Keep your finger on the legal world's pulse

Herbert Smith Freehills (HSF) is merging with U.S. law firm Kramer Levin to form a £1.6bn ($2bn) global legal powerhouse. HSF, established in 2012, has a strong focus on Asia, Australia, EMEA, and the U.K., while Kramer Levin operates from New York and has offices in Silicon Valley, Washington, D.C., and Paris. HSF's turnover increased by over 10% to £1.3bn ($1.3bn), with profits rising 14.5% to £444.5m ($6m). The new firm, named Herbert Smith Freehills Kramer, will employ over 2,700 lawyers, including around 640 partners, and aims to enhance its presence in the U.S. Rebecca Maslen-Stannage, chairwoman and senior partner of Herbert Smith Freehills, said: "This is transformational. We have long been committed to expanding our offering in the U.S. and Kramer Levin is the perfect fit." Howard Spilko, co-managing partner of Kramer Levin, said: "Joining forces with Herbert Smith Freehills is a one-of-a-kind opportunity that helps us achieve our vision and potential for strategic growth."

 

Law.com

The Times

In a recent analysis, Richards, Layton & Finger attorneys Nathaniel Stuhlmiller and Brian Mammarella highlighted the rise of "foot fault litigation," a trend in Delaware where minor technical errors in corporate documents are challenged in court, often without significant benefits to stockholders. Comparing this trend to the pre-2016 wave of "disclosure-only" settlements in mergers, they argue for a "plainly beneficial" standard, akin to the Delaware Chancery's Trulia decision, which set higher materiality requirements for settlements. This approach would help deter frivolous claims and reduce the "governance tax" on corporations, ensuring that litigation only advances when it clearly benefits stockholders.

 

Delaware Business Court Insider

Intel is embroiled in a class-action lawsuit alleging that it knowingly sold CPUs with stability issues in its 13th and 14th Gen Raptor Lake processors. The suit, filed by Mark Vanvalkenburgh, claims he experienced frequent crashes with his Intel Core i7-13700K CPU, despite applying recommended patches. The lawsuit asserts that Intel was aware of these defects prior to release, stating: “By late 2022 or early 2023, Intel knew of the defect.” The case raises questions about Intel's consumer protection practices and could lead to significant financial penalties if the allegations are proven. As the lawsuit progresses, it may impact consumer trust in Intel's brand and prompt demands for higher quality assurance standards in the tech industry.

 

Lawyer Monthly Magazine

Vanguard has reached a $40m settlement with investors who alleged the firm violated its fiduciary duty by restructuring its mutual funds, leading to unexpected capital gains taxes. The settlement, filed in the U.S. District Court for the Eastern District of Pennsylvania, will benefit investors in the Vanguard Target Retirement series who received capital gains distributions in 2021. Despite the settlement, Vanguard maintains that it has not engaged in any wrongdoing or liability. Investors initially filed the lawsuit against Vanguard Chester Funds in 2022, raising concerns over the changes made to the funds.

 

Bloomberg Tax

Chipotle Mexican Grill is being sued by shareholders for concealing how many of its restaurants were skimping on portions, forcing the chain to spend more on ingredients and hurting its stock price. The proposed class action suit, filed in Santa Ana, California federal court, said Chipotle failed to disclose growing unhappiness among customers with inconsistent portion sizes for its burritos and rice bowls. The lawsuit seeks unspecified damages for purchasers of Chipotle stock and options from February 8th to October 29th 2024.

 

Reuters

The Hill reports that President-elect Donald Trump’s administration will oversee workplace raids as part of its broader immigration crackdown, according to incoming “border czar” Tom Homan. Homan, the former director of Immigration and Customs Enforcement (ICE) who was an early advocate of the “zero tolerance” policy that separated more than 4,000 children from their parents in the first Trump administration, said the workplace raids would address labor and sex trafficking. “Where do we find most victims of sex trafficking and forced labor trafficking? At worksites,” Homan said. Such an approach is unlikely to help combat trafficking, opponents say. “He’s conflating the traffickers with the people being trafficked,” observed Heidi Altman, director of federal advocacy at the National Immigration Law Center.

 

The Hill

Yuet-Peng Cheong, a former product manager at Meta, has filed a whistleblower lawsuit alleging wrongful termination and retaliation after she raised concerns about inflated revenue projections for the company's generative artificial intelligence (AI) technology. Cheong claimed that her supervisor, Maryam Gholami, pressured data scientists to increase revenue estimates by $1.5 bn, a figure which Cheong believed was “pulled out of thin air.” After expressing her concerns, Cheong said she faced harassment and was ultimately fired in June 2023. Meta has denied the allegations, stating they are “without merit” and that it will “vigorously defend against them.” Cheong is seeking unspecified damages for the alleged mistreatment and retaliation she experienced during her employment.

 

The Columbian

FTX, the collapsed crypto exchange, has initiated a lawsuit against Binance and its former CEO, Changpeng Zhao, seeking $1.8bn over an allegedly fraudulent share deal. The lawsuit claims that a July 2021 transaction, where Binance sold its 20% stake in FTX back to the company for crypto tokens valued at $1.76bn, was funded unlawfully using customers' money. Caroline Ellison, former CEO of Alameda Research, testified that Sam Bankman-Fried directed her to use around $1bn of customer funds for the transaction. Binance has dismissed the claims as meritless and plans to defend itself vigorously.

 

Ars Technica

Financial Times

Marjorie Rollinson, Chief Counsel of the IRS, expressed confidence in the agency's ability to withstand legal challenges following a recent U.S. Supreme Court ruling that overturned the Chevron doctrine, a measure that previously allowed federal courts to defer to agency interpretations of ambiguous laws. At a California Lawyers Association tax conference, Rollinson stated: “We will continue to write guidance. We will continue to write regulations.” The IRS aims to maintain its regulatory framework despite the changes in judicial interpretation.

 

Bloomberg Tax

A Texas law restricting vision benefit plans from directing customers to specific optometrists based on discounts is under scrutiny for potentially violating free speech protections. During oral arguments, Chief Judge Jennifer Walker Elrod expressed skepticism towards Texas's claim that the law only targets false or misleading information, questioning, “Then why didn't the legislature include that qualification?” The court's concerns suggest that the law's current language may not sufficiently limit its scope, raising doubts about its constitutionality.

 

Bloomberg Law

California voters have declined to amend the state Constitution to prohibit forced labor in all forms, maintaining the current exception for punishment of crime. Advocates for criminal justice reform have raised concerns about the low wages—often less than $1 per hour—paid to incarcerated individuals for various labor tasks, including firefighting and cemetery maintenance. The initiative was part of a broader reparations proposal aimed at addressing historical injustices against Black Californians. Other states, including Alabama, Oregon, Tennessee and Vermont, have in recent years approved constitutional amendments removing slavery and involuntary servitude exception.

 

Los Angeles Times