At Winter Meeting in Costa Rica, Frank Wohl Receives Whitney North Seymour Award
By Bennette D. Kramer and Steven M. Edwards
The Federal Bar Council held its annual Winter Bench and Bar Conference at the Four Seasons Resort Costa Rica at Peninsula Papagayo from February 8 through February 15, 2014. Sheila Boston chaired the meetingand Second Circuit Judge Rosemary Pooler headed the planning committee. Former Federal Bar Council President Frank Wohl received the Whitney North Seymour Award for public service by a private practitioner. There were programs on government surveillance, exoneration, class actions, asset forfeiture, the Supreme Court, copyright law, legal ethics, and the Voting Rights Act.
Judge Vanessa L. Bryant of the District of Connecticut moderated a program on the various government intelligence gathering practices. Judge Bryant began by asking whether we were heading toward an Orwellian dystopia or a safer world.
Panel member Harriet Pearson of Hogan Lovells discussed Edward Snowden and the troubling ease with which someone working for a contractor for a few weeks could take and share so much material with the press. Also, Pearson described the programs that authorized the government collection of information and the type of data that has been collected. She said that in addition to creating a public outcry two additional impacts have resulted from the disclosures: (1) U.S. businesses abroad – particularly telecommunications and intelligence agencies – face a more hostile environment, and (2) a vigorous public debate began about how to control the use of data.
Mark Rosen of Mark B. Rosen, Esquire, P.C., explained the statutory framework for data collection and said that oversight was provided through reports to Congress and the FISA Court.
Kevin O’Connor from United Technologies Corp., explaining the government position on the surveillance, said that there was no debate about the sufficiency of oversight, but maybe the quality was not quite what it should be. The extent of the surveillance was not a secret to the President, the FISA court, or many in Congress who received many reports. Steven Hyman of McLaughlin & Stern explained the conflicting case law on the application of the Fourth Amendment to the gathering of data.
The panel had a lively discussion about the perils of living in the era of big data and the extent an expectation of privacy for the data we transmit and store in the cloud is realistic. The Fourth Amendment only applies to the collection of data by the government from its citizens. The panel finished with a discussion of President Obama’s speech and promised review of the government’s surveillance program and what would provide a fix to government overreaching.
Judge Ronnie Abrams of the Southern District of New York moderated a panel on exoneration – i.e., the extent to which people accused of crimes and sentenced to jail are later found to be innocent. The program began with excerpts from the play, “The Exonerated,” featuring a cast of characters that included (in order of appearance) Jerome Robinson, Rita Warner, Julie Anello, Hallie Levin, Mark Zauderer, Ken Warner, Steve Marshall, Pete Eikenberry, Eliot Long, Eric Franz, Michael Patrick, Miya Matsumoto Lee, and Sandy Samberg. The play is comprised of a series of gripping vignettes based on true stories of people who were sentenced to lengthy prison terms, and in some cases to death, for crimes they did not commit.
In a discussion after the play, Judge Abrams noted that there is a National Registry of Exonerations that includes 1,800 exonerations. Panelist Glenn Garber, who has worked with the Innocence Project, observed that 25 percent to 33 percent of exonerations involve situations where an eye-witness identification was mistaken, and 25 percent of exonerations based on DNA tests involve convictions based on false confessions. Manhattan District Attorney Cyrus Vance said that there is greater awareness today of individuals who are convicted of crimes they did not commit, and he described the work of his office’s Conviction Integrity Unit, which focuses on post-conviction review as well as checklists that must be followed from the outset during a prosecution in an effort to avoid mistakes. Panelist Chris Jensen of Cowan Liebowitz & Latman described his work on behalf of Edward Lee Elmore, a death row inmate in South Carolina, whom Jensen represented for 20 years through numerous trials and ap-
There were programs on government surveillance, exoneration, class actions, asset forfeiture, the Supreme Court, copyright law, legal ethics, and the Voting Rights Act.
peals before finally obtaining his release as a result of a decision by the Fourth Circuit that found that Elmore had been denied effective assistance of counsel. For that effort, Jensen received the Thurgood Marshall Award from the City Bar.
Class Actions and Aggregate Litigation
Led by Second Circuit Judge Raymond J. Lohier, Jr., a panel discussed the latest developments in class actions. Professor Myriam E. Gilles of Cardozo Law School presented a primer on class action law, noting that the most important issues in damage actions under Rule 23(b)(3) are predominance and superiority. While the law is somewhat complex, John Beisner of Skadden, Arps, Slate, Meagher & Flom suggested that it basically comes down to fairness – will class certification be fair both to the defendants and to the members of the class, who could be bound by an adverse decision over which they have little control. Analyzing some of the most important recent Supreme Court decisions, Beisner expressed the view that Wal-Mart v. Dukes is important to defendants because the Court refused to certify a class in an employment discrimination case under Rule 23(a) – where the requirements are supposedly easier to satisfy than Rule 23(b) – absent persuasive proof of a class wide discriminatory policy. The Court’s recent decision in Amgen, on the other hand, is important for plaintiffs because the Court ruled that they do not have to prove materiality in a securities case at the class certification stage. Comcast v. Behrend, however, was a defense victory because the Court suggested for the first time that a plaintiff must establish that it can prove damages as well as liability through common proof.
Gregory Arenson of Kaplan Fox & Kilsheimer observed that there is a tension between Amgen and Comcast over how deeply a court must delve into the merits on class certification. The panel also discussed the Supreme Court’s recent decision in American Express v. Italian Colors, where the Court made it clear that arbitration clauses that bar class actions will be enforced. In addition, the panel discussed the issues in Haliburton, argued this term, where the Supreme Court will consider whether to do away with the fraud on the market theory used in securities cases.
Judge Alison J. Nathan of the Southern District of New York led a panel discussion of various issues related to asset forfeiture in criminal and civil cases. Judge Nathan stated that since 2006 in the Southern District of New York asset forfeitures have resulted in $8.5 billion in forfeited assets with $6 billion returned to victims. Sharon Cohen Levin, Chief of the Asset Forfeiture Unit in the Criminal Division of the Southern District U.S. Attorney’s Office since 1996, described the structure of the forfeiture program. She discussed the difference between civil or in rem and criminal forfeiture, the government’s ability to restrain assets pre-trial, the restraint of assets outside the U.S., procedures for forfeiture in both criminal and in rem cases, and how the U.S. Marshals dispose of the property and what happens to the proceeds. The purpose of forfeiture is to take the profit out of crime.
Next, New York County District Attorney Cyrus Vance talked about the close cooperation between the federal and state authorities and the differences between federal and state law forfeiture procedure. First, under the state forfeiture statutes the
D.A. must file a civil action apart from the criminal action with a different judge, whereas in federal court the forfeiture demand may be part of an indictment and is heard by the same judge. Second, the D.A. may seize traced substitute assets pre-conviction, but federal prosecutors may not. Third, federal prosecutors may seize out-of-state assets, while the D.A. may not. The D.A.’s office works with federal prosecutors to attach out-of-state assets. D.A. Vance said that the theory underlying forfeiture was to penalize people who commit crimes and thereby deter future criminal activity and to make victims whole.
Scott Morvillo of Morvillo LLP, representing the defense position, stated that forfeiture is heavily skewed in favor of the government. The process allows the government to freeze assets at the beginning of a case, including monies that could be used for attorney’s fees. Defendants are therefore deprived of the means to hire defense attorneys. Cohen Levin countered that it was not in the government’s interest to deprive defendants from hiring lawyers and that the U.S. Attorney’s Office was flexible in its approach to money for attorneys, but its underlying policy was that victims come first. The government uses forfeiture tools to make sure that funds are available for restitution to victims. If there is not sufficient money available for restitution, forfeited money will be applied to restitution as part of the forfeiture order.
Panel members then presented and discussed a hypothetical to illustrate some of the forfeiture issues.
Supreme Court Review
For the second year in a row, Neal Katyal of Hogan Lovells and Kannon Shanmugam of Williams & Connolly discussed the upcoming term of the Supreme Court. The panel was chaired by Second Circuit Judge Rosemary
S. Pooler. Katyal noted that the Court will decide 70 cases this term, and most of them come from the Ninth and Eleventh Circuits. Katyal pointed out that the Sixth Circuit is the most reversed circuit, having had its decisions rejected by the Court 24 out of the last 25 times. Shanmugam described the Court’s docket as the “year of the sequel,” with cases revisiting prior decisions on affirmative action, fraud on the market, and cellphone services. He also observed that while the circuits are moving in a more liberal direction, there should be no profound changes in the leanings of the Supreme Court.
Taking a cue from the Academy Awards, the panel dubbed United States v. Bond “the case most likely to be optioned by Lifetime.” That case involves the prosecution of a woman under the statute enabling the Chemical Weapons Treaty for poisoning a friend who was having an affair with her husband. The question is whether the defendant has standing to challenge the statute under the Tenth Amendment because it infringes on powers reserved for the states.
Riley v. California was christened “Best Picture” by the panel.
In that case, the police searched a suspect’s cellphone without a warrant after an arrest. The police were concerned that the contents of the cellphone might be wiped clean, but the cellphone also contained an enormous amount of personal information, implicating the right to privacy. Katyal predicted that the Court may impose some limitations in this area, noting that privacy is not necessarily a left versus right issue among the justices of the Court.
The panelists suggested that Haliburton, in which the Court is revisiting the fraud on the market theory, and Schuette, which involves affirmative action, should tie for the award of “Best Sequel.” Shanmugam suggested that the Court will be reluctant to overrule Basic v. Levinson, where the fraud on the market theory was introduced. Katyal expressed the view that Schuette, where the Sixth Circuit struck down a state statute prohibiting affirmative action, will be reversed; the Court did just that after the Winter Meeting.
Town of Greece v. Galloway won the “Best Documentary” award. That case involves prayers at the beginning of legislative sessions, which the Supreme Court has permitted since it decided Marsh v. Chambers 30 years ago. Even though the prayers in this case are predominantly Christian, Shanmugam thinks the Court will not find that they violate the Establishment Clause because Congress has always begun its sessions with prayers since the adoption of the Constitution. In a decision that came down after the Winter Meeting, the Court permitted the prayers.
The “Outstanding Special Effects” award went to NLRB v. Noel Canning, which challenges the President’s right to make recess appointments. The question is whether a recess occurs when the Senate is out of town but still in session. The Solicitor General argued that an intra-session adjournment is a recess, but the panelists agreed that the text of the Constitution may suggest otherwise. This case marks the first time that the Court has interpreted the Recess Appointments Clause.
In Sebelius v. Hobby Lobby, which was designated “Best Adapted Screenplay,” the Court will decide whether the contra-ceptive-coverage mandate in the Affordable Care Act violates the Free Exercise Clause. In addressing that issue, the Court will have to consider whether a corporation is a person under the First Amendment. Since the dictionary defines corporations as persons under the law, Katyal thinks the Court is likely to rule that this aspect of the Affordable Care Act is unconstitutional.
Finally, in McCutcheon v. Federal Election Commission, the Court will decide whether two-year aggregate campaign contribution limit is constitutional. Suggesting that this case should receive the “Humanitarian Award,” Shanmugam felt that the Court is likely to hold that the limit is unconstitutional. In a decision that came down after the Winter Meeting, Shanmugam proved to be correct.
So You Want to Be a Rock Star
The program started with the recording of a song written and performed by Judge Frederic Block of the Eastern District of New York. The audience followed Judge Block as he asked the panel members questions about copyright, earning opportunities, collection of money, and ethical issues involved with producing and distributing music in our digital age.
Eleanor M. Lackman of Cowan, DeBaets, Abrahams & Sheppard explained the basics of copyright law, telling Judge Block that he had a copyright on the song as soon as it was written. She then described the benefits of copyright registration, particularly the ability to sue and receive statutory damages. Judge Block then asked J. Christopher Jensen of Cowan, Liebowitz & Latman how to make money from his song. Jensen said that every recorded song has two copyrights: one for the sound recording and the other for the musical composition. The first step is to contact a record company (which will then have its own copyright) and negotiate a recording contract that provides as much as possible up front plus a percentage of sales of CDs, albums, digital recordings, and licensing for television and movies, video games, and jukeboxes.
Steven M. Edwards of Hogan Lovells provided the history of performers’ efforts over the years to collect money from performance and distribution of their songs and the role ASCAP has played in protecting copyright holders. Kenneth Plevan of Skadden, Arps, Slate, Meagher & Flom told Judge Block about copyright infringement and how similar another song has to be to infringe on a copyright. With examples, Lachman explained when a parody fell into the fair use exception to copyright. Judge Block asked if he could make money on ancillary rights or sue if someone else used his image on a tee shirt. Pleven said that the determination of infringement also rested on a “fair use” analysis.
Surprise panel member Professor Stephen Gillers of New York University School of Law addressed ethical issues relating to the amount of outside income a sitting federal judge could earn. The limit is 15 percent of total income, but a judge also must be aware of the Code of Judicial Conduct, which prohibits extrajudicial activities that distract from the dignity of the judicial office. Professor Gillers noted that the racy references in Judge Block’s song would not at first blush fit into that requirement.
The program ended with a discussion of the music world today and how to police it on the Internet. Edwards explained that the music business is very fragmented today and it is far more difficult to earn money from recorded music. The people earning money today are the big stars, and small performers find it more and more difficult to earn a living. In a finale, the panel members sang Judge Block’s song wearing tee shirts carrying a picture of his face.
Critical Current Issues in Legal Ethics
A panel composed of the Honorable Andrew L. Carter, Jr., of the Southern District of New York, Professor Gillers, Sean Coffey of Kramer Levin Naftalis & Frankel, Ronald P. Fischetti of Fischetti & Malgieri, Neil V. Getnick of Get-nick & Getnick, Richard J. Morvillo of Morvillo LLP, Audrey Strauss of Alcoa Inc., Mary Kay Vyskocil of Simpson Thacher & Bartlett, and James Q. Walker of Richards Kibbe & Orbe addressed current legal ethics issues using a hypothetical. The first issue concerned a lawyer’s responsibility for real evidence that would certainly inculpate his or her client, but posed a danger to others in its present location. The conclusion was that a lawyer had to retrieve the evidence and ultimately turn it over to the police.
The second issue related to a lawyer’s obligation when he or she knows that the client has given false testimony. The rules require a lawyer to reveal information to the court if the information before the court will mislead it. If the client refuses to clarify his or her responses, the lawyer should go to the tribunal or maybe tell the tribunal that it cannot rely on what the client has said.
The final ethical question was whether lawyers can be whistle-blowers under the Dodd-Frank Act using confidential client communications. Disclosure of confidential communications is permitted under the SEC rules but prohibited under the New York State ethics rules, which do not allow violation of a confidence to get a bounty. The Second Circuit has held that Dodd-Frank does not preempt state ethical rules. The rule is that attorneys are entitled to compensation for whistle-blowing only if they are compliant with their ethical obligations.
Judge Kiyo A. Matsumoto of the Eastern District of New York began this discussion with a description of the Voting Rights Act, which was passed in 1965 and has been reauthorized a number of times. The audience then was treated to a video on the conditions that led to the passage of the Voting Rights Act. Perennial panelist Neal Katyal then described the history of voting rights prior to 1965. At that time, it was difficult to get adequate relief because an election cannot be enjoined on Election Day. Section 4 of the Voting Rights Act provided prophylactic relief by requiring 16 jurisdictions to seek permission before enacting any law relating to voting. In Shelby County, Alabama v. Holder, decided on June 25, 2013, the Court concluded that § 4 was unconstitutional because it violated the doctrine of “equal sovereignty” among the states and the impetus for its passage had changed.
Appearing by video link, panelist Wendy R. Weiser of the Brennan Center noted that a number of states made changes to their voting laws immediately after Shelby County was decided. She also observed that most changes are made at the local level, and as a result of Shelby County there is less transparency into those changes before they happen and, therefore, less ability to stop them by obtaining a temporary restraining order. Will Consovoy of Wiley Rein countered that the Voting Rights Act was passed as an emergency response to an emergency situation that no longer exists. There have been massive changes in the percentage of minority registered voters. He posed the following question: “Is the South so much different than the rest of the country in 2013 that it should be put in federal receivership?”
Weiser responded by stating that the world has changed but discrimination still exists, and voter identification laws are an example of that. Consovoy suggested that voter identification laws deter voter fraud, and it is hard to find an actual plaintiff who was unable to vote because of that requirement. All of the panelists agreed that the voter identification laws are likely to be tested in the Supreme Court.