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Cardinals, MLB lawyer up in Astros hacking probe

Busch-Article-201506171400By Jennifer Henderson, from The Am Law Daily

On the cleated heels of Deflategate and soccer’s global corruption crisis, the scandal-prone pro sports community is in need of legal advice yet again—this time related to alleged Major League foul play involving the St. Louis Cardinals. The New York Times reported Tuesday that the Federal Bureau of Investigation is probing Cardinals personnel for allegedly hacking into Houston Astros databases that house team strategies, including information on scouting and trades.

Several current and former Am Law 200 lawyers have already been called to the field.

In a statement on Wednesday, Cardinals chairman and CEO William DeWitt Jr. and senior vice president and general manager John Mozeliak named James “Jim” Martin as outside legal counsel in connection with the hacking investigation.

Martin, a partner at St. Louis-based Dowd Bennett, is a former federal prosecutor who specializes in white-collar criminal defense, complex business litigation and corporate governance and compliance. He joined Dowd Bennett, which employs about two dozen lawyers, from Armstrong Teasdale early last year. The Cardinals’ general counsel, Mike Whittle, is also a former partner at St. Louis-based Armstrong Teasdale.

Dowd Bennett was founded in 2006 by partners from Bryan Cave; earlier this month former U.S. Sen. John Danforth also joined the firm from Bryan Cave.

The Cardinals’ release states that the team hired Martin several months ago to cooperate with the government’s probe. The team says Martin will also conduct an internal inquiry “to attempt to identify any employee that may have engaged in the alleged conduct.”

“The internal inquiry is not yet complete,” Martin said in a statement. “In the meantime, we wish to respect the process and avoid saying anything which would interfere with the government’s investigation.” He declined to comment further to The Am Law Daily.

The St. Louis Post-Dispatch first reported that Martin is providing legal advice to the Cardinals. The publication also noted that Matthew Schelp is working on behalf of several Cardinal analysts tied to the investigation. Schelp, a partner at Husch Blackwell who focuses on white-collar litigation and internal investigations, did not immediately return requests for comment.

As for the Astros, general counsel Giles Kibbe confirmed that he is handling the hacking matter in-house.

Major League Baseball will also be handling the matter internally, at least for now. Commissioner Robert “Rob” Manfred Jr. publicly confirmed that the organization will not be conducting an internal investigation, leaving the probe to the FBI.

Last year, the league paid 14 law firms to serve as outside counsel on various matters, including Sidley Austin, Cooley, and McCarter & English. While tabs for these firms ranged from around $30,000 to just over $115,000, Washington, D.C.-based Stein Mitchell Muse Cipollone & Beato raked in $412,810 for its work related to the Biogenesis/A-Rod performance-enhancing saga.

Manfred, who was elected MLB’s commissioner nearly a year ago, previously served as in-house counsel in charge of labor relations and as chief operating officer for the league. Before that, he was a labor and employment partner in Morgan, Lewis & Bockius’ Washington, D.C., office, where he served as MLB’s outside counsel and advised the league on the players strike that canceled the World Series in 1994.

Daniel Halem, MLB’s chief legal officer, also made the move in-house from big law, departing his post as a labor and employment partner and member of the sports law group at Proskauer Rose in 2007. Michael Mellis, who was an associate at Patterson Belknap Webb & Tyler prior to joining the league in 1998, was promoted to executive vice president and general counsel in March.

“Major League Baseball has been aware of and has fully cooperated with the federal investigation into the illegal breach of the Astros’ baseball operations database,” the league said in a statement. “Once the investigative process has been completed by federal law enforcement officials, we will evaluate the next steps and will make decisions promptly.”

The New York Times reported that the alleged hack took place last year, and that Astros data was subsequently posted online. The attack reportedly targeted former Cardinals executive Jeff Luhnow, who left the team in 2011 to become the Astros’ general manager. The Times said investigators have determined that the breach originated from a computer connected to Cardinals employees.

The news has rocked the sports world, especially given the Cardinals’ reputation as baseball’s red-plumed golden child. But Craig Newman, chair of the privacy and data security group at Patterson Belknap Webb & Tyler, says that the lawyers involved will face challenges similar to those in most corporate espionage cases.

“From a law firm perspective, the hacking of a sports team is not all that different than when corporate servers are hacked,” says Newman. He added that the episode raises the question of whether security breaches are more widespread in professional and college sports than was previously assumed.

The Cardinals scandal is emerging just months after another controversy had the U.S. professional sports world scouting for legal talent. Back in January, the National Football League drafted Theodore “Ted” Wells Jr. of Paul, Weiss, Rifkind, Wharton & Garrison to lead an investigation into whether the New England Patriots intentionally deflated balls for use during their American Football Conference title game win over the Indianapolis Colts.

As The Am Law Daily reported, the Patriots turned to Morgan, Lewis & Bockius commercial litigation partner Daniel Goldberg for the Deflategate investigation. Winston & Strawn antitrust leader Jeffrey Kessler and litigation partner David Greenspan, both former Dewey & LeBoeuf partners, advised the NFL’s Players Association in Patriots quarterback Tom Brady’s appeal of the league’s findings against him.

Of course, when it comes to legal controversy, neither baseball nor U.S. football can compete with the mess now facing the Fédération Internationale de Football Association. William Burck of Quinn Emanuel Urquhart & Sullivan is representing FIFA in the wake of last month’s indictments for alleged widespread corruption, while Clifford Chance, Holland & Knight, Cleary Gottlieb Steen & Hamilton and other firms have all grabbed roles representing individual defendants.

IMAGE: Busch Stadium in St. Louis, home of the St. Louis Cardinals.

hutchimagoo/iStock

For more on this story go to: http://www.americanlawyer.com/id=1202729764912/Cardinals-MLB-Lawyer-Up-in-Astros-Hacking-Probe-#ixzz3dQ6O7PiB

 

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