Thomson Reuters News & Insight
Featured Content from WESTLAW

Legal

  •  
  •  

Emerging consensus: Dodd-Frank protection extends to SOX whistle-blowers  read more »

Is long-running pollution 'an event'? 3rd Circuit says yes in CAFA case  read more »

Shuttered FrontPoint hedge funds sue Libor banks for $250 mln fraud  read more »

Marketing Popup

Robbins Geller's awkward stance for frenemy Apple in Einhorn case

2/15/2013 COMMENTS (0)

By Nate Raymond  

With a one-paragraph order Friday, U.S. District Judge Richard Sullivan of Manhattan spared Robbins Geller Rudman & Dowd from the awkwardness of helping a longtime client, the California Public Employees Retirement System, come to the aid of a frequent target of the firm, Apple Inc.

Just a day earlier, the firm had sent the judge a letter asking permission to file an amicus brief supporting Apple in its proxy litigation showdown with shareholder David Einhorn of the hedge fund Greenlight Capital. Sullivan didn't see the point of it, though. "Apple is perfectly capable of representing its interests in this matter," the judge wrote. "Calpers provides no rationale as to why its involvement would provide new, relevant information to the court."

The order is surely a disappointment for Calpers, which holds $1.5 billion in Apple stock and has emerged as one the strongest supporters of the Apple shareholder proposal Einhorn opposes, which would, if approved, eliminate its ability to issue perpetual preferred shares without shareholder approval. Einhorn, who is trying to force Apple to return some of its $137 billion in cash to shareholders, sued the company on Feb. 7, asserting that its proxy improperly bundled three shareholder proposals into one vote. In court filings Wednesday, Apple said its shareholder proposal was a response to a report by the influential proxy firm Institutional Shareholder Services, which backs Apple's controversial proposal on perpetual preferred shares. Calpers had hoped to offer its support to Apple, according to a letter submitted to the court Thursday and obtained by Reuters.

It's not surprising that Calpers turned to Robbins Geller, which frequently represents the fund in securities cases. But it was somewhat jarring for us to see the firm on the same side as Apple, which has been hit with more than its share of suits by the prolific plaintiffs' firm. As name partner Samuel Rudman told OTC Thursday, "We sue Apple all the time."

Records show a 30-year history of litigation against Apple by Robbins Geller and its predecessor firms. In 1988, lawyers at what was then the West Coast branch of Milberg secured a $100 million securities fraud verdict - later set aside - against Apple. When those lawyers followed Bill Lerach in splitting from Milberg to form what was then called Lerach Coughlin Stoia & Robbins in 2004, they brought with them another securities fraud case against Apple, which the 9th U.S. Circuit Court Appeals affirmed the dismissal of a year later. Last year, a federal judge signed off on a settlement in a Robbins Geller-led class action over iPhone 4 reception issues. And the firm continues acting as lead counsel in ongoing litigation accusing Apple of violating antitrust laws by preventing users from playing music from services other than iTunes on their iPods. (Apple is in the antitrust lawsuit, as in the Einhorn case, represented by George Riley at O'Melveny & Myers.)

The fact that plaintiffs' lawyers at rival shops had also advanced claims like Einhorn's added to the odd-couple pairing of Robbins Geller with Apple. Einhorn's lawyers at Akin Gump Strauss Hauer & Feld, in fact, owe thanks to the plaintiffs' bar: Labaton Sucharow won the 1999 ruling by the 2nd U.S. Circuit Court of Appeals that gave investors the right to sue companies to enforce bundling rules. Einhorn's bundling claims have also since been adopted by another plaintiffs' law firm, Barrack, Rodos & Bacine, in another case against Apple.

Rudman told us Thursday, though, that the firm's representation of Calpers in support of Apple doesn't conflict with its arguments in suits against the company. "It's not inconsistent with the position we've taken on good governance," he said. Rudman declined to comment on Friday's order. Einhorn is set to file a response brief in the proxy litigation on Friday. A hearing on his motion to enjoin a Feb. 27 shareholder vote on the proposal is set for Feb. 19.

(Editor's note: A previous version misstated David Einhorn's name as Richard.)

Follow us on Twitter @AlisonFrankel@nateraymond@ReutersLegal  | Like us on Facebook  


Register or log in to comment.

© 2013 Thomson Reuters