Faegre Baker Daniels is being sued for legal malpractice by a company that says the firm provided “erroneous” legal services relating to the launch and operation of a fund set up to acquire and manage crypto assets, according to a Bloomberg Law report.

Digital Capital Management’s complaint alleges that the law firm provided “inaccurate analysis and advice” to Digital Capital’s predecessor, Crypto Asset Management, LP, regarding how to register under the Investment Advisers Acts of 1940.

Crypto Asset Management alleges the firm advised the plaintiffs that “Crypto Assets are not securities” and to thus structure the fund’s business “accordingly.” The advice was “erroneous,” the complaint says, resulting in a censure and penalty from the SEC.

Read the Bloomberg Law article.

The ABA Journal reports that a lawsuit claims that Akin Gump Strauss Hauer & Feld and its lawyers took advantage of a corporate CEO who was suffering from substance abuse and mental health problems.

The Journal‘s Debra Cassens Weiss explains:

“The suit, filed in state court in New York, says Akin Gump took over finances and bookkeeping for Future Media Architects, a family-owned company that acquires and sells internet domain names. Akin Gump also directed and negotiated the sale of the domain names, often without input from its then-CEO and half owner, Thunayan Al-Ghanim, the suit says.”

…

“But eventually,” the suit alleges, “Akin Gump—aware that Thunayan was in no condition to monitor either FMA’s or Akin Gump’s activities—took advantage of the opportunity to loot FMA’s assets for personal profit.”

Read the  ABA Journal article.

Bed Bath & Beyond Inc.’s longtime general counsel Allan Rauch is among six senior executives departing the company as part of a corporate restructuring announced Dec. 17, reports Bloomberg Law.

The home goods retailer named a former subordinate of Rauch’s to succeed him as general counsel on an interim basis.

Bloomberg’s Brian Baxter writes that the new interim GC, Michael Callahan, is a former vice president and corporate counsel with more than 25 years of experience in the company’s law department.

Rauch joined the company in 1994 and became general counsel in 1996.

Read the Bloomberg Law article.

A NAVEX Global webinar will address the top 10 risk and compliance trends for 2020.

The complimentary event will be Wednesday, Jan. 15. 2020, at 10 a.m. PT/1 p.m. ET.

In 2020, several critical issues are sure to impact the business landscape, including: election year turmoil, updates to regulatory requirements, digital environment impact, new agency guidance, data privacy, workplace behavioral shifts, and more, NAVEX says in its invitation.

Participants in the webinar will hear how experts are predicting these upcoming trends will provoke, shape and inspire organizational shifts and program improvements.

Register for the webinar.

Schiff Hardin’s Environmental Group took a look prospects for renewable energy in 2020 and determined that development is expected to continue through 2020 and beyond.

Authors of the post in the Energy & Environmental Law Adviser blog are Alex Garel-Frantzen, Amy Antoniolli and Brett Cooper.

They discuss three key issues facing the industry for the coming year: waning federal government incentives; siting renewable energy projects at such locations as retired power plants and landfills can lower costs; and local communities can be slow to get on board with renewable energy initiatives.

See the article.

Before agreeing to a real estate sales contract or lease, the parties may prepare a letter of intent, term sheet or other form of preliminary agreement (together, called here an “LOI”), writes Stephen Siegel of Novack and Macey.

An LOI reflects that the parties have agreed on certain important terms of a deal, though not on all of its provisions or details.

“A well-crafted real estate LOI should address the parties’ intentions on such questions in clear terms. An LOI that is unclear as to what, if anything, it obligates the parties to do can invite uncertainty, disagreements and even litigation,” Siegel writes.

Read the article.

The Morgan Lewis Tech & Sourcing blog discusses a model agreement developed by the Clearing House as a voluntary starting point to facilitate data sharing between financial institutions and fintech companies.

The model agreement covers such provisions and concepts as flow-down obligations, data breach, liability, warranties and disclaimers, intellectual property, disclosure and consent, termination and suspension, and assignment.

Read the article.

Tesla’s general counsel is leaving the company, meaning the company has now lost three general counsels in the past year.

CNBC reports that Jonathan Chang, who was GC at Tesla since February, has taken a position as general counsel at SambaNova.

Chang’s predecessor, Dane Butswinkas, left the company in February 2019 after just two months on the job because he was not a good cultural fit, a source familiar with the situation told CNBC at the time.

Read the CNBC article.

As the launch date approaches for the California Consumer Privacy Act (CCPA) on Jan. 1, 2020, Exterro has published a white paper designed to help legal departments keep their organizations’ privacy processes defensible, and minimize the risk of violating new privacy laws.

The white paper can be downloaded from Exterro’s website at no charge.

The launch of the CCPA means that consumers have more information and control over a business’s data practices, which creates challenges for businesses, mostly: Do they have their arms around their data? Do they understand where it lives within in their organization, and where it’s shared?

The paper breaks down the key questions that arise in keeping an organization’s privacy processes defensible, such as:

• The final “checklist” questions that you should be asking about your organization’s data preparedness
• Tips for breaking down the elements of the CCPA into actionable processes
• Tips for maintaining a trim data inventory

Download the white paper.

The Wall Street Journal takes a look at a specific product liability case and puts it into context in the larger question of how Amazon and other internet companies try to avoid a legal burden when the products they sell malfunction, causing injury and damage.

The article by Alexandra Berzon tells the story of malfunctioning hoverboards that caused millions of dollars in damages when they burst into flames.

“The cases are testing a longtime argument made by Amazon and other internet companies, one that underpins the modern tech industry,” she writes. “We are just operating a platform that connects buyers and sellers, the argument goes. It’s up to the sellers who use our site to make sure that they meet proper safety standards.”

Read the WSJ article.

Lewitt Hackman discusses two recent cases concerning franchise agreements, one involving a forum selection clause and the other covering indemnification.

Inn the first case: “A California Court of Appeal held that courts should not enforce forum selection clauses in contracts that also contain a jury waiver. For franchisors that have California franchisees, this ruling could complicate the ability to litigate claims in their chosen forum.”

And in the second case, a federal appellate court held that a franchisee must indemnify a franchisor for its litigation defense costs, vacating a district court’s order of summary judgment for the franchisee.

Read the article.

A post by Davis Wright Tremaine proposes that professional services and particularly IT outsourcing agreements provide a better model for analytical artificial intelligence services than the widely used cloud services contracts.

“AI services have already become an important component of the IT portfolio for many large and small businesses,” writes Patrick E. Basinski. “The easy application of existing cloud services agreements as a contractual structure for AI services has helped accelerate AI’s adoption. As the reach of AI expands, new structures are needed to drive adoption of a set of potentially valuable AI solutions.”

Read the article.

The former chief executive of Bumble Bee Foods LLC, Chris Lischewski, was found guilty of price-fixing on Tuesday, reports Bloomberg.

Prosecutors in a San Francisco court alleged that he conspired with colleagues and executives at rival companies on a “peace proposal” in order to boost prices and meet earnings targets set by Bumble Bee’s 2010 sale to Lion Capital, according to the report.

Bumble Bee pleaded guilty in 2017 to a felony charge of conspiring with competitors Starkist Co. and Chicken of the Sea Inc. to fix and raise prices of canned tuna in the U.S. from 2011 through at least late 2013.

Read the Reuters article.

Disclosure schedules supplement the purchase and sale agreement in the sale of a business by incorporating disclosures about the business being sold, according to a post on the website of Thompson Coburn.

The authors explains:

“Generally, each disclosure schedule falls into one of two categories: a ‘list’ or an ‘exception.’ A ‘list’ schedule makes a representation that the schedule contains a complete record of certain aspects of the business (i.e., a list of leased or owned real property, registered intellectual property, insurance policies, employee benefit plans, etc.). An ‘exception’ schedule allows the seller to qualify a representation made in the purchase and sale agreement and, therefore, limit the seller’s potential liability.”

Read the article.

Construction disputes often involve voluminous amounts of discovery, including documents in the hand of third parties, points out Matthew DeVries in Burr & Forman’s Best Practices Construction Law blog.

If the case is subject to arbitration, it is likely there will be a dispute about whether the arbitrator has the authority to compel production of third-party documents or witnesses for deposition, he writes.

DeVries discusses a case in which the 11th Circuit  concluded that Section 7 of the Federal Arbitration Act precludes all pre-hearing discovery from non-parties.

Read the article.

A recent New York case sheds some light on the use of contract clauses that cover cardinal changes in construction, according to an alert by Henry L. Goldberg for Moritt Hock & Hamroff.

The case involves a $5,320,000 subcontract for masonry on a project. In a dispute that arose during the project, the subcontractor alleged that the general contractor had interfered with its work and wrongfully deleted an excessive portion of the subcontractor’s work in material breach of the subcontract. In other words, in its defense it asserted the “cardinal change doctrine.”

“The standards for finding a cardinal change are imprecise; courts have wide discretion,” writes Goldberg. “What, in fact, is the ‘essential identify’ and ‘main purpose’ of your contract? Here, the court failed to find the subcontractor in breach for walking off the job.”

Read the article.

Exterro has published “26 Data Privacy Questions for Corporate Legal Departments,” a new guide designed to determine if the necessary people, processes and technology are in place to ensure compliance and avoid costly future litigation over data privacy issues.

The guide can be downloaded from Exterro’s website at no charge.

“With the EU’s General Data Protection Regulation (GDPR) in effect and the California Consumer Privacy Act (CCPA) arriving in 2020 along with numerous other states following suit, businesses must meet new obligations around finding, reviewing and producing/deleting personal consumer data when requested,” the company says.

Download the guide.

The U.S. Court of Appeals for the Federal Circuit reversed a district court decision that retained jurisdiction over a breach of contract action, finding that the action did not sufficiently implicate issues of patent law and instead was simply a state law contract case for past royalties, reports McDermott Will & Emery via Lexology.

One of the parties to a case involving patents and royalties filed suit, alleging breach of contract and other equitable state law claims.

The defendant asserted counterclaims of breach of contract, fraud, negligent misrepresentation, restitution and breach of fiduciary duty. Both parties relied on diversity to establish subject matter jurisdiction.

Read the article.

D.C. Toedt III, writing in the On Contracts blog, offers some lessons for drafting representations and warranties in contracts.

He discusses a hypothetical case that involved the sale of a car, showing how the case could turn out differently, depending on whether the seller represented — or warranted — that the car was in good condition.

“If your client is being asked to represent and warrant some fact, then consider whether the client should only represent the fact, or whether the client should only warrant the fact,” Toedt writes in one of his drafting lessons.

Read the article.

A federal judge recently sent an ominous signal regarding the enforceability of cannabis contracts by issuing an order telling the parties have to show why the court should not dismiss the case, writes Samuel D. Méndez in Lane Powell’s Cannabis Law Advisor.

“The Order to Show Cause states that the contract at issue may be unenforceable under the federal Controlled Substances Act (“CSA”) because it concerns cannabis businesses, and cannabis remains an illegal substance under the CSA,” according to Méndez.

The judge wrote in the order that, although state law governs the breach of contract claim, where it is alleged that an agreement violates a federal statute, courts look to federal law.

Méndez offers some advice on drafting contracts that include a covenant that the parties agree not to raise the argument of enforceability in litigation.

Read the article.