General Motors CEO Mary Barra testifies on Capitol Hill in Washington before the House Energy and Commerce subcommittee on Oversight and Investigation. (Photo: Evan Vucci/AP.)
An exhaustive internal investigation of General Motors Co.’s ignition-switch recall shortcomings found fault with the company’s legal team, but “confirmed” that its top lawyer did not learn about the safety issues until after the recall.
The investigation, led by former U.S. Attorney Anton Valukas, chairman of Jenner & Block, found GM’s handling of the recall was “riddled with failures which led to tragic results for many,” the company’s chief executive office said in a statement released with the report on June 5.
The Valukas report concluded that no one at GM took responsibility to fix the issue on the Chevy Cobalt, GM CEO Mary Barra said. The automaker has recalled 2.6 million cars, agreed to pay $35 million for not reporting defects to the public and acknowledged that 13 people have died due to the ignition defects, which could shut off engines and prevent air bags from deploying in accidents.
Plaintiffs lawyers representing more than 60 lawsuits against GM have highlighted the role of general counsel Michael Millikin, who signed off on settlements in earlier cases involving accidents that could have been caused by the ignition-switch defects.
Senior GM attorney Bill Kemp, who the report said is “widely regarded as GM’s most knowledgeable, experienced, and trusted safety lawyer,” could not explain to GM’s investigators why he failed to tell Milliken about known ignition-switch problems until earlier this year.
The report, which focused in part on the action of the GM legal staff, includes nine recommendations. Those include regular discussions between each product litigation attorney and higher-level attorneys about potential safety issues, and guidance about the types of issues that should be elevated to the general counsel. — Todd Ruger
FRANKEN RELIVES FOX NEWS FIGHT
Sen. Al Franken, D-Minn., got in a subtle jab at an old legal foe — Fox News — during a Senate hearing June 3, thanks in part to longtime First Amendment advocate Floyd Abrams of Cahill Gordon & Reindel. Abrams defended Franken in 2003 in a Fox News trademark lawsuit over the title of Franken’s book, “Lies and the Lying Liars Who Tell Them: A Fair and Balanced Look at the Right.” Then-U.S. District Judge Denny Chin in New York concluded Fox’s case was “wholly without merit” and “trying to undermine the First Amendment.” At the Senate hearing, Franken and Abrams didn’t mention Fox directly. Franken said: “It’s good to see you Mr. Abrams. You actually defended me in a First Amendment case and you won, a brilliant…” Abrams cut off Franken: “Thank you, I remember what you said to me after I won.” Franken replied: “What did I say?” Abrams recalled: “Even a chimp could have won that case.” Franken’s response: “And I was right. But you’re a brilliant lawyer.” — Todd Ruger
CAMPAIGN FINANCE CLASH
The U.S. Supreme Court drew heavy but familiar criticism from federal lawmakers June 3 as Democrats pressed forward with a constitutional amendment to undo the high court’s rulings in campaign finance cases. The debate at a Senate Judiciary Committee hearing centered on an amendment, proposed by Sen. Tom Udall, D-N.M., that would give Congress and states greater authority to regulate campaign finance. Republicans have lined up against the amendment, which aims to overturn the high court’s recent decision in McCutcheon v. Federal Election Commission that struck limits on aggregate campaign contributions.
“Five justices have now repeatedly overturned these common sense and time-honored protections” of limiting the influence of the wealthy and special interests in elections, said Sen. Patrick Leahy, D-Vt., the Judiciary Committee chairman. Sen. Sheldon Whitehouse, D-R.I., said: “We’re trying to repair an erroneous decision by the Supreme Court, a decision that is likely to end up in the category of Lochner and Plessy as really embarrassing moments in the history of the court.” — Todd Ruger
It’s no secret Mayor Vincent Gray (D) is at the heart of an ­ongoing campaign probe by the U.S. attorney’s office in Washington. But he’s often referred to in court filings as an unnamed candidate, since he hasn’t been charged with wrongdoing.
New court records show why one judge decided the government would have to name Gray in open court. Local businessman Jeffrey Thompson pled guilty in March to funneling hundreds of thousands of dollars in illegal campaign contributions to local and national candidates, including Gray. During Thompson’s plea hearing, a number of candidates remained anonymous, but not Gray. On June 2, U.S. District Judge Colleen Kollar-Kotelly unsealed an order from March explaining why she required prosecutors to name the mayor. Identifying Gray did “not raise significant due process concerns,” the judge said, since references to Gray were “necessary, material, and relevant” to Thompson’s plea to election law violations.
The government previously acknowledged Gray’s campaign was under investigation, she noted, and Gray was named in other cases stemming from the probe. Prosecutors didn’t contend those public identifications hurt the grand jury investigation, the judge said. — Zoe Tillman
PACIFIC LEGAL EXPANDS EAST
Seeking a larger voice in the nation’s capital, the California-based Pacific Legal Foundation (PLF) opened its DC Center last week with former Heritage Foundation legal expert Todd Gaziano at the helm. The center, Gaziano said, will have a three-part mission. “We have enough cases in the Supreme Court, both direct actions and amicus filings, that I think it would be helpful to have people here who can attend oral arguments and help explain PLF’s position and be a voice for PLF,” he said.
The conservative-libertarian organization also wants to increase its amicus participation in the District of Columbia federal courts by collaborating with like-minded organizations, he said, many of which have D.C. operations. And third, Gaziano said, “We’ll be here to coordinate testimony before Congress and administrative agencies.” He had always admired the PLF’s issues and had worked with its lawyers over the years, he said, adding, “They’re a serious, smart group of lawyers but they have fun. Given the goals of the DC Center, it seemed like a very natural fit for me.” — Marcia Coyle
PRO BONO HONORS
More than 4,200 members of the D.C. Bar reported performing at least 50 hours of pro bono service in 2013, according to the D.C. court system’s third annual Capital Pro Bono Honor Roll.
Of those lawyers, more than 2,500 did at least 100 hours of pro bono. “We salute the ­commitment and compassion of our 2013 Capital Pro Bono Honor Roll attorneys,” D.C. Court of Appeals Chief Judge Eric Washington and D.C. Superior Court Judge Lee Satterfield said in a statement. It was a good year for pro bono. This year’s honor roll included approximately 150 more lawyers than last year.
There was a similar bump in lawyers who reported hitting the 100-hour mark. “Bar leaders and executives from across the country are ­envious of how committed our lawyers are to pro bono service,” D.C. Bar President Andrea Ferster said in a statement. “The attorneys participating in the Capital Pro Bono Honor Roll reflect the best of our profession.” — Zoe Tillman
D.C. CIRCUIT SLASHES FEES
Lawyers for a company awarded about $13.4 million in legal fees in a decadeslong ­dispute over Iranian dairy interests got bad news last week. A federal appeals court reversed the fee awards, finding their client was instead entitled to only $29,516 in fees.
Morgan, Lewis & Bockius and Winston & Strawn represented McKesson Corp. in litigation against Iran. McKesson partnered with Iranian investors to create a dairy in Iran in the 1960s, but the company and its personnel fled during the Iranian Revolution in 1979. In litigation dating to 1982, McKesson accused Iran of expropriating its interests in the dairy and sued for damages.
The case made numerous trips to the appeals courts over the years, but McKesson ultimately prevailed, winning a $29.3 million judgment in 2013. Between 2000 and 2013, McKesson was awarded approximately $13.4 million in legal fees. Iran, represented by Harris, Wiltshire & Grannis, appealed the fee awards.
Judge Karen LeCraft Henderson said the trial court applied the wrong law in determining how much Iran owed. The litigation was governed by Iranian law, she said. Iran argued that under Iranian regulations, an “official tariff” applied, which would result in a $29,516 fee award. — Zoe Tillman
SURVEILLANCE REFORM URGED
The leaders of Apple Inc., Google Inc., Microsoft Corp. and other major technology companies on Thursday marked the one-year anniversary of former National Security Agency contractor Edward Snowden’s leaks with a plea to the Senate: Pass legislation to reform government surveillance.
Tim Cook of Apple, Larry Page of Google and Satya Nadella of Microsoft were among nine tech CEOs who signed an open letter to senators, urging them to “ensure that U.S. surveillance efforts are clearly restricted by law, proportionate to the risks, transparent and subject to independent oversight.”
“Confidence in the Internet, both in the U.S. and internationally, has been badly damaged over the last year. It is time for action,” the tech leaders wrote in their letter. — Andrew Ramonas