Good morning. Snell & Wilmer withdrew as counsel for the RNC in the lawsuit challenging the results in Arizona; real estate trouble and valuation fights are on the horizon for corporate bankruptcy as the pandemic rages on; Lawrence Hurley has the scoop on how Justice Amy Coney Barrett is settling in at SCOTUS; and Election Day saw some wins for reformist prosecutors. Here we go!
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Snell & Wilmer exits Trump campaign lawsuit in Arizona
As law firms like Jones Day and Porter Wright Morris & Arthur are facing an onslaught of criticism for their work with the Trump campaign, Snell & Wilmer, the largest law firm that was taking part in the post-election litigation, has withdrawn from a lawsuit challenging the results in Maricopa County, Arizona.
The firm was representing the Republican National Committee, which has teamed-up with the Trump campaign and the Arizona Republican Party in the lawsuit. The case was filed Saturday, and Snell & Wilmer partners Brett Johnson and Eric Spencer filed a motion to withdraw on Sunday, David Thomas reports.
By Monday law firms were taking heat for their roles in election-related lawsuits. Many of the lawsuits have been dismissed, and experts say others have little chance of changing the outcome of the election. On Tuesday, Associate Presiding Civil Judge Daniel Kiley granted Snell & Wilmer leave to withdraw as the attorneys of record for the RNC.
An evidentiary hearing in the lawsuit is set for today. Read more here.
On the horizon for corporate bankruptcy: real estate trouble and valuation fights
The COVID-19 pandemic has already pushed many companies into unexpected bankruptcies, but restructuring experts say the worst is yet to come, especially as lenders' patience starts to wane, Maria Chutchian reports. Industries that have strong connections to real estate, including retail and restaurants, will continue to be some of the hardest hit.
Debtors can expect banks and other lenders that may have been lenient over the past several months to start taking action. And while that may not mean an onslaught of new cases in the immediate future, it could result in a rise in Chapter 11 filings around the second quarter of 2021.
As the pandemic continues to take its toll on the economy, experts say valuation disputes are likely to become more common for the businesses that do opt for Chapter 11 protection. Read Chutchian’s story for a full breakdown of issues involving lenders and shareholders that are on the horizon.
Industry buzz
- Jones Day, the go-to law firm for President Trump's campaign, is under fire for representing Republicans in litigation over mail-in ballots, with law students threatening to boycott the firm and a prominent anti-Trump group targeting it online. (Reuters)
- Jeffrey Toobin tweeted that he was fired from the New Yorker on Wednesday. Toobin was suspended from the magazine last month after he allegedly exposed himself during a Zoom call. He is also on leave from CNN where he is chief legal analyst. (Twitter)
- Baker McKenzie kicked off the year-end bonus season, announcing a scale for U.S. associates that reaches $100,000, with a promise to go higher if other firms do. (Reuters)
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When Bryan Cave Leighton Paisner brought on a new data privacy leader this week from Baker McKenzie, it marked at least the fifth time this fall that a firm swiped a privacy or data security lawyer to head a related practice. Privacy lawyers are in high demand and firms are playing tug of war. (Reuters)
- A new poll found that 60% of judges oppose lifetime appointments, largely because they believe such appointments undermine accountability. (Reuters)
- Orrick is starting a program for lawyers who are also caretakers amid the pandemic that permits associates and counsel to work an 80% schedule at full compensation for up to three months. The firm is also offering retroactive pay for all employees who experienced pandemic pay cuts and matching last year’s bonus scale. (Above The Law)
- Baker Botts named Terence Rozier-Byrd partner-in-charge of the New York office and Sam Dibble partner-in-charge of the San Francisco office. (Baker Botts)
Coming up today
- Libertarian think tank the Cato Institute will urge the D.C. Circuit to revive its lawsuit challenging the SEC's policy of barring the targets of its enforcement actions from publicly contradicting the agency's assertions in "no deny" settlements. The Institute for Justice's Robert McNamara will argue for Cato and will face the SEC’s Jeffrey Berger.
- A subsidiary of Indivior Plc is set for the penalty phase before U.S. District Judge James Jones in Abingdon, Virginia, after pleading guilty to a felony charge as part of the drugmaker's agreement to pay $600 million to resolve U.S. allegations that it engaged in an illegal scheme to boost prescriptions of its opioid addiction treatment Suboxone. Jones Day's James Loonam represents Indivior Solutions.
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The D.C. Circuit will consider whether the National Labor Relations Board wrongly approved a bargaining unit of welders employed by a metal-casting company that excluded its other employees. The NLRB in 2017 issued a landmark ruling in the case adopting a standard that made it more difficult for unions to carve out so-called "micro units" containing only small groups of workers. Morgan Lewis’ William Peterson will argue for the company, PCC Structurals, and will face Gregory Lauro for the NLRB.
- The 2nd Circuit will consider whether to revive a proposed class action accusing credit card company Synchrony Financial of failing to disclose to investors that it tightened lending criteria and faced pushback from its retail partners. Bernstein Litowitz’s Salvatore Graziano will argue for the plaintiffs and will go up against Cleary Gottlieb’s Victor Hou for Synchrony and Shearman & Sterling’s Daniel Lewis on behalf of banks that underwrote a 2017 note offering.
- 24 Hour Fitness Worldwide through lawyers led by Weil Gotshal’s Ray Schrock will seek approval from a federal bankruptcy judge in Delaware of its disclosure statement, which outlines the gym operator’s reorganization plan for creditors before they vote on the plan. The company’s unsecured creditors’ committee, repped by a team led by Cooley’s Cathy Hershcopf, has said it will oppose the disclosure statement.
- U.S. District Judge William Young in Boston will preside over a bench trial via Zoom in a lawsuit brought against the U.S. Department of Education and Education Secretary Betsy DeVos challenging the department’s new Title IX rules released in May on campus sexual assault and harassment. The suit claims the rules harm survivors and relieve the schools of some liability. The National Women’s Law Center is counsel on the case with pro bono co-counsel Morrison & Foerster, including partners Julie O’Neill, Natalie Fleming Nolen and David Newman.
Reporter's notebook: New Justice Barrett keeping a low profile as she settles into SCOTUS life
Reuters Supreme Court reporter Lawrence Hurley on Justice Barrett and Tuesday’s Obamacare oral argument:
Justice Amy Coney Barrett has had a pretty low-profile start to life on the Supreme Court following her contentious confirmation by the Republican-controlled U.S. Senate just before the election. During the hearing, Democrats focused on two issues: Barrett's potentially casting a decisive vote to strike down Obamacare in the Republican challenge heard by the court on Tuesday and the possibility of her voting for President Donald Trump, the man who nominated her, in any potential election-related cases that reach the court.
So far neither of those scenarios seems likely to happen. In the Obamacare oral argument, there were strong signals that there is no majority to strike down Obamacare in full and Barrett's questions were mainly focused on whether the challengers even had standing to sue. In election cases that reached the court before the election, Barrett stayed out altogether, saying she had not had time to prepare. Although the Trump campaign is still pursuing its legal challenges to the president's election loss, there is still little sign that the Supreme Court will play a decisive role.
The country may be roiled by the post-election chaos, but to date Barrett is doing her best to stay in the shadows.
Voters have spoken: They want more control over their digital data
Voters this year made it clear they want more control over their digital data as ballot initiatives in California, Michigan and Massachusetts all scored victories. Stacey Gray, legal counsel at the Future of Privacy Forum, discusses the broader implications of these measures for digital privacy rights. Watch the full video here.
"It does not change the truth: Michigan's elections were conducted fairly, securely, transparently, and the results are an accurate reflection of the will of the people."
Jake Rollow, a spokesman for the Michigan Department of State, who said the Trump campaign was promoting false claims to erode public confidence in Michigan's elections. (Reuters)
In the courts
- A union that represents public workers in Wisconsin is attempting to use the U.S. Supreme Court's 2018 Janus decision barring compulsory union fees for public employees to its advantage in a renewed challenge to the state's controversial 2011 law limiting public-sector collective bargaining. The 7th Circuit will hear the case Friday. (Reuters)
- Madera County, California, sued Dow Chemical and Shell in California Superior Court alleging the companies knowingly polluted Madera's drinking water wells by manufacturing and selling fumigants, used in agricultural fields, laced with a toxic chemical. (Reuters)
- The 9th Circuit tossed a $14.8 million fee award to class counsel in a case alleging that Whirlpool dishwashers were prone to overheat and seemed likely to discourage plaintiffs’ lawyers from agreeing to settlements in which a big chunk of the relief can be characterized as a coupon. (Alison Frankel’s On The Case)
- Several states and two groups representing opioid victims have lodged objections to Purdue Pharma’s $8 billion deal with the federal government resolving civil and criminal investigations into its past opioid marketing practices. (Reuters)
Columnist spotlight: Some wins for reformist prosecutors amid lingering criminal justice divide
While elections for prosecutors and law enforcement positions on ballots across the country last week reflect a meaningful ideological shift toward criminal justice reform within the electorate, deep divisions remain. In his latest column, Hassan Kanu writes that it’s important to note that voters selected candidates whose platforms would have been politically untenable just a few years ago. The results suggest a very cautious optimism for dismantling aspects of our racist mass incarceration system, and improving law enforcement generally. Read his full column here.
Check out other recent pieces from all our columnists: Alison Frankel, Jenna Greene and Hassan Kanu.
Lawyer speak: Are genetics a path to resolving asbestos litigation?
Genetic discoveries have the potential to turn asbestos litigation upside down. Crowell & Moring attorneys William Anderson, Peter Condron and Kieran Tuckley explore the current state of genetic proof in toxic tort cases and how courts should anticipate an increasing use of genetic testimony and institute the necessary controls both to reject unscientific guesswork and encourage the development of legitimate genetic evidence of causation.
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