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FEDS UNLIKELY TO BLOCK MEGA-MERGERS For some consumers who aren’t happy that their Oral B tooth-brushes and tubes of Crest will now come from the same corporate behemoth, antitrust regulators might have two words: So what? “Large as bad is not fashionable in antitrust,” says David Evans, an Arent Foxpartner in D.C. Indeed, the upcoming acquisition of the Gillette Co. by the Procter & Gamble Co. will create a juggernaut in personal health and beauty goods, but antitrust experts say that without much direct overlap of product lines, the marriage isn’t likely to prompt serious concerns from federal agencies. Nonetheless, for help with the regulatory hoop-jumping in its $52.4 billion purchase of Gillette, P&G is relying on Jones Dayfor antitrust counsel, led by partner Joe Simsin Washington and, for antitrust review in Europe, partner Bernard Amoryin Brussels. Gillette, which combined with P&G is projected to bring in between $60 billion to $70 billion in annual sales, hired a Davis, Polk & Wardwellteam led by Arthur Golden. The union of SBC Communications and the AT&T Corp. could present more-complex regulatory problems — and ones that don’t lend themselves to simple divestitures of discrete assets since the combined company could capture a steep vertical swath of the market, from huge corporate accounts held by AT&T to the local home phone plans carried by SBC, say some antitrust specialists. For antitrust work, SBC hired Crowell & Moringand Boies Schiller & Flexner. AT&T is looking to Wachtell, Lipton, Rosen & Katzand Sidley Austin Brown & Wood. The $15 billion acquisition of the long-distance giant AT&T by San Antonio, Texas-based SBC is also widely expected to ultimately pass muster with regulators without major concessions by the companies, say antitrust lawyers, in part because of tight competition in the markets the companies serve. “The merger represents a structural change,” says Molly Boast, an antitrust partner at Debevoise & Plimptonin New York. “But there aren’t fatal antitrust flaws.” If recent history is any guide, the two mega-mergers have little to fear. Other recent corporate marriages, like the one between Kmart and Sears, Roebuck and Co., soared through regulatory review. And the government recently lost bids to put the brakes on two mergers, which could further embolden companies to compromise less with federal regulators at the settlement table, Boast says. The Justice Department’s Antitrust Division was unable to block in court the Oracle Corp.’s purchase of PeopleSoft Inc., and the Federal Trade Commission couldn’t get a preliminary injunction to stop Arch Coal from acquiring the Triton Coal Co. — Lily Henning BACK AT WORK The District was rocked last summer by reports that the Federal Bureau of Investigation was checking into whether Pentagon Iran specialist Larry Franklinpassed classified policy information to Israelis via the America Israel Public Affairs Committee(AIPAC). But the Defense Department appears unconvinced their man was a spy. According to his lawyer, Plato Cacherisof Trout Cacheris, Franklin returned to work last month after being placed on paid leave when word of the investigation broke. David Szady, assistant director of the FBI’s counterintelligence division, confirmed Franklin had returned in a “nonsensitive position,” and that his return was not “our call,” but the Pentagon’s. A Defense spokeswoman would say only that Franklin is “still an employee.” Franklin did not return calls. An AIPAC spokesman declined comment. AIPAC is represented by Nathan Lewinof Lewin & Lewinand Abbe Lowellof Chadbourne & Parke, along with AIPAC General Counsel Philip Friedmanand Richard Cullenof McGuireWoods. — Jason McLure SMOKED The U.S. Court of Appeals for the D.C. Circuiton Feb. 4 delivered a major blow to the Justice Department’s suit against the tobacco industry, ruling that the government may not seek disgorgement of $280 billion in tobacco profits. It is unclear how the ruling will affect the ongoing tobacco trial before U.S. District Judge Gladys Kessler. The opinion concluded that Congress didn’t mean for disgorgement to be an option under the Racketeer Influenced and Corrupt Organizations Act. The D.C. Circuit panel split 2-1, with Judge David Sentelleand Senior Judge Stephen Williamsin the majority, and Judge David Tatelin dissent. The DOJ declines comment. But some anti-tobacco advocates fear the government may seek a quick settlement. Nevertheless, Kessler could still impose penalties on the tobacco companies, such as restrictions of advertising and a requirement that they fund anti-smoking programs. — Tom Schoenberg LONE JUSTICE Stephen Breyerwas the only Supreme Court justice to attend President George W. Bush’s Feb. 2 State of the Union address. The justices’ attendance at such events in the past few years has been sparse. At Bush’s 2001 address, Breyer was the lone justice; no justices showed for Bill Clinton’s 2000 address. Breyer’s presence was not lost on the president. While on his way to the podium, Bush greeted Breyer with a handshake. Justices historically have refrained from reacting to political speeches, but Breyer clapped, stood, or nodded at several points. He appeared to give the faintest of nods to Bush’s statement urging Congress to pass legal reforms and appeared to nod in a more pronounced manner at the president’s proposal to “fund special training for defense counsel in capital cases.” Several times Breyer joined the crowd in standing ovations, once when Bush emphasized the civic responsibility of all to vote and several other times when he spoke of the troops, police officers, and firefighters who have sacrificed their lives in the line of duty. On the way out, Bush again shook Breyer’s hand and gave him a small hug. — Marya Lucas LEAP OF FEITH Almost buried in the flood of news over the inauguration, the Iraqi elections, and the State of the Union was the resignation of Undersecretary of Defense for Policy Douglas Feith, the Pentagon’s No. 3 man, for “personal and family reasons.” So what’s next for the former managing partner of D.C.’s Feith & Zell? Through a Pentagon spokesman, Feith declined an interview request, but if he’s going to hook up with his former partner L. Marc Zell, he’ll need a good long-distance plan: Zell’s practice is based in Jerusalem, though it maintains a District phone number. When contacted via e-mail as to whether Feith would be rejoining him, Zell responded, “Good question.” Zell’s current firm, Zell, Goldberg & Co., established an Iraqi task force in 2003, whose goal, according to the firm’s Web site, is “to collaborate with contractors from the United States and other coalition countries.” Feith is no stranger to representing defense firms, having counseled Lockheed Martin, Northrop Grumman, and Loral Space & Communications. Ethics rules will prevent Feith from lobbying the Pentagon directly, but Bruce Fein, a lawyer for the Lichfield Group and a former colleague of Feith’s, says it’s not unlikely he’ll be doing “behind-the-scenes quarterbacking.” Several of Feith’s associates say they think he’ll affiliate with a think tank such as the American Enterprise Institute, home to fellow neoconservatives Richard Perleand Michael Ledeen. — Jason McLure THE AG’S DAY Feb. 3 was a day of celebration for Alberto Gonzales, as the new attorney general was confirmed by the Senate and sworn in by Vice President Dick Cheney. Gonzales’ department also a got sliver of good news as Judge Joyce Hens Greenof the U.S. District Court for the District of Columbiagranted the Justice Department permission to file an immediate appeal in a case brought by roughly 70 detainees at Guantánamo Bay held without trial as a result of a policy shaped significantly by Gonzales in his old job as White House counsel. The appeal was granted just three days after Green had dealt a significant blow to the government’s policy by ruling that detainees from the war on terror had a constitutional right to due process and that the military’s status review tribunals did not qualify. — Jason McLure SUB WARFARE Last year, the George Washington University college newspaper reviewed a popular sandwich shop that recently opened on campus. In describing the Coggins Sandwich Manufactory, the reporter noted similarities between Coggins and another popular D.C. eatery: “One look at the wooden decor and assembly line behind the counter, and you may feel like you’ve walked into Potbelly’s.” That line grabbed the attention of Potbelly Sandwich Works, a Chicago company with 15 restaurants in the D.C. area. On Jan. 31, it filed a trademark infringement suit against Coggins’ owners in the U.S. District Court for the District of Columbia. “I think there are many, many design elements that are similar to ours, which gives the overall impression to consumers that they are affiliated with us,” says John Rawls, a Fulbright & Jaworskipartner who represents Potbelly. Coggins, owned by Ohio-based Farro Enterprises, has yet to file a response. But the company’s outside counsel, John Climaco, denies the allegations, claiming that much of what Potbelly considers protected trade dress are common features of casual restaurants. “We have and want to distinguish ourselves from Potbelly,” says Climaco, a partner at Cleveland’s Climaco, Lefkowitz, Peca, Wilcox & Garofoli. — Tom Schoenberg MOVING ON After 26 years at Collier Shannon Scott, litigation group head John B. Williamsis leaving for the D.C. office of Jones Day, effective March 1. Collier Shannon Chairman Paul Rosenthalsays that Williams had a “very nice opportunity.” But there appears to be some confusion as far as clients are concerned. When asked, Rosenthal says Williams was not leaving with any clients. Williams and Jones Day D.C. managing partner Mary Ellen Powerssay it’s still too early to tell which clients will follow. “We expect that John will expand some of our existing relationships and attract litigation from clients with whom he’s worked in the past,” Powers says. “We didn’t ask John to come to Jones Day because we’re trying to buy a book of business. He’s a terrific lawyer.” Williams says he’s leaving his old firm “with a lot of regret.” Among those he’s represented: R.J. Reynolds Tobacco Co. against the Federal Trade Commission and the Justice Department, and Watergate figure and talk show host G. Gordon Liddy. — Jason McLure QUESTIONED A police study showing a surge in juvenile homicides in the District over the last year prompted D.C. Council members to hold a special hearing last week on the issue of youth violence. Judge Lee Satterfield, presiding judge of the Family Court, was on the hot seat. Councilman Phil Mendelson(D-At Large) repeatedly questioned Satterfield about the revolving door between the courts and the streets, and Councilman Adrian Fenty(D-Ward 4) focused on problems at Oak Hill, the city’s youth detention facility. Satterfield’s response to Fenty: “We know there needs to be an alternative to Oak Hill, because we are the ones that put them there.” — Bethany Broida

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