Keep your finger on the legal world's pulse

Legal experts warn that the Federal Trade Commission (FTC) will likely increase its efforts to enforce a ban on noncompete agreements, despite recent conflicting rulings from federal courts. Attorneys Marina Tsatalis and Jess Krannich of Wilson Sonsini advised companies to audit their noncompete provisions, keeping them narrowly tailored and focused on employees with access to critical trade secrets. As state laws like California's move further toward curbing noncompetes, businesses should also avoid indefinite or broad restrictions and be cautious with choice of state law clauses, which courts may reject.

 

Law

Navigate compliance and risk: Essential insights for legal leaders

On September 19, attend the 2024 NAVEX Next Virtual Conference—a free event for legal and compliance leaders. Gain expert insights on merging legal strategy, ethics, and risk management to build a resilient, accountable organization.

What you’ll learn:

• Strategic compliance: Navigate complex international regulations and global supply chain ethics.
• Proactive risk management: Shift from crisis response to strategic risk mitigation.
• Ethical engagement: Build a culture of integrity that aligns with legal and ethical standards.
• Enhance collaboration: Strengthen ties between legal, compliance, and HR teams.

Featured Sessions:

• The EU Regulatory Survival Guide: Your Essential Guide to EU Compliance.
• Behind the Label: Ensuring Human Rights in Your Global Supply Chain.
• AI Governance and Risk Management.

Explore the agenda

 

Recent mergers among major law firms highlight a growing trend towards consolidation in the legal industry. Kent Zimmermann from Zeughauser Group noted: “More and more firms are appreciating the benefits of scale,” as firms seek to enhance their market presence and client access. Notable mergers include Troutman Pepper and Locke Lord, which together generated over $1.5bn in revenue last year, and Ballard Spahr's merger with Lane Powell, creating a 750-lawyer firm. However, while mergers can provide advantages, they also pose challenges, such as cultural integration and partner retention. Michael Heller of Cozen O'Connor emphasized the increasing difficulty for smaller firms to compete, stating: “The fight for talent, the tech investments, just require more resources today than those regional firms have.” As firms navigate these complexities, the demand for broader expertise from clients continues to drive this trend.

 

Bloomberg Tax

Judge Kathleen Ryan of Oakland County, Michigan, was removed from her docket after recordings surfaced in which she made derogatory remarks about Black individuals and used a gay slur. The recordings were released by Edward Hutton, the court administrator, who had been documenting Ryan's behaviour for years. Ryan has been a probate judge since 2010, and the allegations have been forwarded to the Michigan Judicial Tenure Commission for further investigation. Her lawyers expressed their intent to vindicate her in the appropriate forum, while Hutton emphasiszed his desire for fairness in the court system.

 

ABA Journal

Artificial intelligence (AI)  is revolutionizing business but also introducing significant legal risks, particularly in shareholder securities lawsuits. According to Cornerstone Research's midyear report, there have been at least 11 securities lawsuits related to AI misstatements in 2024 alone. The Securities and Exchange Commission (SEC) is increasingly focused on regulating AI disclosures, with a proposed rule for broker-dealers and investment advisers. Companies must ensure their public statements about AI are accurate, as misleading claims can lead to legal repercussions. As Elizabeth Gingold Clark and Courtney Quirós from Alston & Bird note: "The key is to make sure AI disclosures and company claims about AI prospects have a reasonable basis that's adequately disclosed." With public companies investing around $1tn in AI, the pressure to deliver on these promises is immense, making it crucial for firms to navigate the complexities of AI-related disclosures carefully.

 

Bloomberg Law

Bloomberg Tax

Ellen Rosenblum, Oregon's Attorney General and president of the National Association of Attorneys General, is spearheading a bipartisan initiative with 41 state attorneys general to urge Congress to mandate a U.S. surgeon general warning regarding the risks of social media for young people. In a letter addressed to key congressional leaders, Rosenblum highlighted the dangers posed by social media algorithms, stating: “A warning would not only highlight the inherent risks that social media platforms presently pose for young people.” The push follows a recent advisory from U.S. Surgeon General Dr. Vivek Murthy, which indicated that social media use is linked to negative mental health outcomes for youth. The advisory calls for technology companies to prioritise children's safety and encourages parents to create “tech-free zones” to foster in-person relationships.

 

OregonLive.com

At the recent Lex Summit in Salt Lake City, Filevine showcased its innovative Depo CoPilot, an artificial intelligence (AI)-driven deposition tool designed to enhance legal practices. Chief executive Ryan Anderson likened the platform's potential to the original iPhone, envisioning a future where technology serves as a comprehensive solution for legal tasks. The Depo CoPilot allows lawyers to set goals for depositions and monitors real-time responses, flagging unclear or inconsistent answers.

 

Above the Law

Acting New Jersey Gov. Tahesha Way has signed legislation mandating anti-bias training for real estate appraisers to address the undervaluation of homes owned by people of colour. “For far too long, systems were in place that would perpetuate racial bias,” Way stated. The law updates the Real Estate Appraisal Act, requiring appraisers to complete a fair housing and appraisal anti-bias course. It also reinforces that appraisers cannot consider a property owner's race, religion, or other personal characteristics when determining property value. Attorney General Matthew J. Platkin highlighted that discrimination in appraisals has hindered many, particularly people of color, from achieving wealth through homeownership. Adam Gordon from the Fair Share Housing Center noted that racial bias has historically skewed appraisals, depriving Black homeowners of equity. Ryan Haygood from the Institute for Social Justice called the bill signing “a big win.”

 

NJ.com

Pittsburgh-based Pietragallo Gordon Alfano Bosick & Raspanti is expanding its footprint with a new office in Marlton, New Jersey, led by partner Scott A. Coffina. Coffina, who co-chairs the firm's government enforcement, compliance and white-collar litigation practice group, aims to enhance the firm's capabilities in the region. Currently, the firm has 10 attorneys licensed in New Jersey and plans to increase this number. Their areas of expertise include government enforcement, qui tam and False Claims Act litigation, internal investigations, and more. 

 

Law

Houston-based litigation boutique Murphy Ball Stratton is expanding its office space to 6,000 sq ft as it looks to accommodate more attorneys. Co-founder Dane Ball noted: “We've grown, frankly, more than we've expected in the short time we've been around.” The firm, which focuses on white collar defence, has retained clients like Vitol Inc. and is currently involved in significant cases, including representing Exxon Mobil Oil in a $1.3m federal lawsuit. The firm, launched in January by former Smyser Kaplan & Veselka lawyers, seeks to grow organically while avoiding conflicts that larger firms face. Murphy Ball has also opened an outpost in New Orleans, with plans to continue expanding strategically.

 

Bloomberg Law

Three law firms involved in the Johnson & Johnson talc litigation are now embroiled in a legal dispute among themselves. Beasley Allen has filed a lawsuit against Smith Law Firm and Porter Malouf, claiming they owe over $1m in litigation expenses. The complaint alleges that Smith Law and its founder, Robert Smith, pressured clients to support a controversial settlement to alleviate their financial troubles, which Beasley Allen believed not to be in the best interest of their joint venture clients. Beasley Allen opposes J&J's proposed $6.5bn settlement, stating it “failed to provide fair, timely, and certain compensation.” The firms had a joint venture agreement since 2014, covering 11,000 claims, but Smith Law has reportedly not made required payments since Q3 2023. The case is Beasley, Allen, Crow, Methvin, Portis and Miles, P.C. v. The Smith Law Firm, PLLC, et al.

 

Bloomberg Law

In a recent ruling, federal judge LaShonda Hunt dismissed an antitrust lawsuit against several investment firms, including Fidelity Investments and The Charles Schwab Corporation. The lawsuit, filed by Stephen Greco, chief executive of Spotlight Asset Group, alleged collusion to reduce competition and increase consumer fees. Judge Hunt described the lawsuit as “lengthy, repetitive and convoluted,” stating it “failed to lay out a plausible case.” She noted that the claimants did not provide sufficient evidence of antitrust violations and highlighted the “lack of particularity” in Greco's complaint. The judge allowed the claimants the option to file an amended lawsuit by 4 October.

 

CDR

Los Angeles USD has agreed to pay $24m to three former students who were sexually abused by their teacher, David Ostovich, at Langdon Avenue Elementary School in 2006 and 2007. The settlement resolves a lawsuit alleging that school officials ignored numerous complaints about Ostovich's inappropriate behavior at another school prior to the incidents. David Ring, attorney for the plaintiffs, stated: “This is an outrageous case that highlights LAUSD's systemic failure to protect children from known child molesters.” Despite multiple complaints, Ostovich continued to teach until he was removed in 2007 after further allegations surfaced. He later pleaded no contest to charges of battery involving two of his victims.

 

Los Angeles Times