Good morning. It’s Friday, May 2, and I’m Litigation Daily editor and columnist Ross Todd here with the latest Litigator of the Week Runners-Up and Shout-Outs.

First up this week is a team from Kirkland & Ellis who represented railcar owner GATX Corp. in litigation where the Norfolk Southern railway was seeking to get the company to pay a portion of its $600 million settlement with residents affected by the February 2023 derailment in East Palestine, Ohio. Norfolk Southern claimed GATX had allowed the car in question to sit in a railyard in the floodwaters from Hurricane Harvey, causing a defect in its wheel bearing that led to the derailment. But, after a four-week trial, federal jurors in Youngstown found last week that Norfolk Southern hadn’t proven that GATX was negligent and that the railway was 100% responsible for the cost of the settlement. The Kirkland team included Carrie Karis, Rob Ellis, Lauren Casazza, Patrick Castle, Lauren Biksacky, Zac Ciullo, Aaron Stevenson, Jon Emmanuel, Michael Smith and Alanna Carden. 

Defense lawyers for three healthcare executives—John Holland, William Moore and Edmundo Cota—knocked out charges accusing them of running a $400 million fraud and kickback scheme between 2000 and 2013 to route Medicaid patients to Tenet Healthcare System hospitals in exchange for payments. U.S. District Judge Amy Totenberg in Atlanta granted the defendants’ motions to dismiss under the Speedy Trial Act and the Sixth Amendment after finding “egregious” delays in the prosecution. “During this case’s long life, numerous witnesses have died or become unavailable, at least some evidence has been lost, and memories have inevitably faded,” the judge wrote. William Moore, the former CEO of Atlanta Medical Center, was represented by a team led by Brian McEvoy of Baker & Hostetler that included his colleagues William Ezzell, Jennifer Solari, Kristin Shapiro, Elizabeth Hicks, Phillip Kim, Ryan Mayo and Cornelia Brandfield-Harvey, as well as Brian Rafferty of Rafferty Law Firm. John Holland, the former CEO of North Fulton Hospital, was represented by Cristina Pérez Soto, Joseph Finley and Richard Deane Jr. of Jones Day, Henry Asbill of Schertler Onorato Mead & Sears, Amy Weil of The Weil Firm, David Bouchard of Finch McCranie and Susan Bozorgi of Bozorgi Law. Edmundo Cota, the former CEO of Clinica de la Mama, was represented by Emily Strongwater and Jay Strongwater of Strongwater & Associates.

A trial team at King & Spalding secured a defense verdict for Motive Technologies Inc. in a patent infringement lawsuit brought by rival fleet management company Omnitracs. Omnitracs was seeking more than $100 million in lost profits and royalties, as well as an injunction. But last week, after an eight-day trial, jurors in San Francisco found that Motive didn’t infringe upon any of the four patents Omnitracs asserted at trial. Jurors further found that two of the patents involved things well-understood, routine and conventional to “a person with ordinary skill in the art”—a factual finding aimed at patent eligibility. The King & Spalding team included Angela Tarasi, Jeff Mills, Mikaela Stone, Patrick Lafferty, Mark Zambarda, Andrew Whittaker, Zach Coots, Roy Falik, Ellen Min, Nick Sieger, Kaki Vessels, MK Kennedy, Eric Valuyev and paralegal Jen Miller.

A team at Goodwin Procter led by Robert Carroll, Robert Frederickson and Alexandra Valenti previously took home runner-up honors late last year after they won a trade secret verdict for client Insulet Corp. Massachusetts, when jurors found that Korean rival EOFlow Co. and former Insulet employees misappropriated trade secrets to create a competitor to Insulet’s lightweight, wearable insulin pump, the Omnipod. Last week, U.S. District Chief Judge F. Dennis Saylor IV entered final judgment for Insulet that included damages of more than $59 million and a permanent injunction forcing EOFlow to destroy copies of Insulet’s trade secrets and transfer a pending patent application that incorporated them to Insulet. 

A team at Morgan, Lewis & Bockius won a reversal at the Second Circuit this week for Bakery Drivers Union Local 550 and Industry Pension Fund in its application for $126 million under the Special Financial Assistance program established by the American Rescue Plan Act of 2021. The Pension Benefit Guaranty Corporation, the federal agency responsible for administering the program, had previously found that the fund was ineligible because of its prior “termination by mass withdrawal” in 2016 after the plan’s largest contributing employer ceased making contributions. The Second Circuit, however, held this week that the SFA statute does not allow the agency “to exclude plans based solely on a prior termination.” The Morgan Lewis team included partners Amy Pocino Kelly, Jeremy Blumenfeld and Doug Hastings and associates Mary Petrovic, Brendan Anderson and Debbie Carfora. 

Shout-out to Greenberg Traurig shareholders Daniel Pulecio-Boek and Howard Jeruchimowitz and of counsel John Molluzzo Jr. for their work representing Grupo Cinemex, the largest chain of movie theaters in Mexico, in a dispute with a New York landlord. Ruling on an issue of first impression this week, U.S. District Judge Jennifer Rochon granted their motion to dismiss for lack of subject matter jurisdiction. The judge found that the plaintiff’s “convoluted” corporate structure created an “endless loop,” rendering it “stateless” for purposes of diversity jurisdiction.

Shout-out to lawyers for the NCAA and major athletic conferences who knocked out claims brought on behalf of 16 former college basketball players, including former Kansas guard Mario Chalmers, related to using their name, image and likeness in advertisements and for other commercial purposes. U.S. District Judge Paul Engelmayer in Manhattan dismissed the case this week. The judge held that the plaintiffs, who all played in the period before the June 15, 2016, cutoff in the NCAA’s House settlement, had claims that fell outside the four-year statute of limitations under the Sherman Act. The Wilkinson Stekloff team representing the NCAA included Rakesh Kilaru, Cali Arat, Daniel Epps and Matthew Skanchy. Angela Zambrano, Benjamin Nagin, Natali Wyson and Chelsea Priest of Sidley Austin represented the Big 12 Conference. The team representing the Southeastern Conference included Michael Sommer of Wilson Sonsini Goodrich & Rosati and Kathryn Reilly, Galen Bellamy, Michael Krantz and Natalie West of Wheeler Trigg O’Donnell. The Atlantic Coast Conference was represented by Christopher Yates, Aaron Chiu and Anna Rathbun of Latham & Watkins. The Big Ten Conference was represented by Britt Miller, Daniel Fenske and Gina Del Tatto of Maye Brown. The Big East Conference was represented by Scott Cooper and Kyle Casazza of Proskauer Rose. The Pac-12 Conference was represented by Whitty Somvichian, Ashley Corkery, Gregory Merchant and Mark Lambert of Cooley.

Shout-out to a Quinn Emanuel Urquhart & Sullivan team led by Kevin Johnson, Todd Briggs and Rachael McCracken representing Salesforce in patent infringement litigation targeting the company’s customer relationship management platform. After U.S. District Judge Alan Albright in Waco, Texas, excluded expert testimony put forward by plaintiff Brazos Licensing and Development to put on its damages case for a fourth time last week, the judge entered a stipulated judgment for Salesforce on Monday.

And here’s one last shout-out to a Latham & Watkins pro bono trial team led by Gabrielle LaHatte, who won a $2.3 million verdict, including $2 million in punitive damages, in what appears to be the first jury trial in the U.S. under the federal revenge porn statute, and one of the few under the Texas statute. The Latham team also includes Brett Sandford, Heather Haynes, Dan Muller, Diane Ghrist, Sean Gloth and Jeff Homrig.

Litigator of the Week: A Landmark $4 Billion Settlement For Child Sex Abuse Victims from L.A. County

This week the Los Angeles County Board of Supervisors unanimously approved a $4 billion settlement with more than 7,000 plaintiffs who brought claims that they were abused while in juvenile detention or foster care from the 1980s to the 2000s—the largest sexual abuse settlement in U.S. history. California’s Assembly Bill 218, a 2020 state law, extended the statute of limitations for the claims. Our Litigators of the Week are plaintiffs lawyers at ACTS LAW, Becker Law Group, Boucher LLP, Herman Law, McNicholas & McNicholas and Slater Slater Schulman, who represent a majority of the settling plaintiffs. 

Adam Slater of Slater Slater Schulman, one of the lead negotiators for the plaintiffs, was involved in a settlement that was previously the largest of this kind—a trust of more than $2.4 billion in settlement funds for more than 82,000 abuse claimants that resulted from the Boy Scouts of America bankruptcy. Slater answered Litigation Daily’s questions about the L.A. County settlement.

Who were your clients and what was at stake here?

Our clients include men and women who were sexually abused as children by Los Angeles County employees at county-run juvenile detention facilities, youth emergency shelters like MacLaren Hall and in foster care.

How did you and your firm become involved in this litigation? How many clients do you represent?

Slater Slater Schulman represents over 3,600 of the survivors in this matter, including the first plaintiffs who filed their cases in 2021 and a dozen more who filed in May 2022 alleging childhood sexual abuse at MacLaren Hall, a notorious children’s emergency shelter that operated for decades.

Who all has been taking the lead for the plaintiffs and how have you divided the work that led to this settlement?

The co-leads with Slater Slater Schulman were Boucher LLP, ACTS LAW, Becker Law Group, Herman Law and McNicholas & McNicholas. The work was done jointly by these firms. James Lewis and Alina Sookasian from Slater Slater Schulman serve as co-lead counsel on behalf of the approximately 1,500 MacLaren Hall survivors.  

Where was this litigation playing out? What structure had it taken? And are there plaintiffs left who are not settling?

Los Angeles County Superior Court. The cases were filed individually but have been coordinated for case management purposes. There is a very small minority of plaintiffs who are not part of this settlement.

You have a defendant that faces billions of dollars in costs associated  with this year’s wildfires, project budget shortfalls and the impending threat of federal funds going away. How much do those concerns play into how you negotiate with a defendant like the County of Los Angeles? The Boy Scouts settlement you worked on ended up in bankruptcy proceedings, after all. 

We listened to what the other side had to say and structured the settlement in a fiscally responsible way by spreading out the payments into several equal installments, rather than one lump sum. During the Boy Scouts of America bankruptcy, one of the most surprising things to me was that many former Scouts wanted the institution to live on in some form, but with protections in place for future generations. It’s the same for the County of Los Angeles, which will need funding to continue to supervise children in its care and improve its operations. Fortunately, the County is now on notice to never let something like this happen again. We heard that sentiment reflected in the remarks by the supervisors who unanimously voted to approve the settlement on Tuesday.

It’s worth noting that 30 L.A. officials were indicted earlier this year for allegedly staging “gladiator fights” at juvenile hall. Are there any structural changes as part of this settlement to make sure what happened to your clients doesn’t happen again? 

It is clear that the County has received the message that changes aimed towards the protection of children in their care is a matter of immediate and utmost importance. This was evident in the comments of the supervisors at Tuesday’s meeting. Prior to the vote, Supervisor Holly Mitchell expressed a desire to make it easier to fire municipal workers who are credibly accused of abuse, and Supervisor Janice Hahn stated today she wanted there to be consequences for department and agency heads so that abuse that happens under their watch should be part of their performance reviews and they should lose pay or their jobs because of it.  

What comes next? What will the process look like to determine what individual plaintiffs receive as part of the settlement?

Each individual case will be reviewed by a neutral third-party allocator who will consider all available facts and evidence presented by all parties. The allocator will then use a structured protocol to determine the amount of compensation to be awarded to each claimant. Most of these awards will be paid out to the survivors, periodically, over the next five years.

Are there any limits on the amount of this settlement that will go toward attorney fees?

The rules of professional conduct prohibit unconscionable fees. There’s no numerical figure, however, because victims of childhood sexual abuse should not face barriers in who they are able to hire to represent them. The scales of justice are already tipped in favor of those in power, including government entities, so survivors should have the ability to choose from the best resources and top attorneys available in order to hold their perpetrators and the institutions that enable them accountable.  

What will you remember most about this matter?

There was a moment back in 2022 before our first news conference with civil rights attorney Benjamin Crump and around two dozen of my clients. We held hands and Ben said a few words to help support and guide the survivors who were bravely coming forward. It was an honor to see them speak their truth publicly aloud for the first time. It was cathartic, moving and the beginning of this process that got us to where we are today.

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