Good morning. We're glued to the TV awaiting former President Donald Trump's lawyers' defense case to start today in impeachment land. Meanwhile, would-be lawyers are wondering how states will fare this time with coronavirus-prompted online bar exams; the 1st Circuit says it won't block the extradition to Japan of Carlos Ghosn's accused escape accomplices; and New York's top court has spared Mike Bloomberg from a sexual harassment and assault lawsuit against Bloomberg LP over the strong objections of a dissenting judge. It's about to be a three-day weekend. Let's get this done and kick back until Tuesday!
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Bar exam applicants brace for Round 2 of online tests
The COVID-19 pandemic last year threw bar exams into disarray, as examiners scrambled to come up with alternatives to in-person testing and rushed to adopt online tests that exposed applicants to delays, cybersecurity threats and tech glitches.
Now thousands of applicants in states from California and New York are preparing in the coming weeks for Round 2 of online bar exams. Will this time be better?
Professionals from state bar exam boards, law schools and ExamSoft, which provides online testing software, say yes, Caroline Spiezio reports. "Things have calmed down dramatically," said Rodney Fong, an associate dean at University of Illinois at Chicago John Marshall Law School.
ExamSoft has added support staff, after 2020 applicants complained of long wait times, and updated its software. In Michigan, where a hacking attempt delayed the July 2020 online for some applicants, new password measures are in place.
Concerns remain, including over the use of artificial intelligence by bar exam administrators to flag online test cheating. The Lawyers' Committee for Civil Rights Under Law on Wednesday threatened to sue the State Bar of California if it used facial recognition technology on its Feb. 23 test, saying the tool is disproportionately inaccurate in identifying women and people of color. Learn more about the 2021 exams.
SEC raises bar for waivers for sanctioned companies
The SEC is taking a harder line with corporate wrongdoers by ditching a Trump-era policy that allowed companies to seek a waiver from the securities regulator to keep doing certain types of business as part of their settlement negotiations.
Pete Schroeder reports that the regulator's move to separate the practice of granting waivers from settlement talks with companies accused of running afoul of securities laws suggests a tougher stance by the SEC. Companies found guilty of criminal conduct or fraud can be barred from certain activities, such as private capital deals, without such an SEC waiver.
The move undoes a policy adopted by former SEC Chair Jay Clayton, a Trump appointee, who in 2019 said that allowing settlement offers to be contingent upon granting such waivers could streamline the process and speed relief to harmed parties.
But Acting SEC Chair Allison Lee (pictured) on Thursday said such waivers should not be a "bargaining chip" in negotiations to settle enforcement actions or treated as a given. Some Democrats have criticized the regularity that such waivers are granted, saying they undermine any punishment for wrongdoing by allowing companies to continue doing business unimpeded. Learn more.
Industry buzz
- It wasn't just the biggest, richest firms that saw surprising growth amid the pandemic. Spencer Fane, a Kansas City, Missouri-based law firm with close to 300 lawyers, said its revenue rose by 16.8% compared with 2019 results, and its profits per equity partner increased by nearly 10%, exceeding projections for even the top 50 highest-grossing firms. (Reuters)
- The plaintiffs firm Bernstein Litowitz is trying to turn the tables on rival Robbins Geller in a shareholder case against Symantec in which U.S. District Judge William Alsup in San Francisco ordered depositions to investigate Bernstein's alleged pay-to-play conflict. Bernstein asked Alsup to authorize another investigation, this one into Robbins Geller's "attack (on Bernstein) and the real motivation behind it." Alsup refused but said he would allow Bernstein to propound three interrogatories to Robbins Geller, with answers due within a week. (Alison Frankel's On The Case)
- The FBI as part of an ongoing investigation into Republican Texas Attorney General Ken Paxton is examining renovations made to his million-dollar home, according to records obtained by The Associated Press. A contractor recently received a grand jury subpoena, the AP reported. Four former officials under Paxton in a revised whistelblower lawsuit in state court alleged a wealthy donor was involved in the remodeling. (AP)
- Peter Keisler, a Supreme Court advocate at Sidley Austin who served as a top official in the DOJ during President George W. Bush's administration and for a time as acting U.S. attorney general, has left the Republican Party and registered as an "independent." He said it became clear during the Trump era the party was "something I feel no affinity with." (The American Lawyer)
- O'Melveny & Myers is shaking up its leadership ranks with new litigation and corporate department co-leaders, three new office managing partners, and a new second vice chair role. Dan Petrocelli, the chair of the firm's trial practice, will fill that position. "We all benefit when more of our partners have the chance to take on management responsibilities," firm chair Bradley Butwin said. (The American Lawyer)
- Before she co-founded Fortis Law Partners seven years ago, Julie Herzog said her passion for working with entrepreneurs frequently ran up against her former firms' Big Law billing rates. Now the Morrison & Foerster and Jones Day alum has grown her Denver-area firm into a women-owned, 16-lawyer boutique. It debuted a new pricing and relationship model for start-up or established company clients looking to grow: a subscription service offering outside general counsel services for a flat monthly fee. (Reuters)
- Please wear pants on Zoom. A "Hamilton" parody song (to the tune of "You'll Be Back"), co-written by Texas family court Judge Andrew Ten Eyck and Estes Thorne & Carr partner Lindsay Barbee, reminds lawyers to put on some pants and please, please unmute. (Above The Law)
Former 2nd Circuit Judge Droney: 'I like being back in the real world again'
Alison Frankel interviews former 2nd Circuit Judge Christopher Droney, now in private practice, on what motivated his decision to retire from the bench and about his views on how much politics plays into the recent spate of announcements by federal judges that they will take senior status, which has given President Biden an opening to fill those seats with full-time judges. Read the interview and watch the video here.
Coming up today
- Former President Donald Trump's lawyers are expected to argue during his Senate impeachment trial that he is not guilty of the the charge of inciting insurrection in a fiery speech to his supporters before the deadly attack on the Capitol.
- The Federal Circuit in D.C. will hear arguments over whether it has the constitutional authority to review a decision by the Patent Trial and Appeal Board not to institute a so-called inter partes review to determine the validity of a patent. The issue arose after the PTAB declined to launch such a review at the request of Viatris Inc, formerly known as Mylan, to challenge a Johnson & Johnson patent on a dosing regimen for its schizophrenia drug Invega. It sought the review after J&J sued to block a generic version of the drug. J&J, represented by Pratik Shah of Akin Gump, and the PTO say the appeal should be dismissed. Deepo Mukerjee of Katten Muchin Rosenman reps Viatris.
- The Coca-Cola Company will ask the 9th Circuit in San Francisco to overturn a judge's decision to grant class-action status to plaintiffs alleging the beverage maker falsely claimed that Coca-Cola did not contain artificial flavoring or preservatives. Coca-Cola, represented by Steven Zalesin of Patterson Belknap, denies that the ingredient in question, phosphoric acid, is an artificial flavor or preservative under federal law. Joshua Glatter of Fleischman Bonner & Rocco will argue for the plaintiffs. Check the arguments out online after 1 p.m. PST.
- Consumer rights and wildlife groups including Food & Water Watch will urge the D.C. Circuit to invalidate the Federal Energy Regulatory Commission's 2019 order authorizing a plan by a Kinder Morgan subsidiary to build about two miles of new pipeline and replace a horsepower compressor unit in southern Massachusetts. The plaintiffs claim FERC failed to follow a requirement to meaningfully evaluate greenhouse gas emissions from fossil fuel production and transportation projects. Adam Carlesco of Food & Water Watch will argue for the plaintiffs and will face Robert Solomon with FERC and Brian O'Neill, a lawyer for Kinder Morgan subsidiary Tennessee Gas Pipeline Company at Van Ness Feldman. Stream the arguments online after 9:30 a.m. EST.
- Healthcare system Providence Health & Services and its clinical documentation contractor will urge the 9th Circuit in Pasadena, California, to dismiss a whistleblower lawsuit accusing it of submitting to government health insurance programs claims for payment with false diagnoses. Washington-based Providence, represented by Jessica Ellsworth of Hogan Lovells, contends the entity that brought the False Claims Act case on the government's behalf, Integra Med Analytics LLC, is a "professional whistleblower" that failed to make any specific allegations of wrongdoing. Jeremy Wells of Reid Collins & Tsai represents Integra. Watch the arguments after 9 a.m. PST.
What we learned this week
"It is, of course, eminently reasonable to hold individuals personally liable for their own discriminatory acts. But it beggars belief that this company's owner - alleged to have fostered a pernicious culture of misogyny that facilitated the egregious conduct to which plaintiff was subjected - should nonetheless escape liability by virtue of his position at the top of the company hierarchy."
Judge Jenny Rivera, in a dissenting opinion in the New York Court of Appeals' 6-1 ruling holding that Bloomberg LP founder and former New York City Mayor Michael Bloomberg cannot be held liable for the alleged sexual harassment and assault of a temporary worker by a marketing manager at the company. The majority held the New York City Human Rights Law, which prohibits workplace bias and harassment, only imposes liability on individuals who engage in or aid and abet violations of the law, and not corporate officers. Elise Bloom of Proskauer Rose and Niall Macgiollabhui of the Clancy Law Firm argued the case for Bloomberg and the plaintiffs, respectively. (Reuters)
In the courts
- Federal prosecutors along with regulators are investigating whether market manipulation or other misconduct took place during the social-media driven rallies of stocks including GameStop and AMC Entertainment, the Wall Street Journal reported, citing people familiar with the matter. The DOJ's Fraud Section and the U.S. Attorney's Office in San Francisco have subpoenaed information from brokers such as Robinhood, the paper reported. (Wall Street Journal)
- The 1st Circuit in Boston declined to further delay the extradition to Japan of two men charged with helping former Nissan Motor Co Ltd Chairman Carlos Ghosn flee the country. Lawyers for U.S. Army Special Forces veteran Michael Taylor and his son Peter Taylor, who include Paul Kelly of Jackson Lewis and Abbe Lowell of Winston & Strawn, argued in court papers that absent a stay of a prior ruling, the men could be handed over to Japan as early as today. (Reuters)
- Drugmaker Mallinckrodt won court approval to bring on Kenneth Feinberg, who has overseen victim compensation funds related to the Sept. 11, 2001, attacks and the BP Deepwater Horizon oil spill, to oversee a mediation regarding the allocation of a $1.6 billion trust to be established to resolves thousands of lawsuits over the opioid epidemic. Feinberg told U.S. Bankruptcy Judge John Dorsey in Wilmington, Delaware, that it would be "a challenging assignment" but that he looks forward to working with the parties. George Davis of Latham & Watkins is the company's lead attorney. (Reuters)
- Credit Suisse has agreed to pay bond insurer MBIA $600 million to settle long-running litigation stemming from the 2008 financial crisis related to residential mortgage-backed securities. The settlement came after New York Supreme Court Justice Jennifer Schecter in November found that more than half of the loans in a risky mortgage bond the bank sponsored that MBIA insured were non-conforming. She later ordered the bank to pay $604 million. Marc Kasowitz of Kasowitz Benson Torres and Barry Levin of Orrick led the cases for MBIA and Credit Suisse, respectively. (Reuters)
- The DOJ under the Biden administration asked the 9th Circuit to put on hold the government's appeal of a lower-ruling blocking restrictions that the Trump administration had imposed on Tencent's messaging app WeChat on national security grounds. As it did previously in two similar cases involving the Chinese-owned video-sharing app TikTok, the DOJ said the Commerce Department planned to evaluate the record justifying prohibitions that required Apple and Google to remove WeChat from their app stores. A lower-court judge blocked that order at the request of WeChat users. (Reuters)
- A Trump-era decision by the Bureau of Land Management to nix a prior effort to ban mining on 10 million acres of federal lands in six western states must be vacated because it failed to fully consider how the move would affect sage grouse, U.S. District Judge Lynn Winmill in Boise, Idaho, ruled. The ruling was a victory for environmental groups including the Western Watersheds Project. (AP)
- Offshore driller Valaris through lawyers led by Anup Sathy of Kirkland & Ellis secured the approval of U.S. Bankruptcy Judge Marvin Isgur in Houston to solicit votes from creditors for its modified reorganization plan, which includes a settlement that brings in key support from bank lenders. (Reuters)
- The Board of Immigration Appeals should consider individuals' mental health in deciding whether they committed a "particularly serious crime" requiring their deportation, a three-judge 8th Circuit panel ruled. It concluded the fact that criminal courts may not consider the effect of defendants' mental health on their behavior doesn't mean it's irrelevant in an immigration proceeding. (Reuters)
Industry moves
- Perkins Coie has named Jill Louis, a partner in the firm's corporate and securities practice, as office managing partner in Dallas. Louis succeeds Dean Harvey, who had served in the position since May 2019 and has joined the firm’s management committee. (Perkins Coie)
- Oscar Pinkas, a former leader in Dentons' bankruptcy practice, is joining Greenberg Traurig as chair of the firm's New York restructuring and bankruptcy practice. (Reuters)
- M&A lawyer Will Chuchawat has left Sheppard Mullin to join Proskauer as a partner in Los Angeles. (Reuters)
- John Chrisman has joined Dentons as a partner in its corporate practice in Dallas. He moves over from Norton Rose Fulbright and will continue to focus on corporate, M&A and capital markets matters. (Dentons)
- DLA Piper has added Sue Zabloudil as a partner in the firm’s real estate practice in Miami and Los Angeles. She moves over from Akerman. (DLA Piper)
- Loeb & Loeb is beefing up its SPAC practice. Andrei Sirabionian has joined the firm as a partner in the firm’s capital markets and corporate department in New York, moving over from Seward & Kissel. (Loeb & Loeb)
- Laura Ruettgers has joined Kaufman Dolowich & Voluck in San Francisco as a partner and chair of its data privacy and cybersecurity practice. She was previously with Severson & Werson. (Kaufman Dolowich & Voluck)
Columnist spotlight: DOJ's Access to Justice Office - short history, uncertain future
President Joe Biden's administration is being pushed by justice reform advocates to re-establish a novel office within the U.S. Department of Justice that sought to improve access to legal services and preserve the rights of underprivileged Americans. The Office for Access to Justice was a 2010 initiative by then-U.S. Attorney General Eric Holder and worked for eight years to strengthen the right to counsel for indigent criminal defendants and people facing various civil actions. In 2018, former President Donald Trump's administration shut it down. So where do things stand? Hassan Kanu spoke with Maha Jweied and Karen Lash, both senior fellows at the Center for American Progress, about the division's work, its effective closure and its potential future. Read his full column here.
Check out other recent pieces from all our columnists: Alison Frankel, Jenna Greene and Hassan Kanu.
Lawyer speak: Global M&A in Q4 2020 reaches highest quarterly total in 5 years
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