Minimum Competence - Daily Legal News Podcast
Minimum Competence
Fri 8/22 - Racist Juror Removed in District Court, Big Pharma Prepares to Negotiate with CMS, Anti-DEI Comes for Scholarships, Cisco Acquisition and Trump Fraud Trial Drama

Fri 8/22 - Racist Juror Removed in District Court, Big Pharma Prepares to Negotiate with CMS, Anti-DEI Comes for Scholarships, Cisco Acquisition and Trump Fraud Trial Drama

Racist jurors removed in district court proceeding, big pharma prepares to negotiate, anti-DEI group targets scholarships, Simpson Thatcher advises Cisco on acquisition and Trump spars with DA.

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Salem witch trial, pencil sketch.

On this day in legal history, September 22, 1692, eight people were executed for witchcraft in Salem, Massachusetts during the so-called “Salem Witch Trials.”

The Salem Witch Trials were a series of witchcraft cases brought before local magistrates in a settlement called Salem, which was a part of the Massachusetts Bay Colony in the 17th century. The trials took place between February 1692 and May 1693 and are one of the most notorious episodes in early American history. It all began when a group of young girls claimed to be possessed by the devil and accused several local women of witchcraft. As mass hysteria spread through the community, a special court convened in Salem to hear the cases.

The first convicted witch, Bridget Bishop, was hanged in June 1692. As the trials proceeded, accusations spread to individuals from surrounding villages. At the height of the witch hunt, more than 150 people were found guilty and 19 were hanged. Another man, Giles Corey, was pressed to death with large stones for refusing to enter a plea. Many others languished in jail for months without trials until the hysteria that swept through Puritan Massachusetts subsided.

The Salem Witch Trials have long fascinated historians and psychologists as a cautionary tale about the dangers of isolationism, religious extremism, false accusations, and lapses in due process. It wasn't until 1711 that the colony passed a bill to exonerate the accused and provide financial restitution to their heirs. However, the damage had been done, and the events in Salem have since become synonymous with paranoia and injustice, serving as a vivid cautionary tale for more than three centuries.

In a highly unusual move, U.S. District Judge Timothy Batten removed a white juror from a tax trial involving wealthy developer Jack Fisher, citing the juror's "racist behavior." Fisher is accused of arranging $1.3 billion in fraudulent tax deductions through syndicated conservation easements. The juror, known as Juror 26, had told the judge that she was "standing up for White people," leading to her removal and replacement with an alternate juror. The defense has indicated that they will appeal if Fisher is convicted, citing the rare step of juror replacement during deliberations.

The trial has been fraught with racial tensions and discord among jurors. Judge Batten had to warn jurors against using profanity with each other and interviewed several members of the predominantly Black jury about their disagreements. Juror 26 had falsely accused another juror, a Black man, of saying the defendants should be jailed "because they are rich, White and entitled."

Prosecutors had urged for the removal of Juror 26 due to her comments, lying to the judge, and refusal to deliberate. Defense lawyers argued that her statements were misconstrued and that she had resumed deliberations. Batten eventually decided to remove her, stating that he could not in good conscience allow her to continue on the jury.

Fisher's lawyers have filed a motion requesting the removal of five other jurors or a declaration of a mistrial, which the judge has denied. The trial is set to resume with an alternate juror, and the jury will return on Friday after failing to reach a verdict.

White Juror Tossed at Trial as Judge Cites ‘Racist Behavior’ (1)

Pharmaceutical companies like Boehringer Ingelheim Pharmaceuticals, Inc. and Novartis AG are gearing up to negotiate drug prices with Medicare in compliance with the Biden administration's Inflation Reduction Act. Companies have until October 1 to agree to enter these negotiations. Those who refuse will face a starting tax of 65% on the U.S. sales of the product in question, with the tax rate increasing by 10% each quarter up to a maximum of 95%. The Internal Revenue Service is yet to issue a proposed rule on how this tax will be reported and paid.

Pharmaceutical companies argue that this tax violates the Eighth Amendment's prohibition on excessive fines. However, they are not waiting for further guidance from the Biden administration, as the Congressional Budget Office estimates that the tax could exceed a manufacturer's profits when combined with corporate income taxes. The primary focus for manufacturers is to collect data for the Centers for Medicare & Medicaid Services by October 2, which will help in determining each drug's maximum fair price.

The Congressional Budget Office has not provided a clear estimate on the revenue from the tax penalty but predicts that drug manufacturers will comply due to the high costs of non-compliance. Companies have the option to withdraw their products from Medicare and other federal health programs to avoid the tax, but this would mean losing access to a vast customer base. Industry experts believe that non-compliance is not a feasible option and expect companies to accept whatever price the government dictates. The general consensus is that the tax is not designed to be paid but to force compliance with Medicare's drug pricing program.

Drugmakers Aren’t Waiting Around for Details on Medicare Tax

A non-profit group opposing race-based education policies has filed multiple civil rights complaints against U.S. universities. These complaints challenge the legality of minority scholarships and other programs aimed at promoting racial diversity. The actions follow a U.S. Supreme Court ruling in June that banned the use of race in college admissions, commonly known as affirmative action. The group, called the Equal Protection Project of the Legal Insurrection Foundation, argues that the Supreme Court's decision should extend to all educational programs.

The latest complaint accuses Western Kentucky University of violating civil rights law by offering scholarships exclusively to minority students. Other universities targeted include Kansas State University and the University of Nebraska-Lincoln. The U.S. Department of Education has not yet indicated whether it will launch formal investigations into these complaints.

Advocates of race-conscious programs argue that they are essential for combating societal disadvantages faced by minority students. They warn that removing race as a factor in admissions and scholarships will result in fewer minority students at top schools. Some schools, like the University of Missouri, have already announced the elimination of race as a factor in awarding scholarships.

Legal experts note that it's unclear whether the Supreme Court's ruling will extend to other race-conscious programs beyond admissions. The Department of Education's civil rights office is expected to become a key battleground for these issues. Meanwhile, some schools are exploring alternative methods to improve racial diversity, such as recruiting from underprivileged schools.

Anti-affirmative action group, emboldened by US Supreme Court, targets scholarships | Reuters

Cisco Systems Inc. has announced its largest acquisition to date, buying cybersecurity company Splunk Inc. for approximately $28 billion. The deal is significant, accounting for about 10% of Cisco's market value. Cisco plans to pay $157 per share in cash for the acquisition. Once the deal is finalized, Splunk’s CEO, Gary Steele, will report to Cisco’s CEO, Chuck Robbins, and join Cisco's executive leadership team.

Legal counsel for the deal involves several major law firms. Simpson Thacher & Bartlett is serving as legal counsel to Cisco, while Cravath, Swaine & Moore is acting as Cisco's regulatory counsel. On the other side, Skadden, Arps, Slate, Meagher & Flom is providing legal counsel to Splunk, and Cooley is advising Qatalyst, the financial advisor to Splunk.

The acquisition aims to strengthen Cisco's cybersecurity defenses and enhance its artificial intelligence capabilities. The deal is expected to close by the end of the third quarter of next year, pending approval from Splunk's shareholders. Private equity firm Hellman & Friedman, which owns 7.5% of Splunk stock valued at $1.4 billion, was advised by Kirkland & Ellis on their voting and support agreement as part of this acquisition.

Simpson Thacher Advises Cisco on $28 Billion Splunk Acquisition (1)

Just 10 days before a scheduled trial, lawyers for Donald Trump will attempt to convince a New York judge to dismiss most or all of a lawsuit filed by state Attorney General Letitia James. The lawsuit accuses the former U.S. President of "staggering" fraud. On the other hand, James' legal team will argue that Trump and other defendants, including his adult sons and the Trump Organization, should be found liable for fraud even before the trial begins.

The case is being reviewed by Justice Arthur Engoron and focuses on allegations that Trump inflated the value of more than 20 properties between 2011 and 2021 to obtain better loan and insurance terms. James claims that Trump inflated his own fortune by as much as $3.6 billion. Trump's lawyers argue that James has no authority to sue over what they claim are non-fraudulent private transactions and that most of her claims are beyond the statute of limitations.

The trial comes at a time when Trump is leading in the race for the 2024 Republican presidential nomination, despite facing multiple legal challenges. Last week, Trump accused James of ignoring a court decision and called for a delay in the trial. This led an appeals court judge to temporarily stay the trial, with a decision on whether it should proceed expected next week.

James' lawsuit aims to prevent Trump and his sons from running businesses in New York and seeks at least $250 million in penalties. James has called Trump's request for a delay a "brazen and meritless" attempt to undermine the court's authority and warned that even a brief delay could disrupt this and other trials that Trump faces.

Trump, NY attorney general to argue over scope of looming fraud trial | Reuters

Minimum Competence - Daily Legal News Podcast
Minimum Competence
The idea is that this podcast can accompany you on your commute home and will render you minimally competent on the major legal news stories of the day. The transcript is available in the form of a newsletter at