Good morning. Top New York law firms like Cravath and Davis Polk have a new pandemic-timed issue to grapple with — the loss of hundreds of associates who fled the city or joined rivals looking to staff up in the Big Apple. Big Tech critic Lina Khan is set to head up the FTC, the DOJ is once again taking a stance that President Joe Biden's policy views contradict, a judge blocked Biden's oil and gas lease freeze, and an SDNY prosecutor who helped recover a dinosaur skull from Nicolas Cage has jumped to Simpson Thacher. We know, you're like, why didn't you lead with that?!
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New York's top law firms ask: Where did our associates go?
Source: Decipher Investigative Intelligence. Data of moves from Jan. 1 to May 28
As major law firms invite attorneys back into their offices, some of New York's most elite firms will find something startling: Many of the familiar faces in their junior ranks left for other jobs and cities amid the pandemic.
More than 270 associates had by May left the 10 most profitable New York firms in 2021 including Cravath, Sullivan & Cromwell, Davis Polk and Paul Weiss, Caroline Spiezio reports, citing data collected from LinkedIn profiles and hiring due diligence provider Decipher Investigative Intelligence.
The majority stayed in Big Law, often lured by non-New York firms with a strong presence in the tech sector such as Silicon Valley-based Cooley; Gunderson Dettmer; and Fenwick & West. Several associates said they also left seeking more affordable cities or ones near family, along with work-life balance and tech clients.
Those life factors could make it hard to retain them by simply raising salaries, as several firms including Milbank and Davis Polk are now. Willard Younger, a New York area native, left his associate position at Cravath and, with his wife, then an associate at Proskauer Rose, moved to Tennessee earlier this year to become associates at Waller Lansden Dortch & Davis.
"We started evaluating, 'What are we really paying for in New York?'" he said. "With all the amenities gone, or closed off, it was definitely tougher to justify both of us working Big Law hours in a small apartment." Learn more.
Biden climate agenda hit as federal judge blocks oil and gas lease freeze
President Joe Biden's climate agenda suffered a courtroom setback on Tuesday, when a federal judge in Louisiana issued a nationwide injunction blocking his administration's pause on oil and gas leasing on public lands and waters, Nichola Groom reports.
U.S. District Judge Terry Doughty sided with Republican Louisiana Attorney General Jeff Landry and officials in 12 other states by blocking the U.S. Department of Interior from continuing to implement an executive order Biden issued in January by freezing new drilling auctions pending a review.
The judge, a Trump appointee, ruled the administration failed to follow proper rulemaking procedures, provide any "any rational explanation" for nixing lease sales, or allow the public notice and time to comment before implementing the freeze. "The plaintiff states' claims are substantial," he wrote. "Millions and possibly billions of dollars are at stake."
Landry called the ruling "a victory not only for the rule of law but also for the thousands of workers who produce affordable energy for Americans." The Interior Department said it would comply with the ruling but did not say when auctions might resume. Learn more.
Industry buzz
- U.S. District Judge Jack Weinstein, who during his five decades as a Brooklyn-based judge became known for criticizing the federal sentencing guidelines and helping change how the courts managed mass tort cases, has died. He was 99. (Reuters)
- Lina Khan, an antitrust researcher at Columbia Law School who has focused her work on Big Tech's immense market power, was named by President Joe Biden as the FTC's newest chair shortly after the Senate voted to confirm her as a commissioner. Khan was on the staff of the House Judiciary Committee's antitrust panel, and helped write a massive report that sharply criticized Amazon, Apple, Facebook and Google for allegedly abusing their dominance. (Reuters)
- Biden also announced plans to nominate five more federal judges, bringing the total number of judicial nominees to 24. His latest slate of picks include Myrna Pérez, the director of voting rights at the Brennan Center for Justice, whom Senate Majority Leader Chuck Schumer recommended for the New York-based 2nd Circuit. (New York Times)
- In 2015, Hollywood actor Nicolas Cage turned over a real national treasure to the Mongolian government by agreeing to forfeit a rare stolen dinosaur skull to U.S. authorities. Now Martin Bell, the SDNY prosecutor behind that case and several major corruption and securities fraud prosecutions, is leaving the government. He's joining Simpson Thacher as a partner. (Reuters)
- Boies Schiller and O'Melveny are among the latest firms to follow the lead of Davis Polk in bringing associate salaries for their 2020 classes to $205,000. The moves come as law firms up the ante for junior talent. (Reuters)
- Cravath is making $6 million in donations to five civil rights organizations and Fisk University, a historically Black university in Nashville. The gifts were funded through attorneys’ fees for pro bono work completed for United States v. Jefferson County, which involved claims by Black and women workers alleging discrimination by government employers in Birmingham, Alabama. (Reuters)
- Manhattan-based U.S. Bankruptcy Judge Cornelius Blackshear has died at the age of 81 after a long battle with a stroke-related illness. Blackshear was the first Black person to serve as a U.S. trustee. He later as a judge oversaw the bankruptcies of Pan Am and Federated Department Stores. (Reuters)
- Reed Smith is offering severance for its legal secretaries in the UK and the U.S. as part of plans to create new administrative positions, following similar changes from Clifford Chance and Dentons. (Law.com)
The U.S. House of Representatives Oversight and Reform Committee on Tuesday released 229 pages of emails and other documents that detailed how former President Donald Trump pressed the DOJ and then-Acting Attorney General Jeffrey Rosen during his waning weeks in office to join his failed effort to overturn his election defeat based on his false claims of voting fraud. Many of the overtures came from then-White House Chief of Staff Mark Meadows, who in one email sent Rosen a link to a YouTube video asking the DOJ to investigate an unfounded conspiracy involving the CIA. Rosen forwarded the email to then-Acting Deputy Attorney General Richard Donoghue. "Pure insanity," he responded. (Reuters)
Coming up today
- Former Bumble Bee Foods CEO Chris Lischewski 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.
- Federal prosecutors in Manhattan are slated to file their sentencing recommendations for Michael Avenatti, the celebrity lawyer and once a vocal nemesis of former President Donald Trump, who was convicted in February 2020 for trying to extort Nike out of millions of dollars and defraud a youth basketball coach he represented. Avenatti is also a defendant in three forthcoming criminal trials in New York and California on fraud and other charges. His lawyers, including Miami-based Scott Srebnick, are asking U.S. District Judge Paul Gardephe to sentence him on June 30 to no more than six months in prison followed by 12 months of home confinement.
- New York doctor Jeffrey Goldstein will be sentenced by U.S. District Judge Kimba Wood in Manhattan after admitting that he accepted kickbacks in the form of speaker fees from Insys Therapeutics in exchange for prescribing the drugmaker’s addictive fentanyl spray Subsys. He is one of a number of medical practitioners and former Insys executives to face criminal charges stemming from investigations into the opioid manufacturer. Goldstein, represented by Marc Agnifilo of Brafman & Associates, has asked for a sentence of probation and home confinement without prison time.
- Constellation Brands will ask U.S. District Judge Lewis Kaplan in Manhattan to toss a lawsuit by Corona beer maker Cerveceria Modelo alleging that the large alcoholic beverage company’s Corona Hard Seltzer infringes its trademarks and breaches their licensing agreement. Anheuser-Busch InBev's Modelo, represented by Michael Steinberg of Sullivan & Cromwell, argues that it only allowed Constellation Brands to use the Corona trademark on U.S.-sold beer. Defense lawyers led by Sandra Goldstein of Kirkland & Ellis counter that hard seltzer constitutes "beer" under their agreement.
- The founder of an advocacy group for parents whose children died due to opioid abuse will urge U.S. Bankruptcy Judge Robert Drain in White Plains, New York to appoint an examiner in Purdue Pharma’s Chapter 11 case. Peter Jackson, who says his daughter died after taking an OxyContin pill, says an examiner is necessary to investigate whether the proposed settlement with the Sackler family members that own the company was made in good faith. He’s being repped by Jonathan Lipson of Temple University Beasley School of Law. Marshall Huebner of Davis Polk reps Purdue.
From behind the scenes to chief SDNY bankruptcy judge, Cecelia Morris has seen it all
For the chief judge of one of the busiest bankruptcy courts in the country, doing right by debt-burdened individuals is critical for many reasons. But one she tries to keep in mind is that those people often can't afford to appeal a ruling they think is wrong.
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Chief Judge Cecelia Morris
U.S. Bankruptcy Court for the Southern District of New York
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That's just one of the insights Maria Chutchian gleaned from interviewing Chief Judge Cecelia Morris, the top judge in the U.S. Bankruptcy Court for the Southern District of New York. That court often plays host to some of corporate America's biggest Chapter 11 cases, but Morris more often oversees consumer bankruptcies in Poughkeepsie, New York.
The Texas-raised judge said focusing on consumer cases was a decision she made when she first joined the bench in 2000, knowing she would feel "very comfortable" taking those on. Her appointment as a judge came after 12 years running the court from behind the scenes as clerk of the court.
"Most of the people that come before us that are consumer filers do not have the resources to appeal," she said. "So one of the things you want to do as much as you possibly can – and I think this is true of all judges but I really feel very committed to it in a consumer case – you want to get it right." Learn more about Morris' approach to judging.
"The president believes the department should return to its prior practice, and not carry out executions."
White House spokesperson Andrew Bates, after the DOJ in a brief asked the U.S. Supreme Court to reinstate the death sentence of Boston Marathon bomber Dzhokhar Tsarnaev. The 1st Circuit last year ordered a new trial to determine what sentence he deserved for the death-penalty-eligible crimes he was convicted of. Bates said the DOJ has "independence" to pursue the appeal but that President Joe Biden had made clear he has "deep concerns" about capital punishment. (Reuters)
In the courts
- Harvey Weinstein can be extradited to California from New York to face rape and sexual assault charges, Erie County Court Judge Kenneth Case in Buffalo, New York, ruled, nearly a year after Los Angeles prosecutors asked that the convicted former movie producer be moved. "If California doesn't come to pick up Mr. Weinstein within a reasonable period of time, certainly come back to see me," Case told Norman Effman, a defense lawyer who fought against extradition. (Reuters)
- Rapper Jay-Z sued photographer Jonathan Mannion — who shot the cover of his 1996 debut album "Reasonable Doubt" — in Los Angeles federal court, accusing him of misusing his likeness on merchandise including photo prints, shirts, and turntable mats and licensing his image to others. For the case, Jay-Z turned to his frequent attorney Alex Spiro of Quinn Emanuel. (Reuters)
- U.S. District Judge Edward Davila in San Jose rejected Theranos founder Elizabeth Holmes' proposal to send potential jurors for her criminal fraud trial a questionnaire with more than 100 questions, saying he would send them a slimmed-down version instead. Defense lawyer Kevin Downey of Williams & Connolly argued the questions would help find impartial jurors for the highly-publicized case. (Wall Street Journal)
- A group of investors and the Interfaith Center on Corporate Responsibility sued the SEC in federal court in D.C. to challenge rule changes adopted during the Trump era in 2020 that raised the bar for filing resolutions at annual shareholder meetings to call for new priorities or reforms. The investors' lawyers led by MoloLamken's Robert Kry contend the SEC failed to follow rulemaking procedures when adopting the rule, which takes effect next year. (Reuters)
- New York Attorney General Letitia James secured a court order requiring Eastman Kodak CEO James Continenza and the company's general counsel, Roger Byrd, to publicly testify as part of an investigation into allegations of insider trading. Those allegations center on stock purchases by Continenza that preceded an ill-fated deal in which the Trump administration would lend Kodak $765 million to back production of pharmaceutical components to help fight the COVID-19 pandemic. Michael Asaro of Akin Gump and John Nowak of Paul Hastings are representing Kodak and Continenza, respectively. (Spectrum News)
- The 4th Circuit declined to revive a psychotherapist's lawsuit challenging Maryland's ban on treating LGBT+ minors with "conversion therapy," which aims to alter a person’s sexual orientation or gender identity. The court ruled that Governor Larry Hogan and Attorney General Brian Frosh could not be sued by Christopher Doyle and his lawyers at the conservative religious legal group Liberty Counsel because they were not directly tasked with enforcing the law. It said a lower court could decide whether Doyle can amend his complaint to sue the right defendants. (Reuters)
- Scottish rock band The Jesus and Mary Chain sued Warner Music Group in Los Angeles federal court, alleging the company failed to comply with the band's notice that it was terminating the label's interest in its music. WMG has "no viable grounds" for denying the band its rights "under the current state of the law," the band's attorney, Evan Cohen of Cohen Music Law, said. (Reuters)
- The D.C. Circuit shot down a challenge by stock exchange operators including New York Stock Exchange and Nasdaq to an SEC proposal to give market participants a greater say in how market data is published. The court said the regulator’s call for the exchanges to propose ways to share decision-making power with investors and other stakeholders was not a final action that it could review. Davis Polk, Gibson Dunn and Schiff Hardin pursued the case. (Reuters)
Industry moves
- Capital markets partner Eric Sibbitt is taking his talents to Paul Hastings after 16 years at O'Melveny & Myers. Sibbitt, who previously chaired O’Melveny’s financial technology industry group, will be based in Paul Hastings’ San Francisco office. (Reuters)
- Hiring in Houston is heating up. McGuireWoods just nabbed its fifth partner, M&A lawyer Edmund Daniels, in its Houston office. Daniels leaves Haynes and Boone and is the previous general counsel and chief compliance officer of Panda Power Funds. (McGuireWoods)
- IP litigator Lori Gordon is leaving King & Spalding to join Perkins Coie’s intellectual property practice in Washington, D.C. Gordon has defended clients including TD Ameritrade and Cisco Systems. (Perkins Coie)
- Sheppard, Mullin, Richter & Hampton is adding another notch to its healthcare belt with the addition of Nioura Ghaznihas from Manatt. She is at least the fourth healthcare partner to join the firm this year, following the hiring of John Carroll, Xavier Baker and John Glassgow. (Sheppard Mullin)
- Martin Gusy is leaving K&L Gates to join Bracewell as a partner where he will lead the firm's international arbitration practice from New York. He co-led K&L Gates' international arbitration practice. (Reuters)
- Hughes Hubbard & Reed has added Remy Gerbay as a partner in its arbitration group in Washington, D.C. He joins from MoloLamken. (Hughes Hubbard)
- Matthew Laroche, a former federal prosecutor in Manhattan, is rejoining Milbank as special counsel in the firm's litigation practice. (Milbank)
- Withers has tapped Naomita Yadav as a partner in its trust and estate planning practice in San Francisco. She leaves her position as a senior manager at Ernst & Young. (Withers)
 Back to the future on voting rights. Last week, Attorney General Merrick Garland announced a shift in the DOJ's approach to protecting Americans' voting rights by saying the department will more aggressively oppose efforts to curb the franchise, especially for people of color. The DOJ’s Civil Rights Division will increase its enforcement staff for protecting voting rights, will promptly prosecute violations of federal voting laws, and will scrutinize a rash of newly enacted laws in Republican-led states that make it harder to vote. Hassan Kanu writes that shift in approach is "sorely needed," as more states mull enacting restrictive voting provisions. But he said the announcement also "suggests we may be at the most precarious moment in the decades-long period of peaceful democracy" since the 1960s. Learn more.
 U.S. Chamber, trade groups try, try again for SCOTUS review of California PAGA suits. In 2014, the California Supreme Court ruled that employers cannot compel arbitration of workers’ claims of labor law violations under the state’s Private Attorney General Act. In 2015, the 9th Circuit agreed that the Federal Arbitration Act does not preempt litigation of PAGA claims. Ever since, employers and their friends at the U.S. Chamber of Commerce and other industry groups have been nudging the U.S. Supreme Court to swat down what they have characterized as California’s attempt to circumvent the FAA. So far, the judges have been supremely uninterested, rejecting at least five petitions challenging the PAGA carveout. But as Alison Frankel reports, the ever-persistent business lobby is back for another try at the Supreme Court, filing amicus briefs on Monday that argue PAGA has essentially nullified employee arbitration in California. Will this time be the charm? Read here for Frankel’s take.
Lawyer speak: Who's in charge? an overview of U.S. digital asset regulation
As more financial institutions and governments lean on cryptocurrencies, many are pondering whether digital assets should be considered commodities or securities. Shearman & Sterling's global head of finance Donna Parisi explores the regulatory challenges when categorizing crypto as a commodity under the CFTC or as a security under the SEC. Read more.
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