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Good morning. A group founded by a former Trump aide is filing complaints and lawsuits against companies like Activision and Kellogg over their diversity programs — and experts say this is just the beginning for challenges to corporate diversity after the Supreme Court’s ruling on affirmative action. Plus, California is examining “pharmacy deserts” in Kroger’s bid for Albertsons; and glitches in the online version of the LSAT are pushing more people to take the test in person. We made it to Friday!
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A group headed by former Trump administration official Stephen Miller (above) is accusing Activision, Kellogg and other companies of illegal discrimination over their efforts to diversify their workforces. The latest complaints come as many experts expect an uptick in challenges to corporate diversity programs following a U.S. Supreme Court ruling striking down affirmative action at U.S. colleges, reports Daniel Wiessner.
Miller’s America First Legal previously filed complaints with the EEOC involving Starbucks, McDonald’s, Morgan Stanley and others. America First has also filed lawsuits accusing Target and Progressive Insurance of breaching their duties to shareholders by adopting diversity programs and progressive marketing campaigns.
It is difficult to say whether the EEOC, which enforces federal laws banning workplace discrimination and currently has a Democratic majority, will take up America First’s complaints. But the growing scrutiny underscores competing pressures that companies face to implement diversity initiatives — and also rein them in amid conservative backlash, according to Rick Rossein, a professor at the City University of New York School of Law.
Legal complaints like the ones filed by America First could drive employers to be more cautious, he said.
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- The California attorney general’s office is probing whether Kroger’s $24.6 billion plan to buy rival grocer Albertsons will make it harder for people in poorer parts of cities or rural areas to buy medicines, according to two people familiar with the review. California Attorney General Rob Bonta previously said he was “deeply concerned” about the proposed merger. The companies have said the tie-up would benefit consumers. (Reuters)
- Donald Trump ally and attorney John Eastman lost his bid to delay the resumption of his legal disciplinary trial next week in California following his indictment by prosecutors in Georgia. But it is unclear whether Eastman will testify again at his misconduct proceeding. Judge Yvette Roland said she would weigh Eastman’s Fifth Amendment right to not incriminate himself with the state bar’s desire to continue questioning him over his alleged role in contesting the results of the 2020 presidential election. (Reuters)
- Widespread problems with August’s remote Law School Admission Test are prompting more people to opt for the in-person version of the exam. The Law School Admission Council, which administers the LSAT, said this week it is increasing capacity at in-person test centers for the next regularly scheduled exam on Sept. 8 and 9 due to heightened demand. (Reuters)
- U.S. District Judge Brantley Starr paused his order requiring three Southwest Airlines attorneys to undergo religious rights training by Christian advocacy group Alliance Defending Freedom. Starr paused his order for 30 days to allow Southwest to argue for a longer stay while the company appeals to the 5th Circuit. Starr’s order drew a misconduct complaint from a judicial reform group. (Reuters)
- A Louisiana judge cannot be sued for firing a white employee over a Facebook post stating “#IWillrunYouOver” in response to an article about a motorist driving through a Black Lives Matter protest following George Floyd’s murder, the 5th Circuit ruled. The court upheld the dismissal of Katelynn McLin’s lawsuit against the Louisiana Twenty-First Judicial District and former Chief Judge Robert Morrison. (Reuters)
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In June, three justices of the U.S. Supreme Court more or less invited False Claims Act defendants to mount a constitutional challenge to whistleblower suits alleging fraud on behalf of the U.S. government. Hogan Lovells and Linklaters just accepted that invitation. Alison Frankel has the story on their new brief, which contends that private whistleblowers are constitutionally precluded from representing the interests of the executive branch in False Claims Act suits.
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“Federal courts are not forecasters.”
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—3rd Circuit Judge Stephanos Bibas, writing for a unanimous panel that rejected as premature a lawsuit challenging a New Jersey law that allows the state to sue gun makers and sellers for endangering public safety. The court dismissed a challenge by gun industry group the National Shooting Sports Foundation to a law that expands the liability of gun makers and sellers. The appeals court said it saw “little evidence that enforcement is looming” and upheld dismissal of the case. Similar laws have passed in Colorado, Hawaii, Washington and Illinois in recent months.
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- Montana officials are due to respond to an effort by TikTok and some of its users to block enforcement of a Montana state ban on use of the app before it takes effect on Jan. 1. TikTok, owned by China’s ByteDance, filed suit in May. The company’s lawyers at Covington have asked U.S. District Judge Donald Molloy to issue a preliminary injunction to block the first-of-its-kind U.S. state ban on several grounds, arguing it violates the First Amendment free speech rights of the company and users. Tech groups have filed friend-of-the-court briefs backing TikTok in its lawsuit.
- The SEC will make arguments in a Manhattan federal court filing about why U.S. District Judge Analisa Torres should let the agency appeal her July 13 decision that said the sale of Ripple Labs’ XRP digital token on public exchanges complied with federal securities laws. The SEC has said it wants to appeal the ruling, which was a setback for the agency’s efforts to oversee cryptocurrency markets. Torres’ decision was not a total victory for Ripple, as she found that it violated securities laws by selling XRP to institutional investors.
- U.S. Magistrate Judge Taryn Merkl in Brooklyn will hold a status hearing in a malpractice case against litigation powerhouse Williams & Connolly. Merkl said in a recent report that the D.C.-founded firm should face a nearly $8 million legal malpractice claim from a former real estate investor client who alleged negligent legal advice. Merkl recommended rejecting the firm’s claim that it was entitled to summary judgment because there are no facts in dispute in the case. Williams & Connolly has denied any wrongdoing.
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Court calendars are subject to last-minute docket changes.
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What to catch up on this weekend
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- U.S. District Judge Vince Chhabria in San Francisco dismissed a lawsuit accusing YouTube of restricting or removing videos by Black and Hispanic content creators because of their race. Chhabria said that although the idea that YouTube’s algorithm could discriminate based on race is plausible, the plaintiffs “do not come close” to suggesting they suffered any discrimination. (Reuters)
- A 9th Circuit panel refused to allow Idaho to enforce a first-in-the-nation ban on transgender women and girls from participating in female sports leagues, saying the measure likely was unconstitutional. The court upheld an injunction blocking Idaho’s Fairness in Women’s Sports Act, but 22 other states have adopted similar laws governing sports. (Reuters)
- Venezuela’s legal team at Munger Tolles is making a last ditch attempt to limit the number of companies that can participate in a court-ordered auction of shares in oil refiner Citgo Petroleum, appealing to the U.S. Supreme Court to overturn a ruling that has led to the planned sale of the country’s largest foreign asset. Munger’s Donald Verrilli, a former Obama-era U.S. solicitor general, is lead counsel on the petition. (Reuters)
- FTX-affiliated cryptocurrency trading firm Alameda Research was granted a $175 million unsecured claim on the estate of bankrupt crypto lender Genesis Global Capital, according to a court filing. The settlement marks a significant reduction from the nearly $3.9 billion claim that FTX, which is also bankrupt, had asserted earlier this year. (Reuters)
- Trucking firm Estes Express has submitted a $1.3 billion bid to acquire bankrupt Yellow Corp’s shipment centers, Yellow’s attorney, Allyson Smith of Kirkland & Ellis, said. Yellow has also decided to move forward with a $142.5 million loan provided by hedge fund Citadel and MFN Partners, which is Yellow’s largest shareholder, Smith told U.S. Bankruptcy Judge Craig Goldblatt at a hearing in Wilmington, Delaware. (Reuters)
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- Sanford Heisler brought on Schwanda Roundtree as a D.C.-based partner from the U.S. Defense Department, where she held a deputy general counsel post. (Sanford Heisler)
- Troutman Pepper added private equity partners Jonathan Homer in New York and Bruce Steinert in San Francisco. Homer was previously at Gibson Dunn, and Steinart was at Perkins Coie. (Troutman Pepper)
- Buchalter brought on Christopher Rogers as a Scottsdale-based corporate practice partner. He was previously at Jennings Strouss. (Buchalter)
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