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Climate Work Heating Up at Law Firms
Legal News | 2008/04/04 15:01

Kenneth Berlin and his team at Skadden, Arps, Slate, Meagher & Flom have been working on climate-related matters for years. He headed the Justice Department's Environmental and Natural Resources Division, chaired the Environmental Law Institute and has shepherded a mountain of environmental litigation for major corporations.

Skadden hadn't needed a climate change group before: It simply tapped environmental, energy regulatory, intellectual property and tax lawyers to help out when the need arose. Partners, however, at the nation's highest-grossing law firm have changed their minds: This week, they were scheduled to launch a 23-lawyer group specifically devoted to climate change issues.

"The whole area is changing," says Berlin, who will head the group. "The area is developing so quickly now that it now merits a practice area."

The firm is joining an ever-growing list of major firms that are creating a climate change brand. Akin Gump Strauss Hauer & Feld, for example, debuted its climate change practice in November. Vinson & Elkins announced its climate change practice last spring, and many others have organized groups in recent months. In fact, 26 Am Law 100 firms tout some form of a climate change practice. A handful of others hype clean technology groups.

"Climate is hot in a way that nothing else has been before," says Latham & Watkins partner Robert Wyman Jr., the firm's lead counsel for Clean Air Act matters. "We're talking about transforming the energy and transportation economy."

Unlike other fleeting law firm trends -- remember those Y2K practices? -- there appears to be real work to be done here. Heightened regulation of companies releasing carbon dioxide and other greenhouse gases has led to a host of new legal questions. Although Congress is still working out federal emissions limits, corporate clients are facing state and regional emissions caps as well as standards outside the United States set by the Kyoto Protocol. The work, mainly, falls into two categories: helping companies navigate emissions caps issues and litigating disputes arising from emissions limits or from problems caused by greenhouse gases.

That said, there's still a marketing ploy at work: "Climate change" groups, primarily, rely upon lawyers from existing practice areas, such as corporate, energy, tax and, of course, environmental. Labeling a multidisciplinary group as a "climate change practice" is shorthand for clients who are genuinely fearful about regulation and litigation. "I don't think there's a single Fortune 100 company who has not had a board-level conversation about their exposure to climate change regulation," says Todd Glass, chair of Heller Ehrman's energy practice and a partner in the climate change group.

Naturally, there's money to be made here, too.

Covington & Burling's Rubén Kraiem, who co-chairs the firm's carbon markets, climate change and clean technology practice, says the 17-lawyer area has generated $1.5 million annually since its inception in 2005.

Kraiem estimates that at least 250 of the hours Covington lawyers spent for clients Kohlberg Kravis Roberts & Co. and Texas Pacific Group on their $45 billion leveraged buyout of TXU Corp. in 2007 were billed as climate change work. (Partner Stuart Eizenstat is the Covington group's other co-chairman. During the Clinton administration, Eizenstat led the U.S. delegation that negotiated the Kyoto Protocol.)

During the TXU buyout, investors became concerned about opposition from environmental groups because of the Texas energy company's coal-powered generation of electricity. The buyers wanted the deal to include a number of policies addressing climate change issues. Covington, Kraiem says, helped structure those commitments, which included increasing TXU's investments in renewable energy and creating an advisory board with representatives from environmental groups.

Latham's Wyman says his firm's global climate change practice, which started in 2004, is generating serious revenue. He says one of his current climate projects alone has brought in more than $1 million in fees. He declined to disclose the name of that client.

Claudia O'Brien, a partner in Latham's Washington office and a member of the global climate change practice, says she can recall at least 30 recent deals at the firm that have involved climate change.

Wyman, a partner in the firm's Los Angeles office, organized the California Climate Coalition and now counts it as one of his major clients. The coalition's 18 members include Shell, Chevron, General Electric, Northrup Grumman and a number of startup clean-technology companies. The startups can potentially provide the carbon-emitting members with ways to reduce their emissions, and, in turn, those members can invest in and help expand the startup companies.

Wyman formed the coalition in anticipation of the 2006 enactment of the California Global Warming Solutions Act, which mandates that greenhouse gas emissions from major industries are reduced to 1990 levels by 2020.

American Honda Motor Co. Inc. belongs to the carbon-emitting side of Wyman's coalition. David Raney, senior manager of environmental and energy affairs for Honda, says he sought out Latham, and specifically Wyman, for the firm's expertise on carbon trading. "We're breaking new ground," Raney says. "This is fundamentally asking some new legal questions."

One of the key business drivers for firms is the Kyoto Protocol. Though the United States has never adopted it, Kyoto took effect in much of the rest of the world in 2005 -- and U.S. companies are bound by it when they operate in international markets.

The protocol requires developed countries to reduce greenhouse gas emissions to below-1990 levels and allows companies to invest in clean energy projects in other countries in exchange for credits to offset emissions. The European Union, for example, has set up a cap-and-trade system under which companies are assigned emissions limits. They can then trade for carbon credits if they exceed their caps. Pending legislation in the United States could set up the same type of scheme here. (U.S. companies also engage in voluntary carbon trading, often in response to shareholder concerns.)

And that's where the "carbon lawyers" come in. Alston & Bird partner Kipp Coddington, for instance, helps his greenhouse gas-emitting clients navigate the carbon market by advising them on emissions trading issues. He says 90 percent of the practice's clients are new to Alston and were, specifically, looking for climate change expertise.

Coddington proudly declares himself a carbon lawyer. In many ways his practice bears the markings of traditional corporate work. The Washington partner leads the climate change and carbon management group and says Alston has 10 to 15 lawyers working full time for the practice.

Firms are also anticipating eventual federal regulation in the United States. Clifford Chance created its environmental and climatic trading group back in 2003. Washington counsel William Thomas says his energy and manufacturing clients are increasingly aware that the Securities and Exchange Commission may soon require companies to comply with climate-related disclosures. The firm is helping companies "craft appropriate communications in their financial statements and in their voluntary sustainability reports," Thomas says.

The Senate Committee on Banking, Housing and Urban Affairs, led by Sen. Christopher Dodd, D-Conn., has held hearings on getting the SEC to require public companies to disclose the financial impact of climate regulation. In September, a number of states and investors petitioned the SEC to expand and further explain disclosure requirements related to climate change. So far, the SEC hasn't taken definitive action.



Justices Weigh Definitions of Competency
Legal News | 2008/04/03 14:44

The US Supreme Court took up a question that has plagued trial courts across the country. If a person is sane enough to stand trial, does that mean he is mentally competent to represent himself?

After five years and three findings of mental incompetency, Ahmad Edwards was finally judged to be competent to stand trial on attempted murder charges, but he wanted to represent himself. The Indiana trial judge ruled that Edwards was too disturbed and incoherent to act as his own lawyer. The state supreme court said Edwards had been denied his constitutional right to represent himself and the state appealed to the U.S. Supreme Court, which heard arguments in the case Wednesday.

Lawyer Mark Stancil, representing Edwards, says the Constitution protects the defendant's rights at trial, not the states' rights.

Indiana Solicitor General Thomas Fisher, says the state has an interest in the public perception of a fair process.



Field Fisher Waterhouse £550,000 injury comp
Attorney News | 2008/04/03 14:39

European law firm, Field Fisher Waterhouse LLP, has announced the successful recovery of £550,000 in compensation for a labourer injured at work.

In December 2005, the labourer was instructed by his foreman to collect waste materials from a large open shed. On entering the shed, a large mechanical digger with a sharp bladed shovel drove into him. The shovel hit both legs causing a severe injury at work. As a result, he had a below knee amputation of his left leg. This has meant that while he can now walk using a prosthetic limb, he is unable to return to his former employment or any other manual labour.

Paul McNeil, partner in the Personal Injury Group at Field Fisher Waterhouse, was given legal instruction by the client at the end of 2005.

Although the labourer’s former employer quickly accepted that they were primarily responsible for the accident, they argued that he was also partially responsible for the negligence. They alleged that he had actually gone into the shed against instructions by the foreman.

Field Fisher Waterhouse succeeded in obtaining substantial interim payments to fund medical treatment and rehabilitation. The initial case to decide the issue of fault was fixed for trial in March 2007, however a few days before this date the employers accepted that they were fully liable for the accident.

In the meantime, there was a dispute between the employer and their insurer, which resulted in the insurer cancelling the policy. The meant that Field Fisher Waterhouse then had to bring proceedings against the employer directly.

Due to a significant difference in opinion between the employer and Field Fisher Waterhouse’s valuation of the injury compensation claim, another trial needed to be fixed for December 2007 to settle the matter. Eventually after extensive negotiation, the claim was settled out of court in the sum of £550,000 plus costs.

The labourer received his damages in full as the case was conducted on a no win, no fee basis.

Paul McNeil said: “I am happy that we were able to recover this compensation for our client, who was injured through no fault of his own whilst at work.”



Expert Testimony Issues on the Rise
Legal News | 2008/04/01 15:05

The Court of Appeals for the 10th Circuit in United States v. Nacchio has recently reversed an insider trading conviction in the high profile criminal case, finding, in short, that the trial court improperly denied the defendant an opportunity to call an expert witness. The Court ordered a new trial. "The Court based its holding on the improper exclusion of expert testimony, specifically, an economic analysis of Nacchio's stock trading patterns," says Joseph Martini, a partner with Wiggin & Dana LLP and a member of the firm's White-Collar Litigation and Appellate Practice Groups. "From a review of the cases, it appears that issues concerning the introduction of expert testimony are coming up in more and more white collar criminal cases," he observes. Wiggin and Dana partner James Glasser also notes that during his tenure as former Chief of the Criminal Division of the U.S. Attorney's Office in Connecticut, "defense counsel in white collar cases often argued against federal charges by pointing to experts opinions on such issues as the application of complex accounting principles. These issues are now coming up at trial," says Glasser. Martini and Glasser are available to write or comment on expert testimony issues in white-collar criminal cases including the Nacchio trial.


Paxil Teen Suicide Case Trumped by Michigan Law
Legal PR | 2008/04/01 14:53

The parents of a Michigan teenager who killed herself while on the antidepressant Paxil cannot sue the drug's manufacturer because a state law grants immunity to the maker of any drug approved by the Food and Drug Administration.

U.S. District Judge Paul L. Maloney of the Western District of Michigan said FDA approval of Paxil use by adults was enough to shield manufacturer SmithKline Beecham Corp., even though the agency never approved the drug's use by teens.


He therefore dismissed Nadine White and David B. McCullough's lawsuit against SKB over their 16-year-old daughter Moriah's 2001 suicide after taking Paxil for three months.

Michigan is the only state with a law providing drugmakers immunity from state tort suits if the FDA has certified their products as safe and effective. The only exceptions to the statute are for fraud on the FDA or bribery of an agency official.

In this case, White and McCullough filed a negligence and strict-liability suit against SKB in a Pennsylvania federal court because the company is located in that state.

The drugmaker won a change of venue to the Western District of Michigan because the plaintiffs are residents of that state. It then filed a motion to dismiss.

In their opposition to the motion the plaintiffs argued that their suit is a failure-to-warn case because SKB never warned doctors not to prescribe Paxil to teens or children and, in fact, conducted a secret campaign to promote such "off-label" use.

Moreover, since the company never applied to the FDA for marketing approval to prescribe the drug to teens and children, it cannot argue that it has immunity under the Michigan statute, they said.

Judge Maloney rejected that argument, saying the Michigan Legislature provided immunity to drug manufacturers for FDA-approved products and that it is uncontested that Paxil was approved by the agency for use in adults.

"The statute does not limit the protection to situations when the drug is used for approved purposes," he said. "Should the Legislature wish to limit the protection available to "off-label" uses of the drug, it may do so."



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