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Good morning. A new Reuters special report looks at the myriad complaints over Tesla’s insurance business, as the electric car maker faces litigation and more. Tesla’s CEO Elon Musk is suing the watchdog group Media Matters over its reporting about ads appearing on the X social platform next to antisemitic content. Plus, U.S. financial firms and their trade groups are not shying from suing Biden administration regulators, and online law schools could win the American Bar Association’s blessing in a major policy shift.
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Consumer complaints about Tesla’s insurance program, launched in 2019 by the electric-car company, are drawing scrutiny from state regulators and plaintiffs’ attorneys, according to a Reuters special report from our colleagues Steve Stecklow, Koh Gui Qing and Norihiko Shirouzu.
The company’s program promised to revolutionize auto insurance. But Tesla has run the business at times on a shoestring budget, overwhelming a small team of adjusters with claims. Reuters spoke with policy holders, examined court filings and obtained public records. Tesla and its chief executive, billionaire Elon Musk, did not respond to detailed questions.
The Ohio state insurance department at least twice this year found Tesla had violated the state’s insurance regulations for handling claims, our colleagues report. The department was considering opening formal investigations. On the litigation front, Tesla is facing at least two class actions in Illinois federal court and California state court claiming its vehicles are prone to producing false collision warnings that can inflate premiums. Tesla in filings has denied the allegations and sought to dismiss the cases.
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- Small D.C.-based litigation firm Wilkinson Stekloff will dole out annual seniority-based bonuses to associates of up to $201,250. The firm is among the “boutiques” that typically outpace market-rate bonuses at bigger firms, which have yet to lay out their plans.
- The American Bar Association’s legal education arm is considering extending accreditation to fully online law schools, marking a major shift from its longstanding prioritization of in-person teaching. The ABA’s legal ed section is now seeking public comments on the proposed changes.
- Brooklyn-based U.S. District Judge Roslynn Mauskopf, who serves as director of the Administrative Office of the U.S. Courts, plans to retire from the bench in early 2024. Chief U.S. Supreme Court Justice John Roberts, who appointed Mauskopf to serve as director of the administrative agency in 2021, will select her successor.
- Airbnb named Ronald Klain, former chief of staff in the Biden administration, as the short-term rental company’s chief legal officer. Klain will leave his post as a partner at O’Melveny.
- U.S. District Judge Ana Reyes in D.C. lambasted attorneys on both sides litigating Walgreens’ lawsuit challenging a $642 million arbitration award won by insurer Humana. Reyes in an order expressed “zero tolerance for immature sniping and sharp litigation practices.” She told the attorneys in the case to send her order to their clients’ heads of litigation.
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That’s the verdict against E.I. du Pont de Nemours & Co that the U.S. Supreme Court refused to review, preserving a legal win for an Ohio man who claimed toxic chemicals released by the company into drinking water caused his cancer. The court’s order came after the company asked the justices to review the case in June, arguing its defenses were hamstrung during the 2020 trial. The Supreme Court’s order drew a dissent from Justice Clarence Thomas.
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In class action litigation, the answer to every question is vastly magnified because it applies not just to one plaintiff but to hundreds or thousands of potential class members. That concern, writes Alison Frankel, led the 6th Circuit last week to undo the certification of five statewide classes of Ford pickup owners who claimed that their trucks’ braking systems were defectively designed, holding that the trial judge abused his discretion by failing to explain why class allegations could be evaluated in a single proceeding.
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“You may be right that that’s what the Supreme Court had in mind, but they didn’t hold it.“
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—Judge Guido Calabresi of the 2nd Circuit, expressing his skepticism of a lawyer’s argument at a hearing that a 2018 U.S. Supreme Court ruling made clear that public employees cannot be forced to support a union’s speech. The appeals court panel seemed unlikely to revive a lawsuit claiming that a group of Jewish professors at public colleges in New York City should be able to opt out of representation by a union that has criticized Israel’s treatment of Palestinians, Daniel Wiessner writes. New York and most other states have laws requiring that one union exclusively represent groups of public employees.
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- The FTC is due to respond to an effort by national alcohol retailer Total Wine to block a subpoena from the agency demanding corporate records that the company maintains are beyond the scope of a commission investigation. The agency is probing one of Total Wine’s wholesalers for possible price discrimination. Total Wine, represented by Gibson Dunn, said it is not a target of the inquiry.
- A former Aegerion Pharmaceuticals sales representative accused of defrauding insurers into paying for the company’s expensive cholesterol drug Juxtapid has agreed to plead guilty rather than face trial a second time in the long-running case. Mark Moffett, 51, will plead guilty to a single wire fraud count a year after a federal appeals court overturned his 2019 trial conviction, according to a plea agreement filed in Boston federal court.
- Steve Waithe, a former track and field coach at Northeastern University and other schools, is expected to plead guilty in Massachusetts federal court after being charged in a scheme to trick female student-athletes into sending him sexually explicit photos through sham social media accounts. Prosecutors and a lawyer for Waithe said in October they were “finalizing the terms of a plea agreement that would fully resolve the case.”
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Court calendars are subject to last-minute docket changes.
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- The SEC accused Kraken, one of the world’s largest cryptocurrency exchanges, in a lawsuit in San Francisco federal court of illegally operating its trading platform without first registering with the regulator. The lawsuit is the latest step in SEC Chair Gary Gensler’s push to bring cryptocurrency under his agency’s purview, by contending that crypto assets are offered and sold as investment contracts.
- Elon Musk’s electric car company Tesla defeated claims that the company forced customers to pay high prices and suffer long waits for repairs by monopolizing the markets for vehicle maintenance and replacement parts. U.S. District Judge Trina Thompson in San Francisco gave the plaintiffs 21 days to file an amended complaint. Attorneys from Morgan Lewis represent Tesla.
- Venmo and Cash App users hit Apple with a class-action lawsuit accusing it of curbing competition for peer-to-peer payment platforms. The plaintiffs, represented by the law firm Bathaee Dunne, allege in San Jose federal court they are paying higher transaction fees based on Apple agreements that bar certain crypto technology.
- Texas Attorney General Ken Paxton accused Pfizer and its supplier Tris Pharma of providing children’s ADHD medicine that it knew might be ineffective to the state’s Medicaid insurance program for low-income people, in a newly unsealed lawsuit. The lawsuit stems from a whistleblower complaint. Pfizer and Tris did not immediately respond to a request for comment.
- Two real estate antitrust settlements won preliminary approval in Kansas City federal court, where a jury last month returned an $1.8 billion trial verdict against the National Association of Realtors and a group of home brokers. The class action from home sellers alleged a conspiracy to inflate commissions paid to agents for buyers. In the settlements, Anywhere agreed to pay $83.5 million, and Re/Max will pay $55 million.
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- Polsinelli added D.C.-based real estate partners Anitra Androh and Tim Donovan. They were previously at Nelson Mullins. (Polsinelli)
- Blank Rome brought on Yvonne Saadi as a commercial litigation partner in Pittsburgh. Saadi was previously an assistant U.S. attorney for the Western District of Pennsylvania. (Blank Rome)
- Arnold & Porter added William Choe as a corporate and finance partner in the firm’s Palo Alto office. Choe was previously at Paul Hastings. (Arnold & Porter)
- Reed Smith brought on global corporate group partner Daniel Connelly in Philadelphia. Connelly previously was at Kirkland. (Reed Smith)
- Nelson Mullins hired Christian Herrmann as a Greenville-based partner in the firm’s business immigration practice. Herrmann joins from Ogletree Deakins. (Nelson Mullins)
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