Good morning. The U.S. Senate Judiciary Committee is taking up the first of President Joe Biden’s judicial nominees including Supreme Court short-lister Ketanji Brown Jackson for the D.C. Circuit, legal technology company Clio can now call itself a "unicorn" thanks to its $1 billion-plus valuation, former New York Attorney General Eric Schneiderman has been suspended for a year, a Boies Schiller partner is no longer facing a domestic violence charge, and the Biden administration is promising to reduce courthouse immigration arrests. And there's so much more news than that!
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Ketanji Brown Jackson, top SCOTUS contender, faces Senate panel for circuit nom
The U.S. Senate Judiciary Committee today will hear from President Joe Biden's first batch of judicial picks — including Ketanji Brown Jackson, a nominee to the D.C. Circuit who is widely seen as a top prospect to join the U.S. Supreme Court.
Jackson, a district court judge in D.C., is among the most prominent Black women in the federal judiciary. And with speculation swirling about whether 82-year-old Justice Stephen Breyer will heed calls from liberal activists and retire, Jackson’s judicial record is expected to come under Republican scrutiny, Lawrence Hurley reports.
The 50-year-old has been nominated to fill the D.C. Circuit seat formerly held by U.S. Attorney General Merrick Garland, who was famously blocked in 2016 from joining the Supreme Court. President Barack Obama before settling on Garland considered Jackson, whom he earlier nominated to the district court.
Biden has pledged to use his nominations to diversify the bench. Jackson is considered a frontrunner to replace Breyer along with another Black female judge, California Supreme Court Justice Leondra Kruger.
Other nominees appearing before the committee today include Candace Jackson-Akiwumi, a Zuckerman Spaeder partner nominated to the 7th Circuit. It will also consider three district court nominees including New Jersey-based U.S. Magistrate Judge Zahid Quraishi, who if confirmed would be the first Muslim to serve as a district court judge. See what else is expected.
Industry buzz
- Former New York Attorney General Eric Schneiderman, who resigned in 2018 amid accusations that he was physically violent toward women, has been suspended from practicing law for one year. Schneiderman agreed to the suspension, which was ordered by a state appeals court in Manhattan. His lawyer, Michael Ross, did not respond to requests for comment. (Reuters)
- President Joe Biden plans to nominate Javier Guzman to lead the DOJ's Civil Division. He's currently the deputy general counsel at Harvard University and served as deputy associate attorney general in the Obama administration. (Reuters, White House)
- Coca-Cola Co's new general counsel, Monica Howard Douglas, during a virtual meeting with its global legal team indicated the company was taking a pause on a much-hyped initiative to promote diversity among law firms that her predecessor, Bradley Gayton, announced before he resigned after just eight months on the job, a source told The American Lawyer. A group headed by prominent affirmative action opponent Edward Blum released a letter its lawyers sent the company urging Coca-Cola to rescind the policy. (The American Lawyer, Project on Fair Representation)
- That doesn't mean law firms are slowing down in trying to address their diversity shortcomings. In the latest step taken by a firm, Bryan Cave Leighton Paisner announced that London-based banking partner Daisy Reeves has been named the firm’s "inclusion & diversity client relationship partner." The firm touted the role as a first of its kind among major law firms. (BCLP)
- The bankruptcy trustee for disgraced plaintiffs attorney Tom Girardi's estate, Jason Rund, is in the midst of selling one of the two Los Angeles buildings that housed his law firm Girardi Keese along with other real estate. The trustee for his law firm, Elissa Miller, is also seeking to hire Beverly Hills attorney Ronald Richards to investigate if Girardi's estranged wife, "Real Housewives of Beverly Hills" star Erika Jayne, has assets that belong to the estate. (The Recorder)
- Prosecutors in Marin County, California, have dropped a misdemeanor domestic violence charge against litigator Joshua Schiller, the son of Boies Schiller Flexner co-founder Jonathan Schiller. His lawyer, Douglas Horngrad, in a statement said: "There was no physical harm or instance of domestic violence in this case." (Reuters)
- Several big moves are afoot in the world of bankruptcy amid a surge in work during the pandemic. The head of Morrison & Foerster's New York office, Brett Miller, and two other bankruptcy partners are headed to Willkie Farr & Gallagher, sources told The American Lawyer. Sidley Austin meanwhile poached Tom Califano, the former global co-chair and U.S. chair of DLA Piper's restructuring group, for its New York office. (The American Lawyer, Reuters)
- The SPAC boom that has been keeping law firms busy is again drawing the attention of the SEC, which is now considering new guidance to rein in growth projections made by listed blank-check companies and clarify when they qualify for certain legal protections, according to people with knowledge of the discussions. (Reuters)
Number of the day:
$1.6 billion
Legal technology company Clio said Tuesday that it is valued at $1.6 billion after raising $110 million in its latest funding round. Vancouver-based Clio, which offers cloud-based products, including billing, document automation and client management, saw a "dramatic acceleration" in demand for its products as law firms went virtual in 2020, CEO and co-founder Jack Newton said. He described the latest funding round as a "watershed moment for the legal tech industry" and anticipates the trend to take business online to grow even when firms return to their physical offices. (Reuters)
Coming up today
- The U.S. Supreme Court will hear a bid by a consortium of energy companies seeking to seize land owned by the state of New Jersey to build a $1 billion natural gas pipeline. PennEast Pipeline Company LLC, a joint venture backed by energy companies including Enbridge, is appealing a 3rd Circuit ruling holding it could not under the federal Natural Gas Act bring eminent domain actions to acquire state-held property. Kirkland & Ellis' Paul Clement will argue for PennEast and will face New Jersey State Solicitor Jeremy Feigenbaum. Deputy U.S. Solicitor General Edwin Kneedler will argue for the federal government, which approved the pipeline. Westlaw Today Energy Briefing has a preview of the arguments.
- Supreme Court justices will also hear arguments over whether the Constitution allows school officials to discipline students for speech that occurs off campus in a case involving a cheerleader who made vulgar comments on social media. Lisa Blatt of Williams & Connolly will argue for Pennsylvania's Mahanoy Area School District, which is appealing a 3rd Circuit ruling finding it violated Brandi Levy's free speech rights by banishing her from the cheerleading squad for a year. David Cole of the ACLU will argue for Levy. Reuters' Andrew Chung recently interviewed Levy ahead of the arguments.
- New York's top court will consider whether state law bars a former driver for a transportation services company from pursuing wage theft claims in federal court after winning a judgment for unpaid wages in small claims court. The 2nd Circuit asked the New York Court of Appeals to weigh in on the issue in a lawsuit by Charlene Simmons, represented by Abdul Hassan, who won a $1,000 judgment and $20 disbursement in small claims court against Trans Express. McDermott Will & Emery’s Emory Moore will argue for the company.
- The 3rd Circuit in Philadelphia will consider whether a federal judge in Pittsburgh abused her discretion by ruling that three COVID-19 business-interruption insurance cases present such novel questions of state law that they should be decided in state court. Jack Gerstein of Clyde & Co will argue the appeal for Ohio-based Motorists Mutual Insurance, which had sought to remove the lawsuits by businesses including DiAnoia’s Eatery to federal court based on diversity of citizenship. He’ll face James Haggerty of Haggerty Goldberg Schleifer & Kupersmith.
- A Chinese businessman is slated to plead guilty in federal court in Boston to charges that he conspired to procure U.S. marine-related products for a Chinese military research institute. Shuren Qin, a Chinese national living in Wellesley, Massachusetts, was charged in 2018 along with Northwestern Polytechnical University, a Chinese university linked to China’s army. The plea comes after his lawyers, led by William Kettlewell of McDermott, lost a bid to suppress evidence seized on his laptop and iPhone.
- The 2nd Circuit in New York will consider whether to revive a proposed class action accusing Capital One of violating the Equal Credit Opportunity Act by revoking consumers’ credit without explanation. The CFPB and FTC have filed a brief in support of the plaintiffs, represented by Leah Nicholls of Public Justice, who contend a lower-court judge erred in holding that the law's protection of "applicants" only applies to potential borrowers seeking new credit rather than existing borrowers. Brian Schmalzbach of McGuireWoods will argue for the bank.
- The federally appointed board charged with overseeing Puerto Rico's financial restructuring will ask U.S. District Judge Laura Taylor Swain to approve a schedule to solicit creditor votes for its proposed debt adjustment plan, which would restructure $35 billion in public debt and more than $50 billion in public pension liabilities. The schedule, which includes a hearing on the plan’s disclosure materials on June 16, is opposed by some bond insurers. Martin Bienenstock of Proskauer Rose reps the board.
- The South Dakota Supreme Court will hear arguments over whether to revive a voter-approved state constitutional amendment legalizing marijuana after it was struck down by a judge in February. The law was challenged by the state’s highway patrol superintendent at the direction of Republican Governor Kristi Noem, and Attorney General Jason Ravnsborg has declined to defend the amendment on appeal, leaving advocacy group South Dakotans for Better Marijuana Laws represented by Brendan Johnson of Robins Kaplan to argue the case before the top court.
Video: Digital dollar poses complex legal issues
China is already promoting a national digital currency while the U.S. is exploring the concept of electronic money backed by the Federal Reserve. Reuters video journalist Alex Cohen takes a look at how this could work and the legal questions that need to be addressed. Watch the video.
How a largely-female Davis Wright team landed a massive fast-food deal
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Sarah Tune Davis Wright
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In the world of M&A, Sarah Tune has built something rare--a core deal team of all women.
Her team at Davis Wright Tremaine last month finished a record transaction, advising restaurant operator Flynn Restaurant Group on its $552 million acquisition of more than 1,000 Pizza Hut and Wendy's restaurants operated by bankrupt NPC Quality Burgers.
The transaction, the largest franchisee-to-franchisee deal ever, was the latest to result from a long-running relationship with Flynn, a client Tune first began advising as a first-year associate that has grown in size along with her career. As it grew into the country's largest franchise operator with $3.5 billion in sales, Tune advanced to become the chair of Davis Wright's executive committee.
Her team is based mostly in Seattle and Portland and consists primarily of women, a contrast to the usual batch of male partners at law firms who typically dominate merger work. "It can be somewhat unique when you're negotiating with the other side to have a team that is all female in the M&A world," she said.
The COVID-19 pandemic has done a number on many restaurants, but in the franchise space, restaurants like Pizza Hut have thrived. "You know, pizza has done very well," she said. "Anything that has drive through or carry out."
She says there's growing appetite not just for food on the go but also in pursuing franchise deals like Flynn has done. "Over the last five or 10 years, there has been a lot more interest in franchise businesses by private equity," she said. "So there's a lot of opportunity for a roll-up strategy." Her team itself has already refilled its plate with in-the-works deals.
"Ensuring that individuals have access to the courts advances the fair administration of justice, promotes safety for crime victims, and helps to guarantee equal protection under the law."
U.S. Department of Homeland Security Secretary Alejandro Mayorkas, in announcing that Immigration and Customs Enforcement agents will be limited in their ability to conduct immigration arrests in or near courthouses in an effort to balance the need for access to the justice system with enforcement efforts. The move reverses a Trump-era policy that expanded immigration arrests at courthouses, prompting conflicts with court personnel nationally in many states and litigation. (NBC News, Reuters)
In the courts
- U.S. Supreme Court justices appeared divided during Tuesday's arguments over a bid by small oil refineries to overturn a ruling that faulted the EPA for giving the companies waivers from the Clean Air Act's biofuel blending and renewable fuel standard requirements. The Biden administration is supporting the 10th Circuit ruling, which the refineries, represented by Sidley Austin's Peter Keisler, are challenging. (Reuters)
- The 2nd Circuit in New York on a 2-1 vote held that plaintiffs must present facts showing that employers' violations of the federal Fair Labor Standards Act were willful in order to take advantage of an extended statute of limitations. The ruling, which upheld the dismissal of an overtime lawsuit against manufacturer Hover-Davis Inc, deepened a circuit split. Debra Greenberger of Emery Celli and Michael Billok of Bond Schoeneck & King repped the plaintiff and company, respectively. (Reuters)
- The 2nd Circuit also revived a proposed class action accusing Credit Suisse of causing investors to lose $1.8 billion by defrauding them in a complex product for betting on stock market swings that lost 96% of its value in a single day. The investors' lawyer, Michael Eisenkraft of Cohen Milstein, said: "We look forward to prosecuting these claims vigorously." Cahill Gordon’s Herbert Washer argued the case for the Swiss bank. (Reuters)
- The New York-based federal appeals court churned out a third opinion too, reviving a challenge by nursing homes to a U.S. Centers for Medicare and Medicaid Services rule that allows health officials to survey their facilities in response to complaints without any nurses being part of the team conducting the survey. Brian Feldman of Harter Secrest & Emery argued the case for the nursing homes, including Avon, New York-based Avon Nursing and Rehabilitation. (Reuters)
- The 2nd Circuit kept busy, rejecting Ghislaine Maxwell's latest request for bail, after her lawyer, David Markus, said guards in her Brooklyn jail were keeping her awake at night to ensure she wouldn't commit suicide like the financier Jeffrey Epstein, for whom she is accused of helping recruit and abuse underage girls. The court said that to the extent Maxwell is being deprived of sleep, she should seek relief from U.S. District Judge Alison Nathan, who oversees her criminal case. (Reuters)
- Seth Andrews, a former White House adviser during the Obama administration, was arrested and charged by federal prosecutors in Manhattan with stealing $218,005 from a charter school network that he founded. His lawyer, Michael Yaeger of Carlton Fields, said his client will plead not guilty. (CNBC)
- Boies Schiller Flexner, the litigation firm whose founding partner David Boies rose to fame representing the U.S. government in its antitrust case against Microsoft, has been tapped by a federal judge in San Jose to serve as co-lead counsel with Korein Tillery and Berger Montague in an antitrust litigation by publishers against Google. (Reuters)
Industry moves
- Goodwin has added corporate lawyer Jean Lee as a partner to the firm’s Los Angeles-based technology M&A practice. Lee was previously a partner at Kirkland & Ellis. (Goodwin)
- Morrison & Foerster continues to tap former DOJ officials for its antitrust practice group as David Shaw joins as a partner. Shaw was previously a part of the DOJ’s Antitrust Division where he most recently served as deputy chief of staff and counsel to the assistant attorney general, as well as acting chief of staff for the transition.(MoFo)
- Greenspoon Marder expands its corporate and business practice group with the hire of Michael Burwick as a partner in New York and Miami. (GM Law)
- Real estate transactional attorney Melinda Pasquini has joined Holland & Hart’s Denver office as a partner in its real estate, finance and development practice. (HollandHart)
- Meanwhile, another real estate attorney, James Spitzer, has joined FisherBroyles in New York as a partner. Spitzer was previously at Holland & Knight. (FisherBroyles)
- Appellate side specialist Todd Lundell joins Sheppard, Mullin, Richter & Hampton's Orange County, California office as a partner. Lundell, who joins Sheppard Mullin’s appellate practice, was most recently a partner at Snell & Wilmer. (Sheppard Mullin)
- Ruta Skučas joined K&L Gates as a partner in its power practice in D.C. from Pierce Atwood. (K&L Gates)
Where do women go when they quit Big Law? Even as law firms fill their pipelines year after year with new women associates, their partnership ranks remain stubbornly male-dominated. One piece of the puzzle is figuring out why women are leaving law firms in droves — and where those who continue to practice law go when they quit. Jenna Greene dives into data from Leopard Solutions for some answers. Founder and CEO Laura Leopard shared stats on what 1,360 women lawyers who quit Am Law 200 firms in the past 12 months did next. The No. 1 destination for 48% of them? In-house. Find out more about where the others went, and how their choices differ from men’s.
What we shouldn’t forget about the Chauvin case. From the start, Derek Chauvin's trial for the murder of George Floyd was in some ways a referendum on the urgent need for police reform and better race relations in America. But Hassan Kanu writes that some of the entrenched racial bias in the U.S. justice system that caused the uproar after Floyd's death in the first place also pervaded the trial, in full view of a worldwide television audience. In that sense, Kanu writes, Chauvin’s murder conviction itself demonstrates the need to reimagine our criminal justice system, even as the outcome was widely celebrated. Read more analysis about the trial.
Zantac generics plaintiffs are hoping SCOTUS Ford decision rescues claims v. brand-name makers. The U.S. Supreme Court’s ruling in Ford Motor Company v. Montana Eighth Judicial District is only a month old but it’s already been cited in dozens of cases nationally. The ruling held state courts in Montana and Minnesota had jurisdiction over Ford even though the company did not directly sell the allegedly defective vehicles at the center of products liability suits by state residents. Now lawyers for plaintiffs who took generic versions of the heartburn medication Zantac are looking to also take advantage of it to rescue their negligent misrepresentation claims under California and Massachusetts law against brand-name manufacturers of the drug, which they say contains a carcinogenic chemical. Alison Frankel writes that they've been seeking to impose "innovator liability" on the brand name companies behind Zantac, but a federal judge in West Palm Beach, Florida, dismissed their claims in December on jurisdictional grounds. Find out why the plaintiffs say the Ford ruling means that ruling was wrong.
Check out other recent pieces from all our columnists: Alison Frankel, Jenna Greene and Hassan Kanu.
Lawyer Speak: Navigating a remote workforce: Is your company subject to jurisdiction between state lines?
The past 14 months have been marked by a shift toward a remote workforce, with home offices replacing corporate headquarters as the place where corporate decisions are made. What was initially considered a temporary measure now could be a more structured arrangement likely to extend beyond 2021, as some companies such as Twitter offer employees the option to permanently work from home. These workforce changes not only impact general business operations but raise legal concerns that ought to be considered. Attorney Steve Blonder of Much Shelistin in a recent article discusses the jurisdictional, patent, labor law and tax issues companies face because of the prevalence of remote work during the COVID-19 pandemic. Read more.
Correction: Yesterday's newsletter incorrectly stated how much Sidley Austin grossed in revenue in 2020. It grossed $2.46 billion last year.
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