United Continental Swipes New General Counsel From Sara Lee

Brett Hart has traded all-he-could eat cheesecake to fly the friendly skies as the top lawyer for the world's largest air carrier.

United Continental Holdings, Inc., announced late Wednesday that it has named Sara Lee Corporation's top lawyer as its new general counsel. Hart's first day on the job will be Dec. 15.

Hart replaces Thomas Sabatino Jr., who announced his plans to parachute out of the position on the same day that the Oct. 1 merger was finalized. Sabatino had been selected to head the merged airlines' legal department, but a spokesperson told CorpCounsel.com at the time that he'd simply opted not to move forward with the company.

Hart will be responsible for managing United Continental's legal affairs across the globe — and will report to CEO Jeff Smisek.

"Brett's experience, leadership skills and legal expertise are great assets to our senior management team," Smisek said in a statement announcing Hart's hire. "He will play a key role as we integrate United and Continental and build the world's leading carrier," he said.

Hart joined Sara Lee in 2003 as assistant general counsel, but he had been in the general counsel role for just over a year. He told Corporate Counsel sibling publication The National Law Journal in an interview earlier this year that he hoped not to leave anytime soon. ChicacoBusiness.com reported that Hart departs Sara Lee in anticipation of a management shake-up following the resignation of CEO Brenda Barnes. Barnes suffered a stroke this year.

A Michigan native, Hart earned his law degree from the University of Chicago in 1994 and joined Sonnenschein Nath & Rosenthal. After a two-year stint as special assistant to the general counsel for the U.S. Treasury, he returned to Sonnenschein and made partner.

Sabatino, 51, previously a lawyer at Deerfield, Ill.-based Baxter International, joined United in March from Schering Plough. That was not long before Chicago-based UAL Corp. chose to merge with Houston-based Continental Airlines.

When he resigned, Sabatino was the second general counsel to leave United in less than a year. Paul Lovejoy resigned in November 2009 "for personal reasons," a company spokesperson said at the time.

Shannon Green can be contacted at sgreen@alm.com.

Also See: United's General Counsel Resigns Just Ahead of Merger (from CC)

Also See: Nothin' But Blue Sky: United Airlines' New Top Lawyer Is Flying High (from CC)

Also See: Top Lawyer 'Ceases' to Ride the Friendly Skies (from CC)

Also See: Sara Lee General Counsel Brett Hart: 'It's Delicious' (from NLJ)

Also See: Click Here for More In-House People News

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Report Touts Drug Courts' Low Cost, High Success in Curbing Recidivism

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Bristol-Myers Squibb and Eli Lilly Win Against Generic Pharma Companies

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Wilmer's New Partners -- Color Them Pink

It's just the start of the season for new partner announcements, but I'm willing to gamble. My bet is that Wilmer Cutler Pickering Hale and Dorr will win the contest for elevating the highest percentage and number of women equity partners in The Am Law 100 for the coming year.

Of the 11 newly promoted partners (their elevation will be effective as of January 2011) at the one-tier partnership firm, eight are women. That means women make up a whopping 73 percent of the new partners. (Currently, the firm has 24 percent women partners, and 9 percent diverse partners.)

 "It wasn't conscious," says Wilmer's co-managing partner William Perlstein (pictured right). "There was no decision to increase the number of women partners." He adds that the firm "really didn't realize what percentage of women would be up. . .we start with a reasonably large number of candidates, and the [partnership selection] committee does a careful review."

Perlstein makes it sound almost routine (maybe that's just in keeping with the decorous ways of an old-line firm), but I keep pressing him to spill the secret behind Wilmer's success with the ladies.

Perlstein insists he's not sure, but he does point out that the firm has a number of part-time partners. (There are 13 partners working part-time: ten women and three men.) In fact, he says, one of the new partners is a part-timer. "Part-time partners have worked well here," he notes, adding that the firm has had a thriving part-time policy since the 1990s.

But Perlstein also insists that the firm's part-time policy is "just part of the piece."

He might be down-playing part-time at Wilmer, because the firm's idea of a reduced schedule doesn't seem that relaxing. "Generally they work 75-80 percent of the full-time schedule," Perlstein says. (Two thousand hours is usually the norm.) "You've got to be available all the time to the client. . . . They work quite hard, but less than full-time."

Jennifer Berrent, one of the new partners, says there's another reason women tend to stay at Wilmer: Culture. A single mother with a 4-year old son, Berrent says even senior partners have their priorities right. "The head of the department told me that there will be conflicts between home and work, and that home should take priority," she says.

Despite the availability of part-time work, Berrent opted to stay full-time. "We have a clear hours expectation here--2,000 hours, and that feels okay to me." More important, she says, is the freedom she has to work from home or on a telecommuting basis. "I don't feel I'm fighting the system here," she says about her irregular schedule. "Unless women craft their own systems, they don't feel empowered."

So Wilmer's secret to success with women boils down to a solid history of part-time work (if billing 1,600 hours fits your idea of a reduced schedule), giving lawyers true flexibility, and that intangible thing call culture. Simple, right?

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Florida chief justice says foreclosure hearings must be open

Reacting to reports of barriers to attending foreclosures hearings, Florida Supreme Court Chief Justice Charles Canady issued a memorandum Wednesday directing all judicial circuit chief judges to ensure public access.

The American Civil Liberties Union, news media groups and other parties complained Monday that judges, bailiffs and other court officers are turning away the public and media with excuses such as foreclosure hearings are only for attorneys.

"The people of Florida are entitled to know what takes place in the courts of this state," Canady said in a response to Sam Morley, general counsel for the Florida Press Association. "No crisis justifies the administrative suspension of the strong legal presumption that state court proceedings are open to the public."

Canady instructed the state’s 20 chief judges to examine current practices and remind judges and court staffers that visitors and callers must be given correct information about attending foreclosure hearings.

ACLU attorney Larry Schwartztol said the directive reflects how seriously Canady takes the state’s commitment to open courts. Canady also reminded judges that the goal of clearing 62 percent of the massive foreclosure backlog with the funds provided during the 2010 legislative session was a goal, not a quota.

"There is no reason why the 62 percent goal should interfere with a judge’s ability to adjudicate each case fairly on its merits," he said.

His comment was an affirmation of the position taken Oct. 28 by John F. Laurent, chair of the state Trial Court Budget Commission. The 62 percent goal was based on funding 62 percent of the original request.

In the grips of a foreclosure rate that has stretched courts over the past two years, critics charge judges have taken shortcuts to expedite cases.

Adolfo Pesquera can be reached at (954) 347-2616.

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Democrats Plan Votes on Controversial Nominees, Senator Says

President Barack Obama's nominees for the federal judiciary have stalled for months in part because of heated disagreement over a handful of nominees. Now, Senate Democrats are looking at forcing votes on four of them.

Sen. Sheldon Whitehouse (D-R.I.) said today that Democrats could move soon to end debate on the nominees. He said that Majority Leader Harry Reid (D-Nev.) was lining up support this morning for what’s known as a cloture petition — the necessary paperwork before holding a vote to end debate.

“He’s lining up the signatures,” Whitehouse said after a meeting of the Senate Judiciary Committee. Such a petition requires 16 signatures.

Whitehouse is a vocal supporter of one of the nominees who have drawn fire: John McConnell Jr., a Motley Rice partner who’s been nominated for federal district court in Rhode Island. The U.S. Chamber of Commerce is opposing McConnell’s nomination, citing his work as a plaintiffs’ lawyer on lead paint litigation and other cases.

The other three nominees whom Reid is trying to force votes on, Whitehouse said, are Goodwin Liu for the U.S. Court of Appeals for the 9th Circuit, Edward Chen for the Northern District of California and Louis Butler for the Western District of Wisconsin. Republicans have targeted all three because of what they call the nominees’ extreme views, while the nominees’ home-state senators and other supporters argue they’re being treated unfairly.

A fifth nominee whom Republicans oppose, Judge Robert Chatigny for the 2nd Circuit, is pending before the Senate Judiciary Committee. A committee vote is planned for Thursday.

Though senators have many other priorities during their “lame duck” session, Whitehouse said he thinks there is time to consider the stalled nominees. Otherwise, he said, “there’d be no point getting the signatures” for the cloture petition.

Senate rules require 60 votes to end debate on a nominee or a bill, unless senators agree to waive a vote entirely. Democrats control 59 Senate seats until January.

On Monday, conservatives sent a letter to Reid asking him not to force votes on any nominees between the midterm elections and the start of the next Congress. “Any ‘lame-duck’ confirmations would be a gross abuse of Congressional authority in a last gasp attempt to perpetuate an agenda that the American people have already rejected,” the letter says.

UPDATE (3:43 p.m.): A group of circuit and district court judges from the 9th Circuit sent a letter this week to Senate leaders asking for quicker action on nominees. The signatories include 9th Circuit Chief Judge Alex Kozinski.

"In order to do our work, and serve the public as Congress expects us to serve it, we need the resources to carry out our mission," the letter (PDF) says. "While there are many areas of serious need, we write today to emphasize our desperate need for judges."

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Bombing Suspect Found Guilty of Just One Conspiracy Count

In a stunning verdict, a federal jury in the Southern District last night acquitted accused embassy bomber Ahmed Khalfan Ghailani on all but one of 285 counts in the twin bombings of U.S. embassies in East Africa in 1998.

Clearing the Tanzanian native of four conspiracies and the murder of 224 people in the near-simultaneous bombings of the embassies in Kenya and Tanzania on Aug. 7, 1998, the jury in Judge Lewis A. Kaplan's courtroom shocked prosecutors and defense lawyers alike with its verdict.

But the prosecution nonetheless succeeded in tying Mr. Ghailani to the bombings. The lone guilty verdict was declared on Count 5, a conspiracy to destroy buildings and property of the United States by means of an explosive. The jury answered a follow-up question in the affirmative, finding that Mr. Ghailani's conduct in Count 5 "directly or proximately caused death to a person other than a co-conspirator."

Mr. Ghailani, 36, faces a mandatory minimum of 20 years in prison and a maximum of life when he is sentenced on Jan. 25.

The diminutive Mr. Ghailani, dressed in a white shirt and tie, had entered the courtroom in handcuffs with his trademark shy smile. Minutes later, he was wiping his hand across his face in relief and hugging and shaking hands with the defense team led by Peter Quijano, Michael Bachrach, Steve Zissou and Anna Sideris.

The prosecution team of Southern District Assistant U.S. Attorneys Michael Farbiarz, Harry Chernoff, Nicholas Lewin and Sean Buckley congratulated the defense team and also took handshakes from U.S. Attorney Preet Bharara.

Mr. Ghailani is the first former Guantánamo detainee to be moved into the civilian justice system and tried on terrorism charges, and his long route to the Southern District and several pretrial rulings may have helped shape the verdict reached yesterday.

Mr. Ghailani allegedly worked with al-Qaida's East African cell that was acting on Osama bin Laden's instructions to kill Americans anywhere in the world. More specifically, prosecutors charged, he bought the truck and the gas tanks used in the Tanzanian explosion.

The day before the bombings, they argued to the jury, Mr. Ghailani fled Kenya on a flight to Karachi, Pakistan. But prosecutors were not allowed to argue to the jury their claim that Mr. Ghailani worked directly for Mr. bin Laden until his capture in 2004.

Once captured, Mr. Ghailani was taken to a secret CIA site and questioned by agents using what the government called "enhanced interrogation techniques" and the defense calls "torture."

Because of the taint on any information derived from Mr. Ghailani during the interrogation, the government vowed not to use his statements against him at trial unless the defense put them in issue.

But the prosecution plowed ahead in its attempt to use one piece of information gleaned from the CIA interrogation—the identity and location of Hussein Abebe, a Tanzanian who claims he sold Mr. Ghailani the explosives used in the bombing in Dar es Salaam.

Prosecutors were dealt a major blow pretrial when Judge Kaplan ruled that Mr. Abebe, their only direct witness who could tie Mr. Ghailani to the bombings, could not testify. Facing a serious delay in a trial they had been teeing up for over a year, the government eschewed an appeal of that ruling and decided to complete jury selection and move on.

The prosecution worked with what it had, and on Monday, it appeared to spectators and the defense, that as many as 11 jurors were ready to vote to convict, as one juror sent a note to the judge saying she had made up her mind and was being attacked for her convictions by her fellow jurors.

Yesterday's result was clearly a surprise to a defense that had argued their client was nothing more than a dupe running errands for a conspiracy he never joined and knew nothing about. Mr. Quijano slumped in his chair as the verdict was about to be read, but he bolted upright when the first "not guilty" was pronounced on the initial conspiracy count—the conspiracy to kill U.S. nationals.

Still the prosecution got their conviction in a trial that has been closely monitored by all sides in the debate over whether accused terrorists should be tried by military commission or in Article III courts.

Judge Kaplan addressed the jury briefly before dismissal, praising them for proving that "American justice can be rendered calmly, deliberately and fairly by ordinary people, people who are not beholden to any government, even this one."

Outside the courthouse, Mr. Quijano lauded the jury for delivering its verdict in the shadow of the World Trade Center. He added that the defense still believes Mr. Ghailani is innocent of all charges, and it plans to appeal.

Four men were convicted in the Southern District in 2001 in the embassy bombing conspiracy and they are serving life sentences.

@|Mark Hamblett can be reached at mhamblett@alm.com.

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Pennsylvania Firms Slow to Adopt iTrends

Apple's iPad tablet computer and "e-readers" like Amazon's Kindle and Barnes and Noble's Nook have gained huge popularity with the tech-hungry public over the past few years, but it appears Pennsylvania law firms are not totally sold on the devices as professional tools.

Almost no one The Legal Intelligencer spoke to said they had considered replacing traditional laptops with the iPad, and most agreed the devices are geared more toward entertainment than anything else.

Likewise, firms have yet to embrace e-readers for work, though several individual attorneys said they own or are considering buying the devices for personal use.

And firms seem equally wary of jumping on cell phone trends.

BlackBerry smartphones may be facing stiff competition from Apple's iPhone and Motorola's Droid in the general consumer market, but they still reign supreme at law firms.

The Legal Intelligencer spoke to a number of firms across the state to find out what type of technology their lawyers rely on and what they're considering. What interviews revealed is that most firms, big and small, seem to have a similar approach to technology and little has changed in recent years.

THE iPAD IS NO SUBSTITUTE

Everyone The Legal Intelligencer spoke to agreed that e-mail access is the number one thing lawyers look for in mobile technology, followed closely by the ability to retrieve documents on the go.

Most said attorneys largely use their phones to check e-mail and their laptops to view, edit, and draft documents.

That said, despite its marketing push as a sleeker, less bulky alternative to the traditional laptop, the general consensus was that the iPad is no substitute and therefore has little application for lawyers in the workplace.

For one, according to Laurence Liss, chief technology officer at Blank Rome in Philadelphia, the iPad's data encryption isn't as strong as that of a laptop, making information stored on it more vulnerable to hackers.

"In our opinion, it's not an enterprise-worthy device from a security point of view or, for that matter, a production point of view," he said. "It's not a replacement for a laptop."

Kevin F. McKeegan, managing partner of Meyer Unkovic & Scott in Pittsburgh, said his firm's technology committee has also been reluctant to support Apple products for security reasons.

He added that he doesn't see much professional use for the iPad anyway.

"I bought my son an iPad when he graduated from college and he loves it, but I'm not sure what I would do with it," he said.

Several people said the iPad is also lacking from a production standpoint because, unlike a laptop, it doesn't have a physical keyboard, which is better suited to typing-intensive applications like Microsoft Word and Excel than a touch-screen is.

"I have one person who has an iPad they bought for themselves and she said it's great for checking e-mail but not user-friendly for editing or preparing documents," said Adelaine F. Williams, chief operating officer at Kaplin Stewart Meloff Reiter & Stein in Blue Bell, Pa.

But not everyone agreed the iPad was inapplicable to the practice of law.

Steven W. Agnoli, chief information officer at K&L Gates in Pittsburgh, said a number of attorneys at his firm have been using the iPad as a supplement to their laptops.

"In our case, it's not a laptop replacement, meaning if you have a lot of work you need to do, [such as] e-mails you need to respond to or draft, you wouldn't use an iPad," he said, but added that what the device does do is give users computing capabilities in situations when they might not otherwise have them.

Agnoli said his firm combats security concerns by having iPad users connect through a network called Citrix, which transfers information over servers without copying data to the devices.

Michael O. Pansini of two-lawyer plaintiffs firm Pansini Mezrow in Philadelphia said his iPad actually has fully supplanted his laptop.

"I've been able to basically duplicate my desktop on my iPad," he said, adding that the device is "great for general research."

Nevertheless, the general consensus among the firms The Legal Intelligencer spoke to was that laptops are still firmly the status quo and that the iPad is less a work tool than a leisure device.

"I haven't seen anyone actually use it as a replacement," Liss said. "But I've seen some people buy them because they think they're cool."

E-READERS

As with the iPad, most of the firms The Legal Intelligencer spoke to said they don't feel there's much professional utility in e-readers like the Kindle, the Nook, and others.

"I don't really see an application for the Kindle," Liss said, calling it "a very limited-functionality device."

But while no one said they use e-readers specifically for business, several lawyers said they own them or are considering purchasing them for their personal reading.

Kaplin Stewart managing partner Maury B. Reiter said he uses the Kindle to read books and newspapers, as did David J. Sorin, co-managing partner of King of Prussia, Pa.-based Sorin Royer Cooper.

"I carry it everywhere I go -- my Kindle and a netbook and my BlackBerry -- and I get most of my reading materials directly on my Kindle, in terms of what I read for professional development and for staying current," he said.

One obvious advantage of an e-reader over the iPad is price.

While the leanest version of the iPad retails for around $500, some models of the Kindle and other devices like it are priced under $150.

Of course, the iPad, which was released three years after the original Kindle, performs a much broader set of functions than eReaders, including web browsing and e-mail.

Still, not everyone has been compelled to make a change.

"I was an early espouser of the Kindle and I don't feel any pressing need to switch," Sorin said.

While neither tablet computers nor e-readers have fully caught on with lawyers as professional tools, it's possible that could change if more firms begin digitizing their law libraries.

Sorin Royer Cooper, for example, already hosts a completely electronic library on a private secure cloud, a move that has "dramatically enhanced cost efficiencies," according to Sorin.

Other firms, like K&L Gates, are considering something similar.

Agnoli said his firm's librarians are looking into going digital, though there are currently no set plans.

If the firm does decide to digitize its library, he said, it will make the materials accessible on its network.

SMARTPHONES

Liss said "the vast majority" of law firms are BlackBerry-oriented, adding that, as with the iPad, many attorneys prefer the BlackBerry's physical keyboard to the iPhone's on-screen touchpads.

Clifford A. Goldstein, CEO of Chartwell Law Offices in Valley Forge, Pa., said he has stuck with the BlackBerry for exactly that reason.

"I considered the iPhone but I found the touchpad to be more difficult to use than the BlackBerry keyboard," he said.

Williams said less than 3 percent of the attorneys at her firm use an Apple device in lieu of a BlackBerry.

"In my personal opinion, BlackBerrys are made for enterprises and iPhones are toys," she said.

But Liss said that, while BlackBerry phones are the standard issue devices at his firm, the firm does allow its attorneys to opt for alternatives like the iPhone and reimburses them a portion of the cost.

Liss admitted this policy can present challenges for the firm's IT department.

"It's a little bit of a headache," he said. "We're not in a position to support every device that comes out on the market, but we'll make a best-effort attempt."

Like Liss, Williams said her firm issues and is mainly set up to accommodate BlackBerrys but will partially reimburse those who prefer to purchase an iPhone, albeit while offering less technical support.

However, in an attempt to avoid straining its IT department, the firm has decided not to offer any compensation or support for other phones like Motorola's Droid, Williams said.

"We feel it's more efficient to have a standardized server," she said.

Similarly, Agnoli said K&L Gates supports BlackBerrys, iPhones, and Windows mobile devices but doesn't deviate from those platforms.

SERVICE PROVIDERS

Many of the law firms The Legal Intelligencer spoke to said which cell phone service providers they do business with is based at least as much on quality as it is on price.

Liss said his firm's largest contract is with T-Mobile, partly because of cost but also because the company has offered consistent international network connectivity and phone reception.

"T-Mobile is, for those of us who travel to Europe and overseas, the best," he said.

But Liss said the firm recently entered into agreements with Verizon and AT&T as well, both of which he said have been improving in price and quality as of late.

Similarly, Williams said her firm contracts with Verizon for its BlackBerrys because it has "the strongest network for our area," which extends to Lancaster and Lehigh counties.

Meanwhile, Agnoli said K&L Gates largely leaves it up to its lawyers to decide which service providers suit their travel habits and geographic location.

That said, the number of options varies greatly with each device.

AT&T, for example, is currently the only service provide available to iPhone users, though media reports are predicting the release of a Verizon iPhone in 2011.

Pansini said now that he owns an iPad he's close to getting rid of his iPhone and exclusively using his BlackBerry for phone calls, citing frequent dropped calls as a major frustration.

So will the technology buying habits for Pennsylvania firms change anytime soon? Based on those interviewed, it would seem that firms will have to be sold on the idea of how new devices and services will improve the productivity of attorneys. And getting that buy-in won't be easy.

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Breyer Says Justices Must Adapt to Facebook World

Don't expect a Facebook friend request from Supreme Court Justice Stephen Breyer any time soon.

The 72-year-old justice said in a speech at Vanderbilt Law School on Tuesday that he was perplexed when he recently saw the film "The Social Network" about the origins of Facebook.

But Breyer said the film illustrates his argument that modern conditions -- like the development of the social networking site -- should inform justices when interpreting a Constitution written in the 18th century.

"If I'm applying the First Amendment, I have to apply it to a world where there's an Internet, and there's Facebook, and there are movies like ... 'The Social Network,' which I couldn't even understand," he said.

Breyer said of the high court: "It's quite clear, we don't have a Facebook page."

Although Breyer was making a point about judicial philosophy, he also touched on the Court's sometimes limited grasp of technological developments. For example, Chief Justice John Roberts in a public employee privacy case before the Court earlier this year tried to figure out the role of a text-messaging service in enabling an exchange between two people.

"I thought, you know, you push a button; it goes right to the other thing," Roberts said. Responded Justice Antonin Scalia: "You mean it doesn't go right to the other thing?"

And in a recent case dealing with a California law regulating the sale or rental of violent video games to children, Justice Anthony Kennedy pressed a skeptical state lawyer on whether the v-chip blocking device, rather than a state law, could be used to keep children away from the games.

"V-chips won't work?" Kennedy asked, before the lawyer politely explained they are limited to television programming.

Breyer was in Nashville to speak to students, teach a class and promote his new book, "Making Our Democracy Work: A Judge's View."

Breyer, who was appointed to the Supreme Court by Democratic President Bill Clinton in 1994, said his views contrast with originalist members like Scalia, whose approach focuses on giving a fair reading to the words of the Constitution as they were meant when they were written.

Scalia and Breyer sparred over their philosophical differences in a joint appearance at the Texas Tech University Law School last week. Scalia, who was appointed in 1986 by Republican President Ronald Reagan, called the writing of the Constitution "providential."

Breyer said he disagrees with those who argue that originalism is "a good system because it will keep the subjective impulses of the judge under control."

"If you want to have history solve everything, let's get nine historians and not nine judges," Breyer said. "And you'll discover that the nine historians are fighting about the various points on which these cases turn anyway."

Associated Press writer Mark Sherman contributed to this report from Washington.

Copyright 2010 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.

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Albany: Law Allows Reassignment of Life Insurance Benefits, Judges Find

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U.S. Judge Enjoins N.J. Law Allowing State To Swipe Unused Gift Cards

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Victoria Kolakowski

The Recorder

November 17, 2010

In a tightly contested judicial race Victoria Kolakowski celebrated her win as the nation's first openly transgendered judge.

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FDIC sued over financial services company seizure

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Toyota's Nightmare

Toyota executives and lawyers hope they wake up one day in early January and no longer have to worry about Dimitrios Biller. He's the former in-house lawyer who accused the company of discovery fraud. Now they're adversaries in a bitter arbitration with a final hearing scheduled for Nov. 15 (and a ruling expected in early January).

At the heart of their battle are documents that Biller took when he left. Toyota claims they're protected by attorney-client privilege. Biller argues that the crime-fraud exception has rendered them fair game. So far the arbitrator seems to be leaning Biller's way.

READ THE STORY: Toyota's Worst Nightmare: Where Will the Carmaker's Dispute With a Former In-House Lawyer End?

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Latest Chevron Outtake: 'They're All Corrupt!'

Here, Donziger is returning from a confrontation with the judge whom Chevron had asked to inspect a laboratory testing soil samples gathered by plaintiffs. Donziger muses: "The judicial system is so utterly weak. The only way that you can secure a fair trial is if you do things like that. Like go in and confront the judge with media around and fight and yell and scream and make a scene. That would never happen in the United States or in any judicial system that had integrity." A few moments later, Donziger exclaims: "They're all [i.e., the Ecuadorian judges] corrupt! It's — it's their birthright to be corrupt." (The bracketed text is from Judge Kaplan's ruling of November 5.)

"That Chevron is now using videos taken half a decade ago showing plaintiffs' struggle with [the] spectre of corruption as a way of undermining both the plaintiffs and the Ecuadorian judiciary is glaringly ironic," says plaintiffs' spokesperson Karen Hinton, "especially given that it was Chevron who forced the plaintiffs to litigate in Ecuador and Chevron who at the time the videos were taped was the party attempting to corrupt the courts."

A spokesperson for Ecuador's attorney general's office, Carlos De La Guardia of DLG Consulting Group, says that the laboratory incident was never investigated because plaintiffs never filed a complaint. De La Guardia notes that Chevron praised the integrity of Ecuador's judiciary until 2003, and argues that the system was only strengthened by reforms in 2005. "The Republic stands by its independent judiciary," he says, "and will continue to defend it against unfounded attacks." Chevron denies all suggestions that its lawyers bribed judges in the case.

See All of the Videos on the Hub Page: Chevron in Ecuador — the Tapes the Plaintiffs Don't Want You to See

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Judge Orders BofA to Repay $500 Million Seized in 'Calculated Violation' of Bankruptcy Code

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Facing New Student Loan Rules, For-Profit Colleges See Enrollments Fall

Years of record enrollment growth at for-profit colleges may be coming to an end.

New student enrollments have declined at many for-profit institutions, according to earnings reports released over the past few weeks.

When compared to last year’s figures, new student enrollment was down 2 percent at Strayer Education and down 3.9 percent at ITT Education Services. Corinthian Colleges said it expected declines of 5 to 7 percent this year, while DeVry and Capella Education both announced expectations that new enrollment would drop slightly.

The decline in new student enrollments was most severe at the University of Phoenix, the largest for-profit college in the nation. Although the Apollo Group, the University of Phoenix’s parent company, said that new enrollment had fallen 10 percent in the quarter that ended Aug. 31, the company warned that numbers could sink more than 40 percent in the quarter ending Nov. 30 (“As For-Profit Colleges’ Enrollment Growth Slows, Analysts See Signs of an Industry Reset,” The Chronicle of Higher Education, Nov. 11, 2010).

Representatives for many for-profit institutions are linking the slowing enrollment numbers to the marketing and recruiting changes the schools are making in order to comply with new government rules that regulate access to Title IV federal financial aid, which includes federal grants and federal student loans.

One rule, which is already scheduled to go into effect, extends the period after graduation during which student loan defaults are measured by the U.S. Department of Education from two to three years, making it harder for for-profit colleges to demonstrate sustained acceptable student loan default rates that are low enough for the schools to remain eligible for federal financial aid.

Another rule, referred to as the “gainful employment” rule, is a proposed regulation that creates a debt-to-income ratio that ties for-profit colleges’ access to federal financial aid with the ability of students to find employment and successfully make payments on their federal student loans after graduation. For-profit colleges have lobbied heavily against the gainful employment rule, and the Education Department has delayed final language on the rule until early next year.

Student Loan Regulations Spurred by Schools’ Deceptive Practices

The student loan default rules were developed in the wake of heightened federal scrutiny of for-profit colleges, many of which get nearly 90 percent of their revenue from federal grants and federal student loans. Under the government’s so-called “90/10 rule,” at least 10 percent of a for-profit school’s revenue must come from non-federal sources, such as upfront cash tuition payments and private student loans.

Federal inquiries came to a head this summer when an undercover investigation by the Government Accountability Office found widespread deception by recruiters, admissions officers, and financial aid officers at for-profit colleges. There have also been Senate hearings — the third of which is scheduled for December — and state probes into reports of student-recruiting abuses.

For-Profit Colleges Step Up Screening of Students

As a result of the new financial aid rules, for-profit colleges are becoming more selective about the students they enroll.

“Colleges are paying much more attention to the students they bring into their doors because they’re going to be accountable for them,” said Kevin Kinser, who studies for-profit higher education as a senior researcher at the Institute for Global Education Policy Studies at the University at Albany.

Some of the changes made by the larger for-profit schools include offering free orientation periods during which students and colleges can evaluate each other before either party makes a commitment; providing financial-literacy training to deter excessive student loan borrowing; and no longer enrolling “ability to benefit” students who lack a high school diploma or GED but pass a basic skills assessment test to qualify for federal financial aid.

Ability-to-benefit students tend to default on their student loans at twice the rate of other students.

Ariel Sokol, an analyst with UBS Securities, told The Chronicle of Higher Education that the decline in new student enrollments at for-profit colleges throughout the industry is “an appropriate contraction,” considering the confluence of political, regulatory, and financial pressures and the explosive growth in enrollment rates that the for-profit industry has enjoyed the last few years.

The enrollment growth rate at for-profit colleges was 17 percent in 2008 and 28 percent in 2009, compared with a historic growth rate of between 10 and 11 percent, according to Jerry R. Herman, an analyst with Stifel Nicolaus — a surge that Herman sees as “unsustainable growth.”

In the end, Sokol said, the financial and regulatory pressures could “weed out the bad actors that don’t have the appropriate cost structure or the appropriate business model to serve the student population” that they choose to recruit.

Further Reading

Epstein, Jennifer. “Closer Look at ‘Gainful Employment.’ ” Inside Higher Ed. July 26, 2010.

U.S. Department of Education. “Gainful Employment Proposed Rule.” Federal Register, 34 CFR Part 668. July 26, 2010.

U.S. Government Accountability Office. “For-Profit Colleges: Undercover Testing Finds Colleges Encouraged Fraud and Engaged in Deceptive and Questionable Marketing Practices.” Testimony submitted to the U.S. Senate Committee on Health, Education, Labor, and Pensions. August 4, 2010.

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Refinance Student Loans - How and Why?

Let’s face facts. Going to college these days, especially private universities, is no cheap task and can put you well into debt before you even enter the “real world” for yourself. Most people, especially young college students, do not have the tens of thousands of dollars to pony up every year for college tuition either. Therefore, most college students choose to use student loans to put themselves through college, whereby they can pay the tuition without breaking a sweat. However, when it comes time to graduate from college and pay these student loans back, many people do not know where to begin. How about refinancing these loans before you even start anything else?

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Faltering Economy Eroding Consumer Confidence in Student Loans

Some banking industry experts have long regarded the federal student loan program, established in 1965, as one of the most successful public-private partnerships ever created. A historically steady and reliable source of financing for parents and college students needing help paying for school, the federal student loan program also used to be a mostly risk-free and profitable venture for private lenders issuing government-backed student loans.

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NextStudent’s Commitment to Customer Education Seen in Student Loan Blog

The NextStudent Student Loan Blog celebrates its second anniversary this year, and with the recent political changes in Washington continually propelling the student loan industry to the forefront of political debate, its purpose as an excellent watchdog of student loan news and changes in federal student loan policy is more relevant than ever.

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Sale of California Guarantor of Student Loans to Be Nixed by Federal Government

The U.S. Department of Education announces its intent to block California’s planned but unauthorized sale of a multibillion-dollar portfolio of federal student loans, as the state attempts to generate cash in the face of its crippling budget deficit.

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Reported Financial Aid Fraud at For-Profit Colleges Leads to Florida Investigation

Florida’s attorney general has launched a civil investigation into five for-profit higher education companies for alleged deceptive recruiting tactics, misrepresentations made to students about financial aid and accreditation, and other fraudulent and potentially illegal practices (“Florida AG Investigating Five For-Profit Schools,” The Wall Street Journal, Oct. 19, 2010).

The companies and schools under investigation include Kaplan Inc., which is owned by the Washington Post Co.; Education Management Corp. and some of its Argosy schools; Everest College and other institutions owned by Corinthian Colleges; Apollo Group’s University of Phoenix; and the privately held MedVance Institute.

Attorney General Bill McCollum is taking a closer look at these companies as a result of consumer complaints and evidence brought to light in August by an undercover Government Accountability Office probe of 15 for-profit colleges that found all 15 schools guilty of various deceptive and fraudulent practices.

After sending in undercover government agents posing as students, the GAO issued a report revealing that some recruiters at the for-profit schools were recorded encouraging the agents to falsify financial information on the Free Application for Federal Student Aid (FAFSA) in order to qualify for more money in government-issued Pell Grants and student loans, while other recruiters wildly exaggerated the possible earning potential of degrees awarded by the schools.

Many for-profit colleges derive the bulk of their income from federal financial aid funds awarded to students in the form of federal grants and college loans — taxpayer-subsidized money that can account for as much as 90 percent of a school’s total revenue. Apollo Group, in fact, is the single largest recipient of federal student loan funds in the United States.

None of the recruiters targeted in the GAO probe provided clear information about costs and lengths of degree programs or about the schools’ graduation rates, as required by federal regulations.

“We have received a number of complaints. The combination of the complaints and the [GAO] report that came out” prompted the attorney general’s office to begin an investigation, said Ryan Wiggins, deputy communications director for McCollum (“Washington Post’s Kaplan, For-Profit Schools Are Focus of Florida Probe,” Bloomberg, Oct. 19, 2010).

Although Wiggins declined to specify the source of the complaints or answer questions about other details, the attorney general’s website listed the issues being investigated as “alleged misrepresentations regarding financial aid” and “alleged unfair/deceptive practices regarding recruitment, enrollment, accreditation, placement, graduation rates, etc.”

Representatives from Kaplan, Apollo, and Corinthian told The Wall Street Journal that they had not yet been notified of the attorney general’s investigation, while representatives from Education Management and MedVance were reported as being unavailable for comment.

In response to news reports and inquiries, the Apollo Group issued a statement saying that the company supports “efforts to enhance accountability within higher education” and strives “to play a leadership role in continuously improving and transparently reporting the outcomes and achievements of students served by our schools.”

The news of McCollum’s investigation into the for-profit schools comes on the heels of the announcement from Oregon state officials that Oregon has joined a class-action lawsuit against the University of Phoenix, seeking $10 million for investment losses resulting from the school’s alleged securities fraud, deceptive marketing to students, and fraudulent reporting of income from government-backed student loans.

Further Reading

U.S. Government Accountability Office. “For-Profit Colleges: Undercover Testing Finds Colleges Encouraged Fraud and Engaged in Deceptive and Questionable Marketing Practices.” Testimony submitted to the U.S. Senate Committee on Health, Education, Labor, and Pensions. August 4, 2010.

Florida Office of the Attorney General. Civil investigation into Kaplan, Inc. a/k/a Kaplan Educational Centers, Inc., a/k/a Kaplan University, f/k/a Kaplan College. Case number L10-3-1192.

Florida Office of the Attorney General. Civil investigation into University of Phoenix, Inc. Case number L10-3-1193.

Florida Office of the Attorney General. Civil investigation into MedVance Institute, Inc. a/k/a KIMC Investments, LP, Kann Institute for Medical Careers, Inc. Case number L10-3-1194.

Florida Office of the Attorney General. Civil investigation into Everest College a/k/a Florida Metropolitan University a/k/a Everest University and Everest Institute; National School of Technology, Inc.; Florida Metropolitan University. Case number L10-3-1195.

Florida Office of the Attorney General. Civil investigation into Argosy University of Florida, Inc.; Argosy Education Group, Inc. d/b/a Argosy University; Education Management Corp. Case number L10-3-1196.

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College Students Can Receive Private Student Loan Funds from NextStudent Before Fall Semester Begins

With the approaching fall semester, many college-bound students still are in need of essential funds for school. Whether students need funds to cover the full cost of their tuition and expenses or funds to supplement the financial aid they received, NextStudent, the premier education funding company, can help students through its Private Student Loan Program.

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No-Cost Student Loan Consolidation

A no-cost student loan consolidation – doesn’t that just sound too good to be true? Think about it. You have just accrued thousands of dollars in debt through student loans after 4 years of college, or possibly even more. Then, a company offers to take all of your loans off of your hands, put them into one central loan, and do it all for free! Well, while it might not be too good to be true, it all depends around your particular situation, which could make this a “free” process, or could still work out to the benefit of the consolidation company that you are working with throughout the process.

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Recent Graduates Having Trouble Making Their Student Loan Payments Should Consider Looking Into Their Deferment and Forbearance Options

If you graduated in May with federal Stafford student loans, you may be facing the prospect of adjusting your budget to accommodate new monthly student loan payments as your six-month grace periods end sometime this month. If you’re still doing temp work, looking for a job, or if you just got stuck with a lower-than-expected entry-level salary, it’s entirely possible that you’re not sure how you’re going to come up with the money you’re going to need each month to a meet a new monthly expense from student loans going into repayment.

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Using One That Is Online Offers Better Choices Then The Offline Guides

August 4th, 2010

Why should a person use an online student loans guide when they can use one off-line? Doesn’t the off-line option offer more choices then the online option? These are the two questions a lot of people ask when they are considering using a student loans guide online. They believe more information is included when they look off-line. I would say there is a lot of information in those off-line guides, but a lot of this information is usually out of date and cannot be relied upon. If you’re serious about finding information you can put to immediate use then using an updated online student loans guide may be the best option for you. There is not any one option that will have more choices, but there are options that will have better choices. Using a good student loans guide online will definitely carry the latter.

The off-line option usually does not have information that is up to date nor can the information be updated fast enough. Relying on these sources can end up being a waste of time. Do you want to be wasting your time when you are trying to get the financing to go to the school or university of your choice? Of course you don’t, and when you use a good student loans guide online you will always have access to information that is updated and updated quickly. Even if the information itself is not accurate sources will be included to point you in the direction of updated information.

Off-line sources may offer a wide number of resources as well, but they often do not take into account various factors. One such factor would be the proper time line to apply for the loan of your choice or the different requirements for certain students. You may be a non-traditional student so there will be different requirements for you, the off-line guide may not mention this. You may plan on attending some other type of school or university such as a community college or an online college. What are the different requirements if you are planning on taking one of these routes? Knowing the answers to these questions is important, and using outdated sources off-line are not going to offer you any insight.

Using an online student loans guide will have information that is easily researchable as well as easily updatable. You will not have to worry about hunting through thick booklets of information. After all who has the time to search through thick books of information? You also want to be able to categorize and organize information you feel is most valuable to you. Once you have found the information you want you want to easily be able to make reference to it whenever you need to. Are you going to do this if you’re relying upon an oversized guide off-line? Using a student loans guide online will give you access to the information you need in an easily researchable format, as well as a convenient one.

College Student Loans

Entry Filed under: College Student Loans

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Become Your Own College Funding Resource with NextStudent’s Scholarship Search Directory

There is no question that college costs are escalating beyond the ability to pay for even those of modest means without taking out student loans. New proposed student loan legislation is under consideration to lower interest rates but yet has not been enacted. In addition, individual schools from Ivy League universities to community colleges are implementing their own unique policies and programs to help students finance their college education so they avoid further debt.

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NextStudent Inc. to Explore Liquidity Options for Outstanding Auction Rate Notes

NextStudent Inc. announced today that it intends to explore alternatives for creating liquidity for the outstanding auction rate notes issued by NextStudent Master Trust I.

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Students Spring into Funding College for New School Year

Now that spring break is a gently fading blip on college students’ radar, many students are prone to coast through the final weeks of the semester and forget about more serious considerations like planning for next year. High school seniors are in a different boat altogether, diligently working their way through their first Free Application for Federal Student Aid (FAFSA). In their case, it is wise for students and their parents to monitor where they are in the college funding process and plan accordingly, according to NextStudent, the Phoenix-based premier education funding company.

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Prepared Parents Pave the Way for College Success

Many parents dream of the day when their children have attained a well-rounded education, a top-paying job, and are equipped with the character to succeed in the working world. Students spend hours of their lives laboring to achieve their college degree; and parents invest years of hard work to ensure that their children have what it takes to get there.

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Private Student Loans - dispelling the myths

If savings, grants, scholarships, and federal loans don’t cover the cost of your education, it’s time to turn to private loans. But young college students can’t qualify for a private loan, can they? Wrong! This article addresses this and other myths about student loans that you may run into.

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Stafford Loan Consolidation

A Stafford Loan, can help to finance your way through a college or university.

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Pell Grants

While loans are an effective way to pay your way through college, wouldn’t it be nice to have your college education essentially paid for you by the federal government? With a Federal Pell Grant, you can receive the necessary money to attend college without worrying about paying back a loan, because a Pell Grant does not have to be repaid after you finish your college education. Still, it is important to understand that not every college student is eligible for a Federal Pell Grant while they are attending college.

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A NextStudent Guide to Deferment and Forbearance

Sometimes life can put a dent in your budget, making it harder to pay your everyday living expenses and monthly bills. When faced with the loss of a job, going back to school or sudden unexpected expenses like medical bills or car-repair costs, even the most responsible borrowers can find themselves struggling to make their student loan payments.

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