TRIAL.COM Litigation News

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Please note that this is primarily a news link gathering service. Most of the headlines and squibs here contain links to stories posted on the Internet by various unrelated third parties. As such, the content is owned by those third parties, not by The Network of Trial Law Firms, Inc. And, in some cases, those links may change or expire, which means that you might not be able to view some news stories in older postings.

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Archived Blawg Pages

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Sunday, August 08, 2004

Leading New Mexico Plaintiff Attorney "Never Whupped so Bad" As by Network Attorney Billy Gunn
By Scott Sandlin
Journal Staff Writer
Albuquerque Journal, Aug. 5, 2004

The Albuquerque Journal reports that a federal jury awarded an injured volunteer firefighter a paper verdict of $8.75 million after two weeks of trial but because of the way jurors apportioned blame in the complex case, the plaintiff will recover only 17 percent of the $1.53 million judgment after attorney fees and litigation costs.

The defendant, Northrop Grumman Systems Corp., manufactured a pumper truck that became mobile without a driver during a response to a fire and pinned plaintiff against a post.

A second defendant reached a confidential settlement with the plaintiff during trial.

"I haven't been whupped this bad in all my years of practice," longtime New Mexico trial attorney Bill Carpenter, who represented the plaintiff, said of the verdict.

Atlanta defense attorney and Network firm member Earl "Billy" Gunn, defended Northrop Grumman.

Workers' compensation insurance paid about $1 million in medical costs. Plaintiff sought $10 million, based on future needs and lost earnings, plus punitive damages.

Plaintiff's attorneys hoped to be able to purchase a van, a home that would better accommodate plaintiff's situation and money to pay an estimated $135,000 a year for medical care.

Plaintiff's attorneys called engineers to make a case that a defective design on the truck permitted it to shift unexpectedly when the pump was activated.

The design was called into question in the mid-1980s by the manufacturer's own engineers. But design changes were never made because, the defense said, the company hadn't had any problems with it.

Jurors decided Grumman was negligent, but in apportioning fault they assigned 17.5 percent of the blame to Grumman and 82.5 percent to the Fire Department, which couldn't be sued under state law.

Saturday, August 07, 2004

Corr Cronin Accounts for 5 of Washington's Super Lawyers

Once again, Network attorneys and founding members Kelly Corr and Bill Cronin have been selected by Law & Politics Media, Inc., publishers of Law & Politics Magazine. The list of Super Lawyers® 2004 is based on surveys of more than 20,000 lawyers across Washington and is limited to the top 5% of the Washington bar. Guy Michelson, Josh Preece and the firm's newest partner, Paul Raskin, were also named to the list of Washington's top lawyers this year.

Both Kelly Corr and Bill Cronin were voted among the top 100 lawyers statewide and Kelly was voted among the top 10 in any practice area for the state.

GCs Want More Attention From Outside Litigation Counsel
Adrienne Sanders
The Recorder

GCs are willing to pay a premium for the right outside counsel, but they want plenty of attention for their buck.

Those were among the findings of a survey conducted by a Houston-based law firm that surveyed 300 general counsel from 41 states on U.S. litigation trends.

When seeking outside litigation help, just over a third of GCs said their top priority was specific case experience, and another third said general competence was key. Only 6 percent said they were concerned most about cost-effectiveness when choosing a firm. In other words, they're not bargain-hunting.

A scant 2 percent ranked service and responsiveness as the primary factor in deciding their beauty contests. Once they crown a winner, however, clients want that firm to stick around.

Nearly half of the respondents said they were most troubled by their litigation counsel's lack of communication, and 37 percent cited a lack of responsiveness.

To reduce or control costs, just over half of the GCs said they were turning to a regional or national firm to handle all of their litigation of a certain type.

Sunday, August 01, 2004

The Network of Trial Law Firms is #1 on Google
In-house counsel searching for "trial firms" on Google will have over 2 million choices from which to select, and over a million for "trial law firms". But in both cases, first on those Google lists as of today are the 26 member firms of The Network of Trial Law Firms and the trademarked web site domain name, TRIAL.COM.

And, thanks to the overwhelming popularity of our "Litigation Management in a New York Minute" and "Securities Arbitration and Litigation" CLE programs, TRIAL.COM is also listed first on Google for searched phrases like "Litigation Management CLE" (first among 106,000 choices) and "Securities Arbitration CLE" (first among 56,000 choices).

The Network's TRIAL.COM website has been in existence since 1995 and is about to unveil its fourth major makeover, making the website even easier for in-house counsel to find information about the 26 member firms and their upcoming Litigation Management SuperCourse CLE programs. Soon after the launch of the new look (slated for August, 2004) the site will offer online CLE to in-house counsel through streaming video and PowerPoint presentations converted to web-friendly Flash animation.

All of our website work is done in-house and we are very happy with the visibility that our website has acheived. The Network spends no money on advertising its website, uses no search engine tricks (e.g., meta tags, invisible print, etc.). Our #1 listing position results, we believe, from our "dead-on accurate" content, continually updated material and actual hits which translate into traffic and hits on member law firm websites.

Saturday, July 31, 2004

Friday, July 30, 2004

First Year Lawyer Starting Salaries Decrease
For the first time since 1992, starting salaries for lawyers entering the job market has decreased, according to the 30th annual survey of law school graduates by the National Association for Law Placement. Starting salaries for corporate lawyers dropped from $90,000 in 2002 to $80,000 in 2003, reflecting an increase in hiring at small law firms. For lawyers of all types, the median starting salary in 2003 was $55,000, down from $60,000 in 2002.
New York Law Journal, 7/28/04

Thursday, July 29, 2004

Firms Restructure to Mirror Corporate America
By Trevor Delaney
LawFirmInc./June-July 2004

Many law firms are abandoning management committees and migrating to governance models that more closely resemble those of their corporate clients. Interview with a large firm's COO discussing why his firm went in that direction.

Is Market Resistant to One-Stop International Firm?
Article re London firms unsuccessfully seeking New York City merger partners.

Author: John Malpas
Source: Legal Week
Start Date: 29/07/2004
End Date: 05/08/2004

Top 100 corporate counsel see boost in financial status as salaries rise 6%
Legal Week reports: General counsel at the US’ top 100 corporations have seen their pay increase by 6% over the past year underlining the increasing financial status of the US’ most senior corporate counsel.

The survey by Corporate Counsel magazine of the US’ top 100 best-paid general counsel found that the average in-house legal chief earned $1.116m in 2003, up by 6% on 2002’s $1.053m.

Fred Krebs, the president of the Association of Corporate Counsel, told Corporate Counsel that general counsel are still being rewarded for their role helping companies to comply with the sweeping anti-fraud measures in the Sarbanes-Oxley Act.

"Companies are in compliance or have systems in place. Now companies are in more of a maintenance mode rather than the allconsuming compliance efforts made over the past couple of years," he commented.

The research shows, however, that the inflation of average salary levels is slowing down following 2002’s booming 9% increase for remuneration.

Sector experts are predicting that next year will see another decrease, with some predicting a 3% increase for general counsel pay.

The results confirm the position of top US general counsel as the world’s best-paid lawyers, outstripping the vast majority of partners even at top Wall Street firms. Pay for US legal heads is also far ahead of that offered to employed lawyers in other jurisdictions.

Author: Antony Collins
Source: Legal Week
Start Date: 29/07/2004
End Date: 05/08/2004

Profits Slide at London Firms
The top 10 London firms have seen a 7.6% drop in PPP in 2003/04 reports Legal Week. Average PPP is now £674,000, down by 16.5% from a high of £807,000 in 2001.

The results are in stark contrast to those of the rest of the UK’s top 50 firms, which saw an average partner profits rise of over 9% and an average revenue increase of nearly 6.5%.

The top 10 firms have seen less big cross-border work, and increased competition on pricing and they have been relatively slow at addressing costs."

Author: Paul Hodkinson
Source: Legal Week
Start Date: 29/07/2004
End Date: 05/08/2004

Monday, July 26, 2004

Joke Sites -- Lawyer Jokes
We love to hate them, but sometimes you need a good joke for a presentation, so here they are.

Law Humor -- articles, music, comics and games;
Law HaHa -- humor writing and actual oddball humor drawn from the truth-is-stranger-than-fiction world of lawyers and law students;
Mad Kane -- politics, computers, marriage, cars, work, family, the Internet, the IRS, the news, law, music, money, privacy, technology, Web surfing, media, travel and President Bush;
Lawp Sided;
Legal Humor;
DuHaime's Law Fun;
Power of Attorneys;
Nolo Jokes;
Lawyer Jokes;
Aha's Lawyer Jokes;
Ex-Lawyer Jokes;
ExpertLaw Lawyer Jokes and Legal Humor;
James Fuqua's Law Jokes;;
Profession Jokes: Lawyers;
SCROOMtimes Lawyer Jokes;
The 'Lectric Law Library's Rubber Room;
Stu's Views;
Cartoon Bank, home to nine decades of New Yorker cartoons, a fair share of which covered lawyers and law;
Dan's Cartoons, collection of law and legal cartoons drawn by Dan Rosandich;
Juris Comics, a comic strip that looks at all things law;
Law Comix, a broad-ranging collection of cartoons by lawyer Charles Pugsley Fincher, whose legal and political cartoons have been widely published;
Lawtoons, , a comic drawn by Suzan F. Charlton, a lawyer in Washington, D.C.;
Mason Darrow, non-profit lawyer, is drawn by Maine-based cartoonist John Klossner, who makes his archives available here.

Friday, July 23, 2004

Nixon Peabody Wins NLRB Blockage of Union Organizing by Graduate Assistants at Private Universities
In yet another abrupt policy reversal, the National Labor Relations Board has held that graduate student assistants at private universities are primarily students and are not entitled to protections and rights afforded employees under the National Labor Relations Act, Brown University, 342 NLRB No. 42 (July 13, 2004). This decision overrides the Democratic controlled Board’s contrary ruling four years earlier in New York University, 332 NLRB 1205 (2000). It restores the Board’s original no-coverage policy dating back as far as Adelphi University, 195 NLRB 639 (1972) and Leland Stanford Junior University, 214 NLRB 621 (1974). Graduate assistants at public universities are not covered by the NLRA and are not affected by this ruling.

Nixon Peabody partner Gregory J. Blasi has been named chair of the New York State Bar Association Business Law Section.

George's practice focuses on general corporate and securities matters. He has experience in all phases of acquisition activity from advising clients on proposed acquisitions through negotiations and financing to closing. He has been involved in merger and acquisition activity in connection with chemical companies, energy service companies, radio stations, and computer software companies.

Thursday, July 22, 2004

Competing on Price is a Losing Proposition
Des Cahill, Legal Director, 7/22/04

" . . . [F]irms offering to do work for little or nothing are generally viewed with suspicion by clients, according to a snapshot poll taken by [UK-based] Legal Director this week.

"Low-balling on fees is certainly not a new phenomenon and has been a regular feature of the fees landscape for some time. Whenever there is competition for work law firms will attempt to lure clients in by ever more attractive deals. The rationale is that once hooked the firm will continue to advise the client on more lucrative work.

"A key problem for many is the quality of advice the firm can give at the price quoted. While the work levels are low and assistants have some free time it is all well and good — but what happens when work picks up and bigger and more lucrative deals come along for the firm?"

The Client is Key
Tim Nightingale, Legal Week, 7/22/04
(Tim Nightingale is a director of Nisus Consulting)

Results of survey conducted by Tim Nightingale

Commercial understanding and advice

"Understanding the client’s legal requirements in a commercial context" is the most important criterion. "It was more important than ‘responsiveness’, ‘depth and breadth of expertise’ or even ‘price/value for money’."

Focus on key clients

Stay close to clients

‘Systematic’ loyalty

"There is little to prevent firms switching their loyalties. Providing some form of proprietary systems that are beneficial to clients is one means of ‘locking in’ clients more effectively. Few firms were perceived to be doing this."

Passive value billing

"Respondents reluctantly accept that their legal advisers are joined at the hip to hourly billing. However, they are increasingly insisting on some form of retrospective value assessment in conjunction with what is on the clock.

"Firms that do this proactively, amending their own bills according to value delivered, are a step ahead of the game. The perception that US firms ‘bill to the death’ will put them at a disadvantage in this area."

Invest non-chargeable hours

"Clients are calling out for any indication of partners who are prepared to stop the clock and spend time investing in the relationship in whatever way is most appropriate. This is not about free advice, it is about commitment."

Values for advantage

"Clients still stress that they follow individuals, not firms. Explore the reason for this in more depth and lurking beneath the service is, aside from size and location, the fact that law firms are seen as largely undifferentiated.

"Partners are differentiated. A clear set of distinct values that the whole firm consistently works to would be a good start in providing meaningful differentiation. This is something that most firms are less than comfortable with."

One-to-one marketing

"Mass marketing, whether it is newsletters, hospitality or even seminars, no longer cuts it. Clients are fed up of being bombarded with newsletters; many cite them more as an irritant than an asset.

"Marketing needs to be bespoke, more functional in offering clients real benefits they value and less about trying to curry favour. 'Anything that is tailored to us I am impressed with,' says one in-house counsel."

Performance measurement

"Procurement departments are there not to select law firms, but to ensure that best value is being achieved in the selection. Law firms need to take the lead in demonstrating best value — and using performance measurement tools is an important part of that.

"Independent reviews seem to be dead in the water," one respondent says. "Senior partners may ask how it is going and do a grip and grin with the new general counsel, but not a review."

"Clients like the legal service they are getting. Big and small firms each bring their own benefits. But clients are less than happy with the price they are paying for it. They do not always think they are getting value for money and they are now under pressure to make sure they get it."

Tuesday, July 20, 2004

Nixon Peabody Successfully Defends TAP Pharmaceutical Employee in Major Drug Kick-Back Case

Rob ShermanBob Kirby  Marisa L. Jaffe 
Nixon Peabody LLP has successfully defended one of the eight current and former employees of TAP Pharmaceutical Products who were acquitted of engaging in kickback schemes with doctors and hospitals. A jury in the U.S. District Court in Boston rejected the federal prosecutors’ charge of conspiracy to violate the federal antikickback statute, finding that the employees acted lawfully in connection with the sale and marketing of company drug products.

Boston-based partners Rob Sherman and Bob Kirby and associate Marisa Jaffe represented Donna Tom, a TAP district manager, during the three-month trial. Prosecutors had alleged that the defendants had defrauded the government of millions of dollars by bribing doctors and hospitals by giving incentives such as cash, free drugs, and trips to resorts.

“The federal government and health care task force have been aggressively pursuing companies and individuals in connection with allegedly fraudulent pharmaceutical product marketing activities,” said Sherman. “This is one of the first cases in which individuals put the government to the test. The acquittals demonstrate that the government was overreaching when it sought criminal penalties against individual employees of this company. Hopefully, this case will send a message about future prosecutions of this nature.”

Ken Bean's Defense Verdict in Psychosis Drug Death Case
Stephen Baccus v. Tenet Healthsystem DI, Inc. d/b/a Forest Park Hospital.

Decedent's representative brought against Forest Park Hospital and the employed ER physician for medical malpractice/wrongful death. (The ER physician was dismissed on the day of trial. Ken Bean, of Network member firm Sandberg, Phoenix & von Gontard, represented the hospital.)

Decedent, 29, was taken to the ER room of the hospital after he called the police claiming there were intruders in his apartment who would not leave.

Upon arrival at the ER the patient was examined by the ER physician and hospital staff and was treated for acute psychosis secondary to an anticholinergic drug reaction to the OTC meds and herbal remedies the patient was taking.

The patient was observed for several hours and released with instructions specifically not to take additional medication unless prescribed by a doctor.

Fourteen hours later, the patient jumped to his death from the sixth floor of a parking structure.

After the week-long trial, the jury deliberated for approximately 90 minutes before returning a defense verdict.

Keith Phoenix Leads $2.5 Million Settlement in Death Case
Keith Phoenix of St. Louis member firm Sandberg, Phoenix & von Gontard P.C. recently negotiated a $2.5 million settlement for parents of a ten-year old girl who drowned in a swimming pool while attending a summer camp.
Garrison's Canoe Rental and Campground, Inc. ran a Christian summer youth camp at its campgrounds outside Steeleville, Mo., near the Meramec River.  Garrison's invited Dove Covenant Christian Center Church to send children to its camp in 2002, as it had done in the past, after a visit by the church board.  The church then encouraged parents to send their children to the camp.
Crystal Winston's mother initially refused to give consent for Crystal to go on the float trip because Crystal could not swim, but was reassured by the church supervisor she would be safe.

On the second day of the camp, after returning from the float trip, the youth camp director suggested the children go swimming in Garrison's pool.  A sign outside the pool cautioned that there was no lifeguard and that patrons were to swim at their own risk.
Garrison's sent two counselors to watch over the children as they played in and around the pool. Neither counselor had training as a lifeguard or in CPR.

Shortly thereafter, a child approached one of the counselors and told him Crystal was on the bottom of the pool, not moving. The counselor brought Crystal up from the bottom of the pool and a guest at the campground performed CPR, but Crystal died. An autopsy determined that drowning was the cause of death.

Crystal's parents sued the church for failure to warn of the pool's dangers and negligent supervision.  They sued the campground for negligence per se in violating state regulations regarding the pool, premises liability and negligent supervision.  The plaintiffs retained an expert lifeguard and experts in pool design and recreation.

Defendants denied liability arguing: that Crystal's mother had signed a release; that the danger posed by the pool was open and obvious, that there was a sign stating: "no lifeguard on duty" and "swim at own risk;" and that state regulations did not require defendants to have a lifeguard at the pool.  Moreover, defendants argued Crystal assumed the risk by doing back flips off the side of the pool despite the fact she could not swim.
The defendants made no offer prior to mediation.  During the mediation conducted by Eugene K. Buckley of St. Louis, plaintiffs demanded the policy limits of both defendants to settle with either defendant.  Plaintiffs contended that it would be bad faith for the insurers to expose their insureds to a judgment in excess of the policy limits.

The parties settled that same day for $2.5 million, the joint policy limits of the church and campground's insurance policies.

Top GCs -- What Are They Paid?, July 20, 2004
Here's's list of the 100 best-paid general counsel according to their cash compensation -- salary plus bonus -- in fiscal year 2003.

Thursday, July 08, 2004

Deutsch Kerrigan Wins $3 Million Reversal for AIG's Insured K-Mart
Louisiana Supreme Court Accepts Argument by Bob Kerrigan and Ike Ryan

In Green v. K-Mart Corporation plaintiff alleged closed-head injuries from falling merchandise at a K-Mart store and won a $1.5 million jury verdict in the underlying case handled by other counsel. On appellate review, Louisiana's 3d Circuit increased the award to almost $4.5 million.

National Union (AIG) then engaged DKS as appellate counsel for K-Mart with less than ten days remaining before the appellate judgment becoming final and irrevocable.

DKS successfully applied to the Louisiana Supreme Court for a writ vacating the appellate decision and remanding the case to the court of appeal for another hearing. But, on remand, the circuit court again rendered judgment against K-mart for $4,500,000.

DKS then sought a writ of certiorari, and the Louisiana Supreme Court agreed to hear the case. In a unanimous opinion, the Louisiana Supreme Court reversed the appellate court and reinstated the jury’s original award, Green v. K-Mart, 2003-2495 (La. 5/25/04), _____ So.2d _____, thereby saving DKS' clients more than $3 million in principal and interest.

Bob Kerrigan and Ike Ryan handled the matter within Deutsch, Kerrigan & Stiles for K-Mart.

Monday, July 05, 2004

Boston Law firms' profits jump on business rebound
From the July 2, 2004 print edition of the Boston Business Journal
Sheri Qualters
Journal Staff

At Boston-area law firms, revenue gains ranged from a few percentage points to more than 20 percent. Profits per equity partner made single-digit gains mostly across the board, except for Bingham's nearly 15 percent hike.

Friday, July 02, 2004

Another Asbestos Defense Verdict for Peter Wechsler
Miami Network attorney Peter Wechsler of member firm Ruden McClosky was on the Union Carbide trial team that recently successfully concluded a 2 week asbestos trial in West Palm Beach, Florida where plaintiff claimed he had asbestosis. Plaintiff was from Alabama and was part of a ‘screening” in Mississippi. He had made his way down to Miami to hire plaintiff attorneys.

Dr. Sider, a B reader from New York City, testified by telephone because he was unable to attend the trial and testify in person. His testimony was that the x-rays looked normal. Plaintiff put on a B reader from Miami who said the x-rays were consistent was asbestosis.

The defense put on Dr. William Dyson, an industrial hygienist from North Carolina, who testified that plaintiff’s exposure was not enough to cause asbestosis.

Plaintiff asked the jury for $2.4 Million which the jury rejected and returned in one hour with a defense verdict. Union Carbide is the only asbestos defendant that is trying cases in south Florida.

This "Suing Your Lawyer" Stuff Has to Stop
Editor's Comment

Lloyds Suit Against Its Own Panel Defense Counsel Can Have But One Result -- Overprepared matters (to be doubly sure nothing is missed), Higher Legal Fees, and Increased Professional E&O Policy Premiums

Matthew Haggman writing for Miami Daily Business Review reports in its 07-02-2004 edition:

"Lloyd's of London filed suit Thursday in Florida against [two of its] law firms . . ., seeking to recover a previously undisclosed $30 million settlement the insurance giant paid in a 2003 swimming pool negligence case.

"The London-based insurer alleges that lawyers from the two firms committed a variety of blunders and oversights in representing the defendant building owner, which carried a $1 million liability policy from Lloyd's.

"In the 45-page complaint filed in Broward County Circuit Court, Lloyd's is suing under the theories of legal malpractice and equitable subrogation. It not only seeks to collect the $30 million settlement but all expenses, costs and attorney fees it paid to [those law firms] during the litigation.

"One of the key contentions in the suit . . . is that the defense lawyers failed to properly advise Lloyd's that the damages could far exceed the policy limit and that the carrier should quickly offer the limit to avoid the high risk of a big judgment.

This is not the first time a client has sued its law firm after an adverse verdict. See "Fried Frank settles malpractice case with Fruit of the Loom," NLJ, Oct. 22, 2001 ed. Suing one's own law firm is bad business.

From my experience during 10 years as vice president and chief of litigation of two New York Stock Exchange-listed companies (Combustion Engineering Inc. and GAF Corp.), a case as significant as the underlying LMP case in the claim against Fried Frank (a dispute over a licensing agreement) in which a $96 million verdict was ultimately returned in a second trial won by the plaintiff licensor, and the underlying case in the Lloyds claim would never have gone to trial without a thorough prior review of all options by those persons within the corporate or insurance company client responsible for claims management -- a corporation's general counsel, executive committee and even its board of directors, or an insurer's claim adjusters and supervisors.

Responsible corporations have meetings of senior management in-house, formal and informal, to discuss the potential downside of underlying cases, as well as the wisdom of settlement for an amount less than cases' jury potentials. The LMP case would have been lunchroom conversation, hallway conversation, night and weekend talk, boardroom material. Slapped once with a prior $25 million verdict, a company does not go blindly into trial once again without a thorough analysis of the risks of another, and possibly worse, downside result. Such a company thinks, analyzes, conferences, consults and cogitates.

And, insurers don't assign matters to counsel and go to sleep. They remain actively involved, monitoring matters and keeping apprised of settlement opportunities, even making decisions as to claim potentials and assigning cases to categories that they create to help them identify high risk potentials.

Where does responsibility for bad litigation decisions begin in a corporation or insurer? Try-settle decisions, particularly in cases of the magnitude of these, are the responsibility of the same people who decide other issues material to a company's financial condition -- management and, ultimately the board of directors; claims departments in insurance companies.

And insurers especially often have instructions to counsel as to how they are to defend matters, report developments, and conduct discovery.

Under such circumstances law firms cannot be held to be guarantors or insurers of litigation results. Insurers suing the very defense counsel they hire and often hamper with their own rules of engagement, reporting requirements, billing requirements, and legal fee audits, they are the last people who should be heard from challenging bad results in underlying cases.

Ellis R. Mirsky
Tarrytown, N.Y.

Thursday, July 01, 2004

Michael Bub, a Sandberg, Phoenix & von Gontard partner (St. Louis) and member of the firm’s products liability practice area, has recently been appointed to serve on the Board of Directors of the Missouri Organization of Defense Lawyers.

The Missouri Organization of Defense Lawyers was established to help defense attorneys provide the highest quality representation for clients throughout the state. Since its inception in 1984, the organization has supported the state's defense lawyers with continuing legal education programs, amicus curiae briefs and a wide variety of information assistance programs. In addition, MODL has sought, through its legislative efforts, to balance the scales of justice for all citizens in the State of Missouri and to improve the quality of the Bench.

Sunday, June 27, 2004

Judicial Control Over Questionable Jury Verdicts:
Historical Underpinnings of an Age-Old Practice

The Federal Lawyer Magazine, June, 2004, p. 23
by Martin D. Beirne and Scott D. Marrs
Beirne Maynard & Parsons
Houston and Dallas, Texas

Marty Beirne Scott Mars   

Friday, June 25, 2004

Lightfoot, Franklin & White Wins Hyundai Crash Case

Michael Tomberlin
News staff writer
The Birmingham News
Thursday, June 24, 2004

Hyundai Motor Co. prevailed in a courtroom battle stemming from a fatal car accident in Lowndes County, which has a earned a reputation for socking it to corporations.

Harlan Prater Jere White  Chandler Bailey 
[Harlan Prater, Jere White and Chandler Bailey tried this case in Lowndes County, Alabama, which is among the most, if not the most plaintiff-oriented counties in Alabama. Many consider it to be one of the worst places for corporate defendants in the country. To our knowledge, this is the first defense verdict in a products liability case in this county in over a decade.]

A Lowndes jury late Tuesday returned a verdict in favor of Hyundai in the lawsuit filed by the family of Christine Graham, killed in 1999 when her 2,300-pound Hyundai Excel was struck by a 79,000-pound Freightliner 18-wheeler going more than 60 miles per hour.

Attorneys for the Graham family argued that a faulty seat belt and door latch design contributed to her death in the accident. Hyundai attorneys said the seat belt and door latch met all safety standards and the sheer force of the accident caused the woman's death.

Hyundai attorneys said the U.S. Chamber of Commerce and others have singled out Lowndes as one of the most difficult counties in the United States for corporations in actions brought by plaintiffs' attorneys. They saw their victory as significant.

According to Hyundai attorneys, the Freightliner truck driver had his cruise control set at 65 miles per hour at the time of the accident. The truck struck the car on the driver's side, forcing open the door and ejecting Graham.

There was some dispute about whether Graham had just the shoulder portion of her seat belt buckled or whether she was wearing a seat belt at all at the time of the crash, according to Hyundai's attorneys.

Harlan Prater IV, an attorney with Birmingham's Lightfoot, Franklin & White LLC, which also represented Hyundai, said the automaker is pleased to have won the case after choosing to set up a $1 billion manufacturing plant, which is now under construction in nearby Montgomery.

"A jury verdict in Lowndes County is good news to Hyundai, who I know is looking forward to doing business in Alabama for a long time," Prater said.

Friday, June 11, 2004

Blakes Expands to Better Serve U.S. Clients
Offices in New York and Chicago to Meet Canadian Legal Needs of U.S. Clients

TORONTO (January 6, 2004) – Blake, Cassels & Graydon LLP announced today that it is opening offices in New York and Chicago to serve U.S.-based businesses interested in operating or investing in Canada. Blakes will be the first Canadian law firm with an office in Chicago.

"The U.S. market is extremely significant for Blakes’ practice. Adding offices in New York and Chicago is the next step in our overall U.S. strategy to better meet the Canadian legal needs of our existing and prospective clients," said Jim Christie, Chairman. "The U.S. offices will complement the additional resources we are already devoting to the U.S. market. We will practise Canadian law in the U.S. which will continue to position the Firm strategically as a logical partner for its many U.S. law firm contacts."

Blakes has chosen three senior people to manage these new offices. Leading the U.S. initiative will be Tim Unwin, Partner and Co-leader of the Securities Law Group in Toronto. A former Managing Partner of Blakes’ first international office in London, Mr. Unwin has extensive experience in advising U.S. and Canadian companies engaged in cross-border business including capital markets transactions. He will be based in New York.

"With the increasing integration of the U.S. and Canadian economies, we think it’s important to have a physical presence in the U.S.," said Tim Unwin. "New York because it is the centre of international finance. Chicago because the U.S. mid-west represents a significant untapped market."

Working with Mr. Unwin in New York will be Michael Gans, currently a Partner in Blakes Securities Law Group in Toronto. Mr. Gans has acted as counsel on a variety of cross-border and domestic transactions and in 2002 was named by Lexpert magazine as one of Canada’s top 40 lawyers under age 40. He has previous experience practising law in New York.

Geoffrey Belsher, a Partner practising corporate and securities law in the Blakes Vancouver office, will be based in Chicago. Mr. Belsher’s practice focuses on corporate finance, mergers and acquisitions and cross-border transactions. He was also recognized in 2002 as one of Canada’s top 40 lawyers under 40 by Lexpert magazine.

Founded in 1856, Blake, Cassels & Graydon LLP has over 500 lawyers and will have nine offices in Canada, United States, Europe and China. The Firm’s signature, "Blakes means business" is not just a catch phrase but a discipline that defines how Blakes helps clients achieve their business objectives.

Tuesday, June 08, 2004

Survey of CLO's
Altman Weil's Daniel J. DiLucchio is out with another report to in-house attorneys with observations and conclusions based on a recent survey of in-house counsel. Get your copy here.

EDITOR'S COMMENT: Mr. DiLucchio makes the following conclusory allegation "traditionally, legal work could be performed more cost effectively by inside counsel . . .."

My comment is that if that were so, 99.9% of all attorneys would be working in-house for corporations and rather than delivering legal services as partners or associates at law firms.

Competitive markets adjust for ineffiencies and drive out high cost providers. If legal services could be more efficiently, and more cost-effectively delivered by in-house counsel, more attorneys would be working inhouse.

The problem is that misperceptions abound when any large system is viewed in microcosm. (Is it a tree or an elephant's leg?) All of the costs of legal services must be considered when providing for a corporation's legal counsel.

Thousands of make-buy decisions made every year for the past several decades have converged to an overall cost-effective solution -- corporations using a few generalists and maybe some specialists, depending on the company, and a lot of outside counsel. Even large law departments abide by that solution, when corporate revenue per in-house attorney is the measure.

That solution minimizes the total cost of legal services. Were it otherwise, corporations would have seen it years ago and absorbed more of the available legal talent.

Mr. DeLucchio's conclusory allegation is, therefore, incorrect. Moreover, his advice to squeeze outside counsel for legal fees is a bit like a category-killer retailer coming into your neighborhood, wiping out the competitition, and then increasing retail prices. He advises corporations to squeeze legal fees of law firms that survive convergence programs -- hardly the way to get the best and the brightest attorneys to work on your matters let alone dedicate themselves to the solution of your company's problems. And, not a practice that responsible general counsel should take seriously. Ed.

Mr. DiLucchio's advice is contained in Altman Weil's "Report to Legal Management", Vol. 31, No. 6 titled, "Chief Legal Officers Are Questioned — And the Answers Are 'Costs' and 'Compliance'"

Frustration High with Billing Surprises, Lack of Value, Billing Mistakes, Etc.
Mr. DiLucchio reports that the number one reason given for terminating a relationship is "cost management issues" citing a continuing high level of frustration by in-house counsel with law firm billing "surprises" (unexpectedly high bills for work performed), perceived lack of value for cost, billing mistakes and extreme expense charges.

"It appears that the frustration level with law firm services continues to be high for in-house lawyers. These concerns are fueled by a lack of responsiveness, high fees, and lack of value for costs. The survey data clearly suggest that there is an ongoing problem that is not being addressed."

Hourly Rate Still the Rule
The CLO Survey result is consistent with the results of the Altman Weil 2003 Law Department Management Benchmarks Survey, which reports that of 183 reporting companies, 33.9% continue to pay all of their fees to outside counsel based on hourly rates. Only 27.9% of the reporting companies pay from 1% to 10% of their fees on billing arrangements other than the hourly rate, and only 10.9% pay from 11% to 20% of their fees based on other than hourly rates.

Use of Outside Counsel to Decrease
17.3% of the CLOs plan to decrease their use of outside counsel in the next 12 months while only 15.8% of the CLOs plan to increase their use of outside counsel. This is a significant change from 2001 when 86% of the CLOs responding to the Survey planned to increase their use of outside counsel.

Altman Advises Corporate Counsel to Freeze Outside Counsel Rates
Altman advises in-house counsel:

• Law firm convergence programs are only the first step in a two-step process. The second step is leveraging purchasing power with the firms that are selected. [In other words, pick and squeeze. Ed.]

• Install and use e-billing technology. This is the best available tool for cost analysis and management. Task-based billing did not meet the hype and expectations, but e-billing has the potential to be the needed management tool.

• Manage the cost of each matter, not just the substantive legal issue involved. Realize that by the time a bill arrives on the desk of an inhouse lawyer, it is too late to manage the cost.

• Align law firms with types of matters. Use top firms for strategic legal work and low-cost providers
for commodity work.

• Evaluate lawyers, in-house and outside, for their ability to manage costs — it is part of their job.

• If you are still using hourly rates, at least insist on freezing annual hourly rate increases.

Thursday, May 20, 2004

Document Management in the Digital Age
When formulating a document retention plan, remember that documents today are not always on paper
Einar Rowan
Legal Times

Outsourcing of Work Means Influx of Legal Issues
Lawyers try to get handle on a fledgling practice area

John Covaleski
New Jersey Law Journal

Monday, May 17, 2004

Fitzpatrick Wins Verdict for Readers' Digest Against Former Employee on Non-Compete Breach
Jury Awards $800,000 in Attorneys Fees

After ten months spent building a case against a former employee accused of stealing confidential information, and a one week jury trial, a jury in Richmond, Virginia found that the employee breached his employment agreement by breaching a covenant not to compete and disclosing trade secrets to a competitor, the employee's new employer. The jury awarded Readers' Digest $800,000 in attorneys' fees.

The General Counsel of Readers' Digest flew in twice to watch John Fitzpatrick of LeClair Ryan try the case and had these remarks with respect to Fitz's grueling cross examination of the VP of competitor, said, "Fitz, it is a distinct pleasure to watch you work."

Terrific work over the term on the case was put in by LeClair attorney John Barr, with support from Andrena Althouse, Debby Burke, Miranda Eberhardt, and recently from Ondray Harris. A great team effort with a great result for a great client.

Friday, May 14, 2004

Court throws out $48M award against Propulsid maker
Associated Press

JACKSON, Miss. - The Mississippi Supreme Court on Thursday threw out a $48.5 million damage award against the makers of the heartburn drug Propulsid and ordered that separate trials be held for each of 10 plaintiffs.

The justices, in the 6-1 decision, said it was improper to group the 10 plaintiffs together when their claims did not arise out of the same incident.

London Firm Allen & Overy results: billings flat at £649m

Magic circle firm Allen & Overy is set to post billings of £649m as the financial reporting season opens. The figure, which is still provisional, represents a slight increase on last year’s gross revenues of £647m. In common with most other top 10 London firms, profits are expected to be down on last year’s average of £675,000 per equity partner.

According to an internal memo the magic circle firm is also expecting to pay out its annual worldwide staff bonus at the equivalent of three weeks’ salary.

Thursday, May 13, 2004

Lightfoot Franklin & White LLC is Alabama’s leading law firm for Commercial Litigation expertise

Lightfoot Franklin & White LLC is the number one firm in Alabama for Commercial Litigation legal expertise, according to the third edition of The International Who’s Who of Commercial Litigators, published by Who’s Who Legal this week.

Lightfoot Franklin & White LLC was the most highly nominated firm in the state in the research for the publication with more nominations from clients and peers than any other firm, and two Lightfoot Franklin & White LLC lawyers - more than any other firm in Alabama - are included in the publication. The book, first published in 1999, is a result of six months of independent research incorporating feedback from lawyers and in-house counsel, and includes 349 lawyers in 44 separate jurisdictions.

Managing Editor Callum Campbell said, “It is impossible to buy entry into this publication, only those lawyers who receive sufficient nominations from their peers are included. This book represents a truly global, highly qualitative survey of only the best commercial litigators, based on exhaustive research.”

Lightfoot Franklin & White LLC lawyers included in the book are:
• Samuel Franklin
• Warren B Lightfoot

The third edition of The International Who’s Who of Commercial Litigators will be included in the 2005 edition of The International Who’s Who of Business Lawyers, a compendium volume of all 24 practice areas covered by Who’s Who Legal’s separate single volume publications.

Tuesday, May 11, 2004

Former New York State Judge Franklin R. Weissberg
Joins Lowenstein Sandler in New York Office

New York Lawyer
May 11, 2004
By Anthony Lin
New York Law Journal

Former Manhattan Acting Supreme Court Justice Franklin R. Weissberg has become of counsel in the New York office of Roseland, N.J.-based Lowenstein Sandler.

Mr. Weissberg, who retired from the bench in 2001 after 14 years, will offer advice to clients on trial strategy.

He was of counsel at the New York firm of Morrison Cohen Singer & Weinstein.

Firm Relocates to Expanded Offices in Rockefeller Center
Enhancing the strength of its New York-based litigation practice, Lowenstein Sandler announced today that former New York State Acting Supreme Court Justice, Franklin R. Weissberg, has joined the firm as Of Counsel. The firm has also moved to expanded offices at 1251 Avenue of the Americas located in Rockefeller Center. The new 30,000 square foot space will allow the firm to increase its New York office to 45 attorneys.

In his new position, Justice Weissberg will serve a key role assisting the firm's clients in connection with litigation strategy at both the trial and appellate levels. "Judge Weissberg is an outstanding figure in the New York State judicial system and the legal profession," said Adrian Zuckerman, head of Lowenstein Sandler's New York Office. "His wisdom, experience and leadership will add significant value to our firm and the service we provide to our clients."

"I am delighted to be affiliated with Lowenstein Sandler, a firm with exceptional regional and national strength. I look forward to being a part of the firm's future and know that its New York presence will assist me in serving my theatrical production clients," said Justice Weissberg.

Justice Weissberg has a long and distinguished career as both a senior member of the state judicial system and a prominent litigator. He served as an Acting Supreme Court Justice for more than 14 years presiding over a wide variety of civil and criminal cases. He has lectured on litigation matters at the annual Judicial Seminars for New York State Judges and at the New York County Lawyers Association CLE Program entitled "Advice from the Experts: Successful Strategies for Winning Commercial Cases in New York State Courts." From 1992 to 1999 he was President of the Association of Court of Claims Judges of the State of New York.

Prior to ascending the bench, Judge Weissberg was a senior partner in the New York City law firm of Colton, Weissberg, Hartnick, Yamin and Sheresky where he litigated commercial and intellectual property matters in state and federal courts. He also has extensive experience representing clients in connection with entertainment law and civil litigation matters. He has represented hundreds of Broadway and Off-Broadway theatrical productions and regularly negotiated numerous complex transactions involving motion picture rights, original cast albums and music publishing rights.

Justice Weissberg can be reached by phone at 212.262.6700 or by e-mail at

Wednesday, May 05, 2004

Alabama Supreme Court overturns verdict against Hunt Petroleum
Detroit Free Press
April 30, 2004, 6:24 PM

MONTGOMERY, Ala. (AP) -- The state Supreme Court overturned a $24.6 million verdict against Hunt Petroleum in a natural gas royalty dispute, saying Alabama prosecutors failed to prove the state was defrauded. Hunt was represented by Sam Pointer of the Lightfoot Franklin law firm.

In a 6-1 decision, the Supreme Court threw out the verdict that Alabama won in a fraud suit against Hunt Petroleum in 2001, saying the state had failed to prove that fraud had occurred.

Lightfoot Franklin Firm Brings Auburn University Basketball Program Investigation to Successful Conclusion

Sam Franklin, Drew Kelly and William King represented Auburn University in a two-year investigation into the men's basketball program. By far the most serious allegations made by the NCAA Enforcement Staff were that two Auburn coaches had offered large amounts of cash and automobiles while recruiting two high school players. The Staff also claimed that Auburn was guilty of rules violations because a summer/AAU basketball coach allegedly provided players with cash and other benefits while acting as a representative of Auburn's interests.

Although rare, the firm decided to contest all of the charges before the NCAA Committee on Infractions because the firm did not believe that the evidence substantiated them. As part of the firm's written response to the Committee, the firm acknowledged several other rules violations that the firm discovered during its investigation and self-imposed a series of penalties and corrective measures. The Committee held a hearing on February 13, and issued its decision on April 27. The Committee found in Auburn's favor on the most serious allegations of offers of cash and cars, and against Auburn on the allegations involving the summer/AAU coach.

Tuesday, April 27, 2004

Marty Beirne Featured in ABA Article on Marketing
Richard Levick
ABA Law Practice Management Section
April, 2004

There are lots of litigators in Texas, and for a good reason: There’s lots of litigation in the state—including cases brought to some of the most plaintiff-friendly jurisdictions on the planet. Taking the marketing opportunity by the horns, one trial firm emblazoned its Texas brand worldwide.

Trade Secrets and Corporate Espionage
Protecting Your Company's Crown Jewels

by Glenna Rodgers and Scott Marrs
(Ms. Rodgers is General Counsel for Eni Petroleum a Houston-based exploration and production company -- Scott Mars is a partner at Beirne, Maynard & Parsons, LLP. He represents clients in intellectual property and commercial disputes, trials and arbitrations --

(Published in the ACC Docket 22, no. 4, April 2004, pp. 60-78)

About 85 percent of all corporate espionage incidents involve current or past employees. Use this article by Network attorney Scott Marrs and client Glenna Rodgers to develop and implement a battle plan.

Friday, April 23, 2004

Billy Gunn Interviewed on Airlines' Sky Radio NetworkEarl "Billy" Gunn of Weinberg, Wheeler Hudgins, Gunn & Dial, LLC's founding members, was recently interviewed by the Sky Radio Network about his thoughts on rising medical malpractice liability premiums and on tort reform. Billy's interviews are airing on the Sky Radio Network on various American Airlines flights throughout the month of August 2004. The Sky Radio Network provides business, technology, health, and entertainment programming to some of the largest airlines in the world, including United, Delta, Northwest, U.S. Airways, and America West. Click here to hear the interview (requires Windows Media Player or equivalent.)

Tuesday, April 20, 2004

British Publication Recognizes Lowenstein Sandler as Tops in New Jersey

Firm Ratings Rise

The second edition of the Chambers USA Guide to America's Leading Business Lawyers has been released and, as with last year's first edition, Lowenstein Sandler has more attorneys listed in New Jersey than any other law firm. (The survey is limited to corporate, litigation, employment and real estate practices.)

Last year Chambers named the firm as "the premier New Jersey firm." This year, Chambers did not provide any overall firm ranking. In each of the four practice areas covered by Chambers, approximately one dozen of the top firms in that area in the State are given a ranking of "1," "2," or "3". The Corporate Department was noted as "the leading corporate department in the state." The Corporate Department was the only one awarded a "1" ranking in the State, with 11 other firms earning either 2's or 3's. Clients commended the firm for its "high quality and responsive lawyers."

The Litigation Department moved from a 2 to a 1 ranking, a listing it shared with only four other firms. A total of only 10 firms were given a ranking of any kind. The report noted that clients "think the world of" the 108 attorneys comprising this litigation practice, praising their "responsive approach - it is a creative team that gives terrific service."

The employment group was ranked as a 3, among only 11 firms recognized State-wide. The narrative gave the group high marks for its overall responsiveness and business sense. The real estate group similarly was ranked as a 3 among a total of 13 firms listed and was noted for the service it provides to the firm's diverse business clientele.

Peter Ehrenberg, David Harris, Greg Reilly, Larry Rolnick, Joe Steinberg, Alan Wovsaniker and Ed Zimmerman were recognized individually by Chambersas leading attorneys in New Jersey.

The Full Text of the ranking can be viewed online at

Other Network Firms Also Rated:

Beirne, Maynard & Parsons, L.L.P. -- Ratings

Corr Cronin -- Ratings

Forman Perry Watkins Krutz & Tardy LLP -- Ratings

Goodell, DeVries, Leech & Dann, LLP -- Ratings

LeClair Ryan -- Ratings

Lightfoot, Franklin & White, LLC -- Ratings

Ruden, McClosky, Smith, Schuster & Russell, PA -- Ratings

Snell & Wilmer -- Ratings

Thompson Hine LLP -- Ratings

Weinberg, Wheeler, Hudgins, Gunn & Dial, LLC -- Ratings

Wheeler, Trigg & Kennedy -- Ratings

For information on ratings.

Marketing with Blogs -- 10 Steps
By Rich Ottum
WebPro News

Business weblogs are not rocket science, but like any other communication medium; their effectiveness depends upon quality of content and execution. Before you join the chorus and begin publishing, follow the eStrategyOne 10 steps to marketing with Business Weblogs:

1--Make it New: Your business weblog is not your website. You must offer fresh content and a unique perspective not available from your traditional corporate communications.

2--Give it Voice: Your weblog must have an editorial voice--not corporate-speak, but the voice of a real individual. Think of your favorite editorial writer or humor columnist. Your weblog author should be an individual with a unique and recognized point-of-view. Your author's comments should be informative, provocative, honest, and always in good taste.

3--Say it Often: A dynamic business weblog should be updated every few days, or at least weekly. Concentrate on the most compelling, current or urgent issues in your industry or marketplace. Provide breaking news updates in real time.

4--Ask for Feedback: Successful weblogs encourage reader participation. Make sure you enable comments, and actively solicit feedback. If you are afraid of criticism or controversy from your readers, stick to monolog publishing on your website.

5--Share the Wealth: Despite your pride of authorship, recognize the diverse interests of your readers. Successful business weblogs provide links to numerous outside resources and to other weblogs with like content.

6--Keep it Simple: Leave the Flash introductions to ad agency websites. Keep your weblog graphic design simple. Use color and images sparingly, and focus on readable text. Use categories, and make your archives easy to search. Use a template or an experienced designer to accomplish simplicity.

7--Equip Your Readers: Not all weblog readers or prospective readers have newsreader software. In fact, many readers are clueless regarding XML, RSS, or any technology with three initials. Make sure your readers can easily find your weblog online. Tell your readers where to download newsreader software, but also enable readers to receive your postings via email.

8--Promote in Multiple Channels: Not everyone is cruising aggregators looking for news feeds. Make sure you promote your business weblog in traditional channels, the old-fashioned way. Advertise your weblog in print, on your website, and via email marketing. Finally, do register with blog-specific directories.

9--Join Another Conversation: Weblog authors should read and post comments on other weblog sites. Consider this professional courtesy, not self-promotion. Encourage intelligent dialog in your industry or area of expertise.

10--Be Patient: Weblog syndication technology is nothing new--it's merely recycled "push technology" circa 1998. While the adoption of consumer blogs is exploding, business weblogs are growing more cautiously. Expect a small readership initially, and allow your audience to grow organically.

Partners, Look Before You Leap
Jeffrey Lowe
Legal Times

1. Important factors to consider:

• Platform. Will the new firm be able to support your current practice or offer synergies that will allow you to further develop your practice?
• Compensation.
• Billing. Is the new firm's billing structure consistent with your current billing rate?
• Conflicts. Are there potential conflicts between your existing clients and the new firm's clients?
• Culture. Is the "culture" of the new firm in line with your expectations?

2. What does my partnership agreement say?

3. What's my book?

4. Will my billing rate change?

5. Should I go alone or with a group?

6. What do I tell my clients? My partners? My associates?

Beirne Maynard & Parsons Hits Home Run in 5th Circuit for AIG on Pollution Exclusion

Roger McCleary and a team from Network member firm Beirne Maynard & Parsons have achieved another important win for AIG's National Union Fire Insurance Company of Pittsburgh, PA (National Union) in a major insurance coverage dispute.

The U.S. Fifth Circuit Court of Appeals affirmed a summary judgment declaring that National Union's pollution exclusion insulated the carrier from any obligation to reimburse defense costs or indemnify U.S. Liquids, Inc. and various officers and directors (USL) regarding consolidated securities fraud class action and shareholder derivative litigation. National Union Fire Insurance Company of Pittsburgh, PA, v. U.S. Liquids, Inc., 271 F.Supp.2d 926 (S.D. Tex. 2003), aff'd per curiam, No. 03-20542, 2004 WL 304084 (5th Cir. Feb. 17, 2004).

McCleary argued the case to the Fifth Circuit on January 5, 2004. He was assisted by BMP lawyers Henry Platts, Jr., Megan Gable and Pamela Hicks. USL was represented by King & Spalding, L.L.P., and Hicks, Thomas & Lilienstern, L.L.P.

USL provides liquid waste management services, including collection, processing, recycling and disposal. USL asserted the underlying claims were covered under a Directors, Officers, and Corporate Liability policy issued by National Union. The D&O policy had a $20,000,000 limit of liability and included a Securities Plus II endorsement, which provided expanded coverage for securities claims. USL demanded that the full limit of liability be applied to defense cost reimbursement and settlement of the underlying claims - or to indemnity in the event USL was found liable.

The Fifth Circuit decision extends the application of pollution exclusions to securities fraud class action/shareholder derivative litigation and reaffirms the right of insurance carriers to exclude unwanted exposure associated with pollution through an unambiguously worded pollution exclusion.


The complaint in the underlying consolidated securities litigation, filed in the U.S. District Court for the Southern District of Texas, alleged that purchasers of U.S. Liquids stock were damaged from the diminution in the value of the stock because of alleged violations of federal securities laws. The claimed securities violations included allegations that USL:

• failed "to disclose that a substantial part of [the] revenue and income [of U.S. Liquids] was recognized as a result of defendants' pretending to have performed services which in fact were not performed; to wit the proper treatment and disposal of hazardous material;"

• represented that U.S. Liquids had a "well planned expansion strategy that would result in steady revenue growth and increased EPS . . . [but] that USL's proclaimed increased profitability resulted from the fact that [U.S. Liquids] was illegally charging its customers for waste disposal services it had never performed;"

• represented that U.S. Liquids had "disciplined pre-acquisition review procedures for acquisition candidates, including legal, financial, engineering, operational, and environmental reviews" when "the companies acquired by USL were not properly investigated by USL prior to their acquisition;" and,

• represented that U.S. Liquids was in compliance with applicable environmental law and that employees were properly trained in waste management procedures.

The shareholders derivative lawsuit against USL, also filed in the U.S. District Court for the Southern District of Texas, claimed that USL breached fiduciary duties and wasted corporate assets by allegedly:

• exposing U.S. Liquids to "huge fines or civil penalties and a diminution of USL's revenue growth" and "huge fines and/or penalties USL knew it would have to pay due to" allegedly illegal waste disposal practices;

• illegally dumping waste and charging customers as if the waste had been properly disposed of, thereby driving up the value of U.S. Liquids' shares and reaping "millions in bonuses through their false financial reporting of [U.S. Liquids'] earnings, liabilities and equity";

• permitting U.S. Liquids' financial statements to "materially overstate USL's net income and assets" due to "its illegal conduct"; and,

• exposing U.S. Liquids "to the cost of the defense of and possible cost of liability for a violation of the federal securities laws as a result of the securities laws class action lawsuits [pending] against it in federal court."


USL placed National Union on notice and requested reimbursement of defense costs and indemnification against any liability. After National Union denied coverage for all claims and defense costs based upon the policy's pollution exclusion, BMP filed a declaratory judgment action in the U.S. District Court for the Southern District of Texas. This action sought a judgment declaring that USL's claim under the D&O policy was barred by application of the pollution exclusion. USL counterclaimed for breach of contract and a declaratory judgment of coverage. Cross motions for summary judgment were filed, resulting in dismissal of USL's claims and a declaratory judgment in favor of National Union. USL appealed to the Fifth Circuit, which conducted a de novo review.


USL asserted numerous grounds for appeal. Included among these were the following central arguments, all rejected by the Fifth Circuit:

• the policy provided coverage for the underlying securities and derivative claims notwithstanding the pollution exclusion;

• the pollution exclusion was unenforceable because USL was in the business of waste processing and treatment and, therefore, application of the pollution exclusion would allegedly render illusory the Securities Plus II coverage;

• the allegations and damages claimed in the underlying cases arose from allegedly independent misrepresentations or other conduct unrelated to excluded pollution related matters;

• the pollution exclusion was ambiguous, particularly in the context of application of the Securities Plus II coverage in conjunction with the pollution exclusion to a company in the waste processing and treatment business;

• the district court erred by concluding that under Texas law the "arising out of" language of the pollution exclusion required a broad, general and comprehensive interpretation of the exclusion, rather than a narrow interpretation favoring coverage;

• there must be a causal connection between the injury alleged in the underlying lawsuits and the events excluded by the policy; and,

• National Union had already lost this issue in an allegedly similar case decided in another jurisdiction (and not handled by a Network firm).

Click Click for a copy of the Fifth Circuit Decision.

Tuesday, April 13, 2004

Law Firm Consultants or Arms Dealers?

Altman Weil Offers Plaintiff Law Firms Marketing Tips
Plaintiff law firms on average spend seven or eight percent of their gross income on marketing – almost four times as much as general practice firms do. They rely on a traditional suite of marketing techniques including space ads, radio and television spots, seminars and PR; but sometimes they find this isn’t enough. Altman Weil consultant Debra Rhodunda offers ten marketing tips to rejuvenate a plaintiffs practice.

Sen. Hatch Pushes Fund for Asbestos Claims
By Christopher Smith
The Salt Lake Tribune
April 13, 2004

The Senate will consider next week a new government-managed fund to pay medical claims of asbestos victims.

Lawmakers on both sides of the aisle are skeptical the 60 votes Hatch needs to force a vote on the measure can be mustered.

Monday, April 12, 2004

Mergers boost Reed Smith Revenues by 40%; PPP up 13% to $558K

Legal Week reports:

Reed Smith has chalked up 40% growth in turnover for 2003 after securing a series of ambitious mergers.

The 1,000-lawyer US firm saw 2003 revenue soar to $441m, up 40% from 2002’s total of $314m.

The increase outpaces West Coast firms such as Heller Ehrman White & McAuliffe and Wilson Sonsini Goodrich & Rosati, as well as New York leaders Cadwalader Wickersham & Taft and Willkie Farr & Gallagher.

Partner profits rose by 13% to hit $558,000, against the previous year’s figure of $495,000.

The major driver for growth has been two years of domestic and international expansion, which has seen Reed Smith hire a 26-lawyer team from New York’s Parker Duryee Rosoff & Haft, as well as merge with Virginia’s Hazel & Thomas, New York’s McAulay Nissen Goldberg & Kiel and London’s Warner Cranston.

In addition, the Pittsburgh firm’s merger with 215-lawyer Californian practice Crosby Heafey Roach & May went live on 1 January, 2003.

The firm has continued its policy of expansion in 2004 with the firm securing the takeover of New York advertising and marketing boutique Hall Dickler and Washington DC IP specialists Shanks & Herbert.

Reed Smith managing partner Gregory Jordan told Legal Week: “The results follow from our strategy and is the first year after we integrated the Crosby merger. That has shown immediate benefits and we have been able to generate $20m from new clients as a result of the deal.”

Author: Antony Collins
Source: Legal Week
Start Date: 26/02/2004
End Date: 22/03/2004

Friday, April 09, 2004

Bush Taps Thompson Hine Partner for IRS Position as IRS Chief Counsel

April 8, 2004 - The United States Senate today confirmed the appointment of Donald L. Korb, a tax partner in the Cleveland office of Thompson Hine LLP, to serve as Chief Counsel of the Internal Revenue Service and an Assistant General Counsel in the Department of the Treasury. President George W. Bush had nominated Mr. Korb for the position in December 2003.

“I am honored to have been appointed to this important position,” says Mr. Korb, a Cleveland native and partner in Thompson Hine’s tax practice. “I look forward to the opportunity to serve in the President’s administration.”

The Chief Counsel is the chief law officer for the IRS and an Assistant General Counsel for the Treasury, with duties and responsibilities prescribed by the Secretary of the Treasury and by law. The Chief Counsel of the IRS supervises approximately 1,400 attorneys who are assigned among the IRS National Office and the major operational divisions of the agency. The Chief Counsel’s Office plays a central role in the administration of the Federal tax laws. Its attorneys provide guidance on the correct legal interpretation of the tax laws, represent the IRS in litigation, and provide all other legal support the IRS needs to carry out its mission of serving American taxpayers. For example, the Chief Counsel’s Office drafts regulations, rulings, and other published legal guidance; handles tens of thousands of cases per year in the U.S. Tax Court and bankruptcy courts and works closely with the Department of Justice on other tax litigation in other Federal courts; and provides specific legal advice and determinations to taxpayers and to various IRS offices both before and after taxes are filed.

Mr. Korb began his professional career nearly 30 years ago in the Office of the Chief Counsel of the IRS (in January 1974), after graduating from Case Western Reserve University Law School in 1973 and serving in the U.S. Army. (In addition to his J.D. from Case, Mr. Korb holds a Masters in Taxation from Georgetown University Law Center (1977) and a B.A. from John Carroll University (magna cum laude, 1970).) In 1978, he joined Thompson Hine’s tax practice and was elected to the partnership in 1981. In 1984, Mr. Korb was appointed Assistant to the Commissioner of Internal Revenue, where he led the Service’s participation in the landmark 1986 tax reform process. He then returned to Thompson Hine, where he chaired the firm’s tax practice for more than seven years. In 1997, Mr. Korb joined Coopers & Lybrand LLP as a tax partner in the accounting firm’s National Tax office. In July of 1998, he returned to Thompson Hine and has focused his practice on handling taxpayer controversies with the IRS.

“All of us at Thompson Hine are very excited for Don,” explains David J. Hooker, Managing Partner of Thompson Hine. “He has been an asset to our firm and to our clients. While we will miss having him as a part of our firm, we recognize what an incredible opportunity this is for him.”

More Firms Are Outsourcing Support Services to India. Will Legal Work Be Next?