Minimum Competence - Daily Legal News Podcast
Minimum Competence
Weds 5/31 - ChatGPT Lawyer Debacle, Debt Limit Deal, Manhattan DA Wants Trump in State Court, KPMG and Credit Suisse Sued and Death to NDAs

Weds 5/31 - ChatGPT Lawyer Debacle, Debt Limit Deal, Manhattan DA Wants Trump in State Court, KPMG and Credit Suisse Sued and Death to NDAs

We have the ChatGPT lawyer story, debt limit deals, Manhattan DA wants to keep Trump in state court, KPMG and CS sued and noncompetes are no good.

We have a somber anniversary to acknowledge today as our “this day in legal history” entry. On this day in 1921 the Tulsa race massacre occurred in Tulsa, Oklahoma. 

In May 1921, the Greenwood neighborhood in Tulsa, Oklahoma, was a thriving and prosperous community built by Black people. It was known as America's Black Wall Street and was home to approximately 10,000 residents. Greenwood had a vibrant economy with businesses, homes, schools, churches, and entertainment venues.

However, in less than 24 hours, the neighborhood was destroyed by racial violence during the Tulsa Race Massacre. A white mob of looters and arsonists attacked Greenwood, killing hundreds of residents and destroying homes and businesses. The violence was fueled by resentment towards the Black prosperity found in Greenwood.

The financial toll of the massacre was estimated to be $1.8 million in property loss claims, equivalent to $27 million in today's dollars. The destruction of property was just one aspect of the devastation caused by the massacre. The real loss was the incalculable generational wealth that could have shaped the fortunes of Black families and contributed to their economic prosperity.

Greenwood was rebuilt in the years following the massacre, but it eventually declined due to urban renewal and other factors. The legacy of the massacre has been deliberately buried in history, and even many descendants of perpetrators and victims only learned about it as adults. The survivors faced challenges in rebuilding their lives, including resistance from white officials and insurance companies.

To this day, no one has been held accountable for the destruction caused by the Tulsa Race Massacre. 

1921 Tulsa Race Massacre - Tulsa Historical Society

I’ve been reluctant to report on this story, just owing to the fact that it has been presented as an AI-gone-wrong story and it isn’t clear to me it is really about AI at all. It seems to be, in chief, a story about legal malpractice and the misuse of technology more generally. It has been making the rounds, however, and so…

A recent incident involving a lawyer and the use of OpenAI's ChatGPT chatbot highlights the risks of relying on AI technology without appropriate safeguards. Lawyers Steven Schwartz and Peter LoDuca are facing potential sanctions after submitting a court brief, written by ChatGPT, that cited six nonexistent cases, which were themselves fabricated by ChatGPT. Schwartz initially believed the tool had provided authentic citations but later discovered that they were invented. This case raises concerns about over-reliance on AI and the need for regulatory guidance in the legal profession.

While AI tools like ChatGPT promise to ease lawyer workloads by compiling information and engaging in human-like conversations, they should not replace the need for careful verification of work.

Schwartz used ChatGPT while representing a client in a case involving an injury on an Avianca Airlines flight. District Judge Kevin Castel noticed the nonexistent cases and bogus quotes in the brief, which were provided by ChatGPT. Schwartz had not used ChatGPT for legal research before and was unaware that its content could be false. The case raises questions about whether lawyers should disclose their reliance on AI tools in their work.

The incident has been pointed to as highlighting the need for law firms to establish internal policies addressing the use of generative AI. To my mind, it is more about the need to establish internal policies addressing the use of technology more generally – this same result could have happened with any form of research gone awry, or even through the misuse of autocorrect. 

While law firms expect their personnel to become proficient in using generative AI, they must also remain mindful of the risks and limitations associated with these technologies and the limitations of their own staff that may not be the most technologically proficient folks. Technology training, more than AI-specific training, is what is needed. 

Lawyer’s AI Blunder Shows Perils of ChatGPT in ‘Early Days’

A debt-limit deal reached between President Joe Biden and Speaker Kevin McCarthy is set to be voted on in the House of Representatives after passing a crucial procedural hurdle. The legislation aims to suspend the US borrowing ceiling and cap federal spending, and it needs to be passed before June 5 to avoid a potential US default. While leaders in both parties support the deal, they face opposition from members who are unhappy with the concessions made during the negotiation process. The bill would set federal spending for the next two years and suspend the debt ceiling until January 2025. In exchange for Republican votes, Democrats agreed to cap federal spending, with the Congressional Budget Office estimating that the bill would reduce deficits by $1.5 trillion over 10 years. The fate of the bill was uncertain, but it cleared the Rules Committee with the support of some conservatives, allowing it to move forward for a vote in the House. Both parties express optimism about the bill's passage in the House and its potential to meet the June 5 deadline. Dissatisfaction among conservative members has grown, with some calling for McCarthy's removal as speaker.

Debt-Limit Deal Heads to House Vote After Clearing Key Hurdle

Manhattan District Attorney Alvin Bragg has filed documents to prevent former President Donald Trump from moving a state criminal case to federal court. The case involves charges of falsifying business records prior to the 2016 election. Bragg argues that Trump is not entitled to a change in venue since he is not a federal officer. Additionally, Bragg asserts that Trump was not a federal officer at the time of the alleged crimes, which relate to a hush money payment to a porn star before Trump became president. Trump pleaded not guilty to 34 counts of falsifying business records, and prosecutors claim that he falsified records to conceal reimbursements to his former lawyer related to the payment to the porn star. Trump's lawyers had argued that the federal court had jurisdiction because the charges involved conduct during his presidency. The trial is scheduled for March 2024, coinciding with Trump's campaign for the 2024 presidential election.

Manhattan prosecutor seeks to keep Trump hush money case in state court | Reuters

Credit Suisse Group AG and its ex-auditor KPMG LLP are facing a lawsuit filed by stockholder Gregory Stevenson, who accuses them of "recklessly" mismanaging and "plundering" the bank for over a decade prior to its collapse in March. Stevenson is suing 29 current and former directors and officers of Credit Suisse, its New York-based units, and KPMG on behalf of a proposed class of investors. The complaint alleges that KPMG knew about Credit Suisse's lack of internal controls for more than 15 years while certifying its financial statements. KPMG's motivation was purportedly the desire for substantial fees from Credit Suisse, on which it had become dependent. KPMG was replaced as Credit Suisse's auditor by PricewaterhouseCoopers in 2020. The lawsuit also claims that KPMG stole an oversight board's confidential list of audits it would review, and then destroyed and altered workpapers to deceive regulators. Stevenson seeks compensatory and treble damages, an accounting of leaders' compensation, disgorgement of benefits, and equitable relief. Credit Suisse and KPMG have declined to comment on the matter.

KPMG, Credit Suisse Leaders Sued for ‘Reckless’ Bank Management

Noncompete agreements in employment contracts and severance agreements generally violate federal labor law, according to a memo issued by the National Labor Relations Board's (NLRB) General Counsel, Jennifer Abruzzo. The memo states that noncompete pacts are illegal when they could be interpreted as impeding workers' ability to change jobs or quit, thus hindering their right to engage in collective action to improve working conditions. Such agreements undermine workers' bargaining power during labor disputes and limit job options for those terminated for unionizing or participating in workplace activism. The memo highlights regulatory convergence between the NLRB and the Federal Trade Commission (FTC), which initiated steps to ban noncompetes earlier this year. Around one in five Americans is subject to noncompete agreements, with higher prevalence in certain industries like technology. Abruzzo's memo signals her intent to establish NLRB precedent on noncompetes, and she called for regional agency officers to submit cases involving potentially illegal noncompete agreements. While some tightly crafted noncompetes may be justified to protect proprietary information, the memo suggests that employers' desire to avoid competition or retain workers is unlikely to warrant such agreements, particularly when imposed on low- or middle-wage workers without trade secrets or in states where noncompetes are unenforceable.

Noncompete Pacts Violate Labor Law, Top NLRB Lawyer Says (1)

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