Some attorneys spend decades dreaming of launching their own law firm. Not so Brian Robbins and Marc Umeda, who opened their own litigation shop in 2002, a mere five years out of law school.
"I think I suffered from the benefit of being 28 years old at the time and not knowing I was biting off more than I could chew," Robbins said. "When you do that, I think you don’t have a choice and you figure things out, and it worked out very well for us."
Robbins Umeda is a serious player in the shareholder-rights arena with more than $1 billion in recoveries. The San Diego firm has secured settlements from companies including KB Home and Cardinal Health Inc. It has grown steadily and now boasts about 20 lawyers. Several former assistant U.S. attorneys and major firm lawyers are on in its roster.
Frank Partnoy, director of the Center for Corporate and Securities Law at the University of San Diego School of Law, has been favorably impressed with the firm’s work and the quality of its attorneys. "I think highly of both Brian Robbins and [former O'Melveny & Myers litigator and current Robbins Umeda partner] Felipe Arroyo, who was a law school classmate of mine at Yale," Partnoy said. "Felipe is a really smart lawyer who could be at the very top of any plaintiff or defense law firm or in virtually any government office."
Robbins and Umeda decided to focus on shareholder-rights litigation — not only because they had a track record there but because they felt it was an underserved niche.
"It seemed as though shareholders rights weren’t well-protected or litigated," during the early 2000s, Robbins said. "We saw an opportunity to make a name for ourselves by doing those cases, because they aren’t easy. You have to have a withstandable ego."
Although shareholder rights is the firm’s bread and butter, it also handles consumer class actions, antitrust and Employee Retirement Income Security Act litigation.
Early successes helped the fledgling firm make a name for itself in the relatively small pool of shareholder-rights litigation firms, Umeda said. "We wanted to establish our credibility early on. We didn’t want to be seen as the new knuckleheads on the block. We worked hard to make sure that didn’t happen."
The firm scored a major victory in 2005 with one of the largest securities fraud class action settlements in San Diego history — $61.5 million on behalf of shareholders of defense contractor Titan Inc. The firm was co-lead counsel in the case, which involved the failure of Titan executives to inform potential buyer Lockheed Martin Corp. that it had run afoul of the Foreign Corrupt Practices Act. Shareholders lost money when Lockheed reduced the amount of its bid.
Just after forming, Robbins Umeda attorneys brought a shareholder derivative action against the top executives of Tenet Healthcare Corp. on behalf of the company, which alleged that its leaders knowingly overbilled Medicare. The case dragged on until 2006, when the firm secured a $51.5 million settlement that included corporate-governance reforms.
It hasn’t all been victories for Robbins Umeda. The firm was one of several involved in the high-profile derivatives suit brought by Brocade Communications Systems Inc. against 10 former executives involved in the company’s stock-options backdating scandal. The company collecting less from the former executives than it spent on litigation.
Stock-options backdating cases kept the firm busy during the mid-2000s, Robbins said. These days, the firm is busy representing shareholders in mergers-and-acquisitions cases. "There are a lot of private equity companies or management-led buyouts of publicly traded companies because they see an opportunity to take advantage of the depressed price of those companies," he said. "A lot of our cases right now are focused on representing shareholders in connection with those acquisitions and trying to get them more money for their investments. They don’t really have much say, other than the litigation avenue."
Pushing for corporate governance reforms is a priority, in part because it is a good way to ensure that shareholder values stay up, Robbins said. Major corporate reform was a significant element in a settlement the firm finalized last month with Kratos Defense & Securities Solutions Inc. (formerly Wireless Facilities). The shareholder derivative action was filed in 2004 alleging accounting mistakes and other problems. Under the settlement, the pair of brothers who were running the company took smaller roles and forfeit stock.
"Our goal is to champion shareholder rights on behalf of people who couldn’t really hire lawyers if they had to pay for them on an hourly basis, and do that in a way that brings credibility to our firm and raises our reputation for shareholders-rights litigation," Robbins said. "I think we probably are one of the firms that defense lawyers think of first when they think of shareholder derivative actions."
Contact Karen Sloan at firstname.lastname@example.org.