Rabin, et. al. v. PricewaterhouseCoopers LLP (U.S. District Court, Northern District of California): Lead counsel for PricewaterhouseCoopers in pending putative nationwide collective and class action seeking injunctive relief and damages on behalf of applicants to entry-level employment in Assurance and Tax. Plaintiffs allege unlawful discrimination on the basis of age in violation of the federal Age Discrimination in Employment Act as well as various state anti-discrimination statutes.
Fairfield Greenwich Group./Madoff Litigation: Lead counsel for PricewaterhouseCoopers, LLP (Canada) in litigation in federal district and state courts in New York, as well as pending regulatory proceedings in Canada. The suits seek damages of more than $7 billion for alleged negligence and malpractice in the financial statement audits of various Fairfield Greenwich Group funds, which were the largest investment funds which invested with Bernard Madoff.
Minneapolis Firefighters’ Relief Ass’n v. Medtronic, Inc., U.S. District Court for Minnesota: Lead counsel in putative securities fraud class action against Medtronic and senior executives by shareholders seeking more than $5 billion in damages. Plaintiffs allege that the Company issued false SEC filings and other public statements regarding its compliance with the Food, Drug and Cosmetic Act’s prohibition of promoting products for off-label use.
Confidential Arbitration: Lead counsel for big-four accounting firm in three-week arbitration hearing of $480 million audit-malpractice claims asserted by liquidation trustee of bankrupt former audit client. In June 2011, arbitration panel held in favor of accounting firm on all claims.
Arlin M. Adams, as Chapter 11 Trustee of the Bankruptcy Estate of Coram Healthcare Corporation v. Price Waterhouse LLP, Circuit Court of Cook County, Illinois: Lead counsel for Price Waterhouse LLP in suit by purchaser (and, subsequently, its bankruptcy trustee) of home-infusion healthcare business. Coram initially sued Caremark, the seller and Price Waterhouse client, for fraud and breach of “representations and warranties” on the sale contract, which had included financial statements audited by Price Waterhouse. Caremark settled the suit for $145 million plus assignment of its potential malpractice case against Price Waterhouse. Coram (and its bankruptcy trustee) then brought that assigned claim, seeking approximately $250 million. Jury trial from September to October 2006. Jury verdict in favor of Price Waterhouse.
White, et al. v. Heartland Funds High-Yield Municipal Bond Fund, et al., U.S. District Court, Eastern District of Wisconsin: Lead counsel for defendant PricewaterhouseCoopers LLP in SEC investigation and in related class action under Section 11 of 1933 Securities Act alleging, essentially, that the various prospectuses and other publicly-filed materials associated with the sale of shares of two high-risk municipal bond funds were false and that the related audited financial statements materially misstated. Plaintiffs alleged that the defendants: the Funds, their advisors and officers, and the funds’ auditor PricewaterhouseCoopers LLP, had failed to disclose the risks and uncertainties associated with the investments, specifically, those related to liquidity, as well as industry and credit concentrations. During a volatile market period, the funds lost most of their value and were eventually forced into liquidation by the SEC, leading to an $80 million loss to shareholders. All other parties — the Funds, their advisor, and officers and directors — settled before trial. PricewaterhouseCoopers went to trial before a jury. Jury trial lasted from November to December 2005. The case settled during the “Christmas recess,” which occurred after plaintiffs and PricewaterhouseCoopers presented their cases-in-chief, although plaintiffs’ rebuttal and closing arguments were not held. At the subsequent required “fairness” hearing, jurors returned and spoke for the record against the settlement, stating that they did not believe PwC did anything wrong and would have found in favor of PwC.
Datronic Equipment Income Fund v. Weiss & Company, et al. v. Price Waterhouse, LLP, Circuit Court of Cook County, Illinois: Lead counsel for Price Waterhouse in securities fraud, audit malpractice, breach of contract, conspiracy and common law fraud claims arising from alleged failure to detect major defalcations by CEO of the general partner of a publicly-held limited partnership, seeking more than $65 million (before punitive damages). (Companion federal suit, pending from 1992-95, federal court granted summary judgment for Price Waterhouse.) Jury trial from May to June 1997. Jury verdict in favor of Price Waterhouse, with exception of $739,000 award in connection with audit of one escrow account.
Frederick’s of Hollywood v. Arthur Andersen, et al., Superior Court for the State of California, County of Los Angeles: Lead counsel for Arthur Andersen, LLP in professional malpractice and fraud jury trial following the bankruptcy of Frederick’s of Hollywood against its auditor, where former client alleged that the auditor’s negligence and fraud concealed mismanagement of key financial areas, particularly inventory, leading ultimately to FOH’s bankruptcy. (This is the only audit-failure case tried to verdict by Arthur Andersen after Enron.). At trial, Frederick’s sought $87 million in compensatory damages as well as punitive damages. Jury trial from September to November 2004. Jury verdict in favor of Arthur Andersen.
TruServ Corporation v. Ernst & Young LLP, American Arbitration Association Proceeding: Lead counsel for defendant Ernst & Young LLP in audit malpractice and consumer claim fraud seeking $750 million in damages allegedly arising from professional malpractice by independent auditor. TruServ, the nation’s largest hardware cooperative association, alleged that the auditor had failed to timely detect and correctly report a $191 million inventory loss. American Arbitration Association hearing from January to March 2005. Panel held in favor of Ernst & Young, finding that there had been no audit malpractice or consumer fraud and awarding Ernst & Young more than $12 million in attorneys’ fees and costs. (Appeal of fee award by TruServ reported at 376 Ill. App. 3d 21 8, 876 N.E.2d 77 (1st Dist. 2007).)
Beverly Enterprises v. Andersen Consulting, U.S. District Court, Western District of Arkansas, Fort Smith Division: Lead counsel for defendant Andersen Consulting (now Accenture) in professional malpractice, breach of contract and fraud suit arising from allegedly faulty design and installation of custom software/technology system for the nation’s second-largest nursing home owner and operator, seeking approximately $51 million. Andersen Consulting counter-claimed for unpaid professional fees. Three-week jury trial in 1997 resulted in jury verdict in favor of Andersen Consulting (including complete award on counterclaim). (Featured in National Law Journal, “Year’s Top Wins For The Defense,” April 1998)
Schieffelin/EEOC v. Morgan Stanley, U.S. District Court, Southern District of New York: Lead counsel for Morgan Stanley in landmark “glass ceiling” case which alleged a pattern and practice of discrimination in compensation and promotion against high-level officer and professional female employees in Morgan Stanley’s Institutional Equities Division of Morgan Stanley. On behalf of a worldwide class of hundreds of former and current employees from 1995 to the present, the EEOC sought hundreds of millions of dollars in compensation damages, as well as punitive damages. Allison Schieffelin, an individual claimant who was one of the division’s highest paid women (nearly $2 million in 2000), sought more than $20 million in lost compensation damages, as well as additional punitive damages under various state and city civil rights laws. Settled during trial in July 2004.
Indiana Refrigerator Lines v. Price Waterhouse, U.S. District Court for Nebraska: Lead counsel for Price Waterhouse in claim by Indiana Refrigerator Lines for accounting malpractice and breach of contract, alleging that auditor’s failures had led to multi-million dollar loss, bank’s withdrawal of credit and, ultimately, bankruptcy of trucking company. Price Waterhouse counter-sued for unpaid fees. Bench trial from October to November 1985. Judgment in favor of Price Waterhouse (including on counterclaim for fees.)
In re Kmart, U.S. District Court, Eastern District of Michigan; State of Michigan, Oakland County Circuit Court; Sixth Circuit Court of Appeals: Lead counsel for PricewaterhouseCoopers LLP in various investigations and litigation arising out of alleged accounting and other improprieties at Kmart Corporation. Following the receipt of anonymous letters raising allegations of improper conduct, Kmart launched what was described at the time as the largest internal investigation in the history of the United States, and the SEC and Department of Justice also launched investigations. Led successful representation from January 2002 through Fall 2007 of PwC and its employees in all of these investigations, as well as in a shareholder federal securities fraud class action in the Eastern District of Michigan (which was dismissed on the pleadings and the dismissal affirmed on appeal) and an additional action brought by the creditors of Kmart’s bankruptcy estate.
SEC v. AA Capital Partners, U.S. District Court, Northern District of Illinois: Lead counsel for Ernst & Young LLP in SEC investigation of AA Capital, a management and investment advisor to private equity funds. The Receiver appointed on behalf of AA Capital sought more than $25 million in damages based on defalcations by senior management from the private equity funds and their pension fund investors. Case settled following commencement of arbitration hearing.
Saragusa v. Price Waterhouse, 189th Judicial District, Harris County, Texas: Lead counsel for Price Waterhouse in jury trial against former audit client. Following the bankruptcy of Texas’ largest liquor wholesaler, its former 50 percent shareholder and largest creditor brought claims of professional negligence, fraud, breach of contract, and violation of Texas Deceptive Trade Practices Act against Price Waterhouse, the company’s auditor, seeking more than $21 million (before statutory trebling). Jury trial in 1996. Case settled during plaintiff’s case-in-chief presentation.
American Italian Pasta, U.S. District Court, Western District of Missouri: Lead counsel for Ernst & Young LLP in federal securities class action, state derivative action, and SEC investigation arising out of AIPC’s restatement of its financial statements from 2001 - 2004. The company, its senior executives, and several accounting employers pled guilty to federal criminal charges and entered into consent decrees with SEC.
Retsky v. System Software Associates, U.S. District Court, Northern District of Illinois: Lead counsel for defendant Price Waterhouse in $357 million federal securities class action following failure of software vendor, alleging professional negligence and fraud in connection with audit of vendor’s financial statements. After co-defendants settled before trial, the claim against Price Waterhouse was withdrawn from federal court, by agreement, and resolved through “baseball” arbitration. Arbitration hearing in 2001 resulted in $14 million award against Price Waterhouse.
Korn v. Dow Corning, Superior Court for the State of California, County of Los Angeles: Lead trial counsel for Dow Corning in personal injury and product liability claims by “bellwether” plaintiff (confirmed case of scleroderma) selected from statewide class of personal injury claimants against Dow Corning seeking hundreds of millions of dollars in damages in connection with silicone breast implants manufactured and sold by Dow Coming. Two-month jury trial in 1994. Settled on the morning of closing arguments for $7.8 million.
National Highway Traffic Safety Agency v. General Motors, (reported at 656 F.Supp. 1555 (D.D.C. 1987)): Trial counsel (second chair) for General Motors in United States DOJ/NHTSA suit for injunction seeking to recall General Motors’ first front-wheel drive car, the 1980 “X” car (the platform for many of its models beginning in 1980) for alleged dynamic and potentially fatal vehicle defect: “premature rear wheel lock up.” Bench trial February 1984 to April 1985. Judgment for General Motors.
FMC v. Lummus Crest, American Arbitration Association, Philadelphia, PA: Trial counsel (second chair) for FMC in arbitration of claim of breach of contract and professional malpractice arising from Lummus Crest’s construction of chemical plant for FMC. Arbitration hearing from May to July 1989. Arbitrators made $11 million award to FMC.
UbiquiTel v. Sprint Corporation and Nextel Communications, Delaware Chancery Court: Lead counsel for plaintiff UbiquiTel in injunction action concerning breach of contract arising from implementation of Sprint-Nextel merger. UbiquiTel was a “Sprint affiliate” whose contractual “exclusivity” rights in particular territories were impaired by the merger with Sprint’s competitor, Nextel. UbiquiTel brought suit to enjoin the merged entity’s use of the “Sprint” name in competition with its prior affiliate in the nine-state exclusive territory. (2005 WL 3533697 (Del. Ch. 2005), 2006 WL 44424 (Del. Ch. 2006)) Bench trial in January 2006. Settled the day after closing argument, by a Sprint-Nextel acquisition of UbiquiTel for $1.35 billion (a significant premium over market cap).
Delta & Pine Land Company v. Monsanto Company, Circuit Court of the First Judicial District of Bolivar County, Mississippi: Represented Monsanto in suit by Delta & Pine Land Co. seeking $1 billion in actual and $2 billion in punitive damages for alleged breach of contract, fraud, and tortious interference with contract in connection with failure of merger-acquisition when the Department of Justice effectively blocked Monsanto’s acquisition of America’s largest cotton seed company. Favorably settled by Monsanto’s successful acquisition of Delta & Pine Land Company.
Illinois Bell: Hinsdale Fire Litigation, Circuit Court of Cook County, Illinois: 1988 - 1994 (reported at 161 111.2d 233; 641 N.E.2d 440 (1994)): State court class action alleging violations of the Public Utilities Act in connection with a fire at the Hinsdale Switching Station that led to a month-long outage for major areas of Illinois, Indiana and Wisconsin. Obtained dismissal of all claims in circuit court; after multiple appeals, dismissal affirmed in Supreme Court.
FASB I06/Foster & Shy Litigation/Navistar, U.S. District Court, Northern District of Illinois (Southern District of Ohio): Lead counsel for Navistar in novel federal declaratory judgment action against the class of unions (including the UAW) and a class of union and non-union retirees seeking to alter retirees’ health benefits, which were at the time identical to those of active employees. The UAW filed a responsive breach of contract action in a different federal court. Following expedited discovery before both federal courts, Navistar reached a settlement with the unions and the retirees, which preserved a significantly reduced, sustainable level of retiree health benefits (reduced from approximately $2.9 billion to $900 million).
O’Hare Expansion Litigation (People v. City of Chicago, 202 111.2d 36,779 N.E.2d 875, 269 111.Dec. 21; Philip v. Daley, 339 Ill.App.3d 264,790 N.E. 2d 961,274 111.Dec. 188; St. John’s United Church of Christ v. The City of Chicago, 401 F.Supp. 2d 887 (N.D. Ill. 2005); St. John’s United Church of Christ v. The City of Chicago, 502 F.3d 6 16 (7th Cir. 2007): Lead counsel for City of Chicago against various plaintiffs seeking declaratory and injunctive relief to prevent expansion of terminals and roadways at O’Hare International Airport. The Circuit Court of Du Page County granted summary judgment for the City, denied plaintiffs’ motion for injunction, and denied Congressman Henry J. Hyde and State Senator James “Pate” Philip leave to intervene as plaintiffs in the litigation. Plaintiffs appealed; appellate court held that entry of summary judgment in the City’s favor was erroneous. On the City’s appeal, the Illinois Supreme Court unanimously held that City was entitled to continue with its improvements at O’Hare, reversed the appellate court’s opinion, and reinstated the circuit court’s opinion in favor of the City.