Latest news with #AlgenonMarbley
Reuters
6 days ago
- Business
- Reuters
Appeals court halts ‘shockwave' attorney-client privilege ruling
Aug 12 (Reuters) - When a major Ohio utility was ensnared in a bribery scandal in 2020, it turned to a time-honored playbook for organizations in hot water: The company and its board of directors each hired a large law firm to investigate and advise on how to respond to looming litigation and enforcement actions. What FirstEnergy didn't expect was for a federal judge in Columbus, Ohio, to rule last year that the probe findings weren't shielded by attorney-client or work-product protections. That's because the utility also made use of the advice for business purposes, U.S. District Judge Algenon Marbley found. He ordered the company to turn the documents over to plaintiffs lawyers representing a class of investors suing for securities fraud in the wake of the scandal. The decision sent 'shockwaves' through corporate boardrooms and the legal industry, FirstEnergy lawyers said, and prompted more than three dozen blue chip law firms to sign an amicus brief, opens new tab urging the Sixth Circuit U.S. Court of Appeals to intervene. Should the decision stand, the firms said, it would 'threaten the success of countless internal investigations necessary to the good governance of companies in the United States.' (Left unsaid: their lucrative practices conducting the probes would take a hit as well.) Exhale, everyone. Last week, the appeals court ruled, opens new tab that all likelihood, Marbley got it wrong. FirstEnergy is apt to succeed on the merits of its mandamus petition, the panel held, and the investigation documents created by Jones Day and Squire Patton Boggs will indeed be shielded from discovery. 'What matters for attorney-client privilege is not what a company does with its legal advice, but simply whether a company seeks legal advice,' the unsigned August 7 order stated. 'After all, a corporation could hardly justify expending resources on legal advice that wasn't business-related.' Sullivan & Cromwell co-chair Robert Giuffra, who represents FirstEnergy in the 6th Circuit appeal and underlying securities class action, told me he was pleased that the decision 'reiterates that attorney-client privilege and the attorney work product doctrine apply fully to internal corporate investigations.' Plaintiffs' lawyer Jason Forge, a partner at Robbins Geller Rudman & Dowd, did not respond to a request for comment. The fight over the internal investigation documents reflects what can sometimes be a tricky question: Must legal advice be the only primary purpose of a privileged communication? The U.S. Supreme Court in 2023 had the chance to offer guidance in a case involving an unnamed law firm's bid to designate such 'dual purpose' client records as privileged in a tax and cryptocurrency investigation. Rather than weigh in, though, the high court in a one-sentence order dismissed the case as improvidently granted a few weeks after oral arguments. Internal corporate investigations have been around for decades, and FirstEnergy lawyers point to a 1981 Supreme Court decision, opens new tab to argue the fruits of such probes have consistently been treated as protected communications. As chronicled by my former Reuters colleague Alison Frankel, the FirstEnergy case began in July 2020. That's when the company disclosed, opens new tab that it had received subpoenas from the U.S. Justice Department in connection with what turned out to be the biggest political corruption scandal in Ohio history. Almost overnight, FirstEnergy's share price plunged from nearly $42 to less than $23, and investors lost billions. The company went on to admit to paying a combined $64 million to entities controlled by then-Ohio House Speaker Larry Householder and the chair of the state's public utility commission in exchange for favorable legislation and regulatory treatment, Reuters reported. While FirstEnergy has since resolved much of the legal fallout, including paying $230 million to the U.S. government to settle a federal criminal investigation, it's continued to fight the securities class action by investors, who are seeking $8 billion in damages. In seeking the internal investigation documents, the plaintiffs argued that FirstEnergy brought in Jones Day and Squire for two business reasons: to assuage its auditor's concerns about certifying the company's U.S. Securities and Exchange Commission filings and to determine if the utility should fire any of its executives. The special master and the trial judge agreed that the investigations were not sparked by litigation fears but were intended to provide business advice. The appellate panel – judges Jeffrey Sutton, Alice Batchelder and John Nalbandian, who were appointed by Republicans George W. Bush, George H.W. Bush and Donald Trump -- disagreed, writing that the lower court "gets it backwards.' Precedent requires considering 'whether a communication primarily seeks 'to render or solicit legal advice,' irrespective of a company's reason for wanting that legal advice,' they held. Moreover, the work-product doctrine, which covers documents prepared in anticipation of litigation, also likely applies. Here, the 'flood of legal and regulatory actions prompting FirstEnergy's investigations explains why,' the panel held. 'FirstEnergy, simply put, faced an onslaught of civil and criminal investigations while pursuing internal investigations.'
CBS News
19-04-2025
- Politics
- CBS News
Judge strikes down an Ohio law limiting kids' use of social media as unconstitutional
A federal judge permanently struck down an Ohio law on Thursday that would have required children and teens under 16 to get parental consent to use social media apps. U.S. District Court Judge Algenon Marbley's decision came in a lawsuit filed by NetChoice, a trade group representing TikTok, Snapchat, Meta and other major tech companies. The organization's complaint argued that the law unconstitutionally impedes free speech and is overly broad and vague. The state contends the law is needed to protect children from the harms of social media. Marbley said that the state's effort, while laudable, went too far. "This court finds, however, that the Act as drafted fails to pass constitutional muster and is constitutionally infirm," he wrote, adding that even the government's "most noble entreaties to protect its citizenry" must abide by the U.S. Constitution. Bethany McCorkle, a spokesperson for Republican Ohio Attorney General Dave Yost, said, "We're reviewing the decision and will determine the next steps." The law was originally set to take effect Jan. 15, 2024, but Marbley placed an immediate hold on enforcing it that he later extended. It is similar to ones enacted in other states, including California, Arkansas and Utah, where NetChoice lawsuits have also succeeded in blocking such laws, either permanently or temporarily. The law seeks to require companies to get parental permission for social media and gaming apps and to provide their privacy guidelines so families know what content would be censored or moderated on their child's profile. The Social Media Parental Notification Act was part of an $86.1 billion state budget bill that Republican Gov. Mike DeWine signed into law in July 2023. The administration pushed the measure as a way to protect children's mental health, with then-Republican Lt. Gov. Jon Husted saying that social media was "intentionally addictive" and harmful to kids. Marbley said the law "resides at the intersection of two unquestionable rights: the rights of children to 'a significant measure of' freedom of speech and expression under the First Amendment, and the rights of parents to direct the upbringing of their children free from unnecessary governmental intrusion." But his opinion cited court precedent that such laws don't enforce parental authority over their children's speech, they impose governmental authority over children subject to parental veto. NetChoice praised Thursday's ruling. "The decision confirms that the First Amendment protects both websites' right to disseminate content and Americans' right to engage with protected speech online, and policymakers must respect constitutional rights when legislating," Chris Marchese, NetChoice's director of litigation, said in a statement.
Yahoo
18-04-2025
- Politics
- Yahoo
Ohio judge permanently blocks social media age verification law
(Photo Illustration by). A federal judge in Ohio permanently blocked a parental consent law for social media this week. The measure, approved as part of the 2023 budget bill, would have required social media companies verify a user's age and block access to kids younger than 16 unless they have parental consent. The court had halted it while the case progressed and the statutes were never enforced. From the outset, the proposal's puzzling definitions, carve outs, and cumbersome verification methods made for a rickety structure. Despite lauding the effort to protect children, U.S. District Judge Algenon Marbley determined, 'the act as drafted fails to pass constitutional muster and is constitutionally infirm.' 'Even the government's most noble entreaties to protect its citizenry must abide in the contours of the U.S. Constitution, in this case the First Amendment,' he added. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX Ohio Gov. Mike DeWine, who championed the provisions alongside former Lt. Gov. Jon Husted, disagreed with the ruling. 'We know how harmful social media is to children without parental involvement,' he said in a written statement. 'This law is a commonsense solution that allows social media usage by a child under the permission of a parent, just like going on a school field trip or participating in youth sports. This ruling should be appealed.' A spokeswoman for Attorney General Dave Yost said, 'We're reviewing the decision and will determine the next steps.' Meanwhile, lawmakers are already back at the drawing board, working on new legislation that imposes age verification at the level of a phone's app store, rather than platform by platform. Those bills have yet to get a hearing, but the group that successfully challenged Ohio's existing restrictions testified against similar legislation in Utah. Ohio Republicans propose new social media age verification plan Ohio's law requires websites and online communities that 'target' children or can be 'reasonably anticipated' to be accessed by them to verify a user's age. That verification can happen with an email, credit card, over the phone or by video conference among other options. There's an 11-factor list to determine whether a website falls within the law's scope and has carveouts for product review sites and 'widely recognized' media outlets. The trade group NetChoice argued the law plainly violates the First Amendment by regulating speech based on its content or the speaker. The group added the state's explanation of which companies must comply is unconstitutionally vague. Yost fired back that the law isn't about speech at all, it has to do with whether minors can enter into contracts. 'At worst,' the state argued, the law 'only incidentally implicates speech.' Marbley dismissed the state's contention that the law doesn't regulate protected speech. He drew a comparison between social media companies and publishers, and while acknowledging the analogy is 'imperfect,' it demonstrates that the law restricts speech 'in two consequential ways.' 'It regulates operators' ability to publish and distribute speech to minors and speech by minors,' he explained, 'and it regulates minors' ability both to produce speech and to receive speech.' As for the argument that the measure is really about contracts, Marbley pointed to the law's emphasis on socially interactive features. 'These provisions do not strike at the commercial aspect of the relationship between covered websites and their users,' he wrote, 'they tackle the social speech aspect of it.' Digging further into the dispute over whether the restrictions are content-neutral, Marbley again set aside the state's arguments. He wrote the determination whether a website targets or would likely be accessed by children 'certainly requires consideration of the content on an operator's platform.' He added the law's 11-factor list makes it plain that content is the 'essential consideration.' Marbley found fault with the law's carveouts for review and news media sites as well. He described giving a pass to so-called established media as 'eyebrow-raising' and questioned treating a product review site differently than a book or film review site. The law is 'favoring engagement with certain topics, to the exclusion of others,' he wrote, 'That is plainly a content-based exception.' And although Marbley acknowledged the law could still stand if it's narrowly tailored and serves a compelling state interest, he found the state simply hadn't cleared that bar. 'Ohio's response to a societal worry that children might be harmed if they are allowed to access adult-only sections cannot be to ban children from the library altogether absent a permission slip,' he wrote. Follow Ohio Capital Journal Reporter Nick Evans on X or on Bluesky. SUPPORT: YOU MAKE OUR WORK POSSIBLE
Yahoo
17-04-2025
- Politics
- Yahoo
Judge strikes down an Ohio law limiting kids' use of social media as unconstitutional
COLUMBUS, Ohio (AP) — A federal judge permanently struck down an Ohio law on Thursday that would have required children and teens under 16 to get parental consent to use social media apps. U.S. District Court Judge Algenon Marbley's decision came in a lawsuit filed by NetChoice, a trade group representing TikTok, Snapchat, Meta and other major tech companies. The organization's complaint argued that the law unconstitutionally impedes free speech and is overly broad and vague. The state contends the law is needed to protect children from the harms of social media. Marbley said that the state's effort, while laudable, went too far. 'This court finds, however, that the Act as drafted fails to pass constitutional muster and is constitutionally infirm,' he wrote, adding that even the government's "most noble entreaties to protect its citizenry" must abide by the U.S. Constitution. Bethany McCorkle, a spokesperson for Republican Ohio Attorney General Dave Yost, said, "We're reviewing the decision and will determine the next steps.' The law was originally set to take effect Jan. 15, 2024, but Marbley placed an immediate hold on enforcing it that he later extended. It is similar to ones enacted in other states, including California, Arkansas and Utah, where NetChoice lawsuits have also succeeded in blocking such laws, either permanently or temporarily. The law seeks to require companies to get parental permission for social media and gaming apps and to provide their privacy guidelines so families know what content would be censored or moderated on their child's profile. The Social Media Parental Notification Act was part of an $86.1 billion state budget bill that Republican Gov. Mike DeWine signed into law in July 2023. The administration pushed the measure as a way to protect children's mental health, with then-Republican Lt. Gov. Jon Husted saying that social media was 'intentionally addictive' and harmful to kids. Marbley said the law 'resides at the intersection of two unquestionable rights: the rights of children to 'a significant measure of' freedom of speech and expression under the First Amendment, and the rights of parents to direct the upbringing of their children free from unnecessary governmental intrusion.' But his opinion cited court precedent that such laws don't enforce parental authority over their children's speech, they impose governmental authority over children subject to parental veto. NetChoice praised Thursday's ruling. 'The decision confirms that the First Amendment protects both websites' right to disseminate content and Americans' right to engage with protected speech online, and policymakers must respect constitutional rights when legislating," Chris Marchese, NetChoice's director of litigation, said in a statement.
The Independent
17-04-2025
- Politics
- The Independent
Judge strikes down an Ohio law limiting kids' use of social media as unconstitutional
A federal judge permanently struck down an Ohio law on Thursday that would have required children and teens under 16 to get parental consent to use social media apps. U.S. District Court Judge Algenon Marbley's decision came in a lawsuit filed by NetChoice, a trade group representing TikTok, Snapchat, Meta and other major tech companies. The organization's complaint argued that the law unconstitutionally impedes free speech and is overly broad and vague. The state contends the law is needed to protect children from the harms of social media. Marbley said that the state's effort, while laudable, went too far. 'This court finds, however, that the Act as drafted fails to pass constitutional muster and is constitutionally infirm,' he wrote, adding that even the government's "most noble entreaties to protect its citizenry" must abide by the U.S. Constitution. Bethany McCorkle, a spokesperson for Republican Ohio Attorney General Dave Yost, said, "We're reviewing the decision and will determine the next steps.' The law was originally set to take effect Jan. 15, 2024, but Marbley placed an immediate hold on enforcing it that he later extended. It is similar to ones enacted in other states, including California, Arkansas and Utah, where NetChoice lawsuits have also succeeded in blocking such laws, either permanently or temporarily. The law seeks to require companies to get parental permission for social media and gaming apps and to provide their privacy guidelines so families know what content would be censored or moderated on their child's profile. The Social Media Parental Notification Act was part of an $86.1 billion state budget bill that Republican Gov. Mike DeWine signed into law in July 2023. The administration pushed the measure as a way to protect children's mental health, with then-Republican Lt. Gov. Jon Husted saying that social media was 'intentionally addictive' and harmful to kids. Marbley said the law 'resides at the intersection of two unquestionable rights: the rights of children to 'a significant measure of' freedom of speech and expression under the First Amendment, and the rights of parents to direct the upbringing of their children free from unnecessary governmental intrusion.' But his opinion cited court precedent that such laws don't enforce parental authority over their children's speech, they impose governmental authority over children subject to parental veto. NetChoice praised Thursday's ruling. 'The decision confirms that the First Amendment protects both websites' right to disseminate content and Americans' right to engage with protected speech online, and policymakers must respect constitutional rights when legislating," Chris Marchese, NetChoice's director of litigation, said in a statement.
