Feb. 10, 2022

Good morning. A former Goldman Sachs banker is set to stand trial in a prosecution tied to one of Wall Street’s biggest financial scandals. Kirkland wants its lawyers back in person for three days a week starting next month, and a prominent plaintiffs’ firm lost its bid to undo a federal judge’s sanctions order. Plus, the 5th Circuit turned down a U.S. Justice Department bid to quickly revive a COVID-19 vaccination mandate for federal employees. Thanks for hanging out with us on this busy Thursday. Let’s go!

Our colleague Karen Sloan, who reports on law firms, law schools and the business of law, is co-writing The Daily Docket while Diana Novak Jones is on parental leave. Were you forwarded this email? Subscribe here.

Ex-Goldman banker's 1MDB corruption trial set to begin

REUTERS/Jeenah Moon

The upcoming Brooklyn federal court trial of Roger Ng, former investment banking chief for Goldman Sachs in Malaysia, could shed light on how the bank responded to warnings of corruption tied to Malaysia's 1MDB sovereign wealth fund, our colleague Luc Cohen writes. Ng is charged with helping to embezzle hundreds of millions of dollars from 1MDB.

Ng, represented by New York lawyer Marc Agnifilo, will be the first and likely only person to stand trial in the United States over one of the biggest financial scandals in Wall Street history, Cohen reports. Chief U.S. District Judge Margo Brodie is presiding at the trial in the Eastern District of New York. Jury selection began earlier this week, and opening statements are scheduled for Monday. Ng has pleaded not guilty.

Legal experts told Reuters that prosecutors will likely show the jury emails and online chats indicating Ng’s involvement, as well as financial records showing he benefited from the scheme. The government is also expected to call Ng's former boss, Timothy Leissner, as a witness. Leissner pleaded guilty in 2018 to money laundering and corruption charges but has not yet been sentenced.

Kirkland office return plan could help set legal industry trend

REUTERS/Andrew Kelly

Kirkland & Ellis wants employees back on site three days a week starting March 29, and that decision could help quicken a wider return-to-office movement among law firms in conjunction with states relaxing pandemic restrictions, legal industry experts say. Some firms, including Ropes & Gray, are already encouraging lawyers to be in the office once or twice a week, with plans to ramp up to three days a week in March, Karen Sloan reports.

Kirkland isn’t just telling workers how often they should be in the office, however. It’s also spelling out which days: Tuesdays, Wednesdays and Thursdays. Legal consultants say that allows for more consistent facetime and collaboration, but they also warn it could backfire if lawyers depart for firms that offer greater remote work flexibility.

“There are different expectations across firms, but I’m guessing the Kirkland model, with some variation, will become the norm,” said Lisa Smith, a law firm consultant with Fairfax Associates.

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Industry buzz

Plaintiffs' firm Lieff Cabraser lost its appeal in the 1st Circuit of sanctions it received after a judge found it and other firms behind a $300 million class action settlement with State Street Corp engaged in misconduct while pursuing fees. (Reuters)
Delaware U.S. District Judge Leonard Stark was confirmed by the U.S. Senate in a 61-35 vote to serve on the patent-focused Federal Circuit. (Reuters)
Senate Republicans sharply questioned President Joe Biden's nominee for a key seat on the Federal Communication Commission, in what Democratic Senator Richard Blumenthal called an effort to “deadlock” the agency, which is currently split with two commissioners from each party. It was the second confirmation hearing for nominee Gigi Sohn. (Reuters)
Kramer Levin’s John “Sean” Coffey was confirmed by the U.S. Senate in a vote of 79-17 to serve as general counsel to the U.S. Navy. Coffey, chairman of the firm’s litigation group, earlier reported receiving more than $4 million in partnership share since 2020 for his work advising major U.S. financial companies and corporate executives, among other clients.
A newly disclosed ethics filing shows Elizabeth Prelogar, the U.S. solicitor general, received “authorizations” from the U.S. Justice Department to represent the government in U.S. Supreme Court cases involving firearms, abortion and college admissions. Several authorizations were issued “in cases that presented potential appearance issues,” Prelogar said, since her former law firm, Cooley, had submitted amicus briefs.

Number of the day:

366

REUTERS/Katherine Taylor

That’s how many days former Wynn Resorts casino executive Gamal Aziz was sentenced to spend in prison after being convicted of participating in the U.S. college admissions fraud scheme. Aziz, 64, had urged U.S. District Judge Nathaniel Gorton in Boston to show mercy for his family's sake and sentence him to just four months. Aziz was convicted in the first trial to result from the "Varsity Blues" college admissions scandal. The sentence was the longest yet imposed in the scandal. Nixon Peabody partner Brian Kelly, a lawyer for Aziz, said: "We'll be appealing it and hope to vindicate him in the appellate process.” Read more about the sentencing.

Columnist spotlight:

No fees for you! N.Y. judge rejects lawyers' $250K request in M&A suit

If companies really want to put an end to “deal tax” M&A disclosure suits, they’re going to have to stop paying mootness fees to the shareholder lawyers who file cases after every major deal announcement. Alison Frankel reports that a new ruling against the prolific M&A disclosure litigation firm Monteverde & Associates may encourage M&A targets to go to court against shareholder shops.

Check out other recent pieces from all our columnists: Alison Frankel, Jenna Greene and Hassan Kanu.

Video: 'Magic' mushrooms face legal test

Decriminalized in some states, psilocybin is still an illegal "Class 1" drug. Lawyers have sued the DEA as part of an effort to allow a physician to gain access to the drug to help dying cancer patients. Find out where their case stands and why psychedelics are having a renaissance.

"The public interest is not served by a single Article III district judge, lacking public health expertise and made unaccountable through life tenure, telling the President of the United States ... he cannot take the same lifesaving workplace safety measures as these private sector CEOs."

—5th Circuit Judge Stephen Higginson, writing in dissent in a 2-1 panel order in which the court declined to issue a ruling in the U.S. Justice Department's bid to revive its mandate that federal employees be vaccinated against COVID-19. Circuit Judges Jerry Smith and Don Willett directed the court clerk to issue a fast-track briefing schedule, and now a merits panel will have a chance to take up DOJ's request. Read more.

Coming up today

Paul Weiss appellate veteran Kannon Shanmugam will argue for fintech giant PayPal in the D.C. Circuit in a dispute involving the U.S. Consumer Financial Protection Bureau. The agency appealed after U.S. District Judge Richard Leon in Washington, D.C., invalidated part of a CFPB rule governing prepaid cards and digital wallets in 2020. CFPB senior counsel Christopher Deal will argue for the agency before D.C. Circuit Judges Sri Srinivasan, Nina Pillard and Neomi Rao. Lawyers from WilmerHale also represent PayPal.
A Kansas City federal judge will hear H&R Block's bid for a preliminary injunction to halt Block's use of its new name, based on its arguments that the company formerly known as Square will be confused with the tax-services giant. Block, represented by Quinn Emanuel, has argued that it doesn't offer any customer-facing products under the name, and that a reasonable consumer couldn't confuse its competing tax-preparation product with H&R Block's services. A team from Debevoise represents H&R Block.
The 9th Circuit will take up Jones Day’s effort to serve a subpoena in its arbitration against a former partner who jumped to rival firm Orrick. Jones Day has urged the appeals court to rule that arbitrators can turn to out-of-state federal courts for help when subpoena recipients refuse to comply. Orrick contends a ruling for Jones Day will turn arbitration into a “traveling circus” involving “endless collateral litigation” that undermines the speed and efficiency that arbitration is supposed to promote, as our colleague Alison Frankel writes.

Court calendars are subject to last-minute docket changes.

In the courts

Sarah Palin took the stand in a Manhattan federal court for the first time at her defamation trial against The New York Times over a 2017 editorial that incorrectly linked the former Republican vice presidential candidate to an earlier mass shooting in Arizona. She briefly discussed her family and background before the trial ended for the day. Palin is expected to resume testimony today. (Reuters)
In the first appeal to arise from the "Varsity Blues" college admissions scandal, a lawyer for former TPG Capital senior executive Bill McGlashan told the 1st Circuit that upholding his conviction would open the door to school children being prosecuted for routine test cheating. McGlashan, represented in his appeal by Sidley partner Carter Phillips, pleaded guilty to one count of wire fraud on the condition that he could appeal. (Reuters)
Apple and its frequent court opponent, patent plaintiff Uniloc, persuaded a Federal Circuit panel to allow them to keep the terms of Uniloc's patent licenses secret for now. The court said a California judge overstated the value of the public's interest in the information in denying a motion to seal. (Reuters)
A team from Cahill Gordon, including partner Samson Enzer, is representing a married couple arrested on money-laundering charges in what the U.S. Justice Department has called its largest-ever cryptocurrency seizure. U.S. District Judge Beryl Howell in Washington, D.C., has scheduled a detention hearing for Friday for defendants Ilya Lichtenstein and Heather Morgan.

Industry moves

Fox Rothschild said it boosted its Pittsburgh-based commercial litigation department, adding a team of five litigation partners from McGuireWoods: Matthew Monsour, Jennifer Dempsey, Rachel Dizard, Brett Huston and Kate Stoy. (Fox Rothschild)
Squire Patton Boggs added white-collar principal David Lizmi in New York. Lizmi formerly was a federal prosecutor in the Eastern District of New York, serving as the computer hacking and intellectual property coordinator for the office. (Squire Patton Boggs)
Willkie Farr said Bryan Kelly has joined the firm as a Los Angeles-based tax partner. Kelly earlier practiced at UK-founded Withers. (Willkie Farr)

Lawyer speak: Employer considerations in a hot talent market — don’t get burned

The work-from-home culture that arose in response to the COVID-19 pandemic expanded potential talent pools for companies but also gave rise to myriad employment issues. Employers must now be more aware of where applicants are based in order to ensure compliance with relevant laws in such jurisdictions, write Greg Abrams, Kelly Petrocelli and Caroline Guensberg of Faegre Drinker Biddle & Reath. Read more about evolving employer considerations for hiring and onboarding new employees.

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