BD Digest - January 2018
- 15 Minutes With Lyft's General Counsel
- Zoo Tries To Nix Judge In PETA Suit Over Animal Dwellings
- Shepherds Fight H-2A Visa At DC Circ. In Wage Dispute
- BCBS Agrees To Settle Mental Health Coverage Suit For $7M
- Trump Accuses FBI Agent of ‘Treason’
How has the transportation network industry changed over the past several years?
The change has been a really complete zero-to-100 change because when I first joined the company the industry itself didn't even exist. ... The classification title — transportation network company, or TNC — wasn't even in existence. It wasn't present. That came about through an almost yearlong process that we invested in with our regulator, which is the California Public Utilities Commission here. So that entire framework had to be created. At that time, the idea of getting into a stranger's car was crazy. When I talked to my friends about joining this company they couldn't imagine doing it, and now all of them rely on Lyft to get around every single day.
What do you say now to your friends who doubted your career choice when you joined Lyft in 2012?
Well, I don't have to say anything to them now. No, seriously, they did think I was a little crazy but the calculus for me sort of went like, "Well, I'm taking a big risk joining this company." The company at the time was only 30 people. "But, you know, if this company folds in a year and I only have my job for a year, it will still be good for my professional development because I'll be exposed to different areas of law, different ways of working with people, new and creative ideas." I thought, "OK, it's giving up a little bit of certainty in my future but I will gain other skills, and so if I have to look for a job in a year because this company is not around, so be it."
I think now looking back when I talk to the friends that I consulted with at the time, they all say, "Wow, you really saw something special that was there before any of us did."
What are some of the biggest challenges the industry is facing right now?
The biggest thing that's on the horizon is the emergence of self-driving vehicles, and that's something that we're really excited about. We are working with regulators to create a framework for that. We've partnered with other companies in the space — competitors, auto manufacturers and other tech companies — and so we need to look forward to that eventuality probably over the next several years. But I think that we have a really solid foundation in place now because we do have this long history of working collaboratively with regulators.
Where do you see the industry going in the next five to 10 years?
Self-driving vehicles are one component of it. We think that they'll begin to be adopted but they won't handle every ride, every circumstance. We anticipate that growing.
We also anticipate continuing to work with drivers as we currently do, and we anticipate the industry as a whole growing. Right now even though we are ubiquitous, we still only account for about 0.5 percent of vehicle miles traveled. I think that you're going to see even a much greater incidence of individuals realizing they no longer need personal cars and adopting alternative methods of transportation which might include Lyft, might include public transportation, bike sharing, etc.
What makes Lyft stand out from its competitors?
I think that Lyft's primary differentiating factor is the fact that its two co-founders have been deeply invested in the transportation and ride-sharing space for quite a long time now. ... Every way in which we approach the business is with that fundamental idea of connecting people to create better transportation. It's a focus on connecting people, connecting communities.
What do you enjoy most about your job?
There are really two things that I enjoy the most about my job. One is the substance of the work, and the other is the people that I work with. These are actually the two reasons that I initially took the job. I sort of alluded to liking [co-founders] John [Zimmer] and Logan [Green], and that has remained completely true to this very day.
From a substance perspective, my job is really challenging. There's a lot of gray area in the law, especially in the early days. We were developing the regulations in connection with the regulators, and so there was a lot of just good common sense, gut judgment and effective advocacy that had to come along with that. Today as we look to some of the things that I've already mentioned like autonomous vehicles and international expansion, we're applying all those same skills to unknown areas. Certainly that cutting-edge, innovative nature of the work is really energizing for me.
On the other side, the people side, internally the team that we've built here at Lyft is second to none. Smart, nice, engaged, hard-working people that make me excited to come to work everyday. And then from an external perspective, we work with many, many drivers across the United States, and it's exciting to be able to create income opportunities for them, which helps them achieve their goals.
When I get asked about the idea of, "Well would you want to look for another career or another position elsewhere?" It's hard for me to imagine finding all of those things in another job.
What are the most surprising things you've learned in this role?
I think the most surprising and also humbling thing for me is the fact that you can learn something from every single person internally at the business. I remember when I first joined the company and I was the only lawyer talking to a very junior product manager and I made some sort of legal recommendation and the response was, "Well, that doesn't make sense and here's why." I realized that that individual was correct and that I was wrong.
That's something that I've really taken with me, which is that because we do have such an amazing staff of folks here, you really have to come prepared with a thoughtful and detailed analysis anticipating every question that can come your way. We all are encouraged to challenge one another, from the lowest man on the totem pole up to our co-founders. For me that was surprising because as an attorney at an outside firm, I think you're rarely challenged by your clients to give advice and then you sit back and wait. Whereas here, there's much more open and engaging dialogue.
What keeps you up at night?
I have two young kids. That is what keeps me up at night.
Lyft faces obviously many different problems both in the legal and business world. But we are well-equipped to tackle anything that's thrown our way. It's not the work that keeps me up at night; it's the 3-year-old and the baby.
If you could have lunch with anyone alive or dead, who? And why?
My answer has changed over time on this one but my current answer is Hillary Clinton. I would just love to meet her. I can only imagine the amount of self-reflection she's had to do in the last year. It's not easy to be a powerful female, and I would love to know what she thinks she's done well and what she would do differently because I think that there are a lot of lessons for everyone, but particularly for women executives.
A Maryland zoo moved Thursday to disqualify the judge in a suit brought by animal rights group People for the Ethical Treatment of Animals over allegedly substandard conditions for endangered animals, arguing he had conducted independent internet research and expressed concern for animals that called his objectivity into question.
The Tri-State Zoological Park said in a motion that U.S. District Judge Marvin J. Garbis had looked up online reviews of the zoo, which is located in Cumberland, Maryland, and that his comments implied that the reviews had biased him against it
The zoo also alleged that the negative reviews were mostly planted by PETA and PETA’s affiliates.
“It appears that, based upon independent internet research, the presiding judge has already decided that those reviews on the internet are true and has formed a dim view of defendants’ operations,” the motion said. “This reliance upon unsourced and anonymous hearsay is not fair to the defendants and shows a bias and partiality that demands recusal or disqualification.”
PETA's suit, filed in July, alleged that the small, privately-owned facility kept two ringtail lemurs, five tigers and one lion in substandard conditions in violation of the Endangered Species Act. It also alleged that the facility is not accredited, meaning it did not have license to acquire the lemurs; that it did not have the financial resources to keep up the facility; and that its volunteer staff was not properly trained to care for the animals.
The facility has been cited several times in recent years by the U.S. Department of Agriculture, which also noted substandard living conditions for the animals.
According to the zoo's motion Thursday, Judge Garbis had said during a telephone conference that it appeared the zoo wasn’t able to properly care for the animals, apparently based on online reviews. The judge also seemed to take PETA’s allegations at face value and urged both sides to work together to “help” the animals, the motion said.
The zoo argued that the judge had demonstrated a bias against it based on unknown internet reviews, which it claimed were created by PETA itself. The motion also argued that it was inappropriate for the judge to look up the reviews at all.
In a formal opinion issued in December, the American Bar Association had warned judges against looking up information about a case and declared that it is unethical to use the information from an internet search in deciding cases. The opinion noted that information found online might be biased, misleading or false and should therefore be avoided.
Counsel for the zoo declined to comment. Counsel for PETA did not respond Friday to a request for comment.
PETA is represented by Conor B. O’Croinin, Marcos E. Hasbun and Justin Cochran of Zuckerman Spaeder LLP.
The zoo is represented by Nevin L. Young.
The case is People for the Ethical Treatment of Animals v. Tri-State Zoological Park of Western Maryland Inc., case number 1:17-cv-02148 in the U.S. District Court for the District of Maryland.
The H-2A nonimmigrant visas that allow foreign-born shepherds to work in the U.S. are unlawful because the available positions represent a permanent labor shortage and are thus not temporary, and that they open those shepherds up to abuse by their employers, asserted organizations representing the workers in a brief they filed Tuesday with the D.C. Circuit.
The appellate court should strike down the process followed by federal agencies that allows the dispensing of unlawful visas to companies that go on to pay the workers absurdly low wages, according to the brief filed by organizations such as the Hispanic Affairs Project.
“This is a case about foreign shepherds, the unlawful visas they receive, and the illegally low wages they are allowed to be paid,” the brief reads. “The visas at issue are approved by the [U.S.] Departments of Labor and Homeland Security, which have created an illegal, shepherd-specific exemption from a statutory requirement for obtaining the visas.”
The organizations are seeking that the appellate court reverse orders entered in July by U.S. District Judge Beryl A. Howell, who granted cross motions for summary judgment brought by the DOL, the Mountain Plains Agricultural Service and the Western Range Association, which represent sheep ranches that employ foreign sheepherders with H-2A visas. She found the shepherds’ claims invalid because they had waived their right to oppose H-2A visa regulations during the rulemaking process. The judge also determined that the DOL rightly adopted the federal minimum wage standard for shepherds and that the scope of shepherds’ duties can go beyond herding.
“The shepherds have failed to demonstrate that their specific argument concerning DOL’s alleged permanent work-visa policy was raised before DOL during the rulemaking process,” the judge wrote. “Accordingly, [their] permanent work-visa argument is waived, and the claims predicated on it against DOL cannot proceed.”
The shepherds filed their original complaint in August 2015, alleging that the DOL’s rules at the time for the H-2A visa program for herders relied on old data and an unfairly small sample size of just nine workers to set a wage that added up to about $750 a month, or $2 to $3 an hour, based on work weeks that can approach 80 hours. They contended that the DOL failed to comply with three regulatory requirements, putting it in violation of the Administrative Procedure Act.
After a revised wage rule went into effect in November 2015, the shepherds filed an amended complaint that December challenging the updated regulation, arguing that it “exploits a vulnerable class of mainly foreign shepherds who cannot out-lobby an industry that has captured the agency supposedly charged with protecting worker rights,” according to court documents.
The shepherds are represented by William W. Taylor III and Dermot Lynch of Zuckerman Spaeder LLP.
The federal government is represented by acting Assistant Attorney General Chad A. Readler, and Erez Reuveni and William C. Peachey of the Department of Justice.
The case is Hispanic Affairs Project et al. v. Acosta et al., case number 17-5052, in the U.S. Court of Appeals for the D.C. Circuit.
Blue Cross Blue Shield of California has agreed to pay $7 million to settle allegations that it refused to cover residential and outpatient treatment for mental health or substance use-related disorders, a putative class of customers told a California federal judge on Monday.
The class had said California Physicians’ Service, which does business as Blue Shield of California, and several related health insurance companies refused to cover certain treatments by relying on medical necessity rules that improperly restricted coverage for mental health illnesses more than generally accepted professional standards would permit.
Blue Shield ended up changing its guidelines during the course of the suit, and Monday’s proposed settlement bars Blue Shield from reverting to its previous guidelines, especially when weighing the claims of the class members for a second time. The company is required to issue a bulletin to staff that explains why previous denials of the members’ coverage requests “shall not be relied upon” to deny any future requests on the basis of lack of medical necessity.
“As a result of the settlement, neither class members nor any other participant or beneficiary in plans administered by Blue Shield will ever suffer denials of coverage for residential or intensive outpatient treatment on the basis of the allegedly defective [guidelines] challenged by plaintiffs in this case,” the motion said.
Monday’s motion is the latest in a litigation that Charles Des Roches and Sylvia Meyer launched in May 2016 accusing Blue Shield of violating the Employee Retirement Income Security Act by breaching their contract to provide insurance. The proposed class action lawsuit grew to include approximately 1,373 people who claimed the parameters Blue Shield used to determine the necessity of a given customer’s mental health claims were unfairly limited.
Although the insurance companies denied all liability, Blue Shield stopped using the challenged guidelines for members of its health plans nine months after the class filed suit. Monday’s motion said the additional $7 million settlement is more than fair given that the class did not seek court-ordered benefit payments.
According to the settlement proposal, the fund’s distribution will prioritize class members who actually received treatment that Blue Shield refused to cover. But even those who did not get the treatment after being denied coverage will receive fair compensation, the motion said, because they will share equally in at least 25 percent of the settlement fund.
The class is defined as all health plan participants whose requests for coverage were denied based upon the Magellan guidelines covering residential and outpatient treatment for psychiatric or substance use disorders between January 2012 and now.
Under the settlement’s proposed schedule, Blue Shield has 30 days to provide the class counsel with a class list of qualifying members. The parties agreed to use a confidentiality program to prevent the unintentional disclosure of patient information when serving notice.
Named plaintiffs are set to receive an incentive award of $20,000 each to reflect their role in the case.
Although the motion said the class agreed to let its counsel seek total lodestar, which they calculated at more than $8 million, the attorneys said they seek reimbursement of no more than $850,000.
“Class counsel intends to seek a fee award of one-third of the amount remaining after deduction of litigation costs, notice and administration costs, and any incentive award to the named plaintiffs,” the motion said.
Counsel for both parties did not immediately respond to a request for comment on Tuesday.
The class is represented by Meiram Bendat of Psych Appeal Inc., Daniel L. Berger and Rebecca A. Musarra of Grant & Eisenhofer PA and Jason S. Cowart of Zuckerman Spaeder LLP.
Blue Shield is represented by Joseph Edward Laska and Carri Maas of Manatt Phelps & Phillips LLP.
The case is Des Roches et al v. California Physicians' Service et al, number 5:16-cv-02848 in the U.S. District Court for Northern California.
President Donald Trump said Thursday that an FBI agent once involved in the special counsel’s Russia probe committed “treason,” and he called for Republican investigators in Congress to conclude their probes swiftly.
In an interview with The Wall Street Journal, Mr. Trump, unprompted, labeled as “treason” a text message written by Peter Strzok, an agent at the Federal Bureau of Investigation who was removed in July as a top investigator on the special counsel’s team investigating whether Russia colluded with associates of Mr. Trump to influence the 2016 presidential election.
“A man is tweeting to his lover that if [Democrat Hillary Clinton ] loses, we’ll essentially do the insurance policy. We’ll go to phase two and we’ll get this guy out of office,” said Mr. Trump, giving his interpretation of Mr. Strzok’s text message.
“This is the FBI we’re talking about—that is treason,” the president said. “That is a treasonous act. What he tweeted to his lover is a treasonous act.”
Aitan Goelman, an attorney for Mr. Strzok, said: “It is beyond reckless for the president of the United States to accuse Pete Strzok, a man who has devoted his entire adult life to defending this country, of treason. It should surprise no one that the president has both the facts and the law wrong.”
The crime of treason is defined in the Constitution as aiding enemies of the U.S. or “levying war” against the nation. A spokesman for the FBI declined to comment.
In an August 2016 text, Mr. Strzok wrote: “I want to believe the path you threw out for consideration...that there’s no way he gets elected—but I’m afraid we can’t take that risk. It’s like an insurance policy in the unlikely event you die before you’re 40.”
The Journal reported last month that, according to people familiar with Mr. Strzok’s account, the “insurance policy” reference was meant to convey that the bureau needed to investigate aggressively allegations of collusion between the Trump campaign and Russia. It wasn’t intended to suggest a secret plan to harm his candidacy, they said.
Mr. Strzok was the lead agent on the FBI investigation into Mrs. Clinton’s use of a private email server when she served as secretary of state. Special counsel Robert Mueller removed Mr. Strzok from his team in July after learning that he sent texts critical of Mr. Trump.
In Thursday’s interview, Mr. Trump also said the U.S. is taking steps to ensure that Russia and any other countries don’t try to influence future elections.
“We’re going to be very, very careful about Russia and about anybody else, by the way,” Mr. Trump said.
The president declined to detail specific actions under way to protect the electoral system, beyond saying that his administration is “working on different solutions” and “all sorts of fail-safes.”
Mr. Trump, a Republican, has previously expressed skepticism about a 2017 U.S. intelligence report that said Russia sought to interfere in the 2016 election, an allegation Moscow has denied.
The president, in the interview, also forcefully defended himself against allegations of collusion between his 2016 campaign and Russia and whether he obstructed justice by firing former FBI Director James Comey last spring as the agency investigated Moscow’s alleged interference. Mr. Mueller is investigating those matters.
“Of course there was no obstruction—there was no crime,” Mr. Trump said. “They make up a crime, and the crime doesn’t exist, and then they say obstruction.”
Mr. Trump said he should get credit for firing Mr. Comey, saying “everybody wanted Comey fired.
“I should be given credit for having great insight,” he said.
Last year, lawmakers in both parties criticized Mr. Trump’s decision to fire Mr. Comey, with some Republicans calling it troubling. Lawmakers swiftly called for the appointment of an independent counsel to take over the FBI’s Russia probe.
The president said he based the decision to fire Mr. Comey on Deputy Attorney General Rod Rosenstein’s memo criticizing the then-FBI director. “He was in charge,” Mr. Trump said of Mr. Rosenstein.
Mr. Rosenstein wrote the memo about Mr. Comey at the White House’s prompting, a day after meeting with the president to discuss Mr. Comey’s job performance, the Journal previously reported. The memo didn’t expressly recommend Mr. Comey be fired.
In an NBC interview days after Mr. Comey’s termination, Mr. Trump said “this Russia thing” was on his mind when he decided to fire him. A spokesman for the FBI didn’t immediately return a request for comment.
Mr. Mueller told Mr. Trump’s lawyers last month he may want to speak with the president in the near future. The president, in Thursday’s interview, wouldn’t commit to speaking with or answering questions on obstruction of justice from Mr. Mueller.
Mr. Trump said his lawyers’ initial instinct with regard to the special counsel investigation was: “We’ll fight this.”
But after they reviewed the documents requested by the special counsel, Mr. Trump said, “They said, ‘We should be open.’ They said, ‘You never did anything wrong.’”
“To be honest, they probably were surprised, as most lawyers would be,” he said, referring to what he said was his lawyers’ conclusion that he didn’t do anything wrong.
Mr. Trump offered praise for Republican congressional investigators. Asked whether he believed the congressional investigations were nearing an end, Mr. Trump said: “I hope so.”
Mr. Trump said his call in a tweet earlier this week for Republicans to “take control” of the investigations shouldn’t be interpreted as an order to shut them down. “No, I just want them to be tough—be strong,” he said.
He also defended his eldest son’s decision to take a meeting in June 2016 at Trump Tower with a Russian lawyer tied to the Kremlin. His son, Donald Trump Jr., was promised damaging information about Mrs. Clinton.
Former White House chief strategist Steve Bannon was quoted in a new book about the administration as calling the meeting “treasonous,” though he has since said his comment was aimed at former campaign chairman Paul Manafort, who also attended the 2016 meeting at Trump Tower in Manhattan.
“What he said about my son is horrible,” Mr. Trump said.