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This Day in Legal History: Miranda Rights
On June 13, 1966, the U.S. Supreme Court delivered a landmark ruling in Miranda v. Arizona, fundamentally transforming the criminal justice system. The Court held that suspects must be informed of their rights prior to police interrogation, a decision aimed at protecting the Fifth Amendment right against self-incrimination. This ruling introduced what is now known as "Miranda rights," which include the right to remain silent, the right to an attorney, and the warning that anything said can be used in court. The case arose from Ernesto Miranda's conviction based on a confession obtained without these warnings, which the Court deemed unconstitutional. Chief Justice Earl Warren emphasized the necessity of procedural safeguards to ensure suspects' awareness of their rights. This decision has since become a cornerstone of American legal procedure, significantly influencing law enforcement practices nationwide. The Miranda warning aims to prevent coercion and ensure fair treatment, highlighting the importance of individual rights within the justice system.
Today, Tesla shareholders are voting to approve Elon Musk's $56 billion pay package and relocate the company's legal home to Texas. Musk announced on social media that the pay package and relocation were passing by wide margins. Approval of this substantial pay deal could alleviate investor concerns about Musk's future at Tesla and support the company's efforts to reverse a court decision that voided the pay package. However, the decision may still face challenges in the Delaware court, where a judge previously ruled that Tesla's board was too influenced by Musk. Despite the shareholder vote, legal experts, such as UC Berkeley's Adam Badawi, are uncertain if the court will uphold it.
Tesla's stock rose significantly in premarket trading following the announcement. The final voting results will be disclosed at a shareholder meeting in Texas. Major proxy firms had advised against the pay package, but a mix of institutional and retail investor votes helped secure its passage. Shareholders also voted on relocating Tesla's legal headquarters and re-electing board members Kimbal Musk and James Murdoch. This vote is seen as a test of confidence in Musk's leadership amid Tesla's recent challenges, including a significant drop in stock value since 2021 and concerns about Musk's commitments across his multiple ventures.
Musk says Tesla shareholders voting yes for his $56 billion pay package | Reuters
Disney and Florida Governor Ron DeSantis have resolved their dispute with a deal allowing Disney to develop the Walt Disney World Resort near Orlando for the next 15 years. The feud began in 2022 when former Disney CEO Bob Chapek criticized a state law limiting discussions of sexuality and gender issues in schools, known as the "Don't Say Gay" law. The new agreement, made with the Central Florida Tourism Oversight District, commits Disney to spending at least $8 billion over a decade and $17 billion over 10 to 20 years on the resort. This investment will include expanding affordable housing, ensuring 50% of the spending benefits Florida businesses, and potentially building a fifth theme park, retail and office spaces, and 14,000 additional hotel rooms. Disney President Jeff Vahle highlighted that the agreement facilitates significant investments in the resort. This deal follows a settlement in March to end a lawsuit over control of the special district encompassing Walt Disney World.
Disney, Florida's DeSantis end spat with deal on 15-year expansion plan | Reuters
The U.S. Supreme Court is set to rule on the constitutionality of the Securities and Exchange Commission's (SEC) use of in-house judges for adjudicating enforcement actions. This decision could have significant consequences for other federal agencies that employ similar systems. The SEC employs administrative law judges who handle cases referred by the agency's commissioners. These judges conduct hearings, issue subpoenas, and make initial decisions on sanctions, which are then reviewed by the commissioners. This process is generally faster and more specialized than federal court proceedings.
The challenge originates from George Jarkesy, a hedge fund manager fined by the SEC in 2013 for securities fraud. Jarkesy contested the SEC's in-house system, and the Fifth Circuit Court of Appeals ruled in 2022 that these proceedings violate the Seventh Amendment's right to a jury trial. This ruling has prompted the Supreme Court to review the case.
During a November hearing, the Supreme Court's conservative justices expressed doubts about the legality of the SEC's in-house system, particularly its exclusion of jury trials for fraud charges. Chief Justice John Roberts questioned the constitutionality of depriving individuals of a jury trial based on the government's decision.
If the Supreme Court decides to limit or abolish the SEC's in-house courts, it could affect not only the SEC but also other federal agencies like the Environmental Protection Agency, the Labor Department, and the Commodity Futures Trading Commission. These agencies might face slower enforcement actions, increased resource demands, and challenges in targeting misconduct without the use of in-house tribunals.
Explainer: What is the US SEC's in-house court under Supreme Court review? | Reuters
First, some very brief background. Qualified immunity is a legal doctrine that shields government officials, including law enforcement, from liability for civil damages unless they violated a clearly established statutory or constitutional right. It is intended to protect officials from lawsuits over actions taken in their official capacity, provided their conduct does not violate clearly established laws.
Recently, the Sixth Circuit Court of Appeals told the Ohio Attorney General (AG) to stop blocking a ballot initiative aimed at ending qualified immunity. This initiative arose from widespread public dissatisfaction with various forms of immunity that often protect government employees from lawsuits. Ohio residents have been trying to place a measure on the ballot to eliminate these immunities. However, the Ohio AG, David Yost, has repeatedly refused to certify the proposed amendment, preventing it from advancing.
We'll have to see what Ohio decides, but this development could pave the way for similar initiatives in other states. If Ohio successfully places the measure on the ballot and it gains voter approval, it may inspire activists and lawmakers in other jurisdictions to pursue comparable reforms. The outcome in Ohio could set a precedent and generate momentum for a broader movement to reassess and potentially limit qualified immunity across the United States.
Sixth Circuit Tells Ohio AG To Stop Blocking Ballot Initiative Calling For End Of Qualified Immunity | Techdirt
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This Day in Legal History: Loving v. Virginia
On June 12, 1967, the United States Supreme Court issued a landmark decision in the case of Loving v. Virginia, striking down state laws prohibiting interracial marriage. Richard Loving, a white man, and Mildred Jeter, a Black woman, were married in Washington, D.C., in 1958 but were arrested upon their return to Virginia for violating the state's anti-miscegenation laws. The Lovings were convicted and sentenced to a year in prison, with the sentence suspended on the condition that they leave Virginia and not return together for 25 years.
Challenging their conviction, the Lovings argued that Virginia's laws violated the Equal Protection and Due Process Clauses of the Fourteenth Amendment. The Supreme Court, in a unanimous decision authored by Chief Justice Earl Warren, agreed with the Lovings. The Court held that Virginia's anti-miscegenation statutes were rooted in racial discrimination and served no legitimate purpose other than to maintain racial segregation. This decision effectively invalidated similar laws in 15 other states, affirming that marriage is a basic civil right that cannot be restricted by racial classifications. The Loving v. Virginia decision was a significant step forward in the civil rights movement, reinforcing the principle that all individuals are entitled to equal protection under the law.
Paul Weiss has been aggressively recruiting top-tier mergers and acquisitions and private equity partners, hiring over 20 from prominent firms such as Kirkland & Ellis and Latham & Watkins. This hiring spree, focused mainly in London and New York, reflects a broader trend of escalating compensation for elite lawyers, with some earning over $20 million annually. To fund these high-profile hires, Paul Weiss revamped its partner pay system and adopted a "black box" approach, where pay details are kept confidential among partners. The firm also introduced a new tier of non-equity partners to retain senior attorneys without sharing profits.
This strategy mirrors moves by other top firms like Simpson Thacher & Bartlett and Davis Polk & Wardwell, which have adjusted their compensation structures to remain competitive. Paul Weissâs London office has notably expanded, recruiting high-profile partners from Kirkland to build a comprehensive practice there. The firmâs longstanding relationship with Apollo Global Management continues to bolster its M&A and private equity profile. Despite lagging behind top deal advisors like Kirkland & Ellis and Wachtell Lipton Rosen & Katz, Paul Weissâs aggressive hiring positions it well for future market share gains.
The firmâs recruitment efforts underscore the importance of attracting top legal talent to handle complex and lucrative deals, reflecting a fiercely competitive legal market.
Paul Weiss Hiring Binge Shows Big Lawâs Dealmaker Recruiting War
Power grid technologies (GETs) have gained traction recently as a way to integrate more renewable energy and meet increasing power demands without building new transmission lines. Historically, US electric utilities preferred constructing new lines because they offer guaranteed returns and are seen as less risky, despite the high consumer costs and long timelines associated with them. However, grid congestion in 2022 raised consumer bills by nearly $21 billion, pushing utilities to consider GETs. These technologies optimize existing infrastructure, offering significant cost savings and increased grid capacity.
The Federal Energy Regulatory Commission's new rule requires regional grid planners to consider using GETs. Additionally, a White House meeting led to a federal-state initiative involving 21 states to upgrade 100,000 miles of transmission lines in five years. Studies indicate that implementing GETs could save billions annually and facilitate the connection of more clean energy projects.
Despite their benefits, GETs face challenges due to the traditional utility business model that favors large capital investments. Some states like Minnesota and Virginia are now mandating GETs in resource planning and offering incentives. Vermont Electric Power Co. and AES Corp. are examples of utilities testing GETs, such as dynamic line ratings and valve technology, to improve efficiency and reliability. As utilities and technology providers collaborate more, the industry aims to reduce the need for new transmission lines and overcome the associated regulatory and logistical hurdles.
Grid Upgrades Gain Favor to Meet Power Demands of AI, Clean Tech
On June 11, 2024, Elon Musk moved to dismiss his lawsuit against OpenAI and its CEO Sam Altman. The lawsuit, filed in February, accused OpenAI of deviating from its original mission to develop artificial intelligence for the benefit of humanity. Musk's attorneys did not provide a reason for the dismissal, which was filed in San Francisco Superior Court. The dismissal was without prejudice, allowing Musk the option to refile later.
Musk co-founded OpenAI but has since expressed dissatisfaction with its direction, particularly its focus on profitability following substantial investments from Microsoft. The lawsuit sought to compel OpenAI to release its research and technology to the public and prevent its use for financial gain.
OpenAI countered that Musk's claims were baseless and motivated by his desire to compete with OpenAI through his own AI venture, xAI, which recently raised $6 billion in funding. The court was scheduled to hear OpenAI's motion to dismiss the case the day after Musk's withdrawal. Neither OpenAI nor Musk's legal representatives commented on the latest development.
Elon Musk withdraws lawsuit against OpenAI | Reuters
Adobe faced significant backlash over updates to its terms of use, which users feared allowed the company to seize intellectual property and use data to train AI models. The controversy highlighted the need for clear communication of legal terms, especially in the context of evolving technologies like generative AI. In response, Adobe pledged to revise its terms, explicitly stating it wonât train AI models on cloud content, with new terms set to be issued on June 18.
The uproar began after Adobeâs February update, which included provisions for automated and manual review of user content to screen for illegal material. Users, notified in May, expressed concerns on social media, fearing their confidential content could be exploited. Adobe's general counsel, Dana Rao, emphasized that the language had long been part of Adobe's agreements and was essential for practical tasks like uploading content to the cloud.
Industry experts noted that such terms are common among cloud service providers but acknowledged the heightened sensitivity among creatives towards potential misuse of their work for AI. Adobe's commitment to clearer, user-friendly legal terms aims to rebuild trust, recognizing the unique and personal relationship users have with its products. The incident underscores the importance of transparent communication and the need for companies to preemptively address user concerns in the AI era.
Adobe Responds to AI Fears With Plans For Updated Legal Terms
Johnson & Johnson has agreed to a $700 million settlement with 42 U.S. states and Washington, D.C., resolving an investigation into the marketing of its talc-based products, which were allegedly linked to cancer. The settlement, announced on June 11, 2024, addresses accusations that J&J misled consumers about the safety of its talc products. While J&J did not admit any wrongdoing, it continues to assert that its products are safe and asbestos-free.
This settlement, led by Florida, North Carolina, and Texas, marks a significant step in consumer product safety, according to Florida Attorney General Ashley Moody. Despite the settlement, J&J still faces tens of thousands of lawsuits related to its talc products, primarily from women with ovarian cancer and some with mesothelioma. As of March 31, approximately 61,490 individuals were suing the company.
J&J ceased the global sale of talc-based baby powder last year, opting for corn starch instead. The company has made several attempts to resolve the litigation, including two failed efforts to use bankruptcy to manage its talc liabilities. On May 1, J&J proposed a $6.48 billion settlement to resolve most of the litigation through a third bankruptcy filing and has allocated an $11 billion reserve for talc liabilities. Erik Haas, J&J's worldwide vice president of litigation, stated that the company is pursuing various strategies to achieve a comprehensive resolution of the litigation.
Johnson & Johnson reaches $700 million talc settlement with US states | Reuters
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This Day in Legal History: University of Alabama Desegregated
On June 11, 1963, a pivotal moment in the American Civil Rights Movement unfolded at the University of Alabama. Governor George Wallace famously stood in the doorway of Foster Auditorium to block the enrollment of two African-American students, Vivian Malone and James Hood, symbolizing his commitment to segregation. This act of defiance came to an end when President John F. Kennedy federalized the Alabama National Guard, compelling Wallace to step aside under military pressure. The successful enrollment of Malone and Hood marked a significant step towards educational desegregation in the South.
On the same day, President Kennedy delivered a landmark Civil Rights speech, addressing the nation and emphasizing the moral and legal necessity of ending racial discrimination. Kennedy's speech highlighted the importance of civil rights as a fundamental issue of morality, equality, and justice, urging Congress to pass comprehensive civil rights legislation. This address and the events at the University of Alabama signaled a turning point, showcasing the federal government's commitment to enforcing desegregation and protecting civil rights. The confrontation in Tuscaloosa and Kennedyâs impassioned plea laid the groundwork for the Civil Rights Act of 1964, which aimed to eradicate racial discrimination across various facets of American life.
United Auto Workers (UAW) President Shawn Fain is currently under investigation by the union's federal corruption monitor, Neil Barofsky, for allegations of retaliating against another union officer. This investigation poses a significant threat to Fain, who has built a reputation as a reformist leader closely allied with the Biden administration. The court-appointed monitorâs 36-page report details claims of increased resistance from the union, including delays in providing documents mandated by a consent decree established in 2020 to avoid a federal takeover.
Fain, who narrowly won the presidency last year by pledging transparency and reform, now faces accusations that challenge his public image. The same day the report was filed, the UAW achieved a landmark contract with Ultium Cells LLC, which significantly raised wages for workers. This victory followed Fain's success in unionizing a Volkswagen plant in Chattanooga, Tennessee, though efforts to unionize a Mercedes plant in Alabama failed.
The monitor's report highlights at least two officials who allege retaliation for refusing to approve certain expenditures. One incident involves Fain reassigning duties from Vice President Rich Boyer, purportedly for âdereliction of duty,â though Boyer claims it was due to his refusal to engage in financial misconduct.
Fain has denied these allegations, attributing them to his disruptive efforts to reform the union. He maintains that the UAW leadership is committed to democratic principles and serving its members, and welcomes the investigation to clear any doubts. The report also suggests that the UAWâs cooperation with investigations has declined since February, complicating the monitor's efforts to address corruption.
This investigation into Fain is connected to another probe involving Secretary-Treasurer Margaret Mock, who alleges that her power was curtailed in retaliation for not approving expenditures beneficial to Fainâs office. The U.S. Department of Justice supports the monitorâs claims, noting that the unionâs actions are impeding efforts to eliminate corruption within the UAW.
UAW President Under Investigation by Federal Court Monitor (2)
A secret recording of U.S. Supreme Court Justice Samuel Alito, made public by liberal activist Lauren Windsor, reveals him supporting the idea of returning the country "to a place of godliness." The authenticity of the recording, shared on social media and with Rolling Stone, has not been independently verified by Reuters. Alito is heard agreeing with Windsor's statement about the necessity for believers in God to fight for the countryâs return to godliness.
When questioned about political polarization, the voice identified as Alitoâs suggests that deep ideological differences make compromise difficult and predicts that one side will ultimately prevail. Windsor argues this reveals a bias, undermining judicial impartiality. James Duff, executive director of the Supreme Court Historical Society, condemned the secret recording as inconsistent with the event's spirit.
Alito is also under scrutiny for flags linked to former President Trumpâs election fraud claims flying outside his homes. Despite Democratic calls for his recusal from related cases, Alito denied familiarity with the flagsâ symbolism and stated that his wife was responsible for the flag-flying.
Supreme Court's Alito appears to back US return to 'godliness' in secret recording | Reuters
The 5th U.S. Circuit Court of Appeals in New Orleans has decided against adopting a pioneering rule that would regulate the use of generative artificial intelligence (AI) by lawyers in its proceedings. Initially proposed in November, the rule would have required lawyers to verify the accuracy of citations and legal analysis generated by AI tools like OpenAI's ChatGPT. Misrepresentation could have led to sanctions or filings being dismissed.
The court's decision was influenced by public comments from the legal community, which largely opposed the rule, arguing that existing regulations already ensure the accuracy of court filings. Some other federal appeals courts have also considered similar regulations due to incidents where AI-generated briefs included fictitious citations.
Despite scrapping the proposed rule, the 5th Circuit emphasized that parties and counsel are still responsible for ensuring their filings are truthful and accurate. The court made it clear that using AI will not excuse any violations of existing rules.
5th Circuit scraps plans to adopt AI rule after lawyers object | Reuters
In November, Arizona voters will decide on a proposal that would grant homeowners greater property tax refunds. This proposal allows taxpayers to seek refunds for expenses incurred due to the stateâs inability to mitigate what is deemed a "public nuisance" caused by unhoused populations. I argue that a more compassionate approach would incentivize contributions to initiatives that assist the unhoused rather than compensating homeowners for their presence.
This proposal risks fostering negative perceptions of unhoused individuals by framing homelessness as a detriment to homeowners. Traditionally, property taxes have funded public services that benefit communities, including support for vulnerable populations. State governments often use tax revenues to combat housing shortages and provide relief to economically disadvantaged groups. The proposed policy in Arizona, however, shifts this focus, potentially causing long-term harm by categorizing homelessness as a homeowner inconvenience.
Arizona faces an affordable housing crisis, with a statewide shortage of 270,000 homes and a 72% rise in homelessness in Phoenix over the past six years. The proposal could drain state resources and set a precedent for taxpayers to claim refunds whenever state policies are perceived to cost them money. This shift undermines broader efforts to fund social services and could lead to selective taxpayer funding of services.
A humane alternative would involve increasing property taxes in areas with high unhoused populations to fund comprehensive social services. This could include affordable housing, shelters, mental health services, and job training programs. Taxpayers could receive incentives for donations to approved nonprofits assisting the unhoused, creating a virtuous cycle where increased funding reduces homelessness and, consequently, lowers property tax bills.
As Arizona voters consider this proposal, they will influence how the state addresses homelessness and the role of property taxes in supporting community welfare. They can proceed forward with either compassionate approaches that can mitigate homelessness or reinforce social divisions by using tax policy to marginalize the unhoused.
Arizona Property Tax Bill Would Harm Unhoused to Help Homeowners
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This Day in Legal History: Discriminatory Districting
On June 10, 1946, the US Supreme Court rendered a pivotal decision in Colegrove v. Green, which upheld the validity of uneven congressional districting plans. The case involved a challenge to Illinois' districting plan that disproportionately concentrated voters into large districts in the central part of the state, failing to balance districts according to population. The plaintiffs argued that this uneven distribution diluted their voting power, violating the principle of equal representation.
However, the Supreme Court, led by Justice Felix Frankfurter, ruled against the plaintiffs. The Court held that issues of districting were "political questions" not subject to judicial review, thereby placing the responsibility for fair districting on state legislatures and Congress. Justice Frankfurter famously stated that courts should not "enter the political thicket," emphasizing the separation of powers and judicial restraint.
This ruling had significant implications for the future of electoral fairness, as it effectively removed federal judicial oversight from the districting process. Nevertheless, the decision in Colegrove was short-lived. Less than two decades later, the Supreme Court reversed its stance in the landmark case of Baker v. Carr (1962). In Baker, the Court established judicial standards for addressing political questions, paving the way for greater judicial intervention in ensuring equitable districting practices.
The evolution from Colegrove v. Green to Baker v. Carr marked a transformative shift in the judicial approach to electoral districting, underscoring the dynamic nature of constitutional interpretation and the judiciary's role in safeguarding democratic principles. The concept of the political question doctrine, pivotal in these cases, defines the limits of judicial intervention in matters deemed more appropriately addressed by other branches of government.
Cities across the U.S. are grappling with an October deadline to inventory their lead drinking water pipes, a precursor to the EPA's proposed mandate for full replacement within ten years. Charleston, S.C., for example, faces a daunting task with its 6,100 lead pipes, estimating a cost of $100 million for complete removal. The city's water system, like many others, is concerned about the financial burden on utilities and customers.
To comply with the Environmental Protection Agency's (EPA) proposed Lead and Copper Rule Improvements (LCRI), water systems would need to replace 10% of their lead pipes annually from 2027 to 2037, a significant increase from the current requirement of 3% per year. This expedited timeline aims to reduce the risk of lead poisoning from drinking water, a priority for the Biden administration. Despite the 1986 ban on lead service lines, approximately 9.2 million remain in the U.S., primarily in states like Florida, Illinois, Ohio, Pennsylvania, and Texas.
The initial step is to identify all lead service lines by October 16, using historical records, excavation, and computer modeling. Cities like Chicago, Cleveland, and New York have significant numbers of lead pipes, while Philadelphia and Baltimore report many service lines of unknown material. Some smaller systems, particularly in Ohio, struggle with the manpower and funding to meet this deadline.
While cities such as Denver and Milwaukee are ahead in their inventories, many others argue that full replacement within a decade is unrealistic without additional federal funding. The Philadelphia Water Department and Baltimore's Bureau of Water and Wastewater have requested more flexible timelines or replacement criteria based on lead levels in water.
Charleston, alongside other cities, urges the EPA to reconsider the stringent mandates, highlighting the substantial cost and resource challenges. The debate continues as the EPA reviews feedback and prepares to finalize the LCRI regulations.
Cities Face âImpossibleâ Deadline to Remove 9 Million Lead Pipes
Tesla is seeking support from its large base of small shareholders to endorse Elon Musk's $56 billion pay package, as major institutional investors remain divided. The company's June 13 annual meeting will focus on this issue, following a Delaware court's ruling against the package. Tesla is campaigning to secure votes from retail investors, who tend to favor management but often don't vote.
Big investors have shown mixed reactions; T. Rowe Price supports the package, while others like the California Public Employees' Retirement System and Norway's sovereign wealth fund oppose it. Despite this, Tesla's retail investors, who make up a significant portion of the companyâs ownership, might help pass the pay package. So far, around 90% of retail voters have backed Musk's compensation.
Tesla also proposes reincorporating in Texas and re-electing two directors, including Musk's brother. The outcome of these votes will indicate the level of confidence in Muskâs leadership. Proxy advisors Institutional Shareholder Services and Glass Lewis recommend voting against the pay package, citing its excessiveness. Historically, pay packages have a lower approval rate when both advisors oppose them.
Additionally, Tesla's outreach includes engaging with online influencers and offering factory tours to motivate shareholders to vote. Influential supporters like Omar Qazi and Alexandra Merz actively encourage voting on social media, highlighting the unique grassroots effort among Tesla's retail investors. This unprecedented mobilization reflects the strong community backing for Musk despite the contentious pay package.
Focus: Tesla turns to Musk's small shareholder fans to back $56 billion payday | Reuters
A law firm involved in a $5.6 billion settlement with Visa and MasterCard defended its role after disclosing it unknowingly submitted fake claims. Milberg Coleman Bryson Phillips Grossman informed a U.S. judge that other parties also submitted fraudulent material in the antitrust case. The firm, which terminated its relationship with nearly 2,000 merchant plaintiffs, claims it is being unfairly singled out.
Visa and MasterCard settled in 2018 to resolve overcharge claims from millions of merchants. Milberg, which did not help craft the settlement, sought funds for its clients but recently revealed withdrawing dozens of false claims due to a third-party referral source. The class attorneys suggested punishing Milberg or referring it to the U.S. Justice Department. Milberg countered that it is cooperating fully and called potential penalties "absurd."
Law firm defends work in $5.6 bln card fee case after disclosing fake claims | Reuters
A coalition of over 20 lobbying groups, led by TechNet, is urging Congress to amend the draft American Privacy Rights Act (APRA) to ensure it establishes a uniform national data privacy standard that preempts state laws. The coalition argues that the current draft perpetuates a "patchwork" of state regulations, causing confusion for consumers and hindering economic growth.
In a letter to House Energy and Commerce Chairwoman Cathy McMorris Rodgers and Ranking Member Frank Pallone, the coalition stressed the need for broader preemption to override state laws like California's Consumer Privacy Act and Illinois's Biometric Information Privacy Act. TechNet, representing major tech companies like Apple and Google, as well as smaller firms like Etsy and Instacart, expressed concern that limited preemption would result in significant compliance burdens.
The draft bill has not yet been formally introduced in either the House or the Senate. The coalition remains in discussions with some lawmakers to push for amendments that would ensure full preemption of state laws, aiming for a more streamlined federal standard. However, the path to passing federal privacy legislation remains uncertain.
Trade Groups Urge Congress to Beef Up Federal Data Privacy Power
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This Day in Legal History: Gandhiâs First Act of Civil Disobedience
On June 7, 1893, Mohandas Gandhi committed his first act of civil disobedience in South Africa, an event that would shape his future activism and the global struggle for civil rights. Gandhi, holding a first-class ticket, was ordered to move to the third-class section of a train because he was Indian. Refusing to comply, he was forcibly removed from the train at Pietermaritzburg. This incident ignited Gandhi's resolve to combat racial discrimination and injustice.
In response to this humiliation, Gandhi began organizing the Indian community in South Africa, leading to the founding of the Natal Indian Congress in 1894. This organization aimed to unite Indians and fight against discriminatory laws. Gandhi's efforts in South Africa laid the groundwork for his philosophy of nonviolent resistance, known as Satyagraha.
After gaining experience and recognition in South Africa, Gandhi returned to India in 1915. There, he became a pivotal leader in the struggle for independence from British colonial rule. Through nonviolent protests, boycotts, and civil disobedience, Gandhi mobilized millions of Indians and brought international attention to their cause.
Gandhi's first act of defiance on that South African train was more than just a personal stand; it was the beginning of a movement that would inspire civil rights leaders worldwide, including Martin Luther King Jr. and Nelson Mandela. This day marks a significant moment in legal history, highlighting the power of peaceful protest and the enduring fight for equality and justice.
The US Supreme Court's recent decision has significant implications for estate planning, particularly for family businesses. The ruling mandated that the value of Crown C Supply Co., a family-owned business, must include the life insurance payout received after co-owner Michael Connelly's death. This decision was a setback for Thomas Connelly, the estate executor, who argued against including the payout in the company's valuation.
The unanimous ruling, authored by Justice Clarence Thomas, emphasizes that businesses using life insurance proceeds for shareholder buyouts must account for these proceeds in their valuations or explore alternative strategies. These alternatives include cross-purchase agreements, where individual shareholders, rather than the company, hold the life insurance policies, or placing the policies in a trust.
This ruling could particularly affect small business owners who might not afford extensive legal advice, potentially pushing their estates above the exemption threshold and incurring higher taxes. Estate planners now need to reassess buy-sell agreements and consider more tax-efficient arrangements. Despite the clarified tax risks, not all businesses will shift from the contested buy-sell agreements, as factors beyond tax implications often influence business decisions. The case, Connelly v. United States, highlights the need for thorough estate planning to navigate tax liabilities effectively.
High Court Estate Tax Ruling Forces Succession Planning Revamps
Netflix shareholders voted down a proposal to increase transparency on the company's use of artificial intelligence (AI) at its annual meeting. The proposal, presented by the AFL-CIO Equity Index Funds, requested a report detailing Netflix's AI policies and ethical guidelines. Concerns highlighted included potential hiring discrimination, mass layoffs, and facility closures, arguing that ethical AI guidelines could prevent labor issues and lawsuits.
This follows last summerâs Hollywood strikes, partly driven by fears that AI could undermine writers and actors. Similar AI-related proposals have been presented to other tech companies like Meta and Microsoft but have not passed. In February, a proposal at Apple received notable support, with 37.5% of investors in favor.
Netflix, in its proxy statement, described AI as a tool to enhance creativity and efficiency, not to replace human work. The company also mentioned existing collective bargaining agreements with unions that address AI use. Netflix argued that the requested report could reveal sensitive information and harm its competitive position.
Netflix Investors Reject Bid on AI Discrimination, Layoff Risks
U.S. Circuit Judge Ryan Nelson of the 9th U.S. Circuit Court of Appeals recused himself from a case involving Palestinian rights activists who seek to block the Biden administration's military support of Israel. The recusal follows his participation in a trip to Israel with other judges after the October 7 Hamas attack. Although Nelson believed his impartiality wouldn't reasonably be questioned, he stepped down out of caution. The plaintiffs argued that the trip, organized by the World Jewish Congress, aimed to influence judicial perspectives on Israeli actions, central to the case. Judge Consuelo Callahan replaced Nelson for the hearing. The case, Defense for Children International-Palestine v. Biden, challenges U.S. support for Israelâs military actions in Gaza.
US judge recuses himself from Gaza case after trip to Israel | Reuters
A Texas public library must return eight controversial books, covering LGBTQ+, sex education, and racism topics, to circulation after a divided ruling by the 5th U.S. Circuit Court of Appeals. The court found that removing books based on content objections violated the First Amendment rights of library patrons. The ruling largely upheld a 2023 preliminary injunction by U.S. District Judge Robert Pitman. In dissent, Judge Stuart Kyle Duncan criticized the decision, arguing that it improperly involved federal judges in library decisions. The case, initiated by Leila Green Little and others, challenges the Llano County Library System's removal of books like "Caste" by Isabel Wilkerson and "Being Jazz" by Jazz Jennings. The ruling reflects a broader trend of legal challenges against library book bans, with similar cases arising in Iowa, Texas, and Arkansas. The American Library Association and PEN America report a significant increase in book challenges and bans, particularly those involving marginalized communities.
Texas Library Must Reshelve Controversial Books, 5th Cir. Says
This weekâs closing theme is by Paul Dukas, who passed away on this day in 1935.
Paul Dukas was a notable French composer, critic, and teacher who left an indelible mark on the world of classical music. Born in Paris in 1865, Dukas was a contemporary of Debussy and shared the same innovative spirit that defined French music at the turn of the century. Although his output was relatively small, his meticulous approach ensured that each work he published was of the highest quality. Dukas is best remembered for his orchestral masterpiece, "The Sorcerer's Apprentice" (L'Apprenti sorcier), composed in 1897.
Inspired by Goethe's poem of the same name, "The Sorcerer's Apprentice" vividly depicts the tale of a young apprentice who, in his master's absence, uses magic to animate a broom to do his chores, only to lose control of the spell. Dukas's composition brilliantly captures the whimsical and chaotic nature of the story through its lively orchestration and dynamic contrasts. The piece's enchanting melodies and dramatic crescendos have made it a favorite in concert halls and have cemented its place in popular culture, especially after being featured in Disney's "Fantasia" in 1940.
Dukas's ability to blend narrative with musical innovation showcases his exceptional talent and ensures that "The Sorcerer's Apprentice" remains a timeless piece, beloved by audiences of all ages. As we reflect on Dukas's contributions, we celebrate his genius and the magical world he brought to life through music.
Without further ado, Paul Dukasâ âLâApprenti sorcier,âor âThe Sorcererâs Apprentice,â enjoy.
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This Day in Legal History: SEC Established
On this day in legal history, June 6, 1934, the United States Securities and Exchange Commission (SEC) was established, marking a pivotal moment in the regulation of financial markets. The SEC was created in response to the stock market crash of 1929 and the ensuing Great Depression, aiming to restore investor confidence and safeguard their interests. Tasked with enforcing securities laws and regulating the securities industry, the SEC's mission was to ensure transparency, prevent fraud, and protect investors from unfair practices.
President Franklin D. Roosevelt appointed Joseph P. Kennedy, a businessman and former stock market speculator, as the first Chairman of the SEC. Kennedy's experience and insider knowledge of Wall Street made him a controversial but effective choice for the role. Under his leadership, the SEC began implementing key reforms, including the requirement for companies to provide accurate and comprehensive financial statements, the regulation of stock exchanges, and the enforcement of laws against insider trading. These measures were crucial in stabilizing the financial markets and rebuilding public trust. The establishment of the SEC represented a significant shift towards greater federal oversight and accountability in the financial sector.
The U.S. Federal Trade Commission (FTC) and the Department of Justice (DOJ) have agreed to divide responsibility over the artificial intelligence (AI) industry, allowing the FTC to investigate Microsoft's relationship with OpenAI. The DOJ will probe Nvidia for potential antitrust violations and oversee Alphabet Inc.'s Google. This arrangement follows over six months of negotiations between the agencies.
The FTC has already initiated a probe into Microsoft's $650 million deal with Inflection AI, scrutinizing whether the company properly notified antitrust authorities. Both the DOJ and FTC declined to comment, and representatives from Microsoft, Inflection, OpenAI, Google, and Nvidia did not respond to requests for comments.
The DOJ and FTC jointly enforce U.S. antitrust laws and decide internally which agency will handle specific investigations. This process, known as clearance, has previously led to disputes, especially in high-profile cases like those involving Google.
The process of "clearance" between the DOJ and FTC, which involves determining which agency will investigate specific mergers and anticompetitive conduct, is crucial in managing jurisdictional overlaps and ensuring efficient enforcement of antitrust laws.
In related developments, the European Union reviewed Microsoft's investment in OpenAI but opted not to pursue a formal investigation. Meanwhile, the UK's competition watchdog is examining the partnership but determined that Microsoft's deal with French AI company Mistral AI does not warrant an investigation.
Microsoft, Nvidia to Face US Antitrust Probes Over Moves in AI
US regulators to open antitrust inquiries of Microsoft, OpenAI and Nvidia | Reuters
Dan Jacobs, chef-owner of two Milwaukee restaurants, adopted a service charge model during the pandemic to increase employee pay, which led to a $70,000 tax bill. This situation highlights a broader issue where the U.S. tax code favors traditional tipping systems with tax credits, disadvantaging restaurants that use service charges. Service fees, which can range from a few percent to over 20% of the bill, are intended to raise wages for back-of-house workers and reduce tipping disparities.
Rep. Earl Blumenauer has introduced legislation to equalize the tax treatment of service charges and tips, arguing that the tax code should not penalize restaurants adapting to industry changes. The proposed bill would allow restaurants using service charges to claim a tax credit similar to the tip tax credit, provided the service charge goes directly to employees. Critics argue that service charges reduce workers' take-home pay and believe tips give employees more control over their earnings.
The National Restaurant Association supports policies offering operational flexibility, and many Democrats in Congress advocate eliminating the subminimum tipped wage. Service charges spread earnings among all staff, including those already earning the minimum wage, potentially reducing income for traditionally tipped workers. Ending the tipped wage could address these disparities and make service charges a more viable option for restaurants.
In short, the disparity in tax treatment between traditional tips and service charges under the U.S. tax code, which currently benefits restaurants that rely on tips through tax credits, is a significant issue. This inequity impacts how restaurants choose to compensate their staff and has prompted legislative efforts to create a more balanced system.
Restaurant Service Fees Strike a New Nerve: How Theyâre Taxed
A Georgia appeals court has paused the criminal case against Donald Trump, who is accused of attempting to overturn the 2020 election results, while it considers his request to disqualify lead prosecutor Fani Willis. This decision halts progress toward a trial for Trump and 14 co-defendants until the appeal is resolved. Trumpâs appeal argues that Willis, the Fulton County District Attorney, has a conflict of interest due to an alleged romantic relationship with a former top deputy.
The case is one of four legal battles Trump faces as he campaigns to reclaim the presidency. Recently, a New York jury found Trump guilty of concealing hush money payments to a porn star, a verdict he plans to appeal. Two federal cases, involving attempts to overturn the election and mishandling classified documents, are also entangled in legal delays.
In the Georgia case, prosecutors intend to appeal a previous ruling that dismissed some charges in the indictment. The appeal process is expected to take several months, with oral arguments scheduled for October. Trump and his co-defendants have pleaded not guilty to racketeering and other charges related to the alleged scheme to reverse his narrow loss in Georgia.
Trump election interference case paused in Georgia during challenge to prosecutor | Reuters
Amazon is facing a ÂŁ1 billion ($1.3 billion) lawsuit in the UK, filed by the British Independent Retailers Association (BIRA) on behalf of about 35,000 small retailers. The lawsuit accuses Amazon of misusing non-public data from these retailers to promote its own competing products, thus boosting its market share and profits. BIRA's Chief Executive, Andrew Goodacre, stated that small retailers are compelled to use Amazon due to its extensive reach, but the case aims to prevent Amazon from driving them out of business.
The lawsuit also claims that Amazon manipulated the "Buy Box" feature on its website to its advantage. This feature, which showcases select products at the top of product pages, is already under investigation by Britain's Competition and Markets Authority (CMA) for its impact on fair competition. Last year, the CMA accepted commitments from Amazon to ensure fair competition on its platform. Amazon has not responded to the lawsuit at this time.
$1.3 bln UK lawsuit accuses Amazon of misusing small sellers' data | Reuters
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This Day in Legal History: Denmark Becomes a Constitutional Monarchy
On June 5, 1849, Denmark transitioned from an absolute monarchy to a constitutional monarchy with the signing of its first constitution. This pivotal moment marked the end of absolute royal rule and the beginning of a new era of governance based on democratic principles. The Danish constitution of 1849 safeguarded civil liberties, including freedom of speech, assembly, and religion. It also curtailed the king's powers, ensuring that he could no longer rule by decree.
A significant feature of the new constitution was the establishment of a bicameral legislature known as the Rigstag, composed of the Folketing and the Landsting. The Folketing served as the lower house, representing a broader spectrum of the populace, while the Landsting functioned as the upper house. This legislative framework aimed to balance representation and ensure a more equitable system of governance.
The constitution laid the groundwork for Denmark's modern democratic system, promoting the rule of law and the protection of individual rights. Each year on June 5, Denmark commemorates this historic event with Constitution Day, a national holiday celebrating the values and freedoms enshrined in the 1849 constitution. This day serves as a reminder of Denmark's commitment to democracy and civil rights, reflecting the enduring legacy of the country's constitutional foundations.
The US Federal Trade Commission (FTC) has accused Meta Platforms Inc. of withholding critical information during its initial reviews of the company's acquisitions of Instagram in 2012 and WhatsApp in 2014. These transactions were originally approved after varying levels of scrutiny by the FTC, but the agency now claims that Meta did not disclose key pre-acquisition documents. The FTC, which is currently seeking to break up Meta on antitrust grounds, alleges that this undisclosed information would have impacted its original decisions.
Meta, formerly known as Facebook, is attempting to dismiss the case, arguing that its substantial investments in the acquired apps have benefited consumers. A Meta spokesperson countered the FTCâs claims by stating that Meta faces significant competition and that the companyâs investments have enhanced Instagram and WhatsApp.
This isn't the first time Meta has faced allegations of non-disclosure; in 2017, European regulators fined the company for providing misleading information about the WhatsApp deal. Additionally, the FTC's recent filing accuses Meta of degrading user experience on its platforms by increasing ad loads and under-resourcing Instagram. The case, overseen by US District Judge James Boasberg, has yet to see a trial date set.
Meta Withheld Information on Instagram, WhatsApp Deals: FTC (1)
Former President Donald Trump has requested the judge in his hush money case to lift a gag order following his conviction on 34 felony counts of falsifying business records. The charges stem from a $130,000 payment made by Trumpâs former lawyer, Michael Cohen, to adult film actress Stormy Daniels before the 2016 election to keep her silent about an alleged encounter. Trump denies the affair and plans to appeal the conviction.
Before the trial began, Justice Juan Merchan restricted Trump's public statements about the case to prevent potential threats to the proceedings. Trump's defense argues that with the trial concluded, these restrictions on his First Amendment rights are no longer justified. During the trial, Trump was fined $1,000 for each of 10 violations of the gag order, which included calling Cohen a "serial liar" and criticizing the jury selection.
Trump, a candidate in the 2024 presidential election, claims the gag order is unconstitutional. His lawyer, Todd Blanche, highlighted that President Joe Biden and others have publicly commented on the case, while Cohen and Daniels have also continued to publicly criticize Trump. The judge has previously noted that public critics of Trump likely do not need protection under the gag order.
The Manhattan District Attorney's office, which brought the case, has not yet responded to the request to lift the gag order. The case continues to attract significant public and media attention as Trump prepares for his upcoming campaign.
Trump asks judge to lift gag order after conviction in hush money case | Reuters
The UK's Competition Appeal Tribunal (CAT) has ruled that Google parent Alphabet must face a lawsuit worth up to ÂŁ13.6 billion ($17.4 billion) for allegedly abusing its dominance in the online advertising market. The lawsuit, brought by Ad Tech Collective Action on behalf of UK publishers, claims that Google's anti-competitive behavior caused them significant financial losses.
Despite Google's attempt to block the case, arguing it was incoherent and strongly rejecting the allegations, the CAT has certified the case to proceed towards a trial, expected no earlier than the end of 2025. The CAT noted that the threshold for certifying a collective proceeding in the UK is relatively low.
This case is part of a broader scrutiny of Google's adtech business by regulators, including Britain's Competition and Markets Authority and the European Commission. In the US, Google is also defending against antitrust lawsuits from the Department of Justice and a coalition of states led by Texas.
Google's legal team maintains that the company's impact on the ad tech industry has been pro-competitive. The CAT's decision adds to a series of significant lawsuits against major tech firms this year, including Meta and Apple.
Google has not yet responded to the ruling.
Tribunal rules $17 bln UK adtech lawsuit against Google can go ahead | Reuters
The EU's General Court has ruled that McDonald's cannot use the term "Big Mac" for poultry products after failing to use the trademark for such products over five consecutive years. This decision is a partial win for the Irish fast-food chain Supermac's in a long-standing trademark dispute. Supermac's initiated the revocation attempt in 2017, challenging McDonald's 1996 registration of the "Big Mac" name for both meat and poultry products.
The European Union Intellectual Property Office (EUIPO) initially dismissed Supermac's request, supporting McDonald's use of the term. However, Supermac's continued to contest the decision. The General Court sided with Supermac's, stating that McDonald's did not demonstrate continuous use of the "Big Mac" trademark for poultry products within the EU for five years.
McDonald's has the option to appeal the decision to the Court of Justice of the European Union. The case number is T-58/23 Supermac's v EUIPO - McDonald's International Property (BIG MAC).
No more chicken Big Macs - EU court rules against McDonald's in trademark case | Reuters
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This Day in Legal History: Wiretapping Constitutional
On June 4, 1928, the U.S. Supreme Court rendered a significant decision in the case of Olmstead v. United States, ruling that wiretapping private telephone conversations without judicial approval was constitutional. The case involved Roy Olmstead, a suspected bootlegger during the Prohibition era, whose phone conversations had been wiretapped by federal agents without a warrant. The evidence obtained was crucial in convicting him. In a 5-4 decision, Chief Justice William Howard Taft wrote the majority opinion, holding that the Fourth Amendment's protection against unreasonable searches and seizures did not extend to wiretapping because the Amendment only protected tangible property and physical intrusion.
Justice Louis Brandeis penned a notable dissent, emphasizing the right to privacy and warning of the potential for abuse and overreach in government surveillance. He argued that the Constitution should adapt to modern technological advancements, including the methods of communication. The decision highlighted a significant tension between law enforcement interests and individual privacy rights, a debate that has continued to evolve with advancements in technology.
This ruling stood until 1967, when the Supreme Court overturned it in Katz v. United States, establishing that the Fourth Amendment protects people, not places, thus extending privacy rights to include electronic communications. The Olmstead decision remains a pivotal moment in legal history, reflecting the complexities of interpreting constitutional protections in the face of new technological realities.
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This change will allow us to dedicate more time and resources to enhancing the quality and content of Minimum Competence. We believe this is the best route forward to ensure we continue providing valuable insights and updates. We sincerely thank everyone for their understanding and continued support.
This Day in Legal History: First Federal Child Labor Law Deemed Unconstitutional
On June 3, 1918, the United States Supreme Court ruled in Hammer v. Dagenhart that the Keating-Owen Child Labor Act was unconstitutional. This landmark decision marked a significant moment in the legal battle over child labor laws in the United States. The Keating-Owen Act, passed in 1916, aimed to regulate child labor by prohibiting the interstate shipment of goods produced by children under certain ages and conditions. However, the Supreme Court, in a 5-4 decision, found that the Act exceeded the powers granted to Congress under the Commerce Clause of the Constitution.
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This Day in Legal History: South Africa Established
On May 31, 1910, the Union of South Africa was established, marking a significant moment in the nation's history as it unified the previously separate colonies of the Cape, Natal, Transvaal, and the Orange Free State under British dominion. This union created a self-governing dominion within the British Empire, granting it considerable autonomy while still recognizing the British monarch. The formation of the Union set the stage for a centralized government, which would later play a crucial role in the institutionalization of apartheid.
Exactly fifty-one years later, on May 31, 1961, the Republic of South Africa was proclaimed. This pivotal event signified South Africa's transition from a dominion of the British Commonwealth to an independent republic. This move was largely driven by rising nationalist sentiments and the desire to break free from British influence. The establishment of the Republic came after a referendum in 1960, where a narrow majority of white voters supported the change.
The creation of the Republic also marked South Africa's exit from the British Commonwealth, reflecting its increasingly isolated position on the global stage due to its apartheid policies. These policies would continue to draw international condemnation and sanctions, leading to significant internal and external pressure for reform. The legal and political landscape of South Africa underwent dramatic changes during this period, shaping the country's future and its eventual path towards democracy and the end of apartheid in the early 1990s.
Yesterday, on Thursday May 30, 2024, Donald Trump made history as the first U.S. president to be convicted of a crime. A New York jury found him guilty of falsifying business documents to conceal a payment to porn star Stormy Daniels ahead of the 2016 election. The jury deliberated for two days before delivering a unanimous verdict on all 34 felony counts. Trump remained stoic as the verdict was read and later declared the trial a sham, asserting his innocence and vowing to appeal.
Sentencing is scheduled for July 11, just before the Republican Party's nomination process for the November election. The crime carries a maximum sentence of four years, but Trump will not be jailed before sentencing. This conviction adds complexity to the upcoming election, with Trump aiming to reclaim the White House from President Joe Biden. Despite the verdict, Trumpâs legal troubles do not disqualify him from running for office.
The case revolved around Trump's former lawyer Michael Cohen's testimony about a $130,000 hush money payment to Daniels, which was disguised as legal expenses. Cohen's credibility was a major focus during the trial, but the jury believed the evidence supported his claims. The swift verdict indicated strong juror consensus on Trump's guilt.
The Biden campaign emphasized that the verdict demonstrates no one is above the law, urging voters to reject Trump in the election. Meanwhile, Trumpâs campaign labeled him a political prisoner and hinted at selecting a female vice-presidential candidate. This landmark case, though deemed the least consequential of Trump's legal challenges, significantly impacts his political future and the nation's political landscape.
Donald Trump becomes first US president convicted of a crime | Reuters
A lawsuit filed by a Twitter investor claims that Elon Musk ignored repeated warnings about U.S. securities disclosure obligations while secretly amassing shares in Twitter in 2022. According to the lawsuit, a Morgan Stanley executive who assisted Musk in this process repeatedly informed Musk and his aide, Jared Birchall, about the need to disclose when their stake exceeded 5%. Despite discussing these requirements, Musk and Birchall allegedly delayed disclosure to buy shares at lower prices, saving Musk over $200 million.
The Oklahoma firefighters pension fund accuses Musk of defrauding investors by concealing his growing stake, thereby acquiring shares at "artificially depressed prices." The lawsuit claims that Birchall falsely assured the Morgan Stanley executive that legal advice had been sought when it had not been until Musk's stake exceeded 9%.
Musk eventually acquired Twitter for $44 billion in October 2022, renaming it X. The lawsuit contends that Musk and Birchall deliberately ignored disclosure requirements to avoid increased costs and public scrutiny. Musk's lawyers have argued that any failure to disclose was inadvertent, attributing it to Musk's busy schedule. This incident is part of Musk's ongoing conflict with the SEC, which began in 2018 over a misleading tweet about taking Tesla private.
Musk disregarded warnings, hid Twitter stake, US lawsuit claims | Reuters
On May 30, 2024, U.S. Chief Justice John Roberts denied a request from Democratic Senators Dick Durbin and Sheldon Whitehouse for a meeting to discuss Justice Samuel Alito's recusal from cases related to the 2020 election. The senators raised concerns after reports that flags linked to former President Trump's efforts to overturn the 2020 election were displayed at Alito's homes. They argued that Alito's impartiality was compromised, citing the flags' association with the "Stop the Steal" movement.
Roberts responded that chief justices rarely meet with lawmakers and emphasized the need to maintain judicial independence. He noted that meeting with senators from only one party would be inappropriate, especially concerning matters currently pending before the court. Durbin's spokesperson disagreed, stating that the intent was to restore the court's credibility.
Alito, in letters to the senators, refused to recuse himself, asserting that the flag incidents did not warrant recusal under the justices' guidelines. He clarified that the flags were flown by his wife, exercising her free speech rights, and that he had no involvement. Alito's refusal to step aside drew criticism about the Supreme Court's ethics standards and lack of enforcement mechanisms.
The two cases in question involve Trumpâs claim of presidential immunity from prosecution for his actions related to the 2020 election and an obstruction charge against a participant in the January 6 Capitol riot. Both cases have already been argued, with rulings expected by the end of June.
US Supreme Court's Roberts rebuffs senators' call for Alito meeting | Reuters
This weekâs closing theme is by Franz Joseph Haydn, who died on this day in 1809.
Franz Joseph Haydn, often hailed as the "Father of the Symphony" and the "Father of the String Quartet," was a prolific and influential composer of the Classical period. Born in 1732 in Rohrau, Austria, Haydn's career spanned the late Baroque and early Romantic periods, marking a significant evolution in the structure and style of classical music. His innovative approaches to form and harmony laid the groundwork for future generations of composers, including Mozart and Beethoven.
One of Haydn's most beloved works is his Symphony No. 94 in G Major, famously known as the "Surprise Symphony." This nickname comes from the sudden, unexpected loud chord that punctuates the otherwise soft and gentle second movement, designed to startle the audience. Premiered in London in 1792, this symphony is part of Haydn's twelve "London Symphonies," which he composed during his highly successful visits to England.
The second movement, Andante, is particularly famous for its charming theme and variations, showcasing Haydn's wit and creativity. The "Surprise" element reflects his playful personality and his desire to engage and delight listeners. As you enjoy this week's closing theme, let the elegance and ingenuity of Haydn's composition remind you of the timeless beauty of classical music.
Without further ado, Symphony no. 94 in G 'Surprise', H. I:94 - II, by Franz Joseph Haydn.
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This Day in Legal History: Kansas-Nebraska Act Passed
On May 30, 1854, the U.S. Congress passed the Kansas-Nebraska Act, a significant piece of legislation that allowed the territories of Kansas and Nebraska to decide for themselves whether to allow slavery through popular sovereignty. This act, introduced by Senator Stephen A. Douglas, effectively repealed the Missouri Compromise of 1820, which had prohibited slavery north of the 36°30âČ parallel except within the boundaries of the proposed state of Missouri.
The Kansas-Nebraska Act led to a violent struggle between pro-slavery and anti-slavery settlers in Kansas, a period known as "Bleeding Kansas." This conflict highlighted the deep divisions within the United States over the issue of slavery and pushed the nation closer to civil war. The act's passage demonstrated the growing power of the pro-slavery faction in American politics and underscored the weaknesses of legislative compromises in addressing the moral and political challenges posed by slavery.
By allowing the possibility of slavery's expansion into new territories, the Kansas-Nebraska Act intensified the sectional conflict and contributed to the rise of the Republican Party, which was founded on an anti-slavery platform. The law's implications continued to reverberate throughout the nation, setting the stage for the eventual secession of the Southern states and the outbreak of the Civil War in 1861.
Supreme Court Justice Samuel Alito has declined to recuse himself from cases involving Donald Trump and the January 6 Capitol riot, despite calls from Democratic lawmakers. These calls followed reports that far-right-associated flags were flown over Alito's homes in Virginia and New Jersey. Alito attributed the flag displays to his wife, Martha-Ann Alito, emphasizing her independent decision-making.
In his letters to lawmakers, including Senator Dick Durbin and Representative Hank Johnson, Alito explained that his wife flies various flags and was responsible for the flagpoles at their residences. He mentioned that the upside-down American flag was flown during a neighborhood dispute and that he requested its removal, which his wife initially resisted. He also noted that the "Appeal to Heaven" flag flown at their beach house was meant to express a patriotic and religious message.
Alito's response has intensified discussions about the need for an enforceable code of conduct for the Supreme Court. Johnson criticized Alito's explanation, calling for congressional action to ensure accountability. This controversy comes as the Supreme Court prepares to rule on significant cases related to Trump's alleged efforts to overturn the 2020 election and the January 6 Capitol riot.
Alito, a key figure in the court's conservative wing, previously authored the opinion that overturned Roe v. Wade, ending the constitutional right to abortion.
Alito Rejects Democratsâ Calls to Step Away From Trump Cases (3)
Jurors in Donald Trump's hush money trial have begun their second day of deliberations, focusing on testimony from key witnesses, including Michael Cohen and David Pecker. Trump, charged with falsifying business records to cover up a payment to Stormy Daniels during the 2016 election, has pleaded not guilty. Cohen, who facilitated the $130,000 payment, testified that Trump reimbursed him through disguised legal fees. The jurors requested transcripts of Cohen's testimony and Pecker's account of working with Trump to suppress damaging stories.
The outcome of this trial could impact Trumpâs 2024 presidential campaign, though a conviction would not bar him from running or serving if elected. Jurors must reach a unanimous verdict, and a mistrial could be declared if they fail to agree. Manhattan prosecutors must prove Trump's guilt beyond a reasonable doubt. Polls indicate a tight race between Trump and President Biden, with a potential conviction possibly affecting Trumpâs supportâ
Jurors to begin second day of deliberations in Trump hush money trial | Reuters
Quarterback Jaden Rashada's lawsuit against the University of Florida highlights significant risks in the evolving landscape of name-image-likeness (NIL) deals in college athletics. Rashada alleges that Florida boosters and football coach Billy Napier reneged on a $13.8 million contract promised to him to play for the Florida Gators instead of the University of Miami. According to the complaint filed in the US District Court for the Northern District of Florida, the payment never materialized, leaving Rashada without the promised compensation.
This lawsuit is the first of its kind, addressing fraudulent recruiting tactics involving NIL agreements and third-party collectives. These collectives pool alumni donor money for NIL deals, often resulting in unregulated and problematic agreements for young athletes. Attorney Janet Moreira highlighted the dangers of such unregulated collectives, calling for greater oversight to protect student-athletes.
The case also comes at a time when the NCAA has agreed to a nearly $2.8 billion settlement to end antitrust lawsuits, including provisions for direct revenue sharing with athletes. This settlement marks a significant shift in the financial landscape of college sports, which has historically prohibited athlete compensation until recent legal changes.
Rashada's suit claims that he was lured away from Miami by false promises, with payments from Florida boosters never materializing. The complaint points to long-time Gators booster Hugh Hathcock and Florida's NIL director, who allegedly made misleading assurances about the financial rewards Rashada would receive. This case underscores the ongoing challenges and complexities in the NIL era, where student-athletes must navigate a new and often treacherous financial landscape.
Ex-Recruitâs Fraud Suit Against Florida Coach Exposes NIL Risks
Jenna Ellis, former legal adviser to Donald Trump's 2020 campaign, has had her Colorado law license suspended for three years following an agreement with state legal regulators. This decision, approved by a Colorado Supreme Court disciplinary judge, stems from Ellis' indictment in Georgia for her involvement in efforts to overturn the 2020 election results. Ellis pleaded guilty to aiding and abetting false statements and received five years probation. Her suspension begins on July 2.
Ellis admitted to spreading baseless claims about election fraud and expressed remorse for her actions, acknowledging that she had been misled by senior Trump campaign lawyers. She emphasized the importance of election integrity and accepted her suspension, recognizing the harm caused by her actions.
Jenna Ellis, ex-Trump campaign legal adviser, has Colorado law license suspended for 3 years - CBS News
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This Day in Legal History: House Un-American Activities Committee Probes Hollywood
On May 29, 1947, the House Un-American Activities Committee (HUAC) began its infamous investigation into communist influence in the Hollywood film industry. This marked the start of a series of public hearings aimed at identifying and eliminating alleged communist subversion in American cultural institutions. The HUAC's probe into Hollywood was driven by the fear that communist ideology was being subtly propagated through films and entertainment, which were seen as powerful tools for shaping public opinion.
The investigation led to the subpoena of numerous writers, directors, and actors, many of whom were questioned about their political beliefs and associations. The most notable outcome of these hearings was the creation of the "Hollywood Ten," a group of screenwriters and directors who refused to answer the committee's questions, citing their First Amendment rights. These individuals were subsequently blacklisted by the industry, effectively ending their careers in Hollywood.
The HUAC hearings had a chilling effect on the film industry, leading to widespread censorship and self-policing by studios to avoid further scrutiny. This period is often remembered as a dark chapter in American history, reflecting the intense paranoia and political repression of the early Cold War era. The Hollywood blacklist persisted for many years, and its repercussions were felt long after the initial hearings concluded.
The HUAC's actions in 1947 set a precedent for future investigations into alleged subversive activities, influencing American political and cultural landscapes for decades. This event underscores the tension between national security concerns and the protection of civil liberties, a balance that continues to be a contentious issue in modern times. The Hollywood probe by HUAC remains a significant example of how fear and suspicion can lead to widespread violation of individual rights and freedoms.
PwC has become the first reseller of OpenAIâs ChatGPT Enterprise, aimed at business use, marking a significant step in the adoption of AI tools in the corporate world. This agreement will also make PwC the largest user of this AI product. The deal is part of a broader trend among Big Four accounting firms, which are increasingly incorporating AI into their services. PwC had previously announced a $1 billion investment over three years to integrate AI into its operations, enhancing the efficiency of tasks such as auditing and tax accounting.
Joe Atkinson, PwCâs chief products and technology officer, highlighted that the firmâs experience with AI will help them effectively market these tools to clients, offering significant advantages over traditional methods. PwCâs substantial deployment of ChatGPT Enterprise will set it apart in the market, as the firm aims to lead clients through their AI adoption journey.
As of now, PwCâs largest clients are already engaging with generative AI for various functions, including marketing and customer service, utilizing advanced AI capabilities that surpass traditional chatbots. The rest of the Big Four firmsâDeloitte, Ernst & Young, and KPMGâare also making substantial investments in AI, forming partnerships with major tech companies like Microsoft, Google, and IBM to enhance their services.
PwC First to Resell OpenAIâs ChatGPT Enterprise to Clients
Yesterday, May 28, 2024, a federal judge in Texas transferred a lawsuit challenging the Consumer Financial Protection Bureau's (CFPB) rule on credit card late fees to Washington, D.C. This decision marks the second time U.S. District Judge Mark Pittman has moved the case from his court in Fort Worth, following a federal appeals court's recent decision to relinquish jurisdiction. The CFPB seeks to defend a rule capping credit card late fees at $8, a key component of President Joe Biden's administration's effort to combat "junk fees."
The transfer to Washington, D.C. could benefit the CFPB, as it is now in a jurisdiction where the agency is based. This case involves major plaintiffs, including the U.S. Chamber of Commerce and the American Bankers Association, who are challenging the rule. The CFPB has argued that the rule is necessary, citing that credit card issuers collected over $14 billion in late fees in 2022, with an average fee of $32.
Judge Pittman, a Trump appointee, previously blocked the rule from taking effect, basing his decision on a 2022 ruling by the 5th U.S. Circuit Court of Appeals, which found the CFPB's funding structure unconstitutional. However, the Supreme Court overturned this ruling on May 16. The CFPB plans to seek the removal of Pittmanâs injunction, although the plaintiffs have other arguments to prevent the rule from being enforced. The transfer is seen as a strategic move to place the case in a more favorable venue for the CFPB.
Texas judge again transfers lawsuit over card late fee rule to Washington, D.C. | Reuters
Illinois is on the verge of implementing a progressive tax structure on sports wagering, which could see tax rates as high as 40%. The Illinois General Assembly has passed an amendment to a bill that introduces a graduated tax rate for sports wagering receipts. Businesses with sports wagering receipts between $30 million and $50 million will face a minimum tax rate of 20%, while those with receipts exceeding $200 million will be taxed at the maximum rate of 40%.
This progressive tax structure is a pioneering approach in the sports betting industry and could serve as a model for other states considering the legalization and taxation of sports betting. Illinois aims to maximize state revenue from this rapidly growing industry without stifling its competitiveness. The stateâs approach balances the need for significant tax income with maintaining a healthy market.
Illinois's model contrasts with other states like New York, which has a flat 51% tax on gross gaming revenues. Illinois's graduated system introduces a level of progressivity, that is higher rates for entities with higher revenues, potentially influencing other states to adopt similar frameworks. For instance, New Jersey is considering raising its sports betting taxes to a uniform 30%, it remains to be seen if the Garden State may consider an Illinois-style graduated rate system.
Revenue from vice taxes, including those on gambling, is crucial for states facing budget deficits. However, it's essential that the revenue generated from such taxes be allocated effectively to offset the social costs associated with these activities. In the case of sports wagering, funds should support public health initiatives, addiction treatment programs, and educational campaigns.
Illinois's progressive tax on sports wagering aims to balance industry growth with regulation. If the revenue is used appropriately, Illinois could become a comprehensive model for other states to follow, focusing not only on revenue potential but also on mitigating the larger social impacts of increased sports betting.
Illinois Eyeing Sports Wagering Tax Up To 40%
In my column this week, I address the urgent need for a proactive approach to combat biofuel tax credit fraud. A recent audit by the Treasury Inspector General for Tax Administration highlighted significant flaws in the administration of these credits, revealing that many are awarded without proper documentation. This system's reactive nature allows fraud to flourish, as the IRS can only issue deficiency notices after fraudulent claims are filed.
Biofuel tax credits, intended to promote renewable fuel production and use, have been a cornerstone of U.S. energy policy since 2004. However, the current law's limitations prevent the IRS from denying credits at the time of filing, enabling schemes that exploit information delays. To combat this, the IRS should be given the authority to enforce registration requirements and deny non-compliant claims proactively.
Implementing a track-and-trace system could also help by uniquely identifying and tracking each gallon of biofuel through its production and distribution journey. This would create multiple checkpoints, making it challenging for fraudsters to repeatedly claim credits on the same fuel.
Past fraud cases, such as the Washakie biodiesel fraud and schemes involving Gen-X Energy Group, illustrate how easy it is to exploit the system. Fraudsters cycle biofuel between refineries and distribution points, claiming new credits each time, or recycle biodiesel back into feedstock to produce more biodiesel for additional credits.
The IRS is currently hampered by Section 4101 of the tax code, which allows taxpayers to claim credits without meeting registration requirements. This loophole leaves the IRS to address fraud only after it has occurred, often too late to recover lost funds.
A track-and-trace system, used successfully in other industries, could ensure that each gallon of biofuel is tracked from refinement to consumption, making it harder for fraudulent activities to go unnoticed. By assigning unique identifiers and logging each step in a database, this system would create an auditable chain of custody.
Addressing these vulnerabilities requires legislative action to empower the IRS to deny fraudulent claims at the point of filing. Strengthening enforcement capabilities and closing existing loopholes will help safeguard the integrity of biofuel tax credits and ensure they serve their intended purpose.
To Combat Biofuel Tax Credit Fraud, We Need a Proactive Approach
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This Day in Legal History: Frederic Maitland Born
On May 28, 1850, Frederic William Maitland, a prominent English legal historian, was born. Maitland is renowned for his contributions to the study of English legal history. He co-authored the seminal work "The History of English Law Before the Time of Edward I" with Sir Frederick Pollock. This book, published in 1895, remains a fundamental reference in the field of legal history, providing a detailed examination of the development of English law from its early roots up to the 13th century.
Maitland's meticulous research and ability to contextualize legal developments within broader social and political frameworks revolutionized the understanding of legal history. His work at Cambridge University, where he served as Downing Professor of the Laws of England, further solidified his reputation. Maitland's legacy endures through his scholarly works and the ongoing influence they have on the study of legal history.
Frederic Maitland's birth on this day marks the arrival of a scholar whose impact on legal historiography is still profoundly felt, shaping the way historians and legal scholars interpret the evolution of legal systems in England.
Closing arguments are set to begin in the criminal trial of former President Donald Trump in New York, where he faces charges of falsifying business records. The trial centers on allegations that Trump, 77, unlawfully covered up a payment to adult film actress Stormy Daniels to silence her claims of a sexual encounter prior to the 2016 election. Prosecutors will argue that Trump falsified business documents to hide this payment, which they claim amounted to an illegal campaign contribution.
Trump's defense will aim to convince the jury of his innocence by questioning the credibility of prosecution witnesses, especially Michael Cohen, Trump's former lawyer. Cohen testified that he managed the payment to Daniels and that Trump approved the cover-up, but Trump's lawyers highlighted Cohen's past felony convictions and history of dishonesty to undermine his reliability.
The jury's decision could lead to Trump facing up to four years in prison, though actual imprisonment is unlikely for a first-time offender. A conviction would not bar Trump from running for or holding office if he wins the upcoming election against President Joe Biden. Trump, who has pleaded not guilty to all charges, claims the legal actions against him are politically motivated.
In addition to this trial, Trump faces three other criminal prosecutions, including charges related to attempting to overturn the 2020 election results and mishandling classified information.
A key legal focus is on the elevation of normally misdemeanor charges of falsifying business records to felony charges. This elevation is based on the argument that the falsification was intended to conceal another crime, namely an illegal campaign contribution. This strategy demonstrates the prosecution's attempt to frame the hush money payment as part of a broader illegal scheme, significantly raising the stakes for the defendant.
Jury in Trump hush money trial to hear closing arguments before deliberations | Reuters
On May 25, 2024, proxy advisory firm Glass Lewis recommended that Tesla shareholders reject a proposed $56 billion pay package for CEO Elon Musk. The package, if approved, would be the largest ever for a CEO in the United States. Glass Lewis cited concerns about the excessive size of the pay deal, its potential dilutive effect, and the concentration of ownership. Additionally, they noted Musk's numerous time-consuming commitments, including his recent acquisition of Twitter, now rebranded as X.
The proposed compensation plan, put forward by Tesla's board, does not include a salary or cash bonus. Instead, it offers rewards based on Tesla's market valuation, which needs to increase to $650 billion over a decade starting from 2018. Currently, Tesla's market value stands at approximately $571.6 billion. In January, a Delaware judge nullified the original pay package, prompting Musk to consider moving Tesla's incorporation from Delaware to Texas, a move Glass Lewis also criticized.
Despite these recommendations, Tesla's board has urged shareholders to reaffirm the compensation plan, arguing that Musk's leadership has driven significant financial and operational improvements since he became CEO in 2008. The proxy advisor also advised against the reelection of Kimbal Musk, Elon Muskâs brother, to the board, while supporting the reelection of former 21st Century Fox CEO James Murdoch.
Proxy firm advises shareholders to reject Elon Musk's $56 billion pay package | Reuters
A Delaware Chancery court ruling recently dismissed a shareholder lawsuit against Meta Platforms Inc., which accused CEO Mark Zuckerberg of prioritizing company profits over broader social and economic responsibilities. This decision received unexpected support from advocates of stakeholder capitalism. The lawsuit argued that Meta's leadership had a duty to enhance the portfolios of diversified institutional investors by considering broader social impacts. However, the judge dismissed these claims, emphasizing that while externalities are an appealing concept, enforcing such obligations in corporate law could undermine essential safeguards.
Boston University law professor Madison Condon noted that clear accountability is necessary for managing share prices, as opposed to balancing multiple vague objectives, which could allow directors to act without clear constraints. Similarly, Southern Methodist University law professor Carliss Chatman warned that a ruling in favor of the lawsuit could have allowed corporations to justify almost any action under the guise of economic benefit.
Rick Alexander, CEO of Shareholder Commons, who supported the lawsuit, pointed out that the current corporate framework makes it nearly impossible to hold directors accountable unless there is a clear conflict of interest. Despite the ruling, Alexander believes the lawsuit succeeded in raising important issues about corporate responsibilities and stakeholder interests.
The ruling reaffirmed Delaware's implicit adherence to shareholder primacy, dismissing the argument for a stakeholder-focused approach. It highlighted that corporate boards' fiduciary duties are primarily to grow investor capital, not to address external social concerns.
Law professor Ann Lipton from Tulane University cautioned that imposing stakeholder governance could lead to unworkable situations, allowing corporate leaders too much leeway to pursue their own preferences. She also referenced economic literature suggesting that diversified asset managers might inadvertently encourage anti-competitive practices, challenging the narrative of their positive social impact.
The court's decision underscores the ongoing debate about the role of corporations in balancing profit-making with broader social responsibilities, reflecting the complexities and potential pitfalls of shifting toward a stakeholder governance model.
By way of very brief background, stakeholder governance is a corporate framework where the interests of all stakeholders, including employees, customers, suppliers, and the community, are considered in decision-making processes. This contrasts with shareholder primacy, which prioritizes maximizing shareholder value above all else. Stakeholder governance aims to balance the needs of various groups to create sustainable long-term value, while shareholder primacy often focuses on short-term financial returns. This approach can lead to more ethical and socially responsible business practices, fostering a broader sense of corporate accountability.
Meta Ruling Rejecting Stakeholderism Embraced by ESG Boosters
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This Day in Legal History: Act of Toleration Enacted
On May 24, 1689, the Parliament of England enacted the Act of Toleration, a pivotal law that granted religious freedom to English Protestants. This legislation marked a significant shift in England's religious landscape, as it allowed non-Anglican Protestants, such as Baptists and Congregationalists, to practice their faith without fear of persecution. However, this tolerance came with limitations: it excluded Roman Catholics and non-Trinitarian Protestants, leaving them outside the protection of the Act.
The Act of Toleration emerged in the context of the Glorious Revolution, which saw William of Orange and his wife Mary ascend to the English throne. Their reign, beginning in 1688, was characterized by a move towards greater religious and political stability. The Act was a response to the religious strife that had plagued England for decades, providing a framework for more inclusive, albeit limited, religious coexistence.
Despite its exclusions, the Act of Toleration laid the groundwork for future expansions of religious freedom. It required dissenting Protestants to pledge allegiance to the Crown and reject the authority of the Pope, thus maintaining a degree of control over the newly tolerated groups. This compromise allowed for religious diversity while ensuring loyalty to the monarchy.
The Act's passage was a milestone in the evolution of religious liberty in England, reflecting the changing attitudes towards religious pluralism. While it did not end all religious discrimination, it represented a step towards a more tolerant society. Over time, the principles enshrined in the Act influenced broader movements for religious freedom and civil rights, both in England and beyond.
The significance of the Act of Toleration lies not only in its immediate effects but also in its lasting impact on the development of religious tolerance as a fundamental value in democratic societies.
A Democratic operative, Steve Kramer, faces state criminal charges and a federal fine for using AI to fake President Joe Bidenâs voice in robocalls aimed at discouraging Democratic voters in the New Hampshire primary. Kramer, working for Biden's primary challenger Dean Phillips, was charged with 13 felony counts of voter suppression and 13 misdemeanors for impersonating a candidate. The FCC proposed a $6 million fine for the robocalls, which spoofed a local political consultant's number.
New Hampshire Attorney General John M. Formella emphasized that these actions aim to deter election interference using AI. The incident has heightened concerns about AI's potential misuse in elections. FCC Chairwoman Jessica Rosenworcel proposed a rule requiring political advertisers to disclose AI use in ads, while the FCC also proposed a $2 million fine against Lingo Telecom for transmitting the calls.
The AI-generated robocall, circulated just before the primary, used Bidenâs catchphrase and urged voters to stay home. Despite this, Democratic leaders encouraged a write-in campaign for Biden, leading to high voter turnout in his favor.
Faked Biden Robocall Results in Charges for Democratic Operative
The US Supreme Court has made it more challenging for Black and minority voters to contest the use of race in legislative redistricting, according to civil rights advocates. In a 6-3 ruling, the conservative majority determined that South Carolina voters failed to prove that race, rather than partisanship, influenced Republican legislators when drawing district lines. This decision raises the bar for proving racial gerrymandering and could impact redistricting cases nationwide, not just in South Carolinaâs 1st Congressional District.
Leah Aden of the NAACP Legal Defense Fund expressed concern that it is becoming increasingly difficult for plaintiffs to demonstrate racial discrimination. The ruling, which precedes the upcoming November election, could affect similar challenges in states like North Carolina and Tennessee.
Justice Samuel Alito, writing for the majority, emphasized a presumption that legislatures act in good faith, making it harder to prove racial intent without blatant evidence. Critics argue this standard allows legislators to use partisan motives as a defense against claims of racial gerrymandering.
The decision follows the Supreme Courtâs 2019 ruling that federal courts cannot oversee partisan gerrymandering claims, further complicating challenges to discriminatory redistricting. Justice Elena Kagan, in her dissent, criticized the majority for favoring state arguments and making it tougher for challengers to succeed. This case underscores the evolving legal landscape surrounding voting rights and redistricting in the US.
Supreme Court Conservatives Add New Minority Voter Roadblocks
A Jackson Walker partner alleged that former Texas bankruptcy judge David R. Jones requested the firm to file a potentially false disclosure about his relationship with attorney Elizabeth Freeman. This disclosure came amidst ongoing litigation involving Jones, Freeman, and Jackson Walker, who are accused of concealing their relationship. The scandal follows Jones' resignation after admitting to the romance.
In late 2022, Jones wanted the relationship kept secret as Jackson Walker negotiated with Freeman regarding its disclosure. Despite Freeman's earlier claims that the relationship had ended, the firm discovered in February 2022 that it was ongoing. After confronting Freeman, she admitted the relationship had been rekindled.
Jackson Walker's recent filings argue they shouldn't be held liable for Jones' misconduct and urge rejection of the US Trusteeâs efforts to reclaim $13 million in fees. Jones allegedly provided a misleading proposed disclosure that omitted the romantic aspect of his relationship with Freeman and insisted the firm use it in future cases. Jackson Walker refused and proceeded to separate from Freeman.
The firm claims it acted reasonably and didnât breach any ethical rules, pointing out that the US Trustee hasn't penalized Jones or Freeman. The Justice Departmentâs bankruptcy monitor seeks to recover fees from cases where Jackson Walker failed to disclose the relationship. The case highlights the complex ethical and legal issues surrounding judicial conduct and professional responsibilities.
Jackson Walker Says Judge Tried to Mislead Court on Romance (2)
The U.S. Justice Department, along with 30 states, has filed a lawsuit against Live Nation and its Ticketmaster unit, accusing them of monopolizing concert tickets and promotions. The case, filed in Manhattan federal court, aims to break up Live Nation. Leading the legal team is Jonathan Kanter, head of the DOJ's antitrust division, with Bonny Sweeney as the lead attorney. Sweeney, a veteran antitrust litigator, previously co-headed the antitrust group at Hausfeld and has extensive experience in high-profile cases against companies like Google, Apple, and major credit card firms.
Live Nation and Ticketmaster are defended by teams from Latham & Watkins and Cravath, Swaine & Moore, which have deep experience in antitrust defense. The companies deny the allegations and plan to fight the lawsuit. Latham & Watkins, which has long defended Live Nation in private consumer lawsuits and was involved in the 2010 merger approval, has Daniel Wall, a seasoned antitrust defender, as their executive vice president for corporate and regulatory affairs. Cravathâs team, led by Christine Varney, former head of the DOJâs antitrust division, also represents major clients like Epic Games in similar high-stakes litigation.
US legal team in Live Nation lawsuit includes veteran plaintiffs' attorney | Reuters
This weekâs closing theme is by Carl Philipp Emanuel Bach.
This weekâs closing theme takes us back to the 18th century, honoring a pivotal figure in the transition from the Baroque to the Classical era: Carl Philipp Emanuel Bach. Born in 1714, C.P.E. Bach was the second surviving son of prolific composer Johann Sebastian Bach. Despite his illustrious lineage, C.P.E. Bach carved out his own distinct legacy, becoming one of the most influential composers of his time in his own right.
Today, we commemorate his contributions to classical music as we mark the anniversary of his death on May 24, 1788. Known for his expressive and innovative style, C.P.E. Bach's music bridges the complexity of Baroque counterpoint with the emerging Classical clarity and form. His works had a profound impact on later composers, including Haydn, Mozart, and Beethoven.
One of his most celebrated pieces is the "Solfeggietto in C minor," H. 220, Wq. 117/2. This energetic and technically demanding keyboard composition remains a favorite among pianists and continues to captivate audiences with its vibrant character and virtuosic passages. The "Solfeggietto" exemplifies C.P.E. Bach's mastery of the empfindsamer Stil, or 'sensitive style,' characterized by its emotional expressiveness and dynamic contrasts.
As we listen to the "Solfeggietto," let us reflect on the enduring legacy of Carl Philipp Emanuel Bach, whose music continues to inspire and delight over two centuries after his passing. Join us in celebrating his remarkable contributions as we close this week with the lively and spirited sounds of his timeless composition.
Without further ado, âSolfeggietto in C minorâ by Carl Philipp Emanuel Bach, enjoy.
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This Day in Legal History: South Carolina Ratified the US Constitution
On May 23, 1788, South Carolina ratified the United States Constitution, marking its official entry as the eighth state in the newly formed union. This significant event took place amidst debates and conventions where federalists and anti-federalists argued over the merits and drawbacks of the proposed Constitution. South Carolina's decision to ratify was crucial, as it reinforced the momentum towards establishing a strong federal government under the Constitution. The state played a pivotal role in shaping the early political landscape of the United States, contributing to the foundational structure of American governance. This decision also reflected the complex dynamics of the time, balancing state and federal interests. As a predominantly agrarian society with a significant enslaved population, South Carolina's ratification highlighted regional economic and social considerations influencing constitutional acceptance. The ratification helped ensure a more unified stance among the original thirteen colonies, setting the stage for the eventual adoption of the Bill of Rights. South Carolina's entry into the union marked a step forward in the collective journey towards a cohesive and functioning republic, laying the groundwork for the nation's future growth and development.
The Federal Communications Commission (FCC) has proposed a new rule requiring political campaigns to disclose the use of AI-generated audio, video, and images in their radio and TV ads. This initiative, introduced by Chairwoman Jessica Rosenworcel, aims to ensure transparency by mandating that advertisements supporting specific candidates or issues flag any algorithm-created content. While the proposal does not ban AI-generated content, it seeks to make its presence known to the public. This move comes in response to growing concerns about deepfakes and their potential to spread disinformation, especially with the upcoming 2024 US election.
The proposal must be approved by the FCC's five-member board before further discussion and finalization. Despite potential GOP opposition, highlighted by Senate Republican leader Mitch McConnell's recent criticism of bipartisan efforts to regulate AI in federal elections, various state legislatures are also considering regulations on AI use in political communications. This step by the FCC represents a significant move towards managing the influence of AI in the political sphere.
AI Use in Campaign Ads Would Have to Be Disclosed Under FCC Plan
The U.S. Justice Department, along with several states, plans to sue Live Nation Entertainment Inc. for antitrust violations concerning Ticketmaster's dominance in concert ticket sales. The lawsuit, to be filed in the Southern District of New York, seeks to break up Live Nation. This move follows reports of Live Nation's stock dropping by 7% in premarket trading.
The Biden administration has prioritized competition, bringing similar antitrust cases against major companies like Google and Amazon. Live Nation, the largest U.S. concert promoter, merged with Ticketmaster in 2010 under a settlement with the Obama administration that barred it from retaliating against venues not using Ticketmaster. However, the Trump administration found that Live Nation violated this agreement, leading to a modified settlement in 2019.
The current administration reopened the investigation in 2022, following public outcry over Ticketmaster's mishandling of Taylor Swift ticket sales. This lawsuit adds to the Biden administration's ongoing efforts to address monopolistic practices in various industries, exemplified by recent legal actions against tech giants like Google, Apple, Meta, and Amazon.
Justice Department Seeks Breakup of Live Nation-Ticketmaster (1)
Johnson & Johnson (J&J) faces allegations of abusing the bankruptcy system to avoid lawsuits related to its baby powder, which consumers claim causes cancer. According to a new lawsuit, J&J's two failed Chapter 11 bankruptcy cases aimed to settle current and future claims by improperly shifting assets among its units and delaying jury trials for cancer victims. The company is accused of using "fraudulent transfers" and bad faith bankruptcy filings to hinder and defraud former users.
J&J is seeking consumer support for an $11 billion settlement to resolve these claims, to be managed by a trust in a potential third bankruptcy filing. Despite these legal battles, J&J maintains that its talc-based baby powder, which it replaced with a cornstarch formula last year, does not cause cancer.
The ongoing litigation, which includes over 61,000 suits alleging ovarian and asbestos-related cancers, is impacting J&J's stock value. The lawsuit, filed in New Jersey, targets J&J's executives, accusing them of participating in fraudulent transfers and violating state fraudulent-transfer laws. Previous bankruptcy attempts by J&J's subsidiary LTL Management LLC were rejected by courts for failing to demonstrate financial distress.
Plaintiffs argue they are entitled to damages due to these fraudulent actions, and the lawsuit seeks class action status. The case highlights the complex legal strategies and significant financial stakes involved in J&J's efforts to manage extensive litigation over its talc products.
Johnson & Johnson Talc Bankruptcies Abused System, Suit Says (1)
The heads of three universities and an academic honor society are scheduled to testify before the U.S. House Committee on Education and the Workforce about their responses to pro-Palestinian protests on campuses. This testimony is part of the committee's ongoing investigation into campus tensions following the October 7 Hamas attack on southern Israel, which resulted in 1,200 deaths and over 250 hostages. The subsequent Israeli military offensive in Gaza has led to nearly 36,000 Palestinian deaths and 80,000 injuries, according to Gaza's health ministry.
Students at numerous universities have organized protests, demanding President Joe Biden take action to end the conflict and urging their institutions to divest from companies supporting Israel. The presidents of Harvard and the University of Pennsylvania resigned after facing backlash over their testimony on campus antisemitism in December.
The upcoming hearing will feature leaders from Northwestern University, Rutgers University, and the University of California, Los Angeles (UCLA), along with the head of the Phi Beta Kappa Society, who will testify in a personal capacity. At UCLA, protests escalated into clashes with counter-demonstrators, leading to a significant police intervention and the arrest of 210 protesters. Chancellor Gene Block acknowledged the need for better preparation to ensure community safety.
In contrast, Rutgers and Northwestern universities reached agreements with student protesters to end the demonstrations, with Northwestern allowing protests to continue until June 1. Recently, a Northwestern student filed a class-action lawsuit, claiming the university has permitted widespread antisemitism, affecting Jewish students' educational experience.
University heads to testify before US House committee on campus tensions | Reuters
Microsoft's introduction of Copilot+ PCs, featuring high-performance Neural Processing Units (NPUs), has raised significant privacy concerns for professionals handling sensitive information. These new PCs, designed for AI capabilities, include a feature called Recall, which continuously captures screenshots of all activities on the device. This feature aims to help users retrieve information efficiently but poses potential privacy risks.
Recall is designed to create a searchable database of screenshots, allowing users to locate content across various applications and websites. Although Microsoft claims that the data is processed and stored locally to ensure privacy, the automatic activation of Recall and its extensive data capture capabilities may still pose a threat to professionals who handle confidential third-party information.
The ability to filter out specific applications and websites from being indexed by Recall is provided, but the effectiveness of this feature in safeguarding sensitive data remains questionable. Professions with strict confidentiality standards, such as law, accounting, and healthcare, may find the current privacy controls inadequate.
Another major concern is the capability of Recall to meet data deletion standards. While users can delete individual snapshots and time periods, ensuring that deleted data is permanently erased and unrecoverable is crucial for maintaining compliance with professional and legal standards.
Legal compliance is also a critical issue. Professionals must be able to handle legal obligations, such as subpoenas, without compromising other sensitive information. Whether Recall can balance these requirements effectively remains to be seen.
Overall, while Copilot+ PCs represent a significant advancement in AI-driven productivity tools, the privacy, security, and compliance challenges they pose must be rigorously tested to ensure they meet the needs of professionals handling sensitive information.
Copilot+ PCs Could Be A Privacy Nightmare For Professionals
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This Day in Legal History: Grant Signs the General Amnesty Act
On May 22, 1872, President Ulysses S. Grant signed the General Amnesty Act, marking a significant moment in the post-Civil War reconstruction era. This legislation restored voting rights to most former Confederate rebels who had been disenfranchised under the Fourteenth Amendment as a punishment for their participation in the rebellion. The Act effectively re-integrated approximately 150,000 Southern men back into the political process, leaving only about 500 individuals still excluded from voting and holding office due to their high-ranking roles in the Confederacy.
This move was seen as a step towards national reconciliation, aiming to heal the divisions caused by the Civil War. The General Amnesty Act reflected a shift in federal policy from punitive measures towards a more inclusive approach to rebuilding the nation. It acknowledged the need to bring Southern states fully back into the Union by restoring their citizens' civil rights.
The process of granting amnesty to former Confederates culminated in full universal amnesty on June 6, 1898. By this time, all remaining restrictions were lifted, allowing every former Confederate the right to vote and hold office. This complete restoration of rights underscored the nation's commitment to moving past its divided history and fostering unity among its citizens. The General Amnesty Act of 1872 was a crucial step in this lengthy process of reconciliation and reintegration.
Rudolph Giuliani reached an agreement in bankruptcy court preventing him from making further defamatory statements about Georgia election workers Ruby Freeman and Wandreaâ Arshaye âShayeâ Moss. This accord, set to be approved by Judge Sean H. Lane, follows accusations from Freeman and Moss that Giuliani defamed them during an April livestream. They are also pursuing a $148 million defamation verdict awarded to them in December for Giuliani's false claims of voter fraud. Freeman and Moss had filed a lawsuit on May 10, alleging Giuliani continued his defamatory actions. Giulianiâs radio show was canceled earlier this month amid these allegations.
Giuliani Signs Bankruptcy Court Deal Barring Further Defamation
President Joe Biden is poised to secure his 200th judicial appointment with the U.S. Senate set to confirm U.S. Magistrate Judge Angela Martinez as a district court judge in Arizona. This achievement surpasses the pace set by his predecessor, Donald Trump, despite initial challenges due to a slim Democratic majority in the Senate. Biden's success in confirming judicial nominees, facilitated by deals with Republican senators, contrasts with Trump's more conservative appointments, which shifted the federal judiciary rightward, including the Supreme Court. Biden has focused on diversity, with two-thirds of his appointees being women and a significant proportion being racial minorities. Despite potential hurdles, the White House aims to continue pushing nominations to avoid more extreme outcomes in future judicial appointments.
Biden to secure 200th judicial confirmation as election looms | Reuters
The Wisconsin Institute for Law and Liberty (WILL) has filed complaints against the American Bar Association (ABA), a federal judge, and three law schools, alleging discrimination in student hiring programs. WILL claims these programs violate federal law by using racial quotas and preferences, which they argue have long been illegal. The complaint, filed with the Justice and Education Departments, targets programs that allegedly favor applicants based on race, age, and sexual orientation. South Texas College, the University of the Pacific, and Willamette University are also named in the complaint. Additionally, WILL filed a complaint against Federal Magistrate Judge Leo Brisbois, accusing him of discriminatory practices in ABAâs internship and clerkship programs. These actions follow the Supreme Courtâs 2023 decision to end affirmative action in college admissions. Other conservative groups have similarly challenged diversity programs at major law firms and universities, claiming discrimination against white men.
ABA Faces Discrimination Complaint Over Student Hiring Programs
The House Energy and Commerce Committee will be holding a legislative hearing today, titled âLegislative Proposal to Sunset Section 230 of the Communications Decency Act.â This hearing aims to discuss draft legislation that would terminate Section 230 and push for new regulations.
For those unaware, we have covered Section 230 in a Max Min episode, available via a link in the shownotes. By way of brief background here, or reminder for long time listeners, Section 230 of the Communications Decency Act, enacted in 1996, is a crucial piece of U.S. legislation that provides immunity to online platforms from being held liable for content posted by their users. This law enables websites, including social media networks and forums, to host user-generated content without the risk of facing lawsuits for defamation, libel, or other legal issues arising from that content.
Additionally, Section 230 allows platforms to moderate content in good faith, giving them the flexibility to remove or restrict access to content they consider objectionable without being treated as the publisher of that content. This framework has been key in fostering the growth and diversity of the internet as we know it todayâfor better or worse.
While reforming Section 230 has been a contentious topic, sunsetting the law at this juncture is a misguided approach. Much of the internet's infrastructure relies on the protections offered by Section 230, which shields platforms from liability for user-generated content. This admittedly jerry-rigged but essential policy enables the free flow of information and supports innovation by allowing platforms to host diverse viewpoints without fear of constant litigation. Over the last 26 years it has unquestionably done more to shield marginalized communities from the most virulent hate speech than it has been used as cover for bad actors and, while it also unquestionably needs tweaking, it neednât be discarded entirely.
Removing the protections of Section 230 could immediately and irrevocably stifle innovation and severely impact small platforms that cannot afford extensive moderation. Although Section 230 is not perfect, completely eliminating it without a robust and well-considered replacement could lead to more harm than good. It is crucial that any legislative changes balance the need for accountability with the preservation of the open internet.
Bipartisan Energy and Commerce Leaders Announce Legislative Hearing on Sunsetting Section 230
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This Day in Legal History: American Red Cross Founded
On this day in legal history, May 21, 1881, Clara Barton founded the American Red Cross. Inspired by her experiences providing care to soldiers during the Civil War and influenced by the International Red Cross in Europe, Barton established the organization to offer emergency assistance, disaster relief, and education in the United States. The American Red Cross received its first Congressional Charter in 1900, which was later updated in 1905 to formalize its responsibilities and relationship with the federal government.
The charter defines the organization's mission to provide aid to victims of natural disasters and armed conflict, as well as to maintain a system of national and international relief in times of peace. Under Barton's leadership, the American Red Cross played a critical role in responding to natural disasters such as the Johnstown Flood in 1889 and the Galveston Hurricane in 1900.
Today, the American Red Cross continues to be a vital component of the nation's emergency response infrastructure. It provides blood donation services, supports military families, offers health and safety training, and responds to over 60,000 disasters annually. The organization's founding marked a significant moment in the history of humanitarian aid in the United States, embodying a commitment to compassion and service that endures to this day.
In recent developments regarding Rudolph Giuliani's bankruptcy, creditors are seeking documents from John Catsimatidis, the billionaire owner of WABC Radio, which recently canceled Giuliani's show. The creditors' committee has filed a motion in the US Bankruptcy Court for the Southern District of New York to subpoena Catsimatidis for communications and documents related to Giuliani's relationship with WABC, his compensation, and details about the shows he hosted.
The move comes after Catsimatidis canceled Giuliani's show due to the former mayor's repeated false statements about the 2020 election. The creditors are also interested in information about Giuliani's termination, statements he made regarding the Georgia poll workers who won a $148 million defamation judgment against him, and other potential assets.
Giuliani filed for Chapter 11 bankruptcy following the defamation suit loss, and his recent attempt to challenge the judgment failed. The committee has expanded its efforts to subpoena over 20 individuals associated with Giuliani, including his son, to uncover additional assets for distribution among creditors.
Giuliani Creditors Target Billionaire Radio Station Owner (1)
Martin Gruenberg, head of the Federal Deposit Insurance Corp. (FDIC), announced he will step down following a report of a toxic work environment at the agency. The report, conducted by Cleary Gottlieb Steen & Hamilton, detailed allegations of harassment and discrimination, highlighting a problematic culture at the FDIC during Gruenbergâs tenure. Despite surviving intense congressional hearings, Gruenberg faced increasing political pressure, notably from Senate Banking Committee Chairman Sherrod Brown, who called for new leadership to implement fundamental changes.
Gruenberg, who has been an FDIC board member since 2005 and served twice as chairman, promised to address the agencyâs issues but acknowledged his resignation once a successor is confirmed. The White House plans to quickly nominate a replacement to maintain the Democratic majority on the FDIC board, ensuring the continuation of the administration's regulatory agenda.
The FDIC is currently collaborating with the Federal Reserve and the Office of the Comptroller of the Currency on new capital requirements for big banks, a contentious issue in the financial industry. Gruenbergâs departure could impact these regulatory efforts, especially if the board becomes evenly split between Democrats and Republicans. House Majority Whip Thomas Emmer called for Gruenbergâs immediate resignation, suggesting other capable leaders could take over.
The White House expressed its commitment to appointing a new chair dedicated to consumer protection and financial stability, aiming for swift Senate confirmation. The unfolding situation underscores the ongoing challenges and political dynamics within federal financial regulatory bodies.
FDIC Chair Says Heâll Leave Job After Toxic Workplace Report (2)
The Law School Admission Council (LSAC) is developing a new "environmental context" metric to provide law schools with more information about the socioeconomic challenges applicants face. This metric will include data on institutional student spending, graduation rates, and the percentage of undergraduates receiving federal Pell Grants. Unveiled during an American Bar Association meeting, the project aims to offer a fuller picture of applicants beyond grades and test scores.
The initiative is a collaboration with The College Board, which already provides similar contextual tools for college admissions. LSAC's research director, Elizabeth Bodamer, highlighted the importance of understanding the hurdles applicants have overcome. This new metric comes after the U.S. Supreme Court's 2023 decision limiting the consideration of race in admissions, though LSAC had planned the project years earlier.
Law schools are testing the metric on 2023 applications to evaluate its impact on admissions decisions. Initial findings show that applicants from high-challenge colleges are 2.5 times more likely to be first-generation students compared to those from low-challenge colleges. Additionally, nearly all applicants from low-challenge colleges are accepted into law school, while fewer than two-thirds from high-challenge colleges gain admission.
Law school applicants' socioeconomic hurdles measured by new metric | Reuters
In my column this week, I discuss the IRS's acknowledgment of racial disparities in taxpayer audit rates, as highlighted by Stanford's Institute for Economic Policy Research in 2023. The IRS plans to reassess and refine its compliance mechanisms, but mere algorithm adjustments won't suffice. Accountability is crucial for addressing how these algorithms exhibited biases and ensuring taxpayers can trust the system's integrity. Transparency, such as open-sourcing the audit algorithms, is essential for enabling feedback from researchers and watchdog groups.
The issue of biased algorithms extends beyond statistics. Racial disparities in audits undermine trust in the tax system, which is vital for voluntary compliance. Although algorithms aren't inherently biased, the people who create them can introduce biases, whether intentionally or not. This is evident in similar cases, such as the Netherlands' tax audit scandal, where policies flagged ethnic minorities for audits on childcare benefits, leading to widespread disallowance of said benefits and massive financial harm to numerous innocent individuals.
In the U.S., the IRS's audit algorithms may disproportionately impact Black taxpayers due to the way they predict income misstatements. Stanford researchers found that Black taxpayers were audited at rates 2.9 to 4.7 times higher than non-Black taxpayers. Whether these biases are overt or incidental, the experience of those audited remains unjust.
Greater transparency in audit algorithms is necessary to ensure equity across all demographics. While there are concerns about revealing audit selection criteria, the benefits of transparency outweigh the risks. Disclosing audit rates across demographics and open-sourcing the algorithms will allow for independent assessment and help identify and eliminate biases. Open-source algorithms can also expose vulnerabilities, enabling improvements.
The column underscores that addressing biases in enforcement processes requires more than algorithm tweaks; it involves engaging with affected communities to rebuild trust through transparency and accountability. This level of openness is crucial for restoring taxpayer confidence in the fairness of the IRS's audit practices.
IRS Racial Audit Disparities Need Accountability to Be Resolved
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This Day in Legal History: Free Exercise Clause Applies to States
On this day, May 20, in 1940, the United States Supreme Court made a landmark decision in the case of Cantwell v. Connecticut, significantly shaping the landscape of religious freedom in America. The Court held that the Free Exercise Clause of the First Amendment, which guarantees individuals the right to practice their religion freely, applied to state governments. This decision was pivotal as it extended the protections of the Bill of Rights to state actions, not just federal, through the incorporation doctrine.
The incorporation doctrine is a constitutional principle that ensures the fundamental rights and freedoms outlined in the Bill of Rights are protected against infringement by state governments. This doctrine relies on the Due Process Clause of the Fourteenth Amendment, which has been interpreted to incorporate most of the protections guaranteed in the Bill of Rights. The Cantwell case was a critical moment in the application of this doctrine, marking the first time the Supreme Court applied the Free Exercise Clause to the states.
In Cantwell v. Connecticut, the case involved Jehovah's Witnesses who were arrested for soliciting without a permit and for inciting a breach of the peace. The Supreme Court ruled in favor of the Cantwells, stating that their arrests violated their First Amendment rights. This decision underscored the importance of protecting religious expression from state interference and set a precedent for future cases involving the incorporation of other Bill of Rights protections.
This ruling reinforced the principle that religious freedom is a fundamental right that must be respected by all levels of government, ensuring that individuals could practice their faith without undue state interference. It paved the way for broader interpretations of the First Amendment and fortified the legal framework that guards against religious discrimination and promotes religious liberty in the United States.
Donald Trump, currently on trial in New York for falsifying business records, may testify in his defense this week, although his decision remains uncertain. While Trump initially indicated he would testify, his lawyer Todd Blanche has since expressed uncertainty. Trump faces 34 counts related to hush money payments to Stormy Daniels, aimed at silencing her allegations of an affair before the 2016 election, which Trump denies.
Outside the courtroom, Trump has labeled the trial a politically motivated effort to undermine his 2024 presidential campaign. Inside, he has listened to testimony, including lurid details from Daniels and accounts of efforts to suppress negative stories. Prosecutors are expected to conclude their case after testimony from Michael Cohen, Trump's former fixer who made the payment to Daniels.
Trump's legal team will soon present their defense, potentially calling witnesses, including Trump himself. If Trump chooses to testify, he could challenge the allegations directly but would also face rigorous cross-examination, posing risks of perjury and damaging his credibility. The outcome of this trial, one of four criminal cases Trump faces, could impact his political future.
Trump has the chance to testify at hush money trial - if he so chooses | Reuters
Colorado is set to become the first U.S. state to enact a comprehensive law regulating the use of artificial intelligence (AI) in employment and other critical areas with Senate Bill 24-205 (SB205). Passed on May 8 and awaiting Governor Jared Polis' signature, the law aims to prevent algorithmic discrimination and will take effect in 2026. It targets high-risk AI systems influencing decisions in employment, education, finance, government services, healthcare, housing, insurance, and legal services.
SB205 imposes significant compliance obligations on both developers and users of high-risk AI systems. Developers must provide detailed information about their AI systems, publish risk management strategies, and disclose known discrimination risks to the attorney general. Deployers are required to implement risk management policies, conduct annual impact assessments, and notify consumers about the use of AI systems in decision-making.
The law also mandates that businesses inform consumers about the purpose and nature of AI systems, their influence on decisions, and the right to opt out of profiling. The Colorado attorney general will enforce the law, treating violations as unfair and deceptive trade practices, though there is no private right of action. Businesses can defend themselves by showing they discovered and corrected violations through feedback or internal reviews.
This groundbreaking legislation is expected to influence broader AI regulation across the U.S., as other states consider similar measures, prompting employers nationwide to prepare for stricter AI compliance requirements.
Colorado Passes Groundbreaking AI Discrimination Law Impacting Employers
The U.S. Supreme Court upheld the Consumer Financial Protection Bureauâs (CFPB) funding mechanism, which allows it to draw funds from the Federal Reserve rather than through annual congressional appropriations. This 7-2 decision, issued on May 16, has broader implications for other financial regulators such as the Federal Reserve, Federal Deposit Insurance Corp. (FDIC), and the Office of the Comptroller of the Currency (OCC), which also rely on independent funding mechanisms.
Justice Elena Kagan, in a concurring opinion joined by Justices Sonia Sotomayor, Amy Coney Barrett, and Brett Kavanaugh, emphasized that Congress has historically used various funding mechanisms for federal agencies, underscoring the constitutionality of such arrangements. This decision signals to potential litigants that challenges against the funding of financial regulators are unlikely to succeed.
The ruling reassures that the established funding methods for these agencies, which include assessing fees on the banks they supervise, are constitutionally sound. The decision also highlighted that the independent funding of U.S. regulatory agencies has long been accepted due to its prevalence and practical necessity.
Dissenting Justices Samuel Alito and Neil Gorsuch, while disagreeing with the majority on the CFPB, did not find the funding methods of other regulators constitutionally problematic. They pointed out that the Federal Reserve, FDIC, and OCC operate on specific charges for services, contrasting with the CFPBâs unique funding ability.
Legal experts see this ruling as a robust defense of the current financial regulatory framework, suggesting that any future claims against the funding structures of these agencies will likely face significant hurdles. The case referenced is CFPB v. Community Financial Services Association of America, U.S., No. 22-448.
Banking Regulators See Relief From Funding Fights in CFPB Ruling
States poised to receive portions of $7 billion for bringing solar power to low-income communities face a significant skilled labor shortage in the construction industry. The Environmental Protection Agency (EPA) has selected 60 applicants, including many state energy departments, to implement the Solar for All program, aimed at providing residential solar to disadvantaged populations as part of the Greenhouse Gas Reduction Fund.
The program faces a shortage of 500,000 skilled construction workers, exacerbated by early retirements and recruitment challenges, according to Ben Brubeck of the Associated Builders and Contractors. The Department of Energy's 2023 US Energy and Employment Report noted that 97% of construction employers find it difficult to hire qualified solar workers.
The Solar for All funding encourages project labor agreements, which may deter non-union contractors. Currently, only about 11% of solar energy workers are unionized. This shortage raises concerns about maintaining high-quality and safe infrastructure.
Labor union representatives argue that the issue is more about wages than worker availability. Higher wages, as mandated by the program, might attract more skilled workers. However, the absence of solar-specific apprenticeship programs, unlike those in other construction sectors, contributes to the labor gap.
States like Michigan, Colorado, Washington, and New York are planning to address these workforce challenges during their planning periods. Michigan is considering partnerships with community colleges and labor organizations to meet the expected demand surge. Colorado aims to balance labor distribution between rural and urban areas, while Washington plans to require an apprentice for each solar installation project. New York will leverage federal funding to enhance its existing clean energy jobs and workforce development programs.
The EPA emphasizes that workforce development is crucial for the success of Solar for All, with many applications proposing partnerships to build a robust clean energy workforce.
States Set for Solar Cash Infusion Aim to Build Worker Pipeline
New federal staffing requirements for nursing homes, introduced by the Centers for Medicare & Medicaid Services (CMS) in April, aim to enhance care quality but face significant hurdles due to waivers and exemptions. These regulations, set to take full effect in 2026, mandate specific staffing levels for registered nurses (RNs) and nurse aides. However, federal laws and the Social Security Act allow states and the Health and Human Services (HHS) secretary to grant waivers, potentially delaying compliance for many facilities.
Thousands of nursing homes may qualify for exemptions from these staffing requirements, which worries advocates like Sam Brooks from the Consumer Voice for Quality Long-Term Care. These exemptions could disproportionately benefit poorly performing homes, undermining the rule's intent. Enforcement is further complicated by a shortage of state nursing home inspectors, affecting timely compliance verification.
The rule stipulates that facilities must provide 3.48 hours of care per resident per day (HPRD), with specific hours allocated to RNs and nurse aides. Significant staffing gaps exist, with an estimated need for 12,000 RNs and 77,000 nurse aides to meet the new standards. Facilities in nonrural areas have three years to comply, while rural ones have five.
Exemptions are not guaranteed; facilities must document efforts to hire staff and meet transparency requirements. Critics argue the exemption process is cumbersome and may lead to facility downsizing or closures, limiting seniors' access to care. CMS aims to encourage compliance through these transparency and documentation mandates, but industry representatives are concerned about the feasibility and impact of these rules. The ongoing labor shortage in the nursing home sector and the high cost of compliance, estimated at $43 billion over 10 years, present additional challenges to the successful implementation of these staffing requirements.
Nursing Home Watchers Wary of Staffing Rule Waivers, Exemptions
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This Day in Legal History: Constitution of Norway Signed
On this day, May 17, in 1814, the Constitution of Norway was signed, marking a pivotal moment in the country's history. This significant event established Norway as an independent kingdom, following centuries of union with Denmark. The constitution was drafted at Eidsvoll by the Norwegian Constituent Assembly, composed of prominent figures who were determined to assert Norway's sovereignty and democratic principles.
The document drew inspiration from both the United States Constitution and the French Revolution, emphasizing individual rights, separation of powers, and a parliamentary system. It remains one of the oldest constitutions still in use today, symbolizing Norway's commitment to democracy and freedom.
The signing of the constitution laid the groundwork for Norway's future political development, even though it initially faced challenges. Shortly after its adoption, Norway entered into a union with Sweden, which lasted until 1905. Despite this, the constitution was largely preserved and served as a foundation for Norwegian governance during the union period.
Today, May 17 is celebrated as Constitution Day, or "Syttende Mai," a national holiday in Norway. The day is marked by vibrant parades, patriotic displays, and public speeches, reflecting the pride Norwegians take in their constitutional heritage. It is a day for Norwegians to celebrate their history, culture, and the enduring values enshrined in their constitution.
Constitution Day serves as a reminder of Norway's journey towards independence and the establishment of a democratic society. It honors the vision and determination of those who, over two centuries ago, laid the foundation for a free and sovereign nation. The celebrations highlight the enduring relevance of the principles set forth in 1814, which continue to guide and inspire Norway's democratic institutions today.
On Thursday, the U.S. Supreme Court upheld the funding mechanism for the Consumer Financial Protection Bureau (CFPB), allowing it to continue drawing money from the Federal Reserve rather than Congress. This decision was a victory for the Biden administration and a setback for conservative critics of the agency. However, the Supreme Court's conservative majority still poses a threat to federal agency powers, with pending decisions that could limit their authority in various sectors. These upcoming rulings, expected by the end of June, involve significant cases concerning the Securities and Exchange Commission (SEC), the National Marine Fisheries Service (NMFS), and the Environmental Protection Agency (EPA).
The CFPB ruling, a 7-2 decision written by Justice Clarence Thomas, reversed a lower court's decision that the funding method violated the appropriations clause of the U.S. Constitution. Despite this win, the broader conservative push to reduce federal regulatory power continues, with legal scholars predicting further setbacks for agencies. The SEC faces challenges to its in-house judicial proceedings, while the NMFS case could lead to the reassessment of the "Chevron deference," a doctrine that directs courts to defer to federal agencies' interpretations of ambiguous laws.
Additionally, the EPA's "Good Neighbor" plan, aimed at reducing ozone emissions, is under scrutiny by several Republican-led states and energy companies. These cases reflect ongoing conservative efforts to limit the scope of federal regulations and reshape administrative law.
Despite consumer watchdog's US Supreme Court win, agency powers still on chopping block
At Donald Trump's criminal trial in New York, his former attorney Michael Cohen testified that Trump directed him to pay Stormy Daniels $130,000 to silence her about an alleged affair before the 2016 election and then falsify business records to cover it up. While Trump's lawyers have tried to discredit Cohen, experts note that prosecutors have supported his testimony with phone logs, documents, and other witnesses. For instance, David Pecker, former publisher of the National Enquirer, testified about efforts to suppress damaging stories, and recordings and call logs showed frequent contact between Trump and Cohen during the negotiations.
Despite substantial circumstantial evidence suggesting Trump's involvement, Cohen's claims about specific conversations remain uncorroborated, especially without testimony from Allen Weisselberg, the Trump Organization's former CFO, who could confirm or refute Cohen's statements but is not expected to testify. The defense will likely argue that Trump delegated detailed business matters and that there was nothing improper about categorizing payments as legal fees. Trump, who has pleaded not guilty to the charges, claims the case is a partisan attempt to disrupt his presidential campaign.
Trump prosecutors' hard evidence bolsters Michael Cohen's testimony, experts say
Top lawyers for major U.S. airlines collectively earned almost $50 million in 2023, highlighting the industry's reliance on in-house legal expertise. United Airlines led with President Brett Hart receiving nearly $15 million, including substantial stock awards and cash compensation. Delta Air Lines' Chief Legal Officer Peter Carter earned over $13.1 million, reflecting his additional role and pandemic leadership.
These compensation packages underscore the crucial role of legal teams in navigating regulatory, union, and consumer disputes. Airlines face numerous legal challenges, such as the recent lawsuit against the U.S. Transportation Department and passenger litigation over aircraft issues.
American Airlines paid its Vice Chair Stephen Johnson more than $10.2 million, while legal chief Priya Aiyar received $7.8 million. Despite pandemic pay cuts, airlines now offer competitive salaries to retain top legal talent.
Other industry legal leaders also received significant compensation, with FedEx's Mark Allen earning $5.4 million and JetBlue's Brandon Nelson $4.9 million. This trend reflects the high value airlines place on experienced legal professionals to manage complex legal and regulatory environments.
US Airlinesâ $50 Million Lawyer Pay Shows Industryâs Legal Needs
Microsoft's upcoming appeal of a $242 million patent verdict is set to intensify debates about the role of foreign activities and apportionment in calculating damages. The verdict, awarded to IPA Technologies Inc., found that Microsoftâs Cortana infringed on a patent related to its US-based servers. The jury decided that each time a user command was processed by these servers, it constituted infringement.
The central issue in the appeal is how damages are apportioned, particularly regarding the extent of infringement and the inclusion of non-infringing features. Legal experts anticipate that Microsoft will challenge the damages calculation, arguing that the verdict oversimplifies the product's functionality and inflates the damages.
A significant aspect of the debate involves the Federal Circuit's recent decision in Brumfield v. IBG LLC, which allows for the consideration of foreign sales when calculating damages if they result from domestic infringement. This precedent was used to support the current ruling against Microsoft.
Judge Richard G. Andrews ruled that the damages theory used by IPA was appropriately apportioned, considering both infringing and non-infringing elements of Cortana. However, the complexity of apportionment and the challenge of accurately valuing the patented technologyâs contribution to the overall product make this a contentious area likely to be scrutinized on appeal.
Legal experts believe that while Microsoft will argue that the calculation was flawed, the detailed economic and technical analyses required in such cases will be pivotal. The Federal Circuit's history of closely reviewing these aspects suggests a rigorous examination ahead.
Microsoft Mega-Verdict Appeal Primed to Test Patent-Damages Law
This weekâs closing theme is by Maurice Ravel.
Maurice Ravel, a prominent figure in the world of classical music, was born in 1875 in the Basque town of Ciboure, France. Renowned for his intricate compositions and masterful orchestration, Ravel's work spans a variety of genres, each infused with his distinctive style. One of his remarkable contributions to the realm of classical music is the "Rapsodie espagnole," a four-movement orchestral suite that showcases his fascination with Spanish culture and music.
Among Ravel's diverse compositions, "L'heure espagnole," a one-act opera, stands out for its vibrant portrayal of a comedic love story set in a Spanish clockmaker's shop. Premiering in 1911 at the Opéra-Comique in Paris, this opera exemplifies Ravel's ability to blend humor with musical sophistication. The fourth movement of "Rapsodie espagnole," titled "Feria assez animé," embodies the spirited essence of a Spanish festival, capturing the lively and festive atmosphere through its dynamic rhythms and vivid orchestration.
"Feria assez animĂ©" transports listeners to the heart of a bustling Spanish feria, where the excitement of the crowd and the exuberance of the celebration are palpable. Ravel's meticulous attention to detail and his exceptional skill in orchestration are evident in this piece, making it a delightful auditory experience. As we delve into this weekâs closing theme, we invite you to immerse yourself in the colorful and animated world that Ravel so brilliantly brings to life.
Without further ado, "L'heure espagnole" by Maurice Ravel, enjoy.
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This Day in Legal History: President Johnson Acquitted
On May 16, 1868, a significant moment in U.S. legal and political history occurred when President Andrew Johnson was acquitted in his impeachment trial. Johnson, who had ascended to the presidency following the assassination of Abraham Lincoln, was charged with high crimes and misdemeanors, primarily stemming from his violations of the Tenure of Office Act. This law, which was later repealed, had been designed to restrict the power of the President to remove certain officeholders without the Senateâs approval.
The crux of the case against Johnson was his attempt to remove Edwin Stanton, the Secretary of War, without Senate consent, which ignited a fierce political battle with the Radical Republicans who dominated Congress. These lawmakers sought a stricter Reconstruction of the Southern states following the Civil War, a process Johnson had obstructed through his lenient policies towards the former Confederate states.
The impeachment trial in the Senate was a closely watched affair, reflecting deep national divisions during a tumultuous period in American history. Johnson narrowly escaped removal from office by one vote, securing a "not guilty" verdict with a tally of 35-19, just shy of the two-thirds majority required for conviction.
This verdict had lasting implications for the balance of power between the presidency and Congress, highlighting the complexities of presidential impeachment. Johnsonâs trial set a significant precedent, establishing that political disagreements alone were not sufficient grounds for removal from office under the Constitution. This event remains a pivotal chapter in the saga of American governance and legal standards, underscoring the enduring struggle over the limits of presidential authority.
Ghostwriting in legal briefs refers to the practice where an experienced attorney, often a specialist in Supreme Court matters, writes or significantly contributes to a brief without their name appearing on the document. This tactic is predominantly used in opposition briefsâthe documents that argue why the Supreme Court should not agree to hear a particular case. The strategy behind ghostwriting is to leverage the expertise of seasoned Supreme Court advocates without drawing attention to the case with a high-profile name. This can make the brief more persuasive without signaling that the case might be significant enough to warrant the Court's attention.
Despite there being no explicit rules against ghostwriting in court documents, and the American Bar Association deeming it ethically permissible under certain circumstances, the practice has sparked debate. Critics, like law professor Daniel Epps, argue that it might be seen as misleading because it intentionally hides the involvement of influential lawyers to influence the Court's decisions indirectly. Advocates of transparency suggest that disclosing all authors of a brief could lead to more informed decision-making by the justices.
However, some legal experts argue that ghostwriting is detectable by justices familiar with the distinct writing styles and argumentative structures typical of veteran Supreme Court lawyers. This recognition could potentially undermine the purpose of ghostwriting by making the justices aware of the underlying significance and expert handling of the case. Despite these concerns, ghostwriting remains a utilized, albeit controversial, tactic in the strategic presentation of cases to the Supreme Court.
Ghostwriters Try Steering Supreme Court Justices Away from Cases
Quinn Emanuel, a prominent law firm, has integrated an AI-powered tool from Pre/Dicta to predict judicial decisions in litigation cases, enhancing strategic planning and case management. The tool, developed by Pre/Dictaâa company specializing in judicial analyticsâutilizes artificial intelligence to analyze various judge-specific factors such as age, gender, education, and net worth, which the company's CEO, Dan Rabinowitz, suggests, in reporting by Bloomberg Law, influence decision-making. This predictive capability is seen as critical for litigators, akin to writing briefs.
The technology is designed to anticipate judges' rulings on various motions including summary judgments, class certifications, and venue transfers with an impressive accuracy of about 85%, as evidenced by tests on 50,000 cases. Ryan Landes, a partner at Quinn Emanuel, highlights the strategic advantage this provides, potentially altering the cost-benefit analysis of legal actions based on predicted outcomes.
Currently, the tool is used only for analyzing federal court cases, with plans to expand to state court cases, starting with California. This AI application underscores the broader trend of law firms leveraging new technologies to improve efficiency and decision-making.
Quinn Emanuel Adopts AI-Powered Tool to Predict Judicial Rulings
Federal lawmakers have begun efforts to repeal a new rule by the Department of Labor (DOL) that broadens the definition of a fiduciary, impacting more financial advisors. This rule, finalized in April, extends fiduciary responsibilities to include advice on rolling over 401(k) funds into annuities and individual retirement accounts. Critics, including some Wall Street firms and life insurers, argue that this rule could hinder their ability to earn commissions and offer services, potentially complicating retirement planning for individuals.
The resolution to overturn the rule is led by Senators Ted Budd, Bill Cassidy, Joe Manchin, and Roger Marshall, along with support in the House from Representatives Rick Allen and Virginia Foxx. They claim the rule constitutes executive overreach and could limit consumers' financial management options and access to advice, risking their future financial security.
The rule is already facing legal challenges from the insurance industry, which seeks to prevent its enforcement through a lawsuit filed under the Administrative Procedure Act. This legal action requests both a preliminary and permanent injunction against the rule.
The process to repeal the rule involves a Congressional Review Act (CRA) procedure, where Congress, after receiving a report from the Labor Department, has 60 days to pass a joint resolution of disapproval. If passed, this would proceed to President Joe Biden's desk, where he is likely to veto it based on previous actions, such as his veto of a resolution against the DOLâs ESG rule in March 2023. However, there remains a possibility for Congress to override such a veto.
Biden 401(k) Advice Rule Repeal Effort Begins in Congress (2)
Boeing Co. is facing significant scrutiny from shareholders at its annual meeting on May 17, reflecting deep dissatisfaction with the company's management and response to ongoing safety issues with its jets. Shareholders, advised by proxy-voting firms Glass Lewis and Institutional Shareholder Services (ISS), are particularly critical of Boeingâs board and executive compensation, signaling discontent with how the company has addressed the systemic safety failures that have plagued its newer aircraft models.
Glass Lewis has recommended voting against the reelection of certain board members, including those leading the audit and aerospace safety committees, due to their perceived failure in overseeing necessary safety improvements. Additionally, ISS has advised shareholders to reject the outgoing CEO Dave Calhounâs pay package, which saw a substantial increase despite the companyâs troubling safety record and operational challenges. This package includes a significant bonus that coincided with additional safety incidents, raising concerns about the misalignment between executive compensation and company performance.
The dissatisfaction comes amid a backdrop of operational failures that have not only affected Boeingâs share price, which has dropped significantly, but also raised potential for criminal prosecution due to violations of a deferred-prosecution agreement related to past crashes. These ongoing issues, coupled with a wave of executive retirements, including that of CEO Calhoun, suggest a tumultuous period for Boeing.
Despite the likelihood that the board members and executive pay proposals will pass, a substantial number of dissenting votes would highlight the shaky confidence investors have in the current leadership's ability to turn around the companyâs fortunes and address its safety culture effectively. This climate of uncertainty could also impact Boeingâs ability to attract a capable successor for Calhoun, as potential candidates may be deterred by the reputational risks and scrutinized compensation involved.
Boeing Safety Woes Fuel Opposition to CEOâs Pay, Board Make-Up
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