputy Katyal to handle the expected lawsuits against the health-care bill, she was fully engaged as Obama’s full-time solicitor general--and she would not recuse herself from her duties as solicitor general for another four months. When Katyal emailed back to his colleague Hauck in the associate attorney general’s office that January day that “Elena would definitely like OSG to be involved in this set of issues,” and that he would be bringing “in Elena as needed,” there was no reason for Kagan not to be involved in the issue.

There also was no apparent reason on that day that Obama’s solicitor general and her top deputy--expecting lawsuits against the health-care bill--should not have felt free to discuss the legal and constitutional issues those lawsuits would raise.

But Kagan informed the Judiciary Committee that she never discussed these issues with anyone.

There should have been no apparent reason for Kagan not to expect—and want—the subordinate she assigned to handle the expected legal challenges to President Obama’s health-care bill to work aggressively to defeat those challenges.

But the law says Kagan cannot sit in judgment of a case on the Supreme Court if her “impartiality might be reasonably questioned”—or, if, as a government employee, she ever expressed her opinion on its “merits.”

In July 2010, during her confirmation process, Republican members of the Senate Judiciary Committee asked Kagan in a letter: “Have you ever been asked about your opinion regarding the underlying legal or constitutional issues related to any proposed health care legislation, including but not limited to Pub. L. No. 111-148, or the underlying legal or constitutional issues related to potential litigation resulting from such legislation?”

They also asked: “Have you ever offered any views or comments regarding the underlying legal or constitutional issues related to any proposed health care legislation, including but not limited to Pub. L. No. 111-148, or the underlying legal or constitutional issues related to any potential litigation from such legislation?”

Kagan’s answer to both questions was: “No.”

When CNSNews.com initially sent a series of questions to Acting Solicitor General Neal Katyal on March 25 asking him about his conversation and contacts with then-Solicitor General Kagan about the health-care issue, the Justice Department responded with a brief emailed statement.

“During her tenure, former Solicitor General Elena Kagan did not play any substantive role in litigation challenging healthcare reform legislation, and the documents that have been released reflect that,” said Tracy Schmaler, deputy director of the Justice Department’s Office of Public Affairs.

When CNSNews.com followed up with an email asking if that was “the totality” of what the Justice Department wanted to say in response to the questions submitted by CNSNews.com, Schmaler responded: “Yes—given the subject is matter of ongoing litigation.”

(See the full set of questions CNSNews.com sent to Katyal on March 25 here.)

On April 14, CNSNews.com sent a follow-up set of question to Katyal, with a carbon copy going to Schmaler. CNSNews.com asked Katyal if it was his view that he could not answer the questions CNSNews.com had sent him on March 25 “because of the litigation you are currently working on that involves the health-care legislation the U.S. Senate passed on Dec. 24, 2009?”

CNSNews.com then asked Katyal three additional questions based on two of the questions that the Judiciary Committee Republicans had asked Kagan—and to which she answered, “No.”

CNSNews.com asked: “At any time when Elena Kagan was solicitor general did you and she ever discuss, or did you ever witness her discuss with someone else, the underlying legal or constitutional issues related to any proposed health care legislation, including but not limited to Pub. L. No. 111-148, or the underlying legal or constitutional issues related to potential litigation resulting from such legislation?”

CNSNews.com asked: “Did she ever verbally express to you, or in your presence express to someone else, an opinion about whether the administration should win or lose any court challenge made against the health-care legislation that was passed by the Senate on Dec. 24, 2009 and later signed into law by President Obama?”

And CNSNews.com asked: “If the answer to question 2 or 3 is yes, could you please explain the nature and context of what then-Solicitor General Kagan said?”

(See the full set of questions CNSNews.com sent to Katyal on April 14 here.)

DOJ Deputy Public Affairs Director Schmaler responded to the questions emailed to her and Katyal on April 14. Rather than actually answer the questions, she referred CNSNews.com back to the statement DOJ had issued in response to CNSnews.com’s initial questions: “During her tenure, former Solicitor General Elena Kagan did not play any substantive role in litigation challenging healthcare reform legislation, and the small number of documents that were released reflect that.”

Schmaler also clarified that the Justice Department was not declining to answer CNSNews.com’s questions to Acting Solicitor General Katyal because of the health-care litigation itself, but because of the ongoing litigation—brought by the Media Research Center (CNSNews.com’s parent organization)—over the Justice Department’s compliance with CNSNews.com’s Freedom of Information Act request.

“[T]he litigation I was referencing [in response to previous set of questions sent by CNSNews.com]– it’s the ongoing FOIA litigation ….not the ACA litigation,” wrote Schmaler.

On Nov. 23, 2010, the MRC filed a complaint against the Justice Department in the U.S. District Court for the District of Columbia. The complaint asked the court to direct the Justice Department to comply with a FOIA request that CNSNews.com had initially submitted to the Office of the Solicitor General on May 25, 2010.

CNSNews.com’s FOIA request sought three categories of records. These included records of any meetings or communications Kagan might have participated in as solicitor general that involved President Obama’s health-care reform plan, records of any meetings or communications Kagan might have participated in in which legal challenges to the health-care legislation signed by President Obama were discussed, and records of any meetings or communications Kagan might have participated in in which there was discussion of whether Kagan ought to recuse herself from involvement in any particular case in her role as solicitor general due to the prospect that case might later come before her were she confirmed to a seat on a federal court.

The Justice Department initially asked the court to dismiss the MRC’s complaint. Then on March 15, the Justice Department released 66 pages of documents to CNSNews.com. These documents were primarily internal Justice Department emails. The MRC is seeking the release of additional records responsive to its FOIA request and the case is ongoing in the U.S. District Court for the District of Columbia