Minimum Competence

Andrew and Gina Leahey

Minimum Competence is your daily companion for legal news, designed to bring you up to speed on the day’s major legal stories during your commute home. Each episode is short, clear, and informative—just enough to make you minimally competent on the key developments in law, policy, and regulation. Whether you’re a lawyer, law student, journalist, or just legal-curious, you’ll get a smart summary without the fluff. A full transcript of each episode is available via the companion newsletter at www.minimumcomp.com. www.minimumcomp.com

  1. 20h ago

    Legal News for Weds 6/24 - NY Hate Speech Social Media Law, YouTube Settles Social Media Algorithmic Harm Case, Federal Judge Vacates Trump Courthouse Immigration Arrest Policy

    This Day in Legal History: Dobbs On June 24, 2022, the U.S. Supreme Court issued its decision in Dobbs v. Jackson Women’s Health Organization, a case that fundamentally changed American constitutional law. The case centered on a Mississippi statute that prohibited most abortions after 15 weeks of pregnancy. In a 6–3 ruling, the Court held that the Constitution does not protect a right to abortion. The decision expressly overturned Roe v. Wade, decided in 1973, and Planned Parenthood v. Casey, decided in 1992. Justice Samuel Alito wrote the majority opinion, arguing that abortion was not a right deeply rooted in the nation’s history and tradition. The ruling returned the authority to regulate abortion primarily to the states. Almost immediately, abortion access began to vary widely across the country, depending on state law. Some states enforced near-total bans or severe restrictions, while others expanded protections for abortion access. The decision was also significant because it narrowed the use of substantive due process, the doctrine under which courts have recognized certain unenumerated constitutional rights. Supporters of the ruling argued that the Court had corrected a constitutional error and restored democratic control over abortion policy. Critics argued that the decision removed a long-recognized liberty interest and placed major personal medical decisions under state control. Dobbs also sparked renewed debate over stare decisis, the principle that courts should generally follow precedent. For many legal observers, the case became a defining example of how changes in the Court’s membership can reshape constitutional rights. June 24 therefore stands as the date the Supreme Court ended the federal constitutional right to abortion and transformed the legal landscape of reproductive freedom in the United States. New York’s Court of Appeals, the state’s highest court, has upheld the constitutionality of a law designed to restrict hate speech on social media platforms. The ruling represents a significant victory for free speech limitations in the digital age. Here’s what happened: New York passed a law requiring social media platforms to remove or restrict content that incites hatred or violence based on protected characteristics like race, religion, ethnicity, or national origin. The law’s supporters argue that online platforms have become the new town squares where public discourse happens, and that hate speech can radicalize people and lead to real-world violence. Critics worried the law was too broad and would violate the First Amendment by punishing protected speech. For generations, the government couldn’t regulate speech just because it was hateful or offensive. The First Amendment protected even deeply offensive speech. But online platforms create a new kind of public space where algorithms amplify divisive content, and a single post can reach millions. The question the court had to answer was: Can states regulate hate speech on these platforms the way they might regulate incitement to violence? New York’s highest court said yes, the law likely passes constitutional scrutiny. The court found that the law targets speech that genuinely incites hatred and violence, not merely offensive opinions. It’s narrowly tailored to achieve the state’s legitimate interest in preventing violence and discrimination. This ruling opens the door for other states to pass similar laws. It represents a potential shift in how courts balance the absolute protection of offensive speech against the harms caused by hate speech in the digital age. Tech companies will likely face increased regulation around hate speech, and the definition of what counts as unprotected incitement may narrow. The decision reflects a judicial recognition that online speech operates differently than traditional speech and may warrant different legal treatment. New York’s top court says hate speech social media law likely passes muster | Reuters Google’s YouTube has agreed to settle a lawsuit with a plaintiff rather than face a second trial over questions of social media liability and content moderation. The settlement ends litigation that challenged YouTube’s responsibility for user-generated content that allegedly caused harm. Here’s the broad strokes context: Section 230 of the Communications Decency Act is a federal law that shields online platforms from liability for content posted by users. In other words, if someone posts defamatory content on YouTube, the person who posted it can be sued, but YouTube itself typically cannot be held responsible. The logic is that Section 230 encourages platforms to host diverse content by protecting them from lawsuits about every post. However, plaintiffs have been arguing that Section 230 doesn’t shield platforms from all liability, and that platforms have a responsibility for content they actively moderate or promote. Imagine you own an apartment building. If a tenant commits a crime in their apartment, you’re not responsible for that crime. But if you knowingly rent apartments to criminals or knowingly create conditions that enable crime, that’s different. The question in social media cases is: When does YouTube’s moderation and recommendation algorithms cross the line from passive hosting into active promotion that removes Section 230 protection? YouTube settled rather than litigate this question again, suggesting the company wanted to avoid another trial where a jury might rule against it. The settlement amount and terms weren’t disclosed. Settlement doesn’t necessarily mean YouTube admitted wrongdoing, but it does avoid a precedent-setting jury verdict that could have limited Section 230 protections. This case illustrates the ongoing tension between platforms’ desire to host diverse content and their responsibility to moderate harmful material. As social media litigation continues, Section 230 protections may continue to erode, forcing platforms to be more responsible for content they host or recommend. Google’s YouTube settles case over social media harm to children | Reuters A federal judge has vacated (struck down) Trump administration policies that authorized immigration agents to arrest undocumented immigrants at courthouses. The ruling represents a significant limitation on immigration enforcement tactics. The Trump administration issued policies directing Immigration and Customs Enforcement (ICE) to conduct arrests of undocumented immigrants in and around courthouses, even during court proceedings. The policy’s supporters argued it was an effective enforcement tool that would apprehend deportable aliens. Critics argued the policy undermined the judicial system because it chilled access to courts. If immigrants fear being arrested when they go to court, they won’t report crimes, testify as witnesses, or seek legal protection from domestic violence. They’ll be afraid to appear for required court appearances related to immigration proceedings. The federal judge agreed with the critics. The courthouse is supposed to be a safe space where people can seek justice. Historically, both federal and state judges have issued standing orders prohibiting ICE arrests in courthouses because such arrests interfere with the administration of justice. If people are afraid to go to court because they might be arrested, the entire justice system suffers. Witnesses won’t testify, victims won’t report crimes, and the judicial process breaks down. The judge found that the administration’s policies violated well-established principles protecting courthouse access and were an abuse of enforcement discretion. The ICE agents conducting the arrests violated state court rules and judicial orders protecting courthouse integrity. Why this matters: This ruling reaffirms that even immigration enforcement—an area where the executive branch typically has broad authority—must respect core judicial functions. The decision protects immigrants’ ability to access courts without fear of enforcement. It may encourage undocumented immigrants to report crimes, testify in cases, and pursue legal remedies. Immigration advocates see this as a significant victory. Immigration enforcement officials may argue it limits their ability to apprehend deportable aliens. The decision reflects a judicial judgment that courthouse access is so fundamental that even immigration enforcement must yield to it. US judge vacates Trump immigration courthouse arrest policies | Reuters This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe

    7 min
  2. Legal News for Tues 6/23 - LA "Sanctuary City" Fight with Feds, Voter Roll Database Limits, and OpenAI, Cloud Computing, and the R&D Credit

    1d ago

    Legal News for Tues 6/23 - LA "Sanctuary City" Fight with Feds, Voter Roll Database Limits, and OpenAI, Cloud Computing, and the R&D Credit

    This Day in Legal History: Title IX On June 23, 1972, President Richard Nixon signed the Education Amendments of 1972, a sweeping federal education law that included what became one of the most consequential civil rights provisions in American history: Title IX. Title IX stated that no person in the United States, on the basis of sex, could be excluded from participation in, denied the benefits of, or subjected to discrimination under any education program or activity receiving federal financial assistance. The language was brief, but its legal effect was enormous because it tied sex-equality obligations to the federal funding received by schools, colleges, and universities. That structure gave the federal government a powerful enforcement tool: institutions that accepted federal education money also had to comply with anti-discrimination rules. Although Title IX is often remembered for transforming women’s and girls’ athletics, the law was never limited to sports. It also affected admissions, scholarships, hiring, classroom access, pregnancy discrimination, and later legal debates over sexual harassment and institutional responsibility. Before Title IX, many educational institutions openly limited opportunities for women, including through quotas, unequal athletic resources, and restricted access to professional programs. The statute helped turn those practices into legal liabilities rather than accepted traditions. In later decades, courts and federal agencies would shape Title IX’s meaning through regulations, enforcement actions, and major cases interpreting what counts as sex discrimination in education. Its influence reached far beyond individual lawsuits because schools had to rethink policies, reporting systems, athletic budgets, and equal-access obligations. Title IX also became a model for how civil rights law can operate through spending power, using federal money as the hook for national anti-discrimination standards. Its passage showed that a single sentence in a larger statute could become a foundation for generations of legal, political, and cultural change. On June 23, 1972, the federal government did more than amend education law; it created a durable legal framework for challenging sex discrimination wherever public money supported educational opportunity. A federal judge in California dismissed the Trump administration’s lawsuit challenging Los Angeles’s limits on cooperation with federal immigration enforcement. The administration had argued that the city’s ordinance was unconstitutional because it restricted the use of city resources to support federal immigration operations and limited the collection of citizenship-status information. U.S. District Judge Fernando Olguin rejected that argument, finding that Los Angeles was regulating the conduct of its own employees and agencies rather than trying to control the federal government. The dismissal was not necessarily the end of the case, because the judge allowed the administration to file an amended complaint. Los Angeles City Attorney Hydee Feldstein Soto praised the ruling, saying it confirmed that local governments can decide how to use their own personnel and resources. The lawsuit was filed after immigration-related protests in Los Angeles and after Trump sent troops to the city in response to unrest over deportation operations. The case is part of a broader Trump administration effort to challenge local “sanctuary” policies in Democratic-led jurisdictions. Similar administration lawsuits against Boston and Chicago have also been dismissed by federal judges. The White House did not immediately comment on the ruling. The decision leaves Los Angeles’s ordinance intact for now while giving the federal government another chance to revise its legal claims. US court dismisses Trump administration lawsuit over Los Angeles immigration policy | Reuters A federal judge in Washington, D.C., blocked the Trump administration from using a revised immigration database to help states check voter rolls. The database, known as SAVE, is used by the Department of Homeland Security to verify citizenship and immigration status, but the administration had changed it to make bulk searches easier for state and local officials reviewing voter eligibility. U.S. District Judge Sparkle Sooknanan sided with voting-rights and privacy groups that argued the changes made the system less reliable and could wrongly remove eligible voters from registration lists. The challengers said the database can be outdated, especially when naturalized citizens are still incorrectly listed as noncitizens. The judge also found that the revamped system raised serious privacy concerns because it gave users access to sensitive information, including Social Security numbers. DHS criticized the ruling and framed the case as part of its effort to prevent noncitizen voting. The ruling comes as the Trump administration has tried to expand the federal government’s role in election administration before the November 2026 midterm elections. Courts have already blocked several related efforts, including parts of executive orders involving proof-of-citizenship requirements and mail-ballot restrictions. The administration has also faced setbacks in lawsuits seeking full voter-roll data from states. For now, the decision limits how the federal government can use immigration records in voter-roll checks. Judge blocks Trump’s use of revamped immigration database for voter checks | Reuters In my Bloomberg column this week, I wrote about OpenAI’s request that Treasury update an outdated R&D tax credit rule for computer-related research expenses. My argument is that OpenAI’s position should not be dismissed as just another technology company asking for a more generous tax benefit. The problem is that the existing rule was designed for an older world of identifiable physical computers, not modern cloud computing, data centers, GPUs, and reserved compute capacity. Section 41 allows a research credit for certain amounts paid to another person for computer use in qualified research, but Treasury regulations narrow that benefit by requiring that the computer be owned and operated by someone else, located off the taxpayer’s premises, and not be a computer for which the taxpayer is the “primary user.” That “primary user” test made more sense when a taxpayer could point to a discrete machine, but it becomes unstable when a company is buying access to capacity inside a provider-owned cloud or data center. I argue that reserved or exclusive use of computing capacity should not automatically be treated as ownership or abuse, because modern AI research may require dedicated capacity for security, speed, and performance reasons. The real question should be whether the taxpayer is buying a third-party service or has effectively acquired, operated, or taken control of the infrastructure. Treasury can still protect against abuse without treating ordinary commercial cloud arrangements as disguised ownership. I suggest that a practical safe harbor could presume service treatment where the provider owns, operates, maintains, and houses the equipment off the taxpayer’s premises while bearing the incidents of ownership. That presumption should remain rebuttable where the taxpayer bears ownership-like risks or is simply routing its own equipment through another entity to claim the credit. The broader point is that modernizing the rule would not need to turn the R&D credit into an AI subsidy machine, but it would prevent an old regulatory framework from excluding a major category of modern research. The column closes with the idea that tax rules meant to police fake outsourcing should not end up penalizing real outsourcing just because the computing world no longer looks like it did when the rule was written. OpenAI’s Call for Modernized R&D Credit Rule Makes Perfect Sense This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe

    7 min
  3. 2d ago

    Legal News for Mon 6/22 - CA Parental Notification Ruling, Trump Birthright Citizenship Fight Rolls on and Cameras in Federal Courtrooms?

    This Day in Legal History: Plessy v. Ferguson On June 7, 1896, the Supreme Court upheld the constitutionality of racial segregation in the United States. In Plessy v. Ferguson, the Court ruled 7-1 that states could require separate facilities for Black and white people as long as those facilities were “separate but equal.” Homer Plessy, a man of mixed race, had violated a Louisiana law by sitting in a “whites only” railroad car. When arrested, he challenged the law as unconstitutional. Justice Henry Billings Brown wrote for the majority that the Fourteenth Amendment guaranteed political and legal equality but not social equality, and that the law was reasonable. Justice John Marshall Harlan issued a lone dissent, famously writing: “Our constitution is color-blind, and neither knows nor tolerates classes among its citizens.” This doctrine of “separate but equal” stood for nearly 60 years, providing legal cover for Jim Crow laws and racial apartheid across the South. Schools were drastically unequal in funding and resources. Hotels, restaurants, bathrooms, and water fountains were segregated by race. The doctrine was finally overturned in Brown v. Board of Education in 1954, which acknowledged that “separate educational facilities are inherently unequal” and violated the Fourteenth Amendment. Plessy v. Ferguson represents one of the most consequential wrong turns in Supreme Court history. What made it so damaging was not just the ruling, but the Court’s apparent good faith in the “separate but equal” framework—a comfort with the idea that segregation could be constitutional if resources were distributed evenly, a comfort the Court itself never actually required states to achieve. The case shows how courts can legitimize injustice through neutral-sounding language and deference to legislatures. A federal appeals court ruled this week that California schools cannot keep secret a student’s gender identity transition from their parents. Think of it this way: California had passed a law giving schools discretion to withhold from parents information about changes to a student’s gender expression or identity, reasoning that this protected students from potentially harmful family reactions. But the court found this violated parents’ constitutional rights to direct the upbringing and education of their children. The Supreme Court has long recognized that parents have a fundamental right to make decisions concerning the care, custody, and control of their children. This includes decisions about their education and health. California’s policy attempted to create an exception to parental notification by allowing schools to conceal information about gender identity changes from parents without parental knowledge or consent. The court said California went too far. The judges acknowledged that student safety is a legitimate concern, but concluded that blanket policies allowing schools to hide information from parents violate the constitutional rights that parents have. This case sits at the intersection of three important values: parental rights, student privacy, and student safety. On one side, parents argue they need information to support their children’s development and health. On the other, supporters of the California policy argued that some students face rejection or harm from parents if they learn about gender transitions, and that schools need confidentiality to protect vulnerable youth. The court sided with parental notification rights, but left open the question of whether schools can still withhold information in specific cases where there’s evidence of abuse or danger. The ruling doesn’t mean schools must immediately report every aspect of a student’s identity; rather, it means they generally cannot have a blanket policy of concealing gender-related information from parents. California Gender Transition Parental Notification Case The Supreme Court is set to hear arguments in Trump v. Barbara, a case with potentially enormous implications for citizenship law in America. Here’s what’s at stake: On his first day of his second term, President Trump signed an executive order attempting to deny birthright citizenship to children born in the U.S. if their parents entered the country illegally or are living and working in the U.S. on temporary visas. This directly challenges the Fourteenth Amendment, which provides that “all persons born or naturalized in the United States and subject to the jurisdiction thereof, are citizens.” For over 150 years, the United States has interpreted the Fourteenth Amendment to mean that virtually anyone born on U.S. soil becomes a U.S. citizen at birth, regardless of their parents’ immigration status. Trump’s order says the clause “subject to the jurisdiction thereof” excludes children of illegal aliens and temporary visa holders. The administration argues that these children are not fully “subject to the jurisdiction” of the United States in the way the amendment requires. Legal scholars and immigration advocates counter that “subject to the jurisdiction thereof” simply means not immune from U.S. law—which applies to everyone in the country, citizen and non-citizen alike. This case could affect millions of people. The U.S. currently grants automatic citizenship to roughly 250,000 to 375,000 children born to undocumented immigrants each year. If Trump v. Barbara succeeds, those children would not automatically be citizens. The case will require the Supreme Court to interpret the Fourteenth Amendment—one of the most fundamental provisions in the Constitution. The Court hasn’t definitively ruled on the citizenship status of children born to undocumented immigrants in modern times. The outcome will reshape American immigration law and the path to citizenship for generations to come. Litigation Tracker: Legal Challenges to Trump Administration Actions A Senate Judiciary Committee advanced two bipartisan bills that would expand camera access in the U.S. Supreme Court and other federal courtrooms. The bills, the Cameras in the Courtroom Act and the Sunshine in the Courtroom Act, now move to the full Senate for possible consideration. Supporters say the measures would make the judiciary more transparent by allowing the public to see important proceedings without having to attend in person. Senator Chuck Grassley, who chairs the committee and co-sponsored both bills, argued that Americans should be able to observe cases that affect the whole country, especially at the Supreme Court. Senator Amy Klobuchar also supported the effort, comparing courtroom access to the public’s ability to watch Congress on C-SPAN. The federal judiciary opposes the proposals and warned that cameras could create problems for jury trials, witness safety, courtroom security, and the administration of justice. The Supreme Court has traditionally barred video coverage, although it began offering live audio of oral arguments during the COVID-19 pandemic. The Cameras in the Courtroom Act would require televised coverage of public Supreme Court proceedings unless a majority of justices found that cameras would violate due process. The Sunshine in the Courtroom Act would give federal judges broader discretion to allow photography, recording, broadcasting, or televising of court proceedings. That bill also includes safeguards for jurors and witnesses, limits coverage of private conversations, and would expire after three years unless Congress renews it. US Senate panel advances bills allowing cameras in US Supreme Court, lower courts | Reuters This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe

    7 min
  4. 6d ago

    Legal News for Thurs 6/18 - Polymarket is Gambling in Michigan, Temu Wiretap Suit Survives and a Do Not Call Class Action

    This Day in Legal History: Susan B. Anthony Fined for Voting On this day in 1873, in a federal courtroom in Canandaigua, New York, Judge Ward Hunt fined Susan B. Anthony one hundred dollars for the crime of voting. Anthony had walked into a polling place in Rochester on November 5, 1872, and cast a ballot for Ulysses S. Grant. She was arrested two weeks later under a federal statute, the Enforcement Act of 1870, that made it a crime to “knowingly” vote without being legally entitled to. Her defense was straightforward: the Fourteenth Amendment, ratified four years earlier, said that all persons born in the United States were citizens, and citizenship carried with it the right to vote. Judge Hunt did not let the jury decide. He directed a verdict of guilty without even letting them deliberate — something that would be plainly unconstitutional today — and then asked Anthony if she had anything to say before sentence was passed. She did. She told the court that it had trampled on her natural rights, her civil rights, her political rights, and her judicial rights, and that under such circumstances she would never pay a dollar of the unjust penalty. She never did. Hunt declined to jail her for nonpayment, which would have given her the path to appeal she wanted, and the case died without ever reaching the Supreme Court. The Nineteenth Amendment, which finally guaranteed women the right to vote, was ratified forty-seven years later, in 1920 — fourteen years after Anthony’s death. The lesson lawyers usually take from the case is procedural — about directed verdicts, about appellate review, about the ways a determined trial judge can keep a constitutional question off the docket. The lesson worth keeping today is broader. The legal system that one generation treats as obvious common sense is the one a later generation looks back on and cannot understand how anyone thought was just. Anthony lost in court and won in history. That happens more often than the daily case law makes it look. A federal judge in Michigan ruled Wednesday against Polymarket, a platform that lets people place bets on the outcomes of sports games. Here’s what happened: Polymarket had tried to convince Michigan’s regulators that what it does is not really gambling — it’s a sophisticated financial product called a “swap,” something only the federal government regulates. Polymarket’s argument was: we’re not a sportsbook, we’re a financial market, just like commodity futures markets. A wheat farmer, for example, might use that kind of contract to lock in a price for next year’s harvest. Michigan’s gaming regulators weren’t buying it. They said Polymarket looked and acted like an illegal sportsbook — people betting on sports without a license — and shut it down. Polymarket went to federal court asking the judge to block Michigan from enforcing the law while the lawsuit continues. The judge said no. He found that Polymarket’s argument didn’t make sense; if something is a bet on a football game, calling it something else doesn’t change what it is. The judge also said that even if Polymarket lost the Michigan market, that’s a business loss that money can compensate — not the kind of serious, immediate harm that would justify stopping Michigan from enforcing its own gambling laws. This case matters because it will help determine how the federal government and individual states regulate online prediction markets going forward. Right now, companies like Polymarket are in legal limbo, unable to operate in states that say they’re gambling, while arguing they should operate under federal financial rules. The courts need to settle which it is. Mich. Judge Opens Door For Prediction Market Enforcement An Illinois federal judge ruled Wednesday that a class action lawsuit can proceed against an advertising-technology company that allegedly snuck Americans’ personal information to PDD Holdings, the Chinese parent company of the discount-shopping app Temu. Think of it this way: when you visit websites or use apps, tracking code collects information about you — what you click on, what you buy, where you’re located. That’s normal ad-tech business. But this company allegedly took that data and secretly sent it to China for the Chinese parent company’s benefit. The lawsuit uses two legal theories. First: the federal wiretap law makes it illegal to secretly intercept someone’s communications or data without permission — and the plaintiffs argue this is exactly what happened. The company embedded invisible code on websites that grabbed user data without asking. Second: there’s a new government regulation that forbids sending Americans’ sensitive personal data to countries the U.S. government considers hostile. China is on that list. The company argued the lawsuit should be dismissed, claiming what it does is standard advertising practice and not really interception. The judge disagreed. He said the lawsuit makes plausible claims of wrongdoing and can proceed. Why this matters: this is one of the first big tests of whether tech companies can keep hiding data-sharing practices in fine-print privacy policies. The judge is signaling that burying consent in a privacy policy probably isn’t enough if you’re secretly sending data to foreign adversaries. The case will now move to discovery — where lawyers dig through company records — and that’s usually expensive enough to push companies toward settlement. Ad Seller Can’t Shake Wiretap Suit Over Temu Data Transfers A class action lawsuit filed Wednesday accuses Hilton Grand Vacations — the timeshare and vacation club subsidiary of Hilton Hotels — of repeatedly calling consumers who had registered their phone numbers on the federal Do Not Call list. This is a straightforward violation of federal law. The Do Not Call list is the registry that exists specifically so people can stop getting telemarketing calls. If your number is on that list, companies can’t call you to pitch products unless you’ve done business with them recently or given them permission. Hilton allegedly ignored that. According to the complaint, the company and its marketing contractors called people repeatedly, sometimes years after their numbers were registered on the Do Not Call list, pitching timeshare vacation packages. Here’s why the damages can be huge: the federal law lets you sue for $500 per violation — per call. If a company makes a mistake and thinks the violation was intentional, the damages triple to $1,500 per call. In a class action involving thousands of unwanted calls, those numbers balloon fast. Hilton and other timeshare companies have historically tried to escape liability by claiming their contractors made the calls, not Hilton itself. But courts increasingly reject that defense. If Hilton controlled the marketing campaign and the contractors worked on Hilton’s behalf, Hilton is responsible. The law here is actually simpler than most litigation: a company’s obligation is clear, and the violation is easy to prove if calls were made to numbers on the federal Do Not Call list. Hilton Facing Class Action Over Marketing Calls This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe

    7 min
  5. Jun 17

    Legal News for Weds 6/17 - Judge Dugan Loses Bid to Vacate, Goldstein Loses Acquittal Motion, Guardant Patent Loss, and Problematic IRS Data Sharing with ICE

    This Day in Legal History: The Watergate Burglary On this day in 1972, at roughly 2:30 in the morning, a security guard at the Watergate office complex on Virginia Avenue in Washington named Frank Wills noticed that the latches on a stairwell door had been taped over and called the District police. The police arrested five men inside the offices of the Democratic National Committee on the sixth floor: James McCord, Bernard Barker, Virgilio Gonzalez, Eugenio Martinez, and Frank Sturgis. McCord was the security coordinator for the Committee to Re-Elect the President. Two days later, the FBI traced a $25,000 cashier’s check found in Barker’s bank account to the Committee to Re-Elect’s finance chairman. The burglary itself was a third-rate one — bad lockpicking, surveillance gear that did not work, men carrying address books that linked them to the White House — but the legal consequences took two years to play out and rewrote large parts of American constitutional law in the process. The Senate Select Committee on Presidential Campaign Activities, chaired by Sam Ervin of North Carolina, conducted public hearings in the summer of 1973 that produced the disclosure of the White House taping system. The Saturday Night Massacre in October 1973 — Nixon’s firing of Special Prosecutor Archibald Cox and the resignations of Attorney General Elliot Richardson and Deputy Attorney General William Ruckelshaus — produced the legal scholarship that became the modern law of presidential removal and the Ethics in Government Act of 1978’s independent-counsel framework. United States v. Nixon in July 1974 produced the doctrine that executive privilege is qualified rather than absolute and must yield to a demonstrated need in a criminal proceeding, a holding that is still the foundational separation-of-powers case the Court returns to whenever an administration claims that internal deliberations cannot be subpoenaed. The articles of impeachment voted by the House Judiciary Committee in late July 1974 produced the modern template for impeachment-as-constitutional-remedy that has been deployed four times since. Nixon resigned on August 9, 1974. The constitutional residue of what began with five men and a roll of tape in a Watergate stairwell is in the Federal Election Campaign Act amendments, the Foreign Intelligence Surveillance Act, the Inspector General Act, the Presidential Records Act, the post-Saturday-Night-Massacre statute book that defines what limits an administration faces when it tries to use the criminal-justice system politically. Fifty-four years on, the question of how much of that residue has held up is, as the saying goes, the question. U.S. District Judge Lynn Adelman of the Eastern District of Wisconsin on Tuesday denied former Milwaukee County Circuit Judge Hannah Dugan’s post-trial motion to vacate her December 2025 conviction for felony obstruction of a federal proceeding. Dugan had been charged after she let Eduardo Flores-Ruiz, who had appeared in her courtroom in April 2025 on a state misdemeanor, and his attorney leave through a side door of her courtroom after Immigration and Customs Enforcement officers had assembled in the public hallway to arrest him on a federal civil immigration warrant. A jury found Dugan guilty of obstruction and acquitted her of the lesser concealing-an-individual count. Her post-trial motion pressed two principal arguments. The first was that the Fourth Circuit’s recent decision in United States v. Edwards — which addressed the scope of 18 U.S.C. § 1505 obstruction as applied to interference with administrative agency proceedings — applies to ICE warrant service and so the trial court should have given a narrower jury instruction. The second was that her conduct was protected by the doctrine of judicial immunity for acts taken on the bench. Judge Adelman rejected both. On Edwards, the court held that the Fourth Circuit’s reasoning addresses a different statutory provision and a different agency context, and that Dugan’s case is governed by Seventh Circuit precedent on the obstruction statute she was convicted under. On judicial immunity, the court held that the doctrine is a civil shield against private damages liability and does not bar federal criminal prosecution for affirmative conduct in aid of evading federal law-enforcement officers. Dugan’s team has announced that the case will go to the Seventh Circuit. Sentencing is now back on the calendar. The appellate question that will dominate the briefing is the one Judge Adelman teed up: whether a state judge taking administrative action in the courthouse — guiding a litigant to a back exit — falls inside or outside the federal obstruction statute’s reach when the action is calculated to defeat federal law-enforcement service. That issue has not been squarely decided in the Seventh Circuit. The case is going to be the vehicle. Ex-Judge Loses Bid To Undo ICE Obstruction Conviction | Law360 A Maryland federal judge on Tuesday denied SCOTUSblog co-founder Thomas C. Goldstein’s post-trial motion for acquittal or, in the alternative, a new trial on the twelve counts on which a jury had convicted him in February — tax evasion, assisting in the preparation of false returns, willful failure to pay over employment taxes, and false statements to mortgage lenders. The case is one of the more striking falls in modern Supreme Court practice. Goldstein had argued for years before the Court and was, for two decades, one of the most visible private SCOTUS practitioners in the country, with SCOTUSblog itself becoming the standard public-facing reference for Supreme Court news. The criminal case grew out of his recreational high-stakes poker, which prosecutors used to build out a pattern of unreported gambling income, gambling debts paid out of law-firm funds, and gambling losses claimed as business expenses. The post-trial motion principally argued that the trial court’s jury instructions on willfulness improperly conflated the negligence standard with the higher mens rea Cheek v. United States requires in federal tax-evasion prosecutions, and that the court had wrongly excluded evidence going to Goldstein’s claimed reliance on his accountants’ advice. The court rejected both. On the willfulness instruction, the court found the instruction tracked the Fourth Circuit’s pattern instruction on Cheek and made clear to the jury that a good-faith misunderstanding of the law was a defense. On the accountant-reliance evidence, the court held that the offer of proof was insufficient to establish that Goldstein had actually relied on professional advice in the particular omissions the indictment turned on, as opposed to relying on his own judgment. Sentencing is now the next event. The federal sentencing guidelines on the tax counts alone, with the loss amount the jury found, point to a substantial custodial term. Watch for an appeal that focuses on the willfulness instruction; that is the cleanest reversible-error vehicle in the record. SCOTUSblog Founder Goldstein Denied Acquittal Or Retrial | Law360 A Delaware federal judge on Tuesday denied Guardant Health’s post-trial motion to vacate, reduce, or stay enforcement of the $83.4 million jury verdict TwinStrand Biosciences won against it in late 2023 for willful infringement of diagnostic-sequencing patents covering duplex-sequencing technology used in liquid-biopsy cancer-screening assays. The court also declined to enhance the award under 35 U.S.C. § 284, even though the jury had found willfulness, reasoning that the multi-factor Read v. Portec analysis the Federal Circuit has refined in Halo Electronics and its progeny cut both ways here: Guardant’s pre-suit notice and continued use of the accused technology supported some enhancement, but its defenses on infringement and validity, while ultimately rejected, were not objectively reckless. The decision is notable for two doctrinal reasons. First, it reflects how district courts are continuing to deploy Halo’s discretion-based framework in the post-pandemic-era diagnostic-patent landscape, where the gap between objectively defensible defenses and reckless infringement is being drawn case by case in a way that is making certworthy issues for the Federal Circuit and, eventually, the Supreme Court. Second, it underscores the $83.4 million is significant but not transformative: the broader competitive question in the diagnostic-sequencing space is whether Guardant can design around the asserted claims fast enough to keep its cancer-screening assays on the market without paying a recurring royalty to TwinStrand. Guardant has indicated it will appeal to the Federal Circuit. Both the underlying infringement findings and the no-enhancement ruling are likely to be appealed in parallel — Guardant on infringement and validity, TwinStrand on the refusal to enhance. The verdict stands for now. Del. Judge Upholds $83.4M Patent Verdict Against Guardant | Law360 My Bloomberg Tax column this week argues that the IRS’s disclosure of taxpayer address information to ICE should be understood less as a narrow immigration-enforcement controversy and more as a tax-data governance failure. I argue that Section 6103 does not make IRS data impossible to share, but it does make confidentiality the default and disclosure the exception. That distinction matters because a statutory exception should not become a bulk-transfer mechanism whenever another agency wants access to IRS records. The IRS holds unusually sensitive information because taxpayers are legally compelled to provide it, so any interagency disclosure should require necessity, precision, security, and auditability on a record-by-record basis. The TIGTA report is troubling because the IRS apparently built an automated matching process that was vulnerable to bad ICE inputs, inconsistent formatting, malformed records, and weak matching rules. ICE also had unres

    10 min
  6. Jun 16

    Legal News for Tues 6/16 - SCOTUS Denies Certs on Student Speech and Gun Industry Suits, TCS' $165m Trade-Secret Liability

    This Day in Legal History: The End of Roosevelt’s Hundred Days On this day in 1933, Franklin Roosevelt signed three pieces of legislation that closed out what the country has been calling the Hundred Days ever since: the Banking Act of 1933, the National Industrial Recovery Act, and the Farm Credit Act, with the Home Owners’ Loan Act having been signed three days earlier. The Banking Act of 1933 is the one most lawyers know, because the popular name attached to it — Glass-Steagall — has been doing rhetorical work in financial-regulation debates for ninety-three years. Carter Glass of Virginia and Henry Steagall of Alabama, the Senate Banking chair and the House Banking chair respectively, built the statute around two structural propositions: that commercial banks should be separated from investment banking and the speculative securities business that had helped pull the country into the Great Depression, and that depositors at member banks should be protected by a federal deposit insurance scheme so that a panic at one bank did not become a panic everywhere. The deposit insurance piece became the Federal Deposit Insurance Corporation. The separation piece was the part that got partially repealed by the Gramm-Leach-Bliley Act in 1999 and then revisited in the aftermath of the 2008 financial crisis. The National Industrial Recovery Act, signed the same day, set up the National Recovery Administration and the Public Works Administration and was meant to coordinate industry-wide codes of fair competition; the Supreme Court struck the centerpiece codes provision down two years later in A.L.A. Schechter Poultry Corp. v. United States in 1935 on nondelegation and Commerce Clause grounds, an opinion that nearly killed the early New Deal and prompted Roosevelt’s court-packing plan two years after that. The Farm Credit Act consolidated and refinanced the agricultural lending system that the Great Depression had taken to the brink. The legal point worth remembering is that this last day of the Hundred Days was, in retrospect, the moment the federal regulatory state of the twentieth century stopped being a collection of post-Civil-War commissions and started being the integrated structure of agencies, deposit-insurance funds, securities oversight, labor regulation, and welfare administration that the country has lived inside ever since. The fact that the Schechter Court was waiting in the wings to strike down the most ambitious piece of that day’s work is part of the lesson. The constitutional question of how much economic ordering a Congress and a President can do at once was not answered on June 16, 1933 — it was framed. The Supreme Court on Monday declined to take up E.D. v. Noblesville School District, a free-speech challenge brought by the parents of an Indiana high-school student whose school district had refused to let her post flyers for her student-run anti-abortion club on classroom and hallway walls. The student, identified in court papers by initials because she was a minor when the case was filed, had been the founder of Noblesville High School’s Students for Life chapter. The flyers she wanted posted featured images of demonstrators holding “Defund Planned Parenthood” signs. Noblesville Schools removed the flyers under a district policy giving administrators content-based authority over student materials displayed on school property, and the parents sued under the First Amendment. The Southern District of Indiana sided with the district in 2024, and the Seventh Circuit affirmed in 2025, both applying Hazelwood School District v. Kuhlmeier, the 1988 case that lets public schools regulate the content of school-sponsored expressive activities if the regulation is reasonably related to legitimate pedagogical concerns. The cert denial leaves Hazelwood intact in the Seventh Circuit and everywhere else. The piece worth flagging is Justice Alito’s dissent from denial, joined by Justice Thomas, which urged the Court to grant review and use the case to revisit Hazelwood’s framework. The dissent argues that Hazelwood was wrongly decided to the extent that it lets schools draw viewpoint-based lines under the cover of pedagogical-concern review, and that the doctrinal distinction Hazelwood draws between school-sponsored speech and Tinker-style independent student speech has become unworkable in the age of student clubs, distributed school messaging, and post-Mahanoy off-campus speech. Two votes are not five votes. But two votes naming a case as the vehicle they wanted are how the next decade of student-speech cases gets queued up. The Court has now told litigants what kind of vehicle it might be looking for. Expect a steady drumbeat of cert petitions teeing up the Hazelwood revisit over the next several terms. US Supreme Court turns away free speech claim by anti-abortion student | Reuters via Maryland Daily Record The Supreme Court also turned away on Monday the National Shooting Sports Foundation’s challenge to New York’s General Business Law § 898, the public-nuisance statute the New York legislature passed in 2021 to let the state and certain private plaintiffs sue firearms manufacturers, distributors, and dealers for endangering the public through the marketing and distribution of their products. The challenge was supported by Smith & Wesson, Sturm, Ruger, Beretta, Glock, and Sig Sauer, and went up on appeal from a 2024 Second Circuit decision that held the New York statute is not preempted by the Protection of Lawful Commerce in Arms Act, the 2005 federal statute that broadly immunizes the gun industry from civil liability arising from the criminal misuse of firearms. The Second Circuit reasoned that the PLCAA’s “predicate exception” — which preserves state-law claims when the firearms industry has violated a state or federal statute applicable to the sale or marketing of firearms — covers a state public-nuisance statute that, by its terms, regulates the sale and marketing of firearms. The cert denial leaves the Second Circuit’s reading in place, leaves New York’s statute on the books and enforceable, and leaves the industry with a litigation exposure it had hoped to neutralize. The strategic part of the case is going to be the copycat statutes. California, New Jersey, Washington, Delaware, Illinois, and Hawaii have all enacted versions of the New York approach since 2021, and other states have similar bills in committee. Each of those statutes is going to invite its own PLCAA-preemption fight in its own circuit, and the cumulative jurisprudence is going to get built case by case until either Congress amends PLCAA or the Court decides one of these cases is the right vehicle to step in. Today’s denial was not that vehicle. SCOTUS Upholds NY Law Allowing Lawsuits Against Gunmakers | The Daily Signal The third notable cert denial on Monday was the end of the road for Tata Consultancy Services Ltd. in its long-running trade-secret fight with DXC Technology — the successor in interest to Computer Sciences Corporation. TCS had asked the Court to review a Fifth Circuit decision that affirmed a $168 million judgment against it for misappropriating CSC’s life-insurance-administration software trade secrets and using them to build TCS’s own BaNCS platform, which TCS then used to win a $2.6 billion contract with the insurer Transamerica. The Northern District of Texas verdict, returned in 2022, had been $56 million in compensatory damages and $112 million in punitives, and the Fifth Circuit upheld the punitives ratio in 2025 over TCS’s BMW v. Gore and State Farm v. Campbell challenge to the proportionality of the punitive award and over its Defend Trade Secrets Act extraterritoriality arguments. The cert petition pressed both points and pressed a circuit split on the standard for proving misappropriation by an independent contractor that had been given access to source code under a nondisclosure agreement, but the Court declined. The practical immediate effect is that TCS will recognize a roughly $70 million one-time exceptional charge in Q1 of its 2027 fiscal year and the total exposure on the matter — combining the affirmed judgment with previously taken provisions — settles in around $220 million. The broader effect is doctrinal stability. The Fifth Circuit’s analysis on cross-border trade-secret damages and on the extraterritoriality limits of the DTSA stand. Both questions are going to recur, and the next vehicle that brings them up may catch the Court in a different mood, but for now the law is what the Fifth Circuit said it was. US Supreme Court rejects TCS challenge in $168 million trade secrets case | Business Standard This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe

    8 min
  7. Legal News for Mon 6/15 - Judge McConnell Scolds DOJ, Google Sues Chinese Gemini Phishing Ring, Judge Blocks Trump's Xenophobic Parks Orders

    Jun 15

    Legal News for Mon 6/15 - Judge McConnell Scolds DOJ, Google Sues Chinese Gemini Phishing Ring, Judge Blocks Trump's Xenophobic Parks Orders

    This Day in Legal History: Magna Carta Sealed at Runnymede On this day in 1215, in a meadow at Runnymede on the south bank of the Thames, King John of England affixed his seal to a document the rebellious English barons had drafted, in which the king conceded a series of limits on his own royal authority. We call it Magna Carta — the Great Charter. The immediate political context was a baronial revolt against John’s tax exactions for his disastrous French wars, and most of the sixty-three chapters as drafted in 1215 are concerned with the highly specific grievances of a feudal aristocracy: scutage, wardship, the inheritance fees of widows, the freedom of the church, the standardization of weights and measures in the king’s markets. The two chapters that the centuries have remembered are 39 and 40. Chapter 39 says that no free man shall be taken or imprisoned or dispossessed except by the lawful judgment of his peers or by the law of the land. Chapter 40 says that to no one will the king sell, deny, or delay right or justice. The Charter was annulled by Pope Innocent III within ten weeks of sealing — the pope held that John, as a vassal of the Holy See, could not be bound by a treaty extracted under duress — and the country immediately collapsed into the First Barons’ War. But John died in October 1216, his nine-year-old son Henry III’s regents reissued the Charter as a tactical concession the next month, it was reissued again in 1217 and 1225, and by the late thirteenth century the 1225 version had been confirmed by successive kings as a foundational statute of the realm. Edward Coke, writing in the seventeenth century, transformed Chapter 39’s “law of the land” into the doctrine of due process, and the founding generation of the American Republic picked up Coke’s reading and wrote it directly into the Fifth and Fourteenth Amendments of the United States Constitution. The phrase “due process of law” in those amendments is the most consequential American inheritance from the Runnymede document. The principle the barons were trying to extract from a beleaguered king — that the law constrains the sovereign too — is the substrate on which everything we recognize as constitutionalism is built. Eight hundred and eleven years on, the principle is still the work. The Rhode Island travel-ban lawsuit we covered on June 8 took a sharp turn on Friday. Chief Judge John J. McConnell, Jr., of the District of Rhode Island held a status conference in Dorcas International Institute v. USCIS at which he was openly frustrated with the Justice Department for failing to immediately implement his June 5 vacatur of the four USCIS benefit-freeze policies for nationals of the thirty-nine travel-ban countries. The judge’s message, in plain terms, was that vacatur under the Administrative Procedure Act is self-executing — the moment the order was entered, the policies ceased to exist, and the agency was obligated to resume processing affirmative benefits, asylum claims, and adjudicator-instruction reviews on the prior pre-freeze basis. The Trump administration, after the hearing, told the court it would comply, restart adjudications, and clear the backlog. It also did what defendants typically do when they have lost on the merits and lost again on compliance: it filed a notice of appeal with the First Circuit and asked the appellate court to stay the vacatur pending appeal. That is the live question now. The First Circuit’s stay analysis runs through the standard Nken v. Holder factors — likelihood of success on the merits, irreparable harm, the balance of equities, and the public interest — and the administration’s strongest argument on each is going to be familiar: the executive needs administrative breathing room to implement a travel ban, mass restoration of adjudications creates national-security risk, the harm to applicants is reversible if their adjudications are paused for a few more weeks. The plaintiffs’ strongest counterarguments are also familiar: the policies were unlawful when adopted and the agency had no business adopting them, the harm to applicants from continued delay is concrete and accruing daily, and the First Circuit is not in the business of staying vacaturs of unlawful agency action in order to let the agency continue acting unlawfully. Watch the First Circuit’s calendar this week. The stay motion is the next inflection point. Trump officials agree to resume asylum processing after being scolded by judge | The Washington Post Google filed suit on Friday in the U.S. District Court for the Southern District of New York against a China-based cybercrime network it calls the “Outsider Enterprise,” alleging that the network’s members used Google’s Gemini large-language model to generate the code, copy, and templates for a phishing-as-a-service platform that has built more than nine thousand fraudulent websites and sent two and a half million scam text messages in the two weeks ending June 1 alone. The complaint is significant for two reasons. First, it is, to Google’s knowledge, the first time the company has affirmatively sued threat actors for using its own generative-AI product as the input to a scaled criminal operation, as distinct from the more usual posture of suing scammers who impersonate Google brands. The legal theories are a mix of Lanham Act false-designation-of-origin and trademark-infringement counts, Computer Fraud and Abuse Act counts based on Outsider’s unauthorized access to Google services, breach-of-contract counts on the Gemini terms of service, and a RICO count. Second, the factual record will be a road map for the next decade of AI-misuse litigation. The complaint describes Telegram channels in which Outsider members trade prompts that get Gemini to write phishing code, a library of two hundred and ninety prebuilt templates impersonating brands ranging from the U.S. Postal Service to state DMVs to E-ZPass, and an FBI estimate that the broader campaign Outsider participates in has stolen roughly 3.87 million card numbers and caused $1.9 billion in losses since July 2023. The remedy Google is seeking is a permanent injunction shutting the operation down, plus domain seizures and account terminations across Google’s services and at major U.S. carriers, which Google says it has been coordinating with the FBI, AT&T, T-Mobile, and Verizon. The deeper legal question the case may end up clarifying is whether and to what extent platforms can use private civil suits as the front-line enforcement mechanism against AI-augmented criminal activity that the public criminal-justice system has had trouble keeping up with. Google sues Chinese cybercrime ring that weaponized Gemini AI for phishing scams | TechCrunch A federal district judge in Washington on Friday issued a preliminary injunction barring the Trump administration from continuing to implement Executive Order 14253, the order under which the National Park Service had been scrubbing exhibits, signage, and online materials at sites administered by the Department of the Interior. The judge gave the administration three weeks to restore the materials it had already removed. The order at issue, signed in March, directed federal cultural agencies to identify and remove content that, in the executive’s view, reflected “improper, divisive, or anti-American ideology” or “partisan” framing. In the months that followed, the National Park Service had taken down or altered displays addressing slavery, the Civil Rights Movement, the internment of Japanese Americans during the Second World War, climate change, and the histories of Native American dispossession at sites including the Stonewall National Monument, Independence Hall, and the Manzanar National Historic Site. The case is American Historical Association v. Department of the Interior, brought by historians’ professional associations and a coalition of plaintiffs that includes affected park employees and visitor-experience contractors. The legal theory pleaded was multi-strand: First Amendment viewpoint discrimination as applied to government speech that has taken on a public-forum character, Administrative Procedure Act challenges on the ground that the agency failed to provide a reasoned basis for the removals and failed to consider statutory commands under the Organic Act of 1916, and a Federal Records Act challenge to the destruction of materials that constituted federal records. The judge held that the plaintiffs were likely to succeed on the First Amendment claim and the APA claim, found irreparable harm in the ongoing loss of public access to the underlying historical materials, and found that the public interest was best served by restoration. The administration is widely expected to appeal to the D.C. Circuit. In the meantime, the three-week restoration clock is running. Judge blocks Trump national parks order, calling it “censorship” | The Washington Post This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe

    8 min
  8. Legal News for Fri 6/12 - SCOTUS Saba ICA Private Suit, Judicial Estoppel in BK, and Abouammo's Twitter FBI Obstruction Conviction Tossed on Venue

    Jun 12

    Legal News for Fri 6/12 - SCOTUS Saba ICA Private Suit, Judicial Estoppel in BK, and Abouammo's Twitter FBI Obstruction Conviction Tossed on Venue

    This Day in Legal History: Loving v. Virginia Decided On this day in 1967, the Supreme Court handed down a unanimous opinion in Loving v. Virginia striking down Virginia’s Racial Integrity Act of 1924 and, with it, the anti-miscegenation statutes that sixteen states still had on the books. Chief Justice Earl Warren wrote for the Court. The case had come up from a county courthouse in Caroline County, Virginia, where Richard Loving, a white bricklayer, and Mildred Jeter, a Black and Native American woman, had been arrested in their bedroom in the middle of the night in 1958 by a sheriff acting on an anonymous tip — they had been married in the District of Columbia and returned home to Virginia, where their marriage was a felony. The Lovings pleaded guilty, accepted suspended sentences on the condition that they leave the state for twenty-five years, and lived in exile in Washington until Mildred wrote a letter to Attorney General Robert Kennedy that landed eventually with the ACLU, which took the case. The Supreme Court’s opinion did two things at once. It held that Virginia’s statute violated the Equal Protection Clause because it drew an explicit racial classification with no legitimate state purpose beyond preserving “White Supremacy” — the Court used the phrase the Virginia statute itself had used — and it held that the statute violated the Due Process Clause because the freedom to marry is “one of the vital personal rights essential to the orderly pursuit of happiness by free men.” That second holding, the marriage-as-fundamental-right strand, is the through-line that runs from Loving to Zablocki v. Redhail in 1978, to Turner v. Safley in 1987, to Obergefell v. Hodges in 2015 — every one of those decisions cites Loving and treats it as the foundational case. Whether the Court’s substantive due process marriage doctrine survives the next decade is, as we discussed earlier this week, one of the open questions in American constitutional law. But Loving itself remains intact, and on June 12, 1967, the Court said something it had not said cleanly before: that the right to marry is the kind of liberty interest the Constitution actually protects. The Supreme Court on Thursday reversed the Second Circuit in FS Credit Opportunities Corp. v. Saba Capital Master Fund, Ltd., holding 6-3 that the Investment Company Act of 1940 does not give private parties a cause of action to seek rescission of fund bylaws or other contractual terms. Justice Amy Coney Barrett wrote the majority. The dispute came out of a campaign by Boaz Weinstein’s Saba Capital against eleven closed-end funds — funds that, under Maryland’s Control Share Acquisition Act, had adopted bylaws limiting the voting power of any shareholder who accumulated a disproportionate stake without the consent of other shareholders. Saba sued under Section 47(b) of the ICA, which makes contracts that violate the Act unenforceable, and the Second Circuit held that Section 47(b) implied a private right to rescind the bylaws. The Court told the Second Circuit to look harder at the modern implied-cause-of-action doctrine, which since Alexander v. Sandoval in 2001 has been hostile to inferring private rights of action that Congress did not write into the statute. The opinion reads as a continuation of that line: the ICA’s enforcement structure is committed to the SEC, not to private plaintiffs, and Section 47(b) is a defense against contracts the SEC has already determined to be unlawful, not an offensive cause of action. The dissent, by Justice Sotomayor, joined by Justices Kagan and Jackson, argued that this is a misreading of Section 47(b)’s text and that the majority is gratuitously narrowing the enforcement of the federal securities laws. The practical impact is significant. Activist investors who had been pushing closed-end funds to convert to open-end form, or to alter investment strategies, lose a federal-court tool they had been using; the funds themselves and their independent directors gain a meaningful structural defense. Expect the next round of activist campaigns to move to state-court fiduciary-duty theories instead. US Supreme Court rules against private suits brought under key securities law | US News The Court on Thursday also decided Keathley v. Buddy Ayers Construction, Inc., vacating the Fifth Circuit 9-0 in an opinion by Justice Ketanji Brown Jackson. The case is small in its facts and large in its doctrine. Thomas Keathley filed a Chapter 13 bankruptcy in 2019 and failed to disclose, on his schedule of assets, a personal-injury claim he later brought against a construction company over a truck accident. The Fifth Circuit barred the personal-injury suit on judicial-estoppel grounds — the longstanding equitable doctrine that prevents a party from taking one position in one proceeding and a contradictory position in another — using a three-factor test under which a debtor’s mere knowledge of the facts plus a motive to conceal was enough to bar the later claim. The Supreme Court said no. To determine whether the omission was inadvertent or mistaken for judicial-estoppel purposes, the Court held, the lower courts must look to the totality of the circumstances, not just to whether the debtor knew of the facts and had a motive. The doctrinal interest of the case lies in two concurrences. Justice Sotomayor, concurring, wrote that judicial estoppel should likely never apply in an open bankruptcy case at all — the trustee can simply amend the schedule and pursue the claim for the estate, which solves the problem judicial estoppel was invented to address. Justice Thomas, joined by Justice Gorsuch, went further and questioned whether federal courts have any inherent authority to apply judicial estoppel as a freestanding doctrine, period — a position that, if it ever gets five votes, would unwind a doctrine that has been part of American practice since the 1850s. None of that is the holding. But the votes to revisit one of the duller corners of equitable estoppel are now visibly on the table. Keathley v. Buddy Ayers Construction, Inc. | SCOTUSblog The third unanimous decision of the day was Abouammo v. United States, in which the Court reversed the Ninth Circuit and vacated the obstruction-of-an-FBI-investigation conviction of Ahmad Abouammo, a former Twitter employee whose underlying case was one of the more striking Saudi-Arabia infiltration prosecutions of the last decade. Justice Elena Kagan wrote the opinion. The facts are simple and the constitutional point cleaner than the facts. Abouammo, while working at Twitter’s San Francisco office in 2014 and 2015, accessed and passed on confidential user information about Saudi dissidents to a Saudi official, in exchange for a $42,000 watch and $200,000 in wire transfers. The FBI eventually came to interview him at his home in Seattle, where he had moved by 2018, and during those interviews he created and emailed agents a fake invoice intended to make the wire transfers look like a legitimate consulting fee. The Justice Department charged the obstruction count along with foreign-agent and wire-fraud counts in the Northern District of California, and a San Francisco jury convicted him on all of them. The Supreme Court held that the obstruction count belonged in the Western District of Washington, not California, because the act of creating and sending the false invoice — the only act that supported the obstruction charge — happened entirely in Seattle. Article III’s venue clause and the Sixth Amendment’s vicinage requirement together do not let the government try a defendant in a state where no element of the charged offense occurred, no matter how convenient the prosecution. The obstruction conviction is vacated. The foreign-agent and wire-fraud convictions, which had different venue facts and were not before the Court, stand. Abouammo will not walk free. But the prosecution will need to decide whether to retry the obstruction count in Seattle, and the case is now a clean precedent that the venue clause has real teeth in a multi-district federal investigation. US Supreme Court overturns ex-Twitter employee’s obstruction conviction in Saudi spy case | US News This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.minimumcomp.com/subscribe

    8 min
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Minimum Competence is your daily companion for legal news, designed to bring you up to speed on the day’s major legal stories during your commute home. Each episode is short, clear, and informative—just enough to make you minimally competent on the key developments in law, policy, and regulation. Whether you’re a lawyer, law student, journalist, or just legal-curious, you’ll get a smart summary without the fluff. A full transcript of each episode is available via the companion newsletter at www.minimumcomp.com. www.minimumcomp.com

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