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Litigation Daily
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Jenna Greene
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Good morning! It’s January 31 and I’m Lit Daily editor Jenna Greene, here with your Daily Dicta. Reach me at jgreene@alm.com or on Twitter @jgreenejenna.
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Judgment Bloodhounds: How Kobre & Kim Helps Winners Get Paid
Winning on paper is nice—but it’s not much use if your client can’t collect.
That’s where Kobre & Kim comes in.
Founded in 2003, the fast-growing AmLaw 200 firm is making a name as the go-to experts on judgment enforcement and offshore asset recovery—or for that matter, the opposite, depending on the client’s needs.
Some of the firm’s work sounds straight out of a James Bond movie—trying to collect a $130 million debt from an Eastern European billionaire with alleged ties to the Russian mafia, for example. Or conversely, trying to shield the former ruling family of an African country against attempted asset seizures of more than $1 billion by a consortium of governments in litigations across Europe.
“Kobre & Kim is one of few law firms in the world with a special focus on representing judgment creditors and debtors in complex, cross-border debt enforcement matters in the $100 million to $1billion-plus range,” said Kobre lawyer Chris Cogburn, who is based in New York and previously practiced at O’Melveny & Myers and Jones Day.
The firm’s latest fight is on behalf of three former executives and investors in Sky Solar Holdings Co. On Tuesday, Kobre lawyer John Han filed a petition in U.S. District Court for the Southern District of New York to confirm a $13 million arbitration award entered last May by a tribunal with the Hong Kong International Arbitration Centre.
Han wants the court in New York to convert the Hong Kong arbitration award against Sky Solar founder Su Weili, who allegedly stripped his company’s assets in secret and transferred them to a holding company, which he then took public on the Nasdaq.
The New York action is fairly typical, said Han, who is based in Hong Kong and joined Kobre from Covington & Burling. “The New York Convention (which governs the enforcement of foreign arbitration awards) offers a very limited menu of defenses to confirmation, and none of them are available to these debtors,” he said via email. “With that said, Mr. Su’s attitude toward this obligation has given us no reason to believe that he will honor it voluntarily even after a U.S. court recognizes it, so we don’t expect the confirmation proceeding to be the end of the story.”
The suit comes on the heels of a series of wins last month by Kobre lawyers in enforcing a multimillion-dollar international arbitration award against Chinese billionaire Jia Yueting, who founded technology conglomerates Le.com and LeEco.
So how do the Kobre lawyers do it?
“Our team comprises more than a dozen former DOJ lawyers experienced in tracing and seizing assets of debtors who hide assets in the international black market,” Cogburn said in an email.
“We also have English solicitors and barristers, many of whom are qualified and based in the major offshore jurisdictions (BVI, Cayman Islands), which are popular destinations for debtors hoping to place their assets beyond the reach of judgment or award creditors.”
Han added that they “usually employ a combination of judicially assisted discovery and other asset-tracing tools to form as complete a picture as possible of a creditor’s assets around the globe, then deploy freezing injunctions and a variety of asset seizure measures to ensure our clients are made whole. Our strategies often use a combination of offshore and onshore actions.”
Han said the most likely scenario where someone refuses to accept liability and pay up is when “high-value judgments or awards are issued against debtors…including foreign countries, state-owned entities and high net worth individuals with assets in multiple jurisdictions,” he said. “These debtors are not shy about testing the endurance and resources of their creditors, and our monetization strategies are built to overcome that recalcitrance.”
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Shout-Out: Kirkland’s Kassof and Fields Win Big for Abbott and St. Jude Medical
Defeating a nationwide class action seeking hundreds of millions of dollars in damages, Kirkland & Ellis litigators Andrew Kassof (above, left) and Barry Fields (right) led a team in in securing a major win for St. Jude Medical LLC and Abbott Laboratories.
Their victory—the case was dismissed with prejudice—was one of those legal sleights of hand that shows why venue can make all the difference.
The fight was over St Jude’s cardiac defibrillators, which provide pacing for slow heart rhythms and electrical shock or pacing to stop dangerously fast heart rhythms. The Food and Drug Administration recalled certain models in October of 2016 based on reports that the device’s lithium batteries could deplete suddenly and prematurely.
Abbott Laboratories acquired St. Jude as a wholly-owned subsidiary on January 4, 2017. Nine months later, the companies were hit with a nationwide class action case in the Northern District of Illinois.
The suit was filed by ASEA/AFSCME Local 52 Health Benefits Trust, a “third party payor” of medical expenses—which on behalf of its beneficiaries was stuck covering the cost of implanting the recalled devices and may also be required to pay for removing and replacing the devices. They alleged that St Jude actively concealed information about the defect from its management boards, the FDA and the public.
The Kirkland team’s first crucial step was to get the Illinois case dismissed on jurisdictional and venue grounds—even though Abbott is headquartered in Chicago.
The plaintiffs were forced to refile in Minnesota, where St. Jude is based—and where the U.S. Court of Appeals for the Eighth Circuit has more favorable precedent on preemption.
In a decision issued on January 24, U.S. District Judge David Doty sounded distinctly sympathetic to the plaintiff’s claims. “St. Jude put a defective product on the market that plaintiff paid for and must pay to replace,” he wrote. “In other words, plaintiff has been directly harmed by St. Jude’s alleged misconduct.”
But the Kirkland team argued that all of the claims were preempted under the Medical Device Amendments to the Federal Food, Drug and Cosmetic Act, because the plaintiff challenged the safety and effectiveness of pre-market approved devices.
It was enough to carry the day.
Citing binding Eighth Circuit precedent, Doty found that the court was “constrained to conclude that plaintiff’s claims are preempted. As a result, the court must dismiss the case.”
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What I’m Reading
Mueller Team Questions How Files in Russia Case Wound Up Posted Online
In a new court filing, prosecutors revealed that nonsensitive discovery materials provided to Reed Smith, the U.S. law firm representing the Russian company Concord Management and Consulting, had been altered and disseminated online in October as part of an apparent effort to discredit the investigation into Russian interference in the 2016 election.
Protesters Suing Trump Over Security Detail Scuffle Want to Put Him on Stand
Good luck with that.
Roger Stone's Colorful South Florida Litigation History
Self-professed dirty trickster and longtime Trump ally Roger J. Stone Jr. is no stranger to legal battles, having already faced three major civil lawsuits in South Florida courtrooms. What happened?
SF Judge Finds PG&E Violated Probation, Ponders Further Action to Address Wildfire 'Emergency'
"We cannot continue to sustain this kind of catastrophic injury to the state," said U.S. District Judge William Alsup, who is overseeing PG&E's probation following the company's 2016 felony conviction stemming from a pipeline explosion in 2010.
Environmental Groups Sue EPA Over Delays in Testing Nation's Drinking Water Supply
“At the same time the Trump administration is proposing to weaken the Clean Water Act and is actively allowing toxic chemicals to pollute our drinking water, it also is failing to comply with the Safe Drinking Water Act.”
After Years of Litigation, Allman Movie Train Wreck Suit Ends in CSX Settlement
Camera assistant Sarah Jones was 27 when she was struck and killed by a CSX train that hit the movie set where she was working on a biopic of musician Gregg Allman.
In case you missed it…
Daily Dicta: Gwyneth Paltrow Slammed with $3M Suit for Utah Ski Collision
'Gwyneth Paltrow knew it was wrong to slam into Dr. Sanderson's back, knocking him down, landing on top of him, knocking him out and then leave the scene of the ski crash she caused,' states the complaint filed in Utah state court.
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