Good morning. The legality of the SEC’s in-house proceedings goes before the U.S. Supreme Court today, in a new test of regulatory authority. Plus, Cravath just announced pay raises that match or exceed those made by rival Milbank; lawyer licensing across the country will go under a microscope; and the 5th Circuit today will take up a new Texas law banning some books at public schools. It’s the last Wednesday in November! Thanks for reading.
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The U.S. Supreme Court’s argument today over the SEC’s use of its in-house forum to police financial fraud will give the justices a new chance to curb agency powers. The court in 2018 faulted the way the SEC selected its in-house judges, and in April made it easier for targets of agency actions to mount challenges in federal court, our colleague Andrew Chung writes.
The justices will hear arguments in an appeal from the Biden administration, which is challenging a 5th Circuit ruling against the SEC's in-house tribunal system. The DOJ’s Brian Fletcher, a veteran appellate lawyer, will face S. Michael McColloch, representing hedge fund manager George Jarkesy. McColloch, who argued the case in the appeals court, will make his Supreme Court debut.
The outcome of the case could make it harder for the SEC to weed out bad actors in the securities industry, legal experts told Chung. A separate challenge to the industry-financed "self-regulatory organization" Financial Industry Regulatory Authority is working its way through lower courts. The SEC and FINRA challenges are supported by conservative and business groups that for years have complained about the regulatory reach of the federal "administrative state" in areas including energy, the environment and financial regulation.
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A group of state supreme court justices and state court administrators will examine lawyer licensing and whether law schools are adequately preparing students for real-world practice. Members of a task force, in a joint effort by the Conference of Chief Justices and the Conference of State Court Administrators, will later issue recommendations for reforms to state supreme courts.
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A 1st Circuit panel said it expects a Boston federal judge to "promptly" issue a ruling after a five-year delay in a dispute between three law firms over how to divide more than $20 million in fees from a $784.6 million settlement with Pfizer. The appeals court declined a request that it order the trial judge to finally rule within 60 days.
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The Texas state bar urged the state high court not to block an ethics case against Brent Webster, the top lieutenant to Attorney General Ken Paxton. Webster contends a misconduct complaint over his work on a 2020 election case is out of bounds. The Texas Supreme Court is weighing whether to hear his appeal.
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That is the number of judicial nominees for whom Biden has won Senate confirmation. In the latest vote, the Senate confirmed prosecutor Margaret Garnett to become a federal judge in the Southern District of New York, and Judge Jeffrey Bryan to become Minnesota's first Latino federal district court judge. The vast majority of Biden’s judicial nominees have been women and people of color.
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In February 2021, the start-up crypto law firm then known as Roche Cyrulnik Freedman ousted name partner Jason Cyrulnik, a former Boies Schiller Flexner partner who had been the firm’s highest-paid attorney in 2020. There are two wildly divergent accounts of the events that led to Cyrulnik's departure – one in which Cyrulnik was the victim of greedy young partners who stabbed him in the back when crypto boomed; the other in which Cyrulnik was such a toxic presence that his partners had to kick him out to avert a mass exodus. After a new decision denying summary judgment to both sides, it will now be up to a jury to figure out whose account is true. Alison Frankel has the story.
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"While there is technically a medical exception to the bans, no one knows what it means." |
—Molly Duane, a lawyer with the Center for Reproductive Rights, arguing before the Texas Supreme Court that an exception in the state's near-total abortion ban on abortion for saving the mother's life was so unclear it left doctors too "terrified" to deliver needed care because they faced the prospect of life in prison if they broke the law. Duane asked the court to uphold a lower court order shielding doctors from prosecution for abortions under a range of circumstances.
Judges had skeptical questions for both sides. |
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Rupert Murdoch was set to be questioned under oath for a second day as part of voting technology company Smartmatic's $2.7 billion defamation lawsuit against Fox Corp over coverage of debunked vote-rigging claims involving the 2020 U.S. presidential election, our colleagues Helen Coster and Jack Queen report. Murdoch was giving a deposition in Los Angeles. Fox has denied the allegations made by Smartmatic.
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The full 5th Circuit will hear arguments in a challenge to a new Texas law that limits books with sexual content in school libraries. The state has appealed a preliminary injunction against the law, which requires booksellers to rate books’ appropriateness against a set of criteria laid out in the legislation. The booksellers say the law violates their rights under the First and Fourteenth amendments because it forces them to engage in speech they disagree with.
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U.S. District Judge Sidney Stein in Manhattan is scheduled to hold an initial pretrial conference in a closely-watched lawsuit filed by a group of prominent authors including John Grisham, George R.R. Martin and Jonathan Franzen over the alleged misuse of their work by OpenAI to train its AI systems.
- CFPB director Rohit Chopra is slated to deliver semi-annual testimony before the House Financial Services Committee.
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Court calendars are subject to last-minute docket changes. |
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Warren Buffett's Berkshire Hathaway accused billionaire Jimmy Haslam of promising secret payments to staff that would inflate the price Berkshire would have to pay for the Haslam family's 20% stake in truck stop operator Pilot Travel Centers. Berkshire made the accusation in a countersuit against the Haslam family in Delaware Chancery Court, where the Haslams have sued Buffett's company over Pilot.
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U.S. District Judge Beth Freeman in California delayed a patent case brought by mobile-gaming platform Skillz against rival AviaGames, citing a previously undisclosed criminal investigation into AviaGames' alleged misuse of non-human "bots" in its money games. Freeman pushed back a trial that was set to begin next week. AviaGames has denied rigging its games.
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A former chief executive of Russian state oil company Rosneft claimed ownership of a $300 million yacht seized by U.S. authorities last year as part of a crackdown on alleged sanctions violations. Eduard Khudainatov's effort is a challenge to the DOJ’s push to take permanent ownership of the yacht, which it says is owned by sanctioned Russian billionaire Suleiman Kerimov.
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Meta said it would appeal a D.C. federal judge's ruling from earlier this week that the FTC can seek to reduce the amount of money the social media company makes from users under 18.
- A British-Nigerian national, Idris Dayo Mustapha, pleaded guilty in New York to involvement in a more than seven-year scheme to hack into banks' and brokerages' computer servers, causing more than $6 million in losses for customers. His lawyer was not immediately available for comment.
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Akin hired D.C.-based partner Vanessa Richelle Wilson for its projects and energy transition practice. Wilson arrives from DLA Piper, where she was U.S. head of the energy and natural resources sector (Reuters)
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Paul Weiss hired IP and technology transactions partner John Patten in London. He arrives from Kirkland. (Paul Weiss)
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Emerging companies and venture capital partner Paul Navarro rejoined Perkins Coie in Los Angeles from Morrison & Foerster. He will lead a practice serving Latin America. (Perkins Coie)
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Barnes & Thornburg added litigation partner Dan Cohen in Atlanta. He was previously at Nelson Mullins. (Barnes & Thornburg)
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K&L Gates hired Kevin Gustafson as Chicago-based partner focused on asset management and investment funds. Gustafson previously was general counsel to Innovator ETFs. (K&L Gates)
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