Trial Achievements
United States Fidelity and Guaranty Company, et al. v. Soco West, Inc., et al.
U.S. District Court for the District of Montana
On Feb. 1, 2007, Judge Richard F. Cebull of the United States District Court for the District of Montana granted a Rule 50(a) motion for judgment as a matter of law (JML) in favor of Sonnenschein's client, United States Fidelity and Guaranty Co., a Travelers subsidiary, and Plaintiff Intervenor Continental Insurance Company (the "Insurers") finding that they had no duty to indemnify or further defend Soco for liability arising out of perchloroethylene (PCE) contamination at Soco's Lockwood, Montana chemical distribution facility. The ruling followed a two-week jury trial in a case where Soco had originally sought tens of millions of dollars in damages. Soco was required to prove that it was more likely than not that there was a "sudden and accidental" spill of PCE in order to circumvent the pollution exclusions contained in the CGL policies issued by the Insurers. If Soco successfully proved a sudden and accidental spill, it would then be required to prove the occurrence of property damage during each policy period for which it sought coverage. At trial, after Soco concluded its case in chief, the Insurers moved for JML, arguing that Soco had failed to meet its burden of proving that the damage for which it was seeking coverage was caused by an "occurrence" or that the PCE contamination at the Lockwood site was caused by one or more sudden and accidental events. The court acknowledged that Soco's case was "very weak," but nonetheless denied the Insurers' motion. After the close of all evidence, the Insurers renewed their Rule 50(a) motion. The court again decided to give Soco the benefit of the doubt and gave the case to the eight-member jury. After approximately eight hours of deliberations, the jury issued a note expressing its inability to answer a particular question on the special verdict form. The Insurers once again renewed their motion for JML. Finding the Insurers' oral and written arguments persuasive, the court granted the Rule 50(a) motion, finding that there was not sufficient evidence to prove the existence of a sudden and accidental spill. After trial, Soco made a motion for a new trial. Denying Soco's motion, the court stated once again that the jury did not have a sufficient evidentiary basis to find for Soco.
Sonnenschein Counsel: Robert C. Johnson, John I. Grossbart and M. Keith Moskowitz (Chicago)
BMS Entertainment/Heat Music LLC, et al. v. Bridges, et al.
U.S. District Court for the Southern District Court of New York
Sonnenschein achieved a victory at trial in the Southern District of New York on behalf of prominent hip-hop artists/songwriters Christopher Bridges (p/k/a Ludacris) and Kanye West, as well as various music publishing entities. The plaintiffs, a rap group from Newark, N.J., alleged that Mr. Bridges' and Mr. West's 2003 hit song "Stand Up" infringed their copyright in their work "Straight Like That." Following a well-publicized two-week trial before Judge Castel, a jury determined after less than a day of deliberations that there was no substantial similarity between the two works at issue and rendered a unanimous verdict in favor of the defendants.
Sonnenschein Counsel: Justin Kattan (New York)
Liberate Technologies v. Insight Interactive LLC, et al.
Superior Court of the State of California, County of San Mateo
In a 10-day bench trial conducted before retired United States District Judge Charles A. Legge, who was specially appointed by the San Mateo County Superior Court to try the case, Insight Interactive LLC, a subsidiary of Insight Communications Company (collectively "Insight"), obtained a complete defense judgment on November 1, 2006, in a suit brought by plaintiff Liberate Technologies. In its suit, Liberate claimed that Insight owed it more than $5 million in commissions for allegedly successfully marketing Insight's interactive television program content services to cable television operators in conjunction with the sales of its VirtualModem software, which is installed on cable television set-top boxes to enable interactivity. In his ruling, Judge Legge found that Liberate was not entitled to any commissions, and entered judgment in favor of Insight on Liberate's claims for breach of contract and specific performance, also awarding Insight its costs. Liberate did not appeal the judgment.
Sonnenschein Counsel: Steven H. Frankel and Peter Soares (San Francisco)
SC Johnson & Son, Inc. v. Buzz Off Insect Shield LLC, et al.
U.S. District Court for the Middle District of North Carolina
Culminating years of litigation and a month-long jury trial, Sonnenschein won a major trademark case for S.C. Johnson & Son, Inc. ("SC Johnson") in the United States District Court for the Middle District of North Carolina regarding its Off-based family of marks. SC Johnson alleged trademark infringement by the defendant, Buzz Off Insect Shield, LLC, a North Carolina company that markets clothing with insect repellent and markets the apparel under the name BUZZ OFF. Sonnenschein first began handling the matter in 2002 when it opposed the Defendants' trademark application for "Buzz Off' in the Trademark Trial and Appeal Board. Later, SC Johnson brought a filed a trademark complaint in the Northern District of Illinois adding false advertising claims. After four very contentious trial weeks, the jury took just over an hour to come back with a verdict finding the Buzz Off liable for trademark infringement, and awarding damages. In addition, the jury expressly found that Defendants' infringing conduct was willful and intentional, such that SC Johnson has sought its attorneys' fees and trebled damages for this protracted litigation. This was a significant victory for SC Johnson, bolstering the strength of one of its key trademarks.
Sonnenschein Counsel: James A. Klenk and Leah R. Bruno (Chicago)
Appellate Achievements
Vine Street Clinic, et al. v. HealthLink Inc.
Illinois Supreme Court
Sonnenschein, in cooperation with our Alliance partner, Pugh, Jones, Johnson & Quandt, P.C., represented HealthLink Inc. in its appeal to the Illinois Supreme Court challenging the Illinois Appellate Court's determination that certain fees assessed by the company were prohibited by the Medical Practice Act. HealthLink is a PPO for physician members and more than 200 payor organizations, including governmental agencies, labor union trusts, employer-union groups, public employee groups and insurance companies. HealthLink retained Sonnenschein and Pugh Jones after the appellate court invalidated its entire fee structure by finding that any assessment of fees to members was a referral fee, and as such were a "division of fees" in prohibition of the Medical Practice Act. Recognizing the far-reaching implications to the entire health care industry, the appellate court granted the parties' request to allow the case to proceed to the Illinois Supreme Court on a certificate of importance. The Supreme Court adopted the rational and legislative interpretation advocated by HealthLink and reversed the decision of the appellate court.
Sonnenschein Counsel: James A. Klenk and Leah R. Bruno (Chicago)
DIRECTV, Inc. v. Leto and DIRECTV, Inc. v. Bennett
U.S. Courts of Appeals for the Third and Fifth Circuits
Sonnenschein obtained victories for DIRECTV, Inc. in cases pending in the U.S. Courts of Appeals for the Third and Fifth Circuits. The unanimous, published decisions in DIRECTV, Inc. v. Bennett, 470 F.3d 565 (5th Cir. 2006) and DIRECTV, Inc. v. Leto, 467 F.3d 842 (3d Cir. 2006) establish important precedents for DIRECTV and other companies that rely on the Federal Wiretap Act and the Federal Communications Act to combat acts of satellite and cable piracy. In both cases, the district court had ruled against DIRECTV, which then turned to Sonnenschein to handle the appeals.
In Bennett, the district court had ruled that the Federal Wiretap Act, 18 U.S.C. Section 2510 et seq., does not create a private right of action. The appeal was particularly important to DIRECTV because the Federal Wiretap Act is one of two federal statutes DIRECTV relies upon to deter theft of its satellite signal. DIRECTV prevailed in the appeal, and the Fifth Circuit reaffirmed DIRECTV's right to continue to pursue actions under the Federal Wiretap Act against persons who steal DIRECTV's satellite signal.
In Leto, the district court had dismissed DIRECTV's claims against persons who had allegedly intercepted DIRECTV's programming for misjoinder and then held that DIRECTV was timebarred from filing separate amended complaints against each such person individually. The Leto case was important for DIRECTV because DIRECTV had similarly joined defendants in many other cases. The Third Circuit reversed the district court, ruling that district courts could not combine the effects of the Federal Rule of Civil Procedure governing joinder and statutes of limitations to justify, in effect, dismissing a plaintiffs claims with prejudice for misjoinder. Sonnenschein is 16-0 in its appellate representations for DIRECTV.
Sonnenschein Counsel: Howard R. Rubin and William E. Copley III (Washington, D.C.)
Sims, et al. v. Allstate Insurance Company
Appellate Court of the State of Illinois, Fifth District
The Illinois Appellate Court affirmed a jury verdict entered in favor of Sonnenschein's client Allstate following a three-week class action trial in St. Clair County, Ill. Plaintiffs sought to overturn the jury's verdict that Allstate's auto insurance policy does not require Allstate to pay "diminished value" to nearly 400,000 class members from 30 states. Plaintiffs claimed that vehicles involved in accidents, even after proper repair, necessarily lost value, and that Allstate must pay policyholders for this diminished value. The Illinois Appellate Court held that Allstate's policy language was clear and unambiguous in limiting Allstate's liability to the cost of repair and that plaintiffs' claim for payment of diminished value in addition to the cost of repair therefore failed as a matter of law. The Illinois Supreme Court denied a petition for leave to appeal. 365 Ill.App.3d 997, 851 N.E.2d 701 (5th Dist. 2006), pet. for review denied, 221 Ill.2d 601, 861 N.E.2d 664 (2006)
Sonnenschein Counsel: Margo Weinstein, Richard L. Fenton and Kendra Kekelis Hartman (Chicago)
OCG Communications, LLC, et al. v. General Electric Capital Corp.
Missouri Court of Appeals, Eastern District
Sonnenschein represented General Electric Capital Corp (GECC) in a case brought by OCG Communications, the successor in interest to a bankrupt telecommunications firm known as Omniplex. The plaintiffs sought $75 million in actual damages plus an undisclosed amount for punitive damages in a lender liability action. According to the St. Louis Business Journal, plaintiffs previously obtained a settlement of more than $50 million in December 2005 in a companion case against Lucent Technologies. Our case closely mirrored the case against Lucent, adding only that GECC had aided and abetted the conduct that gave rise to liability on Lucent's part because of its role in financing the underlying transaction. We argued on summary judgment that various orders in Ornniplex's bankruptcy case precluded the lender liability action on doctrines such as res judicata, judicial estoppel, equitable estoppel and waiver. The trial court judge in St. Charles County Circuit Court agreed. On July 24, 2007, the Missouri Court of Appeals affirmed the order of summary judgment for GECC.
Sonnenschein Counsel: Stephen H. Rovak (St. Louis) and Monika J. Machen (Chicago)
Arbitrations
T-Mobile USA, Inc. v. Qwest Corporation
American Arbitration Association
Sonnenschein litigated T-Mobile USA's claims against Qwest Corporation in an 11-day American Arbitration Association arbitration hearing in Denver. The January 2007 hearing included testimony from 11 witnesses, including experts, along with several heated discovery motions. T-Mobile sought more than $8 million in damages for Qwest's billing and collection of state access tariff charges for SS7 signaling, which T-Mobile alleged were unlawfully applied to local traffic already compensated by the payment of reciprocal compensation. In his June 12, 2007 Final Award, the arbitrator ruled for T-Mobile on all of its claims, including agreeing with T-Mobile that a four-year statute of limitations should apply to T-Mobile's claim that Qwest's assessment of access charges on local traffic violated Sections 251 and 252 of the Telecommunications Act of 1996. The arbitrator awarded the full amount of T-Mobile's principal damages of $4.3 million of intrastate access charges paid to Qwest, plus pre-judgment interest, compounded daily from September 2001 through May 2007, of $4.275 million, for a total damages award of $8.575 million. T-Mobile has petitioned to confirm the award in federal district court in the Western District of Washington, and Qwest has moved to vacate.
Sonnenschein Counsel: Douglas G. Bonner and Katherine I. Funk (Washington, D.C.)
Luna, et al. v. New Hampshire Insurance Company
Judge Christopher M. Skelly, Scott & Skelly, LLC, Phoenix, Arizona
We received a favorable decision in a case involving deaths resulting from Naegleria fowleri, a carnivorous amoeba, in a privately owned water system in Arizona. The water company supplies water to residents located in Peoria, Arizona, and was insured by our client. As a result of the presence of the amoeba in the water supply two young boys, both five years of age, died from meningoencephalitis. The plaintiffs alleged that the water company had supplied water infected with the amoeba. In order to resolve the underlying liability case, our client agreed to step into the shoes of the water company and was able to negotiate a resolution of the underlying case that permitted our client to arbitrate the insurance coverage issues, thus avoiding a jury trial. The fundamental question at arbitration was whether the boys death was caused by one "occurrence" or two. The insurance contract provided policy limits of $1 million "per occurrence," defined by the policy as "an accident, including continuous or repeated exposure to substantially the same harmful conditions." After extensive briefing and a hearing on the issues presented, the arbitrator found that Arizona courts apply a "cause test" and that the burden of proving more than one occurrence rests with the claimants. Accordingly, the arbitrator held that there was only one occurrence because the claimants' "predominate theory of liability" was the water company's failure to chlorinate. The arbitrator stated, "This was the provable negligent causative act that led to the deaths of the boys. There was not a subsequent causative act of the insured or someone else. Applying the law to these circumstances, in my opinion, results in the conclusion that there was one occurrence."
Sonnenschein Counsel: Paul E.B. Glad (San Francisco)
American Guild of Musical Artists (AGMA) v. Lyric Opera of Chicago
American Arbitration Association (3 cases) and Independent Arbitrator Sinclair Kossoff (1 case)
Sonnenschein successfully defended the Lyric Opera of Chicago in four separate arbitration proceedings arising out of grievances filed a union on behalf of its member dancers and actors who had appeared in opera productions staged by Lyric. In these cases, the union was seeking to have the arbitrator limit either Lyric's freedom to select performers for roles in its productions or its ability to assign performance duties to those performers whom it had selected. The union was also seeking substantial payments for the performers in the form of lost pay and benefits as well as payments over and above those they had already received for their services. In their decisions and awards, the four different arbitrators sustained Lyric's freedom to select performers and assign its choice of performance duties to them, with essentially no additional costs above those it had already paid out.
Sonnenschein Counsel: Richard L. Marcus (Chicago)
Pre-Trial Achievements
Perez, et al. v. Allstate Indemnity Company, et al.
U.S. District Court for the Northern District of California
Sonnenschein achieved a significant victory for Allstate Indemnity Company in Fall 2006 by obtaining dismissal of a class action entitled Perez, et al. v. State Farm Mutual Automobile Insurance Company, et al. The action, filed in the Northern District of California, charged Allstate and three other major automobile insurance carriers with violations of California's Cartwright Antitrust Act and Unfair Competition Law for alleged conspiracy. The plaintiffs claimed the insurance carriers charged plaintiffs' premiums for original equipment and other high-quality automobile parts, and instead passed-off inferior parts as parts of like kind and quality in connection with collision and comprehensive claims. The class was alleged to be all persons in California who purchased automobile insurance from any of the four carriers beginning in 2001. The complaint sought treble damages for excessive premiums allegedly charged to all policyholders. The Sonnenschein team took a leading role in briefing and arguing the dismissal motions.
Following dismissal, plaintiffs appealed the District Court's judgment to the Ninth Circuit Court of Appeals. The appeal has now been fully briefed and is awaiting the setting of oral argument.
Sonnenschein Counsel: Richard L. Fenton (Chicago), Steven H. Frankel (San Francisco)
Harper v. Experian Information Solutions, Inc., et al.
U.S. District Court for the Eastern District of Pennsylvania
Sonnenschein won a significant class-action victory for Experian when a federal judge in Pennsylvania denied class certification. The putative class in question consisted of opt-outs from a previous class-action settlement negotiated by the firm. In 2003, Sonnenschein had negotiated a very favorable settlement for Experian in a Fair Credit Reporting Act (FCRA) class action pending in federal court in the U.S. District Court for the District of South Carolina. That suit challenged practices of the three major credit reporting agencies (Experian, Trans Union and Equifax) as to reporting joint account bankruptcies on the credit reports of some two million consumers nationwide. Trans Union and Equifax subsequently negotiated identical settlements. The following year, a class action asserting identical claims was filed in the Eastern District of Pennsylvania, on behalf of the opt-outs from the South Carolina settlement. Because the South Carolina court (before Sonnenschein became involved) had certified a litigation class on these same claims, the firm faced an uphill battle on a number of crucial class-action issues. On December 20, 2006, Judge Thomas N. O'Neill Jr. of the Eastern District of Pennsylvania denied class certification for the putative class of opt-outs, basing his ruling on arguments crafted by the Sonnenschein team. He rejected plaintiffs' claim that a statutory damages class would sidestep individualized proof issues, and held that a statutory damages claim in this case, like an actual damages claim, required individualized evidence as to causation and injury, thus rendering plaintiffs trial plan "untenable." He also held that class adjudication of the claims was not a superior method of resolving them, given the decision of the putative class members to opt out of the previous class action and the incentives to bring individual lawsuits provided by the FCRA.
The Third Circuit has since accepted plaintiffs' 26(f) appeal.
Sonnenschein Counsel: Harold Hirshman and Camille Bennett (Chicago)
El Dorado County and VXL for Rural Living, et al. v. Shingle Springs Band of Miwok Indians, et al.
California Court of Appeal, Third Appellate District A
Sonnenschein team secured a victory on behalf of the Shingle Springs Band of Miwok Indians on March 2, 2006 when the California Court of Appeal denied a motion to block work on a proposed highway interchange connected to the Tribe's land in El Dorado County, California, while an appeal is under way. County and local residents had challenged construction of the interchange on the grounds that public access would enable the Tribe to construct a gaming facility on its land. Litigation was filed in both federal court using NEPA and state court using CEQA. The federal case resulted in a victory for the Tribe in the Eastern District of California. Following extensive negotiations—about 90 percent of the way through the process—and before the judge took action—the Sonnenschein team convinced the county to switch sides in the matter and abandon their appeal. A state court judge then opened the way last fall for the Tribe to go ahead with its plans. The Tribe had lacked access to any public roadway for decades, preventing the Tribe from using its land for commercial development.
Sonnenschein Counsel: Nicholas C. Yost and Paula M. Yost (San Francisco)
Pro Bono Achievements
Ligas v. Mavam
U.S. District Court for the Northern District of Illinois
Working with lawyers from Equip for Equality, the ACLU and two other advocacy groups for the disabled, Sonnenschein won a significant victory in the Northern District of Illinois in a class action brought on behalf of Illinois' developmentally disabled residents. The lawsuit seeks to compel the State of Illinois to comply with its obligations under the Americans with Disabilities Act and related mandates and provide disabled citizens with community-based living alternatives, rather than requiring them to accept large-scale institutionalization or no services at all. In March 2006, U.S. District Judge James Holderman certified a class which includes both people who are currently institutionalized in large facilities, and those who are living at home and thus "at risk" of future institutionalization, because of the state's systemic failure to offer community-based residential options to those who would benefit from a non-institutional setting and who desire to live in the community. Judge Holderman's decision to certify the proposed class significantly expands the scope and potential impact of the lawsuit and greatly enhances the prospect that this pro bono effort will result directly in positive changes for people with developmental disabilities in Illinois.
Sonnenschein Counsel: John I. Grossbart and Kendra Kekelis Hartman (Chicago)
Doe v. Constant
U.S. District Court for the Southern District of New York
Sonnenschein partner Ivor Samson teamed with the Center for Justice and Accountability and the Center for Constitutional Rights to secure $15 million in punitive and $4 million in compensatory damages for three women who survived torture and rape committed during the regime of Emmanuel "Toto" Constant and his brutal death squad, the Front for the Advancement and Progress of Haiti ("FRAPH"). U.S. District Court Judge Sidney H. Stein of the Southern District of New York awarded the damages on October 24, 2006. Samson argued in his closing that in addition to compensatory damages, the court should also award punitive damages to punish Constant for his wanton, oppressive and malicious actions. The Court previously found Constant liable for torture, including rape, attempted extrajudicial killing, and crimes against humanity carried out as part of FRAPH's reign of terror during the period of military rule in Haiti from 1991 to 1994. Constant has been living in New York since 1994 and the court's judgment, entered August 16, 2006 marks the first time anyone has been held accountable for the state sponsored campaign of rape and torture in Haiti.
On June 27, 2007, Constant was deposed in Coxsackie State Prison in New York to try and help identify and locate assets to be able to collect on a portion of the judgment.
Sonnenschein Counsel: Ivor E. Samson (San Francisco)
Plains Commerce Bank v. Ronnie and Lila Long
U.S. Court of Appeals, Eighth Circuit
Sonnenschein partnered with Washington University School of Law to achieve an important and rare pro bono victory in an Indian law case. In a June 26, 2007 opinion, the 8th U.S. Circuit Court of Appeals affirmed a ruling by the federal district court in South Dakota, which granted summary judgment in the case, agreeing with the Sioux tribal courts that had previously heard the matter that Indian tribes have jurisdiction over on-reservation lending discrimination claims involving non-Indian lenders. The decision upholds a Sioux tribal court award of $750,000 for members of the Cheyenne River Sioux Tribe who had sued Plains Commerce Bank of Hoven, South Dakota. The couple claimed the bank discriminated against them and withheld promised operating loans.
Sonnenschein Counsel: Roger K. Heidenreich (St. Louis)
