The National Law Journal's L.A. Legal Pad

Judge Carney dismisses felony charge against Samueli

U.S. District Judge Cormac J. Carney a year ago had rejected a plea bargain for Samueli because it did not allow for any jail time. But in a seeming about-face, Carney cleared the Broadcom co-founder of a criminal charge of lying to investigators in a probe of improper accounting at the Irvine microchip designer.

Moments after Samueli completed two days of testimony in the related criminal trial of another former Broadcom executive, the judge said that what Samueli had told the Securities and Exchange Commission was "ambiguous and evasive" but not a material false statement and therefore not a crime.

Carney went on to say that he believed the U.S. Constitution's protection against double jeopardy would bar prosecutors from refiling charges against Samueli.

Full story at LATimes.com.

Water rights case may get a ruling this week

A judge is expected to rule this week on the legality of the Quantification Settlement of 2003. More than a dozen legal challenges to the agreement are the subject of a trial that began in Sacramento last month and is expected to last well into next year.

The first phase of the trial deals with the crux of the case, a lawsuit by Imperial Valley farmers who contend that the water districts were not authorized to set up such a deal. They say the water rights should be attached to the land, not held in trust by the irrigation district.

Also at issue is the state's role in mitigating the effects of the transfer on the ailing Salton Sea, a desert lake in Riverside and Imperial counties fed by agricultural runoff. High salinity threatens the survival of fish and migratory birds.

The case returns to court Monday. Click here for the full story.

Sealed memo momentarily open to public in espionage case

As the first defendants in the nation to plead guilty to economic espionage charges, Ming Zhong and Fei Ye admitted they stole secrets from Silicon Valley companies and sought VC funding from the Chinese government.

The fact of their cooperation with American authorities has been no secret: It appeared in an unredacted portion of their plea agreements. Still, in preparation for sentencing Friday, Santa Cruz, Calif., solo Paul Meltzer asked Northern District of California Judge James Ware to seal Ye's entire sentencing memo. Referring in a declaration to China's economic espionage program, "press disclosure of the details contained in the sentencing memorandum concerning the 863 Program could expose Mr. Ye to reprisals," Meltzer wrote.

Such sealing requests are fairly common and routinely granted, allowing no one but the parties to evaluate their merit. But for a few moments on Tuesday, Ye's sentencing memo was publicly available on the court's electronic docket. In the memo, Meltzer says his client provided "invaluable" information to the feds.

But the document doesn't detail China's program, contrary to what Meltzer wrote in his declaration. Regardless, Ware granted Meltzer's motion Wednesday, with no objection from the government. Meltzer did not respond to messages.

Read the full Recorder story.

Despite voting against stay of implementation, Cal Supremes will hear Prop 8 challenges

The California Supreme Court agreed Wednesday to decide the validity of Proposition 8 and ordered opposing parties to file briefs that will help it decide whether the ballot measure was an improper revision of the state constitution, rather than just an amendment, and whether it violates the separation of powers. The court also asked how the nearly 20,000 marriages performed before the Nov. 4 passage would be affected if the measure is upheld.

To the dismay of Prop 8 opponents, the court -- with the exception of Justice Carlos Moreno -- also voted against staying the initiative's implementation until the three cases before the court are resolved. And Justice Joyce Kennard's vote to deny hearing all the cases, save a potentially resubmitted one on the retroactivity of the initiative, left Prop 8 opponents perplexed.

The court could hear oral arguments as early as March and would be required to issue a ruling within 90 days, meaning a decision could come before June.

See these stories, and read the court order.

Christensen to prosecutors: let's not bicker and argue over who tapped who ...

Terry Christensen, the lone lawyer who was convicted this summer in a high-profile wiretapping case, said the federal government's sentencing recommendation of three years in prison and a $500,000 fine is "excessive," especially given the legal community's attention to this case, according to documents filed this week.

"There is no need to impose a draconian sentence to get the lawyers' attention when they are already keenly aware of the pitfalls that await the attorney who gives an investigator a free hand," wrote Christensen's lawyers. "The government's recommended sentence is not necessary to maintain the deterrence that already exists."

In their sentencing memo, filed last week, prosecutors called Christensen's acts "brazen efforts to corrupt and subvert the legal system." They also argue that, as an attorney, Christensen held a higher level position of trust that requires prison time. In his response, Christensen's lawyers hypothesize that the government's recommended sentence is an attempt to make up for the lack of other attorneys indicted in their case.

Read the full NLJ article.

Three SoCal lawyers figure prominently on Obama's agency review teams

Last week the Obama-Biden transition announced the names of review team leaders who will be completing "a thorough review of key departments, agencies and commissions of the United States government, as well as the White House, to provide the President-elect, Vice President-elect, and key advisers with information needed to make strategic policy, budgetary, and personnel decisions prior to the inauguration." Among those leaders are former Gibson, Dunn & Crutcher counsel Cecilia V. Estolano, UC Hastings real property law professor (and former Solicitor of Interior under Clinton) John Leshy, and O'Melveny & Myers partner Alejandro Mayorkas, whose Clinton association is a little less burnished.

The full list of environmental-related team heads can be found here.

Christensen seeks home confinement

Terry Christensen, the lawyer who was convicted this summer for hiring a private investigator to wiretap his opponent in a high profile child support case, claiming he had an "aberrational, isolated exercise of bad judgment," is seeking a probationary sentence of 10 months to be carried out in home confinement.

The request, outlined in a sentencing memorandum filed on Thursday, mimics the recommendation of the U.S. Probation Office, which also suggested a fine of $30,000, and contrasts significantly with the position of federal prosecutors. On Monday, in their own sentencing memorandum, prosecutors demanded that Christensen, who faced trial alongside the private investigator, celebrity sleuth Anthony Pellicano, serve three years in federal prison and pay a $500,000 fine due to his "brazen efforts to corrupt and subvert the legal system."

The government claims that Christensen paid more than $100,000 to Pellicano to wiretap the phone lines of Lisa Bonder Kerkorian, the ex-wife of billionaire Kirk Kerkorian, in a 2002 child support case involving her daughter, Kira. Bonder Kerkorian and Kerkorian were married for 28 days.

Read the full NLJ article.

Schwarzenegger brushes aside judge's contempt threat over inmate medical care

California Governor Arnold Schwarzenegger and prison officials brushed aside a federal judge's looming threat on Monday to hold him in contempt of court for failure to release $250 million to a court receiver as down payment for improved inmate medical care.

During a tense hearing on Monday it was clear that the state does not plan to come up with the money by a Nov. 5 proposed deadline offered by an attorney for the inmates, James Brosnahan of Morrison & Foerster's San Francisco office.

Late in the day, U.S. District Judge Thelton Henderson ordered California to turn over $250 million to the federal receiver by Nov. 5 or face a contempt of court hearing on Nov. 12.

The case presents unique questions of how much authority a federal judge has to order state expenditure of funds to repair constitutional violations in its prisons.

Henderson has previously declared state prison health care conditions so shoddy that inmates die needless from lack of treatment or medical mistakes in violation of the Eighth Amendment's protection against cruel and unusual punishment.

In 2006, Schwarzenegger declared a state of emergency in state prison health care, but little has changed since then.

The state acknowledged it could not fix the problems alone and agreed to a receiver appointed by Henderson. Plata v. Schwarzenegger, No. C01-1351TEH. He appointed J. Clark Kelso, a University of the Pacific McGeorge School of Law professor who stepped in as acting state insurance commissioner in 2000 following a corruption probe of the elected commissioner.

Kelso called for the state to pony up $8 billion for construction of seven medical facilities for the state's 170,000 inmates and to hire doctors and nurses and provide training to improve care.

But the state has balked at turning over the initial $250 million to Kelso. Daniel Powell, deputy attorney general, told Henderson on Monday that the state has not received enough information from Kelso on what he would do with the money for the state to seek bond funding, before it takes money from the treasury.

Powell said the court cannot order the state to construct prisons under the federal Prison Litigation Reform Act. "it would raise a fundamental sovereign immunity concern," he said. Powell said he had found no case law in which federal judges had ordered state prison construction.

Henderson shot back that it might be that Powell "can't find another case where prisoners are dying, so there are a lot of first impression issues." Brosnahan said the plaintiffs are not seeking new prison construction, but construction of facilities that meet minimal health care standards for people who are already in prison.

He added that this is the first time in the long-running dispute that the state has raised sovereign immunity.

Brosnahan gave the judge a proposed order giving the state until Nov. 5 to pay up or face a contempt of court order no later than Nov. 12. Henderson said he wanted to review the order and "proceed very carefully" before signing an order.

As he rose to leave he added, "I want Mr. Kelso and Mr. Brosnahan to proceed full speed ahead.

-- Pamela A. MacLean

Former senior Milberg Weiss partner asks for no prison time in kickback case

David Bershad, a former senior partner at Milberg Weiss, now called Milberg, is asking for no prison time as part of the government's kickback case against the law firm, even though the U.S. Probation Office is recommending 18 months, according to sentencing papers filed on Monday.

Federal prosecutors, who also filed sentencing papers on Monday, have asked a federal judge to give Bershad six months in prison.

In a plea deal reached last year, Bershad admitted to conspiring to obstruct justice and making false statements under oath. He also agreed to pay $7.75 million in forfeitures and a $250,000 fine.

He is scheduled to be sentenced on Oct. 27.

In court papers, federal prosecutors say the U.S. Probation Office recommendation does not take into account the assistance Bershad provided to the investigation, which resulted in charges against co-founding partner Melvyn Weiss and former partner William Lerach.

"Bershad gave the government the most complete view of the nature, scope, and history of the conspiracy that the government obtained from any source," prosecutors said in court papers. Specifically, the papers say, he identified paid plaintiffs in Florida and bonuses that were used to reimburse partners for their contributions to those kickbacks. He also provided information regarding Weiss's behavior during the government's investigation that lead to an obstruction of justice charge against him. As the "money man" at the firm, Bershad also provided critical information about how the kickbacks were made.

As a result, prosecutors recommend that he serve six months in prison, including three months of community confinement, followed by two years of supervised release and including a fine of $250,000.

A lawyer for Bershad, the first attorney at the firm to plead guilty, emphasized in court papers how her client broke with his senior colleagues, many of whom waited to plead guilty or declined to cooperate with the government's investigation.

"In the tragedy that was the Milberg Firm, many impressive men fell from power to disgrace," wrote Cristina Arguedas, a partner at Arguedas, Cassman & Headley in Berkeley, Calif. "Of these men, only David Bershad came forward to acknowledge unambiguously that he had lost his way and that he alone was responsible for his misconduct."

His assistance was "the critical development" that resulted in the investigation's end, she said. In the months after Bershad pleaded guilty, Weiss was indicted and Lerach negotiated his plea deal.

Twice divorced, with four children, Bershad also has donated generously to his own family members and to others. Attached to his sentencing memorandum are dozens of letters from his legal adversaries, fellow plaintiffs' attorneys and former partners and staff at the firm. Other letters come from family members and friends.

"After a great deal of soul searching, I realized that I had not only broken the law but my solemn oath to uphold it," Bershad wrote, in his own letter to U.S. District Judge John Walter of the Central District of California, who is overseeing the case. "My wrongful acts were in direct conflict with my own values of honesty and integrity."

Steve Schulman, who also is scheduled to be sentenced on Oct. 27, filed his own sentencing papers earlier this month.

Schulman, who argued he was not as involved in the firm's affairs as were Bershad, Lerach and Weiss, is asking for six months in prison. He said he is the primary financial support for his three young daughters.

In a letter to Walter, Schulman said: "I wish to express my profound remorse and contribution for the criminal conduct in which I engaged. I enlisted in a wrongful scheme, failed to disengage or extricate when I should have and participated in concealing the wrongful acts that facilitated the scheme. These were sins of omission no less than commission for which I take full responsibility. By these actions, I violated the law and my enhanced duties as an attorney."

Dozens of other letters were filed on his behalf.

Federal prosecutors are seeking a year in prison for Schulman, who pleaded guilty to one count of racketeering conspiracy and agreed to pay $1.85 million in forfeitures.

The U.S. Probation Office is recommending 15 months in prison.

Both Schulman and Bershad note that, as a result of the investigation, they surrendered their law licenses and have been sued by Milberg and other firm partners for millions of dollars, including their share of the $75 million settlement Milberg reached with prosecutors this year. Unlike Weiss and Lerach, who received financial settlements from their firms, Bershad and Schulman note that Milberg and its partners did not provide them with capital contributions, severance payments or reimbursement for legal representation.

-- Amanda Bronstad

Judicial Council sees need for 31 new judges San Bernardino and Riverside, 5 in L.A.

The Judicial Council is expected to approve a report that finds California's trial courts need 327 more judges, serving as the basis for an eventual request for an additional 100 judgeships in the state.

Five new judges would be requested to go to Los Angeles, while Riverside and San Bernardino would get 31 new judges.

The Recorder's full story