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Legal News Report 6-24-2016
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New York State Lawmakers Vote to Legalize Fantasy Sports
Jun 18, 2016 |
By Jesse McKinley and Joe Drape
ALBANY — Months after being halted by the New York attorney general, daily fantasy sports won a major victory early Saturday as state lawmakers moved to legalize the online games. -
Judge Allows Lawsuit Claiming Starbucks Underfills Lattes
Jun 21, 2016 | The New York Times
By Daniel Victor
Two people who accused Starbucks of deliberately underfilling lattes can continue their lawsuit after a federal judge in California dismissed three counts against the beverage retailer but allowed five to remain. -
Supreme Court Upholds Affirmative Action in University Admissions
Jun 23, 2016 | The Wall Street Journal
By Jess Bravin
WASHINGTON—A divided Supreme Court Thursday upheld racial preferences in public-university admissions, a defeat to a yearslong conservative drive to roll back affirmative action. -
U.S. Supreme Court Deadlock Blocks Obama’s Immigration Plan
Jun 23, 2016 | The Wall Street Journal
By Jess Bravin
WASHINGTON—A deadlocked Supreme Court on Thursday killed President Barack Obama’s plan to defer deportation and provide work authorization for millions of illegal immigrants, pushing the issue to the forefront of the 2016 election. -
Brexit Could Be a Boon for Lawyers
Jun 24, 2016 | Brexit Could Be a Boon for Lawyers
By Sara Randazzo
As companies worldwide digest the news of what Britain’s exit from the European Union means for their business, lawyers are positioning themselves to dole out quick advice—and fill their coffers while doing so.
Legal News
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New York State Lawmakers Vote to Legalize Fantasy Sports
Jun 18, 2016 |
By Jesse McKinley and Joe Drape
ALBANY — Months after being halted by the New York attorney general, daily fantasy sports won a major victory early Saturday as state lawmakers moved to legalize the online games.
Gov. Andrew M. Cuomo, a Democrat, has not yet indicated that he will sign the bill, but the final legislation included proposed modifications from his staff, suggesting at least some degree of support.
Eric T. Schneiderman, the attorney general, who first declared war on the industry in the fall by declaring daily fantasy sports to be illegal gambling, laid the groundwork for a deal in March when he suggested a June 30 deadline for the Legislature to act to address the games’ legal status.
Mr. Schneiderman was neutral on the Legislature’s action on Saturday, calling it “a law that it will be my job to enforce and defend,” but he added that his office would continue to pursue claims against DraftKings and FanDuel, the industry’s two biggest companies, over allegations of consumer fraud and false advertising.
The businesses’ legislative backers in New York have insisted that fantasy sports is not gambling — which is mostly barred by the state’s Constitution— but rather is “based upon the skill and knowledge of the participants.” The widely advertised games, in which players create imaginary teams using real players and win or lose depending on the players’ statistics, would be classified as games of skill, not chance, a distinction under a 2006 federal law governing online wagering.
Under the deal agreed to by lawmakers, highly skilled and high-volume players will have to be clearly identified on the sites, a provision intended to protect casual players from being targeted and taken advantage of by more sophisticated players, something that some class-action lawsuits have alleged takes place and that law enforcement has investigated.
Companies will pay the state the equivalent of 15.5 percent of their revenue to operate, an amount that supporters have estimated to be nearly $6 million a year. Funds collected by the state will be directed to an education fund run by the state lottery.
The battle over daily fantasy sports has been fought hard in Albany, the state capital, culminating in a protracted wait — stretching past midnight — as supporters of the legislation cemented enough support for the bill to pass the State Senate. It had passed the Assembly earlier Friday.
The New York deal is a lifeline for an industry so battered that FanDuel and DraftKings, once bitter rivals, are in merger talks, according to two people familiar with the negotiations. Both companies declined to comment about the talks.
New York had more than 10 percent of the nation’s daily fantasy players at the time the businesses were barred by the state, and the companies’ bottom lines have taken a beating since they pulled out under the March agreement with Mr. Schneiderman.
“There have been meaningful reductions as well as difficulty raising capital,” said Adam Krejcik of Eilers & Krejcik Gaming, a financial research firm that covers fantasy sports.
He added that “the hope is New York could serve as proxy or benchmark” as to how attorneys general and legislators proceed.
When DraftKings and FanDuel blitzed broadcasts with hundreds of millions of dollars in commercials at the beginning of the N.F.L. season last year, daily fantasy sports appeared to be a virtual cash machine. Each company was valued at more than $1 billion, and their investors included Major League Baseball, the N.B.A., and the N.F.L. owners Jerry Jones and Robert K. Kraft, as well as major media companies like NBC.
New York is the eighth and most important market to pass legislation to legalize the games, which are under scrutiny in other player-rich states, such as Florida, Illinois and Texas.
“The lobbying and litigation expenses show no signs of abating,” said Dan Wallach, a gaming and sports lawyer at the commercial law firm Becker & Poliakoff, who added that while more than two dozen states had introduced daily fantasy sports legislation, only a small number had passed laws. “How many more years of this can both companies withstand?”
Such concerns did not seem to affect the enthusiasm of State Senator John J. Bonacic, the chairman of the Racing, Gaming and Wagering Committee.
“Football season is around the corner,” Mr. Bonacic, a Hudson Valley Republican, said. “We’re going to make a lot of football fans very happy.”
http://www.nytimes.com/2016/06/19/sports/new-york-state-lawmakers-vote-to-legalize-fantasy-sports.html
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Judge Allows Lawsuit Claiming Starbucks Underfills Lattes
Jun 21, 2016 | The New York Times
By Daniel Victor
Two people who accused Starbucks of deliberately underfilling lattes can continue their lawsuit after a federal judge in California dismissed three counts against the beverage retailer but allowed five to remain.
The plaintiffs, Siera Strumlauf and Benjamin Robles, contended in a class-action complaint filed in March that the popular drinks were underfilled by about 25 percent of their advertised sizes: 12, 16 and 20 ounces.
Starbucks had argued that a “reasonable consumer” would not have been misled.
But Judge Thelton Henderson of United States District Court in San Francisco said in his ruling on Friday, “This is not a case where the alleged deception is simply implausible as a matter of law.”
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“The court finds it probable that a significant portion of the latte-consuming public could believe that a ‘Grande’ contains 16 ounces of fluid, measured without milk foam or in its cooled state,”he wrote. “If nothing else, it is probable enough that the issue should be decided by a trier of fact, not on a motion to dismiss.”
In their complaint, the plaintiffs said Starbucks used cups that held the advertised amounts only when filled to the brim, but that the drinks were not filled that high. They said that in 2009, Starbucks made a “conscious decision” to save money on milk by using pitchers with etched-in “fill to” lines that were too low, and the recipe required baristas to fill a quarter-inch below the brim of the cups, the lawsuit says.
In a statement, Starbucks said the lawsuit was “without merit.”
“All of our handcrafted beverages are made in accordance with our customers’ preferences,” the company said. “If a customer is not satisfied with their beverage preparation, we will gladly remake it. We will be prepared to defend our case in court.”
It’s not the first time that Starbucks has been sued over its drinks. A separate class-action lawsuit in April by Stacey Pincus of Chicago accused the company of putting too much ice in cold drinks, leaving consumers with just over half the amount they paid for, according to Courthouse News.
Starbucks called that lawsuit “without merit,” as well.
http://www.nytimes.com/2016/06/22/business/judge-allows-lawsuit-claiming-starbucks-underfills-lattes.html
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Supreme Court Upholds Affirmative Action in University Admissions
Jun 23, 2016 | The Wall Street Journal
By Jess Bravin
WASHINGTON—A divided Supreme Court Thursday upheld racial preferences in public-university admissions, a defeat to a yearslong conservative drive to roll back affirmative action.
Writing for a 4-3 court, Justice Anthony Kennedy found that the University of Texas at Austin’s challenged plan passed constitutional muster because it was designed in a narrow way to improve diversity on campus. The school’s plan considered race as an additional factor when evaluating certain black and Hispanic applicants.
Justice Kennedy, joined by Justices Ruth Bader Ginsburg, Stephen Breyer and Sonia Sotomayor, said universities are defined by “intangible qualities…which make for greatness.”
“Considerable deference is owed to a university in defining those intangible characteristics, like student body diversity, that are central to its identity and educational mission,” Justice Kennedy wrote in a 20-page opinion.
Justice Samuel Alito, joined by Chief Justice John Roberts and Justice Clarence Thomas, dissented, saying the court’s decision was “remarkably wrong,” and at odds with a 2013 high court decision in an earlier chapter of the same case.
The university relied upon “unsupported and noxious racial assumptions” and “never provided any coherent explanation for its asserted need to discriminate on the basis of race,” Justice Alito wrote in the dissent. He read portions of it from the bench, signaling the intensity of his disagreement.
The decision came from a court with two vacant seats—one left by the February death of conservative Justice Antonin Scalia, another by the recusal of liberal Justice Elena Kagan, who as the Obama administration’s solicitor general had participated in the case at earlier stages to support the university’s position.
The case was the fourth time since the 1970s that the court has upheld racial preferences in college admissions, albeit with restrictions against numerical quotas or rigid set-asides for minorities. Justice Kennedy said universities must continually review their affirmative-action policies to assess their “positive and negative” effects, and to determine if they are still needed—a statement that leaves the door open to future legal challenges.
At issue was a long-running lawsuit filed by Abigail Fisher, a white applicant who was denied admission by the University of Texas at Austin in 2008. She alleged that the state’s flagship university violated the Constitution’s equal-protection guarantee by giving an edge in admissions to black and Hispanic students.
“I am disappointed that the Supreme Court has ruled that students applying to the University of Texas can be treated differently because of their race or ethnicity,” Ms. Fisher said in a statement issued by the Project on Fair Representation, an organization that financed her case and has sponsored other litigation opposing government programs that benefit minorities.
“I hope that the nation will one day move beyond affirmative action,” added Ms. Fisher, who has since graduated from Louisiana State University.
The university disputed Ms. Fisher’s claims, saying that it also rejected some minority applicants with higher grades and scores than she presented. But UT also said that maintaining the discretion to select a number of minority applicants that might not otherwise be admitted was essential to its ability to create a diverse undergraduate class.
“Race continues to matter in American life. It affects individuals and communities,” University of Texas at Austin President Gregory Fenves said. “We must make sure all of our students are able to excel in the wider world when they leave campus—educating them in an environment as diverse as the U.S. is one of the most effective ways to do so.”
The bulk of minority students who attend UT enter through a race-neutral program guaranteeing admission to Texas students who graduate in the top 10% or so of their high-school class. Because many schools in Texas remain segregated by race, the approach—which places about 75% of the freshman class—guarantees some minority admissions.
The university fills out the remaining 25% through a “holistic” program that considers race and other personal attributes as factors in the admissions process. It was this program that was at the heart of the Supreme Court case.
Had Justice Scalia still been on the court, he almost certainly would have provided an additional vote to the conservative justices who dissented Thursday, a scenario that could have produced a 4-4 tie. Such a stalemate still would have provided a victory for the university because it prevailed at the appeals court level, but the case wouldn’t have set a new national precedent.
Instead, Thursday’s decision further cements the ability of universities to consider race during the admissions process.
The University of North Carolina at Chapel Hill, which also is defending affirmative-action admissions against a lawsuit from the Project on Fair Representation, said the ruling reinforced its ability to admit a “diverse and culturally rich” student body.
But Edward Blum, founder of the fair-representation group, said the case against UNC and a parallel suit against Harvard University would proceed, saying their policies differed from UT’s admissions formula.
Harvard President Drew Faust said Thursday’s ruling supported efforts “to foster a diverse campus community that prepares our students to thrive as citizens and as leaders in an increasingly connected world and global economy.”
The Supreme Court’s earlier decision in the Fisher case, from three years ago, avoided any sweeping pronouncements. The justices at the time ordered lower courts to take another look at the university’s admissions plan, saying judges should strictly scrutinize the race-conscious methods schools use to attain diversity.
Nearly the entire education establishment, including Ivy League colleges, flagship state universities and organizations such as the College Board and the National School Boards Association, supported UT’s position, along with the Obama administration and major employers, including 3M Co., Aetna Inc., General Electric Co. and Procter & Gamble Co.
Ms. Fisher drew support from several conservative advocacy groups, including the Pacific Legal Foundation and the libertarian Cato Institute.
http://www.wsj.com/articles/supreme-court-upholds-affirmative-action-in-university-admissions-1466691615
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U.S. Supreme Court Deadlock Blocks Obama’s Immigration Plan
Jun 23, 2016 | The Wall Street Journal
By Jess Bravin
WASHINGTON—A deadlocked Supreme Court on Thursday killed President Barack Obama’s plan to defer deportation and provide work authorization for millions of illegal immigrants, pushing the issue to the forefront of the 2016 election.
The 4-4 vote left in place a ruling by a federal judge in Brownsville, Texas, that ordered the policy be placed on hold after Texas and 25 other Republican-leaning states sued the administration over the policy. Although the high court’s stalemate established no new precedent, it effectively put an end to Mr. Obama’s effort to extend his executive authority over immigration to the outer limit.
The one-sentence ruling was the latest defeat for Mr. Obama in the courts, which recently have stymied some of his administration’s top policy goals.
A federal judge in Wyoming on Tuesday blocked a rule setting stricter standards for hydraulic fracturing on public lands. And in February, the Supreme Court suspended the Obama administration’s cornerstone climate-change regulation limiting carbon emissions from power plants while litigation proceeds.
Once again, the absence of Justice Antonin Scalia, who died in February and left the court with eight members, was a likely factor in the outcome. Had he lived to vote on the case, he almost certainly would have sided with Texas and created a national precedent limiting executive power over immigration policy.
His death also contributed to the outcome of another case decided on Thursday, when the court voted 4-3 to uphold affirmative action in university admissions. Justice Scalia’s comments at the December oral argument suggested he would vote against racial preferences, which would have led to a 4-4 split that yielded no precedent. Justice Elena Kagan recused herself from the case.
The outcome in the immigration case doesn’t require the administration to begin deportations of the affected immigrants—all of whom had significant ties to the U.S., such as children who are U.S. citizens or lawful residents. But it does halt the government’s plan to normalize their presence by granting them authorization to work.
Speaking from the White House, Mr. Obama expressed frustration at the nation’s continuing paralysis on immigration policy: “I believe that this country deserves an immigration policy that reflects the goodness of the American people.”
The president also complained about the continuation of the open seat at the Supreme Court. Citing the increasingly frequent tie votes, he said that Republicans were extending the court’s paralysis by refusing to consider his nominee for the open seat, U.S. Circuit Judge Merrick Garland.
“Republicans in Congress currently are willfully preventing the Supreme Court from being fully staffed and functioning as our founders intended,” Mr. Obama said.
Republicans have said the next president should decide who should fill the Supreme Court opening.
Immigration policy has been one of the sharpest differences between the two parties in the presidential election. Presumptive Republican nominee Donald Trump has called for a wall along the Mexican border and the mass deportation of illegal immigrants, while Democrat Hillary Clinton has pledged to expand on Mr. Obama’s plans to normalize the status of undocumented immigrants.
Mrs. Clinton called the Supreme Court’s decision “unacceptable” and said families needed “relief from the specter of deportation.” The former secretary of state added that in her first 100 days in office, she would introduce an immigration plan that included “a path to citizenship.”
Mr. Trump said in a statement, “The executive amnesty from President Obama wiped away the immigration rules written by Congress, giving work permits and entitlement benefits to people illegally in the country.”
“This split decision also makes clear what is at stake in November. The election, and the Supreme Court appointments that come with it will decide whether or not we have a border and, hence, a country,” the New York businessman added.
Congressional leaders in both parties echoed their standard bearers.
“The Supreme Court’s ruling makes the president’s executive action on immigration null and void,” House Speaker Paul Ryan (R., Wis.) said. “The Constitution is clear: The president is not permitted to write laws—only Congress is.”
Sen. Richard Durbin of Illinois, the No. 2 Senate Democrat, addressed activists gathered outside the court after the decision, calling on the Justice Department “to use all the authority they have” to protect immigrants who would have benefited from the president’s plan.
Mr. Obama announced the immigration policies in November 2014, describing them as the furthest he believed he could go using executive authority to normalize the status of illegal immigrants after a Senate-passed immigration overhaul died in the House.
The plan sought to assist more than four million people who already are considered the lowest priority for deportation. Authorities, lacking resources to remove most of the more than 10 million illegal immigrants in the U.S., focus on newly arrived individuals and those with criminal records.
By formally suspending the threat of deportation, the program would give affected immigrants the opportunity to obtain work authorization and other prerequisites for participating in society, such as a Social Security number and a driver’s license.
Ezzie Dominguez, a Mexican-born U.S. citizen and immigrant-rights organizer based in Denver, said such a status would have vastly improved her family’s circumstances. Her husband, Jesus, she said, is a Mexican who has been in the U.S. without authorization for 17 years, working off the books at a restaurant and other jobs. “He would have an identity, he would have a status,” she said.
The plan stalled after the multistate coalition steered their lawsuit into the Brownsville courtroom of U.S. District Judge Andrew Hanen. In February 2015, he issued an order temporarily blocking it. He suggested the administration exceeded its constitutional authority, but based his ruling on the more technical ground that the Department of Homeland Security failed to follow the formula for issuing regulations provided by the Administrative Procedure Act.
The Fifth U.S. Circuit Court of Appeals in New Orleans upheld the Hanen order, prompting the administration’s appeal to the Supreme Court.
At oral arguments in April, liberal justices suggested the states had no legal standing to bring the case, since the only injury they alleged from the policy was Texas’s claim that it would have to spend money processing drivers’ license applications from immigrants granted a reprieve. Conservative justices appeared more critical of the administration’s argument, sharply questioning the government’s lawyer over the limits of presidential authority.
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Brexit Could Be a Boon for Lawyers
Jun 24, 2016 | Brexit Could Be a Boon for Lawyers
By Sara Randazzo
As companies worldwide digest the news of what Britain’s exit from the European Union means for their business, lawyers are positioning themselves to dole out quick advice—and fill their coffers while doing so.
Already, U.S. law firms with an international presence and U.K. firms are seeing Brexit as an opportunity for more work coming in the door, though some firms are cautious about whether a hit to Europe’s economy could also impact them negatively. Several firms, including K&L Gates LLP and Dechert LLP, have set up 24-hour hotlines staffed with lawyers across disciplines. Law firm client alerts are flooding inboxes, and webinars are being quickly pulled together by law firm marketing departments.
“There’s a wave that’s growing of work as a result of this,” law firm consultant Kent Zimmermann said, likening it to the work that followed the 2002 passage of the Sarbanes-Oxley Act in the U.S.
On both sides of the Atlantic, law firms’ clients will be looking for advice on tax, antitrust, immigration, intellectual property, trade agreements, employment and other areas of law.
Miriam Gonzalez, a partner in Dechert’s London office, said she’s been running from meeting to meeting all day Friday. “I expect that by the end of the weekend, businesses will digest the news and they will go from the–oh my god what do I need now, explain to me the process–to this is exactly the risk, these are the areas that are important to me,” Ms. Gonzalez said.
Tony Griffiths, the London head of K&L Gates, said they expect a hiatus period when clients will be hesitant to make investments or do deals. But apart from that, he said, “there will be lots of opportunity for strategic legal advice in this absolutely uncharted territory.”
http://blogs.wsj.com/law/2016/06/24/brexit-could-be-a-boon-for-lawyers/
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