This Day in Legal History: 22nd Amendment to the US Constitution 

On February 27, 1951, the 22nd Amendment to the U.S. Constitution was ratified, formally limiting the president to two terms in office. This amendment was a direct response to Franklin D. Roosevelt’s unprecedented four-term presidency, which spanned the Great Depression and World War II. Before Roosevelt, no president had served more than two terms, following the precedent set by George Washington. However, there was no constitutional restriction preventing a president from seeking additional terms.  

Roosevelt’s long tenure raised concerns about excessive executive power and the potential for an elected leader to hold office indefinitely. After his death in 1945, Congress moved to ensure that no future president could serve more than two terms. The amendment was passed by Congress in 1947 and ratified by the required number of states in 1951. It states that no person may be elected president more than twice or serve more than ten years in cases where a vice president assumes the role due to a predecessor’s death or resignation.  

Since its ratification, the 22nd Amendment has shaped U.S. presidential politics, preventing any leader from holding office for more than eight years. Some have argued that it protects democracy by preventing the concentration of power, while others believe it limits voter choice. Despite occasional calls for repeal, the amendment remains in effect, reinforcing the principle of regular transitions of power.

A federal court is scrutinizing the role of Elon Musk and the Department of Government Efficiency (DGE) in cutting U.S. government spending, raising questions about transparency and legality. At a hearing, Judge Colleen Kollar-Kotelly repeatedly pressed a Justice Department lawyer on Musk’s authority but received vague answers. Multiple lawsuits argue that DGE, which operates with secrecy, wields power beyond what is constitutionally allowed for agencies that require congressional approval or Senate confirmation.

Despite Musk’s public claims of leadership, the White House insists he is not an official DGE employee. Courts have been divided on the issue, with some judges refusing to block DGE’s actions due to a lack of clear evidence of immediate harm. However, Judge Jeannette Vargas temporarily restricted DGE’s access to Treasury Department systems over concerns about unauthorized data access.

The Trump administration’s shifting characterizations of DGE—sometimes calling it an agency, other times not—have further complicated legal battles. One judge described it as a “Goldilocks entity,” molded to fit legal needs. While some courts are hesitant to act without stronger evidence, ongoing lawsuits seek to bring DGE’s operations into clearer legal scrutiny.

'Where is Mr. Musk in all of this?' Judges question secrecy of DOGE's activities | Reuters

The U.S. Supreme Court heard arguments in a case brought by Marlean Ames, a heterosexual woman who claims she was denied a promotion and later demoted due to her sexual orientation. Ames alleges that in 2019, her gay supervisor promoted a less qualified gay woman and replaced her with a gay man. The case challenges a legal standard that requires plaintiffs from majority groups—such as white or heterosexual individuals—to provide extra evidence of workplace discrimination under Title VII of the Civil Rights Act of 1964.  

Ames’ lawyer argued that Title VII protects all individuals from discrimination, not just historically marginalized groups. The state of Ohio, her former employer, countered that Ames had not proven bias, noting that decision-makers may not have even known her sexual orientation. Some justices expressed concern that ruling for Ames could flood the courts with discrimination claims. Others questioned whether the heightened standard for majority-group plaintiffs improperly excludes valid cases.  

The case comes amid increasing lawsuits from white and straight workers alleging "reverse discrimination," as well as political pushback against diversity and inclusion programs. A ruling in Ames' favor could make it easier for majority-group plaintiffs to challenge employment decisions, potentially reshaping workplace discrimination law.

US Supreme Court hears straight woman's 'reverse' discrimination case | Reuters

President Donald Trump’s decision to designate Latin American drug cartels as terrorist organizations introduces new legal risks for U.S. businesses and migrants. The February 19 designation applies to groups like the Sinaloa Cartel and Tren de Aragua, allowing the Justice Department to prosecute cartel leaders for terrorism. However, legal experts warn that U.S. and foreign companies operating in cartel-controlled regions could also face prosecution if they make payments to these organizations, which could be considered material support for terrorism.  

This concern is not hypothetical—similar cases have occurred before. In 2022, French cement company Lafarge pleaded guilty and paid $778 million in fines for making payments to terrorist-designated groups in Syria to keep its operations running. Given Mexico’s status as the U.S.’s largest trading partner, businesses must reassess their dealings in high-risk areas.  

Beyond corporate liability, migrants who pay cartels for border crossings or send money to cartel-influenced regions could also be prosecuted. Additionally, drug-related offenses linked to designated cartels could carry harsher penalties, including a 20-year mandatory minimum sentence for narcoterrorism—double the usual drug trafficking penalty. The designation thus has sweeping implications for both corporate compliance and immigration enforcement.

Trump's terrorist label for cartels raises prosecution risks for companies | Reuters

In a piece I wrote for Forbes, I review the latest misguided foray into tech policy from the Trump administration. The White House has issued a memorandum condemning foreign digital services taxes (DSTs), arguing that they unfairly target American tech companies. The memo warns that unless these taxes are repealed, retaliatory tariffs will be imposed. However, this stance appears to protect Big Tech rather than uphold economic fairness, as these taxes exist to counter profit-shifting tactics that allow tech giants to avoid local taxation. The U.S. frequently applies its own extraterritorial laws, such as the Foreign Corrupt Practices Act and the CLOUD Act, yet objects when other countries enforce similar policies on American firms.

The memorandum frames the issue as an attack on U.S. businesses, but every country has the right to tax corporations operating within its borders. DSTs primarily ensure that companies pay taxes where they generate revenue rather than in low-tax havens. The U.S. position ignores the broader global tax landscape and the rationale behind these policies, opting instead to shield Silicon Valley from accountability.

If the U.S. enacts tariffs in response, it could trigger a trade war that harms American farmers, manufacturers, and consumers while preserving Big Tech’s profits. The memorandum’s real purpose seems to be maintaining an uneven playing field where American firms operate abroad without the same obligations as local businesses.

Big Tech Protection: U.S. Picks A Trade Fight To Defend Tech Firms

This Day in Legal History: Woodrow Wilson Signs Grand Canyon National Park Act

On February 26, 1919, President Woodrow Wilson signed the Grand Canyon National Park Act, officially designating the Grand Canyon as a national park. This landmark decision aimed to preserve the canyon’s breathtaking landscapes, unique geological formations, and rich biodiversity for future generations. Prior to its national park status, the Grand Canyon had been a federally protected reserve, but conservationists pushed for stronger protections. The designation marked a significant victory for the early environmental movement, ensuring that the canyon would be safeguarded from mining, logging, and other commercial exploitation.

The Grand Canyon, carved over millions of years by the Colorado River, is one of the world’s most iconic natural wonders. Its layered rock formations offer a window into Earth’s geological history, dating back nearly two billion years. Beyond its scientific significance, the canyon holds deep cultural importance for Indigenous tribes, including the Havasupai, Hopi, and Navajo, who have lived in and around the area for centuries. The national park designation helped protect these cultural and historical sites, though it also led to conflicts over land rights.

The creation of Grand Canyon National Park was part of a broader movement in the early 20th century to protect America’s natural landscapes. This movement, championed by figures like President Theodore Roosevelt, laid the foundation for the modern National Park System. Today, Grand Canyon National Park attracts millions of visitors annually, serving as a testament to the enduring importance of conservation efforts.

President Donald Trump has ordered the suspension of security clearances and government contracts for the law firm Covington & Burling due to its legal assistance to special counsel Jack Smith. In a memo signed in the Oval Office, Trump accused law firms of using pro bono work to obstruct the government. The directive specifically targets Peter Koski, a Covington partner, and calls for a review of the firm’s federal contracts.  

Smith recently disclosed that Covington provided him with $140,000 in pro bono legal services as he faces government scrutiny. Covington stated that it represents Smith in a personal capacity and will continue to defend his interests. Legal experts note that security clearances are crucial for private attorneys handling national security matters.  

Trump, who has been indicted in two cases led by Smith, referred to the order as the "Deranged Jack Smith signing" and mocked the prosecutor after signing the memo.

Trump Targets Covington Security, Contracts Over Work With Smith

The U.S. Supreme Court has ordered a new trial for Oklahoma death row inmate Richard Glossip, ruling that prosecutorial misconduct violated his constitutional rights. In a rare win for a capital defendant, two conservative justices joined the court’s three liberals to overturn Glossip’s conviction. Oklahoma’s Republican attorney general had also acknowledged errors in the case, including prosecutors withholding evidence and failing to correct false testimony.  

Glossip was convicted for allegedly orchestrating the 1997 murder of his boss, Barry Van Treese, though the actual killer, Justin Sneed, was the state’s key witness. Newly disclosed documents revealed that Sneed had considered recanting, was coached by prosecutors, and lied about his mental health history. Writing for the majority, Justice Sonia Sotomayor stated that correcting Sneed’s false testimony would have significantly damaged his credibility.  

Chief Justice John Roberts and Justice Brett Kavanaugh joined the liberal justices in the ruling, while Justice Amy Coney Barrett partially agreed but wanted the state court to decide if a new trial was warranted. Justices Clarence Thomas and Samuel Alito dissented, arguing the case should have been left to Oklahoma courts. Glossip’s execution had been blocked nine times before, and his attorney emphasized the ruling as a crucial step toward justice. It remains uncertain whether Oklahoma will retry the case or pursue the death penalty again.

Justices Order New Trial in Rare Win for Death Row Inmate (2)

A U.S. judge has extended an order blocking President Donald Trump’s administration from enforcing a sweeping freeze on federal funding, citing concerns that the policy could be reinstated. U.S. District Judge Loren AliKhan ruled that despite the administration’s withdrawal of an initial memo pausing grants and loans, statements from White House officials suggested the freeze was still in effect.  

The funding pause, announced in January, aimed to review federal financial assistance programs for compliance with Trump’s executive orders, including those ending diversity initiatives and pausing climate-related projects. Nonprofits and small business groups sued, arguing the freeze would cause widespread harm.  

AliKhan criticized the policy as legally baseless and impractical, saying it would either halt up to $3 trillion in spending overnight or force agencies to review all grants within a day. She called the administration’s actions “irrational” and warned of a potential national crisis. The ruling prevents the government from reimposing the freeze under a different name, marking a legal setback for Trump’s efforts to reshape federal spending priorities.

Trump blocked from imposing sweeping federal funding freeze | Reuters

In my weekly Bloomberg Tax column, I examine Washington State’s new data broker tax, a well-intended but ultimately insufficient approach to curbing exploitative data practices. The legislation treats consumer data like a natural resource, imposing a severance tax on its collection. However, this framework fails to address the real issue: long-term data retention and reuse.  

A more effective solution would be a retention tax, which would discourage firms from hoarding personal data indefinitely. Under the current bill, companies pay a tiered tax based on the number of residents whose data they collect. While this sounds like a fair approach, it risks consolidating data power in the hands of large platforms that can absorb the tax and continue selling consumer information without restriction. Worse, the tax may encourage firms to store data longer, giving it an artificial market value that promotes hoarding rather than limiting collection.  

Unlike oil or minerals, personal data is not depleted upon use—it can be endlessly repackaged and resold. A retention tax would align economic incentives with privacy concerns, forcing firms to justify prolonged data storage and pay accordingly. Without it, Washington’s proposal does little to curb long-term privacy risks and may ultimately entrench the very data exploitation it seeks to prevent.

Washington’s Data Broker Tax Is a Promising but Inadequate Move

This Day in Legal History: Milošević Stands Trial

On February 12, 2002, the trial of former Yugoslav President Slobodan Milošević began at the International Criminal Tribunal for the Former Yugoslavia (ICTY) in The Hague. It was the first time a former head of state was tried for war crimes by an international tribunal. Milošević faced 66 charges, including genocide, crimes against humanity, and violations of the laws of war, stemming from conflicts in Bosnia, Croatia, and Kosovo during the 1990s. Prosecutors accused him of orchestrating ethnic cleansing campaigns that led to mass killings, deportations, and atrocities, particularly against Bosniaks, Croats, and Kosovar Albanians. 

Defiantly refusing to recognize the tribunal’s legitimacy, Milošević insisted on representing himself in court. The trial, one of the most complex in modern history, lasted over four years, involving thousands of documents and hundreds of witnesses. His defense centered on denying personal responsibility, blaming NATO, and portraying himself as a protector of Serbs. However, the proceedings never reached a conclusion—Milošević died of a heart attack in his prison cell on March 11, 2006, before a verdict could be issued. His death frustrated victims who sought justice and left legal scholars debating whether the trial had succeeded in advancing international accountability. The case, despite its abrupt end, set a precedent for prosecuting heads of state for war crimes and influenced later trials, including those of Charles Taylor and Omar al-Bashir.

The U.S. Justice Department under President Donald Trump has significantly reduced its anti-corruption enforcement, halting prosecutions and weakening key laws. Officials have pulled back on enforcing the Foreign Corrupt Practices Act, which bans corporate bribery abroad, arguing that American companies should not be penalized for standard international business practices. Prosecutors were also ordered to drop a criminal case against New York Mayor Eric Adams, a Democrat with ties to Trump, citing his re-election campaign and other priorities. 

In addition, the department has disbanded efforts to sanction Russian oligarchs and dismissed veteran prosecutors who handled cases against Trump. Attorney General Pam Bondi framed these actions as an attempt to root out political bias in the justice system. Ethics officials and independent government watchdogs have been fired or reassigned, including inspectors general and whistleblower protection leaders. Critics, including legal scholars and former officials, warn that these moves align law enforcement with Trump’s political agenda and weaken anti-corruption safeguards established after Watergate. Republican Senator Chuck Grassley has expressed concern and vowed to investigate, while some Democrats and former prosecutors see the changes as an effort to dismantle legal mechanisms designed to hold public officials accountable.

Trump's Justice Department hits the brakes on anti-corruption enforcement | Reuters

Gail Slater, President Donald Trump's nominee to lead the Justice Department's antitrust division, is set to face tough questioning from the Senate during her confirmation hearing. As a former economic adviser to Vice President JD Vance and a veteran antitrust attorney, Slater would oversee major cases against tech giants like Google and Apple if confirmed. Senate Democrats are expected to press her on maintaining enforcement and independence, especially amid concerns that the administration is undermining the DOJ’s traditional nonpartisanship. Senator Cory Booker has raised alarms about potential staffing cuts at the DOJ’s antitrust division, warning they could weaken protections for consumers. Other Democrats, including Senators Peter Welch and Amy Klobuchar, plan to question Slater on her commitment to continuing efforts to lower prices in healthcare, housing, and agriculture. Meanwhile, Republican Senator Mike Lee has voiced support for Slater, expecting her to carry on Trump’s push against Big Tech monopolies. Slater’s background includes roles at Fox Corp, Roku, and a now-defunct tech industry lobbying group, raising further concerns about her potential ties to the companies she would regulate. Her confirmation will be a key test of the administration’s approach to antitrust enforcement and corporate consolidation.

Trump's DOJ antitrust nominee to be grilled on enforcement | Reuters

Tom Goldstein, co-founder of SCOTUSblog, has asked to be released from jail after prosecutors accused him of violating his release conditions by secretly moving millions in cryptocurrency. Goldstein was arrested after a Maryland federal court found probable cause that he had misled officials about his finances. The government claims he used undisclosed crypto wallets for large transactions while arguing in court that he needed his home's equity to fund his defense.  

Goldstein’s attorneys argue the government is mistaken, stating that he does not own the wallets in question. They claim text messages cited by prosecutors actually show Goldstein directing funds to a third party to settle a debt, not controlling the wallets himself. Goldstein faces charges of tax evasion, aiding false tax returns, failing to pay taxes, and lying on a loan application, with prosecutors alleging he concealed gambling income and misused his firm’s funds. He has pleaded not guilty and maintains he will be exonerated at trial. His legal team, including lawyers from Munger Tolles & Olson LLP, has filed an emergency motion for his release, and he has also been permitted to represent himself in court.

Tom Goldstein Seeks Release, Denies Control Over Crypto Wallets

New Jersey’s proposed bill, S1756, is a smart adjustment to the state’s senior property tax relief system, allowing older homeowners to downsize without losing their eligibility for tax benefits. Right now, seniors who move must restart the tax reimbursement process, which can mean higher property taxes and a financial disincentive to selling. By making these benefits portable, the bill removes an unnecessary barrier to housing mobility, freeing up larger homes for younger families without adding excessive costs to the state budget.  

This approach is a model for other states struggling with housing shortages and inefficient tax incentives, but it’s not perfect. The bill’s $500,000 income cap is too high, providing relief to seniors who may not need it. A more reasonable threshold—like 500% of the federal poverty level—would better target those on fixed incomes. Additionally, a cap on home values would ensure benefits don’t go to wealthy homeowners with expensive properties but low taxable income. A reasonable solution would be to apply tax relief only to the first 150% of a state’s median home price, preventing subsidies from disproportionately benefiting the wealthy.  

Ultimately, this bill corrects a major flaw in New Jersey’s tax policy without overhauling the system or eliminating relief for seniors who need it. But states following this example should refine their programs to ensure they help those who truly need assistance, rather than offering broad-based entitlements that distort housing markets.

NJ Senior Property Tax Relief Needs Nuance to Be Most Effective

This Day in Legal History: Bill of Rights Sent to US States for Ratification

On September 25, 1789, the United States Congress sent twelve proposed constitutional amendments to the state legislatures for ratification. These amendments were designed to safeguard individual liberties and limit the power of the federal government, addressing concerns raised during the ratification of the Constitution. By 1791, ten of the amendments were ratified, becoming the Bill of Rights. The Bill of Rights includes fundamental protections, such as freedom of speech, religion, and the press, the right to a fair trial, and protection against unreasonable searches and seizures.

Notably, two of the twelve proposed amendments were not immediately ratified. One related to Congressional representation and never received the necessary support from the states. The other, concerning Congressional pay, lay dormant for over two centuries before finally being ratified in 1992, becoming the 27th Amendment. This long-delayed ratification demonstrated the lasting nature of the constitutional amendment process. The Bill of Rights has since served as a cornerstone of American democracy, influencing both U.S. law and constitutional frameworks worldwide.

A Houston bankruptcy court has approved the sale of assets from Alex Jones’ Infowars media platform, marking a significant step in liquidating Jones’ estate. U.S. Bankruptcy Judge Christopher M. Lopez authorized Chapter 7 trustee Christopher R. Murray to employ a sales broker and begin auctioning the assets of Free Speech Systems LLC, Infowars' parent company. 

This liquidation aims to help Jones pay $1.5 billion in defamation judgments from lawsuits related to his false claims about the 2012 Sandy Hook shooting. The auction will primarily focus on Infowars’ intellectual property, including domain names, trademarks, and social media accounts, with bidding set to end on Nov. 8 and an auction on Nov. 13. Murray may later include Jones’ personal intellectual property in the sale. The bankruptcy court previously converted Jones' personal Chapter 11 case into a Chapter 7 liquidation, enabling the victims' families to pursue their claims. Disputes remain over how funds from the sale will be distributed to creditors.

Alex Jones’ Infowars IP Heads to Auction After Judge Approval

A new medical report by neurosurgeon Aaron Filler has concluded that 97-year-old Federal Circuit Judge Pauline Newman is "fully capable" of performing her judicial duties. Released by Newman’s lawyers, the report follows her suspension by the court’s Judicial Council after she refused a neurological exam with an independent doctor. 

Filler, a physician and attorney, used advanced brain scans and cited objective data to support his findings, dismissing concerns over subjective interpretation. Filler also compared Newman’s current verbal and analytical abilities with his prior interactions with her during legal cases in 2019 and 2022. This report counters previous exams that raised questions about the independence of Newman's physicians, as her colleagues suggested potential conflicts of interest. Newman’s legal team has consistently defended her health and capacity, and this latest report is a key piece in their efforts to overturn her suspension. The Judicial Committee has not yet commented on the new findings.

Judge Newman Fully Capable to Serve, New Physician Report Says

A lawsuit filed in the U.S. District Court for the Central District of California claims that law firm Dentons assisted vape distributor Next Level Holdings in sabotaging vape manufacturer Avid Holdings. The complaint alleges that Dentons, through its offices in Salt Lake City and Shanghai, helped orchestrate a scheme to take control of Avid's assets, cut out its founder, and drain its resources. As part of this plan, Avid claims that Dentons hacked into the laptop of its founder, citing Google Drive logs linking the firm's IP address to the breach. Next Level allegedly used the stolen information to mislead judges in prior legal disputes with Avid. Dentons has not yet commented on the lawsuit. Avid's attorney, Colin Hagan, declined to provide further remarks. The lawsuit follows Dentons’ recent severing of ties with its Chinese affiliate, Dacheng Law Offices.

Dentons Assisted Laptop Hack, Vape Manufacturer Lawsuit Claims

Caroline Ellison, former CEO of Alameda Research and ex-girlfriend of Sam Bankman-Fried, was sentenced to two years in prison for her involvement in the $8 billion fraud linked to FTX's collapse. 

Despite her cooperation with prosecutors, U.S. District Judge Lewis Kaplan emphasized that remorse and cooperation shouldn't serve as a "get out of jail free card" in such a serious case. Ellison had pleaded guilty to seven counts of fraud and conspiracy, which could have carried a sentence of up to 110 years. Her testimony was pivotal in securing Bankman-Fried's conviction, as she revealed that he directed her to misappropriate customer funds. 

While the prosecution acknowledged her critical role in convicting Bankman-Fried, who is serving 25 years, the judge still deemed her "gravely culpable" in the fraud. Ellison expressed deep regret for her actions and will begin serving her sentence in November. Other FTX executives who cooperated, Nishad Singh and Gary Wang, are scheduled for sentencing later in 2024.

Bankman-Fried's ex-girlfriend Ellison gets two-year sentence over FTX fraud | Reuters

A federal judge has ruled that a New York City law requiring food delivery companies to share customer data with restaurants is unconstitutional. U.S. District Judge Analisa Torres sided with DoorDash, Grubhub, and Uber Eats, determining that the law violated the First Amendment by improperly regulating commercial speech. 

The law, enacted in 2021 to support restaurants recovering from the pandemic, required delivery services to share customer names, addresses, emails, phone numbers, and order details with restaurants. The companies argued that this violated customer privacy and data security and hurt their business by allowing restaurants to use the data for marketing purposes. The judge found the city had less invasive ways to help restaurants, such as letting customers opt to share their data or offering incentives. While DoorDash welcomed the ruling, restaurant industry representatives criticized it, arguing it harms small businesses, and urged the city to appeal.

Judge declares NYC law on sharing food delivery customers' data unconstitutional | Reuters

This Day in Legal History: Judiciary Act of 1789

On September 24, 1789, Congress passed the Judiciary Act of 1789, laying the foundation for the federal judiciary as we know it today. This landmark legislation established a three-tiered court system, consisting of district courts, circuit courts, and the U.S. Supreme Court at its pinnacle. The Act also created the position of Attorney General to represent the federal government in legal matters. One of its most critical provisions was the authorization of six justices for the Supreme Court, marking the Court's formal establishment.

The Judiciary Act granted the Supreme Court the authority to hear appeals from state courts, ensuring the supremacy of federal law. Additionally, it gave lower federal courts jurisdiction over specific types of cases, including those involving the Constitution, federal laws, and treaties. Perhaps most famously, the Act's Section 25 allowed the Supreme Court to review decisions of state courts when federal issues were at stake, further centralizing federal judicial power.

This Act played a pivotal role in shaping the balance of powers between the federal government and the states. It ensured that federal laws would have a uniform interpretation across the country. While it has been amended many times, the Judiciary Act of 1789 remains a cornerstone of U.S. legal history, establishing the basic framework for the judicial branch.

In 2021, Eric Adams promised to reform New York City's flawed property tax system, which many blame for exacerbating housing inequality. The current system results in tax disparities, with upscale Manhattan properties often taxed at lower rates than homes in the outer boroughs. Despite Adams’ campaign pledges, his administration has yet to introduce significant reforms. Instead, it has fought a 2017 lawsuit filed by Tax Equity Now New York, which argues the system unfairly burdens minority communities and renters. 

The lawsuit was revived in 2023, and the court ruled that the city has the authority to address these tax inequalities. Adams, however, faces a political dilemma. Any changes would likely increase taxes for many homeowners, threatening key voting blocs. Property taxes are a critical revenue source, generating $32.7 billion in the last fiscal year. City officials prefer state-led reforms, but without a strong push from Adams, the state is unlikely to act. The ongoing lawsuit may force the city to respond more directly. The next court hearing is set for October 2024, where the city will be required to submit documents explaining its tax assessments.

Eric Adams Fights Legal Challenge to NYC’s ‘Unfair’ Property Tax

And on the subject of NYC and the need to focus on state-based reforms, in my column this week, I discuss New York City’s retreat from a proposed partnership tax, emphasizing how it reveals the limitations local governments face in tax policy. 

Municipalities like New York operate under state control, making meaningful tax reform at the city level nearly impossible. Even when a city attempts to innovate, its tax policies must align with state rules, or risk legal and administrative challenges. In this case, New York City’s plan to depart from the state’s method of taxing partnership income posed significant compliance difficulties and potential capital flight. 

Ultimately, the city reverted to the state's tax model, acknowledging the practical benefits of consistency. This outcome reflects broader issues cities face: compliance costs, capital mobility, and state-imposed restrictions all limit local tax initiatives. In states like Wisconsin and Colorado, further limitations on local taxation exist through caps or voter approval requirements. The core message is clear: real tax reform must happen at the state level, as municipalities lack the autonomy to make meaningful changes on their own.

NYC Partnership Tax Retreat Shows Change Must Come at State Level

The U.S. Court of Appeals for the Tenth Circuit heard arguments in Garfield County v. Biden, a case challenging President Joe Biden’s authority to restore the boundaries of the Grand Staircase-Escalante and Bears Ears national monuments. The plaintiffs, including Utah and Garfield County, argue that the monuments, covering over 3 million acres, violate the Antiquities Act by exceeding the “smallest area compatible” for preserving historical sites. The monuments, initially designated by Presidents Clinton and Obama, were reduced in size by President Trump before Biden reinstated them in 2021.

The central question before the court is whether presidential actions under the Antiquities Act can be reviewed by courts. A lower court had dismissed the case, ruling that Biden’s actions were not subject to judicial review. The Tenth Circuit must now decide if courts can assess the legality of these presidential designations.

The case could set a precedent on whether future presidents can use the Antiquities Act to protect vast expanses of land, affecting federal land management and resource development. The lawsuit may ultimately reach the U.S. Supreme Court, where Chief Justice John Roberts has previously expressed interest in revisiting the scope of the Antiquities Act.

Biden’s National Monuments Power Set for Tenth Circuit Scrutiny

Caroline Ellison, former CEO of Alameda Research and ex-girlfriend of FTX founder Sam Bankman-Fried, is set to be sentenced for her role in the $8 billion fraud linked to FTX's collapse. Ellison, who has pleaded guilty to seven counts of fraud and conspiracy, cooperated with prosecutors in Bankman-Fried’s trial, where he was convicted and sentenced to 25 years in prison. Ellison’s sentencing is expected to be more lenient, as her cooperation was deemed "extraordinary" by prosecutors, who highlighted her remorse.

Ellison’s cooperation involved meeting with prosecutors around 20 times to assist in building the case against Bankman-Fried, whom she testified had directed her to misuse FTX customer funds to cover losses at Alameda Research. Her testimony revealed she felt relief after the fraud was exposed, lifting a burden of lies. While Ellison could face up to 110 years in prison, her lawyers have argued for no jail time due to her extensive assistance. Two other FTX executives, Nishad Singh and Gary Wang, are also awaiting sentencing later this year.

Bankman-Fried's ex-girlfriend Ellison to be sentenced over crypto fraud | Reuters

Taft Stettinius & Hollister, a U.S. law firm with 925 attorneys, announced its merger with Denver-based Sherman & Howard, which has 125 lawyers across the Mountain West region. The merger, effective January 1, 2025, is part of a broader trend of law firm consolidations in 2024. This merger will bring the combined firms' projected revenue to $810 million. Taft has been expanding over the past 16 years, targeting high-growth markets like Denver and Phoenix. Sherman & Howard, facing challenges competing with larger firms, sought the merger to gain broader expertise and ensure long-term business viability. Several other law firm mergers have been announced in September, signaling increased consolidation in the legal industry.

US law firm merger streak continues with Taft tie-up | Reuters

This Day in Legal History: McKinley Assassin Stands Trial

On September 23, 1901, the trial of Leon Czolgosz began for the assassination of President William McKinley. Czolgosz, an anarchist, had shot McKinley on September 6 at the Pan-American Exposition in Buffalo, New York. Despite efforts to save him, McKinley died eight days later from gangrene caused by the bullet wounds. The trial was swift, lasting only eight hours over two days, as Czolgosz had already confessed to the crime. His defense team, appointed by the court, argued that Czolgosz was insane, but he refused to cooperate with his lawyers or plead insanity.

The prosecution presented overwhelming evidence, including eyewitness testimonies and the fact that Czolgosz shot McKinley at point-blank range in a public setting. The jury deliberated for less than 30 minutes before finding him guilty of first-degree murder. Czolgosz was sentenced to death and was executed by electric chair on October 29, 1901. His trial and execution sparked discussions about the influence of anarchism in the U.S. and led to increased efforts to suppress political radicalism in the early 20th century.

From a presidential assassin from history to a would-be modern day presidential assassin, Ryan W. Routh, a 58-year-old suspect accused of attempting to assassinate former U.S. President Donald Trump, is set to appear in court on Monday. Routh allegedly hid near Trump's Florida golf course on September 15, pointing a rifle through the tree line while Trump played golf. Although he did not fire a shot and lacked a direct line of sight to Trump, who was several hundred yards away, Routh was charged with two gun-related crimes: possession of a firearm as a convicted felon and possession of a firearm with an obliterated serial number. Additional charges may follow.

A Secret Service agent spotted the weapon and fired in Routh’s direction, causing him to flee. He was later arrested on a nearby highway. Prosecutors are expected to argue for his detention, citing public safety concerns. The FBI is investigating the incident as an apparent assassination attempt ahead of the upcoming November presidential election. Authorities have not yet disclosed a motive, though Routh, a convicted felon with a history of supporting Ukraine, previously made statements in a self-published book suggesting that Trump could be a target for assassination. Cellphone data shows Routh may have been in the area for 12 hours before being apprehended.

Trump attempted assassination suspect Ryan Routh to appear in court | Reuters

An appeals court panel recently reviewed procedural issues in Stephen Thaler’s attempt to copyright an AI-generated image, raising concerns that the court may avoid larger questions about AI and copyright law. Thaler argued that his AI, the "Creativity Machine," autonomously created the work in question, but the U.S. Copyright Office rejected his application, and a lower court dismissed his case. The court found that Thaler had waived the argument that he was the author by continuing to claim the machine was the creator.

During the appeal, the judges suggested that Thaler’s argument may be barred since his appellate brief did not challenge the lower court's finding that he had waived his authorship claim. Legal experts fear this focus on procedural flaws could prevent the court from addressing significant issues about the role of human creativity in AI-generated works.

If the court rules that AI-created works cannot be copyrighted, it could have far-reaching effects, leaving AI-generated content like images and text unprotected and placing them in the public domain. The court’s decision may not close the door on AI-assisted works, but it raises questions about where the line is drawn between human and machine-generated creativity. The case highlights ongoing uncertainties about how copyright law will adapt to AI’s growing role in creative industries. 

The key legal issue here is the court's focus on procedural waiver, which may limit the scope of the ruling and leave broader questions about AI and copyright unresolved.

AI Art Appeal’s Procedural Flaws Put Broader Ruling in Doubt

The U.S. Federal Trade Commission (FTC) has sued the three largest pharmacy benefit managers (PBMs)—UnitedHealth's Optum, CVS Health's Caremark, and Cigna's Express Scripts—accusing them of inflating insulin prices to gain larger rebates from pharmaceutical companies. The FTC claims that these PBMs steered patients towards higher-priced insulin by excluding cheaper alternatives from coverage, harming those with coinsurance or deductibles who couldn't benefit from the rebate. Together, these three companies control 80% of U.S. prescriptions.

The PBMs denied the allegations, arguing that their practices have lowered insulin costs for businesses and patients. The case represents a significant step in the Biden administration's push to lower drug prices, particularly insulin, which has seen soaring costs over the past decade. FTC Deputy Director Rahul Rao labeled the PBMs as "medication gatekeepers," accusing them of profiting at the expense of diabetic patients.

The lawsuit did not target insulin manufacturers like Eli Lilly, Sanofi, and Novo Nordisk but criticized their role in the system. The drugmakers supported reforms to lower patient costs and highlighted their programs to cap insulin prices at $35. The FTC’s suit aims to address broader concerns about the U.S. healthcare system's structure and the rising cost of life-saving medications like insulin.

US FTC sues drug 'gatekeepers' over high insulin prices

FTC Sues CVS, Cigna, UnitedHealth Over Rising Insulin Costs (1)

Jackson Walker LLP is facing disciplinary action after a federal judge found the Texas law firm breached its ethical duties by failing to disclose a secret relationship between one of its attorneys, Elizabeth Freeman, and former Houston bankruptcy judge David R. Jones. Judge Marvin Isgur issued a scathing letter on Friday, criticizing the firm for concealing the affair, which he said violated professional responsibilities and "defiled the very temple of justice." Isgur recused himself from cases involving the firm following this recommendation.

The relationship came to light after Freeman, a former partner at Jackson Walker, continued to see Jones despite telling the firm in 2021 that the relationship had ended. Isgur accused the firm of knowingly withholding this information from clients and the court, calling it an "inconceivable" ethical breach. The U.S. Trustee is now attempting to recover up to $18 million in fees earned by Jackson Walker in cases overseen by Jones while he was dating Freeman.

The disciplinary case has been referred to Judge Lee H. Rosenthal, and Jackson Walker faces potential penalties, including disbarment or suspension. The firm denies violating ethical rules and claims Freeman misled them. However, Isgur emphasized that the firm's decision to protect itself at the expense of its clients and professional obligations was "intolerable." A public hearing is expected to follow, giving Jackson Walker a chance to respond to the charges.

Jackson Walker ‘Defiled the Very Temple of Justice,’ Judge Says

This Day in Legal History: Equal Rights Party Formed

On September 20, 1884, a group of American suffragists formed the Equal Rights Party in San Francisco, marking a significant moment in the fight for gender equality in the United States. The party was established with the goal of securing "equal and exact justice" for all citizens, regardless of color, sex, or nationality. A key focus was on amending state laws to recognize women as voters and to ensure equal property rights, aiming to empower women to become self-sufficient rather than remain dependent. 

In a bold move, the party nominated Mrs. Belva Lockwood as its candidate for U.S. President and Marietta Snow for Vice-President. Lockwood, a lawyer and prominent suffragist, became one of the first women to actively campaign for the presidency. While Grover Cleveland ultimately won the election, Lockwood’s candidacy broke new ground. She garnered around 4,149 votes, all cast by male voters, as women did not yet have the right to vote nationally. 

This event showcased the growing momentum of the women’s suffrage movement, which would eventually lead to the passage of the 19th Amendment in 1920, granting women the right to vote. The Equal Rights Party's formation highlighted the early intersection of gender, legal rights, and political advocacy in American history.

An Alaska man, Panos Anastasiou, has been indicted for sending over 450 threatening messages to six U.S. Supreme Court justices and two of their family members. The threats, which began in March 2023 and escalated in January 2024, included violent, racist, and homophobic language, as well as calls for assassination and torture. Federal prosecutors allege that the messages were intended to intimidate and retaliate against the justices for their legal decisions. 

Attorney General Merrick Garland emphasized that the threats undermine the judiciary’s independence and public officials' safety. While the indictment did not name the specific justices targeted, details in court filings suggest that some threats were directed at Justice Clarence Thomas, referencing racist tropes and his wife’s political activism. Anastasiou has been temporarily detained, with prosecutors expressing concern that he poses a flight risk and a continued danger due to his history of threats against public officials. The case follows a growing concern for the security of federal judges, highlighted by recent threats against other Supreme Court justices, including an attempted assassination of Justice Brett Kavanaugh in 2022.

Alaska Man Charged With Threatening Supreme Court Justices (1)

Following the U.S. Supreme Court’s 2023 decision to ban race-conscious admissions, Harvard Law School saw a drop in students of color, with the percentage decreasing from 51% in 2023 to 43% in the new class. This is the first class admitted after the ruling, which stemmed from cases against Harvard and the University of North Carolina. The data from Harvard does not break down racial groups, leaving unclear how different minority groups were affected. The overall decline translates to about 45 fewer non-white students out of a class of 560, marking the lowest diversity percentage since 2017. Other top law schools have reported mixed results, with some maintaining or increasing their diversity. The University of California, Berkeley School of Law, which has been under a state affirmative action ban since 1996, also reported a decline in students of color. More detailed racial breakdowns from law schools will be provided by the American Bar Association in December.

Harvard Law School says enrollment of students of color dropped after affirmative action ban | Reuters

In a long-running lawsuit accusing Google of secretly tracking internet browsing in "incognito" mode, a major dispute remains over legal fees. Plaintiffs' lawyers from firms like Boies Schiller Flexner and Morgan & Morgan are seeking $217 million in fees for securing a settlement that mandates Google to delete billions of records and update privacy disclosures. 

Google has countered, arguing the fees should be capped at $40 million, claiming the settlement offers no monetary relief for consumers since the lawsuit failed to gain class-action status. Plaintiffs’ attorneys claim their work, valued at $62.4 million in time, provides $3 to $6 billion in privacy benefits to consumers. U.S. District Judge Yvonne Gonzalez Rogers, who presides over the case, noted the plaintiffs were not entirely successful but did acknowledge the significance of the privacy reforms. She also questioned some of the billing rates, calling $667 per hour for document review “excessive.” The case is awaiting a final ruling on the fee dispute. Other recent legal fee awards include $107.8 million in a separate Apple settlement and $102 million for attorneys in a stock-lending conspiracy case.

Legal Fee Tracker: Google, privacy lawyers clash over $217 million fee bid | Reuters

Johnson & Johnson (J&J) has increased its offer to over $8.2 billion to settle thousands of lawsuits alleging that its talc-based baby powder caused cancer, up from a previous $6.5 billion offer. This increase reflects a potential $1.7 billion hike to resolve the litigation, with claimants expected to receive larger payouts and $650 million allocated to cover legal fees. Despite continuing settlement talks, J&J maintains its baby powder is safe and has been marketed appropriately for over 100 years. 

The company has already secured over 75% support from claimants for a settlement covering cases related to ovarian and other gynecological cancers, which may expedite resolution through bankruptcy courts. Some plaintiffs, however, have yet to agree to the terms. J&J has also settled 95% of claims alleging that its baby powder was contaminated with asbestos, leading to mesothelioma. Analysts expect the additional $1.1 billion increase to be within acceptable limits for investors, contributing to a recent rise in J&J’s stock. Total payouts related to the baby powder litigation now exceed $13.4 billion.

J&J Lifts Baby Powder Settlement Bid to More Than $8.2 Billion

Aviation executive Farhad Azima has settled a lawsuit with law firm Dechert and two of its former senior attorneys, Neil Gerrard and David Hughes, over claims they participated in a scheme to hack Azima's emails and use the information in court to harm his business. The terms of the settlement, which was reached in New York, were not disclosed, and Dechert denied any liability in the case. This marks another legal victory for Azima, who previously had British judgments against him thrown out after it was revealed that hackers had been used by Dechert's client, the Gulf emirate of Ras Al Khaimah. Earlier in 2024, Dechert paid Azima £3 million ($3.8 million) to settle a separate case in the U.K. without admitting liability. The firm also settled with journalist Jay Solomon, another hacking victim, last year. Azima continues to pursue legal action against other parties involved in the hacking, including Israeli private investigator Amit Forlit, who faces extradition to the U.S. on related charges.

Aviation executive Farhad Azima settles with law firm Dechert over hacking claim | Reuters

This week’s closing theme is by Franz Liszt.

Franz Liszt was one of the most influential and innovative composers and pianists of the 19th century. Known for his breathtaking piano technique and wide-ranging compositions, Liszt's musical legacy includes both virtuosic showpieces and deeply spiritual works. While his early career was defined by dazzling performances across Europe, his later years saw a profound religious transformation. This turn towards spirituality is epitomized by his ordination as a cleric on this date, September 20, 1865, a significant date in his life that influenced his compositional direction.

One of Liszt's most introspective and spiritual compositions from this period is Via Crucis, written between 1878 and 1879. It is a moving meditation on the Stations of the Cross, combining minimalistic textures and religious themes. The work strips away the flamboyance of his earlier pieces, reflecting a profound inner contemplation. The opening movement, Vexilla Regis, captures the solemnity and grandeur of Christ's procession to the crucifixion, using austere harmonies and chant-like melodies to evoke deep reflection.

As we close this week's program, we'll leave you with Vexilla Regis, the opening theme of Via Crucis. This haunting and reverent piece sets the tone for Liszt’s spiritual masterpiece, inviting listeners into a quiet, reflective space. Without further ado, Franz Liszt's Vexilla Regis, from Via Crucis, enjoy.

This Day in Legal History: Lord Haw-Haw Sentenced to Hang

On September 19, 1945, William Joyce, infamously known as "Lord Haw-Haw," was sentenced to death by a British court for treason. Joyce, an American-born British subject, became notorious for his English-language radio broadcasts during World War II, where he spread Nazi propaganda designed to demoralize Allied forces and sway public opinion. His broadcasts, aired from Germany, ridiculed Britain and encouraged defeatism, earning him the mocking nickname "Lord Haw-Haw" due to his affected, sneering tone.

Interestingly, before aligning with Nazi Germany, Joyce had served as an informant for the British government on Irish Republican Army (IRA) activities. In the 1920s, Joyce had strong anti-communist and anti-Irish Republican sentiments, and his knowledge of far-right politics in the U.K. led him to assist British authorities in monitoring IRA movements. However, his extreme right-wing views eventually drew him to fascism, and by the late 1930s, he joined Oswald Mosley's British Union of Fascists before fleeing to Germany at the onset of World War II.

The nickname "Lord Haw-Haw" was coined by British journalist Jonah Barrington in reference to the exaggerated aristocratic accent of an anonymous broadcaster. Though it initially referred to another German propagandist, the label stuck to Joyce, who became the most infamous voice behind Nazi broadcasts. His broadcasts, filled with mockery of the British government and predictions of their downfall, made him a household name in Britain, and the face of enemy propaganda. Despite his American birth, Joyce's use of a British passport for his travels was enough for the court to convict him of treason. His execution in January 1946 marked the end of one of the most infamous figures of wartime propaganda.

The Compton Courthouse in Los Angeles suffered two major floods in January 2024, caused by burst water valves, resulting in closures and significant disruptions to court operations. Nearly 5,000 cases were impacted, and emergency repairs cost California almost $2.6 million. This courthouse, along with many others in L.A. County, is deteriorating due to a "run to failure" maintenance approach, where repairs are made only after systems break. Budget constraints have forced the California Judicial Council to prioritize only critical repairs, leaving many courthouses vulnerable to failure. Compton is a "medium priority" for repairs, raising concerns about more urgent locations, such as the Clara Shortridge Foltz Criminal Justice Center, which has also faced severe plumbing and hazardous material issues.

Los Angeles has 36 courthouses, many of which are well past their 50-year lifespans, and costly maintenance bills continue to rise. The challenges are compounded by seismic safety risks, as many of these buildings are not built to withstand earthquakes, presenting a significant danger to the public. Renovation and replacement of courthouses are progressing slowly, with only a few new facilities funded each year. Experts suggest modernizing courthouse designs and incorporating technology to reduce the need for large, outdated structures. However, without substantial investment, L.A.’s court infrastructure remains vulnerable to both natural disasters and everyday wear and tear.

L.A. Courthouses Crumble With ‘Run to Failure’ Maintenance

Second indoor flood causes Compton Courthouse to close until further notice

COMPTON COURTHOUSE CLOSED FOR THE NEXT SEVERAL DAYS DUE TO ADDITIONAL FLOODING ISSUES AFFECTING ELEVATORS AND LOBB

Also in California legal news, a judge has denied a request to reopen Golden Gate University’s law school, which closed after 123 years of operation. California Superior Court Judge Richard Ulmer ruled against the plaintiffs, a group of former students and alumni, who had sought an injunction to reinstate the school. The plaintiffs had sued for breach of contract, claiming the university kept students in the dark about its financial struggles before announcing the closure.

Golden Gate University cited declining enrollment, poor bar exam pass rates, and a weak job market as reasons for shutting down its law program. While most of the affected students have transferred to other American Bar Association-accredited schools, such as the University of San Francisco School of Law and Mitchell Hamline School of Law, the plaintiffs argue that the school failed to provide adequate transfer options.

Although the school will not reopen, the plaintiffs can still pursue monetary damages for claims such as breach of contract and false advertising. A hearing is scheduled for October 22 to determine whether their case will proceed. Golden Gate Law is the latest in a series of law schools nationwide facing closures due to similar challenges.

California judge rejects bid to reopen 123-year-old law school | Reuters

Mark Esper, former U.S. Secretary of Defense, joined Squire Patton Boggs as a part-time senior adviser, where he will focus on advising clients on national security and foreign policy. Although Esper has extensive experience in government and previously worked for defense contractor Raytheon, he will not lobby for the firm's clients in Congress or executive branch agencies. His role will leverage his public policy expertise from over 30 years in high-level government positions.

Esper’s move comes after his public break with Donald Trump in 2020, particularly over disagreements about invoking the Insurrection Act during protests following George Floyd’s murder. He has since emerged as a critic of Trump, calling him a “threat to democracy” while also critiquing President Biden. While at Squire Patton Boggs, Esper will continue his work with venture capital firm Red Cell Partners and European think tank GLOBSEC.

The firm views Esper’s hire as a key step toward becoming a leader in national security advisory services. His work is expected to focus more on helping multinational corporations navigate the intersection of economic policy and national security rather than direct governmental advocacy.

Trump Defense Secretary Esper Joins Squire Patton Boggs

Ex-Trump defense secretary Esper joins law firm Squire Patton Boggs | Reuters

Senate Democrats are working to strike a deal with Republicans to confirm a backlog of President Biden’s judicial nominees before the end of the year. Senate Judiciary Chair Dick Durbin is hopeful that Republicans will agree to a package of nominees, a practice that was more common in less partisan times. With the Senate's slim Democratic majority, confirmations have been challenging, particularly for nominees like Rebecca Pennell and Mustafa Kasubhai, whose votes were delayed due to attendance issues and GOP opposition.

Some nominees, such as Charnelle Bjelkengren, faced significant hurdles, with Bjelkengren withdrawing earlier this year due to a failed confirmation hearing. Kasubhai, who is still awaiting a vote, has been scrutinized by Republicans over his stance on diversity and past writings. Additionally, Democrats have faced internal opposition, with key senators refusing to support Adeel Mangi’s nomination due to allegations of affiliations with controversial groups. The Senate faces a tight deadline, with a limited five-week "lame duck" session following the upcoming election recess, during which they must juggle these nominations alongside other legislative priorities.

Democrats Look to Strike Deal With Republicans on Judicial Picks

EU antitrust regulators have initiated proceedings to ensure Apple complies with the Digital Markets Act (DMA), which requires the company to open its closed ecosystem to rivals. The European Commission aims to clarify what Apple must do to meet its obligations, focusing on iOS interoperability for devices like smartwatches, headphones, and VR headsets, as well as how Apple handles third-party and developer requests for connectivity. The Commission expects to finalize the guidelines within six months, with Apple at risk of fines up to 10% of its annual global turnover if it fails to comply. Apple has expressed willingness to cooperate but warned that opening its systems could expose users to security risks.

EU antitrust regulators tell Apple how to comply with tech rules | Reuters

And something of a double-dip in the Apple news bowl, in a piece I wrote for Forbes I spoke about the European Union’s recent win in a legal battle requiring Ireland to collect €13 billion in unpaid taxes from Apple–a significant victory in the fight against multinational tax avoidance. Although the EU's highest court upheld the decision, Ireland remains reluctant to claim the windfall, as doing so could threaten its status as a low-tax haven that attracts large corporations. Ireland had argued, alongside Apple, that the taxes were not owed, reflecting its desire to maintain control over its tax policies.

This case highlights the tension between national tax sovereignty and EU regulations aimed at curbing unfair competition through favorable tax deals. While the EU can force Ireland to reclaim the unpaid taxes, it cannot dictate how the country spends the money, leaving the Irish government with a difficult decision. Ireland’s low corporate tax rate has been key to its economic growth, but the Apple ruling could have global ramifications as more countries adopt minimum tax frameworks to address tax avoidance by multinational corporations.

The case underscores broader issues in international tax law, as countries like Luxembourg and the Netherlands, also known for favorable tax policies, may face similar pressures. While Ireland is legally obligated to collect the money, its cautious approach reflects a concern about maintaining its attractiveness to global businesses. The funds remain in escrow, and Ireland has yet to reveal how it plans to utilize the money, which is equivalent to 2.43% of its GDP.

You Can Give Ireland Tax Revenue—But Can You Make Ireland Spend It?

This Day in Legal History: Fugitive Slave Act Signed

On September 18, 1850, U.S. President Millard Fillmore signed the Fugitive Slave Act into law, a key and highly controversial component of the Compromise of 1850 and a dark moment in American history – unfortunately, one among many in the 19th century. The Act required that escaped slaves, even if they had reached free states, be captured and returned to their enslavers. It also imposed heavy penalties on anyone who aided a fugitive slave, including fines and imprisonment. Disturbingly, the law authorized federal marshals and local law enforcement to arrest individuals based on little more than a slaveholder's claim, placing free Black men and women at risk of being falsely accused and sold into slavery.

The Fugitive Slave Act enraged abolitionists and free states in the North, who viewed the law as a gross infringement on their legal sovereignty and moral principles. Northern citizens were now legally obligated to participate in the enforcement of slavery, a practice many detested. Conversely, slaveholders in the South celebrated the law as a victory, seeing it as essential for the preservation of their economic system. 

This deepened the divide between North and South, escalating tensions that would eventually lead to the Civil War. The Act's passage not only exposed the fragility of compromises between pro-slavery and anti-slavery factions but also galvanized the abolitionist movement. It showed how far the federal government was willing to go to protect the institution of slavery, making resistance increasingly inevitable.

In a piece I wrote for Forbes, I weighed in to a tax policy proposed by former President Donald Trump. Floated by Trump at a rally in Arizona, the "No Tax on Overtime" policy aims to eliminate income tax on overtime pay, echoing a previous proposal to end taxes on tips. While the policy is presented as a way to relieve tax burdens on hourly workers, a closer analysis reveals several potential issues. By creating a tax-free incentive for overtime, the policy could favor workers able to put in extra hours, leaving others—like working parents—disadvantaged. This could deepen income inequality, as those unable to work overtime would continue paying taxes on their standard wages, while others benefit from a lighter tax burden. 

Additionally, employers may shift compensation structures to push for longer working hours, leading to lower base wages and a culture of overwork. Implementation of the policy would also create administrative challenges for employers and the IRS. Instead of targeted tax breaks, broader reforms like increasing the federal minimum wage might better address wage inequities without distorting the labor market.

‘No Tax On Overtime’ Policy Would Be Even Worse Than ‘No Tax On Tips’

In the first 10 days of Kamala Harris’s presidential campaign, lawyers contributed more to her than they did to Donald Trump’s campaign over nearly two years, according to Federal Election Commission (FEC) data. Harris received nearly $8.3 million from around 26,000 contributions from individuals listing "attorney" or "lawyer" as their occupation after Joe Biden endorsed her in July 2024. In comparison, Trump’s campaign, which began in November 2022, raised about $6.88 million from lawyers over that entire period. Lawyers have historically favored Democratic candidates, with Harris’s and Biden’s campaigns together raising significantly more from the legal profession than Trump’s campaign. In previous elections, Democratic candidates like Barack Obama, Hillary Clinton, and Joe Biden have all received much more financial support from lawyers than their Republican counterparts. The data reflects a broader trend where large law firms and individual lawyers increasingly lean toward Democratic candidates.

Lawyers Give More to Harris in 10 Days Than Trump in Entire Race

Donald Trump recently pledged to restore the state and local tax (SALT) deduction, a tax break he limited during his presidency as part of the 2017 Tax Cuts and Jobs Act. In a post on Truth Social, Trump promised to reverse the $10,000 cap on SALT deductions, which has disproportionately impacted residents in high-tax areas like New York, especially in suburban areas where property values are high. The cap was initially supported by Republicans as it helped balance tax cuts elsewhere in the law. Senate Majority Leader Chuck Schumer criticized Trump’s reversal, pointing out that Trump himself had imposed the cap. Repealing the limit could add an estimated $1.2 trillion to the cost of extending the tax law. Trump's focus on this issue, particularly in Long Island, reflects the area’s significance in ongoing battles for control of the U.S. House of Representatives.

Trump Pledges to Restore SALT Write-Off, Tax Break He Curbed (1)

Yesterday, on September 17, 2024, California Governor Gavin Newsom signed two bills designed to protect actors and performers from unauthorized use of their digital likenesses by artificial intelligence. One bill mandates that contracts specify when AI-generated replicas of a performer's voice or image will be used, requiring the performer to have professional representation in contract negotiations. The other bill prohibits the commercial use of digital replicas of deceased performers without consent from their estates. These laws respond to growing concerns in the entertainment industry about AI’s potential to exploit performers’ likenesses without permission, part of broader fears about AI’s ethical and legal implications.

California governor signs legislation to protect entertainers from AI | Reuters

This Day in Legal History: Treaty of Fort Pitt

On September 17, 1778, the newly independent United States and the Lenape (Delaware) Nation signed the Treaty of Fort Pitt, marking the first formal treaty between the U.S. and a Native American tribe. The treaty established a military alliance during the American Revolutionary War, with the Lenape agreeing to assist the U.S. in its fight against the British. In return, the U.S. promised protection and the possibility of creating a 14th state for Native Americans in the future.

Despite its significance as a symbol of diplomacy, the treaty was quickly undermined. U.S. forces often ignored the agreement, and American expansion continued to threaten Lenape lands. The promise of a Native American state was never realized, and tensions between the two sides worsened. This violation of the treaty set a precedent for many future treaties between the U.S. government and Native American tribes, where promises were made but rarely honored. The Treaty of Fort Pitt highlights the complex and often troubled relationship between Native nations and the U.S. government during the early years of American independence.

The Biden administration is launching a new initiative to combat the smuggling of hydrofluorocarbons (HFCs), potent greenhouse gases used in refrigeration, across U.S. borders. The Environmental Protection Agency (EPA), Customs and Border Protection (CBP), and other agencies are collaborating, using new tools like artificial intelligence to identify suspicious shipments. HFC smuggling has surged as the U.S. phases out these chemicals under the 2019 American Innovation and Manufacturing (AIM) Act, which mandates an 85% reduction by 2036. Since fiscal year 2024 began, about 25 illegal shipments have been stopped, but the scale of smuggling remains large.

Smugglers use various methods, such as relabeling containers and falsifying import documents, to sneak HFCs into the country. The black market for these refrigerants mirrors the illicit trade of chlorofluorocarbons (CFCs) in the 1990s after their global ban. Enforcement efforts include developing human intelligence sources, new AI technologies, and enhanced collaboration between government agencies. However, enforcement challenges persist, as it's difficult to catch every shipment and distinguish legal from illegal HFCs once they enter the market.

Biden Fights Smugglers Trafficking Climate-Warming Refrigerants

Cigna Group’s Express Scripts is suing the Federal Trade Commission (FTC) over a July report that it claims unfairly portrays pharmacy benefit managers (PBMs). In its lawsuit, filed in Missouri, Express Scripts calls the report “unfair, biased, erroneous, and defamatory” and demands the agency retract it. This legal action intensifies the ongoing conflict between PBMs and the FTC, which has been investigating the industry for over two years.

The FTC's report accuses PBMs of steering patients to their own pharmacies and charging higher rates. Express Scripts, along with other PBM giants like CVS Health and UnitedHealth Group, disputes these claims, arguing that PBMs help control drug prices and counteract pharmaceutical companies' power. Cigna’s lawsuit also accuses the FTC of ignoring data it submitted, favoring instead what it calls “unsupported innuendo.” The FTC has rejected these accusations and stands by its report, stating that it aims to clarify the complexities of the PBM market. The case is now before the U.S. District Court in Missouri.

Cigna Sues Federal Trade Commission Over ‘Defamatory’ Report

The U.S. antitrust trial over Kroger's $25 billion bid to acquire rival grocer Albertsons is wrapping up, but the legal battles are far from over. Following the Portland trial, where the Federal Trade Commission (FTC) and several states argued that the merger would harm shoppers and unionized grocery workers, two more trials are set to challenge the deal. Washington state's attorney general began a separate trial on Monday, arguing that the merger would raise prices, reduce competition, and allow Kroger to close unionized stores. Later this month, Colorado will bring its own case, focusing on the impact on local farmers and consumers.

Kroger and Albertsons, which have already spent $864 million on merger-related costs this year, argue that the deal would lower prices and allow them to compete better with retail giants like Walmart and Amazon. Despite their assurances that no stores will close due to the merger, critics warn that closures could occur in the future. The ongoing legal challenges could prolong the merger process and add significant costs for the companies.

Kroger-Albertson's US anti-trust trial to end but other legal blocks loom | Reuters

In my column for Bloomberg this week, I explore how land value taxes (LVTs) can address the inequities in the current property tax systems across the U.S.

Property taxes, especially in economically disadvantaged areas, have been scrutinized for burdening low-income homeowners. A land value tax, which taxes only the land's value and not any structures or improvements, could provide a fairer alternative. LVTs can stabilize tax burdens, promote development, and reduce land speculation. This tax system would also allow for income-adjusted progressivity, helping municipalities create more consistent revenue streams while avoiding the boom-and-bust cycles tied to real estate.

In contrast, traditional property taxes—which tax both land and buildings—can disincentivize property improvements, make it cheaper to hold vacant land, and unfairly burden residents in areas with declining commercial property values. This is especially evident in places like Chicago’s south suburbs, where declining commercial revenue is pushing low- and middle-income homeowners to the brink. Similar stories are unfolding in towns like Harvey, Illinois, and Wake County, North Carolina, where property taxes have surged beyond many residents' ability to pay.

Shifting to an LVT would alleviate these problems by taxing land rather than improvements, encouraging landowners to develop or sell underused land, and ensuring more financial stability for homeowners. The switch could be an important step in revitalizing economically depressed areas, promoting development, and creating a more equitable tax system.

Land Value Taxes Can Resolve Property Tax Systems’ Inequities

This Day in Legal History: Amnesty for Vietnam War Evaders

On September 16, 1974, President Gerald Ford announced a conditional amnesty program for Vietnam War draft evaders and deserters. This program offered clemency to those who had resisted the draft or abandoned their military posts, provided they completed two years of public service. Ford aimed to foster national reconciliation following the divisive Vietnam War, allowing many to return to the U.S. without facing legal consequences. The program was administered by the Presidential Clemency Board, chaired by Charles E. Goodell, a Washington lawyer. 

Over its tenure, the board reviewed more than 14,000 cases, granting amnesty in many instances. However, the program drew criticism for being too limited in scope. Only about 19 percent of those eligible applied, with many feeling that the required public service was an unfair penalty. The conditional amnesty remains a significant moment in the legal and political aftermath of the Vietnam War, as it represented a complex attempt to balance accountability with forgiveness.

A legal dispute between attorney Meagan Garland and her law firm, Duane Morris, has intensified over the firm's classification of certain lawyers as "non-equity partners." Garland, a Black woman, is suing the firm, alleging that it misclassified her and others to reduce tax liabilities and business costs. She also claims Duane Morris pays women and minorities less than white male colleagues. The firm has responded by seeking to move the case from Oakland to San Diego, where Garland works, and plans to call anonymous partners to testify about her alleged poor job performance and extended medical leave. 

Garland’s team has accused the firm of conducting a "smear campaign" and violating her privacy rights by referencing her medical history in court. The case is notable for challenging the increasingly common non-equity partner designation in major law firms, with Garland seeking class-action status on behalf of similarly classified partners. Duane Morris, represented by Proskauer Rose, denies the allegations and has committed to defending itself vigorously.

Duane Morris, Partner Clash Escalates in Non-Equity Status Suit

TikTok is fighting a potential U.S. ban in the U.S. Court of Appeals for the DC Circuit, with arguments centered around a law signed by President Biden that would force its Chinese parent company, ByteDance, to sell the app. TikTok, ByteDance, and a group of users argue the law violates the First Amendment by infringing on free speech for the platform’s 170 million U.S. users. The U.S. government views TikTok as a national security threat due to its ties to China, though evidence supporting this remains debated. Competitors like Google and Meta could benefit if TikTok loses, and Oracle, which hosts TikTok's services, could be hurt. The court is expected to rule by December 6, with the ban set to take effect on January 19, unless TikTok prevails or the case advances to the Supreme Court. Multiple challenges to the ban will be heard, and the case may hinge on whether the government can use classified information in its arguments.

TikTok Battles US Ban at Appeals Court to Determine App’s Fate

TikTok, Justice Department face off in court over potential US ban | Reuters

Rupert Murdoch’s succession plans for his media empire are being contested in a closed court in Reno, Nevada. The 93-year-old mogul is attempting to modify the family trust, which controls significant stakes in Fox News and News Corp, to ensure that his eldest son, Lachlan Murdoch, maintains control after his death. The trust currently allocates voting shares to Murdoch's four oldest children—Prudence, Elisabeth, Lachlan, and James—raising the potential for a power struggle, as three siblings could outvote Lachlan. A sealed court document suggests Murdoch’s proposed changes would prevent Lachlan's more moderate siblings from interfering. The court proceedings, closed to the public despite media appeals, focus on whether Murdoch is acting in good faith. Lachlan, seen as aligned with his father’s conservative views, runs Fox, while James, who left News Corp’s board in 2020 over editorial disagreements, supports progressive causes. The outcome of this legal battle could shape the future of Murdoch’s influential media assets.

Murdoch succession drama plays out in closed court | Reuters

The Biden administration's assertion that it has jurisdiction over most wetlands on Alaska’s North Slope under the Clean Water Act is sparking legal tensions. This claim comes despite a 2023 Supreme Court ruling in Sackett v. EPA, which narrowed federal protections to wetlands that are “relatively permanent” and have a continuous surface connection to larger waterways. The Army Corps of Engineers argues that Alaska’s unique permafrost conditions create enough physical connections to justify federal oversight, covering nearly all of the region’s wetlands. Environmental attorneys, however, claim the Corps is overreaching and reviving the rejected "significant nexus" test, which expanded the scope of federal power over isolated wetlands. Critics argue this broad interpretation exceeds the limits set by the Supreme Court. Meanwhile, Alaska officials are pushing back, wanting more control over local development permits. The legal debate, focusing on the extent of federal jurisdiction, is expected to escalate, with lawsuits likely to follow.

Biden Administration ‘Walking Thin Line’ in Alaska Waters Claim

This Day in Legal History: Khrushchev at the Helm

On September 13, 1953, Nikita Khrushchev was appointed General Secretary of the Communist Party of the Soviet Union, marking a pivotal shift in Soviet leadership following the death of Joseph Stalin. Khrushchev's rise to power signaled a departure from the oppressive and brutal regime of Stalin, as he eventually denounced many of Stalin's crimes during his famous "Secret Speech" in 1956. This denouncement was part of Khrushchev’s broader policy of de-Stalinization, which aimed to reduce the terror associated with Stalin’s rule and promote a more moderate, reform-oriented government. 

Khrushchev’s leadership saw significant changes both domestically and internationally. He pushed for economic reforms, introduced policies that relaxed censorship, and reduced the use of forced labor. On the global stage, Khrushchev’s foreign policy was marked by intense Cold War tensions, including the Cuban Missile Crisis of 1962, which brought the world to the brink of nuclear war. His eventual mishandling of the crisis and other domestic challenges contributed to his ouster in 1964 by political rivals within the Soviet leadership.

The legal element here is Khrushchev's role in de-Stalinization, which involved dismantling many of Stalin's legal policies of oppression, including the arbitrary imprisonment and execution of political opponents. His reforms reshaped the Soviet legal system by curbing the powers of the secret police and reducing the scale of political purges.

Hogan Lovells is closing its offices in Poland, Australia, and South Africa as part of a strategic shift to focus on key markets like London, New York, California, Texas, and Washington, DC. This move will result in 123 layoffs, including lawyers and support staff. CEO Miguel Zaldivar explained the decision aligns with the firm’s goal of becoming more financially integrated and reaching $3 billion in annual revenue. Hogan Lovells is following a trend of Big Law firms reducing their real estate footprints, with firms like Dechert, Armstrong Teasdale, and A&O Shearman also closing offices globally. Legal recruiter Jeffrey Lowe noted that international offices are particularly costly for U.S. firms, prompting many to reassess their presence in certain markets. The closures reflect a broader effort to free up capital to attract high-priced lateral talent, a trend expected to continue in the coming years.

Hogan Lovells to Close Three Offices in ‘Strategic’ Move (3)

Norfolk Southern Corp. is seeking its seventh legal leader in as many years after firing Chief Legal Officer Nabanita Nag and CEO Alan Shaw due to a consensual relationship that violated company policy. This follows an internal investigation conducted by an outside law firm. Jason Morris, the company’s vice president for law, has been named acting corporate secretary, though it is unclear if he will assume control of the legal department. Norfolk Southern has faced significant legal and regulatory challenges, including the costly East Palestine, Ohio train derailment in 2022, which has led to $2 billion in litigation and remediation expenses.

Nag, who took over as legal chief in 2022, is the latest in a series of legal department leaders to leave Norfolk Southern. Her predecessors left for various reasons, including retirement and relocation due to the company’s headquarters moving from Norfolk, Virginia to Atlanta. Norfolk Southern has reached large settlements related to the Ohio derailment, including $600 million to resolve lawsuits and $310 million for U.S. government claims. The company continues to deal with litigation over the incident, represented by WilmerHale and Dickie McCamey, and faces further scrutiny from investors following the disaster.

Norfolk Southern Law Head’s Ouster Continues Department Turnover

The House has received a letter from the federal judiciary regarding a potential impeachment inquiry into former Alaska District Judge Joshua Kindred, who resigned after being found guilty of sexual misconduct and lying to investigators. The Ninth Circuit's Judicial Committee certified an impeachment inquiry into Kindred in July, citing his creation of a hostile work environment and an inappropriate relationship with a former law clerk. While Kindred resigned, a Senate conviction could bar him from future public office. 

Democratic Representative Hank Johnson praised the judiciary for taking the allegations seriously, but it remains unclear if the House will pursue the matter. Legal experts suggest Republicans may be reluctant to proceed, given that Kindred is no longer in office, similar to their stance during Trump’s second impeachment trial. The last federal judge impeached and removed from office was G. Thomas Porteous in 2010.

Meanwhile, scrutiny has increased on Kindred’s past cases, with over 40 potentially involving conflicts of interest. Criminal defense lawyers in Alaska are exploring opportunities to overturn convictions related to Kindred’s misconduct. Additionally, Kindred's former clerk has filed a whistleblower complaint, alleging retaliation by the Alaska U.S. Attorney’s office after she reported the harassment.

Ex-Alaska Judge’s Potential Impeachment Moves to House (2)

TikTok and its parent company ByteDance are facing a pivotal court hearing on Monday that could determine whether the app will be banned in the U.S. by January 19, 2025. The U.S. Court of Appeals for the District of Columbia will hear oral arguments in the legal challenge, which occurs as TikTok remains a key platform for political engagement during the 2024 presidential election. 

TikTok argues that the law mandating its sale or banning it violates free speech rights and is a drastic departure from the U.S. tradition of supporting an open internet. U.S. lawmakers passed the law, citing national security concerns over potential Chinese government access to American data. TikTok has claimed that divesting the app is unfeasible, and the case could end up before the Supreme Court. While the Biden administration wants Chinese ownership of TikTok to end, it is not pushing for an outright ban if the app’s ownership issues are resolved. A decision is expected by December 6.

TikTok faces crucial court hearing that could decide fate in US | Reuters

This week’s closing theme is by Clara Wieck-Schumann. 

This week’s closing theme honors the extraordinary Clara Schumann, one of the most influential figures in the world of 19th-century classical music, born on this day, September 13, in 1819. A virtuoso pianist, composer, and teacher, Clara Schumann’s legacy extends far beyond her role as the wife of composer Robert Schumann. She was a musical prodigy who gave her first public concert at the age of nine, and over her long career, she toured extensively across Europe, earning widespread acclaim for her impeccable technique and profound musicality.

Clara Schumann was also a gifted composer, though her work was often overshadowed by the social expectations of her time. One of her standout compositions is Scherzo No. 2 in C minor, Op. 14. Written in 1845, this piece exemplifies her command of the piano, featuring a powerful interplay of rhythmic vitality and lyrical expressiveness. The Scherzo No. 2 showcases Clara’s deep understanding of Romantic aesthetics, with its dramatic contrasts and technical brilliance—a hallmark of her compositional style. The piece demands a high level of virtuosity, a reflection of her own skills as one of the greatest pianists of her era.

Despite facing many personal challenges, including the early death of her husband and the pressure to provide for her family, Clara remained dedicated to her craft. She shaped the landscape of European concert life, championing the works of Robert Schumann, Johannes Brahms, and other contemporary composers, while continuing to write and perform her own music.

Clara Schumann’s Scherzo No. 2 is a fitting tribute to her genius—its energetic and complex nature reflects her resilience and innovation in a time when female composers were seldom given their due recognition. As we listen to this remarkable piece, it’s a reminder of her invaluable contributions to classical music, both as a composer and a performer, whose impact still resonates today. On her birthday, it’s only right to celebrate Clara Schumann’s enduring artistry and reflect on her place in music history.

This Day in Legal History: Brown v. Board Stands

On September 12, 1958, the U.S. Supreme Court issued a unanimous decision in Cooper v. Aaron, reaffirming the authority of federal courts and rejecting Arkansas's attempt to defy the landmark Brown v. Board of Education ruling. The case arose after Arkansas Governor Orval Faubus and the state legislature openly resisted desegregation, particularly in Little Rock, where African American students were blocked from entering Central High School. Arkansas argued that it was not bound by the Brown decision, claiming state sovereignty over education. The Supreme Court decisively rejected this argument, emphasizing that the Constitution is the supreme law of the land and that state officials are bound by its rulings.

In a powerful opinion, the Court reiterated that its 1954 decision in Brown, which declared racial segregation in public schools unconstitutional, was "the law of the land." The justices underscored that state defiance of federal court orders violated the Constitution, asserting that "the basic principle that the federal judiciary is supreme in the exposition of the law of the Constitution" must be upheld. This decision was critical in enforcing civil rights and strengthening federal power to ensure desegregation, marking a pivotal moment in the fight against state resistance to integration.

Three law firms leading litigation against Johnson & Johnson (J&J) over talc-related cancer claims are now clashing in court. Beasley Allen, an Alabama-based firm, has sued the Smith Law Firm and Porter Malouf, alleging they owe more than $1 million in litigation expenses. Beasley Allen also claims that Smith Law, burdened by up to $240 million in debt to outside funders, is pushing clients to accept a $6.5 billion settlement with J&J that Beasley opposes. 

The settlement deal requires 75% approval from claimants and was initiated as J&J sought bankruptcy protection for its talc-related liabilities. Beasley Allen argues the settlement is unfair and insufficient for clients, while Smith Law supports it. Smith Law denies the allegations, calling Beasley Allen’s lawsuit "baseless." Beasley Allen contends that Smith’s financial issues have caused the firm to undermine their joint litigation agreement, which began in 2014. The dispute centers on alleged unpaid expenses and control over client decisions. Additionally, Beasley Allen is involved in a separate legal battle accusing J&J of misusing the bankruptcy process.

J&J Talc Suit Law Firms Clash Over $6.5 Billion Settlement (2)

J&J's proposed talc settlement sparks lawsuit between plaintiffs' firms | Reuters

The U.S. Court of Appeals for the Fifth Circuit has upheld the Labor Department's authority to use salary levels in determining overtime pay exemptions, supporting a rule issued under the Trump administration and providing a legal boost for a similar rule introduced by the Biden administration. The ruling involved a 2019 regulation that mandates salaried workers earning less than $35,568 annually to receive overtime pay, which was challenged by Robert Mayfield, a business owner from Texas. 

Mayfield argued that overtime exemptions under the Fair Labor Standards Act (FLSA) should be based solely on job duties, not salary levels. However, the court found that the Department of Labor (DOL) has long held the authority to set salary thresholds, with guidance from Congress. 

This decision is expected to bolster the Biden administration’s 2024 overtime rule, which raises the salary threshold to $58,656 and aims to expand overtime protections to 4 million workers. Mayfield's legal challenge partly aimed to prevent the Biden rule from taking effect, but courts have consistently sided with the DOL. This ruling is seen as a win for the Biden administration in its effort to expand worker protections.

Fifth Circuit Upholds Labor Department’s Overtime Authority (2)

A Philadelphia jury ruled in favor of Bayer's Monsanto in a lawsuit claiming that the company's Roundup weed killer causes cancer. This marks a win for Bayer, which acquired Monsanto in 2018 for $63 billion and has since faced numerous lawsuits alleging Roundup's cancer risks. The case involved product liability claims, but the jury sided with Monsanto, continuing Bayer's efforts to defend against the wave of litigation surrounding Roundup. Despite many legal challenges, this verdict adds to a series of mixed outcomes for Bayer in Roundup-related cases.

Jury rules in favor of Bayer's Monsanto in Philadelphia trial over Roundup | Reuters

A federal indictment has charged Michael Smith with using bots to artificially inflate streaming numbers for AI-generated music, earning over $10 million in royalties. Smith’s scheme, which spanned seven years, involved creating thousands of fake email accounts to stream his AI-generated tracks on platforms like Spotify and Apple Music. AI allowed Smith to scale the operation by generating vast amounts of content, evading detection for years. 

The indictment marks the first criminal case involving artificially inflated music streams, signaling the Department of Justice’s increasing focus on streaming fraud. Despite some platforms identifying suspicious activity early on, Smith continued his scheme by using bots to manipulate stream counts. The indictment highlights the vulnerability of streaming platforms to fraud, as well as the potential impact on the music industry’s revenue model. The DOJ charged Smith with conspiracy to commit wire fraud, wire fraud, and money laundering. This case emphasizes the need for stronger fraud-prevention measures as AI technology becomes more integrated into content creation.

AI Music Fraud Indictment Brings Scrutiny to Streaming Inflation

This Day in Legal History: Birth of Edison

On February 11, 1847, Thomas Edison was born, eventually becoming one of the most prolific inventors in history. While best known for innovations like the phonograph and the incandescent light bulb, Edison’s impact extended beyond technology—he played a major role in shaping intellectual property law. Over his lifetime, he was granted 1,093 U.S. patents, making him one of the most successful patentees in American history. His aggressive pursuit of patent protection and enforcement helped define modern patent law, particularly in the fields of invention ownership and licensing.  

Edison was no stranger to legal battles. He frequently sued competitors for patent infringement, ensuring that his company, General Electric, maintained control over key technologies. One of his most significant legal disputes involved motion picture technology. His company used patents to create a near-monopoly on filmmaking equipment, leading to the formation of the Motion Picture Patents Company (MPPC), also known as the Edison Trust. This organization aggressively enforced its patents, preventing independent filmmakers from using essential equipment without licensing fees.  

However, Edison’s legal tactics also sparked resistance. Independent filmmakers and rival inventors challenged his monopolistic control, leading to court rulings that gradually weakened the MPPC. In 1915, a federal court ruled against Edison’s film patents, breaking up his trust and setting a precedent for future antitrust actions in the entertainment industry. Edison’s extensive use of patent law demonstrated both its protective power and its limits, influencing later legal battles over intellectual property. His legacy continues to shape debates over patent rights, innovation, and monopolistic practices in technology and media.

The Consumer Financial Protection Bureau (CFPB) was established in 2010 to oversee financial institutions and protect consumers from abusive practices. It played a key role in regulating mortgage lenders, payday loan companies, and credit reporting agencies, introducing rules against predatory lending, deceptive banking fees, and unfair debt collection practices. The agency was instrumental in holding financial institutions accountable after the 2008 financial crisis, issuing billions in fines and refunds for consumers.

Over the weekend, the CFPB was effectively shut down under the leadership of acting chief Russell Vought, who suspended all oversight activities, halted its funding, and closed its headquarters. His actions were met with swift legal challenges from the National Treasury Employees Union, which argued that gutting the agency violated congressional authority. Critics condemned the move as a severe rollback of consumer protections, leaving banks and lenders without federal oversight.

The agency’s dismantling has also raised concerns about conflicts of interest. Elon Musk’s Department of Government Efficiency (DOGE) was granted administrative access to CFPB systems, a controversial move given that Musk’s platform, X, is looking to enter financial services. Union officials claim Musk is trying to take control of his own regulator. The situation has drawn protests from agency workers and legal threats from advocacy groups who argue the actions amount to a systematic effort to remove consumer protections.

Consumer protection agency neutralized by Trump's new chief | Reuters

A federal judge declined to block Elon Musk’s Department of Government Efficiency from accessing the U.S. Department of Labor’s systems, dealing an early blow to unions opposing his efforts to shrink the federal workforce. The lawsuit, brought by the AFL-CIO, argued that Musk could gain access to sensitive government investigations into his own companies—Tesla, SpaceX, and The Boring Company—as well as information about competitors. However, U.S. District Judge John Bates ruled that the union had not yet demonstrated harm, though he expressed concerns about the situation.

AFL-CIO President Liz Shuler called the decision a setback but vowed to present stronger evidence. Critics argue that Musk’s access to government data, including labor investigations and economic statistics, poses a serious conflict of interest. The White House maintains that Musk will recuse himself from matters involving his businesses, but as a special government employee, he is not subject to full federal ethics rules.

DOGE’s growing authority has sparked alarm, with unions and advocacy groups challenging its reach. Another lawsuit has temporarily halted DOGE’s access to Treasury Department records over concerns about unauthorized data sharing. Meanwhile, Musk has already moved to shutter the U.S. Agency for International Development, canceling contracts and leases as part of his broader push to restructure federal agencies.

Judge declines to block DOGE from Labor Department systems | Reuters

This Day in Legal History: Camp David Accords

On September 11, 1978, Israeli Prime Minister Menachem Begin and Egyptian President Anwar Sadat reached a historic agreement at Camp David, laying the foundation for peace between Israel and Egypt. The Camp David Accords, brokered by U.S. President Jimmy Carter, marked the first time an Arab nation had agreed to recognize Israel, a significant diplomatic breakthrough in the Middle East. The accords outlined a framework for peace that included the eventual return of the Sinai Peninsula to Egypt, which had been occupied by Israel since the 1967 Six-Day War, and the establishment of normalized diplomatic and economic relations.

The agreement was formalized in the Israel-Egypt Peace Treaty, signed in 1979. This peace treaty not only ended decades of conflict between the two nations but also set a precedent for future Arab-Israeli negotiations. The accords earned Sadat and Begin the Nobel Peace Prize in 1978, though Sadat’s willingness to make peace with Israel led to his assassination in 1981 by Egyptian extremists. Despite challenges, the treaty has endured, making Egypt the first Arab country to formally make peace with Israel, reshaping geopolitics in the region and establishing the U.S. as a key mediator in Middle East peace efforts.

A recent American Bar Association (ABA) survey reveals that financial stress and anxiety affect two-thirds of young lawyers, with student loan debt significantly shaping their career and life choices. The survey, conducted by the ABA’s Young Lawyers Division and AccessLex Institute, found that 68% of respondents with student loans felt stressed or anxious due to their debt, while 67% of all young lawyers, regardless of loans, reported financial stress. Many respondents, particularly those owing $100,000 or more, said their debt led to feelings of depression or hopelessness. 

The survey also showed that student debt delays major life events like marriage and homeownership for 76% of participants. Most respondents borrowed for law school, with a median debt of $137,500. Additionally, 27% reported owing more now than at graduation due to income-based repayment plans. Despite financial challenges, 74% of young lawyers would still pursue a law degree, and 65% would attend the same law school. Public service loan forgiveness programs and Biden administration debt relief efforts have provided some support, though many obstacles remain.

Financial stress and anxiety plagues two-thirds of young lawyers, ABA survey finds | Reuters

The U.S. House of Representatives is set to vote on a six-month stopgap funding bill proposed by Republican Speaker Mike Johnson, aimed at preventing a government shutdown before the fiscal year ends on September 30. The bill faces opposition from Democrats, primarily due to a provision that would require proof of citizenship to register to vote, a measure seen as politically charged ahead of the November elections. Former President Donald Trump has urged Republicans to pass this voting measure. However, some Republicans oppose the stopgap due to spending concerns, and two Republicans joined Democrats in blocking a procedural vote to advance the bill.

If passed in the House, the bill faces an uphill battle in the Democrat-controlled Senate. Senate Majority Leader Chuck Schumer criticized the proposal as overly partisan, while the White House has indicated President Biden would veto the bill. Biden’s administration is pushing for a shorter funding extension and more disaster relief funding. Additionally, Congress faces a critical January 1 deadline to address the nation’s debt ceiling, risking default if no action is taken.

US House set to vote on Republican-backed stopgap funding measure | Reuters

Three former Memphis police officers are standing trial in federal court for their involvement in the January 2023 death of Tyre Nichols, a Black motorist whose brutal beating by police officers led to widespread outrage and police reform. Video footage showed five officers kicking, punching, and using pepper spray and a baton on Nichols, who died three days later in a hospital. Two of the five officers have pleaded guilty to federal civil rights charges, leaving three facing trial, where they could face life in prison if convicted.

The incident reignited concerns about racism and police brutality in the U.S., prompting reforms in Memphis, such as disbanding the specialized police unit involved in the incident and implementing stricter traffic stop protocols. The officers also face second-degree murder charges in a separate state case, which has been postponed until after the federal trial. Nichols’ family has filed a $550 million lawsuit against the city, seeking damages to push for further changes in police practices nationwide.

In response to the assault, additional officers were either fired or suspended, and several fire department employees involved in the incident were also dismissed.

Three Memphis police officers go on trial in death of Tyre Nichols | Reuters

The Council on American-Islamic Relations (CAIR) has filed a civil rights complaint on behalf of University of Georgia students, alleging discrimination against individuals of Palestinian, Arab, and Muslim descent. The complaint, filed with the U.S. Department of Education, claims the university violated Title VI of the Civil Rights Act of 1964, which prohibits discrimination by institutions receiving federal funding. According to CAIR, pro-Palestinian students faced harassment following the escalation of conflict in Gaza, and the university failed to adequately address or prevent this discrimination.

The University of Georgia responded by emphasizing its support for free speech and non-discrimination policies, while also maintaining that it enforces rules against policy violations. The complaint comes amid widespread protests across U.S. campuses concerning the Israeli-Palestinian conflict, which have seen instances of both antisemitic and Islamophobic rhetoric. The conflict has led to heightened tensions and a broader discussion on human rights, discrimination, and free speech in academic settings.

Muslim advocacy group files civil rights complaint against University of Georgia | Reuters

This Day in Legal History: Howe Sewing Machine Patented

On this day in legal history, September 10, 1846, Elias Howe was granted U.S. Patent No. 3640 for his revolutionary sewing machine. Howe’s invention was a significant breakthrough, speeding up the process of garment production and forever changing the textile industry. However, Howe's legal battles soon followed, as other inventors, including Isaac Singer, began producing sewing machines that closely resembled Howe's patented design.

In 1854, Howe sued Singer, accusing him of patent infringement. The court ruled in Howe’s favor, affirming that Singer’s machine did indeed infringe upon Howe's patent. This victory not only solidified Howe’s place as the rightful inventor of the sewing machine but also secured him substantial royalties from Singer's machines, which were gaining widespread popularity.

The case marked an important moment in patent law, demonstrating the power of legal protections for inventors during the Industrial Revolution. By enforcing his patent rights, Howe reaped financial benefits and ensured that his invention would be recognized for its originality.

In a significant victory for the European Union's regulatory efforts, Apple and Google both lost high-stakes court battles related to antitrust and tax issues. The EU’s Court of Justice upheld a €13 billion ($14.4 billion) tax ruling against Apple, finding that Ireland’s favorable tax treatment of the company amounted to illegal state aid. Apple had previously condemned the 2016 decision, but the court’s ruling now forces Ireland to determine how to handle the recovered taxes.

In a separate case, Google lost its challenge against a €2.4 billion fine for leveraging its dominance in search to prioritize its own shopping services over competitors, a ruling that reinforces the EU’s efforts to regulate Big Tech. These decisions mark a major success for Margrethe Vestager, the EU’s antitrust chief, as she prepares to leave her position after spearheading years of regulatory scrutiny on tech giants, including Amazon and Fiat.

Both Apple and Google expressed disappointment with the rulings, but the decisions signal a continued regulatory clampdown on Big Tech in Europe, bolstered by new legislation such as the Digital Markets Act, which aims to prevent companies from favoring their own services over rivals. The rulings set a global precedent, as other regulators around the world increasingly scrutinize Silicon Valley’s market dominance.

Apple Loses EU Top Court Fight Over €13 Billion Irish Tax Bill

In the start of the Google antitrust trial, the U.S. Department of Justice argued that Google used its size and power to dominate the online advertising market, accusing the company of monopolistic practices. During the opening of the trial in Alexandria, Virginia, prosecutors claimed that Google controlled both sides of the ad tech ecosystem by eliminating competition, acquiring rivals, and locking in customers. Google's actions allegedly stifled competition in a market handling over 150,000 ad sales every second. 

Google’s attorney, Karen Dunn, dismissed the case as outdated, comparing it to relics like BlackBerrys and iPods. She argued that Google's tools now work alongside competitors and that the digital ad market has shifted, with major players like Amazon and Comcast providing significant competition. Google’s defense echoes its arguments in a recent search monopoly case, which it won.

The Justice Department seeks a ruling that could force Google to divest key ad tech products like Google Ad Manager. The trial will continue for several weeks before a ruling is issued by U.S. District Judge Leonie Brinkema. This case is one of several recent efforts to challenge Big Tech monopolies, with similar cases against Meta, Amazon, and Apple also underway.

Google aimed to control web ad tech, US prosecutor says as trial begins | Reuters

In a piece I wrote for Forbes—and with apologies for the double dose of me today—I delve into the tax loophole used by the ultra-wealthy known as the "buy/borrow/die" strategy. This tactic allows the wealthy to use highly appreciated assets as collateral for loans, giving them access to large sums of money without triggering taxable events. While some propose taxing loans at disbursement, I argue that a better approach would be a "repayment realization" rule, where taxes are applied when these loans are repaid, aligning more closely with traditional tax principles.

Taxing at disbursement could open the door to various tax avoidance strategies, such as using offshore lending or taking out smaller loans to stay under tax thresholds. Additionally, taxing loans at the time of issuance could complicate valuations of illiquid or hard-to-value assets, making enforcement difficult. A repayment realization rule, on the other hand, would ensure that taxes are triggered when wealth is actually monetized to repay the loan, addressing these loopholes.

This approach would also reduce the risk of manipulation through rolling over loans or making small repayments, as each repayment would be taxed proportionally. While there are challenges, like preventing double taxation, this proposal offers a more effective solution to ensure the ultra-wealthy pay their fair share of taxes when they access their wealth.

Closing The Loan-Tax Loophole: Considering “Repayment Realization”

In my column this week for Bloomberg, I propose the creation of an IRS-managed "encyclopedia of tax fraud" to help taxpayers spot scams early. While some fraudulent schemes are so obvious they’re easy to recognize, others are packaged cleverly as legitimate tax strategies, making it difficult for the average person to tell the difference. Although the IRS publishes resources like the "Dirty Dozen" list of frauds, these are often too technical or hard to locate, limiting their usefulness. 

I suggest a Wikipedia-style online database, maintained by the IRS, that offers clear, plain-language explanations of fraud schemes, real-life examples, and the warning signs people should look for when receiving tax advice. This would allow taxpayers to identify potential scams before becoming victims or unwittingly participating in fraud. It would also explain the consequences of engaging in fraudulent activity, serving as a deterrent. 

By compiling this information in one place, the IRS could better protect taxpayers and safeguard vital tax revenue, making the job of scam artists much more difficult. My aim is to create a first line of defense for taxpayers as fraud schemes become increasingly sophisticated.

‘Encyclopedia of Fraud’ Would Help Taxpayers Spot Scams Early

This Day in Legal History: Abraham Lincoln Admitted to the Bar

On September 9, 1836, Abraham Lincoln was officially admitted to the Illinois bar, beginning a legal career that would shape his future as one of America’s most influential leaders. After passing the bar exam, he received a license to practice law from the Illinois Supreme Court and soon after set up his practice in Springfield. Lincoln quickly immersed himself in the legal field, filing his first lawsuit on October 5 of that same year.

Over the next 25 years, Lincoln became known as a formidable trial lawyer and skilled orator, handling a wide variety of cases, from small disputes to significant cases involving railroads and property law. His work often took him across Illinois, where he gained a reputation for his honesty and meticulous approach, earning the nickname "Honest Abe." Despite the challenges of frontier law, Lincoln’s dedication and intellect helped him build a thriving practice.

His legal experience also shaped his political career. Lincoln's ability to present clear, logical arguments in court foreshadowed the rhetorical prowess he would later bring to debates and speeches during his presidency. This legal foundation would prove instrumental as he navigated complex constitutional issues during the Civil War.

The Biden administration is set to release a final rule aimed at ensuring employer-sponsored health plans offer mental health and substance abuse coverage on par with traditional medical benefits. Announced by the Departments of Labor, Health and Human Services, and the Treasury, the rule requires employers with self-insured plans to conduct detailed analyses of their mental health benefits under the Mental Health Parity and Addiction Equity Act. It addresses the use of non-quantitative treatment limitations, such as prior authorizations, that hinder access to mental health services. The rule also removes an exemption for non-federal government health plans and adjusts enforcement deadlines for certain provisions.

While employer groups support the principle of mental health parity, many oppose the rule due to concerns over compliance costs and administrative challenges, arguing it may lead some employers to drop mental health coverage altogether. Additionally, critics like House Education and Workforce Committee Chairwoman Virginia Foxx claim the rule overreaches and will increase employee premiums. Despite opposition, the administration remains confident that the rule is legally sound and necessary to improve access to mental health care.

New Mental Health Rule Introduces Employer Benefit Parity Test

Biden administration finalizes rule to strengthen mental health parity law | Reuters

Google's antitrust trial over its dominance in online advertising technology begins in Alexandria, Virginia. The Justice Department accuses Google of monopolizing the online ad space, controlling the infrastructure behind 150,000 ad sales per second. Prosecutors allege Google used acquisitions, customer restrictions, and auction manipulations to suppress competition. If found guilty, Google could be forced to divest Google Ad Manager, a key component of its ad operations.

Google denies the claims, arguing that the prosecution overlooks growing competition from apps and connected TV in the ad market. Ad tech tools generated $20 billion for Google in 2020, a significant portion of its revenue. The trial will feature testimonies from digital ad competitors and publishers who say they were harmed by Google’s conduct. This case is one of several efforts by U.S. regulators to challenge Big Tech monopolies, alongside separate lawsuits against Apple, Meta, and Amazon.

Google's antitrust trial over online advertising set to begin | Reuters

Early data from top U.S. law schools shows minority enrollment has mostly held steady following the 2023 Supreme Court ruling banning race-conscious admissions. Of the six top 20 law schools that provided racial diversity data, five reported either steady or increased enrollment of students of color. These schools include the University of Virginia, UCLA, Cornell, Vanderbilt, and USC, with an average of 44% minority enrollment. Only UC Berkeley saw a decline, dropping from 57% to 50%, though the school’s admissions process did not change.

Despite the ruling, which prohibits using race in admissions, law schools may have been insulated from major declines due to a larger and more diverse applicant pool this year. The full effects of the ruling may become clearer as more schools report their diversity data to the American Bar Association by December. Fear of lawsuits over diversity efforts may also be influencing schools to delay publicizing their figures, in contrast to previous years when many touted their class diversity early on. Legal experts suggest that law schools are navigating a cautious environment amid ongoing legal challenges to diversity initiatives across various sectors.

Minority enrollment holds steady at top U.S. law schools, early data indicates | Reuters

This Day in Legal History: Non-aligned Movement

On September 6, 1961, the first official Non-Aligned Movement (NAM) conference concluded in Belgrade, Yugoslavia. Leaders from 25 countries, including India’s Jawaharlal Nehru, Egypt’s Gamal Abdel Nasser, and Yugoslavia’s Josip Broz Tito, gathered to affirm their commitment to remaining independent of the two major Cold War blocs—the United States and the Soviet Union. The conference marked a significant moment in international diplomacy, as it provided a platform for newly independent nations to advocate for peaceful coexistence, self-determination, and resistance to colonialism.

The Non-Aligned Movement had its origins in the 1955 Bandung Conference in Indonesia, where Asian and African leaders first came together to discuss mutual interests. By 1961, the movement solidified its principles, emphasizing the importance of sovereignty, territorial integrity, and non-interference in internal affairs. At the Belgrade conference, these ideals were codified in what became known as the "Ten Principles of Bandung," which called for disarmament and the end of imperialism.

The closing of this inaugural summit was a milestone in the broader process of decolonization and the emergence of a new voice in global geopolitics. It established NAM as a key player in advocating for a multipolar world order, allowing smaller nations to navigate the pressures of Cold War rivalries without being drawn into the conflict. The legacy of the 1961 conference endures, with NAM continuing to influence international relations today, with a membership that has since grown to over 100 countries.

Donald Trump’s legal team plans to appeal a $5 million jury verdict that found him liable for sexually assaulting and defaming writer E. Jean Carroll. The appeal will be heard by the 2nd U.S. Circuit Court of Appeals in Manhattan, with a panel of three judges appointed by Democratic presidents. This appeal challenges a civil verdict from May 2023, which stems from Carroll’s accusation that Trump assaulted her in a Manhattan department store in the mid-1990s. Trump also contested his 2022 post on Truth Social, where he called Carroll’s claim a hoax. 

The original jury awarded Carroll $2.02 million for sexual assault and $2.98 million for defamation. A separate January verdict ordered Trump to pay $83.3 million for further defaming Carroll in 2019. Trump disputes the trial’s fairness, claiming that evidence of two additional women’s testimonies and a controversial “Access Hollywood” video were wrongly admitted. Trump also argues that the court ignored political motives behind Carroll’s lawsuit. This appeal runs alongside various other legal challenges Trump is currently facing.

Donald Trump to appeal first court loss to E. Jean Carroll | Reuter

Partners at Troutman Pepper and Locke Lord have approved a merger, forming a new firm called Troutman Pepper Locke, set to launch on January 1, 2025. The combined firm will have over 1,600 lawyers across 35 offices in the U.S. and Europe, with a reported $1.5 billion in combined revenue. This merger strengthens Troutman’s presence in Texas and boosts Locke Lord’s attorney headcount, which had been declining. Key leaders from both firms will continue in leadership roles. The merger enhances their complementary practice areas in energy, financial services, and pharmaceuticals, though some partner departures have raised concerns about potential client conflicts.

Troutman Pepper, Locke Lord Partners Approve Big Law Merger (2)

President Joe Biden is set to issue an executive order directing federal agencies to prioritize companies that collaborate with unions and provide strong wages and benefits when distributing funds from key infrastructure and green energy laws. The move applies to laws like the American Rescue Plan and Inflation Reduction Act and sets job quality standards for federal spending. The order builds on previous policies requiring federal contractors to pay at least $15 per hour and use Project Labor Agreements, now making such labor standards mandatory for private employers seeking federal grants. Companies with union-friendly practices, apprenticeship programs, and benefits like child care and paid leave will be favored in federal funding decisions. Additionally, the directive pushes agencies to incentivize higher wages for manufacturing grants, expanding beyond traditional Davis-Bacon Act wage requirements for construction jobs. A task force will be created to oversee policy implementation.

Biden Looks to Tie Infrastructure Cash to Pro-Union Policies

Xockets Inc. has filed a lawsuit accusing Nvidia and Microsoft of stealing its patented semiconductor technology, which offloads AI computing tasks to a data processing unit (DPU). Xockets claims this technology significantly contributed to Nvidia’s rise as a leading AI chipmaker. The lawsuit, filed in Texas, also accuses Nvidia and Microsoft of violating antitrust laws by avoiding direct patent licensing talks through a third-party intermediary, RPX Corp. Xockets alleges this formed a "buyers’ cartel" to avoid paying fair value for its intellectual property. Nvidia’s market value surged to $3 trillion, and Xockets is seeking damages potentially in the billions. The company also seeks an injunction against Nvidia’s AI products and Microsoft’s use of them. Nvidia and Microsoft have declined to comment.

Nvidia, Microsoft Accused of AI Patent Theft, Buyers’ Cartel (2)

Nvidia, Microsoft hit with patent lawsuit over AI computing technology | Reuters

This week’s closing theme is by Tchaikovsky.

This week's closing theme is Pyotr Ilyich Tchaikovsky’s iconic 1812 Overture, which premiered on this day, September 6, in 1882, in Moscow. Tchaikovsky, one of Russia’s most beloved composers, is known for his deeply emotional and powerful compositions, and the 1812 Overture is no exception. Written to commemorate Russia's defense against Napoleon's invading army in 1812, the piece tells a dramatic story through music, blending themes of struggle, victory, and national pride.

Famous for its booming cannon fire and triumphant melodies, the 1812 Overture incorporates elements of Russian folk tunes and even the French national anthem, symbolizing the clash between the two nations. The work culminates in a grand, celebratory finale, where the Russian national anthem resounds, signaling ultimate victory.

Though Tchaikovsky himself expressed mixed feelings about the piece, considering it more of a celebratory commission than a personal masterpiece, the 1812 Overture has become a symbol of musical grandeur. Often performed during patriotic events, it remains one of the most widely recognized pieces in classical music. Its thrilling combination of orchestral power and theatricality makes it the perfect conclusion to this week.

Without further ado, Tchaikovsky’s 1812 Overture, Op. 49. Enjoy.

This Day in Legal History: First Continental Congress in Philadelphia

On September 5, 1774, the First Continental Congress convened in Philadelphia, marking a pivotal moment in American legal and political history. Delegates from twelve of the thirteen American colonies gathered in response to the "Intolerable Acts" imposed by the British Parliament. These punitive laws, including the Boston Port Act and the Massachusetts Government Act, were seen as direct threats to colonial self-governance and economic stability. The Congress sought to unify colonial opposition to British rule, beginning with a coordinated response through non-violent means.

One of its most significant outcomes was the drafting of the "Declaration and Resolves," a document asserting colonial rights. This declaration rejected British authority over internal colonial affairs, reaffirmed the colonies' right to self-governance, and condemned the Intolerable Acts as violations of English constitutional law. It also set forth a colonial boycott of British goods through the creation of the Continental Association. The First Continental Congress did not yet call for independence but emphasized reconciliation with Britain under fairer terms. However, its convening laid the groundwork for future revolutionary actions and the eventual establishment of the United States.

The U.S. Department of Agriculture (USDA) has updated its guidance on marketing terms like "grass-fed" and "free-range" for meat and poultry products. The new rules emphasize more robust documentation and encourage the use of third-party certifications to substantiate claims about animal-raising practices and environmental sustainability. This update, however, falls short of satisfying sustainability advocates who call for stricter regulations. The change follows a rise in lawsuits accusing companies of "greenwashing," where environmental claims are made without sufficient proof. Earlier this year, JBS, the world’s largest beef processor, was sued by New York’s attorney general for allegedly misleading consumers about its sustainability efforts.

The USDA’s new rules aim to create fair competition among businesses making genuine claims and help consumers trust the labels. However, some, like the American Grassfed Association, argue that these guidelines should be mandatory rather than voluntary. Critics, including PETA, remain skeptical, stating that meat and dairy products can never be truly sustainable. Meanwhile, businesses are awaiting further clarity from the Federal Trade Commission’s upcoming update of the Green Guides, which provide broader advice on marketing environmental claims.

Scrutiny of Meat Labels Like Grass-Fed Misses Green Expectations

Harlan Crow, a prominent Republican donor, has refused to provide the Senate Finance Committee with financial records related to private yacht and jet travel involving Supreme Court Justice Clarence Thomas. The committee, chaired by Sen. Ron Wyden (D-Ore.), is investigating whether Crow improperly claimed business deductions for personal trips taken with Thomas. The inquiry follows revelations that Thomas took additional undisclosed trips on Crow’s yacht. Wyden emphasized that the committee seeks to understand the extent of Crow’s undisclosed gifts to Thomas in order to inform potential legislation.

Crow's attorney, Michael Bopp, responded by calling the investigation “abusive and unlawful,” accusing the committee of using Crow’s friendship with Thomas for partisan purposes. He argued that the inquiry goes beyond the committee’s authority and is more focused on judicial ethics than legislative issues. Bopp also dismissed the tax concerns, suggesting that if there were legitimate issues with Crow’s business practices, they should have been handled through an IRS audit within the statute of limitations.

By way of reminder Harlan Crow, you will remember, is the clown that I wrote about last year and whose dubious financial dealings continue to make headlines. In addition to his close ties with Justice Clarence Thomas, Crow has been linked to offshore tax havens through his company, Crow Holdings, which holds accounts in the Cayman Islands. This is just one example of the ways billionaires like Crow use "cashports"—a term I attempted to coin to describe citizenship-by-investment programs that grant passports from countries like St. Kitts and Nevis, known for their financial secrecy. The term went nowhere but, happily, scrutiny of Crow continues.

These cashports allow the wealthy to obscure their assets, evading U.S. taxes and potentially funding criminal activities under the guise of legitimate investment. Tax shelters like these rely on high-profile, quasi-legitimate users like Crow to maintain political and economic standing, despite connections to organized crime and other risks. If we aim to curtail these activities, both transparency measures and strict penalties for tax cheats must be pursued aggressively. Crow’s offshore dealings further complicate the public understanding of his financial gifts to Thomas, highlighting the need for a stronger judicial ethics code and international financial transparency.

Harlan Crow Rejects Senate Records Request in Thomas Inquiry

Golden Visas Let People Like Harlan Crow Keep Too Much Hidden (2)

In the ongoing legal case against Donald Trump over attempts to overturn the 2020 election, a U.S. District Court hearing will take place to determine the next steps after the Supreme Court’s recent ruling on presidential immunity. Trump has argued that his actions were part of his official responsibilities as president, seeking to dismiss some charges under this immunity. The court found that Trump cannot be prosecuted for pressuring the U.S. Department of Justice, but other charges, such as using false claims of voter fraud to subvert the election results, remain.

Special counsel Jack Smith aims to push the case forward, while Trump’s legal team seeks to delay proceedings until after the 2024 presidential election. Trump has also raised concerns about the legality of Smith’s appointment as special counsel, mirroring a successful challenge in a separate case involving classified documents. Judge Tanya Chutkan will weigh these competing proposals in deciding how and when to proceed with the case.

US judge to weigh path forward in Trump election case after immunity decision | Reuters

In response to the growing homelessness crisis, California cities like Palm Springs are increasingly turning to police enforcement, emboldened by a recent U.S. Supreme Court decision that upheld camping bans. Palm Springs, traditionally known for its progressive policies, passed a law in July expanding police authority to arrest people for sleeping on public property. The city’s action reflects a broader trend across California, where 12 cities have enacted similar camping bans, citing the Supreme Court ruling. Despite spending over $20 billion on housing programs, California’s homeless population continues to grow, with an estimated 180,000 unhoused residents.

Critics argue that criminalizing homelessness is counterproductive. Experts emphasize the need for deeply affordable housing and warn that police crackdowns alienate the homeless, complicating efforts to provide outreach services. Palm Springs Police Chief Andrew Mills supports compassionate enforcement but stresses that the community must take action to address the crisis. Meanwhile, some cities, including Los Angeles, are resisting police crackdowns and exploring alternatives like sanctioned camping spaces. The debate continues as advocates push for long-term solutions that address the root causes of homelessness, such as rising housing costs and wage stagnation.

Emboldened by Supreme Court, California turns to police in homeless crisis | Reuters

This Day in Legal History: Orval Faubus Resists Brown v. Board of Education

On September 4, 1957, Arkansas Governor Orval Faubus made a highly controversial decision to call in the Arkansas National Guard to prevent nine Black students, known as the "Little Rock Nine," from entering Central High School. This action directly defied a federal court order mandating the integration of public schools, following the landmark 1954 Supreme Court decision in Brown v. Board of Education, which declared racial segregation in schools unconstitutional. Faubus argued that the move was necessary to prevent violence, but critics saw it as a blatant attempt to resist desegregation.

The crisis quickly escalated into a national issue. President Dwight D. Eisenhower responded by deploying the 101st Airborne Division to Little Rock on September 24, 1957, and federalized the Arkansas National Guard to ensure that the students could safely attend school. This marked one of the most significant federal interventions in a state's civil rights matter during the 20th century. The standoff highlighted the ongoing resistance to civil rights in the South and the federal government’s increasing role in enforcing civil rights legislation. Central High School became a symbol of the struggle to dismantle Jim Crow segregation, and the courage of the Little Rock Nine became a defining moment in the broader civil rights movement.

After leaving the governorship, Orval Faubus made several unsuccessful attempts to reclaim his political position, running in the Democratic primaries in 1970, 1974, and 1986 but losing to prominent figures such as Dale Bumpers, David Pryor, and Bill Clinton. Despite these defeats, Faubus remained active in politics and made a surprising shift in the 1980s by supporting civil rights leader Jesse Jackson during the 1984 and 1988 Democratic presidential primaries. Faubus passed away from prostate cancer on December 14, 1994, and was laid to rest in Combs, Arkansas.

Former U.S. President Donald Trump announced in a court filing that he would plead not guilty to the charges in a revised indictment accusing him of trying to overturn the 2020 election. The indictment, brought by Special Counsel Jack Smith, reiterates the original four charges, including fraud and obstruction related to the election's certification. Trump chose to waive his court appearance, allowing his attorneys to enter the plea on his behalf. The indictment was revised after the U.S. Supreme Court ruled that Trump has broad immunity from prosecution over actions taken during his presidency. Trump's legal team and prosecutors are set to meet to determine next steps following the court's decision.

Trump to plead not guilty to charges in revised US indictment | Reuters

A U.S. judge ruled that former President Donald Trump cannot move his New York hush-money case to federal court, denying his bid to delay sentencing beyond the November 2024 election. U.S. District Judge Alvin Hellerstein stated that Trump's actions, involving hush-money payments to Stormy Daniels, were private and unrelated to his presidential duties, falling outside the bounds of federal jurisdiction. Trump argued the case should be dismissed based on the Supreme Court's ruling granting broad immunity to presidents for official conduct, but Hellerstein found the payments were not part of his official role. Trump has filed an appeal, continuing his efforts to transfer the case, while his sentencing remains scheduled for September 18. The case stems from Trump's conviction for falsifying business records related to a $130,000 payment to Daniels to suppress claims of a past affair during the 2016 campaign.

Trump Loses Bid to Move NY Hush-Money Case to Federal Court (3)

Starlink, Elon Musk's satellite broadband company, has complied with a Brazilian Supreme Court order to block access to the social media platform X in Brazil, after initially resisting the directive. The court's order, issued by Judge Alexandre de Moraes, included freezing Starlink's accounts to secure potential fines owed by X, which is also owned by Musk. Despite calling the freeze illegal, Starlink announced it would follow the court order. Brazil's telecom regulator, Anatel, confirmed that Starlink had begun restricting access to X. The platform was ordered blocked for lacking a legal representative in Brazil, a decision upheld by the Supreme Court. Starlink has since initiated legal proceedings challenging the order, arguing it violates Brazil's constitution. The conflict stems from a prior Moraes ruling that targeted X for spreading misinformation and hate speech, which Musk denounced as censorship. Some users in Brazil continue to access X through alternative methods like VPNs.

Starlink backtracks, complies with order blocking X in Brazil, says regulator | Reuters

A group of Republican-led states filed a lawsuit on September 3, 2024, seeking to block the Biden administration's new student loan relief plan. The lawsuit, filed in the Southern District of Georgia, claims the U.S. Education Department is overstepping its authority by pushing forward with a revised debt forgiveness plan after previous versions were halted by courts. This follows the Supreme Court's August 28 refusal to reinstate Biden’s earlier loan forgiveness initiative. The latest plan, which targets borrowers with increasing loan balances or those in repayment for over 20 years, is being challenged for allegedly circumventing prior court injunctions. The states, including Missouri and Georgia, argue the plan is unlawfully advancing and seek an immediate restraining order. Biden has continued efforts to reduce student debt after his initial forgiveness plan, which aimed to cancel up to $20,000 in loans for millions, was struck down by the Supreme Court in 2023.

Biden Student Loan Relief Plan Faces Fresh GOP-Led Lawsuit

This Day in Legal History: The Allies Declare War on Germany

On September 3, 1939, the world witnessed a pivotal moment in legal and military history as the United Kingdom, France, New Zealand, and Australia officially declared war on Germany, marking the beginning of World War II for the Allies. This decisive action was a direct response to Germany's invasion of Poland just two days earlier, on September 1. The declarations were rooted in a series of mutual defense agreements and the moral imperative to counteract Nazi aggression, which threatened the stability of Europe and global peace.

The legal frameworks for these declarations were based on international treaties and commitments, most notably the Treaty of Versailles and the League of Nations Covenant, both of which sought to prevent such unilateral aggression. The declarations marked the start of a global conflict that would reshape international law, particularly in the areas of war crimes, human rights, and the rules of war.

As the conflict expanded, it underscored the limitations of interwar diplomacy and collective security measures, leading to significant legal and institutional changes after the war, including the establishment of the United Nations and the Geneva Conventions. September 3, 1939, thus stands as a day when legal commitments transformed into military action, shaping the course of the 20th century.

After the Justice Department's recent antitrust victory against Google, the tech giant is facing increased legal challenges, with Yelp filing a lawsuit alleging Google’s monopoly power in the local search advertising market. Yelp's complaint, filed in the U.S. District Court for the Northern District of California, follows a ruling by Judge Amit P. Mehta that confirmed Google’s monopoly in general search services and search ads.

This ruling is likely to encourage more private antitrust lawsuits from competitors and consumers, potentially leading to a wave of litigation against Google. While some companies may wait for the appeals process to conclude, others, like Yelp, are acting now, hoping to capitalize on Mehta’s findings.

Yelp's suit focuses on Google’s alleged "self-preferencing" in local search results, claiming that Google’s practices harm competitors by directing users to its own products and away from sites like Yelp. However, legal experts note that Yelp will need to prove that consumers were harmed by these practices, which could be challenging.

The DOJ case centered on general search markets, while Yelp’s claims are specific to local search advertising—a different market that might require different legal arguments. Despite these differences, the ruling against Google in the DOJ case could provide some advantage to future plaintiffs, though each case will need to address its unique circumstances.

Google in Tech Rivals’ Sights for Suits After DOJ Antitrust Win

A recent court ruling against Shaquille O’Neal highlights the increasing legal risks for celebrities who promote cryptocurrency and digital assets. The case involves O’Neal’s promotion of Astrals and Galaxy NFTs, which have been classified as securities by the U.S. District Court for the Southern District of Florida. The court found that O’Neal, by soliciting purchases of these tokens, could be considered a "seller" under securities law, making him liable for the tokens' loss in value following the collapse of the crypto platform FTX.

This ruling underscores the broader legal challenges facing other celebrities, such as Tom Brady and Gisele Bundchen, who have endorsed similar projects. The decision is significant as it expands the definition of solicitation to include public communications via social media and online platforms, not just traditional advertising.

With the law around digital assets still developing, this case serves as a cautionary tale for celebrities. Legal experts suggest that celebrities should seek legal advice before promoting such assets, as they could face significant liability under securities law. The case also sheds light on the ongoing uncertainty in how courts will treat digital assets and their promoters, potentially leading to more civil litigation in the future.

Shaq’s NFT Case Expands Legal Perils for Celebrity Promoters

Tensions between Elon Musk's companies and Brazil have escalated as the country’s telecom regulator, Anatel, threatened to sanction Musk's satellite broadband company, Starlink. This comes after Brazil's Supreme Court upheld a decision to ban the social network X (formerly Twitter) for failing to comply with local regulations, including naming a legal representative. President Luiz Inacio Lula da Silva supported the court's action, criticizing Musk's influence. Judge Alexandre de Moraes, who led the suspension of X, also ordered the freezing of Starlink's accounts, suspecting them of being used to pay fines owed by X.

In response, Musk hinted at retaliating by seizing Brazilian assets but did not specify how. Starlink, defying Moraes' order, refused to block access to X in Brazil, prompting Anatel to consider revoking its operating license. The conflict highlights a broader feud between Musk and Moraes over compliance with Brazilian laws, with critics accusing the judge of overreach and supporters praising his defense of democracy. The suspension of X, which remains inaccessible to most Brazilians, has sparked debates over freedom of expression and the role of tech companies in upholding legal obligations.

Starlink emerges as fresh battleground between Musk, Brazil | Reuters

Google has struck a deal to avoid a proposed "link tax" in California by agreeing to fund local journalism and an AI initiative, totaling nearly $250 million over five years. This includes $55 million from Google for a "News Transformation Fund," to be administered by UC Berkeley, and $62.5 million for a "National AI Innovation Accelerator." 

In my column for Bloomberg this week, I critique the agreement between Google and California, where Google has committed over $172.5 million to support journalism and AI initiatives. While this might seem like a win for journalism, I see it as a temporary fix that sidesteps more substantial regulatory measures, such as a proposed "link tax" or a broader data tax. In my view, these ad-hoc arrangements fall short of providing the long-term support that journalism truly needs.

I believe a more effective solution would be to implement a comprehensive data tax on companies like Google, targeting the revenue they generate from user data used in advertising and the data they ingest for training AI models. This would ensure ongoing funding for journalism and better reflect the enormous influence these tech giants have in our digital economy.

The deal struck between Google and California may offer some short-term benefits, but I’m concerned that it might ultimately lean too heavily on taxpayer subsidies, given that much of Google’s contribution could be tax-deductible. In my opinion, a data tax would be a more equitable and sustainable approach, ensuring that tech companies contribute fairly to public goods like journalism.

I see the proposed data tax as a critical step toward creating a more balanced relationship between states and large tech companies, providing a more permanent solution that better supports journalism and other digital platforms.

Google–California Deal Falls Short Where a Data Tax Would Succeed

Google avoids “link tax” bill with deal to fund California journalism and AI | Ars Technica

This Day in Legal History: Slobodan Milošević Charged with Genocide

On August 30, 2001, the International Criminal Tribunal for the former Yugoslavia (ICTY) announced that former Yugoslav President Slobodan Milošević would face charges of genocide, marking a pivotal moment in international law. This decision added to the existing charges of war crimes and crimes against humanity related to his role in the brutal conflicts that ravaged the Balkans in the 1990s. Milošević, who sought to prevent the breakup of the Yugoslav Federation through violent ethnic campaigns, was accused of orchestrating mass atrocities, particularly against Bosnian Muslims during the Bosnian War.

The genocide charges centered on his alleged responsibility for the Srebrenica massacre, where over 8,000 Bosnian Muslim men and boys were systematically executed by Bosnian Serb forces. The ICTY’s indictment of Milošević was historic, as it was the first time a sitting head of state was charged with genocide by an international tribunal. The trial, which began in 2002, was a complex and lengthy process, reflecting the gravity of the accusations and the challenges of prosecuting such high-level war crimes. Although Milošević died in 2006 before a verdict could be reached, the charges against him underscored the international community’s commitment to holding leaders accountable for genocide and other severe human rights violations.

Walt Disney and DirecTV are urgently negotiating to renew their distribution agreement before it expires on Sunday. Failure to reach a deal could result in DirecTV's 11 million subscribers losing access to Disney channels like ABC and ESPN just before the NFL season begins and during the U.S. Open tennis tournament. DirecTV is pushing for the option to offer smaller, lower-priced packages that exclude ESPN, catering to consumers' preferences in the streaming era. Disney, however, wants to preserve the value of its sports content, proposing a sports-centric package including ESPN and ABC. 

The negotiations are influenced by ongoing changes in the pay TV industry, where subscriber numbers have declined sharply due to the rise of streaming services. The companies are also dealing with the impact of sports streaming rights, which have been central to maintaining pay TV subscribers. 

A new sports-streaming service called Venu Sports, backed by Disney, Fox, and Warner Bros. Discovery, has been delayed by a legal dispute with FuboTV over antitrust claims related to content bundling practices. The dispute underscores the challenges facing traditional pay TV providers as they navigate the growing demand for streaming options. The outcome of these negotiations will have significant implications for the future of sports broadcasting and the pay TV industry.

Disney and DirecTV aim to renew deal ahead of NFL season | Reuters

The DC Court of Appeals has revived a lawsuit against Coca-Cola, brought by Earth Island Institute, alleging the company made misleading claims about its sustainability efforts. The lawsuit challenges statements made by Coca-Cola, such as a tweet asserting that "business and sustainability are not separate stories" for the company. 

Initially, the Superior Court ruled in 2022 that these statements were merely aspirational and did not violate consumer protection laws. However, the appeals court disagreed, stating that Earth Island plausibly argued that Coca-Cola's statements could mislead consumers into believing the company is environmentally responsible, when it might not be. This case is part of a broader trend of "greenwashing" lawsuits, where companies are accused of overstating their environmental commitments. The Federal Trade Commission is also expected to provide more guidelines on environmental marketing claims through its updated "Green Guides."

Coca-Cola Must Face Suit Over Sustainability Claims After Appeal

X (formerly Twitter) is bracing for a potential shutdown in Brazil following escalating tensions between Elon Musk and Supreme Court Judge Alexandre de Moraes. The conflict intensified when the court froze the bank accounts of Musk's Starlink satellite firm after X failed to appoint a legal representative in Brazil by a court-imposed deadline. The dispute stems from Moraes' orders to block certain accounts on X accused of spreading misinformation, which Musk condemned as censorship. Musk responded by criticizing Moraes publicly and offering free internet access to Brazilians via Starlink. The legal battle could result in X losing access to one of its major markets, as the company has already threatened to shut down operations in Brazil due to what it describes as censorship. The situation reflects broader concerns over freedom of speech versus compliance with local laws in digital platforms.

Elon Musk's X braces for shutdown in Brazil as spat with judge intensifies | Reuters

Amazon lost its bid to overturn a unionization vote at its Staten Island JFK8 warehouse, solidifying it as the company's first unionized facility in the U.S. The National Labor Relations Board (NLRB) dismissed Amazon's objections to the 2022 election, where workers voted 2,654-2,131 in favor of joining the Amazon Labor Union (ALU). This ruling certifies the election results, allowing the ALU to represent the facility's roughly 8,000 workers. 

However, Amazon plans to appeal the decision, arguing that both the ALU and the NLRB interfered with the election. Despite the ruling, Amazon may refuse to bargain with the union, potentially leading to further legal battles. The NLRB has already accused Amazon of stalling contract negotiations and retaliating against union supporters. The decision faced dissent from the NLRB's Republican member, who argued that the union's actions, including those by its founder Christian Smalls, illegally coerced workers into voting for the union.

Amazon Staten Island Center Is Retailer’s First to Unionize (1)

AT&T has been fined $950,000 by the FCC for a 911 service outage in August 2023, which affected parts of Illinois, Kansas, Texas, and Wisconsin. This is the latest in a series of similar outages, including two earlier incidents in 2024 that disrupted 911 services across multiple states. The most recent outage was caused by an independent contractor who unintentionally disabled part of the network during unscheduled testing. 

Despite AT&T's vast revenues and close ties with the U.S. government, which includes significant tax breaks and deregulation, the company has struggled to maintain reliable 911 service. These issues come amid broader concerns about AT&T's network security, as recent hacks have compromised the data of over 73 million customers. Critics argue that the government's lenient oversight and generous financial support of AT&T have contributed to its ongoing performance problems, including these critical service failures.

AT&T Has To Settle Over Another 911 Outage, This Time For $950k | Techdirt

This week’s closing theme is by Georg Böhm.

This week’s closing theme brings us into the contemplative world of Georg Böhm, a prominent figure in the German Baroque era. Born on September 2, 1661, Böhm was a distinguished organist and composer whose works deeply influenced the musical landscape of his time. Perhaps best known for his contributions to organ music, Böhm held the prestigious position of organist at St. John's Church in Lüneburg, where he became a key figure in the development of the Northern German organ school. His music is marked by its expressive depth and innovative use of the chorale.

Tonight, we turn our attention to his beautiful setting of the Lutheran chorale Vater Unser im Himmelreich, a piece that perfectly captures the devotional spirit of the Baroque period. This work is a chorale prelude for organ, where Böhm takes the familiar melody of the Lord’s Prayer and weaves it into an intricate and reflective tapestry of sound. Through his masterful use of counterpoint and ornamentation, Böhm brings out the theological and emotional depth of the text, creating a piece that is both meditative and majestic. 

As we listen, we can appreciate Böhm’s ability to transform a simple hymn tune into a profound musical meditation, making it a fitting choice for our closing theme. Enjoy the rich harmonies and spiritual resonance of Georg Böhm’s Vater Unser im Himmelreich.

This Day in Legal History: Civil Rights Act of 1957

On August 29, 1957, the U.S. Congress passed the Civil Rights Act of 1957, marking the first federal civil rights legislation enacted since the Reconstruction era. This landmark act aimed to address racial discrimination and was a significant step in the ongoing struggle for civil rights in America. 

The law established the U.S. Commission on Civil Rights, a bipartisan body tasked with investigating voter discrimination and other civil rights violations. Additionally, it created the Civil Rights Division within the U.S. Department of Justice, empowering federal prosecutors to seek injunctions against those who violated voting rights. Although the act faced significant opposition and was weakened by compromises, it paved the way for future, more comprehensive civil rights legislation. It also symbolized the federal government's renewed commitment to addressing racial inequality, setting the stage for the civil rights movements of the 1960s. 

The Civil Rights Act of 1957 is often viewed as a foundational moment in the modern civil rights era, reflecting the nation's evolving attitudes toward race and justice.

Lawyers who successfully challenged Elon Musk’s $56 billion Tesla pay package are seeking a record $6 billion in fees, but Delaware's top court has cautioned against awarding "windfall" fees. Chancellor Kathaleen McCormick of Delaware's Court of Chancery, who is overseeing the case, must decide on the fee amount and whether a shareholder vote restored Musk’s pay, which could reduce the fee. The lawyers argue that their fee request is justified by their significant victory and years of unpaid work. However, the court has signaled that extremely high fees should be carefully scrutinized to avoid excessive compensation. If the pay package is considered restored, Tesla's liability for a large fee might be reduced.

'Windfall' fees now less likely for lawyers who sued to cut Musk's Tesla pay | Reuters

The U.S. Supreme Court has decided to keep President Joe Biden's student-loan relief plan on hold, maintaining the pause imposed by a federal appeals court. This decision prolongs uncertainty for around 8 million borrowers enrolled in the SAVE plan, which aimed to lower monthly payments and provide other benefits. The Department of Education expressed disappointment, highlighting the plan's potential to ease financial burdens.

The Supreme Court's action follows its earlier rejection of a separate Biden debt relief plan, which it deemed unauthorized by Congress. Missouri and other Republican-led states argue that the SAVE plan is similarly flawed, as it would eliminate up to $475 billion in debt, making it even more expansive than the prior initiative. The Biden administration insists that the states lack legal standing and that Congress granted the Education Department the necessary authority to implement such plans.

The 8th U.S. Circuit Court of Appeals is expected to deliver a ruling soon, but for now, new enrollments in the program are halted, and borrowers face the possibility of penalties once the current payment grace period ends next month.

Supreme Court Keeps Biden Student-Loan Relief Plan on Hold (2)

US Supreme Court declines to revive Biden's student debt relief plan | Reuters

In a piece for Forbes I wrote a bit about the unrealized gains tax, or wealth tax, that has engendered much consternation among people not worth $100m. 

By way of background, the Biden administration’s FY 2025 budget proposes a 25% wealth tax on unrealized gains for individuals owning over $100 million in assets. Unrealized gains are the increase in an asset's value that hasn't been sold or converted into cash, meaning the gains exist only on paper. This proposal largely affects the ultra-wealthy, with the average taxpayer not impacted.

To illustrate, consider someone who invests $250,000 in a stock, and its value increases 40 times within a year. Even with this substantial gain, the investor wouldn’t face the unrealized gains tax unless their shares appreciated another ten times, reaching a value of $100 million. At that point, they would owe $24.9 million in taxes, requiring them to sell a portion of their shares. Despite the hefty tax bill, they would still retain significant wealth.

Critics worry that such a tax might lead to a stock market downturn if large shareholders sell off assets to cover their tax obligations. However, selling shares to fund other projects is common, and similar concerns about market instability aren’t typically raised in those cases. In sum, you almost certainly needn’t worry about an unrealized gains tax if you are listening to this–and should be more concerned about what kinds of services you can expect to receive from the revenue raised from such a tax. 

If I may briefly editorialize: think about the earlier story, where student debt relief has been shelved–or possibly killed entirely. The only time the national discourse revolves around what a policy will cost–the cost would be borne by the ultra-wealthy and benefits would flow to low and middle-income households. Keep an eye on that, it may be important. 

Unrealized Gains Tax—Visualizing $100m And When To Be Concerned

This Day in Legal History: Alabama Ten Commandments Monument

On August 28, 2003, the Supreme Court of Alabama took down a monument of the Ten Commandments from its courthouse rotunda, marking the culmination of a high-profile legal battle. The monument had been installed by Chief Justice Roy Moore in 2001, who argued that it reflected the moral foundation of U.S. law. However, this act sparked a federal lawsuit, Glassroth v. Moore, in which three Alabama attorneys claimed the monument violated the Establishment Clause of the First Amendment, which prohibits government endorsement of religion.

The federal District Court for the Middle District of Alabama agreed with the plaintiffs, ordering Moore to remove the monument. Moore refused, maintaining that he had a duty to acknowledge God in his official capacity. The case was subsequently appealed to the Eleventh Circuit, which upheld the lower court's ruling. When Moore continued to defy the court orders, the Supreme Court of Alabama intervened, removing him from his position as Chief Justice. This case became a significant moment in the ongoing debate over the separation of church and state in the United States.

It is worth noting that Roy Moore, the then-Chief Justice of the Alabama Supreme Court who so vociferously argued for the inclusion of the Ten Commandment monument is the selfsame Roy Moore that, during his 2017 U.S. Senate campaign, saw nine women accuse him of inappropriate conduct. Three of the women claimed they were assaulted by Moore when they were aged 14, 16, and 28. The other six women described Moore pursuing relationships with them when they were as young as 16. Independent witnesses corroborated that Moore had a reputation for approaching teenage girls at a local mall. Moore's responses to the allegations were inconsistent, initially recognizing some accusers but later denying knowledge of any of them.

Thomas V. Girardi, a prominent figure in toxic tort litigation, was convicted on four counts of wire fraud in Los Angeles federal court. Once renowned for his work on the Erin Brockovich case and his appearances on "Real Housewives of Beverly Hills," the disbarred attorney faced accusations of defrauding vulnerable clients. The jury reached a unanimous verdict after just four hours of deliberation, rejecting Girardi's defense that his cognitive decline prevented him from forming intent to commit fraud.

Prosecutors argued that Girardi knowingly deceived clients, fabricating excuses to explain the missing funds, which he had already spent. The trial centered on the suffering of clients who were betrayed by Girardi in their darkest moments, leading to their financial and emotional devastation. Girardi could face up to 80 years in prison at his sentencing in December. His former CFO, Christopher Kamon, will also stand trial for related charges. The case highlights Girardi's history of evading disciplinary action despite numerous complaints and reveals potential future charges against other senior lawyers at his firm.

Thomas Girardi Found Guilty by Jury of Defrauding Clients (2)

A recent decision by a German privacy regulator has sparked intense debate about how personal data is handled by AI models like large language models (LLMs). The Hamburg Commissioner for Data Protection concluded that LLMs, despite generating personal data, do not store such information in a way that makes it identifiable, challenging the notion that AI systems can retain personal data. 

This stance contradicts findings by technologists who argue that LLMs can memorize and reproduce specific data, including personal details. The German position could limit individuals' ability to control their data in AI systems, potentially leading to significant differences in how the U.S. and the EU regulate AI. While California is pushing for laws that explicitly protect personal data in AI, the German approach may set a precedent for a more lenient interpretation under the GDPR. This divergence highlights the complexity of applying traditional privacy laws to AI technologies, with ongoing discussions about how to reconcile these differing perspectives.

By way of brief background, LLMs do not directly memorize the training material they are exposed to. Instead, they analyze vast amounts of text data and learn patterns, correlations, and structures within the language, which are then used to generate responses. This learning process involves creating a complex mathematical representation of language—a model—rather than storing specific pieces of text verbatim. However, because these models are trained on enormous datasets, they might sometimes generate outputs that resemble specific phrases or data points encountered during training, especially if those phrases are common or particularly distinctive. This can occasionally lead to the unintentional reproduction of personal or sensitive information from the training data, even though the model itself does not store or recall such information in a traditional, deliberate sense.

Of course, that would all be of slim comfort to someone who sees an AI chatbot spit out their home address and social security number in response to a prompt. 

Personal Info in AI Models Threatens Split in US, EU Approach

Special Counsel Jack Smith is moving forward with prosecuting Donald Trump for allegedly attempting to overturn the 2020 election, despite a recent setback from the Supreme Court. The court found that Trump might have partial immunity from prosecution for actions taken as president, leading Smith to file a revised indictment. This new version removes claims related to Trump’s communications with government officials, including efforts to involve the Justice Department, but retains the core charges accusing Trump of conspiring to reverse his election loss. 

The case comes as Trump campaigns for the 2024 election, adding tension to the legal proceedings. Trump criticized the indictment on social media, calling for its dismissal. The updated indictment also cuts references to former Justice Department official Jeffrey Clark as a co-conspirator and modifies Trump’s description, downplaying his role as president at the time. The case now focuses more on Trump’s role as a candidate rather than his presidential actions. As the case progresses, Trump faces other legal challenges, including cases involving classified documents and charges in Georgia related to the 2020 election.

Trump Special Counsel Presses Ahead With 2020 Election Case (3)

A U.S. appeals court has revived a lawsuit against TikTok by the mother of a 10-year-old girl who died after attempting a dangerous "blackout challenge" promoted on the platform. The Philadelphia-based 3rd U.S. Circuit Court of Appeals ruled that TikTok is not shielded by Section 230 of the Communications Decency Act, which typically protects internet companies from liability for user-generated content. 

The court found that Section 230 does not apply when TikTok’s algorithm actively recommends harmful content, viewing such recommendations as the company’s own speech. This decision marks a shift from previous interpretations of Section 230, which had generally protected platforms from liability for failing to prevent the spread of harmful content. The ruling overturns a lower court's dismissal of the case, allowing the mother, Tawainna Anderson, to pursue claims against TikTok and its parent company, ByteDance, following her daughter Nylah's death in 2021. The case could have significant implications for how tech companies are held accountable for the content their algorithms promote.

TikTok must face lawsuit over 10-year-old girl's death, US court rules | Reuters

This Day in Legal History: 25th Amendment to the US Constitution 

On February 10, 1967, the 25th Amendment to the U.S. Constitution was ratified, establishing clear procedures for presidential succession and addressing concerns about vacancies in the executive branch. The amendment was a response to historical ambiguities in presidential succession, particularly after the assassination of President John F. Kennedy in 1963. Prior to its ratification, the Constitution provided little guidance on what to do if a president became incapacitated. The amendment formally allowed the vice president to assume the presidency if the president died, resigned, or was removed from office. It also established a process for filling a vacant vice presidency, a critical change since several vice presidents had died or resigned without a designated replacement mechanism. 

Additionally, it provided a procedure for a president to temporarily transfer power to the vice president, such as in cases of medical procedures. The amendment’s fourth section allowed for the removal of a president deemed unable to discharge the duties of the office, though this provision has never been invoked. The first use of the amendment came in 1973 when Vice President Spiro Agnew resigned, and President Nixon appointed Gerald Ford as his replacement. The amendment was invoked again in 1974 when Nixon resigned, making Ford the first unelected president in U.S. history. Since then, the temporary transfer of power provision has been used several times for medical reasons, including during surgeries for Presidents Reagan, George W. Bush, and Biden. The 25th Amendment remains a critical safeguard, ensuring stability and continuity in the executive branch.

A federal judge has temporarily blocked Elon Musk’s Department of Government Efficiency from accessing certain Treasury Department data and ordered the destruction of information already obtained. The ruling follows a lawsuit filed by 19 Democratic-led states against President Trump and Treasury Secretary Scott Bessent, alleging that allowing Musk’s team access to personal financial data violates federal law. 

The judge found the states likely to succeed on the merits and cited risks of data exposure and hacking. The lawsuit argues that the administration implemented the policy without public explanation or a privacy impact assessment, violating the Administrative Procedure Act. The order prevents Treasury from granting access to unqualified individuals and mandates background checks for those with clearance. Meanwhile, a separate lawsuit filed by unions has also led to a temporary restriction on access to Treasury systems. The White House defended DOGE’s role as a government efficiency initiative, while critics, including Senator Ron Wyden, accused the administration of misleading Congress about the extent of Musk’s involvement. A hearing is set for February 14 to determine whether a longer injunction will be issued.

Musk’s DOGE Blocked From Treasury Data in State AGs Lawsuit (1)

The Justice Department is shifting resources from traditional priorities like counterterrorism and white-collar crime to focus on immigration enforcement under President Trump. Prosecutors are being reassigned to border districts, and the FBI’s joint terrorism task forces have been directed to assist with immigration initiatives. Additionally, US Marshals and DEA agents now have the authority to make immigration arrests. Attorney General Pam Bondi has ordered investigations into sanctuary jurisdictions and instructed DOJ units to prioritize foreign bribery cases linked to cartels over other white-collar crimes. 

Critics, including congressional Democrats, warn that diverting resources in this way could increase crime and weaken national security. Legal experts argue that pulling experienced prosecutors for immigration cases carries a steep opportunity cost, while counterterrorism specialists say their methods are not suited for handling migration. The move reflects a broader effort by the Trump administration to maximize the DOJ’s role in immigration enforcement early in the new term, learning from past efforts to reshape asylum law and border policies.

Border Focus Pulls DOJ Resources From Terrorism, White Collar

A U.S. judge will soon decide whether President Trump’s buyout offer to two million federal workers can proceed. The plan, which offers employees pay through September if they resign now, has been challenged by federal workers' unions, arguing that Congress has not approved funding for it. Overseen by Elon Musk and his newly created Department of Government Efficiency, the initiative is part of Trump’s broader effort to downsize the federal government. 

Democrats and unions have raised concerns over Musk’s growing influence and DOGE’s access to sensitive government data. While 65,000 employees have reportedly accepted the buyout, unions warn that the administration may not honor the deal. The Consumer Financial Protection Bureau (CFPB) has already faced shutdown-like actions, with staff ordered to stop work and the agency temporarily closed. Meanwhile, Trump has hinted at further cuts, including in the Pentagon, as legal challenges continue to mount against his sweeping restructuring efforts.

Judge to review Trump's buyout offer to government workers | Reuters

The Consumer Financial Protection Bureau (CFPB) has been effectively shut down under the leadership of acting chief Russell Vought, who ordered staff to halt all regulatory activities and cut the agency’s funding. The move eliminates federal oversight of financial companies, drawing sharp criticism from consumer advocates and Democratic lawmakers. The National Treasury Employees Union sued to block Vought’s actions, arguing they undermine Congress’ authority. Critics also raised concerns about Elon Musk’s involvement, as his Department of Government Efficiency has gained administrative access to CFPB systems, despite Musk’s business interests in the financial sector. Agency employees and unions accuse Musk of trying to take control of his own regulator. Vought also ordered the agency’s headquarters to close for a week and shut down public communications. The shutdown is part of Trump and Musk’s broader effort to restructure the federal government, prompting legal challenges and public protests.

Consumer protection agency neutralized by Trump's new chief | Reuters

This Day in Legal History: Kellogg-Briand Pact

On August 27, 1928, thirty-two nations signed the Kellogg-Briand Pact in Paris, a treaty aimed at renouncing war as a means of resolving disputes. Initiated by U.S. Secretary of State Frank B. Kellogg and French Foreign Minister Aristide Briand, the pact reflected the widespread desire for peace following the devastation of World War I. The signatories pledged to settle conflicts through diplomatic means rather than military force, marking an ambitious step towards global peace. Kellogg’s role in the treaty earned him the Nobel Peace Prize in 1929.

However, the pact’s impact was limited by significant flaws. It contained no mechanisms for enforcement, leaving it powerless to prevent future conflicts. Additionally, the treaty allowed for "self-defense" and other exceptions, which nations exploited to justify subsequent wars. Despite its noble intentions, the Kellogg-Briand Pact failed to prevent the outbreak of World War II just over a decade later. Nonetheless, it remains a symbolic milestone in the international effort to promote peace and reduce reliance on warfare in global relations.

A federal district court has temporarily halted a Biden administration program that allows immigrant spouses and stepchildren of U.S. citizens to seek removal protections and work permits without leaving the country. Republican-led states challenged the "parole in place" program on August 23, claiming it violated the Administrative Procedure Act and overstepped the Department of Homeland Security's authority. The program was expected to benefit around 550,000 people. Judge J. Campbell Barker, who granted a 14-day administrative stay, clarified that this pause doesn't block DHS from accepting applications. Barker emphasized that the stay is a preliminary measure, without indicating the potential outcome of the case.

A quick bit of editorializing here: The Loper Bright decision's overturning of Chevron deference, coupled with the reimagining of the Administrative Procedure Act, suggests we are on the cusp of significant legal shifts. Without the Chevron framework guiding agency interpretations, courts will likely see a surge in litigation as regulated entities and interest groups challenge agency actions like these here more frequently. This could lead to increased judicial scrutiny of administrative decisions and a more fragmented regulatory landscape, where the consistency of agency enforcement may be replaced by a patchwork of court rulings that vary by jurisdiction.

Judge Freezes ‘Parole in Place’ Program for Immigrant Spouses

Upcoming tax regulations could clarify whether agricultural land contaminated by PFAS qualifies for a 10% federal tax credit under the Inflation Reduction Act of 2022, which incentivizes renewable energy projects on brownfields. While the current definition of brownfields doesn’t explicitly include unfarmable agricultural land, expected updates from the Treasury Department may offer clearer guidance. 

This could benefit states like Maine, where policies already prioritize using PFAS-contaminated farmland for renewable energy projects, although they don't offer direct financial incentives. Developers like Walden Renewables and Dirigo Solar LLC are exploring solar projects on such contaminated sites, seeing it as a way to utilize damaged land without further spreading pollutants. However, not all contaminated farms are suitable due to factors like the cost of connecting to the energy grid. Maine’s laws provide additional protections for landowners, including requirements for restoring the property and covering decommissioning costs, making these projects potentially beneficial for both developers and farmers.

Energy Tax Credit Rules for Polluted Sites Could Help Farmers

In the closing arguments of Thomas Girardi’s criminal fraud trial, prosecutors painted him as the mastermind behind the theft of millions in client settlement funds, labeling him the "thief-in-chief." Assistant U.S. Attorney Ali Moghaddas described Girardi’s law firm, Girardi Keese, as a Ponzi scheme, arguing that Girardi’s cognitive decline did not absolve him of responsibility. The prosecution countered claims that former CFO Christopher Kamon was solely to blame, noting that $14 million was stolen before Kamon even joined the firm.

Moghaddas emphasized Girardi’s active role in the fraud, highlighting his refusal to share bank records and his deceptive dealings with clients like the Ruigomez family. He dismissed the defense's argument that Girardi was mentally unfit, instead portraying him as fully aware of his actions until the end.

In contrast, Girardi’s defense argued that he was more a victim of Kamon’s “generational” fraud and was unaware of the crimes due to his deteriorating mental state. They likened the situation to “Weekend at Bernie’s,” claiming that others propped Girardi up to keep the firm running.

Girardi, who pleaded not guilty to four counts of wire fraud for allegedly stealing $15 million between 2010 and 2020, faces additional charges and civil lawsuits.

Girardi Was ‘Thief-in-Chief’ Prosecutors Say as Trial Closes

U.S. Special Counsel Jack Smith has asked the 11th Circuit Court of Appeals to reinstate the criminal case against Donald Trump for allegedly retaining classified documents. This appeal follows a July ruling by Judge Aileen Cannon that dismissed the indictment, arguing that Smith was unlawfully appointed. Smith's team countered, stating that the Attorney General has the authority to appoint special counsels and that Cannon's decision contradicts established legal precedents, including Supreme Court rulings. They also requested oral arguments to be scheduled. Trump's legal team has called for the case to remain dismissed, claiming it is part of politically motivated attacks against him. Cannon's ruling has been widely criticized for ignoring long-standing legal practices concerning special counsel appointments.

Special counsel asks court to revive charges against Trump in documents case | Reuters

In my column this week I discuss how a wealth tax could address inequality in the US, I explore Spain’s wealth tax model as a potential solution. Spain’s wealth tax targets the top 0.5% of its wealthiest citizens, proving to be a significant revenue generator. This raises the question of whether a similar approach could work in the US, where economic disparity is a persistent issue. 

Spain’s tax model, with rates based on net wealth and specific exemptions, provides a tangible example that the US could adapt. Even applying the lowest Spanish tax rate to the top 0.1% of US wealth holders—those worth over $50 million—could generate approximately $340 billion annually. 

This would represent a 7% increase in federal tax revenue, potentially boosting welfare funding by 25% or slightly reducing national debt. Notwithstanding the promise, implementing such a tax in the US would face serious legal challenges and political resistance. The key to gaining public support will lie in clearly connecting the wealth tax revenue to tangible benefits for the average citizen. 

Spain’s Wealth Tax Model Could Address Inequality in US Policy

This Day in Legal History: Nineteenth Amendment Adopted

On August 26, 1920, the Nineteenth Amendment to the U.S. Constitution was officially adopted, marking a pivotal moment in American history by granting women the right to vote. The Amendment, which states that the right to vote "shall not be denied or abridged by the United States or by any State on account of sex," was the culmination of decades of activism and struggle by women’s suffrage advocates. Pioneers like Susan B. Anthony, Elizabeth Cady Stanton, and many others fought tirelessly for this fundamental right, organizing rallies, petitions, and civil disobedience.

The Amendment's adoption followed a lengthy ratification process, where Tennessee became the crucial 36th state to ratify the amendment, securing the necessary three-fourths majority. This victory did not come easily; it was the result of a concerted effort by suffragists who faced significant opposition. The Nineteenth Amendment not only expanded the electorate but also symbolized a broader movement toward gender equality in the United States. Its passage empowered women to engage fully in the democratic process and laid the groundwork for future advances in civil rights. The legacy of the Nineteenth Amendment continues to influence social and political movements to this day.

Big Law firms are rallying behind Vice President Kamala Harris by hosting high-dollar fundraising events. Sullivan & Cromwell's Rodge Cohen is organizing a New York lunch featuring Doug Emhoff, with ticket prices reaching up to $100,000. In Washington, Jenner & Block’s Josh Hsu is co-hosting an evening reception where tickets are nearly $7,000. 

Since Harris became the Democratic frontrunner, high-profile attorneys have been mobilizing to support her campaign, with several already raising substantial sums. Notably, Mayer Brown partner Phil Recht, a Harris supporter, notes strong momentum in campaign contributions. The host committees for these events include prominent figures from Big Law and the tech industry, such as Skadden's Nina Rose and OpenAI's Johanna Shelton. 

The fundraising effort has seen significant engagement, with many top lawyers eager to contribute. For example, Dawn Smalls of Jenner & Block raised $100,000 in just a week, and partners at firms like Gibson Dunn and WilmerHale are actively supporting Harris through events and donations.

Big Law Throwing Kamala Fundraisers with a Six-Figure Ticket Tier

The U.S. Federal Trade Commission (FTC) is set to challenge Kroger's $25 billion merger with rival Albertsons in federal court, arguing that the deal would harm consumers and workers by reducing competition. The FTC's case, part of the Biden administration's broader effort to address rising consumer prices, will focus on how the merger could lead to higher grocery prices and diminish the bargaining power of unionized workers, particularly in states like California and Washington where both chains have significant overlap. This trial marks a significant test for FTC Chair Lina Khan, who has prioritized using antitrust laws to protect workers, a shift from the traditional focus on consumer prices.

Kroger and Albertsons argue that the merger is necessary to compete with large multinational retailers like Walmart, Costco, and Amazon. They propose selling 579 stores to mitigate competition concerns and promise to lower grocery prices by $1 billion post-merger. However, the FTC, supported by several states, contends that the merger would lead to store closures and weakened union leverage. The trial, expected to last around three weeks, will also examine whether the proposed buyer of the divested stores, C&S Wholesale Grocers, can successfully operate them.

This case is significant as it builds on the FTC's recent focus on labor market competition, following other antitrust actions that have challenged the impact of mergers on workers, such as those in the college athletics and publishing industries. The outcome could pave the way for more scrutiny of mergers based on their effects on labor markets.

US FTC's bid to block Kroger-Albertsons merger heads to trial | Reuters

Kroger case tests FTC Chair Khan's bid to protect workers | Reuters

The US Chamber of Commerce, a conservative business organization, is urging Congress to maintain the 21% corporate tax rate and extend key provisions of the 2017 Republican-led tax law. The Chamber argues that these measures will support sustained economic growth, aiming for at least 3% annually. 

As Congress prepares for a major tax code overhaul next year, the Chamber is actively lobbying to preserve lower international tax rates set to increase in 2025 and to reinstate certain deductions for research and development, interest expenses, and full asset expensing. While Republicans generally support extending parts of the 2017 law, despite concerns about the growing deficit, Democrats advocate for raising the corporate tax rate to 28% and increasing taxes on the wealthy to cover the law's costs. The University of Pennsylvania’s Wharton School estimates that extending the law would only offset about 4.4% of its projected $4 trillion cost through economic growth.

The US Chamber of Commerce is known for its conservative stance, particularly in advocating for pro-business policies and lower taxes. Historically, the Chamber has supported Republican initiatives and has often opposed regulatory measures that it views as detrimental to business interests.

US Chamber to Ask Congress to Preserve 21% Corporate Tax Rate

Citgo Petroleum, originally founded in 1910 as Cities Service Company, became a significant player in the U.S. refining industry. In 1986, Venezuela's state-owned oil company, PDVSA, purchased a controlling stake in Citgo, integrating it into Venezuela's oil export strategy. Citgo operates as a major U.S. refiner with its headquarters in Houston, Texas.

Currently, Citgo is at the center of a complex legal battle in the U.S. stemming from Venezuela's expropriations and debt defaults. A U.S. federal court officer, Robert Pincus, is overseeing an auction of shares in Citgo’s parent company, PDV Holding, to satisfy up to $21.3 billion in claims. These claims have resulted from international arbitration awards and issues surrounding foreign sovereign immunity, making the case particularly complex.

The auction process, ongoing since 2017, has faced multiple delays due to the complexity of the bids and the unprecedented legal context. The latest extension request, the third this year, would push the deadline to September 16 for Pincus to recommend a winning bid. The leading bidders are CVR Energy, supported by investor Carl Icahn, and an investment group led by Gold Reserve, a mining company. Following the recommendation, there will be a 21-day period for objections before a final sales hearing on November 7.

US court officer requests new extension to select winner of Citgo auction | Reuters

This Day in Legal History: Sacco and Vanzetti are Executed 

On August 23, 1927, Italian immigrants Nicola Sacco and Bartolomeo Vanzetti were executed in the Massachusetts State Prison, marking the culmination of one of the most controversial trials in American history. The two men, both anarchists, had been convicted of a 1920 armed robbery and double murder in South Braintree, Massachusetts. However, their trial was widely criticized for being tainted by anti-immigrant and anti-radical sentiments, with many believing they were targeted more for their political beliefs than any clear evidence of guilt. Protests and demonstrations erupted around the world, calling for their release or a new trial.

Despite the global outcry, the U.S. judicial system upheld their conviction, and they were sentenced to death. Sacco and Vanzetti’s execution sparked widespread condemnation and became a symbol of the miscarriage of justice. Decades later, in 1977, Massachusetts Governor Michael Dukakis issued a proclamation officially exonerating Sacco and Vanzetti, acknowledging the unfairness of their trial and the lasting impact it had on civil liberties in the United States. Their case remains a powerful reminder of the dangers of prejudice and the importance of due process in the legal system.

OpenAI has hired Idriss Kechida as its first global data protection officer, reflecting the company's growing focus on privacy amid its rapid expansion in generative AI. Kechida, previously the associate general counsel and chief privacy officer at Match Group, will oversee OpenAI's compliance with global privacy laws and collaborate closely with the company's privacy legal team, led by Emma Redmond. Kechida was drawn to OpenAI by the unique privacy challenges posed by AI technology. His role is part of a broader hiring spree at OpenAI, which has brought on more than a dozen lawyers recently, including high-profile recruits from companies like Google and Netflix, to address the increasing legal and regulatory scrutiny the company faces. This expanded legal team will tackle issues ranging from trust and safety protocols to lawsuits challenging OpenAI’s business practices.

OpenAI Swipes Match’s Privacy Chief for New Data Protection Role

The Eleventh Circuit Court of Appeals has blocked the Biden administration's rule extending Title IX protections to include gender identity and sexual orientation in schools receiving federal funding. This ruling reverses a previous decision by an Alabama judge that allowed the rule to take effect. The rule, adopted in April, faced opposition from over half of U.S. states, leading to multiple lawsuits. Alabama, Georgia, Florida, and South Carolina successfully appealed to the Eleventh Circuit after an initial failure to secure an injunction from the lower court. The appeals court argued that the rule significantly broadened the scope of Title IX beyond its original intent, potentially exceeding the Education Department's authority. The court cited the Supreme Court's definition of discrimination in *Davis v. Monroe County Board of Education*, which requires harassment to be severe, pervasive, and objectively offensive to qualify under Title IX. Judge Charles R. Wilson dissented, supporting the lower court's decision.

Title IX Gender Identity Protections Blocked by Eleventh Circuit

The U.S. Supreme Court, in a 5-4 decision, has partially revived an Arizona law that requires proof of U.S. citizenship to register to vote. The ruling reinstates the provision that mandates documented proof for those using the state voter registration form, but leaves in place a lower court's block on similar requirements for the federal registration form. This decision comes after Arizona Republicans and the Republican National Committee requested the revival, following a federal judge's earlier block of the law due to challenges from the Biden administration and advocacy groups. The Supreme Court's ruling underscores ongoing debates over voting rights, especially in battleground states like Arizona.

US Supreme Court partly revives Arizona's proof of citizenship voter law | Reuters

In my piece for Forbes on IRS data access and accountability, I highlight the challenges faced by the IRS in securing sensitive taxpayer information, given the vast number of employees and contractors with access. Traditional methods like rigorous vetting and background checks are not sufficient, as insider threats often come from those without prior misconduct. Instead of focusing solely on prevention through vetting, I argue that the IRS should prioritize making all data access traceable and creating formal, transparent avenues for reporting concerns.

I propose that the IRS enhance its monitoring capabilities by using artificial intelligence to log and analyze every instance of data access. This would deter unauthorized access and help quickly identify the source of any breaches. Additionally, I suggest establishing an "Office of Public Integrity," a formal mechanism for employees and contractors to disclose information they believe is in the public interest. This office would provide a controlled, internal process for such disclosures, balancing transparency with the need to protect sensitive data. By implementing these measures, the IRS can improve data security and public trust.

Bringing Leakers Into The Fold—IRS Data Access And Accountability

This week’s closing theme is by Ludwig van Beethoven, a composer of some note.

Ludwig van Beethoven, one of the most revered composers in classical music history, was born in 1770 in Bonn, Germany. His music bridged the Classical and Romantic eras, pushing the boundaries of composition and expression. 

Among his vast body of work, the Piano Sonata No. 16 in G Major, Op. 31, No. 1, composed in 1802, stands out as a prime example of his innovative style. This piece is part of a set of three sonatas (Op. 31) that Beethoven composed during a period of personal and artistic transformation. The first movement, Allegro vivace, is marked by its lively and playful character, reflecting Beethoven's desire to break away from the traditional sonata form and experiment with new ideas. The sonata was premiered on August 25th, 1802, offering audiences a glimpse into Beethoven's evolving musical vision. As this week's closing theme, the Allegro vivace offers a vibrant and energetic conclusion, embodying the spirit of Beethoven's creativity and the boldness that made him a giant in the world of music.

Without further ado, Ludwig van Beethoven’s Piano Sonata No. 16 in G Major, Op. 31, No. 1, enjoy. 

This Day in Legal History: Welfare Reform

On August 22, 1996, President Bill Clinton signed the Personal Responsibility and Work Opportunity Act into law, marking a significant overhaul of the American welfare system. This legislation introduced strict work requirements for welfare recipients, imposed a lifetime limit of five years on receiving benefits, and replaced federal welfare entitlements with block grants to states, allowing them to set their own eligibility criteria. While the act aimed to encourage self-sufficiency and reduce dependency on government aid, it also had profound and often harmful consequences. 

The law disproportionately affected low-income families, particularly single mothers, by forcing them into low-wage jobs without adequate support for child care or job training. The five-year cap on benefits led many to exhaust their aid without securing stable employment, pushing them deeper into poverty. Additionally, the block grant system gave states significant discretion, leading to disparities in welfare assistance across the country and often resulting in reduced support for the most vulnerable populations. While the act succeeded in reducing welfare rolls, it did so at the cost of increasing economic insecurity for many families, highlighting the complex and often punitive nature of welfare reform in America.

Following the U.S. Supreme Court's 2023 ruling that banned affirmative action in college admissions, the Massachusetts Institute of Technology (MIT) saw a significant drop in the racial and ethnic diversity of its incoming freshman class. The percentage of Black, Hispanic, Native American, and Pacific Islander students fell to 16% from 31% in previous years. In contrast, the proportion of Asian American students increased from 41% to 47%, while the percentage of white students remained stable.

MIT President Sally Kornbluth acknowledged the decrease in diversity as a consequence of the court's decision and stated that despite the class's overall excellence, it lacks the broad racial and ethnic representation that the institution has historically aimed to achieve. MIT and other colleges have been revising their admissions strategies to comply with the ruling, but these efforts have not fully mitigated the impact on underrepresented minority groups. Moving forward, MIT plans to enhance its outreach, including better promotion of financial aid and expanding access to STEM education for younger students, in hopes of addressing the enrollment gaps.

MIT's enrollment of Black, Latino students drops after Supreme Court affirmative action ban | Reuters

MIT’s Drop in Black Students Shows Fallout From Top Court Ruling (3)

Fred Stone, a third-generation dairy farmer in Maine, had his livelihood devastated by PFAS contamination, commonly known as "forever chemicals," which rendered his farm's land unusable for agriculture. In response, Stone recently signed a 30-year contract with Walden Renewables to convert his polluted farmland into a solar energy site, marking a reluctant but necessary shift to survive financially. Maine has developed innovative strategies, including prioritizing PFAS-contaminated farms for renewable energy projects, to help affected farmers like Stone. The state aims to meet its renewable energy goals while offering a lifeline to farmers whose lands have been compromised by PFAS.

Despite the solar option providing some relief, it’s not the first choice for most farmers, who initially respond with grief and anger to the loss of their agricultural livelihoods. Moreover, only certain properties are suitable for solar energy, limiting the number of farmers who can benefit. While Maine's approach is seen as a potential model, more comprehensive solutions are needed at the federal level to address the widespread issue of PFAS contamination and its impact on farmers.

Maine’s Solar Incentive Helps Farms Spoiled by Forever Chemicals

Lingo Telecom has agreed to pay a $1 million fine for transmitting AI-generated robocalls that falsely imitated President Joe Biden in an effort to dissuade New Hampshire voters during the Democratic primary election. The robocalls, orchestrated by political consultant Steve Kramer, used voice-cloning technology to spread disinformation. The Federal Communications Commission (FCC) initially proposed a $2 million fine but settled at $1 million, requiring Lingo to implement stricter compliance with caller ID authentication rules.

Kramer, who worked for Biden's challenger, U.S. Representative Dean Phillips, and admitted to paying for the calls, now faces additional charges and a proposed $6 million fine from the FCC. The incident has heightened concerns in Washington about the potential for AI-generated content to mislead voters in the upcoming elections. In response, the FCC has proposed new rules that would require political ads on broadcast radio and television to disclose the use of AI-generated content, although the agency lacks authority over internet and social media ads.

Lingo Telecom agrees to $1 million fine over AI-generated Biden robocalls | Reuters

This Day in Legal History: American Bar Association Founded

On August 21, 1878, the American Bar Association (ABA) was founded in Saratoga Springs, New York, by a group of 75 lawyers committed to advancing the legal profession in the United States. The ABA quickly became the nation’s premier organization for attorneys, setting standards for legal education, ethics, and professional conduct. It played a crucial role in shaping American jurisprudence, advocating for legal reforms, and providing resources for continuing legal education. Over the decades, the ABA influenced significant legal developments, including the establishment of the Model Rules of Professional Conduct, which guide attorney ethics nationwide.

However, from 2009 to 2019, the ABA saw a substantial decline in membership, reflecting broader challenges within the legal profession, such as the rising cost of legal education, the changing dynamics of legal practice, and competition from other professional organizations. Despite these challenges, the ABA remains a key player in the legal field, continuing to influence policy and uphold the standards of the profession. Its founding marks a pivotal moment in U.S. legal history, representing the formalization of efforts to unify and elevate the practice of law across the country.

George Santos, a former U.S. congressman representing Queens and Long Island, has pleaded guilty to fraud and identity theft charges, agreeing to serve a minimum of two years in prison. U.S. Attorney Breon Peace highlighted that Santos' acceptance of mandatory prison time was a critical factor in finalizing the recent plea agreement. Originally charged with fabricating fundraising figures and falsifying extensive parts of his biography during his congressional campaign, Santos was expelled from Congress in 2023. The 36-year-old now faces a potential maximum sentence of 22 years, with sentencing set for February 7 by Judge Joanna Seybert. Despite pleading guilty to only two counts, Santos admitted wrongdoing in all 23 original charges, which may influence the severity of his sentence. Peace emphasized the significance of holding corrupt public officials accountable to maintain public trust in governmental institutions.

Recent Supreme Court rulings have narrowed the scope of what constitutes bribery under federal law, impacting how prosecutors approach corruption cases. In June, the Court decided that accepting gratuities after performing an official act does not violate federal bribery statutes for state and local officials. Another ruling limited the application of honest services fraud charges to non-government individuals, further restricting prosecutorial avenues. These decisions present challenges for federal prosecutors, who must now navigate a more constrained legal framework when pursuing corruption charges. Despite these obstacles, prosecutors like Peace remain committed to holding public officials accountable by adapting their strategies within the revised legal boundaries. Understanding these Supreme Court decisions is crucial for comprehending the current landscape of political corruption prosecutions and the efforts required to secure convictions.

Mandatory prison was key to George Santos deal, US prosecutor says | Reuters

Anthropic PBC is facing a copyright lawsuit from authors Andrea Bartz, Charles Graeber, and Kirk Wallace Johnson, who allege that the company used pirated versions of their works to train its AI model, "Claude." The authors claim that Anthropic used an open-source dataset called The Pile, which included a subset known as "Books3" containing nearly 200,000 pirated books, including their own. Although Books3 was removed from The Pile in August 2023, older versions with the pirated content remain available. The lawsuit, filed in the U.S. District Court for the Northern District of California, accuses Anthropic of training its AI on this illegally obtained content instead of properly licensing it, likening the situation to a "modern-day Napster."

The authors argue that Anthropic’s actions harm their ability to earn a living by enabling users to generate text that would otherwise be paid for, thereby undermining the licensing market for copyrighted material. They pointed out that other AI companies, such as OpenAI, Google, and Meta, have struck licensing deals with content owners, highlighting a growing market for legally licensed training data. In a related issue, Anthropic is also being sued by eight music publishers for allegedly using its AI to reproduce song lyrics scraped from the internet. The authors’ complaint criticizes Anthropic for claiming to be a public benefit company while allegedly causing significant harm to copyright owners.

Anthropic Hit With Copyright Suit From Authors Over Flagship AI

A bill passed by the U.S. Senate to add 66 new judges to federal district courts is projected to increase government spending by $349 million over the next decade, according to a report from the Congressional Budget Office (CBO). The bill, known as the JUDGES Act, represents the first significant expansion of the judiciary since 1990 and aims to alleviate the increasing caseloads and staffing shortages in several states, including California, Texas, and Delaware. The bill plans to gradually create these judicial positions, including 63 permanent and three temporary ones, starting in January 2025.

The CBO estimates that $98 million of the total cost will cover the salaries and benefits of the new judges, which are constitutionally protected and not subject to congressional appropriation. The remaining $250 million will cover administrative costs, including court staff, facilities, security, and technology. Additionally, the bill mandates that the Government Accountability Office report on judges' caseloads and federal detention space needs, which would cost $1 million over the same period.

Despite the projected costs, supporters of the bill, including lead sponsor Senator Todd Young, argue that the cost of inaction would be higher, as delays in the judicial system could deny citizens timely access to justice. The bill now awaits consideration in the U.S. House of Representatives.

Bill to add 66 US judges would cost $349 mln over a decade, CBO says | Reuters

A federal judge in Dallas has blocked the U.S. Federal Trade Commission (FTC) from enforcing its near-total ban on noncompete agreements, which was set to take effect in September. U.S. District Judge Ada Brown ruled that the FTC lacked the authority to implement the ban, describing it as "unreasonably overbroad without a reasonable explanation." This ruling, favoring the U.S. Chamber of Commerce and a Texas tax firm that challenged the ban, is a significant setback for the FTC. The decision contrasts with a prior ruling by a Pennsylvania judge who supported the FTC’s authority.

The FTC argued that noncompete agreements harm workers by restricting economic freedom, depressing wages, and limiting innovation, while employers claim they protect investments in employees. Currently, about 20% of U.S. workers are subject to these agreements. Although the FTC planned to use its authority to ban noncompetes as part of its mission to prevent unfair competition, Judge Brown's ruling could lead to an appeal, potentially to the conservative-leaning 5th Circuit Court of Appeals. The case is one of three ongoing lawsuits against the FTC’s rule, with other cases pending in Florida and Pennsylvania.

FTC Ban on Worker Noncompete Deals Blocked by Federal Judge (2)

US judge strikes down Biden administration ban on worker 'noncompete' agreements | Reuters

This Day in Legal History: Economic Opportunity Act

This day in legal history, on August 20, 1964, President Lyndon B. Johnson signed the Economic Opportunity Act into law, a cornerstone of his ambitious "War on Poverty." The Act allocated $1 billion to fund social programs aimed at alleviating poverty across the United States. It created initiatives like Job Corps, which provided education and vocational training to young people, and Head Start, a program focused on early childhood education. 

The legislation also established community action programs designed to empower local communities to fight poverty by giving them control over how federal funds were spent. The Economic Opportunity Act was a key element of Johnson's broader "Great Society" vision, which sought to eliminate poverty and racial injustice while improving education, healthcare, and housing. Though the Act faced criticism for its effectiveness and implementation, it marked a significant federal commitment to social welfare. It laid the groundwork for subsequent anti-poverty programs and remains a pivotal moment in the history of U.S. social policy.

For context and as stated, the act set aside $1 billion for social programs. The richest American of the 1960s was J. Paul Getty, with a net worth of right around $1.2 billion. Therefore, the program set aside about 83% of the net worth of the wealthiest American of the day. If a similar program was enacted today, Elon Musk is the wealthiest American with a net worth of about $195 billion–so a comparable program would need to set aside approximately $162 billion for social welfare programs. Today, Job Corps has a yearly budget of just $1.8 billion and Head Start just $12.5 billion for a combined total of about $15 billion – we have quite a ways to go. 

A group advocating for changes to Ohio's redistricting process has filed a lawsuit against the Ohio Ballot Board, accusing it of misleading voters with biased language regarding a proposed constitutional amendment. The group, Citizens Not Politicians, argues that the board's nearly 900-word description of the measure, which will appear on the November ballot, is designed to prejudice voters against the amendment. The lawsuit asks the Ohio Supreme Court to require the board to use new, neutral language that complies with state law. The board's description suggests that voting "yes" would create a taxpayer-funded commission required to gerrymander districts, which the plaintiffs claim is misleading. The case is expected to be expedited due to the upcoming election.

Ohio Redistricting Activists Sue Over GOP-Passed Ballot Proposal

Walt Disney Co. has agreed to have a Florida wrongful death lawsuit resolved in court, reversing its earlier stance that the case should go to arbitration. The lawsuit was filed by Jeffrey Piccolo, whose wife, Kanokporn Tangsuan, died from an allergic reaction after dining at Raglan Road Irish Pub and Restaurant in Disney Springs, Orlando. The couple allegedly chose the restaurant due to Disney and Raglan's assurances about accommodating food allergies. 

Initially, Disney argued that it wasn’t liable, claiming it had no control over the restaurant’s operations. Later, Disney suggested the case should go to arbitration based on Piccolo's Disney+ subscription, the arbitration clause in the terms of service for that streaming service, and his use of the company’s website. However, Disney has now decided to waive arbitration to expedite the case in court, expressing a desire to address the family's loss with sensitivity.

Disney agrees to have Florida wrongful death lawsuit decided in court | Reuters

U.S. expatriates are frustrated with the IRS’s proposed rules on foreign-trust reporting, particularly regarding the classification and reporting of foreign retirement plans. Many foreign retirement accounts are considered foreign trusts, requiring Americans abroad to report them to the IRS, which can be complex and unclear. 

Despite the IRS's efforts to revise these rules, expatriates and tax professionals feel that the new proposals don't provide enough clarity on who needs to report and which retirement plans are affected, leaving many in financial uncertainty. Over 1,500 comments were submitted to the IRS, with expatriates expressing anxiety and confusion about their obligations. Practitioners highlight that the ambiguity in these rules can lead to severe penalties for non-compliance, making it difficult for taxpayers to understand their responsibilities. The IRS’s public hearing on the matter is expected to focus heavily on the need for clearer guidance, particularly on foreign retirement plans, with calls for broader exemptions and more comprehensive relief.

Americans Abroad Want Relief From IRS on Foreign-Trust Reporting

The EPA argues that the challengers to the Biden administration's power plant carbon limits are unlikely to succeed on the merits of their case. The EPA asserts that its carbon capture technology standard and related limits are based on well-established scientific and technical judgments, which fall within the agency's statutory authority under the Clean Air Act. 

The EPA's power plant carbon limits set new standards for reducing greenhouse gas emissions from coal and gas power plants, focusing on carbon capture and storage technology. The rule requires that existing long-term coal plants implement technology to capture 90% of their carbon dioxide emissions by 2032. It also mandates that medium-term coal plants co-fire with natural gas at 40% of their annual heat input by 2030. For new gas plants operating at a significant capacity, the same 90% carbon capture standard applies. The EPA argues that these standards are based on proven technologies that can feasibly reduce emissions, aligning with the agency’s traditional regulatory approach of improving the environmental performance of individual power plants.

The EPA contends that the rule adheres to the traditional regulatory approach by focusing on technologies that reduce emissions at individual sources, rather than enforcing a generation shift across the energy grid, as the Supreme Court found problematic in the earlier West Virginia v. EPA case. The EPA also argues that carbon capture technology is not only adequately demonstrated but also achievable within the set timelines, based on extensive evidence from current and past projects. Additionally, the EPA claims that the potential impact on coal plants, including possible closures, is incidental and does not invalidate the rule. They stress that the rule’s compliance deadlines are reasonable and that states have flexibility in their implementation plans. The EPA concludes that a stay would cause irreparable harm by allowing continued carbon emissions and that the court should deny the stay applications.

EPA Urges Supreme Court to Block Bid to Freeze Power Plant Rule

This Day in Legal History: Salem Witch Trial Executions

On August 19, 1692, five individuals—four men and one woman—were executed for witchcraft in Salem, Massachusetts, during the height of the Salem Witch Trials. This dark period in American colonial history saw widespread hysteria and a fervent belief in the supernatural, leading to accusations against more than 200 people. The five executed on this day were Reverend George Burroughs, John Proctor, John Willard, George Jacobs Sr., and Martha Carrier. Despite their protests of innocence, they were condemned by the courts based on dubious evidence, including spectral evidence, which allowed testimonies of visions and dreams to be admissible. Reverend Burroughs, who had previously served as a minister in Salem, recited the Lord’s Prayer perfectly before his execution—an act thought impossible for a witch—yet he was still hanged. The executions marked a turning point in the trials, as public opinion began to shift, questioning the legitimacy of the proceedings. The tragic events of this day highlight the dangers of mass hysteria and the miscarriage of justice when reason is overshadowed by fear.

Former U.S. Representative George Santos, expelled from Congress in December 2023, is expected to plead guilty to multiple criminal corruption charges on August 19, 2024, according to sources. Santos, a Republican, faces federal charges for misusing campaign funds for personal expenses, fraudulently charging donors’ credit cards, and receiving unemployment benefits while employed. These actions led to his removal from office after just 11 months, during which he was widely discredited for fabricating parts of his past. A House Ethics Committee investigation revealed Santos spent campaign funds on luxury items and services, further fueling the scandal. Democrat Tom Suozzi won the seat in a special election.

Expelled former Rep. Santos to plead guilty to corruption charges, source says | Reuters

On August 17, 2024, the social media platform X, formerly known as Twitter, announced it would close its operations in Brazil immediately due to what it described as "censorship orders" by Brazilian judge Alexandre de Moraes. X, owned by Elon Musk, claims that Moraes threatened to arrest one of the company's legal representatives if X did not comply with orders to remove certain content. The platform shared a document, allegedly signed by Moraes, outlining fines and arrest threats against their representative. In response, X decided to shut down its operations in Brazil to protect its staff. Despite the closure, the service remains accessible to Brazilian users. The conflict stems from earlier legal disputes, where Moraes ordered X to block accounts associated with spreading misinformation and hate speech during former President Jair Bolsonaro's government. Musk has publicly criticized Moraes, calling his actions unconstitutional.

X says it is closing operations in Brazil due to judge's content orders | Reuters

Sonder Holdings Inc., an alternative-lodging company, has struck a series of deals to raise capital and integrate its brand into Marriott International Inc.'s system to improve its financial stability. After a steep decline in market value from $2.3 billion to $29 million, Sonder secured $43 million in preferred equity and $83 million in additional liquidity from existing lenders. The company has also entered a long-term licensing agreement with Marriott, allowing its properties to be listed on Marriott’s platforms under the "Sonder by Marriott Bonvoy" brand. This partnership is expected to drive demand and reduce costs, aiding Sonder’s path to profitability. Additionally, Marriott’s Bonvoy loyalty program will allow members to earn and redeem points at Sonder properties. Sonder’s CEO, Francis Davidson, believes this collaboration will help the company expand and attract more business travelers. The integration is expected to be completed by 2025, providing Sonder with a more stable financial footing.

Sonder to Announce Marriott License Deal, Additional Liquidity

This Day in Legal History: WWI Spy Convicted

On August 16, 1918, Lothar Witzke became the first German spy convicted by the United States during World War I. Tried by a military commission at Fort Sam Houston, Texas, Witzke was found guilty of espionage for his role in sabotage activities against the U.S., including his alleged involvement in the Black Tom explosion, a major act of sabotage in 1916. His conviction marked a significant moment in the U.S.'s efforts to counter German espionage during the war. Witzke was sentenced to hang, but his fate took a turn when President Woodrow Wilson commuted his sentence on May 27, 1920. The commutation reflected the complexities of wartime justice and international relations.

Later, in 1922, President Calvin Coolidge granted Witzke a pardon, leading to his deportation to Berlin. Witzke's case highlighted the U.S. government's determination to crack down on espionage while also navigating the diplomatic and political nuances of post-war justice.

India's legal market is cautiously opening to foreign law firms under new guidance allowing them to practice international law within the country. However, only a few firms have taken steps to establish a presence, as many remain hesitant due to past challenges and uncertainties about the implementation of these new rules. India’s rapid economic growth and favorable business environment under Prime Minister Narendra Modi make it an attractive prospect for foreign firms, but the memory of previous failed attempts and local opposition leads many to adopt a wait-and-see approach.

Some firms are opting for strategies like the "fly in, fly out" model, running operations from nearby locations like Singapore. Others, like Baker McKenzie and Dentons, are planning to establish offices when permitted, but are currently working through collaborations with local firms. Japan-based TNY Legal and GVA Professional have already entered the Indian market to support their clients' growing needs.

Despite the opportunities, significant hurdles remain, including unclear regulations and potential resistance from the local bar. Implementing legislation is still required, and foreign firms face a complex bureaucracy. The possibility of limits on foreign registrations to protect Indian firms adds to the uncertainty, making the path forward for foreign law firms in India fraught with challenges. 

India Sees Foreign Law Firms Take Baby Steps to Set Up Outposts

TikTok is challenging a U.S. law requiring its parent company, China-based ByteDance, to sell its U.S. assets or face a ban, arguing that the U.S. Department of Justice has misrepresented the app's ties to China. TikTok maintains that its data and content moderation decisions for U.S. users are handled within the U.S. and that the law infringes on its free speech rights. The law, signed by President Biden, aims to end Chinese ownership of TikTok due to national security concerns. The case will be heard by a federal appeals court in September, just before the November presidential election.

TikTok disputes US claims on China ties in court appeal | Reuters

The Ninth Circuit Court of Appeals upheld California's vote-by-mail system, ruling that it does not violate the constitutional rights of in-person voters, even if some invalid mailed ballots are occasionally counted. The court rejected the claim that counting these ballots dilutes the votes of in-person voters, emphasizing that such errors do not disproportionately affect any particular group. The decision arose from a lawsuit aiming to decertify California’s 2020 election results, which, if successful, could have favored Donald Trump. The court found that the plaintiffs' "vote dilution" theory was legally unfounded, consistent with rulings from other circuits.

California Vote-By-Mail Upheld in Rebuke of ‘Vote Dilution’ Suit

GSK plans to seek the dismissal of a Zantac-related lawsuit in Florida, where plaintiffs allege the heartburn drug caused prostate cancer. This follows a recent Florida court ruling in GSK's favor, which excluded expert testimony linking ranitidine, Zantac’s active ingredient, to prostate cancer. The ruling aligns with a 2022 federal court decision that dismissed similar cancer-related claims. However, a Delaware court ruling in June allowed over 70,000 lawsuits to proceed, permitting expert testimony that Zantac causes cancer. GSK is appealing the Delaware decision, as the majority of Zantac cases are concentrated there. Concerns over ranitidine's potential to degrade into the carcinogen NDMA led to the FDA pulling Zantac from the market five years ago.

GSK to seek dismissal of Florida case against heartburn drug Zantac | Reuters

Bayer achieved a legal victory as a U.S. appeals court ruled that federal law shields the company from liability in a lawsuit claiming its Roundup weed killer causes cancer. The 3rd U.S. Circuit Court of Appeals in Philadelphia decided that federal regulations, which require uniform pesticide labeling, preempted Pennsylvania state law from mandating a cancer warning on Roundup. This ruling came in response to a lawsuit by David Schaffner, a landscaper diagnosed with non-Hodgkin's lymphoma, who argued that Bayer's Monsanto unit failed to warn consumers about the cancer risk. The decision could lead to a U.S. Supreme Court review due to conflicting rulings from other federal appeals courts, potentially impacting Bayer's broader litigation risk. Bayer, which has settled much of the Roundup litigation for $10.9 billion but still faces tens of thousands of claims, welcomed the ruling, asserting that Roundup and its active ingredient glyphosate are safe.

Bayer wins victory in US legal battle against Roundup cancer claims | Reuters

This week’s closing theme is by Franz Schubert.

This week's closing theme brings us to the world of Franz Schubert, a composer whose music bridges the Classical and Romantic eras with remarkable emotional depth and lyrical beauty. Schubert, born in Vienna in 1797, was a prolific composer despite his tragically short life, leaving behind a vast body of work that continues to resonate with audiences today. Among his numerous compositions, his Piano Quintet in A major, D. 667, known as the "Trout Quintet," and his symphonies are often celebrated, but today we focus on one of his masterpieces in chamber music: his Piano Quintet in F minor, Op. 15.

The first movement, "Allegro con fuoco ma non troppo," showcases Schubert's unique ability to blend intensity with elegance. The title, which translates to "fast, with fire but not too much," perfectly encapsulates the movement’s spirit. It opens with a passionate and fiery theme that immediately captures the listener's attention, setting the stage for a dynamic interplay between the piano and strings. As the movement progresses, Schubert masterfully balances this intensity with moments of lyrical beauty, creating a musical narrative that is both dramatic and profoundly moving.

This piece exemplifies Schubert's gift for melody and his deep understanding of the human experience, qualities that have endeared his music to generations of listeners. As you listen to the "Allegro con fuoco ma non troppo," let yourself be carried by its sweeping phrases and the emotional journey it offers—a true testament to Schubert's genius.

Without further ado, the first movement of Franz Schubert’s Fantasie in C major, Op. 15, popularly known as the Wanderer Fantasy. Enjoy.  

This Day in Legal History: “Starve or Sell”

On August 15, 1876, the U.S. Congress passed a "starve or sell" bill, a genocidal piece of legislation aimed at coercing the Sioux Nation into surrendering their sacred Black Hills. The bill was passed just two months after the Battle of Little Bighorn, where Sioux and Cheyenne warriors achieved a significant victory against General George Custer’s forces. The Black Hills had become a target for American expansion after Custer's 1874 expedition discovered gold there, sparking a rush of settlers. Rather than respecting existing treaties, which guaranteed the Black Hills to the Sioux, Congress chose to use starvation as a tool of negotiation. The bill stipulated that no further appropriations for the Sioux's subsistence would be made unless they relinquished the Black Hills, leaving the Sioux with little choice but to sign away their land. This event is a dark chapter in American history, reflecting the broader pattern of exploitation and broken promises that characterized the United States' treatment of Native American tribes. The "starve or sell" bill stands as a stark reminder of the lengths to which the government would go to seize indigenous lands.

The FTC has issued its Final Rule on fake reviews, following a Notice of Proposed Rulemaking in July 2023. The Rule targets unfair or deceptive practices in consumer reviews, such as fake reviews, undisclosed company insiders writing reviews, and the sale of fake social media influence. Key provisions include prohibiting businesses from buying reviews that express a particular sentiment and requiring clear and conspicuous disclosures in reviews. 

The Rule also addresses review suppression, ensuring that businesses cannot hide negative reviews through intimidation or selective publication. Notably, the Final Rule excludes a proposed prohibition on "review hijacking," where existing reviews are repurposed for different products. Violations of the Rule could result in significant civil penalties, underscoring the importance of compliance for businesses that rely on customer reviews. The Rule will go into effect 60 days after its publication in the Federal Register. The complex and fact-specific nature of the Rule means businesses must carefully assess their practices to avoid potential penalties.

End of “Fake Reviews”? — FTC Issues the Final Rule

The Biden administration announced that the U.S. government's first drug price negotiations under the Inflation Reduction Act will save Americans $7.5 billion in 2026. These savings will benefit senior citizens, who will see $1.5 billion less in out-of-pocket costs for ten key medications, and the government, which will reduce its Medicare spending by $6 billion. 

The policy, long sought by Democrats, allows Medicare to use its purchasing power to negotiate lower drug prices, a move that could cut the federal deficit by $237 billion over a decade. The newly negotiated prices are expected to be made public by September 1, and the policy will initially affect ten drugs, including treatments for diabetes and heart conditions. While the pharmaceutical industry has opposed the policy, claiming it effectively lets the government set prices, the administration views it as a historic step toward lowering healthcare costs.

US Drug Price Negotiations Cut Costs $7.5 Billion in First Year

The Delaware Supreme Court upheld a $267 million fee award for attorneys who secured a $1 billion settlement with Dell Technologies Inc., reinforcing Delaware’s precedent of substantial payouts in high-risk corporate litigation. Chief Justice Collins J. Seitz Jr., writing for the court, affirmed that the Chancery Court acted within its discretion, emphasizing that the case was complex and contentious, involving nearly 100 defense lawyers. 

This decision, which aligns with Delaware’s long-standing multi-factor approach to fee awards, rejects Pentwater Capital Management LP’s challenge for a lower fee based on federal court standards. The ruling underscores Delaware’s reluctance to adopt rigid rules for fee awards, maintaining the court's discretion to consider case-specific factors like complexity, attorney experience, and the risk of non-payment. The decision comes as Tesla faces similar large fee requests in ongoing litigation, raising concerns about public perception of such massive legal fees. The court acknowledged that while these fees are intended to motivate attorneys to take on challenging cases, there is a risk they could be seen as excessive.

​​Big Lawyer Paydays in Risky Cases Affirmed by Delaware Court (2)

A U.S. judge signaled plans to issue an order requiring Google to give Android users more options for downloading apps, following a jury's finding that Google monopolized app distribution on its platform. Judge James Donato expressed frustration with Google's resistance to implementing reforms proposed by Epic Games, which sued Google for stifling competition. 

Donato indicated that his ruling will prioritize user and developer flexibility outside the Google Play store, aiming to open up the market after years of Google's dominance. He also mentioned setting up a compliance committee to oversee the changes. Despite Google's concerns about the impact on competition and security, Donato emphasized that Google must pay the price for its monopolistic behavior. This case adds to Google's legal challenges, as it also faces a separate government lawsuit over its search engine practices.

US judge says 'monopolist' Google can't avoid app store reforms | Reuters

Chevron Corp has agreed to pay $550 million to the city of Richmond, California, over a decade as part of a settlement that led the city to drop a proposed tax on Chevron's local refinery. The settlement, approved by the Richmond City Council, will be paid in annual installments from July 2025 to June 2035. Richmond had planned to seek voter approval for a tax on the refinery, arguing that Chevron should contribute more to the community where it has operated for over a century. The settlement avoids the need for a ballot measure and resolves the dispute.

Chevron to pay $550 million settlement to Richmond, California | Reuters

Cipher Challenge

In the world of finance and taxation, certain phrases hold the key to understanding foundational concepts that impact us all. The following encoded message is one such phrase, essential to grasping the full scope of what individuals and entities must consider when assessing their financial obligations. Decipher this phrase, and you'll uncover a principle that is central to determining what falls within the broad spectrum of economic gain. The answer lies at the heart of how we define the starting point for many financial calculations. Can you crack the code? Send me a message with your best guess.

doo lqfrph iurp zkdwhyhu vrxufh ghulyhg

This Day in Legal History: Social Security Act Signed

On August 14, 1935, President Franklin D. Roosevelt signed the Social Security Act into law, a landmark piece of legislation that reshaped the American social welfare system. The Act established several critical programs, including unemployment insurance, pension plans for the elderly, and "Aid to Dependent Children," which later became known as Aid to Families with Dependent Children (AFDC). Born out of the economic devastation of the Great Depression, the Social Security Act was a cornerstone of Roosevelt’s New Deal, aimed at providing financial security for vulnerable populations. The signing of this Act marked the beginning of a federal commitment to ensuring a safety net for the elderly, the unemployed, and families in need. The Social Security program has since evolved into one of the most enduring and significant aspects of American public policy, continuing to play a vital role in the lives of millions.

Mars Inc. has agreed to purchase Kellanova, the brand behind Pringles, Eggos and Cheez-its, for nearly $36 billion, marking the largest packaged-food industry deal in almost a decade. The acquisition price includes $83.50 per share in cash, representing a 33% premium over Kellanova's closing price before the deal talks were reported. This move comes as the food industry faces declining volumes and slowing growth, prompting companies to seek consolidation and innovation. 

Kellanova, which spun off its cereal business last year, has shown strong earnings and raised its full-year guidance due to successful new products and marketing efforts. The deal, expected to close in the first half of next year, will allow Mars to diversify its portfolio beyond chocolate, especially as cocoa prices have surged. The transaction will be financed through Mars' cash reserves and a $29 billion bridge loan. Antitrust concerns are expected to be minimal, given the limited overlap between the companies' products. If the deal falls through due to regulatory issues, Mars would owe Kellanova a $1.25 billion termination fee.

Mars Buys Snack Maker Kellanova in $36 Billion Deal

A New York judge, Justice Juan Merchan, has denied Donald Trump's request for the third time to recuse himself from the case in which Trump was convicted of falsifying business records related to hush money paid to Stormy Daniels. Trump’s lawyers argued that Merchan had a conflict of interest due to his daughter's work for a political consultancy linked to Democratic campaigns. However, Merchan dismissed these claims, stating they were repetitive and lacked evidence. Trump was found guilty on 34 felony counts in May, with sentencing scheduled for September 18. The Manhattan District Attorney's Office labeled Trump's recusal attempts as frivolous.

Trump loses third bid for judge to step aside in hush money case | Reuters

The U.S. Department of Justice (DOJ) is contemplating breaking up Google following a court ruling that found the company monopolized the online search market. This would be the most significant antitrust action since the unsuccessful attempt to break up Microsoft two decades ago. 

Among the possible remedies, the DOJ is considering divesting units like the Android operating system and the Chrome web browser, or even forcing Google to sell its AdWords platform. Another option involves requiring Google to share data with competitors like Microsoft's Bing or DuckDuckGo, to level the playing field. 

The DOJ's deliberations follow Judge Amit Mehta's recent ruling against Google, which found that the company used illegal agreements to secure its dominance in search and search ads. The DOJ may also push for a ban on exclusive contracts that stifle competition, which were central to the case. If pursued, the breakup would be the largest since AT&T's dismantling in the 1980s. However, Google plans to appeal the ruling, and any DOJ proposal would need court approval.

DOJ Mulls Google Breakup Push After Landmark Antitrust Win (1)

The National Labor Relations Board (NLRB) has argued that the recent U.S. Supreme Court ruling in Jarkesy v. U.S. Securities and Exchange Commission does not affect its ability to address illegal labor practices. The Supreme Court ruling found that the SEC's in-house enforcement practices violated the constitutional right to a jury trial, raising questions about the powers of other agencies. 

However, the NLRB maintains that its role in remedying worker harm is distinct from the punitive measures by the SEC, as it focuses on compensating workers rather than imposing penalties. Macy's, which is appealing an NLRB decision related to an illegal lockout, contends that the Supreme Court’s ruling applies broadly, including to claims involving illegal firings, which the company argues are similar to common law wrongful termination cases. 

The NLRB cited a 2022 decision in Thryv Inc., which expanded its power to order compensation for direct or foreseeable financial harms. While the 5th Circuit Court invalidated the Thryv ruling on its merits, it did not address broader issues of remedies. The 9th Circuit is now considering the impact of the Jarkesy decision on the NLRB's authority.

NLRB, Macy's duel over US Supreme Court ruling's impact on agency powers | Reuters

Yesterday, in a piece I wrote for Forbes, I explored the economic impact of tax breaks for data centers, arguing that while these facilities are essential to the modern digital economy, they don't generate long-term job growth as some proponents suggest. Instead, data centers resemble traditional infrastructure projects, offering utility rather than sustained employment. For example, in Washington State, tax incentives meant to create jobs in rural areas have primarily benefited large corporations like Microsoft, with minimal job creation for local communities.

These data centers also place significant demands on local resources, such as electricity and water, especially in areas where these resources are scarce. Given their limited role in job creation, I suggest that public subsidies should focus on the construction and development of these centers and related internet infrastructure, rather than on ongoing operational support. By investing in infrastructure that enhances connectivity and sustainability, states can ensure public funds are used responsibly and generate broader social benefits.

Tax Breaks For Data Centers Bring Few Jobs

This Day in Legal History: 11th Amendment Ratified

On February 7, 1795, the 11th Amendment to the U.S. Constitution was ratified, restricting federal judicial power over lawsuits against states. The amendment was a direct response to the Supreme Court’s 1793 decision in Chisholm v. Georgia, which held that a private citizen of one state could sue another state in federal court. This ruling alarmed many states, as it threatened their sovereign immunity and exposed them to lawsuits from individuals. 

In reaction, Congress swiftly proposed the 11th Amendment, which was ratified by North Carolina on this day, completing the necessary approvals. The amendment states that federal courts cannot hear cases against a state brought by citizens of another state or a foreign country. This reinforced the principle of state sovereignty and limited the reach of the federal judiciary. The amendment effectively overturned Chisholm and set a precedent for later expansions of state immunity. Over time, the Supreme Court interpreted the amendment broadly, extending protections to cases brought by a state’s own citizens as well. The 11th Amendment remains a cornerstone of federalism, shaping the balance of power between states and the national government.

Federal agencies have pulled out of law school recruiting events following President Donald Trump’s executive order freezing hiring across the government. More than a dozen agencies withdrew from NYU’s public interest career fair, and others skipped a similar event hosted by Georgetown and George Washington University. The freeze, which affects federal legal jobs and prestigious honors programs at agencies like the DOJ and IRS, has left many law students scrambling for alternatives. While some large law firms are looking to hire displaced junior lawyers, there are limited openings, especially for first- and second-year students whose summer jobs were canceled. 

Firms like Morgan Lewis, Quinn Emanuel, and Elsberg Baker & Maruri are among those actively considering affected candidates. However, with most Big Law summer associate spots already filled, many students may struggle to secure positions. The freeze, which could last up to 90 days, is part of a broader effort to reduce the federal workforce through attrition and “efficiency” measures.

Trump Hiring Freeze Has Agencies Ditching Law School Recruiting

For decades, the Justice Department has prided itself on independence, with attorneys expected to uphold the law "without fear or favor," as former Attorney General Merrick Garland emphasized. This principle, strengthened after Watergate, has long guided DOJ lawyers in their duty to serve the nation rather than any single president. However, Attorney General Pam Bondi’s new memo marks a stark departure from that tradition, warning DOJ lawyers against refusing to advance legal arguments they disagree with and referring to them as the president’s lawyers. 

The memo threatens disciplinary action, including termination, for attorneys who decline to sign briefs or appear in court due to personal objections. Critics argue that this undermines legal ethics and pressures attorneys to prioritize loyalty to Trump over their professional responsibilities. Historically, DOJ lawyers who found themselves in ethical conflicts could ask to be reassigned or resign, but Bondi’s directive appears designed to force them into compliance or out of the department entirely. The memo is particularly concerning as Trump’s DOJ aggressively defends controversial executive actions, making it harder for lawyers to voice concerns about weak or legally questionable cases. Legal experts worry that a mass exodus of experienced attorneys could damage the department’s credibility, further eroding trust in the rule of law.

Bondi Raises Independence Concerns with Attorney Advocacy Memo

The Trump administration is facing a lawsuit from the American Federation of Government Employees and the American Foreign Service Association over its rapid dismantling of the U.S. Agency for International Development (USAID). The suit, filed in federal court, argues that President Trump’s foreign aid freeze and subsequent orders to halt USAID projects were unconstitutional and have caused a global humanitarian crisis. Since Trump’s executive order on January 20, USAID staff have been laid off or placed on leave, and key aid programs combating malaria, HIV, and global hunger have been suspended. The shutdown, largely overseen by Elon Musk, has left food aid worth $340 million stranded and led to worsening health crises, according to the lawsuit. Critics argue that since Congress created USAID by statute, Trump lacks the legal authority to dismantle it. The lawsuit seeks an emergency court order to restore funding, reopen offices, and prevent further agency cuts.

Trump administration sued by government workers over cuts to USAID | Reuters

Companies are rushing to file merger notifications before a new Federal Trade Commission (FTC) rule takes effect after 5 p.m. on Friday, significantly expanding reporting requirements for deals over $126.4 million. The rule, introduced under President Biden and set to take effect under President Trump, is expected to triple the workload for companies seeking regulatory clearance. Businesses are scrambling to file under the old rules to avoid higher compliance costs and navigate a familiar system rather than being among the first to test the new requirements. While attorneys don’t see the rush as an attempt to evade scrutiny, some worry that the surge in filings—combined with Trump’s push to shrink the federal workforce—could result in inadequate review of certain deals. The private equity industry has strongly opposed the rule, arguing it places unnecessary burdens on firms, and has filed a lawsuit to block it, though no ruling is expected this week. Some lawmakers are considering legislative action, and attorneys are closely watching for any last-minute delays, though chances of a suspension are diminishing.

Companies wary of new US rule scramble to file mergers by Friday, lawyers say | Reuters

This week’s closing theme is by Gustav Mahler.

Gustav Mahler, one of the most influential late-Romantic composers, was known for his expansive symphonies that bridged the worlds of the 19th and 20th centuries. Born in 1860, Mahler's music often grappled with deep philosophical and existential themes, blending moments of beauty, nostalgia, and turmoil. His Symphony No. 4, completed in 1900, is one of his most accessible works, offering a lighter, more lyrical approach compared to his more intense symphonies. On February 7, 1904, Mahler himself conducted a performance of this symphony in Berlin, reinforcing its place in the concert repertoire.

The fourth movement, "Das himmlische Leben" (The Heavenly Life), is the symphony’s heart and soul, featuring a soprano voice describing a child's vision of heaven. Unlike the grandeur of Mahler’s other finales, this movement is delicate and dreamlike, with folk-like melodies and a sense of innocence. The lyrics, drawn from the Des Knaben Wunderhorn (The Boy’s Magic Horn) collection, depict a paradise filled with music, dancing, and endless feasting, all with a touch of Mahler’s characteristic irony. The orchestration remains light and transparent, with delicate bells and strings giving the music an ethereal quality.

As this week’s closing theme, "Das himmlische Leben" serves as a gentle farewell, offering a moment of reflection and tranquility. Its serene and almost childlike optimism provides a perfect contrast to the weightier legal discussions, reminding us that even in complex times, beauty and simplicity endure.

Without further ado, Gustav Mahler’s Symphony No. 4, the fourth movement, “Das himmlische Leben” – enjoy. 

This Day in Legal History: Chinese Exclusion Treaty

On August 13, 1894, the U.S. Senate ratified the Chinese Exclusion Treaty, marking a significant moment in American immigration history. This treaty was an extension of the Chinese Exclusion Act of 1882, which was the first significant law restricting immigration into the United States. Under the treaty, China agreed to the exclusion of its laborers from entering the U.S., further cementing the racial and economic discrimination that Chinese immigrants faced. The treaty represented a formal diplomatic agreement between the two nations, wherein China conceded to the exclusion of its citizens in exchange for certain protections for Chinese already residing in America.

The Chinese Exclusion Treaty was part of a broader movement in the late 19th century to limit the influx of immigrants, particularly those from Asia, who were seen as economic threats and culturally incompatible by many Americans. The ratification of this treaty reinforced and prolonged the discriminatory practices against Chinese immigrants, contributing to the legal and social marginalization of Chinese communities in the U.S. It wasn’t until 1943, during World War II, that these exclusionary policies began to be dismantled, reflecting the deep-seated impact of the treaty and the exclusion laws on American legal and social landscapes.

In a recent legal development, a federal judge in California dismissed a consumer lawsuit accusing Google of unlawfully dominating mobile search markets. U.S. District Judge Rita Lin ruled that the plaintiffs failed to provide sufficient evidence showing how Google's market dominance harmed consumers. The lawsuit, originally filed in 2022, alleged that Google conspired with Apple to make its search engine the default on iPhones, restricting competition.

Although the case was dismissed, Judge Lin indicated that the plaintiffs might have another opportunity to amend their complaint. She referenced a separate ruling by U.S. District Judge Amit Mehta in Washington, D.C., which found Google had illegally monopolized the search engine market by paying billions to Apple and other companies for exclusive search engine agreements. This ruling could bolster the plaintiffs' chances if they can provide more concrete evidence of consumer harm in their amended complaint.

Despite this setback for the consumers, their attorney, Joseph Alioto, expressed intentions to revise and refile the lawsuit by the court’s September 9 deadline. Google has denied the allegations and plans to appeal the D.C. court's decision.

Google wins dismissal of US consumer lawsuit over mobile search | Reuters

Johnson & Johnson (J&J) and Avon Products Inc. are both embroiled in legal battles over the alleged harmful effects of talc in their products, leading to significant financial and legal repercussions. J&J recently made progress in its efforts to resolve thousands of lawsuits claiming that its talc-based baby powder caused cancer. Over 75% of the plaintiffs have reportedly supported J&J’s $6.5 billion settlement plan, which aims to address these claims through a pre-packaged bankruptcy filing. This plan follows J&J’s history of legal challenges, including a previous $5 billion payout over similar allegations. Despite this support, J&J still faces hurdles, as its attempts to secure bankruptcy protection have been twice denied in New Jersey courts.

Similarly, Avon Products Inc., known for its iconic beauty brand, has filed for Chapter 11 bankruptcy in Delaware due to the mounting costs of defending against talc-related lawsuits. The company is dealing with 386 individual cases and has already spent $225 million on legal fees and settlements. Avon’s financial struggles have led to its bankruptcy filing, as it seeks a permanent solution to the increasing number of lawsuits. The company plans to sell its assets, with Brazil-based Natura & Co. offering to purchase Avon for $125 million and write off $530 million in debt.

Both companies’ legal strategies highlight the significant impact of talc-related lawsuits on their operations, with J&J seeking a settlement through bankruptcy court and Avon attempting to resolve its liabilities through a similar process.

Avon Products Files for Bankruptcy to Wrangle Talc Lawsuits

J&J Gets Plaintiff Backing for $6.5 Billion Baby Powder Accord

In July 2024, OSHA proposed a new rule aimed at enhancing workplace safety by addressing heat-related hazards, which are the leading cause of weather-related deaths in the U.S. The rule, if enacted, would impact businesses with employees exposed to high temperatures, both indoors and outdoors. Key aspects of the rule include requiring employers to implement a Heat Illness and Injury Prevention Plan (HIIPP), which would mandate rest breaks, access to shade, drinking water, heat acclimatization procedures, and ongoing heat monitoring.

One notable provision is the requirement for employers to provide a paid 15-minute rest break every two hours on days when the heat index reaches 90°F or higher. This has raised questions about how such breaks would interact with the Fair Labor Standards Act, particularly regarding overtime calculations. Additionally, following the recent Supreme Court decision in Loper Bright Enterprises v. Raimondo, which limits agency authority, there may be legal challenges to OSHA’s ability to enforce such mandates.

The proposed rule has yet to be published in the Federal Register, but once it is, the public will have the opportunity to provide feedback before it is finalized. OSHA has encouraged public participation to ensure the final rule effectively protects workers while being feasible for employers.

OSHA Proposes Rule to Regulate Work Heat-Related Hazards

In my column this week, I discuss how applying the marketplace facilitator model, which has improved state sales tax compliance, could similarly enhance federal excise tax collection. Federal excise taxes, particularly on sporting equipment like fishing rods and archery gear, often go uncollected, especially when these items are sold online by foreign merchants. The Government Accountability Office (GAO) recently reported that this lack of compliance has resulted in significant revenue loss, funds that are crucial for wildlife conservation efforts.

Currently, the responsibility to remit these taxes falls on the consumer, a system that is both confusing and inefficient. To address this, I advocate for legislation that would require online marketplaces like Amazon and eBay to collect and remit these taxes on behalf of consumers. This approach would simplify the process, ensuring more consistent revenue collection and leveling the playing field for domestic sellers who are currently at a disadvantage.

Additionally, I propose that the IRS develop a centralized tax calculator accessible to these marketplaces. This tool would automate tax calculations at the point of sale, further reducing administrative burdens and ensuring accurate tax collection. An accompanying information campaign could also educate consumers on their tax obligations and the positive impact of these funds on conservation efforts.

To implement these changes effectively, the IRS should consider launching a pilot program, similar to its Direct File initiative, to test the feasibility of this system. This streamlined approach not only promises increased compliance but also ensures that vital conservation projects receive the funding they need to thrive.

Streamline Excise Tax on Sporting Equipment to Help Conservation

This Day in Legal History: Swiss Banks Settle with Holocaust Survivors

On August 12, 1998, a landmark settlement was reached when Swiss banks agreed to pay $1.25 billion to Holocaust survivors and their heirs. The settlement resolved lawsuits that accused the banks of withholding millions of dollars deposited by Holocaust victims before and during World War II. For decades, these accounts had been frozen, and the banks had been criticized for their lack of transparency and for making it difficult for survivors and their families to access the funds. 

The lawsuits brought to light the complex role that Swiss financial institutions played during the war, often prioritizing financial gain over moral responsibility. This settlement was seen as a significant acknowledgment of the wrongs committed and a step toward justice for the victims. The agreement also marked a broader recognition of the need to address the financial injustices faced by Holocaust survivors, setting a precedent for other restitution efforts globally. 

The $1.25 billion fund was distributed to survivors, heirs, and various Jewish organizations, symbolizing a long-overdue attempt to rectify the banks' wartime conduct. The settlement highlighted the intersection of financial institutions, moral responsibility, and historical accountability in the aftermath of one of history's greatest tragedies.

The recent Supreme Court ruling in SEC v. Jarkesy has sent shockwaves through federal health agencies, significantly impacting their ability to impose civil penalties. The decision, which requires a jury trial for civil penalties in SEC cases, is expected to influence how agencies like the Department of Health and Human Services (HHS), the Centers for Medicare & Medicaid Services (CMS), and the Food and Drug Administration (FDA) conduct enforcement actions. 

Legal experts suggest that this ruling could lead to increased legal challenges from healthcare entities, such as hospitals and drugmakers, against penalties imposed by these agencies. The ruling has raised questions about the constitutionality of administrative procedures, particularly those handled by administrative law judges, and may force agencies to reassess their enforcement strategies. The decision could also slow down current enforcement actions while agencies evaluate their legal standing. This ruling is likely to embolden those facing civil penalties to challenge the HHS and its agencies in court, especially in areas like Medicare, tobacco regulation, and the 340B Drug Pricing Program.

By way of very brief background, in SEC v. Jarkasy, the Fifth Circuit held that the SEC's administrative enforcement of fraud claims without jury trials violated the Seventh Amendment, as such claims involve traditional common law matters warranting a jury. The court also ruled that the Dodd-Frank Act's broad delegation of authority to the SEC to choose between administrative proceedings and federal court without clear guidelines violated the nondelegation doctrine. Additionally, the protections against removal for administrative law judges (ALJs) were found to infringe on the President’s duty under Article II. The Supreme Court later upheld the Seventh Amendment violation but did not address the other issues.

Health Agency Approach on Civil Penalties Shaken by High Court

Ismael "El Mayo" Zambada, a prominent Mexican drug lord and co-founder of the Sinaloa Cartel, claimed he was deceived and forcibly taken to the United States last month. In a statement released by his lawyer, Zambada alleged that he was lured into a meeting by Joaquin Guzman Lopez, the son of his former partner Joaquin "El Chapo" Guzman, and state officials in Sinaloa. He recounted being ambushed, restrained, and flown to the U.S. under duress. Contrary to Zambada's account, Guzman Lopez’s lawyer and U.S. authorities assert that Guzman Lopez surrendered voluntarily after negotiations. During the incident, Zambada claims that one of the officials involved, Hector Cuen, was killed, and his bodyguard has since disappeared. Both Zambada and Guzman Lopez have pleaded not guilty to drug-trafficking charges in the U.S.

'El Mayo' says he was ambushed in new account of US arrest | Reuters

A federal appeals court has extended an order blocking President Joe Biden's administration from implementing its student debt relief plan, which aimed to lower monthly payments and accelerate loan forgiveness for millions of borrowers. The 8th U.S. Circuit Court of Appeals, responding to an appeal from seven Republican-led states, granted an injunction that halts further implementation of the Saving on a Valuable Education (SAVE) Plan. 

This ruling follows a previous order that temporarily blocked parts of the plan. The court's decision means that while loans already forgiven won't be reversed, future implementations are on hold. The Biden administration criticized the ruling, arguing it would increase costs for borrowers, while the Republican-led states contend that the administration exceeded its legal authority with the plan. The SAVE Plan, which had partially taken effect, was projected to benefit over 20 million borrowers but now faces legal hurdles that may delay or alter its future. This development follows earlier challenges to Biden's broader $430 billion debt cancellation initiative, which was blocked by the U.S. Supreme Court in 2023.

Federal court extends block on Biden's student debt relief plan | Reuters

This Day in Legal History: Webster-Ashburton Treaty

On August 9, 1842, the United States and Great Britain signed the Webster-Ashburton Treaty, which played a crucial role in resolving longstanding boundary disputes between the two nations. The treaty, negotiated by U.S. Secretary of State Daniel Webster and British diplomat Lord Ashburton, focused on the contentious northern borders of Maine and Minnesota. 

For years, tensions had simmered over the unclear boundary lines established by the Treaty of Paris in 1783, particularly in the area known as the Aroostook region of Maine. The Webster-Ashburton Treaty provided a compromise that defined the Maine-Canada border, with the U.S. gaining 7,015 square miles of territory and the British securing a vital trade route. Additionally, the treaty clarified the boundary along the Great Lakes and reaffirmed the 49th parallel as the U.S.-Canada border west of the Lake of the Woods. 

Beyond territorial matters, the treaty also addressed issues of extradition and the suppression of the slave trade, marking a significant step in Anglo-American diplomacy. The successful negotiation of the treaty helped ease tensions between the two powers and set a precedent for future peaceful resolutions of international disputes.

A coalition of 15 Republican-led states, spearheaded by Kansas Attorney General Kris Kobach, has filed a lawsuit aiming to block a Biden administration rule that allows up to 200,000 DACA recipients to access federal health insurance programs. The rule, implemented by the Department of Health and Human Services (HHS) in May, designates DACA participants as "legally present," thus qualifying them for healthcare benefits under the Affordable Care Act (ACA). 

The states argue that this classification contradicts federal law, which prohibits providing public benefits to individuals without legal immigration status. They contend that the rule encourages illegal immigration and imposes financial burdens on states by necessitating the provision of additional public services. In a related move, Texas Governor Greg Abbott issued an executive order to track the state's costs associated with providing medical care to undocumented immigrants. The lawsuit reflects ongoing tensions surrounding immigration policy, a contentious issue as the 2024 presidential election approaches.

US states sue over Biden rule extending health insurance to DACA immigrants | Reuters

The IRS has resumed processing certain Employee Retention Tax Credit (ERC) claims that were paused during the pandemic, specifically those filed between September 14, 2023, and January 31, 2024. The agency will focus on processing claims it deems either high or low risk. The decision to start with these claims aligns with a recent bipartisan tax bill that aimed to end the ERC program early, though the bill is unlikely to become law this year. 

The IRS halted the processing of new claims after September 14 due to a surge in claims and concerns over fraudulent filings by third-party companies. Many eligible taxpayers have experienced long delays in receiving their payments. The IRS plans to process 50,000 low-risk claims beginning in September and anticipates sending out another significant batch of payments in the fall. Additionally, the IRS issued 28,000 disallowance letters for high-risk claims, potentially preventing $5 billion in improper payments. However, some tax professionals reported errors in these letters, leading the IRS to promise adjustments and better support for affected taxpayers.

IRS Reopens Processing Some Covid-Era Claims, Pays Out More Cash

Environmentalists and career staff at the Environmental Protection Agency (EPA) are taking steps to protect the agency's work from potential political interference, particularly if Donald Trump is re-elected. Concerns stem from Trump's first term, during which political appointees frequently overruled scientific findings. To mitigate this, the EPA and its largest union have ratified a new contract allowing staff to report violations of scientific integrity without fear of retribution. 

However, despite these protections, there remains significant worry about the extent to which a future Trump administration could reshape the agency, especially given plans outlined in the Project 2025 blueprint, which proposes adding politically appointed oversight roles within the EPA. The agency faces challenges as Trump's allies advocate for policies that could allow the firing of federal employees en masse and the weakening of scientific safeguards. 

Historically, political interference has affected EPA work, with an unprecedented number of scientific integrity violations recorded during Trump's first term. The Biden administration has taken steps to protect its environmental regulations, but there are concerns that these could be rolled back or challenged in court under a future Trump presidency. Additionally, the possibility of a mass exodus of EPA staff if Trump returns to power could further weaken the agency's ability to operate effectively.

EPA Staff Move to Safeguard Work Amid Worries of Trump’s Return

Milbank LLP is awarding special summer bonuses to its associates and counsel, with amounts ranging from $6,000 for first-year associates to $25,000 for more senior staff. This decision reflects the firm's busy workload in the first half of the year and anticipates continued high demand. Milbank, which previously led the market in raising associate salaries, is likely prompting other law firms to follow suit in offering similar bonuses to remain competitive. However, industry experts caution that not all firms are financially positioned to match these bonuses, despite market optimism following recent financial market fluctuations. While some firms may struggle to keep up, others see this move as a positive indicator for future revenue growth.

Milbank Hands Out Summer Bonuses for Associates and Counsel (1)

This week’s closing theme is by Frédéric Chopin.

This week, we’re closing our episode with a piece that holds special significance, especially for my co-host, Gina, who is celebrating her birthday on August 10th. As a birthday tribute to her, we’ve chosen to feature her favorite classical piano piece: Frédéric Chopin’s Nocturne No. 2 in E-flat major, Op. 9, No. 2.

Frédéric Chopin, a Polish composer and virtuoso pianist of the Romantic era, is widely regarded as one of the greatest composers for the piano. His music, known for its lyrical beauty and emotional depth, captures the essence of the Romantic spirit. The Nocturne No. 2, composed when Chopin was just 20 years old, is one of his most beloved works. It’s a piece that perfectly showcases his ability to combine delicate, flowing melodies with rich, expressive harmonies.

The Nocturne is both gentle and introspective, with a melody that seems to float effortlessly over a soft, arpeggiated accompaniment. Its serene, almost dreamlike quality invites listeners to lose themselves in the music. This piece, with its subtle nuances and lyrical grace, is a testament to Chopin's genius and a perfect way to celebrate Gina’s special day.

So, as we conclude today’s episode, sit back, relax, and enjoy the timeless beauty of Chopin’s Nocturne No. 2, a fitting tribute to both the composer and to Gina on her birthday. Happy Birthday!

This Day in Legal History: Nixon Resigns

On this day in legal history, August 8, 1974, President Richard Nixon announced his resignation from the office of the President of the United States, becoming the first and only president to do so. This unprecedented event followed the Watergate scandal, a complex political affair that began with a break-in at the Democratic National Committee headquarters and led to a series of revelations about abuses of power by the Nixon administration. Facing almost certain impeachment by Congress on charges of obstruction of justice, abuse of power, and contempt of Congress, Nixon chose to resign rather than prolong the national crisis.

In his televised resignation speech, Nixon acknowledged that he no longer had a sufficient political base in Congress to continue effectively governing. He expressed regret for any injuries caused by his actions and highlighted his achievements while in office, yet he did not admit to any wrongdoing in the Watergate affair. Vice President Gerald Ford was sworn in as President on August 9, 1974, and later granted Nixon a full pardon for any crimes he might have committed against the United States while in office.

Nixon’s resignation marked a significant moment in American legal and political history, underscoring the constitutional processes in place to address presidential misconduct. It also led to reforms aimed at increasing transparency and accountability in government, such as the Ethics in Government Act and amendments to the Freedom of Information Act. This event reshaped public trust in the presidency and highlighted the importance of upholding the rule of law at the highest levels of government.

A federal judge indicated that the attorneys in a class action lawsuit against Google over Chrome's “Incognito” mode are unlikely to receive their full $217 million fee request. During a hearing in Oakland, Judge Yvonne Gonzalez Rogers also showed skepticism towards Google’s proposal to cut the plaintiffs' attorney fees by 25%. She criticized Google’s legal team for suggesting she personally review thousands of time sheet entries.

The case, which began four years ago, was settled in April with Google agreeing to delete billions of records from Incognito mode users and make some reforms, but without providing monetary damages to users. The plaintiffs’ attorneys, from firms including Boies Schiller Flexner LLP, claimed their fees were justified by 78,880 hours of work and sought a “lodestar multiplier” of 3.5, bringing their total request to $217 million.

Judge Rogers commented that she rarely awards multipliers above three and noted the case’s partial success. Google’s attorney, Andrew Schapiro, argued that the plaintiffs’ fees were excessive, pointing out that Google spent only $40 million on the case. The lawsuit initially filed in 2020 alleged that Incognito mode improperly retained user data despite claims of privacy.

The settlement requires Google to clarify data collection practices and allow Incognito users to block third-party cookies for five years. Individuals can also seek monetary damages in California state court. The plaintiffs originally sought $9 billion in damages, but Google's attorney argued the final settlement warranted a lower fee due to its limited success. The case is Brown v. Google LLC.

Google ‘Incognito’ Case Attorneys Unlikely to Win $217 Million

Thomas Girardi concealed a $53 million settlement from a young man, Joseph Ruigomez, whose home exploded, and misled him about the funds' status, a Los Angeles federal jury heard. Ruigomez and his family, receiving inconsistent interest payments, repeatedly asked Girardi for settlement details after their 2013 agreement with Pacific Gas & Electric, but Girardi never complied. Girardi claimed he held the funds for Ruigomez's protection, citing his youth and alleged drug dependency, though Ruigomez clarified he was on narcotics for pain management due to extensive medical procedures.

During the trial, the defense presented numerous financial documents, while the prosecution did not clarify the annuity terms or the full distribution of the $53 million settlement, which included a $25 million annuity and $12.7 million in legal fees. Kathleen Ruigomez, Joseph's mother, testified that she only learned of the full settlement amount two years later and didn't suspect the discrepancy initially. She later sued Girardi with the help of Robert Finnerty, a former Girardi Keese lawyer.

Girardi faces charges of wire fraud for allegedly stealing $15 million in settlement funds meant for clients. He pleaded not guilty, with prosecutors claiming he delayed payments under false pretenses. Girardi, who avoided disciplinary action despite over 200 misconduct complaints, also faces fraud charges in Illinois federal court and multiple civil lawsuits. His firm, Girardi Keese, went bankrupt in 2020. Girardi's mental competency to stand trial is contested, yet he was seen taking organized handwritten notes during the proceedings. The case is USA v. Girardi, in the Central District of California.

‘Kingpin’ Girardi Hid $53 Million Settlement, Client Says (1)

Delta Air Lines Inc. is facing a proposed class action lawsuit following a software outage on July 19 caused by CrowdStrike, which led to widespread flight delays and cancellations. The lawsuit, filed in the US District Court for the Northern District of Georgia, claims that Delta failed to adequately refund passengers or provide the promised meal, hotel, and transportation vouchers. Instead of issuing refunds, Delta allegedly offered e-credits without informing passengers of their legal right to cash refunds, resulting in many passengers accepting the e-credits.

The plaintiffs argue that Delta did not fulfill its commitments to passengers affected by cancellations within the airline’s control, leading to breaches of contract, fraud, unjust enrichment, and violations of state consumer protection laws. They are seeking class certification and damages, representing all passengers whose flights were canceled between July 19 and July 31, with specific subclasses for California, Colorado, Florida, and Washington state.

The CrowdStrike software update that caused the outage disrupted millions of devices using Microsoft Windows, impacting thousands of flights globally. Delta, the official airline of Team USA, struggled particularly hard, affecting nearly 2,000 athletes and staff traveling to Paris for the Olympics. While other airlines recovered quickly, Delta continued to cancel flights into the following week, even though they announced normal operations by July 25.

The US Department of Transportation is investigating Delta’s response to the glitch after receiving 3,000 complaints from passengers. Delta has declined to comment on the lawsuit, which is being handled by Webb Klase & Lemond LLC and Sauder Schelkopf LLC. The case is Bajra v. Delta Air Lines Inc.

Delta Sued Over Inadequate Refunds Following CrowdStrike Outage

The FCC’s proposed rules for disclosing AI-generated content in political ads on radio and television have sparked a jurisdictional dispute with the Federal Election Commission (FEC). The FCC’s rules, announced on July 25, would require broadcasters to announce when AI is used in political ads. FCC Chairwoman Jessica Rosenworcel emphasized the need for voter transparency, comparing the requirement to existing rules about disclosing ad sponsors.

Supporters, including AI regulation advocates, see it as a positive step amidst increasing deepfake use in campaigns. However, critics, including the FCC’s two Republican commissioners and their FEC counterparts, argue that regulating political disclosures should fall under the FEC’s jurisdiction.

The proposed FCC rules, now open for public comment until September 4, face uncertainty about whether they can be finalized before the upcoming election. This uncertainty is compounded by the US Supreme Court’s decision in Loper Bright Enterprises v. Raimondo, which limits federal agencies’ regulatory powers.

The FEC had already been considering similar AI content regulations since last year and recently sought public input on deepfakes in political ads. FCC critics argue that the FCC’s efforts overlap and potentially conflict with the FEC’s authority. Democratic FEC Vice Chair Ellen Weintraub, however, supports the FCC’s initiative, suggesting that both agencies can complement each other.

Despite the challenges, proponents believe the FCC’s move will raise public awareness about AI in political ads, though the timeline for finalizing these rules remains unclear. The case’s complexity is heightened by the evolving legal landscape and potential challenges to the FCC’s authority following recent Supreme Court rulings.

FCC Election Deepfake Ads Proposal Sparks Turf Fight With FEC

Ripple Labs has been ordered by a Manhattan court to pay the U.S. Securities and Exchange Commission (SEC) approximately $125 million in penalties for the improper sale of XRP tokens. This decision follows the SEC's lawsuit against Ripple, CEO Brad Garlinghouse, and co-founder Chris Larsen, accusing them of raising over $1.3 billion through an unregistered securities offering by selling XRP. Although the SEC initially sought $2 billion in fines and penalties, the court's ruling resulted in a significantly lower amount.

The SEC had dropped its claims against Garlinghouse and Larsen in October, but the case remained significant as one of the largest enforcement actions in the cryptocurrency sector. Ripple CEO Brad Garlinghouse acknowledged the court's decision, expressing respect and a commitment to continue the company's growth. The SEC emphasized that securities laws apply to investment contracts irrespective of the technology or labels used.

This ruling marks a critical moment in the regulation of cryptocurrency sales and enforcement of securities laws within the digital asset space.

By way of brief background, the determination of whether a cryptocurrency qualifies as an "investment contract" is pivotal in deciding its classification as a security. This central question hinges on the application of the Howey Test, which examines whether an investment is one of money in a common enterprise with the expectation of profits primarily from the efforts of others–if it is, it constitutes an investment contract. If a cryptocurrency meets these criteria, it falls under the regulatory purview of securities laws, significantly impacting its issuance and trading.

Ripple ordered to pay $125 million in penalty for improperly selling XRP tokens | Reuters

This Day in Legal History: Gulf of Tonkin Resolution

On August 7, 1964, the U.S. Congress passed the Gulf of Tonkin Resolution, a pivotal moment in American history that marked a significant escalation in the Vietnam War. This resolution was a direct response to the alleged attack on the USS Maddox by North Vietnamese forces on August 4, 1964. The text of the resolution granted President Lyndon B. Johnson the authority to take "all necessary measures to repel any armed attack against the forces of the United States and to prevent further aggression." Essentially, it provided the President with a blank check to conduct military operations in Southeast Asia without an official declaration of war. 

President Johnson's message to Congress emphasized the need for decisive action to protect American interests and allies in the region. He portrayed the resolution as a means to maintain international peace and security, suggesting that failure to act would embolden Communist expansion. The resolution received overwhelming support in Congress, with only two Senators, Wayne Morse of Oregon and Ernest Gruening of Alaska, voting against it. This legislative act significantly broadened the executive powers and set the stage for large-scale American involvement in Vietnam, leading to a prolonged and contentious conflict that would have lasting impacts on both American and Vietnamese societies.

The Biden administration's $250 million initiative aims to bolster electric trucking along the Northeast I-95 corridor through the Clean Corridor Coalition plan. This involves installing chargers in Maryland, Delaware, New Jersey, and Connecticut to support electric trucks, aligning with the administration's climate goals to cut 18.6 million tons of carbon emissions by 2050. Despite this, electric trucks only represent 0.23% of registered U.S. trucks, partly due to their higher cost compared to diesel trucks.

The trucking industry's adoption of electric vehicles is unpredictable due to varying fleet management practices and preferences. Larger companies like J.B. Hunt and Schneider National are leading by integrating electric trucks, potentially setting a trend for smaller fleets. The initiative also intends to inspire private motorists by showcasing electric trucks.

Effective placement of chargers, likely at existing rest stops, is crucial for the plan's success. However, the power capacity at these locations may pose challenges. A mix of charger types is essential to accommodate different charging needs and maintain truck operation efficiency.

Permitting and zoning are being addressed to streamline the installation process. This initiative could potentially pave the way for broader national adoption of electric trucking, although substantial investment in charging infrastructure is needed for full electrification. The coalition's efforts might inspire mid-sized and smaller fleets to follow suit, enhancing the shift towards greener transportation. 

The detailed focus on charger placement and power availability highlights the legal and logistical complexities of this initiative, emphasizing the need for coordinated efforts between state and local governments.

Electric Trucks Put to the Test in I-95 Corridor Charger Program

The U.S. public school system has become a new battleground over religious expression, particularly regarding the display and teaching of religious texts. Louisiana and Oklahoma have enacted laws requiring the display of the Ten Commandments and the teaching of the Bible in public schools, respectively. These moves challenge the Constitution's "establishment clause," which separates church and state. This year alone, lawmakers in 29 states have proposed 91 bills promoting religion in schools, driven by conservative opposition to liberal curriculums and the Supreme Court's recent rightward shift.

In Louisiana, Attorney General Liz Murrill defends the Ten Commandments law as a way to address discipline in schools, while Governor Jeff Landry suggests non-religious parents tell their children to ignore the displays. Oklahoma's policy focuses on the Bible's historical and cultural significance, but some school districts resist the change. The National Association of Christian Lawmakers (NACL) is coordinating these efforts, producing model bills for state legislatures.

The Supreme Court's recent rulings have emboldened conservative Christians by expanding religious rights in public life. Decisions supporting school prayer, exempting religious entities from certain regulations, and backing individuals' rights to refuse services for same-sex weddings have all contributed to this movement. As more laws emerge, the Court may need to address whether such mandates create denominational preferences or coerce religious participation.

How US public schools became a new religious battleground | Reuters

The Justice Department’s Tax Division has been without a Senate-confirmed assistant attorney general (AAG) for most of the time since January 2009, with only a two-year exception. This vacancy undermines morale, hampers tax administration, and impacts taxpayers negatively. The AAG oversees civil tax trials, appeals, and criminal tax cases, making the role crucial for effective tax enforcement.

Historically, presidential appointees have brought unique expertise and accountability to the position. For instance, under President George W. Bush, Eileen J. O’Connor revitalized the Tax Division by updating policies and expediting investigations. Nathan J. Hochman continued these efforts before the position became largely vacant. Although President Obama briefly appointed Kathryn Keneally, who led a successful initiative against Swiss banks facilitating tax evasion, subsequent nominees failed to gain Senate confirmation.

President Trump did not fill the position, and President Biden has also left it vacant without nominating a candidate. This lack of leadership has contributed to a 72% decline in federal tax prosecutions since 2013. The absence of an AAG means there is no one to take responsibility for tax policy decisions, motivate prosecutors, or engage with the IRS and Congress. The resulting leadership void diminishes the Tax Division’s effectiveness and prestige.

To restore the division’s functionality and reputation, it is crucial for the next administration and Senate to prioritize appointing a qualified AAG. This would enhance tax enforcement, support the division’s employees, and ensure better tax compliance and administration.

Tax Leadership Vacuum in Justice Department Must Come to an End

On August 6, 2024, Ohio Judge Michael Holbrook upheld a state law banning gender-affirming care, including puberty blockers and hormones, for transgender minors, following a challenge by families of transgender adolescents. The decision, which came after a non-jury trial, had previously been blocked by Holbrook during the trial. Ohio Attorney General Dave Yost supported the ruling, asserting the legislature's authority to protect children from making irreversible medical decisions.

The American Civil Liberties Union (ACLU) and its Ohio chapter, representing the plaintiffs, expressed their intent to appeal, emphasizing the critical nature of gender-affirming care for transgender youth. Ohio's Republican-controlled legislature passed the law in January, despite Governor Mike DeWine's veto, which he issued after hearing from parents about the lifesaving impact of gender-affirming care.

The plaintiffs argued the law violated a 2011 state constitutional amendment preventing state laws from prohibiting the purchase of healthcare. Judge Holbrook countered that the amendment did not prevent the state from regulating healthcare providers' actions, categorizing gender-affirming care as wrongdoing. He stated that those opposed to the law should seek change through the voting process rather than the judicial system, citing the potential risks and permanent outcomes associated with gender-affirming care as a legitimate state interest in passing the law.

Ohio ban on gender-affirming care for minors upheld by judge | Reuters

This Day in Legal History: Voting Rights Act

On August 6, 1965, President Lyndon B. Johnson signed the Voting Rights Act into law, marking a pivotal moment in U.S. legal history. This landmark legislation aimed to eradicate racial discrimination in voting, targeting practices like literacy tests and poll taxes that had disenfranchised African Americans, especially in the South. The Act introduced federal oversight in jurisdictions with a history of discriminatory voting practices, requiring them to obtain federal approval, or "preclearance," before changing voting laws. This measure was crucial in preventing new discriminatory practices from emerging.

The Voting Rights Act was a major victory for the Civil Rights Movement, leading to a significant increase in voter registration and participation among African Americans. Its effectiveness and impact on civil rights have made it one of the most important pieces of legislation in American history. However, the Act faced challenges over the years, most notably in 2013, when the Supreme Court's decision in Shelby County v. Holder invalidated the preclearance coverage formula, weakening its enforcement. Despite these changes, the Voting Rights Act of 1965 remains a cornerstone of efforts to ensure equal voting rights in the United States.

The Department of Energy is set to announce a $2.2 billion investment to enhance the electrical grid across 18 states. This funding, part of the Grid Resilience and Innovation Partnerships (GRIP) program from the 2021 infrastructure law, will support eight projects aimed at increasing transmission, storage, and distribution capacities to meet rising electricity demand and mitigate risks from extreme weather. These projects will add nearly 13 gigawatts of grid capacity, equivalent to the power of 6.5 Hoover Dams.

The investments include constructing 625 miles of new transmission lines in New York, North Dakota, and Montana, and upgrading 400 miles of existing power lines elsewhere. The new transmission lines will enhance the reliability of the Eastern and Western grids and promote wind power development by the Standing Rock Sioux Tribe. Additionally, four Native American tribes in California will use the funding to develop microgrids, improving power reliability in outage-prone areas.

In North Carolina, Duke Energy and the state’s Department of Environmental Quality will reconstruct an existing power line to bolster the grid in the eastern region. Virginia’s Department of Energy will receive funding to address the grid strain from data centers. More GRIP projects will be announced later this year, building on previous investments that have already added significant capacity and transmission lines to the grid.

Energy Department Gives $2B to Boost Power Grid Across 18 States\

Justice Clarence Thomas reportedly took additional undisclosed flights on billionaire Republican donor Harlan Crow’s private jet, according to new records obtained by the Senate Finance Committee. Committee Chair Sen. Ron Wyden (D-Ore.) received documents from the US Customs and Border Protection showing that Thomas and his wife, Ginni, traveled from Hawaii to New Zealand and back on Crow’s jet in November 2010. Wyden is seeking more information from Crow’s attorney to understand the extent of Crow’s undisclosed gifts to Thomas, which could inform potential legislation regarding federal financial disclosure laws, gift tax returns, and audit requirements for Supreme Court justices.

Wyden's letter follows calls for Supreme Court reform, particularly since former President Trump's appointments solidified a conservative majority. President Biden has supported 18-year term limits for justices and an enforceable ethics code. Recent ProPublica reporting revealed that Thomas accepted lavish vacations and private jet travel from Crow without disclosure. Although Thomas updated his financial disclosures in June, he only reported an eight-day trip to Indonesia on Crow’s yacht.

Wyden's investigation includes examining whether Crow evaded taxes by claiming business deductions for personal trips taken with Thomas. Crow's spokesperson dismissed Wyden's request, asserting that previous inquiries had been addressed and were intended to harass. The Finance Committee, however, has the authority to obtain Crow’s taxpayer records, though Wyden prefers voluntary compliance. The Supreme Court has yet to comment on the matter.

Thomas Took More Undisclosed Flights, Senate Panel Says (1)

On August 5, a U.S. judge ruled that Google violated antitrust laws by spending billions to create an illegal monopoly and establish itself as the world's default search engine – paying for the privilege with companies like Apple, and its Safari web browser, and Mozilla, with Firefox. This decision marks a significant win for federal authorities challenging Big Tech's market dominance. The ruling sets the stage for a second trial to determine possible remedies, which might include breaking up Google’s parent company, Alphabet.

U.S. District Judge Amit Mehta declared Google a monopolist, noting its control of 90% of the online search market and 95% on smartphones. The process for implementing remedies could be prolonged, potentially extending into 2026 due to appeals. Alphabet's shares dropped 4.5% following the announcement.

The ruling follows allegations that Google paid $26.3 billion in 2021 to maintain its search engine as the default on smartphones and browsers. U.S. Attorney General Merrick Garland praised the decision as a historic win, emphasizing that no company is above the law. The White House also hailed the pro-competition ruling as a victory for Americans.

This case, initiated during the Trump administration, is the first major decision among several antitrust cases against Big Tech. It underscores bipartisan support for antitrust enforcement, as highlighted by Senator Amy Klobuchar. Other companies facing similar lawsuits include Meta, Amazon, and Apple.

The Google case is the first major antitrust action since Microsoft’s settlement in 2004 over its Internet Explorer monopoly. The drawn-out legal process may delay any immediate impact on consumers, but it signals a robust stance against monopolistic practices in the tech industry.

Google has an illegal monopoly on search, US judge finds | Reuters

Google illegally maintains monopoly over internet search, judge rules | AP News

In my column this week, I speak a bit about how state tax authorities could better serve small businesses.

A proposal before the Multistate Tax Commission (MTC) aims to revolutionize sales tax compliance through voluntary audits for complex retail establishments with substantial annual receipts. The Sales Tax Compliance Assurance Review program seeks to foster a cooperative relationship between tax authorities and businesses, emphasizing education and support over punishment. To maximize its effectiveness, states should be encouraged to opt in via information-sharing agreements and by showcasing success stories.

The program’s prospective approach involves real-time reviews and resolutions for compliance issues, rather than retrospective audits. This allows businesses to identify and resolve issues early. Retailers with complex tax situations can apply for the program, starting with pre-audit conferences to introduce their recordkeeping systems to tax authorities. State tax administrations would benefit from enhanced compliance and useful data for future audits, while businesses could have their practices reviewed outside of formal audits.

However, the program's success hinges on broader state participation. Currently, only 26 states are MTC members, excluding major states like Pennsylvania, New York, and California. More states must join to create uniform sales tax policies nationwide. Demonstrating the program's benefits in participating states could encourage others to join.

Additionally, a certification process for point-of-sale (POS) systems should be integrated into the program. This would involve developing criteria for POS systems' compliance with sales tax laws, allowing developers to apply for certification. Certified systems would provide retailers with assurance of good-faith compliance, reducing the likelihood of audits based on software use alone.

This expansion would enhance the MTC’s program, aligning with its goals by offering additional compliance support for retailers. If the MTC implements these enhancements, it could pave the way for real-time tax remittance and a fully digitalized sales tax system.

Voluntary Audit Proposal Needs More State Buy-Ins to Work Best

This Day in Legal History: Ronald Reagan Fires Air Traffic Controllers

On August 5, 1981, President Ronald Reagan made a landmark decision to fire over 11,000 striking air traffic controllers. These federal employees, members of the Professional Air Traffic Controllers Organization (PATCO), had initiated a strike on August 3, demanding better pay, shorter working hours, and improved working conditions. The strike posed significant risks to national air travel safety and disrupted the aviation system.

President Reagan responded with a firm stance, citing the controllers' sworn oath not to strike against the government. In a nationally televised address on August 3, Reagan warned that if the controllers did not return to work within 48 hours, they would face termination. When the deadline passed without compliance, Reagan followed through on his ultimatum, effectively dismantling PATCO.

The mass firings had profound implications for labor relations and federal employment policies in the United States. It underscored the government's commitment to maintaining uninterrupted air traffic services and demonstrated a strict enforcement of federal labor laws. This event marked a pivotal moment in the Reagan administration, showcasing its determination to curb union influence and assert governmental authority. The firings also led to long-term changes in air traffic control, with the federal government embarking on extensive recruitment and training programs to replace the dismissed controllers.

A political action committee (PAC) supported by Elon Musk is under investigation in Michigan for potential legal violations. The Michigan Secretary of State's office confirmed the inquiry on Sunday. The Musk-backed America PAC has been collecting detailed voter information through its website, prompting scrutiny from state authorities. 

Although America PAC is a federal entity, Michigan officials are reviewing its actions to determine if state laws have been breached. If violations are found, the case may be referred to the Michigan Attorney General. The investigation is in its early stages, and specific focuses have not been disclosed.

Musk, CEO of Tesla and SpaceX, has previously stated he created a PAC to support candidates but denied making specific pledges. He has publicly supported Donald Trump and criticized various Democratic policies and initiatives.

Neither the Michigan Attorney General's office nor America PAC has commented on the investigation. Musk also has not responded to requests for comment. The situation underscores concerns about how PACs use personal information collected from citizens, particularly in voter registration efforts.

Musk-backed PAC under investigation for potential violations of Michigan laws | Reuters

Thomas V. Girardi, the famed attorney behind the landmark $333 million Pacific Gas & Electric settlement featured in the film "Erin Brockovich," faces a criminal trial for wire fraud in Los Angeles federal court. At 85, Girardi has been disbarred and bankrupt, charged with misappropriating $15 million in settlement funds intended for his clients over the past decade. This trial could mark the end of his distinguished legal career, tainted by allegations of unethical conduct and questionable ties to the state’s lawyer disciplinary agency.

Plaintiff’s attorney Jay Edelson emphasizes the broader implications for the legal community, suggesting it could either prompt reform or be dismissed as an isolated incident. Girardi also faces additional fraud charges in Illinois, and numerous civil lawsuits. His once-celebrated career has become a cautionary tale of legal misconduct.

Prosecutors allege that since 2010, Girardi diverted millions from his firm, Girardi Keese, for personal luxuries and to fund EJ Global, an entertainment company of his estranged wife, Erika Jayne. Girardi’s defense argues that he was not responsible for financial mismanagement, attributing it to the firm’s CFO, Christopher Kamon, whose trial has been separated. They also claim Girardi’s cognitive decline impairs his ability to have intentionally defrauded clients.

Girardi’s case stands out not just for the legal drama but also for its celebrity connections, given his marriage to a reality TV star, influencing public and juror perception. The trial will focus on whether Girardi's cognitive state affects his culpability for the alleged crimes committed during his competent years. The court’s ruling on his competency to stand trial, despite cognitive impairments, adds a layer of complexity to this high-profile case.

Thomas Girardi’s Legal Drama Approaches Its Hollywood Ending

Former Bed Bath & Beyond Inc. has sued GameStop CEO Ryan Cohen and his company, RC Ventures LLC, seeking to recover $47 million from alleged insider trading in 2022. Cohen, also the founder of Chewy Inc., allegedly used nonpublic information to trade Bed Bath & Beyond (BBBY) stock profitably between January and August 2022 while serving as a statutory director. 

The lawsuit, filed in the US District Court for the Southern District of New York, claims Cohen and RC Ventures made numerous profitable trades of BBBY securities, which were executed within a six-month period. Under Section 16(b) of the 1934 Securities Exchange Act, the company seeks to reclaim these short-swing profits because Cohen and RC Ventures owned more than 10% of BBBY's common stock and had access to inside information through their board appointees.

This legal action is part of a broader effort by the bankrupt company and its plan administrator, Michael Goldberg, to recover funds for creditors. Goldberg has also filed a separate suit to reclaim $19 million in tax credits from a New Jersey agency and is pursuing over $300 million from Hudson Bay Capital Management for trading profits related to a failed financing plan.

RC Ventures is GameStop's largest shareholder with an 8.7% stake. Bed Bath & Beyond, now operating as 20230930-DK-BUTTERFLY-1 Inc., is demanding monetary damages and legal costs. Cohen and RC Ventures have not commented on the lawsuit. The case is titled 20230930-DK-BUTTERFLY-I Inc. v. Cohen.

GameStop CEO Sued by Bed Bath & Beyond for Insider Trading (1)

The demand for transactional legal work is recovering after nearly three years of decline, according to the Thomson Reuters Institute’s Law Firm Financial Index. The report shows a 2.2% increase in corporate transactional work, including contract drafting, real estate deals, and bank financing, in the second quarter of 2024 compared to the previous year. This rise contributed to a 2.4% overall increase in law firm demand.

Additionally, U.S. law firms have seen a 6.6% increase in billing rates and a 5.3% rise in direct expenses, putting them in one of their strongest financial positions in the last decade. Profits per equity partner have increased by 8.8% over the past year.

While transactional practices are rebounding, counter-cyclical practices like litigation and bankruptcy continue to drive significant demand. Litigation demand rose by 3.4% and bankruptcy by 2.4% in the same period. These trends provide law firms with greater stability by diversifying their revenue streams.

However, the gains are not uniform across the industry. The Am Law 50 firms have not seen the same increase in litigation demand as other firms, and midsize firms have not experienced the same growth in transactional demand as Am Law 100 firms.

Overall, the second quarter of 2024 has been positive for the legal sector, with significant improvements in demand and profitability.

Law firm transactional work rebounds after 3-year slump, report says | Reuters

This Day in Legal History: Declaration of Independence Signed 

On August 2, 1776, the formal signing of the Declaration of Independence took place in Philadelphia, solidifying a pivotal moment in American history. Although the Declaration was approved by the Continental Congress on July 4, the actual signing by the delegates occurred nearly a month later. John Hancock, serving as the President of the Continental Congress, famously provided the first and most prominent signature. This event marked the official assertion of the thirteen American colonies' intention to separate from British rule. 

The Declaration, primarily authored by Thomas Jefferson, articulated the colonies' grievances against King George III and expressed the fundamental principles of individual liberty and government by consent. The document became a symbol of American ideals and aspirations, laying the foundation for the nation's democratic framework. The signing involved 56 delegates representing the colonies, each risking their lives and fortunes for the cause of independence. This collective act of defiance against British authority galvanized the revolutionary spirit and united the colonies in their quest for freedom. The Declaration of Independence remains a cornerstone of American identity and continues to inspire movements for liberty and justice around the world.

A quick fun fact coda, there are 225 nations spread out across the globe, of which 163 celebrate some form of independence. 63 of them celebrate their independence from Great Britain specifically, lending some sense of scope to the span of the British empire at its zenith. Stretching those out equally across the year, on average every 6 days a country celebrates its independence from British rule.  

A U.S. judge in California dismissed a $4.7 billion verdict against the NFL regarding allegations of overcharging for the "Sunday Ticket" telecasts. The decision by U.S. District Judge Philip Gutierrez followed the NFL's argument that the jury's verdict was unjustified. The NFL welcomed the ruling, stating their media distribution model offers various options for fans.

The lawsuit claimed "Sunday Ticket" prices were inflated to limit subscriptions and protect broadcast network fees. Judge Gutierrez rejected key witness testimonies and found the jury's damages verdict unsupported by evidence, rendering the case unable to proceed.

The ruling can be appealed to the 9th U.S. Circuit Court of Appeals. Initially, a jury had found that the NFL's exclusive distribution allowed DirecTV to charge higher prices, awarding substantial damages based on residential and commercial subscriptions. The NFL denied the overcharging claims, calling the damages amount baseless, while the plaintiffs accused the NFL of speculating about the jury's decision process.

NFL Gets $4.7 Billion Sunday Ticket Jury Award Tossed Out (2)

US judge throws out $4.7 billion verdict against NFL in 'Sunday Ticket' lawsuit | Reuters

Federal Trade Commission Chair Lina Khan is advocating for an investigation into the persistent rise in grocery prices that began during the Covid-19 pandemic and has become a significant issue in the presidential campaign.

During a virtual public meeting hosted by the FTC and Department of Justice, Khan emphasized the need to understand why grocery prices and profits remain high despite apparent cost reductions. She stated the FTC's commitment to ensuring Americans are not subjected to inflated prices due to illegal business practices and will formally request the agency to initiate the inquiry, pending a commission vote.

The inquiry would involve large grocery retailers and examine their sales, costs, and profits for common products. Grocery prices have surged by about 25% over the past four years, outpacing overall consumer price increases. An FTC study found that major grocery stores gained a competitive edge over smaller rivals during the pandemic and may have leveraged inflation to boost profits.

Khan's remarks were made during the first meeting of the Strike Force on Unfair and Illegal Pricing, aimed at addressing business practices that elevate consumer prices. The FTC is also investigating pricing practices related to the use of personal data, algorithms, and AI to set individualized prices.

FTC Chair Khan Pushes for Inquiry Into Elevated Grocery Prices

The U.S. Senate unanimously approved a bipartisan proposal to create 66 new judgeships for federal district courts over the next decade, marking the first major judiciary expansion since 1990. The bill, known as the JUDGES Act, aims to address increasing caseloads by adding judges in 25 district courts across 13 states, including California, Texas, and Delaware. The legislation will now move to the U.S. House of Representatives. No new judgeships have been established since 2003, with previous attempts stalled due to partisan concerns over filling vacancies. 

The JUDGES Act proposes adding new judicial seats incrementally, starting in January 2025. The bill is designed to handle the surge in court filings since the last comprehensive judgeship bill in 1990. The judiciary currently has 677 authorized district court seats, with 10 temporary ones set to become permanent under separate legislation. The JUDGES Act also has support from House Republicans, with Representative Darrell Issa backing the measure. The Judicial Conference, represented by Judge Robert J. Conrad, Jr., expressed gratitude for the Senate's approval and urged the House to pass the bill when they reconvene.

US Senate approves bill to create 66 new federal judgeships | Reuters

This week’s closing theme is by Franz Liszt.

This week's closing theme features the music of the renowned Hungarian composer and virtuoso pianist, Franz Liszt. Born in 1811, Liszt was one of the most influential figures in the Romantic era of classical music. He was celebrated for his extraordinary skill at the piano and his innovative compositions, which pushed the boundaries of music during his time.

Our spotlight this week is on Liszt's most famous piece, "Hungarian Rhapsody No. 2," S. 244/2. This composition is part of a larger set of 19 Hungarian Rhapsodies, which are inspired by Hungarian folk music and showcase Liszt's technical prowess and expressive depth. The "Hungarian Rhapsody No. 2" is particularly known for its dramatic contrasts, lively rhythms, and virtuosic demands on the performer, making it a beloved piece in both classical and popular music spheres. 

This piece has also been famously orchestrated, adding rich textures and vibrant colors to Liszt's original piano composition. 

Liszt's connection to August 2 is marked by his passing on this date in 1886. His legacy continues to inspire and captivate audiences around the world. As we close this week, let the spirited and captivating melodies of "Hungarian Rhapsody No. 2" transport you to the heart of Liszt's musical genius.

This Day in Legal History: Switzerland Federal Charter Signed

This day in legal history marks the anniversary of the signing of the Federal Charter on August 1, 1291, which laid the foundation for the Swiss Confederation. This historic agreement united three Alpine cantons—Uri, Schwyz, and Unterwalden—establishing a pact for mutual defense against external threats and maintaining internal peace. The Federal Charter, known as the "Bundesbrief," is one of the earliest examples of a written constitution in Europe, symbolizing the birth of Switzerland as a confederation.

The signatories pledged to support each other in disputes and conflicts, emphasizing the principles of cooperation and self-governance. This alliance was crucial in resisting the influence of the Habsburg dynasty, which sought to dominate the region. Over time, additional cantons joined the confederation, expanding and strengthening the alliance.

The Federal Charter's emphasis on mutual defense and collaboration laid the groundwork for Switzerland's longstanding tradition of neutrality and federalism. It remains a significant symbol of Swiss national identity and independence. The principles enshrined in the charter continue to influence Switzerland's political structure and commitment to direct democracy. Today, August 1 is celebrated as Swiss National Day, commemorating the unity and enduring legacy of the Federal Charter.

Accounting regulators and industry leaders are drafting reforms to state CPA licensing rules to expand the profession’s workforce by allowing new pathways to earn the credential. These changes may include skills acquired outside the classroom. Draft changes to model legislation, serving as a template for state regulations, could be ready for public comment by September. The goal is to finalize these changes before next year’s legislative sessions, according to Sue Coffey, CEO of public accounting for the Association of International Certified Professional Accountants.

The reforms aim to address declining graduation rates and a workforce that has shrunk by 17% since the pandemic. Proposed pathways for earning the CPA credential may include a mix of formal education and work experience, potentially eliminating the requirement for 150 college credit hours and specific schooling.

A recent report suggests offering skills-based paths without traditional education requirements, which could attract more candidates, including minority students. The report also recommends increasing starting wages, improving the profession’s image, and providing more flexible schedules.

The pipeline task force is collaborating with the National Association of State Boards of Accountancy to develop model language and outline essential skills for credentialed accountants. In September, a broader group of industry leaders will discuss advancing these recommendations and developing a scorecard to measure progress.

States are already exploring flexible education requirements, with some proposing alternatives such as apprenticeships and different combinations of education and experience. Coffey emphasizes that any licensing reforms should maintain the rigor of the CPA license while accommodating state-specific solutions.

CPAs Pitch More ‘Flexible’ Licensing Rules to Expand Workforce

Rudolph Giuliani has agreed to pay $100,000 in cash and use proceeds from future sales of his multimillion-dollar homes to settle administrative bankruptcy fees, concluding his Chapter 11 case. Giuliani and his largest creditors reached an agreement outlining how he will exit bankruptcy without having to testify about his finances. Despite a judge ruling that the case must be dismissed due to a lack of progress, Giuliani initially struggled to guarantee payment for an estimated $400,000 in fees. 

Under the proposed order, Giuliani will immediately pay $100,000 to Global Data Risk LLC, with the remaining fees to be covered by proceeds from the sale of his Manhattan penthouse or his Palm Beach condominium. GDR will have liens on both properties and may foreclose if fees are not paid within six months. Giuliani’s Manhattan penthouse is listed for $5.7 million, and his Florida home is valued at approximately $3.5 million.

Giuliani filed for bankruptcy in December following a $148 million defamation judgment. He has $10.6 million in assets but failed to provide full financial records during nearly seven months in Chapter 11. Additionally, he faces a defamation suit from Dominion Voting Systems, criminal cases related to the 2020 election, and a $10 million lawsuit from former employee Noelle Dunphy for sexual harassment and assault. The case is In re Rudolph W. Giuliani, Bankr. S.D.N.Y., No. 23-12055.

Giuliani Reaches Bankruptcy Dismissal Deal to Pay Legal Fees

CrowdStrike has been sued by shareholders, accusing the cybersecurity company of concealing inadequate software testing that led to a massive global outage on July 19, affecting over 8 million computers. The proposed class action, filed in Austin, Texas, claims that CrowdStrike misled investors about the reliability of its technology, which was proven false when a faulty software update caused significant disruptions worldwide, including to airlines, banks, hospitals, and emergency services. Following the outage, CrowdStrike's share price dropped by 32% over 12 days, erasing $25 billion in market value.

Chief Executive George Kurtz is required to testify before the U.S. Congress, and Delta Air Lines has hired attorney David Boies to seek damages, reporting $500 million in losses from the incident. The lawsuit references a March 5 conference call where Kurtz described the software as "validated, tested and certified." CrowdStrike, based in Austin, denies the allegations and intends to defend itself vigorously. The lawsuit, led by the Plymouth County Retirement Association, seeks unspecified damages for holders of CrowdStrike Class A shares between November 29, 2023, and July 29, 2024.

The case is named Plymouth County Retirement Association v. CrowdStrike Inc et al, in the U.S. District Court for the Western District of Texas. The aftermath of the outage and the subsequent drop in stock prices might lead to more lawsuits against CrowdStrike.

CrowdStrike is sued by shareholders over huge software outage | Reuters

Paul Hastings has recruited Brian Israel, the former chair of Arnold & Porter’s environmental practice, to co-head its environmental litigation practice. Israel, based in Washington and Los Angeles, brings over 20 years of private practice experience and a decade of leadership in environmental law. He is known for representing major corporations such as BP in the Deepwater Horizon oil spill case, as well as companies like Chemours Co., CSX Corp., Dow Chemical, Honeywell Inc., Monsanto Co., and Motorola Solutions Inc.

Israel's decision to join Paul Hastings came after collaborating with its lawyers on a significant environmental case, which convinced him of the firm’s potential to become a leading force in environmental law. Paul Hastings’ environmental practice is co-chaired by Navi Dhillon and has a strong presence in California. Israel sees his move as an opportunity to help build a nationally recognized environmental practice.

This hiring continues Paul Hastings' trend of attracting top legal talent, including recent additions like a 12-lawyer white collar team in Paris, trial lawyer Renato Mariotti in Chicago, and cybersecurity expert Michelle Reed in Dallas. On the transactional side, the firm recently added an 11-partner private credit and restructuring team from King & Spalding.

Israel noted that his area of focus is evolving due to national low-carbon initiatives and recent Supreme Court rulings, which have reshaped the environmental regulatory landscape. These changes are increasing demand for high-level expertise in environmental law, a demand that Israel is well-positioned to meet. He joined Arnold & Porter in 2000 after serving as a trial attorney in the environmental enforcement section of the US Department of Justice and has authored a leading treatise on Natural Resource Damages claims.

Paul Hastings chair Frank Lopez stated that Israel’s addition enhances the firm's capability to handle complex and important matters for its premier clients.

Paul Hastings Lures Arnold & Porter Environmental Chair Israel

This Day in Legal History: Weimar Republic Born

On July 31, 1919, the Constitution of the German Reich was signed in Weimar, Germany, marking the birth of the Weimar Republic. This constitution established a full democracy in Germany, introducing a President, Parliament, and an independent judiciary to govern the nation. It was a groundbreaking document, making Germany the first nation to grant women the right to vote, thus setting a precedent for gender equality in Europe. The Weimar Constitution aimed to create a balance of power, with the President holding significant authority, including emergency powers, while the Parliament, or Reichstag, was responsible for legislation.

The Constitution also enshrined civil liberties, including freedom of speech, press, and assembly, and sought to create a welfare state with provisions for unemployment benefits and worker protections. Despite these progressive elements, the Weimar Republic faced numerous challenges, including political extremism, economic instability, and societal divisions. These issues ultimately undermined the Republic, leading to the rise of Adolf Hitler and the Nazi Party in 1933, which brought an end to the Weimar era.

The Weimar Constitution is often studied as a significant yet flawed attempt at democracy in a turbulent period of German history, highlighting both the potential and vulnerabilities of democratic governance. This event underscores the importance of stable political and economic foundations in maintaining a democratic system.

Law school graduates typically pay over $1,000 to take the bar exam, but this fall, they have a chance to earn $1,500 by participating in a beta test for the National Conference of Bar Examiners' (NCBE) new NextGen Bar exam. This revamped exam, set to debut in July 2026, is seeking about 2,200 participants from the 46,000 taking the 2024 bar exam for an October trial run. Researchers will use the prototype to compare results with the current exam and to develop a new national score scale. The trial will also evaluate the effectiveness of individual questions and assist jurisdictions in setting their passing scores.

The NextGen Bar exam, developed in response to criticisms that the existing test doesn't reflect actual law practice, aims to be more skills-oriented and less reliant on rote memorization. It will be nine hours long, split over two days, compared to the current exam's 12 hours. The new exam will be administered on computers instead of paper. So far, 21 jurisdictions plan to adopt the new exam between July 2026 and July 2028. The prototype test will be conducted in 32 states on October 18-19 or October 25-26, with sign-ups from August 19-29, targeting graduates from both ABA-accredited and non-ABA-accredited law schools, including first-time and repeat bar takers.

Bar exam officials offer law grads $1,500 to beta test revised exam | Reuters

Meta Platforms has agreed to a $1.4 billion settlement with Texas to resolve a lawsuit accusing the company of illegally using facial-recognition technology to collect biometric data from millions of Texans without their consent. This settlement, announced on July 30, 2024, is the largest ever reached by a single state. The lawsuit, filed in 2022, was the first significant case under Texas' 2009 biometric privacy law, which allows for damages of up to $25,000 per violation. Texas claimed that Facebook, Meta's subsidiary, captured biometric data billions of times from user-uploaded photos and videos via the "Tag Suggestions" feature, which has since been discontinued.

Meta, while pleased with the settlement, continues to deny any wrongdoing and is considering future business investments in Texas, such as developing data centers. Texas Attorney General Ken Paxton praised the settlement, emphasizing the state's commitment to holding major tech companies accountable for privacy violations. This agreement was reached in May, just weeks before a trial was scheduled to begin. In a similar case, Meta paid $650 million in 2020 to settle a biometric privacy lawsuit under Illinois law. Meanwhile, Google is currently contesting a separate lawsuit in Texas over alleged violations of the state's biometric law.

Meta to Pay Record $1.4 Billion to End Texas Biometric Suit (2)

Meta to pay $1.4 billion to settle Texas facial recognition data lawsuit | Reuters

The Senate passed landmark legislation aimed at making social media platforms safer for children, marking significant congressional action to regulate the tech industry for the first time in over 25 years. In a bipartisan vote of 91-3, senators approved two bills to enhance privacy and safety for kids on platforms like Instagram, TikTok, and Snapchat. The legislation now moves to the House, where its future is uncertain due to a tight legislative schedule and concerns about potential impacts on free speech and user privacy.

The push for regulation comes amid growing public pressure to address the mental health risks posed to children by social media, including addictive algorithms and harmful content. The Biden administration, mental health advocates, and parents have been vocal in demanding action. The Senate's overwhelming support is seen as a potential catalyst for House approval.

The Kids Online Safety Act (KOSA) and the Children and Teens’ Online Privacy Protection Act (COPPA 2.0) form the legislative package. KOSA aims to create a "duty of care" for social media companies to prevent harm like suicide and eating disorders by regulating app design features. Violations would be penalized by the Federal Trade Commission. COPPA 2.0 updates a 1998 law to prevent companies from collecting personal information from teens aged 13-16 without consent and bans targeted advertising to kids.

Opponents argue that the bills could lead to online censorship, but supporters counter that the focus is on platform design, not content. Senators Rand Paul, Mike Lee, and Ron Wyden voted against the measures, citing censorship concerns. However, co-sponsor Sen. Marsha Blackburn insists the bills are about providing tools for parents and kids to protect themselves online.

House Speaker Mike Johnson has expressed interest in reaching an agreement on the proposals. Sen. Richard Blumenthal hopes the House will recognize the urgency of protecting children online and act accordingly.

Big Tech Gets Rare Rebuke in Senate With Kids’ Privacy Rules

A federal watchdog report revealed that judiciary employees filed 17 complaints against federal judges from fiscal 2020 to 2022, highlighting issues like abusive conduct, religious discrimination, and pregnancy-related harassment. The Government Accountability Office (GAO) found that some judges faced consequences, such as private reprimands or findings of creating hostile work environments. These complaints were processed under the Judicial Conduct and Disability Act. Additionally, judiciary employees filed 161 employment dispute resolution complaints, containing over 500 allegations, primarily of discrimination.

The report noted a rise in allegations from 124 in fiscal 2020 to 336 in fiscal 2022. This increase could be due to improved trust in reporting mechanisms or the return to in-person work post-pandemic. The GAO emphasized that judiciary employees' protections are similar to those for most federal employees, though some protections are more limited. The judiciary's training materials align with Equal Employment Opportunity Commission (EEOC) practices, but inconsistencies exist across circuits.

The GAO recommended that the judiciary start tracking informal reports of workplace misconduct to better understand and address the scope of the problem. Currently, this data isn't collected, potentially leading to an undercount of incidents. A national climate survey conducted last year might help evaluate policy effectiveness, though its data wasn't ready in time for the GAO report. The Administrative Office of the US Courts cooperated with the GAO study, facilitating interviews with various judiciary personnel despite some delays.

It is worth noting that, short of impeachment, there is little that can be done to truly reprimand a federal judge. 

US Court Staff Filed 17 Complaints Against Judges, Watchdog Says

The Fifth Circuit Court ruled that Texas can maintain a floating river barrier on the Mexico border, marking a significant victory for Governor Greg Abbott against the Biden Administration. This decision overturns a previous preliminary injunction by a federal trial court, which had ordered Texas to cease work on the 1,000-foot barrier and move it to the riverbank. Judge Don R. Willett stated that the district court erred in its judgment, contradicting long-standing precedent.

The case is scheduled to return to the district court for trial on August 6 in Austin, Texas. The ruling also reverses an earlier Fifth Circuit panel decision that had upheld the district court's injunction. Judges Andrew S. Oldham, Priscilla Richman, and James C. Ho provided concurring opinions, with Ho partially dissenting, arguing that federal courts may lack jurisdiction since Abbott invoked the federal invasion clause in response to the immigration crisis.

During oral arguments, some conservative judges suggested that the barrier is lawful under the premise that Texas has the right to defend itself against a migrant invasion. Texas has used the invasion clause to justify other border policies that typically fall under federal jurisdiction. Other judges contended that the Rio Grande stretch with the barrier is not navigable, meaning Texas did not violate the federal Rivers and Harbors Act. The barriers have been in place since January, pending the full court's review of the panel's decision favoring Biden.

Texas Can Maintain Floating Border Barriers, Fifth Circuit Rules

This Day in Legal History: Permanent Court of Arbitration Established

On February 6, 1900, the Permanent Court of Arbitration (PCA) was officially established following the ratification of the 1899 Convention for the Pacific Settlement of International Disputes. This marked a major step toward institutionalizing peaceful dispute resolution between nations. The PCA, headquartered in The Hague, Netherlands, became the first international tribunal designed to arbitrate conflicts between states, offering an alternative to war. 

While not a court in the traditional sense, the PCA provides administrative support for arbitral tribunals, helping resolve territorial, trade, and investment disputes. Recognizing the need for improvement, the 1907 Convention for the Pacific Settlement of International Disputes refined its procedures, further solidifying arbitration as a legitimate mechanism for international law. Over the years, the PCA’s role expanded beyond state-to-state disputes to include cases involving international organizations, corporations, and even individuals. 

Today, it operates out of the Peace Palace, home to other key legal institutions like the International Court of Justice. With 109 member states, the PCA continues to handle complex cases, from border conflicts to environmental agreements. Its existence laid the groundwork for later international legal bodies, such as the International Criminal Court and various UN tribunals. By promoting arbitration over conflict, the PCA has helped shape a more structured and rule-based international legal order.

Attorney General Pam Bondi announced a major shift in the Justice Department’s white-collar enforcement priorities, scaling back efforts in foreign lobbying transparency and foreign bribery cases. The Foreign Corrupt Practices Act (FCPA) unit will now focus on bribery cases tied to transnational crime, such as those facilitating human smuggling, drug trafficking, and arms dealing. Other FCPA investigations with no such connection will be deprioritized.

Similarly, Foreign Agents Registration Act (FARA) enforcement will be limited to cases resembling traditional espionage by foreign government actors. The Justice Department’s Counterintelligence and Export Control Section will focus more on civil enforcement and regulatory guidance rather than aggressive criminal prosecutions. These changes mark a significant pullback from the increased enforcement seen over the past decade, particularly under Special Counsel Robert Mueller.

Bondi also disbanded the National Security Division’s corporate enforcement unit, an initiative championed by Biden-era Deputy Attorney General Lisa Monaco. It’s unclear if the division will continue prioritizing corporate crime linked to adversarial nations like China and Iran. These policy shifts were part of a broader series of announcements as Bondi took charge as the nation's top law enforcement official following her confirmation on Tuesday night.

Bondi Diminishes Justice Department White Collar Enforcement (1)

Google is ending its diversity-based hiring targets and reviewing its broader diversity, equity, and inclusion (DEI) initiatives, aligning with a broader corporate trend of scaling back such efforts. The company previously set a goal in 2020 to increase leadership representation from underrepresented groups by 30% by 2025, but Chief People Officer Fiona Cicconi told employees that Google would no longer pursue aspirational hiring goals.

This shift follows years of public DEI commitments, especially after the 2020 protests over police killings of George Floyd and other Black Americans. Google had also begun evaluating executives on diversity metrics, but recent SEC filings show it removed language reaffirming its DEI commitments.

The Alphabet Workers Union (AWU) criticized the move, calling it part of a broader anti-worker trend in the tech industry. Meanwhile, Google cited legal considerations as a federal contractor, stating it is reviewing compliance with court decisions and executive orders affecting DEI policies.

Google will maintain internal employee groups such as “Black Googler Network” and “Trans at Google.” The company’s decision follows similar DEI cutbacks at Meta and Amazon, amid increasing conservative pushback and legal challenges after the Supreme Court’s 2023 affirmative action ruling.

Google scraps diversity-based hiring targets | Reuters

More than 40,000 federal employees have signed up for the Trump administration’s buyout offer, which promises pay through September if they resign by the end of February. This represents about 2% of the federal civilian workforce, with officials expecting a surge in applications before the Thursday deadline.

The initiative is part of President Trump’s second-term effort to reduce the size of the federal government, led by Tesla and SpaceX CEO Elon Musk, who heads the Department of Government Efficiency. The White House initially projected that 5% to 10% of federal workers might accept the offer.

Federal employee unions oppose the plan, questioning its legality and enforceability. The Office of Personnel Management (OPM) has warned workers that job cuts are likely, with agency restructurings and layoffs expected. However, key employees in defense, immigration, law enforcement, and postal services are exempt from the deal.

With nearly 298,000 federal employees eligible for retirement in the next two years, the administration’s strategy could significantly reshape the workforce. Union leaders, like Everett Kelley of the American Federation of Government Employees, have urged workers to reject the offer, calling it misleading and driven by unelected billionaires.

Musk ‘Buyout’ Taken by 40,000 Federal Workers as Deadline Nears - Bloomberg

On her first day as U.S. Attorney General, Pam Bondi issued a directive stating that Justice Department lawyers who refuse to advance legal arguments on behalf of the Trump administration could face termination. The memo warns that attorneys who decline to sign briefs, delay cases, or impede the department’s mission may be disciplined or fired.

The move is part of a broader effort by Trump appointees to assert control over the Justice Department, which has already seen firings and reassignments of career lawyers. Bondi also announced a review of criminal and civil cases brought against Trump and his supporters, including prosecutions related to the January 6 Capitol attack. This "Weaponization Working Group" will scrutinize cases Republicans claim were politically motivated under the Biden administration.

Additionally, Bondi scaled back enforcement of foreign influence laws, stating that criminal cases will only be pursued in instances resembling “traditional espionage”, shifting the focus to civil enforcement. These laws, which require individuals lobbying for foreign governments to register as foreign agents, were previously used to prosecute several Trump associates.

Bondi’s directive reflects Trump allies’ long-standing complaints that career DOJ attorneys obstructed his policies, such as resisting lawsuits against Yale’s admissions practices and refusing to defend the 2017 travel ban. The memo asserts that DOJ lawyers cannot substitute their personal views for the administration’s legal agenda.

Trump's attorney general says lawyers who refuse orders could be fired | Reuters

This Day in Legal History: Medicare Bill Signed

On July 30, 1965, President Lyndon B. Johnson signed the Medicare bill into law, marking a significant milestone in American healthcare. This landmark legislation, part of Johnson's Great Society programs, aimed to address the healthcare needs of the nation's elderly population. With the stroke of his pen, Johnson established Medicare, a federal program providing comprehensive health insurance to Americans aged 65 and older. The bill was signed at the Truman Library in Independence, Missouri, with former President Harry S. Truman by Johnson's side, recognizing Truman's early efforts to promote national health insurance.

Medicare went into effect the following year, in 1966, offering hospital and medical insurance to millions of senior citizens. This historic act transformed the landscape of healthcare in the United States, ensuring that older Americans would no longer face financial ruin due to medical expenses. Medicare's introduction also set the stage for future expansions, including the addition of prescription drug coverage and the establishment of Medicare Advantage plans. Over the decades, Medicare has become a cornerstone of the U.S. healthcare system, providing vital health services to millions of Americans and significantly reducing poverty among the elderly. The signing of the Medicare bill remains a pivotal moment in the pursuit of healthcare equity in the United States.

A federal appeals court overturned a $79 million attorneys’ fee award in T-Mobile US Inc.’s $350 million settlement of a data breach lawsuit. The US Court of Appeals for the Eighth Circuit ruled that the lower court abused its discretion by approving an excessive fee award in a case that settled quickly and without extensive legal proceedings. The court reversed the fee award, reinstated the objection of class member Cassie Hampe, and remanded the case for further proceedings. 

The litigation stemmed from a 2021 data breach affecting 76.6 million people, with settlement approval sought in July 2022. Judge Brian C. Wimes initially approved the fee award in June 2023, dismissing objections from Hampe and Connie Pentz as abusive. However, the appeals court found no evidence of bad faith or extortion by Hampe and criticized the lower court for not adjusting the fee award based on the hours worked by class counsel. The court noted that class counsel’s fee request amounted to an hourly rate of $7,000 to $9,500, deemed unreasonable. The case was sent back for further consideration, with the involvement of multiple law firms representing the parties.

T-Mobile Deal’s $79 Million Attorneys’ Fee Award Gets Overturned

Big Law firms are reevaluating their strategies following a ruling in the Eastern District of Virginia that barred Vinson & Elkins from representing wood-pellet maker Enviva Inc. in its bankruptcy due to a conflict of interest with private equity firm Riverstone Investment Group LLC. This decision has raised concerns about potential conflicts when firms represent both private equity sponsors and their distressed portfolio companies in Chapter 11 proceedings. The ruling could force law firms to choose between lucrative private equity deals and bankruptcy cases, potentially reshaping their business models.

The court rejected Vinson & Elkins' proposal to separate their work for Riverstone and Enviva, citing ethical concerns. This outcome could lead to more aggressive challenges by the US Trustee and might require law firms to adopt stricter conflict management practices. Although some view the decision as specific to the case's facts, it signals a need for firms to better navigate ethical responsibilities.

The ruling has already influenced how law firms approach bankruptcy cases involving private equity-backed companies, with future decisions possibly reaching higher courts for further clarification. Despite this, experts like Nancy Rapoport and Bruce A. Markell believe that Big Law firms will adapt and continue to thrive by finding compliant ways to manage conflicts of interest.

Big Law Confronts Tail Risk Threat to Private Equity Bankruptcy

A New York state judge has ruled against appointing an outside monitor for the National Rifle Association (NRA) but banned former CEO Wayne LaPierre from serving as an officer or director for ten years. The decision by Justice Joel Cohen of the Manhattan Supreme Court comes from a four-year-old civil case initiated by state Attorney General Letitia James. Although a mixed outcome, the ruling followed a trial stage where jurors found LaPierre and others guilty of financial mismanagement, including funding LaPierre's lavish lifestyle. LaPierre was ordered to repay $4.35 million to the NRA, and former finance chief Wilson Phillips was ordered to repay $2 million.

James sued the NRA in August 2020, citing greed, poor oversight, and cronyism. Following the ruling, both parties were directed to negotiate governance changes that could reduce the NRA's board size and facilitate new board candidacies. Despite the lawsuit, the NRA has perceived the case as politically motivated. The NRA, founded in 1871, has seen its influence wane, including within the Republican Party, as its membership and revenue have declined. NRA President Bob Barr acknowledged the jury's findings and reiterated the organization's commitment to good governance. LaPierre, who resigned just before the trial's first stage, has not commented on the ruling.

Judge won't require monitor for NRA, bans ex-chief LaPierre for 10 years | Reuters

The American Bar Association (ABA) has issued its first formal ethics opinion on the use of generative artificial intelligence (AI) by lawyers, emphasizing the need for adherence to ethical obligations. The ABA's ethics and professional responsibility committee highlighted that lawyers must ensure competence, protect client confidentiality, communicate appropriately, and handle fees ethically when utilizing AI technology. While AI can enhance efficiency in legal tasks such as research, document drafting, and analysis, it also poses risks like producing inaccurate results. 

Lawyers are advised to prevent unintended disclosure of client information and consider informing clients about their use of AI tools. The ABA's opinion serves as guidance for interpreting model rules, although these are not binding. The opinion cautioned against relying on AI-generated outputs without verification, noting instances where lawyers have cited nonexistent cases or inaccurate analyses, leading to potential misrepresentations in court.

Recent cases illustrate the consequences of unverified AI use, with a federal judge in Virginia considering sanctions for a filing that included fictitious cases and fabricated quotations. While some courts require lawyers to disclose their use of AI, others, like the 5th U.S. Circuit Court of Appeals, have declined to adopt such rules.

State bar associations have also been developing their own AI guidelines, recognizing the rapidly evolving nature of the technology. The ABA anticipates ongoing updates to their guidance to keep pace with developments in AI.

Lawyers using AI must heed ethics rules, ABA says in first formal guidance | Reuters

The U.S. Senate is poised to pass significant online child safety reforms through two bills: the Children and Teens' Online Privacy Protection Act (COPPA 2.0) and the Kids Online Safety Act (KOSA). These reforms aim to enhance protections for minors on social media platforms. COPPA 2.0 will prohibit targeted advertising to minors, restrict data collection without consent, and allow parents and children to delete their information from social media. KOSA will establish a "duty of care" for social media companies to design safer platforms for minors.

Despite bipartisan support in the Senate, with an 86-1 procedural vote, the bills face uncertainty in the Republican-controlled House, currently on recess until September. While some social media executives support KOSA, others, including leaders from Meta and TikTok, have expressed concerns. Critics, including tech industry groups and the American Civil Liberties Union, argue that the bills could limit access to important content for minors.

In response to these concerns, the bill's language was amended, reducing the enforcement role of state attorneys general. Supporters like Josh Golin of Fairplay for Kids argue that KOSA targets specific risks, such as promoting harmful content, without granting legal grounds for government censorship. The legislation's future now hinges on approval in the House of Representatives.

US Senate set to pass major online child safety reforms | Reuters

This Day in Legal History: NASA Created

On July 29, 1958, President Dwight D. Eisenhower signed the National Aeronautics and Space Act, officially establishing the National Aeronautics and Space Administration (NASA). This landmark legislation was a response to the Soviet Union's launch of Sputnik in 1957, which marked the beginning of the space race. The act represented a significant shift in U.S. priorities, emphasizing the importance of space exploration for national security, scientific advancement, and international prestige. NASA was charged with the responsibility of conducting civilian space research and development, distinguishing it from military operations in space.

The creation of NASA consolidated several existing organizations, including the National Advisory Committee for Aeronautics (NACA), into a single entity focused on space exploration. This integration aimed to foster innovation and streamline efforts in advancing aerospace technology. NASA's establishment marked the start of an era of unprecedented achievements, including the Apollo moon landings, the development of the Space Shuttle, and numerous scientific missions to explore our solar system and beyond.

The act also emphasized the peaceful exploration of space, setting a tone for international cooperation. NASA's formation underscored the United States' commitment to leading the world in space exploration and scientific discovery. This pivotal moment in legal and scientific history laid the groundwork for decades of exploration, research, and technological advancements that have had profound impacts on society and our understanding of the universe.

President Joe Biden plans to propose significant reforms to the U.S. Supreme Court, including term limits for justices and a binding code of conduct. Announced during a speech at former President Lyndon B. Johnson’s library, these reforms also include a constitutional amendment to remove broad presidential immunity. Biden's proposals follow a series of Supreme Court rulings that countered his policies and come shortly after he ended his reelection bid, endorsing Vice President Kamala Harris against Donald Trump.

Biden emphasized the principle that no one is above the law, including the president and Supreme Court justices. His reforms would require justices to disclose gifts, avoid political activities, and recuse themselves from cases with conflicts of interest. The proposals come after the Court adopted a non-binding code of conduct in response to undisclosed travel by Justice Clarence Thomas and other controversies.

However, the reality is passing these reforms through a divided Congress is unlikely. The proposed constitutional amendment to limit presidential immunity would be particularly challenging, requiring broad legislative support and state ratifications.

Joe Biden: My plan to reform the Supreme Court and ensure no president is above the law - The Washington Post

Biden Calls for Strict New Limits on US Supreme Court Justices

Biden to propose Supreme Court term limits, binding code of conduct | Reuters

The U.S. Department of Justice has urged a federal appeals court to uphold a law mandating that China-based ByteDance sell TikTok's U.S. assets by January 19 or face a ban. The DOJ asserts that TikTok's Chinese ownership poses a significant national security risk, citing potential data access and covert content manipulation by the Chinese government. Despite TikTok's denials of sharing user data with China, the DOJ emphasized the threat's seriousness. The Biden administration seeks to dismiss lawsuits from TikTok, ByteDance, and TikTok creators opposing the law.

The government highlighted extensive national security concerns, even though it admitted no evidence that China had accessed U.S. user data. TikTok criticized the government for not providing proof and acting on secret information. A classified document with further security concerns has also been submitted. ByteDance's source code, comprising 2 billion lines, is deemed too extensive for a thorough review.

The law, signed by President Biden, aims to end Chinese ownership of TikTok on national security grounds without banning the app outright. The DOJ dismissed TikTok's First Amendment claims, noting other social media alternatives. TikTok's proposed $2 billion data protection plan was considered insufficient by the DOJ. The legal challenge's oral arguments are set for September 16, just weeks before the presidential election.

Justice Dept. asks court to reject TikTok challenge to crackdown law | Reuters

British drugmaker GSK has confidentially settled a lawsuit in Illinois claiming its discontinued heartburn drug Zantac caused cancer. Zantac, first approved in 1983 and once the world's best-selling medicine, faced scrutiny after the FDA requested its market withdrawal in 2020. The FDA's concerns centered on ranitidine, Zantac's active ingredient, potentially degrading into a carcinogen. GSK, along with Pfizer, Sanofi, and Boehringer Ingelheim, faces over 70,000 lawsuits in Delaware and numerous other claims.

Despite the settlement, GSK did not admit liability and plans to defend itself in remaining cases. Following the settlement news, GSK's shares rose by 0.8%.

GSK settles another heartburn drug lawsuit in Illinois | Reuters

Maryland has enacted the Gift Card Scams Prevention Act of 2024, the nation's first law to protect against gift card fraud, specifically card draining. Card draining involves criminals stealing gift cards from stores, capturing their numeric codes, and then replacing them for unsuspecting customers to purchase. When loaded with money, these cards allow thieves to steal the balance online. This new law mandates secure packaging for most gift cards sold in stores to prevent tampering.

The legislation faced significant industry opposition, with retailers and gift card manufacturers lobbying against it. Despite this, the law requires both open-loop (e.g., Visa, Mastercard) and closed-loop (e.g., Target, Applebee's) cards to have secure packaging that shows signs of tampering. The bill's passage marks a significant step in addressing the surge in gift card fraud that escalated during the pandemic.

Maryland's law is expected to have a national impact, as companies typically prefer to use uniform packaging across all states. This could lead to widespread adoption of more secure packaging practices. The law goes into effect next June, giving companies a year to comply. The hope is that this measure will significantly reduce the incidence of gift card fraud, benefiting consumers nationwide.

The Nation's First Law Protecting Against Gift Card Draining Has Passed. Will It Work?

This Day in Legal History: Dutch Low Countries Independence from Spain

On July 26, 1581, the Dutch Low Countries signed the Plakkaat van Verlatinghe, also known as the Act of Abjuration, formally declaring their independence from Spanish rule. This monumental document marked the culmination of a prolonged struggle against the oppressive policies of the Spanish Habsburgs, particularly under King Philip II. The Act of Abjuration justified the Dutch rebellion by asserting that a ruler who does not protect his subjects and instead oppresses them loses his legitimacy. The declaration was a pivotal moment in the Eighty Years' War (1568–1648), which ultimately led to the establishment of the Dutch Republic.

The Act of Abjuration is often compared to the later Declaration of Independence of the United States, as both documents articulate the right of a people to overthrow an unjust ruler. The Dutch provinces, driven by the desire for religious freedom, economic independence, and political autonomy, took a bold step in severing ties with one of the most powerful empires of the time. The Plakkaat van Verlatinghe underscored the principle that sovereignty resides with the people, a concept that would influence political thought in Europe and beyond.

By declaring their independence, the Dutch not only sought to free themselves from tyranny but also set a precedent for future nations seeking self-determination. The Act of Abjuration remains a significant milestone in the history of democracy and the fight for human rights. It symbolizes the enduring struggle for freedom and justice, themes that continue to resonate in contemporary political discourse.

The California Supreme Court has upheld Proposition 22, allowing Uber, Lyft, and other gig economy companies to classify drivers as independent contractors. This unanimous decision supports the 2020 voter-approved law, preventing a significant shift in labor costs and maintaining the companies' current business models. Had the ruling gone against Prop 22, these companies would have faced increased costs and operational challenges in California, one of their largest markets.

Following the ruling, shares of Uber, Lyft, DoorDash, and Instacart surged, though the gains later moderated. Justice Goodwin H. Liu stated that California’s constitution does not prevent voters from passing initiatives affecting workers' compensation. He emphasized that this ruling does not bar future legislative decisions to extend workers' compensation benefits to independent contractors.

Gig companies hailed the decision, emphasizing that it reflects the will of millions of Californians. However, labor advocates criticized the ruling, arguing it unfairly burdens gig workers by denying them essential protections like minimum wage, sick leave, and overtime pay. Advocates, including the plaintiff Hector Castellanos, renewed calls for unionization to combat these perceived inequities.

The ruling is seen as a victory for gig economy companies but signals ongoing legal and legislative battles. States like Massachusetts, New York, Washington, and Minnesota have tackled gig worker classifications with varying strategies, indicating the complexity and ongoing nature of this issue.

California Gig Workers to Remain Contractors, Prop 22 Upheld (2)

Justice Elena Kagan has proposed that Chief Justice John Roberts appoint a panel of experienced and respected judges to enforce the US Supreme Court’s newly adopted code of conduct. Speaking at a judicial conference in Sacramento, Kagan expressed trust in Roberts to establish such a committee. This suggestion comes amid controversy over reports of lavish gifts received by Justice Clarence Thomas, highlighting the need for an enforcement mechanism to accompany the recently adopted code of conduct.

Kagan acknowledged the challenges in determining who should enforce ethics rules for the justices but emphasized the necessity of finding a solution. During her discussion at the US Court of Appeals for the Ninth Circuit’s annual judicial conference, she also criticized the practice of justices writing multiple opinions in a single case. She argued that this complicates the work of lower courts and prevents the Supreme Court from providing clear guidance.

Kagan specifically mentioned the court's fractured decision in United States v. Rahimi, where seven justices wrote separate opinions despite only one dissent. This case, which upheld a federal gun law related to domestic violence, illustrated divisions among the justices on interpreting firearm restrictions. Kagan's comments follow a term marked by several controversial Supreme Court decisions, including limiting federal regulatory power and providing immunity to former President Donald Trump for certain official acts.

Elena Kagan Endorses High Court Ethics Enforcement Mechanism (1)

Apple Inc. has agreed to adopt a set of voluntary artificial intelligence (AI) safeguards established by President Joe Biden’s administration. These safeguards aim to guide the development of AI technology and encourage companies to protect consumers. Apple joins other tech giants like OpenAI Inc., Amazon.com Inc., Alphabet Inc., Meta Platforms Inc., and Microsoft Corp. in committing to test their AI systems for discriminatory tendencies, security flaws, and national security risks. The companies also pledge to share test results transparently with governments, civil society, and academia, and report any vulnerabilities.

This commitment coincides with Apple’s plan to integrate OpenAI’s chatbot, ChatGPT, into its iPhone voice-command assistant. However, Elon Musk, CEO of Tesla Inc., has threatened to ban Apple devices from his companies if OpenAI's software is integrated at the operating system level, citing security concerns. Musk has his own AI startup, xAI, which has developed a chatbot named Grok.

AI technology has become mainstream, but its use in areas like law enforcement, hiring, and housing has faced criticism for fostering discrimination. President Biden has emphasized the benefits of AI while also warning of its potential dangers, advocating for responsible industry practices. Although the White House guidelines are comprehensive, they are not enforceable, relying on companies to adhere to the standards voluntarily.

In response to the challenges of regulating AI, Biden signed an executive order last year requiring powerful AI systems to undergo testing to be eligible for federal government purchase. He is set to receive an update on the implementation of this directive. Meanwhile, a bipartisan group of lawmakers in Congress has expressed interest in regulating AI, but legislation has not yet been prioritized.

Apple to Adopt Voluntary AI Safeguards Established by Biden

Manhattan prosecutors argued that Donald Trump's conviction should stand despite a Supreme Court ruling that presidents cannot face criminal charges for official acts. In a recent court filing, prosecutors emphasized that the charges against Trump involved personal conduct, specifically the hush money payment to Stormy Daniels, and were unrelated to his presidential duties. Trump was convicted on 34 felony counts for falsifying business records to cover up the payment made by his lawyer, Michael Cohen, before the 2016 election. 

Trump denies the encounter and plans to appeal the verdict. Legal experts believe the request to overturn the conviction is unlikely to succeed as the conduct predates Trump's presidency. Trump's defense claimed the prosecution improperly used evidence of his official acts during the trial, including Twitter posts and testimonies from White House aides, but prosecutors argued these were related to personal matters. 

The judge, Juan Merchan, postponed sentencing to September 18 to allow Trump's lawyers to present their case. If the conviction is upheld, sentencing will proceed, and Trump can then appeal to a higher court.

Trump hush money prosecutors say conviction should stand despite immunity ruling | Reuters

This week’s closing theme is by Ludwig van Beethoven, a composer of some note.

Ludwig van Beethoven, one of the most revered composers in the history of Western music, was born in 1770 in Bonn, Germany. His innovative compositions bridged the Classical and Romantic eras, leaving an indelible mark on music that continues to inspire and move audiences worldwide. Despite becoming profoundly deaf in his later years, Beethoven's prolific output includes symphonies, concertos, string quartets, and piano sonatas, showcasing his genius and resilience.

One of his most remarkable works is the Piano Sonata No. 32 in C minor, Op. 111, completed on July 28, 1822. This sonata is the last of Beethoven's 32 piano sonatas, representing the culmination of his explorations in the genre. The piece is notable for its profound depth, structural innovation, and emotional intensity, characteristics that reflect Beethoven's mature style.

The sonata consists of two contrasting movements. The first movement, "Maestoso - Allegro Con Brio Ed Appassionato," opens with a dramatic, solemn introduction that sets the stage for the ensuing allegro. This section is marked by its passionate energy, dynamic contrasts, and intricate rhythms, driving forward with a relentless, almost fateful momentum. The movement's thematic material is both complex and expressive, embodying Beethoven's masterful ability to fuse technical brilliance with deep emotional expression.

The "Maestoso - Allegro Con Brio Ed Appassionato" serves as a testament to Beethoven's ingenuity and his capacity to convey profound human experiences through music. It challenges the performer with its technical demands while offering listeners a rich, emotional journey. The sonata's significance lies not only in its technical mastery but also in its philosophical depth, inviting interpretations that delve into the realms of struggle, resolution, and transcendence.

As we close our week of shows we invite you to immerse yourself in the powerful and evocative sounds of Beethoven's Piano Sonata No. 32 in C minor, Op. 111. Let the intensity and passion of the first movement, "Maestoso - Allegro Con Brio Ed Appassionato," carry you through its intricate and emotive landscapes. Enjoy this timeless piece and allow Beethoven's genius to resonate within you.

Without first ado, the first movement of Beethoven's Piano Sonata No. 32 in C minor, Op. 111, enjoy.