Legal News for Weds 8/21 - Santos Pleading Guilty and Serving a Term, Anthropic Facing Copyright Lawsuit, Senate Bill to Add 66 Judges and FTC Noncompete Ban Blocked

Minimum Competence

This Day in Legal History: American Bar Association Founded

On August 21, 1878, the American Bar Association (ABA) was founded in Saratoga Springs, New York, by a group of 75 lawyers committed to advancing the legal profession in the United States. The ABA quickly became the nation’s premier organization for attorneys, setting standards for legal education, ethics, and professional conduct. It played a crucial role in shaping American jurisprudence, advocating for legal reforms, and providing resources for continuing legal education. Over the decades, the ABA influenced significant legal developments, including the establishment of the Model Rules of Professional Conduct, which guide attorney ethics nationwide.

However, from 2009 to 2019, the ABA saw a substantial decline in membership, reflecting broader challenges within the legal profession, such as the rising cost of legal education, the changing dynamics of legal practice, and competition from other professional organizations. Despite these challenges, the ABA remains a key player in the legal field, continuing to influence policy and uphold the standards of the profession. Its founding marks a pivotal moment in U.S. legal history, representing the formalization of efforts to unify and elevate the practice of law across the country.

George Santos, a former U.S. congressman representing Queens and Long Island, has pleaded guilty to fraud and identity theft charges, agreeing to serve a minimum of two years in prison. U.S. Attorney Breon Peace highlighted that Santos' acceptance of mandatory prison time was a critical factor in finalizing the recent plea agreement. Originally charged with fabricating fundraising figures and falsifying extensive parts of his biography during his congressional campaign, Santos was expelled from Congress in 2023. The 36-year-old now faces a potential maximum sentence of 22 years, with sentencing set for February 7 by Judge Joanna Seybert. Despite pleading guilty to only two counts, Santos admitted wrongdoing in all 23 original charges, which may influence the severity of his sentence. Peace emphasized the significance of holding corrupt public officials accountable to maintain public trust in governmental institutions.

Recent Supreme Court rulings have narrowed the scope of what constitutes bribery under federal law, impacting how prosecutors approach corruption cases. In June, the Court decided that accepting gratuities after performing an official act does not violate federal bribery statutes for state and local officials. Another ruling limited the application of honest services fraud charges to non-government individuals, further restricting prosecutorial avenues. These decisions present challenges for federal prosecutors, who must now navigate a more constrained legal framework when pursuing corruption charges. Despite these obstacles, prosecutors like Peace remain committed to holding public officials accountable by adapting their strategies within the revised legal boundaries. Understanding these Supreme Court decisions is crucial for comprehending the current landscape of political corruption prosecutions and the efforts required to secure convictions.

Mandatory prison was key to George Santos deal, US prosecutor says | Reuters

Anthropic PBC is facing a copyright lawsuit from authors Andrea Bartz, Charles Graeber, and Kirk Wallace Johnson, who allege that the company used pirated versions of their works to train its AI model, "Claude." The authors claim that Anthropic used an open-source dataset called The Pile, which included a subset known as "Books3" containing nearly 200,000 pirated books, including their own. Although Books3 was removed from The Pile in August 2023, older versions with the pirated content remain available. The lawsuit, filed in the U.S. District Court for the Northern District of California, accuses Anthropic of training its AI on this illegally obtained content instead of properly licensing it, likening the situation to a "modern-day Napster."

The authors argue that Anthropic’s actions harm their ability to earn a living by enabling users to generate text that would otherwise be paid for, thereby undermining the licensing market for copyrighted material. They pointed out that other AI companies, such as OpenAI, Google, and Meta, have struck licensing deals with content owners, highlighting a growing market for legally licensed training data. In a related issue, Anthropic is also being sued by eight music publishers for allegedly using its AI to reproduce song lyrics scraped from the internet. The authors’ complaint criticizes Anthropic for claiming to be a public benefit company while allegedly causing significant harm to copyright owners.

Anthropic Hit With Copyright Suit From Authors Over Flagship AI

A bill passed by the U.S. Senate to add 66 new judges to federal district courts is projected to increase government spending by $349 million over the next decade, according to a report from the Congressional Budget Office (CBO). The bill, known as the JUDGES Act, represents the first significant expansion of the judiciary since 1990 and aims to alleviate the increasing caseloads and staffing shortages in several states, including California, Texas, and Delaware. The bill plans to gradually create these judicial positions, including 63 permanent and three temporary ones, starting in January 2025.

The CBO estimates that $98 million of the total cost will cover the salaries and benefits of the new judges, which are constitutionally protected and not subject to congressional appropriation. The remaining $250 million will cover administrative costs, including court staff, facilities, security, and technology. Additionally, the bill mandates that the Government Accountability Office report on judges' caseloads and federal detention space needs, which would cost $1 million over the same period.

Despite the projected costs, supporters of the bill, including lead sponsor Senator Todd Young, argue that the cost of inaction would be higher, as delays in the judicial system could deny citizens timely access to justice. The bill now awaits consideration in the U.S. House of Representatives.

Bill to add 66 US judges would cost $349 mln over a decade, CBO says | Reuters

A federal judge in Dallas has blocked the U.S. Federal Trade Commission (FTC) from enforcing its near-total ban on noncompete agreements, which was set to take effect in September. U.S. District Judge Ada Brown ruled that the FTC lacked the authority to implement the ban, describing it as "unreasonably overbroad without a reasonable explanation." This ruling, favoring the U.S. Chamber of Commerce and a Texas tax firm that challenged the ban, is a significant setback for the FTC. The decision contrasts with a prior ruling by a Pennsylvania judge who supported the FTC’s authority.

The FTC argued that noncompete agreements harm workers by restricting economic freedom, depressing wages, and limiting innovation, while employers claim they protect investments in employees. Currently, about 20% of U.S. workers are subject to these agreements. Although the FTC planned to use its authority to ban noncompetes as part of its mission to prevent unfair competition, Judge Brown's ruling could lead to an appeal, potentially to the conservative-leaning 5th Circuit Court of Appeals. The case is one of three ongoing lawsuits against the FTC’s rule, with other cases pending in Florida and Pennsylvania.

FTC Ban on Worker Noncompete Deals Blocked by Federal Judge (2)

US judge strikes down Biden administration ban on worker 'noncompete' agreements | Reuters

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