Legal Pad

Arguedas Reps Valley Exec in Galleon Insider Trading Case

A big insider trading case involving highfalutin executives in the Bay Area? You knew that Chris Arguedas would be involved eventually.

Arguedas turns out to be representing Ali Hariri, an executive at Atheros Communications who has been implicated in the sprawling insider trading case surrounding the Galleon Group hedge fund.

The SEC is accusing Hariri of passing inside tips about Atheros to San Jose hedge funds Spherix Capital and Far & Lee, which traded on the information. More specifically, it’s alleged that Hariri told Ali Far, a hedge fund manager who also has a JD from Santa Clara University, about an earnings pre-announcement and earnings announcement at Atheros. Arguedas declined to comment beyond confirming that she is representing Hariri, who was a vice president at Atheros.

The Galleon insider trading case, which has netted a grip of hedge fund managers and tech executives, has been a boon to the local white collar bar. And everyone who hasn’t already scored some work in the case is trying.

— Zusha Elinson

eHarmony Loses Early Round With Can't-Please-Everyone Defense

As far as we know, no LegalPadders have tried out Compatible Partners — online dating company eHarmony’s separate but equal same-sex concession to the New Jersey Attorney General in a discrimination suit there. But we're still curious to know what a Los Angeles jury will say about the company’s service for straight couples.

San Francisco plaintiffs attorneys in the discrimination class action against eHarmony are headed for a February jury trial in Los Angeles County Superior Court. A judge there ruled against defense motions for summary judgment last week.

“You can’t build discrimination into the definition of your service and then claim that you’re not discriminating,” said San Francisco solo Jeremy Pasternak, co-lead plaintiffs attorney with Joshua Konecky of Schneider Wallace Cottrell Brayton Konecky.

Or can you?  After the jump ...

A Small Firm the Big Firms Can Turn To

Funny how contacts and conflicts can conspire to get work in a lawyer’s hands.

Two Morgan Miller Blair partners recently represented Greenbox Technology Inc., a San Bruno energy management software maker for homeowners, in its sale to Silver Spring Networks, a Redwood City green-tech startup. The stock-swap transaction, whose financials were kept under wraps, closed Oct. 2.

Fenwick & West had been outside counsel for the two companies, and obviously couldn’t represent both in the transaction. So Greenbox CFO, Betsey Nelson, dialed partners Steven Harmon and George Cabot — lawyers who, it turns out, had previous ties with her.

How to be the small firm that the big firm calls, after the jump.

S.F. Lawyer Gets Help Prepping for U.S. Supremes

Preparing to argue in front of the U.S. Supreme Court for the first time is taking up most — but not all — of Schneider Wallace Cottrell Brayton Konecky partner Todd Schneider’s time these days.

“The bottom line is, the preparation is the same for any appellate arguments,” Schneider said. “You sit down and read and read and refine arguments until you’re so comfortable with the subject matter that you can have a real academic discussion with the court.”

Schneider is arguing Nov. 10 in a wage and hour case, The Hertz Corporation v. Melinda Friend, et al, that tackles diversity jurisdiction — the question of whether the class of Californians in the case can sue under California law in California court even though Hertz is incorporated in a different state and argues that California isn’t its principal place of business.

An upshot to preparing for the Supreme Court is all of the help that academics send, Schneider said. Stanford, UC-Irvine and American University have all offered to do moot courts.

One of the biggest challenges, Schneider said, is to “marshal what is a very large and complicated record in the case and the case law of every circuit — trying to reconcile all that into an argument that best approximates congressional intent.”

“One certainly feels the gravity of the argument,” he said.

— Kate Moser

Jobhunters: Forget Biglaw, Find a Thriving Boutique

BETWEEN JOBS An occasional look at where the jobs are in a crisis economy.

For law graduates and laid-off lawyers who are fretting over who will hire them, a measure of hope lies in smaller firms like the Royse Law Firm.

Roger Royse opened his five-attorney firm in 2006. Since then, he’s added two lawyers and opened an office in Los Angeles. The Palo Alto business lawyer may not be growing exponentially, but he does keep an open mind. He says he doesn’t shun the green or the unemployed in interviews, and hopes to hire for next year. Legal Pad caught up with Royse this afternoon to see how the statewide expansion has been going.

It’s going after this jump …

Lawyer Helps Ex-Con Seek Justice After 8 Years in Solitary

San Francisco attorney Mark White is no stranger to civil rights cases, but his firm just met with success in its first foray into prisoners’ rights. In the midst of a very high-profile campaign for statewide prison reform, White’s 15-attorney firm got a favorable judgment for an inmate who claimed he was wrongly thrown into solitary confinement — for eight years.

The conditions at the Security Housing Unit at Pelican Bay, the maximum-security state prison where Chapman, Popik & White’s client Ernesto Lira served time on minor theft and drug charges, were horrific, White said. He spent 22.5 hours a day every day in a windowless 8-foot-by-10-foot cell with a two-inch mattress on a concrete slab, only allowed out to shower in the isolation pod three times a week, and once a day to go to the “yard,” a bare concrete-interior court yard with 18-foot walls.

Making the case, after the jump.

San Jose Litigation Shop Scores Big Win in Adverse Climate

Hopkins & Carley litigators Jeffrey Essner and Allonn Levy were advised this was a bad economic climate to try a case on behalf of a bank client.

“They said not to expect a jury to award a multimillion-dollar verdict,” Essner said.

But that’s exactly what they did.

The duo from the 50-lawyer San Jose firm represented Mehrdad Elie, the founder and CEO of Alliance Bancorp, now a defunct mortgage company, in a dispute with cofounder Kathleen Smith over loans the two had made to keep their company afloat when the mortgage crisis hit.

They managed to get their client a $5.8 million award from a unanimous jury on Aug. 3. Today, a San Mateo County Superior Court judge backed the award.

“This is a big win for us,” Essner said. “There was a lot of money at play.”

Levy and Essner said it wasn’t easy to get the jury to be sympathetic to a bank owner who was part of an industry-wide failure. “It took about three weeks to do it,” Essner told Legal Pad. They had to explain why banks were failing and why Wall Street investors stopped buying collateralized packaged loans. Levy said another challenge was helping the jury to grasp the huge amounts of money banks like Alliance were dealing with.

Because there was no written agreement about more than $25 million that Elie had wired out, the case wound up one executives’ word against another. Essner’s advice: “Send an email or write a letter or get a contract. If those documents had existed, we may not have had a jury trial.”

— Petra Pasternak

Small Firm Scores Big Defense Win in Long Water-Contamination Case

Legal Pad caught up with John Barg, who was defense counsel for Union Pacific Railroad in a 4 1/2-month-long toxic torts trial in Sonoma County Superior Court that, after only two hours of jury deliberation, resulted in a defense verdict earlier this month.

“I’ve tried over a hundred cases,” said Barg, a founding partner of Barg Coffin Lewis & Trapp. “I’ve never tried one that lasted this long.”

The plaintiffs — residents of a Santa Rosa neighborhood — were asking for $600 million in damages, the Santa Rosa Press Democrat reported, contending that their drinking water had been contaminated with chemicals from properties owned by United Pacific Railroad and JDS Uniphase. Barg said the defense argued that the contamination in the wells stemmed instead from nearby dry cleaning businesses.

It was the second time Barg tried the case, which has ricocheted through various legal ups and downs over the years. The first trial was declared a mistrial after two weeks, the newspaper reported, and Sonoma Superior Court Judge Allan Hardcastle ordered $2 million in sanctions against the plaintiffs attorneys, which the First District appeal court overturned last year.

Barg gave his closing argument on Sept. 15. The next day was a court closure day, and then on the 17th, jurors got their final instructions and deliberated for two hours before returning the 11-1 defense verdict.

“These toxic tort cases can be difficult for defendants, especially where we have plaintiffs whose wells unquestionably were contaminated,” Barg said. “There’s no question that they had contamination in their drinking water. The only question was, where did it come from?”

— Kate Moser

Intense (But Hey, Productive) Weekend for Lawyers on BART Issue

The weekend deal between BART and union members eased commuters’ worries over a traffic-snarling strike, but last week’s chain of events can also be viewed as the lousy economy playing out in labor and employment law.

The BART board voted last week to unilaterally impose terms and conditions for employment to push the union back to the bargaining table. That approach “hasn’t been used that often until this bad economy,” said M. Carol Stevens, an attorney for BART. “Lawyers are going back to look at it.” Stevens, a partner at Burke, Williams & Sorensen, has done work for BART for at least a decade and had been managing partner of the public-sector labor and employment boutique Kay & Stevens before it merged with Burke, Williams last year.

The two sides came to a tentative agreement Sunday evening. Margot Rosenberg, a Leonard Carder lawyer who represents the Amalgamated Transit Union Local 1555, agreed that the imposition of terms has become more common in the past six months. The two lawyers just disagree about whether it was “legally or tactically appropriate” in this case, she said.

Intense political pressure and media scrutiny were being applied to both sides to avert a strike, making for a strange experience, Rosenberg said. “The negotiating is so unglamorous. You sit in a windowless room for hour after hour after hour. It’s very tedious and painstaking. And then to have that kind of attention — it was pretty surreal.”

— Kate Moser

BART Union’s Lawyers? They’ve Been Busy …

It’s been a hectic week for lawyers at Leonard Carder, the labor law firm representing the Bay Area Rapid Transit train operators and station agents planning to walk off their jobs on Monday.

Several of the 17-lawyer firm’s attorneys have passed many a coffee- and diet-cola-fueled night of late working on the negotiations between local 1555 of the Amalgamated Transit Union and BART management. All that hard work has won the specter of a hellish commute for hundreds of thousands of Bay Area residents come Monday morning. Talks broke down after the union rejected a tentative labor agreement and the BART board voted on Thursday to impose terms of employment on the union.

“Often when folks talk about labor negotiations, the general impression is ‘What is there to discuss?’” said Leonard Carder lawyer Margot Rosenberg, on a break from arbitration for another client today. “It turns out the BART contract was hundreds of pages long.”

The long nights are worth it to defend collective bargaining agreements that become vulnerable in hard financial times, she said, giving credit to colleague Victoria Chin for leading the firm’s efforts on behalf of the BART workers.

“We expect a very busy weekend,” Rosenberg said. “We don’t know the turn it will take. You kind of have to put your life on hold.”

— Kate Moser