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Legal News Report 7-1-2016
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Three states’ abortion laws just fell thanks to the Supreme Court. These states could be next.
Jun 28, 2016 | Washington Post
By Amber Phillips
Immediately after Monday's Supreme Court ruling striking down a restrictive Texas abortion law, triumphant abortion-rights advocates predicted it would give them legal pathway to challenge about a dozen similar laws in other states. The law made Texas one of the -- if not the -- most restrictive states in the nation for abortion, but other states have similar laws, to one extent or another. -
Volkswagen to Pay Up to $14.7 Billion to Settle Diesel-Emissions Claims
Jun 28, 2016 |
By Sara Randazzo and Mike Spector
Federal officials made clear Tuesday that Volkswagen AG’s deal to pay up to $14.7 billion to settle emissions-cheating claims with U.S. consumers and regulators won’t end the auto giant’s woes—nor stop scrutiny of other car makers. -
Judge Orders McKinsey to Disclose Confidential Client Roster
Jun 29, 2016 | Wall Street Journal
By Tom Corrigan
Corporate turnaround guru Jay Alix prevailed Tuesday in his long-running battle with consulting giant McKinsey & Co. -
Adnan Syed, Convict at Center of ‘Serial’ Podcast, Wins New Trial
Jun 30, 2016 | Wall Street Journal
By Associated Press
After spending 16 years in prison, a man convicted of murder who was at the center of the podcast “Serial” has won a new trial in Baltimore. -
Mississippi Law Protecting Opponents of Gay Marriage Is Blocked
Jul 1, 2016 | New York Times
By Campbell Robertson
A federal judge blocked — less than an hour before it was to go into effect at 12:01 a.m. Friday — a Mississippi law that would have given a wide range of special protections only to those who oppose same-sex marriage.
Legal News
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Three states’ abortion laws just fell thanks to the Supreme Court. These states could be next.
Jun 28, 2016 | Washington Post
By Amber Phillips
Immediately after Monday's Supreme Court ruling striking down a restrictive Texas abortion law, triumphant abortion-rights advocates predicted it would give them legal pathway to challenge about a dozen similar laws in other states. The law made Texas one of the -- if not the -- most restrictive states in the nation for abortion, but other states have similar laws, to one extent or another.
They may be getting what they wished for faster than they could have hoped hoped: Texas-like abortion laws in three states -- Alabama, Mississippi and Wisconsin -- just hit legal dead ends less than a day after the 5-3 ruling declaring Texas's law unconstitutional.
"This decision has opened the door to go state by state, legislature by legislature, law by law, and restore access to safe, legal abortion," said Cecile Richards, president of Planned Parenthood, in a statement Tuesday.
To be extra clear, the Supreme Court only ruled on Texas's law, which essentially required doctors doing abortions and clinics where they performed the abortions to meet hospital-like standards that would have closed most of the state's clinics.
But there's a lot the other 10 or so most restrictive states have in common with it. Let's break down the two key provisions -- and what the Court's ruling on each provision in Texas means for other states.
1) Requiring doctors who perform abortions to have admitting privilege at a nearby hospital
This is known as admitting privileges, and abortion-rights advocates estimated it cut Texas's 40 abortion clinics down to less than 20, in part because the law limited "nearby" to 30 miles.
There are 10 other states that require admitting privileges, but Elizabeth Nash with reproductive rights research group Guttmacher Institute said six of those are being challenged in court: Alabama, Kansas, Louisiana, Mississippi, Oklahoma and Wisconsin. Many of those states also have a 30-mile restriction.
Three of those states' challenges hit a legal dead end immediately after the ruling on Texas's law. On Tuesday, the Supreme Court denied to review court cases challenging Wisconsin's and Mississippi's laws, effectively upholding lower court rulings that block the state's admitting-privilege laws.
And late Monday, Alabama's attorney general announced he would stop trying to appeal a 2014 decision that ruled his state's admitting-privilege law unconstitutional, saying Alabama could no longer make a "good faith argument" that the law was constitutional.
Admitting-privilege laws remain in effect unchallenged in four states, though that could change quickly: Missouri (the first state to pass this kind of law, back in the 1980s), North Dakota, Tennessee and Utah. (Missouri and Utah require the hospital to be within a 15-minute drive, according to the Guttmacher Institute.)
2) Require abortions to be done in ambulatory surgery centers
This is a standard that requires what you might expect to see at a hospital; it is known as clinical standards. Texas's version of the law wasn't in place yet, but abortion-rights advocates estimated it would have slashed the number of Texas's abortion clinics from 20 to less than 10 because many abortion clinics said they simply couldn't afford the renovations.
Nash said nearly half of states have some kind of law related to clinical provisions, but only a handful have a restrictive version like Texas's: Michigan, Missouri, Pennsylvania, Tennessee and Virginia. She said she'd expect to see some or all of the five states' clinical provision laws challenged after Texas.
More broadly, as Kim Soffen over at Wonkblog notes, this decision is a rare piece of good news from the Supreme Court for abortion-rights advocates. Since the 1973 Roe v. Wade decision legalizing abortion, there have been a steady stream of decisions upholding restrictive abortion laws. And antiabortion advocates have been on a roll recently passing new laws at the state level.
In part thanks to historic Republican majorities in many states, this year they've passed some 30 laws in 14 states raising the requirements for those seeking an abortion. They argue these restrictions ensure abortions are safer.
As I wrote earlier this month:
Antiabortion advocates aren't just celebrating one good year: 2016 marks the fifth straight year they've passed a large number of abortion restrictions. In 2011 alone, Republican legislatures passed some 92 laws limiting abortions. In total, the past five years account for a quarter of all abortion restrictions enacted since the Supreme Court legalized abortion in 1973.
Some of the big ones passed this legislative session:Nine states introduced measures to ban all or most abortions. Only one, Oklahoma, made it to the governor's desk. The governor vetoed it.Four states have banned the most common method of second-trimester abortions (Louisiana, Alabama, Mississippi and West Virginia), while 13 in all have tried.Two states, Louisiana and Kentucky, lengthened the waiting period to get an abortion.South Dakota and South Carolina voted to enact abortion bans after 20 weeks, making them the 16th and 17th states to do so.Indiana, which already has some of the most restrictive abortion laws in the nation, made it illegal to abort a fetus because it is diagnosed with Down syndrome or because of its race or gender.
But when it comes to the most restrictive laws of them all, abortion-rights advocates can reasonably argue the law is now on their side. And that argument may be having more of an immediate impact than any of them had predicted.
https://www.washingtonpost.com/news/the-fix/wp/2016/06/27/how-many-states-could-see-their-abortion-restrictions-struck-down-after-the-supreme-courts-big-ruling/
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Volkswagen to Pay Up to $14.7 Billion to Settle Diesel-Emissions Claims
Jun 28, 2016 |
By Sara Randazzo and Mike Spector
Federal officials made clear Tuesday that Volkswagen AG’s deal to pay up to $14.7 billion to settle emissions-cheating claims with U.S. consumers and regulators won’t end the auto giant’s woes—nor stop scrutiny of other car makers.
The deal puts one major piece of the cheating saga over pollution-spewing diesel vehicles to rest. But officials excoriated Volkswagen for installing its cars with emissions-cheating devices and put other car companies on notice that they were scrutinizing emissions practices across the industry.
“Volkswagen turned nearly half a million American drivers into unwitting accomplices in an unprecedented assault on our country’s environment,” Deputy Attorney General Sally Yates said on Tuesday, calling the deception “one of the most flagrant violations” of “environmental and consumer laws in our country’s history.”
A related criminal probe examining “multiple companies” and “multiple individuals” is continuing, Ms. Yates said, with investigators still reviewing roughly 1.5 million Volkswagen documents. Potential civil and criminal penalties imposed by the Justice Department also loom.
Environmental Protection Agency Administrator Gina McCarthy said Tuesday that regulators are testing other companies’ cars for devices that, like Volkswagen’s, could trick emissions tests and “will be releasing information as it becomes available.”
U.S. consumers have sued other auto makers alleging increased emissions under hotter or cooler temperatures, in some cases pointing to pollution controls that shut down, though none has been accused by U.S. authorities of wrongdoing. Mercedes-Benz owner DaimlerAG in April said it was conducting an internal probe of emissions practices at the Justice Department’s request. The German company hasn’t been accused of wrongdoing and has denied improperly rigging emissions.
Tuesday’s deal, detailed in court documents, includes up to $10.03 billion for owners of 475,000 affected vehicles with two-liter diesel engines, including Jettas, Passats, Beetles, Golfs and Audi A3s. Volkswagen also will pay $2.7 billion to an environmental remediation fund and $2 billion to promote so-called zero-emission vehicle technology.
“We know that we still have a great deal of work to do to earn back the trust of the American people,” Volkswagen Chief Executive Matthias Müller said. “We are focused on resolving the outstanding issues and building a better company that can shape the future of integrated, sustainable mobility for our customers.”
Volkswagen reached the civil settlement, the largest-ever for an auto maker, with the Justice Department, EPA, Federal Trade Commission, California regulators, and consumer plaintiffs’ lawyers.
Elizabeth Cabraser, the lead lawyer for consumers, said the deal ensures “that Volkswagen be held accountable for all the economic and environmental harm” caused by the diesel vehicles.
Separately, Volkswagen said on Tuesday it reached a $603 million agreement with 44 U.S. states, the District of Columbia and Puerto Rico to resolve consumer-protection claims.
A handful of U.S. states with strict emissions standards are continuing to investigate the auto maker for violations of state environmental laws. The states include New York, whose Attorney General Eric Schneiderman said his office would seek “substantial” additional penalties.
The Wolfsburg, Germany, company faces a potentially expensive settlement with car owners and government officials over similar problems linked to some 85,000 vehicles with three-liter diesel engines, most of them Audi and Porsche luxury models.
Under the Tuesday settlement’s terms, U.S. motorists can either sell back or terminate leases of affected vehicles, or have the cars made compliant with environmental regulations. Vehicle owners opting for a fix must wait until the company wins government approval of an appropriate modification.
All car owners, regardless of whether they keep their vehicle, will receive additional compensation of between $5,100 and nearly $10,000 each. Drivers have more than two years to make a decision, and Volkswagen’s tab will rise to $10.03 billion only if everyone opts for a buyback, according to court documents.
Settlement terms will go before U.S. Judge Charles Breyer for preliminary approval July 26. If approved, Volkswagen could begin buying back cars as soon as October, court documents show.
Tuesday’s settlement partially resolves a crisis that has gripped Volkswagen since September. The car maker has set aside $18 billion to deal with the fallout, and Tuesday said it continues to assess if the amount is adequate.
Volkswagen used software that let vehicles pollute more on the road than during emissions tests, emitting nitrogen oxides at up to 40 times the allowable standard, according to the EPA. Chief Executive Martin Winterkorn resigned soon after the revelations and Volkswagen has faced a barrage of criticism from government officials, consumers and shareholders.
As part of Tuesday’s deal, Volkswagen must get 85% of the affected two-liter vehicles off the roads or make them environmentally compliant by June 2019, or risk facing substantial additional fines, court filings show.
Europe’s largest auto maker by volume is prohibited from reselling any vehicles it buys back, either in the U.S. or abroad, unless it fixes their emissions.
Volkswagen has said it sees no reason to compensate European customers similarly, citing differences in U.S. and European law and environmental standards. Under EU rules, the company has said, Volkswagen’s diesel vehicles don’t violate emissions standards.
Some Europeans disagree. “Consumers have been massively misled by Volkswagen and this settlement in the U.S. recognizes the damage suffered by car drivers,” said Monique Goyens, general director of the European Consumer Organization, a Brussels-based consumer lobby. “It is inconceivable that consumers in the EU get treated differently.”
http://www.wsj.com/articles/volkswagen-to-pay-up-to-14-7-billion-to-settle-diesel-emissions-claims-1467117548
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Judge Orders McKinsey to Disclose Confidential Client Roster
Jun 29, 2016 | Wall Street Journal
By Tom Corrigan
Corporate turnaround guru Jay Alix prevailed Tuesday in his long-running battle with consulting giant McKinsey & Co.
Mr. Alix, who made his career helping distressed companies shed debt and shore up their bottom lines, has accused McKinsey of failing to follow bankruptcy rules by keeping secret the client relationships that could create conflicts of interest in its work advising bankrupt companies. McKinsey denies wrongdoing and has accused Mr. Alix of trying to cripple a rival to the consulting business he founded several decades ago.
But an airing of the dispute Tuesday before U.S. Bankruptcy Judge Kevin Huennekens,who is overseeing the chapter 11 restructuring of McKinsey client Alpha Natural Resources Inc., ended in a victory for Mr. Alix.
Judge Huennekens is requiring McKinsey to divulge to the court by Wednesday key business details, including more than 100 client names the firm has previously sought to keep confidential, though he vowed to make sure the sensitive information wouldn’t fall into Mr. Alix’s hands.
“The purpose here is not to destroy McKinsey’s business model,” Judge Huennekens said at the hearing in Richmond, Va. “It’s certainly not to give a competitive advantage to a competitor.”
The judge called the dispute “unfortunate” but said his ruling should protect both McKinsey and the integrity of the bankruptcy process without disrupting or delaying Alpha’s restructuring, which is in the home stretch.
McKinsey attorney Martin Bienenstock told Judge Huennekens the firm would “do our best” to comply. After the hearing, a McKinsey spokesman said the firm was pleased the judge promised to protect its client information and it would “work to quickly provide the limited information the court required.”
The dispute, which has played out over two years in court filings and hearings, exposes the cutthroat world of corporate restructuring, where a coterie of consultants regularly vie for lucrative jobs helping businesses restructure billions of dollars in debt. Top consultants can charge $1,000 or more an hour, and the assignments—which include helping companies streamline operations, cut costs, slash debt and negotiate with creditors—can stretch for months or even years.
In the Alpha case, where McKinsey has charged nearly $16 million for nine months of work, the rivalry among consultants has become personal, court filings indicate.
“Competition among bankruptcy professionals, both in the marketplace of clients and in bankruptcy litigation, are an ordinary part of the profession,” Mr. Alix’s lawyers said in court papers. “Unfortunately, the same can be said of personal animus among professionals.”
McKinsey has said Mr. Alix wishes to force the firm out of the bankruptcy business, which has been long been dominated by just a few companies, among them AlixPartners, which Mr. Alix founded in 1981. McKinsey’s Recovery & Transformation Services unit was formed in 2010.
Through a spokeswoman, Mr. Alix declined to comment. In court papers, however, he denied he was seeking a competitive advantage for AlixPartners. He retired from the firm in 2006 but retains a minority ownership stake.
Bankruptcy rules require disclosures of potential conflicts so that judges overseeing the cases can decide whether a firm can truly serve as an unbiased advocate for its client. In large bankruptcies where companies can owe money to thousands of people and businesses, big law and consulting firms often file dozens of pages disclosing their past or present relationships with creditors, potential asset buyers, investors and others.
Mr. Alix has said he first raised the issue of McKinsey’s lack of disclosure with Global Managing Director Dominic Barton in September 2014. In October 2015, Mr. Alix hired retired bankruptcy judge Steven Rhodes, who oversaw Detroit’s bankruptcy restructuring, to review McKinsey’s disclosures. Judge Rhodes said he “quite readily” came to the conclusion that McKinsey had not fully complied with the rules in the chapter 11 cases it worked on during the past decade.
Judge Rhodes told The Wall Street Journal that he was struck by “the arrogance of the position that McKinsey was taking,” which McKinsey declined to comment on.
In early 2016, Mr. Alix formed a company called Mar-Bow Value Partners LLC, which purchased $1.25 million of Alpha’s debt. Judge Rhodes told The Wall Street Journal this purchase gave Mr. Alix the legal grounds to challenge McKinsey’s disclosures in Alpha’s bankruptcy.
Mr. Alix also brought his concerns to the Justice Department. The department’s bankruptcy-watchdog unit filed papers in May seeking additional disclosures from McKinsey and criticizing McKinsey as the only professional firm “claiming contractual confidentiality is a blanket shield” protecting it from disclosure requirements.
McKinsey struck a deal with the Justice Department, providing some additional disclosure of client names, but Mr. Alix said in a court filing by Mar-Bow that the added detail gave only “the appearance of compliance without actually complying.”
A spokeswoman for the Justice Department unit declined to comment, but one of its lawyers said Tuesday in court that the additional information had “greatly improved the public record.”
In court papers, Mr. Alix said McKinsey has failed to name at least 121 clients with ties to Alpha’s bankruptcy. “This level of nondisclosure, that even McKinsey admits, is unprecedented in the history of modern bankruptcy,” Judge Rhodes said in court Tuesday.
Before Tuesday’s hearing, a paid advertisement outlining how McKinsey’s alleged disclosure violations threatens “the integrity of the bankruptcy system” appeared online. The webpage was taken down shortly after The Wall Street Journal made inquiries to a Mar-Bow spokeswoman, who declined to comment.
McKinsey defended its disclosures and has questioned Mr. Alix’s timing and motive in “having anointed himself as a private attorney general to police industry compliance.” The firm said it has a “longstanding policy” to protect clients’ identities and confidential information but said it would divulge any potential conflicts that arise.
What’s more, McKinsey said, AlixPartners has itself sought to keep the names of its clients confidential and is now asking McKinsey to “do as I say, not as I do.”
AlixPartners didn’t respond to a request for comment.
“We’ve gone above and beyond,” McKinsey attorney Mr. Bienenstock said in court Tuesday. “We have done more than most professionals in this case and other cases.”
http://www.wsj.com/articles/judge-orders-mckinsey-to-disclose-confidential-client-roster-1467154499
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Adnan Syed, Convict at Center of ‘Serial’ Podcast, Wins New Trial
Jun 30, 2016 | Wall Street Journal
By Associated Press
BALTIMORE—After spending 16 years in prison, a man convicted of murder who was at the center of the podcast “Serial” has won a new trial in Baltimore.
Adnan Syed was convicted of murdering his former high-school girlfriend Hae Min Lee in 1999 and burying her in a park. He was sentenced to life in prison.
Baltimore Circuit Judge Martin Welch ruled Thursday that Mr. Syed deserves another trial because his attorney failed to cross-examine a cell-tower expert about the reliability of data that placed Mr. Syed’s cellphone near the burial site.
Mr. Syed’s case was widely publicized by “Serial.” The podcast attracted millions of listeners by showcasing little-known evidence and raising questions about Mr. Syed’s guilt.
http://www.wsj.com/articles/convict-at-center-of-serial-podcast-wins-new-trial-1467320203
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Mississippi Law Protecting Opponents of Gay Marriage Is Blocked
Jul 1, 2016 | New York Times
By Campbell Robertson
A federal judge blocked — less than an hour before it was to go into effect at 12:01 a.m. Friday — a Mississippi law that would have given a wide range of special protections only to those who oppose same-sex marriage.
In a 60-page ruling, Judge Carlton W. Reeves of United States District Court said the law created “a vehicle for state-sanctioned discrimination on the basis of sexual orientation and gender identity.”
And by setting aside particular beliefs for protection as opposed to religious convictions in general, the law unconstitutionally “put its thumb on the scale to favor some religious beliefs over others.” He concluded by issuing a preliminary injunction against the law from taking effect.
Rob McDuff, a lawyer who argued against the law along with the Mississippi Center for Justice, said in a statement that “the federal court’s decision recognizes that religious freedom can be preserved along with equal rights for all people regardless of race, religion, or sexual orientation.”
Mississippi’s political leaders, who had staunchly defended the law, pledged to appeal.
“The law simply provides religious accommodations granted by many other states and federal law,” Gov. Phil Bryant said in a statement. “I am disappointed Judge Reeves did not recognize that reality. I look forward to an aggressive appeal.”
Though state legislatures across the country considered laws this year to explicitly protect those who object to same-sex marriage, Mississippi’s law, known as H.B. 1523, was the most definitive one to pass, according to the Human Rights Campaign, a gay rights group.
The measure, which was scheduled to go into effect on Friday, is not a version of a traditional religious freedom act, which gives legal backing to those who argue that a given law infringes on their beliefs. Mississippi already has such a law on the books. Instead, it would create an array of protections specifically for those who believe that marriage is only for opposite-sex couples, that sexual relations are reserved for marriage and that gender identity is determined immutably by anatomy at birth.
Under the law, those who act according to these beliefs in foster care, counseling, school administration, facility rentals and wedding services would be fully shielded from a host of potential government actions, including hiring or firing decisions, the charging of fees or the issuing of state contracts.
The law would also allow court clerks to refuse to grant wedding licenses to same-sex couples as long as accommodations were made for the applicants to receive their licenses anyway. Judge Reeves struck down that last element in a separate ruling on Monday, saying that while state officials were free to disagree with it, the Supreme Court ruling on same-sex marriage is now the law of the land.
In a footnote in his ruling on Thursday night — Judge Reeves, who was appointed by President Obama and is the second African-American federal judge in Mississippi — compared Mr. Bryant’s remarks on a state’s “right to self-governance” when it comes to gay marriage to former Gov. Ross Barnett’s 1962 speech before the Legislature in which he invoked states’ rights to oppose the integration of the University of Mississippi.
Mississippi’s law was condemned by civil rights activists, business groups and a number of the state’s mayors, particularly along the tourism-dependent Gulf Coast. But given its lack of Fortune 500 headquarters and its uncontested conservative political landscape, Mississippi did not face the same broad backlash as North Carolina did after passing a law restricting bathroom access for transgender people.
There have been multiple legal challenges with a wide array of plaintiffs: gay and straight, transgender and not. Lawyers in the case, which arose from suits filed by the Mississippi Center for Justice and the Campaign for Southern Equality, argued that the law was motivated by animus toward gay and transgender people and that it unconstitutionally endorsed and provided exclusive protection for “certain narrow religious beliefs.”
Lawyers for the state responded that the law did not affect the rights of gay or transgender people and that it would not favor a particular religious doctrine any more than conscientious objector laws do.
“Protection of free conscience and the free exercise of religion are legitimate and compelling governmental interests,” lawyers for the state said in a motion. It is reasonable to protect the convictions outlined in the law, they continued, “even though plaintiffs disagree with those beliefs and find them ‘offensive.’ ”
But Judge Reeves countered that there were already laws in Mississippi that protect religious beliefs from government interference. The difference, he said, is that those laws protect all beliefs and not specific ones, which the judge ruled would violate the First Amendment’s establishment clause.
“If three specific beliefs are ‘protected by this act,’ it follows that every other religious belief a citizen holds is not protected by the act,” he wrote, saying that Christians who hold different views would “become second-class Christians” in Mississippi.
Judge Reeves also said the law would establish “a broad-based system by which L.G.B.T. persons and unmarried persons can be subjected to differential treatment based solely on their status.”
http://www.nytimes.com/2016/07/02/us/mississippi-law-protecting-opponents-of-gay-marriage-is-blocked.html
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