Legal News for Mon 6/17 - Rare Disease Community and IRA, Alex Jones' BK Rolls on, and President Biden Criticizes SCOTUS

Minimum Competence

This Day in Legal History: James McCord Arrested

On June 17, 1972, James McCord, security director for President Richard Nixon's re-election committee, and four Cuban-Americans were arrested for breaking into the Democratic National Committee Headquarters at the Watergate complex in Washington, D.C. This event marked the beginning of the Watergate scandal, a major political scandal in the United States that ultimately led to President Nixon's resignation. The burglars were caught wiretapping phones and stealing documents, intending to gather information to sabotage Nixon's political opponents.

As investigations unfolded, it was revealed that the break-in was part of a broader campaign of political espionage and sabotage conducted by the Nixon administration. The scandal exposed widespread abuse of power, including illegal wiretapping, break-ins, and attempts to cover up these activities. Journalists Bob Woodward and Carl Bernstein of The Washington Post played a crucial role in uncovering the details of the scandal, leading to increased public scrutiny and pressure on the administration.

The investigation led to the indictment of several Nixon administration officials and the creation of the Senate Watergate Committee. The most significant outcome was the discovery of the existence of secret tapes of conversations in the Oval Office, which revealed President Nixon's involvement in the cover-up. Faced with the likelihood of impeachment, Nixon became the first U.S. president to resign from office on August 8, 1974. The Watergate scandal had a lasting impact on American politics, leading to increased transparency and reforms aimed at preventing such abuses of power in the future.

The rare disease community is advocating for changes to the Inflation Reduction Act’s drug price-setting scheme, which is causing drugmakers and investors to reconsider developing drugs for small patient populations. Companies like Pfizer, Alnylam Pharmaceuticals, Eli Lilly, and Protagonist Therapeutics are altering their research strategies due to concerns over recouping costs under the Medicare Drug Price Negotiation Program. This program exempts orphan drugs with a single FDA-approved indication from price negotiations, but those with multiple indications might not qualify for the exclusion, even if they are not yet approved for additional conditions.

Opponents are seeking legislative and judicial changes to amend the Inflation Reduction Act, as companies and investors shift their focus away from rare disease and small-molecule drugs. Jamie Sullivan of the EveryLife Foundation for Rare Diseases emphasized the importance of achieving technical fixes to support innovation. Recent legislative efforts aim to protect the development of these drugs, and companies like AstraZeneca are challenging the provisions in court. The Inflation Reduction Act has made the capital environment more challenging for rare disease drugs, according to John Stanford of the Incubate Coalition.

Patient groups and some manufacturers argue that the exemption reduces incentives provided by the Orphan Drug Act, which has historically promoted the research and development of rare disease medicines. These drugs often launch with a single indication but can later be approved for additional uses. Concerns are rising that the current policies may hinder further research into rare diseases. Despite industry concerns, some groups argue that drug companies still have substantial resources for robust R&D and can profit from expanding indications for orphan drugs. A CMS spokesperson stated that the negotiation program aligns with the law and won’t harm long-term innovation.

US Drug Negotiations Plan Shifts Focus for Rare Disease Programs

Alex Jones' personal bankruptcy has been converted to a Chapter 7 liquidation, meaning a trustee will now manage how he pays the $1.5 billion in defamation judgments against him. Jones was unable to reach an agreement with the families of the Sandy Hook Elementary School shooting victims, whom he defamed by claiming the 2012 massacre was a hoax. US Bankruptcy Judge Christopher Lopez ruled that Jones' case does not qualify for exceptions to prevent its conversion to Chapter 7, despite Jones’ objections.

During the same hearing, Judge Lopez dismissed the bankruptcy case of Infowars' parent company, Free Speech Systems LLC, allowing the Sandy Hook families to pursue their claims in state court. The judge clarified that there was never a request to shut down Infowars itself. Lopez expressed the difficulty of the case, acknowledging its connection to the tragic 2012 shooting.

Jones’ defamation debts were deemed non-dischargeable in bankruptcy due to the intentional and malicious nature of his actions. Following state court verdicts, Free Speech Systems filed for Chapter 11 bankruptcy in July 2022, and Jones filed for personal bankruptcy in December 2022. Efforts to reach a consensual bankruptcy plan failed, prompting the recent conversion to Chapter 7.

Jones and the Sandy Hook families had recently agreed on the need to convert his case to Chapter 7, but the Free Speech Systems case remained contentious. Ultimately, the court decided that dismissing the Free Speech case was in the best interest of creditors. Despite potential liquidation, Jones may start a new broadcast, according to attorneys for the Sandy Hook families.

This case is being managed under Alexander E. Jones, Bankr. S.D. Tex., No. 22-33553, as of June 14, 2024.

Alex Jones Loses Financial Control as Trustee Takes Over (4)

Alex Jones' assets to be liquidated as his company exits bankruptcy | Reuters

At a star-studded fundraiser in Los Angeles on June 15, President Joe Biden criticized the U.S. Supreme Court as being "out of kilter," emphasizing that it has never been as out of step as it is today. The event, which featured former President Barack Obama and Hollywood celebrities like George Clooney and Julia Roberts, raised over $30 million for Biden's campaign. Biden highlighted the court's conservative leanings, particularly criticizing Justice Clarence Thomas's remarks on reconsidering issues like in vitro fertilization and contraception. He also warned that if Donald Trump wins the 2024 election, he could appoint two more justices, which Biden described as alarming.

The fundraiser was framed by a video montage contrasting Biden's record with that of Trump, drawing cheers from the audience. Biden noted that the Supreme Court, now dominated by conservatives appointed by Trump, has made decisions restricting affirmative action, gay rights, gun control, and environmental regulations. Obama reiterated the importance of elections in determining the court's power, linking the current situation to Trump's 2016 victory.

The event marked the largest Democratic fundraiser in history, surpassing a previous record set in New York City. Other celebrities present included Jack Black, Jason Bateman, and Kathryn Hahn. Despite Biden's low approval ratings and concerns about his age, the fundraiser aimed to showcase the campaign's strength and momentum. Biden and Trump are currently tied in national polls, with Trump leading in battleground states. Both candidates have raised significant funds in California, demonstrating the state's financial influence on their campaigns.

Biden slams Supreme Court at $30 million fundraiser with Obama, Clooney, Julia Roberts | Reuters

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