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D.C. FIRMS CASH IN ON RISE OF CORPORATE WORK Last week saw more signs of the recovery of corporate practices with the announcement of two major transactions handled by D.C. firms. Hogan & Hartson is holding the reins for Rupert Murdoch’s News Corp. as it moves its headquarters from Australia and reincorporates in the United States. And Covington & Burling is lead counsel on oil producer Kerr-McGee Corp.’s $3.4 billion purchase of the Westport Resources Corp. Scott Smith, a New York Covington partner who worked on the Kerr-McGee deal, says the firm has seen a surge in mergers and acquisitions activity in recent months. “Somebody flipped on a switch in November in the M&A practice,” he says. “The number of M&A transactions in our pipeline has increased dramatically over the past three or four months.” Smith says Covington lawyers in Washington, New York, and San Francisco have been “swamped” with other transactions, such as financings for the Goodyear Tire and Rubber Co. and California energy company Calpine Corp. Hogan & Hartson chairman J. Warren Gorrell says his firm has experienced a similar uptick. Gorrell says the firm has seen a steady increase in initial public offerings, financings, and M&A. “We have probably eight to 10 IPOs that we’re working on,” says Gorrell, adding that the firm is involved in “a substantial amount of capital raising for public companies.” In addition to handling the reincorporation of the News Corp., the $52 billion Australian media company that owns the New York Post and 20th Century Fox, Hogan is working on the Lockheed Martin Corp.’s $2.4 billion acquisition of military contractor Titan Corp. Both Gorrell and Smith say D.C. firms have been hawking their regulatory expertise in an effort to snag new corporate clients by offering them a one-stop shop for corporate and regulatory deal work. “It is quite an advantage when you have it all in one firm,” says Smith. And Hogan and Covington aren’t the only firms enjoying the return of corporate work after several years of a sluggish economy. Other D.C.-based firms and local offices of out-of-towners have seen their fair share of large transactions in recent months. In January, the D.C. office of Alston & Bird handled bank holding company Regions Financial Corp.’s $6 billion acquisition of the Union Planters Corp. And Wiley Rein & Fielding represented the General Motors Corp. in its December sale of satellite TV operator DIRECTV to Murdoch’s News Corp. — Marie Beaudette POLICY RESTORED Scott Bloch, the head of the U.S. Office of Special Counsel, announced last week his office would return to its policy of investigating and prosecuting claims of sexual orientation discrimination. Earlier this year, Bloch prompted a firestorm of complaints from Capitol Hill and gay rights advocates after reinterpreting the statute the office had used to pursue such claims. Two weeks ago the White House weighed in, saying the administration is committed to protecting gay federal workers. On April 8, Bloch said in a news release that the office had completed a legal review of the statute, which protects a worker’s personal conduct that doesn’t adversely affect performance. Bloch acknowledged the law protects implied conduct, including sexual orientation. Also last week, the General Accounting Office released a report on the office’s hefty backlog of cases, recommending that the OSC, which handles claims of illegal employment actions against federal workers, give Congress a detailed plan of action to eliminate it. Bloch did not return calls seeking comment. — Marie Beaudette SPACE CASE Steptoe & Johnson has sold its 1330 Connecticut Ave., N.W., headquarters — the third time the firm has transferred ownership of the building. Steptoe bought the property in the mid-1980s, and in 1988 sold the building to a Florida-based pension fund at a profit of more than $10 million, says Roger Warin, Steptoe’s chairman. The firm then leased office space from the fund. In 2000, Steptoe bought the building back from the fund “for less than it was sold in 1988,” Warin says. In the latest sale, Boston Properties is taking the building, and Steptoe & Johnson once again made a substantial profit, Warin says. The firm will lease back space, and Boston Properties will pay to renovate it. Warin says there will be significant improvements “without having to take it out of law firm income.” — Christine Hines OPEN AND SHUT April 7 at the Supreme Court began with a gesture toward public access, but by the end of the day, at least one justice — Antonin Scalia — was drawing fire for secrecy. The Court that day announced it would quickly release audiotapes of three separate oral arguments later this month. Usually, tapes are not available until the end of the term, but in select cases in recent years, the Court has made exceptions. This time, it will ease public access by releasing arguments on terrorist detentions at Guantanamo Bay, the secrecy of Vice President Dick Cheney’s energy task force, and the legal status of enemy combatants. But later on, Scalia opted for less access, as a deputy U.S. marshal enforced Scalia’s policy against taping or broadcast of his speeches and told two reporters to erase tapes of a talk the justice was giving in Hattiesburg, Miss. The Reporters Committee for Freedom of the Press strongly protested and wrote Scalia urging him to change his policy. So why is Scalia adamant about keeping recording devices away? Scalia has said common law judges should stay in the “tall grass” and speak through their opinions. In a 1990 lecture before the American Enterprise Institute — which aired on C-SPAN — he said the work of judges was too complex to be adequately explained in the media. “That is why the University of Chicago Law Review is not sold at 7-Eleven,” he said. But Scalia’s rationale leaves one of his former clerks mystified: “If he feels that way, why does he keep giving speeches?” — Tony Mauro HEALTHY WIN Defendants in a class action filed against a group of hospitals and professional associations were handed a big victory by Congress last week. The $80 billion pension bill passed April 8 included language saying antitrust laws do not apply to the sponsorship of or participation in the resident matching program. The suit, filed in the U.S. District Court for the District of Columbia, argues that the program for matching residents with teaching hospitals does not allow graduates to negotiate their employment terms. Gregg Levy of Covington & Burling — who along with fellow partners James Atwood, John Hall, and Eric Holder Jr. represents the defendants, including George Washington University Hospital — says the exemption will “leave in place a process that has served the interests of medical students for over 50 years.” But lead plaintiffs’ lawyer Sherman Marek says the legislation does not apply to price-fixing claims. “A single price-fixing claim is precisely what we allege,” says Marek, a Chicago solo. “This is not going to have an effect on our claim.” — Lily Henning COMMAND DECISION The Air Force’s two top lawyers, General Counsel Mary Walker and Judge Advocate General Thomas Fiscus, may have reached a cease-fire in their fight for control of work performed by Air Force attorneys. The pair signed off March 29 on a memo that clarifies the roles of civilian and uniformed lawyers. Unlike a proposal circulated by Walker’s office last year, the new guidelines do not require judge advocates in the field to report to the Air Force GC. Tension mounted between Walker and Fiscus over a 2003 order establishing the GC as “solely responsible” for legal issues within the Air Force. The recent memo, hashed out by top deputies to Walker and Fiscus, does not modify the order. Still, insiders say it reflects a compromise and that the majority of provisions affirm the status quo. “It’s pretty much the way we’ve been operating on a daily basis,” says one retired Air Force JAG. — Vanessa Blum STRANGE BEDFELLOWS In one of those you’ve-got-to-see it-to-believe-it moments, a group of congressional Democrats recently teamed with the conservative Washington Legal Foundation to fight the Justice Department. The issue: persuading the U.S. Court of Appeals for the D.C. Circuit not to throw out a $959 million civil judgment against Iraq that was awarded to 17 retired American soldiers who were captured and tortured by the Iraqi Army in the first Gulf War. Last week, the circuit heard arguments on whether President George W. Bush’s grant of immunity to Iraq from terrorism-related suits effectively wipes out the POWs’ July 2003 judgment. In an amicus brief by foundation lawyers Daniel Popeo and Paul Kamenar, Sen. Harry Reid (D-Nev.), Sen. Patty Murray (D-Wash.), Rep. John Conyers Jr. (D-Mich.), and others argued Congress did not have the courts in mind when it gave the president authority to remove funding obstacles for Iraq. Judge David Tatel cited the brief while questioning DOJ lawyer Gregory Katsas on whether the government had documentation showing Congress intended that civil suits pending against Iraq be dismissed. — Tom Schoenberg DELAYED Steptoe & Johnson partner Reid Weingarten tried hard to get the trial started for his client Mark Belnick, ex-GC of Tyco International Ltd. But a New York judge on April 7 delayed the start until April 26 amid pleas from prosecutors that they needed to distance potential jurors from the media frenzy surrounding the recent mistrial of former Tyco CEO L. Dennis Kozlowski and CFO Mark Swartz. Weingarten wasn’t buying it. “People will be talking about the Kozlowski mistrial for years,” he told the judge. Postponing the trial, he said, would create hardships for the defense. He noted that members of the defense team, many of whom live in D.C., had paid for hotel rooms and office space near the courthouse. Weingarten’s tight schedule is also a factor. In addition to Belnick, he represents Bernard Ebbers, the recently indicted former CEO of WorldCom. — Anthony Lin, New York Law Journal PEACEMAKERS An army of lawyers laid the groundwork for a truce between tech giants Microsoft Corp. and Sun Microsystems Inc. — and for a key round of peace negotiations, they camped out in the New York office of Covington & Burling. Covington lawyers weren’t a part of the negotiating team, but Microsoft General Counsel Bradford Smith is a former partner, and the firm does work for the company. So Covington turned over a conference room, provided Internet access, and food and drink, lawyers on the negotiating team say. The office space apparently helped: After lawyers shuttled back to San Francisco for one final meeting, Microsoft announced it would pay Sun nearly $2 billion to settle litigation. — Brenda Sandburg, The Recorder

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