• DOJ seeks a jury trial to sidestep conservative judges
• Legal experts say the legal theory echoes the Microsoft case

The Justice Department’s newest suit against Alphabet Inc.’s Google includes a surprising request: a jury trial.

Federal antitrust lawyers typically opt to present their cases directly to a federal judge. But in its second suit against Google, the Justice Department asks that everyday people determine whether the company’s advertising technology business violates the law.

It’s a risky move, given the complexity of the subject matter. But it could help the Justice Department sidestep the increasingly conservative judiciary, where judges have aligned with large corporations for decades and ruled against it in a string of cases last year.

“If you pull the wrong judge, the law is so defendant friendly,” said Sam Weinstein, an antitrust law professor at Cardozo Law School.

It’s possible that a jury for the Google case could allow the government to tap into the growing mainstream animosity toward the biggest tech companies. But it will be key for the Justice Department to make its case clearly and concisely in order to win over the jurors.

“There’s a real risk that the jury just doesn’t understand how these pieces fit together,” said Dan McCuaig, a partner at Cohen Milstein Sellers & Toll PLLC who served in the DOJ antitrust division for twelve years.

Beyond the jury trial demand, the Justice Department made a series of strategic decisions to improve its chances of winning. The case was filed in the Eastern District of Virginia, which is known for handling intricate business cases – particularly related to patents – more quickly than other court systems. The local rules are designed to expedite the process, and judges in the district pride themselves on moving cases quickly.

The Eastern District of Virginia’s familiarity with areas of the law like patents could mean the jurors are better prepared to handle the case, and an informed judge could make it harder for Google to delay the case for years.

. . .

But even if the jury and judge agree that Google violated the law, the biggest fight is likely to erupt around what the remedy should look like. The Justice Department is calling for Google to spin off its DoubleClick ad technology platform entirely.

“They are shooting for the moon because it would be an effective remedy and it’s not reject-out-of-hand crazy,” said McCuaig. Whether it’s attainable will depend on the judge, he added.

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Workers for a travel company asked a Pennsylvania federal judge to sign off on an $8.7 million deal to resolve their proposed class action claiming their employee stock ownership plan was overcharged when it shelled out $200 million to buy shares from three of their employer’s founders.

The employees asked the court Wednesday to greenlight the settlement between ESOP manager Prudent Fiduciary Services, Prudent founder Miguel Paredes, World Travel Inc. co-founder James A. Wells and a class of workers who said the costly stock transaction ran afoul of the Employee Retirement Income Security Act.

“A settlement avoids the risks and delays attendant with continued litigation and ensures the class members will each receive approximately $11,950 on average before fees and expenses — an amount that far exceeds most other ERISA settlements on similar issues,” the workers said.

The workers said Prudent and Paredes let them overpay in 2017 by allowing three World Travel founders to sell their shares to the ESOP at more than market value while retaining control of the company board.

The May 2021 suit said the $200 million valuation was based on unrealistic growth projections, which left the proposed class receiving smaller amounts of stock, losses to their individual accounts and “tens of millions” of dollars of debt to the plan at large.

. . .

The employees are represented by Daniel Sutter, Laura Older Rockmore, Mary Bortscheller and Michelle C. Yau of Cohen Milstein Sellers & Toll PLLC and Patricia Mulvoy Kipnis, Gregory Y. Porter, Laura E. Babiak, Patrick O. Muench and Ryan T. Jenny of Bailey Glasser LLP.

Read the article on Law360.

The Delaware Court of Chancery took a long-anticipated step this week when it ruled a McDonald’s Corp. officer had oversight obligations on par with directors, in a trailblazing decision experts say will have wide-reaching implications for corporate law in the First State.

The 65-page decision released Wednesday by Vice Chancellor J. Travis Laster drew on conclusions reached years ago in Delaware’s Supreme Court and Bankruptcy Court as well as in courts in California and elsewhere, but previously unexercised in Chancery. It found that corporate duties of loyalty, oversight and care should go forward in a derivative suit launched by stockholders in 2021 against former McDonald’s executive David Fairhurst.

. . .

Julie Goldsmith Reiser, a partner at Cohen Milstein Sellers & Toll PLLC and co-chair of the firm’s securities litigation and investor protection practice, termed the decision far-reaching in an analysis published soon after its release.

“Accordingly, if an officer fails to share information about harm to the company with the board, the directors themselves may want to sue the officer for a breach of duty to the company,” Reiser said in the analysis on the firm’s website. “And, if the board has a potential claim, so too would a stockholder in derivative litigation, in which the shareholder sues for fiduciary breaches in the company’s stead.”

. . .

Reiser noted in her analysis the vice chancellor’s finding that “an officer cannot act in good faith while violating company policy, breaking the law, and exposing the company to liability,” saying the same issues are triggered in sexual harassment and discrimination derivative lawsuits that Cohen Milstein has worked on across the country, including against Wynn Resorts, Alphabet, L Brands and Pinterest.

“Going forward, Vice Chancellor Laster’s ruling will be relied upon not only to support the viability of cases where officers and directors materially support toxic, inequitable workplaces, but also where officers fail to protect a company from harm based on their own officer oversight duties,” she said on the firm’s site.

Read on Law360.

In a largely unregulated industry, some residents trying to get sober are made to work 40 hours a week at restaurants – but don’t receive a paycheck. Michael Hancock, of counsel at Cohen Milstein and the former Assistant Administrator for the U.S. Department of Labor’s Wage and Hour Division, offered his thoughts.

First published by the Montana Free Press, the full article is available on The Guardian’s website.

Judge Leonie Brinkema’s 30 years on the bench have featured a few significant antitrust cases.

What You Need to Know

• U.S. District Judge Leonie Brinkema was assigned to the DOJ’s antitrust lawsuit against Google.
• Brinkema was appointed to the bench in 1993 by Bill Clinton.
• The government wants court to unwind Google’s 2008 acquisition of DoubleClick.

The Justice Department’s second antitrust case against Google over its alleged monopoly on digital advertising was randomly assigned on Wednesday to Judge Leonie Brinkema.

Brinkema was appointed to the U.S. District Court for the Eastern District of Virginia in 1993 by then-President Bill Clinton, after serving as a federal magistrate judge for eight years.

Brinkema’s 30 years on the bench have featured a few significant antitrust cases, including one in the early internet age: a lawsuit game maker Kesmai brought in 1997 against AOL, then a major online service provider that has since shrunk. Kesmai, which had a contract to provide games to AOL, sought to block a merger between AOL and its rival CompuServe. The suit claimed AOL was favoring its own online gaming network over its providers’ games, and it was ultimately settled.

. . .

The keystone of the DOJ’s requested relief in the Google case is to unwind the tech company’s 2008 acquisition of the ad tech firm DoubleClick for over $3 billion, said Daniel McCuaig, a partner at Cohen Milstein.

DoubleClick was the market-leading publisher ad server at the time, with 60% of market share, according to the filing.

McCuaig said Brinkema would carry out a cost-benefit analysis and if she granted that relief, it “would be dramatic and, likely, effective.”

“The biggest issue on the ‘cost’ side will be the extent to which the Google human resources and infrastructure that undergird DoubleClick and AdX are shared with other Google properties in ways that would be difficult to divvy up. Fifteen years after the merger went through, you’d have to expect that divestiture would involve some pain,” McCuaig said, while also noting another key question will be whether the DOJ’s request is needed to rid the market of anticompetitiveness rather than a less onerous proposal Google is likely to put forward.

Read the story on National Law Journal.

Cohen Milstein Sellers & Toll PLLC finalized several multimillion-dollar settlements in federal benefits lawsuits last year and defeated an Illinois casino’s bid to escape a suit from workers alleging mismanagement of their employee stock ownership plan, earning the firm a repeat selection as one of Law360’s 2022 Benefits Groups of the Year.

A federal judge’s Jan. 28 denial of a motion to dismiss in the ESOP suit from Casino Queen employees and plan participants is one of what Cohen Milstein’s Employee Benefits and ERISA practice group leader Michelle Yau described as a streak of dispositive motion wins in 2022 for the firm in Employee Retirement Income Security Act lawsuits.

Victory on the dismissal denial was especially sweet for the firm, because months earlier, the employer’s bid to exit the case by forcing arbitration was also decisively scuttled, thanks to precedent in the Seventh Circuit that Cohen Milstein helped set in another case, Smith v. Board of Directors of Triad Manufacturing .

In that case, a three-judge panel of the Seventh Circuit in September 2021 affirmed a lower court’s ruling that a St. Louis manufacturing company couldn’t force arbitration of a federal benefits lawsuit, because doing so would prevent ESOP participants from being able to seek relief and obtain remedies under ERISA.

Shortly after the Smith decision, Casino Queen defendants in October 2021 moved to voluntarily dismiss their appeal of an arbitration denial from earlier in the year.

“We’re very thoughtful about the cases we bring. And we’re just ecstatic about the success we’ve had, for example, on the arbitration issue,” Yau said on Monday.

Yau said the Casino Queen victory added to a winning streak on dispositive motions for the firm that by her count is 8-0 for the 2022 season, where the firm has defeated largely or entirely defendant motions to dismiss, to compel arbitration, or for summary judgment. Other notable victories in that list include defeating a motion for judgment on the pleadings or for summary judgment in an ESOP case in California in December 2021 and in March 2022 overcoming a radiology company’s ERISA arbitration bid in Colorado federal court.

“Outside of the ERISA context, arbitration class waivers have certainly had little success,” Yau said. “It’s just really exciting that ERISA is such a protective statute that it provides participants — and really retirement plans — protection even without Rule 23, essentially.”

Yau’s reference to the class certification rule touches on a live debate before the Tenth Circuit in the Colorado case, Harrison v. Envision Management Holding Co. et al., regarding the extent of ERISA’s protections for representative action. The case was originally brought by Cohen Milstein in January 2021.

“Envision has now gotten out in front. … it’s probably going to be the next appellate decision on the issue,” Yau said.

Cohen Milstein’s ERISA and employee benefits practice group is eight attorneys strong, and the firm has plans to grow. Kai Richter recently joined as a partner in March 2021, and plans to work out of the firm’s brand-new Minnesota office.

Richter said in an interview about the firm’s award that while he could not take credit for any of the 2022 accomplishments, having joined so recently, the designation was “obviously very gratifying.”

Richter said, “I’m hopeful we’re going to get a favorable result” in the Envision case, noting that he was “very involved in the mocks” prior to arguments on Jan. 17.

A long-sought victory in the settlement realm for the firm came July 15, when U.S. District Judge Jon S. Tigar of the Northern District of California granted final approval to a $100 million settlement between workers and the Dignity Health hospital system. The approval capped proceedings on a case that began in 2013, when workers claimed that their pension plan was underfunded by $1.8 billion due to the erroneous use of ERISA’s exemption intended for churches and their affiliates.

A final settlement came after the case was consolidated with several others and went all the way to the U.S. Supreme Court, resulting in the 2017 decision Advocate Health Care Network v. Stapleton , which settled a long-running fight over whether religiously affiliated hospitals and plans could make use of ERISA’s church plan exemption, even if the retirement plans weren’t originally established by churches.

Settlement proceedings in the case took years, with a California federal judge twice rejecting a motion for preliminary settlement approval before finally giving his blessing to the deal in October 2021.

“We litigated the case hard and we got a very good outcome for the participants,” Yau said, noting that “it took a little while to get approved.”

A particularly notable settlement for Yau came when the firm on Aug. 10 clinched final approval of a $32.5 million deal between Wells Fargo and its workers in a lawsuit alleging mismanagement of an employee 401(k) plan. A deal to end the case came after plaintiffs fought and lost the bank’s bid to switch venues from California to Minnesota district court. That was a potential setback, as case law in the Eighth Circuit, which includes Minnesota, is much less friendly to employees in ERISA cases challenging fund offerings, Yau said.

Yau characterized the outcome of the settlement in the Wells Fargo case as “what Cohen Milstein is about.”

Despite a less favorable circuit for a fund challenge from plaintiffs, “we ultimately prevailed both on the motion to dismiss, and we got a very, very good recovery for the class,” Yau said.

Read the complete profile on Law360.

The U.S. Department of Justice wants to break up Google’s highly profitable advertising business, and it wants to do it fast, according to a new complaint that adds to the company’s other battles against four different and overlapping government enforcement actions.

Tuesday’s complaint, joined by a contingent of state attorneys general, is the second DOJ lawsuit after one targeting the company’s alleged monopoly over online search and the ads that accompany search results and is the most concerted effort yet to disassemble the internet giant.

It’s the second government enforcement lawsuit, following one from state attorneys general led by Texas, to accuse Google of anticompetitively amassing control over every facet of the advertising technology, or ad tech, space. And it’s just the latest government action to target various aspects of Google’s business, including a lawsuit going after its control of the Play Store on cellphones that run its Android operating system.

But the latest case also adds important new elements. It’s the first DOJ Big Tech lawsuit filed during the Biden administration. It’s the first to call for more than just vague injunctive relief, instead expressly calling for the breakup of Google’s ad tech business. And it’s the first filed in the Eastern District of Virginia, a jurisdiction known as a rocket docket where the DOJ could be hoping to get to trial much faster than the three years it took to kick off the trial for the DOJ’s October 2020 search monopolization . . .

New Venue, New Speed

A big question will be whether the case will move fast enough for any ultimate remedy to meaningfully affect the fast-moving sector.

The DOJ will be looking to dismantle the ad tech engine not in its usual home turf in D.C. federal court, where it filed the search monopoly case, but nine miles away in Alexandria, Virginia.

Despite being close in terms of distance, there’s a world of difference in the speed of the courts’ dockets.

“The big differentiator of that docket is it moves,” said Daniel McCuaig, a longtime DOJ antitrust litigator who is now a partner at Cohen Milstein Sellers & Toll PLLC.

. . .

Time Is A Weapon

The attrition that accompanies an enforcement campaign may be part of the DOJ’s calculus in pumping the massive resources into the cases against Google, with fanfare that has gone as far as including the participation of Attorney General Merrick Garland in announcing the case that now takes the lead of the pushback against Google, Meta and other Big Tech platforms.

. . .

Antitrust enforcers, McCuaig said, are “taking a hard soup-to-nuts look at Google’s business practices and bringing enforcement actions where they think they’re warranted.”

The Great Google Breakup

Both this case and the Texas-led action that preceded it by more than two years (filed in December 2020) call for injunctive relief. But the DOJ’s lawsuit goes a step further, seeking a long-called-for-remedy as it targets Google’s power controlling the middlemen in the space that pairs advertisers, website publishers and everyday users in high-speed auctions for specific ads to reach specific eyeballs on specific websites. If the DOJ has its way, Google will have to sell off the service that website owners use to manage their advertising space sales and the ad exchange where digital ad space is auctioned off.

. . .

According to McCuaig, the divestiture bid amounts to an effort to unwind Google’s $3 billion 2008 purchase of DoubleClick, a deal the complaint says the FTC at the time permitted to go forward on the mistaken “assumptions” that customers could simply switch to other publisher ad servers, when Google knew at the time that switching was nigh impossible.

. . .

A “do-over” on DoubleClick, McCuaig said, “is a pretty big ask,” one with which he asserted only the DOJ could have a chance to prevail. One challenge, McCuaig and others said, is the age of the DoubleClick deal, with Google likely to argue how difficult, and damaging to the modern internet, it would be to “unscramble the egg.”

“It can just get really hard to unscramble omelets. And typically more so as time goes on,” McCuaig said.

. . .

Searching For More

McCuaig also noted that the complaint suggests that the DOJ may still not be done with Google. In particular, he pointed to a paragraph in which the DOJ spoke of mergers that scooped up mobile app advertising technology.

“While Google’s conduct in the distinct market for mobile app advertising is outside the scope of this complaint, Google’s anticompetitive conduct in the mobile apps market is consistent with the conduct alleged in the market for display advertising,” the complaint states.

“That’s a pretty strong statement about conduct that you’re not challenging,” McCuaig said.

Theodore Leopold spoke to Roxy Todd of Radio IQ, Virginia Public Radio about the occurrence of a chemical compound, hexafluoropropylene oxide dimer acid, better known by its trade name of GenX, in the Roanoke River.

Listen to or read the full story from NPR Radio IQ.

Cohen Milstein Sellers & Toll PLLC tied up one of the biggest shareholder derivative settlements on record and clinched multimillion-dollar investor deals to hold big corporate boards accountable for rooting out alleged workplace bias and abuse, landing it among Law360’s 2022 Securities Groups of the Year.

With roughly 30 attorneys in offices across the country, Cohen Milstein’s securities litigation practice has long been a core strength, distinguishing the firm over its more than four-decade history as one of the top-tier investor-side shops.

After the 2008 financial crisis, for example, Cohen Milstein’s securities litigators racked up a string of nine-figure settlements for mortgage-backed securities investors. And more recently, as the #MeToo movement brought toxic workplace concerns to the fore, the team has garnered recognition for pioneering shareholder derivative settlements that compel corporate culture reforms.

The team, co-chaired by managing partner Steven J. Toll and partner Julie G. Reiser, has burnished that track record in the past year by sewing up one of the largest-ever derivative settlements, this time in consolidated litigation tied to a costly bribery scandal involving major Ohio electric utility FirstEnergy Corp.

Cohen Milstein was one of three co-lead counsel on the case, in which its client, the Massachusetts Laborers Pension Fund, sought with other investors to hold FirstEnergy leaders liable for allegedly orchestrating bribes aimed at securing an Ohio state bailout of two nuclear plants owned by the utility.

Their settlement, approved in August by an Ohio federal judge, positioned FirstEnergy to receive a $180 million insurer-funded payout, marking the biggest derivative recovery to date in the Sixth Circuit and among the biggest nationally. The deal also provided for greater board oversight of FirstEnergy’s political spending and other governance reforms.

Toll called it an “extraordinary result” that Cohen Milstein and its co-lead counsel managed to achieve while navigating multiple complexities, including the involvement of two different judges in two different courts — one of whom proved quite tough on the plaintiffs’ side —and a special litigation committee of FirstEnergy’s board.

“In derivative cases, when a special litigation committee is appointed, sometimes they try to take the case away from you, so we had to deal with that as well as getting over demand requirements,” Toll told Law360. “Those are the types of issues you often have to confront in derivative cases; we had to overcome all of them to reach this excellent settlement. It was a real team effort.”

This conclusion came just months after Cohen Milstein wrapped up as lead counsel in two other prominent derivative settlements, one involving specialty retailer L Brands Inc. — the former parent company of lingerie brand Victoria’s Secret — and the other involving social media platform Pinterest.

The L Brands settlement, finalized in May by an Ohio federal judge, resolved multiple shareholder suits that claimed top brass damaged the company by allegedly fostering a hostile, abusive work environment and, in the case of founder Les Wexner, palled around with convicted sex offender Jeffrey Epstein.

Cohen Milstein represented an Oregon state retirement fund leading one of those suits. Under the settlement, L Brands — renamed Bath & Body Works Inc. in 2021 — and Victoria’s Secret committed to invest $90 million in a suite of internal reforms, including adopting new anti-harassment policies and training, limiting their use of nondisclosure agreements and launching diversity, equity and inclusion-focused advisory councils.

The Pinterest settlement similarly focused on corporate culture, ending a Cohen Milstein-helmed derivative action in which investors accused the social media platform’s leaders of tolerating a noxious mix of gender- and race-based discrimination at work.

Finalized in June by a California federal judge, the settlement called for Pinterest to put $50 million toward instituting regular pay equity reviews, hiring process improvements, employee resource group enhancements and other diversity and inclusion measures. Notably, it also established first-of-their-kind diversity goals for Pinterest’s platform.

Both deals underscored efforts Reiser has spearheaded at the firm to leverage derivative litigation to push companies to confront harassment and discrimination in their workplaces, an approach that blends the strengths of the firm’s securities and employment law practices.

“A derivative lawsuit is a very useful tool for investors who want to amplify the concerns of the employees within a company,” explained Reiser, who built up years of experience working on civil rights cases early in her career at the firm.

“When you see a scandal at a company like Pinterest, where there were highly successful African-American executives who felt like their voices weren’t heard, or at Victoria’s Secret, where women in high-level executive positions were treated like they were the product, you end up in a situation where a company or board can lose their talent,” Reiser said.

“Talent is a big part of what creates value for an organization, so when investors have a voice and are able to ask the board for accountability with measures to hire, train, promote and retain talent, I think they’re playing a very important role,” she added.

As this kind of derivative litigation has blossomed in recent years, companies have increasingly turned to forum selection bylaws that require shareholders to pursue derivative claims in more business-friendly state courts, overriding the exclusive jurisdiction that federal courts would otherwise have.

In January 2022, Cohen Milstein’s securities team scored an important victory for shareholders on this issue at the Seventh Circuit, which ruled that the Boeing Co. could not enforce a forum bylaw restricting derivative claims to Delaware Chancery Court.

That decision came on appeal in a case that sought to hold Boeing officers and directors liable for alleged proxy misstatements in connection with their oversight of the jet manufacturer’s flawed 737 Max design. Cohen Milstein represented the union worker benefit plan behind that action, which was ultimately settled with a $6.25 million deal late last year. Boeing agreed to rewrite its forum bylaw so that shareholders would be permitted to file derivative claims in federal courts.

“The ability to bring a federal proxy claim in federal courts was, we felt, an important right for investors to get a fair shake,” Toll said, adding that the Ninth Circuit has recently split from the Seventh Circuit by upholding the enforceability of another company’s Delaware Chancery forum bylaw. “It could end up in the Supreme Court one day. We’ll see.”

But while derivative suits have yielded some of the Cohen Milstein securities practice’s highest-profile accomplishments over the past year, the team has been no slouch when it comes to securities fraud class actions. A $35 million settlement approved in July between a Miller Energy investor class and auditor KPMG offers a case in point.

The class, which Cohen Milstein represented as lead counsel, accused KPMG of helping Miller Energy Resources Inc., a now-defunct petroleum production firm, to falsify valuations of its Alaskan oil reserve assets, alleging this fraud fueled investor losses and contributed to the company’s eventual 2015 bankruptcy.

Although pleading standards for auditor liability in securities fraud cases are notoriously stringent, Cohen Milstein and the investors survived a critical motion to dismiss and received class certification in Tennessee federal court in 2021, paving the way for the settlement finalized last summer.

“Overcoming KPMG’s motion to dismiss was huge,” Toll said. “Securities fraud cases against auditors are tough, and they’re not brought very often, but we were successful with KPMG. It’s a pretty remarkable recovery, considering just how challenging these auditor defendant cases are.”

The complete article can be read on Law360.

In a lawsuit against the church, Judge Julie S. Sneed will consider arguments on whether David Miscavige can be served with papers.

For months, Church of Scientology leader David Miscavige has played “a cat and mouse game” by evading formal notices in a human trafficking lawsuit, according to Manuel Dominguez, an attorney representing three former church workers.

In a Tampa federal courtroom on Friday, Dominguez said the three attorneys in attendance representing Miscavige could “end this now” by disclosing where their client lives.

“This is just a game, and I don’t think it should be,” said Dominguez, a partner at Cohen Milstein in Palm Beach Gardens.

U.S. Magistrate Judge Julie S. Sneed tried too, asking Miscavige attorney Joseph Terry for an address, with no success.

The plaintiffs’ attorneys asked Sneed to declare Miscavige served, considering their 27 attempts between May and August to deliver court papers to the Scientology leader at 10 church locations in Clearwater and Los Angeles. After a 90-minute hearing on Friday, Sneed said she will take both sides’ arguments under advisement before issuing a ruling.

. . .

Dominguez noted that Miscavige “is very much engaged in business here in Florida” and cited his appearance at a New Year’s event at the church’s Fort Harrison Hotel. He also referred to a Tampa Bay Times story that detailed Miscavige’s Jan. 6 phone call with Clearwater interim City Manager Jennifer Poirrier to discuss the church’s real estate plans.

. . .

Dominguez countered that Miscavige actively manages the Freewinds and his business in Florida is incidental to his clients’ claims. He said the other church entities named in the lawsuit are located in Clearwater and that “the church itself is his agent,” Dominguez said.

“He and Scientology are the same entity, that’s the way this religion is run,” Dominguez said.

The five church entities named as co-defendants in the lawsuit already have been served and filed motions in July to push the lawsuit into internal church arbitration, where it would go before a panel of loyal church members. A judge has not yet ruled on the church’s request to divert the case out of the U.S. court system.

In the meantime, Dominguez argued his legal team has gone to extensive lengths to serve Miscavige, including hiring a private investigator, researching public records and asking the attorneys representing the five church entities for Miscavige’s mailing address.