Minimum Competence - Daily Legal News Podcast
Minimum Competence
Legal News for Fri 4/5 - 5th Cir. Judge Shopping Worries, Terraform Labs' Fraud Trial, and Trump Gets Bond From 'King of Subprime Car Loans'

Legal News for Fri 4/5 - 5th Cir. Judge Shopping Worries, Terraform Labs' Fraud Trial, and Trump Gets Bond From 'King of Subprime Car Loans'

We explore the Fifth Circuit's judge shopping concerns, Terraform Labs' fraud trial climax, and scrutiny over Trump's $175m bond.
Donald Trump getting his bond, pencil sketch

This Day in Legal History: Libya Surrenders Nationals

On April 5, 1999, a pivotal moment in the annals of international law and aviation security unfolded as the Libyan government surrendered two of its nationals, Abdelbaset Ali Mohmed Al Megrahi and Al Amin Khalifa Fhimah, to British authorities. These individuals were implicated in one of the most devastating acts of terrorism in history—the bombing of Pan Am Flight 103 over Lockerbie, Scotland, on December 21, 1988. This tragedy not only claimed the lives of 270 people, including 11 on the ground but also marked a profound moment of grief and outrage across the globe.

The surrender of the accused to the British government was a culmination of years of diplomatic negotiations and international sanctions against Libya, reflecting the persistent efforts of the victims' families and international community to seek justice. The trial, which began on May 3, 2000, at a special court in the Netherlands, was notable for being held under Scottish law—a unique legal arrangement that underscored the international dimensions of the case.

The court proceedings were meticulous and exhaustive, drawing upon a wealth of evidence that included forensic analysis, witness testimonies, and the intricate tracing of the bomb's components. After extensive deliberations, the verdict was pronounced: Al Amin Khalifa Fhimah was acquitted and returned to Libya, a decision that stirred a mix of reactions worldwide. Conversely, Abdelbaset Ali Mohmed Al Megrahi was found guilty of murder and sentenced to life imprisonment, a conviction that would later be mired in controversy and calls for re-examination.

Megrahi's conviction did not close the chapter on the Lockerbie bombing; it instead opened further debate and investigation, including questions about the evidence, the legitimacy of the trial, and the role of other potential co-conspirators. His release in 2009 on compassionate grounds, due to terminal cancer, sparked further international debate and diplomatic tensions.

This day in legal history underscores the complexities of achieving justice in the wake of terrorism, the challenges of international cooperation in legal matters, and the enduring impact of the Lockerbie bombing on the fields of aviation security and international law.

The Fifth Circuit Court of Appeals is at the center of controversies involving attempts to move high-profile cases out of its jurisdiction, potentially preventing the court from ruling on matters of national importance. This situation arises as questions are raised about the appropriateness of filing certain legal challenges, particularly against government actions, in Texas courts. The ongoing scrutiny aims to determine if these cases genuinely belong in the jurisdictions where they were filed, amidst concerns over "judge shopping"—the practice of selecting courts thought to be favorable to the case.

The Fifth Circuit is deliberating on whether to block lower court decisions that would transfer cases involving the Consumer Financial Protection Bureau (CFPB) and Elon Musk’s SpaceX to other federal courts. These moves are challenged under the premise that they could dilute the Fifth Circuit's ability to influence significant legal questions. Transfers are finalized once a case is docketed in the new jurisdiction, which then assumes authority, complicating any attempts to revert the transfer unless the new presiding judge consents.

Appeals to prevent these transfers hinge on the high threshold for a writ of mandamus, a rare form of relief requiring clear evidence of a lower court's abuse of discretion. The scrutiny extends to the public perception of the Fifth Circuit's motivations, with some experts warning that aggressive efforts to retain cases could reflect poorly on the judiciary's impartiality.

Historically, the Fifth Circuit has encountered issues with jurisdiction after cases were moved, as seen in a dispute involving a "ghost gun" company, highlighting the practical consequences of losing authority over transferred cases. The court's involvement in the SpaceX case, including a rare inquiry into the conduct of NLRB lawyers, further underscores the tension between maintaining jurisdiction and adhering to procedural norms.

Judicial decisions on venue transfers, such as the recent ruling to move a lawsuit from Texas to Washington, D.C., reflect broader concerns about judge shopping and the integrity of case assignments. This ongoing saga emphasizes the complex interplay between legal strategy, jurisdictional authority, and the quest for a fair and appropriate venue for high-stakes litigation.

Fifth Circuit Risks Losing Big Cases Amid Judge Shopping Worries

Terraform Labs and its co-founder Do Kwon are set to present their final arguments in a civil fraud trial, responding to charges from the U.S. Securities and Exchange Commission (SEC) that they deceived investors about the stability of their stablecoin, TerraUSD, and its underlying technology. The SEC's allegations include false claims about Terraform's blockchain being utilized in a popular Korean payment app, aiming to secure civil penalties and industry bans for Kwon and Terraform. Despite Kwon's absence from the trial due to his arrest in Montenegro on separate charges, Terraform's defense contends that the SEC's case relies on out-of-context statements and incentivized whistleblowers. The collapse of TerraUSD in May 2022, which the SEC attributes to manipulated market actions by Kwon and his company, resulted in a $40 billion investor loss and significant disruptions in the broader cryptocurrency market.

Terraform Labs to make final pitch to jury as civil fraud trial wraps | Reuters

A New York judge has scheduled a hearing for April 22 to scrutinize the $175 million bond posted by former U.S. President Donald Trump. This bond was a condition for pausing a $454 million fraud judgment against him while he appeals the decision. The New York Attorney General, Letitia James, raised questions about the sufficiency of the assets of Knight Specialty Insurance Company—the firm Trump used for the bond—prompting the need for proof that it can cover the bond if Trump's appeal fails. 

Trump's bond was facilitated by the insurance company owned by Don Hankey, a California businessman known for his dealings in subprime car loans. Faced with a "practical impossibility" of raising the full amount initially required for the bond, Trump's team secured Knight Specialty's services after an appeals court provided a lifeline by granting an extension and reducing the bond amount. Hankey, dubbed "the king of subprime car loans," has a reputation for lending to individuals with poor credit at high rates and aggressive debt collection practices. 

Despite his wealth, evidenced by his ranking on Forbes's lists, and his history of significant Republican donations and financial dealings with Trump-related properties through Axos Bank, concerns about the sufficiency of assets stem from the specialized, high-risk nature of his business ventures. Knight Specialty's involvement, driven by a blend of business decision-making and political support for Trump, underscores the complexities and potential risks of securing such a substantial bond, especially given the magnitude of Trump's legal and financial challenges.

This development adds another layer to Trump's legal challenges, which include efforts to dismiss criminal charges in Georgia related to the 2020 election and classified records handling, as well as a New York criminal trial on hush money payments set to begin a week before the bond hearing. Trump, who faces four indictments amidst his presidential campaign, has pleaded not guilty in all criminal cases.

The fraud judgment by Judge Arthur Engoron in February, which Trump is appealing, found him liable for significantly overstating his assets' value. Trump's legal team has dismissed concerns over the bond as baseless, while representatives from Knight Specialty Insurance have not commented on the matter. According to a court filing, Knight claims to have $539 million in assets, including $26.8 million in cash, as it faces scrutiny over its ability to support Trump's bond amidst his multifaceted legal battles.

Trump's $175 million bond questioned by New York AG, hearing scheduled | Reuters

New York AG Questions if $175 Million Bond Insurer Can Save Trump

That Guy Who Backed Trump’s Bond? He May Not Have the Money

How did Trump pay his $175m fraud bond – and who helped him?

Robert Schumann , pencil sketch

This week’s closing theme is by Robert Schumann.

Robert Schumann stands as one of the quintessential figures in the Romantic era of classical music, renowned for his richly expressive compositions that spanned piano, chamber music, lieder (those are art songs), and orchestral works. Born in Zwickau, Saxony, in 1810, Schumann initially intended to pursue a career in law, following the wishes of his family–but we’re all glad he didn’t. His deep passion for music, coupled with a hand injury that thwarted his ambitions of becoming a virtuoso pianist, led him down the path of composition and music criticism. Schumann's compositions are celebrated for their emotional depth, innovative harmonies, and poetic inspirations, reflecting the complex inner world of an artist who struggled with mental health issues throughout his life.

In 1841, a year marked by newfound confidence and creativity for Schumann, he composed his Symphony No. 1 in B-flat major, Op. 38, commonly known as the "Spring" Symphony. Inspired by the poem "Spring" by Adolf Böttger, the symphony bursts with the freshness, vitality, and optimism of the season. The work was Schumann's bold entry into the world of symphonic music, encouraged by his wife, the eminent pianist and composer Clara Wieck Schumann. It was completed in just four days in January, a testament to Schumann's intense creative fervor during this period.

The "Spring" Symphony premiered on March 31, 1841, in Leipzig, conducted by Felix Mendelssohn, a close friend and champion of Schumann's music. The reception was overwhelmingly positive, with the symphony hailed as a vibrant and joyful ode to spring. Its success established Schumann's reputation as a master of the symphonic form, a remarkable feat for someone who had previously been known primarily for his piano works and songs.

The opening movement, "Andante un poco maestoso – Allegro molto vivace," immediately sets the tone of awakening and renewal. It begins with a slow, majestic introduction that evokes the first stirrings of spring, before launching into the lively and exuberant main Allegro section. This movement is characterized by its rhythmic vitality and melodic inventiveness, featuring a recurring fanfare motif that Schumann described as the "call of awakening" for spring. The energy and optimism of the Allegro perfectly capture the essence of the season, making it a fitting introduction to a symphony that remains one of Schumann's most beloved works.

Schumann's Symphony No. 1, with its vivid depiction of spring's arrival and rejuvenation, not only solidified his place among the great symphonists of the Romantic era but also offered a deeply personal reflection of the composer's own sense of renewal and hope. Through the "Spring" Symphony, and particularly its spirited Allegro, Schumann invites listeners to share in the joy and boundless possibilities of the season, making it a timeless piece that continues to enchant and inspire.

Without further ado, Robert Schumann’s Symphony no. 1 in B flat 'Spring', Op. 38, the fourth movement, the allegro.

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