BAD SIGN – Law firms will face significant challenges, both practical and existential, after Signature Bank in New York became the second US bank failure in three days and the third largest bank failure in US history. First, reports Law.com’s Andrew Maloney, the bank’s clientele included many mid-sized law firms, and it catered to plenty of personal injury firms and those with significant real estate practices, said industry observers and lawyers with knowledge of the bank’s work. Those law firms could still see delays or other disruptions in access to capital, even though government takeovers of both Signature and Silicon Valley Bank, which failed last week, were swift and intended to protect account holders’ assets. But more broadly, observers said, law firms and other businesses now have another risk to consider and plan for in an environment that was already awash with uncertainty.
INOPERATIVE? – Judges on the U.S. Court of Appeals for the Second Circuit cast doubt on the use of service awards in class-action lawsuits this week, saying the basis for such fees for class representatives is “questionable at best” under U.S. Supreme Court precedent, law. com’s Avalon Zoppo reports. In the underlying case, Judges Dennis Jacobs, Pierre Leval and Michael Park upheld a $5.6 million settlement between Visa and Mastercard and a class of 12 million U.S. merchants who challenged the way the credit card companies set and charge interchange fees. The settlement included $900,000 for the eight lead plaintiffs. The justices said service charges are “probably impermissible” under an 1881 Supreme Court decision, but ultimately noted that binding Second Circuit decisions required them to uphold the charge. The panel ordered the district court to lower the service charge, but upheld the 2012 settlement, believed to be the largest antitrust class action in history, as well as $523 million in attorneys’ fees.