'Astonishing Theft': Microsoft, OpenAI Staff Reckoned With AI

By Dorothy Atkins

Microsoft and OpenAI employees internally acknowledged for years that AI tools trained on news articles would likely replace publishers, leading to a "doom loop," with a Microsoft director calling it "an astonishing theft of unprecedented proportions" and potentially the "largest theft of labor in human history," documents unsealed Thursday show.

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NY Urges 2nd Circ. To Stop DOT Push To End Congestion Pricing

By Linda Chiem

New York transportation agencies have urged the Second Circuit to shut down the Trump administration's continued efforts to eliminate congestion pricing, saying the federal government doesn't have free rein to renege on cooperative agreements without justification.

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Skycom Engineer Says Huawei Was His Real Boss In Iran

By Stewart Bishop

A Tehran-born engineer who has since become a U.S. citizen on Thursday testified that he worked for Huawei on projects for the Iranian government, despite technically being employed by what prosecutors say was a thinly veiled subsidiary that the Chinese telecommunications company used to evade U.S. sanctions.

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Brief

NY AG Seeks Tips From Workers On AI Firms' Unsafe Activity

By Vin Gurrieri

New York Attorney General Letitia James on Thursday urged workers who know about "dangerous" or potentially unlawful conduct by companies in their development of artificial intelligence technology to report their concerns to the state.

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'Fart Proof' Underwear Reeks Of TM Infringement, Suit Says

By Rae Ann Varona

The maker of Little Trees car air fresheners has hauled underwear company Shinesty Inc. into New York federal court, accusing it of infringing the fresheners' iconic evergreen tree design by using "confusingly similar" tree designs on "fart proof" underwear.

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Hyundai Cameras That Watch Drivers A Hazard, Suit Claims

By Jonathan Capriel

Hyundai safety features meant to encourage focused driving by monitoring faces and head position often make inaccurate readings, causing distractions such as issuing "loud" alerts, deactivating cruise control and bringing the vehicle to a full stop, drivers have claimed in a new California federal lawsuit.

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IBM, J&J Get Incurable Data Breach Suit Tossed For Good

By Bonnie Eslinger

A New York federal judge dismissed a proposed class action alleging IBM and Johnson & Johnson's healthcare arm failed to safeguard sensitive health information of thousands of patients before a 2023 data breach, saying he provided plaintiffs a chance to fix their complaint, and they didn't cure its "deficiencies."

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Auto Lender OKs $709.5M Multistate Deal Over Subprime Loans

By Brian Steele

The subprime auto lender Credit Acceptance Corp. has agreed to provide $709.5 million in cash and debt relief as part of a 40-state settlement to resolve allegations that it originated loans to borrowers who could not afford them, attorneys general announced Thursday.

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Racetrack Operators Fight Claims Of 'Rigged' Betting Pools

By Ganesh Setty

Racetrack operators urged a New York federal court to dismiss a proposed class action accusing them of racketeering by systematically advantaging bettors using computer-assisted wagering, while the bettors shot back that their injuries are not so attenuated that they lack standing.

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Fed. Circ. Approves $3.2M In Atty Fees In Diamond IP Case

By Elliot Weld

The Federal Circuit on Thursday affirmed a $3.2 million award of attorney fees to Fenix Diamonds LLC from the Carnegie Institution of Washington and its bankrupt former patent licensee M7D Corp., agreeing with a district judge that the asserted patent infringement claims were objectively baseless.

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Brief

Full Fed. Circ. Won't Rethink Pfizer's Paxlovid IP Win

By Adam Lidgett

The full Federal Circuit on Thursday won't disturb a panel's refusal to revive a patent that Enanta Pharmaceuticals had accused Pfizer of infringing through its blockbuster Paxlovid COVID-19 treatment.

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Local Publishers Say OpenAI, Microsoft Stole Their News

By Craig Clough

More than two dozen regional, local, trade and specialty publishers have sued OpenAI Inc. and Microsoft Corp. in New York federal court, alleging the companies copied hundreds of thousands of copyrighted articles without permission to train products including ChatGPT and Microsoft Copilot.

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Art Institute Wins Appeal In Schiele Nazi-Loot Dispute

By Corey Rothauser

A New York state appeals court Thursday vacated a warrant and orders requiring the Art Institute of Chicago to surrender an Egon Schiele painting to the heirs of Jewish art collector Fritz Grünbaum, finding a criminal-law procedure for returning stolen property could not be used to resolve a sharply contested ownership dispute without full civil proceedings.

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Immigration Attorney Wants SEC Sanctioned In EB-5 Case

By Tom Lotshaw

An immigration attorney and her firm asked a New York federal judge to sanction the U.S. Securities and Exchange Commission for failing to reasonably investigate an allegedly bogus unregistered securities claim it brought against them in an EB-5 immigrant investor case.

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StraightPath-Linked Stockbroker Gets 4.5 Years For Fraud

By Pete Brush

A New York federal judge has sentenced a former Long Island stockbroker to 4.5 years in prison, after he admitted to duping investors as he and others hawked nearly $200 million of pre-initial public offering shares, including for fraud-ridden vendor StraightPath.

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DOJ Official Says Political Appointees Play Antitrust Role

By Matthew Perlman

Associate Attorney General Stanley E. Woodward Jr. on Thursday defended the role political appointees play in enforcing antitrust laws, saying it would be "blatantly unconstitutional" if U.S. Department of Justice leadership merely deferred to unelected officials.

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EU Antitrust Chief Says AI Competition Mitigates Risk

By Matthew Perlman

Europe's top antitrust enforcer raised concerns Thursday about the need to regulate artificial intelligence companies, while a top U.S. official said enforcers need to hear more about potential collaborations on AI safety before deciding if they're problematic.

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1st Circ. Lets HUD Shift $1.3B In Homelessness Aid

By Carolyn Muyskens

A First Circuit panel said the U.S. Department of Housing and Urban Development may redirect $1.3 billion in homelessness funding from programs that focus on permanent housing to those supporting temporary shelter and assistance, finding the Trump administration likely was not required to go through a notice-and-comment procedure.

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Sleep Number OK'd For $154M Paydown In Ch. 11 Plan Deal

By Clara Geoghegan

A New York bankruptcy judge Thursday authorized personalized mattress retailer Sleep Number to pay down around $154 million of its prepetition debt as part of a Chapter 11 plan support agreement with its unsecured creditors and secured lenders.

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TV Azteca Files Ch. 15 Seeking Recognition Of Mexican Reorg

By Alex Wittenberg

Spanish-language television company TV Azteca has filed for Chapter 15 relief in New York bankruptcy court, seeking U.S. recognition of its Mexican restructuring and an order protecting it from litigation in New York that it says threatens its creditors.

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Judge OKs Omnicare Plan That Will Settle $1B In Fraud Claims

By Emily Lever

A Texas bankruptcy judge on Thursday approved CVS unit Omnicare LLC's Chapter 11 plan, which will spin off the unit from the pharmacy megachain and settle $1 billion in federal fraud claims, after the debtor resolved all objections.

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Firm Partners Can't Get Employment Tax Break, 2nd Circ. Says

By Asha Glover

The Second Circuit held Thursday that $141.5 million in partnership income distributed to an investment company's principals was subject to self-employment taxes, following the Fifth Circuit's narrow interpretation for determining eligibility for a self-employment tax exemption for limited partners.

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Ore. Judge Denies HHS' Attempt To Amend Gender Care Order

By Dan McKay

An Oregon federal judge on Thursday rejected the Trump administration's bid to narrow an earlier order that voided a policy declaration central to the government's crackdown on gender-affirming care for minors.

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2nd Circ. Upholds Removal Order Over Baseless Visa Filings

By Tom Lotshaw

A Second Circuit panel Thursday said immigration courts correctly determined a Philippine national granted lawful permanent resident status could be removed after a conviction for conspiring with others to submit false or misleading documents for H-1B visa applications.

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Cayuga Nation Gets Reduced Atty Fees After RICO Verdict

By Corey Rothauser

The Cayuga Nation has been awarded more than $261,000 in attorney fees, costs and sanctions after convincing a New York federal jury that two smoke shop operators violated federal racketeering law, despite the tribe's damages being entirely offset by a larger award on the operators' counterclaim.

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2nd Circ. Pauses Nielsen Order In Cumulus Tying Case

By Nadia Dreid

The Second Circuit has put on hold a preliminary injunction ordering the Nielsen Co. to offer its national ratings data separate from its local offerings after the company argued that the lower court changed the terms of the injunction after the Second Circuit approved it the first time.

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ArentFox Schiff Hires Haynes Boone Real Estate Chair In NYC

By Isaac Monterose

ArentFox Schiff LLP has picked a former Haynes Boone real estate litigation chair to be its new real estate litigation practice leader in its New York City office, the firm announced.

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How FTC's $20B Amazon Suit May Shake Up Ad Enforcement

Gonzalo Mon at Kelley Drye discusses the significance of the Federal Trade Commission's recent suit against Amazon for allegedly overcharging advertising customers more than $20 billion, the company's potential defenses, and the context of rapidly evolving digital advertising technology.

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9th Circ. Ruling Marks New Chapter In Risk Factor Tug-Of-War

The Ninth Circuit's recent dismissal of a securities fraud class action against SunPower is the latest in a growing line of cases addressing whether, if ever, a company's risk factor disclosures can give rise to potential liability, an area where the law remains unsettled, say attorneys at Alston & Bird.

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How GCs Can Assess The Risks Of Emerging AI Laws

Amid a swirl of momentous legislative activity aimed at regulating artificial intelligence, general counsel must return to first principles when determining whether new laws will apply and whether the company’s use could cause regulators to subject it to additional regulation, say attorneys at WilmerHale.

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Senior Lawyers Survey: Tell Us About Your Career

How are senior lawyers adapting to evolving career paths and emerging technologies? Share your perspective in this five-minute survey.

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Analysis

Attys 'Itching' To Join Congressional Probes Of Trump Admin

By Phillip Bantz

Efforts to recruit high-powered lawyers to Capitol Hill to potentially lead congressional committee probes into the various dealings of President Donald Trump's administration are gaining momentum as Democrats push to retake control of Congress in the quickly approaching midterm elections.

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Ex-DOJ Chief Lambastes 'Abuses Of Power' In Goldstein Case

By Jeff Overley

The U.S. Department of Justice constantly made false statements in its criminal case against famed appellate advocate Tom Goldstein, and his convictions must be erased because "prosecutorial misconduct pervaded every stage of the proceedings," a former DOJ prosecutor told the Fourth Circuit.

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Roundup

Taxation With Representation: Davis Polk, Latham, Sullivan

By Zak Kostro

In this week's Taxation With Representation, a group backed by Michael Dell's family office and Sequence Holdings acquires a majority interest in The Baldwin Group, May Mobility merges with a blank check company, and Infineon Technologies sells its memory chip business to Winbond Electronics.

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Ex-Wis. Judge Keeps License Amid ICE Conviction Appeal

By Ryan Boysen

The ex-Wisconsin judge convicted of obstructing an ICE arrest will remain an attorney in good standing while she appeals, after the Supreme Court of Wisconsin declined to suspend her law license.

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Richards Layton Litigator Selected For Chancery Seat In Del.

By Rose Krebs

A Richards Layton & Finger PA attorney has been nominated by Delaware Gov. Matt Meyer to serve on the bench of the nationally important Chancery Court, a venue that adjudicates some of the biggest corporate law cases.

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Judge Questions Whether 'Lawfare' Fund Fight Is Really Moot

By Jared Foretek

A Virginia federal judge seemed unlikely to toss a challenge to the Trump administration's nixed "Anti-Weaponization Fund" and tax audit immunity for the Trump family Friday, saying she worries the fund could be revived in a different form down the road.

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Chief US District Judge In SC To Take Senior Status Oct. 1

By Courtney Bublé

Chief U.S. District Judge Timothy Cain of the District of South Carolina has informed the president that he will be taking semiretired status on Oct. 1, according to an update posted Friday by the federal judiciary.

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Roundup

GC Cheat Sheet: The Hottest Corporate News Of The Week

By Michele Gorman

Starbucks settled a high-profile discrimination suit with Florida over its diversity, equity and inclusion policies, agreeing not to use race- or sex-based goals in hiring and promoting. And the SEC floated changing how publicly traded companies seek shareholder input, including promising to end one pathway for shareholders to place their proposals on corporate ballots. These are among the stories in corporate legal news you may have missed in the past week.

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Reed Smith Defends Docs Production In Ex-Atty's Bias Suit

By Jake Maher

Reed Smith LLP urged a New Jersey court on Thursday to reject an "impulsive" motion from a former attorney suing it for gender discrimination seeking to strike its answer and affirmative defenses.

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Law360's Legal Lions Of The Week

By Kevin Penton

Schemery Zicolello leads this week's edition of Law360 Legal Lions, after a Third Circuit panel ruled that police cannot conduct warrantless strip searches outside of jails or prisons absent consent or an emergency.

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