On Wednesday, the Quinn team led by partner Michael Carlinsky with assistance from partner Chad Johnson scored a huge win. Vice chancellor J. Travis Laster ruled that Koch has to sell his $2 billion energy company, Oxbow Carbon, so that two private equity firms can recoup their investment. The minority investors own one-third of the company. It's a dramatic remedy—albeit one the Quinn lawyers argued is rooted in the original terms of the deal. Where the decision gets juicy is when Laster talks about the role of Koch's lawyers from Mintz, Levin, Cohn, Ferris, Glovsky and Popeo—including name partner and firm chairman R. Robert Popeo— who raked in $50 million in fees. Koch initially hired the firm as his personal counsel, then “modified the firm's engagement letter so that Mintz Levin represented Oxbow. No satisfactory explanation was ever provided for this shift,” Laster wrote. The judge continued, “I personally believe Koch wanted Oxbow's counsel to be loyal to him, liked the idea that Mintz Levin would be in a position to run Oxbow's internal investigations into Koch's perceived adversaries, and understood that the minority members would effectively pay one-third of Mintz Levin's fees.” Koch founded Oxbow in 1983 and is CEO and chairman of the board. In 2007, the company sought private equity financing for two acquisitions. Quinn client Crestview Partners was one of the investors. After seven years, Crestview wanted to sell its shares of Oxbow. Koch (who according to Bloomberg is worth $4 billion) had the option of buying Crestview out, but declined to do so. Per the contract, Quinn lawyers argued, that meant Crestview could then demand the whole company be sold. The investors hired Goldman Sachs and Cravath, Swaine & Moore and found a buyer, ArcLight, willing to pay what they viewed as an above-market price for Oxbow. But the sale didn't happen—and Laster blamed Koch. “The minority members bargained for the right to exit their investment after seven years,” he wrote. “By breaching the Reasonable Efforts Clause, the Koch Parties deprived them of this right… Koch demanded that Oxbow and its counsel work to 'obstruct,' 'derail,' and 'delay' the Exit Sale process.” Particularly maddening for the investors—who owned one-third of Oxbow—was that the company was footing the bill for Mintz Levin to oppose them. “Because the minority members own approximately one-third of Oxbow's interests while Koch and his family members indirectly own approximately two-thirds, causing Oxbow to pay for Mintz Levin meant that the minority members were paying one-third of the bill. The amount is not trivial,” Laster wrote. “The minority members further explain, with the support of an expert affidavit, that they will not be able to recapture the resulting value loss in an Exit Sale. A buyer will pay for Oxbow as it is, depleted by the approximately $50 million spent on Mintz Levin, resulting in the minority members receiving approximately $16.7 million less than they would have received if Koch had paid for Mintz Levin himself.” The judge chastised the firm for its role. “Oxbow and its counsel should not have been picking sides,” he wrote. “But for Koch's personal desire to oppose an Exit Sale, Oxbow never would have needed to hire Mintz Levin. The minority members are therefore entitled to compensatory damages equal to their proportionate share of any amounts paid by or on behalf of Oxbow to Mintz Levin.” Popeo of Mintz Levin did not immediately respond to a request for comment. |

Covington Team Comes Out on Top in Accutane Fight

In 2015, we crowned Covington & Burling's Paul Schmidt and Michael Imbroscio Litigators of the Week for a major victory on behalf of Hoffmann-La Roche Inc., which was facing more than 2,100 big-ticket suits claiming the acne medicine Accutane caused Crohn's disease. The duo persuaded a New Jersey state judge to exclude the plaintiffs' expert testimony—effectively killing the suits. That is, until an appellate panel overturned the decision last year, ruling the judge went beyond his role as gatekeeper. Things looked grim for Hoffman-La Roche—but it turns out, the setback was only temporary. On Wednesday, the New Jersey Supreme Court sided with the company, bringing to a close 15 years of litigation. “Analysis of the record in this case leads to a clear result: the trial court properly excluded plaintiffs' experts' testimony,” the state's high court found . The case, which raised questions about experts, science, and the Daubert standard in New Jersey, attracted significant amicus interest. Consider this nugget from the American Medical Association's brief backing Hoffmann-La Roche: “Patients, physicians and our system of justice all suffer when courts permit outlier experts to confuse juries with disproven theories based on scientifically unsound methodologies that contradict peer-reviewed medical studies.” In addition to Schmidt and Imbroscio, the Hoffman-La Roche team included co-counsel Colleen Hennessey at Peabody & Arnold, Natalie Mantell at Gibbons, Russ Hewit at Dugi & Hewit, and Andy See at Shook Hardy. For more on the case, see Court Axes Accutane Suits, Adopts 'Daubert' Standard for Expert Reports |

Jones Day Sucks Up a Win in Vacuum Patent Suit

Vacuum maker SharkNinja and its lawyers from Jones Day cleaned up in one of the largest design patent summary judgments ever when rival Dyson this week voluntarily dismissed its appeal to the U.S. Court of Appeals for the Federal Circuit. Represented by Kirkland & Ellis, Dyson claimed SharkNinja's Shark Rocket line of stick vacuums infringed three of Dyson's design patents, and asked for $200 million in damages plus an injunction. In March, U.S. District Judge Robert Dow in Chicago granted Shark's third motion for summary judgment of non-infringement of all three asserted patents, concluding that the accused products “are plainly dissimilar.” SharkNinja was represented by Jones Day's John Froemming, David Witcoff, John Evans, Tracy Stitt and Patrick O'Rear. The two companies also clashed earlier this summer, when Dyson won in a false advertising suit against SharkNinja. On June 11, a federal jury in Chicago awarded Dyson $16.4 million in damages for SharkNinja ads that ran during a four-month period in 2014. |

What I'm Reading

'Rein in Your Facial Expressions,' Manafort Trial Judge Tells Lawyers Judge T.S. Ellis III scolded both sides for rolling their eyes and making funny faces. Armstrong Teasdale Beats Age Bias Suit Over Partner Retirement Policy A federal judge ruled that the partner couldn't claim to be an “employee” under a federal anti-discrimination law because he had already made a similar argument in state court and lost. SF Wins Sanctuary Fight Against Trump, but Court Tosses National Injunction Writing for the majority, Ninth Circuit Chief Judge Sidney Thomas said Congress, not the president, has the sole power to attach conditions to the federal grants. Meet the DOJ Appellate Team Fighting AT&T's Merger in the DC Circuit AT&T has hired Sidley's Peter Keisler, a former acting attorney general, to join O'Melveny & Myers' Daniel Petrocelli, while Makan Delrahim, the chief of Main Justice's Antitrust Division, is leading the DOJ's effort. Defendants Allege Perjury in $2 Billion Lawsuit Involving Russian Billionaires The suit centers around a claim that the three billionaires agreed to pool their cash, stock and other assets to obtain control over an oil and gas company in the late 1990s. Former Skadden Partner, 2 Others Referred to SDNY by Mueller Gregory Craig—who served as White House counsel to President Obama—is being investigated for possible unregistered foreign lobbying work. Wells Fargo Agrees to $2B Fine to Settle Mortgage Misrepresentation Case “Today's agreement holds Wells Fargo responsible for originating and selling tens of thousands of loans that were packaged into securities and subsequently defaulted,” said acting U.S. Attorney for the Northern District of California Alex G. Tse.