Airbus targets lawyer in WTO case

WASHINGTON — In an aggressive legal maneuver, Airbus has asked a D.C. court to prevent former U.S. Trade Representative Charlene Barshefsky, now a top Washington, D.C., lawyer, from working on Boeing's behalf in the multibillion-dollar subsidy dispute pending at the World Trade Organization.

Barshefsky, now at the firm of WilmerHale, is working alongside the federal government on the U.S. case claiming that Airbus receives improper subsidies. But from 1993 to 2001, as the U.S. trade representative, she was involved in the nascent Boeing-Airbus dispute and eventually directed the U.S. strategy.

Airbus lawyers say that her previous efforts on this issue disqualify her from representing Boeing under the D.C. Bar Code of Ethics. That code prohibits lawyers from accepting employment on matters in which they participated as public officials, according to Airbus.

Airbus may be overreaching here, because many D.C. lawyers have worked in the executive branch before joining a law firm. Airbus filed suit last week in D.C. Superior Court, asking that WilmerHale be prevented from working for Boeing on WTO matters.

The suit initially cited only one WilmerHale partner in Europe, who did legal work for Airbus in the 1980s and 1990s. But in documents filed Thursday, Airbus broadened its aim to specifically include Barshefsky.

Aerospace analyst Richard Aboulafia said the timing of Airbus' move suggests its assertive legal strategy is driven by the need to redesign their commercial A350, which will probably push the company to accept new European government subsidies.

"Why now?" said Aboulafia, of the Teal Group in Virginia. "It's pretty clear, aside from the legal merits, that the tension is going up because the stakes are going up.

"The new A350 is going to have twice the development costs," perhaps $10 billion, Aboulafia added. "I don't think they could get by without launch aid."

He expects Airbus will announce plans for a new design of the A350 at the Farnborough Air Show in mid-July.

Airbus said the law firm's conflict of interest "puts highly sensitive business information at risk, and ... will continue to cause irreparable harm to Airbus."

Airbus began hinting at this strategy to remove Barshefsky, and her former counsel who is also at WilmerHale, last month. In letters to WilmerHale, it complained that "several lawyers at Wilmer who were personally and substantially involved with the Trade Disputes while serving in government posts are now actively participating in the representation of Boeing."

But the larger targets were really Barshefsky and Robert T. Novick, her former deputy. Both are now at the firm formally known as Wilmer Culter Pickering Hale and Dorr; but Novick is not mentioned by name in the latest complaint.

On May 19, WilmerHale rejected Airbus' contentions in a letter, saying that federal officials had approved the situation.

WilmerHale managing partner Bill Perstein said Thursday that the U.S. Trade Representative Office informed the firm in early 2004 that there was no bar against its representation of Boeing.

He said WilmerHale is confident it is not violating the D.C. bar rules, and "intends to vigorously oppose Airbus' efforts to disrupt the firm's work on behalf of Boeing."

Barshefsky was a good choice for Boeing, say several legal analysts. In the 1990s, she managed U.S. trade strategy on Airbus. She reportedly went on the "trade warpath," in April l999, according to news stories, filing a complaint at the WTO over French subsidies to Airbus. She threatened trade action against the European company in May 2000.

The WTO dispute involves competing complaints by the EU against the United States for helping Boeing with tax breaks, and by the United States against the EU for "launch aid" for its commercial division.

The WTO litigation, filed last year, has been temporarily suspended while all the parties try to streamline the complaints.

Alicia Mundy: 202-662-7457 or amundy@seattletimes.com