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Plus, competing rulings on abortion pill access, and coverage of Kirkland's
cuts, Boies Schiller's financials, and first quarter M&A stats.

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The Brief – Top News of the Day From Bloomberg Law
Saturday, April 8, 2023

Inside:    Editor's Picks   

JOHNSON & JOHNSON delivered one of the more surprising bankruptcy filings in
recent memory. Hours after a judge officially nixed the company’s bid to use
bankruptcy to escape claims that its baby powder caused cancer, it tried the
same tactic...alongside a plan to pay $8.9 billion to resolve tens of thousands
of decades-old suits.

 * Many of the firms that have litigated against J&J on behalf of cancer victims
   say they were intentionally left out of the talc settlement, Evan Ochsner
   reports. The proposal, they say, offers victims far less than they deserve.
   For context, in earlier litigation, the company was forced to pay $2.5
   billion to a group of 20 women who blamed their ovarian cancers on baby
   powder use. Read More
 * “I strongly believe that the law firms that understand the case, the
   seriousness of the injury, the costs to the claimants in medical care,
   couldn’t possibly support something like this,” said Michelle Parfitt, a
   partner at Ashcraft & Gerel who helped oversee more than 40,000 claims during
   multidistrict litigation.
 * J&J argues its second bankruptcy pivot, which uses a controversial maneuver
   known as the “Texas two-step,” is different because more cancer victims
   support the settlement. Some lawyers doubt the Third Circuit will back the
   new Chapter 11 filing by J&J subsidiary LTL Management, Steven Church and Jef
   Feeley report. Read More
 * The court’s earlier ruling created a new “financial distress” standard for
   bankruptcy eligibility. “The ultimate question is, does this meet the test
   the appeals court applied in the first case?” said Anthony Casey, a law
   professor at the University of Chicago who has publicly backed J&J’s use of
   Chapter 11. “I have to say I was surprised to see them try again.”

IN THE PURDUE PHARMA bankruptcy, it has been more than a year since the Second
Circuit agreed to consider whether the company’s proposed plan can include
liability releases for the Sackler family, Evan reports. That question is core
to the $6 billion proposed settlement between Purdue, the Sacklers, opioid
victims, cities, and states.

 * The upcoming decision has the potential to rattle the corporate bankruptcy
   world, as the appellate court grapples with the weight of precedent on
   liability releases, as well as a likely appeal to the Supreme Court if Purdue
   loses. Read More

Also Read: Bankruptcy Vendors Agree to Pay $900K in DOJ Info-Sharing Probe


COMING UP AT SCOTUS: WORKER RELIGIOUS ACCOMMODATION TEST

THE US SUPREME COURT, beset by intensifying public criticism of its ethics
policies, will consider April 18 whether to require employers to do more to
accommodate religious workers’ needs.

In the latest episode of our Cases and Controversies podcast, Kaplan Hecker &
Fink partner Joshua Matz joins Greg Stohr and Lydia Wheeler to discuss Groff v.
DeJoy, which asks the justices to overturn a 1977 ruling that held federal job
discrimination laws don’t require employers to absorb anything more than de
minimis costs for such accommodations. Listen Here





EDITOR'S PICKS


ABORTION PILL TO BE BLOCKED NATIONWIDE UNDER JUDGE’S ORDER

Competing orders issued Friday by a pair of federal judges on the FDA’s approval
of mifepristone potentially sets up another politically seismic abortion ruling
a year after the U.S. Supreme Court overturned Roe v. Wade. Read More


SUPREME COURT’S THOMAS SAYS HE HEEDED GIFT DISCLOSURE RULES

Supreme Court Justice Clarence Thomas defended himself against allegations that
he may have violated the law by not reporting vacations paid for by a
billionaire Republican donor, saying he’d been told he didn’t have to report the
trips. Read More


SWING-STATE FLIP GIVES DEMOCRATS PATH TO SUE ON ABORTION, VOTING

A flip of the Wisconsin Supreme Court gives Democrats an opening to use legal
challenges to try to undo decades of Republican policies—with abortion access
and election law high on their wish list. Read More

Exclusive


BIDEN TARGETS RACE, GENDER IMPACTS WITH REGULATION PROPOSAL

US officials would formally gauge how their health, pollution, and workforce
policies help or harm racial and ethnic minority groups, under a proposal
released by the Biden administration. Read More


MAKING LAW REVIEW IS CAREER GOLD. NYU STUDENTS WANT CASH TOO

Members of the NYU Law Review and seven other journals sent a letter and a
300-signature petition to the administration demanding either hourly pay or
academic credit. If they get their way, the students say NYU would become the
first law school in the country where journal editors are paid. Read More

Deep Dive


NEW ‘APOLLO PROGRAM’ SOUGHT TO FEND OFF CHINA IN GPS SPACE RACE

The future of precision missiles, as well as drones, driverless cars,
super-precise synchronized clocks, and navigation of the Moon and Mars, depends
on a specialized science called geodesy—a field Americans dominated a generation
ago but have almost entirely abandoned. It’s a science China has embraced. Read
More


AMAZON CASE AT LABOR BOARD COULD TOPPLE MULTIPLE PRECEDENTS

Document Attached

The National Labor Relations Board’s legal arm urged the board to strike down
four separate precedents in a pending case against Amazon.com Inc., including
one ruling from the 1940’s and another issued less than a year ago. Read More


STUDENT LOAN MESS COMPLICATES 401(K) PLAN FOR YOUNG SAVERS

Employers can soon choose to let workers’ student loan repayments count toward
401(k) matching contributions under a recently enacted benefits law, but many
are wary of taking that step while so much is unsettled with federal loan
forgiveness programs. Read More


BIG LAW FILE: KIRKLAND CUTS, WHY BOIES SCHILLER IS 'HEALTHIER'

KIRKLAND & ELLIS recently showed the door to an untold number of associates in
California, Texas, Chicago, and Salt Lake City, Utah. But the world’s largest
law firm by revenue said the cuts were performance-related moves linked to
mid-year reviews, not layoffs, Meghan Tribe reports.

 * While a number of major shops have culled their junior ranks in recent months
   after overhiring in 2021, Kirkland said roughly 425 first-year associates
   will start in the fall across the firm’s 11 US offices. Read More

GOODWIN PROCTER, one of the firms that laid off some associates and staff
earlier this year, will be chaired by Silicon-Valley-based tech lawyer Anthony
McCusker as of October, Meghan reported.

 * McCusker, elevated from co-chair of Goodwin’s technology practice, will work
   alongside managing partner Mark Bettencourt to drive strategic initiatives.
   Goodwin has staked its claim on the convergence between private equity and
   life sciences and technology. Read More

BOIES SCHILLER FLEXNER is half the size it was five years ago following a run of
departures and questions about who would succeed legendary litigator David Boies
as leader. The post-Boies question still needs sorting out, but the firm is
embracing its new market position, Justin Wise reports.

 * Gross revenue was $220 million last year, down 4.3% from the prior year. But
   a smaller headcount translated into a boost in profits per equity partner,
   which rose to about $2.5 million—a gain of roughly 13%. “The reduction in
   headcount has made us healthier,” co-managing partner Matthew L. Schwartz
   said. Read More



FENWICK & WEST cemented its reputation as a go-to for tech companies after it
helped Steve Jobs incorporate Apple in 1976. Now, the Silicon-Valley-founded
firm faces federal law enforcement subpoenas and a class action linked to the
implosion of former client FTX, Sam Skolnik and Justin report.

 * Fenwick advised FTX and its sister trading shop, Alameda Research, on areas
   including trademarks, tax, and litigation before the crypto exchange
   collapsed into bankruptcy in November. It also helped set up US-based
   companies affiliated with FTX and Alameda. Read More

IT WAS HARD to imagine M&A deal volumes getting worse than the deep freeze at
the end of 2022, but that’s exactly what happened, legal analyst Emily Rouleau
writes.

 * Global deal volume in Q1 this year was $559 billion, the third-lowest in the
   last decade. All market segments for global transactions dipped below their
   respective levels for Q4 2022 deal volumes. Read More




COLUMNIST CORNER

THE LATEST CHALLENGE to Obamacare is headed to the Fifth Circuit after a federal
judge in Texas ruled against provisions of the law’s free preventive care
mandate. It could set up another Supreme Court showdown over the Affordable Care
Act, Lydia Wheeler writes in her latest Opening Argument column.

The case’s attack on the ACA raises an argument that a majority of the high
court’s conservative wing has already signaled a willingness to hear, George
Washington University law professor Sonia Suter told Lydia. Read More


DIGITAL DOLLAR DEVELOPMENT STIRS TRANSACTION-TRACKING TENSIONS

ADOPTION of a central bank digital currency in the US would involve extensive
technical planning—elements of which are already underway—coupled with a broad
public relations and political campaign to win over skeptics. Privacy questions
are the key to it all.

 * The privacy a digital dollar affords will depend on design decisions such as
   how transactions are recorded, how users’ identities are verified, and how
   virtual wallets work, Andrea Vittorio reports. Design would determine how
   closely transactions could be tracked, either by law enforcement looking for
   illicit financial dealings or by companies interested in consumer buying
   habits.
 * “The more privacy you protect, the less efficiently the government can carry
   out its regulatory functions,” Greg Guedel, chief legal officer at financial
   technology infrastructure company Fluent Finance Inc., said. “That’s really
   the tension they’re grappling with at the policy level now.” Read More

Chuck Rosenberg, a former US Attorney and DEA head, predicts former President
Donald Trump’s defense team will stumble if it claims Manhattan District
Attorney Alvin Bragg’s office “engaged in misconduct by selectively charging
Trump” for political reasons. He says the former president’s case is unique, and
that making a viable claim of selective prosecution would be “extraordinarily
difficult.”

John Malcolm, vice president at the Heritage Foundation, breaks down the
indictment and how Trump’s attorneys might respond to its 34 counts. He says
they could argue it’s “highly irregular” to “resurrect a federal charge and
shoehorn it into a state crime,” especially when the DOJ and FEC opened and
closed investigations without charges being filed.

Joan Vollero, who served as adviser to former District Attorney Cyrus Vance Jr.,
shares an insider view of crisis communications in the Manhattan DA’s office.
She recalls Trump attorney Joseph Tacopina’s behavior in previous cases, calling
him “brash, impressive, and distasteful.” Vollero says Bragg’s office “followed
the facts” in this investigation and learned from Vance’s tenure.

Andrew Sidamon-Eristoff, former NJ state treasurer and NY finance commissioner,
is skeptical that Trump’s tax fraud charges will hold up in court, writing that
Bragg’s allegations are “based on a fragile, interlocking triad of criminal
statutes.” He says the indictment’s tax-related charges “seem like a tall order”
because federal prosecutors declined to pursue a similar case.


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