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Weil Gotshal Plans to Dissolve, the US Sues Google Over a Returning Reservist & the White House Press Fight Moves to the Oval Office

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This Day in Legal History: Black Tuesday

On October 29, 1929, the New York Stock Exchange suffered the worst day of the crash that had begun the previous Thursday. About 16 million shares changed hands, a record that stood for decades, and the Dow fell about 12 percent. Investors who had bought stock on margin, with borrowed money, were wiped out as their loans were called. The crash didn’t cause the Great Depression by itself, but it became its symbol.

The legal response defined American financial regulation for the rest of the century. The Securities Act of 1933 required companies selling securities to the public to register and disclose financial information. The Securities Exchange Act of 1934 created the Securities and Exchange Commission and regulated trading and margin lending. The Banking Act of 1933, known as Glass-Steagall, separated commercial banking from investment banking and created the FDIC to insure deposits. The central idea, borrowed from Louis Brandeis in today’s opening quote, was disclosure: rather than having the government judge which investments were sound, the law would require companies to tell the truth and let investors decide.

The significance of October 29, 1929 is that much of modern corporate and financial law, and much of the work of the big law firms that grew up to practice it, traces back to the response to the crash. Earlier this month we marked the 1987 crash. Today’s anniversary goes back to the original. And our first story is about one of the firms that built its reputation in the aftermath of a later financial collapse.

Weil, Gotshal & Manges, one of the best-known names in corporate law, has told its partners it plans to wind down. Weil’s restructuring practice made it the go-to firm for some of the largest bankruptcies in history, including Lehman Brothers and Enron. Now the firm itself is dissolving after failing to stop a wave of partner departures and, according to Law.com, failing to find a merger partner in recent weeks. The firm says it will carry out an orderly wind-down and keep serving clients in the meantime. Reports say it brought in an outside bankruptcy lawyer to advise on the process. It isn’t yet clear what dissolution means for the firm’s lawyers and staff, numbering more than a thousand, or for its creditors. Law firm collapses are rare at this scale, but they follow a pattern. The most famous recent example is Dewey & LeBoeuf, which filed for bankruptcy in 2012. When partners start leaving, they take clients and revenue with them, which puts pressure on the remaining partners’ compensation and on the firm’s ability to cover its fixed costs, like leases and debt, which leads more partners to leave. Dissolution raises legal questions too. Under partnership law, a dissolving firm doesn’t end overnight; it winds up its affairs, collecting fees, paying creditors, and distributing what’s left. Courts have fought over the “unfinished business” doctrine, which asks whether profits from client matters that departing partners take to new firms belong to the old firm’s estate. And lawyers have professional duties that don’t pause for a wind-down. Clients have the right to choose their counsel, so they must be told promptly what’s happening and be able to decide where their matters go, with files transferred and deadlines protected. The lesson for the profession is how quickly a firm’s most valuable asset, its people, can walk out the door.

Weil Gotshal law firm plans to dissolve, capping dizzying fall | Reuters · Law.com · The Lawyer

The federal government has sued Google in Manhattan federal court on behalf of a former employee who is an Army reservist. Mark Davisson worked at Google as a key account executive, managing relationships with customer accounts. He took a year of military leave and returned in May 2023. The government alleges that Google kept his pay and title but no longer let him manage customer accounts, a change that could have limited his advancement. Google later moved him to a cloud solutions role that also didn’t involve managing accounts, and laid him off in August 2024 as part of a broader workforce reduction. Google hasn’t publicly responded in the reports so far. The suit is brought under USERRA, the Uniformed Services Employment and Reemployment Rights Act. It requires employers to reemploy service members returning from military duty, generally in the job they would have held if they hadn’t left, or one of equivalent seniority, status, and pay. This is known as the “escalator” principle: a service member returns to the step of the escalator they would have reached if they’d never left, not just to the same salary. That’s why the case turns on more than pay and title. If the core function of Davisson’s job, managing client accounts, was taken away, the government argues he wasn’t restored to an equivalent position, even though his paycheck didn’t change. USERRA also protects returning employees from being fired without cause for a period after they return, depending on the length of service, and prohibits discrimination and retaliation based on military service. Google will likely argue that the later layoff was part of a company-wide reduction unrelated to his service. When the Justice Department brings a USERRA case itself, it’s typically because the Labor Department investigated and referred it, and the government represents the service member at no cost. Given how many reservists and National Guard members work for large employers, the case is a reminder that the law asks employers to protect not just the paycheck but the career path.

US sues Google for failing to restore a former employee to a similar job following military deployment | Reuters

And finally, the White House press fight has entered a new phase. Since late September, U.S. District Judge Timothy Kelly has issued orders requiring the administration to restore White House access to journalists from CNN, MS NOW, and Politico, after the President banned the three outlets over what he called negative coverage. Earlier this month, the judge also ruled the White House can’t revoke the hard passes of dozens of the outlets’ reporters. Now the outlets have expanded their lawsuit, saying the White House is still keeping them out of the press pool, the small rotating group of reporters brought into the Oval Office for events or assigned to fly on Air Force One. The White House responded that “The Fake News has no place demanding a spot in the President’s Oval Office.” Separately, press freedom groups filed their own suit this week, arguing the ban violates the public’s First Amendment right to receive information about the government. Here’s why the pool is a harder question than the hard passes. Courts have long held that once the government opens a space to the press generally, it can’t exclude particular journalists based on viewpoint without due process. The White House briefing room and grounds fit that description. But the Oval Office and Air Force One are much more limited spaces, where the President has traditionally had more control over who’s present. Last year, in the Associated Press’s case over its exclusion from the pool, an appeals court allowed the White House to keep limiting the AP’s access to those spaces while the case continued, reasoning that they aren’t open to the press at large. The outlets here will argue that the reason for their exclusion, their coverage, is what makes it unconstitutional, wherever it happens. Viewpoint discrimination, they’ll say, is forbidden even where the government has wide discretion over access. How Judge Kelly draws that line will shape how much control any President has over which reporters see him up close.

CNN, MS NOW, Politico expand lawsuit over White House access limits | Reuters · Washington Post · Deadline



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