“Wisconsin’s state Attorney General [Peg Lautenschlager], who pushed hard for a .08 BAC limit in the state, was arrested for drunken driving Monday night. We don’t know what her BAC was, because she refused to take a breath test (by the nature of the accident, I’d guess it was far higher than .10). Wisconsin is one of 37 states to adopt a measure championed by MADD that’s truly one of the most hysterical drunk driving laws on the books — the state actually imposes a harsher sentence for refusing to take a roadside breath test than it does for taking one and failing it.” (Radley Balko, Feb. 25) See Phil Brinkman, “Lautenschlager gives emotional apology, takes no questions”, Wisconsin State Journal, Feb. 27; Steven Elbow, “AG cited in drunk driving”, Capitol Times (Madison), Feb. 24 (in 1981, state’s then-AG was picked up driving with BAC above legal limit; was easily re-elected the next year); Elbow, “AG’s alcohol level was 0.12”, Feb. 25.
Four years ago (Feb. 16, 2000) we noted that the state of Connecticut had chosen three politically connected law firms to handle the state’s role in the multistate tobacco litigation, a bit of business that yielded a very handsome $65 million in fees. (Other firms that wanted to be considered for the work were cut out.) The three firms included two linked to Attorney General Richard Blumenthal and one, Carmody & Torrance of Waterbury, whose managing partner, James Robertson, was personal counsel to Republican Gov. John Rowland.
Now the firm of Carmody & Torrance has turned up amid the ethical storm swirling around Gov. Rowland, who may face impeachment over various personal financial irregularities. After Rowland nominated Robertson for a Superior Court judgeship, it developed that the Carmody firm had not only performed extensive free services for Rowland but had also agreed to defer payment of some $100,000 worth of paid services. In recent weeks the Connecticut press has had a lot to say about the (relatively small) amounts of conventional legal work that the state government has awarded to Carmody & Torrance in recent years, but (unless we’ve missed something) has expressed little curiosity about the selection of the firm for tobacco work, perhaps having swallowed the fiction by which the $65 million fee supposedly did not come at the state’s expense. (“Rowland lawyer says governor owes firm $100,000”, AP/Stamford Advocate, Feb. 13; Tobin A. Coleman, “Judges asked about gifts for Rowland”, Stamford Advocate, Feb. 14; Gregory B. Hladky, “Rowland?s ethics scandal snowballing”, New Haven Register, Feb. 16; “State ethics law loophole doesn?t exist, Plofsky says”, AP/New Haven Register, Feb. 22).
Calif. Attorney General Bill Lockyer says he’s filing an antitrust suit against Southern California grocery chains alleging that their mutual-aid strike agreement violates the federal Sherman Act. His spokesmen deny (cue laughter) that he’s trying to lend a hand to the sagging fortunes of the United Food & Commercial Workers in its 3 1/2 month old labor dispute with the chains. (“State to file antitrust suit in grocery strike”, San Francisco Chronicle, Jan. 31). “It appears the attorney general’s office is seeking a legal precedent that would scotch strike-assistance agreements in general.” Meanwhile, the Los Angeles city council is expected to vote this month on a bill which would prevent Wal-Mart from opening its SuperCenters within city limits, thus excluding the main source of competition pressing grocery prices lower. We’re sure that isn’t meant as a favor to the UFCW, either. (Shirley Svorny, “Banning Wal-Mart May Prove Costly” (commentary), Los Angeles Times, Jan. 30)
I’ll be the luncheon speaker this Saturday at 12 noon at the Federalist Society’s conference at New York University on “Enforcing Corporate Responsibility Through Criminal Law“. (Yes, this is rather short notice to NYC-area readers; I was tapped to fill in for a luncheon speaker who couldn’t make it.) Earlier, between 10:00 a.m. and noon, a distinguished panel will discuss corporate misconduct and the role of prosecutors, including: Prof. John Baker, Louisiana State Univ. Law Center; the Hon. Mary Beth Buchanan, U.S. Attorney for the Western District of Pa.; the Hon. Eileen O’Connor, Assistant Attorney General, Tax Division, U.S. Department of Justice; and the Hon. George Terwilliger III, White and Case, LLP.
Who’s serving as muscle to enforce a cartel that costs American consumers billions of dollars a year? Why, the National Association of Attorneys General, that’s who. As reported in our Jan. 13 item, the Big Four tobacco companies are starting to lose significant market share to small, regional and foreign cigarette companies that either do not contribute to the MSA (multistate settlement agreement) or do not contribute as much as the majors proportionally. Now AP confirms that NAAG sees this as a big problem and is urging states to pass laws closing the supposed “loophole” (which loophole appears to consist simply of the smaller companies’ not having to pay for past sins absent any showing that they’ve committed such sins). AP also obtained a confidential September memo from NAAG that’s a bit of a smoking gun, we’d say, as far as illuminating the true motives behind the plan. The memo “warned states to expect a $2.5 billion decrease in settlement payments due April 15, down from a projected $9.3 billion. It says about $600 million of that decrease, or 25 percent, is the result ‘not of a decline in smoking but rather of NPM (nonparticipating manufacturer) sales displacing sales by Participating Manufacturers.’ ‘NPM sales confer no benefits on the States,’ reads the memo…. ‘All States have an interest in reducing NPM sales in every State.'” (“Small cigarette makers cut into Big Tobacco’s markets, states’ pockets”, AP/Raleigh News & Observer, Jan. 16). (via Vice Squad).
More trouble (besides the trouble described yesterday) for states financially dependent on the spoils of the great 1998 tobacco robbery: the market share of companies that signed the agreement is eroding at a surprisingly rapid clip, despite the passage of harsh state laws aimed at protecting the loot by discouraging the rise of new, small or foreign cigarette companies. “In four years, the market share of the small cigarette companies has multiplied more than tenfold, from 0.5 percent of cigarettes sold in the United States in 1998 to 6.5 percent in 2002, according to the National Association of Attorneys General. The group said the numbers for 2003 will be more startling.” (“Small Cigarette Companies Whittle Away At Big Tobacco’s Sales”, AP/WRAL, Jan. 5) (via Vice Squad)(& see Jan. 23)
We’ve been saying it for years (here and here, for instance), and now we can cite authority from one of the nation’s most distinguished jurists, Judge Ralph Winter of the Second Circuit: the 1998 tobacco settlement was skillfully designed to create the sort of cartel among cigarette manufacturers that would have gotten tobacco executives packed off to jail had not state attorneys general been on hand to bestow their blessing. In a case called Freedom Holdings, Inc. v. Spitzer (yes, the New York AG, a vocal defender of the 1998 travesty, continues to be on the wrong side), a three-judge panel headed by Winter reinstated a lawsuit by a cigarette importer challenging the deal’s anticompetitive provisions.
“Dan Morales, the former attorney general jailed for scheming to steal millions of dollars from Texas’ tobacco settlement, says sealed court documents could show wrongdoing on the part of private lawyers who represented the state.” (see Nov. 2 and links from there). Morales said a year ago that he believed the Big Five tobacco lawyers he hired may have breached their loyalty to the state in the course of taking home $3.3 billion in fees, and now says documents sealed as part of his criminal case would show such misconduct if made public. The documents were sealed by U.S. District Judge Sam Sparks at the request of attorney Mike Tigar, representing the Five. “Also Friday, Marc Murr, a former Houston lawyer charged as a co-defendant to Morales, was sentenced to six months in federal prison. In October, Murr pleaded guilty to mail fraud.” (Janet Elliott, “Morales urges probe of tobacco attorneys”, Houston Chronicle, Dec. 20).
“I have recently been made aware of a market practice known as ‘short selling’ and am amazed that it is legal,” Oklahoma Attorney General Drew Edmondson wrote the Securities and Exchange Commission last year. That’s one of many tidbits to be found in a column by the L.A. Times’s Mike Hiltzik about politicians’ ties to Oklahoma-based Pre-Paid Legal Services, a multilevel marketing (MLM) enterprise that has been the subject of a fair bit of controversy and litigation over the years (Mike Hiltzik, “Lockyer Not Above a Little Legal Aid”, Los Angeles Times, Dec. 18). Oklahoma AG Edmondson’s bio lists him as having been born on “October 12, 1946” rather than, as one might assume, “yesterday”.
Beth Plocharczyk of Crescat Sententia responds (Dec. 15) to Dr. Kurt Kooyer’s Calvin College memoir on medical liability, recently referenced in this space, and takes issue with Kooyer’s assertion that the obligations of the medical profession toward patients are necessarily of a “covenantal” rather than contractual nature. David Giacalone (Dec. 15) notes that a star witness has emerged to support the state of Massachusetts in its dispute with law firm Brown Rudnick over $2 billion in tobacco fees (see Nov. 4): none other than Thomas Sobol, who served at Brown Rudnick as lead attorney on the state’s case, later departed, and now has testified that it would be “absolutely, clearly excessive” for his former firm to pocket the higher sum. Brian Sack (“Banterist”), provoked by a CBS “60 Minutes” segment (Dec. 8), wonders whether the courts will really award money to complainants who say they couldn’t get jobs at Abercrombie & Fitch because they weren’t “pretty enough” or “All-American enough” (see Dec. 26-28, 2000). (Update Nov. 17, 2004: Abercrombie settles three cases for nearly $50 million.) Professor Bainbridge (Dec. 5, Dec. 11, Dec. 15, Dec. 16) has been hammering away at New York Attorney General Eliot Spitzer for using prosecutorial negotiations to induce mutual fund companies to lower their fees: “Spitzer has no authority — none, nada, zilch — to regulate mutual fund fees. Spitzer’s use of his leverage to extort a reduction in fees is a gross abuse of discretion.” And Curmudgeonly Clerk (Dec. 14) documents the latest adventures of anti-videogame attorney Jack Thompson, already much chronicled in this space (see Sept. 26).