The Work

July 30, 2008 9:41 AM


Posted by Jonathan Thrope

Edited by Andrew Longstreth

Texas Plaintiffs Bigwig is "Sexual Predator" who Defrauded Fen-Phen Clients, Former Paralegal Says
We interrupt the Litigation Daily's usual programming for a special episode of "Lawyers Gone Wild." Warning: The complaint a formal paralegal has filed against Texas plaintiffs giant Richard Laminack contains material not suitable for the squeamish. Angela Robinson's suit, which seeks $55,000 for her allegedly wrongfully termination in April, includes assertions that Laminack demanded sexual favors from male and female employees. Among the lowlights of the complaint, which was first posted at Courthouse News: Robinson claims she was encouraged to perform oral sex on an expert witness who was having trouble preparing for a deposition.

Robinson says she was fired when she threatened to blow the whistle on her old boss, for whom she worked for several years. In addition to Laminack and his firm--Laminack, Pirtle & Martines--the suit also names the O'Quinn Law Firm, where Laminack practiced when it was called O'Quinn, Laminack & Pirtle. "Laminack's appetite and oppression was an open secret at both [firms]," the complaint alleges. "The hostile work environment produced by Laminack's voracity was of such intensity and duration that it actually became, and probably remains, somewhat of a tradition at both law firms."

Among the less prurient--but no less scandalous--allegations are charges that Laminack defrauded clients in the fen-phen diet drug litigation by charging them for non-existent medical records.

Laminack referred The Am Law Daily's calls to Dale Jefferson of Martin, Disiere, Jefferson & Wisdom in Houston. Jefferson called Robinson's complaint "salacious and outlandish," and said Robinson's behavior--especially following Laminack to his new firm in 2002--cast doubt on her accusations.

"Her actions completely refute the veracity of her claims," said Jefferson, who has represented the O'Quinn firm before.

Robinson is represented by Houston's McKinney & Cooper.

For a Change, UBS Gets Good News
It's been a rough summer, to say the least, for UBS. The Swiss banking giant is under investigation by U.S. regulators for selling allegedly sham tax shelters and under assault by angry investors, and two state AGs, for selling auction-rate securities into a collapsing market. If ever a company needed a bit of good litigation news, it's UBS--and on Monday it finally got some, courtesy of New York state court judge Charles Ramos. Judge Ramos granted UBS's motion to dismiss an investors' suit that accused the bank of manipulating stock sales to decrease the value of the hedge fund by $20 million.

UBS was the prime broker and custodian of Wood River, a hedge fund that collapsed in August 2005. Its founder, John Whittier, subsequently pleaded guilty to securities fraud for failing to diversify the fund's holdings. But the plaintiffs, who had invested $79 million in the fund, set their sights on the deep pockets of UBS. They accused the bank of artificially creating a short market for the stock of a company in which Wood River was the largest holder, which sent the value of the fund down $20 million. That theory was a bit of a stretch, according to Judge Ramos.

"The facts alleged do not support the causes of action," Ramos wrote in the opinion, according to Bloomberg. "These plaintiffs lack standing."

UBS was represented by Mayer Brown attorneys Pat Conti, Mark Hanchet, Anthony Diana, David Krakoff, and Andrew Nicely. Conti told us that Ramos' decision reaffirms the duties prime brokers owe their clients--and the more distant relationship they have with the investors of those clients. "Absent extraordinary circumstances," Conti said, "we owe no duties to the investors of our hedge fund clients."

It's worth noting that the Wood River investors were represented by Lance Gotthoffer of Reed Smith, a firm not often seen on the plaintiffs side. Granted, the plaintiff were big-time investors, but it's more typical to see hedge funds represented by litigation boutiques--rather than Am Law 100 firms--in suits against banks. We called Gotthoffer to ask about this unusual representation, but he declined to comment.

Stolt-Nielsen Makes Antitrust Immunity Deals A Little More Transparent
Remember the folks at Stolt-Neilsen? That's the shipping company whose antitrust amnesty agreement was challenged by the Justice Department. The ensuing litigation between Stolt and Justice, which was chronicled by Corporate Counsel in a July cover story, opened a rare window into the race-for-immunity that U.S. antitrust laws have created. Now Stolt has won a ruling from the U.S. Court of Appeals for the D.C. Circuit that will open the window even wider.

On July 25 the appellate court ruled, in Stolt's Freedom of Information Act case against the Justice Department, that amnesty deals between the antitrust division and about 100 companies are not automatically barred from public disclosure. According to Corporate Counsel reporter Sue Reisinger, posting at The Am Law Daily, the decision means that redacted versions of those amnesty deals are likely to become public.

For this treasure trove of information, we can thank White & Case partner Mark Gidley, who has been litigating against the Justice Department on Stolt's behalf for years. Gidley told Corporate Counsel that Stolt's FOI litigation was "the first case anywhere in the world to deal with access to the terms of individual company amnesty agreements." And the D.C. appeals court ruling, he added, "was the antitrust division's first [FOI] loss."

A Justice Department spokesperson said its lawyers are reviewing the ruling to decide whether to ask for a rehearing or seek an appeal.

D.C. Circuit Red Lights Whole Foods-Wild Oats Merger
We don't shop much at Whole Foods; any store that's jokingly called Whole Paycheck is a bit too pricey for us. In antitrust lingo, that makes the Litigation Daily a "marginal consumer" of the high-end grocery store. So we felt personally involved last August, when Washington, D.C., federal district court judge Paul Friedman cited us "marginal consumers" in denying a request by the Federal Trade Commission to stop Whole Foods' merger with Wild Oats. But yesterday the D.C. Court of Appeals forsook us. In reversing Judge Friedman's ruling, the appeals court found that that Friedman should have focused his antitrust analysis on core consumers.

The appellate judges sent the case back to the lower court for a ruling on the merits, but said they did so "reluctantly, admiring the thoughtful opinion the district court produced under trying circumstances in which the defendants were rushing to a financing deadline and the FTC presented, at best, poorly explained evidence."

The decision promises to give more work to Paul Denis of Dechert who argued unsuccessfully for the Whole Foods and Wild Oats merger before the D.C. Circuit. On the brief he was joined by Dechert attorneys Paul Friedman, Nory Miller, and Rebecca Dick.

Simpson Thacher Client Wins America's Cup Appeal
Simpson Thacher & Bartlett partner Barry Ostrager isn't a sailing aficionado. Horse racing in his thing. (No joke: He breeds and owns race horses.) But the man knows how to litigate just about anything, on land or sea. Yesterday the New York State Supreme Court's Appellate Division ruled in favor of Ostrager's client, Societe Nautique de Genève, whose Alinghi syndicate won the America's Cup in 2007. The court ruled that in the next America's Cup, SNG will compete against the challenger it chose a year ago.

The Golden Gate Yacht Club had sued SNG, claiming that it was the rightful challenger to the Cup, not Club Nautico Espanol de Vela, which SNG had selected after it won. While the lower court agreed with the Golden Gate Yacht Club, the appellate court reversed in a 3-2 ruling, which can be read here.

"After a year of litigation interference by GGYC, the Appellate Division has found GGYC's challenges to SNG's conduct of the America's Cup baseless," SNG said in a statement. "The America's Cup will proceed as a challenger series."

Although the Golden Gate Yacht Club, whose BMW Oracle Racing team is owned by Oracle co-founder and CEO Larry Ellison, can appeal the decision, it wasn't immediately clear it would. "We are surprised and disappointed by this ruling," said club spokesman Tom Ehman, according to Sailing World. "We will now be taking legal advice and considering the next step."

Before the appellate court, GGYC was represented by Latham & Watkins attorneys James Kearney and Gina Petrocelli. Ostrager was joined by Simpson attorneys Jonathan Youngwood, George Wang and Laura Murphy.

First Circuit Affirms Dismissal of Challenge to Citigroup Compensation Plans
It was a long and winding road to the First Circuit Court of Appeals, and now two actions challenging Citigroup's employee compensation program have hit a dead end. Last week, the appellate court affirmed the dismissal of two suits consolidated in a Multi-District Litigation proceeding in the district of Massachusetts.

The plaintiffs in both cases are former Citigroup employees who participated in the company's Capital Accumulation Plan, which allows employees to receive Citigroup stock, in lieu of cash, at a discounted rate. The plaintiffs challenged a provision that requires employees to give up unvested shares in the event they voluntarily leave the company. In affirming the lower court's summary judgment for Citi, the First Circuit concluded that "the forfeiture provisions are unambiguous, and thereby enforceable."

Citigroup was represented by Skadden, Arps, Slate, Meagher & Flom. Preeta Bansal argued before the First Circuit. She was joined by William Frank, Thomas Dougherty (who argued the successful summary judgment motions at the district court), David Clancy, Kara Fay, and Sarah McCallum. Bruce Nagel of Nagel Rice represented the plaintiffs at the First Circuit.

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