Category: News Feeds

I swear most surrogacy journeys don’t end in disaster. Or a complicated legal dispute. Most matches actually end with two very happy sides — the intended parents, who grow their families with a new addition; and the gestational surrogate, who is justly compensated and who is content knowing that she forever changed the lives of a family.

But as readers of this column know, the ways in which surrogacy can go sideways keep surprising us. I don’t know what Sarah Koenig, famed journalist and podcast host of Serial, is up to these days, but she should really check out this situation and let us know if Robert Park and the rest of the Omega crew are guilty — in this case of heinously defrauding families at their most vulnerable — or are, as they claim, mere victims themselves.

Over the past couple years, Omega Family Services (“Omega”) — or Lyfgro (pronounced like “Life Grow”), among other names that have been used — have been aggressively selling an insurance product called PregnancyCare to gestational surrogacy matching programs and their clients. The product looked promising and seemed to solve a major reoccurring problem in the surrogacy space. Promising enough that, according to numbers reported by Omega, around 700 hopeful parents purchased the PregnancyCare insurance policy to provide coverage for medical complications and delivery costs for pregnant gestational surrogates.

Too bad it all turned out to be a scam, leaving surrogates’ credit in danger and hopeful parents — many of whom suffered years of costly and painful fertility treatments before turning to surrogacy — on the hook for enormous medical bills.

It Looked Good. At First. 

One of the major obstacles for gestational surrogacy arrangements is finding insurance that covers the surrogate’s pregnancy and delivery healthcare costs. While many women who raise their hands to be surrogates already have health insurance, a large number of those policies have provisions specifically excluding any coverage for surrogacy pregnancies. Meaning the insurance is good for a surrogate’s own pregnancies, but not for a pregnancy where she is acting as a surrogate for someone else. As an alternative, many intended parents are able to find a surrogacy-friendly policy through the Affordable Care Act market — but those policies are only available to be purchased for the following year in the narrow few months of open enrollment, and, depending on the surrogate’s location, may not be available at all.

So in came PregnancyCare. While not cheap, at approximately $1,000 to $1,350 a month (premiums went up during the time the product was being sold), the policy promised to cover the surrogate’s pregnancy-related medical costs. Hurray!

Crumbling Bricks.

As what appeared to be a viable and not-outrageously-expensive option (compared to other private insurance options in the $30K and up range), PregnancyCare was popular. And the policy seemed to be working. At first. Claims were being paid.

Last fall, however, rumors started to swirl that PregnancyCare was no longer paying claims, and that it was cancelling policies. Indeed, with only nine days’ notice, PregnancyCare canceled all policies as of October 31, 2020 — an especially scary Halloween for policyholders. Omega Family Services subsequently filed for bankruptcy in California on December 23, 2020. A public hearing was held by Zoom on January 19, 2021, and, oh boy, was that an unusually popular bankruptcy hearing.

The Hearing.

At the hearing, Robert Park, one of the owners of Omega Family Services, the broker selling the PregnancyCare product, testified. But his testimony was evasive, to say the least. Omega’s bankruptcy reports showed that it had no assets. Like, literally nothing. Meaning nothing to be distributed to its many victims. Apparently all those monthly $1,000-plus premiums from 700 intended parents (so, you know, $700,000-plus a month) were going to Omega Insurance Company Segregated Portfolio, a Cayman Islands company. Probably. Despite Park also being a major shareholder in Omega Insurance, he refused to answer any questions that pertained to that entity, as the hearing was only for Omega Family Services. He also, interestingly, started out his statement implying that Omega Family Services was merely another victim of COVID-19.

That, no one buys.

Bankruptcy expert attorney Justin Leonard took the lead on questioning Park. Among his questions were several inquiries about monetary transfers from Omega Family Services to other Omega-ish entities. Park explained that the transfers were done to help with “cash flow” of the other entities. Hmm.

Were The Omega Guys Victims Themselves? 

In a December 2020  email titled “Update December” sent out by Omega Insurance (the Cayman entity) “To All Concerned Parties,” the company explained that PregnancyCare was licensed through a nationally admitted insurance carrier named State National “as they were given a contract purporting the same.” However, State National adamantly claims that they never had such a contract, and were never involved with the PregnancyCare product or any of the Omega companies.

Omega alleges that it relied on services from a captive insurance company consultant, Brandon White, of Ambassador Captive Solutions. And, in an what initially appeared to be unrelated (but now directly related) case in Kentucky with AIG, White has been accused of forging contracts. State National intervened in the AIG case upon learning that its name was being used in a number of insurance schemes. Those schemes included the “counterfeit policies issued to Omega Family Services” that “purport to provide medical coverage to family surrogacy services clients in the California area.” The Omega Insurance email to the concerned parties explained that “As a result of the dispute [the Kentucky case], State National immediately terminated our license and declined to continue licensing [PregnancyCare.] … The unique nature of PregnancyCare prohibited an alternative licensing agreement to be found in time to carry forward the insurance plan.”

But it wasn’t that State National “terminated” the license. There was never any relationship with State National to begin with. Of course, a key question is: who knew that? And when?

Insurance Economics Are Complicated.

I spoke with surrogacy insurance expert Sarah Paige of ART Risk Financial and Insurance Solutions. Paige explained that, she, too, was hopeful that PregnancyCare was a viable option, but to her the numbers on PregnancyCare raised some doubts. She noted that the average pregnancy costs $18,000. In addition to paying medical bills, a policy has to pay the costs of third-party administrators, claim processors, network access fees, brokerage, licensing, reinsurers, and any potential investors. And, importantly, unlike other insurance policies where only some percentage of members are likely to submit claims, this policy was specifically designed for and sold for use by surrogates, with, like, an expected 100% usage. But with trusted names in insurance like AXA, State National, and Lloyd’s of London being represented as backing the product, she understands why so many people — many after extensive research — were persuaded to purchase the policy.

The next Omega Family Services bankruptcy hearing is scheduled for February 18, 2021. Expect the plot to thicken again before the truth is eventually revealed.

---

Ellen Trachman is the Managing Attorney of Trachman Law Center, LLC, a Denver-based law firm specializing in assisted reproductive technology law, and co-host of the podcast I Want To Put A Baby In You. You can reach her at babies@abovethelaw.com.

* Whole Foods is facing a lawsuit alleging the retailer misled customers by calling a product “Honey Graham Crackers” when it actually wasn’t that healthy. Guess you do attract more flies with honey… [Fox News]

* A Florida lawyer has been disbarred for filming sexual encounters with inmates in jail. [New York Daily News]

* The Manhattan District Attorney is apparently investigating Stephen Bannon following his federal pardon by President Trump. [Washington Post]

* Check out a summary on all of the lawsuits faced by Robinhood over its decisions regarding GameStop stock. [Verge]

* A bank has repossessed a private plane owned by a San Antonio lawyer. Maybe he fought for the plane like it was the Alamo… [KSAT.com]

---

Jordan Rothman is a partner of The Rothman Law Firm, a full-service New York and New Jersey law firm. He is also the founder of Student Debt Diaries, a website discussing how he paid off his student loans. You can reach Jordan through email at jordan@rothmanlawyer.com.

Ed. Note: Welcome to our daily feature Trivia Question of the Day!

Correctly spell the name of the country that Donald Trump served as the 45th president?

Hint: Lawyers for the former president filed a response to the House impeachment manager’s case with a pretty obvious typo. The editing snafu comes right after an Axios report revealed Trump thought Sidney Powell’s repeated misspelling of “district” in election case filings was “very embarrassing. That shouldn’t have happened.”

See the answer on the next page.

One of the predictions floating around regarding the (hopefully soon to arrive) post-COVID 19 patent landscape is that more operating companies with sizable patent portfolios will be considering monetization options. The reasoning behind that prediction is simple. In a challenging revenue environment, even those companies who were previously reticent about patent assertion will be under pressure to turn what can be a sizable cost center into a revenue-generating business unit. At the same time, patent monetization is a difficult endeavor even under optimal economic conditions. While litigation funders and law firms stand ready to assist, developing and executing on a workable monetization strategy requires time, a lot of thought, and significant buy-in within the company ranks. In short, a monetization campaign must be a considered effort, not something undertaken under a whim or based on the conception that following the herd in a particular direction is a good idea.

One company that has been involved in a number of high-profile patent enforcement efforts is consumer products giant (and quite-frequent patent defendant itself) LG. In perhaps the most prominent example of LG’s enforcement efforts, the company took the step of suing major TV competitor Hisense in November 2019, as part of a larger global patent enforcement effort against other TV competitors. The Hisense lawsuit was reportedly settled last week, at least according to a docket entry filed in the California court handling the case. Pointedly, that report of settlement came just a few weeks after Hisense filed a notice of institution of IPR for all relevant claims from two of  the asserted patents. While it is impossible to know how favorable or not the Hisense assertion ended up being for LG, the case does provide a recent example of a major technology company turning to its patent portfolio as a way to generate revenue from a market competitor.

While patent cases filed in LG’s own name are rare, there are other known examples of LG divesting patents for assertion by other entities. Just last week, for example, the Federal Circuit addressed one such divested LG patent in an interesting decision on prior licenses and patent exhaustion. In that case, Evolved Wireless v. HTC Corporation et. al, Appeals Nos. 2020-1335, 2020-1337, 2020-1339, 2020-1340, 2020-1363 (CAFC), the Federal Circuit affirmed the district court’s finding that “Evolved’s patent infringement claims were barred by a license agreement and the doctrine of patent exhaustion.” As background, it is important to note that the patent at issue in the appeal was just one of five asserted in litigation against the various defendants. Those patents were originally sold by LG to an entity called TQ Lambda, before being picked up by Evolved for assertion. (Highlighting the challenges of modern-day patent monetization, even for patents with an LG pedigree, only the patent at issue in the appeal was left standing in terms of potentially leading to revenue for Evolved before it too was bounced by the district court.)

When Evolved acquired the remaining patent, it did so subject to encumbrances originating at LG, including an LG license to Qualcomm that was granted all the way back in 1993. As that LG-Qualcomm license (which was apparently never considered in full, unredacted form by the district court) was renewed over the years, one thing remained constant — LG agreed that it wouldn’t sue Qualcomm or Qualcomm’s customers under any of its patents over their sale of smartphones. Because the license/covenant not to sue was extended at the product, rather than patent, level, the asserted patent was swept into the scope of the license since it was issued before the final renewal took place.

Once Evolved sued Qualcomm’s customers, the license between LG and Qualcomm came into play. As the Federal Circuit noted, if Qualcomm was licensed under the LG agreement then patent exhaustion meant that sales by Qualcomm to its handset-manufacturing customers (e.g., the defendants sued by Evolved) were licensed sales and thus immune from infringement liability. On appeal, everyone agreed that exhaustion would apply. The fight was over whether or not the 4G-capable products sold by the defendants were covered by the Qualcomm license. Finding that they were, the Federal Circuit affirmed the district court’s finding of noninfringement pursuant to the license/patent exhaustion defense.

But all was not lost for Evolved. Because the license between LG and Qualcomm terminated as of the end of 2018 and the district court never addressed that termination in its summary judgment decision, the Federal Circuit remanded with instructions that “the district court should address whether — and why or why not — it considers Evolved’s proffered evidence of the termination part of the summary judgment record. If the district court concludes that the termination issue was properly raised, the district court should conduct further proceedings as necessary to determine whether a termination occurred, and if so, the effect on the license and Evolved’s claims of infringement for the post-termination period.” In short, there may be a path post-Federal Circuit decision for Evolved to sidestep the Qualcomm license issue for 2019 and onward sales of allegedly infringing products.

Ultimately, it is hard to gauge at this point whether Evolved still stands a puncher’s chance of extracting license revenue from the smartphone makers it sued. If anything, Evolved’s tortured litigation history may serve as yet-another cautionary tale for erstwhile patent monetizers looking for action in a patent litigation landscape that seems to favor defendants. At the same time, some on the patent assertion side will take succor in the fact that Evolved’s campaign continues to have life at all, proving the importance of patent plaintiffs demonstrating resilience and resolve in pursuit of their goals. As for those looking to follow in Evolved’s footsteps, we will see whether the alleged interest in post-COVID 19 patent monetization by large patent owners results in more attempts at patent enforcement by companies fitting that profile — whether directly under their own name or through divestment to nonpracticing entities. Put another way, will evolving attitudes lead to action or not?

Please feel free to send comments or questions to me at gkroub@kskiplaw.com or via Twitter: @gkroub. Any topic suggestions or thoughts are most welcome.

---

Gaston Kroub lives in Brooklyn and is a founding partner of Kroub, Silbersher & Kolmykov PLLC, an intellectual property litigation boutique, and Markman Advisors LLC, a leading consultancy on patent issues for the investment community. Gaston’s practice focuses on intellectual property litigation and related counseling, with a strong focus on patent matters. You can reach him at gkroub@kskiplaw.com or follow him on Twitter: @gkroub.

Last night, Representative Alexandria Ocasio-Cortez took to Instagram for a riveting hour and a half live session that detailed exactly what happened during the January 6th Capitol insurrection, from her perspective. It’s a powerful and emotional description of events that *should* transcend politics to reveal the human toll of that day’s violence, but, well, I’m not going to hold my breath.

Before she gets to the harrowing tale of the riot — and really, you should watch it yourself — AOC addresses the critics who suggest she should just “move on”:

“We cannot move on without accountability. We cannot heal without accountability. And so all of these people who want to tell us to move on are doing so at their own convenience.”

In a personal moment, Ocasio-Cortez reveals she’s a survivor of sexual violence and draws analogies to the trauma visited by the insurrection. AOC specifically calls out a pair of Texas lawyers turned lawmakers — Senator Ted Cruz and Representative Chip Roy — for wanting to sweep the insurrection under the rug and even demanding she apologize. Ocasio-Cortez likens this behavior to that of abusers, who seek to move past any violence quickly so they can do it again:

“These are the tactics of abusers. Or rather, these are the tactics that abusers use,” Ocasio-Cortez said. “What they’re asking for when they say, ‘Can we just move on?’ … is, ‘Can you just can we just forget this happened so that I can do it again, without recourse?… Can you just forget about this so that we can, you know, do it again?’”

AOC also mentions the actions of two other lawyer-politicians for their actions in perpetuating the big lie of election fraud and fomenting the violence at the Capitol, Senator Josh Hawley and Representative Mo Brooks. She said she believes all these folks should resign as a result of their actions, and notes that in the weeks since the Capitol violence they’ve had the opportunity to apologize for their actions, but instead they’ve doubled down:

“What that tells me is that when given another window of political opportunity for themselves, even if they know that it means that it will endanger their colleagues, they will do it again.”

“Accountability is not about revenge. It’s not about getting back at people. It’s not about any of that. It’s about creating safety. And we are not safe with people who hold positions of power, who are willing to endanger the lives of others if they think it will score them a political point.”

It might be a mere coincidence that those named-checked by AOC as causing unique harm leading up to and then after the Capitol insurrection are all lawyers. (Lauren Boebert is not named, nor a lawyer or even a high school graduate, while causing plenty of damage.) But it still seems like there is something deeply wrong with our legal education system if it can create so many willing to overlook facts and data for political expediency.

---

Kathryn Rubino is a Senior Editor at Above the Law, and host of The Jabot podcast. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter (@Kathryn1).

This story is brought to you by The Daily Upside. For more crisp and insightful content, you can sign up for the free Daily Upside newsletter here.

These attorneys filed a complaint based on falsehoods, used their law license in an attempt to disenfranchise Michigan voters and undermine the faith of the public in the legitimacy of the recent presidential election, and lent credence to untruths that led to violence and unrest. In doing so, they violated their oath and the ethical rules to which they are bound, abused the court system, and compromised the administration of justice — an important foundation of our civil society and the very bulwark of our democratic institutions.

— Michigan Attorney General Dana Nessel, Governor Gretchen Whitmer, and Secretary of State Jocelyn Benson, in a press release announcing that they would be seeking the disbarment of Sidney Powell and the three Michigan attorneys who joined her in bringing lawsuits based on conspiracy theories alleging unsubstantiated claims of widespread voter fraud in the state.

(Flip to the next page to read the complaint against Sidney Powell in full. Here’s a little teaser: “[A]n attorney who abuses the court system places in peril the very administration of justice that we cherish and depend on. Texas attorney Sidney Powell (16209700) is such an attorney. She did not just tiptoe near a precarious ethical line—she outright crossed it. … Ms. Powell is unfit to practice law and should be disbarred.”)

---

Staci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Twitter or connect with her on LinkedIn.

For folks that follow the ins and outs of the legal world (like most of Above the Law’s readers), Ginni Thomas’s politics are nothing new. Sure you might think brazenly political stands might be surprising for the spouse of a Supreme Court justice — after all, Clarence Thomas has to adjudicate all manner of controversies that intersect with his wife’s interests. For example, she led a grassroots movement in support of Trump’s travel ban, worked for right-wing think tanks, and has led efforts to defeat the Affordable Care Act and with no hard and fast Supreme Court recusal rules, well, that’s just an appearance of impropriety that we, as a nation, have let slide.

Anyway, Ginni’s been back in the spotlight, and that’s because she expressed her “LOVE” to the demonstrators on social media just a few hours before the violent insurrection on January 6th began. (Days later she amended the post to add “[Note: written before violence in US Capitol].”) Now according to a report by the Washington Post, she wrote an apology on a private listserv for those that have clerked for her husband for imposing her “lifetime passions” upon them:

“I owe you all an apology. I have likely imposed on you my lifetime passions,” Thomas, who goes by Ginni, recently wrote to a private Thomas Clerk World email list of her husband’s staff over his three decades on the bench.

“My passions and beliefs are likely shared with the bulk of you, but certainly not all. And sometimes the smallest matters can divide loved ones for too long. Let’s pledge to not let politics divide THIS family, and learn to speak more gently and knowingly across the divide.”

Pardon me while I unstick my eyeballs from the back of my head — they got stuck from rolling my eyes SO DAMN HARD. Ginni Thomas has long trafficked in far right ideology and she doesn’t apologize for supporting folks who tried to violently overthrow the government or to those that were killed, injured, or otherwise traumatized by the events of January 6th. She’s only sad now because the coup attempt may have revealed a crack in the right.

Ginni Thomas’s attempt at brokering peace came after the listserv devolved into a spat about the riot:

After one law professor posted an article from Christianity Today about how rioters usurped religious symbols in the storming of the Capitol, former clerk Wendy Stone Long called it “offensive drivel” and wondered why it was shared.

“Many of my friends and I had been praying our knees off that January 6 would see light and truth being shed on what we believe in our hearts was likely a stolen election,” and that eventually “President Trump would be determined to be the legitimate winner,” wrote Long, a two-time U.S. Senate candidate from New York.

“Many of us marched peacefully and yes, many also prayed and shared another important message, ‘Jesus saves,’ ” she added.

Then former Thomas clerk John Eastman, who is out of his job in legal academia after riling up the crowd at the January 6th rally proceeding the violence, got involved in the discussion:

[Eastman] wrote to the clerks group: “Rest assured that those of us involved in this are working diligently to ascertain the truth.”
That brought an angry response from Stephen F. Smith, a law professor at Notre Dame.

“If by ‘truth’ you mean what actually happened, as opposed to a false narrative, then I agree,” Smith wrote. “I hope (and trust) that you — and everyone on this list — agree that the search for truth doesn’t in any way justify insurrection, trying to kidnap and assassinate elected officials, attacking police officers, or making common cause with racists and anti-Semites bent on wanton violence and lawlessness.”

But of course, calling on truth and facts is considered wilding by some on the right.

---

Kathryn Rubino is a Senior Editor at Above the Law, and host of The Jabot podcast. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter (@Kathryn1).

Last weekend, Donald Trump replaced his entire impeachment legal team, bringing in attorneys David Schoen and Bruce Castor, Jr to represent him at next week’s hearing. According to the New York Times, the split was due in part to his prior counsel’s failure to make the former president’s case to the most important jury of all: “Mr. Trump prefers lawyers who are eager to appear on television to say that he never did anything wrong.”

Naturally Schoen raced to remedy the deficiency with an appearance last night on Sean Hannity’s program, where he derided the entire impeachment as both illegal and bad for the country.

“Besides the fact that this process is completely unconstitutional this is a very, very dangerous road to take with respect to the First Amendment, putting at risk any passionate political speaker, which is against everything we believe in this country,” Schoen said. This is not the position that he’s taken with regard to “passionate” pro-Palestinian speakers on American college campuses, but nevertheless.

“I think it’s also the most ill-advised legislative action that I’ve seen in my lifetime,” he intoned somberly to the television host who opened the segment with a 12-year-old quote from Barack Obama and a suggestion that Democrats want to burn down American cities. “It is tearing the country apart at a time when we don’t need anything like that.”

“He condemned violence at all times. Read the words of his speech. It calls for peacefulness,” Schoen continued, omitting to mention the part where the former president said “We fight. We fight like Hell and if you don’t fight like Hell, you’re not going to have a country anymore,” before exhorting the crowd to “walk down Pennsylvania Avenue” and “try and give our Republicans, the weak ones, because the strong ones don’t need any of our help, we’re going to try and give them the kind of pride and boldness that they need to take back our country.”

Perhaps that’s the reason the former president’s lawyer doesn’t want footage of the riot aired at the impeachment hearing, complaining to Hannity that the rioters whom Trump summoned via multiple tweets, addressed in person, and whose venue was coordinated with members of his own campaign were in no wise inspired by the president’s rhetoric.

“This has nothing to do with President Trump and the country doesn’t need to just watch videos of riots and unrest,” Schoen said. “We need to heal now. We need to move forward.”

Then he finished up by accusing Democrats of being biased against Trump and threatening to call them as witnesses.

“Can you imagine any American citizen considering to be in a trial where the judge and jury has already announced publicly that the defendant must be convicted in this case?” Schoen said indignantly, ignoring last week’s vote where 45 Republicans passed judgment on the president’s claim that the entire process is unconstitutional. “It undercuts democracy. How could you possibly have a fair trial? Senator Schumer promised a fair and full trial. You can’t when you know that they are biased going in.”

And if there’s one thing Sean Hannity can’t stand, it’s political bias!

But David Schoen knows whose fault this is. That’s right, it’s Joe Biden’s job to order Chuck Schumer to shut this whole thing down.

“President Biden missed a great opportunity to be a statesman and demand that this thing be called off,” he huffed.

It’s gonna be a shitshow. And we’re off to a great start.

---

Elizabeth Dye lives in Baltimore where she writes about law and politics.