Keep your finger on the legal world's pulse

Corporate legal departments are preparing for a significant increase in litigation and regulatory enforcement related to artificial intelligence (AI) in 2024. The anticipated surge is being attributed to more companies embracing AI advancements, as highlighted in litigation trend reports by Norton Rose Fulbright and Crowell & Moring. AI is poised to drive a broad spectrum of legal and regulatory risks, impacting areas such as cybersecurity, data privacy, antitrust, intellectual property, and employment law. According to Steve Jansma, U.S. head of litigation and disputes at Norton Rose Fulbright, alongside traditional dispute risks like class actions and regulatory investigations, rapid developments in AI are creating new challenges. Norton Rose Fulbright's 20th annual litigation trends report, surveying over 400 GCs and other in-house leaders, indicates that cybersecurity and data privacy are top concerns, with 44% anticipating increased litigation risk in these areas, up from 40% the previous year. Crowell & Moring predicts more discrimination lawsuits due to the growing use of AI in screening and recruiting. Trina Fairley Barlow, partner and co-chair of the firm’s labor and employment group, notes that employment law is struggling to keep pace with AI advancements, enhancing risks for companies. The firm also anticipates increased disputes in intellectual property law, with cases like Thomson Reuters vs. Ross Intelligence highlighting AI's controversial use in training models on copyrighted works.

 

Corportate Counsel

The latest Legal Trends Report is here

Today, the average lawyer has a heavier caseload and earns more for their firm than in previous years. And, with rapid advancements in new systems and technologies, law firms find themselves at the cusp of rapid, transformative change.

From billable hour trends to perspectives on AI—Clio’s latest Legal Trends Report dives into everything you need to know to set your firm up for success in 2024. Check it out to learn:

• How legal professionals are optimizing financial performance, improving cash flow and ensuring timely payments.
• What legal technology solutions firms are using to have an enormous impact on firm revenues.
• How legal professionals are perceiving and embracing AI and other technological advancements.

Read now

 

California class-action plaintiffs are targeting website user-tracking software, claiming it violates state law. The lawsuits, filed by a small group of plaintiffs, allege that the software acts as an illegal "pen register" and violates the California Invasion of Privacy Act (CIPA). The code used by the accused websites monitors user activity and decodes device data to identify sensitive information. Previous lawsuits challenging user-tracking technologies have struggled to find legal footing, but attorneys believe the new pen-register lawsuits may have better traction. The lawsuits have been filed by attorney Scott Ferrell, who has a track record of CIPA-related cases. Companies are advised to review their tracking software and ensure compliance with the law. Experts predict that the wave of pen-register complaints is likely to grow in the coming year.

 

Bloomberg Law

Andy Hoyt, CTO at Aderant, explores the delicate balance of modernizing legal technology while respecting the unique character of each law firm. He acknowledges the diverse nature of law firms as a valuable asset, albeit a challenge for technology automation. The COVID-19 pandemic, while disruptive, accelerated the adoption of new technologies in the legal sector, including artificial intelligence, cloud services, and enhanced security measures. Hoyt emphasizes that the path to successful legal tech innovation involves more than just introducing new systems; it requires a deep understanding and respect for a firm's individuality. This involves solving critical business problems, such as tackling complex issues like Outside Counsel Guidelines and billing inefficiencies, which can catalyze a positive attitude towards technology. Key to this approach is developing user-friendly technology that doesn't require extensive training, ensuring widespread adoption within firms. Additionally, Hoyt highlights the importance of creating unified and accessible software solutions across multiple devices, catering to the modern lawyer's need for flexibility and mobility.

 

Legaltech News

The coming year is expected to bring both opportunities and challenges to the litigation risk insurance industry. Stephen Kyriacou Jr., a managing director and senior lawyer in Aon's Litigation Risk Group, believes that the focus will remain on finding good opportunities for clients looking to insure their litigation risks. He predicts continued growth in the space, with increased deal flow and more insurers investing in this area. However, he also expects rates to slowly increase and certain risks to become more difficult to insure. Despite these challenges, Kyriacou is optimistic about the future of the industry and believes that increased awareness and sophistication among insurers, brokers, and buyers will drive progress. The article concludes by highlighting the importance of judgment preservation insurance in the patent space and the opportunities and challenges that lie ahead for everyone operating in the litigation risk insurance market in 2024.

 

Above the Law

Columnist David Lat analyzes a new study that examines the ideological leanings of Big Law firms in U.S. Supreme Court pro bono amicus briefs. The study, conducted by Notre Dame University law professor Derek Muller, analyzed briefs filed by Am Law 100 firms over a four-year period. The findings reveal that 64% of the briefs supported the liberal position, indicating a leftward lean in Big Law. In high-salience cases, such as those addressing abortion and LGBTQ rights, 95% of the Big Law briefs supported the liberal position. The study also provides firm-specific insights, ranking Gibson, Dunn & Crutcher as the firm that filed both the most liberal and conservative briefs. The research offers valuable information for law students and lawyers choosing between firms and prompts firms to reflect on their ideological orientation. However, it is important to note that pro bono work represents a small portion of Big Law firms' overall work, which tends to be conservative in nature.

 

Bloomberg Tax

Former Trump White House counsel Pat Cipollone has joined the law firm created by Trump-era U.S. Attorney General Bill Barr and former Facebook General Counsel Ted Ullyot, as part of a significant expansion of the year-old firm in the Washington, D.C. legal market. Torridon Law said that Cipollone will join the company alongside former Trump White House senior counsels Patrick Philbin and Kate Todd. They and several others join from Ellis George. Barr stated that the new arrivals will strengthen the firm's capabilities in litigation, regulatory and enforcement proceedings and investigations. Ullyot described Cipollone and Philbin as "aggressive and creative litigators, and seasoned advisors at the top of their profession." Other notable additions to Torridon include Fred Fielding, who served as White House counsel to the late Presidents George H.W. Bush and Ronald Reagan, and Tim Shea, the Trump-era acting leader of the Drug Enforcement Administration. Conservative-leaning law firms have grown in recent years in the D.C. metro area, as state agency attorneys and former top partners at large firms set up smaller, focused law offices. Former Kirkland & Ellis lawyers have been involved in several of these moves.

 

Bloomberg Law

Law

Reuters

Quinn Emanuel Urquhart & Sullivan has opened its first office in Delaware, positioning itself for more gains in litigation cases. The firm hired Michael A. Barlow to lead the Wilmington office and plans to hire three to five associates. Quinn Emanuel recently won a share of $266.7m in fees from Delaware Chancery Court, the second-largest attorney fee award in the court's history. The firm has a history of battling cases in Delaware and is currently litigating other matters in the state's courts. Other elite law firms also have outposts in Delaware, creating competition for cases. The Chancery Court is expected to see fewer appraisal cases and a continued trickle of Covid-19 related litigation in the coming months.

 

Bloomberg Law

A North Carolina Supreme Court justice has ended her lawsuit against an ethics commission because she says the judicial panel scrutinizing her comments about the courts, colleagues and race has dismissed a complaint against her. Associate Justice Anita Earls, the only Black jurist on the seven-member court, filed the lawsuit against the state Judicial Standards Commission. The commission was investigating comments Earls made in an interview with a legal affairs news website. The commission notified Earls that it had dismissed the complaint "without recommending to the Supreme Court any disciplinary action." Earls said, "I continue to believe that the First Amendment protects my ability to speak about matters of racial equity in the legal system." Earls' attorney confirmed that the commission's notice of dismissal is confidential and will not be released. Earls plans to seek reelection in 2026.

 

Reuters

U.S. News

The U.S. Supreme Court has declined to review Quinn v. Washington, a lawsuit challenging the state's capital gains tax. The tax, which imposes a 7% levy on profits from the sale or exchange of stocks, bonds, and other investments or tangible assets above $250,000, brought in nearly $900m in revenue in its first year. Opponents argued that the tax violated the state constitution, but the Washington Supreme Court upheld it as an excise tax. Supporters of the tax, including Treasure Mackley, executive director of Invest in WA Now, celebrated the decision as a victory for Washington's children and families. However, the battle may not be over, as a conservative group has filed a petition to repeal the tax, which could potentially be on the ballot in the fall.

 

Bloomberg Tax

The Columbian

CPA Practice Advisor

A Los Angeles federal court has dismissed a trademark lawsuit filed by Trader Joe's against its employee union over the use of the store's logos on union merchandise. The court ruled that the union's use of the chain's name and logos would not confuse consumers. The judge also stated that the lawsuit was close to being frivolous and likely filed in response to the union's organizing efforts. Trader Joe's spokesperson stated that the company will continue to take legal action to protect its brand. The union celebrated the court's decision as a victory. Trader Joe's sued the union, claiming that its merchandise would confuse customers, but the judge found no similarity between the union's designs and the store's trademarks. The case is Trader Joe's Co v. Trader Joe's United.

 

Reuters

Syngenta and Corteva are set to face a lawsuit from the U.S. Federal Trade Commission and several states over allegations of unlawful efforts to limit competition from generic pesticide rivals. The lawsuit accuses the companies of running "loyalty programs" that pay distributors to limit their purchase of generic crop-protection products, resulting in artificially high prices. The lawsuit seeks to bolster competition for crop-protection products and impose civil penalties. U.S. District Judge Thomas Schroeder ruled that the lawsuit can proceed, stating that the companies have not demonstrated that the lack of generics in the market is due to fair competition. Syngenta and Corteva have denied the allegations. The case will now enter an evidence-gathering stage.

 

Reuters

The Supreme Court has declined to hear a case involving transgender students' access to school restrooms and locker rooms in Indiana. The case centered around a transgender boy who was barred from using the boys' restrooms at his former middle school. The refusal to take up the case leaves a split among federal appeals courts on whether school districts can prohibit transgender students from using bathrooms that align with their gender identity. Transgender students across the country have filed lawsuits challenging these policies, arguing that they violate the 14th Amendment's Equal Protection Clause and Title IX. The Supreme Court has previously shown reluctance to address transgender protections. The case was backed by conservative groups and 19 Republican state attorneys general. The Supreme Court's decision allows transgender students in Indiana to access school restrooms consistent with their gender identity.

 

The Hill

Another set of passengers on the Alaska Airlines flight that made an emergency landing in Portland has filed a lawsuit against the airline and Boeing. The lawsuit, filed in King County Superior Court, seeks compensation for injuries and trauma suffered by the passengers. The suit alleges that the 737 Max 9 aircraft was defective and unsafe, and faults Alaska Airlines for continuing to fly the plane despite safety concerns. Boeing is accused of design flaws and failure to provide adequate warnings. The emergency landing has grounded other 737 Max 9 jets as inspections are conducted. Alaska Airlines and Boeing have not yet commented on the lawsuit.

 

The Columbian

OregonLive.com

The U.S. Supreme Court is currently evaluating arguments in the case of Loper Bright Enterprises v. Raimondo, which could have significant implications for the IRS's ability to issue regulations. The case challenges the 40-year-old Chevron doctrine, which states that federal courts should defer to agency interpretations when the law is unclear. If the Supreme Court limits or overturns this doctrine, it could open the door for more taxpayer challenges to IRS regulations, resulting in greater uncertainty surrounding tax regulations.

 

Bloomberg Tax

More than 300 companies and financial institutions plan to report on the impacts they have on the natural world, according to the G20-backed Taskforce on Nature-related Financial Disclosures (TNFD). The disclosures aim to provide more information on the risks and opportunities posed by interaction with nature, and will help boards make decisions that positively impact nature and meet the global agreement on biodiversity. The TNFD's 14 recommended disclosures, published in September 2023, will force companies to describe how they assess and manage related issues and improve their performance. Norges Bank Investment Management (NBIM), the largest owner of listed companies globally, is among the organizations committed to disclosing their nature-related impacts and dependencies. "We are committed to leveraging this tool to deepen our understanding of our portfolio's nature-related impacts and dependencies," said Carine Smith Ihenacho, NBIM's Chief Governance and Compliance Officer.

 

Reuters

The U.S. arm of PwC has removed race-based restrictions on internship and fellowship schemes. The firm is the latest business that has been forced to scrap its eligibility criteria after the Supreme Court last year ruled that excluding people based on their race was unlawful. According to PwC’s latest diversity and inclusion report, the firm also dropped a promise to award 40% of its procurement budget to minority-owned suppliers. America First Legal (AFL), which brought the case to the Supreme Court, had targeted PwC last year. Senior counsellor at AFL, Reed Rubinstein, said of PwC’s latest DEI report: “There are changes in nuance and emphasis, but this is still the same racial bean-counting that contrives to reduce individuals to their immutable characteristics in a way that is difficult to square with what the law requires.” Yolanda Seals-Coffield, chief people officer of PwC U.S., told the Financial Times: “Our commitment to cultivating an environment where all our professionals can thrive hasn’t changed. How we get there may face a few hurdles that it didn’t a year ago.”  

 

Bloomberg Law

Financial Times