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Good morning. Tesla faces a trial this week over damages owed to an elevator operator who was racially harassed at the electric auto maker’s flagship plant. Plus, the U.S. Supreme Court will hear arguments today in an Amgen patent dispute; Juul and Altria face their first trial over claims of e-cigarette marketing to teens; and New York now has seven new candidates to serve as the state’s chief judge. It’s a fast-break of legal news underway this week. Hey, how’s your bracket?
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Lawyers for Tesla will head to trial today in San Francisco federal court, as a jury will be asked to decide how much money the electric auto maker must pay to a Black elevator operator who was subjected to severe racial harassment while working at the company’s flagship assembly plant, Daniel Wiessner reports.
The trial comes after a judge last year agreed with a jury that Tesla was liable for race discrimination but said a $137 million verdict for plaintiff Owen Diaz — one of the largest in a workplace discrimination case in U.S. history — was excessive. U.S. District Judge William Orrick, slashed that verdict to $15 million, but Diaz’s lawyers rejected the lower payout and opted for a new trial on damages.
“Tesla is focused on trying to get that number to zero, but that’s a very cynical view to have a Black man racially harassed and suggest that is not worth a lot of money,” Lawrence Organ, a lawyer for Diaz, told Wiessner. Tesla has said it does not tolerate discrimination, and its lawyers at Quinn Emanuel did not respond to requests for comment. The company had urged Orrick to reduce the original jury award to no more than $600,000.
>>> Read more: Explainer – Tesla’s legal troubles: race bias trial is tip of the iceberg
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- A New York state panel sent Governor Kathy Hochul a list of seven candidates to serve as the state’s new chief judge, after the Democrat’s first choice was rejected by lawmakers from her own party. The state Commission on Judicial Nomination delivered the list to Hochul about a month after the state Senate voted down Hochul’s nomination of appellate judge Hector LaSalle. (Reuters)
- The SEC sued New York lawyer Kenneth Miller and his two-attorney law firm Frost & Miller for allegedly allowing the firm’s bank accounts to be used in a series of fraudulent schemes that bilked investors out of $8.4 million. Gregory Frost, Miller’s partner at the firm, was not named as a defendant. Miller could not immediately be reached for comment. (Reuters)
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That’s how much former Goldman Sachs banker Roger Ng was ordered to forfeit, after U.S. District Judge Margo Brodie in Brooklyn sentenced him to 10 years in prison for helping loot billions of dollars from Malaysia’s 1MDB sovereign wealth fund. Brodie rejected Ng’s argument that he owed no more money after forfeiting to Malaysia tens of millions of dollars in alleged proceeds from his crimes. Ng’s lawyer Marc Agnifilo also said his client, Goldman’s former head of investment banking in Malaysia, had been drained of most of his assets. Brodie said the $35.1 million forfeiture was not constitutionally excessive.
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How exactly did the mass tort plaintiffs firm go about signing up 55,000 farmers as clients in the $1.5 billion GMO litigation against Syngenta? A new appellate decision provides some answers. Alison Frankel dives into the case of the South Dakota farmer-turned-marketer who claims Watts Guerra and one of its scores of referral firms reneged on promise to pay him $10,000 a month for duration of the case — and to buy him a $50,000 truck. Watts Guerra said it’s not responsible for pledges made by a referral firm. The 8th Circuit held otherwise.
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“Lawyers are never, ever going to be out of business.“
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—Geoffrey Vos, head of civil justice in England and Wales and one of Britain’s most senior judges, commenting on the growing use of artificial intelligence and the rise of online dispute resolution. Vos told Reuters that it is “inevitable” the legal sector will increasingly use AI. It has already been adopted by global law firm Allen & Overy and by 4,000 legal professionals at accounting and consulting firm PwC among others. Vos is predicting more work for lawyers.
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- The U.S. Supreme Court will hear oral arguments in Amgen’s bid to revive patents on its cholesterol drug Repatha that were invalidated after a legal challenge from rivals Regeneron and Sanofi. The justices in November agreed to take up Amgen’s appeal of a Federal Circuit ruling that threw out the Repatha patents. Amgen and other drugmakers have called the case a test of their ability to earn and defend patents for important drugs. Jeffrey Lamken of MoloLamken is lead counsel for Amgen, and Paul Clement of Clement & Murphy will argue for Sanofi. The DOJ’s Colleen Sinzdak will represent the U.S. as a friend-of-the-court in support of Sanofi.
- In D.C. federal court, jury selection is set to begin in the criminal trial of Grammy award-winning Fugees rapper Prakazrel (Pras) Michel, who prosecutors said conspired with fugitive Malaysian financier Jho Low in three alleged schemes to influence two different U.S. presidential administrations. Michel, represented by D.C. attorney Charles Haskell and Encino lawyer David Kenner, has pleaded not guilty.
- A trial is set to start in Connecticut federal court in a DOJ criminal antitrust prosecution alleging a group of aerospace engineering services executives and managers conspired to restrict employee recruitment and hiring. The defendants, including a former manager at Raytheon Technologies subsidiary Pratt & Whitney, were charged in December 2021 for their alleged roles in a long-running criminal conspiracy. They dispute the charge and have pleaded not guilty. Last week, a jury in Maine acquitted four home healthcare executives or managers on a charge they agreed to fix hourly rates.
Court calendars are subject to last-minute docket changes.
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- On Tuesday, opening statements are expected in the first trial involving Juul Labs and its former largest investor, Marlboro maker Altria Group, over claims by the state of Minnesota that they created a public nuisance by marketing addictive e-cigarettes to minors. Juul and Altria have faced thousands of similar lawsuits around the country. Juul said the “state’s claims do not stand up as matters of facts and law.” Altria has said that the surge in youth vaping in Minnesota happened largely before it took its 35% stake in Juul in 2018, and that as a minority, non-voting investor it should not be held responsible.
- Also on Tuesday, the U.S. Senate Banking Committee is set to hold the first of several hearings on the collapse of Silicon Valley Bank and Signature Bank. The hearing will feature testimony from witnesses including FDIC Chair Martin Gruenberg, Federal Reserve official Michael Barr and Nellie Liang, an under secretary at the U.S. Treasury Department. Silicon Valley Bank was taken over by federal regulators on March 10, with Signature Bank following suit a few days later. Federal agencies including the DOJ and the SEC have opened investigations.
- On Wednesday, Tesla investors will make their case to the Delaware Supreme Court to revive their lawsuit against Elon Musk that sought billions in dollars in damages from the electric carmaker’s chief executive for allegedly coercing the company’s board into buying rooftop solar panel maker SolarCity in 2016. Vice Chancellor Joseph Slights of Delaware’s Court of Chancery last year ruled Musk did not unjustly enrich himself when he guided Tesla to acquire SolarCity, where Musk was chairman and the largest shareholder.
- On Thursday, U.S. District Judge William Alsup in San Francisco will hold a hearing on several dueling motions in one part of a multi-front patent dispute between Google and Sonos over home audio devices. Google, represented by Quinn Emanuel, has asked Alsup to rule that three Sonos patents the company accused it of infringing are invalid. Sonos’ legal team includes attorneys from Orrick and Lee Sullivan Shea & Smith.
- On Friday, U.S. District Judge Benita Pearson in Youngstown, Ohio, federal court will weigh proposals from rival groups of plaintiffs lawyers competing for lead roles in nearly two dozen lawsuits against railway company Norfolk Southern over last month’s train derailment in East Palestine, Ohio. The two groups have presented bids to Pearson, who is presiding over the cases. One plan proposed a coalition of non-Ohio class action firms to take the lead, while the other would split leadership between national and Ohio-based attorneys. Norfolk Southern has said it is working toward creating three long-term funds to benefit East Palestine.
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- GSK lost its bid to keep expert testimony linking its discontinued heartburn drug Zantac to cancer out of an upcoming trial, a setback for the British drugmaker facing lawsuits over the medicine in courts across the United States. A trial set to begin on July 24 in Alameda County Superior Court will be the first test of how Zantac cancer claims will fare before a jury. The company has repeatedly denied that Zantac can cause cancer. (Reuters)
- Google and the DOJ will face fast-track litigation in Alexandria, Virginia, federal court in the government’s antitrust case claiming competition violations over digital advertising technology. A U.S. magistrate declined a proposal from the two sides to push pretrial fact and expert discovery into the middle of next year. Google, represented by lawyers from Freshfields, has denied claims in the lawsuit, filed in January. (Reuters)
- Deutsche Bank settled a lawsuit in Manhattan federal court in which it accused two offshore funds of reneging on an agreement to sell it $1.6 billion of claims in the bankruptcy of Bernard Madoff’s namesake firm. The terms of the settlement between the German bank and the Kingate Global Fund and Kingate Euro Fund were not disclosed, and the accord requires court approvals. (Reuters)
- A whistleblower lawsuit by a former Barclays trader accusing the British bank of firing him after he complained it ignored basic risk management and violated its own policies for detecting rogue trading was dismissed. A Manhattan federal judge ruled the former employee could not sue under the federal Sarbanes-Oxley whistleblowing law, which does not generally cover claims that companies violated internal policies, even if the behavior was wrongful. (Reuters)
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- Winston & Strawn picked up a pair of structured finance partners from Cadwalader: Chris Gavin in New York, and Taylor Speers in Dallas. (Reuters)
- Weil Gotshal brought on London-based transactions partner Brendan Moylan, an infrastructure deals lawyer who arrives at the firm from Latham. (Reuters)
- Cleary Gottlieb added leveraged finance lawyer Edward Aldred as a partner in its London office. Aldred was previously at Linklaters. (Reuters)
- Nelson Mullins added government relations partner Tom Lee in the firm’s Nashville office. He was previously at Frost Brown Todd. (Nelson Mullins)
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Federal and state courts continue to grapple with insurance-related questions spurred by the pandemic. The California Supreme Court has agreed to take up one of the chief arguments that insurers make when rejecting COVID-19 business interruption claims, write Ashley Jordan and Elizabeth Bowman of Reed Smith. That issue centers on whether the actual or potential presence of SARS-CoV-2 on an insured’s premises constitutes “direct physical loss or damage to property.” State courts are an important battleground for policyholders.
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