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This Day in Legal History: 16th Amendment Passed
On July 12, 1909, Congress passed the Sixteenth Amendment to the United States Constitution, marking a significant shift in the country's fiscal policy. This amendment granted Congress the authority to levy income taxes without apportioning it among the states or basing it on the United States Census. Prior to this amendment, the federal government primarily relied on tariffs and excise taxes for revenue, which were often seen as regressive and unfair to lower-income citizens.
The push for the Sixteenth Amendment stemmed from the need for a more stable and equitable source of federal revenue. Advocates argued that an income tax would be a fairer method of taxation, ensuring that wealthier individuals contributed a larger share to the government's coffers. After its passage by Congress, the amendment was sent to the states for ratification.
By February 3, 1913, the necessary three-fourths of the states had ratified the amendment, officially making it part of the Constitution. The ratification of the Sixteenth Amendment allowed for the creation of a progressive income tax system, which has since become a cornerstone of the federal government's revenue structure. This change enabled the federal government to fund essential services and public goods, shaping the modern American fiscal landscape.
Donald Trump's lawyers argued that the conviction in his hush money trial should be overturned, citing improper use of evidence related to his presidential duties. The defense referred to a recent Supreme Court ruling on presidential immunity, asserting that Trump's official acts, including conversations with Hope Hicks and certain tweets, were wrongly presented to the jury. They claimed this constituted a constitutional error that invalidated the May 30 guilty verdict.
Judge Juan Merchan delayed Trump's sentencing by two months to consider these arguments, while Manhattan prosecutors have until July 24 to respond. They previously dismissed Trump's claims as baseless but agreed to postpone sentencing. Legal experts suggest that overturning the conviction is unlikely, as much of the evidence pertains to Trump's actions before his presidency.
The Supreme Court ruling cited by Trump's lawyers originated from another case involving his attempts to overturn the 2020 election results. This decision could also delay his trial on charges of mishandling classified documents. Trump, who denies the allegations, pled not guilty to all charges and plans to appeal the hush money case verdict. The next decision on his arguments is expected by September 6, with potential sentencing set for September 18.
Trump Asks to Toss Hush Money Verdict Over Immunity Ruling (2)
Trump lawyers invoke immunity ruling in bid to toss hush money verdict | Reuters
On July 11, 2024, a U.S. House committee voted to release a transcript from a March hearing on TikTok's potential threats to aid the Justice Department in defending a new law. This law, signed by President Biden in April, requires TikTok's Chinese owner, ByteDance, to divest its U.S. assets by January 19, 2025, or face a potential ban. TikTok, ByteDance, and a group of TikTok creators have filed lawsuits against the law.
The Justice Department requested the transcript to strengthen its litigation position. Representative Cathy McMorris Rodgers stated that the intelligence community highlighted the dangers of foreign-controlled apps during the March hearing. Lawmakers do not plan to make the transcript public.
Rodgers emphasized that China's refusal to relinquish control over such apps indicates malicious intent towards American users. TikTok argued that the legislation process was secretive and rushed. A U.S. court will hear oral arguments on the legal challenges on September 16, with the Justice Department responding by July 26.
A previous attempt to ban TikTok by President Trump in 2020 was blocked by the courts. The March hearing revealed that TikTok's massive data collection and Chinese ownership pose significant national security risks, potentially allowing the Chinese government to access and control U.S. user data.
TikTok crackdown law: US House seeks to boost DOJ defense | Reuters
The U.S. Senate Judiciary Committee narrowly rejected President Joe Biden's judicial nominee, U.S. Magistrate Judge Sarah Netburn, for a district court judge position. The vote was 10-11, with Senator Jon Ossoff breaking ranks with his fellow Democrats to join Republicans in opposition. This marks the first rejection of a Biden judicial nominee by the panel during his presidency. The controversy centered on Netburn's 2022 decision recommending the transfer of a transgender inmate convicted of child sex abuse to a women's prison, which Republicans argued compromised prison safety.
Despite Netburn's rejection, the committee approved eight other nominees, including Embry Kidd for the 11th U.S. Circuit Court of Appeals. Netburn and the White House did not comment on the decision, while Ossoff's spokesperson stated that the senator applied "rigorous and independent judgment."
The debate highlighted concerns over Netburn's application of the Eighth Amendment in her ruling, which was later upheld by a district judge. Senator Dick Durbin defended Netburn, asserting that her decision adhered to the law and facts of the case.
In a first, US Senate panel rejects Biden judicial nominee in New York | Reuters
This week’s closing theme is by Gustav Mahler.
Gustav Mahler, born on July 7, 1860, in Bohemia (now the Czech Republic), was an Austrian composer and conductor renowned for his symphonies and lieder. His works bridge the late-Romantic and early-modern eras of classical music, blending profound emotional depth with intricate orchestration. As a conductor, Mahler was celebrated for his interpretations of Wagner, Beethoven, and Mozart, serving in prestigious posts such as the Vienna Court Opera and the New York Philharmonic.
Mahler's Symphony No. 5 in C-sharp minor, composed between 1901 and 1902, stands as one of his most celebrated works. The symphony is structured in five movements, each exploring a vast range of emotions and musical ideas. The first movement, "Trauermarsch" (Funeral March), opens the symphony with a solemn and powerful tone. This movement reflects Mahler's ability to convey profound sorrow and grandeur through his music.
The "Trauermarsch" begins with a solo trumpet call, followed by a procession-like theme in the strings, evoking a sense of grief and mourning. This movement's intricate orchestration and dramatic contrasts showcase Mahler's skill in creating deeply moving and evocative music.
Without further ado, this is "Symphony No. 5 in C-sharp minor – I. Trauermarsch."
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This Day in Legal History: Former President Taft Becomes Chief Justice
On July 11, 1921, William Howard Taft was sworn in as Chief Justice of the United States Supreme Court, making history as the only person to have held both the presidency and the chief justiceship. Taft had previously served as the 27th President of the United States from 1909 to 1913. His appointment to the Supreme Court was a lifelong dream come true, as he had always preferred judicial work over executive duties.
During his tenure as Chief Justice, Taft made significant contributions to the federal judiciary. He advocated for judicial reforms and was instrumental in the creation of the Judicial Conference of the United States, which helped improve the administration of the courts. His leadership was marked by efforts to enhance the efficiency and integrity of the judicial system.
Taft's unique perspective as a former president provided him with a comprehensive understanding of the interplay between the branches of government. This experience enriched his contributions to the Court's decisions and its operations. His tenure as Chief Justice lasted until his retirement in 1930, leaving a lasting impact on the American legal system.
A recent U.S. Supreme Court decision has impacted two significant Illinois public-corruption cases involving former state House Speaker Mike Madigan. The ruling in Snyder v. United States clarified that federal law criminalizes bribery when officials accept bribes before performing official acts, but not when they accept gratuities after the fact. Following this decision, defense lawyers in the cases involving Madigan and his associates are seeking acquittals or new trials.
Judge John Robert Blakey of the Northern District of Illinois requested updates from the lawyers involved. Meanwhile, attorneys in U.S. v. McClain indicated they would file motions to acquit or seek new trials for four defendants convicted of conspiring to solicit favors for Madigan. Michael McClain’s lawyer argued the Supreme Court's ruling showed the jury was misinformed on the law, potentially invalidating the conviction.
Madigan’s legal team plans to file motions related to the Snyder decision, while prosecutors maintain their original allegations. Even if some convictions are vacated, the government argues that other charges, such as falsifying records under the Foreign Corrupt Practices Act, are likely to stand. Former prosecutor Rachel Cannon noted that these additional charges might withstand the impact of the Snyder ruling.
The Snyder decision might also influence other prosecutions connected to the Madigan scandal. Besides McClain, Jay Doherty, John Hooker, and Anne Pramaggiore were also convicted and await sentencing, which has been postponed pending the Supreme Court's decision. These cases underscore the significant legal repercussions following the high court's interpretation of bribery statutes.
SCOTUS Bribery Ruling Offers Chance to Undo Illinois Convictions
A California judge has granted Tesla more time to prepare its defense against a proposed class action alleging it overcharged customers for insurance. The case, overseen by Judge Michael Markman of Alameda Superior Court, now has a hearing scheduled for October 2025 to determine whether it will proceed as a class action. The lawsuit, filed on behalf of drivers in 11 states, accuses Tesla of inflating insurance premiums based on false crash warnings instead of actual driving behavior, violating California’s unfair competition law and breaching contracts with drivers.
Tesla's attorney, Min Kang, cited delays in gathering defense information due to the involvement of multiple states and the recent departure of a key Tesla employee. This personnel change has complicated the process, with Tesla in the midst of hiring a replacement.
Tesla, which denies any wrongdoing, previously attempted to dismiss some claims but was unsuccessful. The company’s insurance program bases premiums on a "safety score," factoring in vehicle data such as hard-braking and forward collision warning alerts. Plaintiffs argue these scores are unfairly increased by false warnings, raising their premiums. This lawsuit has drawn attention from state regulators and plaintiffs' lawyers, highlighting broader concerns about Tesla's insurance practices.
Tesla gets more time to defend against driver class action over insurance | Reuters
Harvard University has appointed Jennifer O’Connor as its new general counsel, effective July 29. O’Connor previously held senior roles at Northrop Grumman and the US Department of Defense. This move comes as Harvard faces scrutiny over its policies on antisemitism and calls from some students to sever financial ties with military contractors. O’Connor brings extensive experience from large, complex organizations and has served as general counsel for the Department of Defense and held roles in the White House Counsel’s office. She is an alumna of Harvard College and earned her law degree from Georgetown.
Interim President Alan Garber praised her experience, emphasizing her readiness to manage Harvard's legal strategy amid congressional probes and lawsuits related to campus antisemitism and the aftermath of Hamas’s attack on Israel. O’Connor will also address issues related to Harvard's admissions policies after a recent Supreme Court defeat. Neil Eggleston, who worked with O’Connor during the Obama administration, highlighted her familiarity with Washington’s political landscape, which will aid Harvard in navigating upcoming challenges.
O’Connor succeeds Eileen Finan, who has served as interim general counsel since March 1, following the retirement of Diane Lopez. This appointment aims to stabilize Harvard's legal department and address ongoing campus controversies.
Harvard Hires New Lawyer From Weapons Maker Northrop Grumman (1)
Rudolph Giuliani's personal bankruptcy case is likely to be dismissed by a federal bankruptcy judge by the end of the week after nearly seven months of inactivity. Judge Sean Lane of the US Bankruptcy Court for the Southern District of New York indicated during a hearing that he is inclined to dismiss the case entirely, with a final ruling expected on Friday. This dismissal would leave Giuliani without court protection from creditors, to whom he owes over $150 million. Giuliani’s lawyers have consented to the proposed dismissal.
The bankruptcy case has been fraught with disputes over missed deadlines and transparency issues regarding Giuliani’s financial affairs. Giuliani filed for bankruptcy in December, reporting $10.6 million in assets after a $148 million defamation judgment for false accusations against Georgia poll workers in the 2020 election. Wandrea’ Arshaye “Shaye” Moss, one of the poll workers, sits on an official creditors’ committee that has requested a trustee's appointment.
If dismissed, creditors would return to civil court to recover debts, and Giuliani would face continued lawsuits that were paused by his Chapter 11 filing. Attorney Rachel Strickland, representing the Georgia plaintiffs, criticized Giuliani’s lack of cooperation and suggested he might commit bankruptcy crimes. This prompted a heated exchange during the hearing, with Giuliani interrupting to refute Strickland’s claims.
The creditors’ committee opposes the dismissal, arguing that resolving the case within bankruptcy would benefit more creditors than civil court proceedings. Despite these arguments, the dismissal seems imminent, leaving significant creditors, particularly the Georgia poll workers, to seek recovery through other means.
Giuliani Bankruptcy Is Heading Toward Dismissal, Judge Says (1)
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This Day in Legal History: Operation Satanique
On July 10, 1985, French intelligence agents bombed the Greenpeace ship Rainbow Warrior in Auckland Harbor, New Zealand. This covert operation, codenamed "Operation Satanique," aimed to prevent the vessel from protesting French nuclear tests in the South Pacific. The attack resulted in the sinking of the Rainbow Warrior and the tragic death of Portuguese photographer Fernando Pereira.
The incident quickly escalated into an international scandal, straining diplomatic relations between France and New Zealand. In the aftermath, two French agents, Alain Mafart and Dominique Prieur, were apprehended and sentenced to ten years in a New Zealand prison for manslaughter. However, under international pressure, a deal was struck that allowed the agents to serve their sentences on a French-controlled island in the Pacific.
Litigation between France and New Zealand ensued, culminating in a case before the International Court of Justice (ICJ). In this landmark case, New Zealand sought compensation for the attack and the breach of its sovereignty. The ICJ ruling required France to pay New Zealand $7 million in damages and issue a formal apology, marking a significant moment in international law and state accountability.
This event highlighted the tensions surrounding nuclear testing and environmental activism during the Cold War era. It also underscored the importance of respecting international law and the sovereignty of nations. The bombing of the Rainbow Warrior remains a poignant reminder of the lengths to which states might go to protect their interests, often at great moral and legal cost.
The case of New Zealand v. France before the International Court of Justice demonstrated the legal processes and repercussions when a nation's sovereignty is violated by another state. This case emphasized the role of the ICJ in resolving international disputes and upholding international law.
Alec Baldwin's trial for the 2021 fatal shooting of cinematographer Halyna Hutchins on the "Rust" movie set has turned its focus on the Colt .45 "Peacemaker" revolver involved. Jury selection occurred in Santa Fe, New Mexico, with Baldwin and his wife in attendance. The trial, starting almost three years after the incident, sees prosecutors and defense lawyers questioning jurors about their knowledge of the case and Baldwin's influence as a public figure.
The case is unprecedented in U.S. history, as actors rarely face criminal charges for on-set fatalities. Baldwin could face up to 18 months in prison if convicted. The "Rust" armorer, Hannah Gutierrez, was previously found guilty of involuntary manslaughter for mistakenly loading a live round into the gun, receiving an 18-month sentence.
A crucial point in the trial is whether Baldwin should have inspected the gun after being told it was "cold," meaning it should have been empty or contained dummy rounds. Baldwin has stated he did not pull the trigger, but an FBI examination found the gun would not fire without the trigger being pulled. Baldwin's defense argues that the gun was modified, potentially allowing it to fire without a trigger pull, but the FBI destroyed the gun during testing, complicating the defense's ability to prove this claim. Legal experts suggest that the condition of the firearm and its modifications will be central to the trial's outcome.
Alec Baldwin manslaughter trial revolves around Wild West gun | Reuters
Judge Pauline Newman, a 97-year-old member of the U.S. Court of Appeals for the Federal Circuit, lost her lawsuit seeking reinstatement after being suspended for alleged cognitive and physical impairments due to age. Newman challenged her suspension, arguing that the Judicial Conduct and Disability Act of 1980, which governs the removal of judges, was unconstitutional. However, U.S. District Judge Christopher Cooper dismissed her claims, asserting that the law does not violate due process rights. Newman's attorney announced plans to appeal the decision.
The Federal Circuit suspended Newman in September for at least a year or until she complies with court-ordered medical examinations. Chief Judge Kimberly Moore highlighted Newman's alleged cognitive decline and lack of cooperation with mental health inquiries. Newman, a notable figure in patent law, has defended her fitness for duty, citing favorable medical reports and maintaining public appearances.
This case marks a rare public debate over judicial fitness, coinciding with broader discussions about age and capability in public office. The Federal Circuit's judicial council has demanded further explanation from Newman regarding her suspension, signaling potential for the suspension's extension due to her continued non-cooperation.
US judge, 97, loses lawsuit seeking reinstatement | Reuters
97-Year-Old Judge Newman to Appeal Loss in Suspension Suit (3)
A D.C. Circuit panel ruled that Hillary Clinton’s 2016 campaign and a pro-Clinton PAC, Correct the Record, must face claims of improperly disclosing millions in expenditures. The Federal Election Commission (FEC) dismissed a complaint from the Campaign Legal Center, alleging violations of the Federal Election Campaign Act. The court found that the FEC's dismissal was "contrary to law" as it stretched exemptions for internet spending beyond legal limits.
The court emphasized that campaign committees must disclose coordinated expenditures as contributions, with exemptions only for unpaid internet communications. The Campaign Legal Center accused the Clinton campaign of accepting undisclosed contributions from Correct the Record, including opposition research and media activities. The ruling requires the FEC to clarify the internet exemption's bounds and consider enforcement actions against the Clinton campaign and Correct the Record. If the FEC does not act within 30 days, the Campaign Legal Center can pursue a private lawsuit.
The D.C. Circuit’s decision upholds a lower court ruling that the FEC's dismissal was unlawful. It also highlighted how the FEC's interpretation of exemptions could allow circumvention of campaign finance laws. The case has been remanded to the district court and then back to the FEC for further action. Judges J. Michelle Childs and Harry T. Edwards joined in the opinion.
Clinton Campaign Case to Prompt Review of Disclosure Exemption
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This Day in Legal History: Eight States Ratify Articles of Confederation
On July 9, 1778, eight American states—New Hampshire, Massachusetts Bay, Rhode Island, Connecticut, New York, Pennsylvania, Virginia, and South Carolina—ratified the Articles of Confederation, marking a significant milestone in the establishment of the United States' first constitution. The Articles of Confederation served as the foundational legal framework for the fledgling nation during the Revolutionary War. This initial ratification by eight states paved the way for the Articles to take full effect once Maryland, the last holdout, signed on March 1, 1781.
The Articles of Confederation aimed to unify the thirteen original states under a national government with limited powers, primarily to manage war efforts, conduct foreign diplomacy, and handle territorial disputes. However, the Articles granted most powers to the individual states, reflecting the colonists' fear of a strong central authority reminiscent of British rule.
Despite its significance, the Articles of Confederation had several weaknesses, such as the lack of a strong central government, no executive branch, and the inability to levy taxes or regulate commerce effectively. These limitations eventually led to the drafting of the current U.S. Constitution in 1787, which created a more robust federal structure and addressed the shortcomings of the Articles.
The ratification of the Articles of Confederation on July 9, 1778, remains a critical event in American legal history, symbolizing the early efforts to create a unified nation and laying the groundwork for the Constitution that governs the United States today.
Federal judge Joshua Kindred, who recently resigned, engaged in a sexual relationship with a former law clerk and misled an investigating judicial panel about it, according to a Ninth Circuit judicial council report. Kindred, a Trump appointee, was found to have sexually harassed clerks and created a hostile work environment. The council's report describes his behavior as abusive, pervasive, and unprofessional, noting that his interactions with clerks were inappropriate and oppressive.
Kindred submitted his resignation without explanation on July 5. The Judicial Council of the Ninth Circuit publicly reprimanded him and urged his resignation. The council also referred the matter to the Judicial Conference of the United States for potential impeachment.
The report highlighted an "unusually close relationship" between Kindred and a former clerk, involving inappropriate physical contact and over 278 pages of personal text messages. Kindred's actions included discussing vulgar topics in the workplace and belittling clerks who raised concerns. The council expressed doubts about his ability to conduct himself appropriately in the future.
Kindred initially denied the allegations but later admitted to crossing professional boundaries, attributing his behavior to personal turmoil, including a divorce. The investigation also found he was drinking excessively, sometimes in his chambers.
This case comes amid broader scrutiny of judicial misconduct, particularly concerning judges' treatment of clerks. The judiciary has implemented new measures, such as the Office of Judicial Integrity, to address these issues.
Jaime Santos, an advocate for judicial reforms, emphasized the importance of transparency and accountability in such cases to encourage clerks to report misconduct. Jeremy Fogel, a retired federal judge, noted the thoroughness and unanimity of the council's order against Kindred, highlighting the serious concern over his lack of honesty during the investigation.
US Judge Resigned After ‘Sexualized Relationship’ With Clerk (2)
The Federal Trade Commission (FTC) released a report highlighting that concentration and vertical integration among the top pharmacy benefit managers (PBMs) are driving up drug costs and financially straining independent pharmacies. The report stems from a study launched in June 2022, investigating the practices of the six largest PBMs. FTC Chair Lina Khan emphasized that these PBMs, which manage 94% of prescription drug claims, significantly influence drug access and pricing.
The report noted that the top three PBMs—CVS Caremark, Cigna’s Express Scripts, and UnitedHealth Group’s OptumRx—control nearly 80% of the market. Their integration with health insurers and pharmacies allows them to exercise considerable power over drug prices and availability. The FTC found that pharmacies affiliated with these PBMs received reimbursement rates for certain cancer drugs that were 20 to 40 times higher than the national average drug acquisition cost, leading to an additional $1.6 billion in revenue over three years.
These high reimbursement rates contribute to increased out-of-pocket costs for patients, including those on Medicare Part D. The FTC also pointed out that PBMs may engage in anticompetitive practices by negotiating rebates with drug manufacturers to exclude cheaper competitor drugs from their formularies.
The FTC’s study faced challenges due to some companies' failure to provide required data and documents. The agency is prepared to take legal action against non-compliant companies. Despite the findings, PBMs argue that they help reduce prescription drug costs and blame high manufacturer list prices and patents for the rising costs.
The FTC voted 4-1 to issue the interim report, with one Republican commissioner opposing it. The Pharmaceutical Care Management Association, the leading PBM trade group, remains confident that the FTC’s examination will ultimately show that PBMs reduce drug costs for patients and employers.
FTC Blames Pharmacy Benefit Managers for Inflating Drug Costs
Legal experts believe Donald Trump faces slim chances of overturning his conviction on charges related to hush money paid to a porn star, despite a recent U.S. Supreme Court ruling that broadly recognizes presidential immunity from prosecution. Trump's lawyers have argued for setting aside the May 30 guilty verdict, citing the Supreme Court's decision that former presidents cannot be criminally prosecuted for official acts under their "core constitutional powers."
However, experts point out that much of Trump's conduct in question occurred before his presidency and involved personal matters, not official acts. Cheryl Bader, a law professor at Fordham University, noted that falsifying business records to pay off a porn star does not fall within presidential duties. Trump was convicted of 34 counts of falsifying business records to conceal reimbursement to his former lawyer, Michael Cohen, for paying $130,000 to Stormy Daniels before the 2016 election. Trump has denied the encounter and claims the case is politically motivated.
Prosecutors argue the payment was part of a scheme to influence the election by avoiding a sex scandal. Trump's legal team contends that evidence related to his presidency, such as social media posts and an ethics form, should not be considered official acts. Legal experts like Steven Cohen from New York Law School believe these activities are unofficial and unlikely to lead to a reversal.
While Trump's lawyers declined to comment, a spokesperson for the Manhattan District Attorney's office did not respond. There are precedents for overturning convictions following new Supreme Court decisions, but Cardozo Law School professor Gary Galperin notes that even if some evidence should not have been presented, the judge may still uphold the conviction if it did not deprive Trump of a fair trial, known as a "harmless error."
Trump's defense is expected to fully present their arguments in a court filing by Wednesday, with prosecutors responding by July 24. Judge Juan Merchan will decide by September 6, and if the conviction stands, Trump will be sentenced on September 18.
Trump hush money conviction reversal is unlikely, experts say | Reuters
Taxing carbon emissions from livestock in the US could significantly reduce greenhouse gas emissions, as cattle contribute 10% of the nation's agricultural emissions. Implementing a livestock tax would not only promote sustainable agricultural practices but also generate revenue for reforestation and responsible land use. This measure could provide a more comprehensive approach to addressing greenhouse gases compared to the gradual phase-out required for the fossil fuel industry.
Currently, the US government spends about $30 billion annually on agricultural subsidies, a practice that effectively supports both carbonization and decarbonization of the economy. Agriculture's contribution to greenhouse gases, especially from methane emitted by cattle, is substantial yet often overlooked. Methane has a higher global warming potential than carbon dioxide, accounting for around 30% of the observed global temperature rise since the 18th century.
Denmark's successful implementation of a livestock carbon tax demonstrates the feasibility of such policies. Starting in 2030, Denmark will tax livestock emissions, with rates increasing by 2035. This policy includes subsidies for carbon capture and reforestation, balancing environmental goals with farming realities. However, Denmark's policy focuses mainly on carbon dioxide, missing the full impact of methane emissions.
The US could enhance this model by including both carbon dioxide and methane emissions in a per-head livestock tax. This would more accurately reflect the environmental cost of raising livestock, though it would likely increase meat and dairy prices. To make this tax more politically acceptable, the US could adopt a system similar to Austria’s Klimabonus, which compensates residents for the costs imposed by a general carbon tax.
In summary, a well-calibrated livestock tax in the US, incorporating the cost of both carbon dioxide and methane emissions, could drive sustainable agricultural practices, balance environmental and economic interests, and potentially gain public support through consumer compensation mechanisms.
Taxing Cows a Pragmatic Step Toward Mitigating Climate Change
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This Day in Legal History: Vermont Abolishes Slavery
On July 8, 1777, Vermont made history by becoming the first state to abolish slavery through the formal adoption of its new state constitution. This landmark event occurred during the American Revolutionary War, reflecting the evolving values of liberty and human rights among the colonists. Vermont's constitution, drafted in Windsor, boldly declared that all men are born equally free and independent, explicitly prohibiting slavery. This was a pioneering move, as the nation itself was still grappling with the institution of slavery, which would not be federally abolished until the 13th Amendment in 1865. The framers of Vermont's constitution were influenced by Enlightenment ideals and a commitment to individual freedom. Their decision set a precedent and provided a moral compass for other states and the future United States. Vermont's abolition of slavery marked an early and significant step toward the broader movement for abolition and civil rights in America. This moment in legal history underscores the state's progressive stance and its contribution to the fight for human dignity and equality.
Boeing has agreed to plead guilty to criminal fraud conspiracy and pay a $243.6 million fine to settle a U.S. Justice Department investigation into two fatal 737 MAX crashes in Indonesia and Ethiopia that killed 346 people. This plea deal, pending judicial approval, marks Boeing as a convicted felon. The settlement has faced criticism from victims' families who demand a trial and stricter penalties. The guilty plea endangers Boeing's eligibility for government contracts but spares the company from a potentially damaging trial. The agreement also mandates Boeing to invest $455 million over three years to enhance safety and compliance, and imposes an independent monitor to oversee these efforts. Additionally, Boeing's board will meet with the victims' families. The DOJ's charges stem from Boeing's false statements to the FAA about the MCAS software linked to the crashes. The deal does not protect Boeing from future investigations or shield its executives. The court will finalize the plea agreement by July 19.
Boeing's criminal fraud conspiracy charge revolves around their false representations to the FAA regarding the MCAS software, designed to push the airplane's nose down under specific conditions. This misrepresentation significantly contributed to the crashes, highlighting a grave breach of regulatory trust and aircraft safety protocols.
Boeing to plead guilty to fraud in US probe of fatal 737 MAX crashes | Reuters
A lawsuit challenging a Biden administration rule that permits socially conscious investing by employee retirement plans will be a significant test for how courts review federal regulations after a recent Supreme Court decision. The New Orleans-based 5th U.S. Circuit Court of Appeals will hear the case brought by 25 Republican-led states against the U.S. Department of Labor's 2022 rule, which allows 401(k) and other plans to use environmental, social, and corporate governance (ESG) factors as tiebreakers in investment decisions. U.S. District Judge Matthew Kacsmaryk initially upheld the rule based on the Chevron deference doctrine, which the Supreme Court has since overturned, now requiring courts to independently assess agency rules. This change is expected to impact various government regulations.
The core issue is whether the 1974 Employee Retirement Income Security Act permits considering non-financial factors in investment decisions. Critics argue that such factors threaten workers' retirement savings. The 5th Circuit, known for its conservative stance, may nullify the rule even without Chevron deference. The outcome will set a precedent for future challenges to federal agency powers and regulations. The case highlights the ongoing debate over the scope of federal agency authority and the influence of judicial interpretation on regulatory policies.
Republican challenge to ESG investing rule could showcase risk to US agency powers | Reuters
Tesla shareholders will appear in court to contest a record-breaking $7 billion legal fee request linked to CEO Elon Musk's $56 billion pay package. This fee, sought by investor Richard Tornetta and his legal team after winning a lawsuit that voided Musk's 2018 stock option pay package, has been called "outlandish" by many Tesla shareholders. Tornetta's attorneys argue they are entitled to 11% of the value returned to Tesla, approximately 266 million shares worth about $67 billion, asserting that this percentage is modest by Delaware legal standards. They seek payment in Tesla shares, equating to $370,000 per hour worked.
Tesla and its shareholders argue that the fee is disproportionate and unprecedented, vastly exceeding the current highest shareholder litigation fee of $688 million from an Enron class action. Tesla contends that the fee should be as low as $13.6 million, especially since shareholders recently ratified Musk's pay package, nullifying the supposed benefit of Tornetta's legal victory. The case will be heard by Chancellor Kathaleen McCormick, with a decision expected to take weeks or months. This ruling could set a significant precedent for future shareholder litigation fees.
Tesla investors to urge judge to reject record $7 bln legal fee in Musk pay case | Reuters
Closing arguments in the corruption trial of Senator Bob Menendez are set to begin after more than seven weeks of testimony. Federal prosecutors allege that Menendez accepted bribes, including cash, gold bars, and payments for mortgages and cars, in exchange for aiding Egypt in securing U.S. military assistance and helping New Jersey businessmen with their legal and business interests. Evidence presented included gold bars and $480,000 in cash found at Menendez's home.
Menendez, who has pleaded not guilty to 16 charges including bribery and fraud, is accused of using his wife, Nadine Menendez, as an intermediary for the bribes. Nadine Menendez, also pleading not guilty, will face trial separately in August. The case has significantly impacted Menendez’s political career, leading to his resignation as chair of the Senate Foreign Relations Committee. Despite running for re-election as an independent, his chances are slim.
Key testimonies included statements from two New Jersey prosecutors and insurance broker Jose Uribe, who claimed to have bribed Menendez. Uribe testified that Menendez acknowledged helping him avoid state probes. Menendez's defense argued the cash and gold found were related to his wife's activities and their cultural background, citing Menendez's Cuban heritage as a reason for keeping cash at home. Menendez declined to testify. Closing arguments from prosecutors will start in the early afternoon and are expected to continue into Tuesday, followed by the defense's closing arguments.
Senator Menendez's corruption trial heads to closing arguments | Reuters
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This Day in Legal History: Black Sox Scandal Jury Selection
On July 5, 1921, jury selection commenced for one of the most infamous trials in baseball history: the Chicago "Black Sox" trial. Eight players from the Chicago White Sox, including the legendary "Shoeless Joe" Jackson, stood accused of conspiring to throw the 1919 World Series against the Cincinnati Reds. The scandal shocked the nation, casting a shadow over America's beloved pastime and questioning the integrity of the sport.
The players were charged with accepting bribes from gamblers in exchange for intentionally losing the series. The trial attracted immense public and media attention, with fans eagerly following every development. Despite compelling evidence and confessions from some players, the jury ultimately acquitted all eight defendants.
However, the acquittal did not mean exoneration in the eyes of baseball's governing bodies. Newly appointed Baseball Commissioner Kenesaw Mountain Landis took decisive action to restore the sport's integrity. On August 3, 1921, Landis issued a lifetime ban on all eight players involved in the scandal, regardless of the trial's outcome.
The "Black Sox" trial remains a significant moment in legal and sports history, illustrating the complex interplay between law, ethics, and professional sports. The trial's legacy endures, serving as a cautionary tale about the dangers of corruption and the importance of maintaining trust in public institutions.
A federal judge rejected Boehringer Ingelheim’s attempt to block the Biden administration's Medicare Drug Price Negotiation Program, which aims to reduce prescription drug costs. Chief Judge Michael P. Shea ruled against all of Boehringer Ingelheim's claims, stating the program is constitutional. The case centered on whether the Inflation Reduction Act’s provision forcing drug companies to agree to a maximum fair price for selected drugs violates constitutional rights.
Boehringer Ingelheim argued that the program infringed on the First Amendment (compelled speech), Fifth Amendment (due process and takings clauses), Eighth Amendment (excessive fines), the Administrative Procedure Act, and the unconstitutional conditions doctrine. However, Judge Shea determined that participation in Medicare and Medicaid is voluntary, even if economically incentivized, and the federal government can place conditions on participation in its programs. He clarified that Boehringer Ingelheim was not deprived of property interest since it had the option to withdraw before any data submission was required.
Regarding the First Amendment claim, Shea found no support in precedent, likening required communications to standard price regulations. On the Eighth Amendment claim, he noted that Boehringer Ingelheim could not demonstrate a likelihood of success as the argument was novel and lacked precedent.
The case, Boehringer Ingelheim Pharmaceuticals, Inc. v. United States Department of Health and Human Services, highlights ongoing legal challenges to the Biden administration's health plan, specifically targeting the reduction of high drug prices under the Inflation Reduction Act. The key issue here is the First Amendment argument, which was a central but unsupported claim in this case. Judge Shea's ruling emphasized that required communications for regulatory compliance do not constitute compelled speech under the First Amendment.
Judge Tosses Boehringer Bid to Block Biden Drug Price Plan
The Federal Trade Commission (FTC) faced a significant legal challenge when a Texas federal judge halted its rule banning noncompete clauses across the U.S. Judge Ada Brown sided with the U.S. Chamber of Commerce and a Texas tax firm, arguing that the FTC exceeded its authority. This decision, following recent Supreme Court rulings limiting agency powers, underscores the difficulties the FTC may encounter in implementing new regulations.
The FTC's noncompete rule, which was to take effect on September 4, would have impacted around 30 million U.S. workers by prohibiting noncompete clauses that restrict job mobility within the same industry. FTC Chair Lina Khan has been advocating for broader antitrust regulation, including labor markets, but faced opposition from major business groups.
This rule, adopted in April with a narrow 3-2 vote, was a rare move for the FTC, which has traditionally addressed competition issues through legal actions rather than broad rulemaking. Despite the FTC's assertion that it has the authority to issue such a rule, Brown ruled that the FTC Act of 1914 does not permit the agency to create substantive rules on unfair competition.
Legal experts noted that the FTC's limited history with rulemaking poses challenges for the agency, especially in light of recent Supreme Court decisions that reduce judicial deference to regulatory interpretations. This context complicates the FTC's efforts to enforce the noncompete ban, potentially leading to further legal battles.
Brown’s ruling referenced the recent Supreme Court decision in Loper Bright Enterprises v. Raimondo, which overturned the Chevron deference principle, further complicating regulatory actions by the FTC. While this particular decision was limited to the plaintiffs in the case, it sets a precedent that could hinder future FTC regulations.
FTC Noncompete Ban Freeze Signals Tough Legal Road for Agency
US judge partially blocks FTC ban on worker noncompete agreements | Reuters
A liberal group, Accountable.US, filed a complaint with the Washington DC Attorney General alleging that the Conservative Partnership Institute (CPI), a nonprofit organization employing former White House Chief-of-Staff Mark Meadows, improperly funneled money to cover Meadows' legal bills related to investigations into efforts to overturn the 2020 election. The complaint states that CPI gave a $1.2 million grant to Personnel Policy Operations (PPO), another nonprofit, which then transferred $1.1 million to the Constitutional Rights Defense Fund to fund legal defenses for Trump allies, including Meadows.
Accountable.US argues that CPI's actions violate its nonprofit status, which requires operations to benefit the public, not partisan operatives. The complaint calls for the dissolution of CPI and PPO, claiming they serve private interests rather than public purposes. The DC Attorney General has the authority to dissolve nonprofits that fail to operate in the public interest.
CPI, a key organization in conservative circles preparing for a potential second Trump administration, paid Meadows a substantial salary in 2022. The complaint underscores that nonprofits must not engage in political campaigning or private benefit operations to maintain their tax-exempt status. Additionally, another liberal group, Campaign for Accountability, previously filed a similar complaint with the IRS against CPI.
The takeaway here is the requirement for nonprofits to operate for public benefit to retain tax-exempt status. This case raises questions about whether CPI and PPO violated these rules by financially supporting Meadows and other Trump allies.
Mark Meadows Nonprofit Funneled Cash for Legal Bills, Group Says
A $170 million legal fee request from lawyers at Grant & Eisenhofer and three other firms remains unresolved after a Brooklyn federal judge rejected their antitrust settlement with Visa and Mastercard. The settlement, following nearly 20 years of litigation, aimed to reduce the interchange fees merchants pay for credit card transactions. Visa and Mastercard would have paid up to $113.3 million and $56.6 million, respectively, to cover the legal fees if the settlement was approved.
Judge Margo Brodie ruled that the settlement did not sufficiently address the merchants' concerns, despite agreeing with the fee request terms. She argued that Visa and Mastercard could withstand a more substantial settlement, noting that merchants paid $100 billion in interchange fees in 2023 alone. The proposed agreement would have marginally reduced swipe fees and imposed caps for five years but still required merchants to honor all Visa and Mastercard transactions.
The ruling means lawyers must renegotiate better terms with Visa and Mastercard, extending the timeline for any resolution. Despite rejecting the settlement, Brodie's decision cannot be appealed and would be difficult to overturn.
Opposition to the settlement came from major retailers and trade groups, who deemed it inadequate. The National Retail Federation, while not yet addressing the legal fee request, expressed broader concerns over the deal.
In related legal fee news, Tesla and the legal team that voided Elon Musk's $56 billion stock options will argue over compensation, with the plaintiffs seeking around $7 billion, contrasting Tesla's suggestion of $13.6 million. Additionally, firms involved in a $48 million settlement with Progressive over undervalued wrecked cars seek up to $16 million in fees, and Hagens Berman and Cohen Milstein were awarded $51.6 million in a chicken price-fixing case.
Legal Fee Tracker: Lawyers' $170 million payday in limbo in credit card swipe fee case | Reuters
This week’s closing theme is by John Philip Sousa.
This week's closing theme features the renowned American composer and conductor, John Philip Sousa. Known as "The March King," Sousa is celebrated for his extraordinary contributions to military and patriotic music. Born in Washington, D.C., in 1854, Sousa's career spanned more than five decades, during which he composed over 130 marches, as well as numerous operettas, suites, songs, and waltzes. His music epitomizes the spirit and vibrancy of American patriotism, making him a household name and a significant figure in American music history.
Sousa began his musical journey at a young age, joining the U.S. Marine Band as an apprentice when he was only 13. He later became the band's conductor, elevating its status to the finest military band in the country. After leaving the Marine Band, Sousa formed his own civilian band, which gained international fame and toured extensively. His impact on American music extends beyond composition; he also championed music education and the development of the sousaphone, a marching band instrument named in his honor.
Today, we highlight one of his most famous marches, "The Liberty Bell." Composed in 1893, this piece is instantly recognizable and has been used in various contexts, including as the theme for the British comedy series "Monty Python's Flying Circus." "The Liberty Bell" was originally intended for an operetta that never came to fruition, but it found new life as a standalone march. The piece is a perfect example of Sousa's ability to blend melodic ingenuity with rousing rhythmic patterns, capturing the essence of American optimism and pride. The title was inspired by a suggestion from Sousa's wife after they saw a picture of the Liberty Bell in a magazine.
Without further ado, enjoy "The Liberty Bell" by John Philip Sousa.
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This Day in Legal History: Carlin’s Seven Dirty Words Get to SCOTUS
On July 3, 1978, the US Supreme Court delivered a landmark decision in FCC v. Pacifica Foundation, affirming the Federal Communications Commission's (FCC) authority to reprimand New York radio station WBAI for airing George Carlin's "Seven Dirty Words" comedy routine.
The 5-4 ruling centered on Carlin's sketch, which listed words inappropriate for public broadcast. The Court held that the FCC could regulate indecent material on public airwaves during times when children might be listening.
Justice John Paul Stevens, writing for the majority, emphasized that broadcast media have unique accessibility to children and thus require special considerations. This ruling underscored the government's role in safeguarding public morality on airwaves, distinguishing broadcast media from other forms of communication due to its pervasive presence and accessibility. The decision sparked ongoing debates about free speech and government regulation, influencing policies on broadcasting standards and the permissible content on public airwaves.
A federal district court in Kansas has preliminarily blocked an Education Department rule that protects children from discrimination based on gender identity in schools receiving federal funding. Judge John W. Broomes issued the injunction, affecting Alaska, Kansas, Utah, and Wyoming. This rule, which extends Title IX protections to include sexual orientation and gender identity, has now been blocked in 14 states, following similar injunctions last month.
Judge Broomes, appointed by Trump, found that the states are likely to succeed in their claim that the Biden Administration exceeded its authority by expanding the definition of sex discrimination. The states argued that the regulation's definition of sexual harassment would suppress the speech of students who believe sex is immutable and binary, and who use biologically accurate pronouns. Broomes agreed, stating that the rule's definition of sex-based harassment is impermissibly vague under the Administrative Procedure Act.
This decision is a setback for the Biden Administration’s efforts to enhance LGBTQ rights. Since the Supreme Court's 2015 Obergefell v. Hodges decision, which guaranteed same-sex marriage, conservative legal efforts have focused on issues such as transgender bathroom bans, athlete bans, and restrictions on gender-affirming care for minors.
The Department of Justice has not yet commented on the ruling. The case, Kansas v. Dep’t of Education, is represented by the Kansas Attorney General's Office.
Biden’s Title IX Transgender Protections Blocked by Kansas Judge
In light of a recent Supreme Court ruling narrowing a criminal obstruction law, lawyers for Jan. 6 Capitol rioters are preparing to challenge convictions and seek reduced sentences. The Supreme Court's decision requires prosecutors to prove that defendants destroyed or altered documents to convict them under the obstruction statute, impacting over 200 cases related to the Capitol riot.
Attorneys have indicated plans to file motions in the US District Court for the District of Columbia to dismiss charges or seek resentencing for clients who did not handle documents, particularly those linked to the Oath Keepers. This move will significantly affect cases where the obstruction charge was the sole felony. Carmen Hernandez, a criminal defense lawyer, anticipates various creative legal arguments in response to the ruling.
The Supreme Court's 6-3 decision on June 28, which favored Capitol rioter Joseph Fischer, has set a new precedent for interpreting the obstruction statute, originally enacted to address evidence destruction post-Enron scandal. This ruling is a setback for federal prosecutors who had heavily relied on the statute to charge participants in the Capitol attack. Elizabeth Franklin-Best, appealing for Oath Keepers' leader Stewart Rhodes, expects the ruling to substantially impact his sentence, as he was also convicted of seditious conspiracy.
Several attorneys for other Jan. 6 defendants have indicated intentions to seek relief based on the Fischer ruling. The DC courts will likely face an influx of filings for years. The broader immediate impact is somewhat limited as only 249 out of over 1,400 charged individuals were affected by the statute, with 52 cases having obstruction as the only felony.
The Justice Department is still evaluating the ruling's implications, and early signals suggest prosecutors might not concede in all cases. Some defense lawyers are preparing to argue that the initial indictments were flawed under the new interpretation. However, outcomes will likely vary, with hurdles for those who pled guilty before the ruling, and effectiveness depending on individual judges and defendants.
The Supreme Court's re-interpretation of the obstruction statute, requiring proof of document destruction or alteration, is critical. This change affects the foundation of many convictions and challenges the prosecutorial approach, necessitating a reassessment of cases and potentially leading to significant legal revisions and reductions in sentences.
Jan. 6 Rioters to Request Relief After Supreme Court Ruling
US law firms are quickly capitalizing on recent Supreme Court decisions that limit federal agency powers. Within hours of these rulings, firms began sending updates and hosting webinars to explain the implications to their clients. The Supreme Court's decisions, made over three days, restrict agencies' use of internal judges, overturn the Chevron deference principle (which required courts to defer to agency interpretations of ambiguous laws), and revive challenges related to statute limitations, potentially leading to more lawsuits over old regulations.
Experts believe these rulings will significantly boost administrative law challenges, particularly benefiting firms that frequently contest federal regulations. Many lawyers have reported a surge in client inquiries, noting that the end of Chevron deference might lead businesses to pursue more litigation due to increased chances of success. The statute of limitations decision is also expected to result in more legal actions, though some attorneys predict a gradual increase rather than an immediate surge in new cases.
Some attorneys highlight that the post-Chevron landscape is creating uncertainty and questions among clients across various industries. There is an expectation that while some companies may adopt a more aggressive litigation strategy, others might prefer lobbying to challenge regulations, as many corporate clients are cautious about escalating legal expenses.
Overall, the Supreme Court's rulings are reshaping the legal environment, prompting law firms to guide clients through this evolving landscape and capitalize on emerging opportunities.
US law firms smell opportunity as Supreme Court guts agency powers | Reuters
In my column, I argue that the IRS's shift to a broader audit mandate for all high-income taxpayers could undermine tax compliance improvements. The IRS needs to reassess and refine its audit strategies to optimize resources and maximize compliance, particularly among the wealthiest individuals. I propose a hybrid audit strategy that ensures nearly 100% audit coverage for the top 1% of income earners, with progressively lower rates for lower high-income brackets. This approach would be more effective than the current broad mandate, which lacks specific metrics for measuring success and could fail to capture significant non-compliance.
Previously, the IRS had a directive to audit at least 8% of returns for individuals with incomes over $10 million, which was a focused and measurable effort. The new policy, however, aims for broader scrutiny without clear methods to gauge effectiveness, raising concerns about its impact on audit rates and overall compliance. My suggested hybrid approach would combine the precision of the former directive with a progressive audit threshold system, concentrating IRS resources where they can yield the highest return.
Focusing on high-income taxpayers with the greatest potential for avoidance ensures better deterrence of tax evasion. The Treasury Inspector General for Tax Administration's report supports this, showing that audits of high-income individuals are more productive. By defining specific audit coverage thresholds for the highest income brackets, the IRS can optimize its efforts and expand compliance audits down the income brackets.
The critical legal element here is the need for targeted and measurable audit strategies. Specific metrics are essential to ensure the IRS's audit efforts are efficient and effective, allowing the agency to allocate resources where they can achieve the greatest impact on revenue and compliance.
IRS Hybrid Audit Approach Best Bet to Scrutinize Rich Taxpayers
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This Day in Legal History: Sherman Antitrust Act
On July 2, 1890, U.S. President Benjamin Harrison signed the Sherman Antitrust Act into law, marking a transformative moment in American economic history. This landmark legislation aimed to prohibit the formation of trusts and monopolies that restricted trade across states, fundamentally altering the landscape of American industry. Named after Senator John Sherman, the act sought to promote fair competition for the benefit of consumers.
The Sherman Antitrust Act was a response to growing public concern over the power and influence of large corporations, which often stifled competition and controlled vast market shares. Notable entities affected by this law included John D. Rockefeller's Standard Oil and the Bell System of telecommunications. Standard Oil, once a dominant force in the oil industry, was dismantled into smaller companies in 1911, following a landmark Supreme Court decision that found it in violation of the act.
Similarly, the Bell System, which had monopolized the telecommunications industry, was broken up in 1982, leading to the creation of several independent companies. The Sherman Antitrust Act thus paved the way for more robust enforcement of antitrust laws and inspired future legislation, such as the Clayton Antitrust Act of 1914.
The act's passage represented a significant shift toward greater governmental regulation of the economy, aiming to protect consumers and ensure a level playing field for businesses. Over the years, it has served as a critical tool for the U.S. Department of Justice in pursuing antitrust cases. The Sherman Antitrust Act remains a cornerstone of American antitrust policy, highlighting the ongoing importance of regulating corporate power to maintain market integrity.
The transition from fossil fuels to renewable energy and new technology is providing a significant boost to private equity fundraising, benefiting law firms specializing in these areas. Investors have raised $17.4 billion for energy transition projects by June, surpassing last year's total of $10.3 billion, according to Preqin. This surge is driven by tax incentives from the Inflation Reduction Act, public demand for climate change solutions, and advancements in technologies like carbon capture.
Prominent law firms, such as Davis Polk & Wardwell, Gibson Dunn, and Vinson & Elkins, are seeing increased activity due to the growing interest in energy transition investments. Michael Piazza of Gibson Dunn noted that despite the rise in renewable energy investments, continued investment in oil and gas remains necessary to support the energy transition responsibly.
Major funds include Brookfield Asset Management's $10 billion fund announced in February and Morgan Stanley's plan to raise at least $1 billion. Firms like Blackstone, TPG, and KKR are also dedicating substantial resources to energy transition projects.
While private equity fundraising has generally been sluggish, the energy transition sector stands out. Last year, private equity aggregate capital reached its lowest level since 2018, dropping over 8%. Limited partners are holding onto portfolio companies longer due to fewer exits via IPOs and secondary sales, complicating fundraising efforts.
Law firms with expertise in private credit, fund formation, and energy deals are capitalizing on this trend. Firms such as Latham & Watkins and Simpson Thacher & Bartlett have been instrumental in advising on significant private credit loans and fund formations. The demand for legal services in energy transition has prompted firms like Paul Hastings and Sidley Austin to invest in hiring specialists in private credit and finance.
Overall, the focus on environmental, social, and governance (ESG) initiatives has further fueled the energy transition boom, as limited partnerships increasingly include ESG criteria in their investment mandates. This shift provides incentives for investors to choose funds dedicated to climate technology and ESG projects over traditional private equity investments.
Energy Transition Boom Aids Lawyers During Private Equity Slump
Rudy Giuliani has requested to convert his Chapter 11 bankruptcy to a Chapter 7 liquidation. If approved by Judge Sean H. Lane of the US Bankruptcy Court for the Southern District of New York, a trustee will manage Giuliani's estate and liquidate his assets to pay off his creditors, including a $148 million defamation judgment owed to two Georgia election workers.
Creditors had previously called for a trustee, alleging that Giuliani had delayed financial disclosures and moved assets out of their reach. Giuliani's lawyers denied any dishonesty, stating he was correcting past financial mismanagement. The motion to convert the bankruptcy was filed as a one-page document, indicating Giuliani's decision to pursue this legal option against what his spokesperson described as a "partisan and politically motivated proceeding."
Judge Lane has expressed frustration over the slow progress of Giuliani’s bankruptcy case, noting Giuliani's focus on appealing the defamation judgment. Giuliani filed for Chapter 11 in December following the defamation ruling. His legal team is from Berger, Fischoff, Shumer, Wexler & Goodman LLP, while the committee of unsecured creditors is represented by Akin Gump Strauss Hauer & Feld LLP.
Giuliani Moves to Liquidate Assets to Pay $148 Million Debt (1)
Donald Trump is seeking to overturn his New York hush-money conviction following a U.S. Supreme Court decision that grants him some immunity from criminal prosecution for actions taken while president. Trump's lawyers have taken initial steps to request that the New York judge, Juan Merchan, set aside the jury's verdict, and propose delaying his sentencing to allow for briefing and arguments.
The Supreme Court's 6-3 decision earlier stated that former presidents have immunity from prosecution for many official acts, reversing lower-court rulings and potentially influencing Trump's New York case. While two judges previously rejected Trump's immunity claims before this ruling, the decision could impact other legal proceedings against him.
Trump's conviction involves 34 counts of falsifying business records related to payments made by his former lawyer, Michael Cohen, to adult-film star Stormy Daniels during the 2016 election. Prosecutors argued Trump reimbursed Cohen with payments falsely recorded as legal services. Despite Trump's defense, the jury found the payments were intended to silence Daniels about an affair, not for legitimate legal work.
The Supreme Court ruling could also affect other cases against Trump, including federal charges related to the 2020 election and classified documents. The legal landscape for Trump remains complex and dynamic as he navigates multiple legal challenges.
Trump Seeks to Toss NY Felony Conviction After Immunity Win (1)
The U.S. Supreme Court's recent decision on presidential immunity leaves Judge Tanya Chutkan with the challenging task of determining the extent of immunity Donald Trump has in his federal criminal case related to his efforts to overturn the 2020 election results. The Court's 6-3 ruling affirmed that Trump has broad protection from prosecution for actions within his official duties as president. Judge Chutkan must now assess which actions fall under this protection and which do not, significantly impacting the four-count indictment brought by Special Counsel Jack Smith.
This complex evaluation includes analyzing Trump's public statements before the January 6 Capitol attack and his attempts to organize alternate electors. Additionally, Chutkan will decide if prosecutors can overcome the presumption of immunity regarding Trump's pressure on then-Vice President Mike Pence. The Supreme Court's ruling suggests these communications are considered official acts.
The process will delay the trial, originally scheduled for March, potentially pushing it beyond the November 5 presidential election where Trump is the Republican candidate. Chutkan, known for her no-nonsense approach, has previously shown little tolerance for delays and has a history of imposing strict sentences on Capitol rioters. Trump's legal team plans to appeal any unfavorable rulings, which could further prolong proceedings.
Chutkan's previous ruling in December 2023 rejected Trump's broad immunity claims, but the new Supreme Court guidelines require her to reassess this stance. Additionally, a separate Supreme Court decision last week raised the bar for federal obstruction charges, directly affecting two of the four counts against Trump. The outcome of these legal challenges will set a significant precedent for future presidential immunity cases.
US Supreme Court leaves Judge Tanya Chutkan to parse Trump immunity | Reuters
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This Day in Legal History: First US Income Tax
On July 1, 1862, President Abraham Lincoln signed the Tax Act of 1862 into law, marking a pivotal moment in American financial history. This legislation introduced a federal income tax to help fund the Civil War, imposing a 3% tax on incomes over $600 and a 5% tax on incomes above $10,000. Despite the pressing needs of the war, compliance with the act was notably poor, reflecting widespread resistance to the new tax.
The Tax Act of 1862 was significant as it represented the first instance of income taxation by the federal government, setting a precedent for future taxation policies. However, after the Civil War, the constitutionality of the income tax came into question. In 1872, the federal income tax was repealed, and in 1895, the Supreme Court declared it unconstitutional in the case of Pollock v. Farmers' Loan & Trust Co., arguing that direct taxes had to be apportioned among the states according to the Constitution.
This ruling effectively halted federal income taxation until the early 20th century. The financial demands of the country, particularly during times of war and economic expansion, underscored the need for a reliable source of revenue. Consequently, the ratification of the 16th Amendment in 1913 granted Congress the explicit authority to levy income taxes without apportionment, fundamentally reshaping the American tax system.
The Tax Act of 1862 laid the groundwork for this constitutional change and highlighted the ongoing challenges of implementing and enforcing income tax laws. Its passage and subsequent legal battles reflect the evolving relationship between the federal government and its citizens concerning taxation. Today, the income tax remains a cornerstone of federal revenue, illustrating the enduring impact of the Tax Act of 1862 on American fiscal policy.
Today, the Supreme Court issued a decision addressing the scope of presidential immunity in the case of former President Donald J. Trump, who was indicted on charges related to his conduct during his presidency following the 2020 election. The Court held that a former President is entitled to absolute immunity from criminal prosecution for actions within the "conclusive and preclusive" scope of their constitutional authority. For other official acts, the President enjoys at least presumptive immunity. However, the Court affirmed that no immunity exists for unofficial acts. The decision kicks the major questions back to the lower court for a determination consistent with the holding.
Trump v. United States - SCOTUS
The U.S. Supreme Court, in a significant ruling, has overturned the Chevron doctrine, fundamentally altering how courts review agency interpretations of ambiguous statutes. The decision, issued in the case of Loper Bright Enterprises v. Raimondo, dismantles a precedent that has been in place since the 1984 Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. case.
The Chevron doctrine mandated that courts defer to reasonable agency interpretations of ambiguous laws, effectively allowing agencies to shape their regulatory authority. However, the Supreme Court, led by Chief Justice Roberts, concluded that this deference undermines the judiciary's role as defined by the Administrative Procedure Act (APA) and the Constitution.
Key Elements of the Decision:
Judicial Responsibility: The Court emphasized that Article III of the Constitution assigns the judiciary the responsibility to interpret laws, not agencies. The ruling reinstates the principle that courts must use their independent judgment to resolve legal ambiguities.
APA Compliance: The Administrative Procedure Act directs courts to "decide all relevant questions of law" and "interpret constitutional and statutory provisions." The Chevron doctrine's requirement for courts to defer to agency interpretations conflicted with this mandate.
Historical Perspective: The decision drew on historical judicial practices, noting that while courts have often given weight to executive interpretations, ultimate interpretive authority has always rested with the judiciary.
Inconsistencies and Ambiguity: The ruling criticized Chevron for its inherent inconsistencies and the difficulties it posed in defining statutory ambiguities. The Court argued that statutory interpretation is a core judicial function that does not change simply because an agency is involved.
Separation of Powers: The Court's opinion underscored the importance of maintaining clear boundaries between legislative, executive, and judicial functions, rejecting the notion that agencies should have final interpretive authority over ambiguous statutes.
Impact on Agencies: The decision suggests that agencies must now operate under increased judicial scrutiny and cannot rely on broad statutory interpretations to justify their actions.
This landmark decision is expected to lead to more litigation as businesses and industry groups challenge government regulations without the deference previously afforded to agency interpretations under Chevron. It will fundamentally alter the landscape of regulatory law and may very well be the most impactful Supreme Court decision this term.
22-451 Loper Bright Enterprises v. Raimondo (06/28/2024)
Chevron Doctrine’s Demise Would Mean Big Changes for Tax Law
The U.S. Justice Department plans to criminally charge Boeing with fraud over two fatal crashes and will offer a plea deal that includes a financial penalty and an independent monitor for three years. The Justice Department's decision follows a finding that Boeing violated a 2021 agreement shielding it from prosecution. The proposed plea deal, which Boeing must respond to by the end of the week, would require Boeing to plead guilty to conspiring to defraud the Federal Aviation Administration. The plea deal includes a $487.2 million penalty, three years of probation, and meetings between Boeing's board and victims' families. If Boeing rejects the deal, the case will go to trial. Victims' families, unhappy with the proposed plea deal, plan to oppose it in court, seeking more significant accountability and financial consequences for Boeing. This decision intensifies Boeing's ongoing crisis, affecting its financial standing and government contract eligibility.
US to criminally charge Boeing, seek guilty plea, sources say | Reuters
DOJ readying criminal charges against Boeing for prior deadly 737 MAX crashes - POLITICO
Steve Bannon, a prominent ally of former President Donald Trump, is set to report to prison on Monday to serve a four-month sentence for defying a congressional subpoena related to the January 6th Capitol attack investigation. Bannon will serve his time at a low-security federal prison in Danbury, Connecticut. His prison term could extend almost to Election Day, complicating his communication with followers of his "War Room" podcast due to the lack of internet access for inmates.
Bannon's attempt to delay his sentence while appealing his conviction was denied by the Supreme Court. He was convicted in 2022 on two misdemeanor counts of contempt of Congress for refusing to provide documents or testify before the House committee investigating the Capitol riot. Previously, Bannon had been a key figure in Trump's 2016 campaign and served as his chief strategist in the White House in 2017.
Bannon is not the first former Trump official to face prison for non-cooperation with the January 6th committee; former trade adviser Peter Navarro also received a four-month sentence. Additionally, Bannon was pardoned by Trump in 2021 on separate federal charges of fraud related to a border wall fundraising campaign. He still faces state charges for the same issue and awaits trial.
Trump ally Steve Bannon to report to prison following contempt conviction | Reuters
A federal judge has ruled that most of the U.S. Securities and Exchange Commission's (SEC) lawsuit against Binance, the largest cryptocurrency exchange globally, can proceed. The lawsuit accuses Binance and its founder, Changpeng Zhao, of violating securities laws by inflating trading volumes, diverting customer funds, failing to restrict U.S. users, and misleading investors about market surveillance controls. The SEC also claims Binance unlawfully facilitated trading of unregistered securities.
Judge Amy Berman Jackson's decision is a setback for Binance, which sought to dismiss the case. However, the ruling partially favors the cryptocurrency industry, as it supports a previous judgment that secondary sales of Binance's tokens by other sellers on exchanges are not securities. This legal challenge follows Binance's agreement in November to pay $4.3 billion to settle illicit finance breaches with the Department of Justice and the Commodity Futures Trading Commission.
Binance must face bulk of US SEC crypto lawsuit, judge rules | Reuters
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This Day in Legal History: Regents of the University of California v. Bakke
On June 28, 1978, the US Supreme Court delivered a landmark decision in the case of Regents of the University of California v. Bakke, shaping the future of affirmative action in university admissions. The case centered around Allan Bakke, a white applicant who was twice denied admission to the University of California, Davis Medical School, despite having higher test scores than some minority candidates who were admitted under a special admissions program. Bakke argued that he was a victim of racial discrimination.
The Court's ruling was complex, resulting in a split opinion. By a narrow 5-4 margin, the Supreme Court held that the university's use of rigid racial quotas, specifically reserving 16 out of 100 seats for minority students, violated the Equal Protection Clause of the Fourteenth Amendment and the Civil Rights Act of 1964. This decision invalidated the quota system used by the university.
However, the Court also ruled, in a separate 5-4 vote, that race could be considered as one of many factors in the admissions process. This part of the decision, delivered by Justice Lewis Powell, emphasized that while quotas were unconstitutional, affirmative action programs aimed at increasing diversity and providing opportunities for historically disadvantaged groups could be constitutionally permissible.
The Bakke decision was a pivotal moment in the ongoing debate over affirmative action, setting a precedent that continues to influence educational policies and the broader discourse on racial equality in the United States. The case highlighted the delicate balance between prohibiting racial discrimination and promoting diversity and inclusion in higher education.
Despite repeated reversals from the Supreme Court, the US Court of Appeals for the Fifth Circuit has continued to push conservative legal boundaries. This term, the Supreme Court reversed or vacated six out of nine Fifth Circuit decisions, yet still made significant rulings in favor of conservative positions, including limiting the Securities and Exchange Commission’s (SEC) enforcement power and rejecting a federal bump stock ban. Observers note that while the Supreme Court often overturned Fifth Circuit rulings, it also aligned with the circuit's conservative ideology in key cases.
A notable example was the Supreme Court's decision that people subject to civil penalties for alleged securities fraud have a constitutional right to a jury trial, significantly impacting the SEC's adjudication process. Another major case saw the Supreme Court upholding the Fifth Circuit’s rejection of the bump stock ban, a regulation initially issued by the Trump administration.
The Fifth Circuit also won a case involving incomplete deportation hearing notices, which, though technical, reflected the court's influence. However, the Supreme Court criticized the Fifth Circuit for overreaching, particularly on issues like the abortion pill mifepristone and social media censorship, emphasizing the importance of standing.
The Fifth Circuit’s decisions are often driven by judges appointed by former President Donald Trump, whose influence reshaped the court. Legal experts suggest that despite some setbacks, the Fifth Circuit’s conservative rulings continue to shape national policies, revealing a complex interplay between the circuit and the Supreme Court.
Conservatives Gain Despite Fifth Circuit Setbacks at High Court
The home health industry is preparing to refile its lawsuit against Medicare payment cuts after a recent unfavorable court ruling. William A. Dombi, president of the National Association for Home Care & Hospice (NAHC), stated that the organization will first complete the necessary administrative appeals before returning to court. This legal battle could significantly impact Medicare home health providers and beneficiaries.
The US District Court for the District of Columbia dismissed NAHC's initial lawsuit because it was filed before exhausting all administrative remedies. Instead of appealing, NAHC will follow the court’s directive and refile the case. Meanwhile, industry groups are lobbying Congress to pass legislation to block a proposed 1.7% cut to home health payments in 2025.
The Centers for Medicare & Medicaid Services (CMS) proposed a 2.5% payment increase but also a 3.6% cut due to a “permanent behavior adjustment” and a 0.6% cut for outlier payments. This is the third consecutive year of proposed cuts, which, according to Joanne Cunningham, CEO of the Partnership for Quality Home Healthcare, make it difficult for providers to meet the growing care demands of an aging population. High labor costs and workforce shortages exacerbate these challenges, and Katie Smith Sloan of LeadingAge noted that the cuts make it harder to recruit nurses.
Senators Debbie Stabenow and Susan Collins, along with Representatives Terri Sewell and Adrian Smith, have introduced legislation to block the CMS proposal and restrict its authority over payment adjustments based on provider behavior. Dombi emphasized ongoing efforts with lawmakers, indicating that CMS is unlikely to change its stance.
The Medicare Payment Advisory Commission (MedPAC) has consistently recommended reductions in home health payments, citing that current payments are significantly higher than costs. Their latest report projects a profit margin of 18% for 2024, arguing that excess payments diminish the value of home health care. However, Dombi countered that MedPAC’s estimates don’t account for lower payments from private Medicare Advantage plans, which now cover a majority of Medicare beneficiaries.
Home Health Agencies to Renew Suit Over Medicare Payment Rates
A California federal jury has ordered the National Football League (NFL) to pay over $4.7 billion in damages for overcharging subscribers of its "Sunday Ticket" telecasts. The jury found that the NFL conspired with member teams to inflate the price of "Sunday Ticket" for millions of residential and commercial subscribers. This decision followed more than a decade of litigation. The plaintiffs, who were DirecTV subscribers, argued that the NFL's agreements with broadcast partners allowed DirecTV to charge higher prices by monopolizing distribution. A judge may triple the damages under U.S. antitrust law, potentially bringing the total to over $14 billion. The NFL plans to contest the verdict.
NFL hit with $4.7 billion verdict in 'Sunday Ticket' antitrust trial | Reuters
This week’s closing theme is by Ludwig van Beethoven, once again, and still a composer of some note.
As we close out this week, we turn to the life and music of Ludwig van Beethoven, one of classical music’s most iconic figures. On June 28, 1802, Beethoven penned a poignant letter to his friend Franz Wegeler, revealing his deep struggles with his worsening deafness. Despite the profound personal challenge this posed, Beethoven's determination to overcome his condition fueled some of his most extraordinary compositions.
In light of this story, our closing theme is Beethoven’s "Symphony No. 3 in E-flat major, Op. 55," commonly known as the "Eroica Symphony." This symphony, composed between 1803 and 1804, epitomizes Beethoven's resilience and innovation. Originally dedicated to Napoleon Bonaparte, whom Beethoven admired for his democratic ideals, the dedication was famously retracted when Napoleon declared himself emperor. The "Eroica" is renowned for its emotional depth and groundbreaking structure, marking a significant shift from classical to romantic symphonic form.
Beethoven's ability to compose such a powerful and transformative piece while grappling with the despair of impending deafness is a testament to his genius and perseverance. The "Eroica Symphony" not only reflects Beethoven’s personal triumphs but also serves as an enduring symbol of human resilience in the face of adversity.
As you listen to the stirring movements of this symphony, remember the indomitable spirit of Beethoven. Let his story and music inspire you as we conclude this week, reminding us all of the power of determination and the beauty that can emerge from our greatest challenges. Thank you for joining us, and we look forward to sharing more with you next week.
Once again and without further ado, Ludwig van Beethoven’s Symphony No. 3 in E-flat major, Op. 55, the “Eroica Symphony” – enjoy!
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This Day in Legal History: LaGrand ICJ Case
On June 27, 2001, the International Court of Justice (ICJ) made a landmark ruling in the LaGrand case, Germany v. United States, affirming that foreign nationals must be informed of their right to contact their home country's embassy following an arrest. This case revolved around brothers Karl and Walter LaGrand, German nationals who were arrested in Arizona in 1982 for murder and armed robbery. Arizona authorities failed to inform the brothers of their right to consular assistance as stipulated by the Vienna Convention on Consular Relations.
Despite a 1999 U.S. Supreme Court decision upholding their convictions, Germany brought the case to the ICJ, which issued a provisional order to stay the executions. Nonetheless, Arizona proceeded with the executions that same year. The ICJ's 2001 ruling declared that the U.S. had violated both the Vienna Convention and the ICJ's provisional order.
This decision underscored the importance of consular notification and reinforced international legal standards for the treatment of foreign nationals. It also highlighted the binding nature of ICJ provisional measures and the obligation of states to comply with international treaty obligations.
Of course, having said all of that, the brothers LaGrand were still executed in contravention of both the ICJ and the Vienna Convention–so the degree to which decisions by either are truly binding is at least a matter of debate.
The families of victims murdered by a Chiquita-funded paramilitary group will receive around $1,300 per victim, while their lawyer, Paul Wolf, is set to earn over $4 million in fees from the settlement. This payout is significantly lower than a recent verdict awarding millions per plaintiff. Colombian President Gustavo Petro criticized the settlement, arguing that it devalues Colombian lives.
The settlement, affecting about 2,500 victims' families, came after a landmark jury verdict awarded $38.3 million to 16 victims' families. Chiquita, accused of paying paramilitary groups to quell regional unrest, claimed these payments were made under duress, but the jury rejected this defense. Salvatore Mancuso, a former paramilitary leader, confirmed Chiquita's payments in an interview.
The lowest award from the recent verdict was $2 million, much higher than the settlement amount, which must be shared among family members. Wolf will collect over $4 million from the settlement, whether or not his clients accept the deal.
This settlement has sparked additional legal actions and court filings in Florida, where other lawyers aim to secure more funds for victims. Senior District Judge Kenneth A. Marra must decide if there will be a cap on payments to families. Chiquita argued that Colombian law limits damages to about $52,000 per victim, while other plaintiff lawyers disputed this, citing a Colombian court ruling against such caps.
Wolf defended the settlement, stating it was better to secure something for his clients than risk getting nothing. The settlement agreement has complicated efforts to reach a global deal for all victims’ families, but other plaintiffs' attorneys remain committed to pursuing more substantial compensation.
‘Life of a Colombian’ Insulted by Chiquita’s $1,300 Payout
On June 26, 2024, the U.S. Supreme Court ruled in favor of former Portage, Indiana mayor James Snyder, overturning his federal corruption conviction for accepting $13,000 from a truck company awarded city contracts. The 6-3 decision, authored by Justice Brett Kavanaugh, determined that federal law does not criminalize state and local officials accepting gratuities, such as gift cards or lunches, given as tokens of appreciation after official acts. The ruling, supported by the court’s conservative justices and opposed by the liberal justices, emphasized that regulating such gratuities should be left to state and local governments, not federal prosecutors.
Snyder was initially convicted and sentenced to nearly two years in prison for soliciting a payment in connection with government contracts, which he claimed was a consulting fee. The Chicago-based 7th U.S. Circuit Court of Appeals had upheld his conviction, leading to his appeal to the Supreme Court. In dissent, Justice Ketanji Brown Jackson argued that the decision weakens federal efforts to combat public corruption and leaves the prosecution of serious corrupt practices in doubt.
This ruling follows the court's trend of narrowing the scope of federal corruption laws, similar to its decision last year to overturn the bribery conviction of an ex-aide to former New York Governor Andrew Cuomo.
US Supreme Court narrows reach of federal corruption law | Reuters
The National Transportation Safety Board (NTSB) has sanctioned Boeing for releasing confidential details about the ongoing investigation into a 737 MAX mid-air emergency. Boeing is accused of violating investigative regulations by disclosing non-public information and speculating on potential causes of the January 5 Alaska Airlines door plug blowout during a media briefing. As a result, Boeing will retain its status as a party to the investigation but will lose access to information produced during the probe and will not be allowed to ask questions at the upcoming investigative hearing in August.
The NTSB's action has heightened tensions between Boeing and government agencies, especially as the U.S. Department of Justice (DOJ) considers criminal charges against Boeing for violating a 2021 settlement agreement related to previous 737 MAX crashes. The NTSB will coordinate with the DOJ's Fraud Division regarding Boeing's unauthorized information releases.
In February, the NTSB noted the door panel in the Alaska Airlines incident was missing four key bolts. The unauthorized release revealed that Boeing provided unverified information and opinions to the media, which the NTSB had not approved. This incident adds to a series of conflicts between Boeing and the NTSB, including a recent delay in providing employee names involved in the 737 MAX door team, and criticism of Boeing’s portrayal of the investigation.
The NTSB emphasized that its investigation aims to determine the probable cause of the accident rather than assign individual blame. This latest sanction underscores ongoing scrutiny and legal challenges facing Boeing as it navigates compliance and safety issues.
NTSB sanctions Boeing over release of 737 MAX investigation details, flags to DOJ | Reuters
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This Day in Legal History: Pivotal LGBTQ+ Rights Decisions
On this day, June 26th, in legal history, two pivotal Supreme Court decisions significantly advanced the cause of marriage equality in the United States.
On June 26, 2013, the Supreme Court delivered its decision in United States v. Windsor. In a 5-4 ruling, the Court struck down Section 3 of the Defense of Marriage Act (DOMA), which had defined marriage for federal purposes as the union between a man and a woman. Edith Windsor, the plaintiff, had been denied a spousal tax exemption after her same-sex spouse's death, prompting her to challenge the law. The Court held that DOMA's definition of marriage was unconstitutional as it violated the principles of due process and equal protection guaranteed by the Fifth Amendment. This landmark decision allowed same-sex couples to receive the same federal benefits as heterosexual couples, marking a significant step forward for LGBTQ+ rights and equality.
Two years later, on June 26, 2015, the Supreme Court issued another historic ruling in Obergefell v. Hodges. In another closely divided 5-4 decision, the Court declared that same-sex marriage is a constitutional right under the 14th Amendment. The case consolidated several challenges from same-sex couples who had been denied the right to marry or have their marriages recognized by their home states. Justice Anthony Kennedy, writing for the majority, stated that the right to marry is a fundamental right inherent in the liberty of the person, and under the Due Process and Equal Protection Clauses of the 14th Amendment, same-sex couples cannot be denied that right. This ruling effectively legalized same-sex marriage across the United States, ensuring that all states must perform and recognize marriages between individuals of the same sex.
These decisions on June 26th were monumental in affirming the rights of same-sex couples and dismantling legal barriers to marriage equality, marking significant victories for the LGBTQ+ community and setting precedents for future civil rights advancements.
Supreme Court Justice Ketanji Brown Jackson recently surprised defense attorneys with her unexpected votes against criminal defendants, despite her background as a former federal defender. In two cases decided at the end of the term, Jackson broke from her liberal colleagues. She joined the majority in a case broadening expert witness testimony and dissented in another that reinforced the right to a jury trial.
President Joe Biden highlighted Jackson’s unique experience as a public defender when nominating her in 2022.
In Diaz v. United States, a 6-3 decision, the Court sided with prosecutors on expert witness testimony, allowing experts to discuss what most defendants generally know. Jackson joined Justice Clarence Thomas’s majority opinion and wrote separately, suggesting the rule could benefit both prosecutors and defendants.
In Erlinger v. United States, the Court ruled 6-3 to apply the Apprendi v. New Jersey precedent broadly, requiring juries to decide facts that could increase sentences. Jackson dissented, arguing that Apprendi limits legislative efforts to create fairer sentencing systems. She suggested overturning Apprendi, which surprised many in the defense community given its importance to defendants’ rights.
Some notable defense attorneys have expressed disappointment in her positions, though acknowledging that public defender views are not monolithic.
Justice Jackson Takes Unexpected Positions in Criminal Cases
A recent study by Georgetown University’s Center on Education and Workforce revealed that law school graduates earn a median salary of $72,000 after debt payments four years into their careers. However, this figure varies significantly depending on the law school attended. Graduates from seven elite law schools, including Columbia, University of Pennsylvania, and Harvard, have median earnings of over $200,000 after debt. In contrast, graduates from 33 lower-ranking law schools earn $55,000 or less.
The report, titled "A Law Degree Is No Sure Thing: Some Law School Graduates Earn Top Dollar, but Many Do Not," shows that law graduates typically leave school with a median debt of $118,500. Columbia Law School offers the highest return on investment with net median earnings of $253,800 after four years, followed by other top-tier schools. These elite institutions account for about 20% of law students and tend to send over half their graduates to high-paying jobs at large law firms.
Conversely, 20 law schools have graduates with median net earnings of $50,000 or less after debt payments, including Cooley Law School and Atlanta’s John Marshall Law School. The study utilized data from various sources, such as the U.S. Census Bureau and the American Bar Association, to assess employment outcomes, salaries, bar passage rates, and debt.
The report underscores a significant disparity in financial outcomes between graduates of top-ranked law schools and those from lower-ranked institutions.
Law grads' median earnings of $72,000 after debt show 'vast gulf' in pay, study finds | Reuters
Lawmakers in the United States are pushing for the first major federal data privacy legislation, the American Privacy Rights Act, which has bipartisan support. The bill, sponsored by Democratic Senator Maria Cantwell and Republican Representative Cathy McMorris Rodgers, aims to establish a national data privacy standard. This would allow individuals to access, delete, and opt out of their data being used for targeted advertising, and would create a national data broker registry.
The U.S. has lagged behind other regions like the European Union, which implemented the General Data Protection Regulation (GDPR) in 2018. Industry groups, including the U.S. Chamber of Commerce and TechNet, argue that the bill lacks safeguards to prevent states from adding their own regulations, which could complicate compliance for businesses. They advocate for a unified national standard without additional state-level regulations.
Privacy advocates, however, contend that the bill would hinder states from addressing new technological developments and responding to emerging privacy issues. They fear that federal pre-emption could stifle the progressive influence of states like California, which often leads in privacy regulations. Ashkan Soltani, from the California Privacy Protection Agency, warned against setting static regulations given the rapid pace of technological advancements.
Democratic Representative Suzan DelBene supports the bill, citing the current "patchwork" of state laws as problematic for small businesses. The bill will undergo a markup hearing on Thursday, a crucial step before potentially advancing to a House vote.
US lawmakers push for federal data privacy law; tech industry and critics are wary | Reuters
A federal judge has ruled that Walt Disney Co. must face an antitrust class action lawsuit filed by 25 subscribers to YouTube TV and DirecTV Stream. The subscribers allege that Disney's agreements with rival streaming TV providers, which included access to ESPN content, restrained trade and led to higher prices. Judge Edward J. Davila of the US District Court for the Northern District of California found that the plaintiffs plausibly alleged Disney's conduct harmed competition in the streaming live pay TV market (SLPTV).
The lawsuit claims Disney's agreements prevented other streamers from offering lower-priced bundles excluding ESPN, thus raising subscription costs and protecting Disney-owned Hulu from competition. Despite partially dismissing the initial complaint, the judge allowed an amended complaint to proceed, alleging violations of the federal Sherman Act and state antitrust laws. While the court dismissed claims for damages under the Sherman Act, limiting potential relief to an injunction, it allowed most state antitrust claims to continue, except for those under the Illinois Antitrust Act and Tennessee Trade Practices Act.
The decision follows the Justice Department's plans to review a proposed new streaming service by Disney, Fox Corp., and Warner Bros. Discovery Inc. for potential consumer harm. The case, Biddle et al v. Walt Disney Co., continues to highlight concerns over anticompetitive practices in the streaming industry.
Disney Must Face Antitrust Class Suit by TV Streaming Consumers
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This Day in Legal History: Engel v. Vitale Decided
On June 25, 1962, the United States Supreme Court made a landmark decision in the case of Engel v. Vitale. The Court ruled that the recitation of a state-sponsored prayer in public schools violated the Establishment Clause of the First Amendment. This case arose from a New York State law that required public schools to start the day with a non-denominational prayer drafted by the state education board.
The plaintiffs, led by Steven Engel, argued that this practice amounted to an unconstitutional endorsement of religion. The Supreme Court, in a 6-1 decision, agreed and held that government-directed prayer in public schools was inherently coercive and an infringement on the separation of church and state.
Justice Hugo Black, writing for the majority, emphasized that the government should remain neutral on religious matters to ensure freedom of belief for all citizens. This ruling sparked considerable controversy and debate, reflecting broader tensions over the role of religion in public life. Many supporters of school prayer viewed the decision as an attack on religious traditions, while opponents saw it as a vital protection of individual rights.
Engel v. Vitale set a significant precedent for subsequent rulings on the issue of prayer and religious activities in public schools. It reinforced the principle that public education should be free from religious influence, shaping the interpretation of the First Amendment in relation to religious freedom and governmental neutrality. This case remains a cornerstone of American constitutional law concerning the separation of church and state.
Federal judges on trial and appeals courts have received gifts such as private flights, football tickets, and substantial cash gifts, according to a report by Fix the Court, a judicial transparency watchdog. This report comes amid increased scrutiny over gift acceptance by federal judges, following revelations of undisclosed gifts to Supreme Court justices like Clarence Thomas.
The most notable gift was a $24,000 cash gift in 2022 to Chief Judge Timothy Batten of the Northern District of Georgia from Medicraft Enterprises, a medical device company owned by a close friend. Batten also received a $4,000 gift from Medicraft in 2021. These cash gifts are rare on judges' financial disclosures, as noted by Gabe Roth, executive director of Fix the Court.
The judicial code of ethics prohibits judges from accepting gifts from those with court business or interests affected by court action. Judges can accept travel, lodging for educational or legal events, books, resource materials, and gifts from friends or family, provided they do not preside over related legal matters. Gifts over $480 must be reported in annual disclosures, but the judiciary's slow posting has caused delays.
The Fix the Court analysis also found judges commonly received free tickets, including football tickets from alma maters and local teams. Judge Charles Wilson reported football tickets from Notre Dame, while Judges Steve Jones, Lisa Wood, and Julie Carnes received tickets from the University of Georgia Athletic Association.
Judges also reported gifted vacations. Judge Aleta Trauger disclosed a private flight and hotel stay for a Christmas dinner, and Judge Daniel Crabtree reported travel and golf outings worth $4,100. Congress members face stricter gift limits, capped at $100 per donor annually, with exceptions for close friends and special events.
Judges Disclosed Gifts Include $24,000 Cash, Football Tickets
Two federal judges issued temporary halts to parts of President Biden's student loan debt relief program on Monday. Judge Daniel D. Crabtree of the US District Court for the District of Kansas ruled that large-scale student debt cancellation should be decided by Congress, partially granting a preliminary injunction requested by a coalition of states. Crabtree stated that the Biden administration's plan represented a significant regulatory expansion without clear congressional authorization.
In a separate case, Judge John A. Ross of the US District Court for the Eastern District of Missouri also granted an injunction, stating that the states have a fair chance of proving that the administration overstepped its authority by including loan forgiveness. These rulings challenge the Department of Education's July 2023 rule aimed at reducing monthly student loan payments based on income and canceling loans after ten years for borrowers with up to $12,000 in debt.
The relief plan, known as the Saving on a Valuable Education Plan, was set to take effect on July 1 and is estimated to cost $475 billion over ten years. This legal setback occurs as President Biden faces pressure to fulfill his campaign promise of student debt relief ahead of the November 2024 election. The Supreme Court had previously struck down a plan to forgive up to $20,000 in student loans for 40 million people.
Crabtree's nationwide injunction does not affect parts of the plan already in effect, while Ross's ruling limits the injunction to the loan forgiveness component. The cases involved are State of Missouri v. Biden and State of Kansas v. Biden.
Biden’s Student Loan Debt Relief Program Halted in Two Courts
Spotify's recent reclassification of its premium subscription service has sparked significant controversy in the music industry, leading to lawsuits, legislative pushes, and an FTC complaint. The conflict centers around Spotify's attempt to include audiobooks in its premium plan, reducing its royalty payments to songwriters. This move, seen as a "bait-and-switch," has led to accusations from the National Music Publishers Association (NMPA) and the Mechanical Licensing Collective (MLC) that Spotify is attempting to underpay songwriters.
The Music Modernization Act (MMA) of 2018 was designed to simplify royalty payments by creating the MLC, which issues blanket licenses to streaming services. However, dissatisfaction with the MLC's effectiveness is growing. Critics argue that the MLC's song matching process is inadequate, leaving many royalties unpaid. The NMPA has responded by lobbying for legislative changes to allow songwriters to negotiate royalties directly, outside the MLC's framework.
This dispute comes amid a broader debate over the fairness of the current music licensing system. Songwriters and publishers feel squeezed by shrinking revenues from streaming services, and are seeking greater control over their royalties. The FTC complaint against Spotify represents a novel approach in this ongoing battle, highlighting the lengths to which industry players are willing to go to secure fair compensation.
The MLC, up for its first five-year evaluation, faces scrutiny over its handling of unmatched royalties, which amount to significant sums. Despite some support for the MLC, there is a push for more transparency and improvements in its operations. As the industry grapples with these issues, the outcome of this multi-pronged conflict could reshape the landscape of music royalties and streaming.
Spotify Royalty Drama Casts Shadow Over Songwriter Consensus
Julian Assange, the founder of WikiLeaks, is set to plead guilty to violating U.S. espionage law, ending his 14-year legal saga and allowing his return to Australia. Assange will plead guilty to conspiring to obtain and disclose classified U.S. national defense documents. He will be sentenced to 62 months of time already served during a hearing in Saipan, chosen for its proximity to Australia.
Assange left the UK’s Belmarsh prison after being bailed by the UK High Court. This resolution follows a global campaign involving grassroots organizers, press freedom advocates, and political leaders. The Australian government has been pressing for Assange's release, and his wife expressed immense gratitude for the support they received.
The espionage charges stem from WikiLeaks’ 2010 release of hundreds of thousands of classified U.S. military documents, the largest security breach of its kind. The documents, leaked by Chelsea Manning, included sensitive diplomatic cables and battlefield reports. Assange’s prosecution has been controversial, with press freedom advocates arguing that charging him threatens free speech.
Assange’s legal troubles began in 2010 when he was arrested in the UK on a European arrest warrant related to later-dropped sex-crime allegations in Sweden. He sought asylum in Ecuador's embassy in London for seven years to avoid extradition. In 2019, he was arrested and has since been fighting extradition from Belmarsh prison.
The plea deal marks the end of a long ordeal for Assange, who has been compared to other whistleblowers like Reality Winner, who received a similar sentence for leaking classified information.
WikiLeaks' Julian Assange to be freed after pleading guilty to US espionage charge | Reuters
Sales tax compliance in the US is fraught with challenges, largely due to the lack of transparency and a reliable system for reporting and calculating owed taxes. Unlike income tax, where employer reports help bridge gaps, sales tax relies heavily on businesses to self-report, leading to significant discrepancies in what is collected versus what is owed.
A recent example highlighting this issue is GitHub’s announcement that it will begin collecting and remitting sales tax in August. This move underscores a broader problem: the inconsistency in sales tax compliance across corporations. GitHub, a Microsoft subsidiary with $1 billion in revenue and over 1.3 million paid subscribers in 2023, should have been complying all along, which raises questions about the transparency and enforcement of sales tax laws.
The administrative burden on businesses to comply with varied state policies is substantial. For smaller businesses, this burden can be overwhelming and costly, often requiring them to spend a significant portion of their operating capital on compliance. A survey by Avalara/Potentiate found that small and medium-sized businesses spend an average of $2,455 per month on sales tax calculations alone.
The Supreme Court's 2018 decision in South Dakota v. Wayfair, which allowed states to require businesses to collect sales tax regardless of physical presence, aimed to level the playing field between physical stores and online retailers. However, the decision has led to a patchwork of state-specific policies, further complicating compliance, especially for smaller businesses.
To address these challenges, states should not wait for corporations to voluntarily comply with sales tax laws. Instead, they should proactively enforce compliance among major corporations and allocate resources to support small businesses. This proactive approach could include targeted audits of large corporations, increased penalties for non-compliance, and providing tools to help small businesses calculate and remit sales tax accurately.
For example, the creation of state databases of tax rates and an application programming interface for automated calculations could significantly reduce the compliance burden on small businesses. Ensuring compliance among large corporations like GitHub would also help level the playing field, making it fairer for small businesses that are struggling to comply.
In summary, a more transparent and enforced sales tax system is needed. Large corporations should be held accountable, and small businesses should be supported in their compliance efforts. This dual approach can create a more equitable business environment and increase state revenues, ultimately benefiting all parties involved.
States’ Corporate Sales Tax Enforcement Doesn’t Go Far Enough
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This Day in Legal History: Military Selective Service Act
On June 24, 1948, President Harry S. Truman signed the Military Selective Service Act, marking a significant moment in U.S. legal and military history. This legislation established a peacetime draft system, requiring all male U.S. citizens between the ages of 18 and 25 to register for potential military service. The act was a response to growing Cold War tensions and the need for a ready and sizable military force. It aimed to ensure that the United States could quickly mobilize troops if needed, reflecting the country's shift towards maintaining a strong peacetime military presence.
The Selective Service System, initially created during World War I and reactivated in World War II, was thus given a permanent peacetime role. Registration under this act became a civic duty, fundamentally altering the relationship between American citizens and their government regarding national defense. Although controversial, the draft was seen as a necessary measure to prepare for potential conflicts, particularly with the Soviet Union.
This legislation faced opposition and legal challenges, with debates focusing on its fairness and the implications for civil liberties. Despite these controversies, the draft remained in effect until 1973, shaping the U.S. military and its operations through the Korean and Vietnam Wars. The Selective Service System continues to exist today, although conscription has not been active since the Vietnam era, maintaining its relevance in American law and policy as a safeguard for national security.
The U.S. Supreme Court, holding a 6-3 conservative majority, recently delivered key rulings on constitutional gun rights and access to abortion medication, reflecting a temporary ideological bridge. However, as the term nears its conclusion, imminent decisions on several high-profile cases could reveal deeper divisions among the justices. These cases include Donald Trump's claim of presidential immunity, an Idaho abortion ban with no health exceptions, and the Chevron deference doctrine which supports federal regulations.
The court's term has been less ideologically driven compared to the previous two years, where conservative rulings significantly impacted abortion rights and affirmative action in college admissions. Justices have also faced scrutiny for actions outside the court, including flags linked to Trump's election loss efforts at Justice Samuel Alito's residences and undisclosed travel by Justice Clarence Thomas.
Public perception of the court is increasingly polarized, with a May poll showing 69% of Republicans and only 27% of Democrats viewing it favorably. The term's conclusion is anticipated soon, with 14 cases yet to be decided, marking the second-slowest term since 1946. Notably, pending decisions include Trump's federal prosecution avoidance and whether to raise the bar for prosecuting his supporters involved in the January 6 Capitol attack. Additionally, key rulings on agency powers and social media content regulation are awaited, potentially impacting federal regulatory authority and the administrative state.
S&P 500 Firms Rarely Disclose Emissions to SEC as Rules Loom
U.S. prosecutors, led by Special Counsel Jack Smith, are set to request that a judge curtail former President Donald Trump's "inflammatory" statements about law enforcement agents involved in his criminal case concerning mishandling classified documents. This follows Trump's false claim that an FBI policy during a 2022 search of his Florida resort authorized agents to attempt an assassination, a claim prosecutors describe as "deceptive and inflammatory." They argue it poses unjustified risks to agents.
Smith will ask Judge Aileen Cannon to prevent Trump from making statements that threaten law enforcement while he awaits trial. Trump has pleaded not guilty to charges of illegally retaining sensitive national security documents and obstructing efforts to retrieve them. His lawyers argue that restricting his statements would violate his free speech rights during the presidential campaign and that there is no evidence of threats against the FBI.
Previously, Cannon denied Smith's request on procedural grounds, citing inadequate consultation with Trump's lawyers. Trump faces similar gag orders in other federal cases, including attempts to overturn his 2020 election loss and a New York case where he was convicted of falsifying business records.
Trump has consistently criticized prosecutors, judges, and witnesses, claiming that the justice system is being used to undermine his campaign. His baseless assassination claim, included in campaign fundraising emails, was also supported by his congressional allies. Additionally, Trump's legal team is challenging Smith's investigation by arguing it is unlawfully funded and that Smith's appointment lacked necessary congressional approval.
Prosecutors to seek limit on Trump's 'inflammatory' FBI claims | Reuters
The U.S. Supreme Court's decision in United States v. Rahimi, concerning gun rights, highlighted significant divisions among the justices on using history and tradition to evaluate firearm restrictions. Seven of the nine justices wrote separate opinions, indicating a robust debate over originalism, a legal theory embraced by the court's conservative majority. Chief Justice John Roberts clarified that historical analogues, rather than exact matches, should guide the constitutionality of gun laws, addressing misunderstandings from a 2022 ruling. The case upheld a federal law banning gun possession by individuals with domestic violence restraining orders, a decision agreed upon by eight justices with varying opinions on originalism.
Justice Clarence Thomas dissented, arguing no historical precedent justifies revoking Second Amendment rights due to potential interpersonal violence. Justices Neil Gorsuch, Brett Kavanaugh, and Amy Coney Barrett, while concurring with Roberts, wrote separate opinions reflecting different interpretations of originalism. Gorsuch emphasized adhering to the Constitution’s original meaning, Barrett advocated for a flexible approach, and Kavanaugh discussed the nuances of historical analysis.
This debate mirrors other recent cases where justices grapple with applying historical tests to constitutional questions. For instance, in a trademark case involving Trump and an administrative law case, concurring opinions revealed disagreements on using history and tradition. These fractured approaches complicate lower courts' efforts to apply Supreme Court precedents consistently. Legal scholars expect ongoing struggles in deciding constitutional gun questions, given the historical ambiguities and disputes highlighted in these opinions.
Supreme Court Shows Division on History Test in Gun Decision
U.S. prosecutors have recommended that the Justice Department bring criminal charges against Boeing for violating a 2021 settlement agreement related to two fatal 737 MAX crashes, according to sources. The Justice Department must decide by July 7 whether to prosecute Boeing. This recommendation, previously unreported, follows a May determination that Boeing breached the agreement shielding it from fraud conspiracy charges if it overhauled compliance practices and paid $2.5 billion.
Boeing insists it has honored the settlement terms and disagrees with the Justice Department's assessment. Discussions between Boeing and the Justice Department are ongoing, with no final decision yet. Potential resolutions could include extending the settlement or imposing new, stricter terms, such as installing a third-party compliance monitor. Prosecutors might also consider additional charges beyond the original fraud conspiracy.
The situation has intensified scrutiny of Boeing, already under investigation after a mid-flight panel blow-off from one of its jets. The possibility of criminal charges adds to Boeing's challenges, particularly concerning its significant government contracts, which could be jeopardized by a felony conviction.
Families of the crash victims have criticized the 2021 agreement, advocating for prosecution and substantial fines against Boeing. At a recent Senate hearing, Boeing's CEO apologized for the company's safety failures. The families have urged prosecutors to seek nearly $25 billion in fines and proceed with criminal charges.
Exclusive: US prosecutors recommend Justice Dept. criminally charge Boeing | Reuters
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This Day in Legal History: Halifax Founded
On June 21, 1749, British colonists established the town of Halifax in what is now Nova Scotia, Canada. This strategic move was part of Britain's broader efforts to assert control over the North American territories and to counter French influence in the region. Halifax's founding was spearheaded by Edward Cornwallis, the colony's first governor, who arrived with over 2,500 settlers. The site was chosen for its excellent natural harbor, which would later become one of the most important naval bases in the British Empire. The establishment of Halifax also marked the beginning of complex and often fraught relationships with the indigenous Mi'kmaq people, who resisted the encroachment on their lands. Over time, Halifax grew into a key military and economic hub, especially during conflicts such as the Seven Years' War and the American Revolution. The town's early development set the stage for its eventual role as the capital of Nova Scotia, integrating its rich colonial heritage with its modern-day significance. Halifax's founding is a pivotal moment in Canadian history, reflecting the colonial ambitions and geopolitical strategies of the 18th century.
Former President Donald Trump is challenging the appointment of Special Counsel Jack Smith in the criminal case accusing him of mishandling classified documents. His legal team will argue over three days of hearings against both the appointment and a gag order. Trump's allies in Congress have also criticized Smith's appointment and funding. The hearings, presided over by Judge Aileen Cannon, will be the first since Trump's conviction in May on 34 felony counts of falsifying business records in New York. Trump is also awaiting a Supreme Court decision on his claims of presidential immunity related to his efforts to overturn the 2020 election. Trump's legal team argues that Smith's appointment is invalid because he was not confirmed by the Senate, but courts have previously upheld special counsel authority. Trump's challenges are part of a broader effort to dismiss the classified documents charges, with the trial's start indefinitely delayed. The hearings will also address other issues, including Trump's bid to suppress evidence from the FBI's Mar-a-Lago search and Smith's request to bar Trump from making potentially dangerous statements.
Trump to challenge special counsel appointment in documents case | Reuters
After the SEC shut down BF Borgers CPA accounting firm for fraud in early May, about 40% of its nearly 180 clients are still searching for new auditors. Trump's social media company quickly secured a new auditor, but many former Borgers clients, including Nasdaq-listed and OTC companies, are struggling due to high costs and potential new auditors' hesitance to start audits from scratch. The SEC's closure of Borgers, which fabricated audits and violated rules, resulted in a $14 million fine and a permanent ban for the firm and its founder. Companies without new auditors face financial reporting issues, impacting their ability to raise funds and maintain public listings. While larger firms have mostly found replacements, smaller OTC companies find the cost barrier significant, with some new auditors quoting fees two to three times higher than Borgers’. The SEC’s scrutiny means firms taking on former Borgers clients face intense regulatory oversight. Some clients have found new auditors abroad, often driven by cost considerations, although the transition remains challenging.
Trump Media Auditor’s Shutdown Strands Nearly 40% of Ex-Clients
Amendments to Delaware corporate law are headed to Governor John Carney's desk, aiming to reverse a court decision that invalidated certain contracts between corporations and influential investors. The legislation, S.B. 313, passed the House with a 34 to 7 vote and previously cleared the Senate without opposition. These amendments follow a February ruling by Delaware's Chancery Court, which struck down stockholder agreement clauses granting significant managerial authority to founders, preferred investors, or activists. This decision impacted agreements like those between Moelis & Co. and its founder.
Delaware Senate Majority Leader Bryan Townsend sponsored the bill, supported by the Delaware State Bar Association's Corporation Law Council, to restore certainty to such contracts. Critics, including over four dozen law professors, argue the amendments were rushed and need thorough judicial review. Delaware is a key hub for business incorporation, housing over 1 million businesses and nearly 70% of Fortune 500 companies, due to its sophisticated legal environment and expert Chancery Court.
Delaware Corporate Law Amendments Headed to Governor’s Desk
Disbarred attorney Tom Girardi’s defense is attempting to shift blame to his ex-CFO Christopher Kamon for the alleged theft of millions in client funds. This strategy emerged during a pre-trial hearing on evidence inclusion and witness testimony before US District Judge Josephine L. Staton. Despite cognitive impairment claims, Girardi was deemed competent for trial, prompting a defense shift focusing on Kamon's role. Girardi’s lawyers argue disorganization at the firm or Kamon's manipulation caused the theft, noting Girardi's lack of technological use and reliance on Kamon for fund access.
Both defense and prosecution want to present evidence implicating Kamon, who faces charges in multiple jurisdictions for embezzlement. Kamon’s attorney, Michael Severo, counters that others had account access and opposes complicating the trial with excessive evidence.
The trial strategy is also influenced by a recent US Supreme Court ruling in Diaz v. United States, allowing expert testimony on what defendants typically know during offenses. Judge Staton may allow limited testimony from Dr. Helena Chui on Girardi's dementia, although concerns remain about linking dementia symptoms directly to criminal intent.
Jury selection will involve questionnaires to assess potential jurors' exposure to “Real Housewives of Beverly Hills,” where Girardi’s ex-wife Erika Jayne is featured. This high-profile case is set for a 12-day trial, with significant media and public interest expected.
Girardi Lawyers Try to Pin Blame on His Ex-CFO Ahead of Trial
This week’s closing theme is by Ludwig van Beethoven, a composer of some note.
Ludwig van Beethoven, one of the most celebrated composers in Western music history, left an indelible mark on the world with his innovative compositions and profound musical genius. Born in 1770 in Bonn, Germany, Beethoven's talent was evident from a young age. His early works followed the classical traditions of Mozart and Haydn, but he soon developed his unique style, characterized by emotional depth and structural complexity.
As we close this week, we feature Beethoven's "Adieu to Piano," a piece that reflects the composer's intimate relationship with the piano. This work, though less known than his symphonies and sonatas, captures Beethoven's ability to convey a wide range of emotions through music. "Adieu to Piano" is a poignant composition, embodying a sense of farewell and nostalgia, perhaps hinting at Beethoven's struggles with his deteriorating hearing.
This piece serves as a fitting end to our week, reminding us of the power of music to express the inexpressible. Beethoven's work continues to inspire and move listeners, transcending the boundaries of time and culture. As we listen to "Adieu to Piano," we can reflect on the themes of departure and remembrance, appreciating the beauty of Beethoven's musical legacy.
Without further ado, “Adieu to Piano” by Ludwig van Beethoven. Enjoy.
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This Day in Legal History: Lizzie Borden Acquitted
On June 20, 1893, in New Bedford, Massachusetts, Lizzie Borden was acquitted of the notorious axe murders of her father, Andrew Borden, and stepmother, Abby Borden. The trial had gripped the nation, with its sensational details and the prominent social standing of the Borden family. On the morning of August 4, 1892, Andrew and Abby were found brutally slain in their Fall River home, each having suffered multiple axe wounds. Lizzie, the prime suspect, was arrested and charged with their murders.
The prosecution presented circumstantial evidence, including Lizzie's alleged attempts to purchase prussic acid, her burning of a dress similar to the one she was seen wearing on the day of the murders, and conflicting statements about her whereabouts. Despite this, the defense argued there was no physical evidence directly linking Lizzie to the crime, and her reputation as a church-going, unmarried woman was emphasized to cast doubt on her guilt. The jury deliberated for less than two hours before returning a verdict of not guilty.
Lizzie Borden's acquittal remains one of the most controversial and debated decisions in American legal history. The case has inspired numerous books, films, and even a popular rhyme, embedding Lizzie Borden in American folklore. The legal proceedings highlighted the limitations of forensic science at the time and underscored the significant role of societal perceptions in the courtroom.
U.S. accounting firms are pushing back against proposals for stricter reporting rules on their finances, operations, and audit performance, labeling them as overly rigid and costly. They prefer to keep reporting major business changes and financial results as part of routine inspections to protect sensitive information. Firms advocate for voluntary transparency reports over standardized forms for discussing audit management and staffing.
The Public Company Accounting Oversight Board (PCAOB) introduced draft rules in April requiring firms to submit formal financial statements, details on ownership and governance, and business changes. These rules aim to meet investor demands for more auditor insights and codify existing practices, as firms already provide significant details during PCAOB inspections.
Firms, structured as private partnerships, oppose adhering to U.S. GAAP or international standards for compiling their financial statements, arguing it would divert resources for an unnecessary set of records. They also question the PCAOB's authority under the Sarbanes-Oxley Act to demand such detailed disclosures.
While the PCAOB's Investor Advisory Group supports making these financial statements public and audited, audit firms argue this could compromise audit quality and mislead investors due to varying client portfolios. Progressive organizations and labor unions back the proposal, emphasizing that detailed reporting would enhance competition and audit quality.
Auditors Pan Bid to Report Their Own Financials as Too Rigid
Big Tech is shifting artificial intelligence (AI) from the cloud to users’ personal devices, aiming to enhance privacy and performance. Apple introduced "Apple Intelligence," a generative AI assistant that operates directly on devices, claiming it sets a new privacy standard. Microsoft followed with Copilot+ PCs, which include locally running AI models. This move, supported by Qualcomm, highlights the trend of on-device processing, which reduces latency, cost, and privacy concerns associated with cloud-based solutions.
On-device AI aims to protect user data by keeping it on personal devices, thus eliminating risks associated with transmitting data to and from the cloud. However, challenges remain, such as ensuring these local models do not expose sensitive data or produce inaccurate outputs. Experts caution that while on-device AI enhances privacy, it does not eliminate all risks.
The approach is particularly appealing to organizations handling confidential information. Running AI locally means data stays on the device, reducing the risk of exposure during transmission. Despite these benefits, core privacy challenges persist, especially in automated decision-making scenarios like HR processes. Companies must address the cybersecurity implications of hosting substantial data locally.
Tech providers, including Apple and Nvidia, note that running AI on devices involves trade-offs, primarily related to the size and capability of models. Large models like OpenAI’s GPT-4 are too big for individual devices, requiring compression techniques that might limit their functionality. Consequently, some complex tasks may still need cloud support.
The shift to on-device AI represents a significant change from the cloud-centric trend of recent years. Organizations adopting this hybrid approach must adapt their AI governance, ensuring they understand and manage the new dynamics of data processing and security on personal devices.
Big Tech Pushing On-Device AI as Privacy, Performance Booster
On June 19, relatives of victims from two fatal Boeing 737 MAX crashes urged the U.S. Justice Department to impose a fine of up to $24.78 billion on Boeing and pursue criminal prosecution. The crashes in 2018 and 2019 resulted in 346 deaths, making it one of the deadliest corporate crimes in U.S. history, according to lawyer Paul Cassel. The families suggested suspending $14 billion to $22 billion of the fine if Boeing allocates those funds to an independent corporate monitor and compliance improvements.
The Justice Department had previously determined that Boeing violated a 2021 deferred prosecution agreement, which shielded the company from a conspiracy to commit fraud charge related to the crashes. Despite Boeing's claim that it did not violate the agreement, federal prosecutors must decide by July 7 whether to proceed with a criminal case or negotiate a plea deal. An extension of the deferred prosecution agreement is also an option.
The violation was confirmed after an incident involving an Alaska Airlines Boeing 737 MAX 9 on January 5, exposing ongoing safety and quality issues at Boeing. The families also called for Boeing's board of directors to meet with them and for criminal prosecutions of corporate officials responsible at the time of the crashes.
Senator Richard Blumenthal, chair of the Senate’s Permanent Subcommittee on Investigations, supported the call for prosecution, citing overwhelming evidence. The two crashes, linked to a safety system called MCAS, led to a 20-month worldwide grounding of the Boeing 737 MAX.
Families of Boeing 737 MAX crash victims ask US to seek $24 billion fine | Reuters
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This Day in Legal History: Patent Cooperation Treaty Signed
On June 19, 1970, the Patent Cooperation Treaty (PCT) was signed, marking a significant milestone in international intellectual property law. The PCT established a unified procedure for filing patent applications to protect inventions in multiple countries. Prior to the PCT, inventors needed to file separate patent applications in each country where they sought protection, a costly and time-consuming process.
The PCT streamlined this by allowing inventors to file a single international application, which could then be pursued in each contracting state. Managed by the World Intellectual Property Organization (WIPO), the treaty aimed to simplify and reduce the cost of obtaining multinational patent protection.
The system introduced by the PCT has two main phases: the international phase and the national phase. During the international phase, the application is reviewed for formal requirements and subjected to an international search and preliminary examination. In the national phase, the application enters the national jurisdictions of the chosen countries for further examination according to local laws.
The PCT has been crucial in promoting innovation and technological advancement by providing a more efficient path for securing patent rights internationally. Today, over 150 countries are members of the PCT, reflecting its global acceptance and importance in the realm of intellectual property.
Senate Democrats canceled a procedural vote to advance President Biden's nominee, Mustafa Kasubhai, for a federal district court judge in Oregon. Majority Leader Chuck Schumer cited attendance issues as the reason for postponing the cloture vote, which will be rescheduled soon. With a narrow 51-49 majority, Democrats face challenges in confirming controversial nominees. Kasubhai, currently a magistrate judge, would be among the few Muslim Americans to serve as a life-tenured federal judge.
His nomination has faced strong GOP opposition, with Republicans questioning his views on diversity, equity, inclusion, and the use of preferred pronouns in his courtroom. They have also scrutinized his past writings, some dating back to his time as a law student, and accused him of holding radical views, including Marxism. The absence of Sen. Robert Menendez, due to his bribery trial, and potential opposition from Sen. Joe Manchin, who demands bipartisan support for nominees, complicate Kasubhai's confirmation prospects.
Senate Democrats Pull Vote on Trial Court Nominee Kasubhai (1)
A banking industry challenge to the Consumer Financial Protection Bureau's (CFPB) rule capping credit card late fees at $8 will remain in Texas after the Fifth Circuit Court of Appeals blocked a transfer to Washington, D.C. The case, filed by the U.S. Chamber of Commerce and several banking associations, was initially moved by Judge Mark Pittman, who argued it was better suited for the District of Columbia due to the lack of affected banks in Texas. However, the appellate court halted the transfer, noting the nationwide impact of the CFPB's rule.
Judge Don Willett emphasized that the case's broad implications extended beyond Texas, making it inappropriate to consider it a localized issue. The CFPB and the plaintiffs will continue to argue over the venue. This decision comes amidst broader concerns about venue shopping, with industry groups favoring Texas courts perceived as more sympathetic to their challenges against federal regulations.
The CFPB's credit card late fee rule, introduced on March 5, aims to reduce so-called junk fees and could significantly impact banks' revenue, potentially costing them $10 billion annually. The banking industry quickly filed a lawsuit to block the rule, reflecting its substantial financial stakes. The Fifth Circuit's ruling highlights the ongoing tension between regulatory efforts and industry pushback.
Credit Card Late Fee Suit Kept in Texas Again by 5th Cir. (1)
A San Francisco federal judge has sanctioned Apple Inc. in a privacy class action lawsuit by barring certain defenses due to the deletion of audio recordings from its Siri voice assistant. Magistrate Judge Sallie Kim of the US District Court for the Northern District of California ruled that Apple failed to halt its data retention policy after the lawsuit was filed, resulting in the destruction of electronically stored information (ESI) central to the case.
Apple had argued that the deleted data was irrelevant, but the court disagreed. As a result, Apple is prohibited from making several defenses, including claims that plaintiffs lack standing due to insufficient evidence of false Siri triggers, arguments against class-wide damages based on the number of false recordings, and defenses regarding Apple's intent based on repeated false recordings.
The lawsuit, initiated in 2019, accuses Apple of violating wiretap laws by intercepting and misusing private conversations through Siri without users' intentional activation. Plaintiffs alleged that Apple continued deleting relevant recordings years after the litigation began, thus deliberately interfering with the case.
Judge Kim indicated that a jury must decide whether Apple's deletion of information was intentional, which could lead to further sanctions. The plaintiffs are represented by Lexington Law Group LLP, Lowey Dannenberg PC, and Scott & Scott LLP, while Apple is represented by DLA Piper LLP and Morrison & Foerster LLP. The case is Lopez v. Apple, Inc.
Apple Restricted on Siri Trial Defenses for Deleting Recordings
The U.S. Federal Trade Commission (FTC) has referred a complaint against TikTok and its parent company, ByteDance, to the Justice Department over potential violations of children's privacy laws. This action stems from an investigation that found reasons to believe TikTok might be violating the law, prompting the FTC to seek legal proceedings in the public interest. The FTC typically keeps such referrals confidential but made an exception in this case.
The complaint follows earlier reports from 2020 that the FTC and the Justice Department were investigating TikTok for allegedly failing to comply with a 2019 agreement to protect children's privacy. TikTok expressed disappointment over the FTC's decision to pursue litigation instead of seeking a settlement, claiming that many of the allegations are outdated or inaccurate.
This investigation is separate from ongoing Congressional concerns about the potential misuse of data from TikTok's 170 million U.S. users by the Chinese government, an allegation TikTok denies. Additionally, TikTok is preparing to file a legal brief against a law requiring ByteDance to divest TikTok's U.S. assets by January 19 or face a ban.
The FTC's actions highlight the heightened scrutiny TikTok faces regarding privacy and national security issues in the U.S.
Child privacy complaint against TikTok referred to US Justice Dept | Reuters
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This Day in Legal History: Posse Comitatus Act Passed
On June 18, 1878, the U.S. Congress passed the Posse Comitatus Act, a significant piece of legislation that shaped the relationship between the military and civil authorities. The Act made it a felony to use the Army to enforce domestic policies without explicit authorization from Congress or the Constitution. This law emerged from the Reconstruction era's complexities, particularly the federal military's role in enforcing laws in the Southern states post-Civil War. The term "posse comitatus" translates to "power of the county," and the Act aimed to reinforce the principle that civil authorities should maintain law and order without military involvement. The Posse Comitatus Act reflected a commitment to preventing military overreach in civilian matters and preserving democratic governance structures. This principle has influenced various legal and military policies over the years, including modern discussions on the military's role in domestic security. The Act underscores the balance between maintaining national security and protecting civil liberties, a balance that remains a cornerstone of American legal and political thought.
Fisker Inc., an electric-vehicle startup, filed for bankruptcy after halting production of its problematic Ocean SUV. The company's filing in Delaware lists assets between $500 million and $1 billion and liabilities between $100 million and $500 million. This bankruptcy protects Fisker from creditors while it plans repayment.
Henrik Fisker, known for designing BMW and Aston Martin cars, founded Fisker Inc., his second EV venture to face bankruptcy. His previous company, Fisker Automotive, also went bankrupt in 2013. Fisker Inc. went public in 2020 through a SPAC merger, raising roughly $1 billion and partnering with Magna International Inc. for vehicle manufacturing.
Production of the Fisker Ocean SUV began in November 2022 but was plagued by missing features and software bugs. Influential YouTuber Marques Brownlee's negative review in February further damaged the company's reputation. Fisker produced over 10,000 vehicles but delivered fewer than 5,000 to customers.
The company tried partnering with franchised dealers but faced significant financial difficulties, warning in February about its uncertain future. Although it secured $150 million from a lender, a potential deal with an automaker fell through. Magna International, a partner, halted further production of the Ocean SUV. Fisker's bankruptcy highlights broader challenges in the EV market, with several other startups also filing for bankruptcy amid slowing sales in the U.S. and Europe.
Troubled Electric Vehicle Maker Fisker Files for Bankruptcy
Union members at Amazon.com Inc. have voted overwhelmingly to align with the International Brotherhood of Teamsters, a major U.S. labor organization, in a move that could significantly impact staff contract negotiations. About 98% of the Amazon Labor Union (ALU) members supported this partnership, aimed at securing better jobs and working conditions for Amazon employees.
The ALU, which achieved a historic win in 2022 by organizing workers at an Amazon facility in Staten Island, faced setbacks in subsequent elections and internal conflicts. The union struggled to bring Amazon to the negotiating table. However, ALU President Chris Smalls and 15 other officials reached an agreement with Teamsters President Sean O’Brien and his team in Washington. The Teamsters represent approximately 1.3 million people.
This collaboration between the ALU and the Teamsters signals a significant step forward in labor organizing efforts at Amazon, potentially increasing pressure on the company to engage in meaningful negotiations with its workers. Amazon did not immediately respond to requests for comment outside normal business hours.
Amazon Union Allies With Teamsters in Big Labor Advance
The EPA's new limits on PFAS in drinking water are a positive step but more comprehensive regulations are needed to manage the release and disposal of these harmful chemicals. At a recent conference, stakeholders including parents, firefighters, and farmers discussed the need for broader measures to eliminate nonessential PFAS uses and enforce stricter waste management practices.
CDC data shows that reducing PFAS in drinking water correlates with lower blood levels of the chemicals in residents, validating the EPA's efforts. However, the current rules do not prevent the release of PFAS into water or apply to private wells, affecting millions of people.
Environmental advocates emphasized the necessity of treating PFAS as hazardous wastes under the Resource Conservation and Recovery Act (RCRA). The EPA's recent designation of certain PFAS as hazardous under the Superfund law aids cleanup efforts but falls short of comprehensive waste regulation. Proper disposal methods are critical to prevent further contamination, yet data on PFAS waste disposal is limited due to insufficient regulation.
Participants called for more stringent discharge permits under the Clean Water Act and quicker implementation of hazardous waste rules. PFAS, widely used in industries like semiconductors and battery production due to their stability and resistance to damage, require robust management to prevent environmental and health risks.
Examples of contamination were highlighted, including high PFAS levels from military bases causing serious health issues. The EPA's database on waste transfers shows significant amounts of PFAS-contaminated materials being sent to incinerators and other facilities, underscoring the need for better waste tracking and management.
Advocates stress that eliminating unnecessary PFAS uses and implementing strong regulatory measures are essential steps to protect communities and the environment from long-term PFAS contamination.
PFAS Drinking Water Limits Praised but More Regulations Sought
In the ongoing litigation over Johnson & Johnson’s (J&J) allegedly cancer-causing baby powders, a new legal battle has emerged over attorney-client privilege. Plaintiffs' lawyers accuse J&J of misusing the bankruptcy process to evade liability and are pushing for the crime-fraud exception to force the company to disclose internal communications. This could reveal J&J’s strategies to limit liability in around 61,000 talc-related cases.
The litigation involves J&J's use of the "Texas Two-Step," where it transfers liabilities to a subsidiary, which then files for bankruptcy. This maneuver has been met with controversy and legal challenges. Plaintiffs' attorneys argue that J&J’s actions are fraudulent attempts to avoid liability and are calling for these communications to be made public to bolster their case.
In a recent development, the plaintiffs are also seeking to disqualify some lawyers representing J&J and to prevent the company from proceeding with an $11 billion global settlement plan. This settlement, which requires approval from 75% of the plaintiffs, has faced opposition from some plaintiffs' firms.
Despite J&J's efforts to resolve the litigation, the plaintiffs’ legal team argues that more needs to be done to ensure justice for those affected by the contaminated talc products. They are also challenging J&J’s use of bankruptcy as a tactic to force settlements and are pushing for the court to invalidate J&J’s attorney-client privilege in this context.
The outcome of this legal battle could significantly impact the strategies used in large-scale product liability cases, particularly those involving mass torts and bankruptcy.
J&J’s Talc Litigation Saga Gets Attorney-Client Privilege Twist
The IRS should adopt a remote-first work model to attract top talent and enhance operational efficiency. The COVID-19 pandemic proved that remote work is not only viable but also desirable for many employees, particularly in the tech sector. As the IRS continues to modernize with advanced technologies like AI and machine learning, it needs to recruit top-tier tech talent. Offering remote work can help attract this talent by allowing employees to work from anywhere, increasing job satisfaction and expanding the pool of potential applicants.
The Treasury Department has found that job postings highlighting flexible working arrangements attract more applicants. Additionally, the IRS can save on overhead costs by reducing its physical office footprint, which remains significant despite many employees working remotely part-time.
A remote-first approach would also help the IRS compete with private sector tech firms, which have successfully used remote work to attract employees despite offering lower salaries. This flexibility would enable the IRS to draw a diverse workforce, fostering a variety of perspectives and ideas. Existing policies limiting remote work to within 200 miles of an office need reform to maximize employee flexibility.
Security is a critical concern, given the sensitive nature of taxpayer information the IRS handles. However, research indicates remote workers are often more aware of cybersecurity practices. To support a remote-first model, the IRS would need to invest in tech infrastructure and rework management and accountability measures to focus on outcomes rather than hours worked. Embracing remote work is essential for the IRS to continue modernizing and improving taxpayer interactions.
IRS Should Embrace Remote-First Culture to Recruit Top Talent
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This Day in Legal History: James McCord Arrested
On June 17, 1972, James McCord, security director for President Richard Nixon's re-election committee, and four Cuban-Americans were arrested for breaking into the Democratic National Committee Headquarters at the Watergate complex in Washington, D.C. This event marked the beginning of the Watergate scandal, a major political scandal in the United States that ultimately led to President Nixon's resignation. The burglars were caught wiretapping phones and stealing documents, intending to gather information to sabotage Nixon's political opponents.
As investigations unfolded, it was revealed that the break-in was part of a broader campaign of political espionage and sabotage conducted by the Nixon administration. The scandal exposed widespread abuse of power, including illegal wiretapping, break-ins, and attempts to cover up these activities. Journalists Bob Woodward and Carl Bernstein of The Washington Post played a crucial role in uncovering the details of the scandal, leading to increased public scrutiny and pressure on the administration.
The investigation led to the indictment of several Nixon administration officials and the creation of the Senate Watergate Committee. The most significant outcome was the discovery of the existence of secret tapes of conversations in the Oval Office, which revealed President Nixon's involvement in the cover-up. Faced with the likelihood of impeachment, Nixon became the first U.S. president to resign from office on August 8, 1974. The Watergate scandal had a lasting impact on American politics, leading to increased transparency and reforms aimed at preventing such abuses of power in the future.
The rare disease community is advocating for changes to the Inflation Reduction Act’s drug price-setting scheme, which is causing drugmakers and investors to reconsider developing drugs for small patient populations. Companies like Pfizer, Alnylam Pharmaceuticals, Eli Lilly, and Protagonist Therapeutics are altering their research strategies due to concerns over recouping costs under the Medicare Drug Price Negotiation Program. This program exempts orphan drugs with a single FDA-approved indication from price negotiations, but those with multiple indications might not qualify for the exclusion, even if they are not yet approved for additional conditions.
Opponents are seeking legislative and judicial changes to amend the Inflation Reduction Act, as companies and investors shift their focus away from rare disease and small-molecule drugs. Jamie Sullivan of the EveryLife Foundation for Rare Diseases emphasized the importance of achieving technical fixes to support innovation. Recent legislative efforts aim to protect the development of these drugs, and companies like AstraZeneca are challenging the provisions in court. The Inflation Reduction Act has made the capital environment more challenging for rare disease drugs, according to John Stanford of the Incubate Coalition.
Patient groups and some manufacturers argue that the exemption reduces incentives provided by the Orphan Drug Act, which has historically promoted the research and development of rare disease medicines. These drugs often launch with a single indication but can later be approved for additional uses. Concerns are rising that the current policies may hinder further research into rare diseases. Despite industry concerns, some groups argue that drug companies still have substantial resources for robust R&D and can profit from expanding indications for orphan drugs. A CMS spokesperson stated that the negotiation program aligns with the law and won’t harm long-term innovation.
US Drug Negotiations Plan Shifts Focus for Rare Disease Programs
Alex Jones' personal bankruptcy has been converted to a Chapter 7 liquidation, meaning a trustee will now manage how he pays the $1.5 billion in defamation judgments against him. Jones was unable to reach an agreement with the families of the Sandy Hook Elementary School shooting victims, whom he defamed by claiming the 2012 massacre was a hoax. US Bankruptcy Judge Christopher Lopez ruled that Jones' case does not qualify for exceptions to prevent its conversion to Chapter 7, despite Jones’ objections.
During the same hearing, Judge Lopez dismissed the bankruptcy case of Infowars' parent company, Free Speech Systems LLC, allowing the Sandy Hook families to pursue their claims in state court. The judge clarified that there was never a request to shut down Infowars itself. Lopez expressed the difficulty of the case, acknowledging its connection to the tragic 2012 shooting.
Jones’ defamation debts were deemed non-dischargeable in bankruptcy due to the intentional and malicious nature of his actions. Following state court verdicts, Free Speech Systems filed for Chapter 11 bankruptcy in July 2022, and Jones filed for personal bankruptcy in December 2022. Efforts to reach a consensual bankruptcy plan failed, prompting the recent conversion to Chapter 7.
Jones and the Sandy Hook families had recently agreed on the need to convert his case to Chapter 7, but the Free Speech Systems case remained contentious. Ultimately, the court decided that dismissing the Free Speech case was in the best interest of creditors. Despite potential liquidation, Jones may start a new broadcast, according to attorneys for the Sandy Hook families.
This case is being managed under Alexander E. Jones, Bankr. S.D. Tex., No. 22-33553, as of June 14, 2024.
Alex Jones Loses Financial Control as Trustee Takes Over (4)
Alex Jones' assets to be liquidated as his company exits bankruptcy | Reuters
At a star-studded fundraiser in Los Angeles on June 15, President Joe Biden criticized the U.S. Supreme Court as being "out of kilter," emphasizing that it has never been as out of step as it is today. The event, which featured former President Barack Obama and Hollywood celebrities like George Clooney and Julia Roberts, raised over $30 million for Biden's campaign. Biden highlighted the court's conservative leanings, particularly criticizing Justice Clarence Thomas's remarks on reconsidering issues like in vitro fertilization and contraception. He also warned that if Donald Trump wins the 2024 election, he could appoint two more justices, which Biden described as alarming.
The fundraiser was framed by a video montage contrasting Biden's record with that of Trump, drawing cheers from the audience. Biden noted that the Supreme Court, now dominated by conservatives appointed by Trump, has made decisions restricting affirmative action, gay rights, gun control, and environmental regulations. Obama reiterated the importance of elections in determining the court's power, linking the current situation to Trump's 2016 victory.
The event marked the largest Democratic fundraiser in history, surpassing a previous record set in New York City. Other celebrities present included Jack Black, Jason Bateman, and Kathryn Hahn. Despite Biden's low approval ratings and concerns about his age, the fundraiser aimed to showcase the campaign's strength and momentum. Biden and Trump are currently tied in national polls, with Trump leading in battleground states. Both candidates have raised significant funds in California, demonstrating the state's financial influence on their campaigns.
Biden slams Supreme Court at $30 million fundraiser with Obama, Clooney, Julia Roberts | Reuters
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This Day in Legal History: Flag Statutes in Public Schools
On this day in legal history, June 14, 1943, the US Supreme Court issued a landmark decision in West Virginia State Board of Education v. Barnette, profoundly impacting the rights of individuals in public schools. The case arose when Jehovah's Witnesses challenged a West Virginia mandate requiring students to salute the American flag and recite the Pledge of Allegiance, actions contrary to their religious convictions. The Court ruled that forcing students to participate in patriotic rituals violated their First Amendment rights to freedom of speech and freedom of religion.
Justice Robert H. Jackson, writing for the majority, asserted that compelling students to salute the flag was a form of coerced speech that infringed upon their individual liberties. The decision overturned the 1940 ruling in Minersville School District v. Gobitis, which had upheld mandatory flag salutes. Jackson famously stated, "If there is any fixed star in our constitutional constellation, it is that no official... can prescribe what shall be orthodox in politics, nationalism, religion, or other matters of opinion."
This ruling reinforced the principle that the government cannot force individuals to express beliefs they do not hold. It underscored the protection of individual freedoms against state-imposed conformity, significantly shaping the interpretation of First Amendment rights in the educational context. The Barnette decision remains a cornerstone in American constitutional law, symbolizing the enduring protection of individual liberties in the face of governmental authority.
Large national law firms are increasingly establishing offices in Boston, potentially overshadowing local firms that have operated regionally for decades. This year, Simpson Thacher & Bartlett, Paul Hastings, and Blank Rome announced new Boston offices, while Covington & Burling, Arnold & Porter, and Akin Gump Strauss Hauer & Feld did so last year.
In a notable move, Goodwin Procter recently recruited a five-partner tech and life sciences team from Cooley in Boston, signaling a consolidation trend in legal services within these sectors. The health and energy industries have remained strong in a sluggish deals market, bolstered by the financial strength of health care giants and incentives from the Inflation Reduction Act.
The number of law firm openings in Boston has surged over the past decade, with over 40 firms establishing a presence since 2016. This influx includes regulatory-focused firms like Covington and UK-based Magic Circle firms such as Allen & Overy. As large firms move in, regional firms face the risk of losing talent and clients.
Despite these developments, the efforts of new Big Law entrants in Boston remain in their early stages, with firms like Simpson Thacher planning deliberate growth to tap into the city's talent pool.
Big Law Firms Eye Boston to Tap Hot Tech, Health Care Markets
The Federal Energy Regulatory Commission (FERC) has three new commissioners, which could influence the review process for natural gas pipelines and liquefied natural gas (LNG) terminals. Industry advocates argue these projects are essential to meet rising electricity demand, while environmental groups push for rejection due to the long-term climate impacts of fossil fuels. The newly confirmed commissioners—Democrats David Rosner and Judy Chang, and Republican Lindsay See—join FERC at a critical time. With Commissioner Allison Clements' upcoming departure, FERC will regain a 3-2 Democratic majority for the first time in 18 months.
Historically, FERC's decisions on natural gas have been contentious, with a 2022 policy to scrutinize gas projects leading to the end of former Chairman Richard Glick's tenure. The new commissioners have indicated a focus on gas infrastructure, despite past environmental concerns. Chang, for example, moderated her previous stance against new gas pipelines during her confirmation hearing.
FERC's decisions are crucial amid growing electricity demands, driven by factors like artificial intelligence and increased manufacturing. Natural gas consumption is at record highs, and new power generation, particularly from gas, is necessary to meet future needs. However, permitting reviews and litigation have slowed the expansion of pipeline capacity. Industry experts stress the need for regulatory certainty to align infrastructure with demand, a sentiment echoed by the Interstate Natural Gas Association of America. The new FERC commissioners face the challenge of balancing these competing interests as they begin their terms.
Divisive Gas Reviews Pose Early Test for New FERC Commissioners
On June 13, the U.S. Senate Judiciary Committee advanced bipartisan legislation to create 66 new judgeships in federal district courts across states like California, Delaware, and Texas. This marks the first major judiciary expansion in over three decades. The committee's unanimous 20-0 vote moves the JUDGES Act to the full Senate for consideration. If enacted, it will be the first comprehensive authorization of new judges since 1990, addressing longstanding requests to manage rising caseloads in 25 district courts nationwide.
The last time new judgeships were created was in 2003, but efforts to expand the federal bench have since stalled due to partisan concerns. The current bill mitigates these concerns by incrementally adding the new judicial seats over ten years, starting in January 2025, after the 2024 presidential election. This phased approach aims to prevent any single party or president from gaining an advantage.
Democratic Senator Chris Coons, a co-sponsor of the bill, emphasized the urgency of expanding the federal bench to address the growing backlog of court filings since 1990. The JUDGES Act aligns with recommendations from the Judicial Conference, seeking to add judges in districts facing a "genuine crisis of workload."
U.S. District Judge Robert Conrad expressed the judiciary's appreciation for the Senate's efforts. The judiciary currently has 677 authorized district court seats and 10 temporary ones, which another Senate-passed bill aims to make permanent.
Initially opposed to adding more judges, Republican Senator Chuck Grassley supported the bill after amendments spread the additions over time. The JUDGES Act now plans to introduce the 66 new judgeships in five stages through 2035, with three temporary judgeships in Oklahoma.
A companion bill is pending in the Republican-led House of Representatives, backed by Representative Darrell Issa, chair of the House Judiciary Committee’s panel on courts.
US Senate panel advances bipartisan bill to create new judgeships | Reuters
The proposed $30 billion antitrust settlement between Visa and Mastercard to limit credit and debit card fees for merchants is in jeopardy. U.S. District Judge Margo Brodie in Brooklyn indicated she is likely to reject the settlement, citing her intent to write an opinion detailing her decision. Both Visa and Mastercard expressed disappointment, describing the settlement as a fair and appropriate resolution to the nearly 19-year-old litigation.
Announced on March 26, the settlement aimed to address most claims from nationwide litigation, with small businesses making up over 90% of the settling merchants. Businesses have long argued that Visa and Mastercard's swipe fees, which totaled $172 billion in 2023, are excessive and that the card networks illegally prevent them from steering customers to cheaper payment methods. The settlement proposed reducing swipe fees by at least 0.04 percentage points for three years, capping rates for five years, and removing anti-steering provisions.
However, objectors, including the National Retail Federation, criticized the settlement as insufficient, arguing that it would still allow Visa and Mastercard to control swipe fees and prevent future claims by merchants. The case, known as In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, is being heard in the U.S. District Court for the Eastern District of New York.
Visa, Mastercard $30 billion fee settlement in peril | Reuters
This week’s closing theme is by John David Davis.
John David Davis (22 October 1867 – 20 November 1942), often known as J. D. Davis, was an English composer born in Edgbaston, near Birmingham. Although he was born into a musical family, Davis was initially sent to Frankfurt to prepare for a commercial career. However, his passion for music led him to study under Hans von Bülow. Davis completed his education in Germany before furthering his studies in Brussels with Léopold Wallner, Arthur De Greef, and Maurice Kufferath.
Upon returning to Birmingham in 1889, Davis began teaching music, notably at the Birmingham and Midland Institute from 1893 to 1904. In 1905, he joined the Guildhall School of Music as a professor of harmony and composition and also served as Professor of Solfège at the International Conservatoire in London.
In 1919, Davis married Helen Winifred Juta, the daughter of South African judge Henry Juta. The couple lived in Earls Court, London, before moving to Lisbon in 1936. Davis passed away in Estoril, Portugal, in 1942, and his wife later returned to South Africa, where she died in 1952.
This week's closing theme is John David Davis' evocative piece, "Summer's Eve at Cookham Lock, Op. 50." Composed in 1916 for the London String Quartet, this work captures the serene beauty of a summer evening at Cookham Lock. Known for its lyrical quality and gentle atmosphere, "Summer's Eve at Cookham Lock" offers a tranquil auditory experience.
The piece, also known as an Idyl for string quartet, demonstrates Davis' ability to paint a vivid picture through music. Its delicate melodies and harmonies reflect the calm and reflective mood of a summer evening by the water. This composition stands as a testament to Davis' skill in creating evocative and picturesque musical landscapes, making it a fitting and soothing choice for this week's closing theme. Enjoy.
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