In Brief - Milberg LLP

Fall 2011
Volume VI
milberg.com
Noteworthy Results
2
Speaking Engagements
4
Case Highlights
2
Publications 4
Attorney Accolades
3
Milberg Achieves
Record-Setting $85 Million
Whistleblower Settlement
Milberg successfully represented a healthcare worker in a
whistleblower suit against his former employer Medline
Industries, Inc., one of the nation’s largest suppliers of medical
and surgical products, along with its charitable arm, The
Medline Foundation. The Firm negotiated an $85 million
settlement on behalf of the federal government.
(cont’d on page 2)
Judge Approves $180 Million
Sirius XM Antitrust Settlement
On August 24, 2011, the U.S. District Court for the Southern
District of New York approved a $180 million settlement to
resolve antitrust claims brought by a class of consumers,
represented by Milberg, against Sirius XM Radio. The case
stems from the 2008 merger between Sirius Satellite Radio, Inc.
and XM Satellite Holdings, Inc. that created Sirius XM, now the
nation’s only satellite radio company. The plaintiffs alleged that
the merger of the only two U.S. satellite radio providers was an
illegal move to eliminate competition and monopolize the
satellite radio market. Before the merger, Sirius CEO Mel
Karmazin convinced regulators not to block the deal by
promising in congressional testimony that “the combined
company will not raise prices” and that the merger would
actually result in “lower prices and more choice for the
consumer.” After the merger, Sirius quickly reversed course,
raising prices by 15-40% and eliminating multiple radio
stations.
• Blessing v. Sirius XM Radio, Inc. (S.D.N.Y.)
Attorney advertising. Prior results do not guarantee a similar outcome.
Milberg Hosts Second Annual
Shareholder Conference
On July 26, 2011, Milberg hosted the second annual Institutional
Investor Information Exchange (“3iX”) conference entitled, “The
Road to Recovery: Navigating the Challenges of Compliance,
Reform, Activism, and Recovery,” at the Metropolitan Club in
New York City. More than 100 trustees, regulators, and financial
professionals attended the event. Charles Ferguson, producer
and director of the Oscar-winning documentary Inside Job, gave
the keynote speech. The conference featured prominent experts
in the areas of corporate governance, trustee education, and
shareholder litigation, as well as several former judges. The program included a presentation by Thomas J. Mackell, Jr., former
Chairman of the Federal Reserve Bank of Richmond and author
of When the Good Pensions Go Away: Why America Needs a New
Deal for Pension and Health Care Reform.
Former CNN financial editor Todd Benjamin and Milberg
special counsel Professor Arthur R. Miller served as moderators.
Photo by Jason Joseph
Contents
Milberg partners and conference co-hosts
Ariana J. Tadler and Anita B. Kartalopoulos with conference keynote
speaker Charles Ferguson, producer and director of
Oscar-winning documentary Inside Job.
(Whistleblower Settlement, cont’d from page 1)
The whistleblower suit was filed under the False Claims Act
(“FCA”), which allows private citizens to sue companies that
are defrauding the government and to receive an award for
their efforts when the case is successful. The suit alleged that
Medline engaged in a widespread illegal kickback scheme targeting hospitals and other healthcare providers that purchase
medical and surgical products paid for by federal healthcare
programs. Although a party to the settlement agreement,
the U.S. Department of Justice chose not to intervene in the
lawsuit. Milberg pursued the case on a non-intervened basis
and obtained one of the largest settlements of an FCA case
in which the government declined to intervene. The whistleblower was awarded 27.5% of the proceeds.
• Mason v. Medline (N.D. Ill.)
successful attempts by defendants to dismiss the claims under
the Securities Litigation Uniform Standards Act. The Circuit
Court certified a nationwide class asserting state law claims—
a rare achievement—applying Missouri law to all class members regardless of their state of residence.
• Bachman v. A.G. Edwards & Sons, Inc.
(Mo. Ct. App.)
Court Approves $1 Million Settlement and Significant Governance Reforms in Ryland Group Suit
Milberg, serving as co-lead counsel and representing the City
of Miami Police Relief and Pension Fund, secured a settlement
of a shareholder derivative action pending in L.A. County
Superior Court against certain directors and officers of The
Ryland Group, Inc. (“Ryland”) for alleged breaches of fiduciary duty, waste of corporate assets, unjust enrichment, and
violations of state and federal laws. The settlement includes
monetary relief of $1 million for Ryland and its shareholders
as well as significant corporate governance reforms.
• City of Miami Police Relief and Pension Fund v. Dreier
(Cal. Super. Ct. L.A. Cnty.)
Pro Bono Effort Wins Reduced Mortgage
for Distressed Homeowner
Members of the Medline Team:
(Left to right) Kirk C. Chapman, Rolando G. Marquez,
and Ross B. Brooks. (Not pictured: Alastair Findeis)
Noteworthy Results
Appellate Court Affirms $60 Million Settlement
in A.G. Edwards Suit
On May 31, 2011, the Missouri Court of Appeals affirmed
a Circuit Court’s approval of the $60 million settlement
achieved by Milberg, as co-lead counsel, and others on behalf
of a class of investors who maintained brokerage accounts
with A.G. Edwards during the class period. Plaintiffs alleged
that defendants breached their fiduciary duties to their clients
and were unjustly enriched by accepting so-called “revenue
sharing” kickbacks from certain mutual fund companies
based upon the amount of funds held by defendants in class
members’ accounts. The action sought disgorgement of the
revenue sharing payments.
The case was extremely hard fought, including multiple un-
2
Milberg partner Benjamin Y. Kaufman and associate Adam
Bobkin represented a single mother with a disabled child
fighting a foreclosure of their family home after Chase Bank
rejected their loan modification request. The Firm stepped in
after Chase informed the mortgage borrower, a teacher, that
she had been removed from the bank’s loan modification program and that her home would be foreclosed. After months of
negotiations, Milberg convinced Chase to restore the client to
the program and repair all negative credit reporting.
Case Highlights
Milberg Defeats Motion to Dismiss
Homeowners’ Suit Against CitiMortgage
Representing a class of mortgage borrowers, Milberg, as lead
counsel, defeated CitiMortgage, Inc.’s motion to dismiss a case
alleging that the mortgage lender breached its loan modification promises to consumers under the federal Home
Affordable Modification Program by denying requests for
modification, wrongfully charging late fees, and destroying
customers’ credit. On March 3, 2011, the U.S. District Court
for the Central District of California upheld all of plaintiffs’ claims. The suit alleges that by wrongfully reporting the
modified trial period payments as delinquent and requiring
plaintiffs to immediately pay the difference between the modified payments and the regular mortgage payments, CitiMortgage failed to honor its agreement.
• King v. CitiMortgage, Inc. (C.D. Cal.)
Milberg Appointed Co-Lead Counsel
in BP ERISA Litigation
Milberg was recently appointed co-lead counsel in a class
action filed on behalf of participants in BP Corporation North
America, Inc.’s 401(k) plan. Plaintiffs allege that, in light of
events leading up to and surrounding the Deepwater Horizon
explosion and Gulf oil spill, defendants breached their
fiduciary duties to plan participants under ERISA by allowing
for the continued investment of retirement assets in BP
securities when such investment was no longer prudent. The
case is part of a complex, multi-district litigation pending in
federal court in Houston, Texas.
• In re BP ERISA Litigation (S.D. Tex.)
consolidated class action against Apple and several mobile advertising networks and analytic service providers. The lawsuit
alleges that applications for iPhones and iPads transmit users’
personal information to advertising networks without the
users’ consent.
Milberg has been at the forefront of consumer privacy cases
involving the Internet and social media. The Firm also
represents plaintiffs in similar lawsuits against Sony, Facebook,
LinkedIn, and MySpace.
• In re iPhone Application Litigation (N.D. Cal.)
Attorney Accolades
Milberg Achieves Class Certification
in Macy’s ERISA Litigation
Professor Arthur R. Miller Honored as
Commander of the Order of the British Empire
On March 10, 2011, Milberg obtained class certification on
behalf of certain participants in the Macy’s, Inc. 401(k) plans.
The complaint alleges breach of fiduciary duty under ERISA
based on allegations that the plan fiduciaries knew or should
have known that Macy’s common stock was not a prudent
investment. Milberg is co-lead counsel for the class.
• Shanehchian v. Macy’s, Inc. (S.D. Ohio)
Milberg special counsel, Professor Arthur R. Miller, has been
named a Commander of the Order of the British Empire
(“CBE”) by Queen Elizabeth II. One of the few Americans
to receive this high honor, he joins a prestigious list of past
recipients that includes celebrated authors, scientists, artists,
and statesmen.
Shareholder Sues Lender Processing
Board for Foreclosure Fraud
Milberg, representing a shareholder, has brought a derivative
action on behalf of nominal defendant Lender Processing
Services, Inc. (“LPS”) against LPS’s board of directors for
breaching its fiduciary duties to the company. LPS provides
mortgage processing and default services to the mortgage
industry and processes about 50% of all U.S. mortgages.
According to the complaint, the company failed to verify
information in many mortgage documents, including who
owned the mortgages, in order to expedite the foreclosure
process. This practice is now commonly referred to as
“robo-signing.” LPS’s routine practice of referring foreclosure
documents to a network of lawyers that it ranked according to
processing speed has sparked additional class actions against
the company based on claims of unauthorized practice of law
and fee-splitting with attorneys. The shareholder suit alleges
that the directors abdicated their corporate responsibilities and
breached their duty of loyalty to the company by permitting
LPS to participate in such misconduct.
• International Brotherhood of Electrical Workers
Local 164 Pension Fund v. Kennedy (Del. Ch.)
Milberg Appointed to Executive Committee
in iPhone Consumer Privacy Litigation
Judge Lucy Koh of the U.S. District Court for the Northern
District of California has appointed Milberg partner Jeff
Westerman to the plaintiffs’ Executive Committee in a
The award was bestowed in recognition of Professor Miller’s
service to the United Kingdom, including his gift of more
than 1,800 Japanese woodblock prints by the 19th century
artist Utagawa Kuniyoshi to the American Friends of the
British Museum. The prints were exhibited at the Royal
Academy of Arts in London in the spring of 2009 and at the
Japan Society in New York in the fall of 2010.
Ariana J. Tadler Receives Women’s Venture Fund’s
Highest Leaf Award
Milberg partner Ariana J. Tadler has been awarded the
Women’s Venture Fund’s 2011 Highest Leaf Award. The
award is given annually to women business executives who
are leaders in their respective industries and who have
influenced the business world with innovative strategies and
creative ideas. The Women’s Venture Fund is a non-profit
organization that helps women of diverse backgrounds
establish thriving businesses in urban communities.
Milberg Associate Is First Korean-American
Woman to Serve as President-Elect of
Asian American Bar Association of New York
Jean Lee, an associate and member of the Firm’s Diversity
Committee, is the new president-elect of the Asian American Bar Association of New York. Ms. Lee is the first KoreanAmerican woman to be elected to lead the 22-year-old
organization, which is New York State’s largest minority bar
association. The not-for-profit group represents the interests of
New York’s Asian American attorneys, judges, law professors,
legal professionals, legal assistants, and law students.
3
Barry A. Weprin Elected Vice President
of the Institute for Law and Economic Policy
Policy on February 8. Professor Arthur R. Miller moderated
the event.
Milberg partner Barry A. Weprin was elected vice president
of the Institute for Law and Economic Policy. The public
policy research and educational foundation was established to
preserve, study, and enhance access to the civil justice system
by all consumers.
Anita B. Kartalopoulos and Ariana J. Tadler were
panelists for a program entitled, “Re-examining Trustee Ethics,” at the OPAL/LATEC’s Investment Education Symposium
on March 2.
Lori G. Feldman Appointed to Serve on
The Glaucoma Foundation’s Board of Directors
Milberg partner Lori G. Feldman was appointed to serve on
the board of directors for The Glaucoma Foundation. The notfor-profit group funds groundbreaking research on glaucoma
treatment and supports public education about the disease.
Women 2 Women Holds Silent Auction for Charity
Milberg’s Women 2
Women group, chaired
by partner Janine
Pollack (pictured
right), raised more
than $1,600 dollars at
its first silent auction
on December 16, 2010
for the benefit of New
York’s Sanctuary for
Families. Much of the
artwork, crafts, jewelry, and other items on
sale were donated or
handmade by women,
including the painting
pictured right.
Jonathan M. Landers served on a panel entitled, “Recapturing
Value for Creditors: A Reconsideration of Fraudulent
Transfer Law and Intragroup Guarantees,” at a joint program
by the American Bar Association’s Partnerships and Limited
Liability Entities in Bankruptcy and the Corporate
Governance Subcommittees on April 15.
W. Steven Bursey and James M. Brown served on a panel entitled, “The Forensic Accounting Process,” at the 3rd Annual
Buttonwood Series Investment Roundtable by OMNI
Research on July 28.
Publications
Andrei Rado’s article, “Blowing the Whistle on Corporate
Lobby: Why Investors Should Push Back Against Attempts to
Kill the Corporate Whistleblower Law,” was published in the
Spring 2011 e-Newsletter of PAPERS (Pennsylvania Association of Public Employee Retirement Systems).
Ariana J. Tadler, Carla F. Fredericks, Henry J.Kelston, Paul
H. McVoy, Rolando G. Marquez, Joshua Keller, and David
Leifer contributed to the article, “E-Discovery Today: The
Fault Lies Not in Our Rules … ,” published in the Federal
Courts Law Review (Volume 4, Issue 2).
Speaking Engagements
Sanford P. Dumain and Barry A. Weprin served on a panel
entitled, “Federal Courts, Inc.: Is a New Brand of Judicial
Activism Gripping the Supreme Court and other Federal
Courts?” at the American Constitution Society for Law and
Anita B. Kartalopoulos, Ariana J. Tadler, and Todd
Kammerman published an article entitled, “Derivative
Transactional Litigation: The Power of a Single Share,” in the
Spring 2011 issue of The Voice.
Milberg forensic accountant James M. Brown contributed to
a book entitled, Financial Statement Fraud Casebook:
Baking the Ledgers and Cooking the Books, published
in June 2011.
Attorney advertising.
Prior results do not guarantee a similar outcome.
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