Wall-Street.com – Supreme Court victory

THE CHALLENGE

An entrenched circuit split had developed on an issue of statutory interpretation presented at the outset of virtually every copyright case. Section 411(a) of the Copyright Act provides that no infringement suit may be filed unless registration “has been made.” Must the Copyright Office act on an application for registration before suit may be filed, or is filing the application enough?

Multiple circuits, in line with the view of leading treatise authors (Goldstein; Nimmer), had held that simply filing the application is enough. We were retained after a leading Supreme Court expert filed a petition for review advancing this so-called “application” approach.

THE ENGAGEMENT 

Because the petition appeared virtually certain to be granted, our petition-stage goal was to stake out a strong merits position: that the only permissible reading of the statutory language of the Copyright Act is that the Copyright Office must act before suit is filed. When the Court called for the views of the Solicitor General, the government fully endorsed the view articulated in our brief. The Court granted the petition for review.

At the merits stage, with the support of the government and multiple amici, we explained why the compelling policy arguments advanced by the petitioner should not overcome the plain meaning of the statutory text written by Congress. The case was argued by Peter K. Stris in January 2019.

THE RESULT

In an opinion written by Justice Ginsburg (who, despite not being able to attend the argument herself, cited a portion of Mr. Stris’ argument from the transcript for a key point), the Supreme Court ruled 9-0 in our client’s favor. The decision vindicates not only the original text of the Copyright Act, but also Congress’ desire to promote early and extensive copyright registration.

Karen McDougal — Impact Litigation

The Challenge

Representing model Karen McDougal in litigation against a major media organization over a contract that kept Ms. McDougal from telling the story of her 2006-07 relationship with President Donald Trump.

The Engagement

On March 20, 2018, we filed a lawsuit on behalf of Ms. McDougal against American Media, Inc. (AMI), a major media organization who owns the National Enquirer and other widely distributed magazines. The complaint alleged that McDougal’s contract with AMI was an attempt to “catch-and-kill” the story of her relationship with President Trump, and sought a declaration of contract invalidity from the court. It asked the court to set aside the contract on three grounds:

First, the contract was invalid for “fraud in the execution”—a legal concept that deems a contract to never have been formed where a party was deceived about its nature. Ms. McDougal was misled about the contract’s nature (believing it to be a legitimate modeling and writing contract) through the misconduct of her attorney, who was secretly colluding with the other side. As a result, the contract was never formed.

Second, the contract represented an illegal in-kind corporate donation to the Trump campaign. Weeks before we filed the complaint, the New York Times reported that, shortly after the contract was signed, Ms. McDougal’s own lawyer called President Trump’s lawyer to inform him that the “transaction” was complete. Because AMI entered into the contract to influence the election without reporting its contribution, the contract was made for an illegal purpose and was void.

Finally, the contract violated fundamental public policy. While discrediting her story, AMI used the contract to coerce Ms. McDougal into refraining from discussing her relationship with President Trump. Because this violated central tenets of American government, including freedom of expression and conscience and freedom of the press, the contract was void.

When the case was filed, it immediately sparked widespread attention from the press and public, and was prominently featured in national news. That created a pathway for Ms. McDougal to set the record straight, and defend herself from lies being spread about her and her relationship with President Trump.

On April 2, 2018, AMI filed an anti-SLAPP motion arguing that the lawsuit violated AMI’s First Amendment rights. On April 18, 2018, AMI agreed to a settlement through which Ms. McDougal achieved her core goal—reacquiring the rights to her life story so that she, and she alone, could exercise control over them.

The Result

We reached a prompt and favorable settlement with a major media organization that accomplished all of our client’s goals, including, crucially, having the rights to her own life story returned to her.

Johnson — Fighting Illegal Debt-Collection Practices

The Challenge

A handful of large debt-collection companies buy time-barred debt for pennies on the dollar, and then seek to recover that stale debt in consumer bankruptcies—without disclosing to the participants or the courts that the debt is unenforceable. This troubling nationwide practice implicates over a billion dollars annually.

The Engagement

Working with NACBA and several leading consumer-protection attorneys, Daniel Geyser orchestrated a nationwide appellate strategy to challenge this practice in federal circuits throughout the country. After Mr. Geyser argued and won a key case in the Eleventh Circuit, which held the collection practice unlawful under the Fair Debt Collection Practices Act (FDCPA), the case proceeded to the Supreme Court. Mr. Geyser presented oral argument in January 2017.

The Result

In a sharply divided decision, the Court ruled 5-3 against the plaintiff. The narrow loss represented one of the few times in recent years where the plaintiff garnered any votes in an FDCPA case before the Court; the plaintiffs in the last two FDCPA cases lost unanimously.

Bumble and bumble CEO — Executive Compensation

The Challenge

Ensuring the chief executive officer of a successful startup received the equity compensation he was promised.

The Engagement

A successful startup was sold for nine figures to a Fortune 500 company. The former CEO of the company, a graduate of the the Stanford Business School, retained us to secure the equity compensation he had been promised by the founder. When the trial court wrongfully dismissed the suit, Brendan Maher successfully obtained reversal in the New York appellate courts. After discovery commenced, the case settled shortly after Peter Stris deposed the founder.

The Result

Confidential settlement in favor of our client.

Merrill Lynch — Securities Victory

The Challenge

Protecting the authority of state courts to enforce their own laws governing market misconduct.

The Engagement

In a case of extraordinary importance to state authorities and the investing public, we were retained to represent before the United States Supreme Court a group of investors who lost over $50 million when the stock of a company called Escala declined by more than $800 million. The complaint accused several major financial institutions of engaging in improper short-selling practices, and sought relief in New Jersey state court for violations of New Jersey law. Led by Merrill Lynch, the financial institutions argued that the federal securities laws required the case to be brought exclusively in federal court. We argued that longstanding principles of jurisdiction entitled state courts to hear disputes concerning their own laws.

The Result

The Court issued an 8-0 decision in our clients’ favor, holding that the lawsuit could proceed in New Jersey state court. Our victory was described by the press as “the most securities significant decision of the term.”

Xerox — $22+ Million Recovered

The Challenge

Representing a group of accomplished Xerox corporate employees in a complex, landmark pension case.

The Engagement

In the late 1990s, Xerox attempted to rehire veteran employees who had earlier worked at Xerox and left by choice. The returning employees were led to believe that their pensions would be straightforwardly calculated, with no hidden reductions for past service. As the employees approached retirement, they learned that Xerox intended to calculate their pension using an improper and undisclosed accounting method that collectively robbed the group of many millions of dollars. For roughly a decade, our firm represented the plaintiffs in this complex, landmark pension case at every level: the district court; the Second Circuit (three times); and the Supreme Court. Although the Supreme Court narrowly ruled against us in one facet of the case, we persuaded the Justices to preserve an argument (regarding improper notice) that we used to persuade the lower courts to award millions to misled employees.

The Result

We recovered over $17 million in benefits, plus $4.9 million in attorney’s fees.

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.

design LAB — a Decade of Success

The Challenge

Defending a start-up in a bet-the-company jury trial brought by a competitor.

The Engagement

design LAB, Inc. is a private-label design and manufacturing company that was co-founded over ten years ago by Adam Beatty, a Harvard Business School graduate. Shortly thereafter, a lawsuit was brought by one of the company’s primary competitors alleging, without merit, that design Lab’s co-founders had improperly solicited clients and misappropriated trade secrets. The lawsuit, tried before a Santa Monica jury, was an existential threat to the company. Mr. Beatty chose Peter Stris to serve as lead trial counsel.

The Result

Mr. Stris successfully defended this bet-the-company suit by persuading the jury to award the plaintiff only a nominal sum. And, in the decade since, Mr. Stris and his partners have served as outside general counsel as design LAB has grown to become one of the nation’s preeminent private-label designers and manufacturers of pet and theme-park merchandise.