March 22, 2021

Good morning. As opioid settlements with Purdue Pharma and major distributors look increasingly realistic, states are lining up their plans to spend the money. The U.S. Supreme Court is back in action this week starting with a labor case, Visa is facing a DOJ antitrust probe, and Apple is stinging from a big patent verdict as it prepares for another trial in Texas. Let's chug that coffee and get this show on the road!

Our guest contributor today is Sebastien Malo. Were you forwarded this email? Subscribe here.

States eye how to spend billions in opioid settlements

Concern about the opioid epidemic took a backseat as the COVID-19 pandemic grew dire. But as settlements with opioid manufacturers and distributors inch closer to reality, some states are looking at how they can ensure the funds they receive go toward addressing an epidemic that only got worse in the coronavirus era.

Take Virginia, whose legislature established a new body to oversee the funds and direct them to communities for prevention and treatment. "I felt this crisis was so severe that it called out for some new type of approach," Virginia Attorney General Mark Herring, who co-sponsored the bill, told Brendan Pierson.

Other states such as Ohio and Texas have adopted their own measures to govern allocating settlement funds, but many others haven't. Could they do nothing and accept the money without a plan, like with the 1990s tobacco settlement, which critics say was largely used for non-smoking prevention purposes?

"Those aren't the options," Motley Rice's Joe Rice, a lead settlement negotiator, told The Daily Docket. He pointed to Purdue Pharma's bankruptcy restructuring plan filed last week, which proposes a settlement it values at more than $10 billion. Under that proposal, money will only be distributed for authorized purposes aimed at addressing the opioid crisis.

More money is expected. McKinsey & Co recently agreed to pay nearly $600 million for its role, and the distributors McKesson, Cardinal Health and AmerisourceBergen along with Johnson & Johnson are negotiating to pay $26 billion. Learn more, and check out our video interview with Herring.

Industry buzz

Embattled New York Governor Andrew Cuomo has retained former federal prosecutor Rita Glavin as his private attorney amid sexual misconduct allegations by several women. Glavin, who according to LinkedIn recently left Seward & Kissel to launch Glavin PLLC, in the face of the newest allegation by an eighth woman on Friday told The New York Times that Cuomo has "made clear that he has never made inappropriate advances or inappropriately touched anyone." (Reuters, New York Times)
Following last week's Atlanta-area spa killings, several major firms including Akin Gump, Davis Wright Tremaine and Morrison & Foerster are helping to stop racism against Asian Americans. MoFo donated $20,000 to the Asian American Legal Defense and Education Fund. (The American Lawyer)
New York-based Willkie Farr & Gallagher is giving its associates a "special" bonus similar to the one it and other law firms gave in 2020 to reward hard work during the pandemic - but they'll have to stick around until Sept. 30 to get the full payout. Half of the $7,500-to-$40,000 seniority-based bonus will be paid on June 30, and the rest is due in September. (Reuters, Above the Law)
Speaking of feeling flush amid the economic wreckage that is the pandemic, New York's Milbank boasted double-digit growth in annual profits and revenues for 2020 as demand for its prominent financial restructuring practice group jumped. Revenues climbed 15.6% to nearly $1.24 billion, while profits per partner grew 15.9% to $4.5 million. (Reuters)
Less than a third of the way into 2021, self-described "distributed" law firm Rimon has already launched new locations in London and Paris, building on an international expansion that picked up speed last year. Virtual and hybrid firms saw lawyers flocking to their models last year, as the pandemic shuttered offices across the country. (Reuters)
Pharmacy chain operator Walgreens is suing Crowell & Moring in D.C. Superior Court, alleging the law firm has refused to turn over a client file related to advice it provided years ago. Attorneys at the law firm are now representing Blue Cross and Blue Shield of Minnesota in the fraud lawsuit against Walgreens. (The American Lawyer)
The Arizona Supreme Court has approved the first two law firms to be partially owned by nonlawyers after the court last year authorized regulatory changes that would allow for non-traditional legal service delivery models. Trajan Estate LLC and Payne Huebsch PLC will operate as "alternative business structures." Their approval came the same week that the first entirely nonlawyer-owned firm in the country launched in Utah, which also adopted regulatory reforms. (Reuters)

Number of the day: 70%

REUTERS/Maxim Zmeyev/Illustration

DOJ antitrust enforcers are investigating whether Visa Inc uses anticompetitive practices in the debit-card market, the company confirmed Friday. The investigation comes after Visa in January abandoned its $5.3 billion proposal to buy fintech startup Plaid Inc in the face of a DOJ lawsuit. The DOJ at that time alleged that Visa, with its control of about 70% of the online debit transactions market, was seeking to eliminate a nascent competitor and maintain a monopoly. Skadden's Steven Sunshine was among those who defended Visa in that case. Merchants have long complained about the high cost of network fees, or interchange fees, which can be 2% or more of each transaction and go to the financial institutions behind the transactions. (Reuters)

Video: Legal Lookahead

Reuters video journalist Tom Rowe gives you an early view to the week ahead in legal news. Watch the video.

Coming up today

The U.S. Supreme Court is slated to hear a constitutional challenge by two California fruit farms to a longstanding state labor regulation granting unions access to private farmland for the purpose of organizing workers. Joshua Thompson of the conservative Pacific Legal Foundation will argue the case for Cedar Point Nursery and Fowler Packing Co, which say the 1975 rule amounts to an unconstitutional "taking" of private property, because it only permits temporary access to farms. California Deputy Solicitor General Joshua Patashnik will defend the law, which the 9th Circuit upheld. The Trump administration had supported the fruit farms, but the Biden administration recently reversed the government's position. Learn more about the case.
Jury selection is due to continue in Hennepin County District Court in the murder trial of Derek Chauvin, the former Minneapolis police officer charged in the death of George Floyd last year in a violent arrest that spurred nationwide protests against racism. Twelve jurors and one alternate have been seated since the trial began two weeks ago: five white women, two white men, three Black men, one Black woman and two multiracial women. Find out the latest.
The U.S. Senate is expected to vote on President Joe Biden's labor secretary nominee, Marty Walsh, the mayor of Boston. He told a Senate panel last month that he supported raising the federal minimum wage to $15 an hour, would prioritize efforts to achieve pay equity for women and minorities, and would move to hire additional inspectors at the Occupational Safety and Health Administration.
Uber Technologies and Lyft will ask Suffolk County Superior Court Judge Kenneth Salinger in Boston to dismiss a lawsuit by Massachusetts Attorney General Maura Healey alleging they misclassified their drivers as independent contractors instead of employees entitled to extensive benefits. The lawsuit is the latest challenge to the ride-hailing companies' business model. Defending them is Theane Evangelis of Gibson Dunn and Stephen Melnick of Littler Mendelson for Uber and WilmerHale's Felicia Ellsworth for Lyft.
The patent-heavy Eastern District of Texas keeps moving forward with jury trials despite the pandemic, as electronics manufacturer Maxell takes Apple to trial in a lawsuit accusing the iPhone maker of infringing smartphone-related patents. U.S. District Judge Robert Schroeder in Texarkana will preside over the jury trial, in which lawyers for Maxell led by Mayer Brown's Jamie Beaber will go up against Apple attorneys including DLA Piper's Mark Fowler.
The 2nd Circuit will consider whether New York's Metropolitan Museum of Art infringed a photographer’s copyright when it displayed a photo he took of late guitar great Eddie Van Halen and his guitar "Frankenstein” in an online catalog for an exhibition. A lower-court judge ruled that the Met's use of Lawrence Marano's photo constituted fair use and was transformative because it placed his famed guitar in historical context. James Freeman of the Liebowitz Law Firm will argue for Marano against Linda Jane Steinman of Davis Wright Tremaine for the Met.
The Catholic Archdiocese of Washington will ask U.S. District Judge Trevor McFadden in D.C. to block Mayor Muriel Bowser's 250-person and 25% capacity limits on indoor church services aimed at curbing the spread of COVID-19. The church, represented by Anthony Dick of Jones Day, says that it has voluntarily taken effective measures to combat the pandemic, and that the city's "uniquely harsh" restrictions are not supported by science and violate religious liberty.

Later this week

The full 1st Circuit on Tuesday will convene en banc to consider whether the government needed a warrant to install a camera installed on a public utility pole for eight months outside a suspect’s home in Massachusetts under the U.S. Constitution's Fourth Amendment. A three-judge panel last year overturned a lower-court judge's decision to suppress evidence obtained from the pole camera in the case of Daphne Moore and her daughter Nia Moore-Bush, who were charged with being part of a drug trafficking ring. Defense lawyers Linda Thompson of Thompson & Thompson and Judith Mizner of the Federal Public Defender Office, with the support of ACLU attorney Nathan Wessler, will argue against the warrantless camera and will face Assistant U.S. Attorney Randall Ernest Kromm.
The U.S. Supreme Court on Tuesday will consider whether a Native American tribal police officer had the authority to detain and search a non-Native American in a tribal reservation. Then on Wednesday, the justices will take up a case on the scope of police search powers arising from an incident in which officers seized a man's gun from his house without a warrant because of concerns he was suicidal.
The U.S. Senate Judiciary Committee on Thursday will vote on whether to send to the Senate floor for confirmation President Joe Biden's nominees Lisa Monaco and Vanita Gupta to serve as the DOJ's No. 2 and No. 3 top officials. Gupta has faced fierce Republican opposition.
The U.S. Judicial Panel on Multidistrict Litigation on Thursday convenes to consider several requests to consolidate cases nationally. On the agenda is a motion by two retail traders represented by Joseph Saveri of the Joseph Saveri Law Firm to consolidate more than 40 lawsuits nationally against trading platforms including Robinhood for disallowing sales of certain hot stocks including GameStop during the so-called "Reddit Rally." Cravath's Kevin Orsini is defending Robinhood.
Beloved movie theater chain Alamo Drafthouse on Thursday will ask U.S. Bankruptcy Judge Mary F. Walrath in Wilmington, Delaware, to approve a $20 million loan to fund its bankruptcy process, through which it hopes to sell itself to Altamont Capital and Fortress Investment Group. M. Blake Cleary of Young Conaway Stargatt & Taylor reps Alamo.
Lawyers for AMC Networks led by Gibson Dunn's Orin Snyder on Friday will tell Manhattan Supreme Court Justice Joel Cohen that while the company looks forward to a future where the COVID-19 pandemic is over, April 21 is too soon for it to face trial in a $280 million lawsuit by Frank Darabont and Creative Artists Agency over profit participation in the hit TV show "The Walking Dead."

For new Mintz partner, a push to promote women in communications

Angela Kung
Mintz

How do you bring together up-and-coming women to network in an industry dominated by men? Invite them to an Ariana Grande concert.

That was Angela Kung's idea soon after the D.C. lawyer rejoined Mintz in 2019 from the FCC, where during a three-year stint in its wireless telecommunications bureau she had helped lead a nearly $1.5 billion rural broadband subsidy auction.

Kung, 39, fell into the sector as an associate at the firm now called Squire Patton Boggs, which placed her in its communications section. It was a "happenstance" assignment, she said, but turned out to be a good fit. She later moved to Mintz as an associate before joining the FCC.

Much like the broader tech industry, the communications sector is "a very heavily male-dominated field," she said. She would hear from women who wanted opportunities to network at "more female-focused events" than the usual baseball or basketball games.

What emerged was Mintz's Next-Gen-Fem initiative, a professional networking program for women in the communications industry. Launched in 2019 with an invitation to mingle in a suite at one of Grande's concerts, the group's membership of primarily but not only lawyers has ballooned to more than 100 as more events like a wine-tasting and a "puppy party" followed.

Amid the pandemic, events have gone virtual, such as a game night. The ultimate goal, she said, is to "build a sense of community" for the sector's next generation of female leaders. Kung can now count herself among them: She made partner in December.

"The First Amendment guarantees a free press to foster a vibrant trade in ideas. But a biased press can distort the marketplace. And when the media has proven its willingness - if not eagerness - to so distort, it is a profound mistake to stand by unjustified legal rules that serve only to enhance the press' power."

U.S. Circuit Judge Laurence Silberman, who in a lengthy dissenting opinion from a D.C. Circuit panel's ruling called for the overruling of New York Times v. Sullivan, the 1964 U.S. Supreme Court ruling that established a high bar for public officials to sue for defamation. The court on a 2-1 vote upheld the dismissal of a lawsuit by two former Liberian officials against the human rights organization Global Witness over a report that implied they accepted bribes. Silverman, an appointee of former President Ronald Reagan, attacked the Supreme Court decision, a frequent target of former President Donald Trump, and the "shocking" media bias against the Republican Party. He called both The New York Times and The Washington Post "virtually Democratic Party broadsheets." (Politico)

In the courts

A federal jury in Marshall, Texas, said Apple must pay about $308.5 million to patent licensing entity Personalized Media Communications LLC for infringing a patent associated with digital rights management. Apple, represented by a team led by Kirkland & Ellis' Marcus Sernel, plans to appeal, saying cases like this "by companies that don't make or sell any products stifle innovation and ultimately harm consumers." Goodwin Procter's Douglas Kline led the case PMC. (Reuters)
Bayer has decided not to ask the U.S. Supreme Court to overturn a $20.5 million award to a groundskeeper who in the first trial nationally in the litigation claimed the company's Roundup weedkiller caused his cancer. Bayer said its decision in Dewayne Johnson's case reflected "strategic consideration" that a $25 million judgment in a different case was a better candidate for Supreme Court review because it could decide issues affecting Roundup litigation nationwide. Johnson's lawyer, Brent Wisner of Baum, Hedlund, Aristei & Goldman, said the top court "was never going to upset the verdict." (Reuters)
Cryptocurrency-exchange operator Coinbase agreed to pay $6.5 million to settle CFTC charges it reported misleading transaction data that potentially inflated the apparent trading volume on a professional platform it operated. (Reuters)
Allergan swayed U.S. District Judge Brian Martinotti in New Jersey to scale back the claims against it in the multidistrict litigation by women who say it failed to warn of the risk of cancer associated with its Biocell textured breast implants. The judge partially agreed with Allergan's lawyer, Melissa Geist of Reed Smith, in finding that some but not all of the state-law claims asserted by the plaintiffs were preempted by federal law. (Reuters)
A federal grand jury charged four leaders of the far-right Proud Boys with conspiring to block Congress from certifying President Joe Biden's election on the day of a deadly assault on the Capitol, according to newly unsealed court papers in D.C. federal court. About 20 people charged to date are associated with the Proud Boys. (Reuters)
White Stallion Energy's former CEO, during a remote hearing before U.S. Bankruptcy Judge Laurie Selber Silverstein in Wilmington, Delaware, fended off an effort by the mining company's lenders to examine potential claims stemming from his conduct that they say could amount to mismanagement and self-dealing. The Chapter 11 bankruptcy of White Stallion, represented by Chris Dickerson of Paul Hastings, has been plagued by fighting between the lender group led by Riverstone Credit Management, represented by Kevin Barrett of Bailey & Glasser, and former CEO Steven Chancellor, represented by David Gaffey of Whiteford Taylor & Preston. (Reuters)
Drug distributor McKesson lost a bid in the 3rd Circuit to wipe out its $6.9 million debt to bankrupt obesity drug maker Orexigen Therapeutics by offsetting it against $9.1 million that Orexigen owed to a McKesson subsidiary. Jeffrey Garfinkle of Buchalter represents McKesson, while Bennett Murphy of Quinn Emanuel advises Province, the administrator of Orexigen's bankruptcy estate. (Reuters)

Columnist spotlight: Judge in notorious State Street case wants counsel in Lieff appeal

U.S. District Judge Mark Wolf in Boston has asked the 1st Circuit to authorize him to hire counsel to defend his February 2020 decision to claw back about $1.1 million from the fees Lieff Cabraser received in the notorious State Street class action. Alison Frankel writes that in last year’s ruling, Wolf ordered class counsel, including Lieff Cabraser, to return a total of $15 million of the $75 million he previously awarded them in a $300 million settlement of claims that State Street overcharged fees on foreign exchange transactions. Other class counsel are not appealing the fee ruling, but Lieff Cabraser has said Wolf unfairly tarred the firm. Learn more here.

Check out other recent pieces from all our columnists: Alison Frankel, Jenna Greene and Hassan Kanu.

Lawyer speak: After Texas storm, expect flurry of property insurance claims by businesses

The Texas winter freeze of February that left millions without power for days has cost big bucks to businesses operating in the area, and they are now turning to their property insurers to recoup some of the lost income. Many businesses were forced to close as freezing pipes burst or simply due to the outages. Todd Tippett and David Winter of Zelle have taken a deep dive into the issues that are likely to arise as Texas policyholders and their attorneys navigate insurance policies and file claims for what some believe will be the largest insurance event in Texas history. Read more.

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