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TikTok’s new lawsuit to block the United States’ divest-or-ban law could spark a landmark clash over free speech, government power and the balance between open commerce and national security, legal experts said. TikTok and its parent ByteDance filed the case in the D.C. Circuit, the exclusive forum that the new law set for any legal challenges. The lawsuit is the latest move by TikTok to keep ahead of efforts to shut it down in the United States, David Shepardson reports.
The legal complaint argued broadly that the new law, which passed with bipartisan support, unfairly singles out TikTok. The lawsuit called the U.S. law an “extraordinary and unconstitutional assertion of power.” The company, which has denied sharing U.S. user data with the Chinese government, said the law puts all media at risk by circumventing free speech protections. The DOJ declined to comment.
>> Read TikTok’s petition.
A team from Covington including John Hall, Alexander Berengaut, Megan Crowley and David Ziontz filed the case for TikTok and ByteDance. The law firm has long defended the platforms in legal proceedings. Covington is working with Mayer Brown’s Andrew Pincus, who has defended TikTok in other court matters. Jennifer Huddleston, senior fellow in technology policy at the Cato Institute, predicted a key question for the court will focus on whether there are any less stringent regulatory efforts that the U.S. could pursue to address its purported national security concerns.
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- The FDIC must make sweeping changes to address widespread sexual harassment and other misconduct, according to a damning independent report commissioned from Cleary Gottlieb. The report cites accounts from more than 500 people and paints a picture of an agency at which sexual harassment, racial discrimination and bullying were pervasive at every level and tolerated by senior leaders for years, while complaints about misconduct were met with retaliation.
- The manager of an Apple retail store in Manhattan violated U.S. labor law by asking an employee whether he supported a union campaign, the NLRB ruled in its first decision involving the tech giant. The board said the manager’s questioning of the worker amounted to unlawful interrogation and upheld a decision by an administrative judge.
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Pharma company Pfizer told a New York federal judge on Monday that it is entitled to recoup about $75 million from the U.S. Securities and Exchange Commission’s $600 million settlement with now-shuttered hedge fund SAC Capital because it was victimized by SAC’s insider trading. The SEC says all of the 5,000 or so investors who lost money as a result of the insider trading scheme — the largest in U.S. history — have been repaid in full so the U.S. Treasury deserves the remaining $75 million. Pfizer contends that plan fails to acknowledge that the scheme began with a breach of duty by a Wyeth insider not long before Pfizer bought Wyeth in 2009. Alison Frankel has the story.
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“I do not boycott any law school or its students.“
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—5th Circuit Judge Jerry Smith, who spoke to Reuters after 13 conservative judges – including one of his colleagues on the New Orleans-based court – announced they would not hire Columbia students as clerks. The boycotting judges, all appointees of Republican former President Donald Trump, called the Manhattan school an “incubator of bigotry” over its handling of the pro-Palestinian protests on campus. Smith, who said he has hired many outstanding clerks from Columbia, noted that so far only two of the approximately 170 active federal appeals court judges had announced plans to join the boycott. Columbia Law School Dean Gillian Lester backed the students on Tuesday, saying they were consistently sought by leading employers, report Nate Raymond and Karen Sloan.
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- Tesla is expected to file with a Delaware court an expert report challenging the $6 billion legal fee sought by a shareholder who sued and voided Elon Musk’s $56 billion pay package. Musk has blasted the requested fee, saying that “the lawyers who did nothing but damage Tesla want $6 billion.” Judge Kathaleen McCormick in the Delaware Court of Chancery, who is overseeing the case and will decide on the fee, called Musk’s pay “unfathomable” in her ruling.
- “Fortnite” maker Epic Games will ask a U.S. judge to hold Apple in contempt for allegedly failing to follow a court order requiring some changes to its lucrative App Store. Apple has denied violating the terms of the injunction, which Epic won as part of a lawsuit accusing the iPhone maker of unlawfully dominating app distribution and in-app payments. Epic mostly lost the case, and both sides appealed to the U.S. Supreme Court, which in January declined to take the case.
- Midjourney, Stability AI and other AI companies will ask a California federal court to dismiss an amended lawsuit filed by a group of illustrators accusing the companies of misusing their work to train their AI image-generation systems. The court dismissed part of the artists’ original complaint last year. U.S. District Judge William Orrick dismissed parts of the lawsuit but gave the original plaintiffs permission to pursue their claims again in a new complaint.
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Court calendars are subject to last-minute docket changes.
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- A 1st Circuit panel appeared open to concluding the Boston City Council violated the Satanic Temple’s rights when councilors declined to invite Satanists to deliver an invocation before the start of one of its weekly meetings. A lawyer for the city told a three-judge panel that politics, not religion, drove councilors’ decisions about who delivers prayers at its meetings.
- Bankrupt Steward Health Care has put all of its 31 U.S. hospitals up for sale, hoping to finalize transactions by the end of the summer to address its $9 billion in total liabilities, its attorneys said at a court hearing in Houston. Steward, which filed for bankruptcy protection on Monday, hopes to keep all of its hospitals open over the long term, Steward attorney Ray Schrock told U.S. Bankruptcy Judge Chris Lopez, who is overseeing the Chapter 11 proceedings.
- 9th Circuit Judges M. Margaret McKeown and John Owens appeared open to reviving at least part of a 2023 Idaho state law making it a crime to help a minor cross state lines for an abortion without parental consent. While hearing arguments in the state’s appeal of a lower court’s ruling blocking the law, McKeown asked several questions about how transporting someone could be speech protected by the First Amendment.
- Levi Strauss has settled its lawsuit accusing the Italian luxury fashion brand Brunello Cucinelli of infringing its familiar, trademarked rectangular pocket tab. Levi had accused Brunello Cucinelli of selling clothing that contained “nearly identical” copies of its tab, which the retailer of denim and other clothing trademarked in 1938, and provided 14 photos illustrating the alleged infringement.
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- Gibson Dunn added Caith Kushner as a New York-based partner in the firm’s liability management and special situations practice. Kushner was previously at Paul Weiss. (Gibson Dunn)
- Lathrop GPM picked up partner Brent Vincent for its tort, insurance and environmental practice in Chicago. Vincent was previously with Bryan Cave. (Lathrop)
- Norton Rose Fulbright hired private equity partner Nate Christensen in the firm’s Dallas office. Christensen was previously at Foley & Lardner. (Norton Rose)
- McCarter & English hired IP partner Michael Gnibus in Connecticut. Gnibus was previously at Armstrong Teasdale. (McCarter)
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