August 13, 2008 9:43 AM

THE AM LAW LITIGATION DAILY: August 13, 2008

Posted by Nicole White

Correction: In the Securities item below, we mistakenly reported that Paul Weiss assisted Clifford Chance behind the scenes for Citigroup. The firm did not work on this matter, although it is representing Citigroup in Parmalat litigation in other courts. We regret the error.

Edited by Andrew Longstreth

SECURITIES
Bank of America, Citigroup Win Dismissal of Parmalat Shareholder Suit
In January, the Supreme Court gave the defense bar--and Corporate America--a gift when it ruled in Stoneridge Investment Partners v. Scientific Atlanta that third parties in shareholder litigation can't be sued if they didn't mislead investors, even if their business partners did.

Lawyers for Citigroup and Bank of America have put the Stoneridge ruling to good use: The two companies just won the dismissal of a securities class action that claimed they were liable for their role in the collapse of Parmalat Finanziaria. In his ruling, made public on Monday, Manhattan federal district court judge Lewis Kaplan relied heavily on the Supreme Court's Stoneridge directive. "Stoneridge made plain that investors must show reliance upon a defendant's own deceptive conduct" for a suit to succeed against a secondary actor, Kaplan wrote. "Plaintiffs' evidence falls well short of this standard. Nothing about Parmalat's disclosures describes any defendant's own conduct, much less conduct that was deceptive."

The lead plaintiffs, including a British fund manager, are represented by Grant & Eisenhofer and Cohen, Milstein, Hausfeld & Toll (which is not having a very good week). Mark Kirsch of Clifford Chance has been representing Citigroup in the courtroom, with a team from Paul, Weiss, Rifkind, Wharton & Garrison--Brad Karp, Ted Wells, and Jack Baughman--helping out behind the scenes. (Citi hasn't helped Karp's golf game this summer.) Joseph Tompkins, Alan Geolot, and Mark Guerrera of Sidley Austin represent Bank of America.

WHITE-COLLAR
Being Dan Webb Means Defending Embattled Detroit Mayor
Four years ago, American Lawyer senior writer Susan Beck learned what it meant to be Dan Webb, the legendary trial attorney and chairman of Winston & Strawn. Back then It meant flying high with clients like Jack Welch, mired in a divorce battle; George Ryan, the former Illinois governor targeted for fraud and racketeering; and the New York Stock Exchange, tangled in a compensation dispute with its former chairman. But it also meant spending quality time in Gilmer, Texas, home of the Yamboree Yam Festival, for a fen-phen trial on behalf of Wyeth.

What's it like to be Dan Webb today? Well, you'd better like Detroit in August. This week Webb escorted perhaps the most unpopular mayor of a major American city--Detroit's Kwame Kilpatrick--to a state court hearing to determine whether Kilpatrick had violated his bail terms. Prosecutors argued that the mayor spent time with his sister and a police bodyguard, whom he's not supposed to see because both were witnesses to his alleged shove of some sheriff's deputies. Yesterday Michigan state judge Ronald Giles ruled in favor of the mayor. It was a rare bit of good news for Kilpatrick, who is facing criminal charges of perjury, misconduct in office, and obstruction of justice for lying about an extramarital affair with his chief of staff. (You remember: He's the one who sent steamy text messages.) For a glimpse of Webb in action, check out this video from the Detroit Free Press website, which shows Webb defending the disgraced mayor before a throng of reporters.  

APPELLATE
D.C. Circuit Affirms Dismissal of CIA Leak Case
Valerie Plame will just have to sell more books, since it looks like the onetime C.I.A. operative--whose cover was blown by Bush administration officials trying to discredit her husband--doesn't have much chance of collecting damages from the government. Yesterday the Court of Appeals for the D.C. Circuit affirmed a federal district court's dismissal of Plame's suit against the U.S. and Administration officials, including Vice President Dick Cheney, for outing her as a spy.

After reporters revealed her identity in 2003, Plame and her husband, former ambassador Joseph Wilson, sued Cheney; former Cheney chief of staff I. Lewis Libby; former White House aide Karl Rove; and former State Department official Richard Armitage. Plame and Wilson claimed, among other things, that the defendants violated their Constitutional right to privacy. But the appellate court ruled that the offices of the president and vice president are exempt from such claims.

Erwin Chemerinsky, UC Irvine's new law school dean, argued the case before the appeals court for Wilson and Plame. Jeffrey Bucholtz, the acting assistant attorney general, argued for the defendants. Among the attorneys joining him on the brief were several high-profile Washington, D.C., attorneys, including John Kester and Terrence O'Donnell of Williams & Connolly (for Vice President Cheney); Robert Luskin of Patton Boggs (for Rove); and William Jeffress, Jr., and Alex Bourelly of Baker Botts (for Libby).

IP
Settlement Reached in Teeny, Tiny Technology Case
We don't know how big a settlement Veeco Instruments reached with Asylum Research, but we know the patent case involved really, really small technology. The suit, filed by Veeco in September 2003 in the Central District of California, alleged that Asylum infringed patents related to something called an atomic force microscope. Huh? We called Veeco's attorney, Morrison & Foerster partner Charles Barquist, for a translation. He said the instrument is used to "see" extremely small things. It works, he told us, via a sharp tip that taps across a surface, generating an atomic image on a computer screen. Okay, that helps. A little.

The patent case is believed to be one of the first involving nanotechnology. In the settlement, announced on Monday, both companies agreed to cross-license each others' patents for five years and to drop pending claims against each other. Under the agreement, Asylum will pay an undisclosed licensing fee and ongoing royalties.

In addition to Barquist, Veeco was represented by Morrison & Foerster partner Eric Acker and Thomas Humphrey of Wood, Herron & Evans. Fish & Richardson partner John Thornburgh represented Asylum.

IP
EBay Notches Another Win in Worldwide Counterfeit Litigation
As the Litigation Daily's mother used to say, everyone's entitled to their opinion. Yesterday, it was the Belgian Tribunal de Commerce's turn to weigh in on the question of whether eBay is doing enough to police its site for counterfeit goods--specifically, in this case, Lancome perfumes. Courts in the U.S., Germany, and France have already offered their views, in complaints brought by Tiffany & Co, Rolex, LVMH, and Hermès. The Belgains sided with eBay against L'Oréal Group, which, reports Fortune's Roger Parloff, brings eBay's record in these counterfeiting cases to 2 wins and 3 losses.

According to Parloff, the Belgian court defined eBay differently than its counterparts in France and Germany. It found eBay to be what the European Community would consider a passive provider of "hosts services," and thus granted it more leniency in ferreting out fakes than it would a brick-and-mortar store. Courts in France and Germany didn't put eBay in the "passive" category given its active involvement in designing the site and its business model of taking commissions on sales.

More opinions on eBay should be coming soon. L'Oreal has has four pending suits across Europe.

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