Law, disrupted

John is joined by C. Dabney O'Riordan, partner in Quinn Emanuel’s Los Angeles and DC offices and longest-serving leader of the SEC's Asset Management Unit, who left the agency last year. They discuss the actions an asset manager can take if it identifies a potential issue to minimize its risk of an SEC investigation or enforcement action. Among the actions they discuss for consideration include stopping the conduct and implementing remedial measures such as updating internal policies and procedures, providing additional training to staff, considering hiring a compliance consultant, and making remedial payments if appropriate.

Podcast Link: Law-disrupted.fm
Host: John B. Quinn
Producer: Alexis Hyde
Music and Editing by: Alexander Rossi

John is joined by Jesse Bernstein, Partner in Quinn Emanuel’s New York Office and Co-Chair of the Securities Litigation Practice. Jesse explains that the term “securities” applies not only to stocks and bonds, but arguably to any situation where a group of investors place their resources into a common entity where they expect to make profits from the efforts of others. He describes the sources of securities law, including state blue sky laws, the Securities Act of 1933 (which focuses on initial issuances), the Securities Exchange Act of 1934 (which focuses on intentional misrepresentations in securities transactions and the Private Securities Litigation Reform Act of 1995 (which sought to curb perceived abuses in securities litigation by raising the pleading standards required to establish scienter and creating a safe harbor for forward looking statements). They discuss the Supreme Court’s recent ruling in Moab Partners v. Macquarie Infrastructure that pure omissions of material fact are not actionable under Rule 10(b)(5) because the rule only covers affirmative misstatements. Jesse then explains how a Quinn Emanuel team obtained a jury verdict last year in Elon Musk’s favor in a rare securities class action trial on a $12 billion claim based on Mr. Musk’s tweet about taking Tesla private. He describes the arguments made concerning materiality and loss causation that ultimately led to the victory. Finally, they discuss upcoming issues in securities law including how the Macquarie decision will impact cases.

Podcast Link: Law-disrupted.fm
Host: John B. Quinn
Producer: Alexis Hyde
Music and Editing by: Alexander Rossi

John is joined by Dr. Hamed Merah, Chief Executive Officer of the Saudi Center for Commercial Arbitration (SCCA) and Nasser Alrubayyi, Managing Partner (KSA), Co-Chair Middle East & North Africa Practice . They discuss commercial arbitration in the Kingdom of Saudi Arabia and the recent impact of the Saudi Center for Commercial Arbitration. Dr. Hamed explains SCCA’s mission to establish a world class center with full case management services where foreign parties will feel comfortable submitting their disputes to a diverse roster of accomplished, impartial independent arbitrators. Although almost half of the SCCA’s caseload is construction related, it also adjudicates cases involving banking, capital markets, intellectual property, media, and the pharmaceutical industry. They discuss how legislation in the last five years has removed restrictions on Saudi governmental entities submitting disputes to arbitration to the point that arbitration with the SCCA is now the default option in contracts between governmental entities and foreign parties. Nasser explains that parties are increasingly moving from ad hoc stand-alone arbitration procedures to institutional arbitration through the SCCA because the SCCA is the quicker and more cost efficient option. Dr Hamed also describes a recent study concluding that more than 90% of the SCCA’s awards have been upheld when challenged in annulment proceedings. Finally, they discuss how arbitration with the SCCA is becoming more popular in technical cases, IP cases and construction disputes.

Podcast Link: Law-disrupted.fm
Host: John B. Quinn
Producer: Alexis Hyde
Music and Editing by: Alexander Rossi

John is joined by Christopher Bogart, CEO, Director and Co-Founder of Burford Capital, the largest litigation funding firm in the world. They discuss the use of AI and data science in litigation funding decisions. Chris explains that while AI is currently not advanced enough to make decisions on whether to fund a case, advances in data science now allow litigation funders to improve their decisions by examining enormous amounts of public data to find meaningful facts such as accurate damage ranges that are often buried deep in individual case dockets. Chris also identifies the key data points used to evaluate whether to fund a case, including the legal theory of the case, the counsel representing the parties, the judge or arbitrator presiding over the case, and the likely time to reach an outcome. Finally, John and Chris also discuss other ways that AI is impacting the legal profession including the use of AI to provide real time assistance in cross examination, the use of AI by courts in Singapore and Connecticut to adjudicate low value routine matters and traffic violations, and how AI has enabled smaller firms to expand into areas of litigation they previously could not handle such as large antitrust cases by automating the review and processing of millions of pages of documents.

Podcast Link: Law-disrupted.fm
Host: John B. Quinn
Producer: Alexis Hyde
Music and Editing by: Alexander Rossi

Nearly 300,000 United States service members and veterans are suing technology and manufacturing giant 3M over claims that their supply of military earplugs caused soldiers to suffer hearing loss, tinnitus, and other hearing difficulties. The dual-ended Combat Arms Earplugs (CAEv2) were standard issue equipment for US soldiers in Iraq and Afghanistan for over 10 years.

In this episode of Law, disrupted, host John Quinn and his guests, Matt Hosen and Bryan Alystock, discuss how this defective earplug litigation started and evolved into the largest consolidated mass tort litigation in history.

To open the episode, Matt Hosen shares how, as a second year Quinn Emanuel associate, he found, buried in a large document production in an antitrust case in which the firm represented a company called Moldex-Metric, an internal 3M document which became known as “The Flange Report.” He explains that the report by a scientist at 3M revealed that the earplugs that 3M had been selling to the U.S. military for over 15 years were defective.

Matt goes on to describe how Hal Barza, a former Quinn Emanuel partner, used the Flange Report in depositions of 3M laboratory employees to great effect; leading not only to the resolution of the antitrust case, but also the commencement of a whistleblower False Claims Act (Qui Tam) case brought against 3M on behalf of the U.S. government.
In connection with this Qui Tam lawsuit, the Flange Report was brought to the government’s attention, leading to the United States Department of Justice’s intervention in the case. 3M entered into a settlement with the U.S. government in 2018 agreeing to pay $9.1 million to resolve allegations it knowingly sold the earplugs to the U.S. military without disclosing the CAEv2 defects. The DOJ issued a public press release in July 2018 announcing the Qui Tam settlement.

Bryan Aylstock, managing and founding partner of Aylstock, Witkin, Kreis & Overholtz, based in Pensacola, Florida, then joins the conversation to explain how this DOJ press release led to the plaintiffs’ mass tort bar filing cases all over the United States on behalf of U.S. service members alleging product defect, failure to warn and fraud claims. These cases were later consolidated into a multidistrict litigation (MDL) in Pensacola before Chief District Court Judge Casey Rodgers.

Judge Rodgers appointed the Alystock firm to lead a Plaintiff Leadership Committee consisting of over three dozen law firms, including Quinn Emanuel. Judge Rodgers oversaw all aspects of discovery in the MDL, and with input from plaintiffs’ and defendants’ counsel, selected individual service members to serve as bellwether plaintiffs. Bellwether trials began in April, 2021.

Plaintiff service members have achieved victory in 9 of the 15 bellwether trials to date, receiving over $222 million in damages. In the most recent bellwether trial, a Gainesville, Florida jury found in favor of the army veteran on all counts and awarded $2.2 million in compensatory damages. If the average awards in these bellwether cases, including the defense verdicts, are applied across the nearly 300,000 service member lawsuits currently pending, 3M’s total exposure would be over $1 trillion.

With the bellwether process almost concluded, the guests explain how hundreds of individual lawsuits are now completing discovery, prior to being remanded to federal judges across the country for trial.
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Podcast Link: Law-disrupted.fm
Host: John B. Quinn
Producer: Alexis Hyde
Music and Editing by: Alexander Rossi