Good morning. Here's some big fee figures for your Thursday morning: Plaintiffs' lawyers could earn nearly $2 billion from that huge opioid settlement, and the Boy Scouts of America's bankruptcy legal bills are on a path toward $150 million. Speaking of the $26 billion opioid deal, there's already some states saying no to it, with one AG saying it's "not good enough." Jennifer Abruzzo cleared the Senate in a squeaker of a vote to become the NLRB's general counsel. And fallen celebrity lawyer Michael Avenatti during the start of his latest criminal trial did what attorneys fear their clients might choose to do: Go pro se. Let's get going!
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State AGs, plaintiffs' lawyers campaign for support for $26 billion opioid settlement
State attorneys general and plaintiffs' lawyers negotiating a $26 billion opioid settlement with the biggest U.S. drug distributors and Johnson & Johnson finally have a deal. Now they need to sell it to everyone else.
Sure, distributors McKesson, AmerisourceBergen and Cardinal Health agreed to pay up to $21 billion over 18 years, and J&J is kicking in another $5 billion. But states are guaranteed only so much of that money up front: If all of the states participated, they would get only a base payment of $12.12 billion.
To get the rest, they need to get their local governments on board and potentially even pass laws governing settling. "We need that done, and we need that done as quickly as possible in order to maximize this recovery and get all the money working for all the people," said Joe Rice, a lead negotiator for local governments at Motley Rice. Plaintiffs' lawyers like him have an incentive to boost participation: The deal provides for up to $1.95 billion in fees if all agree to the accord, according to the settlement documents.
States have just 30 days to opt into the deal, and their political subdivisions have 120 more to decide whether to join. While North Carolina Attorney General Josh Stein, a top negotiator, estimated "north of 40" states would join, Washington state is out, West Virginia's localities are going a separate route, and New Hampshire appears uncommitted.
"The settlement is, to be blunt, not nearly good enough for Washington," said Washington Attorney General Bob Ferguson. But supporters say the money is needed now to help local communities address rising drug abuse. Ferguson's counterpart in Louisiana, Jeff Landry, said states that don't join "are being irresponsible." Learn more.
Industry buzz
- Last year was profitable for many of the biggest law firms, but overall recruitment was down as they navigated the uncertainties of the pandemic, according to a new report from the National Association of Law Placement. Overall, the median number of offers firms made to students for summer programs was eight, down from 11 last year. (The American Lawyer)
- Vice President Kamala Harris had to step in to get President Joe Biden's pick for general counsel of the National Labor Relations Board, Jennifer Abruzzo, confirmed by the U.S. Senate. Abruzzo, who most recently was special counsel to the Communication Workers of America union, came under fire from Republicans who accused her of orchestrating Trump-era NLRB General Counsel Peter Robb's firing. (Reuters)
- Michael Avenatti made his debut as his own lawyer as opening arguments kicked off in his criminal trial in federal court in Santa Ana, California, where the onetime Trump foe is fighting charges he embezzled his clients' settlement funds. Avenatti told jurors the case was about how settlement payouts are calculated, while Assistant U.S. Attorney Brett Sagel said Avenatti had misled clients about the settlements and pocketed the money himself. (Daily Beast)
- A Debevoise & Plimpton team led by insurance mergers and acquisitions partner Thomas Kelly represented Prudential Financial in the company's $3.5 billion sale of its full-service retirement business to Empower Retirement. Empower, a U.S. subsidiary of insurer Great-West Lifeco Inc, was represented in the purchase by Eversheds Sutherland. (Reuters)
- The District of Columbia Board on Professional Responsibility is asking the D.C. Court of Appeals to reconsider its near-automatic disbarment of attorneys that misappropriate funds. In two attorneys' cases before the appellate court, the board argued that three-year suspensions should be sufficient. (Reuters)
- The Alaska Department of Law has launched an investigation after The Guardian published an article alleging that an assistant attorney general involved in defending the state in civil rights cases posted racist, antisemitic and homophobic messages on social media. (The Guardian, Anchorage Daily News)
- E-discovery provider CS Disco Inc made its public debut on the New York Stock Exchange through an IPO. The Austin-based company, which provides artificial intelligence-powered software for e-discovery, legal document review and case management to corporate legal departments and law firms, listed under the trading symbol "LAW." (Reuters)
REUTERS/Shannon Stapleton
The attorneys handling the Boy Scouts of America bankruptcy have agreed to wait until the end of the case to receive the last 20% of their fees. The total bill from White & Case, which is representing the Boy Scouts, and other attorneys involved in the Chapter 11 case could eventually hit $150 million. The firms will receive the other 80% of their fees as the case goes forward. (Reuters)
Coming up today
- U.S. District Judge Matthew Kacsmaryk in Amarillo, Texas will hold a trial in a lawsuit brought by Texas Attorney General Ken Paxton and Missouri Attorney General Eric Schmitt challenging the Biden administration's policy ending the Trump rule that required migrants waiting on immigration claims to stay in Mexico in the interim. The Republican attorneys general sued in April after the policy was discontinued in the first hours of President Joe Biden's term, claiming it has resulted in a "huge surge" of Central American migrants at the border. They're seeking an injunction barring enforcement of Biden's order.
- The 3rd Circuit in Philadelphia will consider whether to overturn a judge's decision striking down some of Pennsylvania Governor Tom Wolf's COVID-19 emergency orders as unconstitutional. The orders included limits on crowd sizes, requirements that people stay home and the closing of non-essential businesses. U.S. District Judge William Stickman, a Trump appointee in Pittsburgh, in September sided with business owners and Republican politicians by finding the restrictions were arbitrary and violated individual rights. The plaintiffs are being represented by Thomas King III of Dillon McCandless King Coulter & Graham. Pennsylvania Chief Deputy Attorney General Bart DeLone will argue for the state.
- Forever 21's lawyers including Kirkland & Ellis' Joshua Sussberg will ask U.S. Bankruptcy Judge Mary Walrath in Wilmington, Delaware, to allow the fast-fashion retailer to solicit creditor votes for its proposed liquidation plan. The company was sold for $81 million in early 2020. Unsecured creditors owed around $500 million are expected to see recoveries of less than 1%.
- Biotech company Portola Pharmaceuticals and its underwriters will urge U.S. District Judge Vince Chhabria in San Francisco to again dismiss a proposed class action alleging the company misled investors by misstating the market value of a blood clotting drug in its 2019 securities offering. The judge previously dismissed the case with leave to amend, calling the first complaint too long and cautioning the shareholders against "continuing to throw spaghetti at the proverbial wall." Daniel Kramer of Paul Weiss and Anna Erickson White of Morrison & Foerster are defending the company and underwriters, respectively. Daniel Barenbaum and Nicole Lavallee of Berman Tabacco are pursuing the case.
- A Pennsylvania doctor is expected to plead guilty by videoconference before U.S. District Judge William Stickman in Pittsburgh to federal charges that he accepted kickbacks from defunct drugmaker Insys Therapeutics in exchange for prescribing its addictive fentanyl spray Subsys. The defendant, Thomas Whitten, is one of several doctors and executives to be charged nationwide in relation to the scheme, including the company's founder, John Kapoor, who is appealing a racketeering conspiracy conviction. Patrick Thomassey of Thomassey Miller DeRiso is defending Whitten.
- Jurors in federal court in Oakland, California, are expected to begin deliberating in a trial over a lawsuit by Daiichi Sankyo subsidiary Plexxikon alleging that Novartis is willfully infringing its patents through its sales of its cancer treatment Tafinlar. Plexxikon is seeking $178.8 million. Daralyn Durie of Durie Tangri is pursuing the case before U.S. District Judge Haywood Gilliam for Plexxikon and is up against Thomas Steindler and William Gaede of McDermott Will & Emery for Novartis.
Reporter's notebook: Tracking law firm reopenings
Business of law reporter David Thomas on how Big Law is approaching office work after the pandemic.
It's been interesting to watch the variety of approaches U.S. law firms have taken in terms of getting their employees back into the office in an industry that usually craves uniformity. When it comes to associate pay raises and bonuses, Big Law firms tend to fall in line eventually. But that hasn't been the case yet with office returns.
On the one end, there are law firms like Latham & Watkins telling its people to be within commuting distance of its offices by mid-September. On the other end, Cooley recently effectively told its employees, "See ya in 2022!" And in between them, a whole bunch of firms are coming up with different schemes to get people back into the office at least some of the time.
What remains to be seen is whether other law firms – and companies - follow Morgan Stanley’s lead. In case you missed it, the chief legal officer of the very profitable bank threw a big wrench into the remote working gearbox last week, demanding that its outside counsel get their employees back into the office.
Eric Grossman, the Wall Street bank's CLO, says he’s worried about training and firm culture in an age of remote working, but he’s not the only one – other law firm leaders are worried about those things, too.
As Hogan Lovells CEO Miguel Zaldivar told me in outlining his firm's hybrid approach, "We're not running a virtual firm."
REUTERS/Dado Ruvic/Illustration
"I want to see ashes. As long as it takes. Whatever it takes."
Steven Wymer, former senior vice president and chief communications officer of eBay, who was quoted in a lawsuit filed in Boston federal court accusing him, former eBay CEO Devin Wenig and others at the company of orchestrating a harassment campaign targeting a journalist couple. Seven former eBay employees were charged in connection with the alleged plot, which prosecutors say involved cockroaches, a bloody pig mask and a funeral wreath. (Reuters)
In the courts
- An ex-pharmacist at the Massachusetts compounding pharmacy whose mold-tainted drugs sparked a deadly fungal meningitis outbreak in 2012 was resentenced to 10-½ years in prison after the 1st Circuit overturned his earlier eight-year punishment. Glenn Chin, now-defunct New England Compounding Center's supervisory pharmacist, told U.S. District Judge Richard Stearns in Boston that he felt "responsible for what happened" in the outbreak, which sickened 793 patients, more than 100 of whom died. (Reuters)
- The Pennsylvania Supreme Court on a 5-2 vote concluded that Amazon.com Inc should have paid warehouse workers for time they spent in security screenings after their shifts, finding that state wage law is broader than the federal statute, which does not require such pay. Peter Winebrake of Winebrake & Santillo and Richard Rosenblatt of Morgan Lewis represented the workers and Amazon, respectively. (Reuters)
- The DOJ's lawsuit challenging the proposed $30 billion merger of insurance brokers Aon PLC and Willis Towers Watson saw its scope narrowed by U.S. District Judge Reggie Walton in D.C. The judge issued an order limiting the focus of an upcoming trial, as well as allowing the companies to finalize remedies for three of five issues raised by the antitrust regulator. (Reuters)
- Lawyers for Aetna including Dechert's Michael McGinley warned in a 3rd Circuit brief that there could be broad consequences for other companies responding to agency subpoenas if the appellate panel does not overturn a lower court judge’s refusal to seal business information the insurer produced as a third-party in an FTC antitrust lawsuit. (Reuters)
- A federal judge issued a preliminary injunction against an Arkansas state law that criminalizes gender-affirming medical care like puberty blockers and hormone injections for trans minors. The ACLU with help from lawyers at Sullivan & Cromwell, Gill Ragon Owen and the Walas Law Firm sued to stop the law, claiming it violated the 14th Amendment's Equal Protection Clause and the First Amendment's protection of free speech. In a ruling from the bench, U.S. District Judge James Moody Jr. granted the injunction, preventing the law from going into effect next week. (Reuters)
- A producer and writer is suing Disney's 20th Century Studios Inc and talent agency Creative Artists Agency in Los Angeles federal court, claiming the 2019 film "Ad Astra" rips off the script he pitched the companies. Madison Jones says the movie lifted significant material from his 2014 script "Cosmic Force," according to his attorney, Carl Brundidge of Brundidge & Stanger. (Reuters)
Industry moves
- Victor Levy has joined Kirkland & Ellis' investment funds group as a partner in New York from Clifford Chance. He focuses his practice on the formation and representation of private equity funds and hedge funds. (Kirkland & Ellis)
- Brandon Fox is heading back to Jenner & Block after two years as the criminal division chief with the Los Angeles U.S. attorney’s office. As a federal prosecutor, he helped oversee the government's $3 billion settlement with Wells Fargo to resolve claims the bank engaged in fraudulent sales practices. Fox rejoins Jenner as managing partner of the firm’s Los Angeles office. (Reuters)
- Earl Adams Jr. is leaving Saul Ewing Arnstein & Lehr to become chief counsel to the U.S. Department of Transportation’s Federal Motor Carrier Safety Administration. Adams, who was co-chair of Saul Ewing's regulatory, compliance and government practice group and D.C. office managing partner, will handle litigation at the agency as well as advise on legal policy. (Saul Ewing)
Columnist spotlight: DQ from Facebook class action shows risk of Keller Lenkner model
The three-year-old plaintiffs firm Keller Lenkner brashly declares that it’s not like other plaintiffs firms because it plucks impressive lawyers from renowned defense firms to go up against their former colleagues. That model sounds great on the firm’s website, and, as Alison Frankel reports, has generally served the firm well, in combination with Keller Lenkner’s commendable litigation record. But it’s not without risks, as is abundantly clear from an opinion bouncing Keller Lenkner out of a consumer antitrust class action against Facebook. Read Frankel’s latest column to find out why the firm was sunk by a fourth-year associate's previous work at Kellogg Huber.
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