Good morning. The DOJ's inspector general is investigating if officials improperly sought to overturn the presidential election's results following the allegations surrounding Jeffrey Clark. Lawyers' decisions to join President Joe Biden's administration could be impacted by an executive order combating the "revolving door," insurers are claiming lawyers filed an "implausibly" large number of sex-abuse claims in the Boy Scouts of America's bankruptcy case, and new data shows that 2020 was a really bad year to be a False Claims Act whistleblower. Let's go!
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DOJ watchdog opens probe into efforts to overturn election
The DOJ's internal watchdog is opening an investigation into whether any current or former department officials improperly sought to alter the 2020 presidential election's results, Sarah N. Lynch and David Shepardson report.
Inspector General Michael Horowitz announced the probe after The New York Times first reported that Jeffrey Clark, until recently the acting head of the DOJ's Civil Division, plotted with President Donald Trump in a failed attempt to oust then-Attorney General Jeff Rosen so he could pursue investigations of Trump's baseless voter fraud claims.
The plan to push out Rosen and replace him with Clark, a former Kirkland & Ellis partner, collapsed after senior department leaders pledged to resign in protest, according to current and former DOJ officials. Republican Representative Scott Perry of Pennsylvania confirmed on Monday that he introduced Trump to Perry.
Horowitz said his probe will encompass "all relevant allegations that may arise." Democrats on the Senate Judiciary Committee have also vowed to investigate the matter. Clark did not respond to requests for comment but has called accounts of his conversations with Trump inaccurate. Learn more about what officials say Clark discussed with Trump.
Biden's revolving door rules could affect law firm recruiting
As lawyers from major law firms sign up to join the Biden administration, a new executive order that aims to crack down on the "revolving door" between government and private firms could affect some potential recruits' career calculus.
Caroline Spiezio takes a closer look at an executive order President Joe Biden signed last week that not only restored Obama-era ethics rules but went further by preventing appointees who leave the administration from communicating with its officials, including their former agency, for two years.
Incoming appointees also can't participate in matters directly and substantially related to former employers or clients for two years, and they can't get a "golden parachute" payment from the private sector employers they leave behind.
"As much as certain lawyers are excited by the Biden administration and being appointed, this new ban will absolutely impact their decision-making," said Dan Binstock, a D.C. legal recruiter at Garrison & Sisson.
But Richard Painter, a professor at the University of Minnesota Law School who served as President George W. Bush's chief ethics lawyer, said while affected lawyers might not make as much money during the prohibition when they someday leave the administration, "that's part of the price of government service." See more.
Industry buzz
- Jenner & Block partner Emily Loeb is joining the DOJ as a top aide to President Joe Biden's pick for deputy attorney general, Lisa Monaco. At Jenner, Loeb led the firm's government controversies and public policy litigation group with Tom Perrelli. She was a top aide in the DOJ's Civil Rights Division and spent nearly two years as an associate White House counsel in the Obama administration before leaving in 2016. (Reuters)
- Nicholas Sandmann, a Kentucky teenager whose 2019 face-off with a Native American activist in Washington went viral, has fired L. Lin Wood, the Atlanta lawyer who played a key role in Trump's attempts to overturn his election defeat and was representing Sandmann in lawsuits against various media companies. Wood had said he expected Sandmann would "abandon" him because of earlier social media posts in which Wood suggested former Vice President Mike Pence engaged in "treason" and could "face execution by firing squad" for formally recognizing Biden's victory. (Reuters)
- Leon Black said he would step down as chief executive at the private equity powerhouse Apollo Global Management, following an independent review by lawyers at Dechert of his ties to the late financier and convicted sex offender Jeffrey Epstein. (Reuters)
- Biden tapped Sung Ohr, the chief lawyer at the National Labor Relations Board's Chicago office, to serve as the agency's acting general counsel, after firing Trump appointee Peter Robb when he refused the White House's call to resign. (Reuters)
- Davis Polk wants ex-associate Kaloma Cardwell sanctioned for a "defamatory attack" in his racial bias case against the firm. Cardwell, who is Black, alleges he was the victim of a campaign of racial discrimination during his four-year tenure at the firm. Davis Polk has denied the claims. U.S. District Judge Gregory Woods in Manhattan set a Feb. 1 conference on whether to allow the firm to file a motion seeking Rule 11 sanctions. (Reuters)
- The Indiana Supreme Court has cleared a Barnes & Thornburg partner of misconduct after he was accused of having a conflict of interest and making a false statement regarding his relationship with a client's then-wife. Larry Mackey, a former federal prosecutor, married his client's ex-wife in 2012. (Legal Profession Blog, Indianapolis Star)
Coming up today
- A group of retailers including The Kroger Co, Albertsons and SuperValu Inc will urge the 3rd Circuit in Philadelphia to order a new trial in an antitrust lawsuit alleging that egg producer Rose Acre Farms and two industry trade groups, United Egg Producers and United States Egg Marketers, conspired with others to suppress the output of eggs to increase their prices. The plaintiffs had planned to seek $1 billion in damages, which could have tripled under antitrust to $3 billion. But a jury returned a defense verdict in 2019. Paul Slater of Slater & Sperling will argue for the plaintiffs and will face Jay Levine of Porter Wright Morris & Arthur for Rose Acre Farms. Check the arguments out at 9:30 a.m. EST on YouTube.
- The Ohio Supreme Court will consider whether to allow the state to move forward with a lawsuit against Volkswagen arising from its "Dieselgate" scandal and software updates it made related to so-called defeat devices installed on its cars to lower emissions during emissions tests but not on the road. A trial judge found the lawsuit was preempted by the federal Clean Air Act, but a mid-level appeals court revived it. The emissions scandal has produced billions in liability for the company. Jackie Jewell of Reminger and Robert Giuffra of Sullivan & Cromwell rep VW. Ohio Solicitor General Benjamin Flowers will argue for the state. Watch the arguments online at 9 a.m. EST.
- The 4th Circuit in Richmond, Virginia, will consider whether to overturn the North Carolina Department of Environmental Quality's rejection of a key water permit to develop a natural gas pipeline expansion of the Mountain Valley Pipeline. Michael Regan, Biden's nominee for EPA administrator, oversaw the state department when it rejected the permit sought by Mountain Valley Pipeline LLC, represented by Catherine Stetson of Hogan Lovells. Assistant North Carolina Attorney General Taylor Crabtree will defend the agency's decision. Listen to the arguments via YouTube at 9:30 a.m. EST.
- The 4th Circuit will also consider whether to uphold a judge's ruling finding that the federal government's watchlist of more than 1 million people deemed "known or suspected terrorists" violates the constitutional rights of American citizens placed on the list, which is used to keep people off planes and block them from entering the United States. The ruling came in a lawsuit pursued by the Muslim civil rights and advocacy group the Council on American–Islamic Relations. Its attorney, Gadeir Abbas, will face Joshua Waldman of the DOJ. The arguments will be streamed online via YouTube at 9:30 a.m. EST.
- The Consumer Financial Protection Bureau will appear before U.S. District Judge Maryellen Noreika in Wilmington, Delaware, to contest motions to dismiss a lawsuit against one of the largest U.S. holders of private student-loan debt. The CFPB in 2017 sued National Collegiate Student Loan Trusts and the trusts' debt collector, Transworld Systems, alleging they engaged in illegal student loan debt collection lawsuits. The trusts agreed to a settlement that would have required them to audit more than 800,000 student loans, but Noreika in May at the request of several investors and stakeholders including Ambac and the Pennsylvania Higher Education Assistance Agency rejected the accord. Through lawyers including George LoBiondo and Joshua Kipnees of Patterson Belknap Webb & Tyler they are now seeking the lawsuit's dismissal. Allyson Baker of Venable reps Transworld.
- The 6th Circuit in Cincinnati will weigh whether to revive a whistleblower lawsuit accusing the pharmacy chain Rite Aid of illegally charging Medicare and Medicaid more than its usual and customary rates for drugs. The lower court judge dismissed the lawsuit brought by pharmacist Azam Rahimi under the False Claims Act, finding it was barred by a previous public disclosure about the company's actions. Peter Patterson of Cooper & Kirk and William Peterson of Morgan Lewis will argue for Rahimi and Rite Aid, respectively. The arguments can be heard online after 1:30 p.m. EST.
Video: How realistic is Dominion Voting Systems' $1.3 billion damages claim against Giuliani?
Data dive: False Claims Act whistleblowers see awards shrink in 2020
Reuters data journalist Disha Raychaudhuri on the declining size of False Claims Act whistleblower awards.
It's a tough time to be a whistleblower.
Recently-released data by the DOJ shows that 2020 was not just a bad year for the government to recover settlements and judgments in False Claims Act cases brought against companies including in the health and defense sectors. It was also not good for the whistleblowers who often initiate such lawsuits.
The DOJ said it recovered more than $2.2 billion during fiscal year 2020, the lowest amount since 2008. For whistleblowers, who are entitled to 15% to 25% of any recovery the government obtains, that meant a reduced share as well. Whistleblowers, or relators, were awarded a decade-low of $309.4 million. The record haul in the last two decades was $574.1 million in 2011.
COVID-19 might be responsible, Stephen Sozio of Jones Day told reporter Brendan Pierson. "The government was hampered in its ability to investigate these cases, the relators' bar was hampered in its ability to pursue the cases and the defense bar was limited in its ability to investigate the cases and advise their clients on potential liability," he said. Check out his full Q&A.
"Prove it or pay it. The ball's in your court."
Tim Kosnoff, a plaintiffs lawyer with Kosnoff Law, in reaction to claims by the Boy Scouts of America's liability insurers that several law firms conducted an "extraordinary claim-mining operation" that resulted in "implausibly large" numbers of sex-abuse claims filed against the youth organization after it filed for bankruptcy. Insurers affiliated with Hartford Financial Services Group and Chubb Ltd through lawyers at O'Melveny & Myers and WilmerHale are seeking court approval to investigate. Kosnoff said he did not sign any claim that he thought might have been fraudulent. (Reuters)
In the courts
- The U.S. Supreme Court halted lawsuits alleging former President Donald Trump violated the U.S. Constitution's so-called emoluments provisions by maintaining ownership of his business empire including a hotel near the White House while in office, saying they were moot now that had left office. Maryland Attorney General Brian Frosh and District of Columbia Attorney General Karl Racine in a joint statement said their case was significant because the 4th Circuit "ruled on the meaning of 'emoluments' for the first time in American history." (Reuters)
- SCOTUS also rejected a slew of cases, including an appeal by former New York State Assembly Speaker Sheldon Silver of his conviction on corruption charges. It also rejected challenges to a series of decisions holding that public-sector unions do not have to pay back fees they collected from nonmembers prior to the high court's 2018 ruling in Janus v. AFSCME, which said they were unconstitutional. (Reuters, Reuters)
- Duke Energy struck a deal to pay $1.1 billion to clean up coal ash produced by its coal-fired power plants in the state, in a victory for North Carolina Attorney General Josh Stein, who had opposed the utility charging its retail customers for the remediation. The North Carolina Supreme Court in December ordered the state’s utilities regulator to reconsider orders allowing Duke to charge residential customers for the clean up costs. Kiran Mehta of Troutman Pepper repped Duke in that case. (Reuters)
- Johnson & Johnson has won dismissal of a proposed class action accusing it of falsely advertising that its talc products were "safe and pure." U.S. District Judge Todd Robinson in San Diego said lawyers for the consumers failed to point to any specifically misleading advertisements from J&J that caused them to buy the company's talc products. The ruling for J&J, repped by Stacy Harrison of Orrick, came as the company battles thousands of lawsuits alleging talc in its Johnson’s Baby Powder caused people to develop cancer. It has consistently maintained its talc products are safe and asbestos-free. (Reuters)
- Southern California Edison will pay $2.2 billion to resolve insurance claims from a massive wildfire that burned in Los Angeles and Ventura counties in 2018. It also reached settlements with 1,000 plaintiffs in litigation arising from two fires in 2017 and mudslides in 2018 for which they said the utility bore responsibility. SCE, represented by John Hueston of Hueston Hennigan, did not admit wrongdoing. (Reuters)
- U.S. Bankruptcy Judge Mary Walrath in Wilmington, Delaware, approved The Weinstein Co's liquidation plan, which sets aside $17 million for women who accused co-founder Harvey Weinstein of sexual misconduct. A handful of women who are looking to pursue appeals of their claims outside of bankruptcy court had objected. Cravath's Paul Zumbro represents the company. (Reuters)
- A divided 4th Circuit panel ruled that former gang members from specific countries can qualify as members of "particular social groups" that are eligible for asylum, rejecting a Board of Immigration Appeals standard adopted during the Obama era that has been upheld by other courts. The ruling revived an asylum bid by a citizen of El Salvador who was a former member of the gang MS-13. (Reuters)
- Documents that Merck & Co produced in product liability lawsuits related to its anti-baldness treatment Propecia must be unsealed, U.S. Magistrate Judge Peggy Kuo in Brooklyn ruled, after siding with Reuters in finding the public's right to access outweighed the drug maker's arguments for keeping the information secret. Reuters previously spotlighted the litigation as part of an investigation of the impact of court secrecy on public health and safety. Davis Wright Tremaine's Katherine Bolger and Charles Morrow of Butler Snow repped Reuters and Merck, respectively. (Reuters)
Industry moves
- Allison Schoenthal, who led Hogan Lovells' consumer finance litigation team, joined Goodwin Procter in New York as the head of its consumer financial services litigation and enforcement practice. Five other lawyers are joining with her as senior attorneys or in one case as an associate. (Reuters)
- Healthcare transactional lawyers Ankur Gupta, Sam Wales and Ben Kirschner have joined Sidley Austin as partners in Chicago in its global M&A and private equity practice from McDermott Will & Emery, where Gupta was the leader of its global healthcare real estate practice. An associate, Krista Kay Lewis, is also joining Sidley. (Sidley Austin)
- Russell Coleman, who recently resigned as the U.S. Attorney for the Western District of Kentucky, rejoined Frost Brown Todd as a litigator in Louisville with a focus on white collar crime. (Frost Brown Todd)
- Patent lawyer Benjamin Pelletier, whose practice focuses on the biotech, pharmaceutical, life science and medical device industries, joined Haynes and Boone's San Francisco office as a partner in its precision medicine and digital health practice group. He was previously with Venable. (Haynes and Boone)
- Capital markets attorney Marc Adesso joined Saul Ewing Arnstein & Lehr’s Chicago office as a partner in its corporate practice from Waller Lansden Dortch & Davis. (Saul Ewing)
- David Schulman, who co-led Dechert's life sciences practice, joined Orrick as a partner in its D.C. office. (Orrick)
- Alicia Lewis is joining Kelley Kronenberg's Fort Lauderdale office as a partner and is launching the firm's land use and zoning practice. She was previously an attorney at Greenspoon Marder. (Kelley Kronenberg)
- Richard Rahm left Littler Mendelson and joined DLA Piper's employment practice as a partner in San Francisco. (DLA Piper)
- Steptoe & Johnson added Steve Yang to its intellectual property group as a partner in New York. He joins from Alston & Bird where he was a senior associate. (Steptoe)
- Real estate attorney Jody Saltzman has joined Greenberg Traurig as a shareholder in its New Jersey office from K&L Gates, where she was a partner. (Greenberg Traurig)
'The needle is moving': Another MDL judge cites diversity in lead counsel appointments. Nearly three-quarters of the plaintiffs lawyers who will lead the multidistrict litigation over Janssen's interstitial cystitis drug Elmiron are women. And that's no accident. U.S. District Judge Brian Martinotti's first pre-trial order in the 170-case MDL explicitly called on plaintiffs lawyers to propose a leadership slate that was "diverse in gender, ethnicity, geography and experience," and last week he picked three lawyers to head the steering committee, two of them women. Alison Frankel takes a look at how judges, though not without controversy, are helping move the needle to increase diversity among MDL lead counsel. Read her full column here.
Biden's firing of NLRB prosecutor is low-hanging fruit in labor reform. Less than 30 minutes after being sworn in on Jan. 20, President Joe Biden made National Labor Relations Board General Counsel Peter Robb an offer: resign or be fired. Robb, an appointee of former President Trump, chose the latter, as did his deputy, Alice Stock, and Biden dismissed her just hours later. Biden appears to be paying attention to the voices of organized labor and, Hassan Kanu writes, the firings are uncontroversial low-hanging fruit. "Robb's removal is simply a necessary first step to improving U.S. labor law - a sound and obvious move to replace one of the most anti-union officials to hold the post of the country's top union rights enforcer in the NLRB's 86-year history," Kanu writes. Read his full column here.
Check out other recent pieces from all our columnists: Alison Frankel, Jenna Greene and Hassan Kanu.
Lawyer speak: 5 trends to watch in 2021 for trademark & brand management
Greenberg Traurig attorneys Susan Heller, Joel Feldman, Candice Kim and Stephen Baird offer their predictions of what 2021 holds for trademark practitioners, including insights into the Trademark Modernization Act of 2020, the explosion of cannabis and CBD branding, and the U.S. Supreme Court's forthcoming Arthrex decision, which will decide if PTAB judges may continue to be appointed by the Secretary of Commerce rather than appointed by the president.
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