A Winning Streak for Ropes & Gray Litigation Teams
Ropes & Gray’s litigation teams have been on a winning streak recently. Our practice is delivering exceptional results for a wide range of clients, including many high-profile industry leaders. From prevailing in a critical case for a nationally recognized research hospital to winning a $275 million judgment in bankruptcy court to securing one of the largest awards in a Hong Kong arbitration to securing a victory for a national travel brand, Ropes & Gray has racked up wins in hard-fought disputes across the firm’s global offices and practices in a matter of weeks.
“Our clients have been vindicated in decision after decision,” said Jane Willis, chair of the firm’s business & securities litigation practice. “The outcomes are gratifying and a testament to well-reasoned arguments and carefully crafted litigation strategies.”
Here’s a round-up of the firm’s recent notable client wins:
- On Sept. 19, Elliott Management Corp. received a favorable decision from the U.S. Bankruptcy Court for the District of Delaware in the chapter 11 cases of Energy Future Holdings (EFH) and its affiliated debtors when business restructuring partner Gregg Galardi argued a key motion on their behalf. The court granted Elliott Management’s request to reconsider its year-old order that had authorized the EFH debtors to pay NextEra a $275 million break-up fee under its terminated merger agreement. Based on the court’s 2016 order and the terms of the merger agreement, NextEra and the EFH debtors argued that NextEra was potentially entitled to payment of the termination fee, even though the Public Utility Commission of Texas denied NextEra’s application to acquire EFH’s interest in Oncor Electric. Elliott sought reconsideration of the order on the grounds that the termination fee provisions were not fully disclosed or explained when presented at the 2016 hearing; had they been so disclosed and explained, they would have been denied as a matter of Third Circuit law and fact. The court agreed with Elliott Management that it would not, under the controlling precedent, have authorized the payment of the $275 million termination fee. Business & securities litigation partners Peter Welsh and Nicholas Berg, along with business restructuring partners Keith Wofford and Andrew Devore, were instrumental in the outcome.
- Also as part of the Energy Future Holdings bankruptcy core proceeding, business & securities litigation partners Peter Welsh, Matthew McGinnis and Nicholas Berg represented several investment funds affiliated with Elliott Management Corp., the largest EFH unsecured creditor, and engaged in expedited bankruptcy litigation across a number of fronts in an effort to obtain the best deal for the company’s creditors. Ultimately, Elliott’s efforts contesting a proposed transaction with Berkshire Hathaway Energy paved the way for Sempra Energy to put forth a $9.45 billion topping bid, which would provide creditors with significantly higher recoveries.
- On Sept. 22, a litigation team led by Jeffrey Bushofsky and Laura Hoey won a motion to dismiss a putative healthcare-fraud class action brought against Walgreen Co. in the U.S. District Court for the Northern District of Illinois. Judge Samuel Der-Yeghiayan dismissed the case, which alleged improper billing for insulin prescriptions covered by Medicare in Illinois and several other states. The court concluded that it lacked jurisdiction over the plaintiff’s primary claim and closed the matter.
- On Sept. 12, a litigation team led by business & securities litigation partner Harvey Wolkoff secured a decisive victory for Boston Children’s Hospital in the U.S. District Court for the District of Massachusetts in a dispute regarding stolen data that contained potentially valuable research on cutting-edge anti- obesity drugs. The hospital brought suit against a former employee who had removed a work-issued laptop from the hospital, copied the data and research from the laptop, and then deleted thousands of files before returning the laptop to the hospital. Ropes & Gray helped Boston Children’s Hospital secure the return of potentially valuable research data while also establishing the hospital’s right to protect its access to data that it funds and supports.
- On Sept. 11, in litigation for TravelCenters of America (TA), business & securities litigation partners Jane Willis, Matthew McGinnis and C. Thomas Brown guided TA to victory against Comdata, Inc. regarding the fees charged by Comdata to TA for processing payments at TA’s locations using Comdata fuel cards. TA began its litigation against Comdata in November 2016 in response to communications from Comdata alleging that TA had breached certain agreements that require Comdata to process customer transactions using Comdata cards at set fees through January 2, 2022. Comdata had asserted that it was no longer bound by this contract and unilaterally raised the processing fees charged TA, effective February 1, 2017. TA has previously publicly estimated that the excess fees charged by Comdata have cost TA approximately $900,000 per month. After extensive discovery and a four-day trial, the Delaware Court of Chancery ruled that Comdata must honor TA’s contract terms and reimburse TA for all excess amounts charged to TA since February 1, 2017, plus interest. TA’s contract with Comdata also provides for an award of TA’s attorneys’ fees.
- Also on Sept. 11, a judge for the Central District of California granted Medtronic’s motion to dismiss without prejudice a complaint alleging various False Claims Act violations in connection with Medtronic’s Verte-Stack products, a line of spinal implant devices. Government enforcement partners Laura Hoey and James Dowden represented Medtronic with business & securities litigation partner Douglas Hallward-Driemeier. The qui tam suit, filed by a former Medtronic sales representative, asserted that Medtronic caused the submission of false claims for reimbursement to Medicare and Medicaid. The court held that the “alleged fraudulent conduct directed to the FDA, without more, is inadequate to support an FCA claim.” The court also endorsed Ropes & Gray’s argument that Medicare and Medicaid do not prohibit payment for all off-label uses; instead, coverage depends on whether the device is “medically necessary” or “reasonable and necessary” to treat a particular patient.
- On Sept. 6, a litigation team led by Robert Jones secured a complete victory for private equity client Centre Lane Partners in a suit filed in the Southern District of New York alleging that our client’s funds— the ZM Funds— and the funds’ principals engaged in “short-swing” securities trading in violation of Section 16(b) of the Securities Exchange Act of 1934. The court largely adopted Ropes & Gray’s arguments and cited authority, granted summary judgment for ZM, and terminated the case, agreeing that a court-approved settlement of parallel proceedings in the Delaware Court of Chancery barred the Section 16(b) claims.
- On Sept. 6, a Ropes & Gray team secured the complete dismissal of a zoning appeal in Massachusetts Land Court on behalf of Squibnocket Farm Homeowners Association. In this high-profile Martha’s Vineyard dispute, the challengers objected to the Homeowners Association’s construction of a new access way on Squibnocket Point in Chilmark, Mass. Agreeing with arguments presented by Ropes & Gray, Land Court Justice Gordon H. Piper concluded that the court lacked jurisdiction to hear the challenge and dismissed the action in full. Business & securities litigation partner Richard Batchelder and real estate partner Peter Alpert represented the Homeowners Association.
- On Aug. 30, a grocery store chain represented by business & securities litigation partner Harvey Wolkoff obtained a near-total victory in the U.S. Court of Appeals for the Eighth Circuit in a suit stemming from compromised data. At the urging of Ropes & Gray, the Eighth Circuit failed to give plaintiffs standing in federal court, save for one, whose lone claim was remanded for the district court to decide.
- On Aug. 18, a litigation team led by business & securities litigation partners Richard Gallagher and Matthew McGinnis secured a complete dismissal of a securities class-action lawsuit filed in the Southern District of California on behalf of LPL Financial Holdings Inc., its former CEO and its current CFO. Chief U.S. District Judge Barry Ted Moskowitz dismissed the complaint in its entirety. The court held that several of the allegedly false and misleading statements were inactionable as a matter of law, and that the complaint failed in its entirety to allege that the defendants acted with an unlawful state of mind.
- On Aug. 9, Shire U.S. Holdings Inc. received a favorable decision from the Delaware Court of Chancery in alleged breach of contract litigation with Fortis Advisors LLC, the agent for the former stockholders of SARcode Bioscience Inc. The former SARcode stockholders alleged that, based on the results of a clinical trial and subsequent regulatory approval of the drug Lifitegrast, used to treat the signs and symptoms of dry eye disease, they were entitled to milestone payments totaling $425 million. The court granted Shire’s motion to dismiss, dismissed the case in its entirety, and credited the arguments advanced by Ropes & Gray. The court, interpreting the plain language of the agreement at issue, found that Shire’s interpretation of the contract was the only reasonable one. Business & securities litigation partners John Donovan and David Hennes guided Shire to victory.
- On Aug. 7, the CEO and founder of a specialty lending business received a favorable decision in an arbitration before three well-known arbitrators under the auspices of the International Institute for Conflict Prevention & Resolution in New York. He was represented by business & securities litigation partner Gregg Weiner. The issue in dispute was whether Emigrant Bank waived its right under the governing LLC agreement to buy the founder’s shares at a fixed price, or whether Ropes & Gray’s client has the right to force the sale of the entire business to a third party. The panel issued its decision and awarded full relief to Ropes & Gray’s client, including all attorney’s fees and expenses.
- In June, in one of the largest arbitration awards ever decided in Hong Kong or China, a Ropes & Gray litigation team led by Harvey Wolkoff, Dan Ward and Andrew Dale won an almost $100 million dollar award on behalf of client LoJack Corporation and LoJack Equipment Ireland DAC in an international arbitration before the Hong Kong International Arbitration Centre. The tribunal rendered a decision for LoJack against a former product supplier to LoJack for the supplier’s breach of the parties’ supply agreements.