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The Judicial Conference of the United States yesterday strengthened the policy governing random case assignment, limiting the ability of litigants to effectively choose judges in certain cases by where they file a lawsuit, according to a U.S. Courts press release. The policy addresses all civil actions that seek to bar or mandate state or federal actions, “whether by declaratory judgment and/or any form of injunctive relief.” In such cases, judges would be assigned through a district-wide random selection process. “Since 1995, the Judicial Conference has strongly supported the random assignment of cases and the notion that all district judges remain generalists,” said Judge Robert J. Conrad, Jr., secretary of the Conference. “The random case-assignment policy deters judge-shopping and the assignment of cases based on the perceived merits or abilities of a particular judge. It promotes the impartiality of proceedings and bolsters public confidence in the federal Judiciary.” In most of the nation’s 94 federal district courts, local case assignment plans facilitate the random selection of judges. Some plans assign cases to a judge in the division of the court where the case is filed. In divisions where only a single judge sits, these rules have made it possible for a litigant to pre-select that judge by filing in that division. The amended policy applies to cases involving state or federal laws, rules, regulations, policies, or executive branch orders. District courts may continue to assign cases to a single-judge division when they do not seek to bar or mandate state or federal actions, whether by declaratory judgment and/or any form of injunctive relief.

A Texas bankruptcy judge denied the Justice Department’s motion seeking to dismiss or transfer the Sorrento Therapeutics chapter 11 case, ruling a bank account and mailbox the company’s lawyers established justified its bankruptcy petition in Houston days later, WSJ Pro Bankruptcy reported. Judge Christopher Lopez of the U.S. Bankruptcy Court in Houston on Monday said the motion filed by the U.S. trustee for the Southern District of Texas last month and a similar motion filed by a shareholder weren’t timely, as the case had already been pending for more than a year. Sorrento’s bankrupt subsidiary Scintilla Pharmaceuticals’ representation about the mailbox being its principal place of business had been public ever since it filed the petition last February, the judge said. The judge also said that if the case was transferred to a different state, it would take a long time for another judge to get up to speed on it, and he didn’t think that was in the best interest of the administration of justice. The U.S. trustee, which serves as a bankruptcy watchdog on behalf of the Justice Department, submitted a motion before Monday’s court hearing, arguing that Sorrento was a “case of forum shopping and venue manipulation taken to a new and unprecedented extreme.”

The lawyer responsible for guiding Alex Jones' media company through bankruptcy will ask a judge for permission to drop out of the case at a court hearing next week, saying that he has irreparable disagreements with the company's management, Reuters reported. Bankruptcy Judge Christopher Lopez in Houston, Texas, said on Friday that he would convene an emergency hearing on March 11 to consider a request by Ray Battaglia, who has been lead bankruptcy counsel for Infowars' parent company Free Speech Systems since 2022 after Battaglia said his relationship with the company's chief restructuring officer, Patrick Magill is "fundamentally broken." Magill, who is in charge of day-to-day operations at FSS, has withheld Battaglia's legal fees for January and February as "blatant retaliation" for a Jan. 25 disagreement about whether or not FSS should pursue litigation over a legal claim, Battaglia said in a Feb. 29 court filing. Battaglia did not describe the legal claim, but he said that pursuing it would be "ill advised." FSS and Jones filed for bankruptcy after being sued over Jones' repeated lies about the 2012 Sandy Hook elementary school massacre.
A judge has since ruled that Jones cannot use his personal bankruptcy to avoid paying at least $1.1 billion in defamation verdicts that the families have won against Jones in court cases in Connecticut and Texas. The families of the Sandy Hook shooting victims have voted for a bankruptcy plan that would liquidate Jones' assets, if approved in court.

The U.S. bankruptcy judge who is weighing whether to dismiss the bankruptcy of prison healthcare company Tehum Health said on Friday that he doesn't intend to make a sweeping ruling on so-called "Texas two-step" bankruptcy cases, Reuters reported. Opponents of Tehum's bankruptcy, including prisoners who have sued over substandard medical care and the U.S. Department of Justice, have argued that the company's predecessor Corizon Health abused U.S. bankruptcy law when it created a new shell company, Tehum, and placed it into bankruptcy to halt lawsuits filed against Corizon. Bankruptcy Judge Christopher Lopez said during a Friday court hearing in Houston that he intends to take a narrow view of Tehum's bankruptcy and its proposed $55 million settlement of creditor claims, without making a "sweeping ruling" on the Texas two-step or other companies' efforts to resolve lawsuits in bankruptcy. "For me, those issues are for policymakers and not for this court," Judge Lopez said. Tehum filed for bankruptcy in February 2023, shortly after its predecessor, Corizon Health, used a Texas statute to split itself into two companies, YesCare and Tehum. YesCare inherited Corizon's assets and its go-forward business, while Tehum was stuck with the liability from about 200 lawsuits accusing Corizon of providing prisoners with substandard medical care that led to injuries and deaths at 50 detention facilities in 27 states.

Texas law firm Jackson Walker was urged nearly two years ago to disclose that one of its partners was in a romantic relationship with a federal judge who oversaw many of the firm's cases, the U.S. Justice Department's bankruptcy watchdog said in a court filing, Reuters reported. Bankruptcy Judge David Jones resigned in October after his relationship with the lawyer, Elizabeth Freeman, became public. Since then, the U.S. Trustee has filed motions in several corporate bankruptcy cases seeking to force Jackson Walker to turn over millions of dollars in legal fees Jones awarded. A lawyer for Freeman, who was a bankruptcy partner at Jackson Walker until December 2022, had advised the firm earlier that year that it should disclose her relationship with Jones "in all past cases and in cases going forward," the U.S. Trustee said in its court filing on Thursday. A spokesperson for Jackson Walker on Friday said that the firm "emphatically" denies receiving the disclosure advice. Jones, once the busiest bankruptcy judge in the United States, publicly acknowledged he was in a years-long romantic relationship and shared a home with Freeman when he retired last year. The firm in November said it had been deceived by Freeman into thinking the relationship had ended in March 2020. The U.S. Trustee in November said Jones presided over at least 26 cases in which he awarded Jackson Walker about $13 million in fees while he was in a relationship with Freeman. Thursday's filing said Freeman's lawyer had gone so far as to draft papers for Jackson Walker to use to disclose her relationship with Jones. The U.S. Trustee in the filing asked a Houston bankruptcy judge to award sanctions against Jackson Walker in the bankruptcy of the Westmoreland Coal Company.

A Texas bankruptcy judge declined to bring monetary sanctions against lawyers for Sorrento Therapeutics, ruling that a bank account and mailbox established to justify the company’s chapter 11 filing in Houston didn’t rise to the level of bankruptcy fraud, WSJ Pro Bankruptcy reported. Timothy Culberson, a Sorrento shareholder, earlier revealed that Sorrento’s lawyers at the firms Latham & Watkins and Jackson Walker had prepared a bankruptcy petition for the company’s subsidiary Scintilla Pharmaceuticals that relied on a bank account Sorrento wired $60,000 to three days before the filing and a mailbox established at a UPS store in a Houston suburb the day before the filing. Sorrento had used Scintilla’s Feb. 13, 2023, petition as a basis to make its own chapter 11 filing in Houston immediately after. The U.S. trustee for the Southern District of Texas, which serves as a bankruptcy watchdog on behalf of the U.S. Justice Department, presented evidence earlier this month showing that Scintilla had made representations to the California Secretary of State both before and after its bankruptcy filing that its principal address was in San Diego. Both the trustee and Culberson filed court papers this month demanding that the Sorrento and Scintilla cases be either dismissed or transferred out of state, alleging that the Scintilla petition falsely stated the company’s principal assets and place of business were in Texas. Culberson had separately alleged that the actions Latham and Jackson Walker had taken in preparing the filing amounted to bankruptcy fraud, seeking both firms to pay monetary damages.

Lawyers for biopharmaceutical company Sorrento Therapeutics disputed allegations that they committed bankruptcy fraud, saying that a bank account and mailbox created in Texas justified a chapter 11 filing in the state days later, WSJ Pro Bankruptcy reported. The U.S. Justice Department’s bankruptcy watchdog alleged last week that the bankruptcy filed in Houston by Sorrento subsidiary Scintilla Pharmaceuticals in February 2023 falsely represented that its principal assets and business are in Texas when it is actually based in San Diego. A Sorrento shareholder had separately made allegations in court that the company’s lawyers committed fraud by filing the case in Texas. San Diego-based Sorrento had used Scintilla’s chapter 11 petition in the U.S. Bankruptcy Court in Houston as the basis to file its own petition in that court. The U.S. trustee for the Southern District of Texas said that the Sorrento and Scintilla cases should either be dismissed or transferred out of state, noting that Scintilla is a Delaware-incorporated company that made repeated representations to the California secretary of state in June 2023 that its principal address was in San Diego.