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Perkins Coie reached a multimillion-dollar settlement last month with former client Tokyo Kikai Seisakusho, a manufacturer of large newspaper printing presses. The Japanese company sued two of the firm’s Washington-based partners for malpractice in February 2006 stemming from work they did in a legal dispute involving anti-dumping laws. TKS agreed to drop its suit against the Seattle-based firm on August 22. Days before the settlement documents were filed, the company announced in a press release that it would receive $19 million to settle a malpractice suit arising from an anti-dumping case. It did not name the law firm in the release, citing a nondisclosure agreement. But two Perkins Coie partners, Yoshihiro Saito, an international trade litigation lawyer, and Barry Reingold, an antitrust litigation lawyer, were named as co-defendants in the company’s malpractice complaint. Both declined to comment. Saito brought TKS to Perkins Coie as a client in 1998, when he joined as a partner from Graham & James. “It was resolved by agreement, and litigation ended,” says Robert Giles, managing partner of Perkins Coie. “Other than that, I can’t say anything because of the confidentiality agreement.” TKS filed its claim against Perkins Coie, which has more than 580 lawyers, after losing an anti-dumping suit that forced the company to pay $31 million in damages to Goss International Corp., a competitor in the printing industry. The Japanese company claims that it lost the case when a privileged document was negligently handed over to Goss. In the malpractice suit, TKS also sought the reimbursement of more than $3 million in attorney fees and more than $100 million in compensatory and punitive damages. “It looks like a pretty substantial piece of carelessness by the lawyers at Perkins Coie,” says Marc Mayerson, a complex insurance coverage litigation partner at Spriggs Hollingsworth who was not involved with the case. “Law firms don’t want to make themselves to be easy targets for malpractice suits. But that has to be balanced with genuine regret when a law firm’s error harms a client.” Mayerson says it would be uncommon for a settlement of this kind to not fall well within Perkins Coie’s insurance coverage. “If you are sued for a breach of professional obligation in your capacity as a lawyer, then your coverage will apply,” says Mayerson. “There are exclusions for dishonesty — but not for negligence or stupidity.” Peter John and James Benak, litigation partners at Chicago’s Williams Montgomery & John, were the lead attorneys for TKS. Barry Nace, a name partner at Washington’s Paulson & Nace, was the local counsel. Perkins Coie turned to professional liability defense lawyer Michael Sundermeyer, a partner at Williams & Connolly. “That amount of money shows that Perkins Coie felt they were exposed,” says a Washington partner who specializes in malpractice settlements. “You don’t pay $19 million as a law firm if you don’t think you can be hurt.” A PRESSING MATTER The malpractice suit is part of a long-running legal dispute between two makers of newspaper printing presses. The fight centers on TKS’ pricing policies and has pulled in courts and lawmakers from both America and Japan. TKS first retained Perkins Coie on the matter in 1996. At the time, the company was being investigated by the Department of Commerce on charges of “dumping,” or selling its printing presses in the United States for substantially below the market price of similar products it sold in Japan. While that investigation played out, Goss, an Illinois-based company, filed suit in 2000 against four international printing press manufacturers, including TKS. Goss alleged that the Japanese and German companies had violated the Anti-Dumping Act of 1916. According to Goss’ complaint, the dumping severely affected the company’s sales, ultimately forcing it into bankruptcy. With Saito and Reingold already handling the government’s probe, TKS made the duo lead counsel in Goss’ litigation as well. The case would become the first civil matter tried under the Anti-Dumping Act. Three of the four companies settled with Goss in 2003. But TKS says in its malpractice complaint that, following the counsel of Saito, the company declined to accept a $5 million settlement offer that Goss made in December 2002 and decided instead to take the case to trial. Goss had to clear a high threshold to make its case: Under the act, Goss had to show not only that TKS flooded the market with underpriced presses but that it did so with the specific intent of damaging Goss. By the time the case went to trial in November 2003, the parties had exchanged more than a million pages of documents, taken scores of depositions on two continents, and translated thousands of communications from Japanese to English. But in its malpractice complaint, TKS says there was one document in particular that proved critical to the case: In 1996, the company sold two printing presses to The Dallas Morning News with a disguised rebate. TKS and the News originally agreed on a price of $5.2 million for the two presses — the same price TKS had charged the News two years earlier in a similar deal that the Commerce Department later determined to have violated anti-dumping laws. With that in mind, TKS says in its complaint that Perkins’ Saito advised the company to raise the price on the new presses by $2.2 million to avoid another government review. In conjunction with the price increase, though, Saito built a hidden rebate for the News into the deal through a combination of cancelled fees and free supplies that would reduce the paper’s cost back to the 1994 price tag. TKS followed Saito’s advice. A SECRET REBATE REVEALED And that’s when Goss got lucky. During discovery, TKS claims that Perkins Coie made the costly error of sending Goss’ attorneys privileged documents outlining the printing press transaction with the News. According to the complaint, those documents also showed that Saito advised TKS to destroy any evidence of the true cost of the presses sold to the News. But Nicholas Critelli, name partner of Nicholas Critelli Associates, who was local counsel for TKS in the Goss trial, says it was unclear that handing over the documents was inadvertent or, in hindsight, a poor tactical decision. “I think Perkins Coie made a tactical decision with the documents they produced,” says Critelli. “But I didn’t see those documents as ultimately hurting our case. What was critical to us was the court’s ruling on the issue of similarity: Were the presses being sold lower in the U.S. than in Japan?” In December 2003, a federal jury in Cedar Rapids, Iowa, answered the question affirmatively and hit TKS with a $10.5 million judgment. Further, because TKS was found to have violated the anti-dumping act by selling products in the United States at below market value with the intent of destroying or injuring a U.S. industry, the award was tripled, bringing it to $31.6 million. “One way or another, we’re going to the 8th Circuit Court of Appeals,” Barry Reingold told the Corporate Legal Times after the jury’s decision. “And if we have to, we’ll take it all the way to the Supreme Court.” But TKS had other ideas. Before appealing the case, the Japanese company dropped Saito and Reingold as its lead counsel in favor of a team of lawyers from Sidley Austin led by Washington managing partner Carter Phillips and international trade partner Neil Ellis. (TKS lost the appeal.) Subsequently, TKS filed its malpractice suit against Perkins Coie and partners Saito and Reingold. “It was going to be a tough case for Perkins Coie,” says a lawyer involved with the malpractice settlement. “They had some good defenses, but there were things that were going to come out that a jury wouldn’t like. And keep in mind, the settlement shows TKS recognized there was some risk, also.” The case settled before many of the depositions were finished — and those that were taken remain under seal. The list of local lawyers deposed includes Barry Cohen, a professional responsibility partner at Crowell & Moring, and Peter Koenig, an of counsel at Miller & Chevalier focused on international trade. Still ahead for Saito and Reingold is the possibility of a call from D.C.’s Office of Bar Counsel. “If any allegations come to our attention that implicate attorney misconduct,” says Bar Counsel Wallace “Gene” Shipp Jr., “we have an obligation to investigate that case.”
Nathan Carlile can be contacted at [email protected].

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