In re Anthem Data Breach Litigation
Anthem Inc. has agreed to pay $115 million to settle claims related to the massive 2015 cyberattack that affected 78.8 million customers. If approved by U.S. District Judge Lucy Koh of the Northern District of California, the deal would be the largest data breach settlement ever.
As part of the deal, Anthem has agreed to provide two years of credit monitoring and identity protection services to those affected. The deal also creates a $15 million fund to pay out-of-pocket costs for class members stemming from the cyberattack. Plaintiffs lawyers, led by Eve Cervantez of Altshuler Berzon and Andrew Friedman of Cohen Milstein Sellers & Toll, will seek up to 33 percent of the settlement funds under the deal, or nearly $38 million, plus up to $3 million in expenses. The plaintiffs team also includes Geoffrey Graber, Sally Handmaker and Eric Kafka of Cohen Milstein and Jonathan Weissglass, Danielle Leonard, Meredith Johnson and Tony LoPresti of Altshuler Berzon.
In a lengthy statement provided by a company spokeswoman, Anthem pointed out it did not admit any wrongdoing as part of the deal nor “that any individuals were harmed as part of the cyber attack.”
“Nevertheless, we are pleased to be putting this litigation behind us, and to be providing additional substantial benefits to individuals whose data was or may have been involved in the cyber attack and who will now be members of the settlement class,” the spokeswoman said. The company’s lead outside counsel, Craig Hoover in the Washington, D.C., office of Hogan Lovells, declined to comment.
Also representing Anthem are E. Desmond Hogan and Peter Bisio in Hogan Lovells’ D.C. office; Chad Fuller of Troutman Sanders’s San Diego office; John Martin and Lucile Cohen of the Columbia, S.C., office of Nelson Mullins Riley & Scarborough and Brian Kavanaugh of Kirkland & Ellis’s Chicago office.The U.S. Judicial Panel on Multidistrict Litigation assigned more than 100 lawsuits filed against the insurer to Koh in June 2015. The judge rejected Anthem’s early bid to dismiss the lawsuit in February 2016, finding that the theft of personal identification information is a harm to consumers in itself separate from any subsequent misuse of the information.
At press time, the settlement was set for an Aug. 17 preliminary approval hearing before Koh.—Ross Todd
Kirschenbaum v. 650 Fifth Avenue
A charity with an ownership stake in a 36-story building in Manhattan and several other properties served as a front for the Iranian government, moving money at its behest in violation of U.S. sanctions, a federal judge ruled on June 29 following a trial of roughly five weeks. Assistant U.S. Attorneys Martin Bell, Michael Lockard and Daniel Tracer of the Southern District prosecuted the case.
Manhattan federal district judge Katherine Forrest’s 147-page ruling, released just after the jury in the case returned its verdict, allows the U.S. government to seize the Alavi Foundation’s majority stake in the 650 Fifth Ave. building through civil forfeiture. “The government of Iran’s control will not manifest as an Iranian flag flying over the 650 Fifth Ave. building or any other subject property,” Forrest said. “But the evidence is there, it is clear, and it is dispositive.”
The ruling also allows a class of victims of state-sponsored terror attacks and their families to enforce judgments in their favor. The jury awarded them turnover of 650 Fifth Ave. as well as other Alavi real estate holdings in Queens; Houston; Carmichael, California; Catharpin, Virginia; and Rockville, Maryland.
As part of a settlement agreement in the case between the government and the judgment creditors, the government plans to sell the Manhattan building, which is valued at more than $500 million, and pass all forfeiture proceeds to the creditors. James Bernard, a partner at Stroock & Stroock & Lavan, which represented judgment creditors in the case, said Forrest’s ruling brings “our clients one step closer to the recovery to which they are entitled.”
In a statement, Acting Southern District U.S. Attorney Joon Kim said the case amounted to the largest civil forfeiture jury verdict and the largest terrorism-related civil forfeiture in history. “This verdict not only vindicates the exemplary work of all the career prosecutors and law enforcement partners who have doggedly pursued this case for almost a decade, but importantly, it also allows for substantial recovery for victims of Iran-sponsored terrorism,” Kim said.
The building was constructed in the 1970s for the Pahlavi Foundation, a charitable organization formed by the shah of Iran with a New York branch that eventually became Alavi. Financing was provided by a $42 million loan from Bank Melli, which is controlled by the Iranian government.
The U.S. government first began to seek forfeiture of 650 Fifth Ave. in 2008. Forrest first found that the building was subject to forfeiture in 2013 when she ruled that Alavi, which held a 60 percent stake in the building, and the Assa Corp., a partner company that held a 40 percent stake, were working as fronts for Bank Melli, but the U.S. Court of Appeals for the Second Circuit reversed her ruling on appeal. Stroock litigation partner Curtis Mechling, associates Patrick Petrocelli and Pamela Takefman, and former associates Nate Stopper, Ben Weathers-Lowin, Monica Hanna, Jeremy Rosof and Judy Goodwin also served on the trial team in the case.Alavi’s defense team, led by John Gleeson of New York’s Debevoise & Plimpton, also included Debevoise attorneys Matthew Fishbein, Sean Hecker and Derek Wikstrom. Gleeson said in an email that his client is disappointed with the verdict and ruling and that it is “considering its options.”—Andrew Denney
Qualcomm v. Apple
In the latest face-off between Apple Inc. and Qualcomm Inc., the latter has filed two patent infringement complaints related to six of chipmaker Qualcomm’s patents covering key technologies that enable certain features in the iPhone.
Qualcomm filed one complaint with the U.S. International Trade Commission, alleging that Apple has engaged in unlawful importation and sale of iPhones that infringe on six patents in question. The company is requesting that the federal agency ultimately bar importation and halt further sales of infringing products in the United States, according to the July 7 complaint, filed by intellectual property partner S. Alex Lasher, David Nelson, Richard Erwine and Sean Pak of Quinn Emanuel Urquhart & Sullivan. Qualcomm’s lawyers at the ITC also include Tom Schaumberg and Deanna Tanner Okun of Adduci, Mastriani and Schaumberg.In a parallel action, the telecommunications giant filed a patent infringement complaint against Apple in the U.S. District Court for the Southern District of California. Quinn Emanuel IP litigation co-chair Nelson is representing Qualcomm in the suit, as are Evan Chesler, Keith Hummel and Richard Stark of New York’s Cravath, Swaine & Moore and Karen Hewitt and Randall Kay of the San Diego office of Jones Day. “While Apple built the most successful consumer products in history by relying significantly on technologies pioneered by Qualcomm, Apple refuses to pay for those technologies,” the complaint states. “Rather than pay Qualcomm for the technology Apple uses, Apple has taken extraordinary measures to avoid paying Qualcomm for the fair value of Qualcomm’s patents.”
Such measures have included a Jan. 20 lawsuit Apple brought against Qualcomm, alleging “excessive royalties” and withholding of payments. Just days later, Apple also filed suit in China, premised on similar claims.
In response to request for comment, Apple referenced a statement issued on June 20. “Qualcomm’s illegal business practices are harming Apple and the entire industry,” the statement said. “They supply us with a single connectivity component but for years have been demanding a percentage of the total cost of our products—effectively taxing Apple’s innovation. We believe deeply in the value of intellectual property but we shouldn’t have to pay them for technology breakthroughs they have nothing to do with.”
In addition to the ongoing legal battle with Apple, Qualcomm has also been sued by the Federal Trade Commission for using anti-competitive tactics to maintain its monopoly in the supply of a key device used in cellphones. This followed a more than $800 million fine by the Korea Fair Trade Commission and a nearly $1 billion fine for violating China’s anti-monopoly law.—Jennifer Williams-Alvarez