News flash

Trump just appointed Geoffrey Berman of Greenberg Traurig (Rudy’s firm) as interim U.S. Attorney SDNY and is nominating him for the permanent position. He likewise appointed Richard Donoghue, formerly Chief of the Criminal Division in the EDNY, for the top position there.

And a Happy New Year to you all.

Best, Ed.

Memorial Mass for Larry Byrne’s brother, Police Officer Eddie Byrne

Thirty years ago, Larry’s brother, Eddie Byrne, was a police officer sitting in his patrol car protecting a local resident in South Jamaica, Queens when he was assassinated on the order of a jailed drug dealer.

Larry was only in the Office for three weeks when Eddie was killed. He tells me the outpouring of support from the Office and the Alumni network at that time was quite extraordinary and a great comfort to him and his family in the wake of this terrible tragedy.

To commemorate his sacrifice Cardinal Dolan will say a Memorial Mass for Eddie on February 21 at St. Patrick’s Cathedral. February 21 was Eddie’s birthday and he was killed only five days after his 22nd birthday.

Larry is now Deputy Police Commissioner in the New York City Police Department.

Kudos to Paul Shechtman for the hung jury in the Seabrook case

The government’s informant spent half the trial on the stand, thanks no doubt to Paul’s cross attacking his credibility for his changing story as well as his motives. More here: https://www.nytimes.com/2017/11/16/nyregion/mistrial-is-declared-in-corruption-trial-of-ex-jail-officers-union-chief.html

It’s good to hear there are still trials for the defense, and trials that end well.

Paul is now at the Bracewell firm with the Honorable Barbara Jones.

Best, Ed.

David Koenigsberg Writes About False Claims Act Developments in the Second Circuit

New York Law Journal
By David Koenigsberg
Inability to Identify Invoices Does Not Mandate Dismissal of FCA Complaints

Dear Friends and Colleagues

For those of us who represent whistleblowers in False Claims Act qui tam litigation, or for those of us who defend such cases, a recent Second Circuit case has provided guidance concerning Rule 9(b) standards with regard to pleading fraud with particularity. The Court reversed the dismissal of a qui tam complaint, holding that although the relator did not have personal knowledge of whether false claims had actually been submitted to the government, the complaint alleged sufficient facts that a false claim had been submitted to the government to satisfy Rule 9(b). Previously, district courts in the Circuit had dismissed qui tam complaints when the relator could not identify a specific claim for payment that had been submitted to the government.

View full article: http://www.newyorklawjournal.com/id=1202795415726

Best regards,

David Koenigsberg
dkoenigsberg@mbkklaw.com

Sad news.

We are so sad to learn that Debbie Stavile Bartel (AUSA 1983-89), a truly wonderful person, just recently passed away. Here is her obituary in the New York Times:

It is with great sadness that the Bartel family mourns the passing of Deborah, aged 65, on Monday, November 6. Born in New York, NY, the oldest child of E. Patrick and Barbie Stavile, Deborah distinguished herself early on as an honor student at Bishop Reilly High School and graduated magna cum laude, double major, from Queens College, CUNY (1974). In 1979, Deborah received a J.D. with honors (top one percent of her class) from New York University School of Law, where she held the position of Research Editor for the Law Review, and was awarded the Pomeroy Prize (academic prize for the top ten students). Thereafter, Deborah served as law clerk to the Honorable James Hunter III (United States Court of Appeals for the Third Circuit). From 1980 to 1983, she worked as an associate at Sullivan & Cromwell. In 1983 Deborah became an Assistant United States Attorney, S.D.N.Y. working in federal criminal trial, appellate and grand jury practice, and extradition. In 1987 she joined Rubin Baum Levin Constant & Friedman as partner. Throughout her legal career she volunteered for the NAACP and ACLU. While volunteering for the NAACP Legal Defense Fund, she represented the petitioner in Supreme Court case Ake v. Oklahoma (holding that in a capital case Oklahoma’s refusal to provide a psychiatric examination to assist an indigent with an insanity defense violated due process). For the ACLU she drafted portions of the Respondents’ brief in Supreme Court case City of Akron v. Akron Center for Reproductive Health (on whether Ohio regulations of abortion violated Roe v. Wade.) Deborah transitioned to teaching criminal law at Fordham University School of Law in 1991 and continued her career as a law professor at Benjamin N. Cardozo School of Law and Touro Law School, from 1992 to 1997 as a Visiting Associate Professor of Law. Deborah’s published works include Comparing Federal and State Rape Shield Laws (1994), Drawing Negative Inferences Upon Claims of Attorney-Client Privileges (1995), and The Joint Defense Doctrine and A Fair Trial (1996). She was a devoted mother to her two children, Philip and Katie Bartel and retired to spend more time with her family. During retirement, Deborah continued to volunteer her legal services at Safe Horizons, a not-for-profit providing legal help to immigrants who are victims of crime and abuse. Deborah is survived by her husband Paul Bartel and her two children. Her brilliance and kindness will be greatly missed. In lieu of flowers, contributions to Planned Parenthood may be made in her honor.

Brune Law P.C. and Gibson Dunn prevail in “impossible-to-win” trial in the SEC’s administrative tribunal

I hope that you all don’t think that I am being immodest when I accept Ed’s invitation and post about a wonderful victory that we recently obtained for long-time client Lynn Tilton before an SEC ALJ.

The SEC brought fraud charges against Lynn and her private equity firm Patriarch Partners, seeking a lifetime bar and $240 million in disgorgement plus a fine. The case was particularly notable because it was by far the biggest case SEC enforcement case had ever brought administratively. The well-founded wisdom, as we all know, is that it is almost impossible to win in the SEC’s own forum.  After a three-week trial and nearly a year of opinion writing, though, the ALJ handed Lynn and Patriarch a complete victory.  .

It was my pleasure to try the case with Gibson Dunn.

What’s up?

We would like to keep the blog going so please post whatever would be interesting to our fellow alums, whether it is news of general interest or developments in your own practices. If posting is technologically challenging, just email me your text at little@hugheshubbard.com.

Also please let me know of any alums (recent or older ones I’ve missed) who should be added to the membership.

Looking forward to hearing from you, best, Ed Little.

Alan Cohen moves to the SEC

Alan just let me know that after thirteen years as Head of Global Compliance at Goldman Sachs, he is joining the executive staff of the new Chairman of the SEC, Jay Clayton, as Senior Policy Advisor. Congratulations, Alan, nice move! The SEC’s press release is below.

Best, Ed Little.

“Alan Cohen
“Senior Policy Advisor to the Chairman

“Alan Cohen will serve as advisor to the Chairman on emerging risks and regulatory developments, including the impact of Brexit, new European Union regulations (e.g. MiFID II), and issues related to domestic and international clearing and settlement of securities and derivatives transactions. Most recently, Mr. Cohen was an advisor to the executive office at Goldman Sachs after joining the firm in 2004 as the Global Head of Compliance and a member of the management committee, where he supervised a global team that was responsible for compliance across all business and financial products, and in every major international market. Additionally, he was the court-appointed receiver of an SEC- and CFTC-regulated firm that engaged in a global securities and commodities fraud scheme and served on FINRA’s Compliance Advisory Committee and International Advisory Working Group. From 1991 to 2003, Mr. Cohen created and co-headed the white collar and regulatory defense practice at O’Melveny & Myers LLP. Mr. Cohen earned his J.D. from Rutgers School of Law – Newark, a Ph.D. in Political Science from Rutgers University, and an undergraduate degree from Temple University.”

Max Wild Secures Court Approval of Antitrust Class Action Settlement

After nine years of intense and complex litigation and negotiations, Matthew Wild and I, as court-appointed class counsel, won judicial approval of a settlement in a unique class action antitrust case.   The difficulty of this case deserves study by anyone contemplating representing indirect purchasers who have been victimized by an antitrust conspiracy.  It is detailed in the attached 54-page opinion.  A brief description of this litigation follows.

We represented indirect purchasers of packaged ice (i.e., retail consumers).   Our Complaint alleged that the country’s three largest manufacturers of packaged ice agreed to divide the country into three territories, one for each and with the further agreement they would not compete against one another.  This allegedly allowed Defendants to charge more for their ice than if there were free and open competition.  They sold to “direct purchasers,” typically supermarkets, which passed on the overcharge, sometimes adding a mark-up.

The initial problem in representing indirect purchasers, which the Court characterized as like “herding cats,” was caused by long established Supreme Court precedent, Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977), holding only direct purchasers could recover financially for Sherman Act violations, making indirect purchasers ineligible for a financial recovery.  However, as victims, indirect purchasers are entitled to injunctive relief.

In reaction to Illinois Brick, 27 states (referred to as the Illinois Brick Repealer States”) passed laws or interpreted their pre-existing laws to give all victims of antitrust violations committed within the states jurisdiction the right to financial recovery.  Thus, all the indirect purchasers of Defendants’ packaged ice had claims for injunctions under federal law.  Those who purchased in a repealer state also had claims under state law.

In representing indirect purchasers, we sued in federal court alleging the violation of the federal antitrust laws and sought injunctive relief.  As to those who purchased in repealer states, relying upon supplemental jurisdiction and the Class Action Fairness Act, we added state claims and sought financial recovery.  This created two classes of Plaintiffs, those who were entitled only to injunctive relief and those who also were entitled to a financial award.

Many such actions were instituted throughout the country.  The Judicial Panel on Multidistrict Litigation ordered that they all be transferred to the Eastern District of Michigan, where all pre-trial proceedings were to be under the control of a single federal judge.  Matthew Wild and I won appointment as interim co-lead counsel for a putative class of indirect purchasers.  John Perrin, a Michigan lawyer, was appointed liaison counsel. We were thereafter in charge of the litigation.

At a relatively early point in the litigation and before we were permitted to conduct formal discovery, we investigated all available material.  After extensive study of it, we concluded we had a good case.  We negotiated a settlement with the smallest of the three Defendants.  It required the Defendant’s executives to cooperate with us in pursuing our cases against the two larger Defendants.  The settling Defendant also paid $2.7 million dollars and agreed to an injunction.

This cooperation agreement, which the District Court characterized as an “ice breaker,” put heavy pressure on the two larger Defendants should there be a trial.  It gave us great hope that we could quickly settle with them for much greater amounts.

Shockingly, all expectation of a quick settlement with other Defendants was destroyed as the two larger Defendants filed for bankruptcy protection.  Their filings removed our cases against them from the efficiency of the multidistrict court and made our task incredibly more difficult.

One Defendant was a Canadian company with a Delaware subsidiary.  The case against them had to be pursued in bankruptcy courts in Canada and the District of Delaware.  Thus, we were suddenly confronted with learning Canadian bankruptcy law and how it applied to class actions and antitrust matters.

The other Defendant filed a prepackaged Chapter 11 in the bankruptcy court in Dallas, Texas.  The problems with that representation are discussed below.

The problems these bankruptcies caused us were exceedingly difficult, complex and likely unique in the world of class actions.  We now had to pursue the Class’ claims in all three bankruptcy venues.  There was no playbook to guide us.

Canadian law is very different from U.S. law, placing us at a considerable disadvantage.  The Canadian court appointed a large company as the “monitor” of the Canadian Defendant.  A monitor is similar to a trustee in bankruptcy in U.S. law, but with broader powers.  We first succeeded in negotiating a method of resolving the claims in Canada.  We agreed on an arbitration-type proceeding in which the Canadian bankruptcy court would appoint a U.S. attorney, familiar with U.S. law regarding antitrust and class actions.  He would hear the dispute and recommend a resolution.  The scope of discovery was unclear.  We would be denied a jury.  The “Arbitrator’s” recommendation would have to be approved first by the Canadian bankruptcy court and then the Delaware bankruptcy court.

We negotiated a settlement with the monitor in which the the Canadian bankrupt Defendant would pay a maximum of $3.95 million as a settlement.  After payment of fees and costs, the amount of the settlement that was not claimed by the class members would remain with the bankrupt’s estate.  We succeeded in obtaining approval, first by the Canadian bankruptcy court and then by U.S. Bankruptcy Judge in Delaware who characterized our representation as “highly proficient.”

The Texas Defendant’s bankruptcy filing in Dallas presented different problems. Its assets were insufficient to pay all of its debts.  Its pre-packaged Chapter 11, funded by a hedge fund that was acquiring the Texas Defendant’s business, provided only about $300,000 for all its unsecured debts.  By our quick action, we were able to negotiate a $700,000 settlement for the indirect purchaser class.

We thereafter sought approval of the settlement we had earlier reached with the smallest Defendant, which was all that remained of the action in the multidistrict court.  In approving it, the District Court observed, “Class Counsel has had their work cut out for them in taking this Indirect Purchaser Litigation, and have remained actively involved in the case through its numerous bankruptcies, obtaining the assistance of bankruptcy counsel in the … Texas bankruptcy proceedings, and appearing regularly in the … Canadian bankruptcy proceedings and in the Delaware bankruptcy proceedings, representing the interests of the Indirect Purchaser class.”

In approving the settlement, the District Court characterized it as a “well-informed and fairly-bargained agreement, negotiated after years of diligent work by Class Counsel on behalf of the Class, to finally resolve these Indirect Purchasers’ claims, claims that would be exceedingly difficult to prove should this case go to trial.  This truly is a case in which the prospect of the Class Members actually receiving nothing were this Court to disapprove the Settlement agreement is more than a platitude – it is a real possibility.”

The attached 54-page decision points to the hurdles we were faced with and overcame.  The twists and turns, complicated by the bankruptcies, could never have been anticipated when we began the action or even while the entire case was being administered by the District Court.

Regards,

Max Wild
also
for
Matthew S. Wild
and
Wild Law Group PLLC
98 Distillery Road
Warwick, NY 10990
(914) 630-7500

Congratulations to Rich Albert for shutting down DOJ Antitrust!

Congratulations to Rich Albert of Morvillo Abramowitz Grand Iason & Anello and his co-counsel at Ballard Spahr for skillfully persuading a District Judge in Utah to dismiss the Sherman Act indictment against both Rich’s client, who runs an heir-location company in Salt Lake City, and the company itself.     Back in June, the judge ruled that the government had failed to allege a per se Sherman Act violation and that the case was subject to the “rule of reason”.   Unfortunately for the government, its policy is to  criminally prosecute only per se cases.

The government moved for reconsideration, and this week the judge doubled down on his prior ruling, finding that the case also was barred by the statute of limitations.

The case is US v. Kemp & Associates, 2:16-cr-00403 (D. Utah).

You are not a shy lot, are you?

Dear All, it would be great to hear from you. Whether it is a court decision, a DOJ development, an upcoming trial, a cry for help, an alum’s move or even a self-promoting puff piece, please feel free to post. If this website is too challenging, you can always just email me text at little@hugheshubbard.com, and I’ll post it for you. Best regards, Ed.

Rich Albert & Bob Anello on Search Warrants in Digital Age

August 2, 2017
New York Law Journal
by Richard F. Albert, Robert J. Anello
Executing Search Warrants in the Digital Age: ‘United States v. Wey’
Dear Friends and Colleagues,
A recent high-profile Fourth Amendment victory for the defense in Southern District of New York case United States v. Wey provides an occasion to assess how courts are applying search and seizure precedents to today’s “big data.” In our latest New York Law Journal article, “Executing Search Warrants in the Digital Age: ‘United States v. Wey,’” we consider Wey in light of other recent decisions in the Second Circuit. These cases demonstrate that the government’s tendency to use broadly-worded search warrants, combined with uncertainty regarding what meets the Fourth Amendment test of “reasonableness” for off-site reviews of electronic files, continues to raise vexing issues for prosecutors, defense counsel, and courts in white collar criminal cases.
Best Regards,
Rich Albert and Bob Anello

View full article:  www.maglaw.com/publications/articles/2017-08-01-executing-search-warrants-in-the-digital-age-united-states-v-wey

Richard F. Albert
ralbert@maglaw.com
Robert J. Anello
ranello@maglaw.com

 

For those of you who were saved by Annie Hayes’ charts when on trial, she’s back in her own firm.

From Annie:

I’m so pleased to re-introduce myself to this select group of former SDNY AUSAs and am grateful to Ed Little for posting this. We enjoy a long friendship from the early years we worked together at SDNY.

Back then my firm (formerly Hayes/Kough Graphics) worked on dozens of cases for over ten years. Every week brought us a new case, and there wasn’t one type of case that I didn’t work on – insider trading, tax evasion, corporate conspiracy, money laundering, RICO, organized crime, drug trafficking, terrorism, bank fraud, qui tam – nor a governmental agency that I didn’t work with – DOJ, SEC, FBI, DEA, AFT, IRS, EPA, Office of Special Prosecutor/Iran-Contra, NYS AG, various DA Offices.

Over the years I’ve continued to work on high-profile cases, such as Enron, WorldCom, 9/11, and smaller but equally important matters. They include white-collar defense, complex commercial litigation, class actions, IP, securities, bankruptcy, employment, breach of contract, accounting irregularities, antitrust, insurance claims, and education issues. And pro bono cases, including ones that dealt with death penalty, reproduction rights, prisoner rights, etc.

While most demonstratives are created in PowerPoint, we have also come up with unusual solutions like: Full-scale floor plans using police video to create a rendition of a space that no longer existed (Wendy’s Massacre case for Queens DA). 3-D models of a remote canyon changed by river flow after an alleged crime. Video animations for a complex pharmaceutical matter. And an elaborate presentation for use by a client in 9/11 litigation.

Please let me know if I can ever be of assistance. Best, Annie.

Annie Hayes
Litigation Graphics Consultation and Design
Site: anniehayesdesign.com
annie@anniehayesdesign.com
607.435.3468
1 Jersey Street, NY NY 10012