This Week: Nike goes after Lululemon, Biden's vaccine mandates hang in the balance, and a cartel of elite universities goes to court. Plus, Silicon Valley wants to bet on your lawsuit, and cashing in on the SPAC rush.
Some of America's top universities are finding themselves in scandal again, this time with a price fixing scheme. A lawsuit filed in federal court by five former undergraduates alleges that 16 colleges and universities had conspired to reduce the financial aid they award students by working together as a cartel;
Among the 16 universities named in the lawsuit are Yale, Cal Tech, MIT, Vanderbilt, and the University of Chicago, which all participated in a group calling itself the 568 Presidents Group and used a consensus approach when evaluating a student's ability to pay.
According to the New York Times, Universities are allowed to collaborate on financial aid formulas under federal antitrust law, however, only if they do not consider a student’s ability to pay in the admissions process, a status called “need blind.”
While Yale, Georgetown, and other universities are embroiled in this admissions scandal, Harvard and the University of North Carolina-Chapel Hill will soon be in front of the Supreme Court for cases regarding their affirmative action admissions. Should the plaintiffs win, the Supreme Court may strike down the use of affirmative action across the country.
Following the 2019 Varsity Blues scandal which showed that wealthy families could effectively pay their way into elite universities, this new lawsuit seems to further the idea that these institutions favor students who can pay higher tuition with less financial aid. If college has been touted for generations as a path to the American Dream—scandal after scandal is chipping away at that story.
The Biden Administration's vaccine-or-test mandates could be thrown out by the Supreme Court soon. After hearing hours of arguments over the dual mandates issued by OSHA—one mandate for medical workers receiving federal Medicare/Medicaid funding, the other for employers of 100 or more people—the court's majority seems poised to toss at least the private employer mandate.
According to NPR, the court's conservative majority raised concern that the OSHA mandate was an overreach by the Administration, with Chief Justice Roberts saying "This is something the federal government has never done before."
Meanwhile, the court's liberal justices appeared to favor the vaccine mandates, with Justice Kagen saying stressing that COVID "is by far the greatest public health danger that this country has faced in the last century."
As the court heard arguments, the US broke daily infection records set during last winter's surge. Meanwhile, two of the attorneys arguing the case did so by phone as they were sick with COVID, and Justice Sotomayor heard arguments remotely as she is diabetic and was practicing caution in the face of infection.
As the fate of Biden's vaccine mandates hang in the balance, Omicron continues to spread like wildfire, with hospitalizations and deaths beginning to tick up again too. Should the court overturn the mandate, it blocks the Executive branch from using a major tool in the fight against COVID.
Nike is suing Lululemon claiming patent infringement. The case surrounds Lululemon's Mirror, a home exercise device that guides users through various routines. Nike says that it filed a number of patents back in 1983 for device that tracked user's calorie expenditure, distance run, and more—all of which are infringed upon by Lululemon's Mirror.
“The patents in question are overly broad and invalid. We are confident in our position and look forward to defending it in court,” a spokesperson for Lululemon said, according to CNBC.
Lululemon Is Also Suing
If Lululemon and Peloton are competing over at-home training equipment, they're also fighting over apparel. As The Hustle states, Lululemon says Peloton copied various sports bras and leggings, which the fitness bike maker then turned around and countersued Lululemon for.
Seems like Nike is late to the at-home exercise device boom that Peloton, Tonal, and now Lululemon have cashed in on, so their next best strategy is to sue the competition.
📤 What Else We're Forwarding
Trading Suits: Could the legal system be the next cash cow? According to Vice, a new start-up wants to make lawsuits a bettable commodity through tradable tokens.
Pay Day: The 2021 SPAC gold rush was also hugely profitable for Big Law, says Bloomberg. Firms like Ellenoff Grossman and Kirkland & Ellis raked in some $160 billion by aiding and underwriting deals.
🎧 Music We’re Working To
Today we’re listening to Soshi Takeda, a Japanese electronic music producer from Tokyo. He released his first album, Floating Mountains, in 2021 using only hardware and samplers from the ‘90s. It evokes a similar vibe to deep house, but takes a more meditative stance by incorporating flat, crystalline sounds. It lends itself well to being played on loop due to its aqueous structure.
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See ya next week!