🎨 Nazi-Era Art Case: Squashed

Good Monday afternoon. A great round-up for you today:

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.

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:

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.  

Property law > international law. But Leiber’s hoping a technicality can keep the case alive:

Lower courts will now decide if this creates another avenue for the Guelph Treasure heirs to sue Germany.

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:

“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.

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.

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.

Two interesting angles here.

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.

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:

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.

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.

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.

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