Thurs 10/5 - 9th Circuit reviewing Meta’s “Citizenship Bias,” Trump-era CMS rule struck down, SBF’s Trial Rolls on and Trump's Judge Frustration

On this day in legal history, October 5, 1941, Supreme Court Justice Louis Brandeis died at the age of 84. 

Louis Brandeis was born on November 13, 1856, in Louisville, Kentucky. He graduated from Harvard Law School at the age of 20 with the highest grade point average in the school's history. In 1890, he gained recognition for developing the "right to privacy" concept through an article in the Harvard Law Review. Brandeis was a prominent figure in the antitrust movement and was known for his resistance to monopolies, particularly in the New England railroad sector. He also advised Woodrow Wilson and was critical of large banks and powerful corporations in his writings.

Brandeis became active in the Zionist movement, viewing it as a solution to antisemitism in Europe and Russia. He was often referred to as the "People's Lawyer" and took cases without pay to focus on broader issues. He set a new precedent in evidence presentation with the "Brandeis brief," which utilized expert testimony from various professions. In 1916, President Woodrow Wilson nominated him to the U.S. Supreme Court, making him the first Jewish member. His nomination was met with significant opposition but was eventually confirmed by the Senate.

During his tenure on the Supreme Court from 1916 to 1939, Brandeis became one of the most influential justices in history. He was known for his strong defenses of freedom of speech and the right to privacy. However, he has been criticized for not addressing issues related to African-Americans and for supporting racial segregation in some cases. Brandeis retired from the Supreme Court on February 13, 1939, and passed away on October 5, 1941, in Washington, D.C.

The U.S. Court of Appeals for the Ninth Circuit is set to hear a case concerning Meta Platforms Inc., the parent company of Facebook, and its alleged preference for hiring workers on H-1B visas. The case, brought by appellant Purushothaman Rajaram, questions whether U.S. citizens are a protected class under Section 1981 of the 1866 Civil Rights Act. A federal district court previously dismissed the case, stating that the act does not cover "reverse discrimination" claims. Rajaram's lawyers argue that Section 1981 should be broadly interpreted to include U.S. citizens, while Meta contends that the law has traditionally been applied narrowly to race or alien status.

The case also brings into focus Meta's hiring practices. The company was one of the top H-1B employers in fiscal year 2022, with over 1,500 approved petitions for new workers. Rajaram, a naturalized U.S. citizen, claims that Meta's hiring policies favor workers on H-1B visas over equally or more qualified U.S. citizens. If Rajaram wins, it could discourage companies from prioritizing H-1B workers over U.S. citizens.

The Department of Justice and the Department of Labor have previously scrutinized Meta's H-1B hiring practices. The company settled those claims by paying over $14 million in civil penalties without admitting any wrongdoing. Rajaram's lawsuit aims to address citizenship discrimination in hiring more broadly, not just positions earmarked for visa workers.

Experts note that the structure of the H-1B program itself may contribute to competition between visa holders and U.S. workers. Companies have little incentive to pay H-1B workers more than the prevailing wage, leading them to file as many petitions as possible for minimally qualified candidates. The case began with oral arguments yesterday. 

Meta’s H-1B Hiring Spurs Ninth Circuit Look at Citizenship Bias

A federal judge has ordered the Centers for Medicare & Medicaid Services (CMS) to withdraw a Trump-era rule concerning copay assistance programs. The rule had been challenged by patient advocacy groups, including the HIV+Hepatitis Policy Institute and the Diabetes Leadership Council, who claimed it allowed health plans to increase out-of-pocket prescription drug costs. Judge John D. Bates stated that the rule conflicted with the Affordable Care Act's definition of "cost-sharing" and must be set aside.

The 2020 rule had stated that pharmacy benefit managers (PBMs), who manage prescription drug benefits for insurers, were not required to count drugmaker copay assistance toward patients' out-of-pocket costs. The patient groups argued that this allowed PBMs and health plans to collect funds from both patients and drugmakers without using the money to ease the financial burden on patients.

The ruling is seen as a victory for these patient advocacy groups, who filed the lawsuit in August 2022. Carl Schmid, the executive director of the HIV+Hepatitis Policy Institute, expressed satisfaction with the court's decision and called on the Biden administration to enforce it immediately.

The advocacy groups are backed by pharmaceutical companies like Pfizer, Johnson & Johnson, Abbott Laboratories, Eli Lilly & Co., and Merck & Co. While these companies can offer assistance to patients in commercial plans, such programs are prohibited in government-funded health insurance due to the Anti-Kickback Statute.

The Department of Health and Human Services (HHS) had previously argued that manufacturer coupons could add long-term costs to the healthcare system, outweighing the short-term benefits. Both the Department of Justice, representing CMS and HHS, and a CMS spokesperson declined to comment on the ruling. The case is titled HIV & Hepatitis Policy Inst. v. Dep't of Health & Human Servs. and was filed on September 29, 2023.

Judge Strikes Down Trump-Era Medicare Copay Assistance Rule (1)

The trial of Sam Bankman-Fried, founder of the collapsed FTX cryptocurrency exchange, has begun with both sides presenting differing views on the reasons behind the company's failure. Bankman-Fried is accused of using FTX customer funds to support his hedge fund, Alameda Research, as well as for personal expenditures like luxury real estate and political donations. He has pleaded not guilty to these charges. His defense lawyer, Mark Cohen, portrayed him as a "math nerd" from MIT who may have overlooked risk management but did not engage in theft.

Prosecutor Thane Rehn, however, argued that Bankman-Fried took more than $10 billion from FTX customers and used the funds to build his empire through fraudulent means. Rehn stated that the defendant "doubled down" on risky investments when Alameda began losing money. The prosecution plans to call three former associates of Bankman-Fried, all of whom have pleaded guilty and agreed to cooperate, to testify against him.

The defense suggested that these witnesses might retrospectively portray Bankman-Fried's decisions as deceitful, even though they had agreed with those decisions at the time. The jury for the trial includes a diverse group of individuals, including a retired investment banker, a school librarian, and a train conductor. Bankman-Fried has been in detention since August 11 for likely tampering with witnesses.

The trial comes nearly a year after the collapse of FTX, which had a significant impact on financial markets and damaged Bankman-Fried's reputation. It promises to offer an inside look into the operations of a cryptocurrency exchange and the legal boundaries within which such businesses operate.

Sam Bankman-Fried trial jurors hear competing explanations for FTX collapse | Reuters

Judge Arthur Engoron, overseeing Donald Trump's civil fraud trial in New York, expressed frustration with Trump's legal team for what he termed as "ridiculous" and redundant questioning of a witness. The trial is centered on allegations by the New York attorney general's office that Trump inflated his net worth by billions to secure better loan and insurance terms. Engoron, who is the sole decider of the case's outcome, has already disciplined Trump's lawyers for making "frivolous" arguments.

Earlier, Engoron had imposed a gag order on public comments about court staff after Trump criticized the judge's top law clerk on social media. Trump, who has been present in court, has consistently attacked both the judge and New York Attorney General Letitia James, labeling them as "corrupt" and the case as a "sham."

Last week, Engoron ruled that Trump, his two adult sons, and 10 of his companies had committed fraud. He revoked the business certificates for key assets, including Trump Tower and 40 Wall Street, and said he would appoint receivers for their dissolution. Trump's lawyers have appealed this decision.

The trial mainly concerns the assessment of damages, with James seeking at least $250 million in fines and various bans against Trump and his sons from conducting business in New York. The trial is expected to continue until mid-December. Trump also faces other legal challenges, including four criminal indictments and a civil damages trial scheduled for January. He has denied wrongdoing in all cases.

Judge chides Donald Trump lawyer's 'ridiculous' questioning in civil fraud trial | Reuters

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