Montanile — Supreme Court Victory

The Challenge

Persuading the Supreme Court to resolve an important circuit split on the reach of equitable remedies under ERISA.

The Engagement

On numerous occasions (and frequently with our attorneys appearing), the Supreme Court has grappled with the proper scope of the remedies provided under ERISA, the federal statute that covers most Americans’ health insurance. The most recent case on the remedies question involved an unlucky defendant named Robert Montanile, who was hit by a drunk driver and suffered severe injuries. While Mr. Montanile settled with the driver who injured him, those monies were insufficient to cover his medical bills and other necessary expenses. Nonetheless, Mr. Montanile’s health plan sued him, demanding that he personally reimburse it for the six figures in medical bills it had paid. The circuit courts of appeal were split on whether ERISA allowed a plan to obtain reimbursement in those and similar circumstances. We were retained by the defendant’s trial counsel to handle the case before the Eleventh Circuit, and then to obtain certiorari and argue the matter before the Supreme Court. After obtaining certiorari, we argued that neither ERISA nor the practices of historical equity permitted a plaintiff to reach the general assets of a subrogor. The United States Government intervened on our side.

The Result

The Supreme Court issued an 8-1 decision in favor of Mr. Montanile. The constraints it articulated on the recovery of monies from needy beneficiaries will help to protect the limited resources of millions of sick, disabled, and retired people.

Honeywell — $23.8 Million Settlement

The Challenge

Working with lead trial counsel to successfully conclude a pension class action involving complex ERISA questions.

The Engagement

In a long-running ERISA class action against Honeywell, plaintiffs’ trial counsel Susan Martin had been able to successfully resolve portions of the suit. To build on that success, she engaged our firm to collaborate in developing summary judgment, mediation, and appeal strategies for the remaining parts of the case. Working together, we were able to settle the remaining claims for $23.8 million.

Result

A $23.8 million class settlement.

Arena Pharmaceuticals — Ninth Circuit

The Challenge

Reversing a district court decision that excused a pharmaceutical company and its executives from fraud that cost investors over $100 million.

The Engagement

Investors in Arena Pharmaceuticals lost more than $100 million when they were misled about the prospects for regulatory approval of a new weight loss drug. Defendants sought dismissal on the theory that their misleading conduct was not actionable because they legitimately disagreed with the Food & Drug Administration about the relevant carcinogenic science, and because much later the FDA approved the drug. After the district court dismissed the case, leading plaintiffs’ firm Kaplan Fox & Kilsheimer LLP retained Stris & Maher to brief and argue for reversal. Our position is that misleading the market about the existence of a significant scientific disagreement with the FDA is actionable under well-established principles. This appeal would clarify the pleading standard in the Ninth Circuit for a wide range of securities fraud cases.

Result

The Ninth Circuit ruled 3-0 in our favor, reversing the district court’s decision and remanding the case for further proceedings. In April 2018, the district court approved a settlement agreement that would pay $24 million in cash and stock to the proposed class.