Legal News for Thurs 9/12 - Law Firms Sue Each Other Over J&J $6.5b Settlement, Court Ruling on Overtime Pay Rules, Bayer's Roundup Trial Win and an AI Music Fraud Indictment

Minimum Competence

This Day in Legal History: Brown v. Board Stands

On September 12, 1958, the U.S. Supreme Court issued a unanimous decision in Cooper v. Aaron, reaffirming the authority of federal courts and rejecting Arkansas's attempt to defy the landmark Brown v. Board of Education ruling. The case arose after Arkansas Governor Orval Faubus and the state legislature openly resisted desegregation, particularly in Little Rock, where African American students were blocked from entering Central High School. Arkansas argued that it was not bound by the Brown decision, claiming state sovereignty over education. The Supreme Court decisively rejected this argument, emphasizing that the Constitution is the supreme law of the land and that state officials are bound by its rulings.

In a powerful opinion, the Court reiterated that its 1954 decision in Brown, which declared racial segregation in public schools unconstitutional, was "the law of the land." The justices underscored that state defiance of federal court orders violated the Constitution, asserting that "the basic principle that the federal judiciary is supreme in the exposition of the law of the Constitution" must be upheld. This decision was critical in enforcing civil rights and strengthening federal power to ensure desegregation, marking a pivotal moment in the fight against state resistance to integration.

Three law firms leading litigation against Johnson & Johnson (J&J) over talc-related cancer claims are now clashing in court. Beasley Allen, an Alabama-based firm, has sued the Smith Law Firm and Porter Malouf, alleging they owe more than $1 million in litigation expenses. Beasley Allen also claims that Smith Law, burdened by up to $240 million in debt to outside funders, is pushing clients to accept a $6.5 billion settlement with J&J that Beasley opposes.

The settlement deal requires 75% approval from claimants and was initiated as J&J sought bankruptcy protection for its talc-related liabilities. Beasley Allen argues the settlement is unfair and insufficient for clients, while Smith Law supports it. Smith Law denies the allegations, calling Beasley Allen’s lawsuit "baseless." Beasley Allen contends that Smith’s financial issues have caused the firm to undermine their joint litigation agreement, which began in 2014. The dispute centers on alleged unpaid expenses and control over client decisions. Additionally, Beasley Allen is involved in a separate legal battle accusing J&J of misusing the bankruptcy process.

J&J Talc Suit Law Firms Clash Over $6.5 Billion Settlement (2)

J&J's proposed talc settlement sparks lawsuit between plaintiffs' firms | Reuters

The U.S. Court of Appeals for the Fifth Circuit has upheld the Labor Department's authority to use salary levels in determining overtime pay exemptions, supporting a rule issued under the Trump administration and providing a legal boost for a similar rule introduced by the Biden administration. The ruling involved a 2019 regulation that mandates salaried workers earning less than $35,568 annually to receive overtime pay, which was challenged by Robert Mayfield, a business owner from Texas.

Mayfield argued that overtime exemptions under the Fair Labor Standards Act (FLSA) should be based solely on job duties, not salary levels. However, the court found that the Department of Labor (DOL) has long held the authority to set salary thresholds, with guidance from Congress.

This decision is expected to bolster the Biden administration’s 2024 overtime rule, which raises the salary threshold to $58,656 and aims to expand overtime protections to 4 million workers. Mayfield's legal challenge partly aimed to prevent the Biden rule from taking effect, but courts have consistently sided with the DOL. This ruling is seen as a win for the Biden administration in its effort to expand worker protections.

Fifth Circuit Upholds Labor Department’s Overtime Authority (2)

A Philadelphia jury ruled in favor of Bayer's Monsanto in a lawsuit claiming that the company's Roundup weed killer causes cancer. This marks a win for Bayer, which acquired Monsanto in 2018 for $63 billion and has since faced numerous lawsuits alleging Roundup's cancer risks. The case involved product liability claims, but the jury sided with Monsanto, continuing Bayer's efforts to defend against the wave of litigation surrounding Roundup. Despite many legal challenges, this verdict adds to a series of mixed outcomes for Bayer in Roundup-related cases.

Jury rules in favor of Bayer's Monsanto in Philadelphia trial over Roundup | Reuters

A federal indictment has charged Michael Smith with using bots to artificially inflate streaming numbers for AI-generated music, earning over $10 million in royalties. Smith’s scheme, which spanned seven years, involved creating thousands of fake email accounts to stream his AI-generated tracks on platforms like Spotify and Apple Music. AI allowed Smith to scale the operation by generating vast amounts of content, evading detection for years.

The indictment marks the first criminal case involving artificially inflated music streams, signaling the Department of Justice’s increasing focus on streaming fraud. Despite some platforms identifying suspicious activity early on, Smith continued his scheme by using bots to manipulate stream counts. The indictment highlights the vulnerability of streaming platforms to fraud, as well as the potential impact on the music industry’s revenue model. The DOJ charged Smith with conspiracy to commit wire fraud, wire fraud, and money laundering. This case emphasizes the need for stronger fraud-prevention measures as AI technology becomes more integrated into content creation.

AI Music Fraud Indictment Brings Scrutiny to Streaming Inflation

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