Keep your finger on the legal world's pulse
17th March 2023
Federal judges leaving the bench for Big Law
Bloomberg Law examines an emerging trend which is seeing federal judges leave the bench for lucrative jobs at Big Law firms. Former President Donald Trump placed three justices on the U.S. Supreme Court and more than 200 in other federal judgeships across the country during his presidency. Meanwhile, the Biden administration has “more or less” continued to prioritize youth, according to Xiao Wang, a Northwestern University law professor, in addition to looking for judges from underrepresented sociocultural and professional backgrounds. However, many have exited early for jobs in the private sector. Figures from the U.S. Courts website show Federal district judges will make just under $233,000 this year, while appeals judges will make more than $246,000. But at Big Law firms such as fGibson Dunn and Latham & Watkins, first year associates earn as much as $235,000 in salaries and bonuses, while in recent years equity partner profits have surpassed $4m on average at those and other firms. John P. Collins, a visiting associate law professor at George Washington University, said: "Any firm would love to have a former federal judge on their roster, because they come with deep knowledge about how the courts work (and it makes for great marketing to clients)."
Trump Special Council pressing for judge to breach attorney-client privilege
ABC News reports Special Counsel Jack Smith wants to question an attorney for former President Donald Trump about an alleged phone call the two held as investigators were building evidence about Trump's potential obstruction of the government's efforts to retrieve classified materials that he had retained after leaving the White House. Over recent weeks it is understood that Smith has urged a federal judge in Washington, D.C., to pierce attorney-client privilege and force Trump attorney Evan Corcoran to testify. The alleged call would have taken place on the same day that the Trump Organization was served with a subpoena for surveillance footage from Trump's Mar-a-Lago resort. At the time, the government had grown suspicious that Trump was still holding onto classified documents despite one of his attorneys swearing under oath that he had complied with a subpoena requesting any remaining records he might have.
Credit card firms criticized by AGs over gun sale code
A group of 14 state attorneys general have criticised Visa Inc., American Express Co., and Mastercard Inc. for delaying work on a merchant code that would have helped identify suspicious gun sales in the U.S. The coalition, chaired by New Jersey AG Matthew Platkin, condemned the firms for bending under political pressure, in a letter delivered to the chief executives of the companies, and termed their move "unjustifiable". The credit card firms have paused work on a new merchant category code (MCC), citing Republican pushback in various U.S. states on concerns about improper tracking of consumer behavior. AG Platkin wrote: "We see no valid reason why these companies, who process millions of transactions in firearms, ammunitions, gun kits, and more, would renege on their pledge to take...steps to help flag potential gun traffickers and mass shooters." U.S. Senators Bob Menendez and Elizabeth Warren have also called on federal regulators to help speed up the adoption of the MCC by payment networks.
State level e-book licensing would unnecessarily interfere in the copyright marketplace
Zvi Rosen of Southern Illinois University School of Law argues that state level e-book licensing would unnecessarily interfere in the copyright marketplace and diminish authors’ ability to commercialize their works. Under U.S. copyright law, a library cannot purchase an individual license and lend that out - they must purchase a e-lending license, which expressly permits lending of the e-book. Copyright owners pulling works out of libraries altogether would pose a much greater threat to e-book accessibility than exists under the current parameters. The total number of e-books available to borrowers in U.S. libraries more than doubled between 2016 and 2020, to 804m from 392.5m. Global e-book distributor Overdrive reported in 2021 that “libraries achieved all-time records for circulation while lowering the average cost-per-title borrowed.” For Mr. Rosen, libraries subject to price-gouging or unfair trade practices under federal copyright law would be unlikely to experience such expansion. 
Justice Department and SEC probe SVB collapse
The U.S. Justice Department and the Securities and Exchange Commission (SEC) have reportedly launched investigations into the collapse of Silicon Valley Bank. Sources say the investigations - which are separate inquiries - will also examine the actions of the bank's senior executives. A source says the SEC has begun the process of seeking documents by sending out hold notices, which require the recipient to preserve relevant documents and electronically stored information.
Regulator says social media is a 'goldmine for scammers'
The Federal Trade Commission (FTC) has described eight popular social media and video streaming platforms as “goldmines for scammers.” Meta, Instagram, YouTube, TikTok, Snap, Twitter, Pinterest, and Twitch are being asked by the FTC to provide information on how to restrict paid commercial advertising that is deceptive or exposes consumers to fraudulent health care products, financial scams, counterfeit and fake goods, or other fraud. Consumers have reported losing more than $1.2bn to fraud that started on social media in 2022 more than any other contact method. “Social media has been a gold mine for scammers who tout sham products and other scams that have cost consumers enormously in recent years,” said Samuel Levine, Director of the FTC's Bureau of Consumer Protection. “This study will help the FTC ensure that social media and video streaming companies are doing everything they can to keep scammers and deceptive ads off their platforms.”
Former DLA Piper associate fired for requesting maternity leave
A complaint filed with the Equal Employment Opportunity Commission (EEOC) alleges DLA Piper fired senior associate Anisha Mehta in New York because she requested maternity leave. Mehta, represented by employment litigation firm Wigdor, claimed she had received no adverse performance reviews or criticism prior to her firing. Lawyers representing Ms. Mehta allege DLA Piper fired the former associate to avoid paying 18 to 20 weeks of her salary while she took maternity leave. Despite receiving multiple raises during her time at the firm, Mehta's former supervisor cited her lack of preparation for a client call and a sloppy brief as grounds for her termination. The EEOC complaint refutes the firm's rationale. 
The impact of GPT/large language models
According to AI expert and law professor Daniel Katz, the introduction of Open AI’s generative pre-trained transformer (GPT) technology has improved the quality of machines’ ability to process language. However, he acknowledges that the technology has its limitations, arguing that GPT will not mark the end of the need for dedicated legal technology. He expects some of the incumbent legaltech companies to buy some generative AI companies and figure out how to combine them with their tech. Recently, Allen & Overy announced that it has partnered with Harvey, a platform that leverages Open AI’s technology to help lawyers edit documents and perform legal research. This was followed by an announcement on 1 March that U.S. legal research provider Casetext has launched a legal assistant powered by Open AI’s technology. Meanwhile, there are plenty of vendors announcing ChatGPT integrations.  
Tesla wins bid for more details on probe of race bias claims
California’s Civil Rights Department, which is suing Tesla over alleged widespread race discrimination at the company's flagship assembly plant in Fremont, says  California must detail the investigation it conducted prior to filing the lawsuit. California Superior Court Judge Evelio Grillo's tentative ruling could give the electric carmaker an opportunity to narrow the lawsuit filed last year by the state’s civil rights agency. California law requires the department to investigate discrimination complaints by workers before suing employers. If the agency did not investigate certain claims against Tesla before suing, the carmaker could seek to have them removed from the case.
U.S. sues Rite Aid for missing opioid red flags
Rite Aid is facing U.S. Justice Department claims that it intentionally filled unlawful prescriptions for opioid painkillers as part of a whistleblower case over the sales. In a complaint filed in Cleveland federal court, the Department said Rite Aid repeatedly filled prescriptions from May 2014 to June 2019 that were medically unnecessary, for off-label use, or not issued in the usual course of professional practice. The Justice Department also said Rite Aid intentionally deleted some pharmacists' internal warnings about suspicious prescribers, such as "cash only pill mill???", while admonishing them to "be mindful of everything that is put in writing." "These practices opened the floodgates for millions of opioid pills and other controlled substances to flow illegally out of Rite Aid's stores," Associate Attorney General Vanita Gupta said.
Bankman-Fried secretly transferred $2.2bn from FTX
FTX co-founder Sam Bankman-Fried received more than $2bn from entities linked to the collapsed cryptocurrency exchange into his personal accounts, according to court filings. Mr. Bankman-Fried and five members of his inner circle transferred a total of $3.2bn to their personal accounts in the form of “payments and loans.” The money primarily came from Alameda Research, a crypto trading hedge fund affiliated with FTX. Mr. Bankman-Fried faces 12 federal charges and is awaiting trial after pleading not guilty to fraud.


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