[A] large deal of the gleeful Spitzerfreude on Wall Street arose from of the poetic justice of Spitzer’s undoing at the hands of the same extra-judicial tactics he regularly used against Wall Street firms and corporate executives when he was attorney general of New York. The real scandal of Spitzer’s career was not so much the former Girls Gone Wild model as the prosecutors gone wild.

My retrospective of Eliot Spitzer as both archetype and victim of overaggressive prosecutors in the July/August American Spectator is now on line at the AEI website.

New Jersey dental assistant Amber Arpaio found herself an asterisk-to-an-asterisk in the history of political scandals when it was reported that Ashley Dupre used Arpaio’s lost driver’s license to pass for more than 17 when she made a “Girls Gone Wild” video that later became notorious after the exposure of Dupre’s paid liaison with Gov. Eliot Spitzer. So now Arpaio is suing Dupre and Joe Francis, impresario of the “Girls Gone Wild” series. The news coverage of the lawsuit contains no indication that Arpaio suffered any damage to her credit record or other tangible interests from the affair, but she wants upwards of $10 million in cash solace for defamation and invasion of privacy, and, per her attorney, because “when someone searches her name on the Internet, pornographic material comes up.” Much better, when someone searches her name on the Internet, for intimations of litigiousness to come up. (Nancy Dillon, “Duped by Dupre: N.J. woman charges Spitzer call girl with identity theft”, New York Daily News, Jul. 17; AP/Comcast, Jul. 17)(& Prettier Than Napoleon). Plus: complaint at The Smoking Gun (h/t commenter VMS).

More 7/22: Thanks to commenter Eric Turkewitz for pointing out that Dupre had posed as Arpaio in actual news coverage, not just in the signing of film releases and the like, which makes the basis for the suit less unreasonable than I had hastily assumed.

• Beck and Herrmann fisk a NEJM anti-preemption editorial. [Beck/Herrmann; NEJM]
• Lessons of the Grasso case. [Hodak]
• You think BigLaw has it bad? Plaintiffs’ attorney who invented the benefit-of-the-bargain theory for pharmaceutical class actions where no one has suffered any cognizable injury, has made his firm tens of millions, but still hasn’t made partner. “Zigler said he never meets most of the people he represents in these high-profile cases.” [St.L. Post-Dispatch; related analysis from Beck/Herrmann]
• Speaking of harmless lawsuits, “an atrocity in Arkansas,” as Arkansas Supreme Court ignores basic principles of due process and civil procedure to certify an extortionate pre-CAFA class action from MIller County. [Hmm, that's Beck/Herrmann again; General Motors v. Bryant; related from Greve]
• Speedo competitor: unfair competition to say your innovative swimsuit has an advantage just because 38 out of the last 42 world records (as of June 30) were broken in the suit. [Am Law Daily]
• Background on bogus shower curtain scare story (earlier). [NYT; related AEI event]
• EMTALA-orama: don’t discuss payment in the emergency room if you don’t want to get sued. [ER Stories]

His future in private practice? (NBC Saturday Night Live, dubiously safe for work; via Turkewitz).

• Raelyn Campbell briefly captured national spotlight (”Today” show, MSNBC) with $54 million suit against Best Buy for losing laptop, but it’s now been dismissed [Shop Floor; earlier]
• Charmed life of Florida litigators Stanley and Susan Rosenblatt continues as Miami judge awards them $218 million for class action lawsuit they lost [Daily Business Report, Krauss @ PoL; earlier here, here, and here]
• Lerach said kickbacks were “industry practice” and “everybody was paying plaintiffs”. True? Top House GOPer Boehner wants hearings to find out [NAM "Shop Floor", WSJ law blog]
• It’s Dannimal House! An “office rife with booze, profanity, inappropriate sexual activity, misuse of state vehicles and on-the-job threats involving the Mafia” — must be Ohio AG Marc Dann, of NYT “next Eliot Spitzer” fame [AP/NOLA, Adler @ Volokh, Above the Law, Wood @ PoL; earlier]
• Sorry, Caplin & Drysdale, but you can’t charge full hourly rates for time spent traveling but not working on that asbestos bankruptcy [NLJ] More: Elefant.
• Fire employee after rudely asking if she’s had a face-lift? Not unless you’ve got $1.7 million to spare [Chicago Tribune]
• Daniel Schwartz has more analysis of that Stamford, Ct. disabled-firefighter case (May 1); if you want a fire captain to be able to read quickly at emergency scene, better spell that out explicitly in the job description [Ct Emp Law Blog]
• As expected, star Milberg expert John Torkelsen pleads guilty to perjury arising from lies he told to conceal his contingent compensation arrangements [NLJ; earlier]
• Case of deconstructionist prof who plans to sue her Dartmouth students makes the WSJ [Joseph Rago, op-ed page, Mindles H. Dreck @ TigerHawk; earlier]
• How’d I do, mom? No violation of fair trial for judge’s mother to be one of the jurors [ABA Journal]
• First sell the company’s stock short, then sue it and watch its share price drop. You mean there’s some ethical problem with that? [three years ago on Overlawyered]

“Kristen” from the Spitzer affair wants $10 million, saying the notorious video series photographed her when she was 17, not the requisite 18 — it seems likely that she had a hand in this deception herself — and now owes her $10 million for injury to her “business, reputation and good will”. (Curt Anderson, “Spitzer call girl sues ‘Girls Gone Wild’ for $10 million”, AP/Philly.com, Apr. 28; WSJ law blog, Apr. 29).

Do as we say, not as we do?

Ohio Attorney General Marc Dann is leading a group of 18 state Attorneys General seeking a ruling in the U.S. Supreme Court that employees can not be retaliated against by their bosses for filing a sexual harassment complaint.

The case comes at an ironic moment for Dann, as his office is investigating claims by two 26-year-old women who work at the Attorney General’s office that they were sexually harassed on and off the job by their boss, Anthony Gutierrez, a close friend of Dann’s who shared a Columbus condominium with him.

(”Dann Defends Woman Amid Own Office’s Sexual Harassment Flap”, Fox8 Cleveland, Apr. 16; Mark Rollenhagen and Reginald Fields, “Employee in Ohio attorney general’s office files police report”, Cleveland Plain Dealer, Apr. 19). Amid talk of a cover-up, Dann has also denied a request from the Columbus Dispatch under the state’s public records law “to review three months’ worth of e-mail messages between him and his then-scheduler, Jessica Utovich,” both of whose names turn up as possible witnesses in colorful text messages offered as evidence in the claims. “Dann in the past has said e-mails are public records and also has sought troves of messages from public offices when he was a state senator and the Democratic candidate for Ohio’s top legal office.” (James Nash, “Dann won’t release e-mails”, DispatchPolitics (Columbus Dispatch), Apr. 13; Julie Carr Smyth, “Sexual complaint probe at top cop’s office intensifies”, AP/Akron Beacon Journal, Apr. 18; Mark Naymik, “Dann has habit of hiring his friends; some have proved to be embarrassments”, Openers (Cleveland Plain Dealer blog), Apr. 12; Reginald Fields, “Dann employee files complaint with police”, Openers, Apr. 18).

After initial resistance, Dann did release some information that raised reportorial eyebrows:

In a surprising reversal, Attorney General Marc Dann’s office released 12 pages of notes that detail allegations of repeated sexual harassment and possibly an attempt to destroy text messages that may document the incidents. …

Dann’s Equal Employment Opportunity officer, Angela Smedlund, interviewed Cindy Stankoski and Vanessa Stout on March 31 about problems they had had with their boss, Anthony Gutierrez, who is Dann’s friend and former roommate.

Smedlund’s notes reveal the following:

Stankoski agreed to go out for drinks with Gutierrez last Sept. 10, but said she soon “felt tipsy and trapped.” She agreed to go to an apartment Gutierrez shared with Dann and Communications Director Leo Jennings III. She called and text-messaged friends that night.

In the margin, Smedlund wrote: “Leo & Tony destroyed texts Tony admitted to Charlie.” The notes do not identify Charlie’s last name.

Jennings and Gutierrez are now both on paid administrative leave.

(Laura A. Bischoff, “Dann’s office unveils documents detailing harassment report”, Lebanon, Oh. Western-Star, Apr. 16; Rollenhagen/Fields, “Reports show Dann was aware of Gutierrez’s history of troubles”, Cleveland Plain Dealer/Youngstown Vindicator, Apr. 18; Bertram de Souza, “Will Dann survive the crisis?”, StirFry (Youngstown Vindicator), Apr. 17). Perhaps unfortunately in retrospect, the noisily anti-business Dann had been lionized in the New York Times after his election as a possible “next Eliot Spitzer“.

More: Above the Law, John Phillips (”Other key words are pajamas, condo, inappropriate text messages, Hawaiian pizza, booze, passing out in a bedroom, unbuttoned pants upon waking up, and nothing on but his underwear.”), Law and More. Update: Dann’s emails with scheduler released (Dispatch via Genova)

• Schadenfreude overload: Eliot Spitzer fighting with Bill Lerach’s old law firm. You see, Spitzer returned Lerach firm’s money after the indictment (unlike many other Democrats); when Lerach left the firm, Spitzer hit them up for cash again; now, they’re the ones seeking money. [WSJ Law Blog; NY Sun]
• Breakthrough on Keisler nomination. [Levey]
• Sued for accurately saying government employee was a Mexican. [Volokh]
• Global warming lawsuit finds conspiracy in free speech. [Pero]
• Yet another free speech lawsuit: 50-Cent sued for “promoting gangsta lifestyle.” [Torts Prof]
• 3-2 decision in NY Appellate Division: Not a design defect for tobacco companies to sell cigarettes that aren’t light cigarettes. [Rose v. Brown & Williamson Tobacco Co.; NYLJ/law.com via Prince]
• Meanwhile, tobacco companies are also being sued over light cigarettes. Second Circuit tosses Judge Weinstein’s novel class certification (Point of Law); Supreme Court grants cert in Altria Group v. Good.
• Defensive medicine one of many reasons that health-care costs so much in US [New York Times]
• Eyewitness testimony: you can’t always believe your eyes. [Chapman]
• First-hand report on Obama’s views on guns. [Lott]
• Ethical problem for law firm to be representing judges in litigation seeking pay raise? [Turkewitz]

Mark Steyn on the youngster charged with sexual harassment in suburban Washington, D.C.:

Randy Castro is in the first grade. But, at the ripe old age of 6, he’s been declared a sex offender by Potomac View Elementary School. He’s guilty of sexual harassment, and the incident report will remain on his record for the rest of his school days - and maybe beyond.

Maybe it’ll be one of those things that just keeps turning up on background checks forever and ever: Perhaps 34-year-old Randy Castro will apply for a job, and at his prospective employer’s computer up will pop his sexual-harasser status yet again. Or maybe he’ll be able to keep it hushed up until he’s 57 and runs for governor of Virginia, and suddenly his political career self-detonates when the sordid details of his Spitzeresque sexual pathologies are revealed.

(”Attack of the preschool perverts”, syndicated/Orange County Register, Apr. 12; Brigid Schulte, “For Little Children, Grown-Up Labels As Sexual Harassers”, Washington Post, Apr. 3). A contrary view (letter to the editor from Cynthia Terrell of Takoma Park, Md., WaPo, Apr. 5): “The Post showed appalling insensitivity to the inappropriate nature of Randy Castro’s act. …our culture remains largely indifferent to privacy and harassment issues involving gender.”

To read Alan Dershowitz on the Spitzer affair, you might think the criminal laws against “money laundering, structuring and related financial crimes” mostly go unenforced when sums are in the “thousands, not millions, of dollars” and do not arise from “organized crime, drug dealing, terrorism and large-scale financial manipulation”. Alas, plenty of targets of these laws could tell you otherwise, as Forbes found when it went collecting examples from proprietors of cash businesses like restaurants and motels and even a couple who says their legal troubles arose after they divided up for deposit $40,000 they’d received in gifts at their big wedding. (Janet Novack, “My Big Fat IRS case”, Forbes, Apr. 7; earlier; similar from Dershowitz on CNN transcript).

If you’re not keeping up with our sister site, you’re missing out on stories about how expert evidence standards help plaintiffs too (and more); animal rights more voguish at many law schools than those dull old humans; Ohio Supreme Court commended; implications of recent plunge in carpal tunnel cases; 93% enrollment in Vioxx settlement; attorney faces criminal charges after his clients quit their nursing jobs; extensive coverage of Gov. Spitzer’s downfall; more trouble for Florida lawyer accused of bribing defendant’s adjuster to obtain settlement target numbers; ballot measure would abolish employment at will in Colorado; judicial seminars by the securities class action bar; and much more.

• Well, at least he cleaned up Wall Street; so runs one common valedictory to Spitzer, but Prof. Bainbridge begs to differ (Mar. 13)(and see links at my Point of Law roundup last week).
• “Should Spitzer really go to jail because of the way he took his own cash out of the bank?” asks Larry Ribstein (Mar. 11). And indeed bank “Know Your Customer” regulations, of which I’ve been critical for a good long time, might now come in for much needed scrutiny (Jack Balkin, Balkinization, Mar. 13; see also). One public figure who likewise faced the prospect of a “money laundering” indictment when personal weaknesses led him into surreptitious payments was ideological antipode Rush Limbaugh, Megan McArdle reminds us (Nov. 24, 2003).
• Last week’s New York Times article laying out Spitzer’s big crusade against the sex trade, and his successful push for a law lengthening sentences for “johns”, was powerful enough on its own terms. But isn’t it curious that the Times exclusively and at length quoted the feminist and legal-services groups who worked as Spitzer’s allies in that crusade, while not quoting a single source critical of the harsher penalties? Stephen Chapman has one corrective view [syndicated/Chicago Tribune, Mar. 13].
• Toronto law blogger Garry Wise says that unless Spitzer was diverting public moneys his fall constitutes “just another political lynching by the Monica brigade”, a sentiment I find sufficiently wrong-headed that I’m provoked to jump in with a comment [Wise Law Blog]. P.S. Wise says he was referring not to the governor’s downfall, but to his potential overcharging.
• How’d the press find out that “Client #9″ was the governor of New York? All signs point to a prosecution leak — the sort of underhanded tactic that should be left to the likes of, well, the departing governor himself [Frum, National Post]. Plus: Don’t assume that all the ill-advised leaks came from the prosecution side [Beldar]
• Should “Kristen” sue AP and other press outlets for swiping her MySpace pics, she might prove formidable in court: “It’s not often you get a case where there’s someone in the room with a higher hourly rate than the lawyers.” [Steyn @ NRO "Corner"].
• One reader said he had to check Overlawyered to see whether a certain story was true or a parody, so please rest assured: it’s only a parody (Jason Roth, “Spitzer Sues Prostitute Over Sex Addiction”, Save the Humans, Mar. 11).

The WSJ and Mississippi’s WLOX have the news up on Dickie Scruggs’ plea of guilty to conspiracy in the attempted bribe of Judge Henry Lackey. Earlier today, the Journal had an illuminating page-one feature on Dickie Scruggs’s history of fee disputes with other lawyers. YallPolitics‘ server seems to be down at the moment from traffic, but is back up now; in an email alert, YP’s Alan Lange said the surprise plea came three days before the deadline for Scruggs to plead before his approaching trial. Our past coverage is here, or check our Scandals page.

Update 12:18 EST: AP coverage is here (via Rossmiller). Sid Backstrom also pleaded and, per Folo rapid updates, is cooperating with prosecutors. No deal for Zach Scruggs yet. Also per Folo, Scruggs pleaded to conspiracy in the Lackey bribe attempt but did not resolve possible charges in the DeLaughter case, per the government side.

12:44: Now Folo’s server has crashed. Temporary replacement site up here.

1:16: Per Patsy Brumfield at the NEMDJ:

…The government recommended a sentence of five years in prison for Scruggs and 2 1/2 years for Backstrom. They also will pay a maximum fine of $250,000 each and a court fee. …

Before Biggers accepted their pleas, Scruggs and Backstrom admitted in open court that they had done what the government said they had done in Count One – they had conspired to bribe Circuit Judge Henry Lackey of Calhoun City for a favorable order in a Katrina-related legal fees case….

Dickie Scruggs, arguably the most famous plaintiffs’ attorney in the U.S., looked pale and thin but carried himself with a bit more control than his younger colleague at The Scruggs Law Firm, headquartered on the storied Square in Oxford.

The 61-year-old Ole Miss Law School grad and legal giant-killer, as well as Backstrom, likely will voluntarily surrender their law licenses, as has co-defendant Timothy Balducci of New Albany, who pleaded guilty in December although he was wired and cooperating with the government at least a month earlier.

“Do you fully understand what is happening here today,” Biggers asked him.

“Yes, I do,” Scruggs responded.

Questioned about whether he had discussed his decision to plead guilty with his attorney, Scruggs responded, “With my attorney, my wife and my family.”

1:25 p.m.: Rossmiller has an update from a correspondent at the scene. And Folo is up at a temporary site until its server gets back online. Excerpts from Folo’s on-the-scene report:

…* Richard Scruggs is pleading to conspiracy to bribe a state court judge, count 1 of the indictment, with other counts to be dismissed. This was an open plea, that is, no recommended sentence.

* The government expects that he will get the full five year sentence on that count. …

* There was no mention of cooperation by Scruggs. …

* There was an interesting and unusual disagreement with the government’s statement of facts in the plea colloquy. The government stated in its facts for both Backstrom and Scruggs that a conspiracy began in March to corruptly influence the state court judge, and Scruggs spoke to say that he had agreed to earwig the judge but not corruptly influence him in March, and that he later agreed to join a conspiracy to corruptly influence the judge. Sid Backstrom took a similar stance….

[See also WSJ law blog and later NMC post, as well as WikiScruggs on "earwigging" as a Mississippi tradition.]

1:56: Welcome Glenn Reynolds/Instapundit and David Rossmiller/Insurance Coverage Blog readers.

3:18: The Jackson Clarion-Ledger reports: “As part of the plea deal, federal prosecutors agreed to defer prosecution of Scruggs’ son, Zach Scruggs, who agreed to give up his license to practice law.” [N.B.: NMC @ Folo has a very different take, and other sites are also questioning the C-L's reporting on this point.] Folo at its temporary bivouac has PDFs of the Scruggs and Backstrom pleas and underlying facts, as does David Rossmiller. ABA Journal coverage includes the text of a forthcoming article by Terry Carter on the affair, written pre-plea. Other reactions: Above the Law (”has Scruggs employed bribery as a tactic in other matters — e.g., the tobacco cases that made him famous …?”), Beck and Herrmann (”What a week. First Spitzer, and now Scruggs. What goes around, comes around.”), TalkLeft, Michelle Malkin, NAM Shop Floor (”So what are the odds that this was Dickie Scruggs’ first and only crime during his decades-long career as a trial lawyer?”).

6:27: Roger Parloff wonders whether Scruggs will cooperate, and whether the statute of limitations might have run already on tobacco skullduggery. NMC @ Folo wonders what prosecutors will make of a slew of fresh documents from the Scruggs Law Firm, or whether perhaps such documents have already had an effect. Not so surprising a plea, says Jane Genova at Law and More, but rather “widely expected“.

Client #9, also known as Eliot Spitzer, enthusiastically enlisted in a crusade for tougher anti-prostitution laws and specifically for steps to raise the penalties for “johns” who patronized the women involved. The campaign bore fruit, and in his first months as Governor Spitzer signed into law what advocates call “the toughest and most comprehensive anti-sex-trade law in the nation”. Among other provisions, the law “lays the groundwork for a more aggressive crackdown on demand, by increasing the penalty for patronizing a prostitute, a misdemeanor, to up to a year in jail, from a maximum of three months.” (Nina Bernstein, “Foes of Sex Trade Are Stung by the Fall of an Ally”, New York Times, Mar. 12).

The Money Laundering Control Act of 1986 was meant to criminalize the practice of “smurfing”, or evading reporting requirements on the transfer of large sums of cash by breaking the sums down into transactions below the threshold. (”Smurfs” were low-level operatives who agreed to go into banks repeatedly making deposits slightly below the trigger amount.) Who’d've imagined the law would trip up the best-known white collar crime prosecutor of our era? Newsday has the story, which has a Long Island angle:

Spitzer last year had wanted to wire transfer more than $10,000 from his branch to what turned out to be the front for the prostitution ring, QAT Consulting Group, which also uses a number of other names, in New Jersey, the sources said.

But Spitzer had the money broken down into several smaller amounts of less than $10,000 each, apparently to avoid federal regulations requiring the reporting of the transfer of $10,000 or more, the sources said. The regulations are aim to help spot possible illegal business activities, such as fraud or drug deals.

Apparently, having second thoughts about even sending the total amount in this manner, Spitzer then asked that the bank take his name off the wires, the sources said.

Bank officials declined, however, saying that it was improper to do so and in any event, it was too late to do so, because the money already had been sent, the sources said.

The bank, as is required by law, filed an SAR, or Suspicious Activity Report, with the Internal Revenue Service, reporting the transfer of the money that exceeded $10,000, but had been broken down into smaller amounts, the sources said.

“The bank did the right thing,” said one source familiar with the situation. The name of the bank could not immediately be determined.

But the source added that “we then got lucky” in singling out Spitzer and the ring.

Millions of SARs are generated each week and flow into the Internal Revenue Service nationwide, but an analyst at the regional IRS office in Hauppauge [L.I.] noted Spitzer’s particular SAR and singled it out for attention to criminal investigators, the sources said.

The assumption, the sources said, was that Spitzer was being victimized either by a blackmailer or an impostor. The agents also speculated that perhaps the governor was involved in some sort of political corruption, the sources said.

Beldar (writing a day or two ago; note his update and caveats in an excellent post today):

If there were no other organized crime connections, that’s the kind of crime that might well result in a no-prison time recommendation and sentencing calculation for a first offender pleading guilty and cooperating.

AP also covers the smurfing charges, while Scott Greenfield has thoughts on the gradual erosion of financial privacy; I opined on some related matters in Reason a while back. WSJ law blog and Andrew McCarthy @ NRO discuss other charges that prosecutors might conceivably deploy against the governor. McCarthy, incidentally, contends that “innocent people in legitimate cash businesses have no concern” from the reporting requirements, which is not what I’ve heard.

More details from Wednesday’s NYT: It appears bank Suspicious Activities Reports separately directed investigators’ interest to Spitzer’s transactions and to the escort service front, QAT Consulting, and then the two investigations converged. “When he was New York State’s attorney general, Mr. Spitzer himself used the reports [SARs] to make his cases.”

Earlier here.

This morning I was a guest on WTKK’s “Michael Graham Show” out of Boston to discuss the Spitzer scandal. I was also the guest of Mike Rosen on Denver’s KOA for a discussion of the case of the New York lawyer who’s suing casinos for $20 million after her out-of-control gambling ruined her career.

I’ve got a piece in this morning’s National Review Online on some of the ironies of the Spitzer scandal, which recalls echoes of the former prosecutor’s own “imperial CEO” rhetoric and may hinge on a crime — the “structuring” of cash transactions — whose enactment was very much part of the trend toward more ferocious white-collar law enforcement that you might call Spitzerization. (Walter Olson, “Saving Spitzer”, Mar. 11). P.S. I’ve also rounded up a lot of web coverage of the scandal over at Point of Law.

A helpful reader sends along the following information about the offense of “structuring”, which federal investigators are reportedly looking at closely in connection with the Spitzer affair:

If Spitzer structured cash transactions to evade reporting requirements, he may be guilty of a felony. 31 U.S.C. 5324 prohibits certain actions by any person who acts with the purpose of evading the reporting requirements of Section 5313 (Currency Transaction Reports). The definition of structuring for purposes of currency transaction reporting is found at 31 C.F.R. 103.11(gg). The elements of the structuring regulations are:

A person acting alone, in conjunction with others, or on behalf of others,
Conducts or attempts to conduct,

One or more transactions in currency,

In any amount,

At one or more financial institutions,

On one or more days,

For the purpose of evading the reporting requirements of 31 C.F.R. 103.22 (requiring CTRs).

The definition is specifically written to include those transactions which occur beyond a single business day and transactions which are conducted through more than one financial institution, but only if the purpose of the transaction(s) is to evade the reporting requirements.

The reader adds: “The IRS Manual on the BSA structuring provisions is here.”

More: Kerr @ Volokh, WLS @ Patterico, Daniel Gross @ Slate , Mark Steyn (”Almost every white-collar federal offense - wire fraud, mail fraud - boils down to ‘paying for the train ticket’”), American Lawyer, ABC News, as well as my new piece @ NRO.

Yet more, from Eric Turkewitz: “It seems likely that an amount in excess of $10,000 must be at issue if this is what was being investigated, which means more of a mess than Eliot already has. And to tickle the bank to act, it may be a sum well in excess of that amount, because I wouldn’t think an investigation would be opened if they simply saw two transactions of, say, $6,000 each a few days apart. There could be substantially more at play here.”