Welcome back to What's Next, where we report on the intersection of law and technology. In today's newsletter, we're getting ready for an insider trading hearing involving Coinbase. Also on deck, several law schools are making some changes to give their students more hands on experience, and China is using technology to keep tabs on a certain segment of it's minority population. You can read all of that and more, below.

U.S. District Judge Vince Chhabria, Northern District of California.

Coinbase And Its 'New World' Come Back Before Judge Chhabria

Coinbase will get a second at-bat this week as it attempts to avoid an insider trading lawsuit filed by investors over its currency exchange platform.

The investors' attempt was thrown out by U.S. District Judge Vince Chhabria of the Northern District of California in October because the complaint did not provide a legal basis for its claims. The amended complaint, though, seeks to get past the initial hurdle by adding more plaintiffs and building on allegations that Coinbase intentionally lowered the price of bitcoin cash ahead of the launch to allow company insiders to reap the windfalls when its price reportedly surged 200% after trading began.

Thursday's hearing pits Robert Green of Green & Noblin and Lynda Grant of The Grant Law Firm for the investors against Coinbase's defense team from Keker, Van Nest & Peters.

This amended complaint argues that Coinbase has not adequately dispelled reports of insider trading, nor answered why the company decided to launch the trading service without alerting the market beforehand.

The cryptocurrency traders cite the balance test in California's Unfair Competition law to allege that Coinbase acted unfairly when it strayed from its promises to users to not roll out bug-ridden features compromising the marketplace, and failed to consider its own employees' “ulterior motives.”

The new complaint specifically claims Coinbase's purported conflicts of interest include functioning as a broker dealer while making proprietary trades and allowing employees with access to customer information and currency listings to buy and sell on bitcoin cash platforms.

For those of you just tuning in to this saga, bitcoin cash was created last year in a so-called “hard fork” of the bitcoin blockchain—or the creation of a variant of the original software.

Chhabria was admittedly struggling to keep up with the case the first time around while still poking holes in the insider trading complaint for missing key details, like the actual basis for claims of insider trading. Steven Ragland of Keker, Van Nest & Peters said during the first hearing that the words “pump-and-dump” never appeared in the complaint, and that plaintiff's counsel were leveling all kinds of new claims inappropriately.

One thing to watch is whether Chhabria feels more comfortable in the world of blockchain and cryptocurrency his second time around.

“Intuitively, it seems like this is something that was bungled, but I don't know how well the complaint explains again why it was bungled and what the motivations were?” Chhabria said during that September hearing. “It may be because this is a new world, a new area that we judges don't know as much about as we know trading stocks at Charles Schwab.” —Alaina Lancaster

A New Type of Associate

There was a while where law schools were constantly ripped on in legal technology circles for seemingly ignoring skills like e-discovery, client management, or actually practicing law as compared to learning about it theoretically. But it seems law schools have heard the message loud and clear in the past couple of years

Last week, Albany Law School and the SUNY Polytechnic Institute announcedthey are teaming up to offer law, business and engineering students a program to gain hands-on experience in shepherding SUNY products from the lab to the market. The Innovation Intensive Clinic, as it's called, will aim to team 2L and 3L students with engineers to figure out practical ways to use their legal skills to negotiate contracts and patents, and consider any regulatory requirements for their team's tech product.

It's the latest in what's becoming a string of tech courses and programs springing up at law schools across the country. Chicago-Kent announced a masters of law degree in legal innovation and technology earlier this month. New Hampshire and Washburn recently introduced hybrid JD programs that emphasize remote work and technology usage. Schools from Cornell to Arizona, and many places in between, have introduced tech-centric individual classes designed to give law students a new perspective.

So what does it mean for attorneys? Well, for starters, your colleagues of the future will have a new set of skills—ones that may take some getting used to, even for those now familiar to tech-savvy attorneys. “Millennials were living a life where technology was changing things and they were on the forefront of the change,” Orrick, Herrington & Sutcliffe chief talent officer Siobhan Handley told The American Lawyer. “Gen Z doesn't know a time before [that change].”

What that may mean is some inherent shifts in everything from training strategies to team composition. “Because they grew up with all of this technology and social media since they were in elementary school, they're used to going into a room and being on their social media platforms and getting all their work done individually and independent of others, as opposed to being more focused on working in groups,” says Courtney Dredden Carter, associate director of diversity and inclusion at Jenner & Block.

Charlotte Wager, Jenner & Block's chief talent officer, adds, “It's the opposite extreme of the old apprenticeship model. You used to learn everything at the right hand of your mentor.” —Zach Warren

Dose of Dystopia

In an era of omnipresent security cameras, the idea of AI-driven facial recognitionwas already pretty creepy. But New York Times reporter Paul Mozur's explosive piece detailing how China is using the technology to monitor its minority Uighur population is downright bone-chilling. Chinese police are not only using facial recognition to track Uighurs in the western Xinjiang region—where the population is the largest and Uighurs have been thrown into “re-education camps”—but to detect and track the appearances of Uighurs in other cities across the country:

Some police departments and technology companies described the practice as “minority identification,” though three of the people said that phrase was a euphemism for a tool that sought to identify Uighurs exclusively. Uighurs often look distinct from China's majority Han population, more closely resembling people from Central Asia. Such differences make it easier for software to single them out.

Mozur quotes Electronic Frontier Foundation attorney Jennifer Lynch, who points out that biases are already almost surely embedded in other forms of algorithmic decision-making. But she notes that in the U.S., so far, police technology hasn't been so overtly race-oriented. “There's not a system designed to identify someone as African-American, for example,” Lynch said.

But are there sufficient legal limits in place to ensure that something like China's system couldn't take root here? Even if so, should there be regulations to ensure U.S. technology isn't used to build such a vast racial profiling network—in China, or anywhere else? There's a shocking amount of money in the space. Mozur reports that the Chinese companies providing the technology are each valued at more than $1 billion. —Ben Hancock

On the Radar

Mueller Report Keeps the Backdoor Encryption Debate Spinning Encrypted communication channels and ephemeral messaging hindered the special counsel's investigation. Could this influence the debate over absolute encryption versus backdoor access? Read more from Frank Ready.

What Big Law & Tech Leaders Say About California's New Data-Privacy Law We've culled through more than 1,000 pages of comments to spotlight what Apple, Google and a few Big Law firms are saying about the CCPA. Read more from Cheryl Miller here.

ABA Formal Opinion 483: What Are a Lawyer's Obligations After a Data Breach or Cyberattack? Your firm's computer network has been hacked and client data either exposed or likely exposed. What's a law firm to do? Read more from David Bayne here.

After 'Carpenter' Ruling, States Lead Way in Restricting Digital Searches While the federal government ponders its next takes after the U.S. Supreme Court's Carpenter ruling, multiple states are moving to restrict how law enforcement can access and handle their citizen's digital data. Read more from Victoria Hudginshere.

No Impunity for Online Rant, 5th Circuit Rules in Heterosexual's Reverse-Discrimination Suit “Simply put, Title VII does not grant employees the right to make online rants about gender identity with impunity,” wrote Fifth Circuit Judge Catharina Haynes in a concurring opinion. Read more from Angela Morris here.

Thanks for reading. We will be back next week with more What's Next.