Multinational Food & Beverage Company – Successful Defense in New Jersey Franchise Practices Litigation
Successfully defended the U.S. affiliate of a multinational food & beverage company sued in New Jersey federal court by a distributor alleging violation of the state's Franchise Practices Act. In both the district court and on appeal to the Third Circuit, Herrick delivered key victories in opposing the plaintiff's efforts to secure an injunction preventing our client from effecting its contractual right not to renew an exclusive distribution agreement between the parties. In the district court, we obtained rulings partially dismissing the complaint, denying plaintiff's motion for a preliminary injunction, and denying plaintiff's motion for an injunction pending its appeal to the U.S. Court of Appeals for the Third Circuit. Following expedited briefing, the appellate court found in our client's favor, affirming the district court's rulings. In light of these developments, the parties ultimately reached a settlement and stipulated to the dismissal of this litigation.
Counsel and Law Firm – Successful Appeal of Contempt of Court Ruling
Secured a favorable ruling from the Second Circuit on behalf of attorneys and their law firm in their appeal of a district court’s ruling holding them in contempt of court and sanctioning them for the alleged failure of their clients, the Republic of Iraq and Iraq's Ministry of Industry, to comply with a post-judgment discovery order. Finding that our clients had been given insufficient notice of the charges, and that the district court exceeded the bounds of its discretion when, under the circumstances, it proceeded to sua sponte find the attorney appellants in contempt, the Second Circuit vacated the order of contempt against our clients. In vacating the contempt finding, the Second Circuit also ruled that the attorneys had appellate jurisdiction even after the underlying case against their clients had settled and the judgment satisfied, a previously open question of law in this Circuit.
Major League Baseball Franchise – Contract Dispute
Obtained summary judgment, including dismissal of all claims and recovery on counterclaim for breach of contract, on the district court level on behalf a Major League Baseball franchise in a contract dispute involving advertising and sponsorship rights, and protected judgment on appeal to the Second Circuit.
Ukrainian Technology Services Company – Breached Master Service Agreement
Herrick secured an extremely favorable settlement on behalf of a Ukraine-based technology service provider, resolving its claims against a US-based multinational financial services company in connection with more than $6 million in software development services rendered by our client. Significantly, this settlement was accomplished without engaging in potentially extensive and costly litigation.
Multiple Claims Dismissed in Shareholder Derivative Litigation
Secured a ruling in Kings County Supreme Court on behalf of a garment manufacturer and certain affiliated individuals and entities that dismissed several causes of action in a purported shareholder derivative suit. Among the claims asserted was the allegation that a competing entity had been used by certain defendants to usurp business opportunities, and that ownership of a company facility had been fraudulently transferred to a charitable trust and foundation. The court granted our motion to dismiss the claim for a constructive trust over either the alleged competing entity or the foundation; an unjust enrichment claim against the charitable trust and foundation defendants; and a claim of rescission of the alleged fraudulent transfer of the facility, which the court found was time-barred.
Taxi Medallion Financing Company – $27.5 Million Judgment
Represented a large specialty financing company in enforcing a series of agreements that provided the company with an interest in the appreciation of the underlying collateral. Following extensive briefing on a summary judgment motion, the court rejected defenses based on usury and the Small Business Investment Act and issued a $27.5 million judgment in favor of our client.
All Claims Voluntarily Dismissed Following Award of Sanctions in Real Estate Dispute
Successful defense of an LLC in litigation over the breach of an alleged joint venture agreement which plaintiffs claimed entitled them to an ownership interest in a valuable Manhattan property. Herrick obtained an order canceling plaintiffs’ notice of pendency on the property, and successfully argued for sanctions based on frivolous litigation conduct. In addition to negotiating a substantial monetary settlement for attorneys’ fees and for costs associated with delays in refinancing a $32 million mortgage on the property, Herrick secured the voluntary dismissal of our client from the action and the plaintiffs’ unconditional and irrevocable release of any and all claims to ownership of the property.
Multinational Cosmetics Company – Favorable Resolution to Breach of Contract Action
Represented a multinational cosmetics company in litigation filed in New York federal court by a Washington, DC area retailer asserting breach of contract, detrimental reliance, and tortious interference claims, which sought monetary damages and a preliminary injunction preventing our client from violating a retailer agreement that allegedly required it to supply cosmetic products to the plaintiff. After obtaining an order denying the plaintiff’s motion for a preliminary injunction, Herrick negotiated a settlement on favorable terms that resolved the litigation.
All Claims Dismissed in Litigation Challenging $9 Million Sale of Brooklyn Apartment Building
Secured a ruling dismissing all claims against the insured buyers of a Brooklyn apartment building in litigation seeking to strip them of their interests in the property. The plaintiff launched a multi-pronged attack on the $9 million sale of the building, claiming the transaction had violated his right of first refusal, that the individual who had signed the deed transferring title to the property lacked capacity, and that the deed itself was a forgery. In its ruling, a New York state court granted our motion to dismiss in its entirety and cancelled the notice of pendency.
DataTreasury Corp. – $100 Million Dispute with Former COO
Successful defense of DataTreasury Corp. in a 41-day bench trial arising from claims by the company's former Chief Operating Officer that he was entitled to exercise certain stock options granted to him during his tenure. We helped obtain a decision dismissing all of the former executive's claims, based on his disloyal conduct in trying to usurp business opportunities coupled with his failure to properly exercise the options, defeated the plaintiff's multiple post-trial motions, and successfully defended those decisions before the New York State Appellate Division, Second Department which unanimously affirmed.
Affordable Housing Developer – Resolution of Breach of Contract Claims against NYCHA
Negotiated a favorable settlement on behalf of a national developer of affordable housing, resolving a breach of contract litigation against the New York City Housing Authority related to a high-profile and long-stalled project to redevelop a large New York City public housing complex.
Appellate Division Reverses Civil Penalty against Landlord over ADA Accommodations
Herrick achieved a significant appellate victory on behalf of a national real estate development and management firm, securing a ruling from the Appellate Division, Second Department that reversed a New York City Commission on Human Rights order requiring the client to pay a $185,000 fine for denying a tenant's request to construct a handicapped-accessible entrance to her Queens apartment. In its ruling, the court wrote that the record lacked "substantial evidence" to contradict our client’s claim that installing an accessible entrance was not structurally feasible. The decision was the culmination of a nearly 6-year-long dispute in which we initially prevailed on the client’s behalf before an administrative law judge who held that the proposed accommodation sought by the tenant was not reasonable. The Commission, however, summarily rejected the ruling, and awarded $200,000 in damages and penalties. A Queens Supreme Court affirmed the agency’s decision but reduced the award of damages. On appeal, and after oral argument, the Second Department reversed the trial court’s decision, holding that the Commission’s determination of unlawful discrimination and award of damages should have been annulled in its entirety.
Successful Challenge to Arbitration Award in $42 Million Dispute
Herrick successfully argued for the overturning of an arbitration award in a $42 million dispute over the proper distribution of an estate - an especially notable win for our client as arbitration awards are so difficult to vacate. Based on the arbitrator's violation of a little-known New York state law that invalidates arbitration proceedings held on a Sunday, the court ruled that the arbitration proceedings and award were void, and also found that the arbitrator had exceeded the scope of its power when it imposed a legal fee penalizing any party challenging the award when the parties had never agreed to such a provision. Additionally, the court found that the award involved distribution of estate assets which can only be distributed by the Surrogate's Court.
Major League Sports Team – Dismissal of False Advertising Class Action
Successful defense of a major league professional sports team, obtaining pre-motion dismissal of all claims in a high-profile putative class action alleging deceptive trade practices and false advertising in connection with a very large sale of memorabilia.
Real Estate Management Company – Precedent Setting Decision in Wage & Hour Action
Successful defense of a real estate management company and its principal sued by a former residential janitor and two alleged former laborers at New York City properties managed by our client. The plaintiffs claimed minimum wage and overtime violations under the Fair Labor Standards Act and New York Labor Law, as well as related common law claims. The court granted, in substantial part, our motion to dismiss, striking 9 of the plaintiffs’ 12 claims in one of the first decisions to interpret the minimum wage and overtime provisions under New York law and the Minimum Wage Order for the Building Service Industry as they relate to residential janitors.
Brokerage Firm – Dismissal of Discrimination Claims Upheld on Appeal
Successful defense of a luxury real estate brokerage firm in an action alleging discrimination based on sexual orientation and marital status in violation of New York State and City Human Rights Laws. Herrick secured the complete dismissal of the complaint in the trial court, and then successfully defended the ruling on plaintiffs’ appeal to the Appellate Division, First Department which upheld the dismissal, finding the plaintiffs had no cognizable claims against our clients who had sought to facilitate, not prevent, plaintiffs’ purchase of a cooperative apartment.
Manufacturer – All Claims Dismissed in JAMS Arbitration Initiated by Former CEO
Achieved total victory for a promotional products manufacturer and distributor, defeating all claims asserted in an arbitration for breach of employment and shareholders agreements, breach of fiduciary duty, and shareholder oppression initiated by the company’s former CEO and former majority shareholder. The panel found that the claimant had indeed been properly terminated, referencing numerous instances in which the claimant charged the client for non-business related expenses or used company resources to conduct side businesses for the sole benefit of the claimant’s friends and relatives. Finding the remaining claims meritless, the panel ultimately found our client, as the prevailing party, entitled to recover the full costs of the arbitration, including legal fees.
Challenge to New York State’s Charter School Funding Law
Represented the plaintiffs in Brown v. New York, and initially secured a winning ruling in New York State Supreme Court denying a motion to dismiss our lawsuit challenging New York State's method of funding public charter schools. Our clients, five “representative” families whose children attend charter schools in the state and a Charter School advocacy organization for its member New York charter schools (Northeast Charter Schools Network), argued that New York's practice of providing charter students with as little as three-fifths of what district students receive in the same community, violates the state Constitution and disproportionately affects children of color and lower incomes. While we ultimately lost on appeal, the ruling was particularly important as similar claims raised by charter school parents in four others states – North Carolina, New Jersey, Arizona and Texas – all failed to survive lower court defense motions to dismiss.
Business Dispute – Proposed Solar Farm Joint Venture
Successfully defended a New Jersey-based real estate company in litigation filed in New York state court by a potential joint venture partner in the development of New Jersey solar farm installations. When the venture never materialized, the plaintiff filed suit asserting breach of contract and tort claims, and seeking over $10 million in damages. Herrick obtained a dismissal of all claims against the client in the trial court, and won affirmation of the dismissal from the Appellate Division, First Department.
Aviation Services Company – Breach of Contract and Unjust Enrichment Claims
Negotiated a favorable settlement on behalf of an aviation services company to resolve breach of contract and unjust enrichment claims filed in New York federal court in connection with a business venture to purchase and modify a large commercial aircraft for a planned sale to a third-party for use as an executive business jet.
Lelands – Jim Brown’s NFL Championship Ring
Represented Lelands in litigation filed in New York federal court by former National Football League player Jim Brown regarding the recovery of a 1964 NFL championship ring alleged to have been stolen.
Manufacturer – Summary Judgment in Breach of Contract Action
Successfully represented a Queens, NY-based packaging manufacturer, obtaining summary judgment in a New York state court breach of contract action against a former customer who failed to pay for goods ordered and received.
International Diamond Grading Network – All Claims Dismissed in Trademark/Unfair Competition Dispute
Following a 7-day trial in New York federal court, Herrick obtained a ruling dismissing all claims against our clients, an international diamond grading network and related individuals, in a hotly-contested trademark and unfair competition dispute in which the opposing party sought damages totaling nearly $140 million, as well as draconian and sweeping permanent injunctive relief, under the Lanham Act. Herrick delivered a ruling to our clients that removed the threat of a devastating damages award and judicial injunction, as well as any liability for the opposing party's attorneys' fees.
Global Automotive Manufacturer – Dismissal of All Claims in Product Liability Litigation
Herrick successfully defended the North American operations of a global automotive manufacturing company in product liability litigation involving claims based upon implied and express warranties, strict liability and negligence, all premised upon alleged property damage to a vehicle and consequential damages to a construction business caused by allegedly defective tires. The court dismissed all claims against our client, finding that the causes of action were barred under the economic loss doctrine.
New York Attorney – Successful Defense of Malpractice Claims
Successful defense of a prominent New York City attorney against malpractice claims related to the plaintiff's participation in a written agreement to provide for the funding of loans in the New York City taxicab industry. This dispute had progressed to a jury trial when the parties entered into a settlement in which the plaintiff voluntarily dismissed the action and agreed to pay all trial costs.
Title Insurance Company – Class Action Defense
Representation of a title insurance company in a class action alleging overcharges on premiums for policies sold to consumers in New Jersey. We settled—on terms favorable to our client—early enough in negotiations to minimize our client's legal fees.
Trucking Company – Contract Termination/TRO
Representation of Trucking Company in contract termination litigation in U.S. District Court with contract partner/wholesaler attempting to terminate for breach of contract. After hearing, obtained a preliminary injunction preventing termination.
Construction Management Company – Wrongful Termination
Representation of a construction management company in a dispute with NYU Hospitals Center regarding the termination of a multi-million dollar renovation contract. After a trial in Federal Bankruptcy Court, the court held in favor of our client on all counts, entitling them to payment of its outstanding requisitions and dismissal of all claims against them.
Distressed Debt Investor – Mezzanine Loan Foreclosure
Represented a distressed debt investor in foreclosing and conducting UCC secured party sale of portfolio of mezzanine loans securing repo line of credit obligations. One of the mezzanine loan borrowers sought to enjoin the sale; we defeated the TRO application and conducted the sale successfully over the borrower's objection.
International Insurance Company – Breach of Contract
Represented a major international insurance company in breach of contract dispute.
Title Insurance Companies – Class Action Defense
Representation of two title insurance companies in two class actions alleging overcharges on premiums for policies sold to consumers in New York. After extensive litigation, we settled on terms favorable to our clients.
Large Asset Manager – Discrimination Case
Represented a large asset manager in a national origin case based on disability and religion.
Multinational Tire Manufacturer – Consumer Fraud Class Action Defense
Successful defense of the North American subsidiary of a multinational automotive parts manufacturer in national consumer fraud class actions involving allegations that an innovative tire design was more susceptible to road hazard damage than regular tires. The firm’s successes on behalf of the client include obtaining an important, precedent setting decision from the Third Circuit Court of Appeals that vacated the lower court’s certification of a limited New Jersey sub-class of plaintiffs, and then later securing the dismissal of all but one of the claims asserted in a copycat class action, effectively precluding the plaintiffs from further pursuing the litigation.
Product Manufacturer – Class Action
Represented a product manufacturer in a federal class action involving claims of consumer fraud and product liability.
Telecommunications Company – Class Action Dismissal
Represented a major telecommunications company in a New Jersey class action lawsuit alleging overcharges for telephone services.
Real Estate Development Company – Land Purchase Dispute
Representation of real estate development company in an appeal arising from its $3 million purchase and development of 7.5 acres of land from Hebrew Huntington Congregation. A faction of the congregation challenged the court's order that permitted our client to purchase the land under the Religious Corporations Law. The Second Department upheld the order and dismissed the appeal as moot, recognizing that our client was a bona fide good faith purchaser.
Las Vegas Conference Center Real Estate Investors – Arbitration Victory
Represented one of three investor groups in an existing five million square foot conference and exhibit center in Las Vegas in a seven-week, three-panel arbitration over each investor group's rights and ownership in the project. The panel found that all parties to the transaction, except Herrick's clients, had engaged in wrongful conduct. The conference center, at its completion, will cost more than $1 billion to build and is planned to expand to 12 million square feet.
New York Residential Brokerage Company – Successful Mediation
Representation of a prominent New York residential brokerage company in a successful mediation against a civil rights suit alleging conspiracy with building owners to steer families with children away from apartments.
Title Insurance Company – Agent’s Fraud Imputed to Lender
Representation of a title insurance company against a lender whose agent committed a fraud that caused the loss of the insured mortgage. Our client successfully argued that since the agent acted on behalf of the bank, the fraud could be attributed to the bank and therefore fell under the policy’s exclusion for “acts of the insured.” The court’s ruling will have ramifications in the title insurance and mortgage lending industry since many sub-prime lenders relied upon unscrupulous agents to close their loans, and to the extent any frauds committed by those agents lead to a title loss, the lenders cannot look to the title insurers for indemnification.
Joseph Kahan – Arbitration Award Vacated
Representation of Joseph Kahan in successfully petitioning the Kings County Supreme Court to vacate a rabbinical court's arbitration award regarding competing claims to real properties in Brooklyn and other assets. The arbitration agreement provided that the parties could proceed only with counsel acceptable to the arbitrators. Kahan participated in the arbitration even after the arbitrators rejected his proposed counsel and insisted that he could proceed only with counsel they would select for him. Initially, Kahan proceeded without counsel at all, but as the matter progressed, he realized that the arbitrators' procedures were unfair and he withdrew from the arbitration before the panel ruled. Describing its ruling as one of first impression under New York law, the court agreed that the arbitrators had denied Kahan the right to counsel of his choice, and overturned the award. This case was featured in the November 24th 2009 edition of the New York Law Journal. (26 Misc.3d 615, 889 N.Y.S.2d 839 (2009))
Real Estate Investment Management Companies – Construction Litigation
Defended a large industrial real estate investing entity and its investment management firm in a $90 million construction defect litigation with an industrial tenant in New Jersey. We succeeded in getting most of the plaintiff’s case dismissed on summary judgment, and then settled the rest of the dispute case before trial. The settlement included the plaintiff turning over escrowed back rent to our client and entering into a favorable lease extension.
Real Estate Company – Management Agreement Litigation
Represented a real estate services company in a $20 million lawsuit brought by former customers. The former customers, owners of two large New York City office buildings, claimed that our client, which managed the buildings, had committed numerous acts of wrongdoing over several years, including breaching contracts, fraud, and breaching fiduciary duties. The customers sought to recover all the fees they’d paid our client over the years under New York’s “faithless servant” doctrine. The District Court granted our summary judgment motion, dismissing all of the higher-damage tort and equity claims, and we then settled the remaining breach of contract claim. The former customers lost their appeal to the Second Circuit Court of Appeals, bringing the case to a successful conclusion for our client.
Red Rock Services Trustee – Appellate Victory in Bankruptcy Litigation
Herrick secured an appellate victory for the chapter 7 trustee of bankrupt demolition subcontractor Red Rock Services, affirming a judgment of almost $1 million won in a bankruptcy adversary proceeding in the Eastern District of Pennsylvania. On behalf of the trustee, Herrick sued a general contractor for breach of its obligations under subcontracts with Red Rock in a pair of multimillion dollar construction projects in Baltimore and Boston. After eight days of trial, the trustee was awarded a judgment of almost $1 million, including attorneys' fees. Herrick defended the judgment on appeal to the district court, where it was affirmed, and went on to successfully defend the ruling on the defendant’s second appeal to the Third Circuit, which affirmed the judgments of the bankruptcy court and district court in their entirety.
NYSE Company – Internal Investigation
Representation of the Audit Committee of a New York Stock Exchange listed company to conduct an internal investigation of whistleblower claims brought by a former officer alleging that certain officers and directors had committed accounting fraud and violated the Sarbanes-Oxley Act.
Former Corporate Officer – Successful Defense of Fraud and Unjust Enrichment Claims
Successful defense of a former corporate officer in suits filed in New York and Wisconsin state courts arising from an investor’s claims of fraud and unjust enrichment in connection with alleged misrepresentations about the sales, revenues and future prospects of a business in which the plaintiff had invested.
Successful Defense in Multi-Plaintiff Litigation Alleging Fraud, FLSA and Civil RICO Violations
Defended individuals and related corporations affiliated with a global network of yoga studios in a highly publicized lawsuit in Arizona federal court in which more than two dozen plaintiffs asserted claims including fraud, undue influence, unfair and deceptive business practices, emotional distress, FLSA violations and civil RICO violations. Following a ruling dismissing the majority of claims, this litigation was ultimately terminated when all remaining causes of action asserted in an amended complaint were either dismissed by the court or withdrawn by the plaintiffs.
Robert W. Seavey – Victory in $500 Million RICO Case
Representation of Robert W. Seavey, real estate developer and owner, in obtaining a U.S. District Court summary judgment dismissing a $500 million RICO case. The suit also named members of his family, the management company and accounting firm. The court found that the plaintiffs and their forensic accounting firm had failed to find any evidence supporting their claims. The decision appears to be the first New York decision that found that the federal bank fraud statute cannot serve as a predicate act in a RICO case when the plaintiff is not a financial institution. All state court claims were dismissed.
Appellate Victory for Special Servicer
Represented the special servicer for a lender in a suit against a borrower and three individual guarantors after the borrower procured subordinate financing in violation of a non-recourse carve-out provision. In a case of first impression, the Superior Court of New Jersey, Appellate Division enforced the non-recourse carve-out provision and imputed personal liability to the borrower and guarantors. It concluded that the disputed clause fixes liability rather than damages and, therefore, does not constitute an unenforceable penalty as the borrower had argued. The Appellate Division also held that the borrower's efforts to “cure” the triggering event did not vitiate personal liability. As a result, the lender properly obtained a $5 million+ deficiency judgment against the borrower and guarantors.
Senior Executive – U.S. Attorney/SEC Investigation
Representation of a senior executive of a national retail brokerage firm in a joint U.S. Attorney/SEC investigation relating to market timing activities. No charges were instituted against the executive.
Madoff Litigation – Filings Against the SEC
We represent a number of victims of Bernard Madoff's Ponzi scheme. In January of 2009, we filed notices of claim with the Securities & Exchange Commission alleging negligence under the Federal Tort Claims Act. The SEC rejected our claims six months later, and on Wednesday, October 14, 2009, we filed the historic and first known lawsuit against the SEC seeking monetary damages under the FTCA, Molchatsky and Schneider v. United States. We were lead counsel on the Molchatsky case and filed two additional cases against the United States on behalf of other Madoff victims. While the Second Circuit ultimately dismissed the action, essentially saying that the SEC had absolute immunity, the case sent a message that Herrick will leave no stone unturned on behalf of its clients. This work led to favorable tax relief legislation for Ponzi scheme victims as well as a complete overhaul of SEC staff policies and procedures.