Commercial Litigation

Kasowitz has been recognized as a leading firm in the area of general commercial litigation, reflecting the firm’s significant experience in representing clients in all types of breach of contract, fraud, fraudulent conveyance, tortious interference, unfair competition, RICO, breach of fiduciary duty, negligence, and other commercial actions in state and federal courts throughout the country, as well as in national and international arbitrations and mediations.  The firm’s commercial clients include a diverse group of Fortune 500 companies, investment firms and other entities, in a wide-range of industries, including the financial, manufacturing, high-tech, chemical, energy, entertainment, consumer products, pharmaceutical, and telecommunications industries.  The firm’s philosophy is to aggressively litigate every action, while doing so in a cost-effective manner, in order to best achieve the goals of its clients. 

Some of the firm’s notable commercial representations include:

• Federal Housing Finance Agency (“FHFA”), as conservator for Fannie Mae and Freddie Mac, in several actions in federal and state courts against numerous financial institutions and individuals.  The lawsuits seek rescission or damages from the defendants for, among other things, defendants’ misrepresentations concerning pools of mortgage loans that underlie residential mortgage-backed securities issued and securitized by the defendants and sold to Fannie Mae and Freddie Mac.
• Comcast in the defense of a class action involving effectively three sub-classes – each consisting of approximately two million cable subscribers – alleging that Comcast violated antitrust monopolization laws through cable system "clustering" in the Philadelphia, Chicago and Boston areas. The firm represented Comcast in a four-day class certification hearing for the Philadelphia area, resulting in a decision by the federal district court significantly limiting the issues for trial. The court further limited issues on summary judgment, leaving just two claims for trial. In March 2013, the U.S. Supreme Court ruled in favor of Comcast in a landmark 5-4 decision that overturned the certification of the Philadelphia class.
• MBIA Inc., the world’s largest monoline insurer, in defense of four separate state and federal actions brought by 19 of the world’s largest financial institutions, bondholders and a putative nationwide class represented by several hedge funds – all arising from MBIA’s $5 billion corporate restructuring in 2009. In March 2013, following a four-week hearing, the New York State Supreme Court ruled in favor of MBIA Inc., finding that the NY State Insurance Department’s approval of MBIA’s restructuring was not in error.
• Fairfax Financial Holdings Limited, the largest insurance company in Canada, in its $6 billion RICO action against hedge funds, securities analysts and others, in New Jersey state court, alleging that the defendants conspired to target and destroy the company in connection with shorting the company’s stock.
• Hilton Worldwide, in defending a civil action alleging trade secret misappropriation brought by Hilton's competitor, Starwood Hotels & Resorts, and a parallel grand jury investigation by the United States Attorney’s Office for the Southern District of New York.  The case, described by the media as "Grishamesque," in December 2010, settled after a year of discovery.
• Apollo Management’s Hexion Specialty Chemicals in its action against Credit Suisse and Deutsche Bank seeking specific performance of the banks’ $15 billion commitment to finance Hexion’s acquisition of Huntsman Chemical. After expedited discovery, Kasowitz successfully negotiated a settlement with Huntsman, bringing an end to one of the largest-ever battles over a leveraged buyout.  Major media outlets, including The Wall Street Journal, lauded the settlement negotiated by Kasowitz as a "sweet deal" for Apollo and Hexion. 
• Freescale Semiconductor, defending against injunctive and damages litigation by senior lenders who claim that a Material Adverse Change had occurred, and that their interests were diluted, when the company issued incremental debt of $750 million.  This case involved expedited discovery and a number of appellate proceedings.
• Verizon Wireless in a deceptive trade practices lawsuit by the Florida Attorney General against Alltel Communications (“Alltel”), which Verizon Wireless had acquired.  The Florida AG sought more than $20 million in damages and billions of dollars in penalties on behalf of 450,000 Florida customers for alleged unfair trade practices violations in connection with Alltel’s marketing of its roadside assistance feature for mobile customers.  After a three-week bench trial, the Circuit Court Judge rejected the Florida AG’s claims, entered judgment in favor of Alltel on all counts and declared that Alltel had not employed intentionally deceptive practices.
• Source Interlink Distribution, L.L.C. and Source Interlink Companies, Inc. in an antitrust suit against leading magazine publishers and distributors, alleging that these companies conspired to boycott Source, a magazine wholesaler, and force it out of business.  Kasowitz successfully obtained an injunction requiring publishers and distributors to resume supplying magazines to Source.  The defendants thereafter settled with Source, agreeing to continue supplying magazines to Source.  The American Lawyer magazine, which reported on the case, referred to Kasowitz as being “like Superman standing in front of a speeding locomotive” to protect Source.
• TD Bank, in related actions by investment groups alleging that the Bank aided former attorney Scott Rothstein’s $1.2 billion Ponzi scheme.  TD Bank contests the allegations and has asserted various affirmative defenses.
• Southern Union Company in its lawsuit relating to its unsuccessful acquisition bid for Southwest Gas Corp.  At trial, the federal court jury awarded Southern Union $60 million in punitive damages against the Arizona Corporation Commissioner for improperly influencing the outcome of the acquisition.  The primary corporate defendants in the case, Southwest Gas Corp. and the competing bidder, Oneok Inc., agreed to multi-million dollar settlements with Southern Union before trial.  The verdict is believed to be the largest-ever punitive damages award against an individual.
• Mega Bloks, a manufacturer of several lines of children’s toys, in defending against claims for a $60 million “earn-out” relating to Mega Bloks’ acquisition of RoseArt, Inc., and bringing Mega Bloks’ counterclaims for fraud and misrepresentation against the sellers of RoseArt relating to certain allegedly defective products.  After four weeks of trial, during which the firm successfully elicited testimony concerning the plaintiffs’ knowledge of the alleged product defects, and obtained the disqualification of one of the plaintiffs’ lead experts, the action was settled with Mega Bloks receiving $17 million and a full release of the plaintiffs’ claims.
• National Australia Bank and its affiliate as well as the successor to Fortis Bank in actions against OppenheimerFunds and its affiliates concerning defendants’ misconduct in purchasing and managing billions of dollars of mortgage-backed securities and CDOs (compensatory damages in excess of $3.2 billion are sought in the three pending actions).
• Southern Union Company (“Southern Union”) and CrossCountry Energy, LLC (“CCE”) in a Delaware action relating to claims by a major energy corporation (“Defendant/Third-Party Plaintiff”) that: (i) the Defendant/Third-Party Plaintiff was entitled to a right of first refusal to key assets involved in the multibillion dollar merger of CCE with a subsidiary of Energy Transfer Partners, L.L.P. (“CCE Merger”); and (ii) Southern Union was liable to the Third-Party Plaintiff for alleged breach of a capital stock agreement and breach of the implied covenant of good faith and fair dealing in connection with the CCE Merger.  Kasowitz obtained an agreed judgment denying all relief sought by the Third-Party Plaintiff and declaring that the Third-Party Plaintiff had no right of first refusal concerning the assets at issue.
• CDR Créances, a French-government instrumentality charged with realizing the assets of an insolvent French bank, in actions against wealthy real estate developers who misappropriated loan proceeds from the bank and concealed them through a labyrinth of sham entities. Kasowitz obtained an order striking the defendants’ pleadings for fraud on the court, and a final judgment awarding title to property valued at $65 million. The decision was affirmed on appeal as to all but one ancillary individual defendant.
• Verizon Wireless in a lawsuit against premium text message services providers.  Verizon Wireless sought damages and injunctive relief, alleging that the defendants fraudulently accessed its network in order to market their premium text messaging services to Verizon’s customers through unauthorized and deceptive websites.  After a two-day evidentiary hearing, the United States District Court for the District of Arizona entered a preliminary injunction in favor of Verizon Wireless, holding that it was likely to succeed on the merits.  On appeal, the Ninth Circuit affirmed.
• Level 3 Communications, Ltd., one of the largest telecommunications providers in the country, in its action against Switch & Data Management Company to prevent S&D from effectively shutting down large portions of Level 3’s international network as a result of a contract dispute.  The firm obtained a temporary restraining order and, after an extensive evidentiary hearing, obtained a preliminary injunction precluding S&D from taking action to prevent Level 3 from obtaining the benefits under the contract, after which the parties reached a confidential settlement. 
• Martha Stewart Living Omnimedia in its action against TurboChef Technologies, Inc., a leading manufacturer of high-speed ovens, alleging breach of contract for the use of the names and likenesses of Martha Stewart and celebrity chef Emeril Lagasse.
• Special Entertainment Counsel for the chapter 11 Trustee for Trans Continental Television Productions, Inc. in a three-year heavily contested litigation against MTV Networks, Viacom Inc., Viacom International Inc., Bad Boy Films, Inc. and Bad Boy Records, LLC.  The lawsuit centered around MTV’s scheme to misappropriate Trans Continental’s ownership interest in Making the Band, which later featured hip-hop star Sean Combs (p/k/a Diddy).  The case raised novel issues of copyright and contract law arising from a time when reality television was still in its infancy.  On the eve of the three-week jury trial, the Viacom and Bad Boy defendants agreed to pay $7.5 million to settle the case, which will be distributed to Lou Pearlman’s creditors.