Brownstein already handles water cases in addition to real estate, lobbying, litigation, corporate law and gaming cases. Jim Lochhead, a Brownstein lawyer who specializes in water, said Thursday that the merger will allow the combined firm to handle cases across the West at all stages, from arguing for water rights in court to securing permits from regulators.

Lochhead said water will become the most important natural resource in the West over the next 20 to 30 years because of climate change and population growth. He thinks utilities and private industry will increasingly be looking for new ways to provide it and willing to go farther to get it, such as recycling water or converting sea water to drinking water.

"Those kinds of projects and that kind of thinking is really going to require a broadbased approach," Lochhead said.

He said the firm would not be able to represent any cases in which California and Colorado water interests are in direct opposition. But increasingly he thinks complicated water disputes will be worked out by negotiating, as happened recently among upper and lower basin states who depend on water from the Colorado River.

Brownstein's current clients include the Denver suburb of Aurora, the Idaho Power Co. and real estate developers in New Mexico and Colorado.

Hatch & Parent represents the San Diego Water Authority, the cities of Fresno and Oxnard and the South Tahoe Public Utility District.

The two conservative justices subjected a lawyer for corporate investors to tough questioning during arguments as the justices try to set boundaries in stockholder lawsuits for securities fraud.

Investors in Charter Communications Inc., one of the country's largest cable TV companies, are suing two suppliers that allegedly schemed with Charter executives to mislead stockholders about the company's revenue growth.

The outcome of the case will determine the fate of a separate suit by Enron shareholders who are seeking over $30 billion from banks accused of colluding with the energy company to hide its debts.

If the court rules against investors, "it will mean the end of the case" for Enron shareholders and the banks that were primarily liable, attorney Patrick Coughlin, representing Enron stockholders, said outside the Supreme Court after the arguments.

In the case before the court, suppliers Scientific-Atlanta Inc. and Motorola Inc. "were not passive bystanders facilitating a fraud by Charter," said investor attorney Stanley Grossman. "Their deceptive conduct was integral to the scheme to create fictitious advertising revenues for Charter to report to investors."

Why shouldn't the court be guided by its 1994 ruling that sharply restricted liability by saying investors cannot sue for aiding and abetting a securities fraud? the chief justice asked. "You're asking us to extend that liability."

Outside the courthouse later, Grossman said, "We are not asking for an expansion. The other side is asking for a cutback."

Earlier this year, Roberts and Justice Stephen Breyer did not participate when the court decided to hear the case. On Tuesday, Roberts was back, but Breyer was still out. As of last year, both owned stock in Cisco Systems Inc., which now owns Scientific-Atlanta.

Though the absence of Breyer means the case could end up deadlocked 4-4, the hour of arguments Tuesday seemed to weigh against investors.

Scalia suggested that the court might "sensibly limit" the right to sue so that schemes can be attacked by the Securities and Exchange Commission, but not by investors' lawsuits. That is how aiding and abetting violations are handled.

"What distinguishes the liability that you propose from aider and abettor liability?" asked Scalia.

Stephen Shapiro, the attorney representing Scientific-Atlanta and Motorola, said the lawsuit cannot proceed against the two suppliers unless they made misstatements to Charter's investors, prompting an objection from Justice Ruth Bader Ginsburg.

Under the theory of Scientific-Atlanta and Motorola, "they are home free because they didn't themselves make any statement," said Ginsburg. "But they set up Charter to make those statements, to swell its revenues — revenues that it in fact didn't have."

Charter persuaded the two suppliers to buy advertising that was bankrolled with money from Charter, which paid a $20 premium on each of hundreds of thousands of cable TV set-top boxes, for a total of $17 million. The amount of the overpayments equaled the amount the two suppliers paid for the advertising.

Charter reported the advertising payments as revenue, a step that helped Charter paint a rosy financial picture for the fourth quarter of 2000, a move designed to artificially inflate the price of the stock.

Characterized by some as the "Roe vs. Wade for the securities industry" and others as "the most important securities case in a generation," the eventual decision will have a significant impact on whether investors in companies that commit securities fraud should be able to sue investment banks, accountants, lawyers and others who were direct "participants" in that deception. Current shareholders' rights for going after third parties that aid or abet corporate fraud are not as clearly defined as one would think.

First, a quick synopsis of the StoneRidge vs. Scientific Atlanta case: In 2000 to 2001, technology companies Motorola and Scientific Atlanta (now owned by Cisco Systems) allegedly agreed to supply cable TV provider Charter Communications with equipment at a $20 premium over the traditional cost with the knowledge that Charter intended to account for the transactions improperly as advertising revenues (the vendors used the extra funds to buy advertising space).

These "sham" transactions inflated Charter's revenue by $17 million. When the revenue inflation came to light in 2002, Charter's stock crashed from $26.31 to 76 cents, a $7 billion loss in market cap. StoneRidge, an institutional investor in Charter, accused the two vendors of participating in a "scheme to defraud" investors and now wants the right to sue them for remediation.

StoneRidge's ability to go after the tech companies remains thwarted, however, by the outcome of a 1994 Supreme Court case known as Central Bank vs. First Interstate. The Court held that while all "primary actors"--those who were directly part of a scheme (the emphasis is mine) to defraud investors--can be sued for federal securities fraud, the "secondary actors" who aided and abetted the fraud cannot be sued. This case once again raises this all-important issue of third-party liability in securities cases, settling it once and for all.

As an advocate for individual investors, it's not surprising, I'm sure, to hear me contend that all participants who directly engage in activities to deliberately defraud investors be held liable for their actions. Whether the Court will agree with me depends on their definition of the word "scheme" under the federal securities statute.

If you look it up in the dictionary, one definition for the word has it as a synonym for an underhand plot or conspiracy. Since it generally takes two or more to plot and conspire, it could be reasonably argued that the use of the word "scheme" in the statute should allow for more than just one party (such as the investment banks, accountants and lawyers) to be labeled the "participants" in the fraud and hence be held accountable.

If the Court's strict constructionists are to be intellectually honest in their interpretation of the meaning of "scheme" liability in StoneRidge next week, it would prove a revolutionary milestone in the saga of investor rights. Shareholders would be granted a much more level playing field to target for recourse those who had targeted them for fraud.

Sadly, smart money is probably better waged on the Court reaffirming the Central Bank decision from 13 years ago, thereby remaining consistent with its general pro-business stance and previous decisions that limit lawsuits against public companies. While such a toe-the-line decision would generate sighs of relief in the boardrooms of otherwise culpable investment banks, accounting firms and law firms, it is the groans of disappointment at the kitchen tables of victimized shareholders that should ultimately resonate more loudly.

The corporate scandals of recent years may have faded from the headlines, but they are still fresh in the minds of American investors. Their confidence in Wall Street already badly shaken, shareholders need more than empty "we've changed" promises from a mostly self-regulating Wall Street to restore their trust in the system. What they need is for the Court to hold all participants in a fraudulent "scheme" just as responsible as those considered the primary actors.