Category: News Feeds

Because 2020 couldn’t possibly get any worse, Ruth Bader Ginsburg is in the hospital.

Thankfully, all indications are that she’s currently resting comfortably and will just stay in the hospital for a couple of days for observation. Ginsburg checked in after experiencing a fever and chills and had a bile duct cleared according to the Court.

This is as good a time as any to remind folks that the Chief Justice also ended up in the hospital recently but the Court did not let us know about that for days. Individual justices exert some influence over how these things are reported, but it’s telling that the presumption is that RBG’s health news is required to fuel a news cycle while Roberts gets to rest peacefully — if we’re going to do this, all the justices should agree to the same protocols.

But, for now, everyone just relax. Justice Ginsburg has a history of being appropriately cautious with her health and the public has a history of freaking out about it. Be less frantic and more grateful that Ginsburg knows enough to seek professional treatment when she’s feeling sick.

Earlier: John Roberts Fall Down And Go Boom

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Joe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.

On December 30, 2019, Congress passed the Further Consolidated Appropriations Act of 2020, which was later accompanied by a Joint Explanatory Statement, directing the FDA to conduct a sampling study of the current CBD marketplace to determine the extent to which products are mislabeled or adulterated. Last week, the FDA met its obligation by submitted the requested report.

Alas, the report fails to adequately respond to Congress’ request to solve the proliferation of improperly labeled and unsafe CBD products in the United States. The report offers virtually no new insight and merely reiterates the well-known information that prompted Congress’ original request. Though the FDA shared the results of a short-term sampling study it conducted in the past six months, the agency ultimately admitted this data could not be used to draw definitive conclusions on the state of the market.

For the past 18 months, the hemp-derived CBD industry has consistently stressed the need to regulate these products to ensure quality control. Yet, the FDA has limited its involvement to issuing warning letters to CBD companies making egregious, unsubstantiated medical claims about their products.

Despite the fact that the agency “recognizes the significant public interest in CBD products,” the report concludes that the FDA is not yet in a position to regulate these products and ensure public safety given the limited amount of data available for these products.

This conclusion is frustrating because the FDA is pointing to a problem only it can solve. While the rulemaking process can be tedious and lengthy, it does not absolve the FDA for months of inaction on CBD-related issues.

For instance, the agency could have issued informal guidance — agency advice that influences regulated entities but does not carry the force and effect of law — to CBD manufacturers and distributors as opposed to offering broadly drafted FAQs that leave readers with more questions than answers. Over the years, the FDA has come to adopt informal guidance as its primary method of policy making. This nonbinding, informal process allows the FDA to efficiently deploy resources while maintaining administrative flexibility.

Moreover, by delaying its rulemaking process and limiting its enforcement actions to issuing warning letters, the FDA seems to have created the problem it is now addressing in the report.

Back in 2018, Pediatric Neurology Briefs published an article entitled Inadequate Regulation Contributes to Mislabeled Online Cannabidiol Products, which concluded:

Overall, the results of this study are an important contribution to the growing evidence that online CBD products have a high rate of mislabeling. A need exists for consistency and regulation of these products. There is potential for adverse events by having higher CBD concentrations than expected, resulting in changing serum antiepileptic levels.

As this peer-reviewed article suggests, until the FDA starts regulating CBD products, the proliferation of improperly labeled and unsafe products will continue.

In concluding the report, the agency explained it is planning a long-term sampling study that will be conducted by a third party, using the same methodology adopted in the short-term sampling study. The FDA expects the long-term sampling study to be initiated this year but provides no information as to the date of completion. This lack of specificity regarding the study’s timeline suggests that the agency is not close to implementing meaningful reforms surrounding CBD products.

As was shown again in this report, the FDA’s slow approach to carving a legitimate legal pathway for CBD products is not tenable. By failing to expeditiously serve its administrative functions, the FDA is further denying U.S. hemp farmers access to profitable markets for their crops, is preventing the CBD industry from following its course and succeeding, and is jeopardizing the very task with which the agency is responsible: to protect public health and safety.

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Nathalie Bougenies practices in the Portland office of Harris Bricken and was named a “2019 Rising Star” by Super Lawyers Magazine, an honor bestowed on only 2.5% of eligible Oregon attorneys. Nathalie’s practice focuses on the regulatory framework of hemp-derived CBD (“hemp CBD”) products. She is an authority on FDA enforcement, Food, Drug & Cosmetic Act and other laws and regulations surrounding hemp and hemp CBD products. She also advises domestic and international clients on the sale, distribution, marketing, labeling, importation and exportation of these products. Nathalie frequently speaks on these issues and has made national media appearances, including on NPR’s Marketplace. Nathalie is also a regular contributor to her firm’s Canna Law Blog.

This week, I continue my written interview with Eva Shang of Legalist, regarding her experiences cofounding, and now leading, a successful litigation funder. Please see below for Eva’s answers to my second and third questions, focused on how the current pandemic has led to increased demand for litigation funding — and how that demand could serve positive social goals moving forward.

As usual, I have added some brief commentary but have otherwise presented Eva’s answers as she provided them.

Gaston Kroub: There are more funders than ever targeting IP firms and clients. What sets Legalist apart?

Eva Shang: The first and foremost thing that sets Legalist apart is that we are the only litigation funder which specializes in cases requiring less than a million in legal fees. Although we have the capital to make larger investments, our technology allows us to originate and underwrite the kind of volume that allows us to specialize in funding smaller claims. If litigation is a pyramid, the base of the pyramid are exactly these standard small claims. Most cases do not have tens of millions at stake, and that’s why the less-than-a-million bracket is where the greatest need in the legal industry lies. You can’t let the desire to deploy capital distract you from where the need is the greatest.

COVID-19 is forcing many clients and attorneys into considering litigation funding arrangements for the first time by necessity. Attorneys who work on an hourly basis are seeing clients with reduced legal spend unwilling to pay their usual monthly bills; contingency attorneys are seeing large settlement payouts delayed by court closures.

In practice, Legalist has deployed more capital in Q2 of 2019, since the advent of COVID, than any other quarter previously. However, our goal is to convert these first-time users of litigation finance into long-term clients who will continue to see us as a resource even when the pandemic passes. Our hope is that clients will get their first exposure to litigation finance during COVID by necessity, and then use it in the future by choice.

GK: It is clear from Shang’s answer that Legalist aims to develop relationships with firms, even if those firms end up first working with Legalist because of the fallout from the Covid-19 pandemic. At the same time, it is easier to establish longer-term relationships when your funding model welcomes volume and is targeted to the broadest base of potential firms. Legalist’s established success to date bodes well for its ability to capitalize on the increased need for litigation funding, whether that need is driven by Covid-19 claims or not.

GK: Is there a critical misconception you think exists around litigation funding, and if so, how would you correct it?

ES: The biggest misconception around litigation funding is that it’s not mission driven. By design, it is used by the financially disadvantaged party to get on an equal footing with their opponent in court. At Legalist, because we’re focused on individual and small business plaintiffs, we see this systemic imbalance in almost every case we fund, and we want to do even more to address widespread social issues.

The most notable change in litigation finance from 2017 to now is how widely accepted litigation finance is in the legal community. Three years ago,  law firms would frequently bring up issues such as champerty and fee-splitting as reasons why they couldn’t even entertain conversations with us. Ethical concerns were top of mind.

Today, the regulatory framework around litigation finance is much different. With the recent abolition of champerty in Minnesota, you’re starting to see the last few remnants of resistance crumble. Biglaw firms are increasingly engaged in litigation finance, and smaller companies are turning to litigation finance to pursue their claims before they even retain an attorney.

Since the inception of our first fund in 2017, we’ve invested in cases challenging police brutality, workplace discrimination, sexual harassment, prison conditions, and wrongful conviction. We’ve worked with leading exoneration nonprofits as well as with AmLaw 100 law firms. To me, funding can be a powerful tool to build the world we want to see. Providing money to lawyers and plaintiffs working on important cases is a way of literally putting our money where our mouth is. We won’t stop until the work is done, but our roster of mission-driven cases speak for themselves.

With the advent of COVID, you’re likely to see adoption of litigation finance accelerate even more. As both law firms and their clients experience cash crunches in the short term, the appeal of long-term capital from litigation finance firms will be even more apparent. Unlike law firms, who have annual revenue targets, and clients, who have limited legal budgets, litigation funders offer far more patient capital that can wait for two years before being paid out. Inquiries and applications have surged in recent months across the industry; if litigation finance was growing before, COVID-19 only accelerates its progress.

GK: It is not often that you hear how litigation funding can help drive beneficial social change, but Shang makes that case with aplomb. Likewise, her drawing of a contrast between the patience of a litigation funder versus the reacting to cash crunches approach to legal finance engaged in by most firms and clients hits the mark. Indeed, perhaps the greater counterweight to many of the important ethical considerations that arise when we think about litigation finance is the ability of the funder to provide capital and then recede into the background while the case advances on the merits. For one, that type of passive approach can help allay concerns about the litigation funder controlling settlement or otherwise encroaching on the decision-making ability of either the client or the law firm. At any rate, the work of many in the litigation finance industry, Shang and Legalist included, recognize the need to educate lawyers and clients about litigation funding. In my view, that is one area where many of the leading funders do an excellent job and have helped advance the uptake of at least considering litigation funding for many firms and their clients.

My thanks to Eva Shang for the insights and cooperation, and I wish her continued success at the helm of Legalist. It is always a privilege to hear from someone who has bucked the odds as a legal outsider that has found success in the industry, and I thank her for agreeing to this interview. I am always open to conducting interviews of this type with other IP thought leaders, so feel free to reach out if you have a compelling perspective to offer.

Please feel free to send comments or questions to me at gkroub@kskiplaw.com or via Twitter: @gkroub. Any topic suggestions or thoughts are most welcome.

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Gaston Kroub lives in Brooklyn and is a founding partner of Kroub, Silbersher & Kolmykov PLLC, an intellectual property litigation boutique, and Markman Advisors LLC, a leading consultancy on patent issues for the investment community. Gaston’s practice focuses on intellectual property litigation and related counseling, with a strong focus on patent matters. You can reach him at gkroub@kskiplaw.com or follow him on Twitter: @gkroub.

In Biglaw, as in capitalism generally, the rich just keep on getting richer.

According to CounselLink’s 2020 Enterprise Legal Management Trends Report, the more attorneys that are employed at a firm, the more money that firm in able to command in its average billing rates. The biggest 50 law firms have an average partner billing rate of $575 per hour, which is 51 percent higher than the next band of firms. Those that are slightly smaller, with 501-750 attorneys, are averaging partner billing rates of $380 an hour. And it keeps on going down from there, with partner billing rates at firms with 201-500 lawyers 29 percent higher than those with only 101-200 lawyers.

As reported by Law.com, Kris Satkunas, director of strategic consulting at LexisNexis CounselLink, notes that these higher rates make the biggest Biglaw firms even more profitable, but there is an opportunity for the firms below:

“[The largest firms] really have a hold on those markets,” said Kris Satkunas, director of strategic consulting at LexisNexis CounselLink and the report’s author. “It’s almost a chicken-and-the-egg thing: the larger the firm, the higher its rate. But a higher rate drives up the firms’ average income, meaning the firm can grow even larger.”

….

“I don’t think people realize how strong the correlation is between the size of the firm and the rates,” Satkunas said. Firms slightly smaller than the “largest firms” category, ones with head counts of 501-750 lawyers, have an opportunity, she added, as clients look for high-quality legal work at a lower cost.

But the report also found that alternative fee arrangements are gaining traction — as Satkunas said, “I’m hopeful that we’re finally moving away from talking about alternative fee arrangements and starting to embrace them.” Last year, 12.1 percent of matters were under alternative fee arrangements and as the economic pressure of COVID-19 continues, that number is bound to continue to go up.

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Kathryn Rubino is a Senior Editor at Above the Law, and host of The Jabot podcast. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter (@Kathryn1).

When a group of bar exam applicants petitioned Minnesota for a diploma privilege option and the state supreme court agreed to take it up, it sparked measured optimism from law school graduates that the leadership of the state was taking COVID-19 seriously. There is, of course, no credible way to call an in-person bar exam anything but a superspreader event and any honest evaluation of the bar exam concludes that it provides negligible protection to the public. With Minnesota agreeing to go on the record, it seemed a slam dunk that the court wouldn’t use this opportunity to light its credibility on fire.

And yet, it used this opportunity to nuke its credibility from orbit. It was, in the end, the only way to be sure.

Ignoring public health recommendations in lieu of trusting career bureaucrats who swear they bought new HEPA filters from Target — so, you know, everything’s cool — the Minnesota Supreme Court issued an order declaring business as usual for the bar exam. With the state ignoring health officials begging Minnesota to close real bars, it was only fitting that this bar remain needlessly open as well.

BLE will provide two exam dates, additional space per examinee, increased air flow, and other measures, as recommended by public health officials.

By “recommended by public health officials,” the court means “working backward” recommendations from state functionaries in June — when new infections in the state averaged in the 300-400 range. With the three-day rolling average for infections topping 700 this week, maybe that advice could use some reassessing. No? Fine.

And despite Minnesota being the place that provided the trauma animating America’s reckoning with race, the court can’t be brought to give more than a passing mention to the fact — and abjectly refuses to engage with the idea that Black people in Minnesota may have feelings about this and that forging ahead without them only compounds racial fissures in the public’s confidence in the profession.

The opinion notes that applicants are free to put off their careers until February if they’d like — a magnanimous gesture that surely imposes no hardships on anyone — and specifically bemoans that diploma privilege wouldn’t provide a transferrable UBE score.

Throughout this process, this has become the most infuriating canard peddled by the bar exam’s death cult. As Washington showed us, granting diploma privilege to all ABA-accredited graduates does not trade off with a portable score; in fact, it makes the administration of the UBE safer by clearing the venue of anyone who doesn’t need a portable score. And that’s before we consider that states could go back to the era when they just asked neighboring states for reciprocity procedures.

That’s the stance Justice Paul Thissen took, dissenting from the opinion and proposing diploma privilege with UBE administrations for anyone who really wanted one. That this common sense approach did not carry the day is mind-boggling.

Certainly, the public health emergency that has unfolded in Minnesota and elsewhere over the last 6 months presents unanticipated and unprecedented challenges. Minnesota’s 2020 examinees have also been witness to, and in some cases a part of, the national reckoning with racial injustice. Our decision today to proceed with the written bar examination is not intended to either reject or minimize the significance of the challenges faced by some bar examinees in recent weeks and months; rather, it is to acknowledge that proceeding forward with the 2020 bar examination is the best solution in an imperfect setting.

Why? The opinion refuses to engage any of the scholarly literature on the subject. Almost the entirety of the opinion is defensive — explaining why the court doesn’t think this will kill anyone — as opposed to articulating any justification at all for the bar exam other than portability. Zero argument. I’ve seen one-sentence per curiam opinions that make more of an effort to engage the arguments.

Ultimately, we conclude that none of the alternatives to a written bar examination provides a perfect solution for all 2020 bar examinees and a diploma privilege could, instead and unintentionally, exacerbate some challenges. Further, we conclude that now more than ever public confidence and trust in the competency of Minnesota’s lawyers must be honored, and thus we decline to discard a longstanding requirement for admission to the Minnesota bar, even temporarily.

There’s not even an effort to trash diploma privilege or online exams! At least the NCBE was willing to make a bunch of specious racist and sexist claims to make its point. The opinion never poses any criticism of any alternative en route to declaring that none of them are perfect compared to turning the exam into a disease vector.

I say this without hyperbole: if this opinion were turned in as a legal writing assignment, it would receive a failing grade. No citations to anything but boilerplate, no engagement of the arguments below, no effort to make affirmative as opposed to defensive arguments… this is simply bad legal writing.

But, you know, someone from UM practicing is a much greater danger to public confidence than a slapdash opinion from the high court.

Earlier: Law School Grads Petition For Diploma Privilege, State Supreme Court Agrees To Take It Up

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Joe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.

How many talk shows will Mary Trump appear on this week? Let’s go with all of them, since Justice Hal B. Greenwald of the Supreme Court of New York vacated the order barring her from doing publicity for her book Too Much and Never Enough: How My Family Created the World’s Most Dangerous Man (affiliate link).

Two weeks ago, Justice Greenwald dashed off a brief order restraining both Mary Trump and Simon & Schuster from publishing personal details about the Trump family, after the president’s brother Robert Trump sued claiming that they were in violation of a 2001 agreement settling litigation over Fred Trump Sr.’s estate. But after Appellate Division Justice Alan D. Scheinkman revoked the restraint against S & S, and strongly suggested that the order against Mary Trump herself ought to be revisited, Justice Greenwald has had second thoughts.

“[I]n the vernacular of First year law students,” he wrote, “’Con. Law trumps Contracts.’”

Having belatedly remembered that prior restraint on publication is really not a thing, His Honor then turned to plaintiff Robert Trump’s other arguments and found that — surprise! — they are garbage, too.

As proof that he would be irreparably harmed by his niece’s book, Robert Trump pointed to a clause in the settlement contract agreeing that the parties “will suffer irreparable damage and injury in event of any such breach,” an argument the court described as “[t]oo many words, with too many meanings.”

“Irreparable harm must be demonstrated, it is not obtained via a contract clause,” Justice Greenwald wrote. And in fact, he went went even further, speculating that the public itself would be irreparable harmed if the injunction were to deprive it of Mary Trump’s observations about the president.

The real possibility here is for S&S and the public to be irreparably harmed if the Book was enjoined.

What about the public right to know? The Trumps were local in 2001. The leader of the Trump family in 2020 is global. Yet, this action was brought by ROBERT L. TRUMP and no one else. It is he who had to substantiate a claim for irreparable harm, no other Trump family member is specified. Plaintiff has not justified his claim for irreparable harm.

The Appellate Court took a dim view of Robert Trump’s claims against S&S, which was obviously not a part to the litigation over Fred Trump Sr.’s will. And Justice Greenwald agreed, holding that “One cannot be held to breach a contract or specifically perform a contract that one is not a party to.”

Worse still for Robert Trump’s case was the court’s suggestion that the settlement agreement may not cover Mary Trump’s book at all. Donald Trump AHEM Robert Trump’s lawyer Charles Harder has promised to “pursue this case to the very end” and “seek the maximum remedies available by law for the enormous damages caused by Mary Trump’s breach of contract and Simon & Schuster’s intentional interference with that contract.” But unlike the public, Justice Greenwald has seen the sealed settlement agreement, and he doesn’t seem to think it applies to observations about the family.

Simply put. plaintiff claims the goal of the agreement was to prevent confidential information from being released. Was that so? Wasn’t the Agreement a stipulation to settle multiple lawsuits? Make payments to several parties? There was no specific consideration given to anyone for confidentiality. The consideration was provided to settle disputes. The parties agreed to keep the settlement under seal. That’s it.

And even if the agreement did apply to personal information about the family, Justice Greenwald seems to suggest that the the public interest in Donald Trump may well override the obligations of a twenty-year-old contract, noting that “Trump family relationships may be more interesting now in 2020 with a Presidential election on the horizon.”

So, all in all, not a great day for the president and his brother. But Mary Trump’s book is currently the number one book on Amazon’s bestseller list, so at least someone in the family is winning bigly.

Trump v. Trump [Decision and Order, via Gibson, Dunn & Crutcher]

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Elizabeth Dye (@5DollarFeminist) lives in Baltimore where she writes about law and politics.

The last few years have all been good years anyway, so now we will be at or above last year, and that’s good news for legal education. We’re busier at this time of year than we have ever been in our history. We’ve seen a good surge both for this fall, and already for the next fall.

— Kellye Testy, president of the Law School Admission Council, commenting on the surge in law school applications that have been submitted over the past six weeks of the pandemic. More than 61,500 people have now applied to attend ABA-accredited law schools for the upcoming academic year. The online LSAT-Flex and a challenging job market likely impacted the rush of applications.

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Staci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Twitter or connect with her on LinkedIn.

Chief Justice Roberts was hospitalized for a head wound and managed to keep the news from the public for weeks. But it didn’t seem to slow him down on the final day of the Supreme Court season, authoring two opinions punting on Trump’s subpoenas, kicking things back for a nice, long, litigious delay. The rule of law is upheld theoretically if not practically and that’s just where Roberts likes it. Also, we catch up on the looming in-person bar exams, which have crossed into farce refusing public health warnings while issuing dress code modifications.

Judge Alvin Hellerstein ditched the preliminary approval of a proposed settlement in the Harvey Weinstein matter today, deciding that a $46.8 million compensation fund with funds set aside to help Weinstein fight off any accuser who doesn’t join the settlement didn’t make a whole lot of sense.

And Judge Hellerstein didn’t pull punches when describing his feelings about the structure of the deal:

“The idea that Harvey Weinstein can get a defense fund ahead of the claimants is obnoxious,” he said. “The idea you can regulate the claims of people not in the settlement — I can’t subscribe to that.”

The whole effort seemed flawed from jump in a matter where decades of abuse appears to have taken place. The agreement seemed like a rush job to secure releases for the Board members. Hellerstein refused to let this become a class action where a special master would assign value to the claims of women with wildly disparate stories.

The result was welcomed by lawyers representing individual women against Weinstein. From The Hollywood Reporter:

Douglas H. Wigdor and Kevin Mintzer, who represent several women who accuse Weinstein of abuse and harassment, were the first attorneys to issue a statement following Hellerstein’s decision. “We have been saying for over a year and a half that the settlement terms and conditions were unfair and should never be imposed on sexual assault survivors,” it reads. “We were surprised that class counsel and the New York Attorney General did not recognize this fact but are pleased that Judge Hellerstein swiftly rejected the one-sided proposal. On behalf of our clients, we look forward to pursuing justice against Harvey Weinstein and his many enablers.”

This opinion has ripple effects in other litigations. The NYAG gender discrimination action was going to be resolved as part of this settlement — that presumably will be back on. Insurance litigation over Weinstein’s company policies will also see new life. From Variety:

“There’s been numerous discussions in various circles about what to do next,” said Jeffrey Schulman, who represents Weinstein in the insurance case. “This remains quite fluid… I think we’re all going to need to resharpen our pencils and figure out what to do next.”

Judge Rejects Harvey Weinstein Settlement: ‘I Can’t Subscribe to That’ [Variety]
Judge Rejects Proposed Weinstein Class Action Settlement [Hollywood Reporter]

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Joe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.

If you though Joseph Otting spent his entire two-and-a-half years as U.S. Comptroller of the Currency taking the “community” (read: uppity people of color who think they ought to have a say in things in their neighborhoods) out of the Community Reinvestment Act, think again: He also spent it making sure no bank would ever have to suffer the pain and embarrassment of public disclosure of racist lending practices, let alone a fine.

Since President Donald Trump took office, the OCC has quietly shelved at least six investigations of discrimination and redlining, according to internal agency documents and eight people familiar with the cases…. In each case, despite staff recommendations that fines or other penalties be imposed, the OCC took no public action and closed the investigations quietly….

The OCC has historically prioritized the well-being of banks over bank customers, said current and former examiners, but the balance has shifted even further under the Trump administration.