Legal News for Weds 1/15 - Lemley Out for Meta, SEC Suing Elon Musk, Bondi Senate Hearing for Attorney General

Minimum Competence

This Day in Legal History: MLK Born

On January 15, 1929, Martin Luther King Jr., one of the most influential figures in American history, was born in Atlanta, Georgia. As a Baptist minister and leader of the Civil Rights Movement, King played a pivotal role in advancing racial equality and social justice in the United States. His commitment to nonviolent protest, inspired by Mahatma Gandhi, led to significant legal and social changes, including the dismantling of segregation and the affirmation of civil rights for African Americans.

King’s leadership during landmark events such as the Montgomery Bus Boycott in 1955 and the March on Washington in 1963 brought national attention to systemic racism and civil rights abuses. His iconic "I Have a Dream" speech at the Lincoln Memorial articulated a vision of racial harmony and equality, influencing the passage of critical legislation like the Civil Rights Act of 1964 and the Voting Rights Act of 1965.

Despite opposition and threats, King remained steadfast in his pursuit of justice, receiving the Nobel Peace Prize in 1964 for his efforts. His advocacy for economic equality and opposition to the Vietnam War further broadened his legacy. Tragically, King’s life was cut short on April 4, 1968, when he was assassinated in Memphis, Tennessee, while supporting a labor strike.

King’s birthday is now recognized as a federal holiday in the United States, known as Martin Luther King Jr. Day, celebrated annually on the third Monday of January. This commemoration underscores his enduring impact on American law and society, as well as the ongoing struggle for civil rights and equality. King's work has left an indelible mark, shaping legal reforms and inspiring movements for justice around the world.

Stanford law professor and renowned intellectual property scholar Mark Lemley has withdrawn as legal counsel for Meta Platforms Inc. in a high-profile generative AI copyright case. Lemley cited CEO Mark Zuckerberg's controversial recent actions, including ending diversity initiatives and fact-checking on Facebook, and promoting "masculine energy," as reasons for his departure. While Lemley believes Meta has a strong case in the AI copyright dispute, he stated he could not continue representing the company in good conscience.

Lemley’s withdrawal leaves attorneys from Cooley LLP and Cleary Gottlieb Steen & Hamilton to defend Meta against allegations from authors, including Sarah Silverman and Ta-Nehisi Coates, that Meta's AI improperly trains on copyrighted works. The case addresses a critical issue in AI development: whether training models on copyrighted material constitutes infringement. Authors argue this practice unfairly exploits their work, while AI advocates claim it constitutes fair use, given the scale and indirect impact of the works.

Lemley, a distinguished academic and practitioner, has contributed significantly to intellectual property law, including involvement in key cases like Warhol Foundation v. Goldsmith. His departure underscores concerns about Meta’s evolving corporate ethos. Additionally, Lemley announced he would deactivate his Threads account and avoid supporting Meta financially, though he stopped short of leaving Facebook entirely to preserve his social connections.

Meta Lawyer Lemley Quits AI Case Citing Zuckerberg 'Descent' (1)

The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk, accusing him of delaying the required disclosure of his significant Twitter stake in 2022. According to the SEC, Musk violated securities laws by failing to disclose his 5% ownership in Twitter within the 10-day deadline, waiting until April 4, 2022, to reveal a 9.2% stake. This delay allegedly allowed Musk to acquire over $500 million in shares at lower prices, disadvantaging other investors. Twitter’s stock price surged 27% after Musk’s disclosure.

The SEC’s suit seeks to impose civil fines and recover any illicit profits Musk gained. Musk’s lawyer, Alex Spiro, dismissed the lawsuit as a baseless effort by the SEC, framing the issue as a minor administrative oversight.

Musk, who later purchased Twitter for $44 billion in October 2022 and rebranded it as X, has a history of legal disputes with the SEC, including a 2018 settlement over misleading Tesla privatization tweets. He has also faced shareholder lawsuits for the delayed disclosure. Despite these challenges, Musk’s substantial wealth and influence continue to draw attention, with his attorney accusing the SEC of harassment amid leadership changes at the agency.

US SEC sues Elon Musk over late disclosure of Twitter stake | Reuters

Pam Bondi, Donald Trump’s nominee for attorney general, will face a Senate Judiciary Committee hearing amid scrutiny over her past decisions and ties to the former president. Bondi, Florida’s attorney general from 2011 to 2019, played a prominent role in Trump’s 2019 impeachment defense and supported his post-2020 election fraud claims. Democrats are expected to question her impartiality, particularly in light of Trump’s comments about using the Justice Department to target political adversaries.

Bondi has faced criticism for declining to investigate Trump University after her campaign received a $25,000 donation from the Trump Foundation, a decision she has defended as unrelated to the contribution. She also worked as a lobbyist for Ballard Partners, representing clients like Amazon, Uber, and GEO Group, some of which have had dealings with the Justice Department under the Biden administration. Senators are likely to probe potential conflicts of interest arising from her lobbying background.

Bondi has pledged to consult ethics officials on any conflicts. Her confirmation hearing follows contentious reviews of other Trump Cabinet picks, with Democrats raising concerns about loyalty to Trump’s personal interests over those of the United States. The outcome of Bondi’s nomination remains uncertain, as the Republican-majority Senate considers her extensive ties to Trump and her record as a lobbyist and public official.

Trump's attorney general pick Pam Bondi to face US Senate grilling | Reuters

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