Good morning. Former President Donald Trump was none too happy yesterday after the New York attorney general's office decided to join forces with the Manhattan D.A. for a criminal probe into his finances. He wasn't alone in getting bad news, as a federal judge used the word "fraud" to describe the class action firm Robbins Geller's conduct in a case before him. Bayer spent hours yesterday hearing a judge raise concerns about its proposed Roundup settlement. And maybe-someday SCOTUS pick Ketanji Brown Jackson faces a Senate panel vote today on whether to advance her D.C. Circuit nomination. Did we mention we have Epic Games v. Apple news too?
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Merged probes in N.Y. add muscle to Trump criminal investigation
New York Attorney General Letitia James' decision to join forces with Manhattan District Attorney Cy Vance for a newly-combined criminal probe of former President Donald Trump's finances is opening up avenues to sharing critical information that could speed up indictments.
James's office late Tuesday confirmed that its investigation into the Trump Organization, initially a civil probe, was now considered a criminal matter. Linda So, Joseph Tanfani and Peter Eisler report that two assistant attorneys general from James' office are now joining Vance’s team, which was already conducting a criminal probe, to work on the investigation.
"What does it mean for Trump? It's clearly not good in the sense that you now have a combining of resources, information and evidence," said Daniel Horwitz, a former Manhattan prosecutor now at McLaughlin Stern. "It's a muscling up and a sharing of resources."
Both the AG and DA have shown shared interests in a Trump property in Westchester County, which James has jurisdiction over, as well as Allen Weisselberg, chief financial officer at the Trump Organization. People familiar with the matter say he has been pressured by Vance's office to cooperate. Weisselberg's attorney, Mary Mulligan of Friedman Kaplan Seiler & Adelman, declined to comment.
But the involvement of James, a long-time critic of Trump, also "creates a shadow" for the probe by opening the door for the ex-president to attack the investigation’s legitimacy, said Rebecca Roiphe, a New York Law School professor. Learn more.
"Robbins Geller's willingness to submit so misleading a brief, in order to obtain a result for its client which it predictably might not obtain if all relevant facts were addressed, disqualifies it from continuing as counsel in this case."
U.S. District Judge Louis Stanton in Manhattan, who said the class action law firm Robbins Geller intentionally failed to disclose that a pension plan it was representing in a lawsuit seeking to recover stock market losses for Grupo Televisa investors stood to gain from investing in a hedge fund that shorted the Mexico-based media company. Stanton said Robbins Geller failed to mention its client’s "good fortune" when it successfully sought appointment for the "lucrative" role of lead class counsel in the case. "In the world of securities law, that is a definition of fraud," Stanton wrote as he disqualified the firm from the case. Robbins Geller partner Darren Robbins said the firm would appeal the "unprecedented" ruling. (Reuters)
Industry buzz
- President Joe Biden's commission to study potential changes to the U.S. Supreme Court met for the first time in an all-virtual session that lasted less than 30 minutes. The commission, co-led by Yale Law School professor Cristina Rodriguez and New York University School of Law professor Bob Bauer, will have six months to report on reforms such as expanding the number of justices, an idea touted by some liberal activists and Democratic lawmakers. (Reuters)
- Big Law's war for junior talent - waged as firms grapple with burnout and record deal volume - may have a new highest bidder. Kirkland & Ellis has offered M&A associates signing bonuses of up to $250,000, Business Insider reported, citing people familiar with the matter. (Business Insider)
- It's not a bad job market for lawyers, in general. The number of open jobs for lawyers overall has increased by 70% since January 1, new data from legal recruiting tracker Leopard Solutions shows. As of May 14, there were 8,268 available attorney jobs from the over 1,000 law firms that Leopard Solutions tracks, up 150% since the start of the pandemic. (Reuters)
- Latham & Watkins's Marc Jaffe, Gregory Rodgers and Benjamin Cohen, and Skadden's Ryan Dzierniejko and David Goldschmidt landed work on one of the latest tech direct listings, guiding Squarespace's market debut. The website-building company's valuation dropped by nearly a third in its debut on the New York Stock Exchange on Wednesday, after its shares opened 4% below their reference price amid a broader market sell-off. (Reuters)
- Bradley Gayton, who resigned as Coca-Cola Co general counsel last month after less than a year in that role, has joined the board of tax compliance company Vertex, an SEC filing shows. Gayton made headlines while at Coca-Cola for requiring its law firms to staff its matters with diverse lawyers or lose its business. (Corporate Counsel)
- Dallas-based bankruptcy attorney Trey Monsour is withdrawing his federal lawsuit against Polsinelli, taking his claims that the firm forced him out because he is gay and because of his age to arbitration. Polsinelli had argued the claims belonged in arbitration, not court, and that Monsour, now a partner in Fox Rothschild's Dallas office, was terminated in March 2020 because he misrepresented the size of his book of business and mistreated two of his female colleagues. (Reuters)
- High-ranking lawyers at the NLRB celebrated Biden’s firing of Trump-era general counsel Peter Robb and praised his replacement as "wonderful" and "a refreshing change," according to newly released internal emails. The emails released by the National Right to Work Legal Defense Foundation will likely fuel criticisms by Republicans and business groups who say Robb's firing was politically motivated, potentially illegal, and undermined the board's integrity. (Reuters)
- Litigation funders have summer associates now, too. Validity Finance said two Harvard Law first-year students, Marlon Baccera and Shao-Jia Chang, are spending their summer at its Equal Access Fellowship, a 10-week program split between the funder and a legal non-profit of the student’s choice. (Validity Finance)
Number of the day:
$100 million
Dado Ruvic/Illustration via REUTERS
How much did Apple make by charging commissions on Epic Games' "Fortnite" before their antitrust brawl began and the tech giant kicked the popular game off its App Store last year? At least $100 million, Michael Schmid, Apple's head of game business development for the App Store, testified on Wednesday in the third week of trial in federal court in Oakland, California. He made that disclosure during a cross examination conducted by Epic counsel Lauren Moskowitz of Cravath. Epic, which had sought to introduce its own system for in-app payments, has accused the iPhone maker of abusing its power over app developers to extract commissions of 15% to 30% per sale. Apple CEO Tim Cook is expected to testify at the trial's end on Friday. (Reuters)
Video: A look at the AT&T-Discovery deal tax moves
AT&T has reached a deal with Discovery to divest its WarnerMedia unit and combine it with Discovery to form a new company. Reuters video journalist Alex Cohen looks at how this process called a "Reverse Morris Trust" transaction works and some of the legal challenges it poses. Watch the video.
Coming up today
- The U.S. Senate Judiciary Committee is expected to vote on whether to advance five of Biden's judicial nominees including U.S. District Judge Ketanji Brown Jackson, a nominee to the D.C. Circuit who has been considered a possible future SCOTUS nominee by the president. Jackson, who is Black, is among a slate of diverse candidates Biden has put forward to join the federal bench.
- U.S. Bankruptcy Judge Robert Drain in White Plains, New York, will hold a status conference on OxyContin maker Purdue Pharma's much-delayed request to allow it to begin soliciting creditor votes for its proposed reorganization plan, which aims to resolve nearly 3,000 lawsuits accusing the company of fueling the national opioid crisis. The company has received some opposition to its solicitation materials from various states, cities, counties and tribes. Purdue's lawyers led by Davis Polk’s Marshall Huebner had planned to seek Drain's approval at the hearing but recently asked to have it delayed until May 26.
- A son of the co-founder of aircraft interior maker B/E Aerospace will ask U.S. District Judge Denise Casper in Boston to dismiss part of an indictment charging him with participating in a vast U.S. college admissions fraud scheme to secure his daughter's enrollment at Georgetown University. Prosecutors said Amin Khoury agreed to pay $200,000 in bribes to Georgetown's former tennis coach through a middleman in exchange for designating his daughter as an athletic recruit. Eoin Beirne of Mintz Levin is defending him.
- The full 7th Circuit in Chicago will consider en banc whether Indiana's sex offender registration law unconstitutionally violates the rights of offenders to travel by requiring those who relocated to the state after the law was enacted to register when they would not have had to do so had they committed their crimes in Indiana and never left the state. Gavin Rose of the ACLU of Indiana will argue for a group of offenders who earlier convinced a 2-1 panel to declare the law unconstitutional. Indiana Deputy Attorney General Kian Hudson will argue for the state, which has garnered the amicus support of 16 Republican state attorneys general.
- The New York-based 2nd Circuit will consider whether to revive a copyright lawsuit by a professional performance coach against the makers of the Showtime television series "Billions." Denise Shull claims a character on the show was based on a fictionalized version of herself from her book "Market Mind Games," and that the show ripped off scenes from the book. U.S. District Judge George Daniels, though, found the works "do not seem to resemble each other in the least." Jonathan Moskin of Foley & Lardner and Elizabeth McNamara of Davis Wright Tremaine will argue for Shull and Showtime, respectively.
Reporter's notebook: Workers' reluctance could stymie office reopenings
Reuters employment law reporter Daniel Wiessner on how employers are navigating office re-openings.
I've spent most of my decade-plus career in journalism working remotely and listening to friends and colleagues swear that they lacked the discipline to work from home, enjoyed their commute, or would miss Tuesday happy hours and real pants.
The pandemic forced everyone to rethink remote work and many people have embraced it, sweatpants and all. And that reluctance is presenting a major obstacle to the many companies that are planning to reopen their offices by Labor Day.
Littler Mendelson in March surveyed 1,160 executives and in-house counsel, and fewer than 50 said they believed their employees wanted to come back to the office. In response to that sentiment, many businesses are planning to offer a hybrid model in which employees spend, say, three days a week at the office and two at home.
Implementing work-from-home programs will be complicated, and presents plenty of opportunities to violate federal and state laws. Workers could claim hybrid programs don't accommodate their disabilities, that they weren't paid properly for time spent working at home, or that they were treated differently than colleagues who logged more hours at the office. And the experience of the past year will likely undermine some employers' claims that allowing remote work presents an "undue hardship," which would relieve them of offering telework as a reasonable accommodation.
We're likely on the cusp of a surge in remote work-related litigation. And I'll be here watching for it, in shorts.
In the courts
- U.S. District Judge Vince Chhabria in San Francisco during a hearing on Wednesday appeared called aspects of Bayer's proposed $2 billion settlement to resolve future claims that its Roundup weedkiller causes cancer "potentially reasonable." But he spent hours debating concerns about how the settlement would affect people exposed to Roundup but who are not sick. "The question is whether this is too confusing and is speaking of a problem that is too distant," he said. (Reuters)
- The 9th Circuit declined to revive a proposed class action accusing Uber Technologies and former CEO Travis Kalanick of misleading investors in the run-up to several corporate scandals. The three-judge panel said the lead plaintiff, represented by Robbins Geller's Joseph Daley, did not adequately allege that the defendants' alleged misstatements caused the losses the investors suffered. A. Matthew Ashley of Irell & Manella and Sarah Harris of Williams & Connolly argued the case in December for Uber for Kalanick, respectively. (Reuters)
- Wisk Aero, a flying taxi startup backed by Boeing and Google co-founder Larry Page's Kitty Hawk Corp, asked a federal judge in San Francisco to issue a preliminary injunction blocking rival Archer Aviation from using its trade secrets. The company's lawyers led by Quinn Emanuel's Yury Kapgan in the motion said that it's also now cooperating with a related investigation by the DOJ. Archer called the motion "baseless." (Reuters)
- U.S. Bankruptcy Judge Laurie Selber Silverstein in Wilmington, Delaware, on Wednesday offered a grim view of the status of the Boy Scouts of America's reorganization efforts, which have yet to gain support from ex-scouts who say they were sexually abused by scouting leaders. "I will say to solicit a plan that has no abuse survivor support is not an attractive option," she said. "But neither is engaging in protracted litigation that has the potential to end the Boy Scouts as it currently exists." She's expected to decide next week whether the BSA, repped by White & Case's Jessica Lauria, can begin vote solicitation on its reorganization plan. (Reuters)
- The SEC issued a $28 million award to a whistleblower for information that led U.S. authorities to bring foreign bribery charges against a subsidiary of Panasonic. Attorneys Christopher Connors of Connors Law Group LLC and Andy Rickman of Rickman Law Group LLP said they represented the whistleblower and confirmed the award related to the probe of Panasonics Avionics, which in 2018 agreed to pay $280 million to resolve DOJ and SEC charges.
(Reuters)
- The FTC and attorneys general in five states filed a federal lawsuit in Los Angeles accusing Frontier Communications of misrepresenting the internet speeds it offered to consumers. Frontier, which is emerging from bankruptcy protection, has more than 3 million U.S. internet service subscribers, the lawsuit said. (Reuters)
- The full 1st Circuit declined to reconsider its decision to overturn a first-of-its-kind injunction barring U.S. Immigration and Customs Enforcement from arresting immigrants when they make appearances at courthouses in Massachusetts. The Biden administration last month said it would reverse the Trump era policy that allowed for such arrests. The lawsuit challenging the courthouse arrests was pursued by two local district attorneys repped by Goodwin Procter, including Suffolk County District Attorney Rachael Rollins, who's in the running to be named the state's new top federal prosecutor. (Reuters)
- Drug compounding company Edge Pharma won the dismissal of a lawsuit closely watched in pharma circles by Azurity Pharmaceuticals accusing it of producing a medication identical to one of Azurity's drugs without FDA approval. U.S. District Judge Rya Zobel in Boston ruled that the federal Food, Drug and Cosmetic Act gives enforcement power to the FDA, not to private plaintiffs like Azurity. James Hulme of Arent Fox and William Egan of Robinson & Cole repped Azurity and Edge, respectively. (Reuters)
Industry moves
- Law firms are continuing to play musical chairs with data privacy lawyers as demand for that practice area grows (thanks, CCPA). McDermott in Chicago swiped the co-chair of Jenner & Block's data privacy and cybersecurity practice, David Saunders, and plaintiff-side firm DiCello Levitt Gutzler in New York added David Straite - who has gone up against Facebook, Google and other technology companies - from Kaplan Fox & Kilsheimer. (Reuters, Reuters)
- Star power is coming to Katten Muchin Rosenman: The firm has added former Crowell & Moring partner Ilana Lubin, who represents celebrities on endorsement deals, to its roster of M&A lawyers in New York as transaction volume is expected to accelerate. (Reuters)
- Sidley Austin is the latest law firm to bulk up its San Francisco presence, swiping corporate and capital markets partner Carlton Fleming from Cooley. Fleming represents life sciences and technology companies in IPOs and other matters. (Sidley)
- Carl Risch, the former assistant secretary of state for consular affairs, is joining Mayer Brown's global mobility and migration practice in D.C., the second ex-government official to join that office this week. (Mayer Brown)
- Seyfarth added a trio of employment lawyers in Houston and Atlanta, including partner Annette Idalski, who focuses on clients in the energy sector, defending against wage hour class and collective action issues. The group had been at Chamberlain Hrdlicka, where Idalski was national chair of the labor and employment department. (Seyfarth)
- Healthcare and transactional attorney Jeff Saunders has joined Cozen O'Connor as a shareholder in its Minneapolis office from Dorsey & Whitney. Cozen also hired health care lawyer Aselle Kurmanova from Seyfarth Shaw in New York. (Cozen, Cozen)
- Marc Wallenstein, a former federal prosecutor in Hawaii who prosecuted the first terrorism case against an active duty member of the U.S. military, has joined the plaintiffs' law firm Korein Tillery as a partner based in Honolulu. (Korein Tillery)
- Litigator Artin Betpera has joined Buchalter's Orange County, California, office as a shareholder and member of its litigation and class action practice groups. He was previously at Womble Bond Dickinson. (Buchalter)
On shaky ground, SCOTUS dismisses notion of restorative justice. The U.S. Supreme Court on Monday in Edwards v. Vannoy ruled that its decision last term, which held that the Constitution requires jury verdicts in criminal trials to be unanimous, doesn't apply to individuals already convicted. Hassan Kanu writes that the 6-3 decision is not only a loss for Thedrick Edwards and hundreds more in Louisiana and Oregon, the only two states that allow non-unanimous verdicts, but also for individuals who may have been convicted under other racist segregation-era laws and trial rules, sometimes for long, even lifetime, sentences. Kanu looks at the court’s reasoning, grounded largely on the perceived hassle of reviewing past convictions and trials. Learn more here.
Shareholders' best friend in class action against Under Armour? The SEC. Ever wondered why corporations hate to face simultaneous shareholder class actions and investigations by the SEC? Just look at a decision on Tuesday by U.S. District Judge Richard Bennett in Baltimore in a shareholder class action against the sportswear maker Under Armour. Bennett dismissed a previous shareholder complaint back in 2019. Under Armour argued that plaintiffs’ amended complaint contained no more evidence of fraud than the one Bennett previously tossed. But while Under Armour’s dismissal motion was pending, the company reached a $9 million settlement with the SEC. That settlement, writes Alison Frankel, made the judge's decision about dismissing the private class action a whole lot easier. Read here to find out why.
Lawyer speak: Recent SCOTUS ruling could impact challenges to PTAB judges
The U.S. Supreme Court found last month in Carr v. Saul, in which parties appealed their denial of disability benefits from a Social Security Administration administrative law judge to a federal court and added new appointments clause challenges against the ALJs, that those parties did not forfeit their appointments clause challenges by failing to initially raise the issue before the SSA. That decision could impact the outcome of Arthrex Inc. v. Smith & Nephew Inc and appointments clause challenges to PTAB judges, Foley & Lardner attorneys George Quillin and Randy Pummill discuss. Read more.
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