Archive for June, 2007


Friday, June 22nd, 2007

Vice President Dick Cheney has asserted his office is not a part of the executive branch of the U.S. government, and therefore not bound by a presidential order governing the protection of classified information by government agencies.

As we understand the theory, since one of his jobs make him President of the Senate (with the ability to vote only to break tie votes), he apparently is claiming to be a member of the Legislative Branch of Government.

Article Two of the U.S. Constitution which is styled “Executive Department� the office of Vice President is mentioned twice.

U.S. Constitution: Article II

“Article II – Executive Department
  Section 1.

The executive Power shall be vested in a President of the United States of America. He shall hold his Office during the Term of four Years, and, together with the Vice President, chosen for the same Term, be elected, as follows:
In Case of the Removal of the President from Office, or of his Death, Resignation, or Inability to discharge the Powers and Duties of the said Office, the Same shall devolve on the Vice President, and the Congress may by Law provide for the Case of Removal, Death, Resignation or Inability, both of the President and Vice President, declaring what Officer shall then act as President, and such Officer shall act accordingly, until the Disability be removed, or a President shall be elected.�
This novel argument if made by the Vice President in any law school class, would get him hissed at and pelted with spitwads.This claim raises another legal question, If he is not a member of the Executive Branch, then how can he claim Executive Privilege and withold documents…etc.?

Press Frets as More Judges Sue for Libel

Friday, June 22nd, 2007

Tony Mauro Legal Times June 22, 2007 


Supreme Court Justice Antonin Scalia once said judges should adopt a “rope-a-dope” posture when criticized, taking the hits passively until their adversaries wear themselves out. 

But with 25 judges suing for libel in 2005 alone — nearly 10 percent of all libel suits filed nationwide — that form of judicial restraint is fading, raising questions about the role, and the ethics, of judges and whether they have a right to be as litigious as everyone else. 

Last week the news media began to push back, questioning when and whether judges should be able to use their own court systems as a tool to retaliate against the media. 

“It’s time for us to ask, ‘When should judges sue for libel, and when shouldn’t they?’ ” says Bruce Sanford, a leading libel lawyer for news organizations and authors, and a partner in Baker & Hostetler’s D.C. office. “If these suits lead the public to feel that judges are taking care of their own, it will only add to cynicism about the judicial process.” 


Connecticut Avenue

offices are turning into something of a war room in the growing battle against judicial libel suits. 

Sanford and local lawyers for the Kane County Chronicle, a small Illinois newspaper, filed a federal civil rights suit June 12, claiming the paper cannot receive a fair hearing in its appeal of a libel suit that was filed and won by the man who rules the state judiciary: Illinois Chief Justice Robert Thomas. Thomas won a $7 million verdict against the paper — later reduced to $4 million — in a dispute over opinion columns in the Chronicle that suggested that political “shimmy shammy” influenced Thomas’ handling of a disciplinary case against a local prosecutor. 

Thomas’ dogged pursuit of the lawsuit — which included calling his Supreme Court colleagues as character witnesses — has “compromised the independence and integrity of the Illinois judicial system from top to bottom,” Sanford’s brief says. The state Supreme Court, in fact, is now so compromised that it cannot hear any final appeal of the judgment against the newspaper. 

The newspaper’s complaint, in the form of a Section 1983 civil rights suit, asks the federal court to stay the newspaper’s appeal until after Thomas leaves the bench — which will be 2010 or later, if Thomas chooses to stand for re-election. 

Meanwhile, earlier this month, the Boston Herald, another Baker & Hostetler client, wired $3.4 million to Massachusetts Superior Court Judge Ernest Murphy, after losing final appeals in a libel suit before that state’s

Supreme Judicial Court

. The money represented an award plus interest that Murphy won in his suit over Herald stories alleging he made insensitive remarks about a rape victim. 

“Fifteen years ago that case would not have been brought,” Sanford says. “We’re in a whole different climate now.” 


The Thomas and Murphy suits are among the most successful libel suits of recent years — adding, media lawyers say, to the suspicion that judges have an edge when their libel awards are appealed. Murphy’s was the highest libel verdict in Massachusetts since 1980, according to the Media Law Resource Center, and Thomas’ was the largest compensatory award for defamation in Illinois history, Sanford’s brief claims. 

Sanford says that judges should not be barred completely from filing libel suits, but they should be reserved for the most serious claims of damaged reputation. But Thomas’ complaint is far more trivial, Sanford insists — partly because he is suing over opinion columns, which are usually immune from libel suits anyway, and partly because they only accused him of being political, which is hardly unusual in Illinois. Thomas, a one-time place kicker for the Chicago Bears, suffered no damage because of the columns, Sanford says, noting that he was named chief justice by his colleagues after the columns appeared. 

In spite of all this, Sanford says, Thomas chose to subject the Illinois judiciary to unnecessary charges of favoritism. “He could have made a public statement denouncing the columns, rather than suing,” Sanford says. 

“That’s a joke,” says Thomas’ lawyer, Joseph Power Jr., of Chicago’s Power Rogers & Smith. The columns, in effect, accused Thomas of illegal conduct, Power says, and Thomas was entitled to go to court to repair his reputation. 

“The last time I looked, the Seventh Amendment did not contain an exception for judges,” says Power, referring to the constitutional amendment guaranteeing a right to civil jury trials. “As a judge, as a human being, you don’t give up your rights.” 

The 2006 trial of Thomas’ lawsuit in Geneva, Ill., was, by all accounts, unusual. “It managed to push more unique buttons than any libel case I ever studied,” says Sandra Baron, executive director of the Media Law Resource Center, which aids the media in defending against libel and privacy suits. 

Six current and former state Supreme Court justices testified on his behalf, many addressing Thomas as “Your Honor,” even though he was the plaintiff, not the judge in the case. But when lawyers for the newspapers sought to cross-examine the justices about the disciplinary case that was the subject of the newspaper’s columns, they refused, invoking what was later upheld on appeal as a “judicial deliberation privilege.” 

The newspaper’s brief alleges that “the Illinois judiciary barricaded itself behind a wall of privilege that made it impossible for the Chronicle defendants to defend themselves.” 

Another problem, in the newspaper’s view: the same appellate judges who endorsed the privilege were assigned to hear the newspaper’s appeal. And that assignment came from the Illinois Supreme Court, five of whose justices have recused themselves from hearing the final appeal. With no quorum, the state Supreme Court cannot hear the case. Having a fair and complete appeals process available is especially important in libel cases, says Sanford, because U.S. Supreme Court precedent calls for de novo review of the facts on appeal. 

“The chief justice could have seen from day one that his lawsuit would contort the Illinois judiciary in ways it has never seen before,” says Bruce Brown, another Baker & Hostetler partner working on the judicial libel cases. 

At trial, one of Thomas’ claims was that the 2003 columns he objected to deprived him of a spot on President George W. Bush’s short list for a U.S. Supreme Court position. To counter that, the newspaper called Eleanor Acheson, former President Bill Clinton’s judge screener, as a witness. She voiced doubt that Thomas was ever on such a list and said the opinion columns would have made no difference. “It would not stop his appointment,” Acheson testified. 


The rise and potency of judicial libel lawsuits also highlights the increasing role of judges as First Amendment players. The U.S. Supreme Court ruled in 2002 that judges can say more about their views during election campaigns without violating ethics rules, and the American Bar Association recently added a new model rule that allows judges to respond to criticism — or to ask third parties to defend them. 

“Judges are more emboldened to sue nowadays,” says Gary Hengstler, director of the Reynolds National Center for Courts and the Media at the National Judicial College. Hengstler holds workshops for judges on how to handle the media, and often hears complaints about the press. 

But Hengstler hopes the ABA’s new rule allowing judges to respond to criticism will act as a safety valve. “If judges employ that rule and respond to criticism publicly, that will get covered,” Hengstler says. “Hopefully, that will alleviate the need for libel suits.” 

One way or another, lawyer James Goodale, former vice chairman of The New York Times, also hopes judges will stop suing newspapers. 

“When judges judge judges, there is a built-in conflict of interest … It would be the better part of valor for judges not to bring these cases,” Goodale wrote in a recent New York Law Journal column. “Once they are brought, they may find themselves in the comic opera posture of the Illinois Supreme Court.” 


Law study finds one in eight juries are mistaken

Friday, June 22nd, 2007

Marcy Miranda   6/21/07  Northwestern University


A study conducted by a Northwestern professor has found a way to measure the rate of error in the verdict decisions made by judges and juries during trials.
The study found that one out of eight juries made the wrong decision in a set of court cases being analyzed, said Bruce Spencer, the author of the study and a Statistics professor at NU.

Spencer utilized a study conducted by the National Center for State Courts that included 271 criminal cases tried in state courts in four different cities.
“The big finding is that you can do the study,” Spencer said.
Only in a handful of cases where DNA evidence is later retrieved or when the true criminal confesses can it be known for certain whether juries gave the correct verdict or not, he said.
The study conducted offers another way to find out the probability of how accurate the verdict is, he said.
Spencer cautioned that the numerical findings only pertained to the set of data he studied and that they could not be generalized for all other cases.

The importance of the study is that it provides information for people who want to study the justice system, Spencer said.
“As a society, we like to know how well our schools are doing, and our hospitals,” Spencer said. “We should also know how well our courts are doing.”
To conduct the study, Spencer, a Faculty Fellow at the Institute for Policy Research, compared the decisions of judges and jurors on the same cases.
Judges were asked to report their decisions before the jurors gave their decision.
It could not be assumed that the judge was any more correct than the jury, Spencer said.
John Heinz, a law professor at the Northwestern School of Law, recommended a set of data for Spencer to study. Spencer’s study is an innovative way to answer the question of accurate convictions in court cases, Heinz said.

“You wouldn’t think that without knowing (the real answer) you could estimate the error rate, but Bruce has figured out a way to do it,” Heinz said.
The study, funded by the Institute for Policy Research, will be published in the July issue of Journal of Empirical Legal Studies.

U.S. Supreme Court Making Appeals Process More Difficult

Thursday, June 21st, 2007

June 21, 2007 11:54 a.m. EST 

Christopher Rizo – AHN Staff Writer 

Washington, D.C. (AHN)-The U.S. Supreme Court has made it more difficult for most defendants to challenge their federal prison sentences, with a decision announced Thursday. 

Upholding a 33-month sentence given to Victor Rita for perjury and making false statements, the nation’s high court ruled 6-3 that appeals courts that review prison terms imposed by trial judges may deem them reasonable if they fall within federal sentencing guidelines. 

“The first question is whether a court of appeals may apply a presumption of reasonableness to a district court sentence that reflects a proper application of the sentencing guidelines. We conclude that it can,” Justice Stephen Breyer said in his majority opinion. 

Justices Antonin Scalia, David Souter and Clarence Thomas dissented. 

Based on the ruling, defendants who receive prison sentences within the guidelines “are going to have an awfully hard time getting that sentence disrupted on appeal,” said Douglas Berman, a sentencing expert at the Ohio State University law school, according to The Associated Press. 


6th. Cirt. Upholds Privacy of Internet e-mail

Thursday, June 21st, 2007

By Shaun Waterman Jun 20, 2007, 23:49 GMT
WASHINGTON, DC, United States (UPI) — A U.S. appeals court in Ohio has ruled that e-mail messages stored on Internet servers are protected by the Constitution as are telephone conversations and that a federal law permitting warrantless secret searches of e-mail violates the Fourth Amendment.
‘The Stored Communications Act is very important,’ former federal prosecutor and counter-terrorism specialist Andrew McCarthy told United Press International. But the future of the law now hangs in the balance.
An Ohio man whose e-mail was searched after his Internet service provider was ordered to turn it over to federal investigators and not tell him about it sought and won an injunction against the government last year in U.S. District Court. On Monday, that injunction was upheld by the 6th Circuit Appeals Court.
‘The District Court correctly determined that e-mail users maintain a reasonable expectation of privacy in the content of their e-mails,’ ruled the three-judge panel.
They held that the 1986 Stored Communications Act, which allows the government to obtain an ex-parte order requiring ISPs to turn over e-mail stored on their servers, violated the Fourth Amendment prohibition on unreasonable search and seizures.
Ex-parte orders are those issued by the courts at the government`s request without any opportunity for the subject of the order to contest them.
The court ruled that there was a difference between the so-called meta-data stored by the ISP about each e-mail — the addressee, time of transmission and so forth — and the content of the e-mail message itself.
The distinction, the court held, was analogous to that between the so-called pen register information about phone calls like the number dialed, or the time and length of the call, and the actual phone conversation itself.
Pen register information can be subpoenaed or obtained through other court orders from telephone companies. But the content of conversations can only be monitored with a warrant.
The U.S. government argued that there could be no reasonable expectation of privacy, because e-mail is sent via a third party, but the court held, ‘Where the third party is not expected to access the e-mails in the normal course of business … the party (sending them) maintains a reasonable expectation of privacy.’
ISPs, the ruling states, have ‘mere custody’ over the e-mail and subpoenaing them ‘is insufficient to trump the Fourth Amendment warrant requirement.’
In particular the court was concerned that the law allowed the federal government to act without showing probable cause and without allowing the owner of the e-mail account any opportunity to contest, or even know about, the order.
The ‘combination of a standard of proof less than probable cause and potentially broad ex-parte authorization cannot stand,’ reads the judgment.
Some observers warned that the ruling might hamper federal counter-terrorism efforts.
Although there are other means for U.S. agencies to access such information in intelligence-gathering or national security cases, McCarthy said, the ruling would have consequences in those areas.
‘The USA Patriot Act broke down the wall between intelligence and law enforcement. Criminal prosecutors can now share information with the intelligence side of the house,’ he said.
But if the ruling stopped prosecutors from gathering information, it could not be passed along. ‘If you can`t get it, you can`t share it,’ he said.
McCarthy also said that the Stored Communications Act had brought ‘some uniformity to the law.’
‘Until this act was passed there was a lot of confusion about what standards should apply’ to e-mail, because of the numerous gray areas created by the technology: for example, whether e-mail subject lines were meta-data or part of the content.
In general, he said, it was ‘better for Congress to draw these lines than for the courts to do so on an ad hoc basis by drawing on Fourth Amendment principles.’
But former Reagan and George H. W. Bush administration Justice Department official David Rivkin told UPI he believed the case had been correctly decided, and said it would have limited impact.
‘This concerns a criminal case, in which the very highest levels of constitutional protections rightly apply,’ he said, adding that the distinction between meta-data and content was an important one.
He said that, even given the expectation of privacy, the context of the effort to access the data — whether it was part of a criminal case or an intelligence-gathering effort, for instance — had to be considered.
At the end of the day, ‘The question is, is the search reasonable?’ he said. ‘People on both sides tend to think of these issues in absolute terms,’ he said, but in reality, there was ‘a complex matrix’ of factors the courts had to take into account.
Justice Department spokesman Dean Boyd said prosecutors were reviewing the case to decide whether and how to appeal. The decision can be challenged before the full circuit court, or directly to the U.S. Supreme Court.

Unlawful access to stored communications; § 2702. Voluntary disclosure of customer
communications or records; § 2703. Required disclosure of customer … –
Similar Pages
US CODE: Title 18,2701. Unlawful access to stored communications
2701. Unlawful access to stored communications. How Current is This? … or in
furtherance of any criminal or tortious act in violation of the Constitution … –
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SSRN-A User’s Guide to the Stored Communications Act, and a …
SSRN-A User’s Guide to the Stored Communications Act, and a Legislator’s Guide
to Amending It by Orin Kerr. –
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U.S. Supreme Courts Most Kafkaesque Decision. Procedure overrules justice..

Wednesday, June 20th, 2007

 Penalizing a Criminal Defendant for Relying on a Court’s Official Statement of the Due Date for His Habeas Corpus Appeal



By MICHAEL C. DORF Jun. 20, 2007
Last week, in Bowles v. Russell, the Supreme Court held that a federal appeals court had no jurisdiction to hear an appeal from the denial of a habeas corpus petition because the notice of appeal was filed two days late–even though it was filed one day before the date that the federal district judge had (mistakenly) told the petitioner that it was due. As a consequence of the ruling, Keith Bowles loses his one chance to have a federal appeals court correct what he alleges were errors resulting in his murder conviction and sentence of fifteen-years-to-life in prison.
Of course, no legal system could function without deadlines, and sometimes missed deadlines unavoidably result in miscarriages of justice. However, the majority opinion in Bowles–written by Justice Clarence Thomas–appears to go out of its way to avoid doing justice. It is the reductio ad absurdum of legal formalism. It is, as I argue below, almost literally Kafkaesque.
The Procedural Issue
The dispute in the Bowles case concerned Rule 4 of the Federal Rules of Appellate Procedure, which authorizes a district court to reopen the filing time for an appeal for a period of 14 days. After denying Bowles’s petition on the merits, U.S. District Judge Donald Nugent granted Bowles’s request to reopen the filing time, pursuant to Rule 4, and–in a written order–specified that Bowles had to file his notice of appeal by February 27, 2004.
Bowles filed on February 26. But Judge Nugent had made an error. He should have only given Bowles until February 24. Nonetheless, because the two-day delay was undoubtedly due to his own, rather than Bowles’s, error, Judge Nugent treated the notice of appeal as timely.
However, the U.S. Court of Appeals for the Sixth Circuit reversed Judge Nugent’s decision, and ordered the appeal dismissed without ever considering the merits of the arguments raised by Bowles.
The “Jurisdictional” Question: Can the Courts Waive the Time Limit?
In affirming the Sixth Circuit dismissal, Justice Thomas distinguished between two kinds of time limits. First, there are the time limits that appear in judge-made rules, which, he said, serve only to ensure that the work of the courts proceeds in an orderly fashion. The courts have discretion to waive these limits in appropriate cases. In contrast, there are the time limits that appear in statutes written by Congress. Such time limits are part of what defines the jurisdiction of the courts. Such “jurisdictional” time limits, Justice Thomas wrote and the majority held, cannot be waived by the courts.
The time limit at issue in Bowles appears in the Federal Rules of Appellate Procedure, but that rule merely restates what also appears in a federal statute. Thus, the majority in Bowles said, the limit was firm.
In dissent, Justice Souter (and Justices Stevens, Ginsburg, and Breyer) took issue with the majority’s claim that all statutory time limits are jurisdictional and therefore unwaivable. According to the dissent, while court rules are never jurisdictional, only those statutory deadlines that Congress intends to be jurisdictional count as jurisdictional.
As a matter of logic, the dissent clearly has the better of the argument here. Suppose Congress specified a time limit for filing some sort of document, but added in the text of the statute that “this time limit is not jurisdictional and may be waived in the interests of justice as found by the courts.” Clearly, the time limit would not then be jurisdictional, as even the Bowles majority acknowledges by stating that Congress could, if it wished, authorize judges to waive the deadline in future cases.
Accordingly, the real dispute in Bowles is what the default rule should be. In other words, when Congress does not expressly state whether a deadline is waivable, should Congress be presumed to intend that it is, or is not, waivable? Given the dire consequences, the dissent said that statutory deadlines should be treated as mere claim-processing rules–and thus waivable–unless they clearly concern the courts’ jurisdiction.
The majority did not deny the harsh consequences of its holding. Indeed, the majority seemed to relish them, proudly pointing in a footnote to a recent case in which a petition for review in the Supreme Court itself had been rejected by the clerk without even being distributed to the Justices–and the petitioner executed–because the petition was a day late.
Nonetheless, the majority embraced the rule that statutory deadlines should be presumed to be jurisdictional because of the rule’s predictability in application. The dissent’s approach, Justice Thomas warned, would only inspire litigation over deadlines.
The Majority’s Rejection of the “Unique Circumstances” Exception
Much of the disagreement between the majority and the dissent in Bowles concerned how to read the Court’s own precedents. The majority purported to apply a longstanding principle that statutory time limits are (presumptively) jurisdictional limits, while the dissent pointed to very recent (unanimous) decisions that adopt a different approach.
Yet even if one thinks that the majority has the better of that general argument, might there not be an exception for unusual cases–like Bowles itself–in which some unforeseen circumstance excuses strict compliance with a deadline?
The dissent thought so, and pointed to two cases from the 1960s, in which the Court had excused non-compliance with supposedly jurisdictional deadlines where “district court errors [had] misled litigants into believing they had more time to file notices of appeal than a statute actually provided.”
The majority responded by simply overruling those prior cases. The Court, Justice Thomas said, never had the authority to fashion a unique circumstances doctrine, because jurisdictional time limits simply can’t be waived.
The Estoppel Analogy: Why It Isn’t Persuasive
Perhaps the best that can be said for the majority opinion in Bowles (although the majority does not make this argument) is that the rule announced is not materially worse than the applicable rule in the administrative context. If you rely to your detriment on a government official’s characterization of the law–an IRS agent’s informal prediction of the tax consequences of some investment, say–but it turns out that the official was mistaken, you will not ordinarily be excused from complying with the law as written. Put another way, the government is not bound–in legal terms, estopped–by the erroneous representations of its low-level functionaries.
Likewise here, it could be argued, Bowles and his lawyer should not have taken Judge Nugent’s statement of the deadline as authoritative. They should have consulted the rules and calculated the deadline themselves.
But three important caveats make the administrative example a questionable analogy. First, although the Supreme Court has rejected every claim of so-called “estoppel against the government” in the administrative context, it has never ruled out the possibility that a sufficiently extreme case would warrant estoppel, and the lower courts have occasionally deemed particular cases sufficiently extreme. Thus, the rules in this area are reasonably close to the “unique circumstances” doctrine that the Bowles Court overrules.
Second, even if there were a per se bar on estoppel against the government in the administrative context, that would not justify such a bar where the relevant official is a federal district judge, rather than a relatively low-level bureaucrat. Estoppel against the government can be a dangerous doctrine if it effectively gives thousands upon thousands of low-level agency employees the power to overturn decisions made by Congress. However, the professionalism, relatively small number, and constant review of the work of federal judges together place them in a wholly separate category.
Third, the particular facts of Bowles are indeed extreme. There is no claim of any prejudice to anybody as a result of the two-day delay. Moreover, as Justice Souter explained in dissent, there was nothing on the face of the order to indicate that it stated the wrong deadline (because the clock runs from the date an order is “entered,” which does not appear on the order itself). Thus, Bowles and his attorney had no reason to check Judge Nugent’s math.
It turns out, then, that the best that can be said for the majority opinion is not very much at all.
Kafka’s The Trial
The facts and circumstances of the Bowles case are strikingly similar to a chilling allegory in the penultimate chapter of Franz Kafka’s dark novel of the bureaucratic state run amok, The Trial. The protagonist, K, stands accused of an unnamed crime in a court system with enigmatic procedures. When K stumbles upon the prison chaplain, the latter explains to K that he has been naïve in his approach to the law.
The chaplain tells a story of a man from the countryside who comes to the door of the law, only to be told by the doorkeeper that he can’t be let in at the moment but it’s possible that he could be permitted entry later. The man waits before the door for years, until as he is dying, he asks the doorkeeper why, given that everyone wants access to the law, no one but he has come to the door during his many years of waiting. The doorkeeper answers: “Nobody else could have got in this way, as this entrance was meant only for you. Now I’ll go and close it.”
Like the man from the countryside, Keith Bowles was told by a doorkeeper to the law–a federal judge–just what he needed to do to gain access. For following those instructions, he was repaid only by having the door to the law shut in his face by the Supreme Court.
The Court split 5-4 in Bowles along what are conventionally described as conservative-liberal lines, but in this case “conservative” seems a poor description for the majority view. Opposition to arbitrary exercises of power by the bureaucratic state has been one of the hallmarks of the conservative tradition in Anglo-American thought for over two centuries.
The majority opinion in Bowles would be better described as statist than conservative. As Justice Souter wrote in dissent: “It is intolerable for the judicial system to treat people this way, and there is not even a technical justification for condoning this bait and switch.”


Sixth Circuit Sets New Attorney Fees for Appeals Under Criminal Justice Act.

Tuesday, June 19th, 2007

Increase in Compensation for CJA Counsel The compensation limits applicable to counsel appointed under the Criminal Justice Act has been increased from $3,700 to $5,000 for representation in direct criminal appeals, appeals from the denial of habeas corpus or section 2255 relief.

The increases apply in cases in which any work was performed on or after May 20, 2007. The maximum hourly compensation rate for non-capital representation has increased from $92 to $94 for work performed on or after January 1, 2006.

 The maximum hourly compensation rate for capital federal post-conviction proceedings has increased from $163 to $166 for work performed on or after January 1, 2006.

Sixth Circuit Opinion Shuts Out Cincinnati Offense Against Bengals in Antitrust Stadium suit

Tuesday, June 19th, 2007

The Sixth Circuit Court of Appeals sitting in Cincinnati, on June 19th,  turned down the lawsuit filed by the Hamilton County Board of Commissioners against the NFL  and the Cincinnati Bengals.

The court ruled that the antitrust suit was barred by a four year statute of limitations and there was no basis for an equitable tolling of the statute of limitations.

This decision details the history of the Cincinnati Bengals Football team.  Legal scholars and sports fans will find this decision very interesting.  Read full text of decision.

“Long before Ickey Woods shuffled across the end zone, long before Kenny Anderson and
Boomer Esiason led the Bengals to Super Bowls XVI and XXIII (a team from another circuit, the
San Francisco 49ers, won both games), football fans along the Ohio river cheered for the Cincinnati Celts. Started in 1921 as a member of the nascent American Professional Football Association, the city’s first professional football team finished with a 1-3-0 record that year, its one and only season in the Queen City. See Cincinnati Pro Football History, available at   (last visited June 13, 2007).�

� Although suggestions for team names came pouring in (one was the Cincinnati Buckeyes), Brown opted to use the “Bengals� because it provided “a link with past professional football in Cincinnati.�
“The biggest crowd—60,284—came during an October 1971 match-up between the Bengals and their in-state rivals, the Cleveland Browns. Id.�
“The team finished its first season in the new stadium with a losing record (4-12-0), but it is Hamilton County that claims it was the real loser because it signed a lease with the Bengals for the stadium that it now calls “unconscionable.�  “
“To toll a limitations period on this basis, a plaintiff must show “(1) wrongful concealment
of their actions by the defendants; (2) failure of the plaintiff to discover the operative facts that are
the basis of his cause of action within the limitations period; and (3) plaintiff’s due diligence until
discovery of the facts.� Dayco Corp. v. Goodyear Tire & Rubber Co., 523 F.2d 389, 394 (6th Cir.
1975); see also Pinney Dock & Transp. Co. v. Penn Cent. Corp., 838 F.2d 1445, 1465 (6th Cir.
1988). The County cannot satisfy this test because it knew the “operative facts that are the basis of [its] cause of action within the limitations period.� Dayco, 523 F.2d at 394. Before, during and
immediately after the negotiations over the May 1997 stadium lease, the County well understood
the material facts underlying its antitrust claim: evidence of the NFL’s potential monopoly power
and its use of that power to “extort� (in the words of the County) one-sided stadium leases from host cities.�
“Faced on the one hand with newspaper accounts and magazine articles reporting that the Bengals were a profitable franchise and on the other with the defendants’ refusal to release the Bengals’ financial statements, the County did not walk away from the negotiating table. Nor did it suspend negotiations to try to track down the Bengals’ financial information elsewhere.
With red flags flying, the County instead moved forward with negotiations and signed the stadium lease.�
(The Bengals refused to provide discovery of their financial records, and the U.S. District Court instead of granting discovery to Hamilton County, granted a Summary Judgment against them on the basis of the statue of limitations.)
“During discovery in this case, as opposed to during the negotiations over the May 1997 lease, the County sought to obtain from the defendants “financial data for each team, reports comparing the teams’ financial data, and documents� pertaining to the salary cap. Br. at 29–30. The defendants never produced the information, and the County’s Rule 56(f) motion sought to obtain it before the district court ruled on the defendants’ summary judgment motion. “
Pursuant to Sixth Circuit Rule 206     File Name: 07a0229p.06
No. 06-3348
Appeal from the United States District Court
for the Southern District of Ohio at Cincinnati.
No. 03-00355—S. Arthur Spiegel, Sr., District Judge.
Argued: April 24, 2007
Decided and Filed: June 19, 2007
Before: SUHRHEINRICH, SUTTON, and McKEAGUE, Circuit Judges.
COUNSEL ARGUED: Arthur R. Miller, HARVARD LAW SCHOOL, Cambridge, Massachusetts, for Appellant. Gregg H. Levy, COVINGTON & BURLING, Washington, D.C., for Appellees.
ON BRIEF: Arthur R. Miller, HARVARD LAW SCHOOL, Cambridge, Massachusetts, Stanley M. Chesley, Paul M. De Marco, Fay E. Stilz, W. B. Markovits, WAITE, SCHNEIDER, BAYLESS & CHESLEY CO., Cincinnati, Ohio, Robert R. Furnier, FURNIER SIMONDS, LLC, Cincinnati, Ohio, for Appellant. Gregg H. Levy, James M. Garland, Steven E. Fagell, COVINGTON & BURLING, Washington, D.C., Robert A. Pitcairn, Jr., KATZ, TELLER, BRANT & HILD, Cincinnati, Ohio, Kenneth F. Seibel, JACOBS, KLEINMAN, SEIBEL & McNALLY, Cincinnati, Ohio, for Appellees.
SUTTON, Circuit Judge. This case presents the latest twist in the relationship between the City of Cincinnati and professional football, a relationship that spans 86 years and at least 3
stadiums, the third of which is the subject of this controversy. The Hamilton County Board of
Commissioners sued the defendants—the Cincinnati Bengals, the National Football League and its 31 other teams—claiming that they violated the federal antitrust laws by using a monopoly over  1 No. 06-3348 Hamilton County Board of Commissioners v. National Football League, et al.
Page 2


professional football to obtain a heavily subsidized lease for the Bengals’ newly built, football-only
stadium at the expense of Hamilton County and its taxpayers.
The district court concluded that the statute of limitations bars the claim. Because Hamilton
County filed this lawsuit after the four-year limitations period had run, because the County has failed to demonstrate that the limitations period should be tolled due to the defendants’ allegedly
fraudulent concealment of material information regarding the antitrust claim and because the district court did not abuse its discretion in denying the County’s Civil Rule 56(f) motion for additional discovery, we affirm.
Long before Ickey Woods shuffled across the end zone, long before Kenny Anderson and
Boomer Esiason led the Bengals to Super Bowls XVI and XXIII (a team from another circuit, the
San Francisco 49ers, won both games), football fans along the Ohio river cheered for the Cincinnati Celts. Started in 1921 as a member of the nascent American Professional Football Association, the city’s first professional football team finished with a 1-3-0 record that year, its one and only season in the Queen City. See Cincinnati Pro Football History, available at (last visited June 13, 2007).
 Whether for want of a stadium or not, the Cincinnati Celts played all four of their games that season on the road. So far as professional football was concerned, that was it for 12 years.
What began as the American Professional Football Association in 1920 became the National
Football League in 1922. In 1933, the NFL brought a new team to town. Named the Cincinnati
Reds, this football team lasted two seasons before folding. Id. Four years later, a rival league, the
American Football League (AFL), gave Cincinnati its first “Bengals� team, which played in the
league for one season, then played as an independent team for a season after the AFL folded. Id.
The AFL emerged anew in 1939, and the Bengals played in the league for a season before the AFL folded anew. Id. After the AFL experienced yet another rebirth, the Bengals played for two
additional seasons. But when World War II forced the AFL to fold in 1941, so too did the
Bengals—for another 26 years. Id.
 In 1967, Paul Brown, the founder and first head coach of the Cleveland Browns, brought
modern professional football to Cincinnati through an AFL-expansion franchise. Although
suggestions for team names came pouring in (one was the Cincinnati Buckeyes), Brown opted to use the “Bengals� because it provided “a link with past professional football in Cincinnati.� Id. The
team played its first season in 1968, became a member of the NFL when the two leagues merged in 1970 and has been playing in Cincinnati ever since.
The modern-day Bengals have played in three different home stadiums. (True fans do not
speak of football “stadia.�) From 1968 to 1969, the team played at Nippert Stadium, where the
largest crowd on record totaled 28,642 fans. See Bengals Stadium Firsts & Lasts, available at (last visited June 13, 2007). The Bengals
played their first game at Riverfront Stadium (later renamed Cinergy Field) on August 8, 1970, a
stadium it shared with baseball’s Cincinnati Reds, and their last game there on December 12, 1999.
The biggest crowd—60,284—came during an October 1971 match-up between the Bengals and their in-state rivals, the Cleveland Browns. Id.
On August 19, 2000, the Bengals opened their first season at Paul Brown Stadium,
id., which sits along the northern side of the Ohio River in Hamilton County (which
includes Cincinnati), covers 22 acres, stands 157 feet tall, features 65,535 seats and
presumably has ample luxury box seats. See Paul Brown Stadium, available at
No. 06-3348 Hamilton County Board of Commissioners
v. National Football League, et al.
Page 3 (last visited June 13, 2007).
The team finished its first season in the new stadium with a losing record (4-12-0), but it is Hamilton County that claims it was the real loser because it signed a lease with the Bengals for the stadium that it now calls “unconscionable.� Second Amended Complaint ¶ 49.
To understand this charge and the climate in which it was made, we need to backpedal a few
steps. After the NFL awarded expansion teams to Charlotte and Jacksonville in 1993, the three
cities that failed to obtain a team (Baltimore, Memphis and St. Louis) tried to lure existing teams
from their existing cities. Several teams—the Bengals among them—capitalized on this
environment, threatening to leave their host cities unless they obtained a new stadium.
Claiming that his team could not remain competitive without a new stadium because
Riverfront Stadium has “virtually no luxury seating and the league’s smallest seating capacity,� JA
2579, Bengals’ owner Mike Brown (the son of Paul Brown) threatened to move the team if
Cincinnati or Hamilton County would not build a new stadium. At an owners’ meeting in 1995,
Brown announced that Cincinnati had breached its lease agreement when it was late by one week
in paying $167,000 in concession receipts. According to Brown, this breach entitled the Bengals
to relocate to a different city.
At an owners’ meeting the following month, Brown declared that if the city failed to provide
the team with a new stadium, the Bengals would consider moving to Los Angeles. Brown later
visited Baltimore, which offered to build the team a $200 million stadium with a practice facility and
a pledge of $44 million in income.
On June 24, 1995, Brown gave Cincinnati what amounted to an ultimatum: If the city did
not agree to a new stadium deal within five days, the Bengals would start negotiating with
Baltimore. Cincinnati’s City Council and the Hamilton County Commissioners relented, opting to
fund the new stadium with a proposed county sales-tax increase. In March 1996, the sales-tax
referendum passed with 61% support.
During negotiations over the new stadium lease, the County retained two national experts
in developing and leasing professional-sports stadiums. As negotiations proceeded, it became clear to the County that the Bengals’ goal was to acquire sufficient revenue under the new lease to move the team from the last quartile of NFL teams in revenue to the second quartile. County officials asked to see the Bengals’ financial records during the negotiations but the team refused, explaining that the disclosure of this information would violate league policy. The parties executed a lease for the new stadium in May 1997.
Four years later, in May 2001, the Los Angeles Times published an article disclosing the
revenues and profits of NFL teams, which it had obtained from the record in a lawsuit between the NFL and the owner of the Oakland Raiders. The data showed that the Bengals ranked eighth in profits in 1996 and ninth in 1997 out of 31 teams.
On May 16, 2003, six years after the parties signed the stadium lease, Hamilton County
Commissioner Todd Portune (a former Cincinnati City Council member, though not a Hamilton
County Commissioner at the time the parties executed the lease), filed this lawsuit in federal district court against the NFL, the Bengals and the other 31 NFL teams. The Hamilton County Board of Commissioners eventually was substituted as the plaintiff in the case.
The second amended complaint alleges that the defendants violated § 1 of the Sherman Act, see 15 U.S.C. § 1, by engaging “in a contract, combination or conspiracy in restraint of trade,� precluding Hamilton County and others who sell or lease stadiums from being able to obtain
No. 06-3348 Hamilton County Board of Commissioners
v. National Football League, et al.
Page 4
“competitive prices� for their “products and services.� Second Amended Complaint ¶ 41. It also
alleges that the defendants violated § 2 of the Sherman Act, see 15 U.S.C. § 2, because their
“monopoly power in the professional football market� allowed them to “foreclose competition and
gain a competitive advantage in the NFL stadia market.� Second Amended Complaint ¶ 42. It also alleges that the Bengals and the NFL continuously “misstated and concealed their financial position from 1995 until the present day,� making “affirmatively fraudulent or misleading statements regarding the Bengals’ financial position that would necessitate moving the team to another locale.�
Second Amended Complaint ¶ 58. As relief, Hamilton County asked the district court to void the
stadium lease, to award it in excess of $200 million in compensatory and punitive damages and to treble the compensatory-damages award. See 15 U.S.C. § 15(a).
The defendants filed a motion to dismiss the complaint, arguing that the four-year statute of
limitations had run on the claims. In ruling on the motion, the district court determined that any
injury Hamilton County suffered “occurred when the lease was executed� in May 1997, D. Ct. Op.
at 68, that the execution of the lease triggered the start of the four-year statute-of-limitations period and that the plaintiff filed suit two years after the limitations period had expired. It nonetheless denied the motion, reasoning that Hamilton County should be permitted discovery to support its theory that the limitations period should be tolled.
For the next two years or so, discovery proceeded in fits and starts and was suspended for
a time while the parties tried to mediate their dispute. After the mediation effort failed and after the
parties had conducted initial discovery, the district court granted the defendants’ motion for
summary judgment on the statute-of-limitations issue, denied the County’s Rule 56(f) motion for
additional discovery and dismissed the case.
By statute, antitrust claimants have four years from the date an action accrues to bring a
lawsuit. See 15 U.S.C. § 15b; Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 338
(1971). Accrual occurs “when a defendant commits an act that injures a plaintiff’s business.�
Zenith Radio Corp., 401 U.S. at 338. No one disputes the source of the injury in this case (the
stadium lease); no one disputes when the injury occurred (when the parties signed the lease in May 1997); and no one disputes that the County filed the lawsuit more than four years after May 1997 (it filed the lawsuit in May 2003).
 What the parties dispute is whether the limitations period should be extended because, according to the County, the Bengals fraudulently concealed information
material to its antitrust claims during and after the lease negotiations.

To toll a limitations period on this basis, a plaintiff must show “(1) wrongful concealment
of their actions by the defendants; (2) failure of the plaintiff to discover the operative facts that are
the basis of his cause of action within the limitations period; and (3) plaintiff’s due diligence until
discovery of the facts.� Dayco Corp. v. Goodyear Tire & Rubber Co., 523 F.2d 389, 394 (6th Cir.
1975); see also Pinney Dock & Transp. Co. v. Penn Cent. Corp., 838 F.2d 1445, 1465 (6th Cir.
1988). The County cannot satisfy this test because it knew the “operative facts that are the basis of [its] cause of action within the limitations period.� Dayco, 523 F.2d at 394. Before, during and
immediately after the negotiations over the May 1997 stadium lease, the County well understood
the material facts underlying its antitrust claim: evidence of the NFL’s potential monopoly power
and its use of that power to “extort� (in the words of the County) one-sided stadium leases from host cities.
First, these same allegations were the subject of a highly publicized and ultimately
unsuccessful antitrust lawsuit filed by the St. Louis Convention and Visitors Commission against
the Rams two years before the execution of this lease. See St. Louis Convention & Visitors Comm’n No. 06-3348 Hamilton County Board of Commissioners
v. National Football League, et al.
Page 5 v. Nat’l Football League, 154 F.3d 851, 856, 864–65 (8th Cir. 1998) (affirming district court’s grant of judgment as a matter of law for the NFL on a lawsuit brought on December 18, 1995). County officials knew about this litigation. See, e.g., JA 691–92 (County negotiator Peter Bynoe
acknowledging he was aware of the Rams litigation); JA 830–31 (County financial advisor and
negotiator Mitchell Zeits acknowledging he knew about the Rams litigation and discussed it with
County officials).
Second, County officials recognized (and in at least one case embraced) the characterization
of the NFL’s stadium negotiation tactics as extortionary. See, e.g., JA 970 (minutes from County
Commissioners’ meeting on November 15, 1995 during which Commissioner John Dowlin stated
that he spoke with the mayors of Baltimore and Chicago and that both mayors used “the word
extortion� in connection with NFL teams’ tactics for obtaining “better deal[s]� in their host cities);
JA 976 (minutes from County Commissioners’ meeting on January 5, 1996 reflecting that
Commissioner Dowlin called for “somebody [to] stand[] up against the extortion of ball team
Third, before becoming a Hamilton County Commissioner, then-Cincinnati City Councilman
Todd Portune co-sponsored two pertinent motions on the issue. In one, Portune (the original
plaintiff in this case) urged the city to join Cleveland in a lawsuit geared toward stopping the
Browns from leaving Cleveland. See JA 1372 (motion stating that “[c]ities are being ‘held up’ by
the professional leagues and team owners acting in a conspiracy to exploit the taxpayers of . . .
Cincinnati and other member cities�). In the other, Portune urged the Cincinnati City Council to
“take national leadership in forming a league of cities and counties to provide unity in defending
against the professional sports team blackmailers who threaten moving their teams unless they’re
paid ransom in the form of billions of taxpayer funds for stadia.� JA 1374. Portune discussed the
motions publicly and told County officials about them. See JA 788–89 (deposition of Portune
during which he was asked if he discussed the motions “publicly,� to which he replied, “I’m sure
we did�). Another city councilman asked the city solicitor to provide a report declaring that the
“NFL is a cartel[,] . . . [a] rival league cannot obtain franchises[,] . . . [and] [a]s a result of the
monopoly owners can extract enormous subsidies from taxpayers. Some call it extortion.� JA 1114.
Fourth, County officials knew that Congress had been contemplating legislation addressing
antitrust issues in professional sports. See JA 690–91 (Bynoe testifying he “was aware� that
Congress was conducting hearings on “franchise relocation issues in professional sports� and that he was aware that “some of [the proposed] legislation focused on antitrust related issues�); JA 1011 (letter to County Commissioner Bob Bedinghaus and County Administrator David Krings
accompanying a copy of a Congressional Research Service report entitled “Tax-Exempt Bonds and the Economics of Professional Sports Stadiums�); JA 1013 (Commissioner Bedinghaus’ letter in response, deeming the report “very informative� and stating he “will keep it in mind as [the County] move[s] forward with [stadium] financing�).
Fifth, newspapers across the nation carried articles reporting on and editorials decrying the
NFL’s monopolistic behavior. See, e.g., JA 1120–21 (Baltimore Sun article dated October 24,
1993); JA 1118 (USA Today article dated October 25, 1993); JA 1115 (Cleveland Plain Dealer
editorial entitled “Break NFL’s stranglehold,� which was dated November 20, 1995, and which
sparked the Cincinnati city councilman to seek the report from the city solicitor declaring the NFL
a cartel). Then-councilman Portune maintained a file of such articles and other documents, which
he introduced into the official city council record. JA 794 (Portune testifying in deposition that he
“took it upon [himself] to introduce things that were relevant so that there was a record of the
materials that had been received�).
No. 06-3348 Hamilton County Board of Commissioners
v. National Football League, et al.
Page 6
All of this shows that the County in May 1997 had ample information to file a complaint that
the NFL had a corner on the professional football market and used the cartel to “extort� one-sided
stadium leases. And all of this suggests that the County knew the material facts underlying its
antitrust claims long before the four-year limitations period had run, precluding it from relying on
the fraudulent-concealment doctrine to save this lawsuit.
The County to its credit does not disclaim knowledge of these facts. It instead denies that
these are the operative facts—or at least all of the operative facts—of its claim. What remained
unknown was “financial information� about the Bengals’ profitability, which the defendants refused
to disclose during the lease negotiations. Br. at 53. As the County sees it, the Bengals painted a
misleadingly bleak picture of their financial health, leading the County to believe that the team was suffering serious financial woes and could not survive without a new stadium; as it turns out, the Bengals ranked in the top half of the NFL in profitability and thus did not need a new stadium (with a favorable lease) at all. Br. at 47. The County maintains that it did not learn about the Bengals’ profitability until May 2001—when the Los Angeles Times released information about the finances of all of the NFL teams. Without this information, it submits, it could not allege a cognizable antitrust injury and, without the existence of an antitrust injury, the claim would fail at the pleading stage.
Even if we could conceive of causes of action in which profitability might be an essential
piece of information necessary to plead antitrust injury, this antitrust claim is not one of them. To
plead antitrust injury, the claimant must allege that it was injured and that the injury was attributable to “anti-competitive� conduct by the defendant. Atl. Richfield Co. v. USA Petroleum Co., 495 U.S. 328, 334 (1990); see Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489 (1977). The essence of the County’s contention, as the complaint attests, is that the NFL possesses “monopoly power in the professional football market,� and that it engages in “anticompetitive conduct� by “unlawfully leverag[ing] and abus[ing] that monopoly power to foreclose competition and gain a competitive advantage in the NFL stadia market,� causing “tangible harm to competition.� Second Amended Complaint ¶ 42.
With or without information about the Bengals’ profitability, the County
could satisfy both requirements. The County could fairly allege that it was injured the minute it
signed a lease on unfavorable terms. And it could fairly allege that the injury stemmed from anticompetitive conduct based on its belief (and well-known allegations made by other cities) as of May 1997 that the NFL operated as a monopoly and used its cartel power to extort favorable leases for its teams.
Whether the Bengals as one team among 32 NFL teams make money or lose money does not
alter the cognizability of the claim. So long as the County received less income under the stadium
lease than a free market suggests it should have received and so long as the loss stemmed from
monopolistic practices by the defendants, it may allege injury. That a team ranks in the bottom half or top half of the league economically is no more relevant to the existence of that injury than another variable that may affect profitability—the team’s won-loss record. If the County were right, it would mean that an antitrust violator (here, allegedly the NFL) would be liable for only some, but not all, of the direct damage caused by its conduct. That is not the way most antitrust claims work.
The antitrust problem here, to the extent there is an antitrust problem (we need not decide),
is the NFL’s hold on how many teams it will permit to exist and how many cities it thus may
accommodate. The County, like all local governments competing to attract professional sports
teams, understood this reality long before it entered the May 1997 lease and understood the
leveraging truth that goes with it: The only thing worse than having a losing team is having no
team—no team for the community and its political leaders to support and no reason to say “there’s
always next year.�
No. 06-3348 Hamilton County Board of Commissioners
v. National Football League, et al.
Page 7
Even if we treated the Bengals’ profitability as a piece of information that the County needed
to know before bringing this antitrust claim, the County’s theory still fails because it understood the essentials of this information when it signed the lease or at least had sufficient information to be on notice of the team’s profitability. Members of the County’s negotiating team testified that they were aware of the Bengals’ profitability. See, e.g., JA 697 (Bynoe admitting that during the lease negotiations period it “was [his] understanding . . . that [the Bengals] were making money�); JA 815–16 (Zeits admitting to not “being surprised� by the profitability figures for the NFL teams listed in the Los Angeles Times article and admitting that the information was not “inconsistent with any of the assumptions that [he] had about the profitability of the Bengals during the 1990s�); JA 719, 723 (County Commissioner Dowlin stating that he understood “the Bengals were making all kinds of money� at the time the parties executed the lease and that the team did not require a new stadium to be “viable and competitive�).
While the County seeks to dismiss Dowlin’s comments as stemming from “social chit chat,� Br. at 50, Dowlin “quoted� the publication in which he read this information and acknowledged being aware of the financial data published in Financial World magazine—data that included estimates of NFL teams’ profits and losses and that showed the Bengals’ profitability.
In addition to Financial World’s articles featuring annual financial estimates, hometown
newspapers gave estimates about how much money the Bengals were making. See, e.g., JA 879
(November 1993 Cincinnati Post article reporting that “[b]y some estimates, the [Bengals] make[]
at least $22 million every year. Profit.�); JA 884 (November 1993 Cincinnati Enquirer article
reporting that “[t]he Bengals remain profitable, despite their� losing record); JA 881 (June 1995
article in Cincinnati Enquirer reporting that Bengals “believed to make between $6–8 million� in
 County officials admitted they read hometown newspapers to keep up with NFL stadium
developments. See JA 778 (Hamilton County Commissioner Tom Neyer acknowledging he
followed “stadium issues in the newspaper� and read articles in the Cincinnati Enquirer and
Cincinnati Post); JA 762–63 (County Administrator and negotiator Krings testifying that “the local
newspaper did some estimates� on NFL team profits, costs and revenues). And County negotiators admitted to reviewing Financial World’s annual estimates. See 811–15 (Zeits indicating that he “read . . . and looked at� Financial World and that he would provide copies of articles on NFL financial estimates for County officials who asked); JA 685 (Bynoe indicating that he “think[s]� he read Financial World and noting that the publication was “probably the first one[] to do things evaluating franchises�); JA 949–51 (fax from Zeits to Krings containing data from Financial World’s annual valuations of professional sports teams).
Whether these articles were accurate or not, they at least put the County on notice that the
Bengals might well be quite profitable and that it ought to conduct further investigation before
agreeing to the lease terms. See Dayco, 523 F.2d at 394 (“Any fact that should excite . . . suspicion is the same as actual knowledge of [the] entire claim.�). Faced on the one hand with newspaper accounts and magazine articles reporting that the Bengals were a profitable franchise and on the other with the defendants’ refusal to release the Bengals’ financial statements, the County did not walk away from the negotiating table. Nor did it suspend negotiations to try to track down the Bengals’ financial information elsewhere. With red flags flying, the County instead moved forward with negotiations and signed the stadium lease. See, e.g., JA 689 (exchange during Bynoe deposition: “Q[:] So you didn’t insist on additional revenue information, additional cost information? A[:] We asked if we could look at their books, and they said no. Q[:] And that was the end of it? A[:] Right. And we asked the client if they still wanted to continue the negotiations not having gotten that information, and they said yes.
 Q[:] Did the client ever tell you to go back and
insist on getting that information? A[:] No.�). If the County and its experienced negotiating team
considered profitability to be a critical factor in the lease negotiations, their actions certainly do not reflect it; nor do their actions demonstrate the due diligence required for application of the
fraudulent-concealment doctrine. See Dayco, 523 F.2d at 394 (finding existing information about
No. 06-3348 Hamilton County Board of Commissioners
v. National Football League, et al.
Page 8
potential antitrust violations “should have aroused [plaintiff’s] suspicions, and its failure to
investigate further at that time was not the exercise of due diligence required in order to employ the fraudulent concealment doctrine to avoid the bar of the statute of limitations�).
In addition to failing to exercise the requisite due diligence, the County also failed to show
that the Bengals engaged in affirmative acts of concealment—another prerequisite for equitable
tolling. See Bridgeport Music, Inc. v. Diamond Times, Ltd., 371 F.3d 883, 891 (6th Cir. 2004)
(noting that fraudulent concealment requires a showing that the defendants took “active steps,� such as fraudulent statements or misrepresentations, or “hiding evidence or promising not to plead the statute of limitations�); Hentosh v. Herman M. Finch Univ. of Health Scis., 167 F.3d 1170, 1174 (7th
Cir. 1999) (describing the doctrine as requiring “efforts by the defendant—above and beyond the
wrongdoing upon which the plaintiff’s claim is founded—to prevent the plaintiff from suing in
time�) (internal quotation marks omitted), cited in Bridgeport, 371 F.3d at 891. The County has
failed to identify any evidence of “above and beyond� affirmative, fraudulent acts by the Bengals
that prevented the County from discovering the antitrust injury.
The County offers a related fraudulent-concealment theory for tolling the limitations
period—that the NFL falsely told it that the league included stadium revenues in calculating the
players’ salary cap, a fact supporting the Bengals’ lease-negotiation stance that it needed a new
stadium so that it could compete for free agents against large-market teams with higher stadium
revenues. For the same reasons that profitability is not a necessary precondition to pleading an
antitrust injury, neither is stadium revenue. At any rate, the uncontradicted evidence from the
affidavit of Michael Keenan, the NFL’s Senior Director of Labor Finance, shows that no one was
misled—stadium revenues “are included� in calculating the salary cap. JA 2721.
The County persists that not all of its antitrust claims are time-barred; it asks us to preserve
its allegations of antitrust injury stemming from an amendment to the stadium lease executed in
2000. Although the County mentioned the amendment in its complaint, see Second Amended
Complaint ¶¶ 50–54, it did not address the 2000 amendment below in its numerous filings in
response to the defendants’ arguments that all of the County’s claims were time-barred, see JA
1774–88 (County’s motion for summary judgment on statute of limitations asking district court to
dismiss defendants’ affirmative defense based on expiration of statutory period for filing); JA
2362–69 (County’s response to defendants’ motion for summary judgment based on the statute of limitations); JA 2760–68 (County’s reply to defendants’ memorandum in opposition to County’s
summary-judgment motion on statute-of-limitations grounds). The County had more than ample
opportunity to bring the amendment claim to the attention of the district court. But it did not,
waiving the argument. See J.C. Wyckoff & Assocs., Inc. v. Standard Fire Ins. Co., 936 F.2d 1474,
1488 (6th Cir. 1991).
The County independently urges us to reverse the district court’s denial of its Civil Rule
56(f) motion for additional discovery, a decision we review for abuse of discretion. Lewis v. ACB
Business Servs., Inc., 135 F.3d 389, 409 (6th Cir. 1998). During discovery in this case, as opposed to during the negotiations over the May 1997 lease, the County sought to obtain from the defendants “financial data for each team, reports comparing the teams’ financial data, and documents� pertaining to the salary cap. Br. at 29–30. The defendants never produced the information, and the County’s Rule 56(f) motion sought to obtain it before the district court ruled on the defendants’ summary judgment motion.
Even if we assume for the sake of argument that this information would have shown that the Bengals were a profitable team and that the salary-cap rules did not create hardships for them, that would not have affected the assessment of their fraudulent-concealment
No. 06-3348 Hamilton County Board of Commissioners
v. National Football League, et al.
Page 9
theory for tolling the limitations period—for the reasons stated above.
Under these circumstances, the district court necessarily did not abuse its discretion in denying the motion.
For these reasons, we affirm.

Passenger in car during traffic stop may challenge constitutionality of the stop.

Tuesday, June 19th, 2007


Held: When police make a traffic stop, a passenger in the car, like the driver, is seized for Fourth Amendment purposes and so may challenge the stop’s constitutionality.
certiorari to the supreme court of California
Argued April 23, 2007–Decided June 18, No. 06-8120. 2007
After officers stopped a car to check its registration without reason to believe it was being operated unlawfully, one of them recognized petitioner Brendlin, a passenger in the car. Upon verifying that Brendlin was a parole violator, the officers formally arrested him and searched him, the driver, and the car, finding, among other things, methamphetamine paraphernalia. Charged with possession and manufacture of that substance, Brendlin moved to suppress the evidence obtained in searching his person and the car, arguing that the officers lacked probable cause or reasonable suspicion to make the traffic stop, which was an unconstitutional seizure of his person. The trial court denied the motion, but the California Court of Appeal reversed, holding that Brendlin was seized by the traffic stop, which was unlawful. Reversing, the State Supreme Court held that suppression was unwarranted because a passenger is not seized as a constitutional matter absent additional circumstances that would indicate to a reasonable person that he was the subject of the officer’s investigation or show of authority.
Held: When police make a traffic stop, a passenger in the car, like the driver, is seized for Fourth Amendment purposes and so may challenge the stop’s constitutionality. Pp. 4-13.
     (a) A person is seized and thus entitled to challenge the government’s action when officers, by physical force or a show of authority, terminate or restrain the person’s freedom of movement through means intentionally applied. Florida v. Bostick, 501 U. S. 429, 434; Brower v. County of Inyo, 489 U. S. 593, 597. There is no seizure without that person’s actual submission. See, e.g., California v. Hodari D., 499 U. S. 621, 626, n. 2. When police actions do not show an unambiguous intent to restrain or when an individual’s submission takes the form of passive acquiescence, the test for telling when a seizure occurs is whether, in light of all the surrounding circumstances, a reasonable person would have believed he was not free to leave. E.g., United States v. Mendenhall, 446 U. S. 544, 554 (principal opinion). But when a person “has no desire to leave” for reasons unrelated to the police presence, the “coercive effect of the encounter” can be measured better by asking whether “a reasonable person would feel free to decline the officers’ requests or otherwise terminate the encounter.” Bostick, supra, at 435-436. Pp. 4-6.
     (b) Brendlin was seized because no reasonable person in his position when the car was stopped would have believed himself free to “terminate the encounter” between the police and himself. Bostick, supra, at 436. Any reasonable passenger would have understood the officers to be exercising control to the point that no one in the car was free to depart without police permission. A traffic stop necessarily curtails a passenger’s travel just as much as it halts the driver, diverting both from the stream of traffic to the side of the road, and the police activity that normally amounts to intrusion on “privacy and personal security” does not normally (and did not here) distinguish between passenger and driver. United States v. Martinez-Fuerte, 428 U. S. 543, 554. An officer who orders a particular car to pull over acts with an implicit claim of right based on fault of some sort, and a sensible person would not expect the officer to allow people to come and go freely from the physical focal point of an investigation into faulty behavior or wrongdoing. If the likely wrongdoing is not the driving, the passenger will reasonably feel subject to suspicion owing to close association; but even when the wrongdoing is only bad driving, the passenger will expect to be subject to some scrutiny, and his attempt to leave would be so obviously likely to prompt an objection from the officer that no passenger would feel free to leave in the first place. It is also reasonable for passengers to expect that an officer at the scene of a crime, arrest, or investigation will not let people move around in ways that could jeopardize his safety. See, e.g., Maryland v. Wilson, 519 U. S. 408, 414-415. The Court’s conclusion comports with the views of all nine Federal Courts of Appeals, and nearly every state court, to have ruled on the question. Pp. 6-9.
     (c) The State Supreme Court’s contrary conclusion reflects three premises with which this Court respectfully disagrees. First, the view that the police only intended to investigate the car’s driver and did not direct a show of authority toward Brendlin impermissibly shifts the issue from the intent of the police as objectively manifested to the motive of the police for taking the intentional action to stop the car. Applying the objective Mendenhall test resolves any ambiguity by showing that a reasonable passenger would understand that he was subject to the police display of authority. Second, the state court’s assumption that Brendlin, as the passenger, had no ability to submit to the police show of authority because only the driver was in control of the moving car is unavailing. Brendlin had no effective way to signal submission while the car was moving, but once it came to a stop he could, and apparently did, submit by staying inside. Third, there is no basis for the state court’s fear that adopting the rule this Court applies would encompass even those motorists whose movement has been impeded due to the traffic stop of another car. An occupant of a car who knows he is stuck in traffic because another car has been pulled over by police would not perceive the show of authority as directed at him or his car. Pp. 9-13.
     (d) The state courts are left to consider in the first instance whether suppression turns on any other issue. P. 13.
38 Cal. 4th 1107, 136 P. 3d 845, vacated and remanded.
     Souter, J., delivered the opinion for a unanimous Court.

Court House Video captures Ghost?

Tuesday, June 19th, 2007

SANTA FE, N.M. (AP) — A strange image captured by a surveillance camera at the First Judicial District courthouse downtown has left sheriff’s deputies, lawyers, clerks and judges scratching their heads.
Some think it’s a ghost. Others suggest it’s a reflection from a passing car or possibly a piece of fluff from a cottonwood tree.
“I don’t know what it is, but I think it’s neat that it showed up on a Friday,” said Sally Saunders, assistant to District Judge Stephen Pfeffer. “Now we have something to talk about.”
Santa Fe County Deputy Alfred Arana first noticed the image when he arrived at the courthouse Friday morning and began reviewing surveillance video from the night before. Sgt. Vanessa Pacheco arrived a half hour later and was asked by Arana to watch the video.
“It’s something unexplainable,” Pacheco said. “I don’t believe in ghosts so I don’t think that’s what it is.”
The video shows a bright spot of light coming from either the roof or near the courthouse’s back door. It moves toward the west across the front bumper of a parked police before leaving the frame.
Perhaps the most bizarre part is that the light appears to cast shadows.
Courthouse workers debated whether it might have been a reflection. But some said the angle of the sun wasn’t right and a large tree shades most of the area.
Arana said the footage was clearer when he first watched it than when it was replayed over and over Friday. He said he had no idea what the camera captured.
Deputy Anthony Maes said it was a ghost. “What makes us think we’re the only beings on this planet? It’s too weird,” he said.
Maes said he thought it might be the ghost of convicted murderer Andy Lopez, who took nine people hostage at the courthouse in February 1985 before being shot by a deputy as he peeked out the back door.
Candy Sisneros, a clerk, said her husband, a sheriff’s deputy, used to work in the courthouse at night when the county’s dispatch center was there, and he used to hear footsteps, doors opening and closing and elevators going up and down.
Jude Torres has worked at the court house as a janitor for four years and said he sometimes hears noises at night. He said the noises mainly originate from the same side of the building where the light was seen.
Earl Rhoads, a public defender, thinks the image is that of a drifting cottonwood seed.
“I’m not willing to say it’s proof of paranormal activity,” he said. “I think it’s totally explainable.”

On the Net:
Link to courthouse video:

U.S. Supreme Court Rejects Class Action Against Securities Industry

Tuesday, June 19th, 2007

18 June, 2007  All News,
The Supreme Court bestowed on Goldman Sachs and other large investment banks a new shield from antitrust claims, throwing out lawsuits that accused the securities industry of rigging more then 900 initial public offerings.
The justices, voting 7-1, overturned a federal appeals court ruling that had permitted suits against 16 investment banks and institutional investors, The group also included Credit Suisse and Merrill Lynch. The investors sought billions of dollars in damages.
The suits had threatened to bring about an end to what many view as corporate greed in the IPO business. Wall Street’s revenue from stock underwriting has climbed a steady 12-16 percent each year since 1995, reaching $19 billion in 2006, and should surpass that figure this year, based on estimates Goldman Sachs had the lions share of revenue from the business, $1.47 billion, followed by Citigroup, UBS AG, Morgan Stanley and Merrill Lynch.
The court said an antitrust shield was warranted because the Securities and Exchange Commission regulates IPOs and lays out detailed rules governing what steps underwriters can and can’t take. Writing for the court, Justice Stephen Breyer said antitrust suits created “a substantial risk of injury to the securities markets.� “Had the court taken the opposite view, the industry would have faced massive legal exposure and a major engine of American growth would have been unnecessarily damaged,� Marc Lackritz, chief executive officer of the Securities Industry and Financial Markets Association, said in an A.P. statement.
The decision by the Neoconservative Court is a continuance of recent rulings that shield corporate America from consumer class-action lawsuits. Only last month an antitrust suit over the practice of collusion by the nation’s largest phone companies was rejected.
Christopher Lovell, the lead lawyer for the investors at the high court, said the ruling underscores the importance of separate cases that investors are seeking to press against the banks under federal securities laws. “The court decision is saying that the premise is that the securities laws will redress this,� Lovell said. “This puts the focus on the securities cases.� Last year the appeals courts ruled a securities suit against the industry was too wide-ranging to move forward as a single class action case.
The appeals court later said lawyers suing the industry can ask a trial judge for permission to pursue a suit on behalf of a smaller group of investors. Lovell previously stated the antitrust dispute had the potential to be a multi billion-dollar case. Under federal antitrust law, awards triple by statute. The antitrust lawsuits said the securities firms profited at the investing public’s expense by ensuring that the prices of Inc., EBay Inc. and hundreds of other Internet stocks would soar soon after they began trading publicly. The companies were demanding cash kickbacks from clients and engaged in “laddering� a practice which requires clients to buy more stock, at higher prices, after the securities are sold to the public. Hundreds of Internet start-ups rushed to profit from the IPO frenzy of the late 1990s and early 2000’s. With average I.P.O.’s pulling in a whopping 70 to 85 percent on the first day of trading according to IPO researcher CommScan LLC, And the underwriters skimmed billions in fees and commissions.
The principle defendants Citigroup, Morgan Stanley, Lehman Brothers, Bank of America Corp, Fidelity Investments, Janus Capital and Comerica all reported record profits during the period. We are very pleased with the decision,� said Stephen M. Shapiro, a lawyer representing the investment banks in the case. “It appears to be a complete termination of this lawsuit.� The Bush administration had predictably backed the industry in the case.
The Washington post and Phoenix Sentinel both offer indepth coverage of the story
P.S Burton 

Supreme Court Upholds Rights for Car Passengers To Question Traffic Stop

Tuesday, June 19th, 2007

By DAVID STOUT   June 18, 2007   New York Times
WASHINGTON, June 18 — A passenger as well as a driver has the right to challenge the legality of a police officer’s decision to stop a car, the Supreme Court ruled unanimously today.
Skip to next paragraph The ruling came in the case of Bruce E. Brendlin, who was a passenger in a car that was stopped by a deputy sheriff in Yuba City, Calif., on Nov. 27, 2001. The deputy soon ascertained that Mr. Brendlin was an ex-convict who was wanted for violating his parole. An ensuing search of the driver, the car and Mr. Brendlin turned up methamphetamine supplies.
Eventually, Mr. Brendlin pleaded guilty to a drug charge and drew a four-year prison sentence. But he continued to appeal on the issue of whether the evidence of drugs found on him resulted from an illegal search and should have been suppressed because of the Fourth Amendment’s protection against unreasonable search and seizure.
The California Supreme Court found that, consitutionally speaking, only the driver had been “seized� by the stop, and that therefore Mr. Brendlin had no basis for challenging the search that turned up the drugs. The State of California made that argument again when the case was heard before the
United States Supreme Court on April 23.
But Mr. Brendlin’s lawyer, Elizabeth M. Campbell, argued that when an officer makes a traffic stop, “he seizes not only the driver of the car, but also the car, and every person and every thing in that car.�
The justices agreed. “When police make a traffic stop, a passenger in the car, like the driver, is seized for Fourth Amendment purposes and so may challenge the stop’s constitutionality,� Justice David H. Souter wrote for the high court.
Most federal and state courts have ruled that passengers in a traffic stop are also “seized,� legally speaking, and thus may challenge the legality of the stop. But the state courts in Washington and Colorado, as well as California, had held otherwise until today.
The justices rejected the state of California’s contention that, if they found in favor of Mr. Brendlin, it would mean that passengers in buses and taxis would also be “seized� if the driver were pulled over for, say, running a red light. “The relationship between driver and passenger is not the same in a common carrier as it is in a private vehicle, and the expectations of police officers and passengers differ accordingly,� the ruling said.
Although today’s ruling overturns the California Supreme Court’s ruling against Mr. Brendlin, it does not necessarily end his legal troubles. Justice Souter said that it will now be up to the state courts to determine whether the drug evidence should have been suppressed. Prosecutors may try to show that the search was justified on other grounds, in part because Mr. Brendlin was a parole violator and the subject of an outstanding warrant.
The April 23 argument before the high court seemed to foreshadow today’s ruling. When California’s deputy Attorney General, Clifford E. Zall, asserted that when a car is stopped by the police, it is the driver, not the passenger, who is “seized� and submits to authority, Justice Souter asked him, “Have you ever been subject to a traffic stop?�
“Tell the truth now,� Justice Antonin Scalia interjected.
“Yes, yes, I have,� Mr. Zall replied.
“O.K.,� Justice Souter said. “The heart rate went up. The blood pressure went up.�
Supreme Court Opinion

New Laws Become Effective June 26

Monday, June 18th, 2007

FRANKFORT — New laws approved during the Kentucky General Assembly’s 2007 session go into effect on June 26.
Among the measures slated to take effect that day are laws that will raise the minimum wage, make human trafficking a felony and give the Transportation Cabinet authority to raise speed limits on interstate highways and parkways.
The Kentucky Constitution says that legislation approved by the General Assembly goes into effect as state law 90 days after a legislative session ends, unless a bill specifies a different effective date or contains an emergency clause that makes it effective as soon as it is signed by the governor.
New laws going into effect on June 26 include measures on the following issues:
County Law Library  HB 273  Allows county law libraries to share their resources with the local Public Library. (this will help County Law Libraries to comply with Ky. Law requiring County Law Libraries to provide access to their materials six days a week.)
Assistance dogs. Senate Bill 23 will prohibit the denial of emergency medical treatment to an assistance dog because of a handler’s inability to pay prior to treatment.
Bluegrass music. House Bill 71 will designate bluegrass music as the official state music of Kentucky.
Deceptive business practices. HB 246 will prohibit flower shops from misrepresenting their business locations in telephone directories.
Human trafficking. SB 43 takes aim at human trafficking by making it a felony in Kentucky to force someone into labor, domestic work or the sex trade.
Jury duty. SB 111 will allow a mother who is breastfeeding a child to be excused from jury duty.
License plates. HB 390 will eliminate all fees for special Gold Star Mothers license plates that are available to mothers who lost a son or daughter in service to the United States.
Methamphetamine lab cleanup. HB 94 will establish standards and procedures for authorities to follow to ensure proper cleanup of the toxic materials left behind by illegal methamphetamine labs.
Minimum Wage. HB 305 will increase the current minimum wage of $5.15 by $2.10 over the next two years. The legislation requires that the state’s minimum wage increase to $5.85 on June 26; $6.55 on July 1, 2008; and $7.25 on July 1, 2009. If the federal minimum wage is increased beyond the amounts called for in HB 305, Kentucky’s minimum wage will mirror the federal level.
Military burial. HB 280 will require that a funeral director involved in arrangements for a deceased veteran provide a fact sheet stating military burial rights.

School bus safety. HB 230 will prohibit school bus drivers from using cell phones while transporting students.  Exceptions would be made for drivers without two-way radios who need to communicate with their dispatchers and in times of emergency.
Sex offender registry. SB 65 will require registered sex offenders to include their e-mail, instant message and other Internet identities on the state’s sex offender registry.
Speed limits. SB 83 will allow the Transportation Cabinet to increase the speed limits on interstates and parkways in Kentucky to 70 miles per hour in areas where it is determined that vehicles can travel safely at that speed.
Veterans’ families. HB 128 will expand the eligibility for education benefits available to family members of deceased or disabled veterans.

Chicago’s Biggest Mob Trial in Years Set

Monday, June 18th, 2007


CHICAGO (June 6) – It seemed like a good idea at the time. A gang of burglars decided in December 1977 to break into the home of Tony Accardo, one of the most powerful men in organized crime history, and rob his basement vault.

Accardo was not amused.

Six men Accardo blamed for the heist were swiftly hunted down and murdered, according to papers filed by federal prosecutors in preparation for Chicago’s biggest mob trial in years, scheduled to begin Tuesday.

And that’s only one of the grisly tales jurors are likely to hear at the trial stemming from the FBI’s “Operation Family Secrets” investigation of 18 long-unsolved mob murders allegedly tied the Outfit, Chicago’s organized crime family.

“This unprecedented indictment puts a hit on the mob,” U.S. Attorney Patrick J. Fitzgerald said in announcing the charges in April 2005. “It is remarkable for both the breadth of the murders charged and for naming the entire Chicago Outfit as a criminal enterprise under the anti-racketeering law.”

Reputed top mob bosses head the list of defendants – James Marcello, Frank Calabrese Sr. and wisecracking Joseph “Joey the Clown” Lombardo. Four co-defendants include a retired Chicago police officer, Anthony Doyle.

All have pleaded not guilty.

Another defendant, alleged extortionist Frank “The German” Schweihs, has been tentatively dropped from the trial for health reasons.

Accardo, the notorious mob boss whose home was hit by the burglars, died in 1992 at age 86. He boasted that he never spent a night in jail.

The case has already made the kind of headlines that might seem the stuff of novels and movies. A federal marshal assigned to guard a star witness was charged with leaking information about his whereabouts to organized crime. The marshal has pleaded not guilty.

That witness – Nicholas Calabrese, brother of Frank Calabrese Sr. – knows four decades of mob history from the inside and really does have a link to the movies. He is expected to testify against his brother.

Nicholas Calabrese pleaded guilty to several counts in May and admitted that he took part in 14 mob murders including that of Tony “The Ant” Spilotro, known as the Chicago Outfit’s man in Las Vegas. Spilotro, who inspired the character played by Joe Pesci in the movie “Casino,” and his brother were beaten to death and buried in an Indiana cornfield in 1986.

Lombardo, 78, and Schweihs disappeared after the indictment was unsealed in 2005, setting off an intense FBI manhunt.

Crime buffs speculated that Lombardo was hiding out in the hills of Sicily or enjoying a life of ease in the Caribbean. In fact, after nine months on the run, FBI agents nabbed him in a suburban alley one frosty night in January 2006. Schweihs was captured deep in the Kentucky hill country in December 2005.

The Clown lived up to his nickname later when he appeared before U.S. District Judge James B. Zagel, who inquired about the aging man’s health and asked why he hadn’t seen a doctor lately.

“I was supposed to see him nine months ago, but I was – what do they call it? – I was unavailable,” Lombardo rasped.

In the 1980s, Lombardo was convicted in the same federal courthouse, along with then-International Brotherhood of Teamsters President Roy Lee Williams, of attempting to bribe Sen. Howard Cannon of Nevada.

When Lombardo got out of prison he took out a newspaper ad denying that he was a “made guy” in the mob and disavowing any role in future organized crime activities.

Lombardo defense attorney Rick Halprin scoffs at prosecutors’ claims his client is a powerful organized crime leader. “Those things just aren’t true,” he said.

Experts say the Chicago crime syndicate is so deeply entrenched that it won’t be decapitated even if the government gets a clean sweep of convictions.

Gus Russo, who describes the Chicago mob in his book “The Outfit,” noted that the federal Racketeer Influenced Corrupt Organizations Act has helped crime-busting prosecutors make progress against the mob.

“But, regretfully, greed is such a part of our culture that you’re always going to have a criminal element and it will organize,” Russo said. “This will hurt the mob but it won’t end it.”

The trial is expected to take four months. Among the security precautions, jurors’ names are being kept secret and prosecutors say they have nine potential witnesses whose names have been kept secret out of concern for their safety.

Should Juveniles go to court in chains?

Monday, June 18th, 2007

By Martha T. Moore, USA TODAY 


WEST PALM BEACH, Fla. — Handcuffs pin the teenage girl’s wrists together. The cuffs connect to a heavy chain around her waist so she can’t raise her arms. Another chain connects her ankles, shortening her step as she shuffles into the courtroom. When she shifts in her chair, the shackles clink. 

Malyra Perez is 14, and yes, her mother says, she is troublesome. Malyra runs away and goes to school high, her mother tells the judge. She is in court on a charge of grand theft auto. 

But she shouldn’t be in shackles, Myra Perez says. “I didn’t like that, not at all. She’s not a criminal.” 

Such sentiments are being heard in courts across the nation, where there are increasingly vigorous debates over rules that require metal shackles to be used on youths who appear at juvenile court hearings. 

At issue is whether kids as young as 10 need to be shackled for court security, and whether putting chains on young defendants not only makes them look like criminals but also makes them more likely to think of themselves in that way. 

The U.S. Supreme Court has said repeatedly that the sight of shackles on a defendant in a courtroom can unfairly influence a jury. Adult defendants may appear in court in shackles, but not in front of a jury that decides their fate. 

In almost all juvenile proceedings, though, a defendant’s fate is in the hands of a judge, not a jury. Juvenile court procedures vary among the states and even within counties, so it’s unclear precisely how many juvenile courts routinely shackle young defendants. But USA TODAY has found that in 28 states, some juvenile courts routinely keep defendants in restraints during court appearances. 

Routine shackling is a better-safe-than-sorry approach, many juvenile justice officials say. Teenage impulsiveness can lead to an escape attempt or an attack on a lawyer, judge or spectator, they say, and outdated security in some courtrooms and inadequate manpower heighten the risk. 

Twice a day here in Palm Beach County, groups of teenagers who have been arrested shuffle into the courtroom, their ankles and wrists shackled, for their initial appearance before a judge. When their cases are called, they sit shackled at the defense table with their court-appointed attorneys. 

Whether the judge sends them back to detention or releases them, they leave the courtroom the same way, even those small enough to walk under the arm of the sheriff’s deputy holding the door. 

Judges differ on practice  

In state after state, such scenes have inspired attorneys who represent children to launch efforts to have the chains removed. A series of court decisions has shown that judges increasingly believe shackling children is wrong: 

•In Florida, judges in Miami-Dade County ruled in December against routine shackling after a motion by the public defender’s office pointed out that juveniles were shackled and adult defendants in similar situations were not. 

“You go to a juvenile courtroom and you see a child shackled like a wild animal, and you go over to the adult courtroom and the adult is not shackled,” says Carlos Martinez, assistant chief public defender. 

Chaining black or Hispanic juvenile defendants carries racial overtones that make the experience worse for the kids involved, he says. Shackling is “a shameful practice that is rooted in the horrible racist past of this country.” 

A similar motion in nearby Broward County also succeeded. But in Palm Beach County, juvenile judges refused to end shackling, saying in their ruling that the lawyers challenging the practice had not proved that it harmed children and had not evaluated how lifting the rule would affect security. The case is now before an appeals court. 

“The whole experience of juvenile court can have a meaningful impact on children, on their respect for the law and their respect for the court system, that can translate into how they behave when they grow up,” Palm Beach public defender Carey Haughwout says. “They give respect when they’re given respect, and shackling is treating them very disrespectfully.” 

•In North Carolina, Legal Aid lawyers for a 14-year-old girl in Greensboro asked a judge in February to remove shackles for court appearances. The lawyers said shackling traumatized the girl, who as a younger child had been sexually abused while handcuffed. In court, the girl was in leg irons and handcuffs attached to a waist chain. 

“She was crying,” says Ann-Marie Dooley, one of the lawyers who filed the motion. “She could barely lift her hands to wipe her tears.” The girl’s case is pending. 

In March, Guilford County Chief District Court Judge Joseph Turner decided not to end routine shackling there after another teenager in chains, a 16-year-old boy, tried to escape custody while being driven to the courthouse. 

•In Connecticut, juvenile courts stopped shackling youths in March, except when judges decide that certain children require restraints. Now, about 30% of kids in court are in some kind of cuffs, based on assessments made by juvenile detention staff and approved by a judge, says Judge Barbara Quinn, deputy chief court administrator. “It’s being implemented in the way we intended, because we figured a fair number of young people have a history of violence,” Quinn says. 

•In California, an appeals court ruled in May that shackles could be used on minors in a Los Angeles County juvenile court only on a case-by-case basis. 

•In North Dakota, the state Supreme Court ruled in March that a court violated the rights of a 17-year-old boy by not determining whether his request to have his handcuffs removed during trial could be granted. At least two other state supreme courts have ruled against shackling juveniles in court: Illinois in 1977 and Oregon in 1995. 

Advocates for juveniles say policies that require all young defendants to be shackled are unnecessary because most kids who appear in juvenile courts are there for non-violent offenses. Instead, the advocates say, children should be shackled only if a judge agrees they are likely to be violent or to try to escape. 

In 2002, the latest year for which figures are available, less than one-quarter of juvenile delinquency cases that reached court involved assault or more violent crimes, according to the Justice Department. Almost 40% of the 1.6 million cases were for property crimes. There are no national figures for violent incidents in juvenile courtrooms. 

Shackling “is so egregious, so offensive, so unnecessary,” says Patricia Puritz, executive director of the National Juvenile Defender Center, a group for lawyers who represent children in juvenile courts. “There is harm to the child and there is also harm to the integrity of the process. These children haven’t even been found guilty of anything.” 

Martinez says that “in most of the cases in juvenile court, most of the kids plead guilty. They’re pleading guilty while they’re in shackles. If that’s not a coerced plea, I don’t know what is.” 

No one has studied whether young defendants who are chained in court fare worse than those who are not. Juvenile advocates fear that the sight of a youth in handcuffs and leg irons could influence the judge’s assessment of a child and the case at hand. 

“It has the same effect that a judge wearing a robe has,” says Bill Briggs, a court-appointed lawyer in rural Modoc County, Calif., where juveniles are shackled during court appearances. “It creates … a negative perception.” 

“You look guilty,” says Abby Anderson of the Connecticut Juvenile Justice Alliance. “You look violent and dangerous, and most kids who come into juvenile court are scared out of their minds and just did something stupid.” 

Shackling done for security  

In jurisdictions where shackles are used on adults and children in courts, the practice is contrary to the rationale of having a separate court for young people, some critics say. 

“The purpose of children’s court is to rehabilitate, protect and take care of children,” says Rory Rank, a public defender in Las Cruces, N.M., who is petitioning the county juvenile court to end shackling. “If they’re treated with dignity in that courtroom, I think it has a lasting effect on them.” 

Those who believe shackling is necessary to ensure safety say young defendants have less self-control than adults. “They’re more inclined to run than adults. They act completely on impulse. They’re not getting, sometimes, the gravity of the situation,” says Greg Conrad, president of the Court Officers’ and Deputies’ Association. Although handcuffing teenagers “appears tough, people with experience in the field would actually say it saves everybody a lot of trouble.” 

In Jacksonville, where adult and juvenile defendants are shackled — except in front of a jury for adults — small courtrooms with inadequate separation between spectators and defendants make restraints necessary, state’s attorney Harry Shorstein says. He gained a national reputation for reducing juvenile crime in the 1990s by prosecuting more juveniles as adults. 

Taking handcuffs and leg irons off defendants would require more security personnel, Shorstein says. When as many as a dozen youths are brought into a courtroom together and must wait their turn to go before the judge, he says, shackles keep them from ganging up on court officers. “It’s not really a philosophical or criminal justice issue; it’s really a lack-of-facilities issue,” he says. 

In West Palm Beach, Vickie Cramer’s son Alan was the first of nine juveniles who went before Judge Moses Baker Jr. on the same afternoon as Malyra Perez. The 16-year-old was charged with criminal mischief, grand theft auto and aggravated battery with a deadly weapon after he smashed his mother’s door and windows with a baseball bat and drove away in his father’s car. 

“It’s shocking to see him like that. It’s sad to see him like that,” Cramer says of the handcuffs and leg irons her son wore. Then she adds, “Actually, I think it’s a good thing. He needs to know the severity of what’s going on.” 

The outcome of juvenile cases is confidential, but Cramer says Alan later pleaded guilty to lesser charges of criminal mischief and possession of a firearm. Her account could not be verified independently because the court records are sealed. Alan will be under house arrest with an electronic ankle bracelet until he is assigned by the judge in July to a juvenile facility, she says. 

In West Virginia, juvenile courtrooms are closed to the public. Even so, Denny Dodson, deputy director of the Division of Juvenile Services, believes that young defendants find appearing in shackles so embarrassing that it may motivate them to stay out of trouble in the future. 

“In some ways, it’s embarrassing to the point of they don’t want it to happen again,” he says. “To have to wear shackles in front of your mom or your grandmother may well be more positive than negative. They just don’t want that to happen. They hate that.” 

A matter of respect  

Judge Dale Koch has seen children in his court with shackles and without. For years, juvenile defendants in his Portland, Ore., courtroom wore them. He says that didn’t affect his impression of the defendants, whose backgrounds he already knew. 

But being shackled meant youths had trouble handling paperwork and writing with their hands in cuffs, says Koch, president of the National Council of Juvenile and Family Court Judges. And it could have motivated them to agree to plea bargains simply to get out of shackles, he says. “Unfortunately, that is how their reasoning process works,” Koch says. 

In 1995, an Oregon appeals court sent back a case he had presided over, ruling he should have determined whether there was a reason to shackle the defendant before allowing it. Since then, youths appearing in Multnomah County juvenile courts have been unchained. Koch has come to believe it’s better that way. 

“My experience has been that it can be done safely, as long as you have an exception built in where you can decide that under circumstances of that youth, they need to be shackled,” Koch says. “It is just more respectful to not have the kids shackled while they’re … in front of the judge.” 

Handcuffs and leg irons are not intended to punish young defendants but are used to protect others in the courtroom from potential violence, says Hunter Hurst, director of the National Center for Juvenile Justice, a Justice Department-funded research organization. 

Wearing chains does, however, change a person’s appearance, Hurst says. “Of course, you and I both look like someone else in shackles. We don’t look better, we look worse. Therein lies, I guess, one of the conundrums that often face justice: What do you do? Do you risk the audience or do you vilify the person on trial?” 

Contributing: Tali Yahalom  


Appeal on Time, or Don’t Appeal at All, U.S. Supreme Court Advises

Monday, June 18th, 2007

Howard J. Bashman  June 18, 2007

“…the statutorily prescribed time in which to appeal to a federal appellate court from the ruling of a federal district court remains in the truly “jurisdictional” category, and, thus, cannot be enlarged no matter how compelling the circumstances..â€?
The U.S. Supreme Court’s 5-4 ruling last week in Bowles v. Russell contains an important reminder for lawyers who handle appeals before the intermediate federal appellate courts: If an appeal is not filed within the time provided by federal statute, the appeal cannot be heard and decided on the merits.
In other words, the time for appeal set forth in the governing federal statutes is jurisdictional, meaning that unless an appeal is taken within the time allowed, a federal appellate court will be unable to issue a ruling on the merits of the case no matter how compelling the excuse for missing the deadline happens to be.
The excuse at issue in the Bowles case was about as compelling of an excuse as can be envisioned. That case reached the federal courts as a habeas corpus action in which a man convicted of murder in the Ohio state court system was seeking federal habeas relief. After the federal district court denied relief, the petitioner filed a timely motion for reconsideration under a provision of the Federal Rules of Civil Procedure that postpones the start of the 30-day period in which to appeal until the motion for reconsideration is decided.
For whatever reason, the habeas petitioner did not receive timely notification of the federal district court’s entry of an order denying the motion for reconsideration. Instead, he learned of the denial of his motion about three months after the order denying the motion had been entered. By then, the original deadline for appeal had expired approximately two months earlier.
But all hope was not yet lost. The habeas petitioner asked the federal district court to reopen the time in which to file an appeal pursuant to Federal Rule of Appellate Procedure 4(a)(6) and 28 U.S.C. §2107(c). Rule 4(a)(6), in accordance with that federal statutory provision, allows a federal district court, if certain specified conditions are satisfied, to “reopen the time to file an appeal for a period of 14 days after the date when its order to reopen is entered.”
The federal district court agreed with the habeas petitioner that it was appropriate to reopen the time for appeal, but the federal district judge who signed the order specified that the notice of appeal had to be filed within 17 days of the entry of the order. The order was entered on Feb. 10, 2004, the deadline for appeal specified in the order was Feb. 27, and the habeas petitioner filed his notice of appeal on Feb. 26, 2004.
Unfortunately, both the federal statute and Rule 4(a)(6) only permitted a federal district judge to allow an appeal to be filed within 14 days after the entry of an order reopening the time for appeal, and so the actual deadline for appeal was Feb. 24, 2004, a deadline that the habeas petitioner failed to meet due to the federal district judge’s misleading statement in the order that the deadline was instead Feb. 27.
In December 2005, a unanimous three-judge panel of the 6th U.S. Circuit Court of Appeals held that the habeas petitioner’s appeal had to be dismissed for lack of appellate jurisdiction because the 14-day reopened period in which to appeal could not be extended or ignored despite the federal district judge’s misleading order suggesting that an additional three days existed in which to file a timely appeal.
So why did the Bowles case result in a 5-4 ruling from the U.S. Supreme Court instead of a 9-0 affirmance? To begin with, the Court’s four more liberal justices understandably viewed the result as horribly unfair. For example, at one point Justice David H. Souter’s dissenting opinion states, “unless every statement by a federal court is to be tagged with the warning: ‘Beware of the Judge,’ Bowles’ lawyer had no obligation to go behind the terms of the order he received.”
Also, in recent years the Supreme Court has attempted to curtail the sort of rules that are considered truly “jurisdictional” and, therefore, not subject to being relaxed by a court in the interests of justice. Yet, as the Bowles ruling demonstrates, the statutorily prescribed time in which to appeal to a federal appellate court from the ruling of a federal district court remains in the truly “jurisdictional” category, and, thus, cannot be enlarged no matter how compelling the circumstances. Last week’s high court ruling in Bowles v. Russell serves as a stark reminder that when it comes to the time in which to appeal, lawyers must be ever vigilant to make sure that an appeal is filed within the time that federal law provides. Lawyers must be familiar with the deadlines that federal statutes and the Federal Rules of Appellate Procedure establish and must remember that those deadlines are not subject to being extended even if a federal trial court judge purports to do so.
Howard J. Bashman operates his own appellate litigation boutique in Willow Grove, Pa., a suburb of Philadelphia. He can be reached via e-mail at You can access his appellate Web log at

46 Baghad Lawyers Assassinated since 2003

Sunday, June 17th, 2007

By MELANIE KIRKPATRICK  June 15, 2007;  Sent in by Hon. David Steele
At last count, 46 lawyers have been assassinated in Iraq since the summer of 2003, according to a grim tally compiled by the Iraqi Bar Association. Some of the victims were kidnapped before being murdered; others were gunned down in the street or caught in crossfire. A recent casualty is Abdul-Sahib Abdulla al-Kanani, who was killed on his way to the grocery store in Baghdad on May 20. He leaves behind a wife and five children.
Aswad al-Minshidi, president of the Iraqi Bar Association, recounted this story in a phone call from Baghdad the other day. He is anguished at his association’s scant ability to help the murdered lawyers’ families, who often have no means of support. “Dear Miss Melanie,” he says, “I know when a journalist is killed in Iraq, his or her colleagues around the world provide support and raise their voices in outrage. But where are the voices of outrage of lawyers in other countries when a lawyer is killed for doing his job?”
Where, indeed? Here in the U.S., it would be nice to think that part of the answer is that the lawyers, law firms and legal associations that might provide assistance are ignorant of the need. But part of the answer lies, too, in the different priorities many attorneys have set for themselves. Bar associations churn out papers on Guantanamo, Abu Ghraib and the execution of Saddam Hussein. Law firms line up to provide legal services to detainees. Cully Stimson, a deputy assistant secretary of defense, lost his job earlier this year for criticizing American lawyers for such work. The legal establishment’s outrage against Mr. Stimson would have been easier to take had it been working even half as hard to help re-establish the rule of law in Iraq.
The legal profession “is the pillar on which any society is built,” says Feisal al-Istrabadi, Iraq’s deputy permanent representative to the United Nations. “Clearly the insurgents are trying to disrupt our society at every level.” The rule of law is a primary target — and the killings include judges, police officers and recruits, as well as ordinary lawyers. Mr. Minshidi says he and his family have been threatened.
The Iraqi legal system is based on the Napoleonic Code, and in the first half of the 20th century it served as a model for other countries in the region. Mr. Istrabadi, a U.S.-trained attorney who practiced law in Indiana and Illinois from 1988 until 2004, says that after decades of operating under totalitarian rule, the Iraqi legal system is much stronger than he had anticipated. After Saddam’s ouster, “we expected to find that judicial system and the legal profession had been politically corrupted by the previous regime .. but that was not the fact.”
Saddam created an alternative judicial system, where political crimes were tried. The code of ethics among the Iraqi bar was so strong, Mr. Istrabadi says, that “Saddam was unable to corrupt the judicial system and was therefore forced to create an extra-judicial system.” Iraq has a cadre of “world-class” judges and professors educated in the 1950s and 1960s, he says, but “young law professors have been cut off from the world for two decades or more” and younger attorneys need help.
So far the assistance has been meager. While the American Bar Association and the International Bar Association have operated programs, the focus has been on training judges and prosecutors, and most or all of their efforts have been funded by the U.S. and other governments. A program to refurbish Iraqi law schools, operated by DePaul University College of Law, lost its U.S. AID funding after one year. Mr. Minshidi of the Iraqi Bar Association says he is unaware of any efforts to date by U.S. bar associations, law schools or other non-governmental organizations to help, though he notes that the ABA has invited him to attend its annual meeting in August and the Federalist Society will host a small conference for Iraqi bar leaders this fall.
“There is much to do to establish the rule of law,” he says. “So far it has mostly been training judges and prosecutors. Little has been done for law students and lawyers.” (A model here could be the Afghan Women Leaders Connect, founded by American businesswomen to assist Afghan women, including lawyers and judges.)
“Where are the great associations of law we hear about?” asks Mr. Minshidi. “Where are the great law firms? … Where are the law schools? … The help we need is not only the help of the government. We need the help of our brothers in the law.”
Ms. Kirkpatrick is a deputy editor of the Journal’s editorial page.

U.S. Sup. Ct. Upholds Law Denying Use of Union Dues of Non Union Members for Political Ends, Without Consent

Saturday, June 16th, 2007

By Mark Walsh 

The U.S. Supreme Court dealt a defeat to teachers’ unions last week by upholding a Washington state law that required them to get the consent of nonmembers to spend their representation fees on political activities. 

But the court’s unanimous ruling on June 14 will likely do little harm in the long run to the Washington Education Association or other public-employee unions, legal experts said. 

The court declined suggestions from so-called right-to-work groups to reconsider some of its basic precedents in the area of “agency fees,� which unions collect from nonmembers because they benefit from collective bargaining even though they haven’t joined. 

The National Right to Work Legal Defense Foundation, a Springfield, Va.-based organization that represented a group of nonunion teachers in the Washington state case, said workers opposed to having their agency fees go for unions’ political agendas “are little better off after today’s ruling.� 

The Supreme Court “avoided the more critical and far-sweeping question—whether union officials should be able to automatically collect forced dues for politics from nonunion members in the first place,� the foundation said in a statement. 

Robert H. Chanin, the general counsel of the National Education Association, the parent of the WEA, said, “The court could have hurt us, and chose not to, and reaffirmed what we have been doing for 25 years.� He was referring to the complex rules for collecting and accounting for the proper use of agency fees that the high court has addressed in several cases. 

Justice Antonin Scalia, writing for the court in Davenport v. Washington Education Association (Case No. 05-1589), said it does not violate the First Amendment speech or association rights of public-sector unions if states require them to seek an “affirmative authorization� before spending nonmembers’ money on election-related activities. 

“We do not think that the voters of Washington impermissibly distorted the marketplace of ideas when they placed a reasonable, viewpoint-neutral limitation on the state’s general authorization allowing public-sector unions to acquire and spend the money of government employees,� Justice Scalia wrote. 

Chief Justice John G. Roberts Jr. and Justices Stephen G. Breyer and Samuel A. Alito Jr. declined to sign on to some portions of Justice Scalia’s opinion, but the underlying judgment was unanimous. 

Change in Statute 

Justice Scalia didn’t address the fact that Washington state had amended the statute last month, which the parties in the case had told the court. 

The revised law clarifies that unions don’t need authorization for using nonmembers’ agency fees for political and other non-bargaining-related purposes as long as a union has enough money it its general treasury to pay for such activities. 

Some legal experts had expected that the change, enacted by a Democratic governor and legislature some 15 years after state voters had approved the “opt-in� requirement in a ballot initiative, would lead the Supreme Court to send the case back to the Washington state courts without a full opinion. 

But both sides agreed that the change in law did not make the case moot, because more than $500,000 in fines levied by the state against the WEA for violations of the earlier statute were still dependent on the outcome of the case. 

“The union is still subject to hundreds of thousands of dollars worth of fines,� Rob McKenna, the attorney general of Washington state, said in an interview. He said that unions were within their rights to seek a change to the law through the political process, as they did, but that his office was intent on defending the 1992 ballot initiative. 

“The union clearly lost on the question of whether the law it violated was constitutional,� added Mr. McKenna, a Republican. “There’s no way to put a spin on losing a case 9-0 in the U.S. Supreme Court.� 

But Mr. Chanin of the NEA said “the outcome is just fine from our point of view.� He added that he thought there was a good chance that the WEA’s fines would be reduced after further lower-court proceedings. 

The case originated with a state probe of the WEA in 1994 after the union instituted a dues increase, partly to offset an anticipated drop-off in political contributions because of the 1992 initiative. 

In 1998, the state reached a $430,000 settlement in a case against the union. In a subsequent legal action by the state, the union faced a judgment of $590,000 for failing to abide by the opt-in measure. The WEA was also sued by a group of four teachers who were not members of the union and objected to the use of their agency fees for political purposes. 

In March 2006, the Washington Supreme Court struck down the 1992 law. The court said the law imposed a burden on the teachers’ union of confirming that a nonmember does not object to having his agency fees spent on electoral purposes. That burden may have infringed on the union’s First Amendment right of “expressive association,� the court said. 

The U.S. Supreme Court’s decision threw out the state high court’s ruling and sent the case back for further proceedings in the state courts. 

Modest Returns 

In its arguments on behalf of the nonunion teachers, the National Right to Work Legal Defense Foundation had urged the justices to rule that a phrase from a 1961 high court labor precedent applies only to voluntary union members, not to nonmembers. 

In Machinists v. Street, which upheld the idea that nonunion members should not get a free ride when they benefit from a union’s bargaining activities, the Supreme Court at that time further said that “dissent is not to be presumed—it must affirmatively be made known to the union by the dissenting employee.� 

The right-to-work group said that phrase was not meant to apply to nonunion members, whose refusal to join the union has already served to register dissent to the union’s acting on their behalf. 

Justice Scalia said the Washington high court mistakenly relied on the “dissent is not to be presumed� principle to conclude that a nonmember bears the burden of objecting before a union may be barred from spending his or her fees for impermissible purposes. 

The high court’s precedents set a “constitutional floor� for procedures to evaluate unions’ collecting and spending of agency fees, Justice Scalia said, not a “ceiling� for measures that states may enact. 

Justin Hakes, the legal-information director of the National Right to Work foundation, suggested that his group has soured on the effectiveness of “paycheck protection� measures for nonunion workers, despite the group’s push to pass such measures across the country over the years. 

“We don’t feel the underlying [1992] law was effective,� he said. The group contends that unions were able to evade the Washington state provision by changing their accounting methods and taking other steps to fall outside the scope of the regulation, which focused on election-related matters. 

Timothy M. Sandefur, a lawyer with the Pacific Legal Foundation, which filed a friend-of-the-court brief on the side of the nonunion workers, said the Supreme Court’s ruling makes it clear that the states may enact stronger measures to attempt to guarantee that nonunion workers’ fees are not mis-used. 

But even measures such as Washington state’s 1992 law returned relatively little money to such workers, adding to the ineffectiveness of the requirement. 

“It doesn’t pay much for you to refuse to join the union—maybe five bucks back� after a year-end accounting of whether expenses were related to bargaining or not, Mr. Sandefur said. 

Three Lexington Lawyers indicted in Fen Phen case

Friday, June 15th, 2007

By Paul A. Long Ky. Post staff reporter   June 15, 2007
A federal grand jury in Covington on Thursday indicted three central Kentucky lawyers, saying they stole some $65 million from their clients in the Boone County settlement over health problems from the diet drug fen-phen.
Although entitled to fees amounting to about a third of the $200 million settlement, the trio of William J. Gallion, 56, and Shirley A. Cunningham Jr., 52, both of Lexington, and Melbourne Mills Jr., 76, of Versailles, Ky., took at least two-thirds, according to the indictment from U.S. District Court.
“Thereafter, Gallion, Cunningham and Mills ignored both mandatory court rules and their contractual fee agreements with each plaintiff, fraudulently convinced each plaintiff to accept a settlement without full disclosure of the facts, and defrauded the plaintiffs of approximately $65 million, money which the attorneys took over and beyond that to which they were entitled,” said the indictment.
The ramifications from the case have reached into the heart of the court system, leading to the resignation and censuring of former Boone Circuit Judge Jay Bamberger – who oversaw the original case – and to the suspension of the three attorneys.
The indictment did not mention the several prominent local figures whose actions have come under scrutiny – Bamberger; Cincinnati attorney Stan Chesley, who helped negotiate the settlement and has been sued along with Gallion, Cunningham, and Mills; and Mark Modlin, the Northern Kentucky trial consultant who was heavily involved in the case and ran the charitable fund created by the settlement.
Indeed, the indictment neither names nor refers to any actions by Chesley or Modlin. It does not mention Bamberger by name, and its references to his role talk about how he was deliberately lied to or otherwise misled.
For instance, when Bamberger approved their proposed fees during a secret hearing several months after the settlement, the attorneys “purposely failed to advise the court they had contractual fee agreements … and that they had previously transferred the remaining money into their own personal investment accounts,” the indictment said.
When Bamberger approved the creation of a charitable fund, it was “based on the false and fraudulent representations of the attorneys that all plaintiffs were excited and thrilled to establish this fund,” it said. “In truth and in fact, the plaintiffs did not agree and consent to this fund.”
Gallion, Cunningham, and Mills each was indicted on a single count of conspiracy to commit wire fraud, a felony that carries a maximum penalty of 20 years in prison. The government also said it plans to seize money and assets of more than $70 million.
The three will be arraigned next Friday before Senior U.S. District Judge William O. Bertelsman in Covington.
None of the attorneys could be reached for comment, and their attorneys either could not be reached or declined to comment.
But Angela Ford, the Lexington attorney who has sued the three attorneys on behalf of about 440 of their former clients, said the indictments were expected.
“The facts in the indictment are very similar to the facts in my civil case, so the indictment doesn’t come as a surprise,” she said.
Ford said because all three already have testified during depositions, it won’t be a problem if they take the Fifth Amendment when the civil case goes to trial. The jury can simply watch and listen to the depositions, she said.
In those deposition, the three attorneys admitted they met secretly to decide how to split the money and tore up or burned notes showing how much they paid themselves and their clients.
The original lawsuit stemmed from claims that the then-popular diet drug known as fen-phen had caused serious health problems. Lawsuits were filed all over the country, including one in Boone Circuit Court.
That was settled when American Home Products, which manufactured and sold the drug combination, put up $200 million in what is called a “walkaway” settlement. That means it was settling any and all cases arising from its actions in the commonwealth.
But the settlement was sealed, and the indictment maintains that the attorneys refused to disclose the details to their clients. Those clients were not even told about the settlement until a month later, when they were handed settlement checks. They were told, falsely, that they could be imprisoned if they revealed the amount of their settlement to others, according to the indictment.
In February 2002, the Kentucky Bar Association held a hearing and applied for a subpoena for the attorneys’ bank accounts. After that request was made, money that had been diverted to the attorneys’ personal accounts was used to pay a second distribution to the plaintiffs, the indictment said.
In total, according to the indictment, the clients were paid about $75 million. The attorneys took $75 million for themselves, and paid out about $30 million to attorneys and others, including $20 million to Chesley, who they hired to negotiate the settlement. They also put $20 million into the charitable fund, then set themselves up as directors of it to be paid $60,000 a year.

Big Business details Class Action Problems

Friday, June 15th, 2007


By Dick Thornburgh  June 15, 2007 the Washington Times

The Supreme Court’s recent decision to review securities class-action claims, in a case known as Stoneridge Investment Partners, has triggered an intense trial lawyers’ media campaign.
    The case is about whether plaintiffs’ attorneys receive increased leverage to coerce “deep pocket” defendants to pay exorbitant settlements that have little or no relation to each defendant’s legal liability. Thanks to their campaign, much of the media coverage has entirely missed what is at stake.
Unless they are dismissed before trial, most class actions settle — which means the plaintiffs’ claims may never be scrutinized by a judge or jury. Outcomes are often less a matter of justice than of negotiation, as many defendants decide it is better to settle than to incur the enormous costs, inconvenience and risks associated with what may become virtually endless litigation.
    Congress and the courts have repeatedly tried to curtail abuses of the class-action process by allowing defendants to seek dismissal of legally invalid claims. Plaintiffs’ lawyers respond by focusing media attention on victims of misconduct, and demanding “compensation” from any defendant in the vicinity — regardless of legal responsibility. The individual awards to such victims usually pale by comparison to the huge fees collected by plaintiffs’ lawyers.
    In Stoneridge, a U.S. Court of Appeals dismissed efforts to hold equipment suppliers legally responsible for frauds committed by public companies with which they did business, because the equipment suppliers made no false representations to investors. On similar legal grounds, another U.S. Court of Appeals rejected claims against investment banks that did business with Enron. The Enron case is waiting while the Supreme Court considers Stoneridge.
    Much of what has been published about these cases misses that mark. Plaintiffs’ lawyers and their allies have portrayed the defendants, which include clients of my law firm, as greedy and impersonal “big businesses” and “Wall Street banks” that perpetrated frauds on innocent shareholders.
    This rhetoric overlooks the fact that most “big businesses” and banks are themselves public companies, whose shareholders bear the burden of class-action settlements. The media’s accolades to plaintiffs’ lawyers frequently ignore that many class actions transfer wealth from one group of innocent shareholders to another — after the plaintiffs’ lawyers take their cut, and that prominent plaintiffs’ lawyers have recently been accused of unlawful kickbacks and of lying to the courts.
    Most media accounts also skip right over the critical legal issue at stake in these cases. In 1994, after reviewing the language and history of the securities laws, the Supreme Court decided, in a case called Central Bank, that Congress had not authorized private plaintiffs to bring “aiding and abetting” claims against defendants that did not make fraudulent statements to the public. Plaintiffs’ lawyers have argued the same claims can be made by alleging the defendants engaged in “schemes to defraud.” Appellate courts have rejected this obvious end run around Central Bank’s reasoning.
    There are good reasons why “scheme to defraud” claims should not be allowed. They can readily be abused. As the Supreme Court explained, most businesses sued as aiders and abettors would likely abandon their defenses and pay large settlements in order to avoid the expense and risks of going to trial before juries that would apply vague legal standards to complex facts. There could also be dangerous “ripple effects” if businesses were discouraged from dealing with public companies because they might be sued as “aiders and abettors” of someone else’s fraud.
    The Supreme Court’s decision in Stoneridge could affect millions of people who are not parties to those lawsuits. Several recent studies have pointed out that class-action abuse poses a danger to our nation’s competitiveness in a world economy. This has been a concern of mine since 1991 when, as attorney general, I led efforts to end lawsuit abuse, which threatens our economic growth and ability to create jobs by imposing a hidden tax on consumers and by making the United States a less attractive market in which to invest.
    As a former federal prosecutor and as a court-appointed examiner who spent years assessing the collapse of WorldCom, I believe those who break the law should be held to account. The Justice Department and the Securities and Exchange Commission, acting under the broader legal authority Congress has given government enforcement authorities, have aggressively pursued firms and individuals who allegedly aided, abetted or otherwise collaborated with corporate executives accused of fraud. The issue is not whether to give a “pass” to those who engage in misconduct. What the court must decide is whether class action lawyers should be allowed to game the legal system to extort exorbitant settlements from businesses and professionals who deal with a public company that goes under. I respectfully submit they should not.
Dick Thornburgh is a former U.S. attorney general and governor of Pennsylvania. He is counsel to Kirkpatrick & Lockhart Preston Gates Ellis LLP.