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Victory was sweet as a sauterne last May for the lawyers who persuaded the Supreme Court to tear down trade barriers that prevented the interstate shipment of wines direct to consumers. By a 5-4 vote the Court ruled in Granholm v. Heald that state prohibitions against direct sales by out-of-state wineries violated the commerce clause � a triumph that capped a six-year battle waged by small wine makers and their elite legal team. Then came the hangover. A fee dispute broke out among lawyers earlier this year over how much money the winning team, which included Kirkland & Ellis’ Kenneth Starr and former Stanford Law School Dean Kathleen Sullivan, should receive from the state of Michigan, which lost the case. At stake: more than $1.5 million in fees. Part of the squabble was settled last month, and talks are under way to settle the rest of it. But papers filed in the dispute in federal court in the Eastern District of Michigan have shed a rare behind-the-scenes light on how war is waged in high-stakes Supreme Court litigation � complete with lobbying of the Bush administration, intense justice-by-justice prognostication, turf battles among lawyers, and political calculation in the choice of oral advocates. For example, time sheets submitted in the case indicate that Starr, billing at the rate of $750 an hour, devoted 58 hours (a total fee of $43,500) to urging the administration, including White House officials, to support the wineries. His aim was to secure an amicus curiae brief from then-acting Solicitor General Paul Clement, or at least to keep him from supporting the many states on the other side. In the end the administration stayed out of the case and remained neutral � a significant strategic win for the wineries. “It was really a pitched battle,” says Tracy Genesen, of counsel at Kirkland, in defense of the lobbying, which she says was also undertaken by the other side, a powerful coalition of states and alcohol wholesalers. Genesen, spokeswoman for Kirkland on the case and a key player in the litigation and the fee dispute, says: “This was the seminal case for the wine industry. We felt every ounce of energy possible would be needed to win.” And she acknowledges that nowadays, winning at the Supreme Court takes “much more than just dropping your brief off at the clerk’s office.” The wine dispute, fueled by the growth of small wineries and Internet sales, was an uphill challenge to the entrenched system of alcohol sales and regulation that has been in place in states since the end of Prohibition. In 1998, Indiana University School of Law professor James Tanford and Indianapolis lawyer Robert Epstein, a former wine critic, devised a strategy to challenge the bans by filing cases in federal circuits nationwide. Their hope for a split among the circuits that would propel the issue to the high court came to fruition with a 6th Circuit ruling in 2003 that struck down Michigan’s ban and a 2nd Circuit decision six months later that upheld New York’s. The New York case had been filed separately by the Institute for Justice on behalf of Virginia wine maker Juanita Swedenburg, who wanted to sell her wines to fans in New York. When Michigan appealed to the Supreme Court, the wineries’ legal team grew to include Starr, the former solicitor general. Starr had already worked on the issue on behalf of the Coalition for Free Trade, a group representing California wineries. But disagreements soon broke out, according to filings in the fee dispute. Even though Starr had undertaken what Kirkland described as “the Herculean effort” of coordinating the litigation strategy, Tanford produced his own brief for the Court, which Kirkland found inadequate. “Mr. Tanford’s unilateral draft came as a shock to the legal team,” Kirkland told the Michigan judge. After “significant persuasion,” Tanford relented and agreed that another draft written by Kirkland lawyers and Kathleen Sullivan, who had also joined the team, would be the one to go to the Court. Intense preparations continued, including an effort to handicap how justices might vote. Justice Antonin Scalia was identified as a crucial potential swing vote with uncertain views about the commerce clause issue. Starr’s senior associate Kannon Shanmugam, a former Scalia clerk now in the solicitor general’s office, was asked to “provide feedback on how he thought Justice Scalia would react to our arguments,” according to a brief filed by Tanford. Genesen last week confirmed this work, adding that another former Scalia clerk, Susan Engel, a Kirkland associate, also provided important input into “a pretty deep analysis of the jurisprudence of Justice Scalia on this issue.” Scalia ultimately gave the wineries the crucial fifth vote. The biggest dispute among the lawyers was yet to come � over who should present oral argument to the Court. Tanford said in his brief that as the original lawyer for the Michigan plaintiffs, he planned to argue the case. But he agreed to participate in a “beauty contest” in which he and other contenders would mock-argue the case before clients and other lawyers. In addition to Tanford, Starr, and Sullivan, the Institute for Justice’s Clint Bolick also participated. Bolick said last week that the Coalition for Free Trade, Starr’s client, undertook a “ruthless effort to get rid of Tanford and me as advocates. It was the most perverse instance of Supreme Court gamesmanship I’ve ever seen.” The beauty contest, he says, was “completely bogus.” Bolick adds, oddly enough, that it was Sullivan, not Starr, who was the “preordained beneficiary” of the pressure. But it was not Sullivan who elbowed the others aside, he says. The California winery owners, Bolick says, wanted Sullivan � a former prot�g� of liberal Harvard Law School professor Laurence Tribe � not Starr, to argue for political reasons. Sullivan could not be reached for comment. “The feeling was that if we wanted to appeal to the liberal justices, Ken Starr might not be the most provident choice,” Bolick says. Starr is closely identified with Republican causes and was the independent counsel whose investigation led to the impeachment of President Bill Clinton. But in a deposition, Tanford acknowledged another political factor: The plaintiffs, wine lovers Eleanor and Ray Heald, were “liberal Democrats who did not particularly like Ken Starr, and so we had to assure them that he had been politically rehabilitated.” Taking all this in, Michigan asserted that “political correctness, not legal necessity,” led to the selection of Sullivan as the advocate before the high court. Sullivan shared argument time with Bolick, a libertarian sometimes associated with conservative causes, because Bolick’s client wanted him to continue with the case. Genesen, who was counsel for the coalition at the time of the beauty contest, denies any political considerations went into the choice of Sullivan, though she says, “I know that spin sounds sexy.” She says the Michigan plaintiffs were comfortable with Starr from the beginning of the case. The beauty contest, she adds, was “a very open process to test out the arguments.” It was only after the victory that disagreements surfaced again, in contentious discussions between Tanford and Kirkland over how much to ask for from the state of Michigan. Under federal law, prevailing parties in certain suits can recover legal fees from government agencies. With little notice to Kirkland, Tanford filed a motion on his own seeking $1.2 million for all the attorneys involved, including only $65,812.50 for Starr and the rest of the Kirkland team. He asked for $418,480 for himself and $304,940 for Epstein. That got Kirkland’s attention. Genesen filed a brief telling the court that “Mr. Tanford has reduced, by approximately 550, K&E’s billable hours in favor of his own.” She added, “Never able to accept his diminished status in the Supreme Court proceedings, Mr. Tanford now, in his fee petition, seeks to elevate his role well beyond what his performance merited.” Genesen’s brief stressed Starr’s central role, including his assistance to Sullivan in preparing for oral argument and his successful effort to neutralize the administration. “Ken was the maestro for the entire effort,” Genesen said last week. Affidavits by Sullivan and Stephen Shapiro of Mayer, Brown, Rowe & Maw affirmed Kirkland’s role and the reasonableness of its fee request of $329,712. Michigan, for its part, disputed the fees at every turn, calling them unnecessary, duplicative, and inflated because of the infighting. “Surely [Michigan] should not be required to pay for the hours resulting from the intramural differences between K&E and Tanford and Epstein,” wrote Michigan Assistant Attorney General Michael Lockman. Under a settlement between Michigan and Kirkland, announced March 22 and first reported by McClatchy News Service, the firm will receive $150,000. Negotiations with Tanford over the remaining fees are still ongoing. Bolick’s fee request to New York is still pending. Tanford declined to comment except to say, “We have tremendous respect for Ken Starr and the work he did on this issue.” Tony Mauro can be contacted at [email protected]

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