Good morning. A nasty fight is breaking out at the Boies Schiller spinoff Roche Cyrulnik Freedman, with the firm suing an "erratic" co-founder to force him out. Top antitrust enforcers behind the DOJ and FTC lawsuits against Google and Facebook are joining major law firms, a federal jury in Manhattan is hearing a criminal trial concerning the "Uber of weed," Merrick Garland's AG nomination is advancing, and the U.S. Supreme Court is set today to hear a major voting rights case. Let's get this day going!
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Boies Schiller spinoff sues 'abusive' co-founder to force him out after 'shakedown' demand
When Roche Cyrulnik Freedman spun out of Boies Schiller Flexner last year, its partners hoped to pursue big-stakes litigation, but they likely didn't expect to be suing one of their own.
Roche Cyrulnik in a lawsuit asked a Manhattan federal judge to declare it properly voted founding partner Jason Cyrulnik out of the partnership for "abusive, destructive, erratic, and obstructive behavior," David Thomas reports. It accused Cyrulnik of turning the firm into a "war zone" and engaging in a "shakedown" by declining to leave unless he received "excessive payments."
"The firm refuses to be bullied by a former colleague," the firm's lawyers, including Sean Hecker of Kaplan Hecker & Fink, wrote in the 25-page complaint. After the lawsuit was filed, the firm's name on its website was changed to Roche Freedman.
But Cyrulnik, represented by prominent New York litigator Marc Kasowitz of Kasowitz Benson Torres, has told his colleagues he has no intention of leaving and has threatened to litigate to "hold each of you accountable for any harm to (Cyrulnik) or the firm's clients resulting from your egregious actions," the lawsuit said.
The complaint said Kasowitz has threatened to sue the firm on Cyrulnik's behalf if his client didn't receive "immediate unfettered access" to its bank account and the ability to bring in new work without question. Learn more about the partnership fight.
Industry buzz
- Merrick Garland, President Joe Biden's pick for attorney general, garnered bipartisan support in a 15-7 tally in the Senate Judiciary Committee to advance his nomination to the Senate floor for a vote that Democrats hope will be held this week. The committee intends to on March 9 hold a confirmation hearing for Lisa Monaco and Vanita Gupta, Biden's choices to serve in the No. 2 and No. 3 DOJ jobs, but Gupta's nomination is facing Republican pushback. (Reuters)
- New York Governor Andrew Cuomo's administration has retained Elkan Abramowitz of the New York-based white-collar defense firm Morvillo Abramowitz Grand Iason & Anello to represent it in DOJ probes into Covid-19 deaths in the state's nursing homes. New York Attorney General Letitia James is overseeing a separate inquiry into sexual harassment allegations against the embattled governor. (Wall Street Journal, Reuters)
- Top antitrust enforcers involved in probes of Big Tech companies are joining law firms. Among them is Ryan Shores, who oversaw the DOJ antitrust investigation that resulted in its landmark lawsuit against Google. He has rejoined Shearman & Sterling. Ian Conner, who as director of the FTC's Bureau of Competition oversaw the filing of its antitrust lawsuit against Facebook, has joined Latham & Watkins. (Reuters)
- Another partner has left Boies Schiller, the David Boies-founded litigation firm that has seen a wave of defections in recent months. UK-based international arbitration specialist Dominic Roughton has joined Quinn Emanuel, leaving just seven partners in Boies Schiller's London office. (Reuters)
- London-based Allen & Overy is coming to California, with a 19-lawyer project finance and renewables team it swiped from Akin Gump to launch a Los Angeles office. The six-partner team is led by Dan Sinaiko in Los Angeles and John Marciano in D.C. and will be joined by a large group of associates and counsel. (Reuters)
- Four law schools that the American Bar Association's accreditation arm concluded failed to meet bar exam passage rate criteria have now been deemed in compliance by the ABA after they provided further information. Those schools are Atlanta's John Marshall Law School, The Charleston School of Law, Florida Agricultural and Mechanical University College of Law, and the University of South Dakota School of Law. (National Law Journal)
Nearly three-fourths of law firms in a recent survey reported that they had implemented new programs aimed at addressing racial injustice and civil unrest following the death of George Floyd under the knee of a Minneapolis police officer last year and the resurgence of Black Lives Matter matter movement. The NALP Foundation and the National Business Institute said Monday they received responses from 86 law firms, 43% of which also reported redeploying employees to work on diversity, equity and inclusion efforts.
Coming up today
- The U.S. Supreme Court will hear oral arguments over whether two Republican-backed voting restrictions in Arizona are unlawful because they disproportionately burden Black, Hispanic and Native American voters. The laws include one that made it a crime to provide another person's completed early ballot to election officials, with the exception of family members or caregivers. The Arizona Republican Party, repped by Jones Day's Michael Carvin, and Arizona Attorney General Mark Brnovich will urge the court to overturn 9th Circuit rulings finding the measures unlawful. Bruce Spiva of Perkins Coie will argue to uphold the rulings for the Democratic National Committee. Learn more about the case.
- The 1st Circuit will consider whether a judge wrongly declined to issue injunctions forcing Lyft and Uber Technologies to re-classify drivers in Massachusetts from being independent contractors to employees entitled to benefits like minimum wage and paid sick leave. Lyft, represented by Elaine Goldenberg of Munger Tolles & Olson, convinced U.S. District Judge Indira Talwani to send the case against it to arbitration, while the case against Uber, repped by Gibson Dunn's Theane Evangelis, was ordered transferred to California. Shannon Liss-Riordan of Lichten & Liss-Riordan represents the drivers who are appealing.
- The 1st Circuit will also consider whether to uphold a jury verdict against a Massachusetts restaurateur found guilty of making a false statement for telling the FBI he did not recall making options trades in VistaPrint during an insider trading investigation. Charlie Chen, repped by Dennis Carter of Carter & Doyle, argues prosecutors improperly expanded the allegations in the middle of the 2019 trial in which he was acquitted of trading on tips about the printing company. A separate jury later found him liable of insider trading in a civil case by the SEC.
- U.S. District Judge John Lee in Chicago will consider whether to preliminarily approve a $92 million settlement resolving a class action alleging that ByteDance-owned TikTok violated users’ privacy by improperly extracting their data and recording facial-scan images to track and profile them for ad targeting and profit. The company, repped by Wilson Sonsini's Anthony Weibell, did not admit wrongdoing.
- The 9th Circuit will hear an appeal by parents challenging California Governor Gavin Newsom's COVID-19 restrictions that have barred schools across the state from providing in-person education and required remote learning. Robert Dunn of Eimer Stahl will argue for the parents and will face Deputy Attorney General Jennifer Ann Bunshoft.
"These are multimillion, sometimes billion-dollar decisions being made not by someone who's accountable in the usual way that the appointments clause demands."
U.S. Supreme Court Justice Brett Kavanaugh, who was among those on the conservative-dominated court signalling they may rein in the power of administrative judges sitting on the Patent Trial and Appeal Board who have the ability to cancel patents. The justices are considering whether to uphold a Federal Circuit ruling that found a "constitutional defect" in how PTAB judges are appointed. That ruling came in an appeal by Florida-based medical device company Arthrex of a PTAB decision that invalidated part of patents that had been challenged by British-based rival Smith & Nephew. (Reuters)
Data dive: EEOC data suggests more sexual-harassment complaints resolved by conciliation
Reuters data journalist Rick Linsk on the resolution of sexual-harassment claims before the EEOC.
EEOC data on complaints received from workers suggests that workers may be faring better more recently in the resolution of sexual-harassment claims. This graphic shows that although settlements are down, a greater share of workers are receiving benefits upon withdrawal of their complaints and are reaching compromises with employers with EEOC's help.
The trendlines represent:
- Settlements: Charge is settled during investigation with benefits to charging party.
- Withdrawals with Benefits: Charge is withdrawn at the request of charging party, who will receive benefits through a separate agreement with the employer.
- Successful Conciliations: Charge with reasonable cause determination closed after resolution of the charge through voluntary efforts, with EEOC a party to the agreement.
- Unsuccessful Conciliations: Charge with reasonable cause determination closed after failure to resolve it through voluntary efforts.
The charge data includes all charges filed by individuals in the private sector and state and local government workplaces; it does not include discrimination complaints in the federal sector.
In the courts
- A Massachusetts father and son accused of helping former Nissan Chairman Carlos Ghosn flee Japan have been extradited from the United States to Japan. Lawyers for U.S. Army Special Forces veteran Michael Taylor and his son, Peter Taylor, including Jackson Lewis' Paul Kelly and Winston & Strawn's Abbe Lowell had a waged an unsuccessful months-long court battle to block their extradition. (Reuters)
- In one of the first in-person federal trials in Manhattan to take place this year following surging COVID-19 infections, prosecutors told jury on Monday that two men duped financial institutions into handling more than $150 million in payments to Eaze, a marijuana delivery service dubbed the "Uber of weed." Jurors also heard opening statements from Dechert's Michael Gilbert for Ruben Weigand and Quinn Emanuel's William Burck for Hamid Akhavan. (Reuters)
- The Federal Circuit upheld a $182 million judgment in a lawsuit alleging that a Takeda Pharmaceutical unit's hemophilia drug Adynovate infringed one of Bayer's patents. Bayer's lawyer, Sidley Austin's Jim Badke, welcomed the affirmation of the company’s jury trial win. Ed Haug of Haug Partners repped Takeda's Baxalta. (Reuters)
- TC Energy Corp and two former Columbia Pipeline Group executives must defend against a lawsuit claiming the companies' $10 billion merger in 2016 shortchanged Columbia investors, Delaware Vice Chancellor Travis Laster ruled. That lawsuit was brought by former Columbia shareholders repped by Labaton Sucharow's Ned Weinberger and Bernstein Litowitz's Gregory Varallo. Mayer Brown's Brian Massengill leads the defense. (Reuters)
- The U.S. Supreme Court agreed to decide the legality of a decades-old decision by Congress to exclude Puerto Rico from a federal program that provides benefits to low-income elderly, blind and disabled people. The 1st Circuit ruled last year in favor of a Puerto Rican resident named Jose Luis Vaello-Madero who lost eligibility for Supplemental Security Income benefits when he moved to Puerto Rico. His lawyer is Hermann Ferre of Curtis, Mallet-Prevost, Colt and Mosle. (Reuters)
- Ancestry.com won the dismissal of a proposed class action alleging it did not get permission to use photographs, likenesses, and other information in a yearbook database and to advertise and sell its products and services. U.S. Magistrate Judge Laurel Beeler in San Francisco said the plaintiffs lack standing and that the company, repped by Shon Morgan of Quinn Emanuel, is immune from liability under the Communications Decency Act. The plaintiffs plan to file an amended complaint. (Reuters)
- The 5th Circuit handed manufacturing groups including the National Association of Manufacturers a victory by holding that the ruling that the U.S. Consumer Product Safety Commission failed to follow proper rule-making procedures when it adopted a regulation that prohibits children's toys containing too much of a type of chemical used to make plastics. Baker Botts' Aaron Streett argued the case for the groups. (Reuters)
- PepsiCo has been blocked, again, by U.S. District Judge Micaela Alvarez in McAllen, Texas, from launching Gatorade's new Gatorlyte line at the request of Laboratorios Pisa and CAB Enterprises – the Mexican maker and U.S. distributor of Electrolit. She set a March 12 hearing to hear from Samuel Bragg and Paul Tanck of Alston & Bird for the plaintiffs and Timothy Durst of Baker Botts for PepsiCo about whether her temporary restraining order should be extended into a preliminary injunction. (Reuters)
Industry moves
- Alan Friel has joined Squire Patton Boggs in Los Angeles as a partner and deputy chair of its global data privacy and cybersecurity practice. He was previously at Baker & Hostetler, where he led the U.S. consumer privacy practice and co-chaired the firm's retail, restaurant and e-commerce industry initiative. (Reuters)
- Brent Snyder, the former CEO of the Hong Kong Competition Commission (who before that had served as a top official in the DOJ’s Antitrust Division) has joined Wilson Sonsini as a partner in its San Francisco office. (Reuters)
- Antitrust attorneys Stephen Weissman and Michael Perry have joined Gibson Dunn as partners in D.C. from Baker Botts. Weissman is a former deputy director of the FTC's Bureau of Competition, and Perry is a former counsel to the director of the bureau. (Reuters)
- Tax attorney David Levy has joined Weil, Gotshal & Manges as a partner in New York from Skadden. (Weil Gotshal)
- Energy regulatory and litigation attorneys Michael Yuffee and Michael Loesch have joined Baker Botts' D.C. office as partners from Winston & Strawn. (Baker Botts)
- Edmund Cohen and Rachel Ingwer have joined Lowenstein Sandler's tax practice in New York as partners along with Scott Malone, who will be counsel. They joined from Winston & Strawn, where they were partners. (Lowenstein Sandler)
- Lawrence Prosen, who represents contractors in litigation and contract disputes, has joined Cozen O’Connor’s construction law group as a shareholder in D.C. along with two associates. He was previously at Kilpatrick Townsend & Stockton. (Cozen)
- Health care attorney Lara Compton has joined Mintz, Levin, Cohn, Ferris, Glovsky and Popeo as a member in its Los Angeles office. She was previously co-chair of the regulatory and transactional practice of health care specialty law firm Nelson Hardiman. (Mintz)
Columnist spotlight: Is a $97.5 million fee award in a Facebook privacy case a 'punishment'?
Plaintiffs lawyers in the landmark $650 million privacy class-action settlement against Facebook approved last week raked in $97.5 million in fees, an amount shy of the $110 million they had hoped for. And while Alison Frankel writes that we shouldn't shed a tear for law firms Robbins Geller; Edelson; and Labaton Sucharow that handled the case involving facial recognition technology, U.S. District Judge James Donato's fee-trimming raises this question: Was the San Francisco judge essentially penalizing skillful class counsel for litigating a novel and complex case with efficiency? Find out more about the fees awarded.
Check out other recent pieces from all our columnists: Alison Frankel, Jenna Greene and Hassan Kanu.
Lawyer speak: Federal Circuit says government must consider equitable adjustment for missing equipment for contractor
The Federal Circuit in a recent decision held that the Federal Acquisition Regulation requires the government to consider an equitable adjustment when it fails to provide government-furnished equipment called for by a contract. Crowell & Moring attorneys Charles Baek, Michelle Coleman, Skye Mathieson and John Nakoneczy in a recent article examine the December ruling in BGT Holdings Inv. v. United States. The case stemmed from the U.S. Navy's refusal to provide BGT Holdings contractually-required equipment for the construction and delivery of a gas turbine generator unless it reduced its contract price. "The Federal Circuit's decision is an important reminder for contractors that the government cannot make changes to a contract without ensuring that the contractor is compensated for the impact of those changes," the lawyers wrote. Read more.
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