Legal News for Mon 1/13 - SCOTUS TikTok Ban Hearing, Jack Smith Resigns DOJ, Apple $1.8b UK Suit and Medicare Drug Price Negotiations

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This Day in Legal History: Wilder Elected First Black Governor

On January 13, 1990, Lawrence Douglas Wilder made history by becoming the first African American elected governor of a U.S. state, taking office as the 66th governor of Virginia. Sworn in by former U.S. Supreme Court Justice Lewis F. Powell Jr., Wilder's inauguration symbolized a milestone in American political and civil rights history. His election represented the culmination of decades of progress in dismantling racial barriers, particularly poignant in Virginia, a state with a complex history as the capital of the Confederacy during the Civil War.

Wilder, a Democrat, had previously served as the lieutenant governor of Virginia from 1986 to 1990, and earlier in the Virginia State Senate, where he was known for his advocacy for civil rights, education, and criminal justice reform. His gubernatorial campaign focused on pragmatic leadership, fiscal responsibility, and bridging divides in a state still grappling with its historical legacies of segregation and inequality. Wilder's narrow victory highlighted the increasing political influence of African Americans in the U.S. and underscored the potential for diverse representation at the highest levels of government.

During his tenure, Wilder prioritized issues such as improving public education, reducing the state budget deficit, and enacting stricter gun control measures. Following his time as governor, he continued to serve the public as the mayor of Richmond from 2005 to 2009, further solidifying his legacy as a trailblazer and dedicated public servant. Wilder's career remains a testament to the possibilities of progress and a reflection of the changing political and social landscape of the United States.

The U.S. Supreme Court is considering a case involving a law that requires TikTok's Chinese parent company, ByteDance, to sell the platform or face a U.S. ban, with a compliance deadline of January 19, 2025. TikTok's lawyer, Noel Francisco, warned that endorsing such a law could set a precedent allowing Congress to target other companies on similar grounds, potentially infringing on First Amendment protections. Francisco cited examples like AMC Theaters, which was once owned by a Chinese company, to illustrate the broader implications.

The law was passed with bipartisan support due to concerns over national security, with lawmakers fearing the Chinese government could use TikTok to spy on Americans or spread propaganda. TikTok content creators, represented by lawyer Jeffrey Fisher, argued the law unfairly singles out TikTok while ignoring other Chinese-owned platforms like Temu, which also collect U.S. user data.

Solicitor General Elizabeth Prelogar, representing the Biden administration, defended the law, stating it is essential to push ByteDance toward divestiture to mitigate risks from foreign adversaries. If implemented, the ban would prevent new downloads of TikTok, leading to the app’s eventual obsolescence. The justices appeared divided, balancing national security concerns with constitutional protections of free speech. Former President Donald Trump has urged the court to delay the deadline until his administration, beginning January 20, could pursue a political resolution.

TikTok warns of broad consequences if Supreme Court allows ban | Reuters

U.S. Special Counsel Jack Smith, who prosecuted federal cases against Donald Trump for attempting to overturn the 2020 election and mishandling classified documents, has resigned from the Department of Justice. His resignation, effective January 10, 2025, follows Trump’s victory in the 2024 election, which made the continuation of these cases against the president-elect untenable due to DOJ rules prohibiting the prosecution of a sitting president. Smith’s cases were already hindered by legal setbacks, including rulings granting Trump broad immunity for actions taken as president.

Smith submitted his final confidential report on January 7 and defended the merits of his prosecutions while requesting dismissal of the charges. His work led to historic firsts, as Trump became the first former U.S. president federally indicted, accused of retaining classified national security documents and attempting to disrupt the certification of the 2020 election. Both cases, however, faced legal delays, with one dismissed by a Trump-appointed judge and the other paused due to Supreme Court rulings on presidential immunity.

Trump criticized Smith’s investigations as politically motivated and pledged to dismiss him upon taking office. Smith’s tenure included significant legal challenges, culminating in the decision to halt prosecutions against Trump while continuing efforts against associates involved in obstruction. Other legal cases, such as the Georgia election interference case, remain stalled or unresolved. Smith’s resignation marks the end of his role in a polarizing chapter of U.S. legal and political history.

Trump prosecutor Jack Smith resigns from Justice Department | Reuters

Apple is defending itself against a £1.5 billion ($1.8 billion) class-action lawsuit in the UK, which alleges the company abused its dominance by charging a 30% commission on App Store transactions, unfairly inflating costs for approximately 20 million iPhone and iPad users. The lawsuit, led by British academic Rachael Kent, claims Apple maintains a monopoly over app distribution and imposes restrictive terms that harm developers and consumers alike.

Apple argues the case lacks merit, emphasizing that most developers pay no commission and highlighting the benefits of its iOS ecosystem, which prioritizes security and innovation. The company further defends its practices as a legitimate use of its intellectual property, dismissing allegations as an attempt to undermine its rights.

This is the first large-scale lawsuit against a tech giant to go to trial under the UK’s new class-action regime, with additional cases targeting Apple, Google, Meta, and Amazon expected to follow. A similar $1.1 billion case against Google over Play Store fees is set for later in 2025. The trial will last seven weeks, with Apple’s CFO, Kevan Parekh, scheduled to provide testimony.

Apple fights $1.8 billion App Store lawsuit in first of UK class actions against tech giants | Reuters

The Biden administration’s negotiation of Medicare drug prices under the Inflation Reduction Act revealed the strategic approaches taken by both the Centers for Medicare & Medicaid Services (CMS) and pharmaceutical companies. These closed-door negotiations included legal, commercial, and policy experts on both sides, reflecting the complexity of determining prices for some of Medicare’s most expensive drugs. The finalized cuts, announced in August 2024, ranged from 38% to 79%, aiming to generate billions in savings. However, skepticism remains over whether these savings will fully materialize due to offsetting factors.

Pharmaceutical companies tailored their delegations to include experts in market access, global pricing, health economics, and portfolio strategy, reflecting their varied priorities. AstraZeneca, for example, sent contract operations specialists as part of its broader lawsuit challenging the program’s implementation. Meanwhile, Novartis focused on market access for its heart failure drug, Entresto, expressing concerns about reduced patient access. Other companies, including Merck and AbbVie, redacted participant details, citing proprietary considerations.

Legal teams were present at nearly every meeting, underscoring ongoing litigation over the program’s constitutionality. Manufacturers have largely been unsuccessful in court, although some have won partial victories. Topics discussed during negotiations, such as clinical value and FDA approvals, offered insights into how both sides justified price cuts.

The CMS plans to expand the program with additional drugs in its next negotiation round, which will occur under the incoming Trump administration. President-elect Trump has appointed Mehmet Oz to lead the CMS, signaling potential shifts in how the program is managed. Industry observers see these initial negotiations as a test case for broader reforms in U.S. drug pricing policy.

Drug Industry Lawyers, Experts Helped Shape US Drug Price Cuts

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