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WHAT WE'RE WATCHING

DON'T LIE ABOUT A.I. - The FTC's first-of-its-kind case against Automators LLC could portend more FTC claims against companies that allegedly seek to attract investors with bloated artificial intelligence-related promises, consumer protection lawyers told Law.com's Maydeen Merino. The FTC filed suit this month against Automators' operators, alleging they lured consumers into investing $22 million in online stores with baseless claims about profits. The agency also stated the operators claimed to use "AI machine learning" to maximize earnings. Automators has denied the allegations of wrongdoing. It's the first individual case the FTC has brought related to AI scams and is in keeping with recent agency pronouncements, said Daniel Kaufman, a partner at Baker & Hostetler. "The FTC more so than anything [has] been talking about AI a lot," Kaufman said.  "The FTC is looking at these dramatic changes in the marketplace … but it's also looking at it through the lens of how might these changes and these tools be used in ways that violate the FTC Act."

NO MIDDLE FOR MIDSIZE FIRMS - So far, 2023 has been a good year for midsize law firms—well, some midsize law firms.  On one hand, they've seen higher demand growth than their Am Law 200 peers. On the other hand, several have shuttered services or are preparing to do so, including Philadelphia-based Schnader Harrison Segal & Lewis and Dolchin Slotkin & Todd; New York-based Ganfer Shore Leeds & Zauderer, and most recently, Phoenix-based Jennings, Strouss & Salmon. As Law.com's Andrew Maloney reports, a variety of factors are contributing to the diverging trajectories of midsize law firms this year, according to analysts. Some are seeing success because of their additional flexibility and remote work opportunities for talent, the rise of countercyclical practices, and aggressive rate hikes. But this segment of the market is still vulnerable to large, existential threats, such as aging lawyers, a lack of succession planning, and less diversity of client business—any one of which could topple a smaller firm.

ON THE RADAR - Antoine Fuqua, director of "Training Day" and other major films, Sony Pictures Entertainment and other defendants were slapped with a lawsuit alleging breach of oral contract on Aug. 28 in California Superior Court for Los Angeles County. The court action was filed by attorney Philip J. Kaplan on behalf of Paul Lozada, a highly decorated former San Francisco police officer known for working as a "script doctor" on Fuqua's films. Lozada claims he has been denied credit and not been paid for consulting on the upcoming "Equalizer" sequel with Denzel Washington. Counsel have not yet appeared for the defendants. The case is 23STCV20557, Lozada v. Fuqua. Stay up on the latest state and federal litigation, as well as the latest corporate deals, with Law.com Radar.   

EDITOR'S PICKS

3M to Pay $6B to Resolve Thousands of Combat Earplug Lawsuits By Amanda Bronstad

AI-Generated Content, Deepfakes and New Data Push the Limits of Civil Procedure By Jerry Bui

This State Has Proposed a Rule That Would Bar Lawyer-Client Sexting By Aleeza Furman