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Good morning. Montana in a U.S. court today will defend its effort to ban TikTok in the state, an early legal test for the country’s first such regulatory action. Plus, California’s new emissions laws could end up elevating the risk of legal challenges to companies’ climate disclosures, our colleagues report. Elsewhere in court today, the U.S. judiciary’s $125 million PACER fee settlement faces a judge’s review, and Jones Day will tangle with two former associates who’ve sued the firm over its parental leave policy. Let’s dive in.
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Montana’s TikTok ban faces US judge
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REUTERS/Dado Ruvic/Illustration
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Lawyers for TikTok and its users will ask U.S. District Judge Donald Molloy today at a hearing in Montana federal court to issue a preliminary injunction stopping Montana’s ban — the first in the country — on the Chinese-owned short video app from taking effect on Jan 1. TikTok’s attorneys include a team from Covington. Davis Wright lawyers are representing users of the app.
Montana Attorney General Austin Knudsen, a Republican, in August told the court that the state legislature and governor “did the right thing in prohibiting TikTok from operating in Montana as long as it is under the control of a foreign adversary.” A group of 18 state attorneys general led by Virginia have backed Montana’s effort to ban TikTok. Tech groups are backing TikTok in its lawsuit.
In prior statements, TikTok said it “has not shared, and would not share, U.S. user data with the Chinese government, and has taken substantial measures to protect the privacy and security of TikTok users.” The app is banned on government-issued devices for U.S. federal employees. Efforts to pass legislation to give the Biden administration more power to ban or crack down on TikTok have stalled.
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- Edward Blum’s anti-affirmative action group American Alliance for Equal Rights dropped a lawsuit challenging a Perkins Coie fellowship program that was designed to help bolster diversity within the law firm’s ranks. The firm last week said it would allow all law students to apply to the diversity fellowship program, not just members of “historically underrepresented” groups. (Reuters)
- A New York lawyer has been sentenced to up to 7.5 years in prison for stealing more than $1.2 million from his law firm to spend on luxury items including a diamond-encrusted watch. Prosecutors said the attorney had used his firm as his “personal gold mine.” (Reuters)
- Davis Polk is advising ExxonMobil on its $60 billion acquisition of rival Pioneer Natural Resources. Gibson Dunn is counsel to Pioneer. Exxon Chief Executive Darren Woods said he doesn’t anticipate antitrust hurdles to complete the deal, expected to close in early 2024. The transaction would be the largest by Exxon since its acquisition of Mobil in 1999, Davis Polk said.
- Former FTX general counsel Daniel Friedberg asked a U.S. judge to let him intervene in a lawsuit that the crypto platform’s founder, Sam Bankman-Fried, filed against an insurance carrier seeking additional coverage for his legal defense. Friedberg wants to jump into the case to protect what he said was an interest in the insurance proceeds at issue in the litigation. His filing said he was entitled to “substantial coverage” to help defend against civil lawsuits. Bankman-Fried is on trial in Manhattan for alleged fraud. He has pleaded not guilty.
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That’s the number of comments the FTC said it received about how so-called “junk fees” affect personal spending or business practices. The Biden administration just proposed a rule that would require businesses to disclose mandatory fees up front and an instruction to banks not to impose excessive charges for basic information such as account balances. The proposed rule would ban hidden fees across a swath of industries including car rental agencies, hotels, and event ticketing providers. FTC Chair Lina Khan (above) called the fees an “invisible tax” that inflates prices.
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Shareholder lawyers who want to collect about $229 million in fees for forcing Tesla board members to surrender nearly $920 million in compensation fired back this week at the company for asserting that they are entitled to no more than $63.5 million. Alison Frankel has the details on their new brief, which contends that Tesla is trying to defy both Delaware precedent and the company’s own signature on a settlement stipulation that acknowledges the value of the compensation surrendered by the company’s outside directors.
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“Have we ever had a case before where all it is circumstantial evidence?”
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—Chief Justice John Roberts Jr, expressing some skepticism that the Black voter plaintiffs challenging a Republican-drawn electoral map in South Carolina had met their burden to prove their claims. The high court’s conservative majority appeared sympathetic to the state’s defense of its map. The state legislature was accused of racial gerrymandering to reduce the influence of Black voters. A panel of three federal judges blocked the map, which includes parts of Charleston. The outcome of the case could help decide control of the House in the 2024 elections.
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- A federal judge will consider whether to give final approval to a $125 million class action settlement with users of the electronic records system known as PACER that resolves claims that the judiciary overcharged members of the public who downloaded court documents. Deepak Gupta, a lawyer for the plaintiffs at Gupta Wessler, said last year that the accord “reflects a long-awaited recognition by the federal judiciary that it can no longer use PACER fees as a profit center to fund unrelated activities.” The settlement covers only past charges and will not eliminate costly fees the public currently incurs to review records online.
- In D.C. federal court, U.S. District Judge Randolph Moss will hear arguments in a lawsuit accusing Jones Day of sex discrimination and unlawful termination. Two former associates at the firm, Julia Sheketoff and Mark Savignac, claimed that Jones Day’s family leave policy violates civil rights law because it offers paid disability leave for birth mothers, but not fathers like Savignac. He has maintained his termination was unlawful and argued that had he not been fired, he would have made partner. The firm has defended its paternity leave practices and its decision to fire Savignac.
- An IRS contractor charged with disclosing tax return information to news media outlets is set to appear in D.C. federal court for his arraignment and plea agreement. The authorities accused Charles Littlejohn of stealing tax information about an unnamed high-ranking government official and disclosing it to a news outlet. Littlejohn is represented by Lisa Manning of Schertler, Onorato, Mead & Sears. U.S. District Judge Ana Reyes is presiding over the prosecution.
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Court calendars are subject to last-minute docket changes.
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- A divided 9th Circuit voted 7-4 to allow California’s ban on high-capacity gun magazines to remain in place as the state appeals an order from U.S. District Judge Roger Benitez in San Diego that struck down the provision as unlawful. The appeals court’s ruling came in a long-running lawsuit by the California Rifle & Pistol Association and gun owners challenging the ban. (Reuters)
- Meta was sued by an interactive app developer in an antitrust case accusing the technology company of squelching competition in the virtual reality marketplace. Andre Elijah Immersive said it was seeking millions of dollars in damages for Meta’s alleged violations of a contract. Meta had no immediate comment on the lawsuit in California federal court. (Reuters)
- Samsung sued computer-memory company Netlist in Delaware federal court to fend off new infringement allegations in a patent dispute where Netlist has already won more than $300 million from the tech giant. Attorneys for Samsung at Covington and Morris Nichols asked the court to rule it did not violate Netlist’s patent rights or to find that Netlist broke an obligation to offer a license on fair terms. (Reuters)
- Pfizer will pay $50 million to settle claims by drug wholesalers that they overpaid for EpiPen allergy treatment devices as a result of anticompetitive tactics by the drugmaker. The wholesalers, represented by Roberts Law Firm and Nussbaum Law Group, said the settlement was fair and would avoid the risk that an appeals court would uphold an order dismissing their claims. (Reuters)
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