John is joined by Jesse Bernstein, Partner in Quinn Emanuel’s New York Office and Co-Chair of the Securities Litigation Practice.  Jesse explains that the term “securities” applies not only to stocks and bonds, but arguably to any situation where a group of investors place their resources into a common entity where they expect to make profits from the efforts of others.  He describes the sources of securities law, including state blue sky laws, the Securities Act of 1933 (which focuses on initial issuances), the Securities Exchange Act of 1934 (which focuses on intentional misrepresentations in securities transactions and the Private Securities Litigation Reform Act of 1995 (which sought to curb perceived abuses in securities litigation by raising the pleading standards required to establish scienter and creating a safe harbor for forward looking statements).  They discuss the Supreme Court’s recent ruling in Moab Partners v. Macquarie Infrastructure that pure omissions of material fact are not actionable under Rule 10(b)(5) because the rule only covers affirmative misstatements.  Jesse then explains how a Quinn Emanuel team obtained a jury verdict last year in Elon Musk’s favor in a rare securities class action trial on a $12 billion claim based on Mr. Musk’s tweet about taking Tesla private.  He describes the arguments made concerning materiality and loss causation that ultimately led to the victory.  Finally, they discuss upcoming issues in securities law including how the Macquarie decision will impact cases. 

Podcast Link: Law-disrupted.fm
Host: John B. Quinn 
Producer: Alexis Hyde
Music and Editing by: Alexander Rossi

John Quinn is joined by Michael Barlow, Managing Partner and Founding Member of Quinn Emanuel’s Wilmington, Delaware office.  They discuss the evolving state of Delaware corporate law and the legislative response to growing dissatisfaction among corporations over the recent legal treatment of conflicted transactions.  Traditionally, Delaware law has deferred in general to corporate decision-making under the business judgment rule, but rigorously reviewed transactions involving conflicts of interest—particularly those involving controlling shareholders—under an “entire fairness review.”  Entire fairness reviews are fact-intensive and include scrutinizing both the process and terms of the transaction, making early dismissal of claims rare.  In response, Delaware courts developed a safe harbor called the “MFW” framework.  The “MFW” framework involved approval by a special committee of disinterested directors and the minority shareholders.  Still, even under the MFW framework, motions to dismiss were granted in fewer than 40% of cases, leading to frustration among deal planners.

Despite these odds, a Quinn Emanuel team led by Michael recently won a rare complete dismissal of an entire fairness case on behalf of Fidelity National Financial, Inc.  In that case, the court ruled that there were no alleged facts that could support the conclusion that the preferred stock transaction at issue was unfair. 

Frustration among corporate deal planners with what was perceived as activist judicial decisions creating uncertainty (e.g., as to what was a “controlling stockholder,” among other things) has recently led to Tesla, Dropbox and other corporations to express their intent to leave Delaware as their state of incorporation.  “DExit,” is the term coined to describe this trend.  To address these concerns, Delaware enacted Senate Bill 21, a bipartisan effort to clarify and narrow the standards for conflicted transactions.  The legislation provides clearer definitions of controlling stockholders and establishes safe harbors for dismissing cases early if certain procedural protections are followed.  It also reforms the state’s books-and-records statute (Section 220) by limiting the scope of pre-suit corporate document demands.  The next few years will test how effectively the new legislation meets the corporate world’s demand for greater legal certainty.  Finally, Michael believes that Delaware will continue to lead the nation in corporate law due to its unparalleled legal infrastructure and judicial expertise.

Podcast Link: Law-disrupted.fm
Host: John B. Quinn 
Producer: Alexis Hyde
Music and Editing by: Alexander Rossi

John is joined by Christopher Padilla, Senior Advisor at the Brunswick Group and former Under Secretary of Commerce for International Trade. They discuss the recent lawsuits challenging President Trump’s sweeping use of tariffs under the International Emergency Economic Powers Act (IEEPA). The IEEPA is a 1977 statute traditionally used to freeze assets or impose sanctions in wartime or against adversaries. Until now, IEEPA has never been used to impose tariffs, and does not mention the word "tariff." Multiple lawsuits challenging the tariffs have been filed in various courts, including several U.S. district courts and the Court of International Trade (CIT). The CIT, a court traditionally deferential to presidential authority over trade, is moving faster than other courts. It has already denied one preliminary injunction and scheduled initial arguments concerning standing and jurisdiction. The administration has moved to consolidate the challenges filed in district courts with those in the CIT. Plaintiffs range from state governments and Native American tribes to small businesses. The cases largely challenge the President’s authority to issue the tariffs on four main grounds: (1) the IEEPA does not authorize tariffs; (2) the President must have clear congressional authorization to increase the tariffs under the Supreme Court’s “major questions” doctrine; (3) the tariffs violate the constitutional separation of powers and nondelegation doctrine; and (4) the declared "emergencies" used to justify the tariffs—such as immigration or the trade deficit—are not genuine emergencies under the IEEPA. Even if the plaintiffs in these cases prevail, the administration could still reimpose tariffs under other delegated statutory authorities, although proceeding under those authorities will involve several procedural hurdles. Ultimately, Christopher believes that real change would require congressional action, which is unlikely in the short term, and that any rollback of tariffs may depend more on economic developments such as recession, stagflation or a collapse of the bond market than on court rulings.

Podcast Link: Law-disrupted.fm
Host: John B. Quinn 
Producer: Alexis Hyde
Music and Editing by: Alexander Rossi

John is joined by Christopher Kercher, partner in Quinn Emanuel’s New York office, and Jeffrey Chivers, co-founder of litigation AI company Syllo AI.  They discuss the transformative role artificial intelligence played in a recent Quinn Emanuel trial victory in Delaware Chancery Court.  The case involved Desktop Metal's attempt to force Nano Dimension to complete a $183 million merger, where Nano tried to stall the deal by slow-walking regulatory approvals by the Committee on Foreign Investment in the United States until the drop-dead date for the transaction had passed.  Quinn Emanuel was hired to represent Desktop Metal only six weeks before trial, requiring an accelerated approach to discovery and case preparation.  The team used Syllo AI, a litigation focused product that allowed them to review and organize massive volumes of documents through natural language prompts, create timelines, tag relevant material, and identify patterns much faster than traditional methods.  The Syllo platform also integrates multiple AI models that cross-check each other’s outputs while following built-in mental models of legal reasoning.  During the trial, Syllo customized its tools to provide rapid privilege log and document production deficiency analysis, helping to identify gaps in the opposing side’s discovery.  The team also worked with Claude, a large language model developed by Anthropic to test ideas, explore potential legal theories, and brainstorm approaches to witness examinations.  Syllo and Claude helped attorneys identify relevant evidence for use in expedited post-trial briefs and suggested potential lines of questioning for depositions.  Attorneys directed all AI usage, with Claude serving as a cognitive tool that amplified the legal team’s capabilities while the attorneys maintained full responsibility for all work product.  AI did not displace anyone on the trial team. Instead, it complemented the attorneys' expertise, enhancing their ability to deliver strategic insights and respond effectively to case developments.  It may soon become malpractice not to use AI in trial preparation.

Podcast Link: Law-disrupted.fm
Host: John B. Quinn 
Producer: Alexis Hyde
Music and Editing by: Alexander Rossi

John is joined by Michael Gottlieb, partner in the Washington D.C. office of Wilkie Farr & Gallagher, and Nicholas Reddick, partner in the San Francisco office of Wilkie Farr & Gallagher.  They discuss the landmark $1.1 billion judgment Michael and Nicholas obtained against the Islamic Republic of Iran, on behalf of U.S. service members and civilians harmed by Iran-backed terrorist groups and the legal framework for suing state sponsors of terrorism and private organizations that support them.  Claims against sovereign states are based upon the Foreign Sovereign Immunities Act (FSIA).  FSIA claims require plaintiffs to prove that the foreign sovereign materially supported acts of terrorism, often through militia groups operating in conflict zones.  The process is complex and time-consuming.  Although Iran never appears to defend these cases, plaintiffs must still prove liability and damages with admissible evidence, often obtained through Freedom of Information Act requests, military reports, and expert testimony.  Because such judgments are rarely enforceable against Iran’s frozen or inaccessible assets, successful plaintiffs must seek compensation through the U.S. Victims of State Sponsored Terrorism Fund, which draws from congressional appropriations and settlements from unrelated sanctions violations.  Payments from the fund are made annually and prorated based on judgment size, but disbursements have been inconsistent.  Recent developments, including circuit court rulings and a pending Supreme Court case, may reshape key legal standards for FSIA claims, such as the requirement of an actual death for certain terrorism-related claims.  Several new legislative efforts seek to expand the cases that may be brought under the FSIA and increase the funds allocated for compensating victims.  Claims against private entities such as banks, contractors or companies that evaded sanctions rely upon the Anti-Terrorism Act (ATA).  Many such cases are currently being litigated.  ATA claims require proof of the defendant’s material support and knowledge of terrorist outcomes.  The defendants in ATA cases are likely to appear to defend against the claims, but only after the plaintiffs navigate complex issues of jurisdiction and service of process.

Podcast Link: Law-disrupted.fm
Host: John B. Quinn 
Producer: Alexis Hyde
Music and Editing by: Alexander Rossi

John is joined by Courtney Bowman, the Global Director of Privacy and Civil Liberties at Palantir, one of the foremost companies in the world specializing in software platforms for big data analytics. They discuss the emerging trends in AI regulation.  Courtney explains the AI Act recently passed by the EU Parliament, including the four levels of risk it assesses for different AI systems and the different regulatory obligations imposed on each risk level, how the Act treats general purpose AI systems and how the final Act evolved in response to lobbying by emerging European companies in the AI space. They discuss whether the EU AI Act will become the global standard international companies default to because the European market is too large to abandon. Courtney also explains recent federal regulatory developments in  the U.S. including the framework for AI put out by the National Institute of Science and Technology, the AI Bill of Rights announced by the White House which calls for voluntary compliance to certain principles by industry and the Executive Order on Safe, Secure and Trustworthy Development and Use of Artificial Intelligence which requires each department of the federal government to develop its own plan for the use and deployment of AI.  They also discuss the wide range of state level AI legislative initiatives and the leading role California has played in this process.  Finally, they discuss the upcoming issues legislatures will need to address including translating principles like accountability, fairness and transparency into concrete best practices, instituting testing, evaluation and validation methodologies to ensure that AI systems are doing what they're supposed to do in a reliable and trustworthy way, and addressing concerns around maintaining AI systems over time as the data used by the system continuously evolves over time until it no longer accurately represents the world that it was originally designed to represent.

Podcast Link: Law-disrupted.fm
Host: John B. Quinn 
Producer: Alexis Hyde
Music and Editing by: Alexander Rossi

John is joined by Ben Lee, Chief Legal Officer of Reddit.  They discuss Ben’s extensive career as a senior in-house lawyer in several of the most successful tech companies in the world.  After earning degrees in physics and economics, Ben worked at IBM's research lab, where he was intrigued by the way lawyers grappled with the impacts of technology on society.  Ben then went to law school and began his career as a litigator at a New York law firm but left to work at the Legal Aid Society.  Financial realities eventually led him back to private practice and then to a career in-house.  At AT&T and NEC, Ben worked closely with pioneering computer scientists and handled complex IP matters involving emerging technologies like machine learning and AI.  When he moved to Google, Ben advised on major projects like Chrome, Android, and Google Cloud at very early stages when their success was far from assured.  Ben later joined Twitter during its early, fast-paced growth phase, managing litigation, IP, employment, and regulatory issues.  He led Twitter’s lawsuit against the U.S. government over transparency for national security requests.  Later, at Airbnb, Ben tackled challenging regulatory landscapes worldwide, and at Plaid, he advocated for consumers’ rights to financial data.  At Reddit, Ben now oversees all legal functions for a vast online platform with over 100,000 user-created and moderated communities.  Section 230 of the Communications Decency Act is vital to Reddit’s success.  It provides that online users and platforms are generally not liable for content created by others.  Section 230 protects Reddit’s content moderation decisions, the decisions of its volunteer community moderators and its individual users.  Finally, Ben advises young in-house lawyers to remember that their job is not to just point out all potential legal risks in a project, but to help their teams manage those risks so they can build great products and move companies forward.

Podcast Link: Law-disrupted.fm
Host: John B. Quinn 
Producer: Alexis Hyde
Music and Editing by: Alexander Rossi

John is joined by Susheel Kirpalani, partner in Quinn Emanuel’s New York office and founder and Chairperson of the firm’s Bankruptcy and Restructuring Group. They discuss restructuring litigation, including fraudulent transfer litigation and valuation disputes, and how it differs from commercial litigation.  They also discuss the importance of building alliances with other stakeholders in the company, how much the practice is based on relationships and trust, and the opportunities that exist to design creative securities that allow a company to survive but also allow its creditors substantial recoveries. 

Podcast Link: Law-disrupted.fm
Host: John B. Quinn 
Producer: Alexis Hyde
Music and Editing by: Alexander Rossi

John Quinn is joined by Jack Neumark, Managing Partner and Co-Head of Specialty Finance of Fortress Investment Group and founder of its Legal Assets Group.  They discuss the emergence of legal assets as a distinct investment class.  Fortress is a leading player in litigation finance with over $6.5 billion deployed in legal assets and a current portfolio of approximately $3 billion.  While most litigation funders typically invest in individual cases, Fortress invests in diversified portfolios of litigation claims and contingent fee receivables.  Fortress underwrites and finances these portfolios the same way it does other specialty finance products.  To underwrite a portfolio, Fortress has lawyers examine the cases in the portfolio to determine how strong and likely to settle they are.  They consider factors including the defendants and how creditworthy they are, the damage theories asserted, how far the case has progressed, what motion practice has revealed, and whether related criminal charges have been filed.  They also consider the law firms involved, the judge, and the venue.  Fortress also conducts quantitative analyses of the historical results of similar cases based on publicly available data and proprietary data it has accumulated in the 15 years it has invested in legal assets.  Legal asset portfolios are attractive to many investors because the results of lawsuits are less subject to the performance of the economy in general than many other classes of assets.  Also, because the market for legal assets is still developing, sophisticated investors can often obtain better returns than in more mature markets.  Jack believes that as the industry matures, especially with potential regulatory changes around law firm ownership, litigation finance will become more mainstream and integrated into broader investment strategies.

Podcast Link: Law-disrupted.fm
Host: John B. Quinn 
Producer: Alexis Hyde
Music and Editing by: Alexander Rossi

John is joined by Christian Athanasoulas, KPMG’s Global Head of International Tax and M&A Tax and U.S. Tax Practice Leader – Services.  They discuss the groundbreaking shift in the U.S. legal industry arising from Arizona’s decision to allow non-lawyers to have ownership interests in law firms.  This move aligns the U.S. with countries like the U.K. and Australia, where non-lawyers have been permitted to own law firms for years.  KPMG has successfully operated legal practices in over 80 countries, but U.S. regulations previously prevented it from offering legal services alongside its consulting, tax, and advisory work.  Arizona’s new rules allow KPMG to offer the non-legal services it typically offers clients together with related legal services performed by the new law firm.  Previously, KPMG’s clients would have to retain law firms with no formal ties to KPMG for those services.  Christian led the effort to establish KPMG Law US, a wholly owned Arizona law firm under the KPMG umbrella.  KPMG Law US is an independent LLC with Arizona-licensed lawyers and a compliance officer to ensure adherence to legal ethics rules.  Although owned by KPMG, the law firm maintains autonomy.  It can assist clients with legal matters such as contract integration and regulatory compliance.  KPMG Law US leverages its parent company’s technological advancements, including AI-driven contract analysis and process automation, to improve efficiency in the provision of legal services.  The new law firm will not engage in litigation.  For matters outside of Arizona, it will co-counsel with lawyers admitted in the appropriate jurisdiction.  While Arizona is currently the only state permitting non-lawyer ownership of law firms, other states are exploring the possibility of passing similar laws.  The creation of KPMG Law US could signal broader changes in the legal profession, potentially reshaping traditional law firm structures.

Podcast Link: Law-disrupted.fm
Host: John B. Quinn 
Producer: Alexis Hyde
Music and Editing by: Alexander Rossi