IN-HOUSE IMPACT AWARDS GAME CHANGERS GIANT SLAYERS GROUND BREAKERS

LATHAMStanding left to right: Julie Holloway;

James Lynch; Belinda Lee; Christopher Yates.

Seated left to right: Peter Wald; Michele Johnson; Robert Sims

22 | WEEK OF APRIL 27, 2015 DAILY AT WWW.THERECORDER.COM

L A B O R & E M P L OY M E N T

W H I T E C O L L A R

Orrick, Herrington & Sutcliffe

Scheper Kim & Harris

It takes a lot of moxie to rest a client’s de-fense on the contention that a state’s su-preme court is just plain wrong.

But an Orrick, Herrington & Sutcliffe team climbed out on that limb last year

and persuaded two federal judges to follow. The lawyers led by partner Joseph Liburt

persuaded judges in the Northern and South-ern districts of California to send two sets of Private Attorney General Act claims into in-dividual arbitration, despite the California Supreme Court’s 2014 ruling in Iskanian v. CLS Transportation that explicitly exempts such claims from compelled arbitration.

Those aren’t the only recent examples of Orrick taking unflinching stands for employ-ers in legal jeopardy. Exhibit 2: A win at tri-al last month for venture capital firm Klein-er Perkins Caufield & Byers in a gender-dis-crimination suit that had the entire country talking about sexual politics in the work-place. (The Recorder selected Orrick as a stand-out firm for labor and employment litigation based on wins in late 2013 and 2014, but the high-profile triumph further cements its reputation.)

In 2014, Sears Holdings Corp. and its sub-sidiaries, Kmart Corp. and Sears, Roebuck and Co., turned to Orrick to fend off two wage-and-hour suits. Plaintiffs lawyers with Blumenthal Nordrehaug & Bhowmik and the Setareh Law Group had followed the blueprint laid out by the California Supreme Court in Iskanian and framed their suits as Private Attorney General Act claims to cir-cumvent binding arbitration agreements.

“So we had to come up with arguments for why the Supreme Court was simply wrong,” Liburt said. “We argued it from sev-eral different angles to show exactly why the California Supreme Court was simply not following what it was required to do.”

Liburt cited the U.S. Supreme Court’s rul-ing in AT&T Mobility v. Concepcion, which held a court cannot find that a particular type of claim is automatically exempt from arbitration.

The district judges agreed, finding the Federal Arbitration Act trumps the Califor-nia Supreme Court’s holding. As a result, the cases that had posed a potential liability of eight or nine figures became nuisance suits.

While not the first, the Sears and Kmart cases were among the early decisions in which district judges departed from Is-kanian. “The first handful are the hardest,” Liburt said.

Orrick also has continued to beat back age discrimination claims against Lawrence Livermore National Laboratories stemming from mass layoffs at the lab in 2008. Just be-fore Christmas 2013, a jury in Alameda County returned a 12-0 verdict in favor of the nuclear weapons lab in a test case in-volving five plaintiffs. The jury’s verdict also quashed the claims of 86 other plaintiffs, drastically reducing Lawrence Livermore’s future liability.

Andrew Livingston, deputy leader of Or-rick’s employment practice, said the trick was to counter the plaintiffs’ emotional tes-timony with facts, while also trying not to overwhelm the jury with complicated sta-tistics.

Orrick partner Lynne Hermle walked an equally delicate line in her defense of Klein-er Perkins. With Ellen Pao on the stand, Hermle launched a forceful cross-examina-

tion that tore into Pao’s credibility, profes-sional qualifications and motives, but was mindful not to take the fireworks too far.

In an interview after the verdict, Hermle said she trusted her team to signal her if she was too tough. “I don’t believe I’m mean spirited and I don’t try to trick witnesses I’m cross-examining. But my client is entitled to a strong defense.”

Paul Vronsky, Kleiner’s general counsel, said the Orrick team showed a mastery of the relevant statutes, case law and facts in the Pao v. Kleiner case that set them apart from others in the employment bar. Even presiding Judge Harold Kahn looked to Hermle for clarification on legal questions during trial, he said.

But Hermle is most impressive when she’s in front of an audience.

“Her oral advocacy skills are formidable to say the least,” Vronsky said. “You can see that her audience, whether it’s the jury, the judge or the general public, they listen when Lynne speaks.”

— Marisa Kendall

Beating the government at trial would be the highlight of the year for nearly any white-collar defense practice. Los Angeles-based Scheper Kim & Harris, a 15-lawyer defense boutique, ac-

complished the feat twice in a little more than 10 months.

First, name partner David Scheper cleared a CEO of insider trading and securi-ties fraud claims. Then, Scheper’s partner Marc Harris followed up with a full defense verdict for a bank executive who stood ac-cused of conspiring with customers to hide foreign bank accounts from the IRS.

Scheper went to trial in December 2013 af-ter the U.S. Securities and Exchange Commis-sion lodged a complaint against Peter Jensen, former CEO of Basin Water, a Rancho Cu-

camonga-based company that built systems to treat contaminated groundwater before it filed for bankruptcy protection in July 2009. Jensen was accused of misstating company revenues to prop up its stock price and of sell-ing off a portion of his personal stake in the company prior to financial restatements.

At trial, Scheper secured key testimony from Jensen’s broker who said it was him, not Jensen, who initiated $3 million in stock sales just three days before the financial re-statement. After a nine-day bench trial, U.S. District Judge Manuel Real of the Central District of California sided with Jensen and co-defendant Thomas Tekulve Jr., repre-sented by Seth Aronson of O’Melveny & My-ers, finding they were not liable for any of the claims.

Jensen said Scheper is “an extremely competitive guy” and precisely the sort of advocate you want on your side when “the whole U.S. government is trying to kill you.”

In late October 2014, the firm was back in trial, this time before a jury. Federal pros-ecutors had charged Shokrollah Baravarian, an 82-year-old retired executive at Israeli-based Mizrahi Tefahot Bank Ltd., with con-cealing the existence of undeclared ac-counts owned and controlled by U.S. cus-tomers in Israel. The government’s case fell apart as Harris cross-examined six bank customers who prosecutors alleged partic-ipated in the tax scheme. Under question-ing by Harris, all six witnesses—including two who had already signed plea deals with the government for their roles—testified

they had not conspired with Baravarian. “These are the Perry Mason moments you don’t get very often,” Harris said.

After deliberating for four hours, the jury returned not guilty verdicts on all four counts.

Scheper and Harris met nearly 25 years ago as federal prosecutors in the U.S. Attor-ney’s Office in Los Angeles, and their firm now includes trial-seasoned former federal prosecutors Jean Nelson and Richard Drooyan.

Scheper said the “high wire” act atmo-sphere of trial brings the firm together.

“If you come in second at trial, you’ve failed spectacularly,” he said.

—Ross Todd

Joseph Liburt

Richard Drooyan

Andrew Livingston

Marc Harris

Lynne Hermle

Angela Machala

Patricia Gillette

Jean Nelson

Timothy Long

David Scheper