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Legal News for Tues 5/7 - Trump Trial Updates, Law Firm Growth in '24, $23.4m Verdict Against Activision and Income-Adjusted Property Taxes

Legal News for Tues 5/7 - Trump Trial Updates, Law Firm Growth in '24, $23.4m Verdict Against Activision and Income-Adjusted Property Taxes

Trump's trial, law firm growth in 2024, a $23.4 million patent verdict against Activision and Column Tuesday on the idea of income-adjusted property taxes.
Donald Trump tired in court, pencil sketch.

This Day in Legal History: 27th Amendment Ratified

On May 7, 1992, a significant addition was made to the United States Constitution with the ratification of the Twenty-seventh Amendment. This amendment, which prohibits any law that increases or decreases the salary of members of Congress from taking effect until the start of the next set of terms of office for Representatives, addresses concerns about the ethical issues surrounding Congressional pay raises.

The journey of the Twenty-seventh Amendment is particularly unique as it was one of the original amendments proposed by James Madison in 1789. Originally part of Madison's package that included what became the Bill of Rights, the amendment was intended to check Congress's power over its financial recompense. However, it failed to achieve the necessary support from three-fourths of the state legislatures at that time.

The amendment languished in obscurity until the 1980s when a renewed interest in limiting Congressional privileges, spurred by public concerns over government fiscal irresponsibility and perceived excesses by lawmakers, brought it back into the national conversation. The resurrection of the amendment was largely driven by a grassroots campaign led by Gregory Watson, a University of Texas undergraduate who discovered the dormant amendment and spearheaded a national push for its ratification.

By 1992, the required number of states had ratified the amendment, nearly 203 years after it was first proposed. This ratification process holds the record as the longest in U.S. history, showcasing the complexities and capricities of amending the Constitution.

The Twenty-seventh Amendment's ratification marked a noteworthy instance of how citizen activism can influence constitutional law, illustrating the enduring nature of the document and the adaptability of its provisions to the evolving concerns of the American populace. It serves as a reminder of the power of persistence in civic engagement and the impact that individuals can have on national law.

Today in the ongoing criminal trial of former U.S. President Donald Trump, centered around allegations of hush money payments, two significant developments have occurred. Trump, who faces charges of falsifying business records to cover up a $130,000 payment to adult-film actress Stormy Daniels before the 2016 election, stepped closer to facing jail time for contempt of court. Justice Juan Merchan has already fined Trump $10,000 for repeated violations of a gag order and warned that further infractions could lead to imprisonment. This legal action could potentially sway public opinion as the November elections approach, particularly among undecided voters.

Additionally, Stormy Daniels is set to testify today, promising a pivotal moment in the trial. Her involvement stems from claims of a past encounter with Trump, which he denies. The prosecution aims to show that Trump was directly responsible for the illegal cover-up by labeling the reimbursement to his lawyer, Michael Cohen, as legal expenses. Trump's defense argues that Daniels' testimony is irrelevant to the alleged financial misconduct, attempting to keep the dispute centered on the allegation that the former president made financial misstatements.

As we all well know at this point, this trial is just one of several legal challenges Trump faces, including accusations related to attempting to overturn the 2020 election results and mishandling classified documents. The outcome of this trial and Trump's compliance with court orders could significantly impact his political future and public perception as he runs for president again.

Jail time for contempt could spell political trouble for Trump | Reuters

Stormy Daniels to testify in Trump hush money trial, media reports say | Reuters

Law firms have experienced a robust start to 2024, showing a significant recovery from a sluggish 2023 characterized by weak client demand and poor collection rates. According to the Thomson Reuters Institute’s Law Firm Financial Index, which monitors 186 large and midsize firms, there has been a 1.9% increase in demand for legal services in the first quarter of 2024 compared to the same period last year. Billing rates also rose by 6.6%, with midsize firms notably driving much of this growth. Overall firm revenues increased by 5.7%, and profits grew by 5.8%, supported by a controlled rise in direct expenses of just 5.4%.

The sector seeing the most growth in demand was litigation, which surged by 3.8%, followed by bankruptcy with a 3% increase, and labor and employment rising by 1%. However, corporate practices saw only a modest gain of 0.6%, and M&A practices experienced a decline of nearly 4%, with high interest rates posing additional challenges for recovery in this area.

Despite the positive start, there remains some uncertainty about the ability of firms to collect on the increased billing rates due to previous declines in realization rates — the percentage of billed work that is actually paid. The impact of the 2024 billing rates will not be clear until the second quarter results due to billing cycles.

Additionally, law firms are continuing to invest in technology, with spending up 6.6% above inflation, indicating a growing interest in new technologies, particularly those incorporating artificial intelligence. This investment suggests law firms are optimistic about the potential of AI to enhance their operations.

Law firms kicked off 2024 with strong demand and profits, report finds | Reuters

Activision Blizzard has been ordered by a Delaware federal jury to pay $23.4 million in damages for infringing patents related to multiplayer features in their popular games, including "World of Warcraft" and two "Call of Duty" titles. The lawsuit, filed by Acceleration Bay, which acquired the patents from Boeing, argued that Activision's games used their patented technology for online multiplayer networking. The jury awarded $18 million for violations linked to "World of Warcraft" and $5.4 million related to the "Call of Duty" games.

Activision, however, contends that their technology does not infringe on Acceleration Bay's patents and believes there are strong grounds for an appeal. They had previously argued in court that if found liable, the damages should not exceed $300,000. Despite the verdict, Activision expressed disappointment and is considering its next steps in the legal process. Meanwhile, Acceleration Bay has expressed satisfaction with the jury's decision. This legal battle highlights ongoing issues in the gaming industry regarding the use and ownership of multiplayer networking technologies.

Activision hit with $23.4 mln US patent verdict in multiplayer-gaming case | Reuters

In my column this week, I explore the evolving dynamics of property tax systems and suggest an income-adjusted approach to foster homeowner equity. The traditional property tax system, which levies a uniform rate based on property values, increasingly clashes with the financial realities of many homeowners whose incomes haven't kept pace with rising property values. This misalignment has led to higher foreclosure and mortgage delinquency rates. I propose a more equitable system that adjusts tax liabilities based on income, allowing tax burdens to scale with financial capacity, which could mitigate these issues.

Traditional relief methods like reassessments or appeals often benefit those least in need and require resources that not all homeowners have. An income-adjusted system would simplify the process, eliminate the need for appeals, and align tax liabilities more closely with homeowners' ability to pay, enhancing both fairness and compliance.

However, implementing such a system presents challenges, including the need for bipartisan political support and the integration of property and income tax systems to accurately assess individual financial situations. Despite these hurdles, rethinking property tax to include income-sensitive adjustments could lead to a more just tax system that reflects both market values and personal economic realities.

Income-Adjusted Property Tax System Would Foster Homeowner Equity

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