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Minimum Competence (Andrew and Gina Leahey)

minimumcompetence@substack.com
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DateTitreDurée
13 Mar 20233/13 - SVB Collapse, NY Reduce Reuse Recycle, and DoNotPay DoesNotWork00:07:02

In today’s episode we have Silicon Valley Bank collapsing and sending a cloud of bank-choking dust throughout the finance sector, NY seeking to reduce waste, and DoNotPay getting sued for not doing the stuff it says it does on the tin.



Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
14 Mar 20233/14 - NC Gerrymandering, Cohen testifying against Trump, Drilling in Alaska and Class Action against SVB00:06:46

In today’s episode we have a North Carolina redistricting brouhaha, Michael Cohen somehow back testifying about something again, drilling for oil in the Alaskan tundra and fraud lawsuits for SVB and its CEO and CFO.



Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
10 Feb 2023Fri 2/10 - MetaBirkin, Florida Law School Renamed, More Neuralink Trouble, and Criminalizing Derogatory Speech about Political C00:04:53

Today we’ll be discussing an update to the #MetaBirkin #NFT #trademark story, the renaming of a law school, hazardous monkey brain pathogens, and the constitutionality of criminalizing derogatory speech about political candidates.



Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
17 Feb 2023Fri 2/17 - Tax deals in CA, SEC proposes standard segregating assets, and SCOTUS to hear Section 230 challenge00:05:39

In today’s foray in to audio of dubious distinction we talk about the California Fair Political Practices commission decision on a sweetheart tax deal, the SEC proposing a standard for safe storage of client crypto assets and the Supreme Court is set to hear a case involving Section 230 of the Communications Decency Act.



Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
24 Feb 2023Fri 2/24 - EPA in Ohio, Alex Jones with Guns, ESG in Investing, Sidney Powell and Alex Murdaugh00:05:33

In today’s episode we have the EPA stepping in in the Ohio train wreck, Alex Jones having guns and crypto, ESG in investing, Sidney Powell wriggles free from an ethics inquiry and Alex Murdaugh enters his second day of cross examination.



Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
03 Feb 2023Fri 2/3 - Domestic Violence Restraining Orders and Guns, Nike patents, Baker McKenzie and Gas Stoves00:04:40

Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
10 Mar 2023Fri 3/10 - Litigation funding is bad, JPMorgan Woes, SCOTUS wants bodyguards, and Column Friday!00:07:19

In today’s episode we have litigation funding chickens coming home to roost, more bad news for JPMorgan, the Supreme Court wants more money for protection and Column Tuesday on a Friday, where I try to push traffic to my Bloomberg Tax column like I’m former New Jersey Governor Chris Christie … and the column is … a bridge?



Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
17 Mar 2023Fri 3/17 - IP big at SCOTUS, First Republic Ouchie, No Arb for Uber Eats and NY C&F Changes00:05:47

In today’s episode we have an IP heavy docket at SCOTUS, First Republic got a clean bill of health right before it keeled over and nearly died, no arbitration for food delivery services, and New York modifies its ethics rules regarding character and fitness requirements.



Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
03 Mar 2023Fri 3/3 - ERA goes to Washington, SCOTUS may sidestep election rulings, Google Incognito isn't a class and Murdaugh Verdict00:06:39

In today’s episode we have the Equal Rights Amendment fight heading to Congress, SCOTUS indicating it may sidestep election rulings, Google Incognito failing to qualify as a class, and the conviction of Alex Murdaugh.



Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
04 Mar 2023MaxMin - Major Questions Doctrine00:07:29

The subject today is the major questions doctrine, which has come up recently in the context of student loans – but has significance independent of where you stand on the question of loan forgiveness.


Let’s take a deeper look at … the major questions-doctrine. Which kind of sounds like an army officer with a hyphenated last name.


Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
18 Mar 2023MaxMin - Money (How It Is Created, What It Is)00:09:21

Hello and welcome to a weekend edition of Minimum Competence, we’re calling a Maximum Minimum Competence episode. Essentially, time permitting and given a major legal news story, we’ll try to get you a bit more up to speed than we can in our short form daily news show.


This one? It’s on money. Namely, how it’s created, who creates it, and what limits the amount in circulation. Spoiler: the answer to none of those, directly, is the Federal Reserve.


Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
18 Feb 2023MaxMin - Section 23000:05:32

Welcome to the first weekend edition of Minimum Competence, we’re calling a Maximum Minimum Competence episode. Essentially, time permitting and given a coming major legal news story, we’ll try to get you a bit more up to speed than we can in our short form daily news show.


This week, owing to the coming oral arguments in Gonzalez v. Google LLC on February 21st and 22nd, we’ll be taking a slightly deeper dive in to Section 230.


Further reading:



Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
13 Feb 2023Mon 2/13 - Crypto Wells Notice, New Tesla GC, IP Issues for the Bored Ape NFT Creators, and Lawsuits Claim TikTok is Surveilling00:06:36

In today’s alphabet soup, we’ll be discussing a cryptocurrency firm’s warning from the SEC, Tesla’s new GC, continued IP issues faced by the Bored Ape NFT creator and a lawsuit against TikTok claiming that it is surveilling its users.



Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
27 Feb 2023Mon 2/27 - State Solicitors General at SCOTUS, Salt Lake disaster, and the Major Questions Doctrine00:06:01

In today’s episode we have state solicitors generals and the supreme court, an impending environmental disaster at the Great Salt Lake, and the major questions doctrine may spell doom for Biden’s student loan relief plan.



Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
06 Feb 2023Mon 2/6 - Musk dodges liability, FTC fails in Meta purchase, 3M Two-Step and Wells Fargo Fun00:05:53

Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
20 Mar 2023Mon 3/20 - Child Labor, SVB's parent cut off from SVB bank records, and managing Trump arrest expectations00:06:49

In today’s episode we have states trying to put their children to work, SVB’s parent is cut off from SVB bank records, and updates and expectation management for the potential Trump arrest.



Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
06 Mar 2023Mon 3/6 - Hair straightener cancer litigation, NLRB v Starbucks, death of TikTok (?), Binance Troubles Continue00:05:46

In today’s episode we have L’Oreal facing claims that hair relaxers cause cancer, NLRB flexing on Starbucks, the death of TikTok question mark question mark, Girardi says he isn’t guilty and more trouble for Binance crypto.



Big Starbucks Ruling Gives NLRB Chance to Flex Its Remedy Muscle - https://news.bloomberglaw.com/daily-labor-report/big-starbucks-ruling-gives-nlrb-chance-to-flex-its-remedy-muscle
& https://www.nlrb.gov/news-outreach/news-story/nlrb-region-3-buffalo-wins-administrative-law-judge-decision-requiring



Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
16 Feb 2023Thurs 2/16 - Greenwashing, Tesla Unions, India BBC Tax Raids and Disney vs DeSantis00:05:39

In today’s jaunt we talk about greenwashing, an update on the Tesla unionization efforts and the company’s response, Disney versus the government of Florida, and tax raids at the BBC offices in India.



Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
02 Feb 2023Thurs 2/2 - Metabirkin, TikTok, the Death Penalty in GA and Celebrity Attorney Charged with Wire Fraud00:05:05

-Metabirkin NFTs, commercial or artistic? https://news.bloomberglaw.com/ip-law/metabirkin-nfts-were-artistic-experiment-creator-tells-jury


-US Inches Closer to TikTok Ban - https://news.bloomberglaw.com/privacy-and-data-security/tiktok-hawks-in-congress-weigh-options-to-restrict-app-from-us


-Death Row Inmate Wants Firing Squad in Georgia - https://news.bloomberglaw.com/litigation/georgia-death-row-inmate-can-pursue-lethal-injection-challenge


-Tom Girardi, Disbarred CA Celebrity Attorney, Charged with Fraud - https://www.reuters.com/world/us/california-lawyer-tom-girardi-charged-with-stealing-client-funds-2023-02-01/


Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
23 Feb 2023Thurs 2/23 - Self Reporting White Collar Crimes, Bankruptcy and Spousal Fraud, CA vs AI and NFT as Securities News00:05:57

In today’s episode we have an easing up on banks and firms that self-report white collar crimes, bankruptcy failing to discharge debt from spousal fraud, California trying to rein in AI, and NFT-security news.



Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
09 Feb 2023Thurs 2/9 - Trump and the Old Post Office, AI Art and Copyright, Arbitration Clauses in NJ and COVID-19 and Construction Loans00:06:30

Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
16 Mar 2023Thurs 3/16 - FTX's SBF might be a bad guy, GPT-4 passes the bar, Uber and Lyft face the ABCs and MLB news00:06:15

In today’s episode we have, shockingly, it seems like FTX founder SBF might have been trying to transfer money to his own entities, GPT-4 gets a passing grade on the bar, Uber, Lyft and the ABC test and California is well represented at MLB HQ this year.



Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
02 Mar 2023Thurs 3/2 - Cybersecurity Strategies, Opioid Manufacturers Dodge Liability, ESG Heads to Veto, and Racial Bias in the NFL00:04:53

In today’s episode we have new national cybersecurity strategies, opioid manufacturers ducking liability, ESG retirement plan consideration updates and a racial bias claim against the NFL.



Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
09 Mar 2023Thurs 3/9 - SBF wants time, FL prosecutor wants his job back, JetSpiritBlue Airlines and JPMorgan and J. Epstein00:05:23

In today’s episode we have Sam Bankman-Fried asking for more time to prepare a defense, a former Florida prosecutor suing Ron DeSantis for his ousting, the JetBlue and Spirit merger, and trouble for JPMorgan.



Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
31 Jan 2023Tues 1/31 - J&J, Hermes, Trump v. Woodward00:04:10

Find me on the fediverse, for now just head on over to @andrew@esq.social and give me a shout. News stories can be submitted to me there or via our link aggregator at links.esq.social.


#lawfedi #law @law@a.gup.pe @podcast@a.gup.pe


Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
14 Feb 2023Tues 2/14 - AI In Trademark Law, Labor Moves for Starbucks and Tesla, and Column Tuesday on Stock Buyback Programs00:05:05

In today’s Tuesday frolick we have the use of AI in trademark law, labor issues at Starbucks and Tesla, and the debut of Column Tuesday where I implore listeners of the podcast to become readers of my column at Bloomberg Tax.



Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
21 Feb 2023Tues 2/21 - Cali Arb Limits, Toxic Trains, Section 230 and Column Tuesday00:06:40

In today’s episode we have state arbitration limits being themselves limited in California, regulatory plans to avert the next toxic train disaster, section 230 and Column Tuesday taking aim at Experian and Equifax.



Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
28 Feb 2023Tues 2/28 - Column Tuesday!, Identity Theft Penalty Enhancement Act, and the Equal Rights Amendment00:05:40

In today’s episode we have SCOTUS Looking skeptically at the Identity Theft Penalty Enhancement Act, the Equal Rights Amendment being heard by the Senate Judiciary committee and column Tuesday, where I regale you in sound with what I have already subjected folks to in writing and cajole you to read my column on Bloomberg.



Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
07 Feb 2023Tues 2/7 - ABA says yes to LSAT/GRE rec, proposes SCOTUS ethics, 13th amendment and abortion, and SBF of FTX wants to chat with00:04:35

Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
21 Mar 2023Tues 3/21 - Trump in a Cage (?), Fox and Dominion, Sysco Litigation Funding and Column Tuesday00:07:00

In today’s episode they’re trying to put big Donny in a cage, Fox and Dominion each angel for pretrial wins, Sysco has an ongoing issue with its litigation funder, and column Tuesday where I regale you with the similarities between Donald Trump’s baby bonus proposal and Hungary’s tax policy.



Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
07 Mar 2023Tues 3/7 - SCOTUS prayer vigil appeal, Biden admin taxes to fund Medicare, trouble in cheese paradise and Column Tuesday!00:08:53

In today’s episode hosted by @gina@esq.social we have the Supreme Court declining to hear a prayer vigil establishment clause case, the Biden administration looking to increase taxes to fund Medicare, trouble in cheese paradise and Column Tuesday, where we invite you to read co-host Andrew’s latest column at Bloomberg Tax.


Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
01 Feb 2023Weds 2/1 - TX Arbitration Clauses, GA Home Inspectors, Title 42 and Baseball00:05:44

Find today’s host on the fediverse, just head on over to @gina@esq.social and give her a shout. News stories can be submitted there or via our link aggregator at https://links.esq.social.


#lawfedi #law @law@a.gup.pe @podcast@a.gup.pe


Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
15 Feb 2023Weds 2/15 - Wilson Out at FTC, Sohn Grilled at FCC, AI and Patents, and a Modernized IRS00:05:36

In today’s episode we’ll talk about personnel turnover at the #FTC, a grilling at the #FCC, the use of #AI in #patent applications, and the modernization of the #IRS.



Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
22 Feb 2023Weds 2/22 - NLRB Disparages nondisparagement clauses, Section 230 yet again, crime fraud exceptions and J&J must pay00:04:47

In today’s episode we have the NLRB ruling broad non-disparagement clauses in exchange for severance payments impermissible, more Section 230 tea leaf reading, the “crime fraud exception,” and Johnson and Johnson must pay up for pelvic mesh products.



Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
08 Feb 2023Weds 2/8 - Racism as Conflict of Interest, Equitable Education in Pennsylvania, and a Follow-up to the Meta FTC Story00:04:15

Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
01 Mar 2023Weds 3/1 - GOP vs. ESG, ERA hits wall in DC appeal, FTX co founder flips and call for public comment00:05:10

In today’s episode we have House republicans trying to dismantle Department of Labor ESG retirement investing rules, ERA backers defeated in DC appeals case, another brick in the FTX wall and a call for public comment regarding rental discrimination.



Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
15 Mar 2023Weds 3/15 - FDIC Deposit Insurance Fund Primer, Florida Digital Rights, Anti-ESG and Harvey AI00:06:47

In today’s episode we have a quick primer on the FDIC its Deposit Insurance Fund, Florida wants digital rights while it strips regular ones, anti-ESG as the real contagion and Harvey AI has entered the chat.



Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
08 Mar 2023Weds 3/8 - Missouri finds out, Binance shops in the BK bargain bin, Gilead patents and UVA Dean to SCOTUS00:06:15

In today’s episode we have Missouri learning that federal law applies to them as well, Binance picking up a sweet deal on Voyager Digital, hepatitis C treatment patents, and a UVA Dean off to the Supreme Court.



Thanks so much for listening to Minimum Competence. If you have any questions or story suggestions, find us on Mastodon on the esq.social instance. We also have a link aggregator in the fediverse, at links.esq.social, where some of our stories will be sourced from so feel free to sign up and submit there.


We are especially interested in legal happenings from our listeners outside the United States. If you have an interesting case or story, consider recording a 30 second to 2 minute clip on your phone and sending it in. We’d love to run it. Contact information is in the show notes.




This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
22 Mar 2023Weds 3/22 - Global Lanham Act Reach, Federal Waters in Texas and Idaho, Justice Delayed for Trump and Arkansas Stinks 00:06:39

Let’s meet the halfway point in the week head-on and take a peek at today’s legal news.  

The US Supreme Court is deciding whether US trademark law applies to foreign conduct in a case involving a $90m infringement award over radio remote controls. The Tenth Circuit upheld a $115m award, including $90m in trademark infringement damages, to Hetronic International against Abitron Germany for infringing radio remote controls for heavy-duty construction equipment sold worldwide. While Abitron maintained that nearly all its conduct was international and therefore the Tenth Circuit had overreached, Hetronic argued the focus should be on whether actions caused consumer confusion in the US. The case has raised concerns about the reach of US trademark law into other jurisdictions, but the justices have also indicated that Congress’ authority over US commerce becomes difficult to square with arguments limiting the reach of trademark law in a global, internet-connected context. IP attorney Mark Lezama of Knobbe Martens said the majority of justices appeared to be in favour of reversing the Tenth Circuit’s judgment in large part and limiting the extraterritorial reach of the Lanham Act.

By way of brief background, the Lanham Act, also known as the Trademark Act of 1946, is a United States federal law that governs trademarks, service marks, and unfair competition. It provides for the registration of trademarks and service marks with the United States Patent and Trademark Office (USPTO) and establishes procedures for enforcing trademark rights. The Lanham Act prohibits false advertising, false designation of origin, and other deceptive practices that may confuse consumers about the source or quality of goods or services. It also provides for remedies such as injunctions, damages, and attorney's fees in cases of trademark infringement. The Lanham Act has been amended several times over the years to keep pace with changes in technology and commerce, but it remains an important tool for protecting intellectual property rights in the United States and, maybe now, worldwide. 

Justices Weigh Trademark Law’s Reach Against Global Commerce (1)

Texas and Idaho will operate under a federal waters rule that was in place before March 20, after a federal court barred the Biden administration’s 2023 waters of the US (WOTUS) rule from being implemented in those states. The new rule is designed to protect water quality in major waterways across the US, and impacts housing, agricultural, mining and other development projects in every state, as a permit is required to disturb federally protected waters and wetlands. The definition of federally protected waters under the Clean Water Act has been subject to a complex series of challenges and revisions, including a 2008-15 rule, the Obama administration’s expansion of federally protected waters and wetlands, a subsequent court decision rejecting that rule, and the Trump administration’s changes to WOTUS. The Biden administration is facing five lawsuits challenging its 2023 rule, brought by at least 26 states and industry groups. Although the injunction against the rule in Texas and Idaho is not expected to affect the other lawsuits, a Supreme Court case, Sackett v. EPA, could undermine the significant nexus test that is currently used to determine whether waters and wetlands are protected under the law, potentially prompting further litigation.

‘Bizarre’ Texas Injunction Means Past US Waters Rule in Effect

Manhattan prosecutors are expected to decide within days whether to bring charges against former President Donald Trump for his role in hush-money payments made by his former lawyer, Michael Cohen, to Stormy Daniels in the run-up to the 2016 presidential election. Trump denies having had an affair with Daniels. The inquiry into the payments opened and closed several times, leading to the case being referred to as a "zombie case". Doubts had arisen as to whether state felony charges could be brought against a candidate for federal office, and whether the conduct could be considered money laundering. Manhattan District Attorney Alvin Bragg launched the probe after his predecessor Cyrus Vance twice looked into the payment and did not bring charges. The new prosecutor is reportedly approaching the case with a different legal theory. Trump, who is seeking the Republican nomination for the presidency again in 2024, has called the probe a "witch hunt" – which is probably accurate … if there really was a witch and it really had paid off an adult film actress. 

Trump hush-money charges would bring 'zombie case' back to life

Content warning here for a hateful law enacted by a hateful person, with my condolences to all the good people in Arkansas that aren’t currently governor. If you want to hop off here and catch up with us tomorrow, this is our last story of the day. Have a great one.

On Tuesday, Arkansas Governor Sarah Huckabee Sanders signed a law that prohibits transgender individuals from using public school restrooms that match their gender identity. The law applies to multi-person restrooms and locker rooms in public schools and charter schools serving pre-K through grade 12. The law requires schools to provide reasonable accommodations, such as single-person restrooms and changing areas, and school authorities that violate the law can face fines of at least $1,000, while parents can file lawsuits to enforce the measure. A spokesperson for Sanders said that the governor is focusing on protecting and educating children, not “indoctrinating” them – and indoctrinating should be viewed with huge sarcastic air quotes. This law is similar to ones in Alabama and Oklahoma that are aimed at making life miserable for transgender youth, while Republican legislators across the United States have been campaigning to ban healthcare for them. Some are even seeking to charge parents and doctors with child abuse if they provide treatment, all are aiding and abetting their most extreme colleagues by putting party loyalty ahead of basic human decency. 

Arkansas enacts law restricting school bathroom use by transgender people 



This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe
23 Mar 2023Thurs 3/23 - Jack Daniels is not Bad Spaniels, FTC Click to Cancel, Amazon Labor and Beirut Bombing Case00:07:25

Let’s boogie oogie oogie over to today's legal news.

The US Supreme Court heard arguments in a case involving a parody dog toy named "Bad Spaniels," which resembles a Jack Daniel's whiskey bottle. Jack Daniel's is appealing a lower court's ruling that the toy is protected by the First Amendment as an "expressive work," while also raising trademark infringement concerns. The justices were cautious about scrapping the Rogers test, which allows artists to lawfully use another's trademark when it has artistic relevance to their work and would not mislead consumers about its source. Some justices, however, questioned whether the Rogers test struck the right balance between a company's interest in protecting its corporate image against free speech protections. The Biden administration's lawyer urged the justices to adopt the likelihood-of-confusion test, which considers whether the acts would likely cause marketplace confusion, in place of the Rogers test. The decision is expected to be made by the end of June.

By way of very brief background on the Rogers test: The Rogers test is a legal test used in trademark law to determine whether the use of a trademark in a creative work, such as a book or movie or dog toy, is protected by the First Amendment's guarantee of free speech. The test was established by the Second Circuit Court of Appeals in Rogers v. Grimaldi in 1989 and has since been adopted by other courts. The case centered on a movie, Ginger and Fred, that saw two characters emulating the dancing style of Ginger Rogers and Fred Astaire. Ginger Rogers took umbrage with, among other things, her name being used in the title. 

Under the Rogers test, a trademark use in a creative work is protected by the First Amendment if it has some artistic relevance to the work and does not explicitly mislead consumers as to the source of the work. This means that if a trademark is used in a creative work in a way that is relevant to the work and not likely to confuse consumers as to its source, the use is protected by the First Amendment.

The Rogers test strikes a balance between the interests of trademark owners in protecting their marks and the interests of creators in expressing themselves through their works. It recognizes that the use of trademarks in creative works can be a legitimate form of artistic expression and that trademark law should not be used to restrict such expression unless it would cause consumer confusion or other harm to the trademark owner.

U.S. Supreme Court chews on Jack Daniel's fight against parody dog toy  

Rogers v. Grimaldi Wikipedia Synopsis

The Federal Trade Commission (FTC) has proposed a new rule, known as the "Click to Cancel" rule, which would require companies to offer online cancellation options that are as easy as the online sign-up process for subscriptions. This proposal would affect various companies, including fitness and media companies, and would also require companies to send reminders before automatic renewals are billed. The FTC's chair, Lina Khan, stated that companies should not be able to manipulate consumers into paying for subscriptions they don't want. The proposal comes as more companies have shifted to a subscription-based business model, creating greater opportunities for mischief. While some companies, such as Netflix, Peloton, and Spotify, already offer easy cancellation options, others, such as cable-television companies and Adobe, make it harder. The subscription market is expected to expand into a $1.5 trillion market by 2025, up from $650 billion in 2020, and the average American spent $273 a month on subscription services in 2021, according to a consulting firm. The proposed rule is the latest from the FTC, which has taken a more aggressive approach under Khan, proposing rules to curb online data collection and ban nationwide non-compete clauses.

FTC’s ‘Click to Cancel’ Rule to Make Quitting Subscriptions Easy

FTC aims to making cancelling recurring charges easier with Click to Cancel

Federal Trade Commission Proposes Rule Provision Making it Easier for Consumers to “Click to Cancel” Recurring Subscriptions and Memberships

The US National Labor Relations Board (NLRB) prosecutors in Brooklyn have found merit in charges filed against Amazon by the Amazon Labor Union that the company engaged in illegal union busting. The charges include allegations that Amazon refused to bargain with the union, restricted access to facilities, disciplined a union leader and committed other unfair labor practices. The new allegations stem from a unionization vote at an Amazon warehouse in Staten Island in April 2022, which triggered the company’s obligation to negotiate a first contract with workers. In January, an administrative law judge found Amazon guilty of violating federal labor law in its attempt to resist unionization at Staten Island facilities. This is the latest in a string of labor issues at Amazon warehouses across the country. 

Amazon Faces Labor Board Charges of Illegal Union Busting (1)

NLRB Prosecutors Eye Revised Amazon Access Rule

A U.S. District Judge in New York has ordered Iran's central bank and a European intermediary, Clearstream Banking SA, to pay $1.68 billion to the families of troops killed in the 1983 bombing of the U.S. Marine Corps barracks in Lebanon. The lawsuit, which was filed by the victims and their families, sought to enforce a judgment against Iran for providing material support to the attackers. Bank Markazi, the Iran central bank, and Clearstream were named in the lawsuit. Clearstream, which is holding the assets in a client account, said that it is considering appealing the decision. Deutsche Boerse AG, Clearstream's parent company, said that it does not view the ruling as increasing the risk from the lawsuit in a way that would require the companies to make financial provisions. The Oct. 23, 1983, bombing at the Marine Corps barracks killed 241 U.S. service members. In 2007, the victims and their families won a $2.65 billion judgment against Iran in federal court over the attack. They sought to seize bond proceeds allegedly owned by Bank Markazi and processed by Clearstream to partially satisfy the court judgment. In January 2020, the U.S. Supreme Court overturned a lower court ruling in the families' favor, and ordered the case to be reconsidered in light of a new law adopted a month earlier as part of the National Defense Authorization Act.

U.S. judge orders $1.68 bln payout to families over 1983 Beirut bombing



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24 Mar 2023Fri 3/24 - Trump Lies, TikTok CEO Gets Grilled, Utah Kids have a Social Media Curfew and Justin Sun in Trouble00:07:00

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Manhattan prosecutors have accused former President Donald Trump of misleading people to expect his arrest this week and prompting Republican Congress members to interfere with the investigation into his hush-money payment to porn star Stormy Daniels. On Saturday, Trump claimed that he would be arrested on Tuesday in the Manhattan District Attorney's probe. On Monday, three Republican committee chairmen accused District Attorney Alvin Bragg of abusing his prosecutorial authority and sought communications, documents, and testimony from him. As of Wednesday, the grand jury hearing evidence in the Stormy Daniels case had yet to issue an indictment, and on Thursday, Bragg's office confirmed that it was investigating allegations that Trump engaged in violations of New York State penal law. If indicted, Trump would be the first US president to face criminal charges. Trump faces federal investigations stemming from his handling of government documents after leaving the White House, alleged attempts to overturn his 2020 election defeat, and a state-level probe in Georgia into whether he unlawfully sought to reverse the 2020 election results there. Trump has denied the allegations and called the investigation politically motivated.

It’s Friday, let's take a fun little digression into the arrests of presidents of yore. In an oft-retold but perhaps apocryphal tale in 1872, President Ulysses S Grant was arrested for speeding in his horse-drawn carriage. He was nicked at the corner of 13th and M streets in Washington DC, by a Black civil war veteran policeman named William H West. Grant was known for his excellent horsemanship and loved to drive a pair of spirited animals. The president apologized and left on the first occasion, but was caught again the next day. West placed him under arrest and he was ordered to pay $20. A trial was held the next day, with heavy fines and a scathing rebuke issued against numerous speeding drivers. However, Grant did not show up. Trump will probably not be able to get out of this one quite so easily, but if history is any guide he won’t be seeing the inside of a jail cell any time soon. 

Manhattan DA: Trump created false expectation of arrest, Republicans interfered

Galloping Grant: the day a sitting president of the US was arrested

Justin Sun, the crypto entrepreneur who made headlines for paying millions to have lunch with Warren Buffet, is now facing civil charges for allegedly violating US securities laws by offering and selling two unregistered crypto tokens, Tronix and BitTorrent, and manipulating the prices of TRX. The SEC has filed a complaint against Sun and three of his companies in a Manhattan federal court. Sun is a Chinese national and an adviser to crypto exchange Huobi, as well as the founder of blockchain company Tron. The SEC has also brought civil charges against eight celebrities, including Lindsay Lohan, who were paid to illegally promote TRX and BTT. Mr. Sun tweeted that the SEC’s complaint “lacks merit,” and that the accusations were only the latest example of action the regulator has taken against “well-known players in the blockchain and crypto space.” In 2019, Sun paid $4.6 million in an auction to secure a lunch date with Warren Buffett. Sun postponed the lunch, citing an illness with kidney stones, and later said he hoped to discuss cryptocurrencies and blockchain with the billionaire investor. Sun recently made headlines by offering $1.5 billion to buy Credit Suisse, as the bank was in the middle of talks to be bought by rival UBS Group AG. Credit Suisse did not publicly respond to the offer.

Crypto Promoter Justin Sun Draws the Spotlight, This Time From Regulators 

Utah has become the first state to introduce laws that limit children's use of social media. The two measures, signed by Governor Spencer Cox, require parental consent before children can sign up for sites such as TikTok and Instagram. They also prohibit the use of social media by children under 18 between 10:30 pm and 6:30 am, require age verification for users in the state, and seek to prevent companies from luring children to their apps with addictive features. Similar proposals are being considered in Arkansas, Texas, Ohio, Louisiana, and New Jersey, as well as California. Social media companies will likely have to design new features to comply with parts of the law. However, it remains unclear how the regulations will be enforced. Children's advocacy groups have generally welcomed the law, while tech industry lobbyists have criticized it as unconstitutional, citing the infringement of First Amendment rights.

Utah's new social media law means children will need approval from parents

US lawmakers grilled TikTok CEO, Shou Zi Chew, over concerns about the app's influence on Americans and possible Chinese interference. The questions were mostly of a grandstanding variety and those that were directed at specific issues tended, as the clip played in the episode indicates, to miss the point. Chew repeatedly denied connections with the Chinese Communist Party and stated that TikTok has taken necessary steps to ensure the safety of American users. US lawmakers accused the app of damaging children's mental health and promoting content that encourages eating disorders, illegal drug sales, and sexual exploitation. While Chew's responses did little to calm US lawmakers' concerns over the app's China-based parent company, ByteDance, he emphasized that American data is stored on American soil, by an American company, overseen by American personnel. A bipartisan group of US senators has backed legislation that would give President Joe Biden's administration the power to ban TikTok, and the app's fate has added a new element to tensions between the US and China. The hearing's outcome and lawmakers' next steps remain unclear, but the possibility of a ban has prompted shares of social media companies that compete with TikTok for advertising, such as Facebook and Snap, to rise.

TikTok congressional hearing: CEO Shou Zi Chew grilled by US lawmakers



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26 Mar 2023MaxMin - Internet Archive v. Book Publishers00:05:01

Thanks for reading Minimum Competence! Subscribe for free to receive new posts and support my work. You can also subscribe to the podcast in all the usual places.

This week, owing to this week’s decision in favor of four book publishers and against The Internet Archive, we’re covering that case, Hachette v. Internet Archive, in brief. 

On your mark, get set, go. 

First a bit of background …

The Internet Archive is a non-profit digital library that aims to provide free access to digital content for everyone. It was founded in 1996 by Brewster Kahle and is based in San Francisco, California. The organization's mission is to preserve digital content and make it available to future generations. It has a vast collection of websites, books, videos, images, software, and other digital content that can be accessed for free. The Internet Archive has been involved in various projects, including the Wayback Machine, which allows users to see historical versions of websites, and the Open Library, which provides free access to over 2.5 million digitized books. The organization also hosts the annual Decentralized Web Summit, which explores the future of the web and its potential to become more decentralized and user-controlled. The Internet Archive is funded through donations and grants and is a 501(c)(3) charitable organization.

This week, the Internet Archive lost a lawsuit brought against it by four book publishers, who claimed that the website did not have the right to scan books and lend them out like a library. The Internet Archive had launched its National Emergency Library program during the COVID-19 pandemic, allowing people to read from 1.4 million digitized books with no waitlist. However, Judge John G. Koeltl decided that the Internet Archive had done nothing more than create “derivative works” and would have needed authorization from the books’ copyright holders before lending them out. The judge dismissed all of the Internet Archive’s Fair Use arguments and wrote that any “alleged benefits” from the Internet Archive’s library “cannot outweigh the market harm to the publishers”. The Internet Archive says it will appeal. 

Fair use is a legal doctrine in the United States that allows limited use of copyrighted material without seeking permission from the copyright owner. The doctrine recognizes that certain uses of copyrighted material are necessary for freedom of expression, education, research, and other public interests. It provides a legal defense for using copyrighted works for criticism, commentary, news reporting, teaching, scholarship, research, and other transformative purposes. Four factors are used to determine whether a particular use of a copyrighted work qualifies as fair use: the purpose and character of the use, the nature of the copyrighted work, the amount and substantiality of the portion used, and the effect of the use on the potential market for the copyrighted work. Fair use is not a bright-line rule, and courts must evaluate each case on its own merits. In general, a use is more likely to be considered fair if it is non-commercial, transformative, and uses only a small amount of the copyrighted work.

Obviously, the wholesale reproduction of a copyrighted book, for instance, uses a large portion of the copyrighted work and is not transformative of the underlying work – that is, we aren’t talking about Pride and Prejudice and Zombies. A compelling argument can be made that the market harm to the publishers, even in a time like the height of the COVID-19 pandemic, was significant owing to the existence of things like ebooks and the shipment of books from online retailers. 

The Internet Archive also tried to argue that the lending system may have contributed to book sales, the theory being that individuals that borrow a book might like to have a permanent copy. The judge in the case dismissed those theoretical arguments in favor of the publisher’s, let’s face it, theoretical arguments that their sales would have been higher had the Internet Archive not been lending out copies. As ever, it is mostly a test of whose speculative story sounds more plausible. 

The Internet Archive is an important resource for preserving digital information and making it accessible to the public. It provides free access to a vast collection of digitized books, audio recordings, movies, and other materials that are in danger of being lost or forgotten. The website's Wayback Machine allows users to browse over 570 billion web pages saved over time. The Internet Archive also hosts a growing collection of software and video games, as well as a TV News Archive, which provides access to a searchable archive of over one million news broadcasts. In sum, the Internet Archive plays a vital role in preserving cultural heritage and providing universal access to knowledge.

As of now, none of that work in particular is at risk — but care must be taken on the part of the Internet Archive, and this is not legal advice but merely an observation, that their important collection is not put at risk by leaning on concepts as nebulous as fair use in future endeavors. 

In other words, please Internet Archive if you’re listening, don’t get yourself shut down. To our other listeners, enjoy your maximum minimum competence on the Internet Archive case.  



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27 Mar 2023Mon 3/27 - First Citizens Buys SVB, Utah Social Media Challenges, Tesla Bias and Dominion v. Fox News00:07:17

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First Citizens BancShares Inc. has agreed to acquire Silicon Valley Bank after the bank was seized by regulators following a run on the lender. The deal will see First Citizens take on all deposits and loans, including $72 billion SVB assets at a discount of $16.5 billion. The Federal Deposit Insurance Corp will retain $90 billion in securities and other assets for disposition, and also received equity appreciation rights in First Citizens worth up to $500 million. The estimated cost of the failure to the Deposit Insurance Fund is about $20 billion. Silicon Valley Bank collapsed earlier this month, becoming the largest US lender to fail in more than a decade, after taking a huge loss on sales of its securities amid rising interest rates. First Citizens was the winning bidder after the FDIC received “substantial interest” from multiple potential acquirers.

First Citizens Buys Silicon Valley Bank After Run on Lender (3)

Utah has introduced social media laws for minors that are expected to face legal challenges from the technology and advertising industry. The two measures seek to give parents more control over their children’s access to platforms such as Snapchat and Instagram and to protect minors from advertising and addictive features. Under the new laws, Utah has regulatory enforcement power and residents can sue companies that violate their rights. However, technology and advertising industry groups, such as NetChoice and the Computer & Communications Industry Association, have raised concerns that the legislation may violate First Amendment free speech rights. The Association of National Advertisers has also raised concerns about the First Amendment over S.B. 152, which prohibits advertising on teens’ social media accounts. Attempts to filter content by age have been previously struck down by the US Supreme Court. The laws infringe on the First Amendment by preventing users from browsing or posting anonymously and by restricting access to certain content based on age, NetChoice argued in a letter to Utah Governor Spencer Cox.

Utah’s Teen Social Media Laws Brace for Suits Seeking to Ax Them

Tesla is facing a jury trial to determine how much money the company must pay a former Black factory worker who won a lawsuit accusing the electric car maker of allowing severe racial harassment at its Fremont, California assembly plant. The worker, Owen Diaz, was subjected to harassment, including racial slurs and racist caricatures, and a jury awarded him $7 million for emotional distress and $130 million in punitive damages. However, a federal judge lowered the total award to $15 million, which Diaz rejected, opting for a new trial on damages. Tesla faces similar but much broader claims of allowing racist conduct in a proposed class action by Black workers and a separate lawsuit by a California civil rights agency. The company has denied wrongdoing and called the agency's lawsuit politically motivated. Tesla is also fighting a spate of sexual harassment lawsuits by female workers at the Fremont plant and another factory near Los Angeles, as well as complaints filed with the US Department of Labor last year accusing the company of wage theft and worker safety violations at its $1.1 billion truck factory in Austin, Texas. The company is appealing a US labor board's decision that said the company illegally barred workers at the Fremont plant from wearing shirts bearing union insignia. Elon Musk has stated that minorities should be "thick-skinned" and accept apologies from coworkers who insult them, but Tesla has said it does not tolerate discrimination, takes complaints by workers seriously, and disciplines employees who violate anti-bias policies.

In addition to the ongoing racial discrimination lawsuit against Tesla filed by California's Civil Rights Department (CRD), a recent ruling requires the agency to provide Tesla with details of their investigation into the automaker's Fremont factory prior to filing the lawsuit. Tesla had previously argued that the CRD didn't follow proper protocol in its investigation, and the details could provide Tesla with a chance to narrow the scope of the lawsuit. This ruling could also impact Tesla's countersuit against the CRD, in which the automaker alleges that the agency did not notify them of claims of racial discrimination or give them a chance to settle outside of court. Multiple lawsuits alleging discrimination and sexual harassment at Tesla's factories are pending in California courts.

Explainer: Tesla's legal troubles: race bias trial is tip of the iceberg

California agency must provide Tesla with details of racial bias investigation

Lawyers for Fox News and Dominion Voting Systems have argued over the high bar to prove defamation in a $1.6 billion lawsuit that is scheduled to start next month. Dominion claims that Fox allowed allies of former President Donald Trump to falsely claim that Dominion's machines and software were responsible for Trump's election loss. Fox contends that it cannot be held liable for defamation for simply reporting on newsworthy allegations, a sitting president’s claim that the election was being stolen from him. Dominion attorneys say Fox employees allowed guests to falsely claim that the company had rigged the election, flipped large numbers of votes from Trump to Joe Biden through a secret algorithm, was owned by a company founded in Venezuela to rig elections for Chavez, and offered bribes or kickbacks to government officials who used its machines. Fox attorneys argue that the key issue is not whether the allegations were true or false, but whether it was accurately reporting the allegations. The case also holds the potential for redefining libel law in the US.

Fox, Dominion argue over legal standards to prove defamation



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28 Mar 2023Tues 3/28 - ESG Whining, Binance More Trouble, Alphabet wants Dismissal and Column Tuesday!00:06:53

House Republicans are continuing their efforts to oppose a US Labor Department rule on environmental, social, and governance retirement investing, despite failing to override President Joe Biden’s veto of a resolution to kill it. Republican lawmakers are now working on legislation with former DOL Secretary Eugene Scalia that would modify the Employee Retirement Income Security Act of 1974 to ban retirement plan fiduciaries from considering non-pecuniary factors such as ESG when investing in retirement accounts. The new bill, the Ensuring Sound Guidance Act, is expected to go through the House Financial Services Committee and the Education and the Workforce panel, led by Virginia Foxx, which has jurisdiction over ERISA. The move comes as Republicans seek to counter the ESG movement, with some arguing that it politicises Americans’ retirement accounts and represents “woke capitalism”. The bill, which would require retirement account managers to consider only pecuniary factors when investing, would mark a dramatic escalation in the GOP’s opposition to environmentally and socially conscious investing. The Republican position on ESG investing faces added scrutiny from benefits advisers, who favor a process-based legal strategy to ERISA law.

To be clear, the Department of Labor rule would merely permit investment managers to consider ESG issues if they so choose. No such considerations are being compelled and no measures to mandate ESG considerations have been seriously proposed. Once again the rule would merely permit managers to consider such non-pecuniary factors when choosing investments. 

Anti-ESG Investing Effort Pivots to New Republican-Backed Bill

The US Commodity Futures Trading Commission (CFTC) has sued Binance, the world's largest cryptocurrency exchange, and its CEO Changpeng Zhao (CZ) for allegedly breaking US derivatives rules. The regulator has accused Binance of failing to register with it and failing to implement an effective anti-money laundering programme. The CFTC claims that Binance has deliberately put profits ahead of the law and made no effort to comply with US regulations. It also accused Binance's CEO, Changpeng Zhao, of ordering the destruction of documents, instructing US customers to use VPNs, and directing clients with US connections to open accounts under the names of shell companies. While the CFTC cannot bring criminal charges against firms or individuals, it can seek hefty fines and other penalties. Binance has called the CFTC lawsuit “unexpected and disappointing” and claimed it has been working with the regulator for over two years.

Binance, CEO Zhao Sued by US Over ‘Sham’ Compliance Measures (4)

Alphabet, the parent company of Google, has requested a US federal judge to dismiss a Justice Department lawsuit alleging that Google illegally abused its dominance of online advertising. The government filed the ad tech lawsuit in January, claiming that Google should be forced to sell its ad manager suite, but Google denied any wrongdoing. The company argued that the case should be thrown out because the government erred in defining the online advertising market and excluded powerful competitors such as Facebook. Google also stated that the government's estimate of Google's ad exchange as having "more than 50%" of the market fell short of the 70% needed to allege market power. The case is being heard by U.S. Judge Leonie Brinkema in the Eastern District of Virginia. The Justice Department's ad tech lawsuit follows a separate lawsuit filed in 2020, accusing Google of violating antitrust law to maintain its dominance in search. That case goes to trial in September.

Alphabet seeks dismissal of US antitrust lawsuit over Google's online ads | Reuters

Concord Law School at Purdue University Global, the first online law school in the United States, is seeking a rule change from the Indiana Supreme Court that would allow its graduates to take the state's bar exam. Currently, California is the only state that permits online law school graduates to sit for the bar. The Indiana Supreme Court is now seeking public comments on the proposal. Purdue law dean Martin Pritikin said that the change would make legal education more accessible to people living in rural and underserved areas. The court is expected to consider the proposal in the coming months.

Online law school seeks bar exam eligibility in Indiana | Reuters

Knock knock …. Who’s there? … My column … My column who? … My column about how we can learn and improve from the French tax code. 

The idea that modernizing the US tax system is insurmountable seems to be behind every accountant and tax attorney’s grimace and tears when discussing the complexity of the code and filing process. And yet, we have an alternative system just across the pond. The method of processing income tax returns in France is automated and relies entirely on an algorithm written more than 30 years ago and designed to run on a processor a third as powerful as the one that counts your steps in your cell phone. 

France has an automated tax filing system that relies on an algorithm written and maintained by the French Public Finances Directorate. Despite an aging technical infrastructure, French taxpayers use a portal with pre-filled forms, and the algorithm handles all calculations. The French tax code is released under a free software license called CeCILL 2.1, which has been adapted from the GNU General Public License. The French tax code is not simple, as the computation algorithm has 92,000 lines of code. France has undertaken projects to modernize the tax code by reverse engineering the algorithm from publicly available parts and implementing in software the rules of the actual French tax code. The French tax code experience teaches the US to standardize and formalize its tax code, make it algorithm ready, commit to release all algorithms and software code used in public projects, and demand simplicity, automation, and transparency from the government without huge expenditures. A sea change in technology is coming to the tax world, let's make sure a rising tide raises all boats. 

Here’s How We Can Learn and Improve From the French Tax Code



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29 Mar 2023Weds 3/29 - SBF and China, SCOTUS gifts, Adnan conviction and NJ bar mental health progress00:04:41

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Sam Bankman-Fried, the founder of FTX, has been charged with foreign bribery by federal prosecutors in Manhattan, adding to the 13 criminal counts he is already facing, including securities fraud, money laundering, and campaign finance violations. The charge stems from an alleged $40m bribe that Mr. Bankman-Fried instructed his employees to pay to Chinese officials in 2021 to unfreeze accounts held by FTX's sister company, Alameda Research. The accounts held roughly $1bn in cryptocurrency. The payment was allegedly made in cryptocurrency and was successful in getting the accounts unfrozen. The charge was brought under the Foreign Corrupt Business Practices Act. Mr. Bankman-Fried was released on bail, but he is confined to his parents' home in Palo Alto, California. Three former executives who worked closely with Mr. Bankman-Fried have already pleaded guilty and are cooperating with the authorities.

Sam Bankman-Fried Is Charged With Foreign Bribery

The US federal judiciary has introduced tighter financial disclosure guidelines for Supreme Court justices and other judges relating to gifts, meals and personal hospitality paid for by others. The changes, which took effect on 14 March, were outlined by the Judicial Conference and aim to clarify regulations around financial reporting exemptions. The exemption now only applies to gifts of a personal nature such as meals, entertainment or lodging, and not to travel or gifts received at properties or facilities owned by businesses. The rules also require justices and federal judges to disqualify themselves where impartiality could be questioned, including conflicts of interest related to financial holdings. Senator Sheldon Whitehouse has welcomed the new regulations and called for more transparency around the personal ties of justices.

New Gift Disclosure Rules Extend to Supreme Court Justices (1)

US Supreme Court justices get tougher rules for reporting free trips, gifts | Reuters

Adnan Syed, the subject of the 2014 podcast "Serial," had his conviction reinstated after the brother of murder victim Hae Min Lee won an appeal vacating a Baltimore court's decision to release him from prison. Syed has maintained his innocence since his 2000 conviction for the murder of Lee, his ex-girlfriend, and Maryland prosecutors vacated his convictions and life sentence in 2019 after an investigation found undisclosed evidence in support of alternate suspects. However, Lee's brother appealed after the circuit court vacated the convictions, alleging that the state violated his right to attend the hearing by giving him only a day's notice. The decision vacated the circuit court's decision, thereby reinstating Syed's original convictions and sentence pending a new hearing. Syed's counsel has pledged to take the case to the state's highest court, the Supreme Court of Maryland.

‘Serial’ Subject Adnan Syed’s Convictions Reinstated (2)

The New Jersey State Bar Association, along with the deans of Rutgers and Seton Hall law schools, are calling on the judiciary to remove question 12B from the character and fitness application for bar admission. The question requires applicants to disclose any mental health issues they have and the treatment they receive. Those who seek to change the rule claim that the disclosure requirement prevents law students with mental health issues from seeking help. A survey of mental health among 1,537 New Jersey attorneys found that 10% of respondents reported suicidal ideations, a rate three times higher than other working populations. New Jersey State Bar Association President Jeralyn Lawrence has directed her request to Chief Justice Stuart Rabner, saying that 26 other states have either eliminated, substantially modified, or never used mental health status questions on their bar applications. Rutgers Law School said that it has seen a "marked increase" in the incidence of students reporting to school with mental health concerns. Seton Hall Law added that research showed that "mental health and treatment questions are unrelated to the competent practice of law."

Judiciary Urged to Eliminate Mental Health Question From Bar Application | New Jersey Law Journal



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30 Mar 2023Thurs 3/30 - FDIC Allocating Costs to Larger Banks, MDL Changes, LIBOR news, FOTUS is an Acronym and Trump Delays00:07:27

The Federal Deposit Insurance Corp (FDIC) is reportedly considering directing a significant portion of the costs related to recent bank failures towards big banks. The FDIC is facing around $23bn in costs related to the recent collapses of Silicon Valley Bank and Signature Bank, which have reportedly left the deposit insurance fund set to take hits. Officials are believed to be looking at limiting the strain on community lenders by shifting a sizeable portion of the expense towards much larger institutions, some of whom could already face multi-billion-dollar bills. This approach is being seen as the most politically acceptable option. Questions have been raised about who will pay for the failures, particularly after a decision to backstop all of the banks' deposits. These moves saved tech start-ups and wealthy customers, whose balances far exceeded the FDIC's typical limit on coverage. Talks about the size and timing of an assessment are in the early stages. 

FDIC Considers Forcing Big Banks to Pay Up After $23 Billion Hit

A proposed new rule change for the management of multidistrict litigation proceedings (MDLs) has been met with a lukewarm reception from plaintiffs' attorneys. The proposed new Rule 16.1 outlines procedures for an initial management conference and advises the court to order parties to meet and provide a report before the first management conference. It also allows the court to enter a management order that controls the proceedings. However, some plaintiffs' attorneys have questioned the need for new rules, saying that judges already have the tools to manage mass litigation effectively. They also argue that the proposed rule would replace judicial education with rigid standards, limiting the creativity of judges and parties to craft orders and procedures. Defense attorneys have also criticized the proposal for ignoring real problems with MDLs, such as appointing leaders and ensuring adequate representation of all plaintiffs. Some have said that MDL judges prefer to avoid rules with teeth to force settlement rather than engaging in pre-trial proceedings. The proposed rule is currently open for public comment, pending approval from the Judicial Conference’s Standing Committee in June.

Multidistrict Litigation Rules Proposal Gets Chilly Reception

The Senate has approved a Republican-led resolution to overturn President Biden's “Waters of the US” (WOTUS) rule that expanded the definition of bodies of water protected by the Clean Water Act. The House had earlier passed a similar resolution. Neither chamber's vote was large enough to override a presidential veto, which the White House has confirmed will happen. The Biden rule essentially reinstated an Obama-era regulation that gave a broader definition of navigable waters and wetlands, which are subject to federal environmental protections. The interpretation of what qualifies as a body of water has been debated for 15 years, with the definition being narrowed or expanded according to the administration in power. Republican lawmakers argue that the WOTUS rule unfairly penalizes Americans and hinders growth. Democrats argue that the resolution will only increase uncertainty over water regulation, threatening the economy, agriculture, and clean water. The Supreme Court is expected to rule on the issue this year. Republicans have introduced a bill that would narrow the WOTUS regulation by excluding rain-induced "ephemeral waters" and other small waterways from federal jurisdiction under the Clean Water Act.

Senate Reverses Biden Water Rule, Courts White House Veto (1)

Weds 3/22 - Global Lanham Act Reach, Federal Waters in Texas and Idaho, Justice Delayed for Trump and Arkansas Stinks

A New York grand jury investigating former President Donald Trump's alleged role in a hush-money payment to Stormy Daniels is expected to take a pre-scheduled break in April and is not expected to reconvene on the matter until after Easter. If indicted, Trump, who denies an affair took place, would become the first U.S. president to face a criminal charge in court. Trump faces several other criminal investigations, including one tied to the Jan. 6, 2021, assault on the U.S. Capitol by his supporters. He maintains his false claims that his 2020 defeat was the result of fraud. 

N.Y. grand jury probing Trump to break for most of April -reports | Reuters

In the U.S. District Court, Eastern District of New York, Prosecutors have requested that US criminal charges be dropped against two former SocGen bankers for allegedly trying to rig the London interbank offered rate (LIBOR). The former head of SocGen Treasury desk in Paris and her boss were charged in 2017 with preparing inaccurate Libor submissions in 2010 and 2011. The US Attorney did not provide reasons for the request to dismiss the case.

By way of very brief background, the LIBOR scandal refers to the manipulation of the London Interbank Offered Rate (LIBOR), a benchmark interest rate used in financial markets around the world, by a number of major banks. The scandal broke in 2012 when it was discovered that traders at banks including Barclays, UBS, and Deutsche Bank had colluded to manipulate the LIBOR rate, artificially inflating or deflating it in order to benefit their trading positions. LIBOR was supposed to reflect the interest rate that major banks in London charged each other for short-term loans. It was used as a benchmark rate for financial products such as mortgages, loans, and derivatives. The rate was set daily by a panel of banks, and it was supposed to represent the average interest rate at which banks could borrow money from one another. However, the scandal revealed that some of the banks on the panel were manipulating the rate to benefit their own trading positions and profits, leading to a loss of trust and credibility in the financial industry. The banks were fined billions of dollars by regulators and faced public backlash, leading to reforms of the benchmark rate-setting process. The scandal highlighted broader issues of misconduct and lack of accountability in the financial industry.

U.S. prosecutors move to drop Libor case against ex-SocGen bankers | Reuters



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31 Mar 2023Fri 3/31 - Trump Indicted, SEC Expands "Dealer" Definition, "Skinny Labels" on Trial and Ethics 10100:06:37

In what is unquestionably the biggest news of the last 24 hours, former US President Donald Trump has been indicted in New York over hush money payments made to adult film actress Stephanie Clifford, also known as Stormy Daniels, who claimed she had an affair with Trump. A grand jury has voted to indict Trump, the first former US president to face criminal prosecution. Legal analysts suggest that he may be prosecuted for falsifying business records. Trump has denied the allegations and has accused Manhattan District Attorney Alvin Bragg of targeting him for political gain. Trump is also facing several other investigations, including a Georgia election interference probe and a pair of federal investigations into his role in the January 6, 2021, assault on the US Capitol by his supporters. The indictment process could take over a year, raising the possibility that the former president could face trial during or even after the 2024 presidential campaign. The average criminal case in Manhattan takes over 900 days to move from indictment to trial verdict. Trump could challenge the charges on several legal grounds, and his former personal lawyer, Michael Cohen, has stated that he coordinated with Trump on the payments to Daniels and a former Playboy model. Legal analysts suggest that the charge most likely against Trump is falsifying business records, which is typically a misdemeanor. To elevate that charge to a felony, prosecutors must prove that Trump falsified records to cover up a second crime. There is also the possibility that prosecutors could assert that the payment violated state campaign finance laws, but legal experts say that using state election law in that manner in a case involving a federal candidate is an untested legal theory. Trump could also argue that the statute of limitations of five years should have run out, but he may be unable to use serving as US president as an argument for this. According to a spokesperson for the district attorney, prosecutors and Trump's legal team are negotiating a surrender date when Trump would travel to the district attorney's office in New York to be fingerprinted and photographed.

Donald Trump has been indicted - what happens now? | Reuters

The Securities and Exchange Commission (SEC) is expanding its definition of “securities dealers,” leading to a backlash from some private funds and investment advisers who fear that it will result in more regulations. The agency’s proposed rule is set to clarify and expand the definition, including some financial firms such as high-frequency traders that have traditionally not been considered a dealer. Industry advocates suggest that the SEC’s recent lawsuits against penny-stock flippers could further its position that a dealer is any company whose business model is based on buying and selling securities. The expanded definition of “dealer” has the potential to capture many businesses, including hedge funds and venture capital funds that are already subject to regulations. Dealers usually have to register with the SEC and join an organization like Financial Industry Regulatory Authority. Funds facing registration could change their investment strategies to avoid being labelled a dealer, according to industry representatives. However, the SEC is denying that there’s anything radical about its interpretation of “dealer” and said critics are ascribing to the agency a position that it hasn’t taken. 

SEC Pursues ‘Dealer’ Definition Expansion, to Industry’s Dismay

The Biden administration has urged the US Supreme Court to hear the patent appeal case between Teva Pharmaceuticals USA and GlaxoSmithKline (GSK). The case involves “skinny labels”, which omit certain information from drug labels, and their potential to impact the generic-drug industry. Teva has argued that it omitted patented information for Coreg, GSK’s heart drug, from its label in compliance with US Food and Drug Administration instructions. GSK sued Teva for patent infringement in 2014, with a jury siding with GSK and awarding it $235m in 2017, but the Biden administration backed Teva’s argument.

By way of brief background, "Skinny labels" are a term used in the pharmaceutical industry to describe labels on generic drugs that omit certain indications or uses that are covered by existing patents held by brand-name drugmakers. By using a "skinny label," generic drugmakers can launch their products earlier and avoid liability for infringing on brand-name drugmakers' patents. The US Food and Drug Administration (FDA) permits this practice, and generic drugmakers must follow strict guidelines when producing and labeling their products. However, brand-name drugmakers have sued generic drugmakers claiming that they have infringed their patents by marketing the drug for the uses not covered by the "skinny label." The aforementioned legal dispute between Teva and GlaxoSmithKline is a prime example of such a lawsuit, and the outcome of the case could have significant implications for the generic drug industry.

Biden admin urges Supreme Court to hear 'skinny labels' case between Teva, GSK

A court employee in New York, Dionisio Figueroa, has been accused of referring criminal defendants to a private defense lawyer in exchange for bribes. Figueroa allegedly used his position to encourage defendants, many of whom had free, court-appointed lawyers, to instead hire Telesforo Del Valle Jr. in pending cases. In return, Del Valle gave Figueroa referral payments in cash totaling at least tens of thousands of dollars. Both Figueroa and Del Valle have been charged with conspiracy to bribe a federal employee, bribery of a federal employee, and lying to federal law enforcement agents during the investigation. If you’re an attorney and you don’t understand what Mr. Figueroa did wrong, you might want to give your state ethic’s hotline a call before you make any major decisions involving your practice. 

N.Y. court employee, lawyer charged with trading client referrals for cash | Reuters

Finally, and very briefly, there are updates to the Disney Reedy Creek DeSantis fracas. In my other podcast, Esquiring Minds, my co-host Jacob Schumer breaks down all the ins, outs and what-have-yous of the latest. 

In sum, Disney may have got its revenge on Florida Governor Ron DeSantis by outmaneuvering his attempt to gain control of the Reedy Creek Improvement District that operates the 39 square mile property on which Walt Disney World exists. Before the legislation was passed, Disney quietly signed two new agreements with the district that limit what the new district can do to influence Disney's future plans. Legal scholars have said Disney may have the advantage in this situation, as the agreements are contracts that were executed in publicly noticed meetings and adhered to Florida’s open government Sunshine Laws.

As mentioned, please do check out Esquiring Minds, available wherever you get your podcasts – if only for the latest episode wherein Jake does a much better job explaining the story than I can. 

Florida attorney general demands records from former Reedy Creek members

Untangling DeSantis-Disney legal dispute could take years – Orlando Sentinel

Disney outmaneuvered DeSantis' new governing board, but a legal fight is brewing

Esquiring Minds Podcast (@emp@esq.social) 



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02 Apr 2023MaxMin - Mental Health Questions on Character and Fitness Applications for the Bar00:04:46

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When applying to take the bar exam, applicants are required to complete a Character and Fitness questionnaire to assess their ability to perform the duties of a lawyer. Mental health questions are included in the questionnaire in 37 states and Washington, D.C. Fourteen states do not consider mental health status when evaluating fitness, while ten states adopt questions drafted by the National Conference of Bar Examiners (NCBE), and 15 states have their own questions. Some states only ask about mental health in specific contexts. Regardless, any such questions, are problematic. 

There are positive changes coming, as we reported on this past week. The New Jersey State Bar Association and the state’s two law schools, Rutgers and Seton Hall, have asked the Supreme Court of New Jersey to remove a question from the mandatory "character and fitness" questionnaire that asks all applicants whether they have any mental health conditions that could affect their ability to practice law, and whether they are seeking treatment. According to a 2022 national study of law student wellbeing, 44% of survey respondents said the potential threat to their bar admission might deter them from seeking help for a mental health issue. The bar has suggested that rather than contribute to a reluctance to seek mental health assistance, efforts should be made to champion the early help-seeking of bar applicants and attorneys. The New Jersey Judiciary spokesperson noted that the disclosure of a mental health issue does not by itself disqualify a candidate for bar admission, and that the court has been sensitive to candidates' mental health issues. Helping to force the change in the Garden State, in recent years, New York State eliminated its mental health disclosure for bar admission applicants in 2020, while Ohio dropped its character and fitness question about mental or psychological disorders in January. Virginia law students successfully pushed the state in 2019 to stop asking about mental health.

In general, requiring applicants to disclose personal mental health information for bar admission can be stigmatizing and discourage individuals from seeking treatment for mental health issues. There is a real concern that applicants may fear negative consequences, such as being denied admission to the bar, due to mental health issues or treatment. This can create a barrier to seeking help and addressing mental health concerns, which can ultimately harm both the individual and the legal profession. Furthermore, disclosing a mental health issue does not necessarily mean that an individual is unfit to practice law. Therefore, advocates rightly argue that character and fitness inquiries should focus on conduct rather than health records.

Similarly, in the United States, many licensing boards for various other professions, such as nursing, medicine, and psychology, require applicants to disclose any mental health diagnoses or treatment history as part of their character and fitness evaluations. The exact requirements and procedures vary by state and profession. However, some states have recently started to review and modify these disclosure requirements due to concerns about potential stigma and discrimination against individuals with mental health conditions. For example, in 2021, the California Board of Registered Nursing changed its disclosure requirements to only ask about current conditions that may affect an individual's ability to practice safely. As well, in 2020, the National Council of State Boards of Nursing released a report recommending a more nuanced approach to evaluating the impact of mental health issues on nursing practice, rather than simply asking applicants about their diagnoses.

Importantly, it is not sufficient that answers to these questions just not be disqualifying for applicants – they shouldn’t be asked to begin with. Whether or not they impact the ultimate yay or nay on an applicant’s passage of character and fitness, they have a bearing on neither the character nor the fitness of the applicant. As stated the simple fact that the question is asked may dissuade some law students from seeking help when they need it. They are devoting three years of their lives to completing law school in the hopes of having a legal career. They are sacrificing long nights and heavy work loads in furtherance of their goal – they are thus primed for the sort of “grit it out” thinking that leads folks to forego mental health concerns right along with the physical health they are already sacrificing. 

These sorts of mental health questions have been on many state bar character and fitness applications for years. As such, the first step must be removing them in all states. But a close in time second step must be an information campaign, in every state, letting law students know that seeking help will never in any way lead to an applicant being stigmatized. 



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03 Apr 2023Mon 4/3 - COVID-Era Bar Takers, Boy Scouts Want to Exit BK but Insurers Don't, Burford Capital Wins Big, and Musk Tweet Trouble00:05:12

The scores on the February bar exam in the US have fallen for the second consecutive year, with some blame placed on COVID-19 pandemic disruptions in law schools. The national average score on the Multistate Bar Exam was 131.1, a decrease of 1.5 points from the previous year, according to the National Conference of Bar Examiners. The decline is attributed to an increase in repeat test takers and the pandemic’s negative impact on learning. First-time test takers saw the largest decline, scoring two points lower than their 2022 counterparts on average. Many of the first-time examinees were in their first year of law school when campuses shut down and classes abruptly moved online in the spring of 2020. About 72% of the February 2023 takers were likely repeaters, up from 68% the previous year.

US bar exam officials blame low scores on COVID disruptions, repeat testers | Reuters

Insurers of the Boy Scouts have requested a delay in the youth group's exit from bankruptcy to allow them more time to appeal a $2.46 billion settlement of sexual abuse claims. The insurers, which include Liberty Mutual Insurance Company, have said the Boy Scouts' bankruptcy settlement puts them on the hook for paying "thousands of invalid and questionable claims." U.S. District Judge Richard Andrews in Wilmington, Delaware, rejected the insurers' initial appeal on Tuesday, finding the settlement was a good faith effort to resolve claims by more than 80,000 men who say they were abused as children by troop leaders. The Boy Scouts have agreed to contribute insurance rights worth up to $4 billion to the settlement fund that will pay abuse claims. Those insurance payments are in addition to the $2.46 billion already contributed to the fund by the Boy Scouts organization, its two largest insurers, and organizations that have chartered Scouting units and activities, including churches. The Boy Scouts organization said it would oppose any effort to delay bankruptcy exit. The Boy Scouts filed for bankruptcy in February 2020 after several US states enacted laws allowing accusers to sue over decades-old abuse allegations.

Boy Scouts insurers seek to delay $2.5 bln abuse deal, bankruptcy exit | Reuters

Burford Capital Ltd., a litigation funder, has won a major victory in a lawsuit over an Argentina oil company. The company has financed former YPF SA shareholders in their legal claim against Argentina, arguing that the claims are worth over $7.5bn before prejudgment interest. On Friday, a federal court in New York ruled that the country is liable for losses suffered by the 2012 nationalization of the oil company, but did not specify the amount of damages that Argentina will be ordered to pay. Burford shares rose over 30% before trading was suspended.

We have talked about litigation funder Burford Capital Ltd. previously in the context of it having been accused by Sysco Corp of blocking it from hiring new lawyers in price-fixing lawsuits, after providing the food distributor with $140m to pursue the suits. There, Sysco accused the funder of preventing Sysco from getting new lawyers and from signing off on a new fee arrangement for replacement lawyers. Burford denied the accusations, with its chief information officer calling Sysco’s account of the situation “disingenuous” and “inaccurate”. Burford persisted in denying it was interfering with the independent judgment of its counsel.

Litigation funding itself is a controversial concept. It is a process in which a third-party funder provides financing to plaintiffs involved in legal disputes in exchange for a portion of the recovery. The funder pays for the legal costs and other expenses associated with the litigation in exchange for a share of any settlement or verdict. This type of funding is typically used by plaintiffs who are unable to afford the costs of a lawsuit on their own. Some have argued injecting an element of investment, or gambling, into the litigation process is asking for trouble – imagining issues along the lines of what Sysco accused Burford of engaging in. 

Burford Capital Set to Cash Big Bet on Argentina Oil Lawsuit (2)

Sysco Says $140 Million Litigation Funder Blocking Lawyer Change

Elon Musk violated federal labor law with a 2018 tweet in which he said Tesla workers would lose stock options if they unionized, according to a US appeals court. The decision upheld a ruling by the National Labor Relations Board ordering Musk to delete the tweet, which it said amounted to an unlawful threat. The case followed a union organizing campaign at the company's plant in Fremont, California, by the United Auto Workers. The court rejected Tesla's argument that the tweet wasn't a threat and just highlighted that unionized auto workers at other companies didn't receive stock options. Musk's prolific use of Twitter has landed him in legal trouble before, and his purchase of Twitter has landed him in all manner of trouble – from economic to reputational. 

Elon Musk's 2018 tweet on Tesla union campaign illegal, US court rules | Reuters



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04 Apr 2023Tues 4/4 - Trump in Court, Apple Watch Lawsuit, BigLaw M&A, and Column Tuesday on Auditor Independence00:05:22

Donald Trump, former US President and current front-runner for the Republican nomination in 2024, has been formally charged and will appear in court today. He will be the first former or sitting US President to face criminal charges. The charges stem from a 2016 hush money payment to adult film actress Stormy Daniels; Trump denies any wrongdoing and will plead not guilty. Trump's lawyers opposed videography, photography, and radio coverage, but the judge ruled that five photographers would be admitted for a short time. Trump is expected to return to Florida and give remarks from Mar-a-Lago later today. The specific charges will be disclosed, and according to Yahoo News, Trump will face 34 felony counts for falsification of business records. Trump's lead has widened in the Republican Party's presidential nominating contest, as he has pulled ahead of Florida Governor Ron DeSantis. Trump faces several other legal challenges, including a criminal probe into whether he unlawfully tried to overturn his 2020 election defeat in Georgia and two investigations by a special counsel over his handling of classified documents after leaving office.

Trump faces day in court in historic US first | Reuters

Apple faces a billion-dollar lawsuit from medical devices maker, Masimo Corp., and co-plaintiff Cercacor Laboratories Inc., in relation to the theft of trade secrets, including technology that measures the oxygen levels in the bloodstream. The pair alleges that Apple used confidential information from two former executives it hired, one from each plaintiff, to design, build, and sell certain Apple Watch models. The trial will focus on the Series 4-7 and SE models of the Apple Watch, and up to $1 billion could be at stake. The outcome could also influence how the parties’ broader intellectual-property conflict shakes out, and whether a settlement resolving their many disputes is likely. The 10-day jury trial is set to begin on Tuesday in the US District Court for the Central District of California, with the potential for live testimony from Apple’s chief executive, Tim Cook. Trade secrets cases are “especially onerous for defendants, meaning there’s a chance the parties could reach a deal before a verdict.”

Apple Set for Billion-Dollar Trial in Clash Over Watch Secrets

The number of large law firm mergers completed in Q1 2023 has already matched the total number of such mergers in all of 2022, according to data from legal consultancy Fairfax Associates. Large mergers are defined as those in which both law firms have at least 100 lawyers each. Recent mergers include Holland & Knight with Waller Lansden Dortch & Davis, and Orrick, Herrington & Sutcliffe with Buckley. While the number of large mergers in a given quarter or year may be coincidental, interest in large combinations among firms is "dramatically higher" than it was 10 or 20 years ago, according to Fairfax. However, challenges remain in bringing two large firms together, such as client conflicts and increasingly complex deal terms. Fairfax tracked 17 total law firm mergers to take effect in Q1 2023, an increase from 14 in the same period in 2022, but in line with Q1 2021. The firm said there were 46 completed mergers in 2022 as a whole, an increase from 41 the prior year. As with any other industry, consolidation in the law firm industry brings with it myriad risks – from potential conflicts of interest, as larger firms may have clients with competing interests – to decreased competition and higher prices for clients. In the short term, watch for consolidation to result in layoffs. 

Big law firms quicker to merge in 2023 so far, report shows | Reuters

You know what I initially thought was a raccoon or feral cat that had snuck in here to the Minimum Competence offices is, in fact, my column for this week! Let me coax it over to me and take a look at it.

In this one I spoke a bit about auditor independence. 

The Big Four accounting firms and consultants have come under fire following their roles in the high-profile collapses of Silicon Valley Bank and Signature Bank, as well as the near-miss at First Republic Bank. Rightly so as KPMG signed off on the banks' financial statements and, while it is difficult to point out what should have been done to avoid the financial upheaval of the last few weeks, it is clear who should have done something. The solution? There needs to be liability placed on the accounting firm tasked with acting on behalf of a regulator when that organization fails to identify indicia of questionable financial health. Accounting firms have no incentive to draw attention to potential problems, rather than just explicit and clear problems, because it may trigger just what happened anyway–bank collapse. Another impediment to auditor independence is the revolving door of personnel between the major accounting firms and the banks they purport to audit. A blanket ban is necessary on a firm consulting and auditing the same client.

Big Four Auditors and Consultants Need Liability—And a Divorce



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05 Apr 2023Weds 4/5 - Texas Libraries, J&J ~$9b Settlement, IRS $80b, Online LSAT and Trump Indictment00:05:10

A federal court in Texas has ordered a public library system to put back into circulation over a dozen books that were removed from the shelves. The books, which covered issues relating to LGBTQ+ and racism, had been pulled by the library. Library patrons sued, alleging that the books had been removed due to disagreement with their viewpoint. The patrons also claimed that the library had closed board meetings to the public and replaced its advisory board with community members who supported censorship. The judge granted the patrons' request for a preliminary injunction, which also stops the library from removing any more books while the lawsuit is pending. The case comes at a time of increasing school book bans. PEN America has documented nearly 2,532 school book bans affecting 1,648 titles from July 2021 to June 2022, with most of the challenged books addressing LGBTQ+ issues or systemic racism. The books in question include "Caste: The Origins of Our Discontent" by Pulitzer winner Isabel Wilkerson and "Being Jazz: My Life as a (Transgender) Teen" by Jazz Jennings.

Texas Library System Must Return Removed Books to Circulation

Johnson & Johnson has agreed to pay $8.9bn to settle all the lawsuits relating to its talc-based powders causing cancer. The payment is aimed at settling claims from about 60,000 claimants, and the company has withdrawn its talc-based baby powder, Shower to Shower and other such products from the market. The world's largest healthcare products company hopes to fund a trust set up in US bankruptcy court in Trenton, New Jersey, to cover future claims. Monies in the settlement will be paid out over 25 years. Traces of asbestos have been blamed for causing ovarian cancer and mesothelioma, specifically tied to asbestos exposure. Women and men have been blaming the company for causing these diseases, and internal J&J documents dating back to the early 1970s show workers warning managers about traces of asbestos found in talc bottled for baby powder.

J&J to Pay $8.9 Billion to Settle Talc-Cancer Lawsuits (2)

The IRS will release its plan for spending its $80 billion in multiyear funds later this week, according to Treasury Secretary Janet Yellen and IRS Commissioner Danny Werfel. The plan will focus on improving online interactions between taxpayers and the agency, shortening lengthy phone wait times, and providing in-person assistance to taxpayers. The IRS also plans to hire and train employees to audit returns of high-income taxpayers, large corporations, and partnerships. The goal is to make real-world improvements and investments in technology that can digitize IRS processes and strengthen enforcement against corporations and high-income individuals.

IRS Plan for $80 Billion Coming This Week, Yellen Says (1)

The Law School Admission Test (LSAT) will be available for test takers to take at home or at a testing center starting from August. The LSAT was moved exclusively online in May 2020 due to the COVID-19 pandemic and restrictions on in-person gatherings. The Law School Admission Council, which designs and administers the LSAT, partnered with Prometric Testing to provide test sites around the globe. Although most test takers will have a choice, some prefer the in-person experience to the challenges of at-home testing, including unreliable internet connections, multiple roommates, and noisy conditions.

Online? In-person? LSAT takers will soon have a choice | Reuters

And, finally, giving you ample opportunity to completely bail on this last story if you’ve had about enough Donald Trump news. 

Manhattan District Attorney Alvin Bragg's indictment of former President Donald Trump on hush money charges related to a 2016 election scandal brought few new details about the case. Bragg accused Trump of falsifying records in his real estate company's books to conceal reimbursing his personal lawyer Michael Cohen for a $130,000 hush money payment. The payment was made to a woman who alleged she had an affair with Trump. Although it is the first time a former US president has faced criminal charges, legal experts not involved with the case say its strength will likely depend on evidence that has not been made public. The indictment did not specify the crimes that were allegedly being concealed. Meanwhile, prosecutors detailed similar schemes Trump allegedly orchestrated to silence two other people who had damaging information about him in a separate filing. Experts said this could help Bragg's office demonstrate to a jury that Trump intended to commit a crime. Cohen, who testified before the grand jury that indicted the former president, has previously pleaded guilty to campaign finance violations for the Daniels payment, which could leave him open to attacks on his credibility by Trump's defense at trial.

Analysis: Trump indictment on hush money charges brings few new facts | Reuters

https://law-and-politics.online/@Teri_Kanefield/110143334776123102

The People of New York v. Donald J. Trump (documents explained and questions answered)



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06 Apr 2023Thurs 4/6 - chipotle isn't Chipotle, eFile.com is Malware, Legal fee Disputes and Biometrics in the Labor Realm. 00:06:04

Chipotle has filed a lawsuit against Sweetgreen for trademark infringement, alleging that the salad chain's "Chipotle Chicken Burrito Bowl" menu item copies the name and branding of Chipotle's burrito bowls. The complaint, which was filed in a California federal court, claims that Sweetgreen's use of the word "Chipotle" in its advertising and the dish's name is likely to cause consumer confusion. Chipotle alleges that Sweetgreen has used the word "Chipotle" as a source-identifying trademark and that Instagram users have associated the two companies. In addition, a restaurant industry news article has noted that Sweetgreen's new dish "veers directly into arch-rival Chipotle Mexican Grill's territory." Chipotle had contacted Sweetgreen about branding concerns and recommended that the chain rename the dish to use "chipotle" in lowercase, but Sweetgreen did not respond, according to the complaint. The Mexican food chain owns five federal trademark registrations for the word "Chipotle." Sweetgreen has not yet responded to the lawsuit.

Chipotle Sues Sweetgreen for ‘Chipotle Chicken Burrito Bowl’ (1)

IRS-authorized tax e-file software provider, eFile.com, was found serving JavaScript malware called 'popper.js,' containing a base64-encoded code that attempts to load JavaScript from a third party website. This code aims to prevent caching and load a fresh copy of malware when visited. This issue concerns eFile.com and not the IRS e-file infrastructure or domains. Researchers have found the malware to be present on almost every page of eFile.com until April 1st. Additionally, the same Amazon AWS endpoint was serving another file called 'update.js' that prompts users to download next-stage payloads, which establish a connection to a Tokyo-based IP address, hosted with Alibaba. The same IP address also hosts an illicit domain associated with the incident. Further analysis revealed the PHP script as a backdoor malware that remotely accesses an infected device, connects to a remote command and control server every ten seconds, and receives a task to execute on the infected device. The malware can allow full access to a device, providing the threat actor initial access to a corporate network for further attacks. The company has yet to release the full scope of the attack and if it has infected any of its customers. EFile.com has been approached with questions but has not responded. This is the latest in a long series of problems with for-profit tax filing software companies, from security breaches to bait and switch advertising.

Hackers Strike Again: eFile.com Service Suffers Major Cyber Attack

IRS-authorized eFile.com tax return software caught serving JS malware

Law firm Quinn Emanuel Urquhart & Sullivan is opposing an attempt by two US health insurers to review certain internal records as the firm prepares to seek $185m in legal fees from a $3.7bn settlement with the US government. The dispute comes after a court struck down the $185m award in January, with the US Court of Appeals for the Federal Circuit saying the lower court had not "adequately" justified the amount. The health insurers have suggested about $8m in fees would be appropriate. In a statement, surprising no one, Quinn Emanuel's Adam Wolfson said the fee agreement the class members agreed to "should stand."

Law firm Quinn Emanuel resists probe after its $185 mln fee award is tossed | Reuters

The Illinois Supreme Court has ruled that unionized workers who sue for violations of the state’s Biometric Information Privacy Act (BIPA) are pre-empted if the worker is covered by a collective bargaining agreement with a broad management rights clause. Instead, the dispute resolution process set out in the union contract must be used, which typically involves grievance arbitration. The ruling is part of a surge in litigation under Illinois' biometric privacy law, which requires companies to disclose the purpose of collecting the information, obtain permission, and publish data retention or destruction policies. Such violations can be expensive, with a $228m judgment awarded against BNSF Railway Co. truck drivers for collecting employee fingerprints without consent. Arbitrators are responsible for deciding disputes over whether biometric privacy claims must go through a collective bargaining agreement’s dispute resolution process but it remains unclear what happens to such allegations in arbitration. Unions are expected to negotiate for strong biometric privacy protections in future contracts as a result of the ruling.

Union Workers in ‘Uncharted Territory’ on Illinois Privacy Law

The US Department of Justice has agreed to a $144.5 million settlement with survivors and families of the victims of the 2017 mass shooting at a Texas church that killed 26 people, for which a judge found the Air Force primarily responsible. The settlement with more than 75 plaintiffs requires approval by U.S. District Judge Xavier Rodriguez in San Antonio. It would end the government's appeal of Rodriguez's order that it pay approximately $230 million over the November 5, 2017 massacre by former Air Force airman Devin Patrick Kelley at the First Baptist Church in Sutherland Springs, Texas. Kelley had used firearms he should not have been allowed to buy after admitting in a 2012 court martial to domestic violence. In July 2021, Rodriguez found the Air Force 60% responsible over its failure to enter Kelley's plea in a database used for background checks prior to firearms purchases. Though finding Kelley 40% responsible, Rodriguez said not even Kelley's parents knew as much as the government about their son's capacity for violence. The settlement ends a painful chapter for the victims of the crime.

US reaches $144.5 million settlement with Texas church shooting victims | Reuters



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07 Apr 2023Fri 4/7 - IRS $47b to Compliance, NYU Law Review Students Want to Get Paid, Thomas the Jetsetter and M&A Deals are Way Down00:06:24

The IRS plans to use more than half of its $80 billion in new funding to increase enforcement efforts on large corporations and wealthy individuals who are not paying their fair share of taxes. The agency will devote $47.4 billion to auditing “taxpayers with complex tax filings and high-dollar noncompliance,” including large corporations and complex partnerships. The agency has seen a decline in its staff of auditors working on large, complex cases, which has reduced its ability to maintain sufficient audit coverage. However, the new funding will enable the agency to hire more accountants, attorneys, data scientists, and specialists, and boost the size of its enforcement workforce by more than 7,200 by fiscal 2024. The IRS will also increase its scrutiny of digital asset transactions, listed transactions, and certain international issues that it has not had the resources to fully examine in the past. The stepped-up audits will not affect those earning less than $400,000 a year, as promised by the Biden administration. The increased enforcement efforts are not only important in their own right, but they will also increase people’s willingness to pay the taxes they owe and maintain their trust in the fairness of the tax system.

IRS to Devote Much of $80 Billion to Auditing Rich Taxpayers (1)

Students at New York University School of Law are demanding pay or academic credit for working on law journals. Currently, students who work on law reviews, which are considered a stepping stone to elite legal circles, do so without pay or academic credit. The students argue that the lack of compensation limits access to law review membership, as only those who can afford to work for free are able to participate. The students also contend that the reflected prestige of law journals benefits the university, and that the cost of paying students is reasonable given the high tuition fees at NYU Law. The administrators have met with students to discuss the issue, but no decisions have been made. While NYU does offer academic credit to third-year students for checking citations, it does not compensate students for their journal work. Law firms value law review experience as a training ground and as a way for budding lawyers to distinguish themselves from their peers, and students at NYU hope that paying law students for journal work will become a precedent at other law schools.

Making Law Review Is Career Gold. NYU Students Want Cash Too

Senate Judiciary Chairman Dick Durbin has announced that his committee will take action following a ProPublica report that revealed Supreme Court Justice Clarence Thomas accepted luxury trips from a Dallas-based GOP donor. The report detailed gifts of trips on private yachts and jets and luxury accommodations over two decades, which Thomas never reported. This appears to violate a Watergate-era law requiring justices and other federal officials to disclose most gifts they receive. The nine justices of the Supreme Court are the only federal judges who aren’t formally bound by a code of conduct. Durbin called the report a “call to action” and said it shows the high court needs a statutory code of conduct. Another Democratic senator, Chris Murphy of Connecticut, said the report will give fresh momentum to his long-standing drive for legislation that would require the Judicial Conference of the United States to create a code of ethical conduct for the Supreme Court.

More specifically, the ProPublica report outlines how Clarence Thomas has taken luxury trips every year for over two decades with Dallas businessman and Republican megadonor Harlan Crow, without disclosing them. If he had chartered the plane and yacht himself, the total cost of the trip could have exceeded $500,000. Thomas is a public servant with a salary of $285,000. He has vacationed on Crow’s superyacht, flown on Crow’s Bombardier Global 5000 jet, and spent about a week every summer at Crow’s private resort in the Adirondacks. The extent and frequency of Crow’s apparent gifts to Thomas have no known precedent in the modern history of the U.S. Supreme Court. Through his largesse, Crow has gained a unique form of access, spending days in private with one of the most powerful people in the country. By accepting the trips, Thomas has broken long-standing norms for judges’ conduct, ethics experts and four current or retired federal judges said. ProPublica uncovered the details of Thomas’ travel by drawing from flight records, internal documents distributed to Crow’s employees, and interviews with dozens of people.

Clarence Thomas Secretly Accepted Luxury Trips From GOP Donor — ProPublica

Clarence Thomas Luxury Gift Report Prompts Ethics Code Talk (1)

Global mergers and acquisitions activity has declined to its lowest level in over a decade in the first quarter of 2023, with the total value of global announced M&A deals reaching $580bn, down 44% from the same period last year, according to data from Refinitiv. The decrease in activity is due to rising interest rates, high inflation, and recession fears, leading companies to be cautious in dealmaking. Leading law firms have been impacted by this decline, with fewer deals being advised on and a smaller combined value of deals.

Law firms share the pain as global M&A deals dry up | Reuters



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10 Apr 2023Mon 4/10 - J&J Funders, Baidu vs. Apple, Fox vs. Dominion, Tesla vs. Privacy and Law Firm Layoffs00:04:52

Johnson & Johnson (J&J) is offering $8.9 billion to settle all lawsuits over its talc products, which have been linked to cancer, and at least two outside litigation funders stand to benefit. Virage Capital Management and TRGP Capital have invested in hundreds of claims in exchange for a share of any winnings. The funders worked with plaintiffs lawyers handling some of the cases, and their role in the litigation is public knowledge because the cases are in a federal court in New Jersey that requires disclosure of third-party funding. Since the disclosure rule was introduced in 2019, only nine cases have acknowledged outside funding. At the same time, calls for litigation funders to be regulated are increasing. The J&J cases illustrate how third-party funding can level the playing field between individuals and major corporations that often use their resources to steamroll smaller opponents in court.

J&J Talc Suits’ Outside Funders Unveiled Via Little Used NJ Rule

Baidu has filed lawsuits against Apple and certain app developers over fake copies of its Ernie bot app available on Apple's app store. Baidu's artificial intelligence-powered Ernie bot, launched last month, has been referred to as China's closest answer to the U.S.-developed chatbot ChatGPT. For the uninitiated, Ernie bot is the Enhanced Representation through Knowledge Integration service, an AI chatbot service product of Baidu, under development since 2019. It is based on a large language model named "Ernie 3.0-Titan" and it was released on March 17, 2023.

Baidu sues Apple, app developers over fake Ernie bot apps | Reuters

A trial will begin on April 15 in a Delaware court to decide whether Fox News should pay Dominion Voting Systems $1.6 billion for spreading election-rigging falsehoods. The trial has been widely viewed as a test of whether Fox's coverage crossed the line between ethical journalism and the heedless pursuit of ratings, as Dominion alleges and Fox denies. Dominion alleges that Fox destroyed its business by knowingly airing false claims that its ballot counting machines were used to flip the results of the 2020 U.S. presidential election against former President Donald Trump. Fox says the evidence of high-level involvement is threadbare. Delaware Superior Court Judge Eric Davis said he would not block Dominion from calling Rupert Murdoch, chairman of Fox News parent company Fox Corp, to testify in-person about his involvement in the coverage, which Davis has ruled was false and defamatory. The question could hinge upon troves of internal Fox communications and testimony by Murdoch, his son Lachlan, and a parade of Fox higher-ups and hosts who are expected to testify. Opening arguments are set to begin April 17, so look for that to dominate our newscasts next week.

In Fox-Dominion defamation trial, jury to weigh executives' role | Reuters

A Tesla owner in California has filed a prospective class-action lawsuit against the electric car manufacturer, alleging that it violated customers' privacy. The lawsuit came after Reuters reported that groups of Tesla employees privately shared highly invasive videos and images recorded by customers' car cameras between 2019 and 2022. The plaintiff, Henry Yeh, who owns a Tesla Model Y, claims that Tesla employees accessed the images and videos for their "tasteless and tortious entertainment" and for the "humiliation of those surreptitiously recorded." The lawsuit asks the court to enjoin Tesla from violating customers' privacy and to recover actual and punitive damages. The prospective class would include individuals who owned or leased a Tesla within the past four years. Tesla has not yet responded to requests for comment.

Tesla hit with class action lawsuit over alleged privacy intrusion | Reuters

Law firms are continuing to face layoffs due to the decline in global deals and faltering client demand. Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, a Silicon Valley-founded law firm known for working with emerging tech and life sciences companies, has cut 10% of attorneys, paralegals, and staff in its U.S. offices in response to current macroeconomic and market conditions. Other law firms, including Cooley, Goodwin Procter, Stroock & Stroock & Lavan, and Shearman & Sterling, have also laid off lawyers and staff since late last year due to a slowdown in work. The total value of global announced M&A deals in the first quarter of 2023 fell by 44% compared to the same period last year, and legal recruiting firms predict more law firm layoffs heading into the second quarter of 2023.

Law firm layoffs spread as cooling economy keeps clients wary | Reuters



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11 Apr 2023Tues 4/11 - COVID Nat'l Emergency Over, Goldman Fines, Judiciary Committee wants Thomas Investigated, Column Tuesday and Trump Tax Crimes00:05:53

President Joe Biden signed a congressional resolution to end the U.S. national emergency for the COVID-19 pandemic. The emergency measures allowed the government to respond to the virus and support the country's economic, health, and welfare systems. Biden signed the measure behind closed doors after publicly opposing it, but not to the point of issuing a veto. The law signed by Biden on Monday did not affect the public health emergency, which is set to expire in May. The Trump-era Title 42 border policy is also set to expire in May, and the White House has warned that an abrupt end to the public health emergency and Title 42 could create chaos and uncertainty. Unfortunately, for the nearly 2,000 Americans that continue to die from COVID per week – the emergency is anything but over.

Biden ends COVID national emergency after Congress acts : NPR

Biden signs bill ending Covid-19 national emergency - POLITICO

Goldman Sachs has been fined $1m by the US Commodity Futures Trading Commission (CFTC) for not recording traders' phone calls. The CFTC discovered that the bank had not kept certain audio recordings, which swap dealers are required to do under CFTC requirements, in 2014 after the recording hardware on its phone lines restarted prematurely and failed to record. The issue was identified when the CFTC requested audio calls from Goldman Sachs relating to a separate investigation and, gosh darn it, they didn’t have the audio.

Goldman Sachs hit with $1M fine for not recording traders' phone calls | Fox Business

All Senate Democrats on the Judiciary Committee have requested Chief Justice John Roberts to investigate luxury trips taken by Supreme Court Justice Clarence Thomas from a wealthy Republican donor. The lawmakers have also requested Roberts to lead in adopting a code of conduct that would subject the justices to the types of standards applied to lower courts. The calls for investigation come after a report by ProPublica last week detailed Thomas accepting gifts of trips on jets, private yachts, luxury accommodations, including a 2019 “island hopping” vacation that could have exceeded $500,000.

Senate Democrats Ask Chief Justice to Probe Thomas’ Luxury Trips

Twitter has hired Adeeb Sahar, a former Skadden associate, as its new global head of commercial, corporate, and international law. Sahar was part of the team of lawyers who advised Elon Musk on his $44 billion acquisition of Twitter last year. Sahar’s appointment comes as Twitter faces an increasing number of legal liabilities, including a lawsuit filed by its former legal chief. Twitter is at risk of failing to comply with various data privacy regulations and other accords entered into by the company. Sahar previously co-founded and served as CEO of a venture-backed publishing startup called Inklo. Many former Twitter lawyers have secured new jobs at other companies, including social media rival TikTok and Ancestry.com.

Twitter Hires Skadden Lawyer as Musk Tackles Litigation (2)

The Internal Revenue Service (IRS) plans to use part of the $80 billion allocated to it to become a "digital first" tax collector, investing in artificial intelligence (AI) to improve customer service interactions with taxpayers. The tax agency has access to large amounts of data, and the first step in a larger AI project is data mining to extract insights using machine learning algorithms and statistical analysis. Natural language processing (NLP) is another field of AI that can analyze and understand human language to perform various analyses, such as examining tax forms to determine keywords and phrases that may correlate with tax evasion. NLP can also be used to automate customer service, providing faster and more accurate information to taxpayers. Predictive modeling can analyze past known fraudulent returns to identify where future audits may be most fruitful and can be used to evaluate the impact of a given compliance program to better allocate resources. However, policymakers and coders must be careful to avoid injecting underlying biases. The IRS must proceed ethically, ensuring fairness for all taxpayers and limiting knock-on effects. Collaboration among technologists, policy experts, and taxpayer advocacy groups is necessary to ensure the endeavor doesn't jeopardize fairness for taxpayers as it proceeds.

Dear IRS—Here’s Where You Should Spend Some of That $80 Billion

As we all well know by now, former US President Donald Trump was indicted by Manhattan District Attorney Alvin Bragg on numerous charges of falsifying business records. The charges stem from an alleged scheme to falsify records in connection with the payment made to adult film actress Stormy Daniels. The indictment did not specify what the underlying crime was but suggested that it could be a tax crime. Some political pundits have questioned whether there was any fraud involved as the scheme seemingly resulted in too much tax being paid. However, fraud does not necessarily have to result in a financial loss. In this case, the fraud was aimed at using tax authorities as alibi-generators and ensuring that Michael Cohen, Trump's former attorney, would declare the reimbursement payments as income for services rendered. This would have made it difficult for authorities to discover the payoff and would have provided a defense in case the scheme was discovered. From a public policy perspective, taxpayers should not countenance tax authorities being used in furtherance of such schemes. In sum, this allegation is no small thing – and should not be treated as a minor bookkeeping inconsistency.

Trump Indictment and the Underlying Fraud Against Tax Authorities



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12 Apr 2023Weds 4/12 - EY Staying Together, Cooley Screwing First Years, RFC for AI, More Trouble for Fox News in the Dominion Case00:05:55

Ernst & Young (EY) has cancelled the planned split of its consulting and audit practices after its US affiliate opted out of the plan, disrupting almost a year of negotiations to break up the Big Four accounting firm. The firm had intended to spin off its consulting business and tax practice into a standalone public company, but partners disagreed on compensation and resources needed to staff the remaining audit practice. The US affiliate was a key sticking point. EY leaders said they would continue laying the groundwork for the split, but would need more time and investment. The plan’s failure followed repeated delays and disagreements over key aspects of the deal. The logistics of separating the $45bn operation across 75 jurisdictions had also proved challenging. The split, known as Project Everest, was intended to create two profitable and successful organizations.

EY Cancels Breakup of Audit, Consulting Units

Cooley LLP has postponed the start date for its incoming class of first-year associates from November to January 2024. The law firm, founded in Silicon Valley, had laid off 150 lawyers and staff from its offices across the US in late 2022. Cooley was one of the biggest recruiters of new talent during the pandemic, but shifting economic conditions have led to a slowdown in demand for business transactions work, resulting in some trimming of headcounts. Cooley has declined to comment on the delay. Junior associates have had a tough time in recent years and recruiters predict that other firms will follow Cooley’s lead in delaying start dates, especially those who over hired in 2021 and are expecting large first-year classes this fall. During the height of the pandemic, some law firms delayed the start dates for their incoming first-year classes and made pay cuts, furloughs or other moves to trim costs. But by 2021, booming transactions markets created a frenzied demand for associate talent that forced firms to hike salaries and roll out a bevy of bonuses. However, with the recent market disruptions and overall decrease in transaction volume, some firms found themselves with more associates than work to go around as demand later cooled.

Cooley Delays Start Date for Incoming First-Year Associates (1)

The National Telecommunications and Information Administration (NTIA), part of the US Department of Commerce, has launched a request for comment to help ensure that artificial intelligence (AI) systems work as intended and do not cause harm. The Biden Administration is working to create a cohesive approach to AI-related risks and opportunities. While AI systems are being recognized for their benefits, there are concerns about the potential risks to individuals and society that could result from increasingly powerful systems. The NTIA is seeking feedback on policies that can support the development of AI audits, assessments, certifications, and other mechanisms to create earned trust in AI systems. The RFC seeks input on what policies should shape the AI accountability ecosystem, including topics such as trust and safety testing, data access, incentives for accountability, and approaches for different industry sectors. The Biden Administration aims to support responsible innovation and ensure appropriate guardrails to protect Americans’ rights and safety with regard to AI. Comments on the RFC are due 60 days from publication in the Federal Register, which would be June 10, 2023.

NTIA Seeks Public Input to Boost AI Accountability

A judge in Delaware has expressed concern about the trustworthiness of attorneys defending Fox News in a defamation case after they revealed that Rupert Murdoch is not only the chairman at Fox Corp., but also a corporate officer at its subsidiary, Fox News. Delaware Superior Court Judge Eric M. Davis said Fox lawyers had previously said that Murdoch was not an officer for the subsidiary cable network. Counsel for Fox News called Murdoch's position with the network "honorific," and said the role had been disclosed during a previous deposition. The judge replied that an officer of a company cannot "escape responsibility" by saying they didn't have any tasks. The case relates to the $1.6bn defamation lawsuit filed by voting machine software company Dominion Voting Systems against Fox News and its parent Fox Corp. over baseless claims about voter fraud during the wake of the 2020 US presidential election. Fox has previously argued that Murdoch had little to do with editorial decisions at the cable network. The judge claims such information could have led him to make different rulings earlier in the case. 

Judge lectures Fox attorneys over dual roles for Rupert Murdoch : NPR



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13 Apr 2023Thurs 4/13 - Cali. USB-C, Apple Hometown Tax Issues, EY Updates, Racial Disparities in Bar Exam and FTX Recovers Some Money00:05:47

California is set to become the first US state to require all electronic devices, including laptops and phones, to be charged using USB-C cables under legislation approved by the state Assembly Privacy and Consumer Protection committee. The bill, sponsored by Assemblymember Jesse Gabriel, requires wholesalers and retailers to give consumers the option to buy an electronic product with or without a charging device, and for packaging on the product to indicate whether there is a charging device and other information. The move follows similar action taken by the European Union, which adopted a directive last year making USB-C charging mandatory for phones and all laptops. India has also approved similar standards to be in effect by 2025. Advocates of universal charger policies say reducing environmental and consumer costs is a primary motivation. However, supporters of free-market principles argue that the policy would stifle innovation, as companies would no longer feel the need to develop a better charging technology. Additionally, opponents of the policy warn that it could contribute to more customer confusion and create more waste in the long run by forcing existing charging cables into obsolescence.

California Follows Europe’s Lead on USB-C Mandate for Devices

Apple's tax agreement with its hometown of Cupertino, California, is under scrutiny from state regulators, potentially leading to a reduction in the amount of money the company pays to the city. The California Department of Tax and Fee Administration is auditing the arrangement, with Cupertino’s finance director set to explain the findings to the city council. The audit revealed local tax revenues will drop 73% in the current fiscal year, from $42.1 million to $11.4 million, and Cupertino may need to return money received in previous years. Apple is not named in the report, but it is the largest source of sales tax revenue for Cupertino. The issue is Apple's treatment of online sales, as the local portion of sales tax goes to the location where the transaction takes place, not the customer’s location. Apple treats all online purchases of products in California as if they were made in Cupertino, setting aside the 1% local portion of the 7.25% state sales tax for its hometown. Cupertino can appeal the tax department’s findings, but the city may have to cut staff and other spending to cover the shortfall.

Apple’s Local Tax Arrangement With Hometown Comes Under Fire (1)

Ernst & Young's attempt to split its audit and advisory practices has been abandoned due to internal strife, damaged relationships between firm leaders, and distrust between partners in different countries. A major failure of the company's attempt was that economics took over, and strategic benefits lagged behind. The firm is now on a rugged path to carve out its $20bn consulting business. Developing distinct sets of clients for each of the two businesses and rethinking how revenue from those businesses is tracked and reported are among the steps the firm might consider as it attempts another transaction. Interest rates and retired partner debt, perceived future revenue streams and the overall market have challenged the balancing act of spreading out benefits and risks among audit and advisory partners, even retired partners. EY consultants won’t be able to escape restrictions on the clients to whom they can sell. Finally, EY’s Big Four competitors have said they have no plans to follow its restructuring path and have repeatedly said they are committed to their multi-service line offerings, adding market force effect to the disincentive to split. 

EY Battles Internal Strife In Wake of Abandoned Break Up (1)

According to new data from the American Bar Association, the gaps in bar pass rates between white and minority law graduates widened in 2022 for the second consecutive year. The first-time pass rate for white test takers was 83% in 2022, while 57% of Black examinees passed on their first attempt, which is a difference of 26 percentage points. The performance of white first-time bar examinees also declined from an 85% pass rate in 2021 to 83% in 2022, but that decline was smaller than the dip among Black, Hispanic, and Asian examinees. Racial disparities have persisted on “ultimate bar pass rates,” which measure pass rates over two years. No announcements have been made regarding what steps will be taken to ameliorate this disparity, but we’ll be following along closely.

Racial disparities in bar exam scores worsened in 2022 | Reuters

Bankrupt crypto exchange FTX has announced that it has recovered over $7.3 billion in cash and liquid crypto assets, an increase of more than $800 million since January. The company's attorney said that FTX is starting to think about its future after months of effort devoted to collecting resources and figuring out what went wrong under the leadership of indicted ex-founder Sam Bankman-Fried. FTX has benefited from a recent rise in crypto prices, and its total recovery would be valued at $6.2 billion based on crypto prices from November 2022 when it filed for bankruptcy. FTX is negotiating with stakeholders about options for restarting its crypto exchange, and it may make a decision on that in the current quarter. FTX customers in Japan have been the only ones able to withdraw any funds during the bankruptcy case. FTX intends to file a preliminary Chapter 11 plan that would offer the company a path out of bankruptcy, but it acknowledged that many details would have to be worked out as creditors fight for their share of the company's assets. Bankman-Fried and several company insiders have been indicted on fraud charges for their role in the company's collapse.

Bankrupt crypto exchange FTX has recovered $7.3 billion in assets | Reuters



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14 Apr 2023Fri 4/14 - EPA Emissions Stds, Deepfakes and Right of Publicity, Google v. Sonos, a Leaker and Free Speech vs. Attorney Conduct Rules00:06:23

The Biden administration's plan to reduce emissions from the transportation sector through tailpipe emission rules will face industry litigation, but environmental lawyers believe the rule will hold up during inevitable challenges. The proposed standards, revealed by the Environmental Protection Agency, were called the most aggressive ever for cars and trucks. Challengers are likely to argue that the rule is too transformative, but advocates will contend, rightly,  it is rooted in tried-and-true Clean Air Act authority. The standards would put electric vehicles at 67% of new light-duty vehicle sales in 2032, and set light-duty vehicle efficiency at 82 grams per mile in model year 2032, a 56% bump from 2026 levels. Industry groups are already opposed to the proposal, with American Petroleum Institute President Mike Sommers stating that the "deeply flawed proposal is a major step toward a ban on the vehicles Americans rely on". Some states are already using the major questions doctrine, which we covered in a previous Max Min Comp, in a lawsuit against an earlier round of vehicle rules, and West Virginia Attorney General Patrick Morrisey has hinted at a lawsuit. Despite the threat of litigation, advocates of the standards believe the rule is on solid legal ground, with Earthjustice Senior Climate Attorney Hana Vizcarra stating that the agency is "improving the standards as they go in light of what’s happening in the marketplace".

Biden Tailpipe Emission Rules Face ‘Major Questions’ Legal Wave

The increasing use of "deepfakes" technology, which allows users to digitally blend or swap faces and voices, has raised legal questions about exploiting someone's image and voice without permission. Those unwillingly featured in deepfakes and other AI-manipulated content can use right of publicity laws as a legal remedy, but these laws vary from state to state. Generally speaking, right of publicity laws protect an individual's right to control the commercial use of their name, image, likeness, or other recognizable aspects of their persona. The contours of these laws vary by jurisdiction, but generally give individuals the exclusive right to use their name or image for commercial purposes, such as in advertisements or merchandise. In some cases, these laws may also protect against unauthorized use of a person's identity for non-commercial purposes, such as in a work of fiction or in news reporting. Right of publicity laws can be controversial, as they can clash with other forms of free expression, such as the First Amendment right to free speech.

Although California and New York provide clear statutory guidelines for right of publicity, other states have less defined bodies of law. The mesh of statutory regimes could create a patchwork of decisions as generative AI applications continue their rise, and litigation mounts. The lawsuit against Reface, which was created by the Ukrainian company NeoCortext Inc., was brought by Kyland Young, a finalist on the reality competition show “Big Brother.” The First Amendment is a prominent legal defense against publicity rights lawsuits, especially in cases where the underlying product or service is protected by free speech, like comic books or documentaries. Other federal statutes may also be shields against the lawsuits, such as Section 230, which immunizes online platforms from liability over user-created content. This is clearly a burgeoning area of litigation, with new AI models rolling out on a seemingly daily basis.

AI Celebrity ‘Deepfakes’ Clash With Web of State Publicity Laws

A San Francisco federal judge ruled on Thursday that Google must face a trial in a patent lawsuit brought by Sonos Inc over wireless audio technology. The judge failed to invalidate all of the patents before a trial but did narrow Sonos' claims. The case is part of a contentious intellectual property dispute between the former business partners over their smart speakers, including lawsuits in the United States, Canada, France, Germany, and the Netherlands. Sonos won a limited import ban on some Google devices from the US International Trade Commission (ITC) last year, while Google has sued Sonos for patent infringement at the ITC and in California. 

Google must face trial over Sonos patents, California judge says | Reuters

Jack Teixeira, a 21-year-old member of the US Air Force National Guard, has been arrested by the FBI for allegedly leaking classified military intelligence records online. He will appear before a federal judge in Boston on Friday. The leaked documents, posted online in March and potentially even earlier, include records showing purported details of Ukrainian military vulnerabilities and information about allies including Israel, South Korea, and Turkey. It is believed to be the most serious security breach since more than 700,000 documents, videos, and diplomatic cables appeared on the WikiLeaks website in 2010. The Justice Department opened a formal criminal probe last week into the current leaks. Anyone convicted of willfully transmitting national defense information can face up to 10 years in prison, with the possibility of a longer sentence depending on the charges. The Pentagon said that the leak was a "deliberate, criminal act" and that the military had taken steps to review distribution lists and ensure people receiving information had a need to know. The number of documents leaked is likely to be in the hundreds. 

Man suspected of leaking secret US documents to appear in court | Reuters

A federal appeals court in Philadelphia questioned whether a free speech advocate and Pennsylvania attorney can pursue his First Amendment challenge against the state's adoption of an anti-harassment and discrimination professional rule for lawyers. The Pennsylvania rule prohibits lawyers from knowingly engaging in conduct constituting harassment or discrimination based on race, sex, religion, and other grounds. Plaintiff Zachary Greenberg claims he is at risk of violating the rule because of presentations he gives about offensive and derogatory language. However, the Pennsylvania Supreme Court's Office of Disciplinary Counsel has said it would not prosecute such conduct. U.S. District Judge Chad Kenney blocked the rule in March 2022, finding it to be overbroad and in conflict with the First Amendment. The rule has attracted support from the ABA and other bar groups and opposition from conservative and religious groups, including on the grounds that it could be abused by bar officials in the future.

U.S. appeals court weighs free speech challenge to attorney conduct rule | Reuters



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17 Apr 2023Mon 4/17 - SCOTUS v. Administrative State, Who Can Strike for Whom, Dominion Delays, Orrick Lawsuit and a Question of Appeals Court Competence 00:06:00

Two recent US Supreme Court cases merged in a combined ruling, Axon Enterprise v. FTC and SEC v. Cochran allows the SEC and the FTC’s in-house litigation defendants to sue the regulators and is expected to increase the number of constitutional challenges against two of the most powerful regulators, and other federal agencies with a similar structure. The change will allow enforcement targets to challenge the agencies’ constitutional authority in federal district court without waiting for an in-house judge’s decision, as was previously required. The first direct attack against SEC authority has already been lodged at the Supreme Court. The SEC and the FTC will have to more aggressively defend their use of administrative law judges and in-house courts against accusations that they violate due-process rights. The ruling will allow companies to shop for friendly district courts when they're hit by administrative proceedings, such as an FTC suit attempting to block a merger. The change may also force agencies to expend more resources as they litigate on multiple fronts and is of a piece with some of our earlier reporting wherein courts have used the “major questions doctrine” to resist deferring to agency statutory interpretation where the underlying matter is of major economic or political significance. In sum, we may be on the precipice of seeing a substantially weakened administrative state.

Federal Agencies Face Constitutional Fights After High Court Loss

Food distributor Sysco is arguing that unionized workers cannot strike in solidarity with Sysco workers in the Midwest because they technically don’t work for the same company. This follows a recent strike by Sysco workers in Indiana and Kentucky over wages and retirement benefits. Sysco workers belonging to Teamsters Local 117 in Washington state followed suit, but Sysco Seattle filed a complaint in US District Court, stating that its workers could not join the picket because its operation is a separate entity from Sysco Louisville and Sysco Indianapolis. The pending lawsuit raises the question of whether large, multi-pronged corporations are one employer or multiple employers under the law. While the strikes in Indianapolis and Louisville have already ended, the answer is not immediately clear, but will depend on the facts of the case. While federal law allows workers to strike against their employers, it doesn’t extend to third parties, although the Labor-Management Relations Act also permits sympathy strikes, which are different from secondary strikes. The outcome in this case, should it be decided against workers, will significantly weaken labor and provide owners with a path forward to minimize the impact of strikes by creating separate regional entities. 

Sysco Picketing Lawsuit Hinges on Standard for Secondary Strikes

The start of Dominion Voting Systems' $1.6 billion defamation trial against Fox News has been delayed by a day, and sources say that Fox is pursuing settlement talks. The trial is over the network's coverage of the 2020 US presidential election. Dominion is accusing Fox of ruining its reputation by airing baseless claims that its machines secretly changed votes in favor of Democrat Joe Biden, who defeated then-President Trump, a Republican, in the 2020 presidential election. Dominion is asking for $1.6 billion in damages, a figure Fox has said is unrealistic and based on flawed economic modeling. The trial is considered a test of whether Fox's coverage crossed the line between ethical journalism and the pursuit of ratings, as Dominion alleges and Fox denies. Rupert Murdoch, the founder of Fox News, is set to testify, along with a parade of Fox executives and on-air hosts, including Tucker Carlson, Sean Hannity, and Jeanine Pirro.

Fox defamation trial delayed, network pursues settlement talks | Reuters

US law firm Orrick, Herrington & Sutcliffe is facing a $10m lawsuit in California over claims that it misled a Hong Kong tribunal when it sought to enforce an arbitration award against a large Chinese real estate developer. Hong Kong-based Global Industrial Investment Ltd, a subsidiary of China Fortune Land Development, filed the lawsuit seeking more than $9.8m in damages for malicious prosecution and abuse of process. Orrick's clients won a $9.3m award in 2019, and the firm sought to enforce it in courts in Hong Kong and in the United States. Orrick used Hong Kong-based garnishment orders to freeze bank accounts belonging to Global Industrial Investment as part of enforcing the arbitration award, the lawsuit alleged. The Hong Kong court in 2020 set aside the arbitration order after finding "a deliberate attempt to hide relevant material". In a court filing, Orrick's attorneys denied acting with malice and accused Global Industrial Investment of waging a "retaliatory" campaign against the law firm.

Law firm Orrick fights $10 million 'malicious prosecution' case in California | Reuters

A federal appeals judge, Pauline Newman, is under investigation by her own court for allegedly failing to carry out her duties and refusing to respond to other judges' concerns, court officials at the US Court of Appeals for the Federal Circuit said. An order signed by Federal Circuit Chief Judge Kimberly Moore said a three-judge committee had determined that Judge Pauline Newman, who is 95, may "suffer a disability that interferes with her ability to perform the responsibilities of her office." Newman is also under investigation for misconduct for refusing to cooperate with the probe or submit to a medical evaluation. Newman is a leading intellectual property law jurist and a prominent dissenter on the patent-focused Federal Circuit. The Federal Circuit acknowledged the probe in a statement. It is highly unusual for a US judge to face a complaint from a colleague on the bench, especially on an issue as delicate as their competence to serve.

US appeals court judge faces rare probe into competency, misconduct | Reuters



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18 Apr 2023Tues 4/18 - Dominion Resumes, SCOTUS Hears Title VII Religious Rights Case, USNWR Delays Releasing Rankings, J&J Tries to Delay and Column Tuesday00:06:09

In the shortest news hit we’ve ever provided, the Fox Dominion trial is back on. There has been no confirmation as to what the 24 hour delay was for. All the news stories you’re reading today that try to say more are just speculating. The end. 

Dominion's defamation case against Fox poised for trial after delay | Reuters

The U.S. Supreme Court is set to hear an appeal by former mail carrier Gerald Groff, who claims that the U.S. Postal Service discriminated against him on religious grounds. Groff, an evangelical Christian, was disciplined for refusing to work on Sundays, when he observes the Sabbath. Lower courts dismissed Groff's lawsuit, arguing that exempting him from Sunday work would place too much hardship on his co-workers and employer. Groff's case centers on Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination based on religion, among other factors. His attorneys are asking the Supreme Court to require companies to show "significant difficulty or expense" before denying a religious accommodation. The case has sparked debate over whether religious people are more deserving than others of weekend days off from work. Unions representing postal workers have urged the justices to consider the hardship that religious accommodations have on co-workers. The case is being closely watched as the Supreme Court, with its 6-3 conservative majority, has a track record of expanding religious rights.

US Supreme Court tackles religious bias claim against Postal Service | Reuters

U.S. News & World Report has delayed the release of its annual law school rankings by a week amid claims that the employment data they used is flawed. The publication gave an early copy of the rankings to schools on April 11th, as is customary, and some of them say they have already identified discrepancies with the data. The rankings are now scheduled to be published on April 25th. This year, U.S. News & World Report said it would give full weight to law graduates in school-funded fellowships and those in graduate program, a change from how employment was previously reported. The ostensible reason those outcomes were not reported as employment on par with a firm or in-house was the degree to which a school could “hire” its own graduates to bolster its numbers. 

Law schools say US News rankings include faulty job data, as release delayed | Reuters

Johnson & Johnson's subsidiary is seeking to pause more than 38,000 lawsuits alleging that its talc products cause cancer, as it takes another attempt at resolving the litigation in bankruptcy. At a hearing in Trenton, New Jersey, LTL Management will argue that the "automatic stay" under bankruptcy law should also protect J&J, which has a market value of over $430 billion and has not filed for bankruptcy itself. Two groups of cancer plaintiffs and the US Department of Justice's bankruptcy watchdog have opposed the company's bid for a stay, arguing that it is a fraudulent attempt to evade the earlier court ruling. Before the talc lawsuits could resume, LTL filed for bankruptcy a second time, re-opening the legal battle over the bankruptcy's legitimacy. J&J has offered $8.9 billion to settle the claims, but has not provided details about how much each claimant would receive from the deal. Some plaintiffs groups have backed the company's new bankruptcy, and J&J says that attorneys who represent 60,000 plaintiffs have agreed to support the current settlement offer. U.S. Bankruptcy Judge Michael Kaplan will now decide whether to stop the lawsuits again to give LTL a second shot at a bankruptcy settlement.

J&J talc unit again seeks to halt 38,000 cancer lawsuits | Reuters

Apple's tax agreement with its hometown of Cupertino, California, has come under scrutiny by state regulators, who likely believe that the agreement is a form of taxpayer-fleecing collusion — and they’d be right. The issue concerns an agreement in which Apple assigns online purchases in California as if they were made within the city limits of Cupertino. This allows Cupertino to benefit from the 1% allocation of the 9.125% sales tax rate for purchases made within the city. Since 1998, Cupertino has handed 35% of that local portion, amounting to $107.7 million, to Apple, which in no doubt is partly prompting California to launch an audit. The state is examining the extent to which the California purchases attributed to Cupertino are legitimately tied to Cupertino. The permissibility of arrangements like these could give rise to bidding wars between municipalities, each vying to offer the most generous kickbacks in exchange for a corporation allocating its state sales to that location, benefiting only the corporation with the deepest pockets. Sales tax is, as it is, regressive and places a larger burden on low-income taxpayers. These agreements preserve that regressivity at the individual level and inject an additional element of regressiveness at the corporate level. Such arrangements distort the distribution of revenue among communities, taking hundreds of millions of already-collected dollars out of potential budgets for projects and putting them directly in the pockets of big corporations. Thus, the California Department of Tax and Fee Administration is right to launch an audit into this particular arrangement as it is pulling already-collected and remitted sales tax, paid by consumers, out of the coffers of the state and local government and putting it directly in the hands of Apple. Big problem. 

Apple’s Agreement With Cupertino Is Taxpayer-Fleecing Collusion



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19 Apr 2023Weds 4/19 - Fox News Settles, FDIC Reimbursement, More Litigation Funding Problems, Law Partner Tax Problems and Whistleblowers at SCOTUS00:05:21

Fox News has reached a $787.5 million defamation settlement with Dominion Voting Systems, following accusations that the network had ruined Dominion’s business by airing claims that its machines were used to rig the 2020 U.S. presidential election in favor of Democrat Joe Biden and against Republican Donald Trump. Fox still faces a $2.7 billion lawsuit from Smartmatic, another voting technology company, over its coverage of debunked election-rigging claims. Smartmatic is seeking damages from Fox and five individuals, including former Trump lawyers and hosts, alleging that they knowingly spread false claims that its software was used to flip votes. While the Dominion settlement is half of the $1.6 billion Dominion sought, it is the largest ever defamation settlement publicly announced by an American media company, according to legal experts. Fox denies the allegations in both cases.

Fox resolves Dominion case, but a bigger election defamation lawsuit looms | Reuters

The Federal Deposit Insurance Corp. (FDIC) has claimed the rights to $2bn that Silicon Valley Bank's former parent company, SVB Financial Group, believes is theirs. The $2bn deposit could provide potential cash recovery for the bankrupt parent company and its bondholders, which are owed $3.3bn, but the FDIC has laid claim to the money to offset claims relating to Silicon Valley Bank that are believed to have cost the FDIC's deposit insurance fund an estimated $20bn. The ensuing litigation could test the FDIC's power over the costs of failed banks. While SVB may get some of the cash back, it is likely to be on the FDIC's timetable. The FDIC has previously been blocked from retrieving nearly $905m against a bankrupt holding company in 2010. A New York bankruptcy judge will have to address whether the FDIC has a valid claim against the bankrupt company and whether the FDIC should be first in line to be paid back.

SVB Parent’s Fight for Seized Deposits Will Test FDIC Authority

Contingency Capital has filed a lawsuit against ACAP Litigation Fund seeking the return of more than $8.8m it says it loaned to the Houston-based Dunken Law Firm, alleging ACAP and Dunken defrauded the company into lending money to the firm to pay off its debts to ACAP. Contingency claims ACAP lied to it that the loan would cover Dunken's debt to ACAP. ACAP allegedly later declared Dunken in default of a new loan that it had agreed not to extend, according to the complaint. Litigation funders are increasingly providing more general loans to lawyers and firms, often used to pay off existing debts, as the popularity of mass torts has grown. Dunken is facing accusations of fraud and breach of contract over its handling of transvaginal mesh and talcum powder cases. The case highlights the risks litigation funders face in any deal, even when they do their due diligence. Further, and as we’ve discussed at length in previous episodes, it highlights the potential pitfalls and working at cross purposes of the entire litigation funding industry. 

Litigation Funders Fight Over Loans to Houston Injury Law Firm

Williams & Connolly law firm partner Robert Shaughnessy and Susan Shaughnessy have agreed to pay nearly $7.3 million to resolve a U.S. civil lawsuit alleging unpaid federal income taxes. The U.S. Justice Department filed the lawsuit against the Shaughnessys in September, seeking unpaid taxes from 2001 to 2006 and other years. Litigation-focused Williams & Connolly, a 300-plus lawyer firm based in D.C., was not named in the lawsuit. Shaughnessy joined Williams & Connolly in 1988 and became a partner in 1996. The settlement was reached after months of negotiations, according to court filings. The Shaughnessys were due to respond to the lawsuit by May 5.

Williams & Connolly law firm partner to settle U.S. tax case for $7.3 mln | Reuters

The US Supreme Court is considering an appeal by three whistleblowers to revive lawsuits accusing pharmacy operators of overbilling government health insurance programs for prescription drugs. The whistleblowers accused Safeway Inc and SuperValu Inc of offering prescription drugs at discounted prices to most customers, while improperly charging higher rates to the government. The litigation was filed under a law called the False Claims Act that lets individuals sue on behalf of the US government when they have evidence of fraud against federal programs. The issue at hand is whether companies can avoid liability for fraud by showing that an "objectively reasonable" reading of the law supported their conduct, regardless of whether they truly believed that interpretation at the time of their alleged wrongdoing. The Chicago-based 7th US Circuit Court of Appeals previously sided with the companies. President Joe Biden's administration backed the whistleblowers, arguing that the 7th Circuit's ruling undermined the False Claims Act. A ruling is due by the end of June.

US Supreme Court weighs key standard in whistleblower fraud cases | Reuters



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20 Apr 2023Thurs 4/20 - Old Dominion pays $500 for employee biometrics, Dominion (not old) Settlement is a win for Attorneys, SCOTUS at the Mall and AI Copyright Issues00:05:01

Old Dominion Freight Line, a transport company facing a federal lawsuit over alleged violations of the Illinois Biometric Information Privacy Act (BIPA), distributed a one-page waiver to its employees to sign voluntarily, releasing the company from the statute’s obligations. This move follows the state Supreme Court’s Cothron v. White Castle decision, which expanded the potential for huge damages awards under BIPA, leaving companies increasingly exposed to BIPA liability risks in Illinois. The release offers employees $500 if they voluntarily agree not to sue the company and its affiliates from all claims under BIPA. The strategy is seen as a legal attempt to mitigate exposure to BIPA liability risks. While Illinois law allows the validity of releases, the exception to the rule is willful or wanton conduct. No case law currently exists on retroactive BIPA exemption waivers, and whether the strategy succeeds is an open question. Privacy lawyers said releases such as the one used by Old Dominion aren’t uncommon and could help reduce BIPA litigation exposure, but some lawyers said the releases may not prevent employees from joining class actions.

Old Dominion’s Biometric Waiver Offers Creative Legal Tactic

Dominion Voting Systems' defamation lawsuit against Fox Corp has ended with a $787.5 million settlement, marking the end of a lucrative two-year legal battle for the large teams of highly-paid lawyers on both sides. At least 31 lawyers from nine different law firms worked on the case. Dominion accused Fox News of broadcasting false claims that the company’s voting machines were involved in a conspiracy to rig the 2020 U.S. presidential election, and won one of the biggest settlements paid in a defamation lawsuit. Law firm Susman Godfrey, one of two firms that represented Dominion in the case, was hired on a contingency, or success-fee, basis. Partners at large corporate law firms like those representing Fox sometimes bill more than $2,000 per hour. Dominion's lead lawyers at Susman Godfrey included partners Justin Nelson, Stephen Shackelford and Davida Brook. Staple Street Capital Group LLC, the small buyout firm that owns Dominion, is also set to receive a major windfall from the settlement.

Lawyers win big in $787.5 million Fox defamation case | Reuters

The US Supreme Court has ruled in favor of the Mall of America outside Minneapolis, allowing it to challenge an inexpensive lease signed with Sears Holdings Corp in 1991, which it claims it should no longer be bound to. The lease provided Sears with a three-story, 120,000-square foot location at the mall for a rent of just $10 a year. The Mall of America has argued that it should be allowed to charge more to rent the space Sears had occupied since it was subsequently sold to a new owner during the department store chain's bankruptcy. The ruling means that MOAC Mall Holdings can proceed with its challenge to the lease in a lower court. Sears filed for bankruptcy in 2018 and its assets were sold for $5.2bn to former chairman Eddie Lampert and his hedge fund ESL Investments.

US Supreme Court allows Mall of America to fight cheap Sears lease | Reuters

AI companies Stability AI, Midjourney, and DeviantArt are asking a San Francisco federal court to dismiss a lawsuit filed by artists Sarah Andersen, Kelly McKernan, and Karla Ortiz in January. The artists accused the companies of committing mass copyright infringement by using their work in generative AI systems without authorization. The companies argue that the AI-generated images are not similar to the artists' work and that the lawsuit did not identify any specific images that were allegedly misused. They also argue that the lawsuit does not identify any work by the plaintiffs that the companies supposedly used as training data.

The legal battle between artists and AI companies highlights the challenges of prosecuting copyright infringement cases involving generative AI systems. As AI algorithms are designed to create new works by training on large data sets, it is difficult to prove that any one image was used to create a specific output. The companies have thus asked a San Francisco federal court to dismiss the proposed class action lawsuit, arguing that the AI-generated images are not substantially similar to the artists' work and that the lawsuit did not identify any specific images that were allegedly misused – but if the underlying technology requires the use of the images, or images like them, in order to create the model that generates the output, is that not infringement? It is unclear. The case underscores the need for greater clarity on the legal implications of AI-generated works and the importance of developing new standards to protect the rights of artists and other content creators in the digital age.

AI companies ask U.S. court to dismiss artists' copyright lawsuit | Reuters



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21 Apr 2023Fri 4/21 - Tesla Autopilot Crash Case, FTC Green Guides, Fox Troubles, Large Magazine Bans are Constitutional and Teen Vape Case00:05:54

Update 4/21 1:42PM: Jury found Tesla Autopilot did not fail in the crash.

A California state court jury is deliberating in what appears to be the first trial related to a crash involving Tesla's Autopilot partially automated driving software. Justine Hsu, a resident of Los Angeles, sued Tesla in 2020, alleging defects in the design of Autopilot and the airbag and seeking more than $3 million in damages for the alleged defects and other claims. Tesla denies liability for the 2019 accident, stating that Hsu used Autopilot on city streets, despite the company's user manual warning against doing so. The trial, which has unfolded in Los Angeles Superior Court over the last three weeks, has featured testimony from three Tesla engineers. The verdict could offer an important sign of the risk facing Tesla as it tests and rolls out its Autopilot and more advanced "Full Self-Driving" system. While the trial's outcome will not be legally binding in other cases, it is considered a test case because it would serve as a bellwether to help Tesla and other plaintiffs' lawyers hone their strategies. Tesla is also under investigation by the U.S. Justice Department and the National Highway Traffic Safety Administration over its claims about self-driving capabilities and the safety of the technology, respectively.

US jury set to decide test case in Tesla Autopilot crash | Reuters

The Federal Trade Commission (FTC) is considering updating its Green Guides, a set of guidelines established in 1992 to help businesses avoid making deceptive environmental marketing claims, with an overhaul having the potential to significantly impact the marketing strategies of companies. The Green Guides are intended to be instructive rather than punitive, however, their influence has spread over the past three decades, with Maine, Minnesota, New York, and Rhode Island using them to define their own laws against fraudulent consumer marketing. The FTC has the authority to take action against companies making deceptive environmental claims and can also issue guidance on whether there should be new mandatory rules, rather than just advisory guidelines. Environmental groups, industries and individuals have all submitted comments since the FTC started the process of updating the guides in December last year. The FTC is hosting a public workshop in May on the subject of what can be called recyclable. The revisions to the Green Guides are expected to give environmental activists and consumers fresh ammunition to bring challenges and lawsuits.

FTC Eyes Revisions to the Guidelines that Shape Green Marketing

Fox Corp. and Rupert Murdoch, along with his son Lachlan and former US House Speaker Paul Ryan, are facing a new lawsuit in Delaware’s Chancery Court. This comes just two days after Fox announced it would pay $787.5 million to end a defamation case over lies it broadcast about the 2020 election. The circumstances suggest that the suit blames the company’s leaders for steering it into a legal disaster. The proposed class action is the first court case seeking to hold Fox accountable since the Dominion settlement was announced, but it appears to echo a shareholder derivative suit filed April 11, just as the defamation trial was getting underway. The earlier complaint focused at length on blockbuster revelations that emerged from the Fox-Dominion case in February. Fox still faces a parallel defamation case brought by Smartmatic USA Corp. Both Dominion and Smartmatic have also sued Newsmax Media Inc. The ongoing cases seek billions in damages, and Dominion recently said it has been “under siege” from threats since the networks devoted airtime to slandering it.

Fox, Murdochs Face New Lawsuit After $788 Million Dominion Deal

A federal court in the District of Columbia has ruled that the district’s large-capacity magazine ban is constitutional, following a preliminary constitutional challenge by gun owners. The ruling by Judge Rudolph Contreras of the US District Court for the District of Columbia found that large-capacity magazines present “unprecedented societal concerns” and are subject to “dramatic technological changes” that warrant a public safety response. Although the plaintiffs argued that large-capacity magazines are “arms” within the meaning of the Second Amendment, the court found that they are not protected by the constitutional provision because they are not used for self-defense purposes. Gun owners had sought a preliminary injunction against the law, but the court’s order denied the request, opening up the possibility of a review by the US Court of Appeals for the DC Circuit. The case is the latest in a series of legal challenges to state gun laws that have followed the US Supreme Court’s recent decision in New York State Rifle & Pistol Association, Inc. v. Bruen, which held that the Second Amendment protects the right to carry guns outside the home.

DC’s Large-Capacity Magazine Ban Constitutional, Court Says (1)

Altria Group, a tobacco giant, is set to face trial on Monday in a lawsuit filed by the San Francisco Unified School District. The lawsuit accuses the company of contributing to a teen vaping epidemic, along with e-cigarette maker Juul Labs Inc. The school district is seeking to force Altria to pay for the cost of tackling the problem, stating that teachers and staff "have had to go to extreme lengths to respond to the ever-growing number of students using e-cigarettes on school grounds." Altria, which held a 35% stake in Juul from 2018 until earlier this year, faces thousands of similar cases from individuals, local government entities, and states. The San Francisco school district's case was chosen by the presiding judge as a bellwether or test case. Juul has since settled the school district's lawsuit and most of the similar claims against it, paying more than $1 billion to 48 states and territories and $1.7 billion to individuals and local government entities.

Altria faces first trial over claims it helped market Juul to teens | Reuters



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24 Apr 2023Mon 4/24 - JPMorgan Handcuffs, AMC in the Chancery, Samsung Loses Big and Competence in the Federal Circuit00:05:57

JPMorgan Chase, the largest financial institution on Wall Street, reportedly requires its workers to give six months' notice before being allowed to leave for another job. A JPMorgan employee posted on the social media platform Blind, which allows career professionals anonymity, that the lengthy notice period may result in a new job offer being rescinded. The worker claims to earn around $400,000 annually in total compensation after accumulating 15 years of experience. The post stated that the worker was amenable to staying through the notice period but was worried that the new employer would rescind the offer and not wait for six months. Last year, workers at JPMorgan's India corporate offices reported that the Wall Street giant was raising its notice period to 60 days for vice presidents and below and 90 days for executive directors. Some financial professionals say that it is common for banks and hedge funds to include noncompete clauses in employees' contracts that prohibit them from being hired by a competitor for up to six months. The purpose of the notice period is believed to be to prevent staffing shortages when employees leave. However, it has been criticized as an example of an outdated "handcuff" policy that runs against the trend towards worker empowerment. 

And it may do more than just run against current trends. We have reported in the past on the FTC’s increasing attention given to things like non-compete agreements and other employment contract provisions that tend towards the more employee-restrictive end of the management–labor spectrum. Will the FTC be putting JPMorgan in its crosshairs next? We’ll see!

JPMorgan’s Six-Month Notice Rule Is an Old School ‘Handcuff’

JPMorgan Chase ‘requires its tech workers give 6 months’ notice before they quit’

AMC Entertainment Holdings Inc. will appear in Delaware's Court of Chancery on Tuesday to face shareholders and a pension fund challenging the movie theater operator's attempts to convert its preferred equity units into common stock. A hearing for AMC Entertainment Holdings Inc. previously scheduled for Thursday was canceled, with a new one set for Tuesday, where Vice Chancellor Morgan Zurn will discuss "settlement scheduling and logistics." The proposed deal would let AMC move forward with its controversial conversion plan after two months of fast-tracked litigation. The preferred equity units (APE) are fractional units of preferred shares issued in a special dividend to retail investors who previously bailed out the company, but shareholders argue that the vote approving the deal wasn't conducted fairly and sidelines retail investors.

Terminally online folks will remember, in early 2021, a group of retail investors on the social media platform Reddit, specifically on the subreddit r/wallstreetbets, organized a buying spree of shares in the struggling movie theater chain AMC Entertainment (AMC). The group coordinated their purchases through online brokerage platforms such as Robinhood, causing a surge in the stock's price. The phenomenon, dubbed the "Reddit rally" or "meme stock" frenzy, garnered widespread media attention and attracted more investors to join in the buying frenzy. The buying spree caused AMC's stock price to soar, rising by over 2,500% at one point. 

This Week in Chancery Court: AMC’s Stock Conversion Fight

Samsung has been ordered to pay more than $303 million to computer-memory firm Netlist by a Texas federal jury for infringing several patents related to data processing. The court determined that Samsung's “memory modules” for high-performance computing infringed all five patents that Netlist had accused Samsung of violating. Netlist had asked for $404 million in damages. Netlist claimed that Samsung took its patented module technology after the two companies had collaborated on another project. Representatives for the companies have not immediately commented on the verdict.

Netlist Inc has claimed that Samsung's memory products specifically used in cloud-computing servers and other data-intensive technology infringe upon the aforementioned. Netlist argues that its technology increases the power efficiency of memory modules and allows users to get useful information from vast amounts of data in a shorter time. However, Samsung countered this by stating that its technology works differently and merely achieves the same result and that, additionally, Netlist's patents are invalid. Allegations have also been made that other companies, including Google and SK Hynix, have violated Netlist's patented technologies related to the handshaking mechanism of various memory chips such as those used in enterprise cloud computing servers. Following the jury's verdict awarding more than $303 million to Netlist, the company's stocks rose by 21%.

Samsung hit with $303 million jury verdict in computer-memory patent lawsuit | Reuters

In an update to the Federal Circuit judge competency story – Judge Pauline Newman, the Federal Circuit's oldest and longest-serving judge, is seeking to have her chief judge's complaint about her fitness to remain on the bench moved to a different circuit. The New Civil Liberties Alliance, which represents Newman, has filed a letter requesting the transfer to a potentially more neutral venue. The internal court battle has raised issues about the process for addressing a judge's alleged physical and mental impairments and lifetime judicial appointments. The complaint was initiated by Chief Judge Kimberly Moore under the Judicial Conduct and Disability Act, questioning Newman's physical and mental ability to remain an active judge. Newman and the NCLA intend to contest the allegations. The group has also asked that Newman be immediately restored to her full capacity as a Federal Circuit judge. 

Judge Newman Seeks to Move Fitness Complaint From Fed. Cir. (1)



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25 Apr 2023Tues 4/25 - Apple win over Epic, Coinbase has an ask of the SEC, TripAdvisor is Nevada-bound, and Trump Trial 2.000:06:59

Apple has won its antitrust appeals court battle with Epic Games over its App Store policies, according to the opinion issued by the U.S. Ninth Circuit Court of Appeals. The court largely upheld the district court’s earlier ruling in favor of Apple, which restricted app distribution on iOS devices to the App Store, requiring payments to go through its own processor while preventing developers from communicating to customers about alternative ways to pay. However, the court also upheld the lower court’s judgment in favor of Epic under California’s Unfair Competition Law. The ruling is a major setback for Epic Games and other developers who hoped the ruling could set precedent for further antitrust claims and require Apple to open iOS devices to third-party app stores and payment systems. Apple has issued a statement reaffirming its position, while Epic Games CEO Tim Sweeney stated that the court’s positive decision rejecting Apple’s anti-steering provisions frees iOS developers to send consumers to the web to do business with them directly there. Apple has not yet issued an appeal for the latter part of the decision.

Apple wins antitrust court battle with Epic Games, appeals court rules | TechCrunch

Coinbase Global has filed a petition in the US Court of Appeals for the Third Circuit to push the Securities and Exchange Commission (SEC) to create new rules for digital assets. The cryptocurrency exchange filed a petition for rulemaking with the SEC last year, which urged the regulator to provide clarity on the circumstances under which a digital asset is a security and create a new market structure framework that is compatible with cryptocurrencies. However, the SEC has not responded publicly to that petition, which led to Coinbase filing the legal challenge. The crypto industry largely believes it operates in a regulatory gray area not governed by existing US securities laws and that new legislation is needed to regulate the sector. SEC Chair Gary Gensler has said cryptocurrency firms should comply with existing laws and that new crypto-specific regulations are not necessary. Coinbase disclosed in March the firm had been told that SEC staff intended to recommend enforcement action against the company. The company said in a blog post at the time that it was willing to fight any forthcoming enforcement action in court.

Coinbase files legal challenge to push SEC to write rules on crypto | Reuters

TripAdvisor is facing a lawsuit in Delaware over its decision to move its incorporation from Delaware to Nevada. Shareholder firms Bernstein Litowitz Berger & Grossmann, Block & Leviton and Friedman Oster & Tejtel are seeking an injunction to block the move, claiming it is designed to take advantage of Nevada’s “no liability regime”, making it harder for shareholders to hold directors responsible for breaches of their duties. Both TripAdvisor and its parent, Liberty TripAdvisor Holdings, disclosed the plans earlier this month, stating that re-incorporating in Nevada will save money on legal fees, fend off unmeritorious shareholder litigation and allow the companies to attract directors who might have been dissuaded by the expense of defending shareholder claims. The shareholder firms claim that other shareholders have been frozen out of the decision-making process and argue that the move will strip shareholders of their right to sue without offering them any compensation. The companies' filings acknowledge that board members and executives may be in conflict with shareholders over the conversion to Nevada incorporation. Shareholder lawyers argue that fiduciaries of a Delaware corporation cannot use their control over the corporation to force the company and minority investors to give up all of Delaware law’s protections.

In new TripAdvisor suit, Delaware lawyers deride Nevada’s ‘no-liability regime’ | Reuters

The Federal Deposit Insurance Corp. (FDIC) and Securities and Exchange Commission (SEC) are currently unable to retract executive pay from Silicon Valley Bank and Signature Bank leaders using their existing powers, which have no clear consequences for the banks’ managers. A measure (S. 1045) has been introduced to update the Dodd-Frank clawback provisions, which Congress passed to help hold executives accountable for company problems. Creating clawback rules for failures like the Silicon Valley Bank and Signature Bank collapses is much easier now than it would have been before their demises. The SEC still needs the stock exchanges to incorporate the regulations into their listing standards for companies. The rules only require executives to return their bonuses if their awards were based on errors in their companies’ financial statements. Neither bank made an accounting mistake large enough to require a formal correction, or restatement, of their financials, according to research firm Audit Analytics. While the SEC’s authority to reclaim executives’ pay applies to all public companies, the FDIC only has power over banks. It can, however, claw back executive compensation, but only through a never-before-used regulatory process created by Dodd-Frank or a lengthy investigation after a bank fails. The FDIC confirmed it has begun an investigation into SVB and Signature Bank.

Failed Bank Execs Dodge Pay Clawbacks as Tougher Remedies Sought

Former U.S. President Donald Trump is set to face trial in Manhattan federal court on Tuesday, April 25, where writer E. Jean Carroll has accused him in a civil lawsuit of raping her in the mid-1990s. Jury selection is expected to begin, and Carroll is also accusing Trump of defamation. Trump, who has denied the rape allegations, may not appear in court, and Carroll's lawyers have said they do not plan to call him as a witness. The trial, which could last up to two weeks, will be kept anonymous from the public to protect jurors from potential harassment by Trump supporters. Trump also faces a series of lawsuits and investigations, including Manhattan District Attorney Alvin Bragg's criminal charges over hush money payments to a porn star, civil fraud charges by New York Attorney General Letitia James into his namesake company, and criminal probes into interference in Georgia's 2020 presidential race and into classified government documents recovered at his Mar-a-Lago residence, plus inquiries into his role in the Jan. 6, 2021, attack on the U.S. Capitol. Carroll's witness list includes two other women who have accused Trump of sexual misconduct, and lawyers for Carroll could use their testimony to establish a pattern of Trump's alleged mistreatment of women.

Donald Trump goes to trial, accused of rape, article with image



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26 Apr 2023Weds 4/26 - SCOTUS Seized Home Case, ChatPWC, 6th Circuit Likes Bump Stocks, EU Doesn't Like MS Activision Buy, MSG Doesn't Pay Property Tax00:06:22

The US Supreme Court will consider whether Hennepin County's seizure of a woman's Minneapolis condo over unpaid taxes contravened her constitutional rights. Geraldine Tyler had moved out of her home to a senior community when she ran up a tax bill of around $15,000. The county sold the property for $40,000 but refused to give Tyler the surplus. She argues that the action amounts to a Fifth Amendment taking without just compensation or an excessive fine under the Eighth Amendment. Supporters of Tyler have filed 25 amicus briefs supporting her argument. If the county loses, it could have implications for small businesses and lending.

US Supreme Court mulls legality of a state's property tax 'windfall'

Seized Home Sold for Profit Set for Supreme Court Consideration

PwC US, one of the Big Four accounting firms, will invest $1 billion over the next three years to expand the use of AI by its tax accountants, auditors, and consultants. PwC will partner with Microsoft to provide its 65,000 employees with the AI tools to reduce busywork, improve quality of outcomes, and shorten their workday. PwC already uses Microsoft’s Azure OpenAI Service for clients in the healthcare, insurance, and aviation industries. The firm plans to use AI across all its business lines, including tax and audit, to speed up the process of sifting through financial data and to assist in spotting anomalies or outliers. Additionally, AI tools could help accountants and advisers to write first drafts of position papers and memos. The $1 billion investment is an attempt to stay ahead of competitors such as KPMG, which recently announced incorporating AI technology into its global audit platform through a collaboration with MindBridge Analytics Inc.

PwC Stakes $1 Billion on AI Investments in Tax, Consulting Work

The $69 billion takeover of Activision Blizzard by Microsoft has been blocked by the UK antitrust watchdog, the Competition and Markets Authority (CMA). The CMA said that its concerns could not be solved by remedies such as the sale of blockbuster title Call of Duty or other solutions involving promises to permit rivals to offer the game on their platforms. Microsoft has said that it will appeal the decision. The CMA's conclusions come before decisions from the European Union and the US Federal Trade Commission, which is waiting for a hearing in the summer. The deal would have been one of the 30 biggest acquisitions of all time. If it is eventually blocked, Microsoft could be on the hook for a break-up fee of up to $3 billion. Activision shares tumbled more than 10% in pre-market trading, while Microsoft rose 7.4%. The CMA took the view that the merger could result in higher prices, fewer choices, and less innovation for UK gamers. Microsoft had been fighting the regulatory battle in the UK and Europe, with full-page advertisements in British newspapers and press conferences in Brussels to try to influence sentiment on the deal.

Microsoft’s $69 Billion Activision Deal Blocked by UK (2)

Madison Square Garden in Manhattan has not paid property taxes since 1982, which is a cause for concern given the immense public funds invested in the facility. The tax exemption stems from a deal made with former Mayor Ed Koch to prevent teams from fleeing to New Jersey. The total tax expenditure for the exemption is over $875 million, with an ongoing annual cost of $43 million, according to the Independent Budget Office. Taxing the arena like other neighboring businesses would fund New York City's electric vehicle charging station initiatives in about four years, and one year's property tax revenue would fully fund the city's program to improve criminal case processing. However, teams that receive tax breaks frequently threaten to leave cities for better deals elsewhere, which makes cities reluctant to hold them accountable. While these venues purportedly provide benefits like job creation, studies show they may be net fiscal negatives for surrounding communities. The future of ensuring that venues pay their fair share lies in national initiatives such as the No Tax Subsidies for Stadiums Act of 2022, which aimed to eliminate tax-exemption status for bonds used to finance sports stadiums.

Madison Square Garden’s Tax Exemption Is a Disservice to NYC

The Sixth Circuit has ruled that bump stocks, a device that can be attached to a semi-automatic rifle to make it function like a machine gun, cannot be regulated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) under the Gun Control Act. The opinion was based on the rule of lenity, a criminal law doctrine that construes ambiguous statutes in favor of the defendant. The court noted that the ATF didn't adopt a rule treating bump stocks as a machine gun part that could be regulated until after the deadly shooting in Las Vegas in 2018, where the shooter used a rifle with a bump stock to kill 58 people. The ruling creates a circuit split, with the Tenth and D.C. circuits saying that bump stocks can be regulated, while the Fifth Circuit disagrees. Although courts generally defer to an agency's interpretation of a law they enforce, the court said that deference wasn't appropriate here. The court therefore applied the rule of lenity, which says criminal statutes must be construed strictly. Judge John K. Bush concurred in the judgment but said that it's up to Congress, not ATF, to change the law.

Bump Stock Machine Gun Regulation Struck Down by Sixth Circuit



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27 Apr 2023Thurs 4/27 - Disney v. DeSantis, OSHA In Trouble, ERA Vote, MS still wants Activision, AI in the Law and CJOTUS declines invite to be ethical.00:07:13

Disney has filed a lawsuit against Florida Governor Ron DeSantis alleging that he has been using the government's power to damage the company amid a prolonged dispute over a contentious classroom bill. The complaint claims that DeSantis orchestrated a campaign to penalize Disney, which now threatens the corporation's business. This escalates the lengthy fight between DeSantis, who is expected to be a top Republican contender in the 2024 presidential race, and Disney, one of Florida's biggest employers. Disney opposed a Florida bill that restricted classroom discussion of sexual orientation or gender identity, and DeSantis and his allies subsequently aimed at the specific tax district that has allowed Disney to largely govern its Florida operations since the 1960s. On the same day the board of supervisors, which DeSantis picked to assume control over Disney's Orlando-area parks, filed the lawsuit, it moved to overturn a development agreement that it claims Disney made to thwart its authority. The suit claims that this action was the "newest strike" and that the development contracts "laid the foundation for billions of Disney's investment dollars and thousands of jobs." Disney is asking the court to declare the legislative move illegal and unenforceable. DeSantis' office responded by suggesting that the fight was about Disney's unique tax and governance privileges, not political retribution.

For more on the DeSantis-Disney debacle, check out the soon-to-be-recorded latest episode of Esquiring Minds. My co-host, Jacob Schumer, is the expert on the subject and we’ll be delving in to all things Disney when we record this evening. The episode should be up late tonight, or early tomorrow morning.  

Disney sues Florida Gov. Ron DeSantis, alleges political effort to hurt its business

A hearing in the US Court of Appeals for the Sixth Circuit could determine the legality of hundreds of OSHA workplace safety requirements. The case, brought by Allstates Refractory Contractors LLC of Waterville, Ohio, challenges the authority of the Occupational Safety and Health Administration to decide which safety hazards require regulation and what protections should be implemented. If the court rules against OSHA, it could strike down safety regulations dating back 50 years, covering hazards such as falls and electrocution. OSHA argues that over 50 years of court decisions support its safety rule-making powers, and that it is limited to issuing standards that are economically and technologically feasible. If OSHA standards were to be cancelled, state laws, workers’ compensation, industry consensus standards, and fear of lawsuits may fill the regulatory gap. Judges Deborah Cook and Richard Allen Griffin, both appointed by President George W. Bush, and John Nalbandian, appointed by President Donald Trump, will hear the case.

Legality of OSHA Safety Rules Challenged in Federal Appeals Case

The U.S. Senate is set to vote on Thursday on a measure that could allow the Equal Rights Amendment (ERA) to be added to the Constitution, but it is likely to fail due to Republican opposition. The amendment, first proposed in 1923 and passed by Congress in 1972, would entitle women to equal pay and secure their rights in legal matters. Virginia became the 38th state to adopt the amendment in 2020, and a resolution now before the Senate would remove the deadline so that the amendment could go into effect. Proponents argue that the ERA is crucial at a time when women's rights are under threat, while opponents claim it could lead to making abortion rights constitutional and force women into military service. Regardless of the vote outcome, the ERA will face legal challenges, as some states that initially ratified it later rejected it – which is a perfect microcosm of the current state of toxic political discourse.

US Senate to vote on Equal Rights Amendment, a century after introduction | Reuters

Microsoft's president, Brad Smith, criticized the UK's Competition and Markets Authority (CMA) for blocking its acquisition of Activision Blizzard, saying it had shaken confidence in Britain as a destination for tech businesses. The CMA, which operates independently from the government, blocked the deal on Wednesday, saying it could hit competition in the nascent cloud gaming market. Smith said the decision sent the wrong message to the global tech industry about the UK and that if the government wants to bring in investment and create jobs, it needs to look hard at the role of the CMA, the regulatory structure in the UK, this transaction, and the message that the UK has just said to the world. However, a spokesman for the UK Prime Minister, Rishi Sunak, said Smith's comments were "not borne out by the facts". Microsoft said it would appeal the decision with "aggressive" support from Activision. Appeals against CMA rulings are heard by the Competition Appeals Tribunal.

Microsoft hits back at UK after Activision acquisition blocked | Reuters

Legal AI startup Harvey has raised $21 million in fresh investor cash led by Sequoia Capital in a Series A fundraising round. Harvey, built on OpenAI's GPT-4, builds custom large language models for law firms. Several major firms have signed deals to adopt new AI products, such as Casetext's AI legal assistant product, CoCounsel, which uses GPT-4 to speed up legal research, contract analysis, and document review. Even early adopters of AI are cautious and highlight the need for testing and guardrails to protect confidential client data and avoid errors.

As the use of AI in the legal space continues to grow, concerns around privacy and accountability are becoming increasingly relevant. The use of large language models and generative AI tools can potentially lead to the mishandling or exposure of confidential client information, which could have severe legal and reputational consequences for law firms. Additionally, AI systems can introduce bias into decision-making processes, perpetuating existing inequalities and injustices. This isn’t just hypothetical, there are real world examples of this occurring, as in the Dutch AI tax case. There, AI was scapegoated as the cause of a disproportionate number of ethnic minorities being denied benefits and charged with fraud. The reality wasn’t that the AI was racist, but the lawmakers that employed it were. It is crucial for policymakers and even law firms as well as AI developers to establish clear guidelines and protocols for the ethical and responsible use of these tools, including regular audits and risk assessments to ensure compliance with legal and regulatory frameworks.

Legal AI race draws more investors as law firms line up | Reuters

The Chief Justice of the U.S. Supreme Court, John Roberts, has declined an invitation to testify at an upcoming Senate Judiciary Committee hearing focusing on judicial ethics. The committee's chairman, Senator Dick Durbin, had asked Roberts to appear before the panel to address potential reforms to ethics rules governing the justices, citing a "steady stream of revelations" regarding justices falling short of ethical standards. Roberts declined the invitation, saying that such appearances by chief justices were rare due to concerns about the separation of powers between the three branches of the U.S. government.

Supreme Court's Roberts declines to appear at Senate Judiciary hearing | Reuters



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28 Apr 2023Fri 4/28 - OH Prisoner Sues for Train Derailment, Voting Restrictions Upheld in FL, Child Labor in AL, and Mike Pence Sings for a Grand Jury00:04:33

An Ohio prisoner, Joshua Turner, has filed a lawsuit against Norfolk Southern over his alleged exposure to chemicals from the February derailment of a freight train operated by the company in East Palestine, Ohio. The lawsuit claims that his rights under the 8th Amendment of the U.S. Constitution were violated, seeking compensation for health concerns, including respiratory issues and skin rashes. Norfolk Southern has not commented on active litigation, including the proposed class action lawsuits filed by residents and businesses living near the crash site. The company's CEO has committed to addressing the impacts of the derailment.

Prisoner sues Norfolk Southern over East Palestine train crash | Reuters

A federal appeals court has upheld several voting restrictions in Florida that had been challenged by civil rights groups. The laws, signed by Governor Ron DeSantis in 2021, limit the use of ballot drop boxes, ban third-party organizations from collecting voter registration forms, and prevent people from engaging with voters in line. A lower court judge had previously found the laws to be racially discriminatory, but the appeals court disagreed, ruling that there was no evidence that lawmakers deliberately targeted Black voters. The appeals court also threw out the requirement for the state to seek court approval for changes to the provisions.

U.S. appeals court upholds Florida voting law that judge found discriminatory | Reuters

New data from the American Bar Association shows that the University of Virginia School of Law had the highest percentage of 2022 juris doctor graduates who secured permanent, full-time jobs requiring bar passage. More than 95% of the law school's 2022 graduates were employed in legal jobs, surpassing Columbia Law School, which held the top spot for 2021 law graduates. Seven public universities, including the University of Kansas School of Law and the University of Minnesota Law School, were among the 20 schools with the highest percentage of 2022 graduates in permanent, full-time jobs that require bar passage.

These law schools aced the job market in 2022 | Reuters

Hyundai, the third-largest US automaker, is under investigation by the US Department of Labor for the use of child labor in its supply chain. The investigation follows a raid on a Hyundai Glovis warehouse in Montgomery, Alabama, which uncovered the use of a fake ID to allow a 16-year-old worker to be employed. The boy, a migrant from Mexico, had allegedly been hired by three local staffing agencies, who have each paid fines of $5,050 for violating child labor laws. The investigation is part of a wider probe into child labor within Hyundai's supply chain, which began after Reuters first reported on the issue last July.

Special Report: How a fake ID let Hyundai suppliers use child labor in Alabama | Reuters

Former Vice President Mike Pence has testified for over five hours before a federal grand jury investigating the aftermath of the 2020 election and the actions of then-President Donald Trump and others. This marks a momentous occasion as it is the first time a vice president has been compelled to testify about the president he served beside. Pence was compelled to recount conversations he had with Trump about blocking the election result, including on the morning of January 6, when Trump unsuccessfully pressured him to do so on a private phone call. The testimony came as Pence explores a possible challenge to Trump for the Republican presidential nomination in 2024, and it will likely elicit a strong negative reaction from his former boss. The grand jury proceedings are secret, and neither a spokesman for special counsel Jack Smith's office nor a spokesman for Pence commented on the matter.

Former Vice President Pence testifies to federal grand jury investigating Donald Trump and January 6

Pence testifies before federal grand jury investigating Trump's role in Jan. 6

Pence Testifies Before Jan. 6 Grand Jury in Blow to Trump - Bloomberg

And finally, as I mentioned in yesterday’s show, we recorded a Disney-centric, mostly, episode of Esquiring Minds last night. Its up and available in your podcast player of choice. Jacob Schumer, my co-host, along with Jason Ramsland, do a much better job than I ever could laying out what is going on in Florida and what can be expected moving forward. Check it out, if you’re interested, and if you find the banter between two highly knowledgeable attorneys and me interesting – consider subscribing. Its free, and worth it. 



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30 Apr 2023MaxMin - The Equal Rights Amendment (ERA)00:04:27

This week we’re looking at the Equal Rights Amendment (ERA), which just died in the Senate when, on Thursday, Senate Republicans blocked a measure that would have allowed it to be added to the Constitution. Senators voted 51 to 47 to invoke cloture on a motion to proceed, falling short of the 60 votes it needed. For those unaware, the way a motion to invoke cloture works is after cloture is invoked, the Senate automatically proceeds to consider the measure on which cloture was invoked. In other words “yeah, yeah, yeah, let’s put this to a vote.” 

Sens. Lisa Murkowski (Alaska) and Susan Collins (Maine) were the lone Republicans to vote with every Democrat. The Senate resolution would have removed the deadline so that the ERA could become the 28th Amendment. Understanding why the removal of the deadline is important requires a quick overview of the history of the ERA.

And so, from the top. 

The ERA is  a proposed amendment to the United States Constitution that seeks to guarantee equal rights for all citizens regardless of sex. The amendment was first introduced in Congress in 1923 and has been reintroduced in every session of Congress since then.

The idea of an amendment to guarantee equal rights for women was first proposed by suffragist Alice Paul in 1921. She drafted the first version of the ERA, which read, "Men and women shall have equal rights throughout the United States and every place subject to its jurisdiction."

The ERA was introduced in Congress the following year, but it failed to gain traction. It wasn't until the women's rights movement gained momentum in the 1960s and 1970s, nearly a half-century later, that the ERA gained widespread support.

In 1972, the ERA was passed by Congress and sent to the states for ratification. The amendment stated, in relevant part:

"SEC. 1. Equality of rights under the law shall not be denied or abridged by the United States or by any State on account of sex.

SEC. 2. The Congress shall have the power to enforce, by appropriate legislation, the provisions of this article.

SEC. 3. This amendment shall take effect two years after the date of ratification."

The ratification process required approval from three-fourths of the states, or 38 states. Within a year, 30 states had ratified the amendment, and it seemed poised to become part of the Constitution.

However, opposition to the ERA began to grow. Conservative groups, along with purpose-driven interest groups, argued that the amendment would erode traditional gender roles and family values. Some claimed that the ERA would lead to women being drafted into the military and losing their right to alimony and child support. Scare tactics and the usual “ah ah ah, be careful what you wish for” line of argumentation whenever notions of gender equality are discussed, in other words. 

These arguments resonated with many Americans, and the ERA quickly became a divisive issue. In 1978, Congress extended the deadline for ratification to 1982, but the amendment still fell short of the required 38 states. By the end of the deadline, only 35 states had ratified the ERA. Supporters of the amendment continued to push for ratification, but it remained in limbo for decades.

In recent years, there has been renewed interest in the ERA. In 2017, Nevada became the 36th state to ratify the amendment, and Illinois followed suit in 2018. By 2020, Virginia became the 38th state to ratify the ERA, but it obviously did so after the last 1982 deadline to ratify the amendment had long passed. Further muddying the issue, in the intervening years several states — including Nebraska, Tennessee, Idaho, Kentucky and South Dakota — attempted to remove their prior approval. 

Thus, opponents and even the Department of Justice have argued that the deadline for ratification has passed and that the ERA cannot be added to the Constitution. In 2020, a federal judge ruled that the deadline was indeed expired. Advocates for the ERA have continued pushing for it to be added to the Constitution through other means.

Two methods are available for proposing amendments to the Constitution, as outlined in Article V. Congress may propose amendments by passing a joint resolution with a two-thirds vote, which was what was attempted here. Alternatively, a convention may be called by Congress in response to applications from two-thirds of the state legislatures. 

That has never happened and is unlikely to happen any time soon. So the current state of play in 2023 in the United States is that an amendment to the constitution restricting equality of rights under the law from being abridged on the basis of sex is a political non-starter. 



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01 May 2023Mon 5/1 - Exit First Republic, Enter JPMorgan, Energizer and Walmart Battery Antitrust, DeSantis vs. Prosecutor, Alito Knows Leaker and Trump Wants Mistrial 00:05:17

JPMorgan Chase & Co has agreed to acquire First Republic Bank in a government-led deal after it was seized by regulators. The transaction will see the acquisition of around $173bn of First Republic’s loans, $30bn of securities and $92bn in deposits. The deal makes JPMorgan even larger, and critics have said it will likely lead to consolidation in the financial industry. The transaction is expected to generate more than $500m of incremental net income a year.

JPMorgan's acquisition will increase its size, which goes against the government's efforts to prevent further consolidation in the financial industry. Due to US regulatory restrictions, JPMorgan would not be able to expand its deposit base under normal circumstances. The acquisition will result in a one-time gain of $2.6 billion for JPMorgan, but it will also make a payment of $10.6 billion to the FDIC and incur $2 billion in related restructuring costs over the next 18 months.

Functionally, First Republic Bank’s 84 offices in eight states will reopen as branches of JPMorgan Chase Bank, National Association, today during normal business hours.  All depositors of First Republic Bank will become depositors of JPMorgan Chase Bank and will have full access to all of their deposits.

JPMorgan First Republic Deal Ends Second-Biggest US Bank Failure

Energizer and Walmart are facing three proposed class actions accusing them of conspiring to raise disposable battery prices by inflating wholesale prices for other retailers and requiring those retailers not to undercut Walmart on price. Energizer had been trying to recover sales lost in 2013 when Walmart ended its exclusive battery contract with the retailer's Sam's Club unit. The lawsuits seek unspecified compensatory and triple damages under federal and state antitrust laws and various state consumer protection laws. They also seek injunctions to block Energizer from tying battery sales to pricing and require Energizer and Walmart to "dissipate" the effects of their anticompetitive conduct.

Energizer, Walmart sued for conspiring to raise battery prices | Reuters

Florida Governor Ron DeSantis' legal battle with suspended state attorney Andrew Warren, who refused to enforce anti-abortion laws, highlights the increasing scrutiny against prosecutors over cases they decline to bring. Warren's lawsuit against DeSantis argues the Republican governor violated his First Amendment rights by suspending him for political speech and related conduct. The lawsuit is set for oral arguments before the US Court of Appeals for the Eleventh Circuit on May 2. Similar tensions between prosecutors and state officials are playing out across the country, driven by a range of issues beyond just abortion restrictions.

DeSantis, Suspended Prosecutor Spotlight Bigger Discretion Fight

Justice Samuel Alito has said he believes he knows who leaked his draft opinion last year, which indicated the Supreme Court would roll back abortion rights, but lacks the proof to name them. Alito stated that the leaker was part of a campaign to intimidate the court and prevent the Dobbs draft from becoming the decision of the court. In January, following an investigation, the Supreme Court was unable to conclusively identify who leaked the unpublished draft. The leak had caused protests, and Alito had claimed that it endangered the lives of justices by putting a target on their backs.

Alito says he has ‘pretty good idea’ who leaked abortion draft

Three whistleblowers who exposed a $1 billion insurance fraud and helped secure a settlement in a bankruptcy court are not entitled to any of that money, according to a Securities and Exchange Commission (SEC) decision being challenged in two federal lawsuits. Although the whistleblowers worked with the SEC for years and provided information that “significantly contributed” to the successful sanctioning of a Texas viatical company, the money was recovered through a bankruptcy proceeding. Therefore, according to the law, the whistleblowers cannot be paid, the commission ruled. One of the whistleblowers, John Barr, was the SEC’s lead witness in court when it successfully petitioned a federal court judge to install the agency’s own choice to become bankruptcy trustee. There was actually a House bill in 2021 that would have permitted bankruptcy recoveries, but it died without being brought to the floor. 

Whistleblowers Who Exposed $1 Billion Fraud Denied SEC Windfall

Former US President Donald Trump has requested a mistrial in a civil case where writer E. Jean Carroll has accused him of rape and defamation. Trump's lawyer accused US District Judge Lewis Kaplan of being biased against him and of making "unfair and prejudicial" rulings. Carroll's defamation claim concerns an October 2022 post on Trump's Truth Social platform, where Trump called Carroll's case a "complete con job" and "a Hoax and a lie." If the mistrial is not granted, Trump's lawyer has requested that Kaplan correct the record and give him more freedom to cross-examine Carroll and her witnesses.

Donald Trump requests mistrial in rape accuser Carroll's civil case | Reuters



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02 May 2023Tues 5/2 - SCOTUS Ethics Panel, Gilead Sued by US Gov't in Patent Suit, Column Tuesday on "Cashports," and JPMorgan J. Epstein Trouble00:05:12

A Senate panel is set to hold a hearing on Tuesday to scrutinize ethics concerns relating to US Supreme Court justices, following revelations about luxury trips and real estate transactions involving members of the nation's top judicial body. None of the nine justices will appear at the hearing, but lawyers and academics versed in the subject will provide testimony. The news outlet ProPublica has detailed ties between conservative Justice Clarence Thomas and wealthy Republican donor Harlan Crow, including real estate purchases and luxury travel paid for by the Dallas businessman. Additionally, Jane Roberts, the wife of Chief Justice John Roberts, reportedly earned over $10 million in commissions as a legal recruiter from 2007 to 2014, including from law firms that had cases before the Supreme Court. A whistleblower complaint from her former colleague argues that Roberts' commissions were largely due to her husband's role and should be subject to oversight. The complaint also alleges that John Roberts submitted financial disclosure documents identifying his wife's income as "salary" rather than commission, which the colleague argued is misleading. Again, none of the nine justices will appear at the hearing. 

Senate panel to examine US Supreme Court ethics as questions swirl | Reuters

Chief Justice John Roberts’ Wife Made Over $10 Million As Legal Consultant, Report Says

Gilead Sciences is facing a trial in Delaware federal court as the US government seeks more than $1 billion from the company for allegedly failing to compensate the Centers for Disease Control and Prevention (CDC) for discovering that Gilead's HIV-treatment drug Truvada could help prevent the disease. The government claims that the patents it received for HIV prevention drug regimens cover Gilead's pre-exposure prophylaxis (PrEP) drug regimen for lowering HIV infection risk. Gilead denies the allegations and argues the patents are invalid. The trial marks one of the first times the US government has sued a drug maker to enforce its patent rights.

Gilead, US square off in billion-dollar HIV drug patent trial | Reuters

My column this week discusses the use of "cashports," also known as "citizenship by investment" programs, that allow wealthy individuals to purchase citizenship, typically in countries that offer tax anonymity. I’m coining the term “cashport,” so I need the help of all the Minimum Competence listeners to make sure it really takes the world by storm. These programs, such as those offered by St. Kitts and Nevis, allow individuals to avoid paying taxes in their home countries and to hide their financial dealings. I argue that this practice is not only detrimental to tax revenues but also facilitates organized crime and terrorism. I call for greater transparency and for imposing penalties on individuals who use these programs to evade taxes. Additionally, I suggest curtailing financial access to tax havens and imposing restrictions on transfers to and from these countries.

One recent individual in the news making use of a cashport is The latest example of a billionaire keeping his money offshore is Harlan Crow. We’ve learned much about Crow over the past few weeks—as a friend and benefactor of Justice Clarence Thomas, a collector of Hitlerania and garden gnome versions of history’s greatest monsters, and a holder of a “cashport” to St. Kitts and Nevis. His use of offshore banks will likely obfuscate his financial dealings sufficiently that, barring a confession, the extent to which his largesse was used for Clarence Thomas will never be known.

Golden Visas Let People Like Harlan Crow Keep Too Much Hidden

JPMorgan Chase & Co, new owners of First Republic Bank, and Deutsche Bank AG could be held liable for Jeffrey Epstein's sexual abuse if former executive Jes Staley had first-hand knowledge of the financier's sex-trafficking venture, according to a US judge. Judge Jed Rakoff said that if Epstein's accusers can prove that Staley knew about the venture, they could show that JPMorgan "actually knew" or "recklessly disregarded" its existence. The decision concerns two lawsuits against the banks by Epstein's accusers, and a lawsuit against JPMorgan by the US Virgin Islands. All of the lawsuits are scheduled for trial this year.

Judge says JPMorgan could be liable for Epstein sex trafficking if Staley knew about it | Reuters



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03 May 2023Weds 5/3 - Chevron in the Crosshairs, Third Circuit Filing Deadline, Lewis Brisbois Mass Exodus, Ford Wins, and Insider Trading NFTs00:04:55

The Chevron doctrine is a legal principle that has been in place since a Supreme Court decision in 1984. It states, in sum, that when Congress passes a law that is unclear or ambiguous, the courts should defer to the interpretation of that law made by the relevant federal agency responsible for administering it. The doctrine has been used in countless cases and has provided support for agencies to make decisions on complex issues without explicit instructions from Congress. 

Now, the US Supreme Court has agreed to review the Chevron doctrine. The doctrine has been criticized by conservatives as fuelling government overreach. The case taken up by the Supreme Court, Loper Bright v. Raimondo, centers on the requirement by the National Marine Fisheries Service that certain vessels fishing for herring off the Atlantic coast must hire monitors for conservation and management purposes. The challenge is being mounted by four New Jersey fishing companies, who want the rule invalidated and Chevron pared back. Conservative groups are organizing against the doctrine, with the case described as a “textbook example of the conservative legal movement ‘manufacturing’ a case”.

Supreme Court’s Chevron Review Caps Years-Long Conservative Push

The US Court of Appeals for the Third Circuit has adopted a new filing deadline of 5 p.m., effective from July 1, despite opposition from a group of 43 appellate lawyers who stated that the new deadline was "undesirable and counterproductive." The deadline change applies to documents filed after the initiation of a proceeding in the court but not to documents initiating an appeal or other proceedings. The court said the move was aimed at improving work-life balance and avoiding late-night filings that deprive opponents of hours to consider and formulate responses. The new rule ends a practice by some of intentional late-night filings.

Third Circuit Adopts Early Filing Deadline Despite Dissent (1)

At least 125 lawyers from Lewis Brisbois Bisgaard & Smith are leaving the firm to join a new offshoot boutique, Barber Ranen, which has been launched by former leaders of its employment practice. Barber Ranen's founders, John Barber and Jeff Ranen, said they were yearning for an opportunity to build something on their own. The majority of the departures are California-based labor and employment attorneys. The mass exodus roughly halves the size of the firm’s employment group, which had about 200 attorneys nationally.

100-Plus Lewis Brisbois Lawyers Exit for New Employment Firm (1)

A federal judge in Detroit has reversed a jury verdict that ordered Ford Motor Co to pay Versata Software $104.6m for breaching a licensing contract and misappropriating trade secrets. The judge said Versata had offered sufficient evidence of a contract breach, but not enough to let jurors calculate damages accurately. The jury had no basis to determine how long Ford would have needed to develop three trade secrets it allegedly stole, so the damages award was voided. The judge ordered Ford to pay Versata $3 for breach of contract. The $104.6 million award was about 85% of what Versata had sought. $3 is … less. 

Ford wins reversal of $105 million trade-secrets verdict | Reuters

The trial of Nathaniel Chastain, a former product manager at OpenSea, the world's largest NFT marketplace, began with jury deliberations. He is accused of making more than $50,000 in illegal profits by buying NFTs before featuring them on OpenSea's website, and then selling them when their value rose. Prosecutors have charged him with one count of wire fraud and one count of money laundering, alleging that he traded on inside information to profit. This case is the first insider trading case in digital assets, and its outcome could have broad implications for assets that don't fit into existing regulations. Legal experts said the case could affect investment advisers, brokers, and others trading on material nonpublic information. Chastain's attorney argued that the trades did not break OpenSea's rules and that the case was about whether Chastain intended to defraud OpenSea.

Jury starts deliberating in ex-OpenSea manager's NFT insider trading case | Reuters



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04 May 2023Thurs 5/4 - SEC Real Time Hedge Fund Reporting, Indictment for Wire Fraud Ring, Starbucks Union Problems, Goldman Sued Relating to SVB, and more00:07:30

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The US Securities and Exchange Commission (SEC) has approved a new rule that requires hedge funds to share significant investment losses with regulators in near real-time. This marks a significant shift for an industry that is known for its secrecy and is expected to create more administrative work for businesses. Previously, funds have had to report positions in quarterly public filings. The SEC has announced amendments that require large hedge fund advisers and private equity fund advisers to file current reports in the event of certain reporting events that could indicate significant stress or investor harm. 

Large hedge fund advisers must file reports within 72 hours of events such as extraordinary investment losses, significant margin and default events, and terminations or material restrictions of prime broker relationships. 

Private equity fund advisers must file reports on a quarterly basis within 60 days of the fiscal quarter end for events such as the removal of a general partner or certain fund termination events. Large private equity fund advisers must also report information on clawbacks and provide additional information on their strategies and borrowings on an annual basis. 

The rule is part of a campaign by SEC Chair Gary Gensler to scrutinize private investments funds and to get a handle on swift-moving events that may pose systemic risks. Industry groups have expressed concerns that the requirement to quickly report major events will pose its operational challenges and may result in even shorter deadlines. However, some have applauded the SEC’s move. The final rule also requires large firms with at least $2 billion in assets under management to provide more data about their strategies, use of leverage, and a general partner’s performance compensation. Separately, the SEC approved changes to increase the data that public companies must disclose about their stock buyback programs.

Big Hedge Funds Face New 72-Hour Deadline to Report Losses (3)

SEC Adopts Amendments to Enhance Private Fund Reporting

A federal grand jury in Los Angeles has indicted 14 defendants for their participation in a years-long scheme to steal millions of dollars from American consumers’ bank accounts. The indictment alleges that the defendants were members and associates of a racketeering enterprise that unlawfully debited money from the bank accounts of unknowing U.S. consumer-victims. The enterprise obtained identifying and banking information for victims and created shell entities that claimed to offer products or services, such as cloud storage. The enterprise then executed unauthorized debits against victims’ bank accounts, which it falsely represented to banks were authorized by the victims. To conceal and continue conducting unauthorized debits, the enterprise’s shell entities also generated “micro debits” against other bank accounts controlled and funded by or for the enterprise. Co-conspirator Harold Sobel was previously convicted for his role in the scheme and sentenced to 42 months in prison.

The indictment charges the defendants with racketeering conspiracy and wire fraud, and they face a maximum penalty of 20 years in prison for racketeering conspiracy and, if applicable, 30 years in prison for each count of wire fraud. The Department of Justice urges the regular checking of bank, credit card, and other financial statements and contacting financial institutions if an unrecognized charge is seen, as well as reporting any fraudulent debits identified to law enforcement. The USPIS is investigating the case, and the Consumer Protection Branch, in conjunction with the USPIS, is pursuing wrongdoers who disguise the unlawful nature of business activities by, among other methods, artificially lowering financial account return rates. 

Network of Transnational Fraudsters Indicted for Racketeering in Scheme to Steal Millions from American Consumers’ Bank Accounts | OPA | Department of Justice

Starbucks is set to appear in front of a US appeals court in Cincinnati, Ohio to argue that a lower court was wrong to reinstate seven employees who had been fired for leading union organizing efforts at a Memphis café. The company's lawyers are expected to say that the Memphis workers were fired for breaching safety policies rather than for anti-union reasons. Starbucks has previously denied accusations of union busting and claims that it offers competitive wages, benefits and rights under federal labor law. The case in Memphis is one of many disputes arising from a nationwide union campaign at the company. More than 540 complaints have been filed with the labor board, accusing the firm of illegal labor practices. Starbucks is also appealing a February ruling that ordered it to cease and desist from disciplining or firing employees at a café in Ann Arbor, Michigan. The company has been union-free for decades but almost 300 Starbucks cafés in the US have unionized since late 2021.

Starbucks pushes appeal in Memphis union case; US labor tactics scrutinized | Reuters

Goldman Sachs has been named as a defendant in a securities class action lawsuit related to SVB Financial Group's share offerings in 2021 and 2022. The lawsuit alleges that the offer documents contained material misstatements and omissions. The complaint asserts claims under the federal securities laws and seeks compensatory damages in unspecified amounts. The lawsuit was filed on April 7 in the U.S. District Court for the Northern District of California. On March 17, SVB Financial Group filed for a court-supervised reorganization under Chapter 11 bankruptcy protection to seek buyers for its assets, days after its former unit Silicon Valley Bank was taken over by U.S. regulators. The loss on the portfolio was the reason SVB, a technology-focused lender which did business as Silicon Valley Bank, attempted a $2.25 billion stock sale earlier that month using Goldman Sachs as an adviser. Financial stocks have lost billions of dollars in value in the aftermath of the collapse of Silicon Valley Bank and Signature Bank and saw nervous depositors flee to larger 'too-big-to-fail' institutions with their capital.

Goldman Sachs named as defendant in SVB-related class action lawsuit | Reuters

Speaking of SVB…

Federal Reserve Chair Jerome Powell criticized the leadership of Silicon Valley Bank (SVB) and blamed poor management for the bank's collapse, which he described as an isolated instance caused by poor judgment. SVB, a bank popular with technology startups and venture capitalists, collapsed earlier this month after failing to raise cash, which led to panicked depositors withdrawing their funds. Powell stated that the bank grew too quickly, exposed itself to significant liquidity risk and interest rate risk, and didn't hedge that risk. The bank's collapse is the second-largest bank failure in U.S. history. Powell declined to elaborate on his view of what went wrong at SVB or address whether Fed regulators could have prevented the bank's failure. Powell assured investors and ordinary bank customers that SVB's problems were unusual and don't reflect systemic problems with the country's banks. Many Americans have qualms about banks, with nearly two-thirds of Democrats and half of Republicans saying they want more regulation of the finance industry, according to a new AP-NORC poll. SVB and Signature Bank had lobbied for Congress to loosen bank regulations five years ago, shielding midsize lenders, including SVB, from annual Fed "stress tests" to gauge their health and other government oversight. Shareholders in SVB have filed a class-action lawsuit against its parent company, CEO Greg Becker, and Chief Financial Officer Daniel Beck, alleging that the company failed to disclose the risk that rising interest rates could disrupt its business.

Silicon Valley Bank leaders "failed badly," Fed Chair Jerome Powell says - CBS News



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05 May 2023Fri 5/5 - SCOTUS looks at Whistleblower Protections, KPMG Under Scrutiny for SVB etc., Lewis Brisbois Founder is Out and Seditious Conspiracy Guilty Boys 00:05:57

The US Supreme Court is set to clarify the burden-shifting framework for whistleblowers in a case involving a former UBS Securities research strategist. The case hinges on whether the Sarbanes-Oxley Act requires whistleblowers to show that their former employer fired them with retaliatory intent or if it is sufficient to prove that the protected disclosure was a contributing factor to the decision. Requiring proof of retaliatory intent would make it almost impossible for whistleblowers to pursue Sarbanes-Oxley retaliation claims, and the Supreme Court is expected to undercut the legal safeguards for corporate whistleblowers if it upholds the decision. The Tenth, Ninth, Fifth, and Fourth circuits instead have applied the contributing factor test. The decision could have a domino effect on anti-retaliation protections for corporate whistleblowers in other industries. The case could also impact federal whistleblower protection statutes that have virtually identical legal burdens, and there are concerns that the decision could reduce the number of whistleblower cases that otherwise would’ve survived the summary judgment stage or resulted in a verdict after trial.

UBS Whistleblower Case Creates Avenue to Upend Retaliation Test

Senators Richard Blumenthal and Ron Johnson are investigating KPMG's relationship with three recently failed banks, requesting a wide range of documents as part of their initial inquiry. The senators have requested "all communications," records related to the firm's audits and advisory work, and a complete list of all advisory work between KPMG and Silicon Valley Bank, Signature Bank, and First Republic Bank. The inquiry comes as part of the Homeland Security and Governmental Affairs Committee's Permanent Subcommittee on Investigations. KPMG has faced scrutiny for issuing clean audits of all three banks shortly before they collapsed. The senators have also asked KPMG for "all documentation" detailing the firm's policies and practices for any non-audit services, as well as "a complete list" of the firm's employees, contractors, and subcontractors employed by any of the banks after their affiliation with KPMG. They have requested the firm to send the documents as they become available to expedite the subcommittee's review. KPMG has not yet provided a comment on the investigation.

Big Minimum Competence fans will remember this was a subject I covered in a past column and corresponding Column Tuesday segment. I argued on April 4th that the recent collapses of Silicon Valley Bank, Signature Bank, and the near miss at First Republic Bank, all point to the culpability of the Big Four accounting firms that had signed off on the banks' financial statements. I metaphorized the legal concept in torts called res ipsa loquitur, which means "the thing speaks for itself" in Latin, and suggested that something is amiss in the audit opinions provided by KPMG on these banks' fundamentals. The revolving door of personnel between accounting firms and the banks they purport to audit is also part of the problem. Banks with high average deposits and relatively few depositors are especially at risk, as they may be vulnerable to losing their deposit base if there are potential risks in their books. My conclusion was there needs to be liability placed on the accounting firm tasked with acting on behalf of a regulator when that organization fails to identify indicia of questionable financial health. Moreover, consultants who work for accounting firms should not wear auditor hats. It seems there may be some political will to make one or both of those solutions a reality. 

Senators Open Probe Into KPMG’s Relationships With Failed Banks

Big Four Auditors and Consultants Need Liability—And a Divorce

And remember when we reported on Lewis Brisbois having a 100+ attorney walk-out? Well, the founding partner the firm, Robert Lewis, has stepped down from his role as chairman after the departure of at least 110 lawyers to a new firm this week. Lewis helped start the Los Angeles-founded firm in 1979, which has grown to around 1,700 lawyers. Lewis Brisbois will dissolve its executive committee effective immediately, and a newly expanded 13-member management committee will oversee the firm. The firm will hold elections on May 9 to add five new members to the management committee, which will then name a managing partner and other top leaders.

Lewis Brisbois chair, executive committee are out after lawyer exodus | Reuters

Four members of the Proud Boys far-right militia group, including its former leader Enrique Tarrio, have been convicted of seditious conspiracy, which is kind of like treason’s little brother and entails a plot to oppose the government with force, under a Civil War-era law. The conviction carries a sentence of up to 20 years in prison. The jury found they had plotted to attack the US Capitol on Jan. 6, 2021, in a failed bid to block Congress from certifying President Joe Biden's election victory. The verdicts after a trial lasting nearly four months in federal court in Washington were another victory for the US Justice Department, which Attorney General Merrick Garland said has secured the convictions of more than 600 people related to the Capitol rampage by supporters of then-President Donald Trump. The rampage occurred on the day when Congress was voting on formally certifying Biden's victory in the November 2020 election, with rioters attacking police with a variety of weapons. Five people including a police officer died during or shortly after the riot. More than 140 police officers were injured.

Jury convicts Proud Boys members of seditious conspiracy in US Capitol attack | Reuters



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06 May 2023MaxMin - What was Chevron Deference?00:06:11

Update 7/10/24: This piece has been updated to reflect the overturning of Chevron under Loper.

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Chevron deference was a crucial principle in administrative law which was established after a landmark Supreme Court case, Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 468 U.S. 837 (1984).

In 1977, the Clean Air Act was amended by Congress to address the issue of states that had not met the air quality standards set by the Environmental Protection Agency (EPA).

These states, known as 'non-attainment' States, were required to create a permit program that would regulate major stationary sources of air pollution that were either new or modified.

During the Carter administration, the EPA defined a source as any device in a manufacturing plant that produced pollution. However, when Ronald Reagan became president, Anne M. Gorsuch, who was the head of the EPA, adopted a new definition that permitted existing plants to obtain permits for new equipment that didn't meet the standards as long as the total emissions from the plant didn't increase.

This was challenged in court by the Natural Resources Defense Council (NRDC), which argued that this regulation was unlawful. The federal court ruled in favor of the NRDC, and the company Chevron, who was affected by this decision, appealed the court's ruling.

The issue on appeal was the standard of review that should be applied by a court to a government agency’s reading of a statute that it is tasked with administering. The Supreme Court upheld the EPA’s interpretation and created a two-part analysis, known as the “Chevron two-step test:”

First, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. If, however, the court determines Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction on the statute . . . Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency's answer is based on a permissible construction of the statute.

— Chevron U.S.A. v. NRDC, 467 U.S. 837, 842-43 (1984).

The Chevron deference refers to the judicial principle of deferring to administrative actions in a situation where Congress has not spoken directly to the question at issue. The Supreme Court set out a legal test in the Chevron case for when a court should defer to an agency's interpretation or answer, stating that judicial deference is appropriate if the agency's response is not unreasonable and, as aforementioned, Congress has not directly spoken to the issue at hand.

The Chevron deference doctrine or just “Chevron deference” was limited to cases where a legislative delegation to an administrative agency on a particular issue is implicit rather than explicit. In such situations, a court could not substitute its own interpretation of the statute for a reasonable interpretation made by the administrative agency. When a statute is silent or unclear on a specific issue, the question for the court is whether the agency's action was based on a permissible construction of the statute.

For Chevron deference to apply, the agency interpretation in question must be issued by the agency charged with administering the statute – that’s an important part, it is not deference to the administrative state generally but deference to the proper agency. Additionally, the implicit delegation of authority to an administrative agency to interpret a statute does not extend to the agency's interpretation of its own jurisdiction under that statute. In other words, Chevron deference is not given to an agency with regards to its interpretation of whether or not it is the proper agency to be interpreting the given statute. 

Ultimately, to receive Chevron deference, an agency's interpretation of an ambiguous statute had to be reasonable or rational. The court may consider the age of the administrative interpretation and congressional action or inaction in response to it when determining its reasonableness. If Congress was aware of the interpretation when it acted or refrained from action, and the interpretation is not inconsistent with the statute's clear language, it may be considered reasonable. Put another way, a given interpretation may be determined to be de facto reasonable owing to Congress’ action following that interpretation – acting or failing to act to countermand the agency interpretation. 

The scope of Chevron deference had been narrowed in subsequent cases, even before being reversed in Loper Bright, and only agency interpretations reached through formal proceedings with the force of law, such as adjudications or notice-and-comment rulemaking, are eligible for Chevron deference. Interpretations contained in opinion letters, policy statements, agency manuals, or other formats that do not carry the force of law are not entitled to Chevron deference. In such cases, the court would still give persuasive weight to the agency's interpretation under the "Skidmore deference" analysis, but this treatment is slightly less deferential than the Chevron deference.

Okay, so why is this in the news? Well, as you may have heard the case Loper Bright Enterprises v. Raimondo overturned Chevron. We’re left in a bit of an in-between period now, and no one is quite sure if Skidmore controls, or Loper Bright stands for an entirely new proposition.

Regardless, expect to see a lot of administrative actions challenged in court in the coming weeks and months.



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08 May 2023Mon 5/8 - Law Firm Financials Up, Jan 6 Rioter Gets 14 Years, Ron vs. Mickey, Clarence vs. Ethics, Door Hardware Antitrust and More Starbucks Labor 00:06:15

It appears law firm financials are heading in a positive direction. The Thomson Reuters Institute's Law Firm Financial Index rose 14 points in the first quarter of 2023, marking the first increase since Q2 2021. The index found that billing rate growth remained healthy, up almost 6% over the past year, and law firm direct expenses grew more slowly in Q1. Practices such as litigation and labor and employment saw increased demand in Q1 compared with the previous quarter. However, the index also noted a decline in profits-per-lawyer and lawyer productivity over the past 12 months. The report found a divergence between the largest and midsize law firms, with midsize firms seeing an increase in demand and headcount growth but also an increase in direct expenses. In contrast, Am Law 100 firms saw direct expense growth kept to less than 5% but experienced a decline in demand for their services.

Law firm financials heading in the right direction, report finds | Reuters

Peter J. Schwartz, a Pennsylvania man, has been sentenced to 14 years in prison for assaulting police officers with pepper spray outside the U.S. Capitol during the January 6 riot. Schwartz, who was convicted last December, was found to have been at the forefront of the mob that attacked police at the lower west terrace of the Capitol. He boasted later that he had "started a riot" by "throwing the first chair". Prosecutors said Schwartz seized a police duffle bag full of pepper-spray canisters and handed them out to others in the mob, including his wife, so they could turn them against police officers. Schwartz was found guilty on four counts of assault with a dangerous weapon and six other charges, including obstructing an official proceeding and entering a restricted building with a dangerous weapon. His 170-month prison term surpasses the previous longest sentence yet handed down in a case related to the Jan. 6 attack. At least 950 people have been charged and more than 600 convicted for their roles in the Capitol rampage.

Man who pepper-sprayed police gets 14 years in longest Jan. 6-related sentence | Reuters

Florida Governor Ron DeSantis has signed a bill that grants a new board he controls the authority to void development agreements its predecessor signed with Walt Disney. The bill passed the Republican-controlled legislature largely along party lines. The Central Tourism Oversight District Board, whose members are appointed by DeSantis, can cancel any deals signed up to three months before the board's creation. The move comes after Disney and DeSantis have been in a feud since last year when Disney criticised a new state law banning classroom instruction of sexuality and gender identity with younger children. I anticipate this will be a topic of discussion on Esquiring Minds later this week, so don’t forget to jump over to there if you’re interested in hearing an actual expert, Jacob Schumer, discuss the latest news on the Disney–DeSantis brouhaha. 

DeSantis signs bill allowing Florida board to cancel Disney deals | Reuters

The governance arm of the federal judiciary is being called upon to investigate Supreme Court Justice Clarence Thomas again following recent reports on his undisclosed financial ties to Texas billionaire Harlan Crow. The move has brought the judiciary’s process for enforcing financial reporting rules under scrutiny, with long-running concerns that it is inadequate for such matters. A red flag had previously been raised about the handling of public allegations of wrongdoing against Thomas over a decade ago, sparking internal process changes. US District Judge Mark Wolf raised concerns in 2012 that the Judicial Conference of the United States was being kept in the dark and shut out from reviewing complaints against Thomas. Wolf’s objections led to changes in the process that should now formally notify the conference of complaints against Thomas and how they’re handled. This latest controversy, like the one in 2011, has caused a national debate about how the judiciary enforces ethics rules and the Supreme Court’s lack of a binding code of conduct.

Justice Thomas Ethics Review Questioned by US Court Leader in 2012

The US Justice Department has reached a settlement on antitrust concerns surrounding Swedish lockmaker Assa Abloy's $4.3bn purchase of Spectrum Brands' Hardware and Home Improvement unit, allowing the deal to proceed. The Justice Department had sued to block the acquisition in September 2022, arguing that it would limit competition in the residential door hardware industry and raise prices. The settlement requires Assa Abloy to divest some of its brands to Fortune Brands Innovations, which will acquire Emtek, Schaub, Yale and August brands from Assa Abloy. The deal still needs to be approved by a judge. Spectrum Brands' CEO David Maura said the agreement was a "critical milestone toward putting HHI [Spectrum's hardware unit] in the hands of Assa Abloy".

DOJ Settles Antitrust Case, Clearing Way for Assa Abloy Deal - WSJ

A National Labor Relations Board judge has ruled that Starbucks Corp. broke US labor laws when it fired five union activists who appeared in a news report filmed inside a closed store in Memphis, Tennessee. Starbucks terminated the workers in February 2022, alleging that their meeting with the news crew had taken place without the company's approval. But prosecutors alleged that the firings had been motivated by retaliation against workers' attempts to form a union. The judge also found that the coffee giant had committed other unfair labor practices in the Memphis store, including the temporary closure of the site to frustrate a union demonstration. However, the judge found that the termination of two of the workers was lawful. The company said that it was evaluating the decision. Exceptions must be filed by June 1.

Starbucks Illegally Fired Union Activists, NLRB Judge Rules (2)



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09 May 2023Tues 5/9 - Senate Wants Crow, PWC Aus. CEO Steps Down, SBF Wants Case Dropped, Goldman Loses, Twitter Wins, and Column Tuesday00:06:51

Democratic members of the Senate Judiciary Committee have requested billionaire Republican donor Harlan Crow to provide a detailed account of any gifts or payments made to Supreme Court Justice Clarence Thomas and his family. The request comes as a battle over the high court's ethics intensifies. The senators asked the Texas real estate magnate to disclose any items of value, pointing out that many disclosed in recent news reports had not been disclosed by Thomas. The request includes an itemized list of any items of value exceeding $415 given by Crow or entities he owns or controls to any of the nine Supreme Court justices or any real estate transactions that benefit them. The letter marks a turning point as Democrats who control the chamber and who have subpoena powers try to hold to account a high court that has shown no interest in adopting a code of ethics. ProPublica, a nonprofit investigative news organization, reported last month that Thomas failed to disclose luxurious trips including travel on private planes and to resorts over two decades, all paid for by Crow. Crow also bought three Georgia properties, including the home where Thomas's mother resides, from the justice and his relatives, and paid private school tuition for a Thomas grandnephew. Thomas has denied any wrongdoing in accepting travel from Crow, and has said he sought ethics guidance from colleagues and others in the judiciary early in his 32-year tenure on the Supreme Court. Congressional Democrats have pushed for a new ethics code despite steep resistance from Republicans. The Supreme Court is not subject to the same ethics rules applied to other federal judges.

Senate Democrats Ask Crow to Detail His Gifts to Justice Thomas

The CEO of PricewaterhouseCoopers (PwC) Australia, Tom Seymour, has resigned following a scandal involving leaked confidential government tax plans. A former partner of the company was reportedly banned by the country's tax practitioners board for sharing the details with other staff at the firm. The revelations have drawn strong criticism from the Australian government, with Treasurer Jim Chalmers describing it as a "shocking breach of trust". PwC Australia received A$537m ($364m) in federal government contracts during the past two years, according to reports. The firm named its assurance leader, Kristin Stubbins, as acting CEO while it searches for a replacement.

PWC Australia CEO Steps Down Amid Tax Info Leak Scandal (3)

PwC Australia CEO steps down after tax documents leak scandal | Reuters

Sam Bankman-Fried, the former CEO of FTX cryptocurrency exchange, has urged a US judge to dismiss 10 of the 13 criminal charges against him. Bankman-Fried's lawyers argued that prosecutors had charged him in haste after the collapse of FTX during the cryptocurrency market crash in 2022. They added that FTX was not the only cryptocurrency company to have collapsed and that civil and regulatory processes should have been allowed to run their course before charges were brought. Bankman-Fried faces charges of fraud and conspiracy, and is accused of stealing from customers of FTX, buying real estate and making illegal political contributions. His lawyers have asked the judge to order prosecutors to turn over any documents in FTX's possession that could help the defense.

Indicted FTX founder Bankman-Fried urges court to toss charges | Reuters

Goldman Sachs will pay $215 million to settle a class-action lawsuit accusing the Wall Street bank of gender discrimination against female employees in pay and promotions. The lawsuit, brought by former employees, alleged that Goldman Sachs systematically paid women less than men and gave them weaker performance reviews. The settlement covers around 2,800 female associates and vice presidents employed in the investment banking, investment management, and securities divisions of the bank. As part of the settlement, Goldman Sachs will also hire independent experts to conduct additional analysis on performance evaluation and gender pay gaps.

Goldman Sachs to pay $215 mln to settle gender discrimination lawsuit | Reuters

Twitter has won two lawsuits related to mass layoffs but plaintiffs have been allowed to amend their claims. In one case, the plaintiffs accused the company of discrimination against women in layoffs after the acquisition of the firm by Elon Musk. However, a judge found the suit was "devoid of basic information" and said comments made by Musk prior to the acquisition were irrelevant. In a separate case, a judge dismissed claims that Twitter had discriminated against disabled workers by requiring them to work at the office following layoffs in November. That little blue bird lives to see another day. 

Twitter beats two lawsuits stemming from mass layoffs, for now | Reuters

In today’s column I discuss the realities that the US financial sector is overbanked, leading to fierce competition among smaller institutions to find competitive advantages. I argue this can lead to risky endeavors, such as catering to tax evaders, as it has in the past. The IRS plans to devote more than half of its $80 billion funding injection to enforcement efforts directed towards "taxpayers with complex tax filings and high-dollar noncompliance" and "certain international issues." Adding to that priority list the pursuit of tax shelters will pay dividends later, and a failure to act will lead to magnitudes greater issues. Banks who cater to tax evaders present a threat to the stability of their local market and the global economy. By example, UBS, which has a history of tax evasion and is set to acquire Credit Suisse, is now deemed "too big to fail," and any enforcement efforts against ongoing tax evasion will need to be handled with care. However, for smaller banks – those, by extension “small enough to fail” – tax evasion must be stamped out by leveraging existing laws such as the Foreign Account Tax Compliance Act, and where necessary, seeking out additional statutory authority, for smaller domestic banks and foreign financial institutions. The causal arrows point in both directions between a financial institution courting tax evaders and the said institution's health taking a turn for the worse. My suggestion? Chase down institutions that facilitate fraud and prevent their growth to a degree that their collapse stemming from an enforcement action is tantamount to a global collapse. In other words, act sooner rather than later – big novel idea, right?

Catering to Tax Evaders Is a Poor Prescription for Bank Health



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10 May 2023Weds 5/10 - Apple Loses, Crow Says No, Santos in Trouble, Gilead Prevails, Powell in Ethics Hot Water and Trump Held to Account00:06:07

Apple has lost its lawsuit against Corellium, a company that provides virtual iOS devices for security research purposes. The court ruled that the use of Corellium’s CORSEC simulator falls under copyright law’s fair use doctrine. This means that third-party virtual iOS devices are allowed and Apple cannot stop it. The ruling allows security researchers to run virtual desktops and OSs for research purposes. Concerns have been raised that developers may use Corellium’s security-focused VMs to try out apps without having to acquire the related hardware. Apple tried to acquire Corellium in 2018, but was obviously unsuccessful.

Apple just lost its lawsuit trying to ban iOS virtual machines | TechRadar

Texas billionaire and GOP donor Harlan Crow has refused a request from Senate Finance Committee Chairman Ron Wyden to detail the extent and tax treatment of luxury gifts he provided to Supreme Court Justice Clarence Thomas. Crow's attorney argued that the inquiry "appears to be a component of a broader campaign against Justice Thomas and, now, Mr. Crow, rather than an investigation that furthers a valid legislative purpose." Democrats who control the Senate are ramping up inquiries into the relationship between Crow and Thomas and his wife, conservative activist Ginni Thomas, following reports that Thomas never reported luxury trips and other gifts funded by Crow. ProPublica also reported last week that Crow paid tuition at two private schools for Thomas's grandnephew in the late 2000s. Wyden said he is "disappointed but unsurprised" by Crow's refusal to comply and will be talking with other lawmakers on the committee about using "any tools at our disposal" to compel a response. Republicans are pushing back on Democrats' efforts, including their call for a high-court code of ethics similar to one that applies to all other federal judges.

Harlan Crow Refuses Senate Request in Justice Thomas Inquiry

Republican Representative George Santos, who was elected to a district in New York City and Long Island in 2022, is facing federal criminal charges over possible campaign finance violations. The charges could be unsealed as early as today and the case could be prosecuted out of the Eastern District’s central office in Islip on Long Island. Santos has previously rejected calls to resign after it was revealed that he fabricated much of what he had claimed about his education and career. During the campaign, he claimed to have worked for Goldman Sachs and Citigroup, graduated from Baruch College in New York, played on a championship volleyball team and that he was Jewish, but none of those things were true. Santos was part of a Republican wave that picked up House seats in New York State during the 2022 midterm elections. With Republicans holding the House by just five seats, Santos’s vote is a critical part of House Speaker Kevin McCarthy’s hold on power. McCarthy said he would ask Santos to resign if he's found guilty.

George Santos Faces Criminal Charges by US Justice Department

A quick follow-up to an earlier story wherein we covered a rare suit by the US government to enforce a patent against Gilead Sciences.

Gilead Sciences has won a lawsuit brought by the US government over patents for its HIV-prevention regimens using Truvada and Descovy. The Delaware jury found the government's patents were invalid and not infringed following a five-day trial and a morning of deliberations. The US government had argued that Gilead failed to compensate the US Centers for Disease Control and Prevention for discovering that Truvada, first approved to treat HIV, could also help prevent infection by the virus. Gilead reported worldwide sales of more than $2 billion last year from Truvada and Descovy.

Gilead Sciences prevails in US government lawsuit over HIV drug patents | Reuters

Sidney Powell, a former lawyer for Donald Trump, is facing a professional misconduct complaint in Michigan over a failed bid to challenge the 2020 US presidential election results. Powell and other lawyers filed a lawsuit in November 2020 claiming that widespread voter fraud undermined the legitimacy of President Joe Biden’s win over Trump. The Michigan Attorney Grievance Commission filed the case on Friday, claiming the plaintiffs’ lawyers brought a “frivolous lawsuit” and engaged in “conduct that is prejudicial to the administration of justice”. Powell and Wood did not immediately respond to messages seeking comment. Giuliani, Eastman and Wood are among other lawyers in Trump’s orbit facing attorney misconduct claims related to election-related litigation.

Trump ally Sidney Powell, others face misconduct case in Michigan | Reuters

Former President Donald Trump has been found liable for sexually assaulting writer E. Jean Carroll and defaming her by calling her a liar. This is the first verdict against him in a string of legal cases that threaten to erupt during the 2024 presidential campaign. The panel of six men and three women returned the verdict after deliberating on the civil lawsuit for less than three hours. Carroll had accused Trump of attacking her in the dressing room of a Fifth Avenue department store in the 1990s and then harming her reputation by saying she made it up when she went public with her account in 2019. He must pay her $5 million in damages, $3 million of it for defamation. The trial renewed attention on Trump’s fraught history with women, and anyone who thinks women shouldn’t be abused, as he embarks on another run for the White House.  Despite the relatively high-profile trial, recent polls show Trump as the clear front-runner for the GOP presidential nomination. Trump’s attorney Tacopina said Trump would appeal Tuesday’s verdict and seek to reduce the damages. Because it was a civil rather than criminal case, and because the wealthy and powerful are rarely actually held to account, Trump was never at risk of imprisonment over Carroll’s allegations. 

Trump Liable for Sex Abuse, Must Pay $5 Million to Carroll (2)



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11 May 2023Thurs 5/11 - USNWR Ranking, Biden Admin's Pollution Plan is Lackluster, Santos is Going Nowhere, Florida Targets Teachers (Again) and Phoenix Suns Broadcaster BK00:06:41

U.S. News & World Report has released its new law school rankings after a boycott by nearly one-third of law schools and a three-week delay due to data problems. Changes in the methodology of the publication led to notable shifts among elite law schools and significant movement among many schools further down on the list. The changes increased the weight of employment outcomes and bar passage rates and reduced the weight of Law School Admission Test scores and undergraduate grade-point averages. U.S. News defended its rankings as vital sources of information for prospective students. The final rankings show Stanford Law School and Yale Law School tied at the No. 1 spot, with the University of Chicago School of Law holding steady at No. 3. The year’s rankings shakeup was most apparent outside the elite schools, with 62 law schools seeing their ranks increase or decrease by double digits this year compared with 27 schools last year. Duquesne University Thomas R. Kline School of Law saw the single largest increase, moving up 40 spots to No. 89, and Florida International University College of Law was next with an increase of 38 spots to land No. 60.

Revamped US News law school rankings yield major shifts | Reuters

The Biden administration's plan to cut carbon dioxide emissions from power plants aims to require the nation's coal plants and the largest gas-fired units to cut nearly all of their emissions. However, the proposed limits would apply to less than 20% of US natural gas-based power generation capacity, and utilities would have over a decade to comply with greenhouse gas caps. Some industry groups are warning the plan could force power plants to adopt costly technologies that aren't economically or technically feasible, while environmental advocates say it doesn't go far enough, and too many gas-fired plants are exempt. The EPA proposal, which aims to be finalized in 2024, would inevitably face legal and political challenges. Some Republican attorneys general who successfully battled an earlier Obama-administration plan in court are expected to mount similar challenges. The foundation of the plan is the EPA's determination that for many power plants, the "best system of emission reduction" is carbon capture technology, which is barely in commercial use at the sites today. Coal power plants could keep operating through 2040, as long as they substituted natural gas for 40% of their fuel. The EPA predicts that the industry's demand for natural gas would fall 36.8% during the same time frame. The plan would increase electricity prices by 0.24% in 2035, while unlocking up to $85 billion in climate and public health benefits through 2042. The requirements would keep as much as 617 million metric tons of carbon dioxide out of the atmosphere through 2042, according to the government's projections.

Biden’s Plan to Cut Climate Pollution Spares Most Gas Plants

New York Congressman George Santos will continue serving despite facing criminal fraud and money laundering charges. There is no law or rule stopping him from staying in Congress. Santos entered a plea of not guilty to all 13 counts in the indictment against him. If he is found guilty, Speaker Kevin McCarthy has indicated he would ask him to resign, but don’t count on it. Any member of the House can offer a privileged resolution to expel a colleague, but in the past, lawmakers have waited until after their accused colleagues had their day in court. Santos has introduced 11 bills and cosponsored 82. He has filed paperwork to raise money for a re-election bid, and his campaign raised just $5,333 in this year’s first quarter. If he quits, there would be a special election if there’s a vacancy before July 1, 2024, and Governor Kathy Hochul would call it. New York’s 3rd Congressional District backed President Joe Biden in the 2020 election by 8 percentage points.

George Santos Will Stay in Congress and No Rule Stops Him (2)

Florida Governor Ron DeSantis and teachers' unions are in a legal dispute over a new law that places certain restrictions on teachers' unions. Before the law, unions could collect dues directly from teacher paychecks, but now that is prohibited. The Florida Education Association believes the law violates their First Amendment rights, while DeSantis argues it is in the best interest of teachers. The law also requires unions to notify teachers of membership costs, prohibits unions from using government resources to deduct union dues directly from employee paychecks, and requires unions be made up of at least 60% of eligible employees who pay dues. If they can't hit the new benchmark, unions would have to be recertified as bargaining agents. The FEA says the law is unfairly applied because it exempts unions representing law enforcement, corrections officers, and firefighters – how strange. The suit names Donald Rubottom, the chair of the Florida Public Employees Relations Commission, as a defendant, as well as commissioners Jeff Aaron and Michael Sasso. The lawsuit is ultimately asking the courts to keep the defendants from implementing and enforcing provisions of the law, which is SB 256.

New Florida law putting restrictions on teachers' unions leads to federal lawsuit against state officials

A US bankruptcy judge has blocked the NBA’s Phoenix Suns from proceeding with a TV and streaming rights deal with Gray Television and Kiswe, as it violated the rights of its current broadcast partner, Diamond Sports Group. The bankrupt subsidiary of Sinclair Broadcast Group holds the contractual right to negotiate a contract extension, which the Suns’ new TV deal interfered with, according to US bankruptcy law. The Suns’ lawyers had argued that the team’s previous deal with Diamond Sports Group had expired. Phoenix Suns CEO Josh Bartelstein has said the team would work towards “a fair resolution” that benefits its fans, community, and players. The financial terms of the Phoenix Suns’ contract with Diamond Sports and Gray TV were not disclosed in bankruptcy court. Diamond broadcasts games for nearly half of all teams in the NBA, Major League Baseball, and the National Hockey League. Diamond filed for Chapter 11 bankruptcy protection in March.

US bankruptcy judge blocks NBA team Phoenix Suns' new TV deal | Reuters



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12 May 2023Fri 5/12 - Title 42 Ends, Under 21 Guns are a Go, Goldman Settlement Big Win for Women, Assange Hires Squire Patton, Blockfi Customers are Screwed, MS/Activision Updates00:07:52

The federal government has ended COVID-19 border restrictions known as Title 42, which blocked many migrants at the border with Mexico. These restrictions have been replaced with a new asylum regulation aimed at deterring illegal crossings. However, legal challenges have been filed against the new asylum bars, with advocates arguing that they violate U.S. laws and international agreements. The new regulation implemented by President Joe Biden is seen by some as resembling the restrictions imposed by former President Donald Trump. Chaotic scenes have unfolded at the border as migrants rushed to enter the country before the new rule took effect. The new regulation presumes that most migrants are ineligible for asylum if they did not seek protection in other nations first or failed to use legal pathways for entry. Thousands of migrants have attempted to enter the U.S. by crossing rivers, climbing walls, and scrambling up embankments. The Biden administration has defended the regulation, stating that it seeks to incentivize migrants to use lawful pathways for entry. Title 42 was first implemented by Trump in 2020 to curb the spread of COVID-19 in detention facilities and allowed for the quick expulsion of migrants. Biden kept Title 42 in place and expanded it. Republicans have criticized Biden's immigration policies, while Biden has blamed Congress for not passing comprehensive immigration reform. The Biden administration has been trying to send a message that illegal crossers will face consequences, deploying additional personnel to the border. Despite the end of Title 42 and the COVID public health emergency, the U.S. has been dealing with record numbers of migrants at the border, straining authorities and border cities.

Legal challenges threaten Biden's border plan as Title 42 ends | Reuters

A federal judge in Virginia has ruled that federal laws prohibiting the sale of handguns to individuals under the age of 21 violate their constitutional rights to possess firearms. The ruling, which is expected to be challenged by the Justice Department, will not take effect until the judge, Robert Payne, issues his final order in the coming weeks. The ruling will not impact the 19 states that already have their own laws prohibiting handgun sales to those under 21. The judge referenced the Supreme Court's recent expansion of gun rights in his decision. Gun rights are a contentious issue in the United States, with high levels of firearm violence and mass shootings. There have been at least 210 mass shootings in 2023 so far, according to the Gun Violence Archive. The decision was welcomed by the attorney representing the plaintiffs, who expressed optimism that the ruling would be affirmed.

US judge strikes down federal law barring handgun sales to those under 21 | Reuters

Goldman Sachs has reached a $215 million settlement in one of the largest sex discrimination cases on Wall Street, which has the potential to bring about greater gender equality in the financial industry. The settlement is a victory for more than 2,800 female associates and vice-presidents who accused the bank of paying women less than their male counterparts and denying them opportunities for advancement. But a settlement isn’t without its downsides – by avoiding a trial, Goldman Sachs prevents damaging information about its employee evaluation and promotion processes from being revealed in court. As part of the settlement, an independent expert will investigate the bank's practices and conduct a pay-equity review for the next three years. The settlement could have a ripple effect on Wall Street, where gender discrimination and inequality have persisted for decades. Advocates hope that this landmark settlement signals a willingness by the industry to address gender inequality more effectively. However, the case has been a hard-fought battle, lasting nearly 13 years and requiring significant resources. The use of mandatory arbitration agreements in workplace disputes, which limit workers' ability to seek justice collectively, has also drawn criticism. Further legislative action is needed to curtail the use of arbitration agreements in other work-related disputes. The Goldman Sachs case highlights the importance for employers to regularly review their compensation, evaluation, and promotion practices to ensure they do not have a discriminatory impact on protected classes of workers.

Goldman’s Sex-Bias Deal Is ‘Milestone’ for Women on Wall Street

German foundation Wau Holland has hired Squire Patton Boggs, a global law and public policy firm, to lobby the US Department of Justice (DOJ) on behalf of WikiLeaks publisher Julian Assange. The foundation has paid Squire at least $1.2 million since October 2022 to advocate for journalists' rights to publish classified information. The firm aims to discuss the compatibility of Assange's espionage charges with Attorney General Merrick Garland's policy to protect journalists from enforcement actions. Although there is no evidence of progress in arranging a meeting with DOJ officials, this lobbying effort represents Squire's most lucrative federally-disclosed work in the past six months. Advocates for press freedom and civil liberties, major news outlets, and progressive members of the House have raised concerns about extraditing Assange to the US and putting him on trial, citing potential threats to First Amendment rights. Squire Patton Boggs declined to comment on the matter, while the DOJ and Wau Holland Foundation also did not provide comments.

Assange Allies Turn to Squire Patton Boggs to Help Lobby DOJ

Crypto lender BlockFi has received court approval to return $297 million to customers with non-interest-bearing accounts. The ruling by U.S. Bankruptcy Judge Michael Kaplan stated that customers owned their deposits in BlockFi's Wallet program, which kept customer deposits separate from the company's other funds and did not pay interest. However, customers with interest-bearing accounts did not own their deposits, which were considered part of BlockFi's lending business and were subject to being pooled with other assets in bankruptcy proceedings. BlockFi, which filed for Chapter 11 protection in November, froze accounts shortly before the filing, creating confusion among customers. Despite receiving confirmation that their transfers were complete, customers who attempted to move $375 million from interest-bearing accounts to Wallet accounts will not have their funds returned. BlockFi's terms of service allowed it to block transfer requests during the shutdown. The decision aims to protect the recovery for Wallet customers and ensure the return of customer funds from a fixed pool of assets.

BlockFi gets court permission to return $297 million to Wallet customers | Reuters

Microsoft is set to defend its planned $69 billion acquisition of Activision Blizzard in a private antitrust lawsuit filed by video gamers who argue that the deal will harm industry competition. The hearing, taking place in San Francisco federal court, will determine whether a preliminary injunction should be issued to block the acquisition. Microsoft's lawyers have argued that the plaintiffs' request is unprecedented and have asked the court to deny the injunction. The deal, announced in January 2022, is also facing regulatory scrutiny from various competition law enforcers, including the U.S. Federal Trade Commission and Britain's antitrust regulator, which has already stated its intention to block the acquisition. The plaintiffs' lawyers are urging the court to block the deal to allow a trial on the merits of the acquisition to proceed. The case is being closely watched as it raises significant questions about competition in the gaming industry.

Microsoft to defend Activision deal in gamers' lawsuit in US court | Reuters



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15 May 2023Mon 5/15 - Debt Ceiling, Robocall Lawsuits, Google Deceives in Ads, Gilead Win Implications and Apparent Agency Medical Malpractice00:07:44

We have a fun this day in legal history entry for today, on this day, May 15, in 1911, the US Supreme Court ordered the dissolution of Standard Oil pursuant to the Sherman Antitrust Act, holding that Standard Oil’s monopoly “unduly” restrained trade. The ruling resulted in breaking Standard Oil up into 34 independent companies. These companies became known as the "baby Standards." The breakup aimed to promote competition and prevent the concentration of economic power in a single entity.

Among the prominent companies that emerged from the Standard Oil breakup were Exxon (formerly Standard Oil of New Jersey), Mobil (formerly Standard Oil of New York), Chevron (formerly Standard Oil of California), and Amoco (formerly Standard Oil of Indiana). These companies went on to become major players in the oil industry. Ultimately, they’ve merged back down in to 4. Perfect.

President Joe Biden and congressional Republicans are engaged in critical debt-ceiling talks in an effort to reach a deal on spending levels and energy regulations to prevent a damaging default. While both sides are not close to an agreement, the White House has not ruled out the annual spending caps that Republicans insist on for any increase in the $31.4 trillion debt limit. Republicans, on the other hand, are not demanding conditions that the White House considers off-limits, such as repealing green-energy incentives in Biden's Inflation Reduction Act. Energy regulations could potentially be an area of common ground. Biden expressed optimism about reaching a deal and meetings between staff from both sides were described as constructive. However, time is running out, with the United States projected to run out of money to pay its bills as early as June 1. A default would have severe economic consequences and worry investors and consumers. Republicans argue that there is still plenty of time for a deal to be reached. Biden has called for Congress to increase the borrowing capacity without conditions but has also indicated a willingness to discuss budget matters with Republicans. Republicans face pressure from former President Donald Trump, who suggested allowing the country to default unless all their demands are met. House Republicans previously passed legislation that combines a $1.5 trillion debt-ceiling hike with $4.8 trillion in spending cuts, but Democrats oppose certain elements of that legislation. However, they have not ruled out spending caps more generally. The White House and Republicans might also consider easing permitting requirements for energy infrastructure. The longer it takes to reach an agreement, the narrower the scope of the deal is expected to become.

Biden, Republicans search for outline of debt-limit deal | Reuters

XCast Labs, a Voice over Internet Protocol (VoIP) provider, has been sued by the U.S. Federal Trade Commission (FTC) for allegedly facilitating billions of illegal robocalls. The FTC is seeking a court order to compel the company to cease the practice. XCast is accused of assisting other companies, including one that falsely claimed to be a government entity, in contacting individuals on the National Do Not Call Registry and using deceptive tactics to persuade them to make purchases or contributions. The lawsuit requests unspecified penalties against XCast. The company has not yet provided a comment in response to the allegations. The case was filed by the Justice Department on behalf of the FTC in a California district court.

Robocall company behind 'billions' of illegal calls sued by FTC | Reuters

Google, a unit of Alphabet, has agreed to pay $8 million to settle claims made by Texas Attorney General Ken Paxton that the company used deceptive advertisements to promote its Pixel 4 smartphone. The allegations stated that Google hired radio announcers to provide testimonials about the phone, even though they were not allowed to use it. This settlement comes as Google faces scrutiny from both federal and state authorities regarding antitrust and consumer protection issues. Google stated that it takes advertising compliance seriously and is “pleased” to resolve the matter.

Google to pay $8 million to settle claims of deceptive ads -Texas AG | Reuters

We have previously reported on the fact Gilead Sciences recently won a patent-infringement case brought by the federal government over HIV drug patents, causing mixed opinions among industry insiders and healthcare advocates about the impact on future collaborations. The jury voided three government-owned patents and ruled that Gilead's Truvada and Descovy for pre-exposure prophylaxis (PrEP) did not infringe them. While some believe the verdict won't significantly affect government-industry collaborations, others worry it may discourage pharmaceutical companies from entering license agreements with the government. The case highlights the complex relationship between the government and industry regarding intellectual property rights in research partnerships. Now the issue is that the outcome could potentially lead to a more deferential approach by the government towards pharmaceutical companies, raising concerns about high drug prices and limited access for consumers. The case underscores the ongoing tension between the government's desire to protect its rights and the pharmaceutical industry's need for collaboration, leaving the future of such partnerships uncertain and signaling potential implications for not only pricing but also access to innovative treatments.

Big Pharma, US Research Pacts in Flux After Gilead’s Trial Win

Rush-Copley Medical Center Inc., located in Illinois, has been denied summary judgment in a medical malpractice case where a non-employed doctor, Hinna Khan, is accused of negligence. The court ruled that the degree of control exerted by the hospital over Khan was a matter of fact that needed to be determined by a jury. Typically, hospitals have no control over the medical judgment of non-employee physicians, but this case raises the question of whether the hospital can be held vicariously liable for the alleged negligence of a doctor perceived by patients to be employed by the facility.

Nathaniel Pryor Sr. and Adriana Madrigal filed the lawsuit against Rush and Khan, alleging that negligent care by the pediatrician caused brain damage, leading to their son's cerebral palsy, seizure disorder, and permanent disability. Rush argued that it couldn't be held liable because Khan was not its employee, as indicated on an admission form signed by the baby's mother. However, in Illinois, hospitals can be held responsible for the actions of doctors who are their actual or apparent agents.

Apparent agency is established when a physician's actions would reasonably lead someone to believe they are an employee of the hospital, and the hospital acquiesces to such conduct, causing the plaintiff to rely on it. This is a highly fact-dependent question that the court determined should be resolved by a jury. The plaintiffs asserted that Rush's discharge policy required Khan to fulfill certain obligations before discharging a patient, which she allegedly failed to do.

Rush contended that the discharge policy only applied to nurses, but there was evidence suggesting that doctors were also expected to follow it. Judge Franklin U. Valderrama concluded that there was an unresolved question of fact regarding Rush's control over Khan's discharge decisions, denying the hospital's motion for summary judgment. The case will now proceed to trial, shedding light on the complex issue of hospital liability for non-employed physicians and the importance of clarifying the nature of their relationship in such cases.

Illinois Hospital Faces Trial Over Doctor’s Alleged Negligence



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16 May 2023Tues 5/16 - SVB Omitted EVE, FTC Blocking Amgen Acquisition, Dropbox Patent Infringement, Musk Tweets Remain Muzzled00:08:05

We have an interesting this day in legal history entry for today, on this day, May 16, in 1868 President Andrew Johnson was acquitted in his impeachment trial. President Johnson was Abraham Lincoln’s running mate in the 1864 election and was a sop to the south – prior to sharing a ticket Lincoln had never met him. After the Civil War, President Johnson clashed with Congress over the reconstruction of the South. He vetoed legislation aimed at protecting the rights of former slaves, leading to tension and disagreement with his own party. In 1868, the House of Representatives impeached Johnson, accusing him of violating the Tenure of Office Act by removing the Secretary of War. The trial then began in the Senate, where Republicans held the majority, but Johnson was acquitted because not enough senators supported his removal. Johnson's presidency was marked by his opposition to political rights for freedmen and his lenient reconstruction policies. He served out his term but faced significant opposition from Congress. Johnson later returned to the Senate, serving for 3 months before dying in 1875. He is frequently ranked by historians as among the worst American Presidents, with his predecessor Abraham Lincoln typically taking the top spot. Those are difficult shoes to fill, I suppose. All the same, not a great guy. 

Wells Fargo has agreed to pay $1 billion to settle a class-action lawsuit brought by shareholders. The lawsuit accused the bank of making misleading statements regarding its compliance with federal consent orders after the 2016 scandal involving unauthorized customer accounts. Shareholders alleged that former CEO Tim Sloan and other executives provided misleading information to Congress, investors, and the media, painting a more positive picture of their interactions with regulators than was accurate. The settlement funds will be distributed to investors who purchased Wells Fargo stock between February 2, 2018, and March 12, 2020. This settlement follows previous settlements related to the bank's fake-accounts scandal in 2016 and a shareholder settlement in 2018. In 2020, Wells Fargo agreed to pay $3 billion to settle US investigations into consumer abuses.

Wells Fargo to Pay $1 Billion in Class-Action Lawsuit (1)

Silicon Valley Bank (SVB) removed a disclosure metric called economic value of equity (EVE) from its year-end 2022 financial statement, just two weeks before the bank's collapse in March 2023. For the past decade, SVB had provided this metric to demonstrate how interest rate fluctuations would impact its financial health. The removal of EVE, which was expected to show a bleak picture of the bank's situation amid rising rates and depositors withdrawing funds, raises questions about the role of the bank's auditor, KPMG LLP. The financial statement offers no explanation for the removal, and KPMG has not commented on the disclosure changes. Auditors are expected to question significant changes in disclosures and raise concerns when necessary. The omission of EVE, which could have served as a warning sign of growing risks associated with the bank's long-term assets, has drawn attention to the auditor's responsibilities in reviewing management sections of financial statements. Auditors primarily focus on the audited financial statement but are expected to review the management section for inconsistencies and misleading information. However, auditors have limited authority to demand disclosures or address forward-looking risk scenarios. The discretion given to reporting entities allows them to withhold important information from financial statement users.

Regular consumers of Minimum Competence will remember our reporting on the recent collapses of Silicon Valley Bank, Signature Bank, and the near miss at First Republic Bank and the raised concerns about the role of Big Four accounting firms in these failures. KPMG, in particular, had signed off on the financial statements of these banks, leading to questions about the effectiveness and reliability of audits. The problem lies in the close relationships between accounting firms and the banks they audit, potentially leading to conflicts of interest and a lack of incentive to disclose potential problems. To address this, auditors should be held liable for failing to draw attention to aspects of financial statements that require caution, and firms should be banned from both consulting and auditing the same client to avoid conflicts of interest.

SVB Quietly Deleted Rate-Risk Metric as Auditor KPMG Stayed Mum

Big Four Auditors and Consultants Need Liability—And a Divorce

The U.S. Federal Trade Commission (FTC) is expected to file a lawsuit to block Amgen Inc.'s $27.8 billion acquisition of Horizon Therapeutics PLC, according to a source. Amgen had entered into the deal last year to enhance its rare diseases drugs portfolio and aimed to complete the acquisition in the first half of this year. Senator Elizabeth Warren, a critic of corporate consolidation, had expressed concerns about the deal and pharmaceutical price increases. The FTC's move to sue is uncommon, as it typically requires divestments rather than blocking deals in the pharmaceutical industry. The acquisition would provide Amgen with two fast-growing drugs, Tepezza and Krystexxa, which have orphan drug designations.

FTC to block Amgen's $27.8 billion deal for Horizon Therapeutics - source | Reuters

Elon Musk's attempt to modify or terminate his 2018 securities fraud settlement with the U.S. Securities and Exchange Commission (SEC) has been rejected by a federal appeals court. The court upheld the requirement for a Tesla lawyer to approve some of Musk's tweets in advance as part of the settlement. Musk's settlement stemmed from an SEC lawsuit accusing him of defrauding investors with a tweet about taking Tesla private. His lawyers argued that the pre-approval mandate amounted to an illegal restriction on his free speech rights. However, the court panel determined that the SEC's inquiries into Musk's subsequent tweets were appropriate and that complying with the consent decree was not overly burdensome for Musk. The decision affirms a ruling made by a U.S. District Judge in 2022. Musk's lawyers plan to seek further review of the decision.

Elon Musk loses bid to end SEC 'muzzle' over tweets | Reuters

Motion Offense LLC, a patent monetization company, has claimed that Dropbox Inc. owes it $35 million for alleged patent infringement in a federal trial in Waco, Texas. Motion Offense alleges that Dropbox used ideas developed by inventor Robert Paul Morris to enhance file-sharing capabilities, which were similar to Morris' inventions from 2012. Dropbox's attorney countered by stating that the company had already developed the features in question at least three years before Morris began the patent application process. The two sides also disputed the timing of Morris' conception of the patented ideas. Dropbox did not present a damages estimate, while Motion Offense argued for approximately $35 million in compensation. This litigation is part of a broader patent dispute involving Dropbox and other companies.

Dropbox, Motion Offense Square Off in ‘Smart Sync’ Tech Trial

Elon Musk has been issued a subpoena by the US Virgin Islands (USVI) in its lawsuit against JPMorgan Chase & Co., accusing the bank of knowingly benefiting from Jeffrey Epstein's sex-trafficking activities. The USVI believes that Epstein may have referred or attempted to refer Musk to JPMorgan as a client. Other billionaires, including Larry Page and Sergey Brin, have also received subpoenas in this case. The USVI has requested alternative means of serving the subpoena on Musk, as it has been unable to locate his address despite efforts, and is seeking documents related to communications or meetings between Musk, JPMorgan, and Epstein, as well as any information regarding Epstein's involvement in human trafficking and fees paid by Musk to Epstein or JPMorgan.

Elon Musk Was Issued Subpoena in JPMorgan Epstein Suit (3)

Elon Musk documents subpoenaed in Jeffrey Epstein lawsuit by US Virgin Islands | Reuters



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17 May 2023Weds 5/17 - IRS Public E-File, Judicial Fitness in the Fed Cir., Fraud Definition Narrowing, Theranos' Holmes to Jail, Proskauer Malpractice, Column Tuesday! (on Weds.)00:09:37

We have an important “this day in legal history” entry for today. On this day in 1954 the Supreme Court held, in Brown v. Board of Education, that racial segregation of children in public schools was unconstitutional. The case overturned the previous doctrine of “separate but equal” that had been established by Plessy v. Ferguson in 1896. The case was brought by Oliver Brown, whose daughter was denied entrance to a then-white school in Topeka, Kansas. The Court, led by Chief Justice Earl Warren, held that segregation violated the Equal Protection Clause of the Fourteenth Amendment, because separate facilities were inherently unequal. The decision paved the way for integration and was a major victory of the civil rights movement.

Briefly, without too much soapboxing, I think right thinking people everywhere would like to imagine the era of segregation as being a distant memory. An unfortunate period of history that is now so sufficiently obscured by time so as to render it devoid of the pain and damage it caused. It simply isn’t. I’m an “elder millennial,” whatever that means, born in 1985, 31 years after the decision in Brown was handed down. 31 years from 2023 was 1992 – the first Clinton administration. History it is, ancient history it is not. 

The Internal Revenue Service (IRS) has submitted a report to Congress, as directed by the Inflation Reduction Act, evaluating the feasibility of a Direct File option for taxpayers. Direct File is a free, voluntary electronic filing system run by the IRS. The report concludes that many taxpayers are interested in using such a tool and that the IRS has the technical capability to deliver a Direct File program. However, it also highlights the need for sustained budget investment and careful management of the program's operational complexity.

The report focuses on taxpayer opinions, cost, and feasibility, and includes an analysis conducted by an independent third party. It outlines the potential benefits and challenges associated with implementing a Direct File program. IRS Commissioner Danny Werfel states that the agency is committed to improving services for taxpayers and acknowledges the interest in an optional Direct File program.

In response to the Treasury Department's directive, the IRS will initiate a scaled Direct File pilot in the 2024 filing season to gather further information. This pilot aims to assess customer support, technology needs, and overcome potential operational challenges identified in the report. Specific details about the pilot will be announced in the future.

The IRS report relied on data from the agency's Taxpayer Experience Survey, which surveyed thousands of taxpayers, as well as an independent survey conducted by the MITRE Corporation. User research and usability testing using an internal prototype were also conducted to gain firsthand taxpayer perspectives. The report includes a separate independent analysis by New America and Professor Ariel Jurow Kleiman on the Direct File concept.

The IRS is looking forward to engaging with stakeholders in the upcoming months to discuss this important topic. Commissioner Danny Werfel's letter to Treasury Secretary Janet Yellen, accompanying the Direct File report, can be accessed for further information.

IRS submits Direct File report to Congress; Treasury Department directs pilot to evaluate key issues | Internal Revenue Service

HILL TAX BRIEFING: IRS Launching Pilot of Its Own E-File Program

New documents from the US Court of Appeals for the Federal Circuit reveal that Judge Pauline Newman, the court's oldest and longest-serving member, must release her medical records as part of an investigation into her fitness to remain on the bench. Concerns have been raised about observed changes in her behavior, including difficulties with basic tasks, paranoia about being hacked or spied on, and engaging in nonsensical conversations. The court staff reported her agitation and described her behavior as bizarre. Two of her staff members resigned and requested no further contact with her. Judge Newman also failed a mandatory security compliance training and made inaccurate statements about the court's leadership.

The Federal Circuit panel ordered Judge Newman to undergo evaluations by a neurologist and neuropsychologist. They demanded that she respond to the committee's examination request and release records of her mental acuity, attention, memory, and other related areas of treatment within 30 days. Judge Newman's request to transfer the judicial complaint to a different circuit was denied.

The New Civil Liberties Alliance is representing Judge Newman in her lawsuit. The NCLA is a public interest law firm ostensibly dedicated to fighting administrative state overreach. Prominent donors to the alliance include the surviving Koch brother, Charles Koch. Judge Newman's counsel has not yet responded to requests for comment.

‘Paranoid’ Incidents Necessitate Newman Exam, Fed. Cir. Says

Recent Supreme Court rulings have narrowed the scope of federal fraud statutes, raising concerns about ambiguity in their application. Over the past 15 years, decisions such as Skilling, McDonnell, Kelly, Percoco, and Ciminelli have rejected expansive interpretations of these laws. The court's concern is that prosecutors may use the statutes to impose federal ethical standards on state and local governments. Percoco v. United States limited the circumstances in which a private citizen might have a fiduciary duty to the public for "honest services" fraud, while Ciminelli v. United States rejected the "right-to-control" theory of wire fraud. These decisions are seen as steps toward limiting prosecutorial overreach.

However, despite these rulings, uncertainty remains regarding the potential applications of fraud statutes. Skilling narrowed the honest services wire fraud statute to bribery and kickback schemes, while McDonnell limited the definition of an "official act" subject to the law. Kelly held that political retribution schemes targeting toll lanes did not constitute wire and federal program fraud. Percoco and Ciminelli further refined the interpretation of the fraud statutes but left some issues unresolved.

Justice Neil M. Gorsuch, in a concurrence for Percoco, called on Congress to provide clarity in defining "honest services." The court expressed its responsibility in ensuring that the government does not exploit the statutes' broad reach. In Ciminelli, the court rejected the notion that "potentially valuable economic information" constitutes a traditional property interest under the wire fraud statute. The court highlighted that Congress did not explicitly include other intangible interests beyond "honest services" in the statutes.

Although the court has consistently narrowed the fraud statutes, many questions about their scope remain unanswered. Percoco and Ciminelli were fact-specific, and the definition of a traditional property interest has yet to be fully explored. The intent to inflict financial harm and the requirement of economic loss in property fraud cases are still being actively litigated in lower courts. The lack of clarity in the fraud statutes raises concerns about separation of powers, due process, and vagueness in their application. It is crucial that courts ensure that ordinary individuals have advance notice of what is prohibited under these criminal statutes. At the same time it is instructive to illustrate how even a concept such as fraud which at first blush may seem relatively straightforward can raise thorny legal questions. 

SCOTUS Scales Back Fraud Statutes’ Reach, but Ambiguity Persists

Theranos founder Elizabeth Holmes and former CEO Ramesh "Sunny" Balwani have been ordered to pay $452 million in restitution to victims of the blood-testing startup's fraud. Holmes, who was convicted last year of misrepresenting Theranos' technology and finances, had also requested to remain out of prison while challenging her conviction but was denied by an appeals court. Judge Edward Davila, who oversaw Holmes' trial and sentencing, held both Holmes and Balwani equally responsible for the restitution amount, rejecting their argument that intervening events contributed to investors' losses. Holmes will now have to report to prison as a new date is set. Included among the investors that Holmes will need to make whole is none other than Rupert Murdoch – defrauding people is never defensible, but sometimes …

Theranos founder Holmes loses bid to stay out of prison, hit with huge restitution bill | Reuters

Law firm Proskauer Rose has been ordered by a Massachusetts judge to face trial in a $636 million legal malpractice case. The ruling by Suffolk County Superior Court Justice Kenneth Salinger allows a jury to determine whether the firm's alleged mishandling cost former client Robert Adelman his stake in a multi-billion dollar hedge fund. Adelman sued Proskauer in March 2020, claiming that attorneys from the firm included a provision in a partnership agreement that allowed the fund's manager to remove him. Adelman presented handwritten notes from a Proskauer partner that indicated a mistake in the agreement. Proskauer, represented by lawyers from Williams & Connolly, argued that it shouldn't be held responsible for the actions of Adelman's former colleague. The manager accused of ousting Adelman, is not involved in the lawsuit. A final pre-trial conference is scheduled for July 25.

Law firm Proskauer must face trial in $636 million legal malpractice case | Reuters

The Oakland Athletics baseball team is seeking to move to Las Vegas and is requesting hundreds of millions of dollars in taxpayer funds to finance the relocation. Critics argue that this is a bad tax deal for Las Vegas and Nevada, as it sets a precedent of using public money to benefit private sports team owners. Nevada's lower tax burden compared to California is cited as a positive aspect of the deal, but overall, there are few advantages. The Athletics have a relatively low payroll compared to other teams, so players would benefit little, comparatively, from the lack of income tax in Nevada. However, studies have shown that stadium building has limited positive economic effects, and the revenue generated from player salaries would not benefit Nevada due to the aforementioned absence of income tax. The revised funding plan reduces the amount sought from public funds, but it still puts a financial burden on taxpayers. Critics argue that public funding for sports stadiums would be better spent on projects that directly improve residents' quality of life. The deal also marks the end of the Oakland Coliseum, which is widely regarded as an unattractive venue by just about everyone save for perhaps the opossums that live in the walls.

Oakland A’s Move to Vegas Is Costly Gamble for Nevada Taxpayers



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18 May 2023Thurs 5/18 - NYC Law Protecting Fast Food Workers Challenged, EPA Driving Green Bank Boom, Simpson Thacher Back to Office, HSA Limits Increased and TikTok is Banned in Montana00:07:30

We have a regretful this day in legal history today, which is the flipside of yesterday’s anniversary of Brown v. Board of Education. Plessy v. Ferguson, widely regarded as a low watermark for the court and the origin of the “separate but equal” doctrine overturned in Brown was decided on this date in 1896. The case involved a Louisiana state law that permitted segregation by race, providing for "equal but separate accommodations" for white and colored individuals. The ruling upheld the constitutionality of the law, with Justice Henry Brown arguing that the separation did not imply inferiority, but rather was an interpretation chosen to be taken up by the “colored race.” Justice John Marshall Harlan dissented, considering the law to be inconsistent with personal liberties and the spirit of the U.S. Constitution. The decision reinforced the doctrine of "separate but equal" and allowed for the continued enforcement of racial segregation laws. It was not until the aforementioned landmark Supreme Court decision in Brown v. Board of Education in the 1950s and subsequent civil rights legislation that state-enforced segregation was officially dismantled.

The Second Circuit Court of Appeals is set to hear arguments regarding a challenge to a New York City law that requires just cause for terminating fast-food workers. The law, enacted in 2021, limits the authority of fast-food companies to fire employees without valid reasons. If upheld, this law could have broader implications for exceptions to the at-will employment doctrine in other industries and regions. The New York City Council is also considering extending just-cause protections to all industries, and similar legislation is pending in Illinois. The case has attracted numerous amicus briefs from both business groups and worker advocacy organizations. The at-will employment doctrine, which allows companies to terminate workers for any reason except for discriminatory ones, is uncommon among industrialized democracies. Exceptions to this doctrine exist in the form of anti-discrimination laws and specific employment agreements. New York City's law applies to fast-food chains with a minimum of 30 locations and includes requirements for progressive discipline and written explanations for terminations. A US District Judge previously rejected the challenge to the law, ruling that it does not infringe on the collective bargaining process. The arguments in the Second Circuit will further determine the fate of the law.

NYC’s Protections for Fast-Food Workers Get Second Circuit Test

The EPA's $27 billion clean energy fund is driving the establishment of green banks in various states, irrespective of their political affiliation. Over the past two years, several states, including California, Colorado, Illinois, Nevada, and Pennsylvania, have launched green banks, while others are moving closer to implementing them. The Inflation Reduction Act, which includes the $27 billion fund, has encouraged states to embrace green banks as a means of generating job opportunities and investment in renewable energy. Typically associated with blue states, green banks are now gaining traction in red states like Alaska, Florida, and Texas. The EPA's funding could mobilize over $250 billion in total investment, addressing a significant portion of the emissions reductions required to achieve President Biden's net zero emissions goal by 2050. Local green banks, such as Maryland's Montgomery County Green Bank, are well-positioned to leverage federal funding and have a track record of aligning with environmental equity objectives. However, advocates express concerns that Republican-led efforts to rescind climate provisions could undermine the benefits for disadvantaged communities. Despite the establishment of green banks, some Southern states still have policies that discourage residential solar projects, posing additional challenges to clean energy adoption.

Green Banks Spring Up in States, Spurred by $27 Billion Fund

Simpson Thacher, a prominent Big Law firm, has implemented a policy stating that associates must be present in the office at least three days a week to be eligible for annual and discretionary bonuses. The firm recently updated its employee handbook, warning that associates who fail to comply may have their bonuses reduced or become ineligible. As the pandemic subsides, in reality or in practice, law firms are grappling with how to encourage lawyers, particularly junior associates who, the logic goes, benefit from in-person training, to return to the office. Simpson Thacher's move follows a similar announcement by Sidley Austin, another major Big Law firm, which emphasized that attendance would be a factor in bonus considerations. The adjustment in firm policies is attributed to the decrease in leverage for associates due to a slowdown in demand and cost-cutting measures. Simpson Thacher, a top performer in the mergers and acquisitions space, reported substantial gross revenue of nearly $2.2 billion last year. However, some associates express dissatisfaction with the requirement to work in the office while partners often work remotely, leading to challenges in communication and collaboration. Still others see it as a generational difference in work style.

Simpson Thacher Tells Associates to Hit Office or Risk Bonuses

A little bit of tax talk. The Internal Revenue Service (IRS) has announced increased contribution limits for Health Savings Accounts (HSAs) in 2024. Individuals with self-only coverage under a high-deductible health plan can save up to $4,150, compared to $3,850 in 2023. For family plans, the contribution limit has risen to $8,300 from $7,750. To qualify, individuals must have a high-deductible health plan with a minimum annual deductible of $1,600 for self-only coverage or $3,200 for family coverage. These adjustments allow individuals to deposit more tax-free money into their HSAs.

IRS Increases Contribution Limits for Health Savings Accounts

Montana Governor Greg Gianforte has signed legislation to ban Chinese-owned TikTok from operating in the state, making it the first U.S. state to ban the popular short video app. The ban, which takes effect on January 1, 2024, prohibits Google and Apple's app stores from offering TikTok within the state. However, there will be no penalties imposed on individuals using the app. TikTok, owned by ByteDance, responded by stating that the new law infringes on First Amendment rights and that it will continue to defend the rights of its users. The app has faced concerns about potential Chinese government influence and has over 150 million American users, mostly teenagers. The ban is likely to face legal challenges, and the American Civil Liberties Union (ACLU) has criticized it as unconstitutional. Former President Donald Trump's attempt to ban TikTok and WeChat in 2020 was blocked by multiple courts. If the ban is effective, users of TikTok will have to get their Big Sky content from neighboring North Dakota which has, at best, a solid Medium Sky. 

 Montana to become first US state to ban TikTok | Reuters



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19 May 2023Fri 5/19 - MT TikTokers Sue, SCOTUS Clarifies Patent Enablement and Militia Collective Bargaining, FTX Wants a Refund, Federal Virtual Proceedings to End and DB Pays for Epstein00:08:45

We have an interesting this day in colonialism, I’m sorry legal, history today: on May 19, 1848 Mexico ratified the Treaty of Guadalupe-Hidalgo, ending the Mexican–American war and ceding about half of Mexico’s territory to the United States. The treaty did not explicitly list the territories to be ceded and avoided addressing the disputed issues that led to the war, such as the validity of Texas's independence and its boundary claims. Instead, it established the new U.S.-Mexico border, describing it from east to west as the Rio Grande northwest to the southern boundary of New Mexico, then due west to the 110th meridian, and north along the 110th meridian to the Gila River. From there, a straight line was drawn to one marine league south of the southernmost point of the port of San Diego.

Mexico conceded about 55% of its pre-war territory in the treaty, resulting in an area of approximately 1.97 million km². The region between the Adams-Onís and Guadalupe Hidalgo boundaries, excluding the territory claimed by the Republic of Texas, is known as the Mexican Cession. It includes present-day California, Nevada, Utah, most of Arizona, and parts of New Mexico, Colorado, and Wyoming.

The treaty protected the property rights of Mexican citizens living in the transferred territories and required the United States to assume $3.25 million in debts owed by Mexico to U.S. citizens. Mexican residents were given one year to choose American or Mexican citizenship, with over 90% opting for American citizenship. Article XI of the treaty addressed Indian raids into Mexico, but it proved unenforceable, leading to continued raids and later annulment in the Treaty of Mesilla.

The land acquired through the treaty became part of nine states between 1850 and 1912, including California, Nevada, Utah, Arizona, Texas, Colorado, Oklahoma, and New Mexico. The cost of the acquisition was $16,295,149, or about 5 cents per acre. The remainder of New Mexico and Arizona was later peacefully purchased through the Gadsden Purchase in 1853, which aimed to accommodate a transcontinental railroad. The construction of the railroad was delayed due to the American Civil War but was eventually completed in 1881 as the Southern Pacific Railroad.

Five TikTok users from Montana have filed a lawsuit in federal court to challenge the state's ban on the Chinese-owned platform. The ban, signed into law by Montana Governor Greg Gianforte, is set to take effect on January 1, 2024, and prohibits TikTok from being offered on app stores operated by Google and Apple within the state. The users argue that the state is overstepping its authority by attempting to regulate national security and suppress speech, which they believe violates their First Amendment rights. They compare the ban to banning a newspaper due to its ownership or published ideas. Montana's attorney general, Austin Knudsen, who is responsible for enforcing the law, expressed readiness to defend it against legal challenges. TikTok, owned by China's ByteDance, has faced calls for a nationwide ban in the United States over concerns of Chinese government influence. The plaintiffs in the lawsuit include a swimwear designer, a former Marine Corps sergeant, a rancher, a student of applied human physiology, and a content creator who earns revenue from humorous videos. TikTok has denied sharing data with the Chinese government and condemned Montana's ban as an infringement on First Amendment rights. The case has been assigned to Judge Donald Molloy, who was appointed by former President Bill Clinton in 1995. Violations of the ban could result in fines for TikTok, but not users (for now).

TikTok users file lawsuit to block Montana ban | Reuters

The US Supreme Court has issued a ruling in a patent dispute between Amgen Inc. and Sanofi/Regeneron Pharmaceuticals Inc., clarifying the scope of the patent law requirement known as enablement. The decision affirms a narrow interpretation of the requirement, allowing more pharmaceutical companies to compete in the same areas of research and development. The ruling prevents a single company from monopolizing an entire research area through broadly defined patents and raises questions about the validity of certain antibody patents. The court upheld a lower court's decision to invalidate two Amgen patents related to its cholesterol drug Repatha, emphasizing the need for patent applications to provide enough information to enable others in the field to make and use the claimed invention. The decision cites historical cases to support its interpretation of the enablement standard. The ruling is expected to have implications for the biotech industry, potentially de-risking projects for companies with antibody intellectual property and encouraging more research and development. Inventors are likely to file longer patent applications and focus on concrete examples to avoid invalidation of their claims. The decision also casts doubt on the convention of conservative amino acid substitutions being covered by patent applications.

In Amgen-Sanofi Decision, High Court Sticks to Patent Law Script

The U.S. Supreme Court has ruled in a 7-2 decision that state militias, including the Ohio National Guard, can be compelled to engage in collective bargaining with unions by the Federal Labor Relations Authority (FLRA). Justice Clarence Thomas, writing for the majority, stated that state militias function as federal agencies when employing technicians who have both civilian and military roles. As a result, the FLRA has jurisdiction over them concerning those employees. Ohio had argued that the U.S. Department of Defense, rather than state militias, should be responsible for negotiating with unions representing technicians. The decision upholds the power of the FLRA to hear disputes between the National Guard and unions, based on a ruling by the 6th U.S. Circuit Court of Appeals in 2021. Justices Samuel Alito and Neil Gorsuch dissented, contending that the FLRA's authority is limited to federal agencies and that National Guards do not become federal agencies solely through delegated tasks.

U.S. labor agency has power over state militias, Supreme Court rules | Reuters

Crypto exchange FTX, which filed for bankruptcy in November, has initiated legal action to recover over $240 million it paid for stock trading platform Embed. FTX has filed three lawsuits in the U.S. Bankruptcy Court, accusing former FTX insiders, including founder Sam Bankman-Fried, Embed executives, including founder Michael Giles, and Embed shareholders of misconduct. FTX alleges that Bankman-Fried and others misused company funds to acquire stakes in Embed without conducting proper investigations. FTX closed the Embed acquisition just weeks before its bankruptcy, and the current CEO described the actions leading to the collapse as "old-fashioned embezzlement." FTX's recent attempt to sell Embed resulted in an offer of only $1 million from Giles, indicating a significant disparity between the acquisition cost and the company's actual value. FTX claims that Embed's software was essentially worthless and alleges that little investigation was conducted before the purchase. FTX seeks to recover $236.8 million from Giles and Embed insiders and $6.9 million from Embed minority shareholders.

FTX seeks to claw back over $240 million from Embed acquisition | Reuters

This is a bit of news that actually dropped last week, but kind of flew under the radar. The Judicial Conference's Executive Committee has determined that the COVID-19 emergency no longer impacts the operation of federal courts. As a result, a 120-day grace period will begin on May 24, during which federal courts can maintain remote public audio access to civil and bankruptcy proceedings, similar to the arrangements made during the pandemic. However, the grace period does not extend to virtual criminal proceedings, which ceased on May 10 as permission granted under the CARES Act expired. The Judicial Conference Committee on Court Administration and Case Management will continue to assess potential changes to the broadcasting policy for civil and bankruptcy proceedings based on data collected during the pandemic and is expected to present a report in September.

Judiciary Ends COVID Emergency; Study of Broadcast Policy Continues | United States Courts

Deutsche Bank has agreed to pay $75 million to settle a lawsuit filed by women who claimed they were abused by Jeffrey Epstein, the late financier. The settlement resolves a proposed class action and addresses accusations that Deutsche Bank facilitated Epstein's sex trafficking activities by failing to identify red flags in his accounts. Epstein was a client of the bank from 2013 to 2018. The settlement is subject to approval by U.S. District Judge Jed Rakoff, who has scheduled a preliminary hearing for June 1. Two similar lawsuits against JPMorgan Chase & Co, another bank associated with Epstein, remain unresolved.

Deutsche Bank to pay $75 million to settle lawsuit by Epstein accusers | Reuters



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22 May 2023Mon 5/22 - Big Law Mergers, Meta Gets Slapped with Fine, Lawyers Gotta Snitch and SCOTUS Says IRS can Summon Bank Records Without Notice00:08:22

We have a potentially perspective-shifting “this day in legal history” for today. On this day, May 22, in 1872, President Ulysses S. Grant signed the General Amnesty Act. Under the provisions of the act, all but around 500 Southern male voters had their voting rights reinstated after losing them for, you know, starting the Civil War. For a reference point, total numbers for the army of the Confederacy vary, but somewhere between 750,000 and 1.2 million individuals fought for the south in the war. So all but about 0.07% of the members of the Confederate Army had their right to vote reinstated within 7 years of the war ending and Lincoln’s assassination. 

For perspective, at present day, 4.6 million Americans are denied the right to vote owing to a felony conviction – constituting about 2% of the total voting age population. In Alabama, Mississippi, and Tennessee – more than 8 percent of the adult population, or one out of every 13 folks of voting age, is disenfranchised.

Law firms Allen & Overy and Shearman & Sterling have agreed to merge, pending partner approval, creating a significant new player in the legal industry. The combined entity, to be named Allen Overy Shearman Sterling, will comprise over 3,900 lawyers worldwide. The merger follows the breakdown of Shearman's talks with Hogan Lovells earlier this year and provides Allen & Overy with a larger presence in the US. The firms aim to offer integrated and globally consistent services in response to client demands. The leadership structure of the combined firm has not yet been determined, with officials from both firms expected to share leadership responsibilities.

London’s Allen & Overy to Merge With Shearman & Sterling (1)

Law firms Allen & Overy and Shearman & Sterling plan merger | Reuters

Meta Platforms Inc., the owner of Facebook, has been slapped with a record-breaking €1.2 billion ($1.3 billion) fine by the European Union (EU) for privacy violations. The EU regulators found that Meta failed to adequately protect users' personal information from US governmental access and continued to transfer data to the US, posing risks to fundamental rights and freedoms. In addition to the fine, Meta has been given a deadline of five months to halt any future transfer of personal data to the US and six months to cease the unlawful processing and storage of EU data in the US. Meta's stock price saw a 1% decline following the announcement.

While the ban on data transfers was anticipated, it is now less likely to have a significant impact due to the transition period and the potential for a new EU-US data flows agreement in the near future. This ongoing saga originated when the EU's top court invalidated an EU-US pact governing transatlantic data flows due to concerns about the safety of citizens' data on US servers. Despite an alternative tool based on contractual clauses not being struck down by the court, doubts about US data protection prompted the Irish authority to issue a preliminary order prohibiting Facebook from using this method as well.

Meta plans to appeal the Irish decision, claiming it is flawed and unjustified. The company intends to seek a suspension of the banning orders, emphasizing the potential harm to the millions of people who use Facebook daily. Meta's president of global affairs and chief legal officer expressed concerns that these data-transfer restrictions could fragment the internet, impede the global economy, and limit access to shared services.

Meta Fined Record $1.3 Billion in EU Over US Data Transfers - Bloomberg

The State Bar of California's board of trustees has voted in favor of a new ethics rule that would require lawyers to report professional misconduct by their peers. The rule, referred to as the "snitch rule," mandates the reporting of criminal acts, fraud, misappropriation of funds, and other conduct that reflects negatively on a lawyer's honesty, trustworthiness, or fitness. The rule change is aimed at improving lawyer oversight in the wake of the Tom Girardi scandal, where the founder of Girardi Keese faced numerous ethics complaints and was later charged with taking millions of dollars from clients. California, with its large number of lawyers, and relatively high number of large law firms, has received both support and opposition for the rule, as one might expect. Non-attorneys generally favor the change, viewing it as a deterrent to misconduct, while some lawyers argue that it would overwhelm the disciplinary system and hinder lawyer-client relationships. The proposed rule has been sent to the California Supreme Court for final approval, and potential discipline for non-compliance ranges from private reproval to a three-year suspension.

Under ethics pressure, California state bar advances lawyer 'snitch' rule | Reuters

The US Supreme Court ruled unanimously in favor of the IRS in a case concerning the agency's authority to request bank records without notice. The court stated that the IRS can exercise its power to aid tax collection even if the delinquent taxpayer does not have a legal interest in the targeted records. 

The case, Polselli v. IRS, originated from the IRS's attempts to collect a tax assessment against Remo Polselli, who was suspected of using entities to shield assets. The IRS issued summonses to Polselli's law firm and later to banks for records related to the firm and Polselli's wife. The ruling has implications for bank account holder protections, as account holders can only challenge the summons's validity if they had the right to notice. The ruling distinguishes between post-assessment collection cases, where notice is not required, and cases prior to tax assessment, where notice is generally given.

In the court's opinion, Chief Justice John Roberts acknowledged concerns about the scope of the IRS's authority but did not define the precise limits of the phrase "in aid of the collection." The ruling leaves open the question of whether there are further limits on the IRS's exception to notice. In a concurring opinion, Justice Ketanji Brown Jackson outlined potential situations where the IRS might be required to directly notify account holders. However, it remains uncertain how many justices would agree with those potential limits. The IRS is under pressure to close the tax collection gap, but critics worry that the ruling erodes the notice system and places the responsibility on the IRS to determine when notice is required. The government suggested a possible test for allowing no-notice summonses: that the demands be "reasonably calculated to assisting in collection."

Supreme Court Leaves Open Question on Limit of IRS Summons Power



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23 May 2023Tues 5/23 - DOJ Goes After Banks for COVID Frauds, Class Action Suit Against Musk is Thrown Out, TikTok Sues Montana, and Column Tuesday00:07:52

We have an interesting “this day in legal history” for today – on May 23, 1788 South Carolina ratified the U.S. Constitution and became the eighth state. 

South Carolina's journey towards statehood can be traced back to the early days of the United States. Initially, the area was encompassed within the original territory defined in the 1663 charter establishing Carolina, which included both North and South Carolina. The separation of the two regions took place in 1712 and was officially solidified when the Carolina Colony dissolved in 1729, with a shared boundary resembling the present states. However, the precise delineation of this boundary was not settled until 1813. During this time, South Carolina relinquished some of its territory to the United States, which ultimately formed part of the Georgia and Mississippi Territory in 1802. On May 23, 1788, South Carolina ratified the U.S. Constitution, becoming the eighth state among the original 13 to join the Union. 

72 years later it would be the first state to secede from the Union, on December 20, 1860 following the election of Abraham Lincoln. The South Carolina Declaration of Secession formally pointed to one of Lincoln’s most famous lines as the reason secession was necessary:

“A geographical line has been drawn across the Union, and all the States north of that line have united in the election of a man to the high office of President of the United States, whose opinions and purposes are hostile to slavery. He is to be entrusted with the administration of the common Government, because he has declared that that ‘Government cannot endure permanently half slave, half free,’ and that the public mind must rest in the belief that slavery is in the course of ultimate extinction.”

The Civil War, in effect, began in Charleston Harbor on April 12, 1861. We all make mistakes; granted, most of our mistakes don’t rise to the level of starting a Civil War to preserve slavery – but all the same. Happy Birthday, South Carolina. 

The Justice Department is shifting its focus to financial institutions involved in Covid-19 loan fraud cases, aiming to uncover evidence of banks approving fake loans or bypassing fraud-detection measures. This shift comes after the successful prosecution of small-time scammers who misused emergency relief loans. The government faces challenges in holding lenders accountable, including forgiving Trump-era guidance that banks may cite in their defense. Larger banks with sophisticated prevention practices are less vulnerable, while regional banks, local institutions, and fintechs face greater scrutiny. So far, the Department of Justice (DOJ) has achieved limited results, but a 10-year statute of limitations allows ample time for investigations in the finance sector. DOJ's acting Covid enforcement chief has hinted at a new focus on lenders and financial institutions that enabled fraudulent activity. Cases are expected to primarily seek civil liability, although criminal charges may be possible for willful and systemic offenders. 

Fintechs, especially those lacking experience in establishing anti-fraud controls, are likely targets. The compressed time frame and evolving regulatory guidance during the rollout of programs like the Paycheck Protection Program (PPP) offer potential defenses for institutions. The Bank Secrecy Act, which requires financial institutions to prevent money laundering, could also be leveraged in enforcement efforts. However, experts are skeptical about the DOJ's ability to achieve an enforcement sweep similar to the post-housing crisis period. Investigations may utilize the False Claims Act and scrutinize customer due diligence and failure to report fraud or suspicious activity. Both traditional and online lenders, including brick-and-mortar and regional banks, may face scrutiny, especially if there was a close relationship with fraudulent borrowers. The complexity of the Covid-19 relief programs and the government's execution may be raised as arguments in defense.

Covid Loan Fraud Probes Turn to the Bankers Who Approved Them

A proposed class-action lawsuit against Elon Musk, claiming he cheated Twitter shareholders during the company's buyout, has been dismissed by a judge. U.S. District Judge Charles Breyer in San Francisco ruled that the plaintiff lacked standing to sue because the lawsuit challenged Musk's actions associated with the buyout, rather than the fairness of the buyout itself. The judge found no evidence that Musk's belated disclosure of a 9.2% Twitter stake or the delay in the closing of the buyout caused harm to the plaintiff. The plaintiff had alleged that Musk’s stake allowed him to buy more shares at lower prices prior to the actual buyout. Additionally, there was no proof that Musk helped two friends breach their fiduciary duties by favoring their own and Musk's interests. The plaintiff's lawyers have not yet commented on the ruling. Musk, who also heads Tesla Inc, is the world's second-richest person. Twitter has faced challenges in maintaining ad revenue and recently appointed a new CEO.

Judge throws out shareholder lawsuit against Elon Musk over Twitter buyout | Reuters

TikTok has filed a lawsuit against the state of Montana in response to its ban on the Chinese-owned app. Montana became the first state to prohibit the use of TikTok, with the ban scheduled to take effect on January 1. You will remember our previous reporting on Montana TikTok users suing Montana, now their state has been brought into the legal fray. TikTok argues that the ban violates the First Amendment rights of the company and its users. The lawsuit, filed in a Montana federal court, also claims that the ban is pre-empted by federal law and infringes upon matters of exclusive federal concern, as well as violating the Commerce Clause of the U.S. Constitution. The ban imposed by Montana carries potential fines of $10,000 per violation by TikTok. Former President Donald Trump previously attempted to ban TikTok and WeChat at the federal level, but those efforts were halted by court decisions. 

TikTok sues Montana after state bans app | Reuters

The Biden administration's plan to introduce a Digital Asset Mining Energy (DAME) excise tax on electricity used for crypto mining is deeply flawed. While the tax aims to offset climate change, I argue that it is administratively unworkable and misdirected. The lack of clarity on enforcement and the diverse nature of crypto miners pose challenges. Monitoring individual computers or installing spyware would be impractical and costly. Instead, the focus could be shifted to taxing the electricity usage of data centers and artificial intelligence (AI). 

AI models and language generation require significant amounts of electricity, making them potential targets for taxation. The growing AI sector offers an opportunity to offset future energy demands on the grid. However, implementing an excise tax on AI also poses challenges in determining the purpose of electricity usage. An alternative proposal is to broaden the tax to include data centers more generally, avoiding market distortion and future-proofing the tax. 

Otherwise, sectors such as the chemical industry and major technology companies like Google and Microsoft consume substantial amounts of electricity and could be suitable targets. If the goal is to regulate crypto, I suggest focusing on specific regulations rather than an impractical and ineffective excise tax.

Crypto Mining Electricity Excise Tax Should Target AI Instead



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24 May 2023Weds 5/24 - Withdrawn Federal Judge Nominee, Chief Justice Roberts Assures us he is Ethical, Simplifying Automatic Tax Extensions and Affirmative Action Targeted by SCOTUS00:07:16

We have an interesting “this day in legal history” for today – its Benjamin Cardozo’s birthday. If he were alive today he’d be 153 years old and thus very dead. Who is he? Well…

Benjamin Cardozo, born on May 24, 1870, in New York City, was an influential associate justice of the United States Supreme Court from 1932 to 1938. He was known for his creative approach to common-law judging and legal essay writing, which played a significant role in modernizing legal principles and promoting greater involvement with public policy in American appellate judging. 

While generally considered a liberal, Cardozo's focus was more on the nature of the judicial process than ideology. His most notable contributions were made during his time on the New York Court of Appeals, where he served from 1914 to 1932, including as chief judge from 1926. Cardozo came from a distinguished Sephardic Jewish family and had a stellar personal reputation. 

As a lawyer, he achieved great success in the courtroom despite his reserved demeanor. Cardozo's decisions in landmark cases such as MacPherson v. Buick Motor Company (1916) and Palsgraf v. Long Island Railroad Co. (1928) reshaped legal concepts in the United States. In 1932, he was appointed to the U.S. Supreme Court by President Herbert Hoover. During the New Deal era, Cardozo generally aligned with liberal justices and wrote significant opinions, including the majority opinion in Helvering v. Davis (1937), upholding the Social Security program. His ruling in Palko v. Connecticut (1937) introduced a test for incorporating provisions of the Bill of Rights into state law, which remained in use until 1969. 

Cardozo's jurisprudential work, particularly his book "The Nature of the Judicial Process" (1921), and his involvement with the American Law Institute further solidify his lasting impact on American law. Benjamin Cardozo's contributions as a jurist continue to shape legal thinking and practice to this day.

Jabari Wamble, a federal prosecutor and nominee for a federal trial court judge in the District of Kansas, has requested the White House to withdraw his nomination. In a letter to President Joe Biden, Wamble cited his decision to continue his work at the United States Attorney's Office in the District of Kansas. Initially nominated for a seat on the US Court of Appeals for the Tenth Circuit last year, Wamble did not receive a hearing or a rating from the American Bar Association (ABA), which is customary for federal judicial nominees. Subsequently, Biden nominated him for the trial court judgeship in February, but his confirmation process once again stalled without a hearing. The ABA has not yet rated Wamble's qualifications for the district court position. It was anticipated that he would receive a "not qualified" rating from the ABA. This withdrawal follows another recent withdrawal by Michael Delaney, who asked to withdraw his nomination for a judge on the First Circuit due to bipartisan concerns surrounding his prior representation in a sex assault litigation case.

US District Court Nominee Wamble Withdraws from Consideration (1)

Chief Justice John Roberts has expressed his commitment to upholding the highest standards of conduct in the Supreme Court. Speaking at an awards ceremony hosted by the American Law Institute, Roberts assured the public and Congress of his dedication to maintaining the court's integrity. He acknowledged the ongoing scrutiny faced by some justices and emphasized the court's efforts to explore practical measures to ensure ethical standards. 

Roberts's comments come as Congress investigates the conduct of Justice Clarence Thomas and considers legislation for a code of conduct for the high court. The court has recently faced ethical controversies, including questions surrounding vacations and benefits received by Thomas from a Republican donor and his involvement in cases related to the January 6 Capitol attack. Calls for a binding code of conduct for the Supreme Court have been amplified by these controversies. Despite the challenges, Roberts has remained mostly silent, declining to testify on ethics reform and attaching a statement signed by all nine justices that reiterates the court's existing ethics practices. 

Roberts also mentioned the difficulties faced by the court, such as protests outside the homes of justices and the need for round-the-clock marshal protection. The Supreme Court has undergone significant changes with the appointment of three conservative justices under former President Donald Trump, leading to key decisions on abortion rights, gun regulations, religious rights, and federal regulatory power. Roberts, who has occasionally sought to slow down the pace of change, voiced his unsuccessful dissent in last year's abortion case. The court is nearing the end of its current term, with pending decisions on various important issues. Liberal Justice Elena Kagan presented an award to Roberts, highlighting their disagreements but also acknowledging his judicial craftsmanship. So, uh, are your concerns allayed? 

Chief Justice Roberts Says He’s Committed to Highest Standards

Reps. Judy Chu (D-Calif.) and Mike Carey (R-Ohio) have introduced the Simplify Automatic Filing Extensions Act, a bipartisan proposal aimed at helping taxpayers qualify for extensions on their federal tax returns. The bill seeks to change the rules regarding tax return deadlines, allowing taxpayers to make a payment of 125% of their prior year's tax liability to qualify for a six-month extension. Currently, taxpayers requesting an extension must estimate and make a payment based on their current year's tax liability. The lawmakers argue that simplifying the process will reduce stress, improve taxpayer compliance, and allow the government to continue providing essential services. The proposal has garnered support from the Association of International Certified Professional Accountants.

Bipartisan House Pair Introduces New Tax Return Extension Bill

The U.S. Supreme Court is expected to make a ruling by the end of June on whether colleges and universities can continue to consider race in their admissions decisions, known as affirmative action. Affirmative action refers to policies aimed at increasing the representation of minority students, such as Black and Hispanic individuals, on campuses. Many selective schools take race into consideration as part of a holistic review process that considers various factors. 

The litigation before the Supreme Court involves two cases brought by Students for Fair Admissions, challenging the admissions policies of Harvard University and the University of North Carolina. The court's conservative majority has expressed skepticism about the role of race in admissions, leading legal analysts to anticipate a ruling against the schools. 

If the court were to ban affirmative action, colleges and universities would need to find alternative ways to promote diversity in their student populations, as eliminating race-conscious admissions could result in fewer minority students on campuses. The possible outcomes include maintaining the current system, eliminating affirmative action entirely, or establishing more stringent limits on the practice.

Explainer: What happens if the Supreme Court bans affirmative action? | Reuters

U.S. Supreme Court conservatives lean against race-conscious student admissions | Reuters



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25 May 2023Thurs 5/25 - TD Bank Shareholder Suit, Oath Keeper Sentenced, ADA Circuit Split (?) and a New Bar Exam00:07:37

We have a fun “this day in legal history” for today – it's the anniversary of the start of the Scopes Monkey Trial. 

The Scopes "monkey trial" took place in 1925 and involved the prosecution of high school teacher John T. Scopes for teaching evolution, which was prohibited by Tennessee's Butler Act. Scopes was found guilty and fined $100, but the Tennessee Supreme Court later overturned the conviction due to a technicality. The trial was initiated when the American Civil Liberties Union (ACLU) offered to support any teacher willing to challenge the Butler Act's constitutionality.

George W. Rappleyea, the manager of a local company in Dayton, Tennessee, saw the ACLU's advertisement and saw it as an opportunity to put Dayton back on the map. Rappleyea gathered a group of prominent residents, including school superintendent William White, who recruited Scopes as the defendant. Ironically, the textbook used in Tennessee schools, George W. Hunter's "A Civic Biology," endorsed evolution, thus requiring biology teachers to violate the Butler Act.

The trial gained national attention, and renowned attorneys William Jennings Bryan and Clarence Darrow joined the prosecution and defense, respectively. Bryan opposed evolution due to its association with eugenics and social Darwinism, while Darrow was a respected lawyer known for his involvement in high-profile cases. The trial had a festive atmosphere, with banners, large crowds, and the first live radio broadcast of a trial.

The trial ended with Scopes being found guilty by the jury in a remarkably short time of nine minutes. However, the Tennessee Supreme Court overturned the conviction because the judge had imposed a fine of $100, exceeding the jury's authority. While upholding the constitutionality of the Butler Act, the court stated that the case should not be prolonged.

In later years, the U.S. Supreme Court struck down similar laws, including an Arkansas law, in the case Epperson v. Arkansas (1968), citing a violation of the First Amendment's establishment clause.

Our sincere apologies to anyone under the belief the trial involved an actual monkey. 

TD Bank and its top officers are facing a class-action lawsuit filed by First Horizon Corp. stockholders. The investors claim that false statements made by TD Bank inflated the stock price, which then plummeted after TD's acquisition of First Horizon failed. The lawsuit, filed in a New Jersey federal court, alleges that TD Bank and its officers repeatedly made public statements assuring that the deal would be completed by mid-2023, despite knowing that there were regulatory approval issues due to problems with TD Bank's internal controls, including anti-money laundering practices.

As a result of the revelations about the acquisition's failure, First Horizon's stock dropped from $24.64 per share to $10.06 on May 4 when the deal was abandoned. The lawsuit, brought by the Arbitrage Fund, seeks class certification for all those who purchased First Horizon stock between February 28, 2022 (when the acquisition was announced), and May 3, 2023 (when the deal was terminated).

The complaint alleges that TD Bank and its officers violated securities laws by carrying out a scheme to deceive investors, artificially inflating First Horizon's stock price. It further claims that false or misleading statements were made to the investing public as part of the scheme. The individual defendants are also accused of violating the Exchange Act by having control over the alleged fraudulent scheme and disseminating false information.

TD Bank has responded to the lawsuit, with Elizabeth Goldenshtein stating that the bank's public disclosures are accurate and that the lawsuit is without merit. The case is titled Arbitrage Fund v. Toronto-Dominion Bank.

TD Bank Sued by First Horizon Investors After Acquisition Fails

Stewart Rhodes, the founder of the far-right Oath Keepers militia, is facing sentencing later today for charges of seditious conspiracy and other crimes related to the U.S. Capitol attack on January 6, 2021. Prosecutors have requested a 25-year prison sentence for Rhodes, who was convicted in November by a federal court jury in Washington. The sentencing hearing is scheduled to take place before U.S. District Judge Amit Mehta. Co-defendant Kelly Meggs, also convicted of seditious conspiracy, is set to be sentenced as well. Prosecutors argue that Rhodes led a conspiracy of over 20 U.S. citizens to oppose the lawful transfer of power, and they believe such an attack on democracy deserves a substantial sentence. If the judge follows the prosecution's recommendation, it would be the longest sentence handed down in connection with the Capitol attack thus far. Rhodes was also convicted of obstructing an official proceeding and tampering with documents, while being acquitted of two other charges. Prosecutors are requesting a prison term longer than U.S. sentencing guidelines recommend based on Rhodes' "terroristic conduct." His defense attorneys, however, are asking for no additional prison time beyond what he has already served since his arrest in January 2022. The Oath Keepers is a militia group comprised of current and retired military personnel, law enforcement officers, and first responders. Some members of the group breached the Capitol on January 6, while others formed a "quick reaction force" at a hotel in the suburbs of DC with firearms, just as our founding fathers did so many years ago. Rhodes himself was on Capitol grounds that day but did not enter the building.

Oath Keepers founder faces sentencing for sedition in US Capitol attack | Reuters

A federal appeals court, the US Court of Appeals for the Eleventh Circuit, has ruled that workers suing employers under the Americans with Disabilities Act (ADA) for failing to accommodate their disabilities must demonstrate that they were fired, disciplined, or faced another adverse action that negatively affected their employment. 

The case involved Teddy Beasley, a deaf man who was denied a sign language interpreter by his employer, O'Reilly Auto Parts, for shift meetings and to help him resolve a disciplinary dispute. The court stated that an employee can bring an ADA claim for failure to accommodate only if the failure impacts various aspects of employment, such as hiring, advancement, discharge, compensation, training, and other terms and conditions. 

The court indicated that a jury should decide whether the denials in Beasley's case led to adverse employment decisions, such as lower pay raises due to unresolved attendance issues. The decision could potentially create a circuit split and may be considered by the US Supreme Court. Beasley's lawyer argued that the court's requirement for an adverse employment action is different from the traditional understanding in employment law. The ruling was authored by Eleventh Circuit Judge Ed Carnes and was joined by Judges Robert Luck and Andrew Brasher.

Adverse Act Needed for ADA Accommodation Claim: 11th Cir. (1)

The National Conference of Bar Examiners has unveiled the content of the new NextGen Bar Exam, which is set to debut in July 2026. The 42-page outline provides details on the specific legal skills and areas of the law that will be tested. Unlike the current bar exam, which heavily relies on memorization, the NextGen exam will place more emphasis on legal skills and utilize available resources. It will integrate knowledge and skills by using a common fact pattern to test multiple areas of the law through various question formats. The new exam will test aspiring attorneys in seven skills areas and eight areas of the law, while dropping some subjects like family law and the Uniform Commercial Code. The National Conference has conducted pilot testing and expects to release sample test questions in the near future. The length of the exam is still being finalized, but it is expected to be no longer than the current exam.

A new bar exam is coming. Here's what it will test. | Reuters



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26 May 2023Fri 5/26 - BigLaw Return to Office Continues, Oath Keepers Leader Sentenced, Breaking up Large Banks and Tax Provisions in Debt Ceiling Talks00:06:57

We have another Andrew Johnson-related “this day in legal history” for today – on May 26 in 1868, the impeachment trial of President Andrew Johnson concluded without conviction. 

In 1868, President Johnson faced impeachment, and his fate rested on a single vote in the Senate trial. Johnson had become president after Abraham Lincoln's assassination and had a strained relationship with Republican leaders, particularly the Radical Republicans. The House of Representatives impeached Johnson on charges of violating the Tenure of Office Act by removing Secretary of War Edwin Stanton without approval. The Senate trial required a two-thirds majority to convict Johnson.

Senator Edmund Ross of Kansas, a Republican, cast the deciding vote. It was expected that Ross would vote against Johnson, but to the surprise of many, he voted "Not guilty." The Radical Republicans requested an adjournment, and the trial concluded on May 26 with failed votes on two more articles.

The controversy surrounding Ross's vote centers on why he changed his mind. Some speculate that he may have been influenced by a $150,000 slush fund set up by Johnson's supporters. However, there is evidence that Ross's vote may not have been crucial, as at least four other senators were prepared to oppose conviction if necessary.

Skadden, one of the largest law firms in the US, has announced a new policy requiring lawyers to work in the office four days a week. Previously, attorneys were required to be in the office only on Tuesdays through Thursdays. The firm stated that the modified hybrid work model aims to leverage the benefits of remote work while fostering innovation and professional development through increased in-person collaboration. Other prestigious law firms like Davis Polk & Wardwell, Milbank, and Simpson Thacher have already implemented similar office attendance policies. Some firms, such as Simpson Thacher and Sidley Austin, have even threatened to withhold bonus money from associates who do not comply with the office attendance requirements. The shift in policies reflects a power shift in the legal industry, with employers holding more sway due to economic conditions and cost-cutting measures. Younger lawyers, in particular, prefer flexible work arrangements, and a significant number would consider leaving their current jobs for opportunities with greater remote work options. Hybrid work arrangements have become prevalent across industries, with companies like Starbucks, Amazon, and Walt Disney implementing similar policies. However, JPMorgan Chase CEO Jamie Dimon has expressed skepticism about remote work, stating that it doesn't work well for younger staff and management roles.

Skadden Forces Lawyers Back to Offices Four Days Per Week (1)

Stewart Rhodes, the founder and leader of the Oath Keepers, has been sentenced to 18 years in prison for his involvement in a plot to keep former President Donald Trump in power after losing the 2020 election. Another member of the Oath Keepers, Kelly Meggs, the leader of the Florida contingent, received a 12-year prison sentence. These are the first sentences for seditious conspiracy in over a decade. The judge emphasized that Rhodes' actions posed a threat to democracy and the fabric of the country, and he expressed concerns about future election-related violence. 

Rhodes was convicted of seditious conspiracy by a Washington, DC, jury in November, and the judge ruled that his actions amounted to domestic terrorism. Prosecutors had requested a 25-year prison sentence for Rhodes, while Meggs showed contrition and received a lesser sentence due to his lesser role in the conspiracy. Rhodes, before his sentencing, claimed to be a political prisoner and repeated false allegations about the 2020 election. The sentencing is seen as having a chilling effect on extremist groups, and Capitol Police officer Harry Dunn stated that he hopes former President Trump will be held accountable next.

Stewart Rhodes: Oath Keepers leader sentenced to 18 years in prison for plot to keep Trump in power | CNN Politics

The Office of the Comptroller of the Currency (OCC) has announced plans to restrict the growth of large banks and potentially force them to sell assets if they fail to address ongoing issues. The decision follows concerns raised by acting Comptroller Michael Hsu that certain banks are becoming "too big to manage." The OCC intends to use various measures against banks that receive poor management grades, fail to address problems identified in enforcement actions, or face multiple enforcement actions over three years. These measures could include increasing capital and liquidity levels, limiting expansion plans, or canceling dividend payments. In severe cases, the OCC may consider mandating banks to reduce their asset size, divest subsidiaries or business lines, or exit certain markets. The policy aims to ensure that deficiencies are identified and that banks are given opportunities to rectify them. The new enforcement policy comes at a time when U.S. regulators are sending mixed signals regarding allowing further consolidation in the banking industry. Some regulators, such as Consumer Financial Protection Bureau Director Rohit Chopra, argue for dismantling large banks that pose risks to the economy, while others, including Treasury Secretary Janet Yellen, suggest that increased merger activity may be necessary to strengthen the financial system.

Big Banks With ‘Persistent Weaknesses’ Targeted for Breakup

House Republicans are preparing to introduce a tax package that reveals divisions within the caucus and provides insights into the policy approach of the new Ways and Means Committee chairman. The economic package, set to be unveiled in early June, is expected to include measures such as research and development tax breaks, full bonus depreciation, and interest expense deductions. Lawmakers are vying to ensure their priorities are included in the package, with potential measures including lifting the state and local tax deduction cap and changes to the Child Tax Credit. Ways and Means Committee Chairman Jason Smith has shown interest in the Child Tax Credit, and the bill will provide an indication of his stance on various tax issues. The package will need to garner enough votes from the caucus to pass the House. Republican lawmakers have been discussing potential provisions, including individual tax relief and increasing the 1099-K tax reporting threshold. There is also support for a version of the Child Tax Credit to be included, as it expired in 2021. The inclusion of some Child Tax Credit provisions would signal willingness to collaborate with Democrats. Additionally, Republican lawmakers from high-tax states are meeting with Smith to address the cap on state and local tax deductions. The caucus has not decided on its position if the package does not address the SALT cap, but it remains an important issue for them.

SALT Cap Tweak, Child Tax Credit in the Mix for GOP Tax Package



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30 May 2023Tues 5/30 - IRS Gets Sold Out in Debt Limit Deal, ShotSpotter in a Tight Spot, TX AG Paxton Impeached, Trump Attacks Judges and Column Tuesday!00:08:42

On this day in 1431 Joan of Arc was burned at the stake. Born in France somewhere around 1412, she emerged as a pivotal figure during the Hundred Years' War. Joan, a peasant girl, claimed to receive divine visions that called her to rally the French against the English invaders. Numerous theories have been floated by modern scholars as to the underlying cause of the visions, but that makes little difference. Thereafter and owing to them, she led armies into battle, and achieved remarkable victories, ultimately contributing to the coronation of Charles VII as the rightful king of France. As so often is the case with folks that lead such movements, the story didn’t end well for her. 

In a debt limit deal, President Joe Biden and GOP House Speaker Kevin McCarthy have agreed to reduce the IRS's funding by more than $21 billion from its $80 billion supplemental funding. The White House maintains that this cut will not significantly alter the IRS's operations in the coming years and believes the agency can proceed with its overhaul plans in the near term, though additional funding may be necessary in the future.

McCarthy claims victory, stating that the bill would halt the agency's workforce expansion. The legislation trims $1.4 billion in IRS funding provided by Democrats last year and reallocates $10 billion from the Inflation Reduction Act to non-defense priorities in fiscal years 2024 and 2025. This reduction in funding may be seen as a win for Republicans who have sought to reclaim a significant portion of the allocated funds. 

The bill still requires House and Senate votes, with limited time before the approaching deadline when the US could run out of funds to pay its bills. The legislation sets federal spending benchmarks, suspends the debt ceiling until after the 2024 election, and includes various spending cuts across multiple programs. The IRS's requested funding increase has faced criticism from Republicans, but the agency argues that without sufficient operational funding, the supplemental money would be ineffective in transforming its infrastructure. The allocation for enforcement funding has been a contentious issue, with Republicans spreading false claims while Democrats defend the need for increased enforcement to ensure tax compliance among the wealthiest taxpayers and businesses, exempting those making less than $400,000.

IRS Gets $21 Billion Haircut In Debt Limit Deal

ShotSpotter, now known as SoundThinking Inc., is facing an increasing number of subpoenas from attorneys seeking to either support or challenge criminal cases using its data. The company, based in Fremont, California, has been served with subpoenas several times a week and has been asked to produce data in over 250 criminal cases across 22 states. 

ShotSpotter's technology uses a network of microphones and sensors to detect possible gunshots, but this has led to arrests for unrelated crimes, putting the company at the center of a legal battle between prosecutors and defense attorneys. Defense attorneys argue that the use of ShotSpotter data violates their clients' constitutional rights, while prosecutors rely on the data to establish probable cause for police stops. The defense bar believes it is necessary to subpoena ShotSpotter data, but as cases are decided by trial courts, both sides will gain a better understanding of how judges treat this evidence, potentially resulting in a decrease in subpoenas. 

ShotSpotter has an in-house team and an external law firm to handle the high volume of subpoenas. 

The reliability of ShotSpotter data has been questioned, with defense attorneys arguing that it is too unreliable to be used as evidence. The rulings by judges on the admissibility of ShotSpotter evidence have been inconsistent across different states. While ShotSpotter has received court rulings in eight states allowing its data to be used as evidence, defense lawyers will continue to raise Fourth Amendment concerns if prosecutors persist in using the data. The counterargument to its use is that it lacks rigorous scientific testing and reliability comparable to the gold standard, which is DNA evidence.

ShotSpotter Trapped in Subpoena War From Data Hungry Attorneys

The Texas House of Representatives has voted to impeach Attorney General Ken Paxton, a staunch conservative and ally of former President Donald Trump. The vote came after a lengthy debate, with 121 members in favor and 23 against impeachment. Paxton, who is accused by fellow Republicans of abusing his office, will now be temporarily removed from office pending a trial in the Senate. His wife, Angela Paxton, is a senator in the Texas Senate, which is currently in recess until Sunday. Paxton has denied the accusations and criticized the impeachment proceedings as unjust. The impeachment articles include allegations of improperly aiding a political donor, conducting a sham investigation against whistleblowers, and covering up wrongdoing in a federal securities fraud case. The impeachment has exposed divisions among Texas Republicans, with some supporting the removal of Paxton while others criticize the process and question the evidence. Paxton, known for his far-right positions on cultural issues, has filed numerous lawsuits against the Biden administration. The Texas House General Investigating Committee unanimously recommended his impeachment based on years of alleged abuse of office.

Texas House votes to impeach Attorney General Ken Paxton | Reuters

Former President Trump is intensifying his attacks on judges as he faces increasing legal scrutiny. He has criticized judges overseeing cases involving him, questioning their motives or legitimacy. Trump has targeted the judge handling the civil case brought by writer E. Jean Carroll and the judge overseeing the hush money case brought against him by Manhattan District Attorney Alvin Bragg. This strategy is not new for Trump, as he frequently questioned court rulings during his presidency. However, his attacks on judges are notable as he campaigns for the 2024 presidential election, promising "retribution" for those who feel wronged by the government. 

Trump has taken to social media, calling judges biased or partisan, and his attacks have raised concerns within the legal community. Observers warn that such irresponsible attacks undermine the justice system and the rule of law. Threats against federal judges have increased in recent years, and some judges and their families have received death threats due to Trump's criticism. The disruptions and threats extend beyond individual cases, potentially discouraging people from participating in the court system. While Trump's rhetoric alarms Democrats and some independents, only a few Republicans have raised concerns about his attacks on the judiciary. 

Trump's disregard for the norms surrounding the justice system raises questions about the fairness of his actions and their potential impact on ongoing cases. The responsibility often falls on bar associations and legal organizations to defend the legal system when judges are attacked. Trump's speech has been restricted in some cases, but in others he remains free to discuss the cases and express his opinions on social media. It is unclear whether his strategy is strategic or primarily aimed at gaining public support and fundraising for his campaign.

Trump escalates attacks on judges amid increasing legal scrutiny | The Hill

The IRS's report on implementing an IRS-run direct e-file return system has received widespread approval as it promises a public option for filing tax returns. However, ensuring data security and accountability is crucial when transitioning from a system dominated by for-profit private tax preparers to one dominated by a public entity. While public entities aren't inherently more secure than private ones, accountability for data leaks and mishandling is often lacking in the private sector. The Taxpayer Bill of Rights should be amended to include the Right to Ownership of One's Data, granting taxpayers control over their personal information and the ability to seek compensation and legal recourse if their data is misused by any entity, including the IRS. Looking at Canada's tax system, which primarily relies on an online portal, it becomes evident that the IRS must not disclaim liability in the event of data security violations. A simple process for filing damage claims related to data leaks should be established to protect taxpayers' interests and ensure that the new system prioritizes security and privacy.

IRS Direct File Program Must Ensure Taxpayer Data Stays Secure



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31 May 2023Weds 5/31 - ChatGPT Lawyer Debacle, Debt Limit Deal, Manhattan DA Wants Trump in State Court, KPMG and Credit Suisse Sued and Death to NDAs00:08:46

We have a somber anniversary to acknowledge today as our “this day in legal history” entry. On this day in 1921 the Tulsa race massacre occurred in Tulsa, Oklahoma. 

In May 1921, the Greenwood neighborhood in Tulsa, Oklahoma, was a thriving and prosperous community built by Black people. It was known as America's Black Wall Street and was home to approximately 10,000 residents. Greenwood had a vibrant economy with businesses, homes, schools, churches, and entertainment venues.

However, in less than 24 hours, the neighborhood was destroyed by racial violence during the Tulsa Race Massacre. A white mob of looters and arsonists attacked Greenwood, killing hundreds of residents and destroying homes and businesses. The violence was fueled by resentment towards the Black prosperity found in Greenwood.

The financial toll of the massacre was estimated to be $1.8 million in property loss claims, equivalent to $27 million in today's dollars. The destruction of property was just one aspect of the devastation caused by the massacre. The real loss was the incalculable generational wealth that could have shaped the fortunes of Black families and contributed to their economic prosperity.

Greenwood was rebuilt in the years following the massacre, but it eventually declined due to urban renewal and other factors. The legacy of the massacre has been deliberately buried in history, and even many descendants of perpetrators and victims only learned about it as adults. The survivors faced challenges in rebuilding their lives, including resistance from white officials and insurance companies.

To this day, no one has been held accountable for the destruction caused by the Tulsa Race Massacre. 

WHAT THE TULSA RACE MASSACRE DESTROYED1921 Tulsa Race Massacre - Tulsa Historical Society

I’ve been reluctant to report on this story, just owing to the fact that it has been presented as an AI-gone-wrong story and it isn’t clear to me it is really about AI at all. It seems to be, in chief, a story about legal malpractice and the misuse of technology more generally. It has been making the rounds, however, and so…

A recent incident involving a lawyer and the use of OpenAI's ChatGPT chatbot highlights the risks of relying on AI technology without appropriate safeguards. Lawyers Steven Schwartz and Peter LoDuca are facing potential sanctions after submitting a court brief, written by ChatGPT, that cited six nonexistent cases, which were themselves fabricated by ChatGPT. Schwartz initially believed the tool had provided authentic citations but later discovered that they were invented. This case raises concerns about over-reliance on AI and the need for regulatory guidance in the legal profession.

While AI tools like ChatGPT promise to ease lawyer workloads by compiling information and engaging in human-like conversations, they should not replace the need for careful verification of work.

Schwartz used ChatGPT while representing a client in a case involving an injury on an Avianca Airlines flight. District Judge Kevin Castel noticed the nonexistent cases and bogus quotes in the brief, which were provided by ChatGPT. Schwartz had not used ChatGPT for legal research before and was unaware that its content could be false. The case raises questions about whether lawyers should disclose their reliance on AI tools in their work.

The incident has been pointed to as highlighting the need for law firms to establish internal policies addressing the use of generative AI. To my mind, it is more about the need to establish internal policies addressing the use of technology more generally – this same result could have happened with any form of research gone awry, or even through the misuse of autocorrect. 

While law firms expect their personnel to become proficient in using generative AI, they must also remain mindful of the risks and limitations associated with these technologies and the limitations of their own staff that may not be the most technologically proficient folks. Technology training, more than AI-specific training, is what is needed. 

Lawyer’s AI Blunder Shows Perils of ChatGPT in ‘Early Days’

A debt-limit deal reached between President Joe Biden and Speaker Kevin McCarthy is set to be voted on in the House of Representatives after passing a crucial procedural hurdle. The legislation aims to suspend the US borrowing ceiling and cap federal spending, and it needs to be passed before June 5 to avoid a potential US default. While leaders in both parties support the deal, they face opposition from members who are unhappy with the concessions made during the negotiation process. The bill would set federal spending for the next two years and suspend the debt ceiling until January 2025. In exchange for Republican votes, Democrats agreed to cap federal spending, with the Congressional Budget Office estimating that the bill would reduce deficits by $1.5 trillion over 10 years. The fate of the bill was uncertain, but it cleared the Rules Committee with the support of some conservatives, allowing it to move forward for a vote in the House. Both parties express optimism about the bill's passage in the House and its potential to meet the June 5 deadline. Dissatisfaction among conservative members has grown, with some calling for McCarthy's removal as speaker.

Debt-Limit Deal Heads to House Vote After Clearing Key Hurdle

Manhattan District Attorney Alvin Bragg has filed documents to prevent former President Donald Trump from moving a state criminal case to federal court. The case involves charges of falsifying business records prior to the 2016 election. Bragg argues that Trump is not entitled to a change in venue since he is not a federal officer. Additionally, Bragg asserts that Trump was not a federal officer at the time of the alleged crimes, which relate to a hush money payment to a porn star before Trump became president. Trump pleaded not guilty to 34 counts of falsifying business records, and prosecutors claim that he falsified records to conceal reimbursements to his former lawyer related to the payment to the porn star. Trump's lawyers had argued that the federal court had jurisdiction because the charges involved conduct during his presidency. The trial is scheduled for March 2024, coinciding with Trump's campaign for the 2024 presidential election.

Manhattan prosecutor seeks to keep Trump hush money case in state court | Reuters

Credit Suisse Group AG and its ex-auditor KPMG LLP are facing a lawsuit filed by stockholder Gregory Stevenson, who accuses them of "recklessly" mismanaging and "plundering" the bank for over a decade prior to its collapse in March. Stevenson is suing 29 current and former directors and officers of Credit Suisse, its New York-based units, and KPMG on behalf of a proposed class of investors. The complaint alleges that KPMG knew about Credit Suisse's lack of internal controls for more than 15 years while certifying its financial statements. KPMG's motivation was purportedly the desire for substantial fees from Credit Suisse, on which it had become dependent. KPMG was replaced as Credit Suisse's auditor by PricewaterhouseCoopers in 2020. The lawsuit also claims that KPMG stole an oversight board's confidential list of audits it would review, and then destroyed and altered workpapers to deceive regulators. Stevenson seeks compensatory and treble damages, an accounting of leaders' compensation, disgorgement of benefits, and equitable relief. Credit Suisse and KPMG have declined to comment on the matter.

KPMG, Credit Suisse Leaders Sued for ‘Reckless’ Bank Management

Noncompete agreements in employment contracts and severance agreements generally violate federal labor law, according to a memo issued by the National Labor Relations Board's (NLRB) General Counsel, Jennifer Abruzzo. The memo states that noncompete pacts are illegal when they could be interpreted as impeding workers' ability to change jobs or quit, thus hindering their right to engage in collective action to improve working conditions. Such agreements undermine workers' bargaining power during labor disputes and limit job options for those terminated for unionizing or participating in workplace activism. The memo highlights regulatory convergence between the NLRB and the Federal Trade Commission (FTC), which initiated steps to ban noncompetes earlier this year. Around one in five Americans is subject to noncompete agreements, with higher prevalence in certain industries like technology. Abruzzo's memo signals her intent to establish NLRB precedent on noncompetes, and she called for regional agency officers to submit cases involving potentially illegal noncompete agreements. While some tightly crafted noncompetes may be justified to protect proprietary information, the memo suggests that employers' desire to avoid competition or retain workers is unlikely to warrant such agreements, particularly when imposed on low- or middle-wage workers without trade secrets or in states where noncompetes are unenforceable.

Noncompete Pacts Violate Labor Law, Top NLRB Lawyer Says (1)



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01 Jun 2023Thurs 6/1 - Debt Ceiling Deal, Oath Keepers Sentencing, SBF of FTX, Operation Fox Hunt and Chewy Chews on OSHA00:07:05

We have a patent anniversary to acknowledge today as our “this day in legal history” entry. On this day in 1869, Thomas Alva Edison was granted a patent for an electric voting machine to be used by Congress. 

The “Vote Recorder” was Edison's first patented invention and was specifically designed for legislative bodies like Congress. His motivation for creating this device came from reports in the Telegrapher, stating that the Washington, D.C., City Council and the New York State legislature were considering the installation of electric vote recorders. Edison's system involved each legislator moving a switch to indicate a "yes" or "no" vote, which transmitted a signal to a central recorder. The recorder had two columns of metal type labeled "Yes" and "No," where the names of the members were listed. A recording clerk would then place chemically prepared paper over the columns and roll a metallic roller over it, creating imprints of the names through chemical decomposition.

The machine also had dials on its sides to record the total number of "yeas" and "nays." Edison was granted U.S. Patent 90,646 for this invention on June 1, 1869. A fellow telegrapher named Dewitt Roberts bought a share in the invention for $100 and brought it to Washington, D.C., to demonstrate to a committee of Congress. However, the chairman of the committee was unimpressed with the device's speed in recording votes and stated that it was not something they wanted. The traditional roll call voting process, although slow, allowed members to filibuster or persuade others to change their votes, leading to the vote recorder's ultimate disuse.

Like so many great ideas, Edison’s invention died in committee. 

Rutgers - Vote Recorder

The House of Representatives passed a debt-limit legislation proposed by President Joe Biden and Speaker Kevin McCarthy. The bill, approved with a 314-117 bipartisan vote, aims to impose spending restraints until the 2024 election and prevent a potential U.S. default. The agreement garnered support from two-thirds of House Republicans, boosting McCarthy's position as speaker. More Democrats voted in favor than Republicans and conservative critics argue that the deal was unfavorable. The bill now moves to the Senate, where approval is expected. The legislation suspends the debt ceiling until January 1, 2025, while Democrats agreed to cap federal spending until then. The agreement is seen as a rare moment of bipartisan accord in a divided Washington. Investors have already shifted their focus to other factors influencing growth, such as potential Federal Reserve interest rate increases and the weakening Chinese economy.

Debt-Limit Deal Wins House Passage, Easing US Default Concerns

Two members of the far-right Oath Keepers militant group are facing sentencing for seditious conspiracy and other crimes related to the January 6, 2021, attack on the U.S. Capitol by supporters of then-President Donald Trump. Prosecutors are requesting a 17-year prison sentence for each defendant. If the judge follows this recommendation, it would be among the longest sentences for anyone charged in the Capitol attack. The Oath Keepers founder, Stewart Rhodes, was recently sentenced to 18 years in prison, the longest sentence so far. The defense attorneys for the defendants argue that the evidence against their clients is weak and that the blame should be shifted to Trump for misleading his supporters.

More Oath Keepers convicted of sedition in US Capitol attack face sentencing | Reuters

Sam Bankman-Fried, the former chief executive of FTX cryptocurrency exchange, is seeking documents from Fenwick & West, the law firm that advised his defunct exchange, as he faces fraud charges. Bankman-Fried believes that the documents could help prove he relied on legal advice and did not knowingly break the law. The requested documents relate to matters central to the government's case, such as FTX's use of disappearing messaging services and failure to properly register with regulators. Bankman-Fried has pleaded not guilty to multiple charges, including fraud and conspiracy. Prosecutors have opposed his request, stating that his claims are meritless.

Bankman-Fried seeks documents from former FTX law firm in crypto fraud case | Reuters

Retired NYPD Sergeant Michael McMahon and two individuals accused of being Chinese agents are standing trial in Brooklyn for their alleged involvement in a plot to repatriate a former Chinese government official residing in New Jersey. This case is part of Operation Fox Hunt, an initiative by the Chinese government to coerce Chinese nationals living abroad to return to China through tactics such as harassment and threats. The defendants are the first to be tried in the United States in connection with this operation. McMahon, along with Yong Zhu and Congying Zhen, allegedly used the elderly father of their target as bait to warn him about the consequences of not returning to China. McMahon, hired as a private investigator, is accused of surveilling the target, while Zhen is accused of harassing the target and his daughter. The prosecution argues that each defendant played a role in the Chinese government's efforts to intimidate and threaten the victim. McMahon has pleaded not guilty, claiming he was unaware of the true intent behind the scheme. The trial is expected to last two to three weeks, and if convicted, McMahon could face up to 10 years in prison.

Ex-NYPD Sgt., others accused of harassing and intimidating Chinese dissidents in US - ABC7 New York

Pet supply retailer Chewy Inc has won a challenge to a fine imposed by the U.S. Occupational Safety and Health Administration (OSHA) over a forklift accident that resulted in the death of a warehouse worker. The 11th U.S. Circuit Court of Appeals ruled unanimously that Chewy did not violate federal workplace safety law because it had complied with a specific rule governing forklifts. OSHA had fined Chewy around $13,000 in 2019 following the accident in Florida, but the court found that the company had provided the required training and that the OSHA rule on forklifts applied, preempting the general duty to protect workers. The court's decision highlighted that the retail industry generally does not consider eliminating "under-rides" necessary and that doing so could actually increase the risk of accidents. For those that don’t moonlight as forklift operators, an “under-ride” is when a forklift operator reverses towards a storage rack with the forks trailing. If the operator extends the forklift too far, causing it to pass beneath the horizontal crossbar, it creates an "under-ride" situation. In such cases, the crossbar can enter the operator's compartment and result in injury. Essentially, it is running a fork-lift backwards such that the front safety mechanisms are not the first thing to hit a shelf – you are. So now you know. 

Pet goods supplier Chewy wins challenge to OSHA fine over worker death | Reuters

Standup Forklift Under-ride Hazards



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02 Jun 2023Fri 6/2 - Starbucks Labor Disaster, SCOTUS Blow to Labor Strikes, AirBnb sues NYC, Gambia Retains US Firm and Scienter is a Fun Word00:08:46

On this day in legal history, Italy turned from a monarchy into a republic following a public referendum.  

On June 2, 1946, Italy underwent a momentous transformation as it transitioned from a monarchy to a republic, marking a significant milestone in its history. This pivotal event was the result of a nationwide referendum held following the fall of Fascism and the end of World War II. The choice before the Italian people was clear: they had to decide between retaining King Umberto II as their monarch or establishing a republic. The Italian people, weary of the autocratic rule that had characterized the monarchy and the role the country played in the Second World War, cast their votes to determine the country's future. With an overwhelming majority, they chose to abolish the monarchy and establish a republic, cementing their commitment to democratic principles. This decision led to the creation of the Italian Republic, where sovereignty now rested with the people. 

Italy had been ruled by the House of Savoy, a royal family that held power since the unification of the country in the late 19th century. As a result of the referendum, King Umberto II, the last monarch of Italy and the House of Savoy, abdicated his throne on June 18, 1946. The monarchy was formally abolished, and the Italian Republic was proclaimed. The head of state would now be a president, elected by the Parliament.

This transition also sparked a wave of reforms, including land reform, labor rights, and the expansion of social welfare programs. Italy embarked on a path of modernization and reconstruction, focusing on economic development, infrastructure, and education. The republican system allowed for greater political participation and representation, empowering the Italian people to shape their own destiny.

Starbucks, the world's largest coffee chain, has been found to be violating federal labor law in numerous administrative law decisions, indicating a deliberate effort to impede unionization and disregard the authority of the National Labor Relations Board (NLRB). Over the past eight months, Starbucks has lost 16 out of 17 cases decided by NLRB administrative law judges, facing charges such as worker intimidation, discriminatory rules, and unlawful termination of union organizers. The company has also been accused of interfering with NLRB processes, reflecting a corporate strategy that treats labor law violations as a mere cost of doing business. The rulings, although representing a fraction of the NLRB complaints against Starbucks, could strengthen allegations in other cases and potentially lead to court injunctions. The NLRB has filed nearly 100 complaints against Starbucks based on union-filed charges, while Starbucks has reciprocated with charges against Starbucks Workers United, the union representing its employees. Critics argue that Starbucks seems to undermine the NLRB's authority, believing it will be vindicated by the courts or that the board's remedies are insufficient to change its behavior. These labor law violations shed light on Starbucks' alleged anti-union campaign, which the company denies, emphasizing its commitment to policies that prohibit retaliation against organizers and its dedication to engaging in collective bargaining. The ALJ decisions have revealed a pattern of violations, including illegal statements made by managers and promises of benefits to dissuade unionization efforts. Such previous misconduct can serve as evidence in future cases, demonstrating anti-union motives. As Starbucks continues to face legal challenges, labor law experts suggest that the company is prepared to fight these allegations extensively, reinforcing the need for a comprehensive cease-and-desist order to curtail its nationwide strategy.

Starbucks Is Racking Up Labor Law Violations as Rulings Roll in

The US Supreme Court has ruled in an 8-1 decision that federal labor law does not prevent a ready-mix concrete company from suing a union in state court for alleged intentional destruction of property during a strike. The ruling allows costly lawsuits against striking unions based on the economic consequences of their protests and may lead to state legislation curbing strike conduct. However, the decision is specific to the case and does not reshape the law on strike protections. 

The case involved Glacier Northwest Inc., a concrete supplier, accusing an International Brotherhood of Teamsters affiliate of coordinating with truck drivers to time their strike in a way that would result in wasted concrete. The Supreme Court overturned a Washington state high court decision and clarified the boundaries of state and local efforts to regulate conduct in relation to the National Labor Relations Act. 

The majority opinion, written by Justice Amy Coney Barrett, emphasized the duty of the Teamsters affiliate to protect Glacier's property and stated that the union's conduct went beyond the protections of the NLRA. Justices Clarence Thomas and Neil Gorsuch indicated their willingness to reconsider the broad preemption doctrine of the NLRA. Justice Ketanji Brown Jackson dissented, suggesting that labor disputes of this nature should be resolved by the National Labor Relations Board. 

The ruling was seen by Glacier's attorney and the National Federation of Independent Business as upholding the balance of power between labor unions and employers, while the Teamsters criticized it for favoring corporations over workers. The Service Employees International Union expressed satisfaction that the right to strike was not rolled back. The Teamsters affiliate's attorney noted that the ruling left options open for the union to seek preemption in state court based on new evidence. Overall, the decision is not expected to limit union workers' ability to strike.

For further reading, check out Law Dork with Chris Geidner coverage here and LaborUnionNews.com discussion of same here.

Justices Allow Company to Sue Union for Strike Destruction (2)

Supreme Court ruling could chill labor strikes | Reuters

Airbnb has filed a lawsuit against New York City over a new law that the company claims will act as a "de facto ban" on short-term rentals. The law, set to take effect in July, will impose stricter regulations on hosts, requiring them to register with the city and comply with various complex regulations. Airbnb argues that these regulations will make it more difficult for hosts to do business. The company is seeking a court order to block the enforcement of the law. In response, the Mayor's office stated that it will review the lawsuit while emphasizing its commitment to protecting safety and community livability.

Airbnb sues New York City over short-term rental restrictions | Reuters

The Gambian government has hired a U.S. law firm to explore potential legal action following an investigation that found contaminated medicines from India were likely responsible for the deaths of children in the country. 

At least 70 children, mostly under the age of 5, died from acute kidney injury between June and October. Local doctors suspected Indian-imported cough syrups, and tests by the World Health Organization confirmed the presence of lethal toxins. Gambian Justice Minister Dawda Jallow stated that legal action was being considered, but did not specify the target or name the law firm involved. 

The medicines linked to the deaths were manufactured by Indian drugmaker Maiden Pharmaceuticals, which denied wrongdoing. A report by a panel of international experts indicated that 22 of the analyzed cases were "very likely" caused by poisoning from the toxins found in Maiden products. The causality assessment and the justice ministry's recommendations will be made public within six months. Gambia plans to establish a testing facility for imported drugs with support from the World Bank.

Read coverage by The AfricaBrief here.

Exclusive: Gambia hires US law firm to consider action on toxic Indian cough syrup, minister says | Reuters

The US Supreme Court has revived two False Claims Act (FCA) suits against SuperValu Inc. and Safeway Inc. that were filed by whistleblowers alleging overcharging the government for prescription drugs. The suits were initially rejected by the US Court of Appeals for the Seventh Circuit for lack of "scienter," (SAI-UHN-TER) which refers to a defendant's knowledge and subjective beliefs. The Supreme Court stated that the appeals court failed to consider evidence of subjective intent and that the scienter element should focus on the defendant's actual mental state, not an objectively reasonable interpretation. The companies are accused of falsely reporting reimbursement prices to Medicaid and Medicare, claiming they were their "usual and customary" prices while charging retail customers less. Whistleblowers can establish scienter by demonstrating that the companies knew their reported prices were inaccurate, were aware of the risk but intentionally avoided verifying accuracy, or submitted claims despite being aware of a substantial and unjustifiable risk. The ruling is expected to make it more challenging for defendants to seek early dismissal based on lack of scienter, potentially leading to increased discovery costs and more FCA cases being brought forward.

Supreme Court Reopens Fraud Suits Against SuperValu, Safeway (1)



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05 Jun 2023Mon 6/5 - Law School Admissions Normalize, SEC Dismisses Data Access Cases, Solicitor General Whoopsies and LOTR Unauthorized Sequel Lawsuit00:08:12

On this day in legal history the landmark Supreme Court decision of Sweatt v. Painter was decided. 

In 1946, Heman Marion Sweatt, an African American man, applied to the all-white University of Texas School of Law but was denied admission based on his race. This decision was made in accordance with the segregated policy outlined in Article VII, Section 7 of the Texas Constitution. Sweatt took legal action with the support of the NAACP, seeking enrollment at the university. Initially, a temporary law school called the School of Law of the Texas State University for Negroes was established for black students. It provided access to resources such as the Texas Supreme Court library and had faculty members from the University of Texas School of Law. Sweatt's case was dismissed by a state court after the black law school was established. However, Sweatt appealed to the United States Supreme Court, arguing that the Texas admissions system violated the Equal Protection Clause of the Fourteenth Amendment. On June 5, 1950, the Supreme Court ruled that in states where white students had access to graduate and professional schools while black students did not, black students must be admitted to the white institutions. This decision led to Sweatt's admission to the University of Texas School of Law, along with the enrollment of other black students in subsequent years. The impact of the case was limited to graduate and professional programs at the University of Texas, as black undergraduate students were still not admitted, although graduate students could take undergraduate courses if necessary for their program.

With Sweatt v. Painter and another case, McLaurin v. Oklahoma State Regents for Higher Education, the Supreme Court began the long process of overturning the separate but equal doctrine in public education–first by requiring graduate and professional schools to admit black students.

Law school applications in the United States have returned to normalcy after the pandemic-induced surge in 2021. The number of applicants has decreased for the second consecutive year, indicating that the previous year's increase was an anomaly attributed to COVID-19. As of Thursday, law school applicants were down by 2.4% compared to the previous year. The Law School Admission Council expects the national applicant pool for this cycle to be slightly smaller than the year before, which was already 12% smaller than in 2021. The decrease in applications aligns with the trend of the past five years, where the number of applicants remained relatively consistent. The increase in applications in 2021 was attributed to various factors, including the disruption of the job market for college graduates caused by the pandemic, protests over racial inequality, and the political climate. The pool of law school applicants continues to become more diverse, with applicants of color comprising 46.5% of the current pool. 

It’s a 'return to normalcy' for law school admissions | Reuters

The U.S. Securities and Exchange Commission (SEC) has dismissed 42 enforcement cases after discovering that its enforcement staff had unauthorized access to materials intended for commission officials handling those cases. The SEC conducted a review of the matter, which was initially raised in April 2022 when it was revealed that certain databases allowed enforcement staff to view legal materials meant for the in-house court officials. The SEC acknowledged the error and expressed regret, emphasizing its commitment to rectify the situation. The improper access was deemed accidental, as administrative staff in the enforcement arm unintentionally accessed adjudication materials while collecting relevant information. An internal review concluded that the improper access had no impact on the decisions made by the enforcement staff or the officials reviewing the cases. However, the SEC decided to dismiss all pending cases that were affected by the improper access, primarily involving individuals and smaller firms. Additionally, the SEC agreed to lift industry bans on 48 individuals who had requested relief from the agency and were also implicated in the incident.

US SEC to dismiss 42 enforcement cases after internal data mishap | Reuters

The US Solicitor General has admitted to misleading the Supreme Court in a 2017 patent case involving Nike and Adidas. The misrepresentation occurred during an argument about the validity of inter partes review, a process that allows the US Patent and Trademark Office (USPTO) to reexamine issued patents. By way of very brief background, inter partes review is a process in the United States patent system that allows a third party to challenge the validity of an issued patent before the Patent Trial and Appeal Board (PTAB). It provides a mechanism for reviewing and potentially invalidating patents based on prior art and other grounds, offering an alternative to litigation in resolving patent disputes. In this case, the Solicitor General apologized, stating that the USPTO failed to alert them about the mistake. This is not the first time the Solicitor General has corrected statements made to the justices. The admission came in the context of a separate whistleblower dispute raised by Judge Michael Fitzpatrick, who expressed concerns about attempts to expand the number of judges in the Nike case. The Merit Systems Protection Board ruled in favor of the judge, noting that the Solicitor General's office was not made aware of the potential mistake. The government acknowledged the need for absolute candor and accuracy in its representations to the Court. 

Solicitor General Office Admits It Misled Court in Patent Case

The estate of J.R.R. Tolkien, the renowned author of "The Lord of the Rings" trilogy, has filed a copyright lawsuit in Los Angeles federal court against author Demetrious Polychron. The estate accuses Polychron of writing and selling an unauthorized sequel titled "The Fellowship of the King." The lawsuit comes after Polychron himself filed a copyright suit against the Tolkien Trust and Amazon Inc., alleging infringement of his sequel's copyrights following the release of the TV series "The Lord of the Rings: The Rings of Power." The estate discovered Polychron's unauthorized sequel online in March and sent a cease-and-desist letter. Despite the estate's policy of not licensing writers to create sequels, Polychron persisted in pitching his written sequel. The estate attempted to resolve the dispute through a call, but Polychron continuously postponed, citing illness and instead Polychron filed a lawsuit against the Tolkien Estate and others. The estate's complaint states that Polychron's sequel incorporates various copyright-protected elements from the original trilogy, including verbatim passages, characters, and the entire plot premise. Online reviews of the sequel suggest that readers were aware it was an unauthorized derivative work.

Tolkien Estate Sues Over Unauthorized ‘Lord of the Rings’ Sequel



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06 Jun 2023Tues 6/6 - Binance and Coinbase Sued, Lewis Brisbois Baddies, Texas Wins in Suit with Google but Loses on EV Tax00:09:31

On this day in legal history the Securities and Exchange Commission was established.

During the 1920s, the United States experienced a period of economic growth known as the "Roaring 20s," characterized by prosperity, consumerism, and increased debt. Many people invested in the stock market, taking huge risks without federal oversight. However, on October 29, 1929, known as "Black Tuesday," the stock market crashed, causing widespread losses and a loss of public confidence. This crash led to the closure of thousands of banks, bankruptcies, high unemployment rates, wage cuts, and homelessness, ultimately triggering the Great Depression.

In response to the stock market crash and to prevent future crises, the U.S. Senate Banking Committee conducted hearings in 1932, known as the Pecora hearings. These hearings revealed widespread misconduct in the financial industry, including misleading investors, irresponsible behavior, and insider trading. As a result, the Securities Act of 1933 was passed, requiring registration of most securities sales and aiming to prevent fraud by ensuring investors received truthful financial information.

The Glass-Steagall Act, also a response to the Pecora hearings, was passed in 1933. It separated investment banking from commercial banking and established the Federal Deposit Insurance Corporation (FDIC) to oversee banks, protect consumers' deposits, and handle consumer complaints.

To further regulate the securities industry, President Franklin D. Roosevelt signed the Securities Exchange Act in 1934, on this day in fact, creating the Securities and Exchange Commission (SEC). The SEC was granted extensive powers to regulate the securities industry, including the New York Stock Exchange, and had the authority to bring civil charges against violators of securities laws. Joseph P. Kennedy, a Wall Street investor and businessman, was appointed as the first chairman of the SEC by President Roosevelt.

It is also obviously the anniversary of the Normandy landings – while not explicitly a day in legal history, it is safe to say the second half of the 20th century in American jurisprudence might have transpired differently had the invasion gone differently. 

The SEC is busy on its birthday. Today, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Coinbase Inc, the largest cryptocurrency asset trading platform in the United States. The SEC accused Coinbase of operating illegally without registering with the regulatory agency. According to the complaint, Coinbase has been functioning as an unregistered broker since at least 2019, conducting cryptocurrency transactions and evading disclosure requirements designed to protect investors. The SEC further stated that Coinbase Prime, a service that directs orders to Coinbase's platform and other platforms, as well as Coinbase Wallet, which enables investors to access liquidity outside of Coinbase's platform, also operated as unregistered brokers. Gary Gensler, the Chair of the SEC, expressed via Twitter that Coinbase's alleged failures deprived investors of crucial protections against fraud, manipulation, conflicts of interest, and routine inspection.

Coinbase's stock experienced a 15.9% decline in premarket trading following the filing of the lawsuit, and the company did not immediately respond to requests for comment. This SEC lawsuit against Coinbase came just one day after the regulator had filed a separate lawsuit against Binance, the world's largest cryptocurrency exchange, and its founder, Changpeng Zhao. The lawsuit against Coinbase was submitted in Manhattan federal court. This development adds to the regulatory scrutiny faced by major cryptocurrency platforms, highlighting concerns over compliance and investor protection.

By way of additional background on the aforementioned Binance suit, the SEC alleges that Binance and Zhao engaged in deceptive practices, conflicts of interest, lack of disclosure, and evasion of the law. They are accused of secretly allowing high-value U.S. customers to trade on the Binance.com platform while publicly claiming to restrict them. Additionally, the SEC claims that Binance.US, which was presented as an independent platform for U.S. investors, was actually controlled by Zhao and Binance behind the scenes.

The SEC also alleges that Zhao and Binance had control over customer assets, permitting commingling and diversion of funds, including to an entity owned by Zhao called Sigma Chain. Furthermore, the SEC asserts that Binance and BAM Trading operated as unregistered national securities exchanges, broker-dealers, and clearing agencies. They are charged with offering and selling their own crypto assets, including BNB and BUSD, without proper registration. Zhao is held responsible as a control person for these violations.

SEC Chair Gary Gensler emphasized the extensive deception and evasion of regulations by Zhao and Binance. He cautioned the public against investing with or on these unlawful platforms. The complaint filed by the SEC seeks accountability for the alleged violations of securities laws and investor protection.

US SEC sues Coinbase, one day after suing Binance | Reuters

SEC Files 13 Charges Against Binance Entities and Founder Changpeng Zhao

Two former partners of Lewis Brisbois were forced out of the boutique they had started after their former firm released a collection of racist, sexist, and antisemitic emails they had written while employed there. You will remember we previously reported on their spin-off firm, when they were able to convince more than a hundred Lewis Brisbois attorneys to follow them. The remaining leaders of the spin-off boutique, which was formed by John Barber and Jeff Ranen, will establish a new firm. The partners' former firm, Lewis Brisbois, shared a series of emails spanning more than a decade that revealed disparaging remarks made by Barber and Ranen about female associates, clients, and others, as well as their use of racist, antisemitic, and anti-LGBTQ slurs. Following the release of the emails, Barber and Ranen resigned from Barber Ranen, expressing their remorse and apologizing for their words.

The exposure of these emails could negatively impact recruitment efforts for both Lewis Brisbois and the new boutique. It may also result in client losses for the firms. The incident has drawn attention to the need for a more inclusive and respectful culture in the legal profession. The former partners have stated that they will take time away from the legal business to reflect on their actions and explore ways to demonstrate their contrition and commitment to a more inclusive world. The release of these emails has prompted discussions about the need for ethical training and quality control in the legal profession.

Ex-Lewis Brisbois Partners Ousted Over Racist, Sexist Emails (1)

Texas has emerged victorious in its antitrust lawsuit against Google as a U.S. judicial panel has ordered the case to be returned to federal court in Texas. Initially, Google had succeeded in moving the lawsuit to a federal court in New York upon its request, where other advertising technology cases were being heard. However, Texas sought to have the case moved back after the U.S. Congress passed the Venue Act in 2022, granting state attorneys general the right to choose the jurisdiction for litigating antitrust lawsuits. The Texas lawsuit accuses Google of violating the law by exerting control over the process used by advertisers to place online ads, resulting in reduced revenues for website publishers. Google has expressed its disagreement with the decision, asserting that the Texas Attorney General's case is flawed in terms of both facts and law. The case will now be heard in the eastern district of Texas, known for its efficiency in handling cases. Google is facing antitrust lawsuits globally, with allegations of abuse of dominance in various areas of its businesses. Apart from the Texas lawsuit, Google is also battling the U.S. federal government in two separate antitrust lawsuits related to search dominance and advertising technology, while states led by Utah have accused the company of violating antitrust laws in its management of the app store.

Texas wins round against Google as antitrust lawsuit returned to Lone Star state | Reuters

Hey, looky here – its Column Tuesday again!

This week I wrote about the Texas tax on electric vehicles and its overall wrongheadedness. I tried to give credit where credit was due, Texas has it partially right—the state is just taxing the wrong thing, at the wrong time, with the wrong rate, and for the wrong reasons. Other than that, the EV tax is a great idea.

About that tax: starting from September, Texas will impose a $400 initial registration fee and a $200 annual renewal fee for EV owners. The rationale behind the fee is to offset the portion of the gas tax that goes towards infrastructure and road maintenance, which EVs do not contribute to. However, I argue that the bill is more about protecting the oil and gas industry and winning a culture war than about effective policy. The bill excludes hybrid vehicles and other small electric vehicles from the tax, leading to logical inconsistencies.

An alternative approach I suggest is to implement a tax based on the kilowatt hours used at public chargers. This would more accurately reflect the use of infrastructure by EVs and could fund public charging infrastructure. The tax could also be adjusted based on income to address regressiveness. However, if the goal of the tax is to offset wear and tear on roads and bridges, hybrid vehicles, which have higher fuel efficiency than traditional gasoline-powered cars, should also be subject to such a tax.

The new EV tax in Texas results in EV drivers paying more for road maintenance compared to gas-powered car drivers.

While there may be a need for a tax on EVs in the future when they become more prevalent, it should be implemented with careful consideration and for the right reasons. The current EV tax in Texas is misguided and poorly designed.

Texas’ New EV Tax Should Fix the Bridges, Not ‘Own the Libs’



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07 Jun 2023Weds 6/7 - Michigan Court Pronouns, Trump Can't Escape, Biden Wants a Dismissal and UBS is Almost Done Chewing Credit Suisse00:05:46

On this day, June 7, in legal history Griswold v. Connecticut was decided by the US Supreme Court, holding that the use of contraceptives was protected by the constitutional right to privacy. 

In the landmark case of Griswold v. Connecticut (1965), the Supreme Court struck down a Connecticut law that criminalized the use of birth control devices and the provision of advice regarding their use. The Court asserted that the Constitution protected a right to privacy, relying on various amendments and their penumbras, or implied rights. Justice William O. Douglas, writing for the majority, emphasized that the First Amendment safeguarded collateral rights, such as association, education, and intellectual freedom. He linked these rights to provisions in other amendments, including the Third, Fourth, Fifth, Ninth, and Fourteenth, to establish a comprehensive right of privacy that protected married couples' choice to use contraception. Concurring opinions by Justices Arthur J. Goldberg, John Marshall Harlan II, and Byron R. White further supported the notion of a right to privacy based on the Ninth and Fourteenth Amendments' due process clauses. The ruling in Griswold v. Connecticut laid the foundation for subsequent privacy-based decisions, including the now overturned Roe v. Wade case in 1973, which had legalized abortion.

Griswold v. Connecticut | Oyez

A proposed rule change in the Michigan Supreme Court regarding pronoun selection is sparking a divide among judges, highlighting perceived competing interests in civility and judicial discretion. The proposed change aims to accommodate transgender and gender-nonconforming lawyers and litigants by requiring courts to use their preferred pronouns or respectful alternatives for clarity in court records. Advocates argue that these changes are necessary to ensure equal treatment and access to justice. However, shocking no one, some judges express concerns about potential confusion, mistakes, and religious liberty infringements. 

Similar rules have been enacted in other states, and proponents emphasize the importance of accuracy, dignity, and respect to foster trust in the judicial system. The ongoing debate reflects a nationwide discussion on inclusive language changes and parallels past efforts to properly recognize women in court. Ultimately, the outcome of the proposed rule change in Michigan may significantly impact the courtroom experiences of transgender and gender-nonconforming individuals.

Pronoun Selection for Lawyers, Litigants Divides Michigan Courts

A New York appeals court is unlikely to dismiss a civil lawsuit filed by state Attorney General Letitia James against Donald Trump, his family business, and three of his children for alleged fraud. James accuses Trump of lying to lenders and insurers between 2011 and 2021 about asset values at the Trump Organization and his own net worth. She is seeking damages of at least $250 million and wants to prevent the Trumps from operating businesses in New York. Trump's children, Donald Jr., Eric, and Ivanka, are also named as defendants in the case. Trump's lawyer argued that James filed the lawsuit too late and lacked the authority to investigate legitimate transactions, but some judges expressed skepticism about this argument. The court seemed more receptive to the possibility that James may have sued Ivanka Trump too late. The appeals court did not announce a date for its ruling. This case is separate from a criminal indictment brought by Manhattan District Attorney Alvin Bragg against Trump over hush money payments, to which Trump has pleaded not guilty.

Donald Trump faces skeptical court in New York fraud appeal | Reuters

The Biden administration has requested a federal judge to dismiss a lawsuit filed by Republican-led states that aimed to invalidate a rule permitting socially-conscious investing in employee retirement plans. The U.S. Department of Justice argued that the rule was necessary to replace the restrictive limitations imposed by the Trump administration on considering environmental, social, and corporate governance (ESG) factors when making investment decisions. A coalition of 25 states, led by Utah and Texas, filed the lawsuit in January, claiming that the Department of Labor rule would jeopardize the retirement savings of millions of Americans by allowing investments based on political agendas rather than financial considerations. The Biden administration contended that the rule emphasizes the importance of financial factors in retirement plan decisions while recognizing that issues like climate change and social justice can impact companies' long-term financial health. 

Biden admin. moves to nix US states' challenge to ESG investing rule | Reuters

UBS expects to finalize its agreement with the Swiss government to cover up to 9 billion Swiss francs ($9.92 billion) in losses from its emergency takeover of Credit Suisse by June 7, according to a regulatory filing. Under the terms of the takeover, UBS agreed to cover the first 5 billion francs in potential losses, while the government committed to shoulder up to 9 billion francs on top of that. The completion of the government agreement is one of the final steps UBS needs to take before officially closing the acquisition of Credit Suisse. The filing also mentioned discussions between UBS and Switzerland's financial regulator, FINMA, regarding the capital and liquidity requirements for the combined bank, with higher capital requirements phased in by the end of 2025 and completed by the start of 2030.

UBS sees agreement on Credit Suisse loss guarantee by June 7 - SEC filing | Reuters



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08 Jun 2023Thurs 6/8 - Cooley Delays, Davis Polks Demands, FL Privacy Law is Bad, Trump to be Indicted Against and Arrested Development Actor Arrested Development00:08:53

On this day, June 8, in legal history James Madison first proposed the Bill of Rights. 

On June 8, 1789, James Madison presented the proposed Bill of Rights to the House of Representatives. Initially, Madison included more amendments than what eventually made it into the final version. The House agreed on a Bill of Rights with 17 amendments, but later the Senate consolidated them to 12. Ultimately, in December 1791, 10 out of the 12 amendments were approved by the states, becoming the Bill of Rights. One of the rejected amendments, regarding congressional pay, was later ratified as the 27th Amendment in 1992. Madison also suggested a two-part Preamble for the Constitution, incorporating part of Thomas Jefferson's Declaration of Independence. However, this proposal was not adopted.

Madison emphasized the need to assert the equal rights of conscience, freedom of the press, and trial by jury in criminal cases for all states. Madison also wanted to clarify the distinct roles of each branch of government, ensuring they did not encroach upon one another's powers. However, these provisions did not pass the congressional review process.

Madison's proposed Article VII, highlighting the separation of powers, did not make it into the Constitution. However, the second part of that article survived as the Tenth Amendment, which reserves powers not delegated to the federal government to the states. Additionally, Madison's version of the Second Amendment recognized the right to bear arms in the context of a well-regulated militia.

Madison desired to interweave the Bill of Rights within the Constitution, but this idea faced resistance due to concerns of appearing to rewrite the Constitution. Consequently, the Bill of Rights was appended at the end of the document. Despite these alterations, many of Madison's core ideas were incorporated into the ratified version of the Bill of Rights. Madison aimed to bolster the rights of the people and earn their confidence by protecting them against government encroachments.

On this day: James Madison introduces the Bill of Rights | Constitution Center

Cooley LLP, a Silicon Valley-based law firm, has asked some incoming first-year associates to delay their start dates for another year, offering them a $100,000 stipend in return. The firm reached out to incoming corporate associates, providing them with three options. They can defer their start dates and receive a stipend, stick to their original January start dates in the corporate group, or switch to another practice area with more available work. These measures are being taken to reduce the size of Cooley's incoming corporate class due to a slowdown in demand. The firm had already postponed the start date for its first-year class from November to January 2024. Cooley laid off 150 attorneys and staff in late 2022 as a necessary response to decreased workload. Despite being a top recruiter during the pandemic, the firm is now facing reduced demand for corporate and deals work, leading to the need for workforce adjustments. Fenwick & West, another law firm, has also decided to postpone the start date for its first-year corporate and technology transactions associates to January 16, 2024.

Cooley to Delay Some First-Year Associate Start Dates by Year

Back-to-back legal industry news. 

Law firm Davis Polk & Wardwell is implementing a four-day office work-week for its lawyers, joining a trend of firms adopting more in-person work policies as the pandemic recedes. Starting after Labor Day, the firm will require its U.S. lawyers and business services professionals to work in the office from Monday through Thursday. As always, the claim is the move is aimed at facilitating mentorship, training, and relationship-building opportunities that are believed to be more effective in an in-person environment – none of these announcements ever admit it's just to bring associates to heel. 

Davis Polk will also introduce a new remote day "bank" that allows employees to choose 16 days per year to work from home. Other law firms, such as Skadden and Quinn Emanuel Urquhart & Sullivan, have also made adjustments to their work policies, with some offering more flexibility for remote work.

Law firm Davis Polk adopts four-day office work-week, joining Skadden | Reuters

Florida Governor Ron DeSantis has signed a new privacy law, S.B. 262, aimed at giving consumers more control over their data and addressing concerns about tech giants' alleged censorship of conservative views. The law, known as the "Digital Bill of Rights," includes provisions common to other state privacy laws, granting consumers rights over their data collection, storage, and sharing.

However, it also requires search engines to disclose whether political ideology influences search results and prohibits government-mandated content moderation on social media platforms. The law provides additional protections for children under 18 years old. Florida is the ninth state to enact comprehensive privacy legislation, and it targets only the largest tech companies, subjecting them to significant fines. 

The law will take effect in stages, with the social media moderation section starting this July and the bulk of provisions going into effect on July 1, 2024. Consumer advocacy group Consumer Reports has called for stronger measures in the law, citing limited applicability and potential loopholes that could leave personal information unprotected. The law applies to companies with more than $1 billion in gross annual revenue and over half of their revenue coming from online ads. It also covers companies operating smart speakers and those running app stores with at least 250,000 available applications. 

Violations of the law could result in penalties exceeding the maximum fines imposed by other state privacy laws. The attorney general will have sole enforcement power and can seek civil penalties of up to $50,000 per violation, which may be tripled under certain circumstances. Consumers will have the right to access, correct, and delete their data, as well as opt out of processing for targeted advertising or profiling purposes. Businesses will be required to reasonably secure consumer data and conduct assessments to evaluate data collection risks and benefits. The law also prohibits state and local government entities from requesting the removal of content or accounts on social media platforms based on "unfair censorship" concerns.

DeSantis Takes Swing at Big Tech in New Florida Privacy Law (1)

Federal prosecutors have informed former U.S. President Donald Trump's attorneys that he is the target of an investigation into his handling of classified materials, according to a person familiar with the matter. The notification from the Justice Department does not necessarily mean Trump will be charged but gives him an opportunity to present his own evidence before a grand jury. 

The news comes just days after Trump's attorneys met with Justice Department officials to discuss the case. Trump's legal team was notified on Monday, although the timing of such notifications does not indicate when charges might be brought. Trump, who is currently campaigning for the 2024 Republican presidential nomination, has dismissed the investigations as politically motivated. 

One federal grand jury is investigating Trump's retention of classified materials after leaving the White House, while another criminal investigation is focused on alleged efforts to overturn his 2020 election loss. In August 2022, investigators seized around 13,000 documents from Trump's Mar-a-Lago estate, some of which were marked as classified. Trump's legal troubles have expanded, including a civil lawsuit in which he was ordered to pay damages for sexual abuse and defamation, as well as a criminal investigation in Georgia related to his efforts to reverse the 2020 election results.

Trump lawyers notified that he is the target of classified documents probe

A Hollywood actor is the latest January 6th rioter arrested – I guess you can tell by the way I’m introducing this you’re not going to have heard of them.

Jay Johnston, an actor known for his roles in TV shows like "Arrested Development" and "Bob's Burgers," has been arrested for his involvement in the January 6, 2021 Capitol riot. Johnston is the latest individual to be charged in connection with the incident, which aimed to keep Donald Trump in the White House. He was charged with various offenses, including interfering with law enforcement officers, entering a restricted building, disorderly conduct, and impeding passage through Capitol grounds. Johnston surrendered to the FBI in Los Angeles, where he resides. An FBI affidavit stated that he was seen wielding a stolen U.S. Capitol Police riot shield and participating in the mob that clashed with officers near a tunnel leading into the Capitol building. Online amateur investigators reportedly identified Johnston from FBI-released images seeking public assistance in identifying participants in the riot. Trump had encouraged his supporters to disrupt the certification of Joe Biden's electoral victory. Johnston has appeared in numerous films and TV shows, often playing law enforcement roles, and he voiced a character in the animated series "Bob's Burgers" until he was reportedly banned from the show following his association with the Capitol mob.

Hollywood actor becomes latest arrested in Jan 6 Capitol assault | Reuters



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09 Jun 2023Fri 6/9 - Trump Indicted Federal Boogaloo, SCOTUS Gives Jack Daniels a Hand, OpenAI Sued for Defamation, New Law School Entrance Exam for AZ00:06:08

On this day, June 9th, in legal history Warren Burger succeeded Earl Warren as Chief Justice of the United States Supreme Court.

On May 21, 1969, President Richard M. Nixon put forth the nomination of Burger to become Chief Justice of the United States. This appointment received confirmation from the Senate on this day, June 9, in 1969, and Burger assumed office on June 23, 1969. The Burger court, in addition to being the court that convicted and sentenced the Hamburgler, was the last liberal court to date. It was the court under which Roe v. Wade and the New York Times v. United States, which permitted the Pentagon Papers to be published, were decided.

In July 1985, President Ronald Reagan appointed Burger to lead the Commission on the Bicentennial of the United States Constitution. Throughout his tenure as Chief Justice, Burger also held the positions of Chairman of the Judicial Conference of the United States and Chairman of the Federal Judicial Center from 1969 to 1986. After serving for seventeen years, Burger retired from the Court on September 26, 1986. Even after his retirement, he continued to direct the Commission on the Bicentennial of the United States Constitution from 1986 to 1992. On June 25, 1995, at the age of eighty-seven, Burger passed away.

It’s like Groundhog Day but way lamer, Donald Trump is indicted again.

Former President Donald Trump has been indicted on seven counts in the special counsel's classified documents probe, marking the first time a former president has faced federal charges. The charges against Trump include obstruction of justice, destruction or falsification of records, conspiracy, false statements, and a charge under the Espionage Act. The investigation focuses on Trump's handling of classified documents brought to his Mar-a-Lago resort in Florida after leaving the White House. The indictment came as a surprise to law enforcement officials, and preparations are underway for Trump's expected court appearance in Miami. This federal indictment adds to Trump's legal challenges, as he already faces criminal charges in New York. Trump's allies have rallied to his defense, while Democrats and some Republicans believe the indictment demonstrates that no one is above the rule of law. The investigation into Trump's actions regarding the classified documents began when the FBI executed a search warrant at Mar-a-Lago and seized thousands of documents, including some marked as classified. The probe has included the testimony of multiple witnesses before grand juries in Washington, DC, and Florida.

Trump Indictment in Florida Heads Off Defense Attack on Venue

Donald Trump indicted on 7 counts in classified documents probe | CNN Politics

The US Supreme Court has revived a lawsuit brought by Jack Daniel's Properties Inc., the maker of Jack Daniel's whiskey, in a trademark dispute over a dog toy called "Bad Spaniels" that mimics the design of the whiskey bottle. The Supreme Court's unanimous ruling is a victory for Jack Daniel's and a setback for VIP Products LLC, the company behind the toy. The case explored the boundaries of trademark rights and First Amendment claims. A federal appeals court had previously ruled in favor of VIP Products, stating that the toy was an expressive work protected by free speech. However, Justice Elena Kagan, writing the opinion for the Supreme Court, overturned that ruling and stated that the so-called Rogers test, which allows trademark use in expressive works if it is artistically relevant, did not apply in this case. The case will now go back to the lower courts, where the focus will be on whether consumers are likely to be confused by the Bad Spaniels toy and mistake it for a product of Jack Daniel's. The decision could potentially make it easier for trademark holders to sue companies that create parodies of their marks on commercial goods.

Jack Daniel’s Wins Supreme Court Bid to Sue Over ‘Bad Spaniels’

OpenAI LLC, the organization behind the artificial intelligence program ChatGPT, is facing a defamation lawsuit filed by a Georgia radio host named Mark Walters. Walters claims that ChatGPT generated a false legal complaint through its chatbot feature, accusing him of embezzling money. The lawsuit alleges that ChatGPT provided this false information to Fred Riehl, the editor-in-chief of AmmoLand, a gun publication, who had requested a summary of a real-life legal case involving the Second Amendment Foundation. 

Instead, ChatGPT allegedly provided a summary falsely stating that Walters was being sued for defrauding and embezzling funds from the foundation. Walters, who is not involved in the actual case, asserts that every statement pertaining to him in the summary is false. The lawsuit highlights the growing concern over the truthfulness and reliability of AI-generated outputs, as similar cases of misinformation and fabricated information have arisen recently. OpenAI has not yet commented on the lawsuit.

OpenAI Hit With First Defamation Suit Over ChatGPT Hallucination

The American Bar Association (ABA) has approved a new law school entrance exam developed by the University of Arizona James E. Rogers College of Law. The JD-Next program, which includes an eight-week online course, aims to provide prospective law students with a taste of law school and assess their ability to learn the material. The approval currently applies only to applicants to the University of Arizona law school, but other schools can seek ABA permission to use the exam. The University of Arizona was the first to incorporate the GRE alongside the LSAT for law school admissions in 2016. JD-Next seeks to address racial score disparities often observed in standardized tests like the LSAT. The Law School Admission Council, which produces the LSAT, emphasized the LSAT's effectiveness as a predictor of law school success and its role in promoting diversity. JD-Next participants have shown improvement in their first-year law school performance, with a .2 increase in grade-point averages compared to non-participants. The program is currently free, and plans are underway to establish JD-Next as a separate testing entity.

New law school admissions test developed by Univ of Arizona gets ABA approval | Reuters



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12 Jun 2023Mon 6/12 - Retaliation Payout in WA, NJ Corp. Tax Overhaul, AeroFarms BK, Trump is in Deep Doo-Doo and Mt. Gox News00:08:52

On this day, June 12th, in legal history the landmark Supreme Court Decision Loving v. Virginia was decided. 

On June 12, 1967, a relatively scant 56 years ago, the Supreme Court issued its decision in Loving v. Virginia. Mildred and Richard Loving, an interracial couple, faced legal challenges when they moved to Virginia, where interracial marriage was prohibited. They filed a lawsuit, arguing that the ban violated the Equal Protection Clause. The Court ruled in their favor, stating that the Virginia law violated the Fourteenth Amendment due to its clear intention to impose racial restrictions. The Court reasoned that the law discriminated against individuals based on race, as it criminalized marriages between a white person and a black person. This landmark decision expanded the Court's interpretation of the Equal Protection Clause and the rights it safeguards, acknowledging that individuals should not be treated differently or penalized based on their race when it comes to marriage.

Chief Justice Burger, writing for the majority, held:

“The clear and central purpose of the Fourteenth Amendment was to eliminate all official state sources of invidious racial discrimination in the States. 

…

There is patently no legitimate overriding purpose independent of invidious racial discrimination which justifies this classification. The fact that Virginia prohibits only interracial marriages involving white persons demonstrates that the racial classifications must stand on their own justification, as measures designed to maintain White Supremacy. We have consistently denied the constitutionality of measures which restrict the rights of citizens on account of race. There can be no doubt that restricting the freedom to marry solely because of racial classifications violates the central meaning of the Equal Protection Clause. . . .”

For perspective, Loving v. Virginia was decided in 1967 – the same year Kurt Cobain was born. Bans on interracial marriage are a relative new thing and, without vigilance, similar restrictions of rights can easily coalesce around other marginalized groups. 

A Washington state agency and two officials have been ordered by a jury to pay $2.4 million to an employee as compensation for retaliation she faced due to whistleblowing and opposing workplace bias. Kim Snell successfully proved that the state Department of Social and Health Services, Judith Fitzgerald, and Una Wiley violated her rights under whistleblower protection laws and Washington's Law Against Discrimination. The jury awarded Snell $83,000 in back pay, $320,000 in front pay, $201,000 in lost retirement benefits, and $1.8 million in noneconomic damages. The defendants' bid for summary judgment on Snell's retaliation claims was rejected by Judge John H. Chun, as they failed to meet the burden of proving the absence of a factual issue for trial. Snell's protected activities included reporting discriminatory comments and engaging in whistleblowing against wasteful spending and unfair hiring practices.

Washington State Employee Wins $2.4 Million for Job Retaliation

New Jersey lawmakers are pushing for a significant overhaul of the state's corporate business tax through a revenue-neutral package. The proposed bill, SB 3737, includes changes to how the state taxes the earnings of foreign subsidiaries of multinational corporations, as well as modifications to the method of apportioning taxable income and determining economic presence or nexus with the state for out-of-state businesses.

 The legislation aims to update New Jersey's corporate business tax, which has not been modified since 2018. The bill is expected to move forward with an amendment that removes a controversial provision granting the director of taxation broad discretion in determining the composition of the combined group for tax purposes. The proposed changes are intended to be revenue-neutral and operate independently of broader budget discussions, which have faced challenges, including disagreements over property tax cuts for homeowners 65 and older. 

The legislation also addresses the taxation of global intangible low-taxed income (GILTI), expanding the exclusion for GILTI income to 95% to align with neighboring states. The bill includes revenue-raising measures such as changes to allocation factors for corporate filers, adopting economic nexus thresholds, and ending special tax treatment for certain entities like real estate investment trusts (REITs).

New Jersey Lawmakers Launch Action on Corporate Tax Changes

More news out of the garden state, AeroFarms Inc., an indoor vertical farming company known for selling greens in grocery chains like Whole Foods and Harris Teeter, has filed for Chapter 11 bankruptcy. The Newark-based company listed $50 million to $100 million of liabilities in its petition. Existing investors have agreed to provide $10 million to support AeroFarms during the bankruptcy process. The company aims to quickly exit bankruptcy through a transaction with its investors and is exploring additional financing options to maximize credit recoveries and company value. AeroFarms' co-founder and CEO, David Rosenberg, will step down, with CFO Guy Blanchard assuming the additional role of president. AeroFarms attributes its bankruptcy filing to industry and capital market challenges, although its farm in Virginia continues to operate as planned. This bankruptcy follows similar challenges faced by other vertical farming companies, such as Kalera, which filed for bankruptcy in April.

Indoor Vertical Farmer AeroFarms Files for Chapter 11 Bankruptcy

Former President Trump is in the biggest legal mess of his illustrious legal mess career.

Donald Trump is facing an uphill battle in a case where he is charged with illegally retaining classified documents upon leaving the White House in 2021. Legal experts believe that neither the law nor the facts appear to be in his favor. The indictment against Trump includes 37 counts, such as violations of the Espionage Act, obstruction of justice conspiracy, and false statements. National security law experts find the evidence in the indictment to be extensive and compelling, supporting the allegation that Trump unlawfully took the documents and attempted to cover it up. Trump's defense lawyers have not yet commented on the charges.

Trump's greatest risk may lie in the charges of conspiracy to obstruct justice, which carry a maximum sentence of 20 years in prison. The evidence suggests that Trump was aware of the documents subject to a subpoena but refused to turn them over and encouraged his lawyers to mislead the FBI. Legal experts consider this a clear case of obstruction.

Obstruction of justice charges are challenging to defend against, as they offend people's sense of justice and honesty. Trump's alleged years-long effort to conceal the documents likely played a significant role in his indictment. The cover-up is seen as worse than the initial crime, and the conspiracy element in the obstruction charges makes them more serious. Prosecutors only need to prove that Trump collaborated with someone else to hinder the investigation, regardless of the outcome.

Trump has claimed that he declassified the documents before taking them, but a taped conversation cited in the indictment contradicts this assertion. The classification issue may ultimately be irrelevant, as Trump is charged under the Espionage Act, which criminalizes the unauthorized retention of national defense information, regardless of its classification status. Georgetown University law professor Todd Huntley explained that the Espionage Act does not care if the documents were declassified.

Trump's defense team could challenge witness accounts, shift blame to others, or argue that he was following his attorneys' advice and did not intend to break the law. If the case goes to trial, a Florida jury would hear it, and in a conservative-leaning state, Trump would need just one juror to oppose his conviction for a mistrial to occur. His defense team could also file motions to delay the trial until after the November 2024 election. The possibility of Trump pardoning himself if he were to win is a topic of debate among legal experts.

Trump faces difficult odds in classified-documents case | Reuters

SDFL Indictment

Long term followers of crypto will remember the rise and fall of Mt. Gox. Suffice it to say, Mt. Gox exploded on the runway so that FTX could one day crash directly into a mountain. 

The Department of Justice has unsealed an indictment revealing the identities of the hackers behind the 2011 attack on the Mt. Gox cryptocurrency exchange. The hackers, identified as Russian nationals Alexey Bilyuchenko and Aleksandr Verner, allegedly orchestrated the theft of 647,000 bitcoins from the exchange, which at the time was the largest in the world. The stolen bitcoins would be worth $17.2 billion today. The indictment claims that Bilyuchenko, Verner, and other co-conspirators gained access to a web server storing users' assets and transferred the funds into their own wallets. The duo is also accused of conspiring to launder the money through a New York-based bitcoin brokerage service. Assistant Attorney General Kenneth A. Polite, Jr. emphasized the Department's commitment to prosecuting criminals in the cryptocurrency ecosystem and preventing financial system abuse.

Feds Say They've Finally Identified the Hackers Behind the Mt. Gox Crypto Collapse



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