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KPMG class action leads to law firm feud Competition for control of the class action against KPMG for selling allegedly abusive tax shelters ratcheted up last week, when Bernstein Litowitz Berger & Grossmann began to suspect Big Four accountant KPMG International was negotiating secretly with rival plaintiffs’ firm Milberg Weiss Bershad & Schulman. New York-based Bernstein Litowitz, seeking lead counsel status in the litigation, rushed to federal court in Arkansas for an injunction, in Becnel v. KPMG, No. 05-cv-6015, to block what the it called “colluding” between KPMG and Milberg to produce a “pre-packaged settlement . . . presumably on terms less favorable to the class than plaintiffs could achieve.” The firm asked to be named interim lead counsel to prevent KPMG deal-making and to bar Milberg Weiss from filing any class suit arising from the KPMG tax-shelter conduct. KPMG’s negotiations were part of a “reverse auction” intended to use Milberg Weiss to minimize its financial exposure and “quietly sweep these problems away,” according to Max Berger, for Bernstein Litowitz. KPMG has been sued by wealthy buyers of investments between 1998 and 2000 intended to reduce tax liability that the Internal Revenue Service has since labeled abusive tax shelters. Representatives from New York-based Milberg Weiss declined comment. Pryor says he will follow ‘evil’ abortion laws Federal appeals judge William H. Pryor Jr., whose fierce opposition to abortion prompted a two-year fight over his Senate confirmation, said last week that “it’d certainly be wrong for a Catholic lawyer or judge to do something to advance a grave evil like abortion.” Pryor, who recently won a narrow Senate confirmation to the 11th U.S. Circuit Court of Appeals, was answering a question about how Catholic lawyers should approach Roe v. Wade. He had just delivered an address to the St. Thomas More Society, a Catholic lawyers group. But Pryor emphasized that as an appeals court judge he would uphold abortion laws. “The law does not empower you to stop someone else from doing evil,” he said. Upholding a law “does not make you a formal cooperator with the evil act.” Asked about the possibility of Roe being struck down, Pryor said it wasn’t his place as an appeals court judge to comment. “That’s something the Supreme Court would have to consider. I don’t have that privilege.” D.C. Circuit slaps SEC in mutual funds case The U.S. Circuit Court for the District of Columbia handed a significant win to the nation’s largest business lobby in a decision that affects who sits on mutual fund boards and how independent they should be from the funds’ managers. The D.C. Circuit directed the Securities and Exchange Commission to reconsider rules passed in June 2004 requiring the chairman and 75% of most mutual fund boards to be independent of fund managers. U.S. Chamber of Commerce v. SEC, No. 04-1300. In a unanimous decision on June 21, a three-judge panel found that the SEC violated rule-making procedures by failing to take into account how much the reforms would cost the industry. Full 2d Circuit weighs felons’ voting rights Members of a national movement to win voting rights for convicted felons focused on the 2d U.S. Circuit Court of Appeals last week as the full court heard a challenge to New York’s felon disenfranchisement statute. Sitting en banc, the judges peppered prisoners’ rights advocates on whether Congress really intended to bring laws barring felons from voting within the ambit of the federal Voting Rights Act’s prohibition against any voter qualification that “results” in the denial of the right to vote “because of race.” Muntaqim v. Coombe, No. 01-726.

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