Pfizer to face lawsuit over diversity fellowship program, US supports Musk in OpenAI lawsuit, and more ??

?? Good morning from The Legal File! Here is the rundown of today's top legal news:

?? Pfizer must face lawsuit over diversity fellowship program, US court rules

A U.S. appeals court on Jan. 10 revived a lawsuit by a conservative group opposed to diversity initiatives in medicine that challenged a Pfizer fellowship program designed to boost the pipeline of Black, Latino and Native American people in leadership positions at the drugmaker.

At the urging of the group Do No Harm, a 2-1 panel of the New York-based 2nd U.S. Circuit Court of Appeals revisited a decision it issued last year holding the organization lacked legal standing to challenge the drugmaker's program in court.

That earlier decision had raised the bar for groups like Do No Harm to pursue similar cases on behalf of their membership by finding that they needed to identify members who were affected by the alleged discrimination they were suing over by name.

Do No Harm and other conservative advocacy groups had urged the 2nd Circuit to reconsider that holding, which they said would chill civil rights litigation by exposing individuals to harassment and retaliation if their identities were revealed.

Stanley Goldfarb, Do No Harm's chair, in a statement said it was pleased the court "reversed course and correctly recognized our right to protect our members in the district court."

Pfizer in a statement said Do No Harm's claims were without merit and that it was "proud of its commitment to diversity, equity, and inclusion."

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??US supports Musk argument in OpenAI lawsuit

U.S. antitrust enforcers weighed in on Jan. 10 on Elon Musk's lawsuit seeking to block OpenAI's conversion to a public company, pointing out legal doctrines that support his claim that OpenAI and Microsoft engaged in anticompetitive practices.

The U.S. Federal Trade Commission and Department of Justice were not expressing an opinion on the case, but offered legal analysis on aspects of the case ahead of a hearing in Oakland, California. Musk co-founded OpenAI and owns AI startup xAI.

A spokesperson for OpenAI referred to a court document where the company said the lawsuit lacks evidence and amounts to harassment. A spokesperson for Microsoft declined to comment.

Musk's lawyer Marc Toberoff said, "the participation of the DOJ and FTC is a sign of how seriously regulators take OpenAI and Microsoft’s misconduct.”

Musk alleges OpenAI violated antitrust law by making investors agree not to invest in rival artificial intelligence firms, and by sharing board members with Microsoft, which is also a defendant in the lawsuit.

The FTC is separately looking into partnerships in AI, including between Microsoft and OpenAI, investigating potentially anticompetitive conduct at Microsoft and probing whether OpenAI violated consumer protection laws.

Musk also claims that OpenAI facilitated a group investor boycott against its rivals. Such claims are viable even when the organizer of the boycott is not a member, the FTC and DOJ said.

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?? TikTok warns of broad consequences if Supreme Court allows ban

The lawyer for TikTok and its Chinese parent company ByteDance offered a warning during Supreme Court arguments over a law that would compel the sale of the short-video app or ban it in the United States: If Congress could do this to TikTok, it could come after other companies, too.

The law, which was the subject of arguments before the nine justices last week, sets a Jan. 19 deadline for ByteDance to sell the popular social media platform or face a ban on national security grounds. The companies have sought, at the very least, a delay in implementation of the law, which they say violates the U.S. Constitution's First Amendment protection against government abridgment of free speech.

Noel Francisco, representing TikTok and ByteDance, argued that Supreme Court endorsement of this law could enable statutes targeting other companies on similar grounds.

"AMC movie theaters used to be owned by a Chinese company. Under this theory, Congress could order AMC movie theaters to censor any movies that Congress doesn't like or promote any movies that Congress wanted," Francisco told the justices.

The justices signaled through their questions during the arguments that they were inclined to uphold the law, although some expressed serious concerns about its First Amendment implications.

TikTok is a platform used by about 170 million people in the United States, roughly half the country's population. Congress passed the measure last year with overwhelming bipartisan support, as lawmakers cited the risk of the Chinese government exploiting TikTok to spy on Americans and carry out covert influence operations.

Donald Trump on Dec. 27 urged the court to put a hold on the Jan. 19 deadline to give his incoming administration "the opportunity to pursue a political resolution of the questions at issue in the case."

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?? Trump prosecutor Jack Smith resigns from Justice Department

U.S. Special Counsel Jack Smith, who led the federal cases against Donald Trump on charges of trying to overturn his 2020 election defeat and mishandling of classified documents, has resigned, as the Republican president-elect prepared to return to the White House.

Smith resigned on Jan. 10 from the Department of Justice, according to a court filing on Jan. 11 to U.S. District Judge Aileen Cannon, asking her to lift a court order she issued blocking release of his final report.

Notice of Smith's resignation came in a footnote in the filing, which said the Special Counsel had completed his work, submitted his final confidential report on Jan. 7, and "separated" from the Justice Department on Jan. 10.

A former war crimes prosecutor, Smith brought two of the four criminal cases Trump faced after leaving office, but saw them grind to a halt after a Trump-appointed judge in Florida dismissed one and the U.S. Supreme Court — with three justices appointed by Trump — found that former presidents have sweeping immunity from prosecution for official acts. Neither case went to trial.

After Trump defeated Democratic Vice President Kamala Harris in the Nov. 5 election, Smith dropped both cases, citing a longstanding Justice Department rule against prosecuting sitting presidents. In asking courts to dismiss the charges, Smith's team defended the merits of the cases they had brought, signaling only that Trump's impending return to the White House made them untenable.

Trump welcomed Smith's departure on Jan. 12, saying on Truth Social that Smith had accomplished nothing and accused the prosecutor of "destroying the lives of many people and families."

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?? That's all for today, thank you for reading The Legal File, and have a great day!

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