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July 24, 2008 10:46 AM

THE AM LAW LITIGATION DAILY: July 24, 2008

Posted by Jonathan Thrope

Written and edited by Andrew Lonstreth

TRADE SECRETS
Motorola Settles Trade Secrets Case With Willie Gary, but It Ain't for $10 Billion
Willie Gary's trade secrets case against Motorola has received plenty of attention over the last couple years. For starters, his client, SPS Technologies, was seeking $10 billion--yep, that's a "b"--for what SPS alleged was Motorola's theft of its idea for a vehicle-tracking system. After the case went to trial in 2006 and the jury deadlocked, the famed Florida plaintiffs lawyer asked for a mere $200 million in attorneys fees and costs--which worked out to the nice round figure of $11,000 per hour. His justification? Gary claimed that Motorola's attorneys at Shook, Hardy & Bacon had violated court orders. Broward County Circuit Court Judge Leroy Moe brought Gary back to a more recognizable reality, awarding him $23 million, or a still-princely $1,000-an-hour.

After the first trial ended Motorola brought in new attorneys from Quinn Emanuel Urquhart Oliver & Hedges--Faith Gay and Edward DeFranco. The second trial was set for next Monday, but late Tuesday night the two sides reached a confidential settlement. The Am Law Daily reports that Gary's dreams of billions were just that--a dream. The article cites sources familiar with the deal who say that SPS will only be receiving a sum in the low tens of millions of dollars. Gary's take should just about cover gas for his personal Boeing jet.

APPELLATE
Parmalat Must Remain Defendant In Securities Class Action
When a new management regime revived Italy's fraud-riddled Parmalat SpA, Parmalat's lawyers at Quinn Emanuel Urquhart Oliver & Hedges were quick to go on the attack, using American courts to pursue the banks and auditors that new Parmalat claims were allegedy abettors in the fraud that sent the company into bankruptcy in 2003. Parmalat's much-watched case against Citigroup, for instance, is currently on trial in New Jersey state court. But on Tuesday, the Second Circuit Court of Appeals ruled that new Parmalat must also play defense.

Parmalat had appealed a decision by Manhattan federal district court judge Lewis Kaplan, who denied the company's motion to be enjoined from actions brought against it in the U.S. After the successor company emerged from Italian bankruptcy proceedings, Judge Kaplan allowed plaintiffs in the megamillions Parmalat securities class action to add New Parmalat to their long list of defendants. The appellate judges agreed with his reasoning. At the Second Circuit argument last November, Stuart Grant of Grant & Eisenhofer argued for the plaintiffs. Quinn Emanuel appellate star and former Stanford Law School Dean Kathleen Sullivan made the unsuccessful case for Parmalat.

ANTITRUST
No Class: San Francisco Judge Rules For AMD and Nvidia in Price-Fixing Case
Just a few weeks ago, the civil antitrust case against the makers of computer chips known as--stick with us here--graphics processing units and graphic cards--looked strong. At a class certification hearing earlier this month, San Francisco Judge William Alsup seemed to be persuaded by an e-mail that plaintiffs attorney William Isaacson of Boies, Schiller & Flexner read aloud as evidence of a conspiracy between the defendants--Nvidia and AMD--to fix prices of GPUs and graphic cards. The e-mail was from an executive at Nvidia to an executive at ATI Technologies, a subsidiary of AMD. "I really think we should work harder together on the marketing front," the Nvidia executive wrote. "As you and I have talked about, even though we are competitors, we have the common goal of making our category a well positioned, respected playing field. $5 and $8 stocks are a result of no respect."

But when Judge Alsup ruled last week, he denied the plaintiffs' motion to certify a nationwide class of direct purchasers of GPUs and graphic cards. He also denied a motion to certify a national class of indirect purchasers--consumers who were seeking an injunction, as well as 19 state consumer subclasses seeking damages. The class that Alsup did certify--direct retail purchasers who bought graphic cards from ATI's website--represents a tiny fraction of the class that plaintiffs lawyers were seeking to represent. Alsup made no mention in the class certification ruling of the e-mail that had seemed so persuasive earlier this month.

Isaacson and John Cove, Jr., of Boies Schiller represent the direct purchasers. Lead counsel for the indirect purchasers are Michael Lehmann at Cohen, Milstein, Hausfeld & Toll and Craig Corbitt and Henry Cirillo at Zelle Hoffman.

AMD was represented by a herd of Latham & Watkins attorneys: Peggy Zwisler, Eric McCarthy, Chuck Samel, Al Pfeiffer, Mandy Reeves, Allyson Maltas, Irene Ayzenberg, Mia Sussman, Jennifer Carmassi, Farbod Moridani, Brett Collins, and Josh Holian. Nvidia had Cooley Godward Kronish attorneys Stephen Neal, Craig Waldman, James Donato, John Dwyer, Whitty Somvichian, and Jeff Gutkin.

SECURITIES
Hedge Fund Investors Drop Suit Against Citigroup
Citigroup's lawyers at Paul, Weiss, Rifkind, Wharton & Garrison didn't have to put up much of a fight against investors in a hedge fund that the bank is trying to liquidate. Bloomberg reports that the investors in Falcon Strategies Two, represented by Coughlin Stoia Geller Rudman & Robbins, have withdrawn the class action they filed in the Southern District of New York in May.

The investors had claimed that an offering memorandum from Citigroup, which called for the bank to buy their shares for 45 cents on the dollar, didn't provide them sufficient information to evaluate the offer. The plaintiffs sought expedited discovery and an injunction to stop the deal. But Judge Sidney Stein didn't go for it. "The plaintiff is attempting to transform the anti-fraud provisions of the securities laws into broad disclosure provisions," he wrote in a July 17 opinion. Charles Davidow of Paul, Weiss was the lead lawyer for Citigroup. Joseph Russello of Coughlin represented the investors.

INTERNAL INVESTIGATIONS
Covington Completes Internal Investigation, InfoGroup Chairman is Out
Over the last five months, Covington & Burling attorneys Bruce Baird, Elaine Stone, David Bayless, and Michael Fanelli have spent a fair amount of time in Omaha, Nebraska. But they weren't seeking wisdom at the feet of Warren "The Oracle of Omaha" Buffett. Covington has been assisting a special litigation committee of the board of directors for InfoGroup, a database provider. The committee has been investigating claims made in a derivative shareholder lawsuit pending in Delaware state court. Among the allegations: The company spent money on things it shouldn't have, including nearly $900,000 to fly former President Bill Clinton and Senator Hillary Clinton to various political events.

According to the company, the committee and its counsel reviewed more than 1 million documents and interviewed 79 people. And the result? On Tuesday, InfoGroup announced that it would remove founder Vin Gupta as chairman, although he will remain CEO. Gupta also "orally" agreed to pay $9 million to the company. InfoGroup said that deal is subject to court approval, but did not specify which court.

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