Elizabeth B. Bannigan

The U.S. Chamber of Commerce and a trade association have urged the U.S. Supreme Court to review a proposed class action accusing shipbuilders for the U.S. military of conspiring to suppress wages, saying keeping the case alive could cause a cascade of antitrust litigation over decades-old conduct. The Shipbuilders Council of America backed General Dynamics Corp., Huntington Ingalls Industries Inc. and others in an amicus brief filed Wednesday, saying the Fourth Circuit's holding that the former naval architects' claims could proceed, despite the companies' alleged decades-old no-poach conspiracy, supplants Congress' judgment by giving plaintiffs a free pass on time-barred claims when they assert an unwritten antitrust conspiracy. "It also distorts the law of fraudulent concealment, which generally requires a defendant to take active steps to conceal the basis for the claim; 'mere silence' is not enough. ... The Fourth Circuit was wrong to hold that a mere allegation that a conspiracy was unwritten meets the high bar to demonstrate fraudulent concealment," the Shipbuilders Council said. The council warned that should the Fourth Circuit's decision remain in place, it will have potentially enormous effects on the shipbuilding industry and other industries by subjecting them to "significant liability for stale claims based on decades-old conduct," which, if allowed to proceed past the pleading stage, could create significant settlement pressure. "This court should grant certiorari to prevent that unwarranted result," the council said. The U.S. Chamber of Commerce and National Association of Manufacturers also filed an amicus brief in support of the shipbuilders on Wednesday. In their brief, the Chamber and NAM said the Fourth Circuit's decision "permits plaintiffs to evade statutes of limitations simply by alleging that defendants chose not to commit their conduct to writing," thereby transforming "silence into concealment." But fraudulent concealment requires more than keeping a secret, the Chamber and NAM said; it necessitates a showing of affirmative deception. "By erasing that distinction, the Fourth Circuit invites the resurrection of decades-old claims based on nothing more than allegations of nondisclosure," the duo said. "The consequences for the business community are severe. If allowed to stand, the Fourth Circuit's rule would expose businesses to indefinite liability for ancient conduct that cannot be fairly defended." The justices should grant the shipbuilders' petition to "to reaffirm that fraudulent concealment is a narrow exception reserved for affirmative deception — not a license to revive claims that are simply untimely," the Chamber and NAM said. The case stems from a proposed class action from former naval architects, Susan Scharpf and Anthony D'Armiento, who accused General Dynamics, Huntington Ingalls and 18 other companies of illegally scheming for decades to not actively recruit, or poach, each other's employees. The suit, filed in Virginia federal court in 2023, aims to represent a class of all people employed by the companies as naval architects, marine engineers or both from Jan. 1, 2000. Although a Virginia federal judge found their claims fell outside the four-year statute of limitations and dismissed the suit in April 2024, a split Fourth Circuit panel reversed that decision in May. The majority held that Scharpf and D'Armiento had adequately pled that they were kept in the dark about the alleged conspiracy within the statutory period because the employers were deliberately trying to conceal it. D'Armiento has since withdrawn as a plaintiff from the case. The shipbuilders filed their petition before the Supreme Court in September, arguing the Fourth Circuit panel's decision conflicts with prior rulings by the Fifth, Sixth and Ninth circuits, which have explained that mere silence or unwillingness to admit wrongful activities is insufficient to establish fraudulent concealment. They also said the decision flouts the statute of limitations period Congress contemplated. Counsel for the parties did not immediately respond to requests for comment on Thursday. The Shipbuilders Council is represented by Nicole A. Saharsky and Leif Overvold of Mayer Brown LLP. The Chamber and NAM are represented by Jonathan D. Urick and Matthew P. Sappington of the U.S. Chamber Litigation Center, Erica T. Klenicki and Caroline McAuliffe of National Association of Manufacturers, Elbert Lin, Kevin S. Elliker, David M. Parker and Erica N. Peterson of Hunton Andrews Kurth LLP. The shipbuilders are represented by Donald B. Verrilli Jr. and Ginger D. Anders of Munger Tolles & Olson LLP, Matthew S. Hellman, Douglas E. Litvack, Elizabeth B. Deutsch, Michael A. Doornweerd and Gabriel K. Gillett of Jenner & Block LLP, Adam Block Schwartz, Todd Stenerson and Joseph P. Samuels of Allen Overy Shearman Sterling, Sima Namiri-Kalantari and Chahira Solh of Crowell & Moring LLP, David G. Barger of Greenberg Traurig LLP, Attison L. Barnes III, Krystal B. Swendsboe, Scott M. McCaleb and Jon W. Burd of Wiley Rein LLP, Brian A. Hill and Brian J. Whittaker of Nixon Peabody LLP, Benjamin L. Hatch, Casey E. Lucier, J. Brent Justus, Nicholas J. Giles, Joshua D. Wade and W. Cole Geddy of McGuireWoods LLP, Allison W. Reimann, Sean O'D. Bosack and Christie B. Carrino of Godfrey & Kahn SC, Christopher C. Brewer, Ryan P. Phair, Michael F. Murray and Craig Y. Lee of Paul Hastings LLP, Perry A. Lange, Jennifer Milici and John W. O'Toole of WilmerHale, William DeVinney of William DeVinney PLLC, Matthew J. MacLean and Alvin Dunn of Pillsbury Winthrop Shaw Pittman LLP, and William E. Lawler III and Amanda C. DeLaPerriere of Blank Rome LLP. The naval architects are represented by Brent W. Johnson, Steven J. Toll, Robert W. Cobbs, Alison S. Deich, Zachary R. Glubiak and Sabrina S. Merold of Cohen Milstein Sellers & Toll PLLC, Shana E. Scarlett, Rio S. Pierce, Steve W. Berman, Kevin K. Green and Elaine T. Byszewski of Hagens Berman Sobol Shapiro LLP, George F. Farah, Nicholas J. Jackson and Simon Wiener of Handley Farah & Anderson PLLC, Candice J. Enders and Julia R. McGrath of Berger Montague, and Brian D. Clark, Stephen J. Teti and Arielle S. Wagner of Lockridge Grindal Nauen PLLP. The case is General Dynamics Corp. et al. v. Susan Scharpf et al., case number 25-293, in the Supreme Court of the United States.

Oct 16

5 min

An Illinois federal judge has certified a class of roughly 1.2 million users of Amazon's Alexa in litigation accusing the e-commerce giant of unlawfully collecting their biometric voice data, allowing two people to serve as representatives for those in the state for whom Amazon allegedly created voiceprints. In a redacted version of U.S. District Judge Franklin U. Valderrama's Nov. 6 order, filed Wednesday, the judge certified a class of "all natural persons in Illinois for whom Amazon created a voiceprint on or after June 27, 2014." Judge Valderrama found, for instance, that Alexa users in the suit satisfied a requirement that a class action be superior to other methods of adjudicating a case. "The class at issue is one of nearly 1.2 million people," Judge Valderrama wrote. "The putative class challenges actions taken by Amazon that apply uniformly. A case-by-case resolution of the class members' claims would be an inefficient use of judicial and party resources." In granting class certification, Judge Valderrama allowed two of the three proposed class representatives to represent the class. Judge Valderrama said Illinois residents Jason Stebbins and Christopher Block's claims are typical of the class, as they are "enrolled users in Amazon Alexa, allegedly suffered the same statutory violations, and are entitled to the same statutory damages per violation." Michael Gunderson, however, is not an adequate class representative because he is "subject to arguable defenses that the court finds to be atypical of the class," Judge Valderrama said. Amazon intends to appeal the court's class certification order, according to a joint status report filed on Nov. 14. If Amazon's petition for permission to appeal is granted, Amazon intends to seek a stay of the case until the Seventh Circuit issues a ruling on whether class certification was proper, according to the report. The parties are "discussing potential mediation with a private mediator." The class action alleges Amazon violated Illinois' Biometric Information Privacy Act, which requires companies that collect or otherwise obtain an individual's biometric data to have the individual's informed, written consent. BIPA also bars companies in possession of biometric data from selling, leasing or otherwise profiting from the data and from disclosing or disseminating the data without consent. Judge Valderrama had sent the case to arbitration in early 2022 after Amazon removed the case from state to federal court. In 2023, the Alexa users who lodged the suit survived Amazon's motion to dismiss their second amended complaint. Judge Valderrama granted class certification on Nov. 6, though his opinion and order remained under seal until the redacted version was filed Wednesday. Amazon tried to disqualify Block and Stebbins as class representatives, including by challenging Block's relationship with class counsel and Stebbins' credibility. In granting class certification, Judge Valderrama said the fact that Block was involved in prior lawsuits represented by class counsel "is not enough to make him inadequate to represent the class." According to Judge Valderrama's opinion, Block's only relationship with the law firm KamberLaw was when the firm served as local counsel in several of his Americans with Disabilities Act cases in 2019. Block also didn't communicate with anyone from the firm for this case until spring 2023, according to the opinion. As for Stebbins, Judge Valderrama agreed with Amazon that Stebbins may have a credibility issue. But what matters is whether the credibility issue is likely to harm the class, Judge Valderrama said. "The court does not find that it 'is likely to harm the [c]lass' and therefore does not warrant his disqualification as a class representative," Judge Valderrama wrote. Judge Valderrama also concluded that the issue of whether Amazon collected, captured or otherwise obtained biometric identifiers or information is a "common question that predominates over any individual inquiries." He said that whether Amazon did so without first obtaining written informed consent also met that requirement. Whether Amazon actually sold, leased, traded or otherwise made money off of a person's biometric information is also a "merits-based question not to be resolved at this juncture," Judge Valderrama wrote. He said the property question is whether the evidence used to decide the question will involve common evidence across the class members. "Plaintiffs argue that common evidence will be used to answer this question, and the court agrees," Judge Valderrama wrote. Counsel for the class and Amazon did not immediately respond to requests for comment Wednesday. The class is represented by Michael Aschenbrener, Scott A. Kamber and Deborah Kravitz of KamberLaw, Gerald J. Bekkerman, Bradley N. Pollock, Sean P. Murray and Marc A. Taxman of Taxman Pollock Murray & Bekkerman LLC, James Frickleton of Bartimus Frickleton Robertson Rader, Thomas P. Rosenfeld and Kevin P. Green of Goldenberg Heller & Antognoli PC and Brandon M. Wise of Peiffer Wolf Carr Kane & Conway LLP. Amazon is represented by Elizabeth B. Herrington and J. Warren Rissier of Morgan Lewis & Bockius LLP. The case in Michael Gunderson, et al., v. Amazon.com Inc., et al., case number 1:19-cv-05061, in the U.S. District Court for the Northern District of Illinois.

Nov 19

4 min

Willkie advised Prudential Financial, Inc. on its agreement to reinsure a $10 billion portion of its traditional variable annuity block with an affiliate of Constellation Insurance Holdings, Inc. Under the terms of the agreement, announced on May 24, Constellation’s affiliate will reinsure approximately $10 billion of Prudential Defined Income (PDI) traditional variable annuity contracts with guaranteed living benefits issued by Pruco Life Insurance Company (PLAZ), a subsidiary of Prudential Financial. The transaction will result in approximately $650 million in proceeds for Prudential, furthering Prudential’s transformation strategy by reducing market sensitivity and increasing capital flexibility. Prudential Financial, Inc. is a global financial services leader and premier active global investment manager with approximately $1.4 trillion in assets under management as of March 31, 2023. The Willkie team was led by partners Gregory Astrachan and Michael Stern and included partners Howard Block, Elizabeth Bannigan, Chip Lunde, Allison Tam, Vadim Mahmoudov, Laura Jehl and Daniel Alvarez, and associates Jenae Moxie, Rubini Wu, Kari Prochaska, and M. Dalton Rodriguez.

May 25

1 min

A former naval engineer accusing shipbuilders of conspiring to suppress industry wages has told the U.S. Supreme Court that their petition for review of a Fourth Circuit decision reviving her proposed class action rests on a rule the panel never adopted. Susan Scharpf said in a brief Friday that although General Dynamics, Huntington Ingalls and other shipbuilders argued the panel adopted a rule under which Scharpf's mere claim that their alleged no-poach deal is unwritten is enough to establish fraudulent concealment and delay the statute of limitations, the Fourth Circuit didn't do so. "Instead, it applied a factbound, consensus standard under which: (a) affirmative acts to cover up an antitrust conspiracy can be sufficient to allege fraudulent concealment; and (b) a wide range of conduct can be evidence of an affirmative cover up, including efforts to conceal evidence and avoid a paper trail," Scharpf said. That's the same rule applied by other circuit courts the shipbuilders asserted the Fourth Circuit split from, Scharpf said. Moreover, the panel also expressly rejected the rule the shipbuilders said it adopted, Scharpf stated, adding that the panel held that even if a plaintiff adequately claims there was an unwritten agreement they must also allege facts sufficient to infer that the defendants intended to prevent others from uncovering their scheme. "This is plain from the face of the opinion," Scharpf said, explaining that the panel wrote the shipbuilders affirmatively acted to cover up their conspiracy by avoiding putting anything in writing and using coded language, as well as enforced their conspiracy through private phone calls between high-level executives and unofficial retribution. "Because the petition's arguments about a circuit split, importance, and the merits all rest on a supposed rule that the court below never adopted — and because those arguments are wrong on their own terms in any event — the petition for a writ of certiorari should be denied," Scharpf said. The case stems from a proposed class action by former naval engineers and architects, Scharpf and Anthony D'Armiento, who accuse General Dynamics, Huntington Ingalls and 18 other companies of suppressing industry wages by illegally scheming for decades to not actively recruit, or poach, each other's employees. The suit, filed in Virginia federal court in 2023, aims to represent a class of people employed by the companies as naval architects, marine engineers, or both, from Jan. 1, 2000. Although a Virginia federal judge found their claims fell outside the four-year statute of limitations and dismissed the suit in April 2024, a split Fourth Circuit panel reversed that decision in May. The majority held that Scharpf and D'Armiento had adequately pled they were kept in the dark about the alleged conspiracy within the statutory period because the employers were deliberately trying to conceal it. D'Armiento has since withdrawn as a plaintiff from the case. The shipbuilders filed their petition before the Supreme Court in September, arguing the Fourth Circuit panel's decision conflicts with prior rulings by the Fifth, Sixth and Ninth circuits, which have explained that mere silence or unwillingness to admit wrongful activities is insufficient to establish fraudulent concealment. They also said the decision flouts the statute of limitations period Congress contemplated. The U.S. Chamber of Commerce and the Shipbuilders Council of America filed amicus briefs in October in support of the shipbuilders' petition. Counsel for the parties did not immediately respond to requests for comment Monday. The shipbuilders are represented by Donald B. Verrilli Jr. and Ginger D. Anders of Munger Tolles & Olson LLP, Matthew S. Hellman, Douglas E. Litvack, Elizabeth B. Deutsch, Michael A. Doornweerd and Gabriel K. Gillett of Jenner & Block LLP, Adam Block Schwartz, Todd Stenerson and Joseph P. Samuels of Allen Overy Shearman Sterling, Sima Namiri-Kalantari and Chahira Solh of Crowell & Moring LLP, David G. Barger of Greenberg Traurig LLP, Attison L. Barnes III, Krystal B. Swendsboe, Scott M. McCaleb and Jon W. Burd of Wiley Rein LLP, Brian A. Hill and Brian J. Whittaker of Nixon Peabody LLP, Benjamin L. Hatch, Casey E. Lucier, J. Brent Justus, Nicholas J. Giles, Joshua D. Wade and W. Cole Geddy of McGuireWoods LLP, Allison W. Reimann, Sean O'D. Bosack and Christie B. Carrino of Godfrey & Kahn SC, Christopher C. Brewer, Ryan P. Phair, Michael F. Murray and Craig Y. Lee of Paul Hastings LLP, Perry A. Lange, Jennifer Milici and John W. O'Toole of WilmerHale, William DeVinney of William DeVinney PLLC, Matthew J. MacLean and Alvin Dunn of Pillsbury Winthrop Shaw Pittman LLP, and William E. Lawler III and Amanda C. DeLaPerriere of Blank Rome LLP. The proposed class is represented by Brent W. Johnson, Steven J. Toll, Robert W. Cobbs, Alison S. Deich, Zachary R. Glubiak, Sabrina S. Merold and Callie C. Bruzzone of Cohen Milstein Sellers & Toll PLLC, Deepak Gupta and Thomas Scott-Railton of Gupta Wessler LLP, Shana E. Scarlett, Rio S. Pierce, Steve W. Berman, Kevin K. Green and Elaine T. Byszewski of Hagens Berman Sobol Shapiro LLP, George F. Farah, Nicholas J. Jackson and Simon A. Wiener of Handley Farah & Anderson PLLC, Candice J. Enders and Julia R. McGrath of Berger Montague, and Brian D. Clark, Stephen J. Teti, Arielle S. Wagner and Eura Chang of Lockridge Grindal Nauen PLLP. The case is General Dynamics Corp. et al. v. Susan Scharpf et al., case number 25-293, in the Supreme Court of the United States.

Nov 24

4 min

An attorney for ITG Brands LLC told Delaware's Supreme Court on Wednesday that a Chancery Court ruling in April effectively rewrote contract terms, which resulted in the tobacco company's liability for more than $251 million in payments to Florida that ITG never agreed to assume under a settlement covering acquired cigarette brand liabilities. Gregory G. Garre of Latham & Watkins LLP, counsel for ITG, told the five-member appellate court that Vice Chancellor Lori W. Will's decision on liabilities under the 1997 settlement with Florida granted R.J. Reynolds Tobacco Co. "an enormous windfall" by failing to factor in its savings from related profit adjustments. Under the original agreement, Garre argued, ITG was not to assume Florida settlement liabilities if it was unable to settle with the state on the relevant acquired brands after reasonable best efforts. "Can you tell me why your interpretation makes sense?" Chief Justice Collins J. Seitz Jr. asked. "I know we're very technical about reading contracts in Delaware, but tell me why your interpretation makes sense." Garre said the terms figured in a larger, $27 billion sale of brands, with details showing that Reynolds "knew the difference between making ITG liable regardless of best efforts and only if they used best efforts." "Last, Reynolds still secured substantial relief under the state settlement agreement," Garre said, including releases for all state of Florida claims, "which was viewed at the time as an enterprise-threatening liability. ITG doesn't get the benefit of that agreement." Justice Karen L. Valihura asked Garre "wasn't the big picture here that once ITG owned the acquired brands, ITG would be responsible for liability arising from its ownership of the brands?" Garre said the agreement included a number of provisions and involved disputes with four states over tobacco settlements. Even if the justices don't find that some terms unambiguously require a decision in ITG's favor, Garre said, "the very least the court should hold is that this agreement is susceptible to different interpretations." The Florida liabilities stem from a series of settlements in the 1990s in which tobacco companies agreed to make annual payments to states to compensate for public healthcare expenses tied to smoking. The multimillion-dollar annual payments are calculated based on each company's market share. When ITG bought the four brands from Reynolds, it successfully took over settlement obligations in most other states but couldn't reach a deal with Florida. Florida sued Reynolds in January 2017 for overdue payments. ITG then sued Reynolds in Delaware after Reynolds sought to have a Florida court determine ITG's obligations under the asset purchase agreement. Noel J. Francisco of Jones Day, counsel for Reynolds American Inc. and R.J. Reynolds Tobacco Co., told the justices that the asset purchase agreement indemnity provisions "provided that they're required to reimburse us for what we actually paid to Florida." Francisco added: "It is undisputed that had the Florida judgment not been entered, we would be $276 million richer than what we paid." Reynolds' position would give it a $155 million incentive not to join the settlement agreement, Francisco said. "Why on earth would we give a $155 million incentive when the whole purpose of the RBE is to try to get them to join that agreement?" Francisco asked. "In order to make the merger possible, it had to sell the required brands and had to reach an agreement with ITG on those brands. It had every incentive to reach an agreement," Garre said, and the one with ITG to use reasonable best efforts. When Vice Chancellor Will took on the case, Garre said, the court for the first time held that a key provision of the agreement compelled a reading in favor of Reynolds. Vice Chancellor Will found in October 2023 that ITG must indemnify Reynolds for more than $231.5 million in postsale payments that Reynolds made to Florida for the four brands under a 1997 settlement related to cigarette advertising. "These are respected courts, respected jurists, and they have reached different conclusions," Garre said. "No court today has adopted the position that was advanced before this court. At the bare minimum the court should hold that the contract is reasonably susceptible to different interpretations and remand." The justices said they would take the arguments under advisement. ITG Brands LLC is represented by Stephen C. Norman and Tyler J. Leavengood of Potter Anderson & Corroon LLP, Gregory G. Garre, Margaret A. Upshaw and Sakina J. Haji of Latham & Watkins LLP, and Elizabeth B. McCallum, Thomas E. Hogan, Evan Mannering and Carey Busen of BakerHostetler. Reynolds American Inc. and R.J. Reynolds Tobacco Co. are represented by Rudolf Koch, Robert L. Burns, Matthew D. Perri and Sandy Xu of Richards Layton & Finger PA, and Noel J. Francisco, C. Kevin Marshall, Ethan D. Beck and Katrina L.S. Caseldine of Jones Day, The case is ITG Brands LLC v. Reynolds American Inc. et al., case number 204-2025, in the Supreme Court of Delaware. The case under appeal is ITG Brands LLC v. Reynolds American Inc. et al., case number 2017-0129, in the Court of Chancery of the State of Delaware.

Dec 3

4 min