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July 31, 2008 6:17 PM

Gone Fishing: Parmalat Case Goes on Six-Week Hiatus

Posted by Brian Baxter

Quinn Emanuel Urquhart Oliver & Hedges is riding high.

The renowned litigation firm secured a victory two weeks ago for Mattel, the world's largest toymaker, in its highly publicized trial against MGA Entertainment, maker of the Bratz doll line.

The firm received more good news last week, when a New Jersey state court judge rejected a bid by litigators at Paul, Weiss, Rifkind, Wharton & Garrison seeking to dismiss Parmalat's $2.2 billion damages case against Citigroup.

Quinn Emanuel partners Kenneth Chiate, Steven Madison, Marc Greenwald, and Peter Calamari are representing Parmalat in various proceedings as the company tries to recover assets for the bankrupt estate of its predecessor company, which collapsed after the discovery of widespread accounting fraud in 2003. (The case against Citigroup was filed in Bergen County Superior Court in New Jersey because that's where Parmalat's former U.S. subsidiary--now called Farmland Dairies--was based.)

But Quinn Emanuel litigators might not be smiling several weeks from now, when the Parmalat jury returns from its summer recess. After nearly two-and-a-half months of trial, Quinn Emanuel rested its case last week. In a procedural move, Citigroup's Paul Weiss lawyers--litigation cochair Theodore "Ted" Wells, Jr., partner John "Jack" Baughman, and counsel Daniel Levi--asked Judge Harris for a directed verdict dismissing the case.

Harris rejected Citigroup's motion, but it wasn't all bad news for the New York firm. One trial observer says the Paul Weiss litigators would have "fallen out of their chairs" had the motion been granted.

With the end of today’s proceedings in Hackensack, N.J., the Parmalat trial goes dark for six weeks, reconvening September 8. The reason: Judge Harris promised jurors they would have August off.

Some observers say that's extremely good news for Citigroup.

"The break is great for Citigroup and very bad for Parmalat," says Patton Boggs litigation partner Todd Harrison, who is uninvolved in the case. "Parmalat just put on their case, their evidence is fresh in the jury's mind, and by the time they get back six weeks from now, that jury will have forgotten much of what Parmalat was trying to get across."

In a complex and lengthy case, says Harrison, it's hard for jurors to keep the details straight, and that difficulty is exacerbated over periods when court is not in session.

The break also potentially hurts Parmalat because it gives Paul Weiss more time to strategize. "[Paul Weiss] now has six weeks to reconfigure the evidence for their case based on what Parmalat has put on," Harrison says. "They can move their presentation of evidence around to more effectively rebut points that Parmalat made over the last several months."

An individual familiar with Parmalat's case against Citigroup who requested anonymity describes the six-week break as extremely unusual. "I've seen a week break and even a two-week break during my career, but never six weeks," the lawyer says. "But the judge made a commitment to the jury that I think he wanted to fulfill, even if that meant coming back in September."

The lawyer says the break comes at a good time--roughly at the trial's midpoint between Parmalat's and Citigroup's presentations--and notes that Parmalat will still be able to remind jurors of its view of the case on rebuttal.

Harrison disagrees.

"Judges are usually pretty strict on rebuttal because they figure both sides have made their points, so they want to limit the evidence," Harrison says. "And, frankly, by that time the jury is going to be so sick of the case that they're just going to want to be done. You never know how much they'll be paying attention at that point."

Lawyers for Parmalat and Citigroup say they expect the trial to conclude sometime in October.

Jurors can only hope that Judge Harris adheres to that time frame so the Thanksgiving holiday doesn't present any delays.

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