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Legal     1 - Duke Energy Employee Advocate

Legal - Page 17

Energy Evidence Allegedly Destroyed

Fulton County Daily Report – by R. Robin McDonald - December 5, 2002

IT worker says legal department selected files to delete

(12/4/02) - A former Mirant Corp. employee has claimed that the Atlanta-based energy marketer's legal department issued orders to erase computer data after the company became the target of an investigation by California.

"They [Mirant executives and attorneys] had us deleting files in order to cover up information, to get rid of information that would have been damaging to them in court," that employee told the Fulton County Daily Report Tuesday on the condition that he not be named. "They knew it and we knew it."

Mirant CEO S. Marce Fuller was among 40 to 50 senior executives and traders whose computers were cleansed of certain e-mail and files, according to the former employee whose allegations have surfaced in a federal suit.

Any allegations that Mirant employees "have willfully destroyed documents related to our business in California are utterly baseless," Mirant spokesman David C. Payne said Tuesday. The company, he continued, "will vigorously defend its actions and reputation."

If proven true, the allegations could suggest to a judge or jury that Mirant was systematically deleting information relevant to its California operations now under investigation by that state's attorney general.

"It demonstrates that defendants were likely threatened by the material, adding to the strong inference that defendants were aware of the illegality of their California operations," according to the suit.

In addition, if California seeks criminal charges against Mirant for federal antitrust violations, destruction of relevant documents could be considered obstruction of justice, also a federal crime.

The employee's allegations are included in an amended complaint filed last week in U.S. District Court in Atlanta. In re: Mirant Corporation Securities Litigation, No. 1:02-cv-1467 (N.D. Ga. Nov. 26, 2002).

The amended complaint is attached to at least 20 shareholder suits against Mirant alleging securities fraud that have been consolidated in federal court in Atlanta. The suits accuse Mirant of manipulating California electricity prices to reap illegal profits and artificially inflate its stock. The suits also claim the energy firm broke federal antitrust laws in order to boost California's electricity prices -- and Mirant's stock prices -- to record highs in 2000 and 2001.

Atlanta firm Chitwood & Harley and the Boca Raton, Fla., offices of Milberg Weiss Bershad Hynes & Lerach are co-counsel for the plaintiffs. The consolidated cases have been assigned to U.S. District Judge Beverly B. Martin. The former Mirant employee is not named in the consolidated, amended class complaint. He worked at Mirant's information technology department from August 2001 through February 2002 and provided technological support for company executives, according to the suit.

On Tuesday, Chitwood & Harley senior partner Martin D. Chitwood declined to discuss the allegations.

The complaint details an interview in which the former IT employee claims he had been instructed to delete "certain specified files concerning Mirant's activities in California" after that state's attorney general launched a probe of Mirant and other energy marketers, including Enron.

California officials are investigating whether the companies, including Mirant, illegally manipulated energy sales in California during periods of high demand two years ago to drive up prices, sometimes by as much as 200 percent.

The IT worker said that after the California investigation began, Mirant's law department generated a list of employees whose computer hard drives needed to be copied onto a single stand-alone server and then erased. That server then would be made available to any litigants who sought Mirant's computer files.

However, shortly after the project began, he was told "on the side to delete certain drives before they were copied onto the stand-alone server. The orders came from Mirant's management at corporate headquarters in Atlanta, the director of the IT Department and the director of the Legal Department," according to the amended complaint.

The former employee also said he was instructed to take computers to company lawyers who would review computer files and then give the IT employee a list of files or drives to erase before he copied them. "At other times the legal department would first delete files themselves before giving it to him to copy," according to the complaint.

The IT employee said that much of what he was ordered to delete were e-mails, "all of them pertaining to California," and briefs that energy traders had shared. According to the employee, Mirant's legal department "was adamant about the need" to erase files before copying the hard drives onto the stand-alone server.

"This former employee stated that there was a list of all the hard drives, all the people who had them, all the computers they had, and that people were called at home and told to bring in their laptops. This former employee explained that by cleaning up the drives before copying, they were deleting information that Mirant did not want anyone to have," according to the amended complaint.

"A couple of 'higher ups,' particularly those with laptops, tried to refuse the file copying and deleting, but the Legal Department forcefully reminded them that the computers were 'not their property' and required them to turn over the machines," according to the complaint.

"When this employee left Mirant in February 2002, his former IT Department co-worker was still erasing hard drives. The employee stated that all the attention was being placed on the California traders and their systems, and anybody who dealt with California had red flags on all their systems."

Unemployment Rights Win Over Signed Waivers

Houston Chronicle – by L. M. Sixel – December 2, 2002

(11/26/02) - Workers don't lose their rights to unemployment compensation when they waive future claims against former employers in exchange for severance, a federal appeals court has ruled.

Although the practice of seeking such waivers from fired, laid off or retiring workers is relatively common, interpreting a claim to mean filing for state unemployment compensation is not.

That, however, is what Houston-based Mitchell Energy & Development did when it sued four former employees who received severance packages after signing claim waivers.

Had the 5th U.S. Circuit Court of Appeals let Mitchell's interpretation of the law stand, the practice of -- in effect -- forcing workers to choose between unemployment compensation and a company-sponsored severance package might have become more common, labor lawyers said Monday.

In its ruling, the appeals court overturned a decision by U.S. District Judge David Hittner who accepted Mitchell's interpretation of the law -- that seeking unemployment benefits from the state is a claim -- even though the company didn't specifically prohibit filing for unemployment benefits.

Further, Hittner ruled that the Employee Retirement Income and Security Act, the federal law governing employee benefits, trumps the state law that prohibits employers from forcing workers to make a choice.

The case stemmed from four clerical employees in Mitchell's Mineral Wells office who received early retirement packages after signing the promise not to file claims against the company.

For breaking their promise, the workers were ordered to pay $41,000 to cover Mitchell's legal fees.

With last week's ruling, the employees no longer have to pay the lawyers' bills and get to keep the unemployment compensation they received for the three months between losing their jobs and beginning to receive retirement payments.

Lawyers for Mitchell did not return a call for comment.

Claim waivers are common, said W. Fulton Broemer, an employee benefits lawyer in Houston who represents the four employees. Just last week, he said, he reviewed several written by oil and gas companies that required employees not to file claims in exchange for severance benefits.

But as a practical matter, not many employers in Houston tie the promises not to sue to unemployment benefits, said Teresa Valderrama, an employment lawyer with Baker Botts in Houston.

Prudent employers want ex-employees to find new jobs, and unemployment benefits can help with that transition, she said. They don't want to unnecessarily anger ex-employees by opposing unemployment benefits.

The longer a former worker is unemployed, the larger the company's unemployment tax can get. That's because taxes on employers finance the state's unemployment compensation fund.

The appeals court's decision is good news for Enron employees who were laid off before the company's bankruptcy filing in December.

Under its severance pay plan in place before it filed for bankruptcy last year, Enron stipulated, "Severance benefits payments cease upon reemployment or upon your application for state unemployment benefits."

That kept many former Enron workers from claiming benefits.

"We don't want to preclude anyone from receiving benefits that they're entitled to," Enron spokesman Mark Palmer said.

Enron's new severance plan leaves it up to the state to decide who receives benefits, he said.

Texas Workforce Commission spokesman Larry Jones said there is no time limit on filing a claim for unemployment. An applicant would have to show good cause on why he's late in filing, and each case will be handled individually.

In his appeal, Broemer was joined by several states, including Texas Attorney General John Cornyn, the AARP and the U.S. Department of Labor.

Mitchell Energy was sold to Oklahoma City based-Devon Energy Corp., which has no comment on the Mitchell case, Devon spokesman Brian Engel said.

Supreme Court Miranda Challenge

L. A. Times – by David G. Savage – December 1, 2002

Ruling in Oxnard case could reinterpret landmark decision on rights during police questioning. White House backs a change.

(11/24/02) - OXNARD -- Maybe you don't have a right to remain silent after all.

The Supreme Court in its landmark Miranda opinion ruled that police must respect the rights of people who are held for questioning. Officers must warn them of their right to remain silent, and, equally important, honor their refusal to talk further.

But that widely known rule is about to be reconsidered in the high court in the case of a farm worker here who was shot five times after a brief encounter with police. Legal experts say the case has the potential to reshape the law governing everyday encounters between police and the public.

While the farm worker lay gravely wounded, a police supervisor pressed him to talk, to explain his version of the events. He survived, paralyzed and blinded, and sued the police for, among other things, coercive interrogation.

But Oxnard police assert that the Miranda ruling does not include a "constitutional right to be free of coercive interrogation," but only a right not to have forced confessions used at trial.

Bush administration lawyers have sided with the police in the case. The Supreme Court will hear oral arguments on Dec. 4.

Police can hold people in custody and force them to talk, so long as their incriminating statements are not used to prosecute them, U.S. Solicitor Gen. Theodore B. Olson and Michael Chertoff, the chief of the Justice Department's criminal division, say in their brief to the court.

It "will chill legitimate law enforcement efforts to obtain potentially life-saving information during emergencies," including terrorism alerts, if police and FBI agents can be sued for coercive questioning, they add.

Legal experts on the other side of the case foresee far-reaching effects if the police prevail.

"This will be, in essence, a reversal of Miranda," said University of Texas law professor Susan Klein.

"Officers will be told Miranda is not a constitutional right. If there is no right, and you are not liable, why should you honor the right to silence?" she asked. "I think it means you will see more police using threats and violence to get people to talk. Innocent people will be subjected to very unpleasant experiences."

It was early evening on a November day five years ago when Oliverio Martinez, 29, rode his bicycle down a path and across a vacant lot toward a row of small homes.

Two officers, Andrew Salinas and Maria Pena, had stopped to question a man they suspected, wrongly it turned out, of selling drugs. When they heard a squeaky bike approach in the dark, they called for the rider to stop.

Martinez dismounted and put his hands over his head. In a leather sheath on a waist band, he carried a long knife that he used to cut strawberries.

When the officer patted him down and grabbed for the knife, Martinez tried to run. Salinas tackled him and tried to handcuff him. As they struggled on the ground, the officer called out that the man had a huge knife. Pena moved closer and fired.

One bullet struck Martinez near the left eye and exited behind his right eye. A second hit his spine. Three more shots hit his legs.

When patrol supervisor Sgt. Ben Chavez arrived, a handcuffed Martinez lay bleeding on the ground. Once Martinez was loaded into an ambulance, Chavez climbed in with a tape recorder in hand.

On and off for the next 45 minutes in the ambulance and at the hospital, he repeatedly asked the gravely wounded man to admit he had grabbed the officer's gun and provoked the struggle. In agony, Martinez is heard screaming in pain and saying he is choking and dying.

"OK. You're dying. But tell me why you were fighting with the police?" Chavez asks. "Did you want to kill the police or what?" he continues. One officer had said Martinez tried to grab his gun.

In the emergency room, Chavez continued to press Martinez to tell him what happened.

"Why did you run from the police?" Chavez is heard to say over the sounds of nurses and doctors.

"Did you get his gun? ... Did you to try to shoot the police?"

Martinez in a low voice responds: "I don't know.... I don't know."

Lawyers for Martinez say he panicked when the officer tried to tackle him, but they say he did not grab the officer's gun.

In the emergency room, he is heard asking Chavez several times to leave him alone. "I don't want to say anything anymore."

"No? You don't want to say what happened?" the sergeant continues.

"It's hurting a lot. Please!" Martinez implores, his words trailing off into agonized screams. Undaunted, Chavez resumes. "Well, if you're going to die, tell me what happened."

Silence came only when pain medication took hold, and Martinez faded into unconsciousness.

Martinez survived, although he would not see or walk again. He sued Oxnard police for illegal arrest, the use of excessive force and coercive interrogation in police custody.

Under a post-Civil War law, city and state officials, including police officers, can be sued in federal court if they violate a person's rights under the U.S. Constitution.

A federal judge in Los Angeles cleared Martinez's case to go to before a jury.

Oxnard's lawyers said the allegations against Chavez should be dismissed because the patrol supervisor was merely trying to learn what had happened. U.S. District Judge Florence Cooper disagreed and said his questioning suggested he had sought to obtain an admission from Martinez that would clear the two officers.

In the past, the Supreme Court has said police cannot be sued unless they violate "clearly established" rights.

Before the case could be tried, Oxnard's lawyers appealed on behalf of Chavez saying he had violated no clearly established right. (Under California law, cities and counties are responsible for paying money verdicts against their officers.)

But the U.S. 9th Circuit Court of Appeals rejected Oxnard's appeal and said the facts as alleged, if proven at a trial, would justify holding Chavez and the city liable.

The 9th Circuit judges said the rule against coercive police interrogation had been established decades before the Miranda decision of 1966.

"Sgt. Chavez doggedly pursued a statement by Martinez despite being asked to leave the emergency room several times," wrote Judge Richard Tallman. "A reasonable officer, questioning a suspect who had been shot five times by the police and then arrested, who had not received Miranda warnings and who was receiving medical treatment for excruciating, life-threatening injuries ... would have known that persistent interrogation of the suspect despite repeated requests to stop violated the suspect's 5th and 14th Amendment right to be free from coercive interrogation."

The Miranda decision grew out of the 5th Amendment, which says no person "shall be compelled in any criminal case to be a witness against himself." This has long been known as the right against self-incrimination.

The Supreme Court in the 1950s and '60s struggled in a series of cases to decide whether a person's confessions to the police had been voluntary or compelled. Often, a suspect claimed to have been beaten, but the police denied it. In one case, five members of a Los Angeles family had been held in jail for more than a week before one of them talked.

In frustration, Chief Justice Earl Warren announced a broad new rule in Miranda vs. Arizona. He said that because police questioning is inherently coercive, officers must warn suspects of their rights before questioning begins. His opinion and others that followed it described the so-called Miranda warnings as limitations on the police.

But all along, some lawyers and law professors have questioned whether the Miranda warnings themselves are a constitutional requirement.

When Oxnard's lawyers appealed the case of Chavez vs. Martinez to the Supreme Court, they asked a basic question. Is there a constitutional right to be free of coercive police interrogation?

The answer to that question should be no, they said. And they cited a reliable source for their view: Current Chief Justice William H. Rehnquist, a frequent critic of Warren's opinion in the Miranda case.

In a 1990 ruling, Rehnquist commented that the right against self-incrimination in the 5th Amendment was a "trial right." Police cannot violate this right when they force someone to talk, since "a constitutional violation occurs only at trial," the chief justice said. The National Assn. of Police Organizations, the California attorney general's office and the Criminal Justice Legal Foundation in Sacramento all have urged the court to use the Martinez case to make clear that the Constitution does not limit forceful police questioning.

"Contrary to the 9th Circuit's conclusion, there is no 'right to silence,' " said Oxnard's lawyer Alan E. Wisotsky. Since Martinez was not prosecuted for anything he said, his rights were not violated by Sgt. Chavez, he concludes.

The pro-police advocates say that torturing a suspect, or perhaps denying him food and water for an extended period of time, would be unconstitutional. They say that "shocking" or "brutal" police conduct could be punished.

However, "the fact that a federal appellate court has allowed [a lawsuit] for Sgt. Chavez's brief, comparatively benign questioning demonstrates the need to clarify the law," said Charles Hobson of Criminal Justice Legal Foundation. Klein, of the University of Texas, filed a friend-of-the-court brief on behalf of the National Police Accountability Project. She argued that innocent people will be particularly vulnerable if the court rules the Constitution does not forbid coercive police questioning. Criminal suspects still can insist their incriminating statements not be used against them at trial. But an innocent person who is held for questioning would have no right and no remedy, she said.

Two years ago, the high court took up a well-publicized challenge to the Miranda decision and ultimately refused to overturn it. Rehnquist, a long-time critic of Miranda, surprised many by writing the decision for the 7-2 majority.

But his opinion did not describe the Miranda decision as limiting the police. Instead, he said it means that some incriminating statements "may not be used as evidence in the prosecution's case."

Former Los Angeles prosecutor Steven Clymer, now a Cornell University law professor, said the Martinez case will decide "what Miranda really means on the street. I think the court will say it is OK for the police to violate Miranda. You are not violating the Constitution when you ignore Miranda," he said.

That will affect how police behave, he said. "If the guy says, 'Stop, I don't want to talk,' or he says, 'I want to see a lawyer,' you [as a police officer] aren't going to get anything out of him," he explained. If the officer continues the questioning and pressures the suspect, he or she may learn valuable information, such as facts about the crime, the location of a weapon or the names of other suspects or witnesses. All this information can be used against the suspect, even if incriminating statements cannot be used at a trial.

"If you're the officer, you look at the costs and the benefits," Clymer said. And many police officers will decide it is better to ignore the suspect's right to remain silent than to respect it, he said.

Clymer, who has an article in the Yale Law Review next month titled "Are Police Free to Disregard Miranda?" said the Supreme Court would be "more honest if it just overruled Miranda."

Such an outcome would surprise many.

"A generation of Americans have been brought up with the belief that we have a right to remain silent," said Ben Wizner of the ACLU of Southern California.

Los Angeles lawyer R. Samuel Paz, who is representing Martinez, said he is surprised by the strange turn in the case.

"They are taking a radical position," Paz said of Oxnard's lawyers. If they are right, it "would permit officers to engage in the most egregious and abusive conduct in violation of decades of 5th Amendment jurisprudence," he wrote in his brief to the court.

Although most lawyers who have followed the case think the Rehnquist court will overrule the 9th Circuit and side with Oxnard, some think the brutal shooting will cause several justices to hesitate.

The court could decide the case narrowly by focusing on whether Martinez was in police custody at the hospital or whether the law regulating Chavez was clearly established. But the justices agreed to take up Oxnard's appeal posing the broad question of whether the Constitution regulates police questioning that does not lead to an incriminating statement in court.

For Martinez, the slow-moving legal battle has proven to be a new type of agony. Now 34, he lives with his father in a one-room trailer on a farm field in Oxnard. He is in a wheelchair and wears dark glasses, covering his missing eye.

"Everything has changed. I can't do anything for myself," he said in an interview. His father leaves food on the stove each day before leaving so his son can warm his lunch.

"I depend on my dad. It's very difficult for me," he said.

Oxnard's lawyers have refused requests to pay for any therapy for him.

Regardless of what happens in the Supreme Court, Martinez and his lawyers say they will continue to press their claims for illegal arrests and excessive force against the Oxnard police.

The city's lawyers say they are not willing to make payments or a temporary settlement.

The three officers involved in the Martinez shooting remain on the Oxnard police force and suffered no disciplinary action as a result of it, city lawyers said.

Court Documents Should be Public

New York Times – by Stephen Gillers – December 1, 2002

(11/30/02) - The Justice Department asked a federal judge this week to seal documents that might otherwise aid parents in lawsuits against the maker of a mercury-based vaccine preservative called thimerosal, which the parents claim caused their children's autism. The department has the right to make the request, but if the court grants it, parents could be prevented from getting evidence that might prove their claims. The court should refuse.

Courts occupy a borderland between the private and the public. In resolving disputes, they gain control of information that litigants wish to keep private. Some of this information deserves privacy, like trade secrets or details of a divorce. But information that alerts the public to danger or that might help prove responsibility for injuries should be publicly available once it is filed in court.

Similarly, a judge should not suppress information that enables the public to evaluate the performance of the courts, government officials, the electoral process and powerful private organizations. A federal appeals court was correct to unseal a letter that prosecutors had submitted to a trial judge last May in support of a lenient sentence for a political contributor who had aided their investigation of Senator Robert G. Torricelli of New Jersey. The letter, which contained evidence supporting the contributor's claims that he had given Mr. Torricelli thousands of dollars in cash and gifts, was initially sealed at the request of the prosecutors and the senator, who was seeking a second term. Within days after the court unsealed the letter, Mr. Torricelli was forced to withdraw from the race.

This is how things are supposed to work. In 1978, the Supreme Court noted that it was "clear that the courts of this country recognize a general right to inspect and copy . . . judicial records and documents." Yet judges often seal records and order litigants to conceal what they may have learned in discovery before trial. By doing so, judges give the parties protection from public scrutiny that they could not get at a trial in open court. This benefits defendants by shielding possible misconduct. Plaintiffs benefit, too, because the prospect of court-imposed secrecy makes it more likely that defendants will offer more generous settlements. And courts benefit because cases are resolved more quickly.

Of course, the public pays for secrecy by losing the information that the trial would have revealed. Worse, even the request for sealing documents occurs in secret.

There is evidence that court-ordered secrecy is increasing, especially in defective products cases. A study in Dallas County, Tex., found that between 1920 and 1980, only 80 cases had sealed records. Between 1980 and 1987, the study found 200 sealed cases.

Not all judges comply with the wishes of the litigants. This week, Constance M. Sweeney, a state judge in Massachusetts, rejected the Boston archdiocese's motion to suppress 11,000 documents concerning the church's responses when priests were accused of sexually abusing children. The archdiocese had been ordered to give the documents to a lawyer representing four men suing the church, but it wished to keep them from public view while it sought to have the case thrown out. But Judge Sweeney properly refused to hide documents that contained information about a scandal involving serious harm and a powerful institution.

Defenders of court-imposed secrecy argue that it encourages settlements and avoids the costs of a trial. Some even argue that the courts' only job in private disputes is to help the parties resolve their differences and that the public interest enters the equation hardly at all. But when, as with thimerosal, a court is asked to suppress information that might help vindicate legal claims, or that reveals a continuing public danger or unethical behavior by powerful people or institutions, secrecy is intolerable. The harm is made worse when a judge, a public official, is asked to use public power to inflict it.

Stephen Gillers, vice dean of New York University School of Law, teaches legal ethics.

Expose Campaign Finance Secrets

New York Times – December 1, 2002

The ink was barely dry on the McCain-Feingold campaign finance law last March when more than 80 interest groups ran to federal court to challenge it. That lawsuit, which could undo a critical piece of reform legislation, will be argued next week. But even before the case is decided, the American public is already losing, because the court has allowed parts of the record to be kept secret. The court should lift this secrecy, so the people can be full participants in this important case.

The three-judge panel hearing the case issued a protective order last summer, allowing witnesses to mark all or part of the evidence they submit as "confidential." The idea for the order began with the parties. Some of them clearly wanted to hide from the public just how unseemly the connection between contributions and influence can get. Others apparently went along so the litigation would not get bogged down in battles over what to make public.

It is, of course, impossible to know precisely what information is being kept secret. And other than the Republican National Committee, whose withholding of information has been made public, it is impossible to know which, or even how many, parties to the case have submitted confidential evidence. Still, it seems likely that much of the missing information concerns how political parties and special-interest groups extract contributions, and what the donors get for their contributions. In other words, it is just the sort of information an interested citizen would want to know in evaluating this case.

To keep the secret evidence secret, the parties to the suit have had to submit two versions of their legal briefs, a full one for the court and a redacted one for public consumption. When the court issues its decision, it may have to issue two versions, one for the parties and a redacted one for everyone else. There is no reason any of the information in this record should be kept secret. But it is particularly wrong that parts of the record that are being cited in the parties' briefs, and that could end up in the court's decision, are withheld from the public.

There are cases in which protective orders and secret evidence are appropriate. When national security could be compromised, or even when industrial secrets are at risk, a court may be justified in withholding parts of the record from the general public. But there is nothing in this challenge to the campaign finance law that resembles these sorts of considerations. This case deals, rather, with the central issue of how our political system functions.

In fact, this is one of the most important free speech cases in decades. It is a case about the degree to which the nation's political process has been co-opted by special-interest money and behind-the-scenes deals. If ever a case cried out for openness and transparency, it is this one.

The court issued an order this week in which it urged the Republican National Committee to try to reach an agreement with other parties in the case who want more of the record opened to the public. In its order, the court noted the strong public interest in the case. The court should continue to prod the parties to make the key evidence available to the American people, and if the parties refuse to, the court should do it for them.

Appeal Rejected on Cheney Papers

Reuters - November 29, 2002

Groups question influence of energy companies

WASHINGTON (Reuters) -- Vice President Dick Cheney will have to turn over energy-policy documents within two weeks or explain why they should be withheld from watchdog and environmental groups, a U.S. judge ruled in an order released Wednesday.

In the latest legal twist between Cheney and watchdog groups that want to find out how he formed his oil-friendly energy policy, U.S. District Judge Emmet Sullivan ruled late Tuesday that the vice president cannot appeal an order to turn over documents while the case is still being heard.

Conservative watchdog group Judicial Watch and the environmental group Sierra Club are seeking records of an energy task force headed by Cheney to find out what influence energy companies, including bankrupt Enron Corp., had on the policy it developed.

The task force produced a policy paper in May 2001 that called for more oil and gas drilling and a revived nuclear power program. Environmentalists say they were largely shut out of the policy-making process.

The legal challenge already has forced the Bush administration to produce thousands of documents from various government agencies that were involved in the task force to determine energy policy in the spring of 2001.

But the administration refused to turn over documents relating to Cheney, who headed the task force, and three senior White House officials, prompting Judicial Watch to ask that Cheney be found in contempt of court.

Sullivan ordered the administration in October to produce the documents or submit a detailed explanation of what ones they were withholding and why.

The government appealed the order and sought the judge's approval to go ahead with the appeal even though the entire case has not been finished.

Sullivan said he was not convinced.

"Defendants have simply failed to establish the factual and legal predicates justifying interlocutory review," the judge wrote.

White House officials will have to turn over the documents by December 9, Judicial Watch said.

Cheney also faces a lawsuit from the General Accounting Office, Congress' investigative agency. Arguments in that case were heard in September, but U.S. District Judge John Bates has not ruled.

Asbestos Lawsuit Win

Associated Press – November 22, 2002

SALISBURY, N.C. - Three former contract workers at a Rowan County manufacturing plant diagnosed with asbestosis have been awarded more than $400,000 by a Rowan County jury.

Donnie Bell of China Grove, Donnie Benson of Cleveland and Gary Schenk of Salisbury all worked for Daniel Construction Co. of Greenville, S.C., at a Hoechst Celanese textile plant in western Rowan.

The construction company, now known as Fluor Daniel, built and maintained the Hoechst Celanese plant, which is now a polyester manufacturing plant owned by KoSa.

Jurors on Tuesday awarded $200,000 to Bell, $165,000 to Benson and $45,000 to Schenk after a monthlong trial that included testimony from doctors who treated the men.

Chris Mauriello, the Salisbury lawyer who represented the men, said jurors agreed with claims that Hoechst Celanese failed to protect the workers from asbestos during work at the plant.

Asbestosis is a potentially deadly lung disease linked to the inhalation of asbestos fibers, which are blamed for various breathing ailments - including lung cancer. Asbestos once was a commonly used insulating material.

"It was obviously a hard-fought case, and we, of course had hoped for a defense verdict, but in the end the jury verdict was fair," said Josephine Hicks, attorney for the Hoechst Celanese. Hicks added, "Of course we do not think our client was liable."

Bell worked as an insulator, Schenk as a pipe-fitter and Benson as an electrician. The men are part of a larger group of workers who sued in 1999, Mauriello said. Other plaintiffs' cases are still pending.

Win for Whistleblower and Counsel

The Recorder – by Jahna Berry – November 19, 2002

(11/18/02) - Eight months after a jury slapped Lawrence Livermore National Laboratory with a $1 million verdict for firing whistleblower Dee Kotla, an Alameda County, Calif., judge awarded the woman's attorneys $1 million in fees.

Superior Court Judge Yolanda Northridge later snipped $255,000 from the jury verdict, but her order on attorney fees brings the lab's legal loss to about $2 million. In her Nov. 4 order, Northridge awarded the plaintiff's lawyers at Oakland, Calif.'s Gwilliam, Ivary, Chiosso, Cavalli & Brewer about $714,000. With a 0.5 multiplier, the total fee award increases to about $1,069,000.

The judge denied the plaintiff's request for a multiplier of three, but said because the case was "aggressively defended" and that it had "several layers of evidentiary analysis ... that added to its complexity," she granted the lower number.

Northridge also awarded the plaintiff nearly $50,000 in court costs.

The case stems from Kotla v. Regents of the University of California, V014799-8. Kotla, who was a lab worker, said she was fired shortly after she testified on behalf of Kim Norman, a woman who sued a male lab employee for alleged sexual harassment.

Kotla was Norman's supervisor. Norman's case settled, but Kotla said the lab began investigating her computer use and phone calls after she gave testimony that backed Norman's claims. The lab says Kotla was fired because she was using her telephone and computer for unauthorized purposes.

In May, Massachusetts Congressman Edward Markey used the Kotla case as an example of how Department of Energy contractors -- such as the University of California Regents, which runs the lab -- are wasting money on legal expenses.

If the DOE doesn't look at expenses more closely, "contractors will have no incentive to settle cases that are frivolous or in which they are in the wrong," Markey said in a press release.

A lab spokeswoman disputed Markey's characterization and said the lab has already filed an appeal with the First District Court of Appeal. It plans to add its objections to the fee award to that effort.

"We are, frankly, shocked," said Susan Houghton, a spokeswoman for the lab. "We don't think that this is supported by case law."

Houghton contends that, in the end, Kotla will take home less than her lawyers. In addition to the fee order, her attorneys will get 30 percent of Kotla's remaining $745,000 jury award. That means Kotla's attorneys could take home about $1.5 million, Houghton said.

Houghton said San Francisco's Littler Mendelson, which was outside counsel for the lab, was paid $250 per hour and has gotten a total of $840,000 in fees and court costs so far. J. Gary Gwilliam, Kotla's attorney, requested that he be paid an hourly fee of $500, according to court documents.

Gwilliam declined to delve into details of his fee agreement with Kotla, but he disputed Houghton's math.

Kotla's final jury award and the attorneys fees will go into one pot, he said. Her attorneys, which include Gwilliam and attorneys who handled the case earlier, are all working on contingency and will get a percentage of the entire amount, he said. Also, according to Gwilliam's fee application to the court, the Department of Energy has reimbursed the lab $781,500 for Littler's legal fees. That figure could grow larger, Gwilliam said.

It's "1,000 percent" not true that plaintiffs' attorneys will get more than Kotla, Gwilliam said.

The Pre-Kindergarten Connection

New York Times – November 17, 2002

(11/16/02) - Unless you've recently lost a bundle on AT&T stock, pull up a chair — this is a good one. Why did Salomon Smith Barney's former telecom analyst Jack Grubman lift his rating on AT&T's stock from a "hold" to a "buy" in late 1999, after his boss, Citigroup's chairman Sanford Weill, asked him to take a "fresh look" at the company?

Part of the answer, according to an e-mail Mr. Grubman wrote to a friend in January 2001, is that he was desperate to get his kids into the right nursery school, and Mr. Weill was willing to go to bat for him.

Investigators looking into Mr. Grubman's activities might have written off this claim as too far-fetched had they not also found a memo from Mr. Grubman to Mr. Weill dated Nov. 5, 1999, that was helpfully entitled: "AT&T and the 92 Street Y."

After Mr. Grubman reconsidered his previous wariness about Ma Bell's prospects, the 92nd Street Y accepted not only Mr. Grubman's twins, but also a $1 million contribution from Citigroup. Readers outside New York City might wonder why a man earning eight figures needed any help in placing his children at the right school, but that is a subject for another editorial. In his chatty memo, Mr. Grubman declared that it was statistically more difficult to get into the twins' preschool of choice than it is to get into Harvard.

In the same 2001 e-mail, one of many that New York State's attorney general, Eliot Spitzer, has been reviewing as part of his inquiry into Citigroup's research practices, Mr. Grubman set forth a novel explanation as to why Mr. Weill wanted him to reconsider his AT&T rating in the first place. It wasn't simply to obtain the sizable investment-banking fees from AT&T for spinning off its wireless unit — which Citigroup did pocket months later. According to the Grubman scenario, Mr. Weill was looking for allies in his campaign to ditch his Citi co-chief-executive, John Reed, with whom he'd been sharing power since the 1998 Travelers-Citicorp merger. AT&T's chief executive, Michael Armstrong, served on the Citigroup board of directors.

Citigroup acknowledges that Mr. Weill did ask Mr. Grubman, his star analyst, to take another look at AT&T, but denies that he sought to influence the analyst's judgment. Mr. Weill says he did put in a good word at the nursery school, but only because Mr. Grubman was a valuable employee. Mr. Grubman's denial has been more artful; he claims that he "invented a story in an effort to inflate my professional importance."

It will be up to Mr. Spitzer and other regulators to determine whether Salomon's research was improperly tainted. As a result of Mr. Spitzer's earlier inquiries into Merrill Lynch's research, investors are already plenty outraged. During the late 1990's bubble, it seems that Wall Street firms' ostensibly objective research was often corrupted by a desire to land hugely profitable investment-banking deals from the subjects of these reports.

In recent months Citigroup has instituted a series of reforms, including measures to insulate its research from its investment-banking unit. Meanwhile the Securities and Exchange Commission, Mr. Spitzer and other regulators are working on their own set of remedies.

The allegations in the Grubman case suggest you can go only so far in guarding against tainted research by erecting a wall between analysts and investment bankers. This is especially true when an analyst knows that somebody on the other side of the wall holds the key to the right nursery school.

$7.67 Million Disability Award Upheld

The Recorder – by Jason Hoppin – November 16, 2002

Judge blasts claims-handling practices

(11/15/02) - U.S. Magistrate James Larson has dropped a 62-page grenade on the nation’s largest disability insurer in a first-of-its-kind order that could add fuel to a firestorm of suits against it.

The strongly worded injunction tells Tennessee-based UnumProvident Corp. to stop using biased medical examiners, targeting categories of claimants for review, destroying medical reports and withholding benefits information. If it doesn't, the company could be subject to a contempt order.

Larson, who sits in the Northern District of California, upheld a $7.67 million jury verdict awarded to a chiropractor whose long-term disability benefits were cut off by the company. The verdict includes $5 million in punitive damages.

"Despite conclusive evidence that plaintiff was unable to work as a chiropractor and that her other attempts to work had failed, after one-and-a-half years of paying benefits, defendants subjected her to a biased medical examination, then recharacterized her occupation as a business owner, rather than a chiropractor, and claimed she was not totally disabled because she could perform bookkeeping or teach a class or see two patients per hour," Larson wrote.

Berkeley, Calif., chiropractor Joan Hangarter filed for disability benefits after experiencing severe pain and a degenerative cervical disk disease that prevented her from treating patients. She was forced to file for bankruptcy after Paul Revere Life Insurance Co., a subsidiary of UnumProvident, rescinded her benefits. She and her two children eventually began receiving food stamps.

UnumProvident on Thursday released a three-page response blasting Larson’s interpretation of the evidence. The company vowed to appeal the case to the 9th U.S. Circuit Court of Appeals.

The order comes at a bad time for UnumProvident, which issues one out of every four disability policies in the country and faces a slew of litigation over its practices.

NBC's "Dateline" recently ran a highly critical piece on the company’s practices, and the CBS program "60 Minutes" will air its own story Sunday. Georgia Insurance Commissioner John Oxendine is investigating the company, which also faces a suit by its own former medical director alleging he was fired for not denying legitimate claims.

California Insurance Commissioner-elect John Garamendi was interviewed for the "60 Minutes" story. He could not be reached for comment.

Larson's order is the first to find that the company engages in unfair business practices under California law. The company said "the opinion colors and misstates the facts in several respects."

It offered a 12-point rebuttal to various findings by Larson, including the use of biased doctors and a policy of shredding potentially explosive records. "The company does not engage in any of the acts from which it has been enjoined," the company said. "UnumProvident and its subsidiary companies will abide by the law and the proud tradition of serving its policyholders as it has done for the past century, and will continue to do so for the next century."

A spokesman for the trade organization Health Insurance Association of America said that because of UnumProvident’s pre-eminence in the industry, it has become a "natural target for the plaintiffs' bar."

"For the most part, companies that are offering that product" -- high-risk disability insurance -- "are anxious to pay off legitimate claims," said Larry Ackey, HIAA's communications director. "They don't want to get a reputation as someone who doesn't pay up."

Hangarter's lawyer, Raymond Bourhis of San Francisco's Bourhis & Wolfson, has sued the company several times. He said the company routinely finds illegitimate reasons to deny costly claims.

"What I would have thought would be a reasonably intelligent approach on their part was to say that they're going to take what [Larson] said very seriously, and will begin implementing it immediately," Bourhis said. "Instead it's more of the same ... they're attacking Judge Larson. It's unbelievable."

Evan Tager, a partner at Mayer, Brown, Rowe & Maw in Washington, D.C., represented the insurer.

Bourhis said he will follow up his win in Larson's court with a class action, which he said will be filed "soon."

Another class action was recently filed against the company in New York on behalf of all policyholders who obtained the insurance through their employers -- a potential class which runs into the millions.

Evan Schwartz, at Garden City, N.Y.'s Quadrino & Schwartz, is one of the plaintiffs lawyers involved in the case. He said he's already seen the order Larson released Wednesday in Hangarter v. Paul Revere Life Insurance, 99-5286.

"We're actually engaging in a debate as to how it impacts our particular case," Schwartz said, adding that such findings by any judicial body are bound to help.

During a recent conference call with Wall Street analysts, UnumProvident CEO J. Harold Chandler was quizzed about the allegations.

He said the company has become a target for plaintiffs' lawyers, but according to news reports added that if mistakes were made, the company will correct them.

"We have and will continue to learn from this experience," Chandler said. "The lessons will not go unheeded."

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