Good morning. It’s Friday, Oct. 11, and I’m Litigation Daily editor and columnist Ross Todd here with this week’s Litigator of the Week Runners-Up and Shout-Outs. 

First up is a team at Sullivan & Cromwell led by Brian Glueckstein that won approval for the Chapter 11 reorganization plan of cryptocurrency platform FTX Trading Ltd. After a five-hour evidentiary hearing, U.S. Bankruptcy Judge John Dorsey in Delaware this week signed off on the plan to use as much as $16.5 billion recovered since the exchange’s collapse to pay customers at least 118% of the value in their accounts as of the November 2022 bankruptcy filing. The judge called this a “model case for how to deal with a very complex Chapter 11 bankruptcy proceeding.” The Sullivan & Cromwell team included restructuring partners Andy Dietderich, Jim Bromley, Alexa Kranzley and the largest group ever assembled at the firm to handle a single matter.

A team at MoloLamken secured a win for Brighton Marine Inc. in an adversary proceeding in the bankruptcy case of Steward Health Care System. Brighton Marine, a Boston-area nonprofit that provides services to veterans and military families, had a nine-digit contract with Steward to administer its U.S. Family Health Plan. After a 10-hour evidentiary hearing last month, U.S. Bankruptcy Judge Christopher Lopez in Houston found that Brighton Marine’s termination of its contract with Steward—which had been noticed before Steward’s bankruptcy date, but with an effective date after the bankruptcy petition was filed—was valid and enforceable. The MoloLamken team included partners Eric Nitz, Jennifer Schubert and Justin Shur, as well as associates Jackson Myers, Walter Hawes and Catherine Martinez.

Rakesh Kilaru, Tamarra Matthews Johnson, Cali Arat, Matthew Skanchy and their team at Wilkinson Stekloff fended off an attempt to block the National Collegiate Athletic Association’s prize money regulations for individual sports the same week they helped win approval for a multibillion settlement set to reshape the economic model of college sports. U.S. District Chief Judge Catherine Eagles in Greensboro, North Carolina denied University of North Carolina tennis player Reese Brantmeier’s motion for a preliminary injunction blocking the prize money rules that limit tennis players to $10,000 per year in prize money plus winnings to cover necessary expenses prior to college. Eagles wrote that “the evidence of harm to competition from the prize money rules is remarkably thin.”

Shout-out to lawyers at Emery Celli Brinckerhoff Abady Ward & Maazel and the National Women’s Law Center, who represent a class of LGBTQ

individuals insured by Aetna Life Insurance Company. The plaintiffs claim that the company requires them to pay out-of-pocket for several rounds of

fertility treatments before insurance pays—something not required for non-LGBTQ individuals who can receive treatment immediately after they represent that they have been unable to conceive naturally in the past year. U.S. District Judge Vernon Broderick in New York this week gave preliminary approval to a settlement that will provide class members with at least $2,300 as direct compensation for any prior out-of-pocket payments, plus a lump-sum payment of about $10,000 for “additional damages suffered.” The Emery Celli team includes Zoe Salzman, Debbie Greenberger and Eric Abrams. The Center’s team includes Alison Ann Tanner, Donya Khadem, Michelle Iris Banker, Sudria Twyman and Noel Leon.

Shout-out to a joint team at Keker, Van Nest & Peters and Cooley that helped The Scripps Research Institute and two award-winning chemists beat back a lawsuit brought by John Clarke, a partner of venture capital firm Cardinal Partners. Clarke claimed he had entered into a joint venture agreement with Dr. Jin-Quan Yu and Dr. Benjamin Cravatt to develop and commercialize Yu’s carbon-hydrogen activation technology. Clarke alleged the scientists breached that agreement and that Scripps intentionally interfered with the joint venture. But San Diego County Superior Court Judge Gregory Pollack granted summary judgment to Yu, Cravatt and Scripps last week, finding Clarke failed to establish the existence of any joint venture. The Keker team includes partners R. James Slaughter, Bailey Heaps, Maya James, associates Niharika Sachdeva, Jasmine Virk and of counsel Steve Hirsch. The Cooley team included partners William O’Connor, Megan Donohue and associate Vivienne Pismarov.

Shout-out to lawyers at Latham & Watkins who represent Hayward Holdings, a designer and manufacturer of pool equipment, and lawyers at Willkie Farr & Gallagher and Seyfarth Shaw who represent the company’s private equity sponsors, CCMP and MSD, respectively. U.S. District Judge William Martini in New Jersey dismissed a securities lawsuit claiming the company made false and misleading statements about its inventory and distribution channels after growth in demand in the pool industry at the start of the COVID-19 pandemic. In particular, the judge dismissed claims against the private equity defendants with prejudice, finding neither was the “maker” of Hayward’s statements. The Latham team representing Hayward includes partners Kevin McDonough and Andrew Clubok, counsel Corey Calabrese, and associates Eric Pettis, Larry Hong and Rosa Vargas. The Willkie team representing CCMP includes partner Tariq Mundiya, counsel Joshua Levy and law clerk Matthew Davis. The team at Seyfarth representing MSD includes partners Gary Friedman, Daphne Morduchowitz, Vincent Sama and Catherine Schumacher and associates Matthew Catalano and Sarah Fedner.

Shout-out to a team at Paul Hastings that got Digital World Acquisition Co., the SPAC survived by Truth Social owner Trump Media & Technology Group, dismissed from a $20 million insider trading lawsuit. U.S. District Judge Kathleen Williams in Miami last week dismissed DWAC in what appears to be the first decision finding that an issuer is not an “indispensable party” in a Section 16 case. The Paul Hastings team was led by Brad Bondi and included Traci Zeller, who died unexpectedly in August while the motion to dismiss was pending, of counsel Michael Wheatley and associate Marisa Polowitz.

Shout-out to a team at White & Case that helped securities broker-dealer Apex Clearing Corp. beat back claims springing out of the January 2021 “meme stock” frenzy. Plaintiffs claimed that buy-side trading restrictions Apex put on certain meme stocks suppressed the appreciation of the prices damaging investors. The Eleventh Circuit this week upheld the dismissal of the investors’ claims this week in an unpublished decision. “Although they may disagree with how Apex handled the volatility of the market on January 28, they have failed to show that Apex is liable for its actions under New York law,” the panel wrote. J. Mark Gidley of White & Case argued the appeal for Apex. The team also was led by partners Jack Pace and Bryant Gant and counsel Celia McLaughlin.

Litigators of the Week: Jeffrey Kessler and Steve Berman Reach a Settlement With the NCAA that Reshapes College Sports

The economic model of college sports in the United States already looks quite different than it did when Jeffrey Kessler of Winston & Strawn and Steve Berman of Hagens Berman Sobol Shapiro first teamed up in antitrust litigation against the National Collegiate Athletic Association and major conferences about a decade ago.  

But thanks to a settlement that received preliminary sign-off this week from U.S. District Senior Judge Claudia Wilken in Oakland, the state of play in college sports is set to change even more dramatically. Kessler and Berman won preliminary approval of a settlement that will pay more than $2.75 billion in back damages to college athletes who competed before July 2021, the time when the NCAA first allowed athletes to earn money from their name, image and likeness rights. On top of that, the deal will allow schools to share revenue with current players through pools of up to about $21.5 million in the first year of the deal.

Litigation Daily: Briefly walk me through the three separate class actions you filed against the NCAA and the Power 5 conferences at issue here and what they each targeted.

Jeffrey Kessler: The House litigation challenged the NCAA rules restricting payments for the Name, Image, and Likeness (NIL) rights of Division I athletes, including for the rights to use football and basketball players’ NIL in broadcasts of their games. The Hubbard case sought damages for those athletes who were deprived of the cash academic achievement awards held to be lawful in our Alston litigation before the Supreme Court. The Carter litigation challenged the NCAA rules prohibiting schools and conferences from compensating Division I athletes for their participation on their teams. Taken together, the cases have been the vehicle for dramatically transforming college sports and opening the door to revenue sharing at a level comparable to professional sports.

Steve Berman: Jeff nailed it.

Who is on your teams and how have you divided the work that got you to this settlement agreement?

Kessler: We have a terrific team at Winston from top to bottom. This includes my partners David Greenspan, David Feher, Jeanifer Parsigian, Adam Dale, Matt DalSanto and Sofia Arguello, associates Sarah Viebrock, Scott Sherman, Joseph Blake, Robert Pannullo, Neha Vyas, Whitney Williams and Nick Sloan, as well as other Winston team members Corinne Kyritsopoulos, Rick Rosario, Shane Otten, Tessa Nguyen and Ramona VanNess. Each one has made an important contribution to get us to this landmark settlement.

Berman: The Hagens Berman team included Emilee Sisco and Stephanie Verdoia, who along with myself are former college athletes. In addition, we had on our team Ben Siegel from our Berkeley office and Meredith Simons from our Seattle office.

Your law firms have significant differences in terms of size and structure and yet you’ve been working alongside each other on these cases against the NCAA for more than a decade now. How would you describe the working relationship?

Kessler: We have become true partners and close friends. While our firms are different in size, and we have different experiences and perspectives, we share a common dedication to the college athletes, who have been economically exploited for so many years. 

Berman: During the Alston case we developed a great working relationship and became friends. Which is an interesting development because we see Winston against us often in non-sports class actions.

I’d like to ask you both if there’s anything skill-wise or strategy-wise that you have picked up from working with one another?

Kessler: Steve has taught me the importance of moving more nimbly and simplifying where the temptation might be to over-litigate or complicate. 

Berman: Jeff has one of the best antitrust minds I have worked with, so it’s been a pleasure working with him.

Mr. Berman, you told the court that when you went into your first session with the defendants and the mediator in this case, you told them you had to negotiate the injunction first and that you wouldn’t talk about anything else until the injunction was finished. Why was that?

Berman: We knew, given the size of the case and its prominence, certain lawyers would be looking for a way to object and sue that as a vehicle to get a seat at the table (and get fees). We were aware of the decision in the payment case overturning a settlement on the grounds that class counsel had a conflict evidenced by a weak injunctive settlement. So, to cut off this type of objection we focused on the injunction first. And we predicted perfectly the objection that did in fact come and we beat it as a result of the way we approached settlement.

You’ve had multiple groups tell the judge they believe the allocation of the $2.75 billion in damages is unfair to women athletes and could violate Title IX. What has your response been to the potential Title IX issues?

Kessler: We have settled antitrust litigation, which requires us to allocate past damages in accordance with the revenues for each sport. Title IX claims have not been prosecuted or released by our settlement. Women sports have not been adequately supported in the past, but we cannot right that wrong with antitrust damages. 

What’s important here in this settlement for college athletes—past, present and future?

Kessler: The injunctive relief will transform college sports, providing for tens of billions of dollars in future revenue sharing with the athletes and unlimited scholarships. The past damages are almost $3 billion, which is one of the largest antitrust settlements in history. 

How, if at all, have the NCAA and the conference defendants changed as litigation opponents in the time that you’ve been up against them?

Kessler: It took more than 10 years, but they finally realized that it was better to reach a fair settlement in which they could help shape the future rather than fight to the death in endless litigation, in which they were suffering repeated losses. 

What will you remember most about getting this result?

Kessler: The courage of the athletes who stood up to be class representatives and the difference that this settlement is going to make in the lives of generations of college athletes going forward.

What I'm Reading:

Phila. Jury Returns $78M to Plaintiffs in Roundup Case

The verdict marks the fourth plaintiffs win in the Philadelphia Roundup litigation since trials in the mass tort began a year ago, and the third win for the plaintiffs team of Kline & Specter and Arnold & Itkin.

JAMS Launches Initiative to Leverage AI Technology in Dispute Resolution

The initiative, called JAMS Next, will see the organization leverage testimony management and court reporting platform Prevail to offer AI transcript services, among other changes.

The Del. Supreme Court Could Make the Next Big Move in Anticompetitive Agreements. Here's How.

What the court hasn't explicitly weighed in on, and what the Seventh Circuit is asking it to clarify, is whether forfeiture for competition agreements in other types of contracts are subject to a court's analysis of their reasonableness.

DOJ: TD Bank Agrees to Pay $3B Over Anti-Money Laundering Program Violations

"TD Bank created an environment that allowed financial crime to flourish," U.S. Attorney General Merrick Garland said. "By making its services convenient for criminals, it became one."

Calif. Appellate Court Finds Inattentive Juror's Removal Reasonable, Not Sign of Bias

"No matter what a person's background, race, or economic standing, if the juror does not pay attention, the juror does not belong on any jury," wrote Presiding Justice Arthur Gilbert of the Second District Court of Appeal, Division Six.

Girardi's Lawyers Move for New Trial: He Doesn't Remember Jury's Verdict

Tom Girardi's lawyers asked a federal judge on Tuesday to toss his conviction because he wasn't competent enough to understand his own criminal trial.

In Case You Missed It:

A Reporter and a Mayor: Behind the Scenes During the Eric Adams Indictment News Cycle

One reporter's peek inside the 48 hours surrounding the indictment of New York City Mayor Eric Adams on charges including wire fraud, solicitation of contributions from foreign nationals and bribery.