Minimum Competence - Daily Legal News Podcast
Minimum Competence
Thurs 9/21 - Judge Newman Suspended 1 year, UFC Monopsony Suit, Judiciary has 2 weeks Funding, $10k/hour Legal Fees in Tesla Case, America Supports Strikes and Authors Sue OpenAI

Thurs 9/21 - Judge Newman Suspended 1 year, UFC Monopsony Suit, Judiciary has 2 weeks Funding, $10k/hour Legal Fees in Tesla Case, America Supports Strikes and Authors Sue OpenAI

Elder Judge suspended for a year, UFC monopsony suit, judiciary can run for 2 weeks if gov shuts down, attorneys that sued Tesla want $10k/hour, support for strikes is high and authors sue OpenAI.

Signing contracts in the octagon.

On this day in legal history, September 21, 1981, the United States Senate approved the nomination by President Reagan of Sandra Day O’Connor to the United States Supreme Court–making her the first female Supreme Court justice. 

O'Connor, who often leaned conservative, used her political experience from her time in the Arizona state Senate to shape her judicial views. She was known for filing concurring opinions that aimed to limit the scope of majority rulings. 

She faced opposition from the time of her nomination from anti-abortion and religious groups. During her tenure, O'Connor was known for her pragmatic approach and often served as the swing vote in contentious cases. Initially aligning closely with conservative Chief Justice William Rehnquist, her voting record later became more moderate as the Court's composition shifted. She played a pivotal role in key decisions, including those related to abortion rights, affirmative action, and campaign finance.

She was involved in landmark cases such as Grutter v. Bollinger, which upheld the constitutionality of race-based admissions to universities, and Planned Parenthood v. Casey, which preserved the core constitutional precept of Roe v. Wade. O'Connor retired in 2006 but left a lasting impact on American jurisprudence, particularly in her nuanced approach to complex legal issues.

O'Connor also had a brief stint in acting, appearing as Queen Isabel in a 1996 Shakespeare Theatre production of Henry V. In a landmark decision, she cast the deciding vote in the 2000 Bush v. Gore case, which ended the Florida vote recount and paved the way for George W. Bush's presidency. She later expressed reservations about the court's involvement in the case.

In another historic moment, O'Connor became the first woman to preside over an oral argument in the Supreme Court during the case of Kelo v. City of New London on February 22, 2005. Later that year, at the age of 75, she announced her plans to retire from the bench. Following her retirement, she took on the ceremonial role of the 23rd chancellor of William and Mary College in Williamsburg, Virginia, a position first held by George Washington. Her groundbreaking career remains a significant chapter in the history of the U.S. Supreme Court.

The Federal Circuit's active judges have suspended 96-year-old Judge Pauline Newman for one year for failing to undergo medical testing as part of a disability and misconduct investigation. Initiated by Chief Judge Kimberly A. Moore, the probe began after Newman allegedly had a cardiac incident and raised questions about her productivity. The investigation is notable for its public nature, a rarity in judicial disability investigations. Legal scholars suggest that such probes may become more frequent as the average age of federal judges has risen to 69.

Newman has contested the investigation, framing it as bullying and arguing that it was motivated by her frequent dissents in favor of stronger patent rights. The council stated that Newman's non-compliance with medical tests hampers their ability to assess her fitness for duty. A special committee had recommended the suspension, citing Newman's consistent refusal to cooperate.

Newman's lawyer, Greg Dolin, criticized the investigation's procedures and called the renewable suspension "unlawful" under the Judicial Conduct and Disability Act. Newman plans to appeal the council's order and has also filed a lawsuit seeking reinstatement. She submitted two medical reports affirming her mental fitness, which the council dismissed as inadequate.

The case has drawn public attention, contrasting sharply with Newman's recent accolades at a legal conference. Affidavits from court staff depict her as struggling with memory loss and paranoia, adding another layer of complexity to this unprecedented judicial probe.

Embattled 96-Year-Old Judge Suspended in Disability Probe (2)

A high-stakes antitrust lawsuit has been filed against the Ultimate Fighting Championship (UFC) by around 1,200 former fighters, including Nate "Rock" Quarry. The suit alleges that UFC confines athletes to perpetual contracts and pays them far less than they would earn in a competitive market. The case has been fast-tracked for trial next spring and is closely watched as it could set a precedent for athletes in various sports to fight for better pay using antitrust law.

The UFC, owned by Endeavor Group Holdings, generated a record revenue of $1.14 billion last year and reaches over 900 million households globally. Fighters are required to sign exclusive deals, often including four fights per year. However, the UFC allegedly withholds the last fight in a contract until the fighter agrees to renew, effectively trapping them in a cycle of successive contracts.

The fighters argue that the UFC is a "monopsony," a sole buyer in a market, and accuse it of abusing this power. Monopsony cases are rare but have gained attention under the Biden administration. While there are other combat sports promotions, the plaintiffs argue that UFC controls the majority of fighters in nearly all weight classes and has also bought or shut down its rivals.

The class action status of the lawsuit increases the risk for UFC, as it could be compelled to pay up to $4.8 billion in treble damages. The case could also encourage athletes in other industries to file similar suits. UFC has petitioned to appeal the class certification, arguing that the court erroneously certified the class.

The case also highlights the financial struggles of fighters, who are independent contractors paid per bout. While top fighters can earn millions, most fighters have to fund their own training and equipment, leaving them with little net income. The case aims not just for compensation but also to bring about a change in the sport, offering fighters better terms and ending the cycle of perpetual contracts.

UFC Fighters Test Antitrust Law to Escape ‘Perpetual’ Contracts

The U.S. federal judiciary has enough funds to operate for at least two weeks if the government shuts down due to a lapse in funding. The Administrative Office of the U.S. Courts stated that court fees and other available funds could be used to continue hearing cases. Some case deadlines may be rescheduled if federal agency attorneys are not working during the shutdown. If the funds do run out, the judiciary would operate on a limited basis, retaining only the staff necessary for mission-critical work.

Current government funding is set to expire at the end of the fiscal year on September 30, putting pressure on lawmakers to reach a deal on a short-term funding bill. Infighting among House Republicans and disagreements between the Republican-controlled House and Democratic-controlled Senate have jeopardized the passage of appropriations bills for fiscal year 2024. House Republicans have proposed allocating $8.7 billion to the federal judiciary for the next fiscal year, while Senate Democrats have proposed $8.56 billion. Both fall short of the judiciary's request for $9.1 billion.

Judge Lavenski Smith of the U.S. Court of Appeals for the Eighth Circuit expressed that a potential government shutdown is a "consistent matter of concern" and that plans are being considered to keep the judiciary operational. The judiciary, which employs nearly 30,000 people, almost ran out of money during the last government shutdown in 2018. The Case Management/Electronic Case Files (CM/ECF) system, used for electronic filing of documents, remained operational during the previous shutdown. The U.S. Supreme Court, which opens its new term on October 2, has used non-appropriated funds in the past to continue short-term operations.

Judiciary Has Funds for Two Weeks if Government Shuts Down (1)

A legal team that successfully sued Tesla's board of directors for allegedly overpaying themselves is now seeking $229 million in legal fees, amounting to $10,690 an hour. The request was made in a filing in Delaware's Court of Chancery on September 8. If approved, this would be one of the largest fee awards ever resulting from a shareholder lawsuit against a board. The case took several years to build and focused on the compensation paid to Tesla's directors from 2017 to 2020.

The 12 director defendants, including James Murdoch and Larry Ellison, had agreed to return $735 million in compensation and forego another potential $184 million. They also agreed to overhaul the board's compensation determination process. The settlement money will be paid to Tesla and indirectly benefit shareholders, making this a derivative lawsuit.

The law firms involved in the case estimate the total settlement value at $919 million and are seeking 25% of that sum as their fee. They are also requesting about $1 million in expenses. Partners and staff from the law firms involved have billed thousands of hours on the case.

Courts typically review fee requests by balancing the need to reward risk and effort against the risk of a disproportionate windfall that could undermine public confidence in the legal system. David Paige, founder of Legal Fee Advisors, described the fee request as "extraordinary" compared to typical hourly rates for corporate attorneys, which can go up to $2,000.

Tesla's directors have not yet objected to the fee request but are expected to do so, according to court filings. A hearing to approve the settlement and the legal fees is scheduled for October 13, and Tesla shareholders have until Friday to file any objections.

In 2012, Delaware courts approved an hourly rate that worked out to $35,000 in a Southern Copper shareholder lawsuit, setting a precedent that the outcome achieved should be the focus, not the hourly rate.

Lawyers who sued Tesla board for excess pay want $10,000 an hour | Reuters

A recent Reuters/Ipsos poll reveals that a majority of Americans, including both Democrats and Republicans, support the ongoing strikes in the auto industry and Hollywood. The poll found that 58% of Americans back the United Auto Workers union's strike against Ford, General Motors, and Stellantis for better pay and benefits. In the entertainment industry, 60% support the strikes by screenwriters and actors for better pay and protections. Among Democrats, the support is especially strong, with 72% backing the auto workers strike and 79% supporting the Hollywood strike. Interestingly, a significant number of Republicans also expressed support for the strikes, despite the party's traditional pro-business stance. The poll reflects a broader trend of increased union activism in the U.S., with 2023 on track to become the busiest year for strikes since 2019.

Americans broadly support auto, Hollywood strikes -Reuters/Ipsos poll

A U.S. authors' trade group, including renowned writers like John Grisham and George R.R. Martin, has filed a class-action lawsuit against OpenAI. The lawsuit accuses OpenAI of unlawfully training its AI chatbot, ChatGPT, on copyrighted works from these authors. The Authors Guild, which filed the suit, is also concerned that the training data may have been sourced from illegal online book repositories. OpenAI has defended its actions by claiming that the use of internet-scraped training data falls under "fair use" according to U.S. copyright law. The lawsuit is part of a broader legal landscape where AI companies are facing challenges over the data used to train their systems.

John Grisham, other top US authors sue OpenAI over copyrights | 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