Judicial Notice (11.27.21): 'The System Works'
Two landmark victories against racism, the start of Biglaw bonus season, and other legal news from the week that was.
I hope that you and your families had great Thanksgiving holidays—as did I. Zach and I spent Thanksgiving with his family, at the beautiful home of his Aunt Lori and Uncle Al in the Philadelphia suburbs. We got together with the extended family on Zach’s dad’s side, and it was wonderful to see everyone, especially since we missed each other last Thanksgiving because of the pandemic. We enjoyed an abundance of superb food—and an abundance of lawyers (seven out of the 15 adults in attendance, not counting Zach’s cousin Michelle, who’s a 1L).
Aside from Thanksgiving, the week was quiet for me, as the week of Thanksgiving generally is. I got my flu shot (get yours if you haven’t already), I went for a haircut, I started my holiday shopping, and we received the second half of the sectional for our family room that we ordered seven months ago (yay).
I appeared on two podcasts. On the New Liberals podcast (“liberal conversations for illiberal times”), I spoke mostly (but not entirely) about L’Affaire YLS. On Movers, Shakers, and Rainmakers, my co-host Zach Sandberg and I discussed associate development during the pandemic, which presents both challenges and opportunities.
Now, on to the news.
Lawyers of the Week: Roberta Kaplan, Karen Dunn, Alan Levine, and the trial team in Sines v. Kessler.
The obvious pick for Lawyer of the Week would be Linda Dunikoski, the prosecutor who secured guilty verdicts against all defendants in the Ahmaud Arbery murder case. But I’ll instead honor Dunikoski and discuss the Arbery verdict in the Ruling of the Week, discussed below.
For Lawyers of the Week, I’m recognizing the lawyers who scored a victory against racism in another headline-making trial this week. Congratulations to Roberta Kaplan of Kaplan Hecker & Fink, Karen Dunn of Paul Weiss, Alan Levine of Cooley, and all their colleagues on the trial team of Sines v. Kessler.
On Tuesday, after a four-week trial, a federal jury ruled against the main organizers of the infamous 2017 alt-right rally in Charlottesville, Virginia. The jury found the defendants liable for the deadly violence that ensued—and awarded around $26 million in damages to the nine plaintiffs, four men and five women, including four of the people who were injured when Heather Heyer was killed. (The jury deadlocked on two federal conspiracy charges, but because this is a civil case, the plaintiffs could seek a retrial on them.)
Given the historic nature of the underlying events, the terrible tragedy at the heart of the case, and the incredible effort by talented lawyers at three top firms, the victory is in many ways remarkable. But at the same time, even though the win was “very meaningful,” it was also “very reassuringly normal,” as Karen Dunn of Paul Weiss told the National Law Journal—a judge and jury playing their proper roles in our justice system. As Robbie Kaplan of Kaplan Hecker put it, “The system works.”
Around $24 million of the damages took the form of punitives, which defense lawyers have stated they will seek to have reduced—and they might succeed, given the high ratio between punitive and compensatory damages. Also, collecting the full damages could prove challenging as a practical matter, since many of the defendants are imprisoned, in hiding, or judgment proof.
But there’s no doubt that the lawsuit has dealt a blow to the white-supremacist movement, with alt-right leader Richard Spencer calling the litigation “financially crippling” even before the trial even started. And of course the massive verdict sends a powerful message to those who would foment hate. As Oren Segal of the Anti-Defamation League told the Associated Press, “Accountability can’t be underestimated in a case like this.”
Runners-up for Lawyer of the Week:
Chesa Boudin. The spree of high-profile, large-scale retail thefts in the Bay Area this week will not be helpful to the embattled San Francisco district attorney as he tries to fight off a recall effort.
Bruce Matson. The former chief legal officer of the now-defunct LeClairRyan law firm got sentenced to 44 months in prison, after pleading guilty to embezzling some $800,000 during his time as liquidation trustee for LandAmerica, one of the largest title insurance groups in the country.
Derek Vashon James. The Florida Supreme Court suspended James for 91 days for coaching a witness via text message during a phone deposition—and then failing to own up to it when questioned by opposing counsel and the judge. (I’m surprised we don’t see more cases like this.)
Judge of the Week: Judge Robert B. King.
Judge Robert King made waves this week after rescinding his decision to take senior status, which would have given President Joe Biden another seat to fill on the Fourth Circuit. The 81-year-old jurist has served on the court since his appointment in 1998 by President Bill Clinton.
What happened? Professor John Collins, an expert on President Biden’s approach to judicial nominations, suggested to Nate Raymond of Reuters that Judge King’s decision might have had something to do with an issue regarding his replacement. I have reason to believe this is correct; sources tell me that Judge King was less than thrilled with the White House’s pick for his seat.
For quite some time, the frontrunner appeared to be the well-credentialed and well-connected Carte Goodwin, a partner at Frost Brown Todd, where he serves as vice chair of the appellate practice and leads the firm’s office in Charleston, West Virginia’s capital. A graduate of Emory Law (Order of the Coif), Goodwin previously served as general counsel to then-Governor Joe Manchin (D-W. Va.), who appointed Goodwin to fill the vacancy in the U.S. Senate caused by the passing of Robert C. Byrd. The Goodwins are something of a legal and political dynasty in West Virginia: Carte’s uncle is Judge Joseph Goodwin (S.D. W. Va.); Judge Goodwin’s son (and Carte’s cousin), Booth Goodwin, served as U.S. Attorney from 2010 until 2015; and Booth’s wife, Amy Shuler Goodwin, is the current mayor of Charleston.
Oh, and Carte Goodwin also served as a federal law clerk. To none other than… Judge Robert King.
But being a white male Biglaw partner from a dynastic family is not the preferred profile of a judicial nominee in the Biden Administration. The White House instead went with J. Jeaneen Legato, a personal-injury lawyer in Charleston with close ties to West Virginia’s powerful senior senator, Joe Manchin.
Legato’s selection didn’t sit well with Judge King. He’s not a Manchin fan, and he didn’t love his former clerk being passed over for—and “his” seat being filled by—a nominee he sees as, well, less than distinguished. So he “took back” his going senior.
This isn’t the first time a circuit judge has rescinded a decision to take senior status after having an issue with a prospective replacement. For example, Judge Michael Kanne of the Seventh Circuit rescinded his retirement after Vice President Mike Pence spiked Judge Kanne’s prospective replacement, Tom Fisher—Indiana’s solicitor general, and a former Kanne clerk. (I’m not a fan of this trend of judges changing their retirement plans because of issues with their likely successors, and I might have more to say about it later.) [UPDATE (12/8/2021, 11:36 a.m.): Just to be clear, unlike Judge Kanne, Judge King did not have just one potential successor in mind; he was open to multiple possibilities. He was just unhappy with the nominee the White House ultimately selected (whom he saw as unqualified), which is why he took back his retirement.]
Runner-up for Judge of the Week: Governor Kathy Hochul appointed Judge Shirley Troutman, a western New York judge for more than 30 years, to the state’s highest court, the New York Court of Appeals. Congratulations to Judge Troutman, only the second Black woman to serve on the high court.
Ruling of the Week: State of Georgia v. McMichael.
On Wednesday, the jury in the Ahmaud Arbery case found the three defendants—Travis McMichael, his father Gregory Michael, and their neighbor William “Roddie” Bryan Jr.—guilty of the murder of Arbery, a 25-year-old Black man out for a jog. More specifically, the jury found Travis McMichael guilty of malice murder, or killing with the “deliberate intention” to take the life of another human being, and Gregory McMichael and Travis McMichael guilty of felony murder, or causing the death of another person while committing a felony—here, aggravated assault, false imprisonment, and criminal attempt to commit false imprisonment. (The defendants were also convicted of all these felonies, except for Roddie Bryan on one of the two assault counts.)
When I served on a jury years ago, Friday afternoon had a powerful clarifying effect on the thinking of the holdout juror. Not long after we enjoyed our free lunches, she suddenly came around to everyone else’s thinking. So I wasn’t surprised when we received a verdict in the Ahmaud Arbery trial on the Wednesday afternoon right before Thanksgiving. The jury hadn’t deliberated for very long, having started deliberations on Tuesday afternoon—but given the clarity of the evidence and a defense that I previously opined was a hard sell, the timing didn’t surprise me.
Even though I felt the evidence was overwhelming and prosecutor Linda Dunikoski did an excellent job, my main reaction to the guilty verdicts was… relief. High-profile cases can have unpredictable outcomes, and I had a real fear that the jury might acquit—a fear that turned out to be unwarranted. As almost all judges will tell you, properly instructed juries will get it right, almost all of the time. Or as Robbie Kaplan put it in the Charlottesville case, “the system works”—and our justice system, despite its many flaws, is something to be thankful for this time of year.
Runners-up for Ruling of the Week:
The Kevin Strickland exoneration. In 1979, an all-white jury convicted Strickland, a Black man, of a triple murder—despite alibis, a lack of physical evidence connecting him to the crime, and the insistence of the two admitted killers that he was not involved. After prosecutor Jean Peters Baker used a new Missouri law to move for his exoneration, Judge James Welsh ordered Strickland released—more than 43 years after he was first imprisoned.
In re National Prescription Opiate Litigation. After a six-week trial, a 12-member jury in Cleveland found that three major pharmacy chains—CVS Health, Walmart, and Walgreens—substantially contributed to the opioid crisis. The verdict is noteworthy because the plaintiffs, Ohio’s Lake and Trumbull counties, relied on a public-nuisance theory of liability—which other courts have rejected.
BMLA, Inc. v. Jordan. This opinion reads like something out of a 1L Torts class. Was there legally sufficient proof that plaintiff Keziah Jordan’s food poisoning was caused by “a dubious-tasting kolache”? By a 2-1 vote, the Texas appeals court here said no.
Leigh Ann H. v. Riesel Independent School District. Judge Jennifer Elrod (5th Cir.) takes her judicial duties seriously, as one can tell from her well-written opinions, but she’s also not afraid to have fun. See, e.g., her star turn in this Hamilton parody—or footnote two of her opinion in Leigh Ann H. (gavel bang: Short Circuit).
Litigation of the Week: United States v. United States Sugar Corporation.
On Tuesday, under the leadership of the newly confirmed Jonathan Kanter, the Antitrust Division of the Department of Justice filed a civil antitrust lawsuit to prevent United States Sugar Corporation from acquiring a competitor, Imperial Sugar Company. The complaint, filed in Delaware federal court, alleges that the transaction would leave just two producers handling an overwhelming majority of refined sugar sales in the Southeast.
The litigation is important for at least two reasons. First, as the DOJ’s fourth significant challenge to a deal, it’s a sign that the Department remains committed to vigorous antitrust enforcement (one of the few areas where the Trump Administration took a hard line, often against tech companies the former president clashed with). With a deal value of $315 million, the U.S Sugar/Imperial Sugar transaction is relatively small—but the willingness of the DOJ to try and stop it reflects the Biden Administration’s zeal.
Second, the case could end up being “one of the major cases going forward on how you define relevant market,” as Carl Hittinger, head of the antitrust practice group at BakerHostetler, told Law.com. This case involves market definition in terms of both product (refined sugar versus sweeteners more generally) and geography (the Southeast versus some larger region). Market definition is a critical step in building an antitrust case, and U.S. Sugar could create new precedent in this area.
Runners-up for Litigation of the Week:
United States v. Holmes. Yes, the trial of disgraced Theranos founder Elizabeth Holmes is still going on—and right now, Holmes is on the stand. It’s a risky move, and Holmes could get taken apart in cross-examination. But given the strength of the prosecution’s case, I don’t know that her Williams & Connolly team had any other choice.
Berger v. North Carolina State Conference of the NAACP. On Wednesday, the Supreme Court agreed to hear this case, which involves North Carolina’s controversial voter-ID law. The case concerns procedural questions, namely, which government actors can defend the law and under what circumstances—but these issues come up with some regularity in election law cases, as Professor Rick Hasen told The Hill.
Fulton v. City of Philadelphia. This legal battle between a Catholic foster-care agency and Philadelphia, which went all the way up to the Supreme Court, just ended in a settlement. Philadelphia agreed to pay $2 million—$1.95 million to the Becket Fund, which litigated the case for Catholic Social Services (CSS), and another $56,000 to CSS itself—and wrote into CSS’s contract that it would be exempt from the citywide nondiscrimination ordinance. (CSS’s refusal to certify same-sex parents as foster parents, in violation of Philly’s nondiscrimination ordinance, is what led to the litigation in the first place.)
Deal of the Week: Bain Capital and Hellman & Friedman’s $17 billion purchase of Athenahealth Inc.
This week, private equity-backed deals surpassed the $1 trillion mark for the first time ever. Contributing to this milestone was the latest Deal of the Week, Hellman & Friedman and Bain Capital’s $17 billion acquisition of Athenahealth, a leading player in the world of healthcare software.
As noted by the New York Times, the transaction reflects the continuing boom in the world of private equity M&A—which shows no signs of abating, with PE firms holding almost $2 trillion in capital they have not yet deployed. The deal also allows Athenahealth to turn the page on its contentious past, which included a hard-fought takeover battle with Elliott Management, the prominent hedge fund, which led to the resignation of founder Jonathan Bush—yes, a member of that Bush family—amid allegations of domestic abuse and inappropriate workplace behavior.
The deal should close in the first quarter of 2022. Congratulations to all the law firms, including Kirkland & Ellis (who else?) for the PE purchasers, Milbank for Athenahealth and seller Veritas Capital, Gibson Dunn for seller Evergreen Coast Capital, and Dechert for Singapore sovereign wealth fund GIC, a new investor in Athenahealth.
Runner-up for Deal of the Week: Manscaped’s $1 billion, go-public SPAC merger with Bright Lights Acquisition Corp. As its name suggests, Manscaped is a startup focused on below-the-waist men’s grooming products. See, e.g., the Crop Preserver®, an “anti-chafing ball deodorant,” and Crop Mops®, “refreshing moist ball wipes… specially designed for male hygiene.”
There’s celebrity involvement here, in the form of investment from actor Channing Tatum (who, in my contrarian opinion, is not as hot as everyone else seems to think). Kudos to the law firms: Buchalter for Manscaped, Skadden Arps for Bright Lights, and Paul Hastings for the placement agents.
Law Firm of the Week: Cravath Swaine & Moore.
Biglaw bonus season has begun! And as noted by Staci Zaretsky of Above the Law, “Cravath has reclaimed its throne as Biglaw’s bonus leader,” after letting other firms take the lead for the past two years. Here’s the Cravath scale for 2021 associate bonuses:
Class of 2021: $15,000 (pro-rated)
Class of 2020: $20,000
Class of 2019: $30,000
Class of 2018: $57,500
Class of 2017: $75,000
Class of 2016: $90,000
Class of 2015: $105,000
Class of 2014: $115,000
Recall that these year-end bonuses come on top of the special/retention bonuses that Cravath and its peer firms paid out earlier this year, which ranged from $12,000 to $64,000. At the top of the scale, a seventh-year associate (class of 2014) will get $179,000 in bonus money on top of a base salary of $350,000, for more than $500,000 in total comp.
Will the Cravath scale become the prevailing bonus scale for 2021? Thus far, a few firms have matched Cravath, including Cleary Gottlieb, Cadwalader, Boies Schiller, and Fried Frank (with the last three of those firms offering extra amounts, on top of the Cravath scale, for high billers or top performers). But certain major players in the associate comp space, such as Davis Polk, Milbank, and Simpson Thacher, have yet to weigh in—so stay tuned.
Runner-up for Law Firm of the Week: Littler Mendelson, which must be feeling a lot smaller right now. Littler’s former client, an Alabama steel mill named Outokumpu Stainless USA, got thoroughly benchslapped by Judge Jeffrey Beaverstock (S.D. Ala.) for a “subversive approach to discovery” that “poisoned the entirety of this case.” For a thorough breakdown of Judge Beaverstock’s 94-page (!) order, see @gokpkd’s detailed Twitter thread. (To its credit, it appears that Littler has parted ways with the partner who was the most egregious offender.)
Lateral Move of the Week: Paul Weiss hiring Steven Banks as special counsel for pro bono.
Overseeing pro bono work at a major law firm is a pretty great gig. You get to engage in meaningful and interesting work that advances the public interest, you have incredible resources at your disposal, and you earn a Biglaw salary on top of it all. What’s not to like?
So congratulations to Steven Banks, currently commissioner of the New York City Department of Social Services, who in February will join Paul Weiss as special counsel for pro bono. The firm has a long and storied pro bono practice, including involvement in such cases as Brown v. Board of Education and United States v. Windsor. And Banks, who has extensive experience in the world of public interest law—before taking his current role, he was attorney-in-charge at the New York City Legal Aid Society for a decade—seems like an excellent choice to lead it.
Runners-up for Lateral Move of the Week:
Intercom, a software unicorn backed by the likes of Mark Zuckerberg and Jack Dorsey, has hired Cheree McAlpine as its first general counsel.
Maxwell, the Wells Fargo-backed fintech mortgage platform, has hired Sonny Abbasi as its first general counsel.
Loeb & Loeb has hired Jessica Isokawa, who focuses on M&A and other transactional work for private equity firms, in San Francisco.
That’s all, folks. Once again, I hope your Thanksgiving holidays were delightful. And in the spirit of Thanksgiving, I thank you as always for your readership and support.
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The Cravath pay raise took effect on July 1, meaning that for the first six months of the clear, a class of 2014 member was earning a base salary of $325,000 rather than $350,000. But that still results in more than half a million in total comp—$516,500, by my calculations.