Good morning. Jurors in the murder trial of Derek Chauvin are entering their second day of hearing evidence related to George Floyd's death, President Joe Biden is announcing his first judicial nominations, U.S. News & World Report is out with its closely-watched law school rankings but without its planned diversity score, and the U.S. Supreme Court is taking up a case related to standing to pursue class actions. Let's get this day going!
Our guest contributor today is Chinekwu Osakwe. Were you forwarded this email? Subscribe here.
Jurors in Derek Chauvin's trial hear how George Floyd died under his 'crushing' knee
Concrete barriers, barbed wire and National Guard soldiers on Monday ringed the downtown Minneapolis courthouse where Derek Chauvin's murder trial is taking place as a prosecutor told jurors that the former police officer's "grinding and crushing" knee killed George Floyd during his arrest last year.
For nearly an hour, jurors listened as Jerry Blackwell delivered the prosecution's opening statement. Blackwell, a corporate litigator at Blackwell Burke and founder of the Minnesota Association of Black Lawyers, joined the attorney general's team for the case on a pro bono basis.
Jonathan Allen reports that Blackwell told jurors that Chauvin "betrayed" his badge by using excessive and unreasonable force on Floyd, whose "very life was squeezed out of him."
Defense lawyer Eric Nelson used his opening statement to describe Floyd's drug use, health problems and a chaotic scene in which the screaming of bystanders ended up "causing the officers to divert their attention from the care of Mr. Floyd."
Toward the end of his opening statement, Blackwell played the widely-seen bystander video of Chauvin kneeling on Floyd. The first witness to take the stand was Minneapolis 911 emergency dispatcher who alerted a police supervisor after watching live surveillance video footage of Floyd's arrest. Prosecutors also called two bystanders. Learn more, and watch our video recap on what Monday's proceedings were like.
Industry buzz
- President Joe Biden is out with a list of his first set of judicial nominees. The 11 nominees include three Black women who would join federal appellate courts: U.S. District Judge Ketanji Brown Jackson, who would take Merrick Garland's place on the D.C. Circuit; Tiffany Cunningham, a Perkins Coie partner who would join the patent-centric Federal Circuit; and Candace Jackson-Akiwumi, a Zuckerman Spaeder partner who would join the 7th Circuit. (White House, Washington Post)
- U.S. News & World Report released its latest law school rankings this morning, with Yale Law School again taking the top spot, followed by Stanford Law School and Harvard Law School. The latest edition came after U.S. News last week postponed plans to release a new ranking of schools based on their racial and ethnic diversity, after deans raised concerns that it wasn't counting multiracial students as underrepresented minorities. (U.S. News, Reuters)
- Iowa-based Davis Brown is now officially the fourth Midwestern law firm to combine with Dentons, the firm known for using its "golden spike" strategy to grow its already massive platform of more than 10,000 lawyers in 70 countries. The firm, which will now be called Dentons Davis Brown, has about 80 lawyers. (Reuters)
- A California appeals court revived a lawsuit by personal trainer Jillian Michaels and a company she co-owns accusing Greenberg Traurig of failing to take the restrictions of her contract to appear on NBC's "The Biggest Loser" into account when they advised her on another contract with a nutraceutical company. (Reuters)
- The American Association for Justice, the nation's largest association of plaintiffs' lawyers, is suing the insurer Lloyd's of London for denying a $1 million coverage claim after its annual 2020 convention was canceled due to the coronavirus. The insurer is seeking to have the case transferred to federal court in D.C. (Reuters)
- More law firms are joining the growing list promising associates as much as $64,000 extra in bonuses this year to reward hard work during the pandemic. The latest include Cravath; Latham & Watkins; Weil, Gotshal; Wilson Sonsini; and Lowenstein Sandler. (Reuters, Above the Law)
- The New York State Commission on Judicial Conduct concluded that an upstate judge should be admonished for making "inappropriate" posts on Facebook publicly supporting law enforcement, including posting about his attendance at a "Back the Blue" rally. (Syracuse.com)
Embattled attorney Steven Donziger is starting his 603rd day of being subject to home confinement with electronic monitoring pending his upcoming May 10 trial for criminal contempt of court. The 2nd Circuit in New York on Monday declined to overturn those conditions of release. The contempt case stems from Donziger's years-long effort to collect a $9.5 billion judgment he won against Chevron in an Ecuadorian court. He has been unable to enforce it, though, after a federal judge in Manhattan found it had been obtained through fraud. (Reuters)
Coming up today
- Federal prosecutors in Manhattan will seek a life prison sentence for Juan Antonio "Tony" Hernandez, the brother of Honduran President Juan Orlando Hernandez, after he was convicted of drug trafficking and related weapons charges. Prosecutors in a filing last week told U.S. District Judge P. Kevin Castel that Tony Hernandez, a former Honduran congressman, "played a leadership role in a violent, state-sponsored drug trafficking conspiracy," along with his brother, who has denied the allegations and not been charged. Peter Brill of the Brill Legal Group is defending him.
- The U.S. Supreme Court will consider whether the U.S. Constitution's standing requirements or the federal rules of civil procedure preclude class actions seeking damages in which the vast majority of the class's members suffered no actual injury. The justices are taking up an appeal by credit-reporting giant TransUnion in its bid to undo a $40 million judgment in a class action alleging violations of the Fair Credit Reporting Act. Kirkland & Ellis' Paul Clement will argue for TransUnion and will face Samuel Issacharoff of New York University School of Law for the plaintiffs.
- Lawyers for Google, the DOJ and various state attorneys general will appear before U.S. District Judge Amit Mehta in D.C. for a status conference in antitrust lawsuits accusing the $1 trillion company of abusing its market power to maintain a monopoly in the search and search advertising markets. In a joint status report, the DOJ accused Google of refusing to turn over documents relevant to its lawsuit, in many cases declining to turn over records produced before 2014. Google is being defended by lawyers including John Schmidtlein of Williams & Connolly, Susan Creighton of Wilson Sonsini and Mark Popofsky of Ropes & Gray.
- Drugmaker Mallinckrodt will ask U.S. Bankruptcy Judge John Dorsey in Wilmington, Delaware, to approve a bonus plan that would pay 12 executives up to $27.7 million if they achieve certain goals. The request, made by lawyers for the company led by Latham & Watkins' George Davis, has prompted opposition from the DOJ's bankruptcy watchdog. Mallinckrodt recently built up some creditor support for a proposed restructuring strategy that would reduce its debt by $1.3 billion and includes a $1.6 billion trust to pay out people and entities that accuse the company of helping fuel the opioid epidemic.
- U.S. District Judge Andrew Hanen in Houston, who is considering whether to invalidate the Obama-era Deferred Action for Childhood Arrivals program, will hold a hearing to discuss how the litigation would be affected by the passage by the Democrat-led U.S. House of Representatives of legislation that would create a path to citizenship for immigrants nicknamed "Dreamers" who are living illegally in the United States after entering the country as children. Hanen is weighing a challenge by a group of Republican-led states to DACA. The Biden administration on Friday said it would issue a proposed rule to preserve and fortify the program.
- United Specialty Insurance will urge U.S. District Judge Yvonne Gonzalez Rogers in Oakland, California, to dismiss proposed class action lawsuits filed by plaintiffs seeking to force the ski-pass insurer to refund the costs of their season passes after Vail Resorts closed all of its ski resorts last year in response to the COVID-19 pandemic. The judge is overseeing multidistrict litigation against the company, which is one of many travel and ski-pass insurers facing litigation related to pandemic cancellations. Duane Morris' Thomas Cahill is leading United's defense, while Rachel Schwartz of Stueve Siegel Hanson and John Schirger of Miller Schirger serve as co-lead interim class counsel.
Data dive: IRS criminal prosecution referrals lowest in nearly three decades
Reuters data journalist Disha Raychaudhuri on the steep decline in criminal cases to result from IRS audits.
The IRS in 2020 made the lowest number of criminal prosecution referrals since 1992, potentially resulting in corporate giants and millionaires avoiding criminal liability for not paying billions of dollars in taxes, according to a report by the Transactional Records Access Clearinghouse at Syracuse University.
While twice as many millionaires existed in 2020 than in 2012, the number of tax returns the IRS audited fell 72% over the same time period. Only 533 taxpayers were convicted in 2020 as a result of IRS criminal investigations, and only 255 of those convictions were for tax fraud or other Internal Revenue Code violations.
This drastic decrease in criminal prosecution referrals to the DOJ can be attributed to staffing and funding cuts at the IRS. The number of IRS revenue agents is down by 43% since 2010, and IRS criminal investigators are down by 26% over the same period.
In 2012, audits of IRS returns filed by millionaires led to the recovery of $4.8 billion in unreported taxes. Eight years later, there were less than a third of the number of audits, and only $1.2 billion was recovered.
"There are people who would regard, 'We are a nice company,' as a fraudulent statement depending upon subsequent events, and how would they make that case?"
Chief Justice John Roberts, who discussed that hypothetical as the U.S. Supreme Court weighed to what extent a statement by a public company could be too general to impact its stock price and provide a basis for a shareholder class action. Goldman Sachs is asking the justices to overturn a 2nd Circuit ruling that upheld class certification in a lawsuit accusing the bank of concealing conflicts of interest when creating risky subprime securities before the 2008 financial crisis. The lawsuit claims that investors buying Goldman's shares relied on statements about its controls against conflicts of interest and that its "clients' interests always come first." (Reuters, Alison Frankel's On the Case)
In the courts
- The U.S. Supreme Court agreed to hear a bid by Republican Kentucky Attorney General Daniel Cameron to defend a restrictive state law that abortion rights advocates say would effectively ban the procedure after 15 weeks of pregnancy. The justices are only being asked to consider the narrow issue of whether Cameron can intervene to defend the law after Democratic Governor Andy Beshear's administration dropped the case. The court is not being asked whether the law violates the constitution. (Reuters)
- New York must begin offering COVID-19 vaccines to every incarcerated incarcerated person in the state immediately, Bronx Supreme Court Judge Justice Alison Tuitt ruled. The judge, ruling in a case brought by advocates at groups including the Bronx Defenders, the Legal Aid Society and the New York Civil Liberties Union, found that leaving people in prisons and jails out of the vaccine rollout was “unfair and unjust." (New York Times)
- Elon Musk's rocket company SpaceX should be required to respond to a DOJ subpoena as part of an investigation into whether it discriminates against non-U.S. citizens in its hiring, U.S. Magistrate Judge Michael Wilner in Los Angeles recommended. SpaceX, represented by Akin Gump's Jessica Ro, says the probe is an "overreach" by the government. (CNBC)
- Walmart persuaded the 4th Circuit to overturn a $95.5 million verdict by a federal jury in North Carolina that found the retail giant willfully infringed the trademarks of a small retailer named Variety Stores Inc by selling grills and grilling products under the name "Backyard Grill." The court agreed with Walmart's attorney, Orrick's Mark Puzella, that the trial judge failed to properly instruct the jury on the definition of what constitutes willful infringement. W. Thad Adams of Shumaker Loop & Kendrick argued the case for Variety Stores. (Reuters)
- The maker of Tofurky meat substitute products failed to convince the 8th Circuit to block enforcement of a Missouri law making it a crime to misrepresent a plant-based product as a meat product, one of several similar state laws adopted by Republican-led states in recent years. The ACLU pursued the case on behalf of Turtle Island Foods SPC, which does business as Tofurky Company. (Reuters)
- Texas Attorney General Ken Paxton's office wants the federal bankruptcy judge in Houston overseeing the Chapter 11 case of Griddy Energy to approve the creation of a committee to represent customers after the retail electric provider filed for bankruptcy in the wake of the state's historic winter storm last month, which left it owing $29 million to the state’s grid operator. Baker Botts' David Eastlake reps Griddy. (Reuters)
- Federal prosecutors in Manhattan secured a revised, eight-count indictment against Ghislaine Maxwell that includes new charges that a fourth underage girl fell victim to her efforts to help the late financier Jeffrey Epstein advance his sex trafficking scheme. Maxwell had previously pleaded not guilty to helping Epstein recruit and groom three teenage girls for sex between 1994 and 1997. (Reuters)
- Monteverde & Associates, the shareholder law firm founded by plaintiffs' attorney Juan Monteverde, lost a bid for $400,000 in attorney's fees for lawsuits that prompted energy company SemGroup to make extra disclosures before its $5 billion acquisition by Energy Transfer in 2019. U.S. District Judge Ronnie Abrams in Manhattan said the added information was of little value. Monteverde & Associates has been among the top five filers of lawsuits challenging pre-merger disclosures in recent years, according to Cornerstone Research. (Reuters)
Industry moves
- Milbank has expanded its private equity capabilities by bringing on corporate and capital markets partners Richard Presutti and Antonio Diaz-Albertini in New York. They've joined from Schulte Roth & Zabel, where Presutti was the co-chair of its M&A and securities group and a member of the firm’s executive committee. (Reuters)
- Matthew Krueger, the former U.S. attorney for the Eastern District of Wisconsin, has joined Foley & Lardner in its D.C. office as a partner in the firm’s government enforcement defense and investigations practice group. (Foley)
- Real estate attorney Aimee Contreras-Camua has joined Munger, Tolles & Olson as a partner in the firm's Los Angeles office. After spending 20 years at Sidley Austin and another two at Pircher Nichols & Meeks where she served as outside counsel for a real estate firm, Contreras-Camua will continue to work with large real estate companies and investors. (Munger)
- Michael Rinaldi, the former deputy chief of the economic crimes unit of the U.S. Attorney's Office in the Eastern District of Pennsylvania, has joined Duane Morris as a partner. Rinaldi will work on white collar cases and SEC investigations in the firm's trial practice group in Philadelphia. (Duane Morris)
- Garrett Johnston, who focuses on private equity and dealmaking, has joined McGuireWoods' Houston office as a partner. Johnston, who was previously counsel at Willkie Farr & Gallagher, will be a part of the firm’s corporate and private equity department and will represent clients in various industries including energy, healthcare and technology. (McGuireWoods)
- Eva Temkin, the former acting director for policy at the FDA's Office of Therapeutic Biologics and Biosimilars, has joined King & Spalding in D.C. as a partner on its FDA and life sciences team. (King & Spalding)
- Christopher Schott has joined Latham & Watkins as a partner in the corporate department in D.C. and will be a member of the healthcare and life sciences practice. Schott is a former Hogan Lovells partner and focuses on pharmaceutical regulation. (Latham)
- Akerman has poached a five-member Robins Kaplan team for its litigation practice group in New York led by partners Craig Weiner and Lisa Coyle. Three other lawyers are joining as associates. (Akerman)
Columnist spotlight: Meet Catherine Dargan, Covington's new corporate and M&A practice head
In the traditionally male-dominated world of mergers and acquisitions, there aren't many women partners, nor are there many minorities. As a Black woman, Catherine Dargan is a rarity. Jenna Greene spoke with Dargan, who is leading Covington’s team with a slew of deals, including Merck's pending $1.85 billion acquisition of Pandion Therapeutics and Adtalem Global Education's pending $1.48 billion acquisition of Walden University. "The challenge for me was developing my own style," Dargan told Greene. Learn more about Dargan.
Check out other recent pieces from all our columnists: Alison Frankel, Jenna Greene and Hassan Kanu.
Lawyer speak: Can pensions finally make a comeback?
After higher than expected retirements by Baby Boomers, fewer union employees, and an economic recession in 2008 that was second only to the Great Depression, pension funds have been severely underfunded for years. When President Joe Biden signed the American Rescue Plan Act of 2021, he also enacted the Butch Lewis Emergency Pension Plan Relief Act. The EPPRA plan provides relief for struggling multiemployer pension plans, but doesn’t directly help employers. Paul Friedman of Jackson Lewis in a recent article dives deep into the changes to pensions over the years and outlines the implications of the EPPRA. Read more.
Copyright © 2021 Thomson Reuters. All rights reserved. 610 Opperman Drive, Eagan, MN 55123
Want to change how you receive these emails? You can unsubscribe from this list here.
|