Nike settles lawsuit against maker of Lil Nas X ‘Satan Shoes’

NEW YORK (Reuters) – Nike Inc said on Thursday it has settled a lawsuit against a Brooklyn company that made “Satan Shoes” in collaboration with the rapper Lil Nas X, and that the company has agreed to a voluntary recall.

The settlement with MSCHF Product Studio Inc resolves a trademark infringement lawsuit that Nike filed last week over the black-and-red, devil-themed sneakers, which carry the Nike “swoosh” logo.

Reporting by Jonathan Stempel in New York; Editing by Chris Reese

Apple to argue it faces competition in video game market in Epic lawsuit

(Reuters) – Apple Inc said it plans to argue that it faces abundant competition in the market for video game transactions to defend itself against antitrust allegations by “Fortnite” maker Epic Games, the iPhone maker said on Thursday.

Epic sued Apple last year in federal court in California, alleging the 15% to 30% commissions that Apple charges for the use of its in-app payment systems and Apple’s longstanding practice of exercising control over which apps can be installed on its devices amount to anticompetitive behavior. The dispute arose after Epic tried to implement its own in-app payment system in the popular “Fortnite” game and Apple subsequently banned the game from its App Store.

The case is to be heard in May in Oakland, California, by U.S. District Judge Yvonne Gonzalez Rogers, who will have to rule on which notion of a “market” is the correct one for analyzing Apple’s moves for signs of anticompetitive conduct.

Epic has framed its case around the idea that Apple’s iPhones, with an installed base of more than 1 billion users, represent their own distinct market for software developers. Epic has argued that Apple has monopoly power over that market because it decides how users can install software on the devices and says it abuses that power by forcing developers to deliver their software through the App Store, where developers are subject to fees on some transactions.

In a filing that Apple planned to make Thursday, the company rejected that notion and said the proper market to analyze the case is the video game transaction market, which includes platforms such as Nintendo Co Ltd and Microsoft Corp’s Xbox gaming consoles, which also limit the software that can run on their hardware and charge fees to developers.

Apple said it plans to argue that consumers have many choices on how to carry out video game transactions, including purchasing virtual tokens from game developers on other platforms such as Windows PCs and using the tokens on iPhones with no fees to the game developer.

Singapore blogger crowdfunds $99,000 to pay PM: Court case

SINGAPORE (Reuters) – A Singaporean blogger said on Monday he had raised S$133,000 ($98,840) via crowdfunding on social media to cover damages he was ordered to pay Prime Minister Lee Hsien Loong in a defamation case filed by the city-state’s leader.

Lee had sued Leong Sze Hian, a financial advisor, after he shared on Facebook an online news article that linked the premier to a financial scandal at Malaysia’s state fund 1MDB.

Lee’s lawyers have said such links were “false and baseless”. Leong had deleted the November 2018 Facebook post within three days of sharing it, complying with a government request.

The Singapore high court on March 24 ordered him to pay Lee S$133,000.

“I am very happy, very grateful,” he told Reuters on Monday.

Leong made the announcement on Facebook late on Sunday, when he posted: “It is finished. All paid for.”

As the head of a government that has pledged zero tolerance of corruption, Lee, 69, is no stranger to seeking to protect his reputation via legal channels.

Senior figures in the ruling People’s Action Party, including Lee’s late father and the founder of modern-day Singapore, Lee Kuan Yew, have previously sued foreign media, political opponents and online commentators for defamation.

($1 = 1.3456 Singapore dollars)

Tesla files a petition against U.S. labor board order

(Reuters) – Tesla Inc has filed an appeal on a U.S. National Labor Relations Board ruling that the electric-car maker had violated U.S. labor law, and on the agency’s order that Chief Executive Officer Elon Musk delete a tweet from the account.

The electric-car maker filed a petition on Friday with the New Orleans-based U.S. Court of Appeals to review the NLRB’s decision and order issued on March 25.

In the petition, Tesla asked the court to review the order and grant Tesla “any further relief which the Court deems just and equitable.”

Last month, the NRLB ordered Tesla to direct Musk to delete the tweet and to post a notice addressing the unlawful tweet at all of its facilities nationwide and include language that says “WE WILL take appropriate steps to ensure Musk complies with our directive.”

In the 2018 tweet, Musk wrote: “Nothing stopping Tesla team at our car plant from voting union. Could do so tmrw if they wanted. But why pay union dues & give up stock options for nothing? Our safety record is 2X better than when plant was UAW & everybody already gets healthcare.”

The NLRB also directed Tesla to offer one former employee reinstatement as well as to rescind 2017 rules that prohibited distributing union literature in its parking lot on non-work time and rules that barred distributing union stickers, leaflets, and pamphlets without first obtaining permission.

EU fines Moody’s for failing to disclose conflicts of interests

The European Union’s markets watchdog said on Tuesday it has fined credit ratings firm Moody’s 3.7 million euros ($4.35 million) for breaching rules including the failure to disclose conflicts of interests.

All the breaches resulted from negligence on the part of the company, the European Securities and Markets Authority (ESMA) said, adding that the fine was for five Moody’s entities based in France, Germany, Italy, Spain and Britain.

ESMA said Moody’s had inadequate internal policies and procedures to manage shareholder conflicts of interest. The breaches took place between 2013 and 2017, it said.

“ESMA found that MIS (Moody’s Investors Service) had no intent to infringe the EU regulation and there was no impact on the quality of any ratings,” a Moody’s spokesperson said in an e-mailed statement to Reuters.

Moody’s, one of the three largest credit ratings agencies alongside S&P Global and Fitch, added that the regulator had recognised the steps it has taken to prevent similar infringements in the future.

ESMA said the breaches were of a rule that prevents agencies from issuing ratings on companies in which they own 10% or more of its shares, or where they have a board position.

The regulator fined Fitch 5.1 million euros a couple of years ago for similar breaches.

“ESMA believes it is crucial, to ensure independent good quality ratings and to protect investors, that (ratings agencies) carefully identify and subsequently eliminate or manage and disclose conflicts of interest to avoid interference by shareholders with the rating process,” the watchdog said. ($1 = 0.8503 euros)

Nike sues Lil Nas X over blood-filled ‘Satan Shoes’

Nike is suing rapper Lil Nas X and art collective MSCHF over a controversial pair of “Satan Shoes” that contain a drop of real human blood in the soles.

The $1,018 (£740) trainers, which feature an inverted cross, a pentagram and the words “Luke 10:18”, were made using modified Nike Air Max 97s.

MSCHF released 666 pairs of the shoes on Monday on its app and says they sold out in less than a minute.

Nike is claiming the collective infringed its trademark.

The black and red shoes were “dropped” by MSCHF on Monday, coinciding with the launch of Lil Nas X’s latest song Montero (Call Me By Your Name), which debuted on YouTube last Friday.

In the music video, the rapper is seen sliding down a stripper pole from heaven to hell, wearing a pair of the trainers.

The imagery and the shoes reference the Bible verse Luke 10:18 – “So He told them, ‘I saw Satan fall like lightning from heaven’.”

Each shoe features a signature Nike air bubble cushioning sole, containing 60 cubic centimetres (2.03 fluid ounces) of red ink and a single of human blood, donated by members of the art collective. 

The sports shoe giant says in a filing with the US District Court for the Eastern District of New York that it does not approve or authorise the customised Satan Shoes.

Lil Nas X and MSCHF's Satan Shoes sold out in less than a minute on Monday
image captionLil Nas X and MSCHF’s Satan Shoes sold out in less than a minute on Monday

Nike is asking the court to stop MSCHF from selling the shoes and prevent them from using its famous Swoosh design mark.

“MSCHF and its unauthorised Satan Shoes are likely to cause confusion and dilution and create and erroneous association between MSCHF’s products and Nike,” the sports shoe giant says in the lawsuit.

“In fact, there is already evidence of significant confusion and dilution occurring in the marketplace, including calls to boycott Nike in response to the launch of MSCHF’s Satan Shoes based on the mistaken belief that Nike has authorised or approved this product.” View original tweet on Twitter

The lawsuit cites a tweet by popular shoe influencer @Saint from last Friday, which teased the upcoming release of the shoes and drummed up publicity over the weekend on social media and in the media in the US.

Some Conservatives, including South Dakota Governor Kristi Noem, and some religious followers, took offence at the controversial design of the shoes and criticised Lil Nas X and MSCHF on Twitter. 

Lil Nas X hit back at the governor and other critics on Twitter, and on Monday was tweeting several memes on his profile in response to news of the Nike lawsuit.

Boeing asks Delaware court to throw out investors’ 737 MAX lawsuit

SEATTLE (Reuters) – Boeing Co asked a Delaware court to throw out a shareholders’ lawsuit over the safety of its 737 MAX, saying the board engaged in “robust and well-established” oversight of the design and certification of the plane.

In an amended complaint unsealed in February, New York State Comptroller Thomas DiNapoli, who heads the state pension fund, and other investors argued that Boeing’s board breached its fiduciary duties and acted with gross negligence by failing “to monitor the safety of Boeing’s 737 MAX airplanes.”

The lawsuit, filed in Delaware Chancery Court, also alleges that the board did not develop any tools to evaluate and monitor airplane safety until after both 737 MAX crashes and the fleet was grounded.

In its motion to dismiss the complaint, made public on Monday, Boeing said the plaintiffs ignore “the robust systems that had long been in place” to keep the board informed about significant risk issues.

“Boeing’s Directors maintained this high scrutiny, moreover, during a period in which commercial aircraft, and Boeing’s in particular, achieved ever higher levels of safety,” Boeing said, “a trend that cannot be squared with Plaintiffs’ simplistic narrative about a ‘safety-engineering culture’ that had been ‘intentionally dismantled.’”

Boeing had management briefings at the board and an internal corporate audit group to evaluate risks, as well as a mechanism to receive reports on employee ethics and compliance complaints, Boeing said.

A Boeing representative did not immediately respond to a request for comment.

A lawyer representing the plaintiffs declined to comment.

Ex-lobbyist sues Eli Lilly company alleging sexual harassment

(Reuters) – A former top lobbyist for pharmaceutical giant Eli Lilly & Co accused a high-ranking executive and another senior manager of engaging in sexual discrimination, harassment and retaliation against women in its Washington D.C. office, according to a lawsuit filed Friday.

The suit, filed in federal court by in-house lobbyist Sonya Elling, alleges that a Lilly senior vice president, Leigh Ann Pusey, repeatedly demeaned Elling and other women, and eventually forced Elling to resign. Elling’s lawsuit seeks unspecified damages for lost pay and alleged reputational and emotional harm.

Pusey, senior vice president of corporate affairs and communications, was one of Chief Executive Officer Dave Ricks’s first appointments upon taking the role in 2017.

Eli Lilly is the only named defendant in the suit. Pusey did not respond to requests for comment.

A Lilly spokeswoman denied the allegations in the suit. “Lilly is committed to fostering and promoting a culture of diversity and respect, and a work environment free of discrimination, harassment or retaliation of any kind,” the spokeswoman, Kathryn Beiser, said. “We hold all employees accountable to our core values and believe our executives carry an even higher burden in ensuring those values are upheld.”

The lawsuit comes as other allegations of inappropriate or retaliatory actions by Lilly executives against employees at Lilly have surfaced. Last month, Lilly announced that the company’s chief financial officer, Josh Smiley, resigned after Lilly said in a securities filing that he had engaged in “consensual though inappropriate personal communications” with employees. Smiley declined to comment.

Reuters reported earlier this month that a former Lilly human resources manager alleged she had been forced out of her job because she repeatedly raised concerns with executives about manufacturing problems at a New Jersey factory. Lilly told Reuters it has rigorous quality assurance programs in place and welcomes employee feedback.

Elling had worked as an in-house lobbyist for Lilly since 2003, rising to become a senior director in 2005.

Pusey, named to her post in the wake of President Donald Trump’s election, has worked for several Republican leaders and organizations including the Republican National Committee, according to her online Lilly executive bio.

The suit alleges that Elling and other women were subjected to sexist comments by Pusey and another senior manager, including that they were “nasty,” “bitches,” “disruptive” “aggressive,” and “rude.” Pusey regularly mocked Elling’s appearance and that of other women while noticeably treating male employees more favorably, the suit states.

In 2018, according to the suit, another woman lobbyist at Lilly filed an internal complaint against Pusey, alleging that she had created a hostile workplace and made several offensive comments about Elling and others. That lobbyist is not named in the lawsuit.

In May of that year, a Lilly human resources investigator interviewed Elling about the other lobbyist’s complaint, which Elling corroborated, the suit said. Ultimately the investigator found the complaint to have merit, according to the suit.

After that, the lawsuit said, Pusey began to exclude Elling and others who participated in the complaint investigation from briefings of senior leaders.

In 2019, Pusey hired an executive, Democrat Shawn O’Neail, to directly supervise Elling and other lobbyists, the suit states. O’Neail engaged in inappropriate sexual behavior in the office, including “sexual self-groping,” during meetings with Elling in her office, the lawsuit said.

The lawsuit alleges that O’Neail had a history of misogynist and racist conduct at pharmaceutical giant Novartis AG, where he had previously worked, and that he once used the N-word to refer to a Black executive at a rival drug company. The company, Pfizer Inc, declined to comment.

O’Neail, who was not named as a defendant in the suit, did not respond to requests for comment. Novartis declined to comment.

O’Neail was brought in to “clean house,” the lawsuit said, by terminating Elling and another employee, the lawsuit said. According to the suit, O’Neail falsely accused Elling of making disparaging statements about Lilly to congressional staff. He eventually put Elling on a job performance improvement plan, according to the suit.

On December 1, 2019, Elling sent a resignation email to top executives, saying she was forced into the decision due to Pusey and O’Neail’s discrimination and retaliation against her, the suit said.

Deutsche Bank can sue Madoff feeder funds over $1.6 billion claims sale

NEW YORK (Reuters) – A U.S. judge said on Friday Deutsche Bank AG may sue two offshore funds for allegedly reneging on an agreement to sell the German bank $1.6 billion of claims in the bankruptcy of swindler Bernard Madoff’s namesake firm.

Deutsche Bank had accused the Kingate Global Fund and Kingate Euro Fund, which funneled client money to Madoff before his Ponzi scheme collapsed in 2008, of having “sellers’ remorse” for agreeing to sell the claims at 66 cents on the dollar in 2011, only to see their value later rise substantially.

In refusing to dismiss the lawsuit, U.S. District Judge Edgardo Ramos in Manhattan pointed to language that the agreement was “firm, irrevocable and binding,” though a formal contract was never signed and much time had passed.

“Here, two sophisticated parties agreed of their own free will to be bound,” Ramos wrote.

Ramos said Deutsche Bank can also pursue a claim that the Kingate funds acted in bad faith by filing for protection under Chapter 15 of the U.S. bankruptcy code in September 2019 to escape possible litigation by the bank.

Lawyers for the Kingate funds did not immediately respond to requests for comment. A spokesman for Deutsche Bank declined to comment.

In June 2019, the Kingate funds agreed to return $860 million in a settlement with Irving Picard, the court-appointed trustee liquidating Madoff’s former firm, Bernard L. Madoff Investment Securities LLC.

Madoff, 82, is serving a 150-year prison term.

The case is Deutsche Bank Securities Inc v. Kingate Global Fund Ltd et al, U.S. District Court, Southern District of New York, No. 19-10823.

Mastercard battles return of $19 billion UK class action

LONDON (Reuters) – A specialist London court will this week re-consider allowing a historic 14 billion pound ($19 billion) class action against Mastercard to proceed, which could entitle adults in Britain to about 300 pounds each if successful.

Former financial ombudsman Walter Merricks, who alleges that Mastercard overcharged more than 46 million people in Britain over nearly 16 years, hopes the Competition Appeal Tribunal (CAT) will certify the case after the UK Supreme Court overruled objections to it proceeding in December.

A two-day court hearing will kick off on Thursday and will determine the fate of Britain’s first mass consumer claim — and clarify the rules for a string of other competition class actions that have stalled in its wake.

Merricks, who is being advised by U.S.-headquartered law firm Quinn Emanuel, alleges Mastercard charged excessive “interchange” fees – the fees retailers pay credit card companies when consumers use a card to shop – between May 1992 and June 2008 and that those fees were passed on to consumers as retailers raised prices.

Mastercard says the claim should not be brought, that people received valuable benefits from its payments technology and that the lawsuit is driven by U.S. lawyers and backed by organisations focused on making money for themselves.

“We fundamentally disagree with this claim…,” it said.

THE DECEASED, COMPOUND INTEREST IN FOCUS

Legal arguments this week are expected to revolve in part around whether estates of the deceased should have a claim and whether compound interest should accrue, which are “significant” for the ultimate size of the claim, Mastercard says.

The case was filed in 2016, one year after the CAT was nominated to oversee Britain’s U.S.-style “opt-out” class action regime for breaches of UK or EU competition law — and 12 years after the European Commission ruled that Mastercard had charged unlawful cross-border interchange fees over the period.

In such cases, UK-based members of a defined group are automatically bound into legal action unless they opt out.

But the CAT blocked the lawsuit in 2017 because it thought it unsuitable for collective proceedings, triggering drawn-out appeals and causing a bottleneck for other class actions.

If the case proceeds, Merricks is expected to need to prove that Mastercard’s domestic fees were illegal — and to quantify the costs passed on to consumers.

Litigation funder Innsworth Capital has stumped up 60.1 million pounds to cover the legal costs of the case, including 15 million pounds for Mastercard’s legal costs if the claim fails. It will be paid from any unclaimed damages awarded, after agreement from the CAT.

Typically, take-up by claimants is low in such claims. The U.S. Federal Trade Commission found in 2019 that only about 9% made a claim after successful consumer class actions.

($1 = 0.7189 pounds)