300 New Jersey Avenue, N.W., Suite 900
Washington, D.C. 20001
Phone: 202-465-8728
July 30, 2024
Joseph C. Shenker Esq.
Sullivan & Cromwell LLP
125 Broad Street
New York, NY 10004
Re: Blacklisting detractors of the Israeli government provoked by the indiscriminate Israeli
killings of infants, children, women, and men in Gaza, including a siege openly earmarked by no
water, no food, no shelter, no power, no medicine, no journalists.
Dear Mr. Shenker:
This letter responds to your remarks reported in The New York Times, “A Wall Street Law Firm
Wants to Define Consequences of Israel Protests,” by Emily Flitter (July 9, 2024).
Speaking as a leader of Sullivan & Cromwell, you stated all applicants for employment would be
vetted for lawful statements, actions, or beliefs that your law firm defines as antisemitic,
including mingling with pro-Palestinian demonstrators chanting “From the river to the sea,
Palestine will be free.” Will Sullivan & Cromwell establish an Index of Forbidden words, songs,
signs, or sayings that would be off limits to any of the firm’s employees?
We are concerned about the absence of due process safeguards that could destroy an applicant’s
professional career in addition to Sullivan & Cromwell’s apparent complacency with hiring
lawyers who engage in hate speech or violence against Arabs or other races. Doesn’t that
discrepancy smack of George Orwell’s Animal Farm, “All animals are equal, but some or more
equal than others?” Is Sullivan & Cromwell, now in its 145th year, seeking to make amends from
its earlier history of notorious discrimination against Jews until the 1950s, not to mention biases
against Muslims and Arabs?
There is no articulable definition of verbal antisemitism free from manipulation for ulterior
purposes. Sullivan & Cromwell seems to equate anti-Zionism with antisemitism. But renowned
scholars of Judaism like Allan C. Brownfeld insist that Zionism is a form of political idolatry that
elevates worship of the State above worship of the Torah and God. Would Sullivan & Cromwell
hire Mr. Brownfeld?
Will Sullivan & Cromwell provide applicants a fair warning of what words or acts will be treated
as antisemitic? What will be Sullivan & Cromwell’s standard of proof? Reasonable suspicion,
probable cause, a preponderance, clear and convincing, beyond a reasonable doubt, or non-
fantastic speculation? What rules of evidence will govern the antisemitism vetting? Will hearsay
be admitted? How will documents be authenticated? Will applicants have a right to counsel to
voice objections and a right to confront their accusers? Who will do the vetting? What selection

Fred Segal, once a centerpiece to the Los Angeles fashion scene, closed its two remaining stores Tuesday, bringing a quiet end — at least for now — to a name that endured for decades as a shopping destination.

The brand, which once had nine stores in California and locations in Switzerland and Taipei, succumbed to a challenging retail landscape, never recovering from the impact the COVID-19 pandemic had on sales despite being a fixture of Los Angeles fashion since the 1960s, said owner Jeff Lotman.

When Lotman bought the company in 2019, he said he had no plans to run the day-to-day operations of the stores, but was forced into the role by the pandemic.

“Everything just fell apart and then I sort of had to become a retailer, which is not what I planned to do,” he said. “I knew nothing about retail.”

Instead, Lotman, who owns the brand licensing company Global Icons, had aspired to oversee a dramatic expansion of the Fred Segal brand that was supposed to include around 20 new shops in major cities across the country and a move into home decor and accessories.

“It’s not that retail is dying,” Lotman said at the time. “Boring retail is dying.”

The marquee name first appeared in 1961, when Fred Segal opened a small shop in West Hollywood, which grew into a cultural touchstone interwoven into the identity of Los Angeles. Its high-end, California-inspired line of clothes included bikinis, denim shorts and tank tops, often blending luxury with a laid-back look.

The company made its way into popular culture, getting referenced in shows like “Beverly Hills, 90210” and “Dawson’s Creek” and attracting celebrity customers such as Jennifer Aniston and Diana Ross.

Before the pandemic, Lotman said, the company had pending deals to open stores in Dubai, Canada and Japan. The two stores closing Tuesday are in West Hollywood and Malibu.

“Sixty years the company’s been around and it’s a shame that it’s finally coming to a close,” Lotman said.

One of the company’s downfalls was not having enough self-branded products, Lotman said. Fred Segal stores carried close to 200 outside brands but had few of their own offerings.

“That’s really what we needed to develop to make this thing work,” Lotman said. “Retail is hard and being a multi-brand retailer is even harder.”

While the majority of the Fred Segal empire is shut down, including its online store, a Fred Segal Home furnishings store will remain open in Culver City.

The Segal family owns the Fred Segal trademark, said Lotman, who was licensing the trademark. Any decision about whether to open new stores or begin selling online again would be up to them, he said.

Larry Russ, the family’s attorney, said this is not the end of the road for the brand, but could not share more information.

“We are going to be looking for a new operator to open up more stores in the future,” he said.

Lotman said he isn’t aware of any concrete plans to reopen business, but he’s optimistic.

“Hopefully someone may pick it back up and get it to go,” he said. “It is truly one of the great fashion brands out there.”

A new law that could force homeowners across California to cover billions of dollars of insurer losses caused by a catastrophic wildfire is generating pushback from a leading consumer group, which has called it an industry “bailout.”

State Insurance Commissioner Ricardo Lara announced Friday he had reached an agreement with the California FAIR Plan that would allow losses suffered by the state’s insurer of last resort to be recouped by surcharges on residential and commercial insurance policies statewide in an “extreme worst case scenario.”

The FAIR Plan, which insures property owners who cannot get or afford traditional policies, is backed by licensed insurers such as State Farm and Allstate. As the program is structured, they are on the hook to pay claims if the FAIR Plan runs through its reserves, reinsurance and catastrophe bonds.

Under Lara’s agreement, if that happens and those insurers suffer large losses, they could seek to be reimbursed by their own policyholders. The deal allow insurers that are assessed by the FAIR Plan to cover up to $1 billion in residential losses and up to $1 billion in commercial losses to ask the insurance commissioner to allow them to surcharge their policyholders for half of the assessed amounts. They also could seek surcharges on policyholders for 100% of losses that exceed those limits. Homeowners would not be surcharged for commercial losses.

“It’s outrageous and outside the law for the insurance commissioner to force consumers to bail out home insurance companies and then call that consumer protection,” said Carmen Balber, executive director of Los Angeles-based Consumer Watchdog.

Gabriel Sanchez, Lara’s press secretary, defended the agreement, saying, “It would be easy to listen to the elites and the entrenched interests defending a system that clearly isn’t working. Commissioner Lara is focused on hearing from the public, following the data and creating realistic, long-lasting solutions for everyone in this state.”

The FAIR Plan assessment is the latest element of Lara’s Sustainable Insurance Strategy, a package of executive actions intended to stabilize the California market, which has seen insurers stop writing new policies and decline to renew existing policies amid a sharp increase in claims for wildfires damage.

Just this week, firefighters are battling the massive Park fire in Butte, Tehama and Shasta counties, where 100 structures have been destroyed, 4,200 were threatened and 26,000 people were forced to evacuate as of Monday. It is the sixth-largest fire in state history.

As insurers have pulled back from high-fire risk neighborhoods, the number of residential FAIR Plan policies has more than doubled since 2019 to about 408,000 as of June. Commercial policies similarly increased to 11,026.

The FAIR Plan has a market share under 4%. Policyholders are concentrated in canyons, hillsides and other high-risk neighborhoods, vulnerable to fire and catastrophic insurance losses. The plan’s loss exposure was $393 billion as of June, even though the plan’s policies are more limited than those available through the regular commercial market.

Lara said Friday in a release announcing the agreement that “modernizing the FAIR Plan is a crucial step in our strategy to stabilize California’s insurance market.”

The FAIR Plan’s financial risk is overwhelmingly due to its residential policies, which account for about 95% of its $393 billion in total loss exposure, according to the insurer.

The Insurance Department downplayed a worst-case scenario, noting that even the 2018 Camp fire in Butte County that ravaged the town of Paradise, destroying or damaging more than 19,000 structures and causing some $16.5 billion in damage, did not deplete the FAIR Plan‘s reserves.

The Insurance Department contended that the agreement was actually favorable to consumers because under current law there is nothing prohibiting the insurers from seeking policyholder assessments on all FAIR Plan losses they must cover.

“The agreement … requires insurance companies to share the burden, something not clearly outlined before. That protects consumers by providing predictability which leads to stability,” Sanchez said.

Balber disputed that reading of the law and said Lara has not been able to get legislative authority for the insurer policyholder assessments, so he proceeded under questionable executive authority. “We have several questions about the legality of this proposal and are looking into it,” she said.

Consumer Watchdog has called for requiring insurers to offer policies in wildfire-prone neighborhoods to homeowners who have taken steps to reduce fire risks on their property as the best method to reduce enrollment in the FAIR Plan and stabilize the state’s insurance market.

Another key element of Lara’s FAIR Plan reforms call for the insurer to offer greater commercial coverage — up to $20 million per structure and $100 million for any one location.

Dan Dunmoyer, chief executive of the California Building Industry Assn., said the trade group has been seeking higher commercial coverage limits due to the rise of insurance premiums, which have slowed the construction of condominium complexes that builders insure.

He estimated that astronomical insurance rate increases have slowed condo construction by about 70% in the last 12 months, with fewer than 6,000 units built.

“Our view on this is: Get some competition in the marketplace, expand commercial coverage, let us build the most affordable for sale homes in California, which are condos,” he said.

The American Property Casualty Insurance Assn., an industry trade group, called Lara’s plan “an important step toward restoring the FAIR Plan’s financial stability and ensuring consumers have access to the coverage they need.”

The deal reached by Lara with the FAIR Plan is a binding legal stipulation and it requires the insurer to develop a “Plan of Operation” within 30 days detailing how it will carry out the agreement. It has 120 days to submit a rate plan for offering the higher commercial coverage.

The FAIR Plan was sued last week by four California residents who claim its policies offer subpar coverage for fire and smoke damage. The proposed class-action lawsuit seeks to represent more than 300,000 of the plan’s residential policyholders. The plan also is facing a lawsuit from more than 1,000 homeowners in Los Angeles who say the plan wrongly denied their claims.