Keep your finger on the legal world's pulse

The American Bar Association (ABA) has initiated a lawsuit against the Trump administration, alleging a campaign of intimidation against major law firms. The lawsuit claims that the administration's executive orders violate the U.S. Constitution by targeting law firms based on their past clients and hired lawyers. William Bay, the ABA's president, said: "There has never been a more urgent time for the ABA to defend its members, our profession and the rule of law itself." The ABA, representing around 150,000 members, argues that Trump's actions have hindered its ability to find law firms willing to represent it in litigation against the federal government. The lawsuit follows a series of court victories for law firms challenging Trump's orders, which stripped their lawyers of security clearances and limited their access to government officials.

 

Bloomberg Tax

ABA Journal

U.S. News

A federal judge has ruled that some of the Trump administration’s cuts to National Institutes of Health grants focused on minority groups are “void and illegal.” Judge William G. Young of the Federal District Court for the District of Massachusetts accused the government of racial discrimination and prejudice, and condemned its motives in targeting hundreds of grants that focused on health minority groups including Black communities and L.G.B.T.Q. individuals. He ordered the government to restore much of that funding for now, pending an appeal. “This represents racial discrimination and discrimination against America’s L.G.B.T.Q. community,” Young said. “That’s what this is.” He said that over the course of a 40-year career, he had “never seen government racial discrimination like this . . . [and] I would be blind not to call it out.”

 

New York Times

A federal judge in San Francisco has halted Secretary of State Marco Rubio's plans to downsize the State Department, saying that it was prohibited behavior under an injunction issued last month. U.S. District Judge Susan Illston said that President Donald Trump did not seek Congressional approval for the proposed cuts. Despite this, the State Department had already informed Congress of a deeper reorganization that would significantly reduce programs and personnel. Rubio also ordered the termination of remaining staff from the U.S. Agency for International Development, asserting that the State Department would assume its foreign assistance roles. Illston wrote: “If the State Department has any question about whether planned actions fall within the scope of the Court's injunction, the Court ORDERS the Department to first raise those questions with the Court before taking action.”

 

U.S. News

California's Insurance Commissioner Ricardo Lara has announced a formal inquiry into State Farm General's handling of wildfire claims following numerous complaints from policyholders. The investigation, termed a "market conduct examination," aims to assess whether the insurer has adhered to California's consumer protection laws. Lara said: "Californians deserve fair and comprehensive treatment from their insurance companies." State Farm has received over 12,800 claims related to the January fires, paying out more than $3.85bn. However, complaints about delays and inadequate communication have surged, prompting Lara to act. The department has noted "troubling patterns" in claims handling, including frequent reassignment of adjusters and inconsistent claim processing. The inquiry follows a previous examination in 2022 regarding underinsurance issues after past wildfires.

 

Los Angeles Times

A jury in New York has awarded $6.2m to Denise A. Rubin, a former general counsel at Napoli Bern Ripka Shkolnik, who sued her firm for allegedly firing her after she complained that she was paid less than male attorneys who ranked lower than her. Jurors also found that Rubin was the target of retaliation by Paul Napoli, the firm's founding partner, who she said personally and professionally denigrated her to colleagues and filed “meritless, lewd and professionally damaging” counterclaims against her.

 

ABA Journal

Oregon Attorney General Dan Rayfield, alongside nine other states, has filed a lawsuit against the Trump administration over its efforts to dismantle stringent car and truck emissions standards aimed at reducing air pollution. The lawsuit, lodged in U.S. District Court in northern California, follows President Trump's approval of Congress's move to revoke clean air waivers that allowed California to enforce stricter emission rules. Rayfield said: “These clean air standards aren't just about cars – they're about protecting Oregonians' health, our environment and our future.” The lawsuit seeks to overturn the federal resolutions that rescinded these waivers and to uphold the stricter emissions standards adopted by the states, which are crucial for transitioning to electric vehicles and improving public health. Other states involved include Colorado, Delaware, Massachusetts, New Jersey, New Mexico, New York, Rhode Island, Vermont, and Washington.

 

OregonLive.com

A Colorado jury has ordered Mike Lindell, the founder of pillow-manufacturing company My Pillow and a steadfast Donald Trump supporter, to pay $2.3m in damages after finding that his statements about election fraud were false and defamed an employee of voting machine company Dominion Voting Systems. The lawsuit was filed by Eric Coomer, former director of product strategy for Dominion, who said that Lindell spread baseless conspiracy theories about election fraud in the 2020 U.S. presidential election, which Trump lost.

 

U.S. News

The U.S. attorney’s office for the Southern District of Florida has charged Miami investor Suresh Gajwani for allegedly misusing tax incentives under Puerto Rico's Act 60 to evade taxes on $80m in Tesla stock gains. This marks the first federal criminal case linked to the IRS's audit campaign initiated in January 2021. Mr. Gajwani, who founded Nimco II Corp., reportedly sought advice to convert his company to an S corporation to qualify for the incentives, despite knowing he did not meet the residency requirements. The IRS has identified around 100 individuals potentially abusing these incentives, with lead executive Orrin Byrd stating, “These wealthy individuals are attempting to avoid U.S. taxation on U.S. source income.” Concerns about the IRS' capacity to manage these cases have arisen due to staff reductions and budget cuts.

 

Tax Notes

Rod Rosenstein, the former acting U.S. Attorney General, has transitioned to Baker McKenzie from King & Spalding. With extensive experience in the Justice Department, Rosenstein is recognised for appointing Robert Mueller as special counsel in 2017 to investigate Russian interference in the 2016 election. At Baker McKenzie, he will spearhead the national security practice.

 

Bloomberg Law

Law

U.S. toy supplier MGA Entertainment abused its dominant position to try to block Cabo, a new market rival, by threatening to withdraw its own popular L.O.L. Surprise! dolls from British retailers, London's High Court found on Monday. The company, which also owns the Bratz dolls brand, allegedly interfered with the launch of Cabo's Worldeez range by asserting that the toys' globe packaging was an imitation of MGA's L.O.L. Surprise! and threatening to withhold supplies of L.O.L. Surprise! to retailers that stocked the Worldeez globe. The Worldeez toy ultimately failed and was discontinued in 2018, prompting Cabo to sue MGA, seeking up to £90m ($122m) in damages for lost profits. Although Judge Kelyn Bacon rejected Cabo's claim for damages, she found that MGA had abused its market position by making "unjustified threats of patent infringement proceedings" to retailers Toys 'R' Us, The Entertainer, and Smyths.

 

Reuters

The Trump Organization is set to launch Trump Mobile, a new mobile phone service, as part of its expansion strategy. The service will feature a gold-colored smartphone priced at $499, with a monthly plan costing $47.45. Donald Trump Jr, executive vice-president of the Trump Organization, said: "Trump Mobile is going to change the game, we're building on the movement to put America first, and we will deliver the highest levels of quality and service." The service will provide telehealth options and free international calls to over 100 countries, using 5G networks from AT&T, Verizon, and T-Mobile. The initiative follows the family's other recent ventures, including a bitcoin exchange traded fund and a property deal with Qatari and Saudi firms, all of which have increased conflict-of-interest concerns about President Donald Trump's business interests while he is in office. “The danger is always that this becomes the channel through which improper influence flows," said Harvard law professor Lawrence Lessig.

 

CNN

Reuters

Washington Post

Financial Times