Good morning. We're still celebrating here after our colleagues WON A PULITZER for their examination of qualified immunity! On the agenda today is a meeting between Attorney General Merrick Garland and top media executives about the DOJ's leak probes and the expected Senate vote on possible SCOTUS contender Ketanji Brown Jackson's nomination to the D.C. Circuit. In Big Law, the industry waits to see if any firms will top the new associate salary scale Davis Polk debuted, and whether Coca-Cola will soon face a shareholder lawsuit over its law firm diversity policies. All that and so much more!
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Garland, media execs to meet following outcry over DOJ leak investigations
Susan Walsh/Pool via REUTERS
U.S. Attorney General Merrick Garland will sit down today with executives from The New York Times, The Washington Post and CNN following disclosures about efforts by the Trump-era DOJ to secretly obtain their journalists’ records during leak investigations.
DOJ's pursuit of not only news organizations' communications, but also of Democratic lawmakers, including some on the U.S. House of Representatives Intelligence Committee, is facing growing backlash. DOJ Inspector General Michael Horowitz on Friday said he'll investigate, and top Democrats in Congress said on Sunday they wanted former Attorneys General William Barr and Jeff Sessions to testify about what they knew.
New York Times Publisher A.G. Sulzberger in a statement said he hoped "to use the meeting to learn more about how this seizure of records happened and to seek a commitment that the Department of Justice will no longer seize journalists' records during leak investigations."
President Joe Biden has vowed to ban the "simply wrong" practice of seizing reporters' records, and DOJ has said it will follow that directive. But the new policy's exact details need to be hashed out. Garland told the Senate Appropriations Committee last week he expected it to be laid out in “some kind of memorandum," a route that would leave it easier to revoke than a regulation or law.
Ted Boutrous, a Gibson Dunn partner who repped the Times in responding to the DOJ leak probe, tweeted on Saturday that "it is more clear now than ever we need a federal shield law banning subpoenas and orders seeking journalists’ confidential source and other newsgathering information." Learn more.
SCOTUS short-lister Ketanji Brown Jackson faces D.C. Circuit confirmation vote
Ketanji Brown Jackson appears poised today to clear the U.S. Senate to join the D.C. Circuit, a potential stepping stone to a Supreme Court nomination in the future. Her high court prospects have made her President Joe Biden's highest-profile judicial nominee so far.
The nomination of the Black district court judge to the appellate gig was met with Republican opposition. Republican Senator Chuck Grassley of Iowa declared he would not support any nominee who did not commit to the conservative originalist judicial philosophy. Several GOP members questioned her on whether race plays a role in her approach to deciding cases. (She called injecting race into considering a case "inappropriate.")
But ultimately, three Republicans--Senators Susan Collins of Maine, Lindsey Graham of South Carolina and Lisa Murkowski of Alaska--joined with Democrats on Thursday to vote 52-46 to cut off debate on her nomination, setting up the expected confirmation vote today.
Biden's 20 judicial nominees thus far have been a diverse group, and he's pledged that if a Supreme Court vacancy opens up he'll take the historic step of nominating a Black woman. Notably, Jackson, a Harvard Law School graduate, early in her career served as a clerk to 82-year-old liberal Justice Stephen Breyer, who is under pressure to retire. See what she told the Senate Judiciary Committee about her approach to judging.
Congratulations to Reuters reporters Andrew Chung, Lawrence Hurley, Andrea Januta, Jaimi Dowdell and Jackie Botts, who won a Pulitzer Prize for explanatory reporting for their series on qualified immunity, showing how the legal doctrine protects police accused of using excessive force. You can read their four-part series here.
Number of the day:
$202,500
Davis Polk on Friday upped the ante in the Big Law compensation wars by setting starting salaries for its first-year associates at $202,500. That's $2,500 higher than the $200,000 first-year salary that rival Milbank unveiled the day before. Several firms including Baker McKenzie and Dechert followed Davis Polk's lead and said they too would offer its pay scale too. The standard starting salary for associates at Big Law firms in New York had been $190,000 since 2018. Big Law is grappling with how to keep associates engaged as deal work volume stays high and as the coronavirus pandemic raises the risk of burnout. (Reuters)
Industry buzz
- A group of Coca-Cola Co shareholders represented by the conservative American Civil Rights Project in a letter threatened legal action against the company's board unless it ended what they alleged were illegal policies that the company adopted in January under its former general counsel, Bradley Gayton, to promote diversity among its outside counsel. Gayton resigned in April, after only eight months on the job. (Reuters)
- Litigation funder Legalist has hired Anand Upadhye, the former vice president of business development at legal research company Casetext, as director of investments and Jaemin Chang, a former Fox Rothschild partner, as assistant general counsel. (Reuters)
- Former Kansas Attorney General Vern Miller, who during a long career in law enforcement garnered attention in the 1960s and 1970s with stunts like jumping out of the trunk of undercover officers' cars to grab suspects, has died. He was 92. (Witchita Eagle)
- Skadden and Kirkland & Ellis are spearheading online sporting goods retailer Signa Sports United GmbH's $3.2 billion merger with special purpose acquisition company Yucaipa Acquisition Corp, in the first known merger between a U.S. SPAC and a German company. Kirkland's David Feirstein, Marshall Shaffer, and Christian Nagler are advising Yucaipa, while Skadden's Stephan Hutter and Howard Ellin are advising Signa Sports. (Reuters)
- The lobbying industry is grappling with changes, from how to adapt to new technology and implement effective diversity initiatives to an expected boost from the Biden administration's infrastructure bill. Ivan Zapien, the leader of Hogan Lovells' government relations and public affairs practice, discusses where the industry is at today on all those issues, and what’s next. (Reuters)
Reuters video journalist Tom Rowe gives you an early view of the week ahead in legal news. Watch the video. For a quick take on what's coming this week, listen to journalist Alex Cohen's audio Lookahead.
Coming up today
- The U.S. Supreme Court is expected to issue rulings, with decisions outstanding in major cases including a Republican bid to invalidate Obamacare, a dispute involving LGBT and religious rights and another focused on voting restrictions. The court could also as soon as today say whether it will take up a closely-watched case against Harvard over its race-conscious college admissions practices. The justices will have additional rulings on Thursday as the court's term winds down. Learn more.
- A trade group representing General Motors, Toyota, Volkswagen and other major automakers will take the state of Massachusetts to trial in its effort to block a measure that voters approved through a ballot initiative last year that expanded the state's "Right to Repair" law, which would increase access to vehicle data. Laurence Schoen of Mintz and John Nadolenco of Mayer Brown are pursuing the case for the Alliance for Automotive Innovation and will face a team of attorneys from Massachusetts Attorney General Maura Healey's office.
- Investment fund owner Donald Blakstad is slated to go to trial before U.S. District Judge Edgardo Ramos in Manhattan on charges that he engaged in a scheme to trade on inside information concerning the biotech company Illumina and defrauded investors in companies he controlled. Blakstad, represented by Eugene Iredale of Iredale and Yoo, denies the allegations.
- The environmental group California River Watch will urge the 9th Circuit in San Francisco to revive a lawsuit seeking a court determination as to whether the city of Vacaville generates the chemical compound hexavalent chromium through its drinking water system at levels that are dangerous to human health. U.S. District Judge Kimberly Mueller in Sacramento last year ruled that the group’s claims under the Resource Conservation and Recovery Act failed because the chemical's alleged presence in the city's potable water cannot qualify as the type of "solid waste" the statute regulates.
- The 9th Circuit will also consider whether to uphold a ruling against the San Francisco Bay Conservation and Development Commission in its challenge to the U.S. Army Corps of Engineers’ plans for the maintenance dredging of shipping channels in the San Francisco Bay area.
- Boutique investment banking firm New York Bay Capital and telecommunications provider GigNet will face off in a virtual bench trial before U.S. District Judge Gregory Woods in Manhattan over whether GigNet is contractually required to pay out nearly $4 million in success fees to the investment firm after the company raised millions of dollars to finance a large telecommunications network in Mexico. Evangelos Michailidis of Duane Morris and Joseph Ceccarelli of Ceccarelli Law Firm represent New York Bay Capital while James Mahon and Sarah Klein of Becker Poliakoff are defending GigNet, formerly known as Cobalt Holdings.
Later this week
- Mallinckrodt on Tuesday will ask U.S. Bankruptcy Judge John Dorsey in Wilmington, Delaware, to allow it to solicit creditor votes for its proposed reorganization plan, which would cut its debt stack by $1.3 billion and set up a $1.6 billion trust to pay out people and entities that have filed opioid-related claims against the company. After receiving several objections to its disclosures associated with the plan, Mallinckrodt, represented by George Davis of Latham & Watkins, has postponed the hearing multiple times.
- Executives from Google and Amazon.com head the list of witnesses for a hearing on Tuesday before the U.S. Senate Judiciary Committee's antitrust subcommittee along with an executive from speaker maker Sonos, which has been critical of the two tech giants. Ryan McCrate, an associate general counsel, will speak for Amazon while public policy specialist Wilson White will testify for Google. Sonos General Counsel Eddie Lazarus will also testify. Learn more about the hearing.
- Disgraced former movie producer Harvey Weinstein is expected at a Tuesday hearing before Erie County Court Judge Kenneth Case in New York to again oppose an effort to extradite him to California to face rape and sexual assault charges there. Weinstein has challenged the extradition on the grounds that the paperwork was not done properly. The extradition has been repeatedly delayed because of the pandemic. He is already serving a 23-year sentence in upstate New York after being convicted on separate sexual assault and rape charges. Norman Effman is representing Weinstein.
- Former Bumble Bee Foods CEO Chris Lischewski on Wednesday will urge the 9th Circuit to overturn his conviction on charges that he conspired to fix prices for canned tuna with executives at other companies in violation of the Sherman Act. Lischewski, represented by San Francisco-based criminal defense lawyer John Cline, was sentenced to three years in prison.
- A group of hospitals including AdventHealth Orlando and University of Alabama Hospital on Thursday will urge the 8th Circuit to strike down a U.S. Department of Health and Human Services policy on allocating kidney transplants. The 2019 policy replaced a system allocating kidneys based on so-called donation service areas and regions with one giving priority to transplant centers within 250 nautical miles of the donor's hospital. The hospitals, represented by Jacob Roth of Jones Day, allege the so-called fixed circle policy was passed without following proper rulemaking procedure and that it will result in fewer transplants and thus more patient deaths. Bradley Hinshelwood of the DOJ will defend the policy.
- U.S. District Judge Jed Rakoff in Manhattan on Friday will sentence two consultants who worked with the online marijuana delivery company Eaze Technologies and were convicted of participating in a scheme to get $150 million in marijuana payments past banks by keeping the financial institutions in the dark about what their cardholders were ordering. Hamid Akhavan and Ruben Weigand are being defended by William Burck of Quinn Emanuel and Michael Gilbert of Dechert, respectively.
Meet the Schulte Roth partner who helped an activist hedge fund take on Exxon
Engine No. 1, a small activist hedge fund, shocked the energy industry recently when its nominees won three seats on Exxon Mobil's board, an upset victory that could push the oil giant to address growing investor concerns about global warming.
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Ele Klein
Schulte Roth & Zabel
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It had legal help: Ele Klein, Schulte's M&A and securities group chair and shareholder activism group co-chair, advised on the campaign. He spoke with Caroline Spiezio about the successful effort.
On his response when he heard Engine No. 1’s Exxon goal: "Admiration and respect."
On shareholder vote day: "One of the reasons why we have to participate is that we have to be ready to react to things that may come up. The unexpected becomes expected in a lot of situations."
On the campaign’s impact: "It definitely validates that a well-thought-through and analyzed situation can succeed, particularly with an environmental twist. … [It tells activists that] environmental issues do get support - people have talked about it, you really see it happening here." Check out the full interview.
"The federal courts are courts of limited jurisdiction. No matter how interesting or elegant a party’s argument, the federal courts have no power to breathe life into disputes that come to us without it."
U.S. Circuit Judge J. Harvie Wilkinson III for a 4th Circuit panel rejecting a federal worker union's challenge to a now-withdrawn memo of the U.S. Office of Special Counsel that said federal employees could not advocate for or against Donald Trump's impeachment. The memo was later withdrawn after Trump left office, but the American Federation of Government Employees argued the policy should still be enjoined. But Wilkinson, a Reagan appointee, said the case was moot and that the court "has no authority to write an advisory opinion on an advisory opinion." (Reuters)
In the courts
- U.S. District Judge Lynn Hughes dismissed a lawsuit brought by 117 workers at a Texas hospital over its requirement that they be vaccinated against COVID-19. The ruling for Houston Methodist Hospital appeared to be the first time a federal judge had ruled on the legality of such a mandate. (Reuters)
- A U.S. Army Special Forces veteran and his son pleaded guilty in Tokyo to charges that they illegally helped former Nissan Motor Chairman Carlos Ghosn flee Japan hidden in a box aboard a private jet in December 2019. Lawyers for Michael Taylor and his son, Peter Taylor, including Jackson Lewis' Paul Kelly and Winston & Strawn's Abbe Lowell unsuccessfully fought a months-long court battle in Massachusetts to block their extradition to Japan. (Reuters)
- The New York-based 2nd Circuit rejected the FTC's claims that 1-800 Contacts entered into anticompetitive agreements to settle trademark cases against rival online contact lens sellers that restricted their ability to advertise their products online. The court agreed with defense lawyer Stephen Fishbein of Shearman & Sterling that the agreements did not constitute an unfair method of competition under the FTC Act. (Reuters)
- U.S. District Judge Colleen McMahon in Manhattan ruled that AbbVie must face a proposed class action on behalf of insurers and health plans that claim they overpaid for the company's Alzheimer's drug Namenda because of illegal settlements that delayed the launch of generic versions of the drug. Martin Toto of White & Case is defending AbbVie, while Marvin Miller of Miller Law and Peter Safirstein of Safirstein Metcalf represent the plaintiffs. (Reuters)
- Trade groups including CTIA, USTelecom and the New York State Telecommunications Association persuaded U.S. District Judge Denis Hurley in Central Islip, New York, to block a new New York law that requires companies to provide discounted internet service to low-income households. Jeffrey Lamken of MoloLamken and Scott Angstreich of Kellogg, Hansen, Todd, Figel & Frederick are among the lawyers representing the plaintiffs. (AP)
- The Federal Circuit on a 2-1 vote ruled that smartphones made by Apple and Samsung don't infringe a patent related to improvements to digital camera technology, finding the relevant parts of the patent invalid. The court found that the patent owned by inventors Yanbin Yu and Zhongxuan Zhang covered an abstract, unpatentable concept. It was a victory for defense lawyers Heidi Keefe of Cooley for Apple and Doug Hallward-Driemeier of Ropes & Gray for Samsung. (Reuters)
- The Tennessee Court of Appeals declined to put on hold a July 26 trial that will determine if Endo International should pay up to $2.4 billion to several counties for fueling the opioid epidemic after a judge as a sanction entered a default judgment of liability against the drugmaker. Endo, represented by Ronald Range of Baker Donelson, denies wrongdoing and is seeking to overturn the default judgment. (Endo)
- The SEC in a lawsuit filed in Denver accused a biotechnology company and two of its founders of defrauding private investors out of at least $10 million by misrepresenting its funding and research. The SEC claims Cell>Point CEO Greg Colip and his brother, CFO Terry Colip, falsely told investors that the company's cancer imaging agent was nearing the end of clinical trials when it actually had been halted in 2014. Alex Lakatos of Mayer Brown is defending the Colips. (Reuters)
- Members of a 9th Circuit panel on Friday appeared skeptical of arguments by groups that represent freelance journalists and photographers that California's strict worker classification law AB5 violates freelancers' free-speech rights. The case, by the American Society of Journalists and Authors and the National Press Photographers Association, is being led by lawyers at the conservative Pacific Legal Foundation. (Reuters)
Columnist spotlight: Gym holding company claims Gordon Rees wasn't authorized to settle N.Y. AG case
Last February, Gordon Rees signed a settlement agreement with the New York AG to resolve claims that New York Sports Clubs and Lucille Roberts gyms were fleecing customers during the pandemic. Alison Frankel writes that the settlement, which called for the defendants to surrender a $250,000 surety bond, was on behalf of both companies operating the gyms, Town Sports International LLC and its parent, Town Sports International Holdings. But in a lawsuit filed on Thursday in Manhattan State Supreme Court, the holding company contends that at the time of the agreement with the AG's office, Gordon Rees wasn’t its counsel anymore. The AG says that’s bosh. Gordon Rees has called the assertion a "blatant falsehood." Read Frankel’s latest column to get the details on the dispute.
Lawyer speak: False Claims Act recovery amounts crashed last quarter. Why?
After recovering a record $3.23 billion in False Claims Act cases in the first quarter of fiscal year 2021, the DOJ recovered just $186 million in the second quarter. Christian Sheehan of Arnold & Porter Kaye Scholer examines what caused the crash. Read more.
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