Documents on Boumediene detainee ruling

jharrow@akingump.com (Jason Harrow) — Fri, 21 Nov 2008 20:33:19 GMT

The transcript of District Judge Richard J. Leon’s remarks on Thursday, in announcing his decision in the habeas case Boumediene, et al., v. Bush (04-1166). is now available here. This includes comments that were not included in the written order he issued Thursday afternoon. This transcript covers only Judge Leon’s publis session. He also met [...]

The transcript of District Judge Richard J. Leon’s remarks on Thursday, in announcing his decision in the habeas case Boumediene, et al., v. Bush (04-1166). is now available here. This includes comments that were not included in the written order he issued Thursday afternoon. This transcript covers only Judge Leon’s publis session. He also met with counsel in a closed-door session afterward.

Attorney General Michael B. Mukasey commented on the ruling, and on his desire for a new legislative approach to detainee cases, in this opinion piece, published Friday by The Wall Street Journal.

Hospitality Lawyer - "Speed bumps" in the road to bankruptcy for hotels and resorts. Part 2 - Can a hotel ever be a "single asset" for bankruptcy purposes?

jbutler@jmbm.com (Jim Butler) — Fri, 21 Nov 2008 19:25:08 GMT

Hospitality Lawyer: Turnarounds, workouts, receiverships, bankruptcies and deeds in lieu for troubled and defaulted hotel mortgage loans. As the bad news continues from the Global Financial Crisis, and as the recession bites deeper, the hotel industry is starting to feel the pain. In his 2-part series of articles on "speed bumps" in the road to hotel bankruptcies, my partner, Bob Kaplan, adds some valuable insight to the rich library of resources available here at www.HotelLawBlog.com on troubled hotel mortgage loans (see http://hotellaw.jmbm.com/2000/01/workouts_index.html). As Bob Kaplan said last time in Part 1 of his article, the new wave of bankruptcies will test loan structures and provisions developed since the mid 1990s and never tested before, as with the requirement for unanimous board approval for bankruptcy filing (See Part 1 at http://hotellaw.jmbm.com/2008/11/ hotel_speed_bumps_1.html). In Part 2 of the "speed bump" series (below), Bob talks about an issue that hotels, resorts, marinas, sports facilities and other hospitality-related assets will likely present to many lenders seeking to use the expedited relief from bankruptcy stay provisions available to creditors in certain "single asset" bankruptcy cases.

By Jim Butler, Hotel Lawyer | Author of www.HotelLawBlog.com
16 November 2008

Hospitality Lawyer: Turnarounds, workouts, receiverships, bankruptcies and deeds in lieu for troubled and defaulted hotel mortgage loans. As the bad news continues from the Global Financial Crisis, and as the recession bites deeper, the hotel industry is starting to feel the pain.

In his 2-part series of articles on "speed bumps" in the road to hotel bankruptcies, my partner, Bob Kaplan, adds some valuable insight to the rich library of resources available here at www.HotelLawBlog.com on troubled hotel mortgage loans.

As Bob Kaplan said last time in Part 1 of his article, the new wave of bankruptcies will test loan structures and provisions developed since the mid 1990s and never tested before, as with the requirement for unanimous board approval for bankruptcy filing (See (Part 1).

In Part 2 of the "speed bump" series (below), Bob talks about an issue that hotels, resorts, marinas, sports facilities and other hospitality-related assets will likely present to many lenders seeking to use the expedited relief from bankruptcy stay provisions available to creditors in certain "single asset" bankruptcy cases.

"Speed bumps" in the road to bankruptcy for hotels and resorts
Part 2 -- Can a hotel ever be a "single asset" for bankruptcy purposes?
By Robert B. Kaplan, Hotel Lawyer

Hotel loans are more complex and challenging

Making hotel mortgage loans and dealing with troubled hotel loans is always more complex than with other real estate assets. Some of these issues have been nicely summarized at www.HotelLawBlog.com in a current series of articles on troubled hotel mortgage loans.

As Part 1 of this article noted, the new wave of bankruptcies will test loan structures and provisions developed since the mid 1990s and never tested before, as with the requirement for unanimous board approval for bankruptcy filing (See Part 1.)

In Part 2 of the "speed bump" series (below), we look at an issue that hotels, resorts, marinas, sports facilities and other hospitality-related assets will likely present to many lenders seeking to use the expedited relief from bankruptcy stay provisions available to creditors in certain "single asset" bankruptcy cases.

One commentator argued, perhaps only half tongue-in-cheek, that every hotel should have a gift shop, if only to avoid single asset real estate status in bankruptcy.

Defaulted hotel mortgage loan bankruptcy speed bumps: Can a hotel ever be a "single asset" for bankruptcy purposes? And who cares?

Since the mid 1990s, lenders on hotels, resorts and other hospitality properties have generally required their borrowers to transfer the asset being financed into a "special purpose" entity which will own only the asset being mortgaged. Intuitively, a corporation with only one asset would seem to be a "single asset" entity, but does that work under the Bankruptcy Code, and why is it important to lenders and borrowers?

This determination has important consequences. If a bankruptcy involves a "single asset" (or "single asset real estate" as it is often called), the proceedings will tilt greatly in favor of the secured creditor. In a single asset real estate bankruptcy, the creditor will be entitled to relief from the bankruptcy stay as a matter of law, unless the debtor does one of two things within 90 days of filing.

The debtor must either:

file a plan of reorganization which has a reasonable possibility of being confirmed in a reasonable time, or
start making interest only payments at the non-default contract rate of interest

These are often difficult to accomplish unless the asset is really viable and cash flowing.

And if the bankruptcy court finds that the hotel does not involve a single asset real estate bankruptcy, the creditor will likely be delayed in more protracted proceedings and greater costs.

But, why isn't a single hotel a "single asset"? How could a borrower with a single hotel possibly avoid this single asset rule that gives creditors an expedited relief from the bankruptcy stay?

. . . creditors make take hope from a case . . . where a 126-room Comfort Inn was held to be a single asset.

When is a hotel NOT a "single asset"?

The expedited relief from stay provisions are set forth in section 362(d)(3) of the Bankruptcy Code for cases which involve "single asset real estate" or SARE as defined in section 101(51B) of the Code. The idea is that creditors should not be unduly delayed from foreclosing where there is a single real estate asset and therefore minimal chances of a successful bankruptcy reorganization.

The courts generally hold that there are certain requirements for a debtor to qualify as a SARE debtor, as follows:

The real property must
constitute a single property or project
(other than residential property with fewer than four residential units).
The real property must
generate substantially all of the income of the debtor
.

The debtor is not a family farmer and is
not engaged in any substantial business other than operation of the real property
and activities incidental thereto.

[a limitation of secured debt to $4 million was eliminated by the Bankruptcy Code amendments in 1994.]

The classic cases for single asset real estate involve a single office building or apartment house passively held for income. Properties involving an operating business, like hotels, are more problematic. Thus, the 9th Circuit Bankruptcy Appellate Panel (or BAP) found that at least a full-service hotel did not qualify as SARE. In the case before it, the Court said that the "hotel is sufficiently active in nature to constitute a business other than the mere operation of property." The gift shop, restaurant and bar, among other things included in the operation of a 63-room full service, constituted other "substantial business" than the operation of real property. (CBJ Dev., Inc., 202 B.R. 472-473).

And another case where the hotel was operated without a gift shop or restaurant, also held that the hotel business itself was more than "the business of operating the real property" and the property was therefore not single asset real estate.

In fact, some courts have declared a wide range of hospitality properties to be non-SARE, including properties involving one of the following

a marina
a golf and ski club
a property with golf pro shop and golf-related services

One commentator argued, perhaps only half tongue-in-cheek, that every hotel should have a gift shop, if only to avoid single asset real esatet status in bankruptcy.

But creditors may take hope from a case decided in Tennessee where a 126-room Comfort Inn was held to be a single asset.

What does this all mean in terms of debtor or creditor strategy?

As noted above, debtors may open gift shops if only to defeat single asset status. Otherwise, they face relatively short proceedings unless they either present a plan of reorganization within the first 90 days after the bankruptcy filing (or a court-approved extension), or start making interest only payments on the loan.

Where it is clear that a case is a single asset case (like an office building or an apartment house), the strategy is for the lender to wait 90 days, and if the debtor has not done one of the required things (i.e. filed a plan of reorganization, or started making interest payments), then the lender would move for relief from stay.

But, when there is doubt about the single asset status -- as there will normally be with hotels, resorts, marinas, and sports facilities -- the lender should generally move quickly to file a motion for the bankruptcy court to determine if it is a single asset case. If you have a hotel, you probably need to make this motion unless there is governing law in the jurisdiction involved.

And if the bankruptcy court finds that the hotel does not involve a single asset real estate bankruptcy, the creditor will likely be delayed in more protracted proceedings and greater costs.

The lender wants a determination of the single asset status early, because if it turns out to be a single asset case, the statute gives the lender relief from the bankruptcy stay the LATER of 90 days after the petition's filing, or 30 days after court determines it is a single asset.

Another strategy that we recommend in appropriate situations is adding a provision to any workout or forbearance agreement. In substance, the lender wants to include a representation or warranty by the debtor that the debtor qualifies for single asset real estate status to be governed under the appropriate provision of the Bankruptcy Code, and acknowledging that the lender is entering into the forbearance agreement in reliance on this representation and undertaking. We don't know if this works yet, but it is worth a try, and a lot of covenants may be enforceable if made in a workout that would not have been valid when the loan was originated.

Robert Kaplan is a partner in JMBM's Bankruptcy, Insolvency and Restructurings Group and a senior member of the Global Hospitality Group® -- a team of 50 seasoned professionals with more than $50 billion of hotel transactional experience, involving more than 1,000 properties located around the globe.

Bob represents lenders, special servicers, hard money lenders, community banks, national banking associations, distressed debt investors, and equity investors, positioning them for the best possible outcome by acting expeditiously to preserve value and increase cash flow. His industry experience and his knowledge of the current capital markets -- where distressed assets often include complex deal structures and securitized loans -- allows him to bring creative and effective strategies to the table. When aggressive litigation is the best strategy, he is a vigorous and effective advocate for his clients.

Bob represented the securitized lender in the Chapter 11 bankruptcy case filed by the Clift Hotel in San Francisco, and in the subsequent negotiations and successful sale of the loan to a third party. The lender -- acting by and through GMAC Commercial Mortgage Corporation as special servicer -- was the holder of a $60 million loan secured by a Deed of Trust on the Clift Hotel. He has also served as counsel to JER Robert Company, AMRESCO Management Inc. and Midland Loan Servicer in their capacity as special servicers on troubled hotel loans in CMBS pools.

To read more about hotel workouts, go to www.HotelLawBlog.com and select "Workouts" For more information, contact Robert Kaplan at 415.984.9673 or rkaplan@jmbm.com.

Distressed hotel loans -- Resource Library for hotel workouts, hotel bankruptcies, and hotel deeds in lieu of foreclosure

The hospitality lawyers at JMBM's Global Hospitality Group have a great library of free resources on dealing with troubled hotel loans. Go to top of the home page at www.HotelLawBlog.com, click on the "HOTEL LAW TOPICS" tab, and then select "Workouts, Bankruptcies & Receiverships."

Here are a few of the recent articles on the subject for your convenience:

Hospitality Lawyer -- Workouts and Special Servicing for Hotel Loans: What is so different about TROUBLED HOTEL MORTGAGE LOANS?
Hospitality Lawyer asks, "Do you know the 8 Dos and Don'ts of handling troubled hotel mortgage loans?"

Hospitality Lawyer - The "Comprehensive Situation Analysis" for troubled hotel mortgage loans and workouts

Hospitality Lawyer: Lender and borrower alternatives for troubled hotel mortgage loans

Hospitality Lawyer -- Butler's Matrix: Key to hotel mortgage loan defaults, workouts, bankruptcies and receiverships.

Hospitality Lawyer: Special Servicers and Special Asset teams confer in Dallas for top special servicing conference

Hospitality Lawyer -- "Speed bumps" in the road to bankruptcy for hotels and resorts. Part 1 -- Special Purpose Entities getting approval to file bankruptcy.

Hospitality Lawyer - "Speed bumps" in the road to bankruptcy for hotels and resorts. Part 2 - Can a hotel ever be a "single asset" for bankruptcy purposes?

JMBM's Distressed Assets Expertise
JMBM's Global Hospitality Group® includes an experienced Distressed Assets Team that mobilizes quickly to address the complex issues surrounding distressed hospitality properties and stalled developments. Whether it is a solution to a lender's troubled loan or the response to a buyer's opportunity, we work quickly to preserve value and increase cash flow.

Because hotels are special assets, with operating companies, numerous issues come into play in a workout or bankruptcy scenario. Because we have represented creditors, owners and investors in the hospitality arena for more than two decades, we do not need to "get up to speed" on the special issues.

Regardless of where we are in the market cycle, JMBM's Distressed Assets Team is involved, day in and day out, in restructuring and working out deals that go sideways. Our experience -- together with our knowledge of the current capital markets where distressed assets often include complex deal structures and securitized loans -- allows us to bring creative and effective strategies to the table. When aggressive litigation is the best strategy, we are effective, rigorous advocates for our clients' interests.

For information about how we can help, contact one of the senior members of the team, below.

Jim Butler 310.201.3526 JButler@JMBM.com
Neil Erickson 310.201.3516 NErickson@JMBM.com

Robert Kaplan 415.398.9673 RKaplan@JMBM.com

Guy Maisnik 310.201.3588 GMaisnik@JMBM.com

David Poitras 310.201.3571 DPoitras@JMBM.com

Richard Rogan 415.984.9606 RRogan@JMBM.com

This is Jim Butler, author of www.HotelLawBlog.com and hotel lawyer, signing off. We've done more than $50 billion of hotel transactions and more than 100 hotel mixed-used deals in the last 5 years alone. Who's your hotel lawyer?

________________________

Our Perspective. We represent developers, owners and lenders. We have helped our clients as business and legal advisors on more than $50 billion of hotel transactions, involving more than 1,000 properties all over the world. For more information, please contact Jim Butler at jbutler@jmbm.com or 310.201.3526.

Jim Butler is one of the top hospitality attorneys in the world. GOOGLE "hotel lawyer" or "hotel mixed-use" or "condo hotel lawyer" and you will see why.

Jim devotes 100% of his practice to hospitality, representing hotel owners, developers and lenders. Jim leads JMBM's Global Hospitality Group® -- a team of 50 seasoned professionals with more than $50 billion of hotel transactional experience, involving more than 1,000 properties located around the globe. In the last 5 years alone, Jim and his team have assisted clients with more than 100 hotel mixed-use projects -- frequently integrated with energizing lifestyle elements.

Jim and his team are more than "just" great hotel lawyers. They are also hospitality consultants and business advisors. They are deal makers. They can help find the right operator or capital provider. They know who to call and how to reach them.

Contact him at jbutler@jmbm.com or 310.201.3526. For his views on current industry issues, visit www.HotelLawBlog.com.

More on Melamine . . .

KMODZA@stoel.com (Kenneth Odza) — Fri, 21 Nov 2008 16:16:21 GMT

I was interviewed recently by Food Innovation Weekly on “Melamine, Recalls and Crisis Management.” This question-and-answer article discusses how the waves of melamine issues circling the globe affect the way a company should think about crisis management. I suspect that we’re not done hearing about melamine contamination and that the scope of fraud has yet to be fully uncovered. Some of the more interesting issues are safe dosage levels, product testing and what companies should or should not disclose to consumers.

FERC Order Allows Tying of Capacity at Open Access Terminals to Release of Related Pipeline Capacity

Fri, 21 Nov 2008 15:06:50 GMT

FERC yesterday issued an order on rehearing regarding its final rule governing the release of firm capacity by shippers using interstate natural gas pipelines and open access LNG terminals. The Commission generally reaffirmed its decision to remove the maximum rate cap on short-term capacity releases and exempt certain releases from bidding. The order also clarified that capacity released at open access LNG terminals can be tied to the release of capacity on downstream pipelines. FERC declined to extend this opportunity to LNG terminals that are not open access, expressing concern that the agency lacks knowledge on how such arrangements would be structured and therefore would not be able to ensure transparency. Platts LNG Daily [subscription required] provides additional coverage. The order, as well as Chairman Joseph T. Kelliher's statement on the decision, is available in FERC's eLibrary under Docket No. RM08-2.

Class Action Defense Cases—In re SemGroup Energy: Judicial Panel On Multidistrict Litigation (MDL) Grants Plaintiff Motion To Centralize Class Action Litigation In Northern District of Oklahoma

MJH@jmbm.com (Michael J. Hassen) — Fri, 21 Nov 2008 13:16:00 GMT

Judicial Panel Grants Plaintiff Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, Unopposed by Common Class Action Defendants or by Plaintiffs in New York Class Action, and Transfers Class Actions to Northern District...

Two class actions – one in Oklahoma and one in New York – were filed against SemGroup Energy Partners alleging violations of federal securities laws; specifically, the class action complaints alleged that defendants “made materially false and misleading statements which artificially inflated the price of SGLP common stock in violation of the federal securities laws” In re SemGroup Energy Partners, L.P., Securities Litig., ___ F.Supp.2d ___ (Jud.Pan.Mult.Lit. October 10, 2008) [Slip Opn., at 1]. Plaintiffs in the Oklahoma class action filed a motion with the Judicial Panel for Multidistrict Litigation (MDL) requesting centralization of the class actions pursuant to 28 U.S.C. § 1407 in the Northern District of Oklahoma; plaintiffs in the New York class action supported the motion but argued alternatively for transfer of the class actions to the Southern District of New York. Id. The Judicial Panel granted the motion to centralize the class action lawsuits and agreed that the Northern District of Oklahoma was the appropriate transferee court, particularly as it was supported by all parties and because “SGLP, its general partner and affiliated individual defendants are located in Tulsa, Oklahoma, and parties, witnesses and documents may be found there.” Id., at 1-2. Accordingly, the Panel centralized the class actions in Oklahoma, id., at 2.

Download PDF file of In re SemGroup Energy Partners, L.P., Securities Litigation Transfer Order

Today at the Supreme Court | 11.21.08

jharrow@akingump.com (Jason Harrow) — Fri, 21 Nov 2008 12:51:06 GMT

No oral arguments are scheduled and no non-capital orders are expected to be released from the Court today. Oral arguments will resume December 1. To follow developments on Attorney General Michael Mukasey, who collapsed Thursday night while giving a speech to the Federalist Society in Washington, click here.

No oral arguments are scheduled and no non-capital orders are expected to be released from the Court today. Oral arguments will resume December 1.

To follow developments on Attorney General Michael Mukasey, who collapsed Thursday night while giving a speech to the Federalist Society in Washington, click here.

Time's 2008 Inventions of the Year: Chicago Connections

david.donoghue@hklaw.com (R. David Donoghue) — Fri, 21 Nov 2008 11:03:57 GMT

Time has published a list of 2008's best inventions -- click here to read it. Here are a couple of inventions with Chicago connections:

12. MacroMarkets -- MacroMarkets was instrumental in starting housing futures trading on the Chicago Mercantile Exchange (the Chicago connection). Now MacroMarkets is working on exchange-traded funds that allow regular investors to bet on housing futures.
23. The Branded Candidate -- This invention is actually about a trademark and a brand. Chicago's own President-elect Obama created a marketing sensation with his branding this year. Here is how Time describes it:

Barack Obama hat: $15. Barack Obama special-edition Beyoncé T shirt: $60. Devising a system to make and sell your own swag and garner millions in profits, not to mention the phone numbers and addresses of hundreds of thousands of potential volunteers? Priceless.

Hat tip to Dennis Crouch who identified Time's list at Patently-O.

Obama's Radio Address is Streamed on the Internet - Demonstrating Why There Need Not Be Any Return of the Fairness Doctrine

davidoxenford@dwt.com (David Oxenford) — Fri, 21 Nov 2008 05:13:51 GMT

Last week, President-elect Barack Obama delivered his first weekly radio address since he was elected President. The broadcast made news, not only for its content, but also because it was streamed on the Internet, particularly on You Tube, but also retransmitted on many other websites. The fact that the Internet makes such transmissions not only possible, but so easy and so widely available demonstrates one of many reasons why all the worry about the return of the Fairness Doctrine is unwarranted. With access to so many diverse opinions not only on the radio but also through all of the new technologies, why should the government care that one radio station may not cover all sides of a controversial issue? If one station does not put on a strongly held viewpoint on an important issue, you can bet that someone who holds that viewpoint will find some way to transmit it to others.

The return of the Fairness Doctrine has been the great invisible monster in the room since the election - with many commentators, particularly conservative ones, worrying that the Democratic Congress will attempt to reinstate the Fairness Doctrine. Off-hand comments such as those made by Senator Schumer on Fox News, have fueled this speculation, even though the Obama campaign has specifically rejected such a return. The Fairness Doctrine is one grounded in scarcity of the electronic spectrum - from the fear that if one side of an issue was allowed to dominate one of the few means of communicating with the population of a community, it would effectively be able to stifle the ability of those with contrasting viewpoints to get their message out. But, to use a phrase that is becoming increasingly popular - that thinking is so 20th Century.

The FCC itself abolished the Fairness Doctrine in the last century finding it unconstitutional, especially in light of the growth in the number of media outlets. Since the abolition, the number of available media outlets has increased exponentially. Just look at the recent elections, when blogs and other websites often drove the political conversation, identifying issues that were later picked up by the mainstream media, and debunking arguments and talking points that were disseminated by the mainstream media. The growth of the Internet alone shows how communications has become so diverse that there is no scarcity that could justify the imposition of a fairness requirement only on the broadcast media. There is so much other media that is delivered to any home - whether by new broadcast outlets, or by satellite or cable delivery, or even in print, that there can no longer be any scarcity justification for the Fairness Doctrine. Earlier this week, I attended the Future of Television Conference in New York City, where much of the conversation was on the delivery of television programming to cell phone handsets or other mobile devices. There is simply an explosion in the number of media outlets - and no justification for the return of the Fairness Doctrine.

Those who even discuss the return have to consider what it would mean. We have written about how it would be a prescription for the return of bland programming. Stations that run talk programming - whether it be Rush or Air America, would have to avoid the opinionated messages that they now air so that all sides of issues could be presented on every station. Why force every station to air the same opinions, when with the number of broadcast outlets available in most markets, there can be a real diversity of voices among the competing stations? I've heard some broadcasters say that the return of the Fairness Doctrine and the end of opinionated programming would effectively signal the end of the already ailing AM radio band which now relies very much on talk radio, compelling to niche audiences, to bring in audiences. Others forget that issue-oriented commercials also had to be "fair" - so if one side of an issue was able to buy advertising time on a station and the other side could not afford to buy time to respond, the station had to give the other side airtime - for free! Just imagine if such a requirement were put on newspapers, magazine or websites. In a moment, the Courts would declare any such government requirement unconstitutional.

So let's hope that, in this multichannel universe with almost unlimited media outlets, the rumors of the return of the Fairness Doctrine are just that - rumors. In an administration looking to bring about change and take America into the future, let's not look at yesterday's rules to further imperil broadcasters in a very competitive, very uncertain time.

Privacy under the 44th President? Will the New Administration Bring a New Playbook?

btavelli@proskauer.com (Brendon Tavelli) — Fri, 21 Nov 2008 03:58:11 GMT

As we prepare to welcome both the 44th President and a revamped Congress to Washington, it is time to consider what privacy under the new administration will look like. Barack Obama polled strongly on the campaign trail as the candidate most likely to advance individual privacy rights, but are the pollsters a good indicator what privacy will look like under the new administration? Here are some of our thoughts about what we may see in the next four years.

National Privacy Law: Major players in the online marketing sphere, such as Microsoft and Google, already have expressed support for a generally-applicable privacy law to preempt a growing number of state laws that impose varying requirements on the collection, use, storage and disclosure of personal information. Whether a federal law emerges governing the collection and use of personal data, including for marketing purposes, is the looming question in the new administration.

Behavioral Advertising: Behavioral advertising -- the practice of tracking of an Internet user’s activities online in order to deliver advertising targeted to an individual consumer’s interests -- which Congress examined extensively over the summer -- should continue to generate interest under an Obama administration. Indeed, the Federal Trade Commission (“FTC”) is expected to announce its final guidance concerning the self-regulation of behavioral advertising even before President-elect Obama takes office in January. We are also likely to see behavioral advertising legislative proposals at the state level, with efforts gaining traction in states like New York, where both Houses are now controlled by the Democrats.

Electronic Health Records: A key component of President-elect Obama’s health care plan is the migration of health care records from paper to more universally accessible forms of electronic media. The incoming president believes strongly that the use of technology will help lower the cost of health care. But as many commentators have suggested, greater accessibility carries greater risk, and the shift toward computerized health records is one area in which President-elect Obama’s aggressive technology and innovation policies may outgrow existing consumer protection safeguards. President-elect Obama’s commitment to providing robust protections against the misuse of this kind of sensitive information likely will require the development of additional, and more broadly-applicable, regulations to shore up existing safeguards provided under the Health Insurance Portability and Accountability Act (“HIPAA”) and other existing legal regimes.

Data Breach Notification: Over the past few years, states have been very active passing legislation that requires businesses that retain information about state residents to notify such residents when that information is compromised. Efforts to pass a preemptive national law have stalled largely because of the greater discretion proposed for business regarding the need to notify. That issue will likely continue to impede consensus on a national law, and the state framework is likely to be with us for a while.

Legislative activity at the state level concerning the protection of personal information, however, is likely to continue as lawmakers try to respond to several high profile information security breaches from previous years. Moreover, as we are seeing in Massachusetts and Connecticut where new data security laws have been passed, we may see a stronger push at the state level toward requiring affirmative steps to protect personal information, rather than just requiring businesses to respond to a breach incident.

More Robust Federal Trade Commission: President-elect Obama plans to enlarge the FTC budget and enforcement power to aid in the implementation of his technology and innovation policies. The FTC’s expanded powers will likely be used to enforce the Commission’s new identity theft Red Flags Rule, which requires financial institutions and creditors to implement comprehensive written identity theft prevention programs by May 1, 2009. The FTC’s decision to extend the original November 1, 2008 compliance deadline for an additional six months portends relatively immediate enforcement activity in Summer 2009 that will help define precisely what is required, and from whom, under the Rule. The push for more enforcement power may also spur the expansion of the FTC’s authority to seek civil penalties and other monetary remedies for violations of the statutes and regulations the Commission enforces.

Location Data & Government Surveillance: President-elect Obama’s desire to develop and better utilize available technologies to create real change in America will likely create some friction in the areas of government surveillance and the collection of location data where the interests of national security and personal privacy diverge. Moreover, the private sector’s collection and use of location data and other “tracking” information to more effectively market to consumers raises concerns on both sides of the aisle since these technologies arguably can be misused to compromise national security or personal privacy. While we expect the Obama administration to back away from the aggressive government surveillance policies and programs implemented by the previous administration in the wake of September 11, 2001, the success of these efforts will require a delicate balance between a strong stance on national security and a shift toward protecting the privacy of Americans at home.

No Longer Good Law

the10bdaily@hotmail.com (Lyle Roberts) — Fri, 21 Nov 2008 03:28:54 GMT

As discussed in The 10b-5 Daily before, whether the Tellabs decision on pleading scienter (i.e., fraudulent intent) can best be described as a victory for plaintiffs or defendants has to be evaluated on a circuit-by-circuit basis. In the U.S. Court...

Cabela’s Settlement Includes Audit Requirement

Fri, 21 Nov 2008 03:06:13 GMT

Last week we reported on the settlement agreement that Cabela’s, the outdoor supply store, entered into the the Bureau of Industry and Security (”BIS”) to settle allegations that the company had exported 76 rifle scopes without the required BIS licenses. This was the company’s second settlement of illegal export charges, the first covering allegations [...]

The settlement documents are now available on the BIS website and provide details not available in the press release that served as the basis for our initial report on the settlement. Not surprisingly given Cabela’s repeat offender status, the settlement also includes a requirement that Cabela’s conduct a compliance audit substantially in accord with BIS’s Export Management System audit module.

The audit requirement imposed in the settlement agreement is purely an internal audit. Even so, the audit module requires extensive review of company compliance procedures, including compliance with many outmoded requirements. This is because the audit module was created in 2000 and hasn’t been revised since then. Extensive coverage in the audit module is devoted to inquiring whether the company’s export procedures provide instructions on filling out and retaining copies of the Shipper’s Export Declaration (”SED”), even though filing an SED is now a violation of applicable regulations. The module also seems to hark back to the pre-Internet dark ages by requiring the company to keep hard copies of the Export Administration Regulations and the Denied Party List.

It seems to me that if BIS wants to tout the EMS audit module as the touchstone of export compliance, it might want to update it a little more often than every decade.

The Voluntary Carbon Standard Issued Revised Agriculture, Forestry and Other Land Use Documents

Fri, 21 Nov 2008 01:25:08 GMT

The Voluntary Carbon Standard (VCS) issued its revised stanard that addresses forest-based voluntary carbon credits. The standard is known as the Guidance for Agriculture, Forestry, and Other Land...

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Governor Schwarzenegger and Two Other US Governors Enter into Avoided Deforestation Agreement with Governors from Brazil and Indonesia

Fri, 21 Nov 2008 00:48:12 GMT

Press release issued regarding governors agreement regarding avoided deforestation and climate change:Continuing his leadership to collaborate with other states to minimize climate change impacts,...

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U.S. Treasury Troubled Asset Relief Program: Recent Developments

joewallin@dwt.com (Joseph M. Wallin) — Fri, 21 Nov 2008 00:15:27 GMT

By Laura A. Baumann

On Oct. 14, 2008, the United States Department of Treasury announced the Troubled Asset Relief Program, or TARP Program, which is one of several recent government initiatives to improve the strength of financial institutions and enhance market liquidity. We summarized the highlights of the program in an advisory bulletin in October. On Nov. 17, 2008, the Treasury released the term sheet and frequently asked questions for certain privately held financial institutions applying for the TARP Program. This bulletin will briefly summarize the recent developments with respect to the TARP Program. Continue reading...

Today’s detainee case developments

jharrow@akingump.com (Jason Harrow) — Thu, 20 Nov 2008 23:17:14 GMT

U.S. District Judge Richard J. Leon ordered the release “forthwith” of five Bosnians now held at Guantanamo Bay, Cuba, but upheld the continuing detention of a sixth. His 14-page ruling is here. A Justice Department statement reacting to the decision is here. Lyle’s post discussing the ruling is here. The case is Boumediene, et al., [...]

Senior U.S. District Judge Thomas F. Hogan ordered lawyers for Guantanamo detainees to file by next Wednesday their responses t o the Justice Department’s sweeping challenge to the procedures Hogan has crafted for processing 113 habeas cases involving about 200 prisoners. The Hogan order is here; a post discussing the challenge is here. The order was issued in a variety of cases, including the leading group of cases (District Court docket 08-442).

A three-judge panel of the D.C. Circuit Court held a 40-minute hearing on the Justice Department’s argument that the Supreme Court decision in Boumediene v. Bush has scuttled the Circuit Court system of civilian review of Pentagon detention decisions. Circuit Judge Judith W. Rogers, who has been skeptical of many government maneuvers on detainee issues, dominated the questioning. The Court did not indicate when it would rule. The question of its jurisdiction to decide Detainee Treatment Act cases is now at issue in Bismullah v. Gates (Circuit docket 06-1197).

Hotel Lawyer: The "Great De-leveraging," a "financial panic" and unprecedented opportunities coming our way. Do you see them? Are you ready?

jbutler@jmbm.com (Jim Butler) — Thu, 20 Nov 2008 23:01:00 GMT

Hospitality Lawyer with updated thoughts from the latest commercial real estate finance program in San Francisco. Many of my friends in the hotel industry are in denial. Others are consumed with the daily drama of the unfolding financial panic. I am excited that we are about to see some of the greatest financial opportunities of our lifetime. Here are some thoughts that I presented yesterday as keynote speaker at the 6th Annual Bay Area Income Property Lending Conference.

By Jim Butler, Hotel Lawyer | Author of www.HotelLawBlog.com
19 November 2008

Hospitality Lawyer with updated thoughts from the latest commercial real estate finance program in San Francisco.

Many of my friends in the hotel industry are in denial. Others are consumed with the daily drama of the unfolding financial panic. I am excited that we are about to see some of the greatest financial opportunities of our lifetime.

Here are some thoughts that I presented yesterday as keynote speaker at the 6th Annual Bay Area Income Property Lending Conference.

Craig Sullivan and Jim Butler after Jim presented keynote speech at commercial real estate lender conference. Butler says, "Our attorneys represented a lot of players in this last 'great redistribution of wealth' which probably involved 'only' $300 billion or so. . . there will be a phenomenal opportunity to make money in the very near future. . . NOW is the time to get ready for the unprecedented opportunities.

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The commercial real estate lender conference -- 6th Annual Bay Area Income Property Lending Conference. What focused my thinking?

Many months ago, before the Financial Crisis hit, my friend Craig Sullivan of Old Republic National Commercial Title, asked me to be the keynote speaker at the 6th Bay Area Income Property Lending Conference that he and Arnie Garfinkel organized in 1992. The conference is basically a lender conference -- in many ways like JMBM's Meet the Money®. But this conference covers financing for all types of commercial real estate, with more of a focus on office and multi-family. Meet the Money® deals ONLY with hotel and hospitality product finance. Next session will be May 5-7, 2009 at LAX Sheraton.

Although my professional focus has been 100% on hotels for more than 20 years, I was intrigued that they thought a hotel lawyer had something to offer to commercial real estate people. Because we have long believed that hotel mixed-use is the key to the future of hotel development, I had some ideas.

Initially, those ideas revolved around the use of hotels as the "spark plug" for mixed-use projects. But as the Global Financial Crisis continued to engulf our economy and short term prospects, I found a new challenge. My topic was specifically "Who's Making Money NOW in Commercial Real Estate." And of course my keynote topic was prominently advertised in the San Francisco Chronicle, conference brochures, and other conference promotions.

By November 18 -- the date scheduled for my address -- the commercial real estate world was in the same kind of financial panic as the rest of the planet, and that limited a lot of my options. So with the indulgence of Craig and Arnie, I shifted tack only a little and talked about "The Greatest Opportunities of Our Lifetimes That Are Coming Soon In Commercial Real Estate."

If you follow www.HotelLawBlog.com, you have heard the first part my thesis (see Hospitality Lawyer: Fortunes will be made . . . or lost . . . in the wake of The Financial Bailout Bill and the Panic of 2008. What happens AFTER the Bailout Bill . . .).

"Next to my children I love a good panic more than anything else."

The Great De-leveraging . . . The Global Financial Crisis . . . The Panic of 2008

Whatever you want to call it, I believe that we are in the middle of a Financial Panic -- probably the biggest meltdown since World War II. Many have resisted calling a spade a spade, hoping that things would get better and wanting to avoid adding to the panic.

I understand that approach. I don't want to add to the panic either. I didn't cause this mess, and I am very sorry for all who are hurt by it. But I do believe that things have reached a point that we can only move on if we admit where we are, are realistic about the situation, and make the best of it that we can. Being an ostrich will not improve our situation.

With the virtual revamping of our banking and investment banking industries, failures of Bear Stearns and Lehman, the nationalization of our housing finance mechanisms (Freddie Mac and Fannie Mae), the Fed guaranteeing money market accounts, and stepping in to buy commercial paper from GE because GE cannot sell its paper in the markets . . . Citibank laying off 50,000 employees worldwide, consumer confidence at the lowest point since records were kept . . . Where do I stop?

Have you talked to people losing their jobs, struggling to meet a mortgage or being wiped out by margin calls? People are scared. They are terrified. They are in a "panic" that I believe will go down as one of the most important financial disasters in the past 200 years (Yes. That was 200, not 20). So why pretend everything is fine? Even better, why not look for opportunity?

As I mentioned in one of my earlier posts, one of the most prominent investors of all time has summarized the opportunity. In fact, this person would be in the Top All Time 40 of Richest People in the U.S. And she was the only woman in this category with 39 other men. Her name was Hetty Green (not Henrietta. Hetty.). Hetty inherited some money, but took a few million to more than $100 million before her death, and in current dollars, her worth would be valued at more than $19 billion. How did she do it? Her answer is in a quote that says it all:

"Next to my children I love a good panic more than anything else."

these government bailouts will cause a tectonic movement in the ownership of real estate assets

A seminal event . . . unparalleled opportunities to make a fortune

I hope the "downturn" is a short and shallow one, but that is not what the Fed is saying or the data indicates. The most optimistic experts are now looking to mid 2009 as a possible bottom, but others are looking to 2010 or beyond, and fear a weak recovery when it finally comes.

As I count, the current commitments of the U.S. government for bailout are well north of $2 trillion dollars . . . and the governments of the civilized world are throwing billions or trillions more at their economies. Although no one knows exactly what this means today, these government bailouts will cause a tectonic movement in the ownership of real estate assets. And whenever that much real estate changes hands in troubled times, fortunes will made that dwarf the fortunes built in the "RTC days" in the early 1990s.

Do your own research. Look at who made money then. You will find names like Bass Brothers, Fisher Brothers, J.E. Robert, Colony Advisors, and many more. Our attorneys represented a lot of players in this last "great redistribution of wealth" which probably involved only $300 billion or so. JMBM was one of the top 25 firms in the U.S. representing the FDIC and the Resolution Trust Corporation when the U.S. government stepped in to bail out failed financial institutions holding distressed real estate assets. Others now on our team represented many of the opportunistic investors that "cleaned up" from this situation.

We may still have some significant pain to suffer, but there will be a phenomenal opportunity to make money in the very near future. We are still having trouble accepting that things are this messed up. So every new piece of depressing data immobilizes us like we were for months after the 9-11 tragedy -- frozen in front of our TVs, watching the twin towers getting hit over and over.

NOW is the time to get ready for the unprecedented opportunities. Somewhere in 2009 or 2010 the landscape will start to look different. You can hunker down until then or you can start looking for opportunities that will put you way ahead of the game.

We are on the verge of value opportunities that we haven't seen for at least 20 years.

I didn't cause this mess and I am very sorry for all who are hurt by it. But I do believe that things have reached a point that we can only move on if we admit where we are, are realistic about the situation, and make the best of it that we can. Being an ostrich will not improve our situation.

Here are some of the opportunities I see which I shared with the commercial real estate lender conference:

Discounted notes.
Opportunistic investors with capital will look first at discounted notes. Without regard to real value of the underlying asset (which may be compromised in varying amounts), many note holders will feel the pressure -- maybe for reasons of their own capital or liquidity requirements, regulatory issues, or fund end-of-life dates. This is an area where we expect price and value will take bigger adjustment, faster. Look for the discounted debt to provide IRRs of 20 percent or more. Some are seeing what they believe are IRRs of up to 30 percent now.
Recapitalizing distressed borrowers.
One way to invest in the upside is to buy assets through participating or mezz debt, or outright equity in distressed owners needing capital to fund operations, meet maturity calls, or other financial challenges. The necessitous owner may give the new money a preferred position, or may even step back into a passive position with little prospect of economic gain other than delaying or avoiding tax recapture (of accelerated depreciation, tax credits) or forgiveness of indebtedness income. This is an area for creative and aggressive deal making with the assistance of a competent advisory team.

Equity purchases or investment.
It's not "whether" it's going to come back, it's "when." Cash is king, so if you are royalty, get ready to jump in the game. How long should you wait before you jump in? Don't wait too long - a good deal is a good deal. I remember the 1992 NYU Investment Conference when the talk was: "We don't know if it's low enough to buy yet; how long can we carry it?" A few years later the talk was: "We should have bought everything we could." Everyone who bought well made a bundle. (This was the era when the Waikaloa was purchased at 10 percent of its replacement cost.)

Workouts.
Workouts are an opportunity to harvest great value. A lot of this opportunistic activity is going to involve restructuring. Don't let this stop you! Hook up with those who have knowledge, energy, and capital and have been through the workout drill before. There is a ton of capital on the sidelines. Workouts will help the deal flow.

REITs.
Some of the best REITs around, including hotel REITs, are showing phenomenal yields. But their stock is in the crapper. Some of the best hotel REITs are trading at 10 percent of their 52 week highs! REITs are reflective of opportunities. What would Hetty do? She'd carefully perform her due diligence (loans may be due, inflating the opportunity) and make a move if was warranted.

Mixed use and hotel mixed use.
Condo hotels, hotel condos and hotel mixed use will have an enduring place in real estate. If you have the stamina and the intelligence, those properties can be repurposed with great profit potential. Due diligence is particularly critical here. If you don't know how to create a successful condo hotel regime, then you don't know the right questions to ask to see if your potential investment can succeed, or to develop the exit strategies!

Geographic gems.
International gateway cities like San Francisco, Seattle, Boston, New York, etc. will continue to provide opportunities that outperform the norm. Ultimate destinations will continue to do well. Infill areas will have great value as populations shift due to changing values in the housing market.

I asked the audience of bankers, brokers, and property owners if they were optimistic about the future. At least 90% of them raised their hands! Those in the real estate industry are often accused of being cockeyed optimists. It's a good thing, too. These are the people that will do the deals that will help get the economy back on track. Some of them will even make a fortune.

This is Jim Butler, author of www.HotelLawBlog.com and hotel lawyer, signing off. We've done more than $50 billion of hotel transactions and more than 100 hotel mixed-used deals in the last 5 years alone. Who's your hotel lawyer?

________________________

Our Perspective. We represent developers, owners and lenders. We have helped our clients as business and legal advisors on more than $50 billion of hotel transactions, involving more than 1,000 properties all over the world. For more information, please contact Jim Butler at jbutler@jmbm.com or 310.201.3526.

Jim Butler is one of the top hospitality attorneys in the world. GOOGLE "hotel lawyer" or "hotel mixed-use" or "condo hotel lawyer" and you will see why.

Jim devotes 100% of his practice to hospitality, representing hotel owners, developers and lenders. Jim leads JMBM's Global Hospitality Group® -- a team of 50 seasoned professionals with more than $50 billion of hotel transactional experience, involving more than 1,000 properties located around the globe. In the last 5 years alone, Jim and his team have assisted clients with more than 100 hotel mixed-use projects -- frequently integrated with energizing lifestyle elements.

Jim and his team are more than "just" great hotel lawyers. They are also hospitality consultants and business advisors. They are deal makers. They can help find the right operator or capital provider. They know who to call and how to reach them.

Contact him at jbutler@jmbm.com or 310.201.3526. For his views on current industry issues, visit www.HotelLawBlog.com.

Primer on Boumediene’s week of reckoning

jharrow@akingump.com (Jason Harrow) — Thu, 20 Nov 2008 22:27:30 GMT

Analysis Five months and seven days after the Supreme Court’s path-breaking decision in Boumediene v. Bush — the most important so far of its four rulings on “war on terrorism” issues — a week that will test the scope and meaning of that ruling is about to open. It will involve all three levels of the federal [...]

Analysis

Five months and seven days after the Supreme Court’s path-breaking decision in Boumediene v. Bush — the most important so far of its four rulings on “war on terrorism” issues — a week that will test the scope and meaning of that ruling is about to open. It will involve all three levels of the federal judiciary, winding up next Tuesday in the Supreme Court.

But as judges in all of those courts and teams of lawyers wrestle earnestly with basic questions about government powers and Guantanamo Bay detainees’ rights, a certain air of unreality will hang over all of the proceedings. In 62 days, a new President will take over, having pledged to shut down Guantanamo altogether and to re-think the government’s entire policy of military detention and war crimes prosecution.

Judges and lawyers, however, have schedules to meet, and cannot wait to see what President-elect Barack Obama will do once in the White House. So, starting Thursday, and in sequence, a Circuit Court panel will hold a crucial hearing on civilian courts’ powers in reviewing military detention decisions; a District judge will decide the first of the contested Guantanamo habeas cases — a reprise of the very same Boumediene case that went to the Supreme Court and returned; a Circuit Court panel will hear government pleas to keep any detainees from being transferred to the U.S.; a District judge will try to sort out the links and conflicts between habeas, claims of torture and war crimes evidence, and the Supreme Court will get its first look at the first major sequel to Boumediene — a test of the President’s power to detain an individual who was lawfully in the U.S., was seized inside this country, and is now being held indefinitely and without charges in a military jail in South Carolina.

Each of those developments, in its own way, is a test of what the Supreme Court intended to happen when it ruled on June 12 that detainees have a constitutional right to bring habeas challenges to their confinement, while finding inadequate (but leaving intact) two other legal processes to weigh detention decisions by the military.

What follows below is a primer that simplifies and sorts out these developments, and shows how they mesh or clash.

Thursday at 9:30 a.m., U.S. Courthouse, Washington

Bismullah, et al., v. Gates, Circuit docket 06-1197.

A three-judge panel of the D.C. Circuit holds a 30-minute hearing on whether that Court has lost the authority to decide detainees’ challenges under the Detainee Treatment Act of 2005. Under DTA, Congress wiped out courts’ authority to hear detainee challenges under the federal habeas law, and substituted a review process before the Circuit Court. In Boumediene, the Supreme Court found that the DTA alternative was not an adequate substitute for constitutional habeas, but left the DTA process intact even as it authorized new habeas challenges. The Justice Department has since argued that the Boumediene decision, in legal effect, scuttled the DTA process altogether, so that detainees may only pursue one form of challenge — through habeas.

Significance: For more than a year, the Justice Department has been attempting to overturn a Circuit panel’s initial decision in July 2007 in the Bismullah case — a decision that laid down the basic ground rules for DTA review of military detention decisions. The Department has protested that the decision went too far to impose duties on the Pentagon and intelligence agencies to produce information to the Circuit Court, causing severe burdens and threatening national security. That challenge has failed. Since the Supreme Court decided Boumediene, the Department has been attempting to end the DTA process altogether. This case amounts to a showdown over the fate of the DTA system. If the government challenge succeeds, habeas will be the only process left to detainees.

The Circuit panel includes Judges Douglas H. Ginsburg and Judith W. Rogers, who supported the initial Bismullah ruling and have favored fairly robust DTA review, and Karen LeCraft Henderson, who has been opposed to the Bismullah decision and has suggested that the DTA process is probably dead now.

Thursday at 10 a.m., U.S. Courthouse

Boumediene, et al., v. Bush, et al., District Court docket 04-1166.

U.S. District Judge Richard J. Leon, who has cases involving two dozen of some 200 detainees with habeas cases pending in District Court, is to announce orally his first ruling. It will be in the Boumediene case, involving six detainees. The issues: Has the government, using both public and secret information, justified continued confinement of those captives? If not, what remedy will the judge impose?

Significance: Judge Leon has moved rapidly on his post-Boumediene habeas cases. Another District judge, Ricardo M. Urbina, on Oct. 7 ordered the release of 17 detainees into the U.S. — the first ruling on the merits in a new habeas case; in that case, however, the government no longer contended that the detainees were enemies justifying detention on that basis. Leon’s ruling thus will give the first glimpse in a contested case of whether constitutional habeas holds any promise for release of Guantanamo detainees, and whether the government’s case for detention is compelling, just sufficient, or wanting. It will not bind any other judge. The side losing the case is expected to appeal. (Judge Leon’s 2005 ruling in the first Boumediene proceeding was that detainees were not entitled to any relief under the federal habeas statute; that was upheld by the D.C. Circuit, but overturned by the Supreme Court’s constitutional ruling.)

Monday at 9:30 a.m., U.S. Courthouse

Kiyemba v. Bush (lead case of six), Circuit docket 08-5424.

A three-judge panel holds a hearing to review Judge Urbina’s decision (District Court docket 05-1509) requiring that 17 Chinese Muslim Uighur detainees be released and brought to the U.S., to live at least temporarily. As noted above in the entry on Judge Leon’s planned ruling, the Urbina decision came in a case in which the Pentagon no longer seeks to detain the Uighurs as “enemy combatants.” But the government insists that no detainee may be brought into the U.S., and that the Uighurs can be held at Guantanamo until they can be resettled in some other country than their native China, where they would face abuse or torture. This Kiyemba case is separate from another Circuit Court case with the same title and involving some of the same detainees (Circuit docket 05-5487), testing judges’ authority to limit the government’s power to transfer detainees out of Guantanamo. That other case was heard Sept. 25, and a decision is awaited.

Significance: The decision in this case, together with the coming ruling by the Circuit Court in the other Kiyemba case, likely will go far toward settling the scope of federal judges’ powers to regulate the transfer of detainees now at Guantanamo. The Justice Department contends that Congress has taken away entirely the judges’ power to oversee transfers and conditions at Guantanamo, and that the Boumediene decision did not disturb that court-stripping move. It also argues that, in any event, no judge has the authority to order any detainee to be brought into the U.S.; entry to the U.S., for any reason, is strictly within the powers of the Executive Branch, it asserts. If the government wins, that would strictly curb the range of remedies available in habeas cases or in other challenges to conditions at Guantanamo.

The Circuit panel includes Senior Judge A. Raymond Randolph, who has been the most sympathetic Circuit judge to the claims of Executive power over Guantanamo and the detainees, Judge Henderson, who has been a favorable vote for the government in detainee cases, and Judge Rogers, who supports a strong oversight role for the courts.

Three different Circuit judges — Douglas H. Ginsburg, Thomas B. Griffith and Brett M. Kavanaugh — are on the panel that heard the other Kiyemba case in September It is unclear how, if at all, the two rulings can or will be coordinated.

Monday at 2:30 p.m., U.S. Courthouse

Habashi, et al., v. Bush, et al. (District Court docket 05-765).

U.S. District Judge Emmet G. Sullivan holds a hearing in a case involving an Ethiopian-born former British resident, Binyam Mohamed al Habashi, captured in Pakistan, who claims that the Central Intelligence Agency sent him to Morocco where he was tortured. His lawyers contend that the government’s evidence to support continued detention is based on confessions he made under torture. He allegedly confessed to being a part of a terrorist plot to detonate a radioactive bomb attack in the U.S.

The government, however, has dropped war crimes charges against him, and the Justice Department has said it will no longer rely on that allegation as a basis for his detention. That has prompted Judge Sullivan to order the government to release to Mohamed’s lawyers all documents that may help him in his challenge to his enemy designation. Monday’s hearing is on Mohamed’s specific demand for the judge to compel the government to go further with disclosures. The government contends that it has sufficient evidence to justify detention without anything Mohamed said during interrogation.

Significance: This case may lead to a major ruling on how far judges may go to facilitate the constitutional habeas process that the Supreme Court’s Boumediene decision provided for detainees. It is likely to produce a fundamental ruling on the scope of detainees’ rights to demand information from the government that may help them contest their ongoing confinement by the military. It also may set a precedent on access to information to support claims of torture, arranged or tolerated by the U.S. government. The government contends that a 2004 Supreme Court decision (Hamdi v. Rumsfeld) limits the scope of court review of military detention decisions, and severely restricts the rights of “discovery” to aid detainees’ challenges. Mohamed’s lawyers have said that the government has come close to contempt of court by refusing to carry out its obligations to supply background information about this detainee.

Judge Sullivan, who has often demonstrated limited patience with government attorneys in cases before him, is considered one of the District judges most likely to rule in favor of broad detainees’ rights. He has become visibly upset in court over the government’s actions in the Mohamed case.

Tuesday morning, Supreme Court Building

Al-Marri v. Pucciarelli (Supreme Court docket 08-368).

At its closed-door Conference to consider new cases it may want to decide, the Court will confront a core issue of presidential “wartime” power: the authority — or lack of it — to order the detention in the U.S. and prolonged captivity of an individual suspected of terrorism, but who is not charged with any crimes. The case involves a Qatari national, Ali Saleh Kahlah al-Marri, who was arrested in his home in Peoria, Ill., where he was a graduate student. He is the only detainee seized in the U.S. under presidential order and still in military captivity inside the country. His lawyers have asked the Supreme Court to rule that no federal law and no part of the Constitution allows the President to order such detentions. The Justice Department has urged the Court not to consider the case at this stage, but to allow it to return to District Court in South Carolina for a fuller examination of the government’s reasons for holding al-Marri.

There is now no doubt that al-Marri had a right in a habeas case to challenge his detention. He was legally in the U.S. at the time he was turned over to the military for detention, and the government did not contest his right to challenge — though it did so unsuccessfully — until he appealed. Thus, the key issue in Boumediene – did a habeas right remain — is not at issue. The appeal, however, is a major test of whether the Boumediene principle — substantial power in the U.S. courts to review military detention even to the point of second-guessing presidential actions amid what the government terms wartime — applies within the U.S. Boumediene, of course, involved foreign nationals held outside the U.S.

Significance: The outcome of the al-Marri case, if the Court steps in now or later, will settle a fundamental constitutional issue about presidential authority over terrorism suspects. Al-Marri’s appeal notes that the detention power claimed in his case is so unlimited that it would extend even to U.S. citizens, if the government decided to take them into captivity on terrorist suspicion (as it did in the famous case of Jose Padilla, who later was released from military custody and was tried and convicted in regular federal court).

The government defends the seizure and detention of al-Marri as valid under the post-9/11 Resolution (AUMF) authorizing a presidential response to the 2001 terrorist attacks, and under the President’s power as commander-in-chief. But the government prefers to have the al-Marri case first go through another habeas review in District Court.

The Supreme Court may announce its reaction to al-Marri’s appeal as early as Tuesday afternoon, following its Conference. It has no obligation to do so, however.

The key to a grant of review at this point apparently would be the reaction of Justice Anthony M. Kennedy. If he would prefer (as he initially did in the Boumediene case) to let the lower courts proceed further, he presumably would not vote in favor of review now. There probably are four votes to grant review among the Court’s moderate and liberal Justices, but they very likely would not press the issue if Kennedy balked.

Another unknown factor, of course, is how President-elect Obama’s administration would react, if the case is granted. If it wished to do so, it could simply inform the Court that it no longer supports the detention authority at issue, and that probably would be the end of the case — in effect, a “confession of error.” If review is granted, briefing in the case would still be going forward when Sen. Obama takes office.

NOTE TO READERS: The foregoing does not take into account the developments that may be occurring with war crimes prosecutions at Guantanamo Bay in coming weeks, even though those may be influenced in greater or lesser ways by the Court’s Boumediene decision.

Neither does the foregoing consider what may happen this week or next in a new move by the Justice Department to narrow sharply the scope of habeas review in the wake of Boumediene. That maneuver is discussed in this post. The outcome of that challenge could have a decisive influence on the shape of habeas review. How it will play out, however, cannot be known at this early point.

Joint Commission Throws "HIT's" Weight In the Ring

hoscislawski@foxrothschild.com (Helen Oscislawski) — Thu, 20 Nov 2008 22:00:47 GMT

The Joint Commission released a Report today titled "Health Care at the Crossroads: Guiding Principles for the Development of the Hospital of the Future" that, among other things, emphasizes that health information technology ("HIT") will be key to hospitals' viability in the future. According to the Report, HIT will play a significant role in enhancing health care quality and safety. More specifically, the Report recommends that hospitals adopt integrative technologies across their facilities and systems, and find competent consultants to provide technology and investment guidance. Ultimately, the Report concludes that HIT is the inevitable way of the future for health care.

In light of the release of the Report, I will be monitoring whether the Report will ultimately impact the Joint Commission's Hospital Accreditation Standards in the future. Interestingly, the introductory page of the Report specifically states that the Report does not intend to describe new Joint Commission requirements for health care organizations, nor does it intend to suggest that new requirements will be forthcoming in the future. However, it is certainly possible and imaginable that the adoption and use of HIT may be woven into any number of Elements of Performance in future versions of the Joint Commission's Accreditation Standards.

Judge orders five detainees freed

jharrow@akingump.com (Jason Harrow) — Thu, 20 Nov 2008 21:57:28 GMT

UPDATED to 4:30 p.m. NOTE TO READERS: This post includes a link to the judge’s 14-page ruling. However, that “memorandum order” does not include the judge’s remarks encouraging the government to forgo an appeal of his order to release five captives, his comments about the long delay the detainees faced in getting a legal answer to [...]

UPDATED to 4:30 p.m.

NOTE TO READERS: This post includes a link to the judge’s 14-page ruling. However, that “memorandum order” does not include the judge’s remarks encouraging the government to forgo an appeal of his order to release five captives, his comments about the long delay the detainees faced in getting a legal answer to their challenges, his statements that his ruling would have no precedential effect for other cases, or his suggestion that the Supreme Court had imposed a judicial process on the intelligence-gathering regime. Those presumably will be reflected in the transcript of Thursday’s session, available later.

—————————–

U.S. District Judge Richard J. Leon, in the first ruling in a full trial testing the Supreme Court’s June decision on detainees’ rights, on Thursday ordered the federal government to release five Guantanamo Bay detainees “forthwith.” The judge found, however, that the government had justified the continued imprisonment of a sixth detainee, Belkacem Bensayah. (The ruling is available here.)

The judge, in an unusual added comment, suggested to senior government leaders that they forgo an appeal of his ruling on freeing the five prisoners. While conceding that the government had a right to appeal that part of his ruling, Leon commented that he, too, had “a right to appeal” to leaders of the Justice Department, Central Intelligence Agency and other intelligence agencies, and his plea was that they look at the evidence regarding the five he was ordering released. “Seven years of waiting for our legal system to give them an answer to their legal question is enough,” he commented.

Senior leaders of the government, he went on, will have “more than enough opportunity” to test the novel issues at stake in defending against an appeal of his ruling in the case of Bensayah. He said he was appealing to those leaders “to end this process” for the five.

Robert Kirsch, one of the detainees’ lawyers, said after the session that they would appeal the decision to continue the imprisonment of Bensayah. Kirsch also told reporters that there have been diplomatic negotiations with Bosnian authorities, and they have indicated a willingness to take the five detainees once they are released. The six prisoners were captured in Bosnia, where they had been living, although they are all natives of Algeria.

The Justice Department said in a statement that it was “promptly reviewing the decision” on releasing the five captives. It did not indicate whether it would appeal that part of the ruling, although it said it disagreed with it. It also said that the ruling demonstrates “the need for Congress to enact” new procedures to limit court review of detention cases — a goal that Attorney General Michael B. Mukasey has sought.

The judge appeared to be mildly critical of the Supreme Court’s ruling on detainees’ habeas rights, saying that ”the practical effect of imposing the habeas process on the world of intelligence-gathering” is “to create a virtually limitless complex of novel and difficult questions; as a result, the precedential value [of his decision] should be and is limited to these cases.”

In ruling against the government as to the five detainees, Judge Leon said that the Justice Department and intelligence agencies had relied solely on a classified document from an unnamed source, which he found was not persuasive on the government’s claim that the five had planned to travel to Afghanistan to join in hostile actions against the United States and allied forces. That secret document, the judge said, was too “thin a reed” on which to base detention.

Leon also said he could not evaluate that intelligence report for credibility or corroboration because the government had not given him information enabling him to do so, and he said it did not convince him that the five had a plan to fight against the U.S. or its allies, or even knew of such a plan. He said he could not be more specific in public, because of the classified nature of the information. (After announcing his ruling, Judge Leon met in private with lawyers for both sides to discuss the information he could not mention in open court.)

The five detainees ordered released are Lakhdar Boumediene, Hadj Boudella, Mustafa Ait Idir, Saber Lahmar and Mohammed Nechla.

The judge said, however, that the government had persuaded him that Bensayah was “an al Qaeda facilitator” who sought to arrange travel to Afghanistan by others to join in armed hostilities toward U.S. and coalition partners. Applying a “preponderance of the evidence” standard of proof, Leon said that the government had proved “that it was more likely than not that Bensayah planned to take up arms against the United States, but also planned to facilitate travel of others to do the same.”

He added that there “can be no question that facilitating others to join the fight against the United States in Afghanistan constitutes direct support of al Qaeda in furtherance of its objectives, and that this support is within the definition of ‘enemy combatant’ ” on which the judge was relying.

Near the close of the oral announcement of his decision, the judge cautioned observers not to read any wider effect into his ruling. “Few if any of the others will be factually like” the Bosnians’ case, he said, adding: “Nobody should be lulled into a false sense that all of the government’s cases will look like this one.”

The judge also added that “there comes a time when the desire to resolve novel legal questions…pales in comparison to effecting a just result based on the state of the record.”

It took nearly an hour for the judge to announce his ruling, because it was being translated, sentence by sentence, into arabic so that the six detainees could keep up with it via a telephone link with the U.S. Naval prison at Guatanamo Bay.

Statute of Frauds - Legal Description Requirements Strictly Enforced

claytongraham@dwt.com (Clayton Graham) — Thu, 20 Nov 2008 21:00:26 GMT

A recent Division One Court of Appeals case highlights the importance of including an unambiguous legal description in any contract for the sale of real property. The Court has once again strictly enforced the Statute of Frauds, which requires a description of the land to be transferred that is sufficiently definite to locate it without recourse to oral testimony. The parties in Dick Bedlington Real Estate, L.L.C. v. Tawes, No. 59387-1-I (2008) (unpublished) [link to opinion: http://www.courts.wa.gov/opinions/pdf/59387-1.unp.doc.pdf] entered into two separate purchase and sale agreements. In the first agreement, the seller agreed to sell a parcel of land of approximately 88 acres, with 3 acres reserved to the seller. The "approximate" location of the land reserved to the seller was noted, along with a statement that "[t]he exact configuration shall be approved by the parties prior to closing." In the second agreement, the seller agreed to sell "3 acres" of a larger parcel that was described in the agreement.

The Court held that the legal descriptions in both agreements were deficient under the Statute of Frauds because they did not contain enough information to locate the land to be sold. The court refused to read the two agreements together to cure this deficiency, and held that the agreements were void and unenforceable.

Statute of Frauds – Legal Description Requirements Strictly Enforced:

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