April 1, 2021

Good morning. U.S. Supreme Court justices have concerns about the NCAA's athlete compensation rules, the first openly gay judge to serve on New York's high court has died, the conservative-dominated Wisconsin Supreme Court has struck down the governor's mask mandate amid climbing COVID-19 cases, and law firms like Manatt Phelps and Nelson Mullins are adding new diversity officers as calls for change within the profession grow. Watch out folks, it's a silly day, don't get tricked!

Our guest contributor today is Chinekwu Osakwe. Were you forwarded this email? Subscribe here.

NCAA faces U.S. Supreme Court grilling over 'odd' college athlete compensation rules

U.S. Supreme Court justices on Wednesday expressed skepticism about the NCAA's bid to maintain limits on education-related compensation for student-athletes, expressing concern that the organization could be using the cloak of amateurism to fix labor prices at an artificially low level despite antitrust laws.

Amid debates about student-athlete compensation, the court reviewed an order barring the NCAA from limiting non-cash payments to college athletes related to education, Lawrence Hurley reports. While some justices questioned whether the injunction opened the door to future litigation challenging NCAA policies, they told the NCAA's lawyer, WilmerHale's Seth Waxman, that they found its restrictions "disturbing" and "odd."

Justice Brett Kavanaugh: "I start from the idea that the antitrust laws should not be a cover for exploitation of the student-athletes, so that is a concern, an overarching concern here."

Justice Clarence Thomas: "It just strikes me as odd that the coaches' salaries have ballooned and they're in the amateur ranks, as are the players."

Justice Elena Kagan: "There's another way to think about what's going on here, and that's that schools that are naturally competitors as to athletes have all gotten together in an organization, an organization that has undisputed market power, and they use that power to fix athletic salaries at extremely low levels."

Justice Amy Coney Barrett: "I'm wondering, why does the NCAA get to define what pay is?"

Industry buzz

Paul Feinman, the first openly gay judge to serve on New York's high court and a longtime advocate for LGBTQ rights, has died at the age of 61. He was the newest judge on the New York Court of Appeals, having been appointed by Governor Andrew Cuomo in 2017. (Reuters)
A state court judge in Michigan who was acquitted of federal corruption charges 15 years ago recently interviewed to take charge of the U.S. Attorney's Office for the Eastern District of Michigan, the same office that prosecuted him. Macomb County Circuit Court Carl Marlinga, 74, is barred from running for re-election to the bench by age limits. (Detroit News)
The job market for associates has heated up so much that some law firms are now offering signing bonuses and extending offers the day they interview the lawyers, recruiters say. Decipher found that in the 10 most active legal markets, associate moves compared to the four-year average are up 20% or more in January and February. (The American Lawyer)
In accordance with the "new mindsets" that have been brought on by the pandemic, Dentons, the 10,000-plus lawyer firm, will be allowing employees in the UK, Ireland and the Middle East to work from home permanently. According to Dentons' managing director for the UK and Middle East, Lisa Sewell, offices may be used for meetings in the future. (City A.M.)
U.S. Secretary of State Antony Blinken will be the keynote speaker at Columbia Law School's virtual graduation. President Joe Biden pre-election was the Columbia Law School speaker last year. (New York Law Journal)
Asian lawyers at firms including Goodwin Procter, McDermott Will & Emery, Pillsbury Winthrop Shaw Pittman, King & Spalding and White & Case signed onto a letter calling for change and community support after COVID-19 spurred discrimination in the Asian American community. Along with other business leaders, the group of lawyers committed to donating $10 million to support organizations that help provide justice to Asian Americans. (Reuters)

Number of the day:

470

Morry Gash/Pool via REUTERS

The conservative-leaning Wisconsin Supreme Court on a 4-3 vote struck down Democratic Governor Tony Evers' statewide mask mandate, finding he needed legislative approval to keep extending the initial order. "The question in this case is not whether the governor acted wisely; it is whether he acted lawfully. We conclude he did not," Justice Brian Hagedorn wrote. The ruling came amid calls by President Joe Biden for governors to reinstate mask mandates as COVID-19 case counts rise. In Wisconsin, the seven-day case average has increased to 470, after dipping to as low as 378 in mid-March. (Reuters)

Coming up today

The U.S. Supreme Court is expected to issue rulings in some already-argued cases.
The murder trial is continuing in the case of Derek Chauvin, the former Minneapolis police officer charged over the death of George Floyd. On Wednesday, the third day of testimony in the trial, prosecutors in Hennepin County District Court presented jurors with several pieces of video evidence detailing the minutes before and after the 46-year-old Black man's death. Learn more.
A status conference is scheduled in the case of two lawyers charged with participating in a Molotov cocktail attack on an unoccupied police vehicle during summer protests in Brooklyn over the police killing of George Floyd. Federal prosecutors in Brooklyn recently extended plea offers to suspended Pryor Cashman associate Colinford Mattis and public interest attorney Urooj Rahman, prompting an earlier hearing to be called off. They each currently face a mandatory-minimum 45-year prison sentence if they are convicted in a case that their supporters say the Trump administration overcharged.
The 7th Circuit in Chicago will consider whether to revive a proposed class action accusing Champion Petfoods of falsely marketing its products as made from fresh ingredients. Rebecca Peterson of Lockridge Grindal Nauen will argue for the lead plaintiff, a Wisconsin resident who alleged that the company used expired ingredients and that its products included potentially harmful chemicals like pentobarbital and bisphenol. A. Elliot Scherker of Greenberg Traurig is defending the company.
Movie theater chain Alamo Drafthouse will ask U.S. Bankruptcy Judge Mary 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 is representing Alamo.
Argentina's state-owned oil company, YPF SA, will ask a Delaware bankruptcy judge to disqualify White & Case from representing the Maxus Energy liquidating trust in litigation over billions of dollars in environmental liabilities. YPF, represented by Cleary Gottlieb's Howard Zelbo, claims it was blindsided by the departure of its former lead attorney in the case, Jessica Boelter (now Lauria), from her former firm, Sidley Austin, to White & Case in October and the fact that she was marrying the head of White & Case's restructuring practice, Tom Lauria.

Reporter's notebook: Law firms bulk up C-Suites with diversity officers

Reuters business of law reporter Arriana McLymore on the influential role law firm diversity officers are increasingly playing.

George Floyd's death and the increased attacks on Asian Americans have forced law firms to grapple with the experiences of underrepresented lawyers and how to create an inclusive environment in an industry that's long struggled with its lack of diversity.

Many law firms are now turning to diversity executives to create a path to inclusivity and to be more competitive as clients up the demand for diverse advisors.

Just this month, four major law firms announced newly-created diversity and inclusion executive positions. Michelle Cooke was named Manatt, Phelps & Phillips' first-ever chief diversity and inclusion officer, while Nelson Mullins Riley & Scarborough hired Katerina "Kat" Taylor as its director of diversity, equity and inclusion. Dickinson Wright brought on Jake McMillian as director of diversity and inclusion.

Satra Sampson-Arokium, who previously served as Dechert's global director of diversity and inclusion, became the 150-year-old firm's first Black C-suite executive when it recently elevated her to serve as its chief diversity, equity and inclusion officer.

These new members of the C-Suite have frequent meetings with firm leadership, clients and diversity committees—a level of access that previously was not granted to diversity and inclusion professionals.

"I’ve been in the DEI field for a long time, and never before have I seen the conversations that we’re having today," Sampson-Arokium told me. "There is real momentum for change in the legal industry now, and in my new role, we are better able to harness it."

"Plaintiffs' remedy lies with the Legislature and not the courts if there is to be a mechanism by which employees can challenge an OSHA investigator's finding of no imminent danger."

U.S. District Judge Malachy Mannion in Scranton, Pennsylvania, in dismissing a lawsuit by three employees at a meatpacking plant run by Maid-Rite Specialty Foods where half the workforce contracted COVID-19, saying he could not force the Occupational Safety and Health Administration to enforce safety protocols at the facility. The lawsuit was brought by lawyers at Friends at Farmworks, Toward Justice and Public Justice and the law firm Nichols Kaster. (Reuters)

In the courts

The SEC has opened a preliminary investigation into trading at Archegos Capital Management, the $10 billion single-family office run by Bill Hwang, after it defaulted on margin calls by its banks, triggering a turmoil on Wall Street, the Wall Street Journal reported, citing people familiar with the matter. (WSJ)
Ray LaHood, who served as transportation secretary during the Obama administration, failed to disclose that he accepted $50,000 from an associate of a Lebanese-Nigerian billionaire in 2012, federal prosecutors in Los Angeles said. LaHood, represented by Blank Rome's Henry Schuelke III, agreed to pay a $40,000 fine and repay the $50,000 under a non-prosecution agreement. Billionaire Gilbert Chagoury paid $1.8 million under a deferred prosecution agreement that resolved allegations related to illegal campaign contributions. O'Melveny & Myers' Daniel Petrocelli and James Bowman and Steptoe & Johnson LLP's Stewart Baker repped Chagoury. (Axios)
The largest U.S. meatpacking union persuaded U.S. District Judge Joan Ericksen in Minneapolis to invalidate a Trump-era rule allowing hog slaughter plants to run without line speed limits. United Food and Commercial Workers Union and its lawyers at Public Citizen argued faster slaughter speeds allowed for under the 2019 ruled issued by the U.S. Department of Agriculture undermined worker safety. (Reuters)
U.S. District Judge Paul Gardephe in Manhattan dismissed long-running antitrust litigation against 10 large banks including Bank of America, JPMorgan, Credit Suisse, Goldman Sachs and Morgan Stanley for allegedly conspiring to suppress competition in the now $21.2 trillion market for U.S. Treasury securities. He said statistical analyses presented by traders represented by lawyers at Cohen Milstein, Labaton Sucharow and Quinn Emanuel to support their claims were "no substitute" for evidence of individual or collective wrongdoing. (Reuters)
A group of drugmakers including Johnson & Johnson and Teva Pharmaceutical Industries lost their latest bid to dismiss claims in a lawsuit brought by the city of Chicago accusing them of fueling the opioid epidemic. The ruling by U.S. District Judge Jorge Alonso in Chicago came in one of the first case to be filed among the 3,400-plus now pending over the drug crisis. Drug distributors McKesson, AmerisourceBergen and Cardinal Health seperately failed to convince U.S. District Judge David Faber in Huntington, West Virginia, to toss an opioid lawsuit set for trial on May 3. (Reuters)
The 7th Circuit ruled in a proposed class action that Southwest Airlines supervisors who oversee the loading and unloading of plane cargo are "engaged in interstate commerce," making them exempt from having to arbitrate employment-related disputes under federal law. The case was argued by Jennifer Bennett of Gupta Wessler for the supervisors and Melissa Siebert of Shook, Hardy & Bacon for Southwest. (Reuters)
The judge overseeing the National Rifle Association's bankruptcy, U.S. Bankruptcy Judge Harlin Hale in Dallas, said he would allow a board member to testify at a trial next week over the legitimacy of the gun rights organization's bankruptcy case as to whether Chapter 11 was discussed by the board before it was filed. New York Attorney General Letitia James had sought to block the NRA from relying on statements made during a Jan. 7 executive board session at the trial. (Reuters)
The False Claims Act protects former, not just current, employees from retaliation, a divided 6th Circuit panel ruled, reviving a retaliation claim by a neurologist who said his former employer, William Beaumont Hospital, "blacklisted" him after he filed a whistleblower lawsuit against it. (Reuters)

Industry moves

Elizabeth Manno joined Dentons as a partner in its Denver office. Manno, who represented technology clients in her private practice, will join the firm’s intellectual property and technology practice group. She was previously with Perkins Coie. (Dentons)
Former Miles & Stockbridge litigators Alicia Ritchie and Jonathan Huber have joined Nelson Mullins' litigation group. Ritchie, who co-led Miles & Stockbridge’s products liability, mass torts and environmental energy practice group, will join the firm's Baltimore office as a partner and Huber will join the firm's D.C. office as counsel. (Nelson Mullins)

Columnist spotlight

Star asbestos lawyer dinged as 'unprofessional' in pro hac vice dispute. You think pro hac vice applications are routine? You might want to think again after hearing the story of Jessica Dean's ill-fated application in an Iowa asbestos case. Alison Frankel dives into how Dean's application was denied by a judge after opposing counsel said it contained inaccuracies. Turns out Dean’s application and others at the firm had been filed by a rogue paralegal, the firm said. Dean tells Frankel that she is grateful to opposing counsel for forcing her firm to conduct an investigation but that she believes that opposing counsel targeted her as a matter of strategy. Learn more here.

For-profit bail industry cloaks itself in 'social justice' banner. While a coalition of for-profit bail companies have battled against cash bail reform in Florida, Texas, New York and other states, Hassan Kanu, pointing to a recent Reuters report on the cash bail industry, writes that what's happened in California offers insight into the industry-funded campaigns that he says have eroded public support for reform. Kanu compares the coalition’s messaging in that state with an even more perverse category of the "Willie Horton" style of political advertisement. Instead of triggering white Americans' racist fears about criminality among people of color, the cash bail ads played on Black Americans' legitimate fears of being ensnared by a racist criminal justice system. The result? The coalition ultimately helped preserve cash bail in California. Read more here.

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

Lawyer speak: Will PPP lawsuits take over in 2021?

The Small Business Administration's Payment Protection Program has been rife with fraud from the onset and now, the government’s quick response to save businesses during the pandemic is under increased scrutiny. Not only will the DOJ and SBA be scrutinizing companies’ eligibility for the loans, especially for loans that exceed $2 million, DOJ officials say that a number of qui tam cases have been filed by whistleblowers and some have even settled. PilieroMazza's Jon Williams in a recent article discusses what could happen if businesses are subject to the False Claims Act. Read More.

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