Good morning. Michael Avenatti is waking up a day after being sentenced to 2-½ years in prison, OxyContin maker Purdue Pharma is a step closer to winning approval of its restructuring plan, and a new recruit by White & Case from Quinn Emanuel is providing proof that the market for IP lawyers is heating up. It's Friday, hurray!
Were you forwarded this email? Subscribe here.
Michael Avenatti's 'outrageous' crimes result in 2-1/2 year sentence
Michael Avenatti choked up as he appeared before U.S. District Judge Paul Gardephe on Thursday.
The California lawyer only three years ago became a fixture of cable TV and nemesis to former President Donald Trump while representing the porn star Stormy Daniels, Jonathan Stempel reports. He even toyed with a White House run.
But Avenatti found himself in a Manhattan courtroom after being convicted of trying to extort Nike. Prosecutors said he threatened to expose alleged corrupt payments Nike made to families of college basketball prospects unless it forked over up to $25 million to Avenatti and celebrity attorney Mark Geragos to conduct an internal probe. Geragos was never charged.
Prosecutors said Avenatti exploited information he learned from a client, youth basketball coach Gary Franklin, whom he also defrauded. Avenatti told Gardephe he had "lost his way," after years of "fighting for the little guy against the Goliaths." Avenatti is separately facing trial in a case set for jury selection next week in California over allegations he defrauded other clients.
"TV and Twitter, your honor, mean nothing," Avenatti, who frequently used the micro-blogging platform to lash out at critics, told the judge. "Everyone wants to ride in a limo with you, but very few are willing to sit next to you on the bus. Even fewer, your honor, are willing to take your calls from prison."
Prison is where Avenatti is likely headed, as Gardephe said Avenatti's "outrageous" conduct warranted a 2-1/2 year stint. "Mr. Avenatti had become drunk on the power of his platform, or what he perceived the power of his platform to be," he said. Learn more.
Industry buzz
- Former CIA Director Gina Haspel has joined King & Spalding’s national security team as a senior advisor. She is one of several Trump administration officials in the firm’s government matters practice, including former director of national intelligence Dan Coats and former Deputy Attorney General Rod Rosenstein. (Reuters)
- The market for IP lawyers continues to heat up. In the latest big hire in the field, White & Case has recruited Peter Armenio, who co-led Quinn Emanuel's life sciences practice. Armentio focuses on patent litigation in the pharmaceutical and medical device arenas and will be based in New York. (Reuters)
- U.S. District Judge Thomas Durkin, the Chicago judge who held Tom Girardi in contempt over $2 million in missing settlement proceeds, plans to hold an evidentiary hearing by Sept. 14 to determine whether to hold two other former Girardi Keese lawyers in contempt. David Lira and Keith Griffin are fighting being held in contempt for failing to alert the judge to missing money owed to the families of victims of the 2018 Lion Air 610 crash in Indonesia. (Law.com)
- The 6th Circuit has dashed the hopes of a former employee in Williams & Connolly's finance department seeking to obtain disability benefits because of "chronic stress" she said she incurred as a result of her "traumatic" experience working at the firm. Lisa Holden, in a lawsuit against the D.C. firm's benefits administrator Unum, said her stress stemmed from excessive work, bullying and sexual harassment by an executive at the firm. (Reuters)
- Despite recent regulatory changes in Arizona that have opened the door to law firms taking on outside investors, major Phoenix-based firms like Lewis Roca Rothgerber Christie and Snell & Wilmer remain on the sidelines. Ken Van Winkle, Lewis Roca's managing partner, told The American Lawyer that while private equity shops have expressed interest in investing in the 220-lawyer firm, taking in outside money would require major structural changes. (The American Lawyer)
- Edward Diskant, who as the head of the public corruption unit at the Manhattan U.S. Attorney's Office supervised the criminal cases against Jeffrey Epstein and Steve Bannon, has officially joined McDermott Will & Emery after departing the office in May. Asked about the ongoing probe of Rudy Giuliani, he declined to comment beyond saying he thinks highly of Rebekah Donaleski, the prosecutor now leading the probe. (Reuters)
- Goodwin Procter and Greenberg Traurig are spearheading Boston-based cryptocurrency platform Circle's efforts to go public through a $4.5 billion merger with a blank check company backed by former Barclays CEO Bob Diamond. (Reuters)
- Uber deputy general counsel Keir Gumbs, who was part of the team that guided the ride-sharing giant's 2019 IPO, is joining fintech company Broadridge Financial Solutions as its chief legal officer. Gumbs, who spent 13 years as a partner in Covington & Burling's corporate practice before joining Uber, replaces Adam Amsterdam, who previously led Broadridge’s legal department. (Reuters)
The DOJ declined to prosecute 82% of people suspected of federal hate crimes over most of the past two decades, according to a report released on Thursday, a rate far lower than for other federal crimes. The Bureau of Justice Statistics said prosecutors investigated 1,864 suspects for possible hate crimes from Oct. 1, 2004 - the beginning of the 2005 fiscal year - through Sept. 30, 2019, and referred only 17% of those individuals for prosecution. The report comes amid a push by Attorney General Merrick Garland to increase federal prosecutors' focus on hate crimes and improve coordination with local law enforcement and community advocacy groups. (Reuters)
Coming up today
- Homayoun Zadeh, an associate professor of dentistry at the University of Southern California, is set to become the latest parent to admit wrongdoing in the U.S. college admissions scandal. Prosecutors had accused Zadeh, who will plead guilty to a tax offense, of agreeing to pay $100,000 to secure his daughter's admission to the university as a fake lacrosse recruit. The plea deal his lawyer, Tracy Miner of Miner Siddall, negotiated calls for U.S. District Judge Nathaniel Gorton in Boston to sentence him to six weeks in prison.
- A 9th Circuit panel in Seattle will consider whether to revive a proposed class action accusing Costco Wholesale of failing to disclose to investors that the bulk retailer had inadequate information technology and financial controls. Nicholas Porritt of Levi & Korsinsky will argue for the plaintiffs and will face Gregory Watts of Wilson Sonsini for Costco.
- U.S. District Judge M. Casey Rodgers will hold a case management conference in the multidistrict litigation over allegedly defective 3M earplugs formerly used by the U.S. Army. More than 230,000 claims are pending, making the litigation the largest consolidated federal mass tort in U.S. history. Three bellwether trials have been held, with two plaintiffs' verdicts and one win for 3M. Mike Brock of Kirkland & Ellis is leading 3M's defense. The lead plaintiffs’ lawyers include Bryan Aylstock of Aylstock, Witkin, Kreis & Overholtz; Shelley Hutson of Clark, Love & Hutson; and Christopher Seeger of Seeger Weiss.
- U.S. District Judge Susan Illston in San Francisco will consider whether to grant class action status in a lawsuit brought on behalf of thousands of California customers of mortgage servicer Ocwen Financial Corp. The plaintiffs are claiming their cell phone conversations with the company were recorded without their consent in November 2015. Abbas Kazerounian of Kazerouni Law Group is leading the charge for the plaintiffs. Sara Markert of Bryan Cave Leighton Paisner is repping the defense.
- Boeing equipment supplier TECT Aerospace Group Holdings will hold a sale hearing before U.S. Bankruptcy Judge Karen Owens in Wilmington, Delaware, for its Kansas manufacturing facilities and related business. Boeing emerged as the top bidder for those assets following a June 30 auction with a $19.8 million bid. TECT is represented by Daniel DeFranceschi of Richards Layton & Finger.
What to catch up on this weekend
- Alison Frankel calls her latest column "an obituary for a litigation-funding model" which supporters saw as an innovative way to police fraud against government healthcare programs and critics called a perversion of the False Claims Act's whistleblower provisions. Frankel explains how two recent rulings by the 5th Circuit and U.S. Supreme Court helped doom that business model by upholding the dismissals of lawsuits brought against drugmakers by a company the DOJ has said was controlled by investors and former Wall Street investment bankers.
- Andrew Glenn has been keeping busy since he and several former Kasowitz Benson & Torres partners left the New York litigation firm to launch Glenn Agre Bergman & Fuentes. Since then, he helped shareholders in Hertz's Chapter 11 case secure a rare bankruptcy recovery of at least $1 billion. Maria Chutchian caught up with Glenn to speak about his work in Hertz and on behalf of other shareholders in major bankruptcies.
- Who are the lawyers representing former President Donald Trump in his long-shot lawsuits accusing Twitter, Facebook and Google's YouTube of silencing conservatives? David Thomas found they include a mix of solo practitioners and lawyers at small firms, such as John Coale, a D.C. lawyer and veteran of tobacco litigation and John Kelly, a personal injury attorney at Ivey, Barnum & O'Mara who represented Nicole Brown Simpson's estate in its lawsuit against O.J. Simpson.
- Next week, U.S. District Judge Judith Levy in Ann Arbor will begin considering whether to approve a $641.25 million class action settlement with the state of Michigan in the Flint tainted-water scandal. It's expected to be a contentious hearing, so now would be a good time to check out Alison Frankel's latest column on the case. Frankel looked at the 6th Circuit's decision not to intervene ahead of the hearing amid allegations that Levy effectively became an advocate for the deal and coerced cooperation from a lead attorney for the class.
- As protests against racism swept across the United States last year following George Floyd's murder in Minneapolis, major law firms reckoned with inequality and a lack of diversity in their own ranks. Arriana McLymore and Caroline Spiezio took a look at the extent to which firms began adding chief diversity, equity and inclusion professionals. The result: more than one-fifth of the 100 highest-grossing U.S. law firms, including Winston & Strawn and Locke Lord, now have an official with that once-rare title.
- Business lobbying groups cheered the recent bipartisan $1.2 trillion infrastructure deal. But David Lawder reports that deep-pocketed lobbying groups, including the U.S. Chamber of Commerce and National Retail Federation, are gearing up to fight the corporate tax hikes looming in a separate spending bill that Democrats hope to pass without Republican support.
"While I know this resolution does not bring back loved ones or undo the evil of what the Sacklers did, forcing them to turn over their secrets by providing all the documents, forcing them to repay billions, forcing the Sacklers out of the opioid business, and shutting down Purdue will help stop anything like this from ever happening again."
Massachusetts Attorney General Maura Healey, the first attorney general to sue members of the Sackler family who own Purdue Pharma. Her remarks came after Massachusetts and 14 other states and the OxyContin maker negotiated a revised settlement of claims that it fueled the opioid epidemic. The new deal, which is part of its restructuring plan, calls for the public release of millions of internal documents and the Sacklers to up their contribution to roughly $4.5 billion. (Reuters)
In the courts
- Victims and survivors of a 2019 mass shooting at a California synagogue can go forward with a lawsuit accusing firearms manufacturer Smith & Wesson of negligently marketing the AR-15 style semiautomatic rifle used by the shooter, San Diego Superior Court Judge Kenneth Medel ruled. Jonathan Lowy of the gun rights group Brady and Donna Vobornik of Dentons successfully argued against the gunmaker's motion to dismiss for the plaintiffs. (Reuters)
- Life sciences company Bio-Rad Laboratories reached a mid-trial settlement with French rival Stilla Technologies in a lawsuit alleging the company infringed patents related to a genetic research tool that allows scientists to analyze biological samples by separating them into tiny droplets. The trial in Boston federal court pitted lawyers for Bio-Rad led by Weil Gotshal's Edward Reines against a defense team led by Fish & Richardson's Juanita Brooks, who argued Bio-Rad’s patents were invalid. (Reuters)
- Medical device company Avanos Medical has agreed to pay more than $22 million to resolve a criminal charge that the company misbranded its MicroCool surgical gowns by falsely claiming they provided a high level of protection against fluid and virus penetration. Avanos, represented by Ropes & Gray's Joshua Levy, entered into a deferred prosecution agreement to resolve the case, which was filed in Dallas federal court. (Newsweek)
- The Office of the Comptroller of the Currency has dropped administrative cases that sought penalties and industry bans for two former currency traders at JPMorgan Chase and Citigroup accused of scheming to rig benchmark exchange rates. The banking regulator's action came after a federal jury in Manhattan acquitted Richard Usher and Rohan Ramchandani in a related case. Heather Nyong'o, a WilmerHale lawyer for Ramchandani, said the OCC dropped the case on the eve of his trial in September. Usher's lawyer Michael Kendall of White & Case called the decision "a testament to the strength of our case." (Reuters)
- Republican North Dakota Attorney General Wayne Stenehjem filed a lawsuit claiming the U.S. Bureau of Land Management illegally canceled oil and gas lease auctions in the state. The lawsuit came after a federal judge in Louisiana last month issued a nationwide injunction blocking the Biden administration's pause on oil and gas leasing on public lands and waters. Stenehjem tapped Greenberg Traurig’s Paul Seby to pursue the case. (Reuters)
- U.S. District Judge Kimba Wood blasted a Manhattan doctor for contributing to the "scourge of our lifetime, our opioid crisis," as she sentenced him to 17-1/2 years in prison for accepting kickbacks from Insys Therapeutics to prescribe an addictive fentanyl spray and for writing illegal opioid prescriptions to a patient who died of an overdose. Gordon Freedman's sentence was one of the longest to result from the wide-ranging investigation into Insys. (Reuters)
- Abbott Laboratories' St. Jude Medical unit has agreed to pay $27 million to resolve allegations by the DOJ that the company knowingly sold defective heart devices to health care facilities. The company, represented by Bringham Cannon of Kirkland & Ellis, did not admit wrongdoing as part of the accord, which resolved claims first alleged in a whistleblower lawsuit filed in federal court in Maryland. (Reuters)
- Facility services company ABM has agreed to pay $140 million to resolve a long-running wage-and-hour class action filed in 2006 in San Francisco Superior Court brought on behalf of tens of thousands of janitorial workers in California. The plaintiffs' firm Mallison & Martinez confirmed the proposed settlement on its website. Keith Jacoby of Littler Mendelson and Theane Evangelis of Gibson Dunn have been defending the company. (ABM)
Industry moves
- Financial restructuring and bankruptcy lawyer Joseph DiPasquale is jumping to Fox Rothschild from Lowenstein Sandler. He'll be a partner based in Morristown, New Jersey. (Fox Rothschild)
- McKool Smith is also expanding its D.C., office, adding patent litigation lawyer Christina Ondrick as a principal in its intellectual property litigation group. Ondrick, who has represented tech companies, joins from Paul Hastings. (McKool Smith)
- Litigator and defense lawyer Christos Papapetrou is joining Haynes and Boone as a partner in New York. Papapetrou previously was a partner at Levine Lee, where he handled complex commercial litigation matters. (Haynes and Boone)
- Seyfarth has added former prosecuting attorney and real estate lawyer Ian Taylor as a partner in its Seattle office. Taylor, who joins from Pacifica Law Group, will be part of the firm’s real estate department and leasing practice group. (Seyfarth)
- Trademark attorney Keith Sharkin has joined Gordon Rees Scully Mansukhani as a partner in the firm's New York and New Jersey offices. He was previously with Powley & Gibson. (Gordon Rees)
- Intellectual property attorney Marlene Williams has joined Buchalter as a shareholder in San Francisco. She was previously at Nixon Peabody. (Buchalter)
Columnist spotlight: ACLU's lawsuit against Maricopa County feels all too familiar
The ACLU's recent federal class action, which alleges that prosecutors in Arizona threaten people arrested for drugs or lower-level felonies with "substantially harsher" prosecution in order to coerce them to plead guilty, highlights "vast racial and economic discrepancies in plea bargaining techniques used across the county," the organization argues. Hassan Kanu analyzes the lawsuit and how it fits in with other cases in which "routine" practices during and after arrest for low-level crimes are deemed systematic violations of Constitutional rights. Learn more here.
Lawyer speak: Safe-harbor protection extended to SPACs faces scrutiny
Trendy and sometimes even touted by celebrities, special purpose acquisition companies seem to be everywhere these days. Part of the attraction has been the lack of formal regulation and legislation governing SPACs, and the safe-harbor provision under the Private Securities Litigation Reform Act, which grants protection from liability for forward-looking statements made to shareholders, so long as they are made in good faith and include cautionary language. Roger Barton and Michael Ward of Barton LLP discuss potential legislative changes that would exclude SPACs from the safe harbor and the ensuing legal risks to issuers who rely on it when making forward-looking statements. Read more.
Copyright © 2021 Thomson Reuters. All rights reserved. 610 Opperman Drive, Eagan, MN 55123
Want to change how you receive these emails? You can unsubscribe from this list here.
|