Keep your finger on the legal world's pulse

During recent years, businesses have undertaken ESG initiatives. However, the risk of litigation related to these efforts has never been higher. ESG litigation is on the rise, with private litigants and government agencies challenging ESG initiatives. The recent U.S. Supreme Court decision in Students for Fair Admissions v. Harvard has further fueled litigation, with private litigants using the Court's reasoning to challenge corporate diversity, equity, and inclusion efforts. Companies are facing challenges to their hiring initiatives and board diversity policies. Shareholder lawsuits have also been filed against companies for their commitment to diversity and equity. In response, some companies are adopting a "greenhushing" approach, staying silent about their environmental goals to avoid litigation. However, this deprives companies of the benefits of public pronouncements of ESG programs. Companies are also advised to carefully substantiate their environmental claims and avoid making misleading or overstated claims. Language matters, as marketing words like "clean" and "sustainable" can lead to false advertising claims. Companies should carefully consider their public statements and assess the potential risks and benefits of ESG efforts. Steve Blonder, a legal and business counselor, advises companies to be environmentally responsible while navigating the legal landscape.

 

Reuters

Generative AI and large language models are set to revolutionize the legal profession. Law firms need to adapt to the changes brought by this technology in order to enhance their creativity and provide better services to clients. The use of generative AI can automate routine tasks and allow lawyers to focus on higher-level thinking. Law firms should prioritize process management, empathy, understanding of technology, and preservation of creativity to effectively utilize generative AI. By doing so, they can better serve their clients and navigate the implications of this technology, such as changes in billing, organizational design, and industry structure. The future of law firms lies in embracing generative AI and leveraging its capabilities for the benefit of both clients and the firms themselves.

 

Bloomberg Tax

Ari Kaplan recently spoke with David Perla, the co-chief operating officer at Burford Capital, a litigation funding company and a leading provider of legal finance. Perla discussed the evolution of legal finance, stating that it has moved from a niche offering to a more mainstream and less controversial option in the legal market. He highlighted the business factors that are making legal finance more appealing, including increased awareness, the recognition that litigation is not a core business for many corporations, and higher interest rates. Perla also drew parallels between legal finance and legal outsourcing, noting that both industries were created by demand and have faced opposition from proponents of the status quo. He discussed a recent victory in a long-standing case against the government of Argentina, emphasizing the importance of merit in evaluating cases for investment. Perla sees legal finance becoming more ubiquitous, with CFOs, GCs, and law firms considering financing for complex and expensive litigation cases.

 

ABA Journal

A case study examines the wrongful use of civil proceedings and abuse of process in litigation. In Cruz v. Princeton Insurance, parents Jacqueline Nieves Cruz and Oscar Cruz filed an abuse of process claim against the insurer after it filed a petition for appointment of a guardian ad litem. The parents had filed a medical malpractice action against Northeastern Hospital on behalf of their son, Adam, who suffered permanent injuries at birth. After a jury verdict in their favor, settlement negotiations began, but the parents rejected the insurer's offer. The insurer then petitioned the court for a guardian ad litem, causing emotional distress to the parents. The case went through several appeals before the Supreme Court reversed the summary judgment and remanded for further consideration. The case highlights the elements of abuse of process and the harm caused to the plaintiffs. Abuse of process and wrongful use of civil proceedings are different but can have similar effects.

 

Law

The U.S. Federal Trade Commission (FTC) has filed a 172-page antitrust lawsuit in Seattle federal court against Amazon, saying the tech giant restricts retailers on its marketplace from discounting, stifling competition. “A single company, Amazon, has seized control over much of the online retail economy,” said the lawsuit, which was filed in U.S. District Court for the Western District of Washington, and is backed by 17 state attorneys general. “It exploits its monopolies in ways that enrich Amazon but harm its customers: both the tens of millions of American households who regularly shop on Amazon’s online superstore and the hundreds of thousands of businesses who rely on Amazon to reach them". The FTC asked the court to issue an injunction blocking Amazon from engaging in “unlawful conduct” and raised the possibility of altering the company’s structure, although it stopped short of detailing how the court could clip Amazon’s dominance, such as breaking apart elements of its business. Amazon general counsel David Zapolsky commented that the FTC "is wrong on the facts and the law", adding that if its suit succeeds the outcome "would be fewer products to choose from, higher prices, slower deliveries for consumers and reduced options for small businesses — the opposite of what antitrust law is designed to do".

 

CNN

NPR

New York Times

Wall Street Journal

Amazon General Counsel David Zapolsky has a deep bench of lawyers to call on to help contest the Federal Trade Commission's (FTC) antitrust lawsuit against the online retailer. The first member of Amazon's defense team identified in a court document in the case is Kevin Hodges, a partner at Williams & Connolly who is also representing Amazon in an ongoing antitrust lawsuit by California's attorney general accusing the company of forcing artificially high prices on consumers. Amazon has also turned to Paul, Weiss, Rifkind, Wharton & Garrison to navigate government scrutiny. Paul Weiss recently secured the dismissal of an antitrust lawsuit against Amazon brought by Washington, D.C.’s attorney general, although an appeal remains pending. Covington & Burling has also worked with Amazon in the past, collaborating with Williams & Connolly in an unsuccessful attempt to force FTC Chair Lina Khan - a vocal critic of the online retailer - to recuse from matters involving the company.

 

Reuters

JPMorgan Chase has reached settlements with the US Virgin Islands (USVI) and former executive Jes Staley to resolve lawsuits related to sex trafficking by Jeffrey Epstein. The settlements, totaling $75m, conclude major litigation involving Epstein's victims and powerful figures in finance and business. The settlement with the USVI includes funds for charitable organizations, law enforcement, and attorney's fees. JPMorgan did not admit liability. The terms of the settlement with Staley remain confidential. In June, JPMorgan agreed to pay $290m  to Epstein's accusers. The bank terminated its relationship with Epstein in 2013. USVI Attorney General Ariel Smith called the settlement a "historic victory." Epstein died in 2019 while awaiting trial. The settlements resolve a public relations problem for JPMorgan CEO Jamie Dimon. Deutsche Bank also reached a settlement with Epstein's victims. Staley, former CEO of Barclays, expressed regret for his friendship with Epstein.

 

Reuters

A judge has ruled that Donald Trump committed fraud for years while building his real estate empire. The ruling came in a civil lawsuit brought by New York's attorney general, who found that Trump and his company deceived banks, insurers, and others by overvaluing his assets and exaggerating his net worth. The judge rejected Trump's claim that a disclaimer on financial statements absolved him of wrongdoing. Manhattan prosecutors declined to bring a criminal case, leaving the attorney general to sue Trump. The ruling resolves the key claim in the lawsuit, but six others remain. The trial is set to begin on October 2, with the attorney general seeking $250m in penalties and a ban on Trump doing business in New York.

 

Reuters

Chicago Tribune

The Baltimore Sun

Anti-affirmative action activist Edward Blum is using a Civil War-era law to challenge American corporate diversity programs. Blum's American Alliance for Equal Rights organization has filed lawsuits against a venture capital fund and two law firms, accusing them of violating Section 1981 of the 1866 Civil Rights Act. Blum's strategy, backed by the Supreme Court's conservative majority, aims to dismantle race-conscious student admissions policies and now targets corporate diversity programs. The first major test of Blum's strategy will be a lawsuit challenging a grant program designed to promote businesses owned by Black women. Blum's group argues that race-based criteria for the grant program are illegal. The lawsuits have already had an impact, with one law firm removing language specifying that a diversity fellowship was only open to certain racial groups. Critics argue that Blum's lawsuits threaten efforts to address inequities and remove barriers to opportunity in the private sector.

 

Reuters

U.S. News

Former corporate attorney Julia Rix has filed a lawsuit against Polsinelli and two senior shareholders, Dov Scherzer and Gabriel Dabiri, alleging sexual harassment. Rix claims she was repeatedly harassed, including instances of unwanted physical intimacy, and was fired without cause after reporting the misconduct. She is seeking damages of at least $20m. Polsinelli stated that it takes allegations of harassment seriously and has procedures in place to address such claims. Rix is represented by the law firms Briglia Hundley and Brewer, Attorneys & Counselors. Scherzer and Dabiri have not yet commented on the lawsuit.

 

Law

Desktop Metal Inc. investors have lost their proposed class action against the 3D printer maker over claims of non-compliance with FDA regulations and product quality. The U.S. District Court for the District of Massachusetts ruled that the shareholders failed to demonstrate a material misstatement and the required level of intent for securities fraud. The case was brought by lead plaintiffs Sophia Zhou and Yichun Xie, who alleged that Desktop Metal's acquisition of rival EnvisionTEC resulted in the production of dental materials that were weaker than required. However, the court found no evidence to support these claims.

 

Bloomberg Law

White-collar litigator Randall Jackson, known for his involvement in the prosecution of former aides of Ponzi schemer Bernard Madoff, has joined New York firm Wachtell, Lipton, Rosen & Katz. Jackson, who recently served as a partner and co-chair of the white-collar defense practice at Willkie Farr & Gallagher, has now become a partner in Wachtell's litigation department. Wachtell confirmed the appointment, with co-chair of the litigation department, Bill Savitt, praising Jackson as a "superb lawyer." Jackson's career includes over eight years in the office of former U.S. Attorney Preet Bharara, where he handled high-profile cases. He also played a role in the successful prosecution of five former Madoff aides.

 

Reuters