Benchmark Litigation

Delaware

Review

Dispute resolution
Abrams & Bayliss

Formed in 2005 as Abrams & Laster, Wilmington boutique Abrams & Bayliss has staked a firm claim in the community, placing itself on equal footing with the more historically established shops. In fact, some actually consider the firm to be in an advantageous position to overtake those firms. “There is a generation of lawyers in Delaware that are 20 years senior to those at Abrams & Bayliss that for the past 20 years have dominated Delaware. Well, those people are ready to retire! That puts a firm like Abrams & Bayliss, who has a consistently strong bench of people in their 40s and 50s, ready to take over from those other firms who had one major star and no one else because they didn’t groom the younger partners.” The firm is also said to be “very selective with its associates.” A peer offers in summation, “Abrams & Bayliss is terrific, incredibly plugged into the Delaware space. They don’t do as much in the federal space but in Delaware they are second to none.” 
     Thompson Bayliss has emerged as the firm’s “leading light” in recent years, enjoying a well-earned ascent in profile due to his raft of commercial Chancery litigation in both the plaintiff and defense capacities. “He just got a $600-something million verdict from Chancellor Laster [a firm founder and former partner, now on the Delaware Court of Chancery.] It’s in this weird niche MLP [master limited partnership] space. It’s on appeal, of course, but if it sticks, Tom could just retire!” This verdict, with an actual amount of $690 million, was secured in November 2021 for former investors of Boardwalk Pipeline Partners who claimed they were short-changed in a July 2018 buyout. Loews, which controlled Boardwalk's general partner, was found to have breached Boardwalk’s partnership agreement in exercising its right to buy out the limited partners, and the Chancery Court found that the buyout did indeed undervalue the limited partners’ stake by 31%, and that they deserved $17.60 per unit instead of the $12.06 they were awarded. The case is currently on appeal to the Delaware Supreme Court, but Bayliss’s remarkable triumph for the plaintiff investors – achieved in a solo capacity and not acting as simply Delaware counsel for a larger firm – catapults Bayliss into his debut position in the coveted Top 100 Trial Lawyers list in this edition of Benchmark. Beyond Bayliss, Michael Barlow is said to be increasingly developing a name for himself. “He has such a strong relationship with firms like Quinn Emanuel,” notes a peer, “and they are calling on his services more and more.” 

Bernstein Litowitz Berger & Grossmann

Bernstein Litowitz is an undisputed leader in the securities-focused plaintiff arena. Peers on both the same and opposite sides of the “V” offer plaudits and admiration on a near-unanimous basis. “Bernstein is always at the top,” declares a peer, voicing a general consensus. “They are one of the few firms in this capacity that files the big, meaty securities cases, and they litigate them hard. They’re not just ‘first-to-filers’ trying to get out as quickly as possible with a weak settlement.” Historically a New York-based institution positioned as “an attack dog for Wall Street,” the firm has also attended to a Delaware practice, a stance that the firm cemented when it recently opened an office in Wilmington and installed recruit Greg Varallo to run it. Varallo, long known to the Delaware Chancery community as a defense lawyer at Wilmington institution Richards Layton & Finger, raised eyebrows and had the legal market talking when he “flipped sides.” A local peer confirms, “Greg is well known and well liked by everyone in the Chancery community. He’s got a certain charisma and credibility.” A New York partner familiar with Varallo notes: “Greg did really well in a Gilead case – he got sanctions against the company that refused to produce documents!” The firm’s foray into the Delaware market is viewed as “smart and enormously successful,” in the eyes of peers. “There is a lot of action in Delaware nowadays, and plaintiffs know this, so to bring these actions in Delaware without having your own counsel here…I can’t imagine what the cut would be to hire Delaware counsel but it would be big,” opines one Wilmington peer. “With Bernstein coming in here, they have not only won big within their own confines but have also pretty much put a few of the more historic Delaware plaintiff shops out to pasture.”

While based in the firm’s New York flagship, Mark Lebovitch is also known for a Delaware element to his practice, which frequently involves derivative actions and often finds him teaming up with Varallo. “If you’re a Delaware company, you’re getting hit with a 220 demand,” states a peer, “and Mark ‘The Maestro’ Lebovitch is all over this. He is getting really aggressive, pushing for emails and text messages from company directors. Typically, that is not where discovery happens – it usually has to be on company-related documents – but Mark is saying, ‘Nah, listen – cell phones, personal emails, executives now frequently use these channels to communicate, and I want to see what’s happening on those channels.’ He is getting increasingly successful in convincing judges to allow this!” Lebovitch and Varallo represented the Hollywood Firefighters’ Pension Fund in successfully stopping GCI Liberty’s and Liberty Broadband’s controlling stockholders from using complex financial engineering in a merger of the two companies to consolidate their voting power at the expense of GCI Liberty’s public Class-A stockholders. The litigation caused the controllers to unwind all of the personal benefits they had sought for themselves while securing a $110 million cash settlement for former GCI Liberty stockholders. 
     

     Peers note that the firm’s center of gravity, Max Berger, is “still the king when it comes to standing up and getting the settlements, but others are doing the heavy lifting. Hannah Ross, for one.” Berger and Ross initiated a comprehensive, proprietary investigation in the wake of the collapse of the Allianz Structured Alpha funds during the beginning of the pandemic. The investigation focused on alleged misconduct and breaches of fiduciary and contractual duties in the management of those funds, which had deviated from their stated market-neutral strategy. As a result of this, the Bernstein Litowitz team managed to secure settlements between February and April 2022 totaling nearly $2 billion to the firm’s clients. Sal Graziano, one of the firm’s most active litigators, scored a $175 million settlement in September 2021 on behalf of investors in Luckin Coffee, a Chinese coffee chain that received well-publicized infamy for being fraudulent. Beyond the senior level, more junior partners are making their mark. Newly listed future star Edward Timlin is tipped by peers as one to watch. “Ed trained under [universally revered securities litigator] Adam Hakki and got defense expertise from this development at Shearman [& Sterling.] [He is] definitely worth keeping your eye on.”

Labaton Sucharow

Plaintiff shop Labaton Sucharow historically has been viewed as, and still is primarily known as, a securities boutique. Operating in the financial district of New York as well as in Wilmington, Delaware and Washington, DC, the firm is well poised to feed heartily on a steady diet of corporate disputes arising on Wall Street and in the Delaware Court of Chancery. “Labaton is one of the few plaintiff firms that get the big, meaty securities cases and they litigate them,” confirms a defense-side peer. Another advises, “Look closer – Labaton is getting more into the consumer class-actions space as well, particularly with privacy and data breach work.”

     A noticeable change of the guard has transformed the front lines of Labaton’s bench, with a host of younger partners making their mark with lead appointments on some of the firm’s biggest cases of late. Exemplifying this, as well as the observations about the firm taking on more privacy-related work, New York future star, Michael Canty provided co-lead counsel and secured an all-cash $650 million settlement from social media juggernaut Facebook in a case alleging Facebook’s use of facial recognition technology to extract and store user biometric identifiers without consent and as required by the Illinois Biometric Information Privacy Act. “They were actually working this up for trial against Facebook’s very formidable team of lawyers and it settled,” testifies a peer. Another New York future star, Carol Villegas is lauded for her “grit and talent,” both of which were put on display in several cases in which she provided co-lead counsel. In one such case, she served as lead counsel in a securities class action against data analytics behemoth Nielsen and certain of its executives, that alleges the company misrepresented the strength of its Buy business, the value of its goodwill, and the impact of the EU’s privacy law, the General Data Protection Regulation. Villegas argued that the price of Nielsen publicly traded common stock was artificially inflated as a result of Nielsen’s allegedly false and misleading statements and omissions, and that the price declined when the truth was allegedly revealed through a series of partial revelations. The parties settled for $73 million in cash. Villegas also served as lead counsel in a securities class action against World Wrestling Entertainment – the sports entertainment company primarily known for its brand of professional wrestling – and certain of its executives, that alleges the company misrepresented the status of its media rights agreements in the Middle East and North Africa region, once again artificially inflating the company’s common stock, which suffered a precipitous drop following revelations about the stock. James Johnson, a more senior partner in the New York office, lays claim to several key victories of his own. He acted as lead counsel in a securities class action against Canadian cannabis producer CannTrust Holdings following a cross-border exposure of CannTrust’s illicit business practices and related regulatory violations – namely, secretly growing massive amounts of cannabis in unlicensed rooms in violation of Canadian cannabis regulations. Through a mediation process, Johnson and his team was able to settle with all but one of the named defendants, with preliminary approval of a $66.4 million settlement in the US.

     One of Labaton’s biggest developments as of late has been the rising profile of the firm’s Delaware practice. This has largely been attributed to the efforts of Ned Weinberger, a partner who has the community talking. “Ned is one of the leaders,” confirms one Wilmington peer. “There are no shortcuts in Delaware – you have to earn your way up through the peers and judiciary. Ned has gotten appointed lead counsel on several cases, important cases, OVER people from several other plaintiff firms that are more established in Delaware!” Another peer adds, “Courts love him, he’s an aggressive litigator who gets results.” Still another peer confirms, “These days, he has very quickly risen up to the position of being my first or second call if I needed to refer a case to a plaintiff. I would choose him over more established plaintiffs in Delaware, who are older and fading.” Weinberger is co-lead counsel in the class action and derivative lawsuit against certain officers, directors, and/or controlling stockholders of Expedia Group arising out of a transaction that allowed Barry Diller, chairman of Expedia’s board of directors and the company’s senior executive, to acquire super voting shares in the company. According to the complaint, Expedia suffers from an extreme separation of ownership and control. A peer offers in summation, “There’s something going on in Wilmington in the plaintiff bar – can’t you just feel it? And that’s Ned – he’s building that out.”

Ross Aronstam & Moritz

Wilmington corporate and commercial litigation boutique Ross Aronstam & Moritz has edged its way into a position at the forefront of the crowded Delaware community, earning “a top seat at the table” among larger, older and more established institutions. “Ross Aronstam has come a long way,” confirms a local peer, “and they did it fast! We are all watching them and respect them equally.” The firm has even earned acclaim from out-of-town firms, several of whom are themselves widely championed brand-name “white shoe” firms who have partnered with Ross Aronstam. “A lot of ‘big law’ firms have this high-handed attitude in Delaware,” elaborates one peer. “They come in and go, ‘I respect your opinion, and I want to hear what you have to say, but ultimately, it’s our case. This is a BIG MISTAKE! Judges in Delaware spot it immediately and hate it. But Ross Aronstam is one firm I have never witnessed this happening to! They get immediate respect, and I don’t just think it’s luck - I think that alone speaks volumes as to their reputation.” Indeed, the firms calling on Ross Aronstam’s services as Delaware counsel read like a “who’s who” of blue-ribbon big law and out-of-town litigation boutiques, and the cases the firm handles illustrate a broad cross section of commercial and Chancery disputes.
      All three name partners are namechecked by peers. David Ross is called “the one l would go with for case strategy, if I had to choose only one lawyer in Delaware. He also knows the bench really well.” Ross provides lead counsel to Facebook in several matters. In one, he represents the company and its current and former officers and directors in a purported derivative action seeking to recover based upon alleged issues concerning advertising metrics, competitive practices, and executive compensation. Ross is also co-counsel to Facebook in connection with various litigations arising out of the well publicized Cambridge Analytica privacy breach scandal, including derivative actions and actions seeking to inspect company books and records. In another of his (non-Facebook-related) matters, Ross represents Swipe Acquisition Corporation, the acquirer in action asserting fraud arising out of a substantial indirect acquisition by a fund advised by Platinum Equity Advisors. Bradley Aronstam is attending to novel matters in the rapidly burgeoning SPAC area; in one such matter, he is partnering Weil Gotshal & Manges in representing Churchill Capital Corp III and the former directors of Churchill in consolidated stockholder litigation challenging Churchill’s SPAC acquisition of MultiPlan Corp. Garrett Moritz is attending to a diverse basket of matters straddling several practices. He acts with Cravath in representing the directors of Tesla in stockholder litigation challenging Tesla’s acquisition of SolarCity in a stock-for-stock transaction that valued SolarCity at approximately $2.6 billion to $2.8 billion. Shortly before trial, the director defendants other than Elon Musk reached an agreement in principle, subject to court approval, to settle for $60 million to be funded by insurance. Trial was set to proceed in the Court of Chancery in March 2020 with respect to Elon Musk but was delayed due to the COVID-19 crisis. Trial moved scheduling to July 2021. In a more commercial-related matter, Moritz acts with Gibson Dunn & Crutcher in representing Keurig Dr. Pepper affiliate The American Bottling Company in litigation against BA Sports Nutrition, LLC and the Coca-Cola Company for wrongful termination of a distribution contract with The American Bottling Company to distribute the sports drink Bodyarmor in order to wrongfully move distribution to Coca-Cola. ABC’s contract and tortious interference claims seeking to recover hundreds of millions of dollars or more in losses have survived a motion to dismiss. The case is currently in discovery, with a jury trial scheduled for February 2022 in Delaware Superior Court. In a derivative matter concerning corporate governance, Moritz represents McDonald’s in a lawsuit against McDonald’s former CEO Stephen Easterbrook for breach of fiduciary duty and fraudulent inducement. The case arises from McDonald’s discovery - after entering into a Separation Agreement with the Easterbrook after learning that he had engaged in a sexual relationship with a subordinate - that Easterbrook had lied about the existence of other sexual relationships with other Company employees during an internal investigation, and that Easterbrook had approved an equity grant to one of the employees, in violation of Company policy. In February 2021, the Court of Chancery denied Easterbrook’s motion to dismiss. The case is currently in discovery and trial is expected to be held in mid-2022.