View profile

🎨 Nazi-Era Art Case: Squashed

Legit.
Good Monday afternoon. A great round-up for you today:
  • Supreme Court squashes Nazi-era art dispute.
  • McKinsey settles opioid probe.
  • Pot is hot right now.
  • Chinese tech giant vs. Chinese tech giant.

INTERNATIONAL
Nazi-Era Art Case: Squashed
Image: Getty
Image: Getty
The US Supreme Court sided with Germany in a dispute over art extorted from Jewish collectors in 1935.
The backstory. The case centers around an infamous art collection valued at $250 million: the Guelph Treasure. A consortium of three Jewish-owned firms bought the collection in the waning days of the Weimar Republic.
  • But, when the Nazi government grabbed the reins of power, the treasure caught the eye of Hitler’s pal and prime minister of Prussia – Hermann Goering.
Jeb Leiber, an heir to the collection, says Goering – “one of the most notorious art thieves of all time” – forced the consortium to sell the Guelph Treasure for a fraction of its true value, threatening the dealers with persecution and violence if they disobeyed.
After failing to resolve the matter in German courts, Leiber and two other heirs sued Germany in America for the return of the collection.
But… the Supreme Court said no. Under the Foreign Sovereign Immunities Act, countries are generally immune from being dragged into American courts. The heirs, though, tried to rely on an exception:
  • You can sue other countries in the US for property “taken in violation of international law.”
Sliiight issue. Germany argued this exception doesn’t apply if a country is taking property from its own citizens. The SC agreed, saying (1) domestic takings should be dealt with domestically; (2) America would hate if its historical bad behaviour e.g. slavery was punished by other countries.  
THE TAKEAWAY
Property law > international law. But Leiber’s hoping a technicality can keep the case alive:
  • German Jews were stripped of their citizenship under the Nuremberg race laws so, technically, Goering didn’t take property from his own citizens - meaning the domestic takings rule is void.
Lower courts will now decide if this creates another avenue for the Guelph Treasure heirs to sue Germany.
PHARMA
McKinsey McSettles
Consulting firm McKinsey has agreed to pay 47 states $573 million for its role in ‘turbocharging’ the opioid epidemic.
The allegation. A few months ago, lawsuits unearthed documents showing McKinsey worked with Purdue Pharma to “supercharge” sales of the painkiller OxyContin, despite the magnitude of the opioid epidemic. Its efforts included:
  • Encouraging sales reps to target doctors who overprescribed OxyContin.
  • Switching patients to more powerful doses.
  • Brainstorming ways to “counter the emotional messages from mothers with teenagers that overdosed.”
“McKinsey’s efforts worked. The number of pills prescribed, Purdue’s profits and McKinsey’s fees all skyrocketed,” said the AG for North Carolina. “But so did the number of overdoses.”
The flip side. McKinsey admits no wrongdoing under the settlement, but will make thousands of documents related to its opioid work publicly available.
THE TAKEAWAY
Consulting shops have been blurring the line between offering advice and actually implementing this advice for years now.
This settlement crushes the distance McKinsey and its competitors – who traditionally argue they only make recommendations – put between their advice and client’s actions, per the NYT
Zoom out. Members of the Sackler family, who own Purdue, agreed last fall to pay the federal government $225 million in civil penalties, and are in talks with other litigants to cough up $3bn.
M&A
Pot-quisition Surges Cannabis Stock
Jazz Pharmaceuticals is acquiring British biotech company GW Pharmaceuticals for $7.2bn, it announced Wednesday.
Each year… GW Pharma grows 20 tons of cannabis in greenhouses scattered around a secret corner of the English countryside.
Not for you to get high, though. The plants have been genetically modified to remove psychoactive properties and are used to make Epidiolex - a treatment for children with severe epilepsy and the first cannabis-derived drug to win FDA approval.
The deal is an opportunity for Jazz, who up until now has focused on sleep disorders and cancer treatments, to beef up its neuroscience unit.
THE TAKEAWAY
Two interesting angles here.
The pharmaceutical/recreational divide
  • The marriage between Jazz and GW adds legitimacy to the growing crop of companies focused on creating predictable, pharmaceutical-grade cannabis. These companies can (a) sail through regulatory hurdles and (b) access European markets - unlike their recreationally-focused counterparts. 
(Pot) bullish markets
  • Weed stocks soared this week as spectators anticipate the Biden administration will soften cannabis legislation within weeks. If it does, M&A activity in the marijuana industry is likely to balloon, with the legal marijunana market projected to reach $73.6bn by 2027.
Ganjapreneurs, get ready.
Zoom out. Amidst the glut of opioid scandals (read above), pharma is putting more stock in its ability to manufacture alternative, safer, non-addictive medicine.
ANTITRUST
ByteDance and Tencent Right Now
Image: Giphy
Image: Giphy
In an interesting change of scenery from US-China TikTok drama (update here), China’s social media giants are turning on each other. Beijing-based ByteDance sued Tencent on Tuesday for abusing its “market dominance.”
The allegations. ByteDance claims Tencent violated Chinese antitrust laws by blocking access to content from Douyin (TikTok’s Chinese twin) on WeChat and QQ (Tencent’s messaging apps). It’s asking Tencent for 90 million yuan ($14 million) in compensation.
Old rivalry: the two tech giants have been arch-rivals for years. Bytedance is:
  • Swallowing an increasing share of user’s screen time with Duoyin.
  • Aiming to take Tencent’s throne in the gaming and payment industries.
Tencent, on the other hand, has built a walled garden via WeChat, policing the content and services its 1 billion users can interact with. The result? Many, many fights between the two companies.
New rules: this fight, though, is different. Last year, Chinese regulators drew up landmark antitrust laws for the tech sector, aimed mostly at chipping away Jack Ma’s Alibaba. Angela Zhang, antitrust expert at the University of Hong Kong, says Beijing’s new policy initiatives could work in ByteDance’s favor.
THE TAKEAWAY
Tit-for-tat. At this point, it’s unclear how China’s new anti-monopoly rules will interact with ByteDance and Tencent’s escalating turf war. One hiccup though: the central government’s antitrust bureau only has 45 staff, meaning it could struggle to pull together the manpower needed for enforcement action this big.
Zoom out. Another Chinese tech giant is edging its way into the arena; TikTok rival Kuaishou went public via IPO in Hong Kong this week, with its share price nearly tripling on Friday. The upside: investor appetite for tech companies remains strong despite the Alibaba saga.
LEGIT ONE LINERS
  • Smartmatic files $2.7bn suit against Fox News over election fraud claims.
  • Myanmar blocks Facebook and Twitter amidst military coup.
  • EU and UK will open a probe into Nvidia’s $40bn acquisition of Arm.
  • France court finds government liable for climate change inaction.
  • 23andMe, genetics testing company, is going public by merging with a Richard Branson-backed SPAC.
  • US Justice Department drops lawsuit accusing Yale of racial bias.
  • Amazon will pay $62 million to settle claims it withheld tips from delivery drivers.
  • NY Attorney-General becomes the first-ever AG to sue the police for excessive use of force during BLM protests.
THE FUTURE OF LAW
As weird as 2020 was, it was an exciting year for law.
We think 2021 will be even better, so have put together a collection of essays on where the legal industry is heading this year - covering legal tech to SPACs and everything in between.
Want to see ‘em? Just refer 2 friends to Legit and we’ll send The Future of Law your way.
Here’s a message you can use to share with your friends:
Hey! Do you read Legit? Highly recommend - it’s the best legal newsletter out there. Fast, fun, digestible. And free. Give it a try and subscribe using my personal invite link:
Click here to access your personalized referral portal and check your referral count.
Thanks for reading Legit!
Like what you see? Share Legit with your friends.
Or talk to us at crew@readlegit.com.
Did you enjoy this issue? Yes No
Legit. | Legal News
Legit. | Legal News @anniamirza

The free weekly email bringing you fast, fun, digestible legal news.

If you don't want these updates anymore, please unsubscribe here.
If you were forwarded this newsletter and you like it, you can subscribe here.
Created with Revue by Twitter.