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Law Firms Face New Rules on Retirement
Legal Business |
2007/11/28 02:05
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With hordes of attorneys poised to assume senior status, achieving a consensus among partners to ditch mandatory retirement policies is just the first step -- and perhaps the easiest -- in switching to what many say is a fairer system. Kirkpatrick & Lockhart Preston Gates Ellis recently did it, Pillsbury Winthrop Shaw Pittman made the change, and others are expected to follow. And while these firms report that reaching the decision to abandon age-based retirement was relatively painless, implementing a merit-based system for evaluating older attorneys will not be a simple feat for most. "It takes time for people to internalize what this means," said Deborah Johnson, a member of Pillsbury Winthrop Shaw Pittman's executive committee and the firm's chief human resources officer. Pillsbury Winthrop in April decided to get rid of the provision in its partnership agreement that, in general, created a rebuttable presumption that when lawyers turned 65 it was time for them to give up full equity status. In light of the firm's decision, Johnson has worked with other firm leaders to devise a system that provides flexibility but holds attorneys accountable for their contributions. She estimates that the change affects about 10 percent of the firm's partners. The full results of the decision at the 755-attorney firm will take at least a year to realize, Johnson said. In the meantime, the firm is operating under its newly implemented program that includes refined partner evaluations, stated goals from senior partners, revised financial planning services and an increased role for career consultants in working with "seniors." The firm defines seniors not by their age but by year of service. It considers as seniors those who have practiced for 25 years or more. |
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New court date set for Vick over dogfighting
Court Watch |
2007/11/28 01:59
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Disgraced football star Michael Vick will stand trial on April 2 on state charges of involvement in dogfighting, a Virginia state court ruled on Tuesday. The trial of the suspended Atlanta Falcons quarterback in a state court is separate from federal charges of dogfighting to which Vick pleaded guilty in August. Vick is due to be sentenced on those charges on December 10 and faces up to five years in jail, though prosecutors have requested a sentence of between 12 and 18 months. In an unusual move, the 27-year-old turned himself in to U.S. marshals last week to begin serving the federal sentence early. The two state charges carry sentences of five years each, which would be added to any sentence on the federal charges, according to media reports. Vick's indictment in July shocked U.S. sports fans because it was a spectacular fall from grace and because dogfighting, in which people bet on pit bulls and other aggressive dogs, is widely reviled for its cruelty. Vick initially pleaded innocent but then admitted his guilt after reaching an agreement with prosecutors. The brief hearing at Surry County Circuit Court, Virginia, also set court dates in March and April for three other co-defendants, according to a member of the prosecutor's team. |
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High-Profile Lawyer Sentenced for Taxes
Legal Business |
2007/11/27 08:03
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A civil rights lawyer known for his high-profile cases against police and President Bush was sentenced Tuesday to three years in prison for federal tax evasion, bankruptcy fraud and money laundering. Stephen Yagman, 63, was convicted of trying to avoid paying more than $100,000 in federal income taxes while living what prosecutors said was a lavish lifestyle that included shopping sprees and Aspen vacations. Yagman told U.S. District Judge Stephen Wilson that he was "a target" for prosecutors because of his legal campaigns against police. In a statement spanning two days at the end of his sentencing hearing, Yagman argued that his problems stemmed from careless inattention. "I am kind of a savant, focused on civil rights," Yagman said Monday. "I got sloppy." Wilson said he had known Yagman professionally for 20 years and called him brave for taking on the establishment — but he also said Yagman committed his crimes knowingly. He ordered Yagman to surrender Jan. 15, serve two years of supervised release after his prison term and pay the costs of his prosecution. Prosecutors had asked for a nine-year minimum prison sentence. "The fact that the defendant is a lawyer is an aggravating factor," federal prosecutor Alka Sagar said Monday. "He of all people knew the implications of his conduct." Defense attorney Barry Tarlow said he would appeal Yagman's conviction. Yagman led high-profile legal campaigns against police, and over several years filed dozens of lawsuits claiming that Los Angeles police abused and framed suspects and made false arrests. He also sued President Bush and other officials, alleging violations of constitutional rights of a detainee at the U.S. prison camp in Guantanamo Bay, Cuba, and sought class-action status on behalf of all detainees. Yagman filed for bankruptcy in 1999, but prosecutors said he failed to disclose that he lived in a 2,800-square-foot home near the beach. He had, however, made mortgage and property tax payments on the property and claimed the homeowner's mortgage-interest deduction on his tax returns. The government argued that Yagman paid only a fraction of his income taxes from 1994 to 1997, eventually owing the IRS more than $158,000 in back taxes, interest and penalties. Prosecutors also alleged he failed to pay $30,000 in payroll taxes that his law firm owed during that period and claimed he hid about $617,000 he received from his mother and elderly relatives from the IRS. Yagman also tried to hide $70,000 in assets to avoid paying out a civil judgment awarded against him and his firm in 1996, prosecutors said. |
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JDSU Wins Class Action Jury Verdict
Class Action |
2007/11/27 08:02
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JDSU today announced that a jury has ruled in favor of the Company on all claims in a securities class action lawsuit filed by Connecticut Retirement Plans and Trust Funds against the Company in the United States District Court for the Northern District of California, Oakland, California. "We are extremely gratified by the jury's verdict, as we have always believed that the plaintiffs' claims were without merit," said Kevin Kennedy, JDSU's President and Chief Executive Officer. "We will continue focusing our full attention on developing innovative products and delivering on the significant potential of our business model to create shareholder value." The Company noted that while the jury's decision in this case is a significant positive milestone, it continues to defend itself in the securities class action and related litigation. |
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High court hears case of lost 401(k) funds
Breaking Legal News |
2007/11/27 08:01
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Although U.S. workers can invest money in a retirement fund sponsored by their employer, it is not clear whether they can sue to recover money lost because of mistakes by the fund's administrator.
That issue came before the Supreme Court on Monday in a case that could shape the pension rights of 70 million employees.
The case began when James LaRue, a management consultant from Texas, said he lost $150,000 from his 401(k) retirement account when the plan's administrators ignored his instructions to move his money from a high-risk stock fund into government bonds in 2001. LaRue sued his employer, DeWolff, Boberg & Associates, but his claim was thrown out before a trial because, according to the lower courts, the federal law governing pensions and benefits does not allow individuals to sue over losses in their retirement accounts.
His case prompted the high court to reexamine the federal pension law in an era when employees -- not their employers -- are responsible for deciding where their retirement funds will be invested.
In 1974, Congress adopted federal rules for employer-sponsored pension funds and health benefits in the Employee Retirement Income Security Act. In the decades since, the high court has interpreted this worker-protection law to bar employees from suing their employers over benefit claims. For example, the court said employees and their families could not sue for damages if their healthcare plan refused to pay for a needed medical treatment.
During Monday's oral argument, the justices seemed divided over whether to allow employees like LaRue to sue over losses in their retirement funds.
Under the 1974 law, the sponsors for a pension plan who breach its trust can be sued and forced to pay for "any losses to the plan." But the lawyer for LaRue's employer said that did not refer to individual claims. It refers to "something systemic, something that affects the interests of the plan as a whole rather than just one individual participant," said Thomas Gies.
He and other business lawyers warned that opening the door to lawsuits over investment losses could prove very costly to employers -- and could even encourage some of them to drop their retirement plans.
Bush administration lawyers joined the case on the side of LaRue. They said the 1974 law was intended to protect the pensions of workers. "It is thus hard to imagine that Congress would have left participants and beneficiaries who have been injured by a breach of [trust] duties without any effective federal remedy," said U.S. Solicitor General Paul Clement in his brief to the court.
A huge sum of money is potentially at issue, Clement noted. In the first quarter of this year, so-called defined contribution plans, to which employees contribute their own money, held about $3.3 trillion in assets, according to the Federal Reserve Board.
Representing LaRue was Peter K. Stris, a law professor at Whittier Law School in Costa Mesa. He said the "plain text" of the 1974 law allows suits when trustees breach their duty, and that is what occurred in this case. This is "a make-whole remedy for . . . losses that are caused by a breach of trust," he said, not an open-ended claim for damages against the employer.
While Chief Justice John G. Roberts Jr. and Justice Antonin Scalia seemed skeptical of LaRue's right to sue, Justices David H. Souter, Ruth Bader Ginsburg and Stephen G. Breyer appeared equally skeptical of his employer's claim that no lawsuits are allowed.
And Justice Anthony M. Kennedy, who usually casts the deciding vote when the court is closely split, was uncharacteristically quiet during the hourlong argument. |
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Court to Consider Investor's 401(k) Suit
Breaking Legal News |
2007/11/26 08:41
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James LaRue says he lost $150,000 when his instructions to his employer on where to invest money in his retirement plan were ignored. Now the Supreme Court will decide whether a federal pension-protection law gives LaRue the right to sue to recover his losses. Arguments in the case, which has far-reaching consequences, were scheduled for Monday. LaRue, who used to work at a management consulting firm, is among the 42 million workers who contributed to a 401(k) retirement plan. At issue in LaRue's case are the limits to lawsuits under the Employee Retirement Income Security Act. It regulates private-sector retirement plans holding over $5.5 trillion in assets, including $2 trillion in an estimated quarter of a million 401(k) plans across the country. Unlike traditional pension plans, participants in 401(k) plans — named after a section in tax law — do not know how much money they will receive in retirement. It depends on how well their chosen investments have performed. ERISA was designed to safeguard pension fund money from misappropriation. The 1974 law followed the failure of some companies to pay promised pensions and extensive looting of some pension and welfare funds at companies and labor unions. Class-action suits filed under the law over the past decade have targeted Enron, WorldCom and other major companies tainted by scandal. From a legal standpoint, it is less clear what action an individual account holder can take against a retirement plan when the conduct at issue is less than criminal. LaRue says that in 2000 and 2001 he requested changes in his investment allocations in mutual funds that were available to participants in his company's 401(k) plan. He says the requests were not honored. "I wanted to sell stocks and move to cash because I thought the market would head down. I was right," LaRue said in a telephone interview. "I didn't find out that the plan had not executed my transactions until 10 months later. They had a substandard reporting system. I left the firm. I asked them again to make the change, and they still didn't do it. I don't know why." The Bush administration, siding with LaRue, says an appeals court ruling against him would leave participants in "the most common form of pension plan who have been injured by a breach of fiduciary duty without a meaningful remedy from any court." LaRue sued in 2004, saying he had tried to avoid going to court and instead sought to reach a settlement with his former employers. He was unsuccessful, as it turned out. "We had already been through one lawsuit over stock in the company, which I won," said LaRue. "Even though I prevailed, it was not pleasant. I didn't want to go through it again." Business groups assign a different motive to the long delay in filing the second suit, saying LaRue was waiting to see how the market performed. If the value of his investment went up, he made money. If it went down, he would head to court. LaRue, according to the American Council of Life Insurers, was "squarely in the proverbial catbird seat. ... He could not lose. ... Granting LaRue relief in this case would encourage other plan participants to do the same." In papers in the case, the council said denying LaRue the right to sue for damages would ensure that a plan participant who claims his investment directions were not followed would act promptly, seeking a court order if necessary. When ERISA was passed, decisions on where to invest money were out of workers' hands. Under 401(k) and other types of plans, employees make the choice. "If they're going to shift the responsibility for a plan from a company to the individual, then they should listen to our instructions," LaRue said. ERISA pre-empts state laws relating to employee benefit plans, meaning LaRue cannot use them to sue, and therein lies his problem. Besides protecting workers, ERISA was aimed at encouraging employers to set up retirement plans and in doing so, Congress limited the right to sue. Just where the line is drawn is the question in LaRue's suit, though the Supreme Court in past decisions on ERISA has drawn the line in favor of employers. The business world says allowing cases like LaRue's could lead to a wave of suits without merit. "There is a cost associated with any expansion of remedies," the U.S. Chamber of Commerce said in a filing in the Supreme Court supporting LaRue's former employer. Opening up plan administrators to liability will increase the cost of running ERISA plans, result in fewer being established or reduce the level of benefits, the business group says. The case is LaRue v. DeWolff, Boberg & Associates Inc; and DeWolff, Boberg & Associates Inc., Employees' Savings Plan, 06-856. |
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Court Won't Review San Diego Home Hunts
Law Center |
2007/11/26 05:42
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The Supreme Court rejected a challenge Monday to a county's practice of routinely searching welfare applicants' homes without warrants and ruling out assistance for those who refuse to let them in. The justices refused, without comment, to intervene in the case from San Diego County, where investigators from the local District Attorney's office show up unannounced at applicants' homes and conduct searches that include peeking into closets and cabinets. The visits do not require any suspicion of fraud and are intended to confirm that people are eligible for government aid. Failure to submit to the searches, which can last an hour, disqualifies applicants from assistance. The 10-year-old program was challenged by the American Civil Liberties Union on behalf of six single parents who were seeking assistance. The welfare applicants argued that the Fourth Amendment, which prohibits unreasonable searches, protects them from the home visits. "When the investigator conducts the home inspection, no part of the home is off-limits," they said. The 9th U.S. Circuit Court of Appeals, upholding the program, said the Supreme Court in 1971 allowed social workers to visit homes in New York to determine eligibility. The appeals court, in a 2-1 decision, said the visits do not even constitute a search under the Fourth Amendment in part because people are free to turn away the investigators. In dissent, however, Judge Raymond Fisher said it was unlawful for an investigator from the district attorney's office to go "walking through the applicant's home in search of physical evidence of ineligibility that could lead to criminal prosecution either for welfare fraud or other crimes unrelated to the welfare application." The local government said the high court should not step in. "No applicant has been prosecuted for welfare fraud based upon anything observed or discovered during a home visit that contradicted information provided by the applicant," the county said in its brief for the Supreme Court. Eight appeals court judges voted to have the full San Francisco-based court hear the case. Seven of those judges called the program "an attack on the poor." |
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Class action or a representative action is a form of lawsuit in which a large group of people collectively bring a claim to court and/or in which a class of defendants is being sued. This form of collective lawsuit originated in the United States and is still predominantly a U.S. phenomenon, at least the U.S. variant of it. In the United States federal courts, class actions are governed by Federal Rules of Civil Procedure Rule. Since 1938, many states have adopted rules similar to the FRCP. However, some states like California have civil procedure systems which deviate significantly from the federal rules; the California Codes provide for four separate types of class actions. As a result, there are two separate treatises devoted solely to the complex topic of California class actions. Some states, such as Virginia, do not provide for any class actions, while others, such as New York, limit the types of claims that may be brought as class actions. They can construct your law firm a brand new website, lawyer website templates and help you redesign your existing law firm site to secure your place in the internet. |
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