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Good morning. The 6th Circuit won an appeals court lottery in its selection as the venue where telecom industry advocates will battle the FCC over its new net neutrality rules. Plus, suspended Florida prosecutor Monique Worrell lost her fight against Ron DeSantis; a 9th Circuit judge will recuse from hearing a case over the war in Gaza; and the Ozempic multidistrict litigation in Philadelphia has a new judge. In court today, Google and the DOJ will face off over a check the tech giant wrote to the United States. Happy Friday — let’s do this!
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The Cincinnati-based 6th Circuit will hear a series of legal challenges seeking to block the Biden administration’s reinstatement of landmark net neutrality rules set to take effect on July 22, our colleague David Shepardson reports. A federal judicial panel randomly selected the 6th Circuit after cases challenging the new regulations were filed there and in other federal appeals courts.
The FCC in April voted along party lines to reassume regulatory oversight of broadband internet and reinstate open internet rules adopted in 2015 that were rescinded under former President Donald Trump. Challenges were filed in seven circuit courts. Industry groups said the FCC “once again claimed all-encompassing authority to regulate how Americans access the internet.” FCC Chair Jessica Rosenworcel said she has “full confidence in what this agency has developed with respect to net neutrality, and I believe our work will be upheld by the courts.”
Two net neutrality cases were pending in the 6th Circuit when the Judicial Panel on Multidistrict Litigation announced its random selection. Lawyers from Sullivan & Cromwell, including Jeffrey Wall, a former Trump-era U.S. solicitor general, are representing the Ohio Telecom Association in one of those cases. In the other, Latham’s Matthew Brill, chair of the firm’s connectivity, privacy and information practice, represents the Ohio Cable Telecommunications Association.
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- Suspended Florida prosecutor Monique Worrell lost her bid in the Florida Supreme Court to overturn a decision by Republican Governor Ron DeSantis to remove her from office. In a 6-1 ruling, the Florida high court found that DeSantis had the authority to suspend Worrell as the lead prosecutor in Orange and Osceola counties. Worrell was the second of two elected Democrats whom DeSantis suspended. In the other case, Andrew Warren is suing in U.S. court for reinstatement.
- U.S. District Judge Alvin Hellerstein in Manhattan ordered a probe of the claims distribution process in a $30 million settlement with consumers and health plans in a Novartis antitrust class action over its hypertension drug Exforge. Just 22,000 claims of more than 132,000 were allowed, the judge noted. Hellerstein in his order cited his concerns about the integrity of the process.
- Artificial intelligence company DoNotPay is settling a proposed class action alleging it provided “substandard” services and engaged in the unauthorized practice of law, according to a California federal court filing. The parties have “reached a settlement in principle” and are finalizing the agreement, lawyers for both sides said in a joint status update. The filing did not contain additional details on the terms of the settlement.
- The FTC and DOJ reached an agreement to divide up how the agencies will be looking at competition in the artificial intelligence arena. Both agencies enforce U.S. antitrust law. The DOJ will take the lead in investigating whether Nvidia violated antitrust laws, while the FTC will examine the conduct of OpenAI and Microsoft.
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That’s how many new terms appear in the latest edition of Black’s Law Dictionary, the iconic legal reference book that often makes an appearance in court filings and rulings. The dictionary, published by Thomson Reuters, is now in its 12th edition, under the leadership of chief editor Bryan Garner. The new terms include deepfake, ghost gun, shadow docket, hot-tubbing, litigation funding, cyber-extortion and legal-defense fund.
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As U.S. District Judge Karen Marston in Philadelphia takes the helm of litigation involving Ozempic and similar drugs, she’ll step into a lively fight where early battle lines have already been drawn. A former federal prosecutor who was nominated to the bench in 2019, Marston on Thursday was chosen to take over the product liability multidistrict litigation after the sudden death of the previous judge. The plaintiffs’ lawyers expect the MDL to include more than 10,000 personal injury lawsuits. Jenna Greene in her latest column looks at key issues the new judge will face. Read more.
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“It is far from certain that an objective observer would reasonably question my impartiality.“
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—Circuit Judge Ryan Nelson, in an order in which he said he will recuse from hearing a bid by Palestinian rights activists to block the Biden administration’s military support of Israel after he joined a delegation of judges for a trip to the country following the Oct. 7 attack by Hamas. Nelson, a Trump-era appointee to the 9th Circuit, said “out of an abundance of caution,” he would not participate in the case. A three-judge panel will hear arguments on Monday in San Francisco.
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- U.S. District Judge Daniel Crabtree in Kansas said he will announce a ruling on whether to dismiss a lawsuit from a group of Republican-led states challenging a new Biden administration student loan repayment program that aims to provide debt relief to millions of people. The DOJ told the court in seeking dismissal that the states “clearly have policy and legal disagreements with the secretary’s approach to student loans, but their standing theories give them no basis to air those grievances in federal court.”
- Tesla is expected to ask a Delaware judge to reject a request for a $6 billion legal fee for the lawyers representing a shareholder who sued and voided Elon Musk’s $56 billion pay package from the automaker. Musk has blasted the request on his X platform, saying that “the lawyers who did nothing but damage Tesla want $6 billion.” Tesla shareholder Richard Tornetta sued Musk in 2018 over the pay package, which a Delaware judge nixed in January.
- Google’s lawyers at Paul Weiss will ask U.S. District Judge Leonie Brinkema in Alexandria, Virginia, federal court to bar the DOJ from getting a jury trial in its antitrust suit over advertising technology. Google said it had cut a check covering the government’s alleged damages of less than a million dollars, and so there was nothing left for a jury to decide. Instead, Brinkema would hold a bench trial on the remaining bid by the DOJ to break up Google’s digital ads business. The DOJ has questioned Google’s effort to circumvent a jury trial.
- FTC Chair Lina Khan will deliver remarks in Atlanta at the American Constitution Society’s annual conference. Other sessions will focus on First Amendment speech rights, challenges to agency regulatory authority and labor issues.
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Court calendars are subject to last-minute docket changes.
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- The U.S. Supreme Court ruled that insurers have a broad right to weigh in on bankruptcies that may put them on the hook for paying claims, in a victory for an insurer challenging the restructuring plan of a manufacturer of asbestos-containing products. The court in an 8-0 opinion authored by Justice Sonia Sotomayor held that Truck Insurance Exchange should have been allowed to object to Kaiser Gypsum’s proposed $50 million settlement of thousands of asbestos-related lawsuits through its Chapter 11 bankruptcy reorganization, because the deal would be funded largely company’s insurance policies.
- A financial industry trade association sued the SEC for information about the agency’s multibillion-dollar crackdown on how banks and other firms handle work-related communication on personal devices. The American Securities Association said in its lawsuit in Tampa federal court that the agency had improperly rejected its request under federal public records law.
- Google persuaded a federal judge in San Francisco to dismiss a proposed class action over its alleged misuse of personal and copyrighted data to train artificial-intelligence systems including its chatbot Bard. U.S. District Judge Araceli Martinez-Olguin said in a two-page order that she would dismiss the case in light of concerns raised by another California judge in a related lawsuit against OpenAI and Microsoft.
- The 5th Circuit ordered that eight of 17 books removed from a Texas library’s shelves over conservatives’ complaints that they were inappropriate must be returned. The panel said in a 2-1 ruling that partially upheld a lower court’s injunction that the library in the small town of Llano had infringed on defendants’ First Amendment rights to information by removing some of the books.
- Harley-Davidson persuaded a judge to dismiss a proposed class action claiming the company imposed unlawful restrictions on customers that boosted the cost of repairs for its iconic motorcycles. U.S. District Judge William Griesbach in Green Bay ruled for now against 15 individual consumers who bought Harley-Davidson motorcycles between 2016 and 2022.
- Litigation claiming that Abbott Laboratories is marketing Glucerna shakes and nutritional powders with harmful ingredients can move forward, U.S. District Judge P. Casey Pitts in San Jose said. The judge rejected Abbott’s motion to dismiss the proposed class action, ruling that the consumers had provided enough evidence at this stage to support their claims that Glucerna, which says on its label that it is “scientifically designed for people with diabetes,” contains sucralose and other additives that some studies show have dangerous health effects.
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- Alston & Bird added privacy, cyber and data strategy partner Jennifer Everett in the firm’s D.C. office from Jones Day. (Alston & Bird)
- McDermott brought on litigation partner Amy Bentsen (Boring) in Atlanta from King & Spalding. (McDermott)
- Paul Hastings hired executive compensation partner Jason Ertel in New York from Fried Frank. (Paul Hastings)
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Many borrowers are finding it increasingly difficult to navigate the changes in the commercial real estate market where, in many instances, costs of capital have increased, property valuations have decreased, rent growth has slowed, and lending standards have tightened. According to many industry professionals, these challenges are likely to continue until mid-2025, write Brian Bullard, Tara Darling and Joe Esposito of Polsinelli. Borrowers now need to look at alternative investment sources to complete their capital stacks. For many, the answer has been preferred equity.
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