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Legal News Report 6-10-2016
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Supreme Court will again consider limits on imposing death penalty
Jun 6, 2016 | The Washington Post
By Robert Barnes
The Supreme Court on Monday said it would review two cases brought by African Americans on death row in Texas, the state that most often carries out what is an increasingly rare punishment in the United States. -
Jeb Hensarling Plan Rekindles Debate as Republicans Aim to Dismantle Dodd-Frank
Jun 7, 2016 | The New York Times
By Victoria Finkle
A proposal by a senior House Republican to dismantle portions of the 2010 Wall Street reforms known as the Dodd-Frank Act has rekindled a partisan debate over the state of banking regulation eight years after the financial crisis. -
French Court Convicts Uber of Violating Transport, Privacy Laws
Jun 9, 2016 | The Wall Street Journal
By Sam Schechner, Douglas Macmillan and Nick Kostov
A French court added a criminal conviction to a list of world-wide regulatory setbacks for Uber Technologies Inc. that are compelling the car-hailing company to adjust its sharp-elbowed business approach as it works to sustain its growth. -
Citigroup Calls Guy Hands’ Testimony in EMI Trial ‘Confused’
Jun 9, 2016 | The Wall Street Journal
By Becky Pritchard
Terra Firma founder suing investment bank for losses tied to 2007 buyout of music company
Legal News
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Supreme Court will again consider limits on imposing death penalty
Jun 6, 2016 | The Washington Post
By Robert Barnes
The Supreme Court on Monday said it would review two cases brought by African Americans on death row in Texas, the state that most often carries out what is an increasingly rare punishment in the United States.
One challenge involves Texas’s use of what lawyers say is an outdated method of determining whether inmates’ intellectual disabilities are so great that they should not be executed. The other alleges that racial discrimination infected an inmate’s sentencing.
Last term, Justices Stephen G. Breyer and Ruth Bader Ginsburg urged the court to accept a case that would allow the justices to fully examine whether capital punishment can be carried out in a way that satisfies the Constitution. So far, the court has not accepted such a case.
But Monday’s actions and recent decisions by the court are a reminder of how much time the court spends policing the imposition of the death penalty and the inclination of the justices to put limits on its use.
The court last term upheld the use of a much criticized drug used in lethal injections. But it has also thrown out the death sentence imposed on a black Georgia man by an all-white jury, tossed out the capital-punishment sentencing scheme in Florida, raised questions about the method used in Alabama and said states must be more flexible in determining intellectual disability.
Both of the cases accepted Monday come from Houston, which is in Harris County. About half of the African American prisoners on Texas’s death row are from there, according to lawyers in the case. They add that since December 2004, all of the new death sentences in Harris County have been imposed on men of color — three Hispanic men and 13 black men.
Texas has carried out six executions this year, representing nearly half of the 14 executions nationwide.
One of the cases is brought by Duane Buck, who says his trial attorney was inadequate because he presented testimony at sentencing by an expert who said black people were more likely to be violent.
“By any measure, Duane Buck’s death sentence is extraordinary,” his new attorneys said in a brief to the Supreme Court. “At sentencing, his trial attorney presented ‘bizarre and objectionable’ testimony from a ‘defense expert’ that Mr. Buck was more likely to be dangerous in the future because he is black.”
Buck was convicted of murder in the killing of his ex-girlfriend and a man at the woman’s Houston apartment in July 1995; her children were present.
During the sentencing phase of his trial, Buck’s attorney called psychologist Walter Quijano to testify about the convicted man’s “future dangerousness,” something Texas requires in order to impose death.
Buck’s attorney put Quijano on the stand even though he knew that Quijano believed “that race was among the ‘statistical factors in deciding whether a person will or will not constitute a continued danger,’ ” said Buck’s brief to the Supreme Court, filed by the NAACP Legal Defense and Educational Fund and the Texas Defender Service.
Then, on cross-examination, “the trial prosecutor exploited and compounded defense counsel’s error by asking Dr. Quijano to reiterate his false and discriminatory ‘expert’ opinion that Mr. Buck’s race increased his likelihood of future dangerousness,” the brief said.
Then-Texas Attorney General John Cornyn, now a Republican U.S. senator, conducted a study and said six death-penalty cases, including Buck’s, needed to be reopened because of testimony by Quijano.
But the U.S. Court of Appeals for the 5th Circuit denied Buck’s attempt to overturn his death sentence. Texas says future litigation of the long-running case is barred for procedural reasons.
Bobby J. Moore’s case is even older. He was convicted of murder for a killing during a grocery-store robbery in Houston in 1980. His case raises the question of whether modern standards should be used in determining whether he is intellectually disabled and thus ineligible for the death penalty.
Moore’s attorneys say the Texas Court of Criminal Appeals ignored the Supreme Court’s recent rulings about not using a strict IQ-score threshold in determining whether an inmate is mentally incompetent.
“Texas’s highest criminal court has decided that Texas courts must continue to apply a 1992 standard of intellectual disability unless and until the state’s legislature sees fit to enact” new regulations, said the brief filed by Washington lawyer Clifford M. Sloan. That approach “defies both the Constitution and common sense,” it said.
When the court first announced Monday morning it was accepting Moore’s case, it indicated it would also consider whether Moore’s 35 years on death row and 15 years in solitary confinement violated the Constitution’s protection against cruel and unusual punishment.
But hours later it clarified that the justices were considering only the intellectual-disability question.
The cases are Buck v. Stephens and Moore v. Texas.
https://www.washingtonpost.com/politics/courts_law/supreme-court-will-review-sentences-of-two-black-death-row-inmates/2016/06/06/91087c38-2bf3-11e6-9b37-42985f6a265c_story.html
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Jeb Hensarling Plan Rekindles Debate as Republicans Aim to Dismantle Dodd-Frank
Jun 7, 2016 | The New York Times
By Victoria Finkle
WASHINGTON — A proposal by a senior House Republican to dismantle portions of the 2010 Wall Street reforms known as the Dodd-Frank Act has rekindled a partisan debate over the state of banking regulation eight years after the financial crisis.
Representative Jeb Hensarling of Texas, who is chairman of the House Financial Services Committee, outlined the main parts of his plan on Tuesday during a speech in New York. He plans to introduce the legislation this month. The debate shows how divided Washington remains over how to supervise the financial industry, from the big banks to the small community institutions.
Mr. Hensarling’s plan, called the Financial Choice Act, builds on longstanding Republican hostility to the financial reform law, rolling back significant provisions and limiting the role of regulators in overseeing the country’s biggest banks. But it also advocates stronger penalties for financial fraud and puts a focus on capital buffers for large banks.
“Simply put, Dodd-Frank has failed,” Mr. Hensarling said in remarks to the Economic Club of New York. “It’s time for a new legislative paradigm in banking and capital markets.”
After the speech, Mr. Hensarling planned to meet with the Republican presidential candidate Donald J. Trump, who has called for a repeal of Dodd-Frank. The Trump campaign did not immediately respond to a request for comment.
Back in Washington, Democrats had sharp words for the plan. “We’ve only seen a summary of the bill so far, but even from that, it’s clear that Congressman Hensarling and his fellow Republicans think that the poor Wall Street banks have suffered too much under the new rules, and it’s time for them to return to the good old days before the 2008 crisis, when these banks could run wild,” Senator Elizabeth Warren, Democrat of Massachusetts, said during a hearing of the Senate Banking Committee on Tuesday.
Senator Warren called the bill “Congressman Hensarling’s wet kiss for the Wall Street banks.”
Sherrod Brown of Ohio, the top Democrat on the banking panel, said in a statement that the plan “underscores the collective amnesia of many in Congress and on Wall Street about how devastating the financial crisis was for an entire generation of working and middle-class Americans.”
One of the plan’s central provisions would allow the country’s biggest banks to exempt themselves from capital and liquidity requirements and other regulatory standards if they held enough capital to surpass a certain threshold.
Mr. Hensarling estimated that the biggest banks would be required to collectively raise “several hundred billion dollars in new equity” to benefit from the proposal.
That is likely to dissuade many of the top financial institutions from offering broad support for the measure.
Isaac Boltansky, a policy analyst at Compass Point Research & Trading, said, “The nation’s largest banks are unlikely to throw their weight behind it, as they would have to raise hundreds of billions of dollars to benefit, and doing so would undermine the tens of billions they have already spent to comply with the Dodd-Frank Act.”
According to an outline released on Tuesday, the bill would also repeal theVolcker Rule, which restricts trading activities at banks, and replace the Dodd-Frank Act’s process for winding down a failing institution with a new chapter of the bankruptcy code.
On Tuesday, Mr. Hensarling said, “I also would point out, regulators essentially bailed out Bear but let Lehman fail,” references to Bear Stearns and Lehman Brothers, which ran into trouble around the time of the financial crisis. “Although it was painful, somewhat chaotic,” he continued, “those in the bankruptcy arena would tell you the Lehman bankruptcy, to some extent, worked as it should have worked.”
The White House has been critical of the proposal, including changes to the process for dealing with distressed institutions.
The proposal “will allow big banks to go back making risky bets and put taxpayers on the hook once again for bailing out those banks to prevent a second Great Depression,” said Josh Earnest, the White House press secretary. “That doesn’t make any sense.”
The plan also takes aim at the Consumer Financial Protection Bureau, the brainchild of Ms. Warren. Mr. Hensarling proposes to restructure it and other agencies as bipartisan commissions and subject them to congressional appropriations.
In addition, a body of regulators known as the Financial Stability Oversight Council would lose its ability to designate risky nonbanks as “systemically important.” The legislation also includes a number of regulatory relief items for community banks, some of which are widely supported and others that have been opposed by Democrats.
James Ballentine, executive vice president of congressional relations and political affairs for the American Bankers Association, said the group appreciated efforts to improve Dodd-Frank, though more details were needed.
“We really need to see the language on this bill. From the outline, there are several proposals, particularly in the regulatory relief area for community banks, that we’ve advocated for quite some time,” he said.
As Mr. Hensarling delivered his speech, a handful of protesters stood outside, asserting that he had received millions of dollars in campaign funding from major banks in his role as chairman of the powerful House banking panel. In a statement, the group, Take on Wall Street, called the bill a “free pass” for the financial services industry. It is backed by several labor organizations and grass-roots networks.
Representative Maxine Waters, a Democrat from California and the ranking member on the House committee, said the plan “immediately takes two steps backward by eliminating any oversight of the riskiest activities at banks and nonbanks by dismantling the Financial Stability Oversight Council and subjecting bank regulators to the appropriations process.”
For now, the proposal remains a messaging tool for House Republicans, one that might influence the presidential debate.
“There is much that Donald Trump has said and done with which I disagree, but one thing I do agree with is that it is time to rebuild and replace Dodd-Frank,” Mr. Hensarling said.
http://www.nytimes.com/2016/06/08/business/dealbook/republicans-plan-to-dismantle-dodd-frank-rekindles-a-debate.html?ref=topics
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French Court Convicts Uber of Violating Transport, Privacy Laws
Jun 9, 2016 | The Wall Street Journal
By Sam Schechner, Douglas Macmillan and Nick Kostov
A French court added a criminal conviction to a list of world-wide regulatory setbacks for Uber Technologies Inc. that are compelling the car-hailing company to adjust its sharp-elbowed business approach as it works to sustain its growth.
On Thursday, a Paris court convicted Uber and two of its executives in France— Pierre-Dimitri Gore-Coty and Thibaud Simphal—of violating transportation and privacy laws, fining them a total of about €964,000 ($1.1 million). The outcome in Paris illustrates the degree to which the company is under pressure to adapt to a broad array of regulatory threats.
Uber has defied regulators and flouted local laws in five continents, but it has still managed to spread quickly into over 400 cities by sometimes making concessions when pressured by local governments. It has suspended its low-cost UberPop in places across Europe including France, assented to a temporary freeze on surge pricing in New Delhi, and agreed in California to obtain permits for airport pickups and nix “the safest ride” slogan from marketing promotions.
France, once Uber’s largest European market, is now one of its biggest sore spots. Uber has money to pay the fines after raising a total of more than $13.5 billion in equity and debt. But, the verdict is a blow for the San Francisco company in the broader legal war between Silicon Valley firms and governments world-wide about how—and whether—to regulate the digital economy. It represents one of Uber’s highest profile legal defeats in a market it at one time believed was so promising that it chose Paris for its first overseas expansion.
An Uber spokesman said the company “is disappointed” by the verdict and will appeal.
Law-enforcement officials in France and other countries say Uber has tried to sidestep the rules meant to ease traffic and protect riders in a race to gain market share. Uber says it is bringing innovation to the taxi sector, where regulations are protecting incumbent companies that haven’t kept pace with technology. Opposition and closer regulatory oversight have forced Uber into some rare retreats in many markets. The company last month halted ride-hailing services in Austin, for instance, where residents voted against overturning background-check regulations that included expensive and time-consuming fingerprint scans.
UberPop—which uses drivers without commercial licenses, the equivalent of UberX in the U.S.—has come under regulatory attention in Europe. In addition to France, the company has had to close the service in Belgium, Germany, the Netherlands, Spain, and Sweden under pressure from regulators and courts. On Thursday, a German court upheld its ban on the UberPop service.
The UberPop pullback has slowed Uber’s growth in Europe, some people close to Uber have said. In France, Uber had about 500,000 regular UberPop riders before it closed the service, nearly half its total of 1.2 million in France. Uber continues to operate its more expensive services using licensed drivers in the country. The company also faces continuing battles over whether its drivers should be categorized as employees rather than independent contractors—something that would upend its business model. The company recently agreed to pay up to $100 million to settle a class-action lawsuit in California to ward off that threat.
In France, meanwhile, an agency charged with conducting payroll taxes in the Paris region recently asserted that the company’s drivers are in fact employees, but Uber is appealing that decision in a case that could eventually end up in court.
In response to these challenges, Uber has deployed an army of lawyers and lobbyists and organized groups of its customers to pressure local lawmakers into passing pro-Uber ordinances in over 70 jurisdictions in the U.S.—including cities and states—as well as parts of Mexico, Canada, Australia, India and the Philippines. The first place to pass a ride-hailing law was California in 2013.
Uber also has made peace in another place where it had faced criminal charges: South Korea. The country, which had indicted Uber Chief Executive Travis Kalanick and his Korean partners for violating public-transport law, passed a revised set of regulations after Uber agreed to register existing taxi drivers to operate their own vehicles with its mobile app.
Uber has also begun to use its valuable equity to form strategic alliances with powerful nation-states. The company last month took a $3.5 billion investment from Saudi Arabia’s sovereign-wealth fund, part of the kingdom’s effort to diversify its economy.
Uber’s rivals aren’t without their own legal challenges, albeit in a smaller geographic footprint. In China, where Uber battles Didi Chuxing Technology Co., the government is considering imposing taxi-like regulations to ride-hailing companies. Uber’s main competitor in the U.S., Lyft Inc., faces many of the same issues, and also recently backed out of Austin. France also has indicted a Paris-based ride-sharing service called Heetch, which faces trial this summer.
For Uber, the legal fight in Europe continues. Uber has appealed to the European Union’s executive arm against transport laws in France, Germany and Spain, arguing the laws violate EU treaty principles such as the right to free enterprise. In the French case decided Thursday, Uber had mounted a spirited defense on multiple fronts. In the end, the court found the company and the two men guilty of all of the taxi-related charges, clearing the men on two data-protection charges and the company on one.
Uber also has asserted that the law used to bar UberPop in France wasn’t applicable because France should have notified the EU before enacting it, because the law regulates an “information-society service.” The body could decide to sue France in EU court seeking changes, and a similar question already is headed to the EU’s top court.
Uber recently scored some points on that front. France’s highest administrative court agreed with part of the company’s reasoning last month, invalidating a decree that banned Uber from showing the location of available cars on a map. The EU’s executive arm last week also warned member states not to over-regulate companies such as Uber, saying that they should turn to bans only as a last resort.
http://www.wsj.com/articles/french-court-convicts-uber-of-violating-transport-privacy-laws-1465477861
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Citigroup Calls Guy Hands’ Testimony in EMI Trial ‘Confused’
Jun 9, 2016 | The Wall Street Journal
By Becky Pritchard
Citigroup struck back at private-equity firm Terra Firma Capital Partners founder Guy Hands in court on Thursday, saying his testimony about the disastrous purchase of music company EMI Group was “hazy” and “confused.”
Terra Firma is claiming at least £1.5 billion ($2.2 billion) in damages for fraudulent misrepresentation from investment bank Citigroup over Terra Firma’s 2007 takeover of EMI, home to artists from The Beatles to The Beastie Boys. Terra Firma lost its entire £1.75 billion investment in EMI when it was taken over by lender Citigroup in 2011 following financial difficulties.
EMI’s finances began deteriorating rapidly after the Terra Firma buyout. The company had been struggling with a decline in global CD sales and the rise of music downloading, and several big artists left the label after the buyout including Radiohead and Robbie Williams. In 2011 the company was seized by lenders after talks to restructure its debt failed.
Mr. Hands lost a legal claim against Citi in New York in 2010 over the EMI takeover, but in 2013 won the right to have a retrial on the grounds that the judge in the original case had given incorrect instructions to the jury. Both sides then agreed to hear the case in London and the six-week trial began on June 7.
On the third day of the High Court trial, Mark Howard QC, representing Citi, cross examined Mr. Hands calling his memory of events “hazy” and saying that his testimony was “confused” and “very very different” in some respects to the testimony he gave in the New York case six years earlier.
Mr. Hands said that nine years after the takeover, some parts of his memory weren’t strong but that “I think my memory is very good on certain bits.”
Citigroup and Terra Firma declined to comment Thursday.
Terra Firma’s main claim is that Citi banker David Wormsley misled Mr. Hands in May 2007, telling him that private-equity firm Cerberus was bidding for the company and that Mr. Hands would need to put in a higher bid if he wanted to win the auction for the company, according to court documents. Cerberus didn’t put in a bid for EMI. Citi denies all of Mr. Hands’ allegations and says that Mr. Wormsley didn’t make those claims.
Terra Firma also says in court documents that former senior Citi bankers Chad Leat and Michael Klein had a negative view of the company yet reassured Mr. Hands that EMI was healthy. Citi denies that Mr. Leat and Mr. Klein made any dishonest claims or misled Mr. Hands. Much of the case relies on Mr. Hands’ recollections of phone calls, some of which Citi disputes ever took place.Advertisement
During the Thursday hearing, Justice Michael Burton, who will decide the case without a jury, asked Mr. Hands why his testimony had changed since the New York hearing in relation to a phone call between Messrs. Hands and Mr. Wormsley before a crucial meeting in May 2007. Citi agrees the call took place but disputes the nature of the conversation.
http://www.wsj.com/articles/citigroup-calls-guy-hands-testimony-in-emi-trial-confused-1465496403
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