The core of our practice remains prosecuting class actions and derivative cases on behalf of shareholders and consumers. We have an active practice before the Delaware Court of Chancery and have achieved success before the Delaware Supreme Court litigating matters involving stockholder rights and the rights of limited partnerships. Our recent victory before the Delaware Supreme Court strengthens the rights of limited partners in public partnerships.
We have a strong securities litigation practice, particularly notable given our relatively small size. We represent both plaintiffs and defendants in securities fraud and other cases involving alleged corporate mismanagement. We frequently represent shareholders who institute securities and/or derivative class actions. We have also been involved on the other side in securities defense work representing our clients in litigations alleging fraud as well as SEC investigations.
We are one of the nation’s leading firms in master limited partnership litigation. We have represented investors seeking damages and equitable relief arising out of conflicted transactions between public master limited partnerships and their controlling parent entity. BESPC attorneys have litigated complex issues concerning the interpretation of master limited partnership agreements under Delaware law. Our attorneys successfully tried an action before the Court of Chancery and obtained the only verdict finding that independent directors of a master limited partnership acted in bad faith by approving a conflicted transaction with the parent. In re El Paso Pipeline Partners, L.P. Derivative Litigation, Delaware Court of Chancery (case subsequently dismissedon appeal due to plaintiff’s loss of standing).
We also have a robust practice litigating claims on behalf of consumers. These matters include claims arising out of loyalty programs, student loan administration, and the federal Fair Credit and Reporting Act. Our attorneys are also knowledgeable about a wide-range of issues affecting the public, including Internet privacy laws, whistle-blower protections, and food labeling violations.
Significant victories include:
In re Activision Blizzard, Inc. Stockholders Litigation, Delaware Court of Chancery. Derivative settlement on eve of trial of $275 million, by far the largest monetary settlement in the history of the Court of Chancery and the largest cash derivative settlement in the country. In addition, settlement provided significant corporate governance benefits to class.
Gerber v. Enterprise Products Holdings LLC, Delaware Court of Chancery. We served as lead counsel for derivative and class claims arising out of a variety of master limited partnership transactions, alleging that the general partner’s approvals of the transactions were done in bad faith and in breach of the implied covenant of good faith and fair dealing. One action was settled by defendants agreeing to a merger that increased the value of the limited partnership units by approximately $400 million. In another action, after the trial court dismissed the complaint, we prevailed before the Delaware Supreme Court to reinstate the claims for breach of implied covenant. The matters settled for $12.4 million for the Master Limited Partnership unitholders. Reported decision at 67 A.3d 400 (2012).
In re El Paso Pipeline Partners, L.P. Derivative Litigation, Delaware Court of Chancery. We are prosecuting claims on behalf of a El Paso Pipeline Partners, L.P., a public Master Limited Partnership, against its general partner and its sponsor, El Paso Corporation (now merged into Kinder Morgan, Inc.). The claims arise out of the 2010 “drop down” of certain pipeline assets from the general partner to the partnership. After trial, the Court found that the Special Committee which recommended approval of the transaction did not believe that the transaction was in the best interests of the partnership and, therefore, that the general partner breached the partnership agreement by engaging in the transaction. The Court found that the Partnership was damaged in the amount of $171 million. (Case dismissed on appeal due to lack of standing.)
Sateriale v. R.J. Reynolds Tobacco Co., United States District Court for the Central District of California. We brought claims against R.J. Reynolds Tobacco Co. (“RJR”) arising out of the Camel Cash Loyalty Program. The Ninth Circuit reversed the district court’s dismissal of the complaint, holding that RJR’s alleged communications concerning the Camel Cash program – “C-Notes” – constituted offers to enter into unilateral contracts. The Trial Court subsequently denied RJR’s motion for summary judgment and certified a California class and denied RJR’s motions to reconsider. Pursuant to a settlement reached in 2016, Reynolds will offer Class Members the opportunity to use C-Notes that they collected and held as of October 1, 2006, to redeem for non-tobacco merchandise. Class Members can participate in the settlement even if they no longer hold their C-Notes. Reported at 697 F.3d 777 (9th Cir. 2012).
Representative Cases/Reported Decisions
Castillo v. Seagate Technology LLC, United States District Court for the Northern District of California. We represent current and former employees of Seagate and its affiliates, and the employees’ spouses, seeking damages arising from Seagate’s March 2016 data breach in which Seagate wrongfully disclosed the employees’ 2015 Form W-2 tax information.
Feinman v. T.D. Bank, N.A., United States District Court for the District of New Jersey. We represent T.D. Bank customers asserting that the bank’s Penny Arcade coin-counting machines were short-changing consumers by undercounting depositing coins.
Brinkerhoff v. Texas Eastern Products Pipeline Company, LLC., Delaware Court of Chancery. Reported decision at 986 A.2d 370 (2010). We brought claims on behalf of TEPPCO’s common unitholders claiming that in transactions orchestrated by TEPPCO’s general partner, TEPPCO had been shortchanged by hundreds of millions of dollars. The action was resolved by a merger which benefitted TEPPCO’s unitholders by more than $400 million.
Bennett Funding Litigation. Successfully served as co-lead counsel and special insurance counsel to plaintiff’s lead counsel in class actions in both the Federal District Court, Southern District of New York and the Bankruptcy Court of the Northern District of New York. Actions settled suits against Assicurazioni Generali, S.p.A. Company for $125 million as reported at 258 B.R. 78 (Bankr. N.D.N.Y. 2000) and against Sphere Drake Insurance PLC for $27.5 million, as reported at 439 F.3d 155 (2d Cir. 2006). The matter involved a ponzi scheme and dealt with complicated issues of identification of beneficiary of insurance policies and intersection of bankruptcy and securities laws and of equities between class members and creditors of bankrupt estate.
Trinad Capital Master Fund Ltd. v Majesco Entertainment Company, et al., United States District Court for the District of New Jersey. Represented hedge fund in opt out securities fraud litigation against officers and directors of public company. Case resolved favorably for client.