Good morning. The U.S. Supreme Court is taking on its biggest Second Amendment case in years, a U.S. House panel is weighing how to give the FTC some of its powers back after the justices last week gutted them, Sidley Austin for the first time in 155 years is going to have a woman as its chair, and a lawyer for Ghislaine Maxwell says she can't get any sleep in jail and wants the 2nd Circuit to let her out. Let's get this day going!
Our guest contributor today is Nimitt Dixit. Were you forwarded this email? Subscribe here.
U.S. Supreme Court takes on major gun rights case
The U.S. Supreme Court, after a decade-plus lull in issuing major rulings on gun rights, is wading back into the fray by agreeing to hear a National Rifle Association-backed challenge to New York state's restrictions on people carrying concealed handguns in public.
Amid a recent surge in mass shootings, the conservative-dominated court took up an appeal by two gun owners and the New York affiliate of the NRA of a 2nd Circuit ruling tossing their lawsuit, Andrew Chung and Lawrence Hurley report.
Behind the major Second Amendment case is Paul Clement, the former solicitor general under Republican President George W. Bush and Kirkland & Ellis partner who is among the rare group of attorneys who can claim to have argued more than 100 times before the justices.
New York Attorney General Letitia James, a Democrat who has been fighting to dissolve the NRA, called the state's restrictions consistent with the Second Amendment. But the court's 6-3 conservative majority is seen as having expansive views on the amendment.
"If the court rules as expected, that New York state law infringes the right to carry a gun in public, we're likely to see a vast increase in the number of guns carried on the streets of America's major cities," said Adam Winkler, a professor at the University of California, Los Angeles. Find out more.
Industry buzz
- Hogan Lovells has become the latest law firm to shift its Silicon Valley footprint from Menlo Park, California, to nearby Redwood City in search of less expensive real estate options in the Bay Area. The firm signed an 11-year lease in Redwood City for about 10,000 less square feet than its current office with hopes of attracting young talent with more flexible post-pandemic work options. (Reuters)
- That's not the only law firm rethinking its real estate needs after the pandemic. Dechert signed a short-term lease renewal for its office in Philadelphia, where it was founded, for about half the space its original lease called for about 15 years ago. The firm had been reducing its square footage there even before the coronavirus. (Legal Intelligencer)
- A survey conducted of American Bar Association members has researchers alarmed about the pandemic's effects on women and minority attorneys. Among its findings, about 53% of women with children ages five or younger reported they would prefer to work part time compare to 35% of attorneys on average overall. The survey, conducted in September and October, also found notable amounts of anxiety at work related to race. (The American Lawyer)
- As the White House prepares to propose nearly doubling taxes on capital gains to 39.6% for people earning more than $1 million a year, wealth advisers and tax lawyers are counseling clients on how to avoid being clobbered by the potential hike. Christopher Karachale, a San Francisco-based tax lawyer with Hanson Bridgett, said many of his clients - founders of startup companies - are anxious about the possibility of paying more than 50% when California's taxes are factored in. Some are speeding up deals to sell their businesses or sell their stock, he said. (Reuters)
- Ryan Hartman, a former in-house attorney at BP, who as a vice president had responsibilities for a variety of litigation and compliance matters including overseeing the energy giant’s anti-corruption and anti-money laundering compliance teams, has joined Arnold & Porter's complex litigation practice as a partner in Houston. (Texas Lawyer)
- Kasowitz Benson Torres in a letter demanded that lawyers representing ousted music executive Charlie Walk drop the $60 million legal malpractice lawsuit they filed in New York state court by end of day Thursday or else the firm would seek "all available costs, attorneys' fee and other sanctions against you and your client." (Reuters)
Source: Institute for Well-Being in Law
Five major law firms are coming together to launch a nonprofit aimed at providing mental health programming and pushing for systemic change as the industry grapples with issues like burnout and substance abuse. Crowell & Moring, Katten Muchin Rosenman, Latham & Watkins, Morgan Lewis and Reed Smith have pledged to contribute $100,000 each to the Institute for Well-Being in Law over the next four years. Its creation was announced by an American Bar Association task force focused on mental health in the legal profession. (Reuters)
Coming up today
- The U.S. Supreme Court will hear a bid by small refineries to overturn a 10th Circuit decision that cast doubt on a program granting oil refiners exemptions to biofuel blending laws. The 10th Circuit ruling limited the EPA's power to grant waivers under the Clean Air Act to exempt small refineries from a requirement to blend billions of gallons of corn-based ethanol and other biofuels into their fuel or buy credits from those that do. The EPA during the Trump era had backed the appeal by the refineries, represented by Sidley Austin's Peter Keisler, but under the Biden administration it supports the 10th Circuit's ruling.
- A U.S. House of Representatives' panel will hold a hearing to consider legislation to restore the FTC's ability to obtain restitution for victims of scam artists and companies that deceive consumers. The hearing before the House Energy and Commerce Committee's Consumer Protection and Commerce Subcommittee follows last week's U.S. Supreme Court ruling that gutted the regulator's ability to force defendants to give up their ill-gotten gains in court.
- New York’s top court will once again confront litigation over toxic mortgage backed securities that were at the heart of 2008's financial crisis. Credit Suisse will urge the New York Court of Appeals to hold that U.S. National Bank Association as the trustee to mortgage-backed securities trusts failed to comply with a contractual requirement when it sued over mortgage bonds by not providing timely notice of each allegedly defective loan beforehand. The trustee is seeking to force the bank to repurchase $246.4 million in loans. Orrick's Richard Jacobsen and Kasowitz Benson Torres' Hector Torres will argue for Credit Suisse and the trustee, respectively.
- The 2nd Circuit in New York will consider whether to revive claims by 24 people who allege Pfizer's cholesterol drug Lipitor can cause diabetes. Lawyers for the plaintiffs including Keith Altman of Excolco Law argue that U.S. District Judge William Pauley in Manhattan wrongly concluded that their state law claims that Pfizer failed to warn of the risks were preempted by federal law. Mark Cheffo of Dechert represents Pfizer, which has faced similar cases elsewhere nationally.
- The U.S. Senate Judiciary Committee's courts subcommittee will conduct a hearing scrutinizing the U.S. Supreme Court, a continued focus of its chair, Democratic U.S. Senator Sheldon Whitehouse of Rhode Island. His office said the hearing will "highlight the problem of the Supreme Court engaging in appellate fact-finding in major decisions in recent years, including Shelby County v. Holder and Citizens United v. FEC." Witnesses will include law professors and officials with groups including the Campaign Legal Center and the Cato Institute.
- U.S. District Judge George Daniels in Manhattan will hear competing bids from Alibaba shareholders represented by Glancy Prongay & Murray, Robbins Geller and Pomerantz to lead a proposed class action against the Chinese e-commerce company alleging it failed to warn investors of regulatory issues that led to China's suspension of the initial public offering for its Ant Group subsidiary. Stephen Patrick Blake of Simpson Thacher & Bartlett is defending the company.
- Lawyers for several large California counties at Motley Rice are expected to call a pharmaceutical marketing expert to testify in support of their claims that Johnson & Johnson, Teva Pharmaceutical Industries Ltd, Endo International Plc and AbbVie's Allergan unit fueled the opioid epidemic through deceptive painkiller marketing. Should Orange County Superior Court Judge Peter Wilson find the companies liable, the counties say the drugmakers should be forced to pay $50 billion to help foot the costs of abating the public nuisance they created, plus penalties.
- Gulfport Energy will ask U.S. Bankruptcy Judge David Jones in Houston to approve its proposed reorganization plan, which would eliminate $1.25 billion from its debt stack. The natural gas producer, represented by Edward Sassower of Kirkland & Ellis, filed for bankruptcy in November in the wake of low crude prices fueled by the COVID-19 pandemic.
In a first, Sidley Austin will be chaired by a woman
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Yvette Ostolaza Sidley Austin
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For the first time in its 155-year history, Sidley Austin is set to be chaired by a woman. Yvette Ostolaza, a co-chair of its global litigation practice, is slated to take over as the chair of the 2,000-lawyer firm's management committee next year, succeeding Larry Barden.
The Dallas-based lawyer will not only be the first woman to head the firm, which grossed $2.16 billion last year, but also the first Latina and the first partner not based out of Chicago, where the firm was founded, to do so. She spoke with David Thomas about her new role.
On what it means to be the first woman to chair Sidley Austin's management committee: "Being the first in anything this special is unique. But Sidley is not the only one that has been in a position to not have a woman chair. I am the first woman and the first Latina at Sidley to be in that role. In our Constitution, I wasn't even supposed to vote so we are all catching up as a profession."
On her goals: "What I will tell you is that I will undergo a process alongside Larry and [executive committee chair] Mike [Schmidtberger] to develop the goals for next year. So stay tuned."
On whether she's satisfied with the firm: "I will say that I would never feel comfortable with the status quo. I think that law firms all in the top have to run to stay in the same place, what Alice in Wonderland said somewhere in her book."
On reopening Sidley's 21 offices: "We're taking those on a regional basis. For example, in Texas, where we've been an essential business and open since last May, we're having an in-person summer associate program, and we have folks coming into the office. We're not going to have one-size-fits-all. That's not what our firm is about."
"In this era there seems to be quite a bit of loose accusations about organizations. For example, an organization that has certain views might be accused of being a white supremacist organization or racist or homophobic, something like that, and as a result become quite controversial."
Justice Clarence Thomas, who was among the U.S. Supreme Court justices who appeared sympathetic to a challenge by two conservative groups to a California requirement that tax-exempt charities disclose to the state their top financial donors. Quinn Emanuel's Derek Shaffer, who argued for the Koch brothers-affiliated Americans for Prosperity Foundation and the Thomas More Law Center, told the conservative-dominated top court that the requirement would expose their donors to harassment and violated their First Amendment free speech and association rights. (Reuters)
In the courts
- The U.S. Supreme Court asked the Biden administration to weigh in on whether Volkswagen can be sued by local governments in Florida and Utah over its diesel emissions cheating scandal. The justices separately declined to allow Republican-led states including Texas to take over the defense of the Trump era "public charge" rule that barred immigrants likely to require government benefits from obtaining legal permanent residency, saying they’d need to ask the lower courts first. (Reuters, Reuters)
- Latham & Watkins' Gregory Garre during arguments later in the day before the Supreme Court urged the judges to rule for the territory of Guam and overturn a ruling that left the island on the hook for the $160 million cleanup of a former U.S. Navy landfill leaking toxic chemicals into the Pacific Ocean. (Reuters)
- A lawyer for Ghislaine Maxwell told the 2nd Circuit in New York that she deserves bail because her "horrific" jail conditions make it impossible to prepare for trial on charges she procured teenage girls for Jeffrey Epstein to sexually abuse. The lawyer, David Markus of Markus/Moss, said guards wake her with flashlights every 15 minutes out of concern she, like Epstein, might commit suicide. "It's impossible to prepare for trial when you're getting no sleep,” he said. (Reuters)
- The maker of White Claw, Mike's Hard Lemonade, and other flavored malt beverages sued Bang Energy in Manhattan federal court, alleging its new "Mixx" drinks infringe its "MXD" trademark. Dublin-based Mark Anthony International's lawyer, David Bernstein of Debevoise & Plimpton, said his client sought an amicable resolution but Bang Energy "refused to even consider a change of its name." (Reuters)
- The city of Chicago sued an Indiana gun shop it claims sold hundreds and possibly thousands of guns that were trafficked into the city and used in crimes there. The lawsuit against Westforth Sports Inc was brought by the city with the aid of lawyers at the litigation arm of Everytown for Gun Safety Support Fund and Mayer Brown. (Wall Street Journal)
- Frontera Holdings, the owner of a natural gas plant near the U.S.-Mexico border, secured confirmation of its reorganization plan even as Houston-based U.S. Bankruptcy Judge Marvin Isgur expressed concern about its financial forecast. The Blackstone Group-backed company, represented by Joshua Sussberg of Kirkland & Ellis, had about $944 million in debt when it filed for Chapter 11 amid the pandemic. (Reuters)
- The Federal Circuit in a newly-unsealed ruling concluded that a Johnson & Johnson subsidiary is entitled to duty-free imports for the active ingredient of its HIV drug Prezista, upholding the company's claim that it wrongly paid about $100 million in duties. Gregory Diskant of Patterson Belknap argued the case for J&J. (Reuters)
- A former New York Post photographer filed a lawsuit in state court accusing the tabloid of unlawfully firing him for complaining about its refusal to provide staffers with protective equipment amid the COVID-19 pandemic. (Reuters)
Industry moves
- Healthcare fraud and compliance specialist Gina Cavalier has joined Cooley’s healthcare regulatory and business litigation practices in Los Angeles. Cavalier was previously a partner at King & Spalding for nearly a decade. (Reuters)
- Leveraged finance attorney Rachel Gray has joined Winston & Strawn's New York office, where she will play a role in expanding its lender designation practice as its newest partner. She was previously at Kirkland & Ellis. (Winston)
- Farnaz Thomson, a former deputy general counsel at the U.S. Department of Education, has joined McGuireWoods as a partner in Washington. Thomson will be part of the firm’s labor and employment practice. (McGuireWoods)
- Foley & Lardner has added Matthew McBride as a partner in its fund formation and investment management practice in Boston. McBride was previously a partner at Proskauer Rose in its private funds group. (Foley & Lardner)
- Commercial real estate attorney Timothy Walsh has joined Saul Ewing Arnstein & Lehr's Minneapolis office as a partner in the firm’s real estate practice. (Saul Ewing)
Columnist spotlight: 2nd Circuit says no circuit split on data breaches and standing
The 2nd Circuit on Monday ruled that data breach victims can establish a right to sue in federal court by showing that they are at increased risk of identity theft. The court also said there's actually no circuit split on this question -- even though other federal circuits have said there is. As Alison Frankel writes, the 2nd Circuit's ruling -- its first precedential opinion on Article III standing for data breach victims -- analyzed years' of appellate precedent from its sister circuits to derive a few overarching principles. Writing for a three-judge panel, U.S. Circuit Judge Richard Sullivan came up with three questions to guide trial courts weighing whether data breach victims have constitutional standing. Read Frankel's article to find out what those questions are.
Check out other recent pieces from all our columnists: Alison Frankel, Jenna Greene and Hassan Kanu.
Lawyer speak: Lawmakers raise compliance concerns over hospital price transparency rules
New Centers for Medicare & Medicaid Services regulations that came into effect on Jan. 1 require hospitals to publicly report information regarding their standard charges, including privately negotiated charges with commercial health insurers. On April 13, four members of the U.S. House of Representatives wrote to the U.S. Department of Health and Human Services expressing concern over reports of non-compliance with these rules and seeking stricter enforcement provisions to ensure compliance. Baker Donelson's Jeffrey Davis in a recent article discusses the concerns raised in the letter and potential implications for hospitals. Read more.
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