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Good morning. California’s top court just handed workers a big win in the state, and reporter Daniel Wiessner has the latest on the court’s order. Plus, analysts expect the SEC to appeal a U.S. court’s ruling for cryptocurrency developer Ripple on a central legal issue, but there are risks; Teva must face trial over the federal government’s drug kickback claims; and a Florida judge today will take up a key pretrial legal issue in the prosecution of Donald Trump. It’s a sizzling legal news day in mid-July.
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Uber must face a lawsuit claiming it should have covered UberEats drivers’ work-related expenses, the California Supreme Court said in a closely watched labor and employment case that could be a major blow to companies in the largest U.S. state, our colleague Daniel Wiessner writes.
In a unanimous opinion, the state Supreme Court said UberEats driver Erik Adolph did not give up his right under state law to sue on behalf of a large group of workers even though he signed an agreement to bring his own work-related legal claims in private arbitration. The justices’ ruling addressed legal standing under a unique state law called the Private Attorney General Act. That law, the justices said, does not bar workers from pursuing claims on their own behalf in arbitration while separately litigating large-scale claims in court.
Gibson Dunn’s Theane Evangelis, a lawyer for Uber, said the ruling conflicts with U.S. Supreme Court precedent and a federal law requiring the enforcement of valid arbitration agreements. Michael Rubin of Altshuler Berzon, who represents Adolph, said the ruling could spur companies to reconsider forcing workers’ claims into arbitration if large-scale PAGA lawsuits can still move forward in court.
The U.S. Chamber of Commerce and other groups filed briefs in the case warning that a ruling against Uber could encourage workers to file meritless lawsuits and pressure companies to settle them. The court said those concerns should be directed at state legislators, who have the power to change the law.
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- Arnold & Porter Kaye Scholer hired retired 3rd Circuit Judge Joseph Greenaway Jr, who left the bench in June after serving for nearly 30 years in U.S. judiciary posts. Greenaway, a New Jersey federal district judge prior to his elevation to the appeals court, will join the law firm as a partner in its Newark and New York offices in September. (Reuters)
- Jeffrey Rosen, former acting U.S. attorney general under President Donald Trump, joined Cravath as of counsel in the firm’s litigation group in D.C. Rosen, a former Kirkland partner, led the DOJ in the last days of the Trump administration. (Reuters)
- The U.S.-based Semiconductor Industry Association trade group called on the Biden administration to “refrain from further restrictions” on chip sales to China as chief executives from the biggest U.S. semiconductor firms planned to visit Washington this week to press their views on China policy. (Reuters)
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A New York plaintiffs lawyer who leveled splashy insider trading accusations against Elon Musk and Tesla knew that the premise of his case was false before he lodged his claims, according to a new sanctions motion by Tesla and its CEO. Alison Frankel writes that Musk and the company are seeking Rule 11 sanctions against Evan Spencer of Evan Spencer Law, who represents a prospective class of Dogecoin investors suing Musk and Tesla for allegedly duping them into buying the coins. Neither side is short on spicy rhetoric.
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“The stakes are too large, especially in light of cases against Coinbase and other issuers, for the SEC to let this opinion stand.“
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—Carol Goforth, a law professor at the University of Arkansas, predicting the U.S. securities agency would appeal a federal judge’s ruling that Ripple Labs did not violate federal securities law by selling its XRP token on public exchanges. SEC Chair Gary Gensler said on Monday the agency was “disappointed” by the cryptocurrency industry’s landmark legal victory. An appeal for the SEC carries risks for the SEC.
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- The U.S. Senate is expected to vote on the 6th Circuit nomination of Ohio public interest lawyer Rachel Bloomekatz to serve on the Cincinnati-based appeals court. At a hearing last year, Republicans questioned her work on behalf of Everytown Law, the legal arm of Everytown for Gun Safety, defending gun safety ordinances and challenging an Ohio school district’s decision to allow teachers to be armed. Bloomekatz stressed she would follow U.S. Supreme Court rulings protecting firearm ownership under the 2nd Amendment. Bloomekatz’s legal career includes stints at Gupta Wessler and Jones Day.
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U.S. District Judge Aileen Cannon is scheduled to hold a hearing in Florida federal court to determine how to handle classified information in the criminal case against Donald Trump over his retention of government materials. Legal experts have said the complexities surrounding the use of highly classified documents as evidence are likely to delay Trump’s initially scheduled Aug. 14 trial. Trump and an aide who was also charged have pleaded not guilty. They contend that the current trial schedule is “untenable.” The prosecution has said trial should be delayed until December.
- In the 2nd Circuit, the SEC is expected to file a brief in a case that considers whether syndicated loans are securities under state law. The appeals court sought a filing from the securities agency, which is not a party in the lawsuit, indicating how the regulator views the $1.4 trillion market. The court panel after hearing argument in March solicited the SEC’s view “given the importance of the issue, the parties’ diverging positions, and the policy implications that would result from our resolution of this case.” Approval from a majority of the SEC commissioners is required to file any amicus brief.
- The Missouri Supreme Court will hear arguments in a dispute between state Auditor Scott Fitzpatrick and state Attorney General Andrew Bailey over the cost of a ballot measure that the Center for Reproductive Rights said would “restore abortion rights in the state.” A state circuit judge previously ordered the attorney general to approve the auditor’s fiscal note summaries. The attorney general’s office said at one point that the fiscal impact report “contained inadequate and conflicting submissions from local government entities.” The reproductive rights group said Bailey’s rejection of the auditor’s fiscal notes has delayed the approval process for the proposed constitutional amendment.
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Court calendars are subject to last-minute docket changes.
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- In Florida federal court, the U.S. sued Fluent for allegedly operating a “massive ‘consent farm’ enterprise” to trick nearly 1 million people a day into providing personal information and consent to receive telemarketing calls. New York-based Fluent was accused of using deceptive ads and websites to promise free rewards, including from familiar brands such as Amazon and Walmart, that were impossible to obtain. A lawyer for the company did not immediately respond to requests for comment. (Reuters)
- An inventor sued Nike in Boston federal court, accusing the clothing giant of stealing her technology for a line of sports bras with pockets. Sherry Goff’s SherryWear, represented by Caldwell IP Law, told the court that Goff pitched her patented Pocket Bra to Nike starting in 2015, and that the company later used her inventions without permission. Nike did not immediately respond to a request for comment. (Reuters)
- Tesla sued Australian company Cap-XX in Texas federal court over IP rights for supercapacitors used to store energy in electric-vehicle batteries. According to Tesla, Cap-XX is infringing two U.S. patents owned by Tesla subsidiary Maxwell Technologies. Represented by Fish & Richardson, Tesla says the legal action comes in response to a lawsuit that Cap-XX originally filed against Maxwell in 2019 for patent infringement. (Reuters)
- Lawyers for fast-fashion retailer Temu at Boies Schiller sued rival e-commerce platform Shein in Boston federal court, accusing it of abusing its market power through exclusive dealing with clothing manufacturers. Shein is separately suing Temu in Chicago federal court, alleging it had worked with social media influencers to try to disparage the company in online posts. (Reuters)
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- Salesforce appointed Wachtell’s Sabastian Niles as its chief legal officer. The move comes months after Niles helped defend the business software provider against several hedge funds that had called for changes at the company. (Reuters)
- Former Freedman Normand Friedland partners Eric Rosen and Constantine Economides opened their own law firm Dynamis. Rosen and Economides are the sole partners at the firm, which has offices in Boston, Miami and New York. (Reuters)
- Lewis Brisbois hired Daron Watts as national chair of the firm’s D.C.-based government affairs and public policy practice. Watts was most recently at The Watts Group, a law and public policy firm he founded in 2018. (Reuters)
- Pallas Partners hired partner Joshua Naftalis in New York from the Manhattan U.S. attorney’s office, where he had been a federal prosecutor for more than a decade. (Reuters)
- Thompson Coburn brought on two partners for its Dallas office: Tom Reddin, who focuses on employment law and litigation, joins the firm from Norton Rose, and Andrew McKeon, who joins from Munck Wilson Mandala and focuses on general business matters. (Reuters)
- Cozen O’Connor hired white-collar partner Sarah Krissoff in the firm’s New York office from Day Pitney. (Cozen)
- Morgan Lewis added two partners: Paul Fuener in Pittsburgh, and Matthew Schnall in Boston. Fuener, who focuses on insurance coverage disputes, arrives at the firm from K&L Gates. Schnall, previously at WilmerHale, focuses on business-related tax matters.
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Goodwin brought on Manuel Lauredo as a New York-based partner focused on real estate joint venues and investment funds. Lauredo was previously at Paul Weiss. ( Goodwin)
- Venable added antitrust partner William Vigen in the firm’s D.C. office. Vigen was previously at the DOJ. (Venable)
- McGuireWoods added New York-based trusts and estates litigation partner Helen Gavaris. She arrives at the firm from Loeb & Loeb. (McGuireWoods)
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Rules that address how and when employees can make workplace recordings can carry legal pitfalls. An approach that bans all recording could run afoul of federal labor law, write Mark Goldstein and Claire Throckmorong of Reed Smith. But allowing employees to record anything exposes an employer to potential privacy and wiretap liability. Here are a few considerations and takeaways.
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