Good morning. Welcome back to The Daily Docket, your go-to morning newsletter from Westlaw Today for the latest on courts, lawyers and the legal profession. Elizabeth Holmes may be preparing a "mental disease" defense in the Theranos fraud case, Davis Polk is giving up on pure lockstep pay, would-be bar exam takers still can't duck it in Pennsylvania, and Grant & Eisenhofer's co-founder now has a side hustle writing sci-fi with his son. And there's much, much more!
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Mental state of Elizabeth Holmes at issue in Theranos fraud case
Lawyers for one-time Silicon Valley wunderkind Elizabeth Holmes at her trial may pursue a "mental disease" defense against charges that she misled patients and investors about the capabilities of her company Theranos' blood tests.
The potential defense was disclosed in a ruling late Wednesday by U.S. District Judge Edward Davila in San Jose, who ordered the former Theranos CEO to be examined by a psychologist and psychiatrist chosen by the prosecution over two days on video.
Jonathan Stempel reports that Davila authorized the examinations after her lawyers said they planned to introduce expert evidence from a clinical psychologist relating to a mental disease or defect bearing on the question of her guilt.
Her lawyers, Kevin Downey and Lance Wade of Williams & Connolly, had retained Mindy Mechanic, a professor at California State University at Fullerton specializing in psychosocial consequences of violence, trauma and victimization, including violence against women, according to her university biography.
Further details of her defense could not be determined. The ruling was partially redacted and her mental state was previously discussed in sealed court documents. She is scheduled to face trial in March 2021.
Lockstep pay continues to lose favor, this time at Davis Polk
The fading lockstep compensation model used at large New York law firms to pay partners is becoming even rarer, as longtime proponent Davis Polk & Wardwell on Thursday said it would adopt a new structure, Caroline Spiezio reports.
Davis Polk was among just a handful of top New York law firms including Cravath, Watchell and Debevoise that continued to deploy the strict compensation structure based on seniority. Those firms generally have argued the model was key to promoting collaboration and their long-term success.
But the model has come under strain as other firms like Kirkland & Ellis have moved to reward their star fee earners and pay big bucks to poach lawyers -- including partners at their lockstep rivals.
Davis Polk, one of the oldest firms in the country, plans to adopt a modified lockstep system, allowing it to pay more competitively to retain and recruit top talent. The firm said the new system "recognizes and rewards the entirety of a partner's contributions on behalf of clients and in support of firm priorities." The firm's profits per partner in 2019 were $4.5 million, according to The American Lawyer.
Pennsylvania top court rejects diploma privilege case
Pennsylvania will not be joining four other states in temporarily granting recent law school graduates diploma privilege instead of requiring them to take a bar exam during the COVID-19 pandemic, the state's top court said on Thursday.
The Pennsylvania Supreme Court in a one-page order denied a petition by a group of applicants who argued that forcing them to take the exam in these circumstances violates their rights under the state's constitution to pursue their chosen occupation.
Those applicants argued the court should abandon the already-delayed Oct. 5-7 test now being held online and grant licenses to law school graduates set to take it. They cited the risks of cyberattacks, which occurred in Michigan when examiners used the same software provider for its July virtual test.
But the Pennsylvania Board of Examiners said while a remote exam "is far from perfect" it could not adequately ensure minimal standards for licensed lawyers without it.
Buchanan Ingersoll & Rooney's Michael Engle, who represented the applicants with Temple University law professor Louis Natali, said they were "deeply disappointed" and that the case raised issues of "deep concern" to bar admission candidates.
Coming up today
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The 4th Circuit will consider whether to uphold an injunction sought by North Carolina's chapter of the NAACP that barred enforcement of a voter identification law.
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Small businesses and church pastors represented by the New Civil Liberties Alliance will urge the Massachusetts Supreme Judicial Court to rule that Republican Governor Charlie Baker unconstitutionally overstepped by relying on a Cold-War-era statute to declare a state of emergency to force businesses to close and to limit social gatherings.
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The U.S. Chamber of Commerce and other business groups will try to persuade U.S. District Judge Jeffrey White in Oakland, California, to block Trump's temporary ban on work visa holders entering the country. A federal judge in D.C. last week ordered his administration to resume issuing diversity visas but declined to block the ban as it related to other visa categories.
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The D.C. Circuit will consider reviving a challenge by a group of asylum applicants to U.S. Citizenship and Immigration Services regulations implementing the Trump administration's "transit ban." The 2019 policy holds that asylum seekers must already have been denied protection in a country they traveled through en route to the United States to be eligible for asylum. Greenberg Traurig’s Steven Barringer will argue for the plaintiffs against the DOJ's Erez Reuveni.
What we learned this week
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A small group of U.S. lawyers pushed voter fraud fears into the mainstream. Pieced together from court records, tax filings and leaked documents from a conservative foundation, Reuters reporters uncovered how this tight network of lawyers became a force in American politics, working through nonprofit groups to secure funding from right-wing donors.
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Many Texas bar applicants took the exam in separate hotel rooms as a pandemic safety measure. Alaska, Hawaii, Minnesota, New Mexico and Virginia were among the states that also held bar exams this week.
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Double Olympic 800 meters champion Caster Semenya will likely continue her battle to set aside a 2019 Court of Arbitration ruling ahead of next year's Tokyo Olympics. The ruling found that female athletes with high natural testosterone levels must take medication to reduce those levels. Semenya lost her appeal at the Swiss Federal Tribunal this week.
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Charleston, South Carolina, became the first city in the South to sue oil and gas companies over the cost of climate change. "These companies have known for more than 50 years that their products were going to cause the worst flooding the world has seen since Noah built the Ark," Mayor John Tecklenburg said.
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And pro bono lawyers saved Pepe the Frog from the clutches of hate.
"Century 21, the downtown discount store, was the best part of jury duty."
Sarah Jessica Parker as Carrie Bradshaw of "Sex and the City," long before the off-price New York retailer filed for bankruptcy to wind down its remaining stores, blaming its financial woes on insurers that have refused to cover COVID-19-related losses. Proskauer Rose represents it. (Reuters)
Shareholder litigator, kid co-write children's sci-fi book
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Source: Jay Eisenhofer
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Jay Eisenhofer is known for pursuing class action lawsuits for shareholders against public corporations and executives accused of malfeasance. But the Grant & Eisenhofer co-founder's latest side hustle? Sci-fi writer.
"Black Shadow" is a time travel, intergalactic adventure novel co-authored by the veteran litigator with his 10-year-old son Mark that they self-published. Eisenhofer told The Daily Docket he spent two years off-and-on writing the book, largely during vacations, based on discussions with his son.
"He liked to create these characters, and he wanted to act them out when he was younger," Eisenhofer said. "I wrote down the first chapter of it based on some of the things he had been doing. He kind of liked it, so we would talk about it and just kept it going."
The novel follows the adventures of Terry, a wisecracking, young space pilot known across 115 galaxies. Eisenhofer readily admits it isn't making the best seller list, but "we really did it for ourselves."
Any sequel plans? "He has a lot of ideas, but I'm not sure about working another couple years on a book," Eisenhofer said. "It might be time for him to start writing his own books."
Industry buzz
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EPA General Counsel Matt Leopold will leave the agency in the coming weeks. He'll remain in D.C. practicing environmental law but did not share specific plans. (Politico)
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Litigator Alex Romain left Irell & Manella for Milbank in Los Angeles. Irell has lost more than a dozen partners since last year. In February, the firm said it would phase out most of its transactional practices to focus on high-end commercial and intellectual property litigation. (Reuters)
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The My Pillow guy, Michael Lindell, hired Lin Wood and is threatening to sue CNN's Anderson Cooper for defamation over an interview. In a letter to CNN, Wood wrote that Cooper's interview was "the most outrageously unprofessional 'hit piece' interview I have ever viewed." (Above The Law, Newsweek)
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The New Jersey Supreme Court approved a change allowing law firms to adopt trade names. The old rule only allowed firms to adopt trade names if they were accompanied by the full or last name of at least one lawyer at the firm. (New Jersey Law Journal)
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The parents of two Northeastern University students whom the school dismissed last week for breaking coronavirus-related rules on socializing have hired Joshpe Mooney Paltzik's Brett Joshpe and plan to challenge the university's decision. The school has said it will not refund their $36,500 tuition. (Boston Globe)
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King & Spalding launched a new global human capital and compliance practice with a trio of partners from Seyfarth Shaw. Darren Gardner will head the practice and is joined by Dominic Hodson and Amanda Sonneborn. (Reuters)
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Cloud-based law firms Rimon and FisherBroyles added new partners in D.C. International dispute resolution lawyer Katie Hyman left Akin Gump, where she was counsel, for Rimon and Bob Ellerbrock departed Ogletree for FisherBroyles to join its employee benefits and executive compensation practice. (Reuters)
In the courts
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A panel of federal judges in Manhattan on Thursday declared unlawful a recent directive from President Donald Trump to exclude people who are in the United States illegally from representation when apportioning congressional seats. The ruling was a victory for the 38 states, cities and counties, plus several immigrants rights nonprofits. (Reuters)
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LVMH, the French owner of brands such as Louis Vuitton, said on Thursday it would counter-sue Tiffany, accusing it of mismanagement through the coronavirus crisis. The news came a day after the U.S. jeweler in a lawsuit its lawyers at Sullivan & Cromwell filed in Delaware Chancery Court accused LVMH of trying to bow out of a $16 billion acquisition deal. (Reuters)
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U.S. District Judge Karen Caldwell in Kentucky signed off on Walmart's $20 million settlement of an EEOC lawsuit claiming the company's practice of giving physical ability tests to applicants for grocery warehouse jobs made it more difficult for women to get the positions. (Reuters)
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Three Vermont families have sued the state's education secretary and several school districts claiming that denying them a state tuition benefit to send their children to religious schools is unconstitutional. The suit comes after the U.S. Supreme Court ruled that Montana can’t cut religious schools from programs that direct public money to private schools. The libertarian public interest law firm Institute for Justice represents the parents. (AP)
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Four attorneys general and environmental groups have sued the EPA for allegedly failing to require New York and Pennsylvania to abide by an agreement that seeks to mitigate agricultural pollution in the Chesapeake Bay by 2025. (Reuters)
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The Ohio Supreme Court unanimously upheld the removal of rapper Kanye West from the state's presidential ballot, affirming a determination by Ohio Secretary of State Frank LaRose that the information on West's nominating petition did not match the petitions signed by voters. (Cleveland.com)
Columnist spotlight: The error that trailed Utah’s new SG into her new job
On Wednesday, Melissa Holyoak's first day as solicitor general of Utah, the state's two biggest newspapers ran stories about a show-cause order last week from U.S. Magistrate Judge William Matthewman of West Palm Beach. Matthewman harshly criticized Holyoak for raising a "patently false" objection to a class action settlement involving the registration of newly-sold tires. "It was a fun way to start," Holyoak told Alison Frankel.
Holyoak said in the interview she made a mistake in her initial reading of the settlement agreement and withdrew her objection to the injunctive part of the settlement. But she maintained in a July 6 brief that the settlement should not receive final approval unless class members shared in the money slated for class counsel and named plaintiffs. Matthewman vehemently disagreed, approved the deal and gave her until Sept. 16 to file a brief explaining why she should not face sanctions.
The Utah AG's office is standing by Holyoak, who says she's "embarrassed" by the mistake, but, if nothing else, the headlines on her first day in office were a pointed reminder of what she's leaving behind, Frankel writes.
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