By Terry Baynes and Carlyn Kolker

Federal judges catch Rakoff fever

2/24/12

Rakoff fever is spreading. The movement began when Manhattan federal judge Jed Rakoff rejected the Securities and Exchange Commission's $285 million settlement with Citigroup Inc last November. Now, other judges are catching on, questioning whether the government is letting companies off the hook too easily, The AmLaw Litigation Daily writes.

On Wednesday, New Jersey federal judge Renee Marie Bumb ordered the Federal Trade Commission and weight-loss advertising company Circa Direct LLC to answer a bevy of questions before she approves their $11.5 million settlement. Following in Rakoff's footsteps on the Citigroup settlement, she questioned whether the settlement was really "in the public interest" since it does not require the company to admit wrongdoing.

The FTC, which sued Circa Direct and nine other companies last April over the marketing of acai berry weight-loss products on fake news websites, defended the proposed settlement in a statement.

Bumb isn't the only other judge to channel Rakoff's skepticism. In January, a Wisconsin federal judge questioned the SEC's settlement with headphone maker Koss Corp before ultimately approving it. Earlier this month, Brooklyn federal judge Frederic Block called on the SEC and former Bear Stearns fund managers Ralph Cioffi and Matthew Tannin to explain why their $1 million deal was fair.

The man presiding over Deepwater Horizon case

2/24/12

The lawsuit over how much oil company BP Plc and others should owe for the explosion on the Deepwater Horizon oil rig is, as Jonathan Stempel of Reuters has written "perhaps the most complex environmental lawsuit in history." Bloomberg News previews the upcoming trial, which is scheduled to begin on Monday, by taking a look at U.S. District Judge Carl Barbier, a former maritime lawyer who is presiding over the case. Barbier, 67, a Clinton appointee, was born and bred in Louisiana's oil exploration lands, Bloomberg notes. He grew up in a cluster of towns across the Mississippi River from New Orleans that served the oilfield services industry. His father was a marine diesel engineer. He attended Southeastern Louisiana University on a football scholarship, and then law school at Loyola University. Before becoming a judge, he practiced federal maritime law, representing plaintiffs suing tankers and oil companies over injuries. His previous life representing plaintiffs has caused some on the defense to cry foul over possible bias, Bloomberg reports. Still, says Blake Jones, who represents business owners suing BP, Barbier must ultimately respond to the 5th Circuit Court of Appeals - one of the most conservative in the nation. "I don't think he'll stray too far off the leash," Jones tells Bloomberg.

One man's quest for racial neutrality

2/24/12

The engineer behind Fisher v. University of Texas, the affirmative action suit headed to the Supreme Court, is an unassuming one-man show. Edward Blum has no law degree and no staff, yet he is the driving force behind several high-profile lawsuits challenging race-based laws and policies, The Texas Tribune writes. After losing a run for Congress in 1992, the former investment broker proved in court that his Houston district was drawn to segregate minority voters. That win set off his a two-decade-long courtroom quest for racial neutrality. In 1997, he stopped the Houston Independent School District from considering race when admitting children to its gifted programs.

Now, Blum is taking on University of Texas at Austin's affirmative action policy -- a case the Supreme Court will hear next term. And he has another critical case waiting in the wings: Shelby County v. Holder, which is from Alabama. There, he's hoping to overturn the preclearance provision of the Voting Rights Act, which requires areas with a history of racial discrimination to get federal approval before making any voting changes.

Fifth Amendment password protection

2/24/12

The target of a child pornography investigation does not have to unlock his encrypted computer hard drives for law enforcement, a federal appeals court ruled on Thursday. Forcing him to do so would be tantamount to making him testify against himself -- a violation of the U.S. Constitution's Fifth Amendment protection against self-incrimination.

The 11th Circuit Court of Appeals' ruling appears to be the first federal appellate decision to extend Fifth Amendment protection to encryption codes and passwords in a criminal investigation, the Wall Street Journal Law Blog's Joe Palazzolo writes. The decision could handcuff federal investigators, as more data are locked behind passwords and encryption codes.

The central question for the court was whether decrypting the hard drives is akin to testifying, or just a physical act like handing over the key to a safe. The Fifth Amendment does not apply to physical acts, but only to testimony where a person has to use "the contents of his own mind." The court found that unlocking the drives and producing the potentially incriminating files required the suspect to use his mind and was not a simple physical act.

The Fifth Amendment privilege also doesn't apply if the government already knew the information that could be incriminating -- something known as the "foregone conclusion" doctrine. Here, the 11th Circuit found that the government didn't know what, if anything, was on the encrypted hard drives or if the suspect was even able to unlock them.

Two district courts came to the opposite conclusion in Colorado and Vermont, finding that the government could force suspects to decrypt storage devices and computers in criminal probes. But the testimony in those cases was a foregone conclusion, writes The Volokh Conspiracy's Orin Kerr. In the Vermont case, investigators had already seen evidence of child pornography on the suspect's laptop.

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