Keep your finger on the legal world's pulse

Nevada's attorney general has filed lawsuits against popular social media platforms TikTok, Snapchat, and Meta, accusing them of exploiting children and creating an "addiction machine." The lawsuits claim that these platforms manipulate young emotions and exploit children's developing minds for financial gain. The allegations include risks such as auto accidents, drug overdoses, suicides, eating disorders, and sexual exploitation. The lawsuits seek unspecified damages and have been filed in state court in Las Vegas. The outcome of these lawsuits could have significant implications for the regulation of social media platforms and their impact on children. Relatedly, a congressional hearing was held on Wednesday where top executives from major social platforms testified on the policies and controls their platforms have in place to prioritize safety. Parents who lost children to suicide held up pictures of their deceased kids during the hearing. Senate Majority Whip Dick Durbin (D-IL) criticized the companies for their failure to prioritize safety. Meta chief executive Mark Zuckerberg apologized to the parents but advocates argue that the companies are not doing enough. Both Republicans and Democrats expressed frustration with social media companies and their lack of prioritization of child safety. 

 

CNN

USA Today

U.S. News

Chicago Tribune

The Biden administration will require developers of major artificial intelligence (AI) systems to disclose their safety test results to the government. The White House AI Council will review progress made on the executive order signed by President Joe Biden three months ago. The order mandates that AI companies share safety test information with the Commerce Department. The government aims to ensure that AI systems are safe before they are released to the public. The National Institute of Standards and Technology will develop a uniform framework for assessing safety. AI has become a significant economic and national security concern, and the Biden administration is working on legislation and international cooperation to manage the technology. The government has also conducted risk assessments on AI's use in critical national infrastructure and has increased the hiring of AI experts and data scientists at federal agencies.

 

U.S. News

A Legalweek panel has discussed the differing approaches of law firms towards the adoption of generative artificial intelligence (AI) in litigation. Vanessa Barsanti, a partner at Kirkland & Ellis, described the firm as a "late adopter" of AI, while Niloy Ray, a shareholder at Littler Mendelson, expressed "cautious optimism." The panel also debated the duty of lawyers to understand and explain the technology they use, with Barsanti arguing that litigators have a responsibility to explain their methods to a judge and opposing counsel. The issue of pricing legal services powered by AI was also raised, with the possibility of moving away from hourly billing towards value-based and flat-fee billing. The panel concluded that integrating AI into work functions will require a shift in how firms train associates.

 

The American Lawyer

Ernst & Young LLP has partnered with legal technology company Reveal to integrate artificial intelligence (AI)-powered e-discovery technology into its global offering for clients. This alliance aims to enhance the process of searching and analyzing data and documents related to regulatory matters, investigations, and litigation. Todd Marlin, the global forensic and integrity services technology and innovation leader at EY, highlighted the significance of this collaboration. The Big Four firm is actively investing in artificial intelligence to strengthen its client services. Last year, EY incorporated Microsoft AI technology into its tax platform.

 

Bloomberg Tax

Top U.K. law firms are taking action to address the pay disparity with their U.S. rivals. The five prestigious law firms based in London, known as the Magic Circle, are not able to match the compensation scale of elite U.S. law firms. Pay at U.K. firms is 35% to 40% below the Cravath scale for junior lawyers. U.K. firms have struggled to match U.S. firms' profits due to increased competition and post-Brexit currency changes. The pay difference adds to the challenges faced by London firms in competing with U.S. firms on their home turf. U.K. firms have been raising associate salaries and offering bonus schemes to bridge the pay gap. However, U.S. firms continue to increase salaries, maintaining the gap. The newest Cravath scale for U.S. law firms in London ranges from $225,000 for first-year associates to $420,000 for seventh-year associates. U.K. firms are also facing pressure from U.S. firms' aggressive hiring and lateral moves. The future of the legal market in London remains uncertain as the competition intensifies and the availability of work fluctuates.

 

Bloomberg Law

Bloomberg Tax

Law firms are not firing associates who are working less and getting paid more than ever. The average hours worked by lawyers at the top 100 firms have reached their lowest point on record, while associate compensation has risen to record highs. Despite the loss of productivity, law firms have not reduced headcount due to the rapid increase in associate billing rates. The less-busy, more-expensive associates generate more revenue than the harder-working, less-paid associates. Law firms have raised rates so quickly that they can employ more lawyers at higher salaries and still be profitable. However, experts predict that 2024 will be a busier year for law firms, with major corporate transactions expected to increase associate workload.

 

Bloomberg Law

Bloomberg Tax

A judge in London has thrown out a lawsuit by Donald Trump accusing a former British spy of making “shocking and scandalous claims” that were false and harmed his reputation. Judge Karen Steyn said the case Trump filed against Orbis Business Intelligence should not go to trial. The company was founded by Christopher Steele, who created a dossier in 2016 that contained rumors and uncorroborated allegations that caused a political storm just before Trump's inauguration. Steele, who once ran the Russia desk for Britain's Secret Intelligence Service, also known as MI6, was paid by Democrats to compile research that included salacious allegations that Russians could potentially use to blackmail Trump. The former president had sought damages from Orbis for allegedly violating British data protection laws.

 

Reuters

Reuters

U.S. News

A federal jury in Manhattan has rejected the claims of a former lawyer at Davis Polk & Wardwell, who alleged that the law firm fired him in 2018 due to racial discrimination. The jury found Davis Polk not liable for retaliation, marking a defeat for the plaintiff, Kaloma Cardwell. Cardwell, a Black former associate at the firm, filed the lawsuit in 2019. The trial included testimony from various current and former employees of Davis Polk, including Thomas Reid, the firm's former managing partner. Cardwell had alleged receiving negative reviews after filing a complaint with the U.S. Equal Employment Opportunity Commission. Davis Polk argued that Cardwell was terminated for poor performance. The case is Kaloma Cardwell v. Davis Polk & Wardwell, et al., U.S. District Court for the Southern District of New York, 19-cv-10256.

 

Reuters

American Airlines is being sued in a proposed class action by two customers who claim the airline stripped them of 1.1m frequent flier miles. The customers, Ari and Shanna Nachison, allege that American wrongly accused them of fraud for opening multiple AAdvantage accounts with credit cards issued by Citibank and Barclays. The Nachisons argue that their card applications did not prevent them from receiving multiple mileage bonuses, and they are unsure why their accounts were closed. American cited violations related to the accrual of ineligible miles and benefits as the reason for terminating the accounts. The lawsuit seeks damages for individuals whose AAdvantage accounts were terminated based on alleged fraud for obtaining Citi-AAdvantage and Barclays-AAdvantage credit cards. American Airlines is yet to comment on the lawsuit.

 

Reuters

The Environmental Protection Agency (EPA) is taking steps to regulate per- and polyfluoroalkyl substances (PFAS), a family of synthetic chemicals found in consumer goods. The EPA has proposed designating two types of PFAS, perfluorooctanoic acid (PFOA) and perfluorooctane sulfonate (PFOS), as hazardous substances under CERCLA. This could lead to increased litigation and remediation costs for manufacturers and users of PFAS. The EPA is also working on setting the first-ever national drinking water standard for PFAS, with a proposed maximum contaminant level of 4 parts per trillion. PFAS contamination has already resulted in thousands of lawsuits, and the number is expected to grow as more evidence of health effects emerges. Companies are advised to assess their PFAS liability and consider alternatives to minimize risk. Miles Scully, a mass tort litigation expert, provides tips for companies to navigate the PFAS landscape.

 

Reuters

New York City has filed a lawsuit against the Federal Deposit Insurance Corp. (FDIC) for approximately $44m in unpaid municipal taxes. The city's department of finance audited Signature Bank, which closed in March, and discovered tax deficiencies for the years 2015 through 2021. The deficiencies were related to unreported income allocation and adjustments to investment and capital income. This is not the first time New York City has taken legal action against the FDIC for unpaid taxes, as it recently filed a similar suit seeking over $2.1m from Silicon Valley Bank. The FDIC had rejected New York's request for payment of back taxes in July. The case is NY v. Federal Deposit Insurance Corp., 24-cv-00629, US District Court, Southern District of New York (Manhattan).

 

Bloomberg

Paul Hastings has hired David K. Hong, a Kirkland & Ellis restructuring and special situations partner, to expand its restructuring group. Hong brings in-house experience from his time as associate general counsel at King Street Capital Management. He believes there is significant debt coming due in the next few years, and organizations will need to restructure or pay off that debt. Hong noted that the high-yield markets are no longer as friendly for financing, so companies will need to explore alternative options.

 

The American Lawyer

Allen & Overy is advising WillScot Mobile Mini on its $3.8bn acquisition of California-based business-to-business rental company McGrath RentCorp, repped by Morrison & Foerster. The cash-and-stock deal comes as WillScot, which is headquartered in Phoenix, Arizona and leases modular offices and portable storage units, looks to expand its presence across North America.

 

The Global Legal Post