Sunday, April 21, 2013

Keeping it legal an increasing tall order for local marijuana collectives


The marijuana dealers have a Facebook page. They also have a website promoting their business, complete with a logo of a cute, green bud with googly eyes.

The family that ran the Grass Rootz medical marijuana store in Lexington wasn't trying to hide the business. The store has operated largely in the open, because Washington relaxed its rules for medical marijuana use 15 years ago and voters legalized recreational pot use last year.

Nevertheless, on Feb. 28 the Longview Street Crimes Unit raided the West Side Highway home where Grass Rootz's owners say they sold pot only to patients with medical marijuana certificates. Five people involved with the business now face felony marijuana charges.

Medical marijuana plants
Medical marijuana plants at his family’s
Grass Rootz was among two Cowlitz County medical marijuana providers raided by the Street Crimes Unit in the past six months. In late December, Naturally Yours, a West Longview provider operated by Kellie Opsal, 37, of Toutle also was shut down. Opsal faces multiple counts of dealing pot as well as operating a drug house and leading organized crime.

The raids have cut off supplies to an estimated 2,500 medical marijuana patients who use the drug to cope with a variety of cancers, seizures, multiple sclerosis and AIDS, the business owners said in recent interviews. The arrests also have raised questions about how local prosecutors and law enforcement officials are responding to the changes in the state's marijuana laws, which have become murky since voters passed Intiative 502.

Even while marijuana laws have become ambiguous, Douglas Hiatt, a Seattle attorney and medical marijuana activist representing both businesses, says the two busts simply don't make sense.

"I just don't know what the hell's going on down there," Hiatt said in a recent interview. "This is the stupidest case I've ever seen."

The owners of Grass Rootz and Naturally Yours say they were operating well within medical marijuana laws. But even if that claim doesn't bear out, the activities they're accused of may be legal by the time their cases go to trial. (Much of the state's new recreational marijuana regulations are expected to take effect later this year.)

In fact, the two Cowlitz County medical marijuana cases are headed for trial as a Seattle entrepreneur is planning to grow a 16-acre cannabis crop in Pacific County, which would be sold for recreational use. That and other enterprises will need to qualify for a state license, but state officials said this week that those licenses probably won't be issued until December.

Cowlitz County Prosecutor Sue Baur declined to discuss how her office will handle the cases of pot dealers and medical marijuana providers following passage of I-502. And prosecutor's office spokeswoman Michelle Shaffer said the office also will not discuss the Grass Rootz and Naturally Yours cases while they are pending.

The Street Crimes unit used confidential informants to buy marijuana from Grass Rootz, according to police reports. During the Feb. 28 raid, police found 25 plants growing in a barn and seized more than a pound of cultivated marijuana, $4,366 in cash, drug packaging materials, scales and a 9 mm pistol, according to the reports.

Drug agents arrested Grass Rootz's founders and operators: 50-year-old Kirk Kightlinger; his girlfriend, Mandy F. Henderson, 52; and his sons, Aaron Kightlinger, 30, and Steffen Kightlinger, 25. All were charged with dealing marijuana.

The officers left behind Grass Rootz's growing pot plants after the bust. A police official explained later that Grass Rootz is legally allowed to keep the plants under medical marijuana laws.

Because the Kightlinger home is near a school bus stop and the family owned a gun — which Kirk Kightlinger said was unrelated to the marijuana business and was kept in the home for protection — Grass Rootz's proprietors face years in prison if convicted. The case is back in court on Monday.

Kirk Kightlinger, who uses medical marijuana himself to treat a back injury, said he has invited prosecutors and police to visit him anytime and see what he's doing. The invitation was never accepted, he said. He added that he and his employees have always insisted that each patient — even regulars — present a valid medical marijuana card and state-issued identification when picking up medication.

"We have several patients ready to testify that we've turned them away because they left their paperwork at home," Kirk Kightinger said.

In an interview Thursday, Longview police Captain Robert Huhta, who oversees the drug unit, declined to say whether the informants who bought pot from Grass Rootz or Naturally Yours presented valid medical marijuana prescriptions. He said both businesses were violating medical marijuana rules, but he declined to say exactly how.

"We received repeated complaints regarding these businesses," Huhta said. "We had people calling us and saying we were blatantly allowing people to violate the law."

Huhta said targeting methamphetamine and heroin traffickers is a much higher priority for the Street Crimes Unit than arresting dealers or buyers of marijuana. But he said the passage of I-502 hasn't prompted his agents to stop making marijuana busts.

"I have not given advice or direction to our Street Crimes Unit to ignore all marijuana offenses," Huhta said. "The distribution of marijuana is still illegal at this time."

Still, Huhta acknowledged that the recent busts may result in new case law which could guide law enforcement and prosecutors as the state's marijuana laws change.

"Over time, as we've seen, certain laws are going to evolve. ... It may go to where there will be civil penalties down the road, but as it currently stands that's not the case."

Medical marijuana dispensaries aren't legal in Washington, but "collective gardens" are. It may be semantics, but that's how both Grass Rootz and Naturally Yours say they stayed within the law. Patients contributed money. If they couldn't pay, some offered time or labor.

Hiatt, the attorney, speaks passionately about his years battling on behalf of medical pot advocates. His sentences often are punctuated by four-letter words as he explains what he sees as the senseless targeting of people who insist marijuana helps their ailments in ways other medications can't.

He said he is mystified that local police and prosecutors are cracking down on his clients, calling it a "backlash" by officials who have long been accustomed to illegal marijuana and are unsure how to proceed now that it's become largely legal.

"I don't know what you're accomplishing here. Are you doing anything for the community?" Hiatt asked. "You guys have huge fish to fry down there. You've got violent crime. You've got heroin."

Hiatt said the state's new recreational marijuana law may offer his clients legal cover. But those same clients opposed I-502, he said, fearing new DUI laws, high taxes and poorly-worded regulations will cut patients off from pot.

Grass Rootz has a sophisticated growing operation in its barn that includes equipment for controlling temperature and light conditions. The equipment cost thousands of dollars, and Kirk Kightlinger insisted his family isn't getting rich off the enterprise. The electric bill alone is $1,000 a month, he said.

The real goal of the business, said Henderson, was giving marijuana patients a clean, safe place to buy marijuana. She said a small percentage of clients are probably abusing the system, but the vast majority are sick, in pain and benefit from marijuana use.

Kightlinger and Henderson have driven hundreds of miles to deliver a small amount of pot to a sick person, said Hiatt. That sort of generosity is common in the medical pot community, which Hiatt says offers a bond among patients and their providers similar to any other support group for sick people.

"People get involved in medical marijuana, and they get evangelical about it," Hiatt said. "It starts helping people out. They can see it. They can see people getting better."

The Naturally Yours and Grass Rootz operators say many of their customers sought to replace highly-addictive opiate painkillers. One of them was Gary Wallace, 62, of Kalama, who began using medical marijuana two years ago to treat a litany of injuries from his days as a logger and construction worker.

"It eliminates pain for me," he said.

Wallace said he has used the drug recreationally and was caught with a pound of it in the 1970s. But he said he functions far better on pot than the prescription painkiller Oxycontin, which left him unable even to remember what he'd watched on TV.

"Pot makes you high, but ... you're physically able to interact with people," he said.

Wallace said he expected to find a bunch of "high school aged pot heads" when he first visited the Naturally Yours collective garden in West Longview. Instead, he found retired men and women, many of them with injuries like his from demanding, physical labor.

"I was totally surprised. I was like, ‘These guys are my age,'" he said. "It's indicative of any blue-collar town. Lumber mills, trucking. It's all heavy-duty stuff. It tears your body up."

Since the Street Crimes Unit shut down Naturally Yours in December, Wallace has had trouble finding a safe place to get marijuana. He said he grew his own for a while.

"(Police busts) force people like me to go look for another source, back on the street," Wallace said.

Opsal, the owner of Naturally Yours, said her boyfriend got her interested in the medical marijuana business several years ago. She is slight and shy, sometimes hiding her eyes behind her long, brown bangs. Hiatt, her attorney, scoffs at the idea that she's been charged with "leading organized crime."

Her store, located in the 2200 block of 46th Avenue, offered pot, edible marijuana products and topical creams.

Opsal said she was shocked to see police approaching her West Longview store because she'd hired a legal consultant to make sure the operation was within the law before she started it.

Police reports say drug agents used informants to buy from Opsal on six occasions between May and September of last year. During the Dec. 21 raid, police seized $16,000 cash and 16 pounds of pot from the business, as well as packaging materials, a digital scale and food and drink products containing THC, the active psychotropic ingredient in cannabis. Police also took "membership paperwork for hundreds of customers," according to the report.

In an interview this month, Opsal said she has never sold marijuana to anyone who didn't present a medical marijuana card and has often called doctors to make sure a patient's paperwork is legitimate.

"It broke my heart when I found out the informant was an actual patient," she said. "I've had them over to my house for dinner, all of them."

Still, she said, even if she knew she would be arrested again, she would open up the business and keep distributing pot to patients.

"I can't let these people down," Opsal said. "If we hadn't been there, where would they go? They would meet somebody on the side of the road, feeling it's dirty and wrong. We made sure they felt comfortable and safe."

By Tony Lystra, The Daily News

Source: The Daily News

Legal questions riddle Boston Marathon case


The capture of the Boston Marathon bombing suspect raises a host of freighted legal issues for a society still feeling the shadow of 9/11, including whether he should be read a Miranda warning, how he should be charged, where he might be tried and whether the bombings on Boylston Street last Monday were a crime or an act of war.

The suspect, Dzhokhar A. Tsarnaev, 19, was taken, bleeding, to a hospital on Friday night, and it remained unclear on Saturday whether he was conscious.

The authorities would typically arraign a suspect in a courtroom by Monday, a process that involves his being represented by a lawyer.

Most experts expected the case to be handled by the federal authorities, who were preparing a criminal complaint, including the use of weapons of mass destruction, which can carry the death penalty because deaths resulted from the blasts.

Boston marathon
"I think we can expect the prosecution to put together a meticulous case based on the forensic evidence, the videos, eyewitness test and any statements that the surviving defendant makes to the authorities," said Kelly T. Currie, who led the Violent Crimes and Terrorism section in the Brooklyn U.S. attorney's office from 2006 to 2008, where he supervised a number of terrorism prosecutions.

"I would think it's going to be a very strong case, and ultimately all the pieces put together are cumulatively going to show a pretty full mosaic of this defendant's actions leading up to the attack and in its wake," Currie said.

Massachusetts has no death penalty, so a defense attorney in this case might seek to have the case tried in state court. State and county officials might also be eager to prosecute the defendant in the deaths of four of their residents.

President Barack Obama described the attack that Tsarnaev and his older brother, Tamerlan, 26, were accused of committing as "terrorism." Tamerlan Tsarnaev was killed.

The administration has said it planned to begin questioning the younger Tsarnaev for a period without delivering the Miranda warning that he had a right to remain silent and to have a lawyer present.

Normally such a warning is necessary if prosecutors want to introduce statements made by a suspect in custody as evidence in court, but the administration said it was invoking an exception for questions about immediate threats to public safety. The Justice Department has pressed the view that in terrorism cases the length of time and type of questioning that fall under that exception is broader than what would be permissible in ordinary criminal cases, a view upheld by a federal judge in the case of the man convicted of trying to bomb a Detroit-bound airliner in 2009.

Civil libertarians have objected to the more aggressive interpretation of the exception to the Miranda rule, which protects the constitutional right against involuntary self-incrimination. Anthony D. Romero, the executive director of the American Civil Liberties Union, said that it would be acceptable to withhold Miranda before asking whether there were any more bombs hidden in Boston, but that once the FBI went into broader questioning, it must not "cut corners."

But some prosecutors suggested that if any confession was unnecessary to convict him, then the FBI might keep him talking without a warning without ultimately invoking the more disputed version of the public-safety exception to introduce it in court.

"I see a fairly strong case against this young man based on a great deal of evidence so, as a prosecutor, the top of my list would not be necessarily to Mirandize him and get a usable confession," said David Raskin, a former federal prosecutor in terrorism cases in New York.

At the same time, some Republican senators, including John McCain of Arizona and Lindsey Graham of South Carolina, argued that using the criminal-justice system was a mistake and that Tsarnaev should instead be held indefinitely by the military as an "enemy combatant," under the laws of war, and questioned without any Miranda warning or legal representation, in order to gain intelligence.

By New York Times

Source: The Tampa Bay Times

Sunday, April 7, 2013

Dozens rally for stricter gun laws


A rally for tougher gun laws becomes a heated debate when gun rights advocates decided to bring a message of their own on the south side of the Capitol.

The organizers of the Texas Rally for Gun Sense say they're not against law abiding gun owners.

They say they're fighting for universal background checks and they want to limit assault weapons and high capacity magazines. They also oppose putting any guns on a school campus.

Among the speakers at the rally were people who's lives have been touched by gun violence.

"She could have fought him off, she would have won if he hadn't had the gun," said Judy Johnson, the sister of a gun violence victim.

Organizer say after devastating shootings in Connecticut, Colorado and Oregon last year something has to change.

Gun laws
"I've never been so deeply touched as I was after Sandy Hook and that day was a turning point for me," said Hilary Rand with Moms Demand Action. "I used to just be a mom. Now I'm a mom and an activist."

When a couple of gun rights activists showed up at the event, the crowd rushed to the front to block their signs from media and the crowd. Police had to step in for crowd control as speakers took the stage and the confrontation heated up.

"Its time to speak up against people who are perpetrating things that are just not true," Rand said. "Nobody wants to ban guns here we're just trying talking about coming up with sensible solutions that can help make us safer, we're talking about strengthening the laws that we currently have and creating new laws that will help us enforce those laws we currently have, nobody wants to change the constitution."

Austin city councilman Mike Martinez even addressed the 2 men, saying the message on their sign is incorrect.

"We will make your sign legitimate shortly, so you hang on to that," Councilman Martinez told them.

"Passing more gun laws will not keep guns out of the hands of people that don't want to obey the law that are criminals, the very fact that they're criminals means they will ignore any laws," said one of the gun rights activists who calls himself "Texas George."

Speakers at the rally included state legislators from both the House and Senate. The crowd also heard from several victims of gun violence and Austin Police Chief Art Acevedo.

"Universal background checks make sense. It's not a political issue, it's a common sense issue. It is an issue that's not red or blue, the only red we're talking about is the blood of innocent people being spilled because we're not doing enough as American's," Chief Acevedo said.

By Shannon Murray, KVUE News

Source: The KVUE.com

Can Democrats defuse a filibuster on gun legislation?


When Sen. Rand Paul, R-Ky., first circulated a letter at the end of March promising to filibuster proposed legislation that would expand background checks for gun buyers and crack down on illegal gun trafficking, the message was clear: Passing new gun laws would not happen without a messy procedural fight. Amassing 51 votes would be hard enough, but Paul's letter crystallized what many had already assumed: The Senate would need 60 votes to proceed with gun control.

Since then, opposition to the proposed gun legislation has only intensified. The letter, originally signed by Paul along with Sens. Mike Lee, R-Utah, and Ted Cruz, R-Texas, now bears 13 signatures and will be re-circulated on Monday, according to Politico.

In it, the 13 senators promise to "oppose any legislation that would infringe on the American people's constitutional right to bear arms, or their ability to exercise this right without being subjected to government surveillance."

Senate Majority Leader Harry Reid, D-Nev., is expected to bring his gun legislation to the floor as early as next week. The bill includes expanded background checks and cracks down on gun trafficking but will not include a ban on military-style semiautomatic assault weapons. That proposal, too heavy a lift to pass the Senate, was dropped to ease the passage of other gun laws.

Gun laws
But it's not at all clear that Reid will be able to circumvent or defeat the Republicans' promised filibuster. Under a recent change in Senate rules, Reid could avert a filibuster on the motion to begin debate on the gun bill by promising each party two amendments to the legislation. His aides have discussed that route, according to Politico, but the majority leader has not yet indicated whether he would use it.

Even if Reid manages to defuse a filibuster to begin debate on the bill, closing the debate is another matter entirely; Paul and his colleagues would be free to filibuster the legislation during the floor debate, ensuring that 60 votes would eventually be required to push the bill through the upper chamber.

There Reid's task becomes significantly trickier. He could conceivably break a filibuster by peeling away enough Republicans to surmount the 60 vote threshold, but volunteers from across the aisle have been scarce: Sen. Lindsey Graham, R-S.C., has said he wouldn't support a filibuster if senators are allowed to freely amend the legislation on the floor, but few GOP lawmakers have followed Graham's example.

  • Lawmakers get an earful from voters on guns
  • Obama to Congress: Colorado proves gun control is possible

Republicans and other gun-rights supporters have objected to the proposed expansion of background checks, worrying it would be the first step in the development of a nationwide gun registry that could eventually be used to confiscate firearms.

Gun-control advocates have pushed back. "Nobody is talking about creating an entirely new system," President Obama said in Colorado on Wednesday. "We are simply talking about plugging holes, sealing a porous system that isn't working as well as it should. If you want to buy a gun, whether it's from a licensed dealer or a private seller, you should at least have to pass a background check to show you're not a criminal."

"That's just common sense," the president said.

Paul's newest letter, in addition to Lee and Cruz, also bears the signatures of Sens. Marco Rubio, R-Fla., Jerry Moran, R-Kan., Jim Inhofe, R-Okla., Richard Burr, R-N.C., Mike Enzi, R-Wyo., Ron Johnson, R-Wis., Jim Risch, R-Idaho, Dan Coats, R-Ind., Mike Crapo, R-Idaho, and Pat Roberts, R-Kan.

By Jake Miller, CBS News

Source: The CBS News

Monday, April 1, 2013

Lawyers prepare for battle over N.D., Ark. abortion laws


Rival legal teams, well-financed and highly motivated, are girding for court battles over the coming months on laws enacted in Arkansas and North Dakota that would impose the nation’s toughest bans on abortion.

For all their differences, attorneys for the two states and the abortion-rights supporters opposing them agree on this: The laws represent an unprecedented frontal assault on the Supreme Court's 1973 Roe v. Wade decision that established a nationwide right to abortion.

The Arkansas law, approved March 6 when legislators overrode a veto by Democratic Gov. Mike Beebe, would ban most abortions from the 12th week of pregnancy onward. On March 26, North Dakota went further, with Republican Gov. Jack Dalrymple signing a measure that would ban abortions as early as six weeks into a pregnancy, when a fetal heartbeat can first be detected and before some women even know they're pregnant.

Abortion-rights advocates plan to challenge both measures, contending they are unconstitutional violations of the Roe ruling that legalized abortion until a fetus could viably survive outside the womb. A fetus is generally considered viable at 22 to 24 weeks.

"I think they're going to be blocked immediately by the courts -- they are so far outside the clear bounds of what the Supreme Court has said for 40 years," said Nancy Northup, president of the Center for Reproductive Rights.

Abortion laws
The center will be leading the North Dakota legal challenge and working in Arkansas alongside the American Civil Liberties Union's state and national offices. Both Northup and ACLU lawyers say they have ample resources to wage the battles, and they expect victories that would require their attorneys' fees to be paid by two states.

Dalrymple, in signing the ban, acknowledged that its chances of surviving a court challenge were questionable, but said it was worth the eventual price tag -- at this point unknown -- in order to test the boundaries of Roe.

North Dakota's attorney general, Wayne Stenehjem, initially said lawyers from his office would defend any lawsuits but is now considering hiring outside help.

The two-year budget for his office, which has some 30 attorneys, is about $60 million. Stenehjem said the cost of litigation is unknown but his office expects to have an estimated dollar amount that could be presented to lawmakers this week.

"We're looking at a sufficient amount to adequately defend these enactments," Stenehjem said.

He expects lawsuits to be filed in federal court "but that's not up to us," he said.

Under federal law, he said, "Whoever loses generally has to pay attorneys' fees for the other side."

North Dakota lawmakers have shunned critics' repeated attempts to set aside money for the inevitable lawsuits.

Sen. Connie Triplett, D-Grand Forks, thrice tried to amend bills to set aside $1 million for the sure-to-come litigation but each of her amendments failed.

Most Democrats and a handful of Republicans have been vocal in saying it's irresponsible for lawmakers to pass such controversial measures without setting aside money to fight court battles.

"North Dakota taxpayers at least deserve to know the cost of litigating these bans," said Democratic Sen. Mac Schneider, the Senate's minority leader and a Grand Forks attorney.

The North Dakota Legislature's move to enact the most stringent abortion laws in the nation likely could backfire, with the state on the hook for both sides' litigation costs, Schneider said.

"The possibility of paying attorney fees for the other side of this should concern everyone in North Dakota," Schneider said.

A lead sponsor of the Arkansas ban, Republican state Sen. Jason Rapert, said threats of lawsuits "should not prevent someone from doing what is right."

He contended that the ban had a chance of reaching the U.S. Supreme Court through the appeals process and suggested that the victory predictions made by abortion-rights lawyers amounted to "posturing" aimed at deterring other states from enacting similar bans.

In both Arkansas and North Dakota, the states' lawyers will be getting pro bono assistance from lawyers with Liberty Counsel, a conservative Christian legal group.

Mathew Staver, the group's chairman, said supporters of the bans were resolved to fight the legal battles to the end, and issued a caution to the rival side.

"They ought to hold off on their celebrations," he said. "The cases have a long way to go through the court system."

The North Dakota ban is scheduled to take effect Aug. 1, along with two other measures that have angered abortion-rights backers. One would require abortion providers to have admitting privileges at a local hospital, the other would make North Dakota the first state to ban abortions based on genetic defects such as Down syndrome.

The Center for Reproductive Rights is reviewing its options regarding the latter two bills, but definitely plans to challenge the 6-week ban before Aug. 1. Northup said her team is pondering whether to file suit in state court or U.S. district court.

In Arkansas, where the 12-week ban would take effect 90 days after the end of the legislative session, abortion-rights lawyers plan to file their challenge in federal court within the next few weeks.

Bettina Brownstein, who will be representing the ACLU of Arkansas in the case, said the U.S. district court with jurisdiction over Little Rock had issued rulings in past abortion-related cases that gave her confidence of victory this time.

"Eventually it could go to U.S. Supreme Court on appeal, but that would take a while, and they may not want to hear it," she said. "It's a question of how much money the state wants to spend."

Northup chided officials in both Arkansas and North Dakota for their willingness to spend taxpayers' money on difficult and divisive legal cases.

"It's important that the citizens of those states realize that every dollar spent to defend blatantly unconstitutional laws is taxpayers' dollars wasted," she said.

Attorneys' fees for the upcoming cases are impossible to estimate at this stage, but Northup said her organization received $1.3 million in fees from Alaska after that state lost a recent case regarding an abortion-related law.

The last few years have been intensely busy for the Center for Reproductive Rights, the ACLU and other abortion-rights legal groups as Republican-controlled legislatures have enacted scores of laws seeking to restrict access to abortion. At least two dozen such measures are currently the target of lawsuits, said Northup, who vowed that her organization "will not let unconstitutional laws go unchallenged."

Some of the recent laws place new requirements on abortion clinics, others require abortion providers to perform certain procedures or offer state-mandated counseling before an abortion can take place.

At least 10 states have passed bills banning abortions after 20 weeks of pregnancy on the disputed premise that a fetus can feel pain at that stage. One of those laws, in Idaho, was struck down by a U.S. district judge on March 6, while the laws in Georgia and Arizona have been temporarily blocked by judges pending further court proceedings.

Abortion-rights advocates, while eager to defeat the new bans in North Dakota and Arkansas, worry about the impact of the broader surge of restrictions.

"I don't believe these bans are going to take effect, but the danger is that they make the other laws look reasonable," said Talcott Camp, deputy director of the ACLU's Reproductive Freedom Project. "The ultimate goal is to take this decision away from a woman and her doctor and give it to the politicians."

One of the most frequent targets of the anti-abortion laws is the Planned Parenthood Federation of America, which -- in addition to providing a range of other health services -- is the nation's leading provider of abortions.

Planned Parenthood's president, Cecile Richards, said she found it frustrating that women "continue to be a political punching bag." But she saw an upside to the wave of anti-abortion legislation: more members and more donations for her organization.

"These attacks have served to energize our supporters," she said. "We've gained 2 million members in the past two years."

There's new energy on the other side as well.

The tough North Dakota laws have been welcomed by the protesters who gather weekly in Fargo outside the state's lone abortion clinic.

Among those on hand for the latest protest at the Red River Women's Clinic was Scott Carew, 50, who had brought two anti-abortion posters nailed to pieces of wood.

"Certainly, we're proud of the governor standing up for life," Carew said. "We're going to keep standing up for life until we can't stand up anymore."

By Associated Press

Source: The Bismarck Tribune

Attorneys weigh in on Citigroup counsel fees


The plaintiff's lawyers in the Citigroup Inc. securities litigation case are tying to inflate the price of temporary attorneys nearly five to nine times the actual cost, according to William Ruane, a former associate general counsel for litigation at Wyeth Pharmaceuticals Inc.

William Ruane
William Ruane
"The market value for the services provided by temporary attorneys . . . is, at most, in the $50-$75 range," Ruane said in a declaration earlier this month in U.S. District Court in Manhattan.

But plaintiff law firm Kirby McInerney is seeking $275 to $550 per hour for such services, according to court documents, justifying the upcharge in part because the law firm trained and supervised the temps. In total, the law firm is seeking 16.5 percent of the $590 million settlement in legal fees for the class action case.

"It's outrageous," Ruane told CorpCounsel.com on Friday. "There are a lot of inefficiencies in the hourly billing system. And the whole trend for the past 10 years or longer for clients who pay for their own legal work is to reduce the cost of that."

But the law firm used a so-called lodestar multiplier method, which computes fees by multiplying the number of hours reasonably spent by counsel times a reasonable hourly rate. The figure can be adjusted for other multipliers, such as the contingency risk taken by counsel and the quality of the work done.

"Let's make believe [the temporary lawyer is] the same as a $500 associate -- that's what the lodestar multiplier is really about," Ruane claimed.

The former in-house counsel, who headed Wyeth's litigation efforts for 20 years, didn't discuss the settlement amount in his filing. But on the fee amount, he wrote, "I certainly never permitted, and I am not aware of any other client who has permitted, outside counsel to inflate that cost by a multiple of 4.5 to 9 solely because the temporary attorneys had been trained and supervised."

He said the plaintiff's firms were asking rates consistent in retaining New York law firms with "permanent, partner-track associates, not for temporary attorneys."

He cited charges for one temporary attorney as especially egregious: A lawyer who spent one month, about 239 hours, reading and digesting one deposition transcript, Ruane noted.

"Even at one of the lower temporary rates ($375 per hour), the project resulted in an asserted lodestar of almost $90,000," Ruane said. "I submit that it is difficult to justify a $90,000 deposition digest . . . The actual cost of the time that allegedly went into the digest was probably closer to $15,000."

Ruane was a witness for attorney Theodore Frank, of the Center for Class Action Fairness, who is also a member of the class as a Citigroup shareholder. Frank has objected not only to the allegedly inflated contract attorney fees, but also to the total fee amount and to the settlement amount.

"It is indisputable that class counsel's proposed billing rate for the contract attorneys is inflated six- to tenfold," Frank said in his court filing [PDF].

"I don't think this is a unique case," Frank told CorpCounsel.com Friday. "This is happening in a lot of securities cases. And I think pension funds, mutual funds, and hedge funds should actually hire someone on a contingency basis to scrutinize these fee requests."

Frank has made it his life's work to oppose padded fees, and has filed objections in about two dozen cases over the years. He told the court he has been successful in about 18 of those cases.

"Like most lawyers, I became a lawyer to correct injustice," Frank said in an interview. "No one else is doing this, and I saw a need. They are taking money from innocent shareholders -- tens of millions of dollars. It's the rich raiding the pensions of the middle class."

U.S. District Judge Sidney Stein has set a settlement fairness hearing on April 8 to discuss the amounts at issue in the Citigroup case.

The Association of Corporate Counsel has also objected to the legal fees in an amicus letter sent to the judge. The case is one of several in which courts are being asked to more closely scrutinize attorney fee requests.

But in its response to the objectors, the Kirby McInerney law firm has defended its fees as reasonable and customary in the industry.

Peter Linden, a Kirby McInerney partner involved in the case, defended the firm's use of contract attorneys in a recent interview with Forbes, saying, "Not only has the practice been endorsed by numerous courts, but it has allowed for more efficient prosecution of the case."

The law firm also presented a court filing from its own expert, professor Geoffrey Miller, of the New York University Law School and a former in-house lawyer in the U.S. Department of Justice's Office of Legal Counsel.

Miller said in the filing that he analyzed the settlement and found it "represents excellent value for the class." He determined the fee request of 16.5 percent of the settlement amount to be "within the ordinary range for percentage fee awards."

The rates are necessary, Miller argued, in order to properly compensate counsel "and to incentivize attorneys to bring similar cases in the future."

The professor went on, "The rates charged by counsel are commensurate with those charged by attorneys with similar expertise and qualifications in New York and around the country."

Frank disagreed, saying that Miller was working on the false premise that the rates charged were for Kirby McInerney attorneys and not for contract lawyers.

As for the law firm's argument that other courts have allowed such rate markups, Frank countered: " ‘Everybody's doing it' -- that's their defense?" he asked. "If that's so, then it's a problem that could reach into billions of dollars."

By Sue Reisinger

Source: Law.com