FREEDOMPOST, a lawyer's commentary

PACKING THE SUPREME COURT

Next week the Senate Judiciary Committee will vote on whether or not to send Sonia Santomayor's nomination to the floor of the Senate for confirmation.

 

Historian James MacGregor Burns has published a new book entitled "PACKING THE COURT". This title raises again the main issue decided by the Supreme Court in Marbury v. Madison, i.e., judicial review.

 

Has the power of Judicial Review negated the original intent of the "Framers" by permitting the 3rd branch of government to overrule the other two branches? I believe that to some extent it has. In 2000 the Supreme Court stopped the recount of the Florida presidential vote by "wrongfully" applying the equal protection clause of the 14th Amendment  stating that Bush v. Gore cannot be used as precedent. This was clearly, to this 71 year old lawyer, a political decision, not a judicial one, and should have been rejected by Al Gore. The Constitution spelled out the process by which Presidents should be elected, but the Supreme Court illegally usurped that power to themselves.

 

That Constitutional War should have been fought then and there. But Al Gore deferred by conceeding. An unacceptable result to this writer.

Two big ideas animate “Packing the Court.” One is that the court has for more than 200 years illegitimately claimed a power not granted to it by the Constitution. The other is that it has on the whole used this power to protect the powerful and to thwart progress.

James MacGregor Burns is a distinguished historian best known for his work on Franklin Delano Roosevelt, and the book’s title is, of course, a reference to Roosevelt’s failed attempt to increase the number of justices after the court repeatedly struck down New Deal legislation. That episode, presented in lively detail, accounts for only two of the book’s 12 chapters, but it informs Burns’s view of the court from start to finish.

Burns is deeply hostile to Chief Justice John Marshall’s claim, in Marbury v. Madison in 1803, that the Supreme Court has the last word on whether the actions of the other two branches are constitutional. “The court’s vetoes of acts of Congress are founded in a ploy by John Marshall that was exploited and expanded by later conservatives until the court today stands supreme and unaccountable,” Burns writes.

He proposes a counterattack. If the court repeatedly strikes down “vital progressive legislation,” he says, the president should “announce flatly that he or she would not accept the Supreme Court’s verdicts.” The case against judicial review has been made more fully and rigorously elsewhere, but whatever its merits, it is hard to take very seriously as a practical matter this late in the life of the Republic.

Burns is more persuasive when he writes that the court “has far more often been a tool for reaction, not progress.” The justices are, after all, often a sort of lagging indicator, legacies of the presidents who appointed them decades earlier. There is a random element, too. President William H. Taft appointed six justices in three years. The last Democratic president, Bill Clinton, appointed two justices over eight years; the one before him, Jimmy Carter, had no appointments in his single term. This amounts, Burns writes, to a “judicial roulette wheel.”

The court’s history as recounted by Burns certainly does not lack low points. In its first use of the power of judicial review established by the Marbury decision, the court declared in the Dred Scott case in 1857 that black people could be property but not citizens. During Reconstruction, Burns writes, the court extended the liberty of entrepreneurs and corporations even as it frustrated Congressional efforts to protect freed black slaves from Southern racism and violence.

In later years, he continues, the court sided with capital against labor, struck down more than a dozen New Deal-era laws in a single 18-month stretch, tolerated the suppression of dissent and endorsed the internment of more than 100,000 Japanese-Americans during World War II.

But the court-packing controversy at the heart of the book is more instructive than Burns lets on. Roosevelt lost the battle, but he won the larger war when Justice Owen Roberts changed positions in a case about the minimum wage — “the switch in time that saved nine.” The resolution of the court-packing fight suggests that the court tends toward a kind of political equilibrium, and this may undercut some of Burns’s grander claims.

Burns is, unsurprisingly if at some level inconsistently, a great admirer of Chief Justice Earl Warren, who “would forge a luminous exception to the court’s historic role as the bulwark of antidemocratic, anti-egalitarian conservatism.” He is less satisfied with the Rehnquist and Roberts courts, which he says have been “quietly laying the groundwork for confrontation with a president and Congress elected on a platform of change.” Well, maybe. Or perhaps, as in the Roosevelt era, the Obama administration and the court, through changes of personnel, attention to the shifting political winds, and an aversion to the kind of conflict that diminishes the authority of both branches, will learn to live with each other.

Reviewed and edited by Martin S. Friedlander, Esq.

THE PROCEEDINGS BEFORE THE JUDICIARY COMMITTEE REFLECT THE INCOMPETENCE AND BIGOTRY OF THE SENATORS FROM THE HOUSE ON "C" STREET

THE SELECTION PROCESS FOR APPOINTING SUPREME COURT JUSTICE ENSURES THE APPOINTMENT OF BIASED JUSTICES.

As a recently retired lawyer, I know that many judges are quite lacking. I only wish I could have tried more cases before a judge as competent, principled, thorough and self-examining as Judge Sonia Sotomayor. The hearings have shown us the future and — thankfully — it is not this Republican band of grumpy old men.

Martin S. Friedlander, Esq.

THE BANKS AND CREDIT CARD ISSUERS SHOULD BE STIFFLY REGULATED TO CURB THE ABUSES THAT HAVE CONTRIBUTED TO THE MASSIVE INCREASE IN BANKRUPTCIES. SUPPORT SEN. MENENDEZ.

Home Biography Committees Issues & Legislation Newsroom Press Releases Floor Statements Committee Statements Latino Leadership Link Senate Hispanic Task Force Latino Leadership Link Constituent Services Veterans Casework Flags Visiting Washington Service Academy Nominations Internships Page Program Grant Information New Jersey Links Photo Gallery En Español SEARCH: OFFICE LOCATIONS: 317 Senate Hart Office Building Washington, D.C. 20510 202.224.4744 202.228.2197 fax One Gateway Center, Suite 1100 Newark, New Jersey 07102 973.645.3030 973.645.0502 fax 208 White Horse Pike, Suite 18 Barrington, New Jersey 08007 856.757.5353 856.546.1526 fax	Newsroom Press Release of Senator Menendez CREDIT CARD REFORM:STRONGEST LEGISLATION YET TO REIN IN OUT-OF-CONTROL COSTS ANNOUNCED BY SENATOR MENENDEZ "Credit Card Reform Act" will put the brakes on wild interest rate hikes, changes in terms of agreements and extreme penalties, among other practices Wednesday, March 12, 2008 WASHINGTON – As an increasing number of Americans fall victim to out-of-control credit card costs and as the credit card market begins to resemble the subprime mortgage market from when the foreclosure crisis began, U.S. Senator Robert Menendez (D-NJ) today announced a sweeping plan to put an end to deceptive practices and irresponsible marketing. The Credit Card Reform Act goes beyond any other current legislative proposal in curtailing skyrocketing interest rates, curbing sudden changes in credit card agreements, and restricting issuance of cards to consumers who don’t have the ability to make payments, along with other deceptive practices undertaken by some credit card companies. The Credit Card Reform Act has the backing of 11 major consumer groups and unions, which have signed a letter of support to Senator Menendez (http://menendez.senate.gov/pdf/Credit%20Cards%20Menendez%20bill%20group%20letter-08%202.pdf). Joining him to announce the legislation today were representatives from the Consumer Federation of America, National Consumer Law Center, Consumer Action, Demos and NCLR. Also joining the announcement was East Rutherford, New Jersey resident Tarek Salib, whose personal story of a skyrocketing interest rate represents the hundreds of calls and letters that have flooded the Senator’s office from consumers struggling because of deceptive credit card practices. Senator Menendez said, “Too many families feel like their credit card contracts are booby-trapped. Credit card companies use a layer of fine print to conceal all kinds of trap doors: take one false step, then your credit rating plummets and your interest rate shoots through the roof. This bill that rerpresents the strongest, most comprehensive effort yet to end some of the most egregious practices of credit card issuers, while making sure that Americans young and old don’t so easily fall into financial traps. The big principle behind this bill is: companies should be clear about the rules up front, and shouldn’t change them in the middle of the game. “We cannot allow predatory and deceptive practices in the credit card industry to continue as we did in the subprime mortgage market. We cannot allow the credit card problem to become the next foreclosure crisis.” Travis B. Plunkett, Legislative Director, Consumer Federation of America said, “The Consumer Federation applauds Senator Menendez for introducing important legislation to stop credit card companies from using traps and tricks to unjustifiably increase fees and interest rates. As the economy teeters on the brink of recession and many debt-choked families find it harder to get by, it is high time that credit card companies use some responsibility in the way that they extend credit and price their product.” Lauren K. Saunders, Managing Attorney, National Consumer Law Center said, “American families struggling in today’s economy shouldn’t be slapped with huge, retroactive interest rate increases that bury them deeper in debt instead of helping them to manage their finances and keep their homes.  Credit card companies often increase rates on purchases already made for no apparent reason other than to make up for their loses in the mortgage market or to punish a consumer for minor slips such as paying late a couple of times.  That’s just not fair.” Linda Sherry, Director of National Priorities, Consumer Action said, “It's outrageous that companies claim they are using sound risk-based pricing principles when they hit consumers with exorbitant hair-trigger fees and enormous, unjustified rate hikes-at any time, for any reason. It makes no sense to increase the interest rates of customers who are having a hard time with their debt load while still allowing them to go over-limit. This system is broken and Consumer Action supports Sen. Menendez' efforts to fix it.” Caleb A. Gibson, Advocacy and Legislative Coordinator, Demos said, “Due to steady deregulation of the credit card industry, financial bargaining power has been heavily tilted toward the lender, making it harder for families to get out of debt and back on the path to savings.  Since 1989, credit card debt has shot up by 315 percent—to over $900 billion dollars—while savings rates have dipped to their lowest point since 1934.  It is time for Congress to stand up against usurious practices and give families a real chance to get ahead.” CREDIT CARD REFORM ACT SENATOR ROBERT MENENDEZ The Credit Card Reform Act would end some most egregious credit card practices that continue to lure Americans young and old into financial traps, such as excessive fees, retroactive rate increases, universal default, unilateral changes to credit card agreements, and deceptive credit card offers.  Creates Opt-In for Underage Consumers Requires credit card issuers to receive “opt in” approval from young consumers under age 21 before they mail credit card solicitations to these consumers.  Prohibits Unilateral Changes in Credit Card Agreements Prohibits credit card issuers from changing the terms of the credit card agreement. Prohibits Universal Default Prohibits credit card issuers from increasing a cardholder’s interest rate based on activity unrelated to their credit card agreement – for example, a late payment on another bill or a change in credit score.   Ban on Retroactive Rate Increases Prohibits interest rate increases on existing balances.  Limits Penalty Interest Rate Increases Limits penalty rate increases to a seven percentage point increase. Limits Late Payment Fees Requires issuers to state clearly on a billing statement the postmarked date and the amount of the late payment.  Does not allow late fees or other adverse consequences for payments made by the postmarked date.  Makes Fees Reasonably Related to Cost Requires that any penalty fee, such as a late payment fee or over-the-limit fee not exceed an amount that is reasonably related to the cost that the issuer incurs as a result of the consumer’s action.   Requires Verification of Ability to Pay Credit card issuers may not offer credit or raise credit limits to consumers unless they determine that the consumer will be able to make the scheduled payments under the terms of the agreement based on their current income, obligations, and employment status.  The Federal Reserve would provide the appropriate formula for determining ability to pay. Ban on Deceptive Credit Card Offers Stops bait and switch tactics by requiring “pre-approved” offers to be a true, firm offer containing the material terms such as interest rate, fees, and amount of credit; requires such offers to be honored by the issuer. Bill is endorsed by: Center for Responsible Lending, National Consumer Law Center, Consumer Action, Consumer Federation of America, National Council of La Raza, Consumers Union, U.S. Public Interest Research Group, Demos,  Service Employees International Union, and National Association of Consumer Advocates.                                                       ###
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GM: THE CASE AGAINST A BAILOUT THAT IS SUPPORTED BY LOGIC AND BY THIS COMMENTATOR

 

 

 

GM: The Case Against a Bailout

Jack and Suzy Welch say that bankruptcy reorganization, with the U.S. as financier, would open the doors to meaningful structural change

By Jack and Suzy Welch

Should the government bail out the U.S. auto industry to keep the players from going into bankruptcy?—Bill VanderMolen, Pittsfield Township, Mich.

How about this instead: The boards of Chrysler and General Motors (GM) put their companies into bankruptcy with the clear intent of reorganization and merger. As radical as that sounds, it's the best road we can see to a viable future for the industry.

And yes, the U.S. car industry does belong in the future. Free-market proponents have a point about the industry's "natural demise." Despite huge progress in American quality and design, well-run German, Japanese, and Korean companies have taken about half the U.S. market, and the competition—which will include China and India—is only getting tougher. But like many others, we believe that for the sake of jobs, national defense, and self-respect, America needs to keep its "true" domestic auto industry alive.

A government handout, however, isn't the way to make that happen. Washington would impose conditions and promise strict oversight, but it simply can't push through the kind of transformative change the industry needs. There would be too much political opposition, and regardless, the bailout sums being bandied about—$25 billion of taxpayer dollars, for starters—would only keep the Big Three heaving along, basically as they are. It's a life-support solution, not a cure.

Time for a Bold Move

That's why the boards of the automakers should take the courageous step of putting their companies into bankruptcy. Some creditors might make the case for liquidation, but given the diminished worth of the automakers' assets, that's an unattractive scenario. Instead, creditors would most likely opt for the government stepping in as the debtor-in-possession financier supporting the reorganization.

Talk about a fresh start. For more than a decade, U.S. carmakers have chipped away incrementally at massive legacy costs. But reorganization would open the doors to meaningful structural change through the renegotiation of contracts with creditors, dealers, and unions. And it would offer better odds of paying back taxpayers.

Once in Chapter 11, a merger would further galvanize real change. Three companies are too cumbersome to unite, and Ford (F) has a two-tiered, family-owned structure, so we'll leave them out of this for now and propose GM and Chrysler join forces. Such a merger could create $15 billion in synergies from reduced capacity and overhead, money that could lower production costs and boost R&D spending. Granted, GM and Chrysler could lose share during the transition, but a merged entity would still end up with more than a quarter of the U.S. market.

Worth the Long, Bumpy Ride

We don't want to make this sound easy. Mergers are challenging under any circumstances, and a merger of two companies in bankruptcy would be at the outer limits of difficulty, requiring the commitment of constituencies steeped in old, adversarial ways. And there will be real pain before a turnaround begins. Shareholders will see their investment evaporate. Thousands of jobs will be lost. Many employee benefits will shrink. And banks will see much of their debt converted to equity.

We also realize there are dozens of reasons to shoot at such a drastic solution. Some argue that American consumers won't "invest" $30,000 or more by buying a car from a bankrupt company. But Americans regularly invest their most precious asset—their lives—in bankrupt airlines when they fly. That said, if the government wants to see Chrysler and GM emerge from bankruptcy sooner rather than later, it could show its long-term support, perhaps by backing new-car warranties.

Others will argue that the mechanics of two bankruptcies and a merger are impossible to execute, and still others will say too many contractual concessions have already been made. Leaders, too, may balk at championing painful change. That's a brutal task in normal times—and it will be Herculean in this highly politicized environment.

But for the U.S. industry to get from here to there—"there" being a globally competitive future—it has to get off the beaten path of incrementalism. With reorganization and a merger, a long and bumpy trip awaits, but the destination should make it worth the ride.

 

DAN RATHER, THE GREAT JOURNALIST, WILL BE VICTORIOUS IN HIS LAWSUIT V. CBS AND WILL PUT A NEW NAIL IN BUSH'S COFFIN.

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November 17, 2008

Rather’s Lawsuit Shows Role of G.O.P. in Inquiry

By JACQUES STEINBERG

When Dan Rather filed suit against CBS 14 months ago — claiming, among other things, that his former employer had commissioned a politically biased investigation into his work on a “60 Minutes” segment about President Bush’s National Guard service — the network predicted the quick and favorable dismissal of the case, which it derided as “old news.”

So far, Mr. Rather has spent more than $2 million of his own money on the suit. And according to documents filed recently in court, he may be getting something for his money.

Using tools unavailable to him as a reporter — including the power of subpoena and the threat of punishment against witnesses who lie under oath — he has unearthed evidence that would seem to support his assertion that CBS intended its investigation, at least in part, to quell Republican criticism of the network.

Among the materials that money has shaken free for Mr. Rather are internal CBS memorandums turned over to his lawyers, showing that network executives used Republican operatives to vet the names of potential members of a panel that had been billed as independent and charged with investigating the “60 Minutes” segment.

Mr. Rather attracted the ire of Republican bloggers and talk radio in particular after the segment, which was broadcast on a weekday edition of “60 Minutes” in September 2004. It purported to have unearthed evidence about favorable treatment extended to President Bush during his Vietnam-era service in the Texas Air National Guard.

The network eventually responded to its critics by saying it could no longer vouch for the authenticity of the documents on which the report had been based. The network also commissioned an investigation led by Dick Thornburgh, a prominent Republican and former United States attorney general, and Louis D. Boccardi, a former chief executive of The Associated Press, not so much to verify the documents, but to determine how the segment got on the air.

In its final report, which was issued in January 2005, the panel cited a breakdown in standards by CBS in rushing the Bush segment onto the air but found no evidence of liberal bias in CBS’s preparation of the segment.

By the time the panel’s report was issued, Mr. Rather had already announced that, under pressure, he would step down as anchor of “CBS Evening News.” But he did not leave the network until more than a year later.

In September 2007, he filed the $70 million lawsuit charging that CBS had violated his contract and that the investigation was compromised. A New York State Supreme Court judge has since jettisoned parts of the suit, including Mr. Rather’s contention that CBS had engaged in fraud.

But the judge has permitted Mr. Rather to go forward with the core of his case, including his argument that CBS had limited his work as a correspondent after he left the anchor desk and, in the process, damaged his reputation. The case is on track to go to trial soon, possibly early in the new year.

Those who have worked on the case with Mr. Rather, 77, say he has approached it with the zeal of a correspondent trying to report out a “60 Minutes” segment about himself, burying himself in deposition transcripts late into the night and providing his lawyers with road maps of leads he thinks they should pursue. He rarely misses a court hearing on the case.

“I want to go the distance,” Mr. Rather said recently over a lunch of chili and cornbread at a barbecue restaurant. “Like any good reporter, I want to get as many as facts as possible; I want to get to the bottom of the story.”

Some of the documents unearthed by his investigation include notes taken at the time by Linda Mason, a vice president of CBS News. According to her notes, one potential panel member, Warren Rudman, a former Republican senator from New Hampshire, was deemed a less-than-ideal candidate over fears by some that he would not “mollify the right.”

Meanwhile, Mr. Thornburgh, who served as attorney general for both Ronald Reagan and George H. W. Bush, was named a panelist by CBS, but only after a CBS lobbyist “did some other testing,” in which she was told, according to Ms. Mason’s notes, “T comes back with high marks from G.O.P.”

Another memorandum turned over to Mr. Rather’s lawyers by CBS was a long typed list of conservative commentators apparently receiving some preliminary consideration as panel members, including Rush Limbaugh, Matt Drudge, Ann Coulter and Pat Buchanan. At the bottom of that list, someone had scribbled “Roger Ailes,” the founder of Fox News.

Asked about the assembly of the panel in a sworn deposition, Andrew Heyward, the former president of CBS News, acknowledged that he had wanted at least one member to sit well with conservatives: “CBS News, fairly or unfairly, had a reputation for liberal bias,” and “the harshest scrutiny was obviously going to come from the right.”

Other documents, meanwhile, suggest that Ms. Mason, who reported to Mr. Heyward, was getting updates from panel investigators on some of their findings, at a point when CBS News was telling outsiders that the network was staying out of the investigation.

Jim Quinn, a lawyer at Weil, Gotshal & Manges who is representing CBS, said in an interview that whatever Mr. Rather had learned in the discovery process would not help his case. He said it was the network that had gained the most ground, especially in persuading the judge to dismiss five of the seven original claims by Mr. Rather, as well any claims against individual CBS executives. CBS is believed to be spending about as much on its defense as Mr. Rather is spending.

Mr. Quinn also said CBS would consider asking for a summary dismissal of the case, once the process of discovery had concluded. “Either on summary judgment or at trial, we feel very comfortable we’ll succeed,” he said. “We feel the case is meritless.”

Still, Chaim B. Book, a Manhattan employment lawyer who is not connected to the case, said that Mr. Rather and his team had already reached something of a milestone.

“Getting through discovery and getting a case significantly closer to trial, in and of itself, is an achievement,” Mr. Book said. “Discovery, besides being expensive and time-consuming, can lead to embarrassing disclosures.”

One of Mr. Rather’s initial goals was to compel depositions of many of his former bosses and colleagues under oath. Thus far, in addition to Mr. Heyward and Ms. Mason, his lawyers have questioned Leslie Moonves, the chief executive of CBS; Gil Schwartz, executive vice president of communications for CBS; Sandra Genelius, a former CBS News spokeswoman; and Michael J. Missal, who helped oversee the panel report on behalf of Mr. Thornburgh.

Each could conceivably be called to testify in open court, as could Sumner M. Redstone, executive chairman of CBS. (Mr. Rather’s lawyers have expressed interest in deposing Mr. Redstone, a request the judge, Ira Gammerman, has neither granted nor ruled out.)

The day after Election Day, the two sides squared off in Judge Gammerman’s courtroom in State Supreme Court in Manhattan over a request by Mr. Rather’s lawyers, led by Martin R. Gold of Sonnenschein Nath & Rosenthal, to gain access to several thousand documents that were used by the investigative panel to compile its report, including notes from interviews and e-mail messages from top executives.

Lawyers representing the panel have resisted Mr. Rather’s request for documents, citing attorney-client privilege. At the same time, CBS suggested in its latest filing that Mr. Rather was engaging “in nothing more than an intrusive and expensive fishing expedition.”

In court in July, Judge Gammerman spoke openly about the extraordinary attention that a Rather-versus-CBS trial would attract and reassured the lawyers that, having previously tried cases involving Woody Allen and Rosie O’Donnell, he could promise both sides a fair hearing.

“And I tried a case involving Joan Collins,” he said, adding that, despite intense publicity, “the jury was able to reach what was a reasonable decision..

LERACH GETS LERACHED--ITS ABOUT TIME

September 18, 2007

Guilty Plea Is Expected in Kickbacks at Law Firm

By BARRY MEIER

The securities lawyer William S. Lerach is expected to plead guilty today to a criminal conspiracy charge in connection with a class-action scheme involving his former firm, now known as Milberg Weiss, several people with knowledge of the plea agreement said yesterday.

Mr. Lerach, who has long been under investigation by federal authorities, is expected to enter his plea in United States District Court in Los Angeles. Under the plea deal, he faces one to two years in prison, and will also pay a significant fine, the people said. All spoke on the condition that they not be identified.

Mr. Lerach’s plea comes amid a seven-year investigation into whether he and other senior lawyers at Milberg Weiss conspired to pay kickbacks to individuals who agreed to serve as named plaintiffs in class-action lawsuits.

One person with knowledge of the plea deal said that Mr. Lerach would plead guilty to being aware of one such incident.

Another former senior partner in the firm, David J. Bershad, has already pleaded guilty to a charge related to the kickback scheme, and another named partner at the firm, Melvyn I. Weiss, has also been a subject of the investigation, but has not been charged.

For years, Mr. Lerach and his former firm aggressively filed class-action lawsuits, particularly in the securities area. Being the first to organize and file suits also put them in position to get a sizable share of any legal fees produced by the cases.

Mr. Lerach, who did not return a telephone call to his office, long championed the class-action system as an equalizer for small investors and other plaintiffs seeking redress of corporate wrongdoing. John W. Keker, Mr. Lerach’s lawyer, did not return a phone call, and the United States attorney’s office declined to comment.

Under the plea agreement, Mr. Lerach is not required to cooperate with the government in any further inquiries into the matter, the people knowledgeable about it said. The agreement terms, they said, also call for the law firm from which Mr. Lerach recently resigned, Coughlin Stoia Geller Rudman & Robbins, to face no liability or risk.

If a judge declines to accept the terms of the plea agreement, Mr. Lerach is free to withdraw his guilty plea.

Last month, Mr. Lerach resigned from the firm he founded three years ago to fight the charges. Soon after, his name was excluded from the firm’s name. Though they have been under investigation, Mr. Lerach and Mr. Weiss have not been formally charged.

A 20-count indictment against Milberg Weiss handed up in May 2006, stemming from a long federal investigation, sketched out a conspiracy stretching from the 1970s to 2005. Prosecutors say that Milberg Weiss paid $11 million in kickbacks to plaintiffs in more than 150 cases, earning the firm more than $216 million.

Several plaintiffs have stepped forward and said that they received payments from Milberg Weiss in exchange for their testimony.

In July, Mr. Bershad pleaded guilty to one count of conspiracy and agreed to cooperate with prosecutors. His plea was seen as crucial, given his knowledge of the firm’s finances.

As part of his plea agreement, Mr. Bershad outlined a decades-long scheme in which the firm recruited plaintiffs, secretly paying them a portion of its legal fees. The plan, according to Mr. Bershad, allowed Milberg Weiss to mount more lawsuits at a faster pace than competitors, making the firm counsel for the lead plaintiff in many cases and earning it a larger share of the fees.

Among Mr. Bershad’s claims is that a group of partners personally contributed to a special fund that he used to dole out payments to plaintiffs. The partners were later awarded bonuses equaling their payments to the fund.

Two partners who contributed to the fund, named in Mr. Bershad’s statement as simply “Partner A” and “Partner B,” are widely believed to be Mr. Weiss and Mr. Lerach.

Comment by Editor

There are a few more lawyers out there who deserve to go to the Federal Farm House. It is just the beginning.

Martin S. Friedlander, Esq.

ARITRATION HAS BEEN SOLD AS THE SAVIOUR OF THE LEGAL SYSTEM BY A DUPLICIOUS SUPREME COURT

     ARBITRATION IS NOT ALL THAT IT IS CRACKED UP TO BE. THE SUPREME COURTS OF THE UNITED STATES AND OUR NATION STATES HAVE SOLD ARBITRATION AS THE MEANS BY WHICH WE MAY OBTAIN QUICK, HONEST, JUSTICE. UNFORTUNATELY YOU GET NEITHER. GET RID OF JURY TRIALS, THE BANE OF MODERN SOCIETY.

     I HAVE BEEN ON RECORD FOR THE LAST 40 YEARS THAT THE SUPREME COURT DUPED US ALL. JUSTICE IS INJUSTICE, HONEST IS DISHONEST, QUICK IS LONG, AND GUESS WHAT-- THERE IS NO RIGHT TO APPEAL IF THE ARBITRATORS MAKE A MISTAKE IN LAW OR FACT. THEN YOU HAVE "RETIRED JUDGES" AS ARBITRATORS, EARNING, IF YOU CALL IT THAT, UP TO $500 PER HOUR. THEY SHOULD HAVE BE SENT OUT TO PASTURE WITH THE REST OF THE OLD, USED UP, FEEBLE BULLS. I AM LOOKING FOR FRIENDS.

     FINALLY, THE NEW YORK TIMES COURAGEOUSLY TELLS US HOW IT IS. IT WILL TAKE AN ACT OF CONGRESS TO CHANGE IT. AFTER ALL THE SUPREME COURT IS SUPREME. REMEMBER BUSH V. GORE ? ALL YOU GET FROM OLD BULLS IS BULLSHIT. READ THIS.......

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August 12, 2007

When Arbitrators Are Their Own Judges

By GRETCHEN MORGENSON

WHEN Harley C. McDonald, a retired lawyer for a Nebraska construction company, lost 80 percent of his $60 million stock market nest egg, he lost faith in the brokerage industry.

And now, after having filed a complaint contending that his broker had neglected his investments, he’s losing faith in the arbitration system that is supposed to address grievances.

Whether Mr. McDonald’s broker is at fault is undetermined; an arbitration panel will decide that. But what is certain — at least in the eyes of Mr. McDonald, his wife, his lawyer and investor advocates — is that the arbitration process is flawed.

“There’s no justice here,” said Mr. McDonald’s wife, Carol. “You don’t have any way to get due process.”

The source of Mrs. McDonald’s ire is the process used to determine the members of the arbitration panel. Given that there are just three members and that they act as judge and jury, each individual holds great sway.

The problem is that the potential arbitrators are trusted to volunteer their own possible conflicts of interest. But, as Mr. and Mrs. McDonald found, that is not always the case.

For investor advocates, the potential for conflicts among arbitrators ranks high on the list of arbitration problems. They say that requiring arbitrators to volunteer their conflicts with little policing of those disclosures is an honor system that can lead to abuse.

In the McDonalds’ case, a potential conflict of interest was not disclosed by the nominated arbitrator. Instead, it came out after the McDonalds’ lawyer, Lawrence L. Klayman of Klayman & Toskes in Boca Raton, Fla., challenged the arbitrator.

Securities arbitration panels are supposed to offer a way to resolve disputes fairly, faster and more cheaply than the overtaxed court system. A three-member panel hears the case; one person represents the brokerage industry, and the other two are public representatives.

Arbitration became practically ubiquitous in 1987, after the Supreme Court ruled in a case known as Shearson/American Express v. McMahon that account forms signed by customers requiring that disputes be resolved in arbitration were enforceable contracts. Wall Street firms soon required clients to sign such documents.

The process is overseen by the Financial Industry Regulatory Authority, a nongovernment agency formed through the combination of the former arbitration units of the NASD and the New York Stock Exchange. Previously, those units operated separately.

Last year, according to the authority, 7,212 cases were decided in arbitration, down from a peak in 2004 of 9,209. Forty-two percent of cases in 2006 resulted in monetary awards for the customer. Five years earlier, that figure was 54 percent.

The stakes in the arbitration were high for the McDonalds, as they often are for investors who bring securities claims against their brokers. Filed in September 2005, the McDonalds’ claim contended that their broker failed to diversify their $60 million portfolio, which held just two volatile telecommunications companies. The couple lost $48.6 million as a result, they contend.

The shares were a part of Mr. McDonald’s earnings over almost 30 years at Peter Kiewit Sons, a privately held construction services company in Omaha. As general counsel for the company’s construction division, Mr. McDonald earned compensation that included shares in the company. When he retired in 1993, those shares were worth about $6 million. Five years later, some of that stake had become stock of public companies, Level 3 Communications and WorldCom.

MR. McDONALD explained that both he and his wife were unsophisticated investors who had never had a brokerage account.

When he retired, Mr. McDonald put his shares in a safe deposit box at FirsTier Bank of Omaha. After FirsTier was acquired by U.S. Bancorp in 1999, the couple opened a brokerage account at the firm. Their broker soon moved to Piper Jaffray, a regional firm based in Minneapolis, taking the McDonalds’ account with him.

“Both Carol and I were called in, and we said we don’t know anything about the stock market,” Mr. McDonald, who is 66, said. “They assured us they had experts in the two stocks we held, and they would be able to monitor them and advise us what to do.”

He said the brokers gave them little guidance, offering no advice except to send research reports that recommended the purchase of Level 3 shares. By June 2000, the couple’s holdings in the two stocks were valued at $66 million. They owned no other stocks.

The couple sold some of their shares — worth about $5 million — between 1999 and 2001. But by the end of 2001 their portfolio, ravaged by the downturn in technology and telecommunications stocks, had dwindled to $7.3 million. In the summer of 2002, WorldCom declared bankruptcy.

Research analysts at Piper Jaffray, like many brokerage firms during this period, had maintained bullish opinions on telecommunications and technology stocks, including Level 3, well after the tech stock bubble burst. For example, according to the complaint, the firm did not downgrade Level 3 from “strong buy” until April 19, 2001, when it moved it down a notch, to “buy.” But that was after the shares had fallen to $13.06 from a peak of almost $50 that previous January.

The couple sold another $7 million in stock between 2001 and 2004, but in September 2005 they filed a complaint against their broker. Piper Jaffray denied the McDonalds’ allegations, arguing that a broker does not have a duty to provide advice to customers about stockholdings that he did not personally recommend. The firm’s lawyers also moved to dismiss the case on the grounds that the McDonalds should have filed it a year earlier.

But the case progressed, and an arbitration panel was convened in January 2006. Because of scheduling conflicts on both sides, the hearing was not scheduled to begin until last month. When arbitration panels are convened, lawyers representing both parties can choose from a list of potential panelists. There are 6,773 potential panelists in the pool overseen by the financial regulatory authority.

According to the arbitrators’ manual, panelists are asked to disclose any relationships that involve family members, current or former employers, partners or business associates. In a so-called arbitrator disclosure report, potential panelists list their background, education and training and other information, like lawsuits filed against them. Armed with this information, lawyers for both plaintiff and defendant can assess arbitrators’ fitness for a case.

During the arbitrator selection process, lawyers for both sides are allowed to strike people from the list of candidates. If all are struck, the lawyers must accept the regulatory authority’s choices for the panel. At that point, lawyers for both sides can challenge a panelist only for possible biases, misclassification, conflicts or undisclosed material information.

The chairman appointed to the McDonald’s panel was Mark F. Marshall, a lawyer at Davenport, Evans, Hurwitz & Smith a 35-lawyer firm in Sioux Falls, S.D. As an arbitrator, he represented the public, not the brokerage industry.

Last month, just four days before the first hearing was scheduled, the McDonalds’ lawyer, Mr. Klayman, learned that Mr. Marshall’s firm represented Piper Jaffray in a 1999 lawsuit, and that in 2002 and 2006, his firm provided legal services to Piper relating to public offerings it helped underwrite. In a letter to regulators on July 12, Mr. Klayman challenged Mr. Marshall’s selection as an arbitrator.

The next day, according to documents filed with the regulatory authority, Piper Jaffray’s counsel reported that it had uncovered further ties between it and Davenport Evans, Mr. Marshall’s law firm: Davenport had represented the brokerage firm in 2003 in a case involving three Piper Jaffray brokers. Mr. Marshall did not represent Piper, but Mr. Klayman challenged his selection again, and on July 16, Mr. Marshall was removed from the panel by the authority.

A new chairman will be chosen in the coming weeks. The hearing has not yet been rescheduled.

Mr. McDonald said he was surprised to learn that his panel’s chairman could have decided a significant case involving a brokerage firm that had ties to his employer. “I can’t imagine an attorney with a law firm making a decision adverse to one of the firm’s major clients,” he said. Mr. Marshall did not return two phone calls seeking comment.

Mr. Klayman said that he thought it should not be up to the lawyers representing brokerage firm customers to track down undisclosed conflicts among arbitrators. Lawyers for brokerage firms in these cases should be required, he said, to investigate potential conflicts among the arbitrators selected for a panel.

“Our goal is to find somebody who is unbiased and who has disclosed all their conflicts,” Mr. Klayman said. “Investors, I believe, are entitled to a fair shot at justice.”

He suggests that the rules be modified to require defense counsel to investigate ties among its firm, its client and arbitrators assigned to a case and report them to the regulators.

“The system needs to be overhauled,” he said. “Now we have evidence that possibly mandates change.”

OFFICIALS at the Financial Industry Regulatory Authority said the arbitrator selection system has extensive checks and balances that make it work well for both parties in any dispute. Linda D. Fienberg, president of the authority’s dispute resolution program, said in a statement that new applicants undergo extensive background checks by an outside vendor and that applicants who intentionally misstate facts or fail to disclose material information are disqualified. Each time they are appointed to a case, she said, arbitrators must sign an oath attesting to the truthfulness and completeness of their disclosures.

“Even in the rare cases when an arbitrator with an apparent conflict ends up on an arbitrator list,” Ms. Fienberg said, “the error is discovered and Finra moves quickly to rectify the problem — by removing the arbitrator and providing new arbitrator choices to the parties.”

At least one firm already does appear to scrutinize arbitrators chosen to oversee cases in which it is involved. Mr. Klayman noted that in a recent case involving Wells Fargo Investments, the firm’s lawyers notified Klayman & Toskes before arbitrator selection that one potential panelist should not be a candidate in the case as she is a Wells Fargo employee. The firm also said the arbitrator should not be listed as representing the public because she works for Wells Fargo, a fact that was not mentioned on her arbitrator disclosure report.

“Wells Fargo’s outside counsel should be commended for their honesty and forthrightness,” Mr. Klayman said.

Questions about how closely regulators monitor arbitrator disclosure forms arose in another case involving Wells Fargo. One of the 24 arbitrator candidates on the list prepared by Finra had disclosed that he was a senior regional manager for Wells Fargo Private Client Services in Omaha. Indeed, he had overseen the branch office that was at issue.

An official from the regulatory authority said that Finra’s inclusion of that manager as a potential panelist was a clerical error that was corrected without doing any harm to the parties.

Cynthia J. Swan, senior counsel at Wells Fargo & Company, said: “According to the rules, the NASD, now Finra, employs a screening mechanism for its arbitrator lists but, in our experience, it sometimes misses people associated with either the claimant or the respondent.” But they don’t necessarily serve on panels, she said, because the lawyers for either party identify the conflicts or the arbitrators themselves point them out.

Steven D. Toskes, a partner at Klayman & Toskes, said: “Everybody should want the process to be fair to everybody. That’s all we ask, and that’s all the McDonalds are asking.”

Editor and commentator.

Martin S. Friedlander, Esq.

PUNITIVE DAMAGES AT RISK AGAIN

The Supreme Court’s Crusade: Fairness for the Powerful

 

By ADAM COHEN

 

 

 

"When Jesse Williams died of lung cancer, his widow sued Philip Morris, claiming it misled him about the danger of smoking. A jury agreed, awarding her $79.5 million in punitive damages. The Oregon Supreme Court affirmed the award, calling Philip Morris’s decades of deception “extraordinarily reprehensible.”

The United States Supreme Court is hearing arguments in the case next week, and the broader business community has joined Philip Morris in asking the court to sharply reduce the damages. They are relying on a controversial line of recent cases in which the court struck down punitive damages awards that it deemed “excessive.”

The Philip Morris case will tell us a lot about the John Roberts court, which may be the most pro-business court in decades. It is a test of whether the court will abandon its conservative principles to be activist and “rights-making” when the party that needs help is a large corporation. It will also reveal whether the court will continue on its current disturbing path of giving corporations more protection from excessive punishment than it gives to people.

The court began its punitive damages crusade in 1996, in the case of a man who sued BMW for failing to tell him that the new car he bought had been damaged and repainted. The man won $4,000 in compensatory damages and $2 million in punitive damages. The Supreme Court set aside the punitive damages award as so “grossly excessive” that it violated due process, but the court declined to lay out any clear standards for when an award was too high.

In 2003, in a fraud case against State Farm Insurance by a policyholder, the court struck down $145 million in punitive damages. It held that the award was excessive since compensatory damages were only $1 million. That 145-to-1 ratio was unacceptable. Due process generally required, the court held, a “single-digit ratio” between punitive and compensatory damages.

These rulings are remarkably “activist” by all the traditional measures. They take a vaguely worded constitutional guarantee — that no one shall be deprived of property without “due process of law” — and translate it into a right that is not at all apparent from the words’ plain meaning. They attempt to turn the guarantee into a precise mathematical formula. And they substitute the judges’ worldview for that of elected officials. If Oregonians believe punitive damages are too high, their legislature can impose a legal cap.

These activist decisions, which give corporations valuable constitutional privileges, relied on the votes of conservative justices, who are supposedly skeptical of “judge-made” rights. Justices Sandra Day O’Connor and Anthony Kennedy provided key votes for BMW. Justice Kennedy wrote the State Farm “single-digit ratio” opinion, and Justice O’Connor and former Chief Justice William Rehnquist joined it.

The contrast with the court’s decisions on punishment of human wrongdoers is stark. In 2003, the court considered the sad case of Leandro Andrade, a father of three who was given a minimum of 50 years in prison under California’s tough “three strikes” sentencing law, for shoplifting $153.53 worth of videotapes from Kmart. He argued that his prison term violated the Eighth Amendment. The Supreme Court — in a majority joined by Justices O’Connor and Kennedy and Chief Justice Rehnquist — could find nothing excessive in the punishment.

Based on the Constitution’s words, Mr. Andrade certainly had a stronger case than BMW or State Farm. The Eighth Amendment expressly bars “cruel and unusual punishments,” which might reasonably be interpreted to cover imprisoning a man from age 37 to 87 for stealing $153.53. The companies claimed only that the punitive damages awards violated their “due process” rights, a far greater textual stretch.

On the issue of what is “excessive” punishment, Mr. Andrade’s claim is also stronger. It is hard to see how it is excessive to make Philip Morris, whose market capitalization is $166 billion, pay a mere $79.5 million for “extraordinarily reprehensive” and lethal conduct, but not excessive to make Mr. Andrade spend what is likely to be the entire second half of his life in prison for a petty theft.

The question of whether there should be constitutional limits on punitive damages has proved difficult to resolve, and it has caused divisions in both the court’s liberal and conservative blocs. (It is one of the very few issues in which John Paul Stevens votes with corporations and Antonin Scalia votes against them.) Whatever the court decides, it should develop a constitutional theory of excessive punishment that covers human and corporate wrongdoers equally, as the Duke Law School Professor Erwin Chemerinsky and others have urged.

The current doctrines make no sense, least of all by the standards of conservative constitutional interpretation. Conservatives like to talk about the “framers’ intent.” The framers were deeply concerned about excessive punishment, and set forth their views on it in the Eighth Amendment. They would be perplexed that the high court they created believes their Constitution permits a father to remain in jail for 50 years for petty theft, but does not tolerate taking a fraction of the wealth from a company that kills people."

This writer's conclusion. Without punitive damages as the lever, major corporations such as insurance companies will breach their contracts with impunity.

Martin S. Friedlander, Esq.

MAD GEORGE BUSH'S WOLVES PARROTING THE ABOLISHMENT ON THE FIRST AMENDMENT.

In the wake of a June 23 New York Times article describing a secret Bush administration program designed to monitor international financial transactions, numerous conservative media figures have lashed out at the newspaper and its executive editor, Bill Keller, arguing that the publication of the article was a treasonous act and suggesting that the newspaper is "sid[ing]with al Qaeda," "aiding and abetting the terrorist movement," and "prepared to cripple America in order to go after the president."

Conservatives have directed their vitriol almost entirely at The New York Times, despite the fact that the Los Angeles Times and The Wall Street Journal (subscription required) also posted articles on the subject on their web pages on the same day -- June 22 -- as the New York Times, and both published articles on it in their June 23 print editions.

The question of whether the June 23 article -- as well as the Times' prior disclosure of the administration's warrantless domestic surveillance program -- represented acts of treason or qualified as violations of the Espionage Act has been the topic of numerous discussions on the cable news networks in recent days. These debates have taken place under banners such as "Did Media Aid, Abet Enemy?" and "Are 'Scoops' More Important To Media Than Stopping Terror?" On the June 26 edition of MSNBC's Scarborough Country, host Joe Scarborough asked his viewers to take part in an online poll asking, "Should The New York Times be prosecuted for publishing stories revealing secret information about the war on terror? Are they guilty of treason?" Following are examples of those conservative media figures who asserted that Times editors and reporters should be prosecuted for revealing the program's existence:

• Melanie Morgan, radio talk show host: "I see it as treason, plain and simple, and my advice to Attorney General Alberto Gonzales at this point in time is chop-chop, hurry up, let's get these prosecutors fired up and get the subpoenas served, get the indictments going, and get these guys [Keller and The New York Times] behind jail." [MSNBC's Hardball, 6/26/06]
• Ann Coulter, right-wing pundit: [R]evealing a classified program, which no one thinks violates any laws ... that has led to the capture of various terrorists, and to various terrorist money-laundering operations. If that is not treason, then we're not prosecuting anymore." [MSNBC's Scarborough Country, 6/26/06]
• William Kristol, editor, The Weekly Standard: "I think the Justice Department has an obligation to consider prosecution. ... This isn't a partisan thing of the Bush administration. This is a U.S. government secret program in a time of war, willfully exposed for no good reason by The New York Times." [Fox Broadcasting Co.'s Fox News Sunday, 6/25/06]

Many other conservative media figures took to the airwaves to simply bash the Times for purportedly aiding the terrorists and putting American citizens in greater danger:

• L. Brent Bozell III, president, Media Research Center: "The New York Times needs to be reminded ... that on September 11, 2001, something really awful happened right down the street from the newspaper. ... And the last thing we need is The New York Times aiding and abetting the terrorist movement. And that's exactly what they're doing by divulging these secrets." [Fox News' Fox & Friends, 6/27/06]

• Rush Limbaugh, syndicated radio host: "I think 80 percent of their subscribers have to be jihadists. If you look at The New York Times and the kind of stories they're leaking and running and the information they're getting, it's clear that they're trying to help the terrorists. They're trying to help the jihadists." Limbaugh added that he thought that "80 percent of their subscribers have to be jihadists." According to the latest circulation statistics, the Times sells more than 690,000 copies of its daily edition, and more than 1.1 million subscribers to its Sunday edition, via home delivery. [The Rush Limbaugh Show, 6/27/06]

• Andrew McCarthy, senior fellow at the Foundation for the Defense of Democracies: "Yet again, The New York Times was presented with a simple choice: help protect American national security or help al Qaeda. Yet again, it sided with al Qaeda." ["The Media's War Against the War Continues," National Review Online, 6/23/06]

• Newt Gingrich, former House speaker (R-GA) and Fox News political analyst: "You would think that The New York Times, located on the same island where the World Trade Center once existed, would have some residual memory of 9-11. You'd think that The New York Times ... would have some sense of survival. ... [M]y sense is that they hate George W. Bush so much that they would be prepared to cripple America in order to go after the president." [Fox News' Hannity & Colmes, 6/26/06]
• Michael Barone, U.S. News & World Report senior writer: "Why do they hate us? Why does the Times print stories that put America more at risk of attack? ... We have a press that is at war with an administration, while our country is at war against merciless enemies. The Times is acting like an adolescent kicking the shins of its parents, hoping to make them hurt while confident of remaining safe under their roof. But how safe will we remain when our protection depends on the Times?" ["Why do "they" hate us?" syndicated column, 6/26/06]
• Morton M. Kondracke, Roll Call executive editor: "And for God's sake, The New York Times ought to look down the street and remember where 9-11 happened. It really happened in New York City, you know? And they act as though it never happened." [Fox News' The Beltway Boys, 6/24/06]
• Heather McDonald, contributing editor to the Manhattan Institute's City Journal: "By now it's undeniable: The New York Times is a national security threat. So drunk is it on its own power and so antagonistic to the Bush administration that it will expose every classified antiterror program it finds out about, no matter how legal the program, how carefully crafted to safeguard civil liberties, or how vital to protecting American lives." ["National Security Be Damned," The Weekly Standard, July 3 issue]

From the June 24 edition of Fox News' The Beltway Boys:

KONDRACKE: And for God's sake, The New York Times ought to look down the street and remember where 9-11 happened. It really happened in New York City, you know? And they act as though it never happened.

From the June 25 edition of Fox Broadcasting Co.'s Fox News Sunday:

CHRIS WALLACE (host): Bill, your latest issue of The Weekly Standard raises this question: Should The New York Times be prosecuted? Should it?

KRISTOL: I think the attorney general has an absolute obligation to consider prosecution here. This is not a Bush -- I love the way Bill Keller calls it the Bush administration program. This is a program of the United States government. There's no charge that it's unconstitutional, illegal. There aren't whistleblowers coming forward saying data's being misused. This seems to have been a total sort of vanilla secret program in an ongoing war on terror. This is not the Pentagon Papers, a historical document that was classified where you're probably not going to prosecute people because it's not revealing ongoing operations in a war that has stopped people from killing Americans. They absolutely -- I think the Justice Department has an obligation to consider prosecution, and I think Congress can weigh in here, too, because The New York Times' rhetorical defense is well, we're exposing the Bush administration.

[...]

KRISTOL: This isn't a partisan thing of the Bush administration. This is a U.S. government secret program in a time of war, willfully exposed for no good reason by The New York Times.

From the June 26 edition of Fox News' Hannity & Colmes:

GINGRICH: You would think that The New York Times, located on the same island where the World Trade Center once existed, would have some residual memory of 9-11. You'd think that The New York Times, in probably the richest -- one of two richest targets in the U.S., along with Washington, D.C. -- would have some sense of survival.

MIKE GALLAGHER (guest co-host): So don't they?

GINGRICH: Instead what you have is --

GALLAGHER: Don't they?

GINGRICH: I think that -- my sense is that they hate George W. Bush so much --

ALAN COLMES (co-host): We're going to pick it up in a moment --

GINGRICH: -- that they would be prepared to cripple America in order to go after the president.

GALLAGHER: Wow.

COLMES: -- like the evidence we've been damaged, if there is any, but we're gonna pick it up in just a moment.

From the June 26 edition of MSNBC's Hardball with Chris Matthews:

CHRIS MATTHEWS (host): Here to pick apart the politics of this story is former presidential candidate Al Sharpton and radio talk show host Melanie Morgan. Melanie, what's the issue here as you see it?

MORGAN: I see it as treason, plain and simple, and my advice to Attorney General Alberto Gonzales at this point in time is chop-chop, hurry up, let's get these prosecutors fired up and get the subpoenas served, get the indictments going, and get these guys behind jail.

MATTHEWS: What would be the crime? What's the crime?

MORGAN: Treason. You do not reveal secrets in a time of war. And for what purpose? Bill Keller made some sort of incomprehensible defense on his website of The New York Times' decision to unveil secrets, statewide secrets with this financial data plan. I do not understand what he's talking about. It's something about "Oh, well, the public has a right to know if there's a change of policy." What in the world does that mean? What I do know is that you cannot risk American lives who are fighting overseas at war in order to -- what? -- get a Pulitzer Prize?

[...]

MATTHEWS: Let me ask you, Melanie -- thanks for coming on, by the way -- but let me ask you, Melanie, do you really mean treason? You mean put them in jail for life?

MORGAN: Yes --

MATTHEWS: I don't know what treason carries as a sanction, but I assume it's -- the penalties are incredibly severe, 20 years perhaps. You are saying to put Bill Keller, the editor of The New York Times --

MORGAN: Yes. Yes.

MATTHEWS: -- and his associates in prison for 20 years?

MORGAN: Absolutely. I absolutely am advocating that. What has happened is shameful. If he was ultimately the one responsible for making the decision to publish --

MATTHEWS: Well, it's his call. What about the NSA [National Security Agency]? Would you do the same in the NSA [warrantless domestic wiretapping] case?

MORGAN: Yes, absolutely I would.

MATTHEWS: You would have put him in jail for 20 years for that?

MORGAN: Yes I would, yes, because when you break the law, you break the law, and the press, the media in this country has got to learn one thing, that they have to operate under the same laws and the same rules and regulations that all the rest of the American citizens do.

From the June 26 edition of MSNBC's Scarborough Country:

SCARBOROUGH: I've got a lot of questions to ask you, but I want to start with our poll question. I'm sure you'll have a quick response to this. Is The New York Times guilty of treason?

COULTER: Oh, the polls -- you don't have the answers yet? You're asking me?

SCARBOROUGH: I'm asking you. Do you think the -- were you voting in a poll tonight --

COULTER: Yes, they are.

SCARBOROUGH: Why?

COULTER: Yes, they've done far less than Ezra Pound or Tokyo Rose did, and they were prosecuted. Ezra Pound went to prison for treason for radio broadcasts not even in this country. He certainly wasn't revealing classified programs to the enemy. He was just giving broadcasts that encouraged the enemy, and he was prosecuted and tried for treason. Unless this country is going to say that, "Oh, well, since Jane Fonda sat on a Viet Cong tank, that's it." We don't prosecute for treason. It's going the way of, you know, antiquated torts like alienation of affection, and it's just something we have on the books but we never prosecute for.

Yes, yes, revealing a classified program, which no one thinks violates any laws, no abuse of power, it's a third-party administrator of these transactions, that has led to from suspected terrorists going and, you know, money laundering, that has led to the capture of various terrorists and to various terrorist money-laundering operations. If that is not treason, then we're not prosecuting anymore.

SCARBOROUGH: All right. Well, I'll tell you what? We'll put you down as a yes.

COULTER: Yes.

From the June 27 edition of The Rush Limbaugh Show:

LIMBAUGH: That could take me right to The New York Times. The New York Times, ladies and gentlemen, is doing everything -- it may as well be published. I think 80 percent of their subscribers have to be jihadists. If you look at The New York Times and the kind of stories they're leaking and running and the information they're getting, it's clear that they're trying to help the terrorists. They're trying to help the jihadists.

[...]

Well, if you want your sleeper cell to sleep safely -- if you want your safe house to be really, really safe, then I suggest you read The New York Times. In fact, I think The New York Times should start running ads and get some jihadists and get some terror members and have them say, [speaking with accent] "I saved my sleeper cell thanks to The New York Times."

From the June 27 edition of Fox News' Fox & Friends:

BOZELL: Again, The New York Times needs to be reminded -- I think they forgot that on September 11, 2001, something really awful happened right down the street from the newspaper. And since then, the United States has been engaged in a global war against these damn terrorists. And the last thing we need is The New York Times aiding and abetting the terrorist movement. And that's exactly what they're doing by divulging these secrets.

MAD KING GEORGE'S COVERUP OF WRONGDOING BY PHONY INVOCATION OF A NATIONAL SECRETS PRIVILEGE

Give judges a peek at secrets

Courts don't have to roll over for the executive branch's claims of secrecy.

By Louis Fisher
LOUIS FISHER is the author of the forthcoming "In the Name of National Security," which analyzes United States vs. Reynolds.

June 14, 2006

THE JUSTICE Department told a federal judge Monday that a challenge to the National Security Agency's controversial domestic eavesdropping program must be thrown out of court because the secrets involved are just too sensitive.

"The evidence we need to demonstrate … that it is lawful cannot be disclosed without that process itself causing grave harm to the United States' national security," said the government's lawyer, Anthony J. Coppolino.

This is not the first time the Justice Department has invoked what is known as the "state secrets privilege." It was used, for instance, to dismiss the case of an FBI whistle-blower, and again to derail the case of an African American CIA officer who charged discrimination in the agency. It was used in the case of Khaled Masri, the German citizen who alleges he was detained while on vacation and held for five months in Afghanistan, where he was shackled and beaten before being released as a case of mistaken identity.

Each time, the courts have agreed to dismiss the proceedings simply because the Justice Department says that trying the cases would reveal state secrets.

But that's not the way it has to be.

The fact is that the branch of government that runs the courtroom and decides questions concerning privilege and the introduction of evidence is the judiciary, not the executive branch. Judges have a constitutional duty to function as neutral referees to allow each side to present its case fairly. A court that automatically accepts the government's argument about state secrets, without ever looking at the documents in question, aligns the judiciary with the executive branch and eliminates any chance of a fair trial.

The "state secrets privilege" reached the Supreme Court in 1953 in United States vs. Reynolds, a case in which the widows of three civilians who died in the crash of a B-29 bomber sought damages. They asked the government to give them the accident report and the statements of three surviving crew members. Lower courts held that the government must surrender the secret documents to the trial court or lose the case. The judge would examine the documents in his chambers to determine if the government's demand for secrecy was valid.

Refusing to release the documents, the government lost at the district and appeals court levels. But when the case got to the Supreme Court, the justices reversed course and accepted the government's argument about state secrets — without ever looking at the documents. Even having the judge examine the evidence alone in his chambers could jeopardize national security, the majority ruled. When the documents were declassified in the 1990s, it became evident that the Supreme Court had been misled: The documents contained no state secrets.

In his authoritative 1940 treatise on evidence, John Henry Wigmore concluded that the executive branch is entitled to protect state secrets but that in cases in which classified information is at issue, it is up to the judge to decide whether such evidence qualifies as legitimately secret, and thus legally privileged. A court that "abdicates its inherent function of determining the facts upon which the admissibility of evidence depends will furnish to bureaucratic officials too ample opportunities for abusing the privilege," Wigmore warned.

I believe that Wigmore was right and that the Supreme Court decided the Reynolds case wrongly. Some federal judges agreed, and they have continued to recognize their obligation to examine disputed documents in their chambers before passing judgment on matters of evidence and privilege.

In 1971, the U.S. Court of Appeals for the Federal Circuit argued that "an essential ingredient of our rule of law is the authority of the courts to determine whether an executive official or agency has complied with the Constitution and with the mandates of Congress which define and limit the authority of the executive."

Claims of executive power "cannot override the duty of the court to assure that an official has not exceeded his charter or flouted the legislative will," the court said.

The executive branch may assert a right to keep its secrets, but this must not be viewed as an absolute right, only a privilege granted by the court when appropriate. Otherwise, even in the age of terrorism, there can be no judicial independence and no fair trial for Americans who would challenge their government."

Mr. Bush. Before you attempt to spread American form democracy in the Middle East, clean up your act in America. Not everything you fail at is a "National Secret". Your failures should be disclosed since you publicize your professed victories. You make a mockery of the Constitution.

Edited by:
Martin S. Friedlander, Esq.

   

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