Deals & Suits

Corporate Counsel

2013-03-01 00:00:00.0

Freeport-McMoRan Plains Explorations & Production Company
McMoRan Exploration

Freeport-McMoRan Copper & Gold Inc. made a major move into oil and gas exploration and production on December 5 by agreeing to acquire Plains Exploration & Production Company and McMoRan Exploration Co. for a total of $8.9 billion in cash and stock. Freeport-McMoRan will also assume $11 billion in debt in the two deals.

Freeport-McMoRan, already the world's largest publicly traded copper company, will pay $6.8 billion for Plains, half in cash and half in stock. At $50 per Plains share, the deal came at a 39 percent premium to the target's closing price on December 4. Plains has aggressively snapped up oil and gas properties in recent years and last fall paid BP p.l.c. $5.55 billion for oil and gas assets in the Gulf of Mexico [Deals & Suits, February].

McMoRan Exploration shareholders will receive $14.75 in cash and 1.15 units in a royalty trust that will hold a 5 percent interest in future production from the target's exploration properties. The cash portion of the offer reflects a 74 percent premium to McMoRan's December 4 closing price. Freeport-McMoRan and Plains already own 36 percent of McMoRan Exploration. The buyer will have to shell out $2.1 billion for the rest of McMoRan Exploration, which Freeport-McMoRan spun out in 1994. The parties hope to close the deal in the second quarter pending approvals from regulators and shareholders of the two target companies. Freeport-McMoRan shareholders do not have a vote on the deal, which angered some of them and helped push the company's stock price down by 16 percent on the day that the deal was announced.

For acquiror Freeport-McMoRan Copper & Gold Inc. (Phoenix)

Davis Polk & Wardwell:

M&A: Paul Kingsley and Marc Williams. Credit: Lawrence Wieman. (All are in New York.) The firm represented the company in its 2007 acquisition of Phelps Dodge Corporation for $26 billion.

For special committee of Freeport-McMoRan board of directors

Wachtell, Lipton, Rosen & Katz:

Corporate: Gordon Moodie and David Shapiro and associates Eitan Hoenig, Jenna Levine, Zachary Podolsky, and Elina Tetelbaum. Antitrust: Nelson Fitts.Executive compensation and benefits: Jeanne­marie O'Brien and associate Adam Kaminsky. Finance: Joshua Feltman and asso­ciates Neil Chatani and Austin Witt. Tax: Joshua Holmes. (All are in New York.) Wachtell represented a Freeport-McMoRan special committee in 2010 when the company made an investment in McMoRan Exploration.

For target Plains Exploration & Production Company (Houston)

In-House:

General counsel John Wombwell and assistant general counsel Carolyn Bertrand and Kimberly Warnica.

Latham & Watkins:

Corporate: Michael Dillard, Mark Gerstein, Sean Wheeler, and associates Christopher Little, Adrian Milton, Samuel Rettew, Trenton Roberts, Enoch Varner, Matthew Waldron, and Debbie Yee. Tax: John Clair, Laurence Stein, and associate Jason Choi. Employee benefits and executive compensation: James Barrall, Laurence Seymour, and associates Thomas Asmar and William Kessler.Antitrust: E. Marcellus Williamson and counsel Sydney Smith. Finance: Patrick Shannon and asso­ciate Victoria Salem. Litigation: Blair Connelly .Environmental: Joel Mack, Claudia O'Brien, Michael Romey, and associate Davon Collins. Mining-related issues: Christopher Langdon and associates Opeyemi Atawo and Isoken Idemudia. (All are in Houston except for the following: Gerstein is in Chicago; Clair, Stein, Barrall, Seymour, Asmar, Kessler, and Romey are in Los Angeles; Choi is in Singapore; Williamson, Smith, Shannon, and O'Brien are in Washington, D.C.; Salem and the mining lawyers are in London; Connelly and Collins are in New York.) Latham advised Plains in its purchase of the BP assets. Dillard represented the company on its 2002 IPO and numerous other securities law matters.

Richards, Layton & Finger:

Corporate: Donald Bussard and Mark Gentile. Litigation: Srinivas Raju. (All are in Wilmington.) Plains is incorporated in Delaware.

For special committee of board of directors at target McMoRan Exploration Co. ?(New Orleans)

Weil, Gotshal & Manges:

M&A: Michael Aiello and associates Alexander Clavero, Matthew Falcone, A.J. Frey, Sachin Kohli, and Frank Martire. Energy: Rodney Moore and associate Sacha Jamal. Capital markets: Matthew Bloch and associate Andrew Woodworth. Banking: Richard Ginsburg. Tax: Jared Rusman and associate Randell Gartin. Intellectual property: Charan Sandhu. Litigation: Greg Danilow and John Neuwirth. Environmental: Annemargaret Connolly and associate Thomas Goslin. Employee benefits and executive compensation: Amy Rubin and associates Zahava Blumenthal and Eric Schecter. Antitrust: Steven Newborn and counsel Vadim Brusser. Real estate: Samuel Zylberberg and associate Elliot Ganchrow. (All are in New York except for Dallas-based Moore, Jamal, Rusman, and Gartin, and Washington, D.C.–based Connolly, Goslin, Newborn, and Brusser.) Weil bankruptcy partner Michael Walsh had worked with one of the members of the committee on another matter and introduced Aiello to the client.

—David Marcus

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Equity Residential and AvalonBay
Archstone

Lehman Brothers Holdings Inc. opted to sell Archstone Enterprise LP to Equity Residential and AvalonBay Communities Inc. for $6.5 billion on November 26 rather than complete an IPO of the apartment-building REIT , whose 2007 acquisition helped hasten Lehman's downfall the next year.

Equity Residential, the REIT run by Sam Zell, will assume 60 percent of Archstone's assets and liabilities and gain 78 apartment communities, while AvalonBay will pick up 40 percent of the balance sheet and acquire 66 communities. AvalonBay will pay $669 million in cash and $1.9 billion in stock, and Equity Residential will pay $2 billion in cash and about $1.9 billion in stock. The two buyers will also assume $9.5 billion in debt, most of which is held by Fannie Mae and Freddie Mac . Lehman and the buyers hope to close the deal by the end of March.

Lehman teamed with Tishman Speyer Properties L.P. to pay $22 billion for Archstone at the height of the private equity bubble in 2007. When Lehman went bankrupt the next year, it had to sell a 53 percent stake in Archstone to Bank of America Corporation and Barclays PLC . The Lehman estate bought back those stakes in 2012, which foiled an effort by Zell to acquire control of Archstone by snapping them up.

For acquiror Equity Residential (Chicago)

In-House:

General counsel Bruce Strohm, deputy general counsel James Fiffer, and first vice president–legal Scott Fenster.

Hogan Lovells :

Corporate:Oles­ya Barsukova-Bakar, Bruce Gilchrist, Warren Gorrell, and associates Lauren Bellerjeau and Rishikesh Gadhia.Real estate:Lee Berner.Tax:Cristina Arumi and Prentiss Feagles.Antitrust:Michele Harrington.Restructuring:Ira Greene and associate Hugh Hill. (All are in Washington, D.C., except for McLean, Virginia–based Harrington and New York–based Greene and Hill.) Hogan represented Archstone in its 2007 sale to Lehman and Tishman Speyer [Deals & Suits, September 2007]. Equity Residential has been a Hogan client for more than a decade, and Gilchrist started working closely with the company when it began pursuing the Archstone portfolio in early 2011.

Morrison & Foerster:

Corporate:David Slotkin and associates Jacob Bernstein and Henrique Canarim. Real estate:Thomas Fileti and associate Rada Blumkin.Finance:Peter Dopsch and asso­ciate Joshua Pierce.M&A:Spencer Klein.Executive compensation and employee benefits: Domnick Bozzetti and associates Amanda Hines and Wells Miller. (All are in New York except for the following: Slotkin ?and Canarim are in Washington, D.C.; Bernstein is in McLean, Virginia; Fileti and Blumkin are in Los Angeles; Miller is in Palo Alto; Hines is in San Francisco.) Slotkin worked with Equity Residential as a partner at Hogan, from which he joined MoFo last year. He also worked on the 2007 sale of Archstone while he was at Hogan.

For acquiror AvalonBay Communities Inc. (Arlington, Virginia)

In-House:

General counsel Edward Schulman, senior real estate counsel Alan Adamson, and associate general counsel Catherine White.

Goodwin Procter :

M&A:John Haggerty and counsel John Newell.Capital markets:Ettore Santucci.REITs:Craig Todaro.Tax:Kelsey Lemaster and Neal Sandford.Real estate:Christopher Barker, James Broderick, and Craig Todaro.Corporate finance:James Barri.Leveraged finance:Jennifer Bralower.Financial restructuring:Daniel Glosband.Labor and employment:Robert Hale.ERISA and executive compensation:Scott Webster.Antitrust: counsel J. Todd Hahn. (All are in Boston except for New York–based Bralower and Hahn.) Goodwin represented Avalon on its 1993 IPO and advised Bay Apartment Communities Inc. in the 1998 merger that formed AvalonBay. Schulman is a former Goodwin partner.

Goulston & Storrs :

Environmental due diligence:William Seuch and associate Kate Velásquez-Heller. (Both are in Boston.)

Womble Carlyle Sandridge & Rice:

Real estate:Pamela Rothenberg, of counsel Lisa Ruddy, and contract attorney Chris Iavarone. (Rothenberg and Ruddy are in Washington, D.C. Iavarone is in London.)

For seller Lehman Brothers Holdings Inc. (New York)

In-House:

At Archstone: general counsel Ariel Amir and asso­ciate general counsel Thomas Reif.At Lehman: real estate general counsel Joelle Halperin.

Weil, Gotshal & Manges:

Real estate:Michael Bond and David Herman.M&A:Raymond Gietz and associates Paul Carbonelli, Elliott DeRemer, Lindsay Germano, Sacha Jamal, Sanil Padiyedathu, and Sandra Rutova.Tax:Scott Sontag and associate Mark Schwed.Executive compensation and employee benefits:Michael Kam and associate Verity Rees. (All are in New York except for Dallas-based DeRemer, Germano, and Jamal.) Weil is Lehman's bankruptcy counsel and represented the company on its acquisitions of the two Archstone stakes earlier in 2012 as well as the original Archstone purchase in 2007.

—D.M.

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Conagra
Ralcorp

Conagra Foods Inc. finally succeeded in its pursuit of Ralcorp Holdings Inc. More than 20 months after Conagra initially approached the country's largest private-label food packaging company, Ralcorp agreed to sell for $5 billion in cash on November 27. At $90 per share, the deal came at a 28 percent premium to Ralcorp's closing price on November 26. Conagra will also assume $1.8 billion in debt in Ralcorp, whose products are sold as house brands by retailers such as Costco Wholesale Corporation and Trader Joe's .

Conagra approached Ralcorp's board with a $4.7 billion bid in March 2011 and went public with the offer that May. Ralcorp resisted, and Conagra withdrew its bid that September. In February 2012, Ralcorp spun out its cereal unit, Post Holdings Inc. , which it had acquired from Kraft Foods Group Inc. for $2.6 billion in 2007. Ralcorp and Conagra hope to close their deal by March 31 pending approvals from regulators and Ralcorp shareholders.

For acquiror Conagra Foods Inc. (Omaha)

In-House:

General counsel Colleen Batcheler, chief employment counsel Megan Belcher, and senior counsel Nate Mailander and Lyn Rhoten.

Davis Polk & Wardwell:

Corporate:Arthur Golden, Marc Williams, and associates Daniel Borlack, James Elworth, and Jesse Kramer.Executive compensation and employee benefits:Jean McLoughlin and associate Gillian Emmett Moldowan.Tax:Neil Barr and associate Anthony Oliva.Antitrust:Ronan Harty. (All are in New York.) Steven Goldstone, a former Davis Polk partner, is the chairman of Conagra's board of directors.

Jones Day :

Financing:Charles "Chip" Bensinger III and asso­ciate Beth Vogel.Capital markets:Michael Solecki and associate Andrew Thomas. (Bensinger is in New York; Vogel is in Chicago; Solecki and Thomas are in Cleveland.) Batcheler is a former Jones Day lawyer. The firm has done capital markets work for Conagra since 2006.

Thompson Coburn :

Corporate:Thomas Proost, Frederick Strasheim, and associate Allison Isaak. (All are in St. Louis.) Ralcorp is incorporated in Missouri, and Strasheim advised on issues of Missouri corporate law. Davis Polk's Golden is on the board at St. Louis–based Emerson Electric Co. , and he asked the company's in-house department to recommend Missouri counsel. Strasheim has previously worked with the company, which gave his name to Golden.

For target Ralcorp Holdings Inc. (St. Louis)

In-House:

General counsel Gregory Billhartz and corporate assistant secretary and senior legal assistant Cynthia Vinyard.

Wachtell, Lipton, Rosen & Katz:

Corporate:Steven Rosenblum, counsel Nancy Greenbaum, and associates Daniella Genet and Jorge Gutierrez.Antitrust:Ilene Knable Gotts and associate Yuni Yan.Executive compensation and benefits:Michael Segal and associates Mohit Gourisaria and Timothy Moore.Restructuring and finance:Eric Rosof and asso­ciate Emily Johnson.Tax:T. Eiko Stange and associate Vincent Kalafat. (All are in New York.) Wachtell represented Ralcorp on Conagra's initial approach in 2011 as well as on the Post Holdings spin-off.

Bryan Cave :

Corporate:Stephanie Hosler and William Seabaugh.Tax:Philip Wright.Finance:Bart Wall.Employee benefits and executive compensation:Jennifer Stokes. (All are in St. Louis.) Billhartz is a former Bryan Cave associate. The firm worked on Ralcorp's 1994 spin-off from Ralston Purina Company and also advised Ralcorp on the Post spin-off, Ralcorp's 2007 purchase of the business, and a 2010 deal in which Ralcorp bought the American Italian Pasta Company for $1.2 billion. —D.M.

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Loschiavo et al. v. Fidelity Management Trust Co. et al.

A federal district court judge in Manhattan dismissed an unusual case brought on behalf of investors in the Lehman Brothers Savings Plan, a 401(k) plan for Lehman Brothers Inc. employees that collapsed in value during the financial crisis.

In a ruling on December 3, U.S. District Judge Lewis Kaplan dismissed claims that Fidelity Management Trust Co. , the plan's trustee, improperly failed to sue Lehman auditor Ernst & Young LLP for malpractice. The next day, Kaplan dismissed derivative claims over the plan's decision not to bring its own malpractice case against E&Y . The rulings are a win for Nicholas Pappas of Weil, Gotshal & Manges , who led the defense of the Lehman Savings Plan fund.

Lawyers for the plan's investors brought suit in 2008, soon after Lehman collapsed. Because the plan was heavily invested in Lehman stock, its holdings' value plummeted when Lehman went belly-up. Plan investors accused Fidelity of breaching its fiduciary duties by not suing E&Y over its failures to spot trouble at Lehman. They also brought state law derivative claims against E&Y for professional negligence and malpractice on the plan's behalf, with the plan itself as a nominal defendant.

Weil, joined by E&Y 's lawyers at Latham & Watkins , moved for dismissal, arguing that the claims were preempted by the Employee Retirement Income Security Act ( ERISA ). Meanwhile, Fidelity's lawyers at Goodwin Procter moved to dismiss the fiduciary duty suit against it, asserting that the company had no obligation to sue E&Y in its role as trustee. That duty fell on the committee overseeing the fund, Goodwin argued.

Kaplan accepted both arguments. Except in a few specific circumstances, he concluded, a retirement plan's trustee does not owe a fiduciary duty to the plan's investors. The plaintiffs hadn't met the "heavy burden" of showing that those circumstances existed, Kap­lan ruled. As for the derivative claims, he held that ERISA does not confer on plan participants the authority to bring state law claims derivatively and that there were no cases in the record in which they had been permitted to do so.

For plaintiff Plan investors

Gilman and Pastor :

David Pastor. (He is in Boston.)

Rigrodsky & Long :

Timothy MacFall and associate Olga Pettigrew. (They are in Garden City, New York.)

Egleston Law Firm :

Gregory Egleston. (He is in New York.) None of the plaintiff firms returned requests for comments.

For defendant Fidelity Management Trust Co. (Boston)

Goodwin Procter:

James Dittmar, Alison Douglass, James Fleckner, and associate Chelsea Teachout. (They are in Boston.) The firm won a favorable ruling for Fidelity entities in a whistle-blower case last February.

For defendant Ernst & Young LLP (New York)

In-House:

Deputy general counsel Ronald Hauben and associate general counsel William Barrett.

Latham & Watkins:

Miles Ruthberg, Peter Wald, Jamie Wine, counsel Christopher Turner, and associates Sarah Greenfield and Kevin McDonough. (Wald is in San Francisco; Turner and Greenfield are in Washington, D.C.; and the rest are in New York.) Ernst & Young is a longtime client.

For defendant Lehman Savings Plan fund (New York)

In-House:

At Lehman Brothers Holdings Inc.: managing director, co–general counsel Thomas Hommel.

Weil, Gotshal & Manges :

Nicholas Pappas , counsel Lawrence Baer, Ardith Bronson, and associate Allison "Millie" Warner. (Bronson is in Miami; the rest are in New York.) Weil has represented Leh­man in other employment-related matters arising from its bankruptcy.

—Jan Wolfe, with Tom Coster

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Laumann et al. v. NHL et al.

In a decision that should delight sports junkies, who have long complained about broadcast blackouts and the high cost of getting access to specific games, a judge in Manhattan rejected a bid to end a proposed antitrust class action over how pro baseball and hockey games are televised.

On December 5, U.S. District Judge Shira Scheindlin in Manhattan gave the green light to claims alleging that the National Hockey League and Major League Baseball stifle competition by blacking out games in certain geographic regions. But the judge tossed some claims against codefendants Comcast Corporation and DirecTV LLC .

In March 2012 plaintiffs firms filed two separate suits against MLB and NHL on behalf of a putative nationwide class of consumers. The complaints alleged that MLB and NHL colluded to limit the selling of "out-of-market" live broadcast packages only through the leagues, which led to diminished sports entertainment choices and inflated prices. Their complaints, which were consolidated before Scheindlin, also named as defendants Comcast, Direc TV , a dozen sports franchises, and some regional sports networks .

In a motion to dismiss filed in July, the defense, led by Shepard Goldfein of Skadden, Arps, Slate, Meagher & Flom , argued that the viewer plaintiffs didn't demonstrate that the defendants' actions had harmed competition in the sports viewing marketplace. Nor could the TV defendants have logistically conspired with the teams, the motion argued. The defendants also contended that decisions about where to broadcast live televised games are germane to the core product offerings of the networks.

Scheindlin found that the plaintiffs had made a strong enough argument that all the defendants violated section 1 of the Sherman Antitrust Act. But she dismissed claims related to violations of section 2 of the Sherman Act against Comcast, Direc­ TV , and the regional sports networks, saying that the plaintiffs didn't back up assertions that the parties exerted monopoly powers.

For plaintiff Thomas Laumann et al.

Langer, Grogan & Diver :

Ned Diver, Howard Langer, and asso­ciate Peter Leckman. (They are in Philadelphia.) The firm was co–lead plaintiffs counsel. Langer argued the motion.

Klein Kavanagh Costello :

Kevin Costello and Gary Klein. (They are in Boston.) The firm did not comment.

Pomerantz Grossman Hufford Dahlstrom & Gross :

Michael Buch­man and John Ioannou. (They are in New York.) The firm was appointed co–lead counsel.

Wolf Haldenstein Adler Freeman & Hertz :

Mary Jane Fait, Fred Isquith Sr., and Alexander Schmidt. (They are in New York.)

For defendant National Hockey League (New York)

Skadden, Arps, Slate, Meagher & Flom:

Paul Eckles, Shepard Goldfein, James Keyte, and asso­ciate Matthew Martino. (They are in New York.) The firm is also representing the New Jersey Devils LLC and several other hockey teams.

For defendant Office of the Commissioner of Baseball d/b/a Major League Baseball (New York) et al.

In-House:

At the Office of the Commissioner: senior vice president and general counsel Thomas Ostertag and counsel Christopher Brumm.At MLB Advanced Media: senior vice president and general counsel Michael Mellis and senior counsel Mitchell Schwartz.

Proskauer Rose :

Helene Jaffe, Bradley Ruskin, Jennifer Scullion, and associates Carl Forbes Jr. and Robert Forbes. (Robert Forbes is in Los Angeles; the rest are in New York.) The firm, which has represented MLB in a variety of matters, also represents other league entities and many teams in this litigation.

For defendant New York Rangers Hockey Club (New York)

Quinn Emanuel Urquhart & Sullivan :

Stephen Neuwirth,Richard Werder Jr., and associate Ben Harrington. (They are in New York.) The firm did not comment.

For defendant New York Yankees (New York) et al.

Boies, Schiller & Flexner :

Christopher Duffy, Jonathan Schiller, and Alan Vickery. (They are in New York.) David Boies left his previous firm in 1997 in order to continue representing the Yankees in a suit against MLB over merchandising rights.

For defendant Comcast ­Corporation (Philadelphia) et al.

In-House:

At Comcast: senior vice president and deputy general counsel Thomas Nathan and assistant general counsel Jon Newcomb.At NBCUniversal Media LLC: vice president–litigation Mariano Schwed.

Davis Polk & Wardwell:

Arthur Burke, counsel James Haldin, and associates Elyse Glazer and Christopher Lynch. (Burke is in Menlo Park, California, and New York; the rest are in New York.) The firm is long-standing antitrust counsel to Comcast.

For defendant DirecTV LLC (El Segundo, California) et al.

In-House:

Deputy general counsel Christopher Murphy.

Alston & Bird :

Louis Karasik, Andrew Paris, and associates Alexander Akerman and Brian Boone. (Boone is in Charlotte; the rest are in Los Angeles.) The firm has represented DirecTV in commercial litigation matters for many years.

—J.W., with T.C.

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Allen et al. v. Dairy Farmers of America et al.

On November 19 U.S. District Judge Christina Reiss certified two classes of northeastern U.S. dairy farmers who accuse Dairy Farmers of America Inc. , a national milk marketing cooperative, of fixing prices for raw milk. The case, filed in federal district court in Rutland, Vermont, is the second of two related actions; the other, on behalf of southeastern dairy farmers, ended with a $145 million settlement in June [Big Suits, October 2012]. Both involve similar damage claims.

Robert Abrams, then at Howrey , spearheaded the two class actions in 2008 and 2009. Both accused major players in the industry, including DFA and a producer, Dean Foods Company , of suppressing raw milk prices to maximize their profits.

Following his move to Baker & Hostetler , Abrams secured a $145 million settlement with Dean Foods and other defendants in the Tennessee case and clinched an additional $56 million in attorney fees. A trial against the remaining defendants in the Tennessee case, including DFA , was scheduled for January.

The Vermont case, a joint effort between a team at Cohen Milstein Sellers & Toll led by Kit Pierson and Abrams's group, has already produced a $30 million settlement with Dean Foods. Once Dean dropped out in early 2011, the only defendants left were DFA and a related entity, Dairy Marketing Services LLC .

After an initial certification motion failed because the judge found that the plaintiffs' expert couldn't show a common injury, the dairy farmers' team, led by Baker & Hostetler's Robert Brook-hiser, reworked their arguments and renewed their bid for class certification in July. This time they sought to certify a class of farmers that belonged to the DFA and one that did not.

Reiss agreed to certify both. She conceded that objections to class certification hinged on the case's merits, not on whether it can be heard on a classwide basis.

For Non–DFA/DMS plaintiffs

Baker & Hostetler:

Robert Abrams, Robert Brookhiser, Gregory Commins Jr., Terry Sullivan, and counsel Danyll Foix. (They are in Washington, D.C.) The firm represents dairy farmers who were not members of the DFA/DMS.

Langrock Sperry & Wool:

Emily Joselson and Lisa Shelkrot. (They are in Burlington, Vermont.) The firm is local counsel.

For DFA/DMS plaintiffs

Cohen Milstein Sellers & Toll:

Benjamin Brown, Brent Johnson, Kit Pierson, and associates George Farah and Emmy Levens. (Farah is in New York; the rest are in Washington, D.C.) The firm is co–lead counsel.

For defendant Dairy Farmers of America Inc. et al.

Williams & Connolly:

Kevin Hardy, Steven Kuney, Carl Metz, and associates Lauren Collogan, Greg Hilson, and Christopher Looney. (They are in Washington, D.C., except for Looney, who has left the firm.) The firm represents DFA in the related Tennessee class action.

—J.W., with T.C.

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USA v. Caronia

In a closely watched ruling, a panel of the U.S. Court of Appeals for the Second Circuit set aside the 2009 conviction of a pharmaceuticals sales representative on First Amendment grounds. The panel, by a 2-to-1 vote, concluded that drug companies and their reps have a constitutional right to promote prescription drugs for lawful off-label uses. The ruling's potential impact on the Food, Drug and Cosmetic Act, which the government has parlayed into billions of dollars in settlements with drug companies, remains unclear.

The back story began more than a decade ago, when the Food and Drug Administration approved a drug called Xyrem, made by Orphan Medical Inc. , as a treatment for sleep disorders. The FDA regulated Xyrem's distribution closely, because its active ingredient, gamma hydroxybutyrate, is known as the "date rape" drug.

One early proponent of the drug was Dr. Peter Gleason, a psychiatrist in Maryland, who touted it for off-label uses like pain relief and treating depression and was hired by Orphan to promote Xyrem to other doctors. Alfred Caronia, an Orphan sales rep, was one of Gleason's contacts at the company.

In May 2006 Gleason was arrested and charged with several federal felonies related to off-label promotion. Caronia was hit with similar charges. Gleason eventually pled guilty before trial to a misdemeanor offense, but the case appeared to hound him. He committed suicide in 2010. Caronia took his case to trial in 2009, represented by criminal defense lawyer Jennifer McCann and her mentor, Thomas Liotti. Caronia beat back some charges, but a jury convicted him on one misdemeanor conspiracy count. He paid a $25 fine and served a year of probation.

McCann appealed to the Second Circuit, joined by Jones Day's Michael Carvin and Eric Murphy for the Washington Legal Foundation . The team argued that Caronia had been wrongfully convicted of conspiring to misbrand a prescription drug. A group of more than 10 pharma companies tapped Sidley Austin and Ropes & Gray to file amicus briefs.

For appellant Alfred Caronia et al.

Law Offices of Thomas Liotti and Law Offices of Jennifer McCann :

Thomas Liotti and Jennifer McCann. (Liotti is in Garden City, New York; McCann is in New York.) The two handled the original criminal case and briefing and arguments pertaining to errors in jury instructions.

For appellee the United States of America

In-House:

At the U.S. Department of Justice, appellate division: Assistant U.S. Attorney Jo Ann Navickas and attorney Scott McIntosh.At the Office of General Counsel, Food and Drug Division: associate chief counsel Anne Walsh.At the U.S. attorney's office in Brooklyn: U.S. Attorney Loretta Lynch.

For amicus Washington Legal Foundation (Washington, D.C.)

In-House:

Chief counsel Richard Samp. (He is in Washington, D.C.)

Jones Day:

Michael Carvin and associate Eric Murphy. (Carvin is in Washington, D.C., and Murphy is in Columbus.) The firm briefed and argued the First Amendment arguments in the appeal.

For amicus The Medical Information Working Group (Washington, D.C.)

Ropes & Gray:

Alan Bennett, Douglas Hallward-Driemeier, Joan McPhee, and associates Douglas Brayley and Aaron Katz. (Bennett and Hallward-Driemeier are in Washington, D.C.; the rest are in Boston.) The firm has previously represented the group and filed the amicus brief based on issues addressed by the U.S. Supreme Court in Sorrell v. IMS Health Inc.

Sidley Austin:

Coleen Klasmeier and Paul Kalb. (They are in Washington, D.C.) Sidley became involved through its work for numerous members of the group, which is made up of major drug and device manufacturers.

—J.W., with T.C.

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In re Aetna UCR Litigation

On December 7 Aetna Inc. agreed to pay $120 million to settle claims by health care providers that its reliance on an industry database led to widespread under-reimbursement for procedures performed by out-of-network health care providers.

Aetna, which made no admission of any wrongdoing in the proposed settlement, looked to Richard Doren of Gibson, Dunn & Crutcher . James Cecchi of Carella, Byrne, Cecchi, Olstein, Brody & Agnello led settlement negotiations for the plaintiffs.

The litigation began in 2000, when the American Medical Association and state medical associations filed suit in federal district court in New York against UnitedHealthcare Corporation and other insurers. The AMA claimed that the insurers were using an allegedly defective database run by UnitedHealthcare subsidiary Ingenix Inc. to determine "usual, customary, and reasonable" charges for medical procedures. The Ingenix UCR reports, they alleged, grossly understated the true market costs of many procedures, leading the insurers to set artificially low reimbursement rates for out-of-network providers. The AMA went on to file suit in multiple federal and state courts against insurers that relied on the database, including Aetna, Health Net Inc. , Cigna Corporation , and Wellpoint Inc.

In 2007 New York's attorney general filed a suit with related claims. UnitedHealth reached a settlement with the attorney general's office in 2009, agreeing to stop using Ingenix and to rely on a new database run by academic institutions instead of the industry.

In 2011 U.S. District Judge Stanley Chesler in Newark, who is overseeing much of the UCR litigation, including the AMA's suits, dismissed the providers' claims against Cigna in the parallel federal case, prompting settlement talks in the Aetna dispute, according to a plaintiffs lawyer. The current settlement, if approved, will cover claims by patients from March 2001 to the present, and by doctors from June 2003 to the present.

Meanwhile, AMA claims against WellPoint were pending in federal district court in Los Angeles. Health Net settled in 2008 for $225 million and UnitedHealthcare, in 2009, for $350 million. Neither admitted wrongdoing.

For plaintiff the American Medical Association (Chicago) et al.

Pomerantz Grossman Hufford Dahlstrom & Gross :

Robert Axelrod, D. Brian Hufford, and associates Anthony Maul and Susan Weiswasser. (They are in New York.) The firm, which was first retained by the AMA for rate litigation in 2001, chaired the plaintiffs executive committee in the Aetna litigation.

Carella, Byrne, Cecchi, Olstein, Brody & Agnello :

John Agnello, James Cecchi, and associate Donald Ecklund. (They are in Roseland, New Jersey.) Cecchi was selected as lead settlement liaison for the plaintiffs in 2009 by Judge Faith Hochberg, who presided over the rate cases in the District of New Jersey before Chesler took them on.

Wilentz, Goldman & Spitzer :

Kevin Berry, Angelo Cifaldi, Barry Epstein, Lynne Kizis, Eric Marcy, Barbara Quackenbos, Kevin Roddy,Philip Tortoreti, counsel Abby Resnick-Parigian, and associates Michael Fried and Keven Friedman. (Berry is in New York; the rest are in Woodbridge, New Jersey.)

Whatley Kallas :

Edith Kallas, W. Tucker Brown, and Joseph Whatley. (Brown is in Birmingham; the others are in New York.)

Seeger Weiss :

Christopher Seeger and Stephen Weiss. (They are in New York.)

Scott + Scott :

Christopher Burke, Joseph Guglielmo, David Scott, and associate Amanda Lawrence. (Burke is in San Diego; Guglielmo is in New York; and the others are in Hartford.) The firm coleads the UCR litigation pending in California.

For Aetna Inc. (Hartford)

Gibson, Dunn & Crutcher:

Richard Doren, Joshua Lipton, Geoffrey Sigler, and associates Nicci Adams, Brian Boone, Beth Coombs, Carey Anne Fenton, Tyler Green, Melanie Katsur, Heather Richardson, and Sarah Wilson. (Doren, Coombs, and Richardson are in Los Angeles; Boone has left the firm; the rest are in Washington, D.C.) Aetna is a longtime client.

—Brian Zabcik, with T.C.

David Marcus is senior writer for TheDeal.com. Email: editorial@alm.com.