Government Response to Cybersecurity Threats
Over the past several years, data security breaches have hit a broad array of industries -retail, financial, entertainment, health care. Universities and governments have also fallen victim to cyber threats. In response to the proliferation of these threats, corporate leaders, consumer groups, and intelligence and military leaders have all called for comprehensive cybersecurity
and data-breach legislation. But Congress has reacted slowly, sending to the President's desk only one bill that continued
existing efforts without confronting the harder issues presented by these threats. In the face of this legislative inaction, the President has issued executive orders aimed at fostering public-private cooperat ion on data security issues, while federal and state regulators are moving to fill the legislative void with standards of their own, often in a piecemeal fashion without express Congressional authority. Industry and business groups are forced to address data security challenges witho ut clear lines of authority in the government or a modern set of laws identifying permissible and impermissible data security techniques.
The Federal Trade Commission, for example, now describes itself as the "nation's leading privacy enforcement agency,"
aggressively pursuing enforcement actions under Section 5(a) of the FTC Act against companies for allegedly failing
to properly manage their cyber risk. Meanwhile , the Department of Homeland Security has the lead in assessing cybersecurity vulnerabilities w ithin the private sector and responding to cyberattacks. The Departments of Commerce, Treasury, and Justice , as well as the Securit ies and Exchange Commission and financial market regulators, also increasingly are involved in overseeing the intersections between data security, law enforcement, privacy and consumer protection, market disclosure, and systemic risk.
"It is generally acknowledged that the government 's efforts have
been reactive and disjointed, and many have questioned the wisdom of ad hoc enforcement actions to establish standards and rules in this area. It remains to be seen if the 114th Congress can deliver comprehensive cybersecurity legislation to empower and guide regulatory agencies , enforcement authorities , and corporate America. "
Danielle Gray, a partner in the Financial Services practice.
O'Melveny is uniquely equipped to provide strategic advice for managing risk in this rapidly changing area. Our team includes a former US National Security Advisor, a former Cabinet Secretary and Senior Adviso r to the President, a former
White House Counsel, a former Deputy Secretary of Commerce, a former Director of the Federal Trade Commission's Bureau of Competition, and severalformer top lawyers in the Department of Justice and Securities and Exchange Commission.
Inter Partes Review Now Standard in Patent Cases
Since the Leahy-Smith America Invents Act made the inter partes review (IPR) process available in September 2012,
it has become an extraordinarily popular defense tactic for responding to patent infringement litigation. The process before the Patent Trial and Appeal Board (PTAB) moves far more quickly than the old reexamination processes, providing certain advantages over district court litigation, including no presumption of validity of a challenged patent and a "broadest reasonable interpretation" standard of claim construct ion. Both of these advantages make invalidity easier
to prove. The IPR process also requires challengers to file petitions quickly and carries estoppel provisions that will bar them from asserting invalidity in district court on any grounds that could have been brought in the IPR once the PTAB issues a final decision.
"Every patent litigator, whether on the defense side or plaintiff 's side , needs to be intimately familiar w ith the inter partes review process. It is part of the strategic thinking now in nearly every patent case we handle ."
Darin Snyder, chair of the Intellectual Property & Technology practice.
Although the PTAB has instituted review based on IPR petitions in the vast major ity of cases, it can be defeated. O'Melveny recently defeated institution of an IPR review by attacking the challenger's failure to adequately articulate a motivation to combine the asserted prior art references and failure to address the secondary evidence of
non-obviousness developed during the original prosecut ion of the challenged patent. In what the media called
a "rare" and "potentially groundbreaking" decision, O'Melveny defeated an effort by Synopsys, Inc. to invalidate patent claims owned by Mentor Graphics. To our knowledge, this was one of the first final decisions in an IPR in which patent claims survived. These claims ultimately served as the foundation for a successful jury trial and a more than US$36 million award to our client.
How to Prepare for the Chinese Anti-Corruption Crackdown
To avoid getting swept up in the Chinese government's corruption crackdown, as seen in its recent arrests of foreign executives, companies conduct ing business in China should take immediate action to bolster their anticorruption compliance programs to address issues from Chinese anti-cor ruption laws, and the intersections between the
anti-corruption laws and the FCPA and UKBA. The best plan of action is to identify risk areas and implement a fully
functioning anti-bribery compliance program and to conduct effective compliance risk evaluation from time to time.
"It is difficult to predict where and when the Chinese government will take aim. This means that any company doing business in China needs to be prepared for the worst."
Bingna Guo , partner in the International Litigation practice.
"The government 's increasingly active anti-corruption campaign means that not only are Chinese prosecutors looking for cases in this area, but Chinese companies are conducting their own anti-corruption audits and these too can snare US and other global companies who do business with them ."
Steven J. Olson, partner in the White Collar Defense and Corporate Investigations practice.
Being prepared can help companies handle a Chinese government investigation quickly, without too much disruption to their business. O'Melveny assisted a leading California-based semiconductor company in successfully navigating the arrest and prosecution of one of their sales executives in China for alleged commercia l bribery. The firm conducted a rapid internal investigation, advised the company on strategy-including remedial measures -and coordinated wit h two Chinese criminal law firms representing the company and the employee.
A Look at the Global Regulatory Landscape for Funds
O'Melveny is working with US and Asia-based fund managers, as well as EU-based managers, to navigate the continuing requirements of the A IFMD (Alternative Investment Fund Managers Directive). This remains the key consideration for all fund managers looking to raise funds from European investors. The AIFMD has changed the global fundraising landscape with its increased authorization and transparent reporting requirements. Although the aim was to create a simple European
fundraising passport , this is not fully in place and managers will still need to consider the regime of each individual European
country where they are fundraising for the next few years.
"This is a real challenge as, in a number of European countries, the rules are not written or are impossible to understand. "
John Daghlian, chair of the global Investment Funds practice.
Within the US, O'Melveny is keenly aware of the continuing focus by the SEC, FINRA, and CFTC on our asset management clients. One of the regulatory issues the firm guides clients through is the need for asset managers to set up broker dealers to house their sales teams. The SEC has begun to target firms that do not comply with the exemptions from broker dealer registration . In addition, we are regularly analyzing whether hedging and swap transactions by our asset manager clients require such clients to register with the CFTC.
"One legal challenge facing FinTech companies is determining how the complex and evolving web of state , federal , and fore ign regulations apply to newer business models in the financial services industry, one of our economy 's most highly regulated sectors. "
Eric Sibbitt , partner in the Capital Markets practice.
O'Melveny advises early-stage and established FinTech companies on corporate, regulatory, and litigation considerations, helps them bring their offerings to market, and counsels them on major capital-raising and strategic transactions. In 2014, the firm played a key role in the blockbuster billion-dollar initial public offering of Lending Club, which marked the first IPO by an alternative lender and was one of the 10 biggest IPOs by a US tech company ever. The success of the Lending Club IPO is expected to have a
major impact on the FinTech industry, as it ushers in offerings by other FinTech companies. O'Melveny represented Morgan Stanley
& Co. LLC, Goldman, Sachs & Co., Credit Suisse Securities (USA) LLC, and Citigroup Global Markets Inc., as joint bookrunners; and Allen & Company LLC, Stifel, Nicolaus & Company, Incorporated, and BMO Capital Markets Corp. as co-managers in the deal.
Energy Tax Breaks Extended
At the end of 20 14, legislation extended the date by which construction had to commence (the "begun construction" deadline) from January 1, 20 14 to January 1, 20 15 in order for wind and certain other renewable energy projects to qualify for production tax credits (or, alternatively, investment tax credits in lieu of production tax credits).
"This extended deadline, although limited , provides new opportunities for tax equity investment in 2015 because it allows developers to reallocate activities performed and costs incurred in 2014 to separate
projects, increasing the number and size of projects that qualify for credits. Furthermore , certain projects intended to qualify under the prior begun construction deadline may now be more attractive to tax equity investors since this extended date mitigates uncertainty as to whether the activities performed or costs incurred before the end of 2013 were sufficient to
satisfy the prior begun construction deadline. "
A rt Hazlitt, partner in the Project Development and Real Estate and Business Tax practices.
In addition to traditionaltax equity investments, 20 15 may see a significant increase in the use of "yieldco" structures in the United States. By combining operating renewable energy projects (or, in some cases, renewab le energy projects and other non-renewable energy assets) in a single publicly traded entity (i.e., a yieldco), renewable energy developers are able to access capital markets by offering investors equity in vehicles that produce a steady stream of income that is, in large part, off-set for federal income tax purposes by the tax benefits generated by the renewable energy assets . The industry's increasing interest in the yieldco structure will very likely continue into 2015.
Impact of Recent Supreme Court Decisions on Securities Class Actions
Reinforcing Wai-Mart v. Dukes' requirement that courts must undertake a "rigorous analysis" of Rule 23's requirements before certifying a class, the US Supreme Court in Comcast v. Behrend handed corporate defendants a valuable new tool for fending off class actions. Noting that "Rule 23(b)'s predominance criterion is even more demanding than Rule 23(a)," the Comcast Court held that class certification was improper where plaintiffs failed to demonstrate that damages were "capable of measurement on a classwide basis." In the time since Comcast, it has become clear that the decision holds particular value for defendants in securities class actions, allow ing them to zero in earlier in a case at the class certification phase on
what is often one of the greatest weaknesses in the plaintiffs' case-a viable damages theory.The Supreme Court raised the class certification bar even higher for securities cases in Halliburton Co. v. Erica P. John Fund, Inc. , holding that defendants may rebut the fraud-on-the-market presumption of reliance at the class certification stage by showing that the alleged misrepresentation did not actually impact defendant's stock price.
"While Comcast was an antitrust case, the decision has significant ramifications for securit ies actions , putting the spotlight on plaintiffs' Achilles heel: the ability to isolate damages attributable to the alleged fraud from those caused by other factors. Both Comcast and Halliburton will likely result in district courts ' increased scrutiny of damages and price impact th rough evident iary hearings at the class certification stage ."
Jeffrey Kilduff , chair of the Securities Litigation practice.
While these two decisions will no doubt result in the increased use of event studies and expert testimony at the class certification stage, much remains to be seen about their other practical effects, particularly on the timing of class
certification. For example, will litigants on either side see tactical advantages to expediting the class certification process, or will lengthy class certification discovery and briefing become the norm? Will merits discovery be delayed until after class certification motion is resolved, or will parties oppose staggered, separate tracks and support a single track for merits
and class certification? And, bigger picture, how will the time and expense of these efforts affect the timing of settlement discussions and the ultimate settlement value of cases? We expect to begin seeing answers to these questions in 2015 as Comcast and Halliburton begin to shape how district courts will grapple with these issues.
Oil Prices Affecting E&P Industry
From July 2014 through the beginning of 2015, crude oil prices in the United States tumbled to the lowest levels in approximately half a decade. The US Energy Informat ion Administration (the EIA) expects continued downward pressure on oil prices over the next year, and the early 2015 values of futures and options contracts suggest high market uncertainty
in the 2015 price outlook for crude oil. Declining oil prices have had a tremendous impact on cash flow for exploration and
production (E&P) and services companies , causing many of them to become highly leveraged. Less than a week into 2015 , WBH Energy became the first E&P company to file for chapter 11 this year. With oil prices projected to remain low for at least the first half of 2015, market speculators think this may be the first of a wave of E&P companies and E&P-service companies that file for chapter 11 in 2015.
"The current environment faced by over-leveraged E&P companies and service providers , influenced largely by the continued drop in oil
prices, means that some companies may need to move defensively and consider restructuring alternatives while others may move offensively. Similarly, investors may seek to protect , bolster, or estab lish their positions in the industry."
Suzzanne S. Uhland , chair of the US Restructuring practice.
There are many unique issues with distressed E&P companies and service companies . O'Melveny has unique qualifications and experience to provide strategic advice for any participant in the E&P industry, whether at the company, lender, or investor level. This experience is buttressed by the firm's substantial skill and knowledge in all bankruptcy-related matters, having played significant roles in many of the largest and most high-profile restructurings in recent years with particular depth in the energy space. O'Melveny's experience in bankruptcy is complimented by some of the leading transactional attorneys in the United States, who have extensive experience advising clients on a variety of oil and gas matters.
Banking and Financial Services
In 2014, O'Melveny solidified its reputation as a leading advisor to banking and other financial institutions. Chambers USA notes our "broad group of experienced attorneys who regularly represent high-profile clients in the financial services sector." Sources say that our "great partners" are "very client service-oriented and very smart strategic thinkers" and "put whatever resources necessary to address an issue."
O'Melveny represents ACE in numerous high stakes coverage cases involving bankruptcy, environmenta l, mass tort, and other issues. In 2014, O'Melveny was retained to serve as lead trial counsel in an insurance coverage case over liability for environmental contamination at hundreds
of sites across the United States. After O'Melveny defeated
summary adjudication motions on several critical issues and advanced creative positions that threatened to shape the scope of trial to ACE's advantage , the parties entered into a global settlement, thereby putting an end to a decade-long legal battle. O'Melveny also successfully resolved coverage litigation arising out of a high-profile mass-tort bankruptcy with over US$5 billion in damages asserted.
O'Melveny won dismissal with prejudice of a putative securities class action in the Southern District of New York for an underwriting syndicate involved in the initial public offering of an Argentine energy company. The action
was brought by purchasers in YPF Sociedad Anonima's US$1.07 billion IPO in March 2011 . The plaintiffs claimed that the offering documents misled them about the risk that the A rgentine government might nationalize YPF, a risk that came to fruition in April 2012. In dismissing the case, the court accepted O'Melveny's arguments that the claims against the underwriters were time barred.
O'Melveny served as underwriters' counsel in Lending Club's US$1 billion-plus initial public offering-the second largest IPO by a US techno logy company in 2014 and
one of the 10 biggest tech offerings ever. The IPO is
also the first public offering for an alternative lender, and stands at the intersection between the traditional financial services sector and the emerging peer-to-pee r technology sector. Lending Club is the world's largest
online marketplace connecting borrowers and investors,
and its marketplace has fac ilitated over US$6 billion in loan originatio ns since it first launched in 2007.
O'Melveny successf ully defended H&R Block in a nationwide class and collective action alleging failure to provide compensation for continuing education. Following oral argument , the Eighth Circuit Court of Appeals affirmed the district court's ruling granting O'Melveny's motion
for summary judgment, which dismissed the case on the
merits as to all of the federal and state-law claims asserted against H&R Block by the approximately 45,000 members of the certified classes. The Eighth Circuit's opinion is expected to have a widespread, precedential impact on several key national wage and hour issues, including the question of whether "interns" are employees entitled to compensation under the Fair Labor Standards Act.
Banking and Financial Services (cont 'd)
Beach Point Capital Management, LP
An O'Melveny team of litigators and restructuring and financing spec ialists represented Beach Point, a multi billion dollar investment manager specializing in credit related investments, in several matters in 2014, including:
O'Melveny secured a favorable settlement for Beach Point in a dispute stemming from a loan of more than US$73 million provided to real estate company Variant Holding Company, LLC to finance the acquisition of various apartment complexes around the United States . Beach Point sued in California state court after Variant defaulted on
the loan. Discovery revealed that Variant had used
shell entities, kick back arrangements, and forged documents to abscond with loan proceeds intended for capital expenditures on the apartment complexes.
Variant also was skimming proceeds off the top of
the sales of certain properties that were otherwise due to Beach Point under the loan agreement. The scheme resulted in the diversion of millions of dollars to Variant and its management at Beach Point's expense. Variant responded by filing for bankruptcy in the District of Delaware, temporari ly staying the California litigation and the foreclosure auction. O'Melveny then immediately filed a motion for the appoint ment of a chapter 11 trustee to take over
control of Variant. The restructuring lawyers worked with the litigators to buttress the trustee motion with the evidence of fraud collected in the California action. The US Department of Justice joined in
the request for a trustee, citing the overwhelming evidence of fraud that O'Melveny had amassed and presented. On the eve of the trustee motion hearing, Variant agreed to oust current management and appoint an independent board of managers and
a chief restructuring officer to oversee the sale of
its assets. Variant also agreed to pay Beach Point US$78 million plus interest from the proceeds of the sales-an amount that includes payment of all of O'Melveny's fees.
O'Melveny represented Beach Point in the negotiation of a US$65 million investment in a Certares-led joint venture. Beach Point's investment took the form
of the acquisition of a US$65 million term loan to
and 20% equity position in the Certares investment vehicle. As part of the transaction, American Express spun off its Global Business Travel division operations into a joint venture, of whic h an investor group led
by Certares acquired a 50% interest in exchange for an investment of US$900 million. The business will continue to operate under the "American Express Global Business Travel" brand.
Consumer and Retail Products
Over the past year, consumer and retail clients turned to O'Melveny for advice on matters ranging from antitrust, intellectual property, and products liability litigation to M&A, restructurings, and strategic corporate advice. Our successes include defeating class certification on a multi-billion-dollar price-fixing claim and closing the largest cross-border acquisition within the publishing industry in Chinese history.
Sportsman's Warehouse Holdings, Inc.
O'Melveny represented outdoor sport ing goods retailer Sportsman's Warehouse and affiliated funds of Seidler Equity Partners in the US$132.1 million initial public offering of Sportsman's Warehouse Holdings' common stock on the Nasdaq Global Select Market. Sportsman's primarily used the proceeds to repay amounts outstanding under its term loans.
O'Melveny secured dismissal of a class action complaint in which the plaintiffs alleged that Marriott, other hotels, and online travel agencies were using a complex web of
most-favored-nation clauses and resale price maintenance
agreements to illegally fix prices for online room
reservations. The court, holding that plaintiffs had failed
to satisfy Twombly's pleading requirements, threw out the first amended complaint and then, after giving plaintiffs the opportunity to remedy the complaint's deficienc ies, dismissed the claims again. In a rarely seen concession of defeat, the plaintiffs abandoned their appeal rights, allowing the appeal deadline to pass and sealing the victory for Marriott and the other defendants.
Phoenix Education Publishing Co., Ltd.
O'Melveny represented Chinese media and publishing company Phoenix Education in its acquisition of children's book business of Illinois-based Publication International Ltd. (PIL}. Phoenix Education purchased assets relating
to the children's book business from PILand PIL's
subsidiaries in the US, the UK, Aust ralia, and Spain, as well as shares of PIL's subsidiaries in Germany, France, and Mexico. In addition to structuring and negotiating the purchase agreement , O'Melveny assisted Phoenix Education in setting up a holding company in the China (Shanghai) Pilot Free Trade Zone and negotiated a comprehensive transition service agreement covering warehousing, IT services, sales force, and account ing. The deal marks the largest cross-border acquisition within the publishing industry in Chinese history, according to China Dealmaker magazine .
Clearlake Capital I Ashley Stewart
O'Melveny represented an affiliate of Clearlake Capital in its section 363 acquisition of clothing retailer Ashley Stewart in the retailer's chapter 11 bankruptcy in the US Bankruptcy Court, District of New Jersey.
Consumer and Retail Products (cont'd)
O'Melveny has defended Samsung in numerous patent infringement and antitrust matters over the years. Among our accomplishments in 2014:
O'Melveny secured a victory for Samsung Electronics and US-based subsidiaries in two consolidated patent infringement lawsuits brought by Virginia Innovation Sciences (VIS) in the Eastern District of Virginia . VIS accused dozens of Samsung's flagship products including the Galaxy S series smartphones, Galaxy Tab, and Galaxy Note products of infringing six patents purportedly covering the transmission of downloaded video content from a mobile device onto
an alternative display such as a television. VIS sought
over US$100 million in past damages and a royalty on future sales through expiration of the patents in 2025 . First, O'Melveny won a motion that removed willful infringement from the case and invalidated
certain claims. Next, on the eve of trial, Samsung won
summary judgment of non-infringement on most of the remaining claims which severely limited potential damages. These rulings, combined with other key victories at the pretrial conference, signaled the death knell for the cases. VIS stipulated to a judgment of non-infringement in order to create a final appealable judgment, resulting in a complete district court victory
for Samsung and saving it the cost of completing trial.
O'Melveny defeated class certification on a
multibillion-dollar price-fixing claim against Samsung, Toshiba, Panasonic , Sony, Philips, BenQ, Hitachi, LG, and several joint ventures owned by combinations of these compan ies. The Northern District of California denied class certificat ion as to both direct purchasers and indirect purchasers in an antitrust MDL in which major manufacturers of Optical Disk Drives (ODD)
and products containing ODDs were alleged over a six year period (2004-2010) to have conspired to fix prices and to have engaged in bid rigging. O'Melveny argued the motion on behalf of the direct purchaser defendants and O'Melveny drafted the winning brief
on class certification. This is only the second time that a court has denied class certification in the civil setting even though certain defendants and their executives pleaded guilty on the criminal side. The Ninth Circuit subsequently denied the plaintiffs' petition for permission to appeal.
11 Year in Review
Energy and Utilities
O'Melveny advised clients on matters across the upstream, midstream, and downstrea m segments of the energy industry in 2014 . US Legal 500 notes our "very busy" renewables/a lternative energy group continues "to support compan ies and investors driving the nascent alternative energy space."
Apollo Global Management
In 2014, O'Melveny provided diligence and documentation services on various acquisitions that bolstered Apollo's energy portfolio. These include the announced acquisitions of Houston-based oilfield services company Express Energy Services from existing shareholders, Gulf of Mexico offshore assets from Stone Energy Corp ., Canadian assets from Encana Corp., and Alaska assets from Pioneer Natural Resources.
Hanwha SolarOne Co.
O'Melveny represented the special committee of the board of directors of Hanwha SolarOne in its US$1.2 billion combination with Q Cells. The combined company will
be the world's largest manufacturer of solar cells.
Entegra Power Group
O'Melveny achieved confirmation of the fully consensual
chapter 11 plan for Entegra and 11 of its subsidiaries
less than two months after filing for chapter 11 protection in the US Bankruptcy Court for the District of Delaware. Notably, the plan, whic h significantly reduces Entegra's institutional indebtedness from US$1.5 billion to approximately US$788 million, did not receive a single dissenting vote. By proceeding with a fully consensual prepackaged plan, we ensured that the debtors'
day-to-day business operations would not be impacted,
the chapter 11 cases were significantly shortened, and the administrat ion of the chapter 11 cases were simplified and less costly. Entegra was named one of
the largest and most successful restructurings of 2014
by Turnarounds & Workouts.
Energy and Utilities (cont'd)
Renewable Energy Projects
In 2014, O'Melveny represented a range of clients from major financiers and developers to innovative start-ups and investors on their invest ment in and acquisition
of various renewable energy projects around the United States, including:
Bloom Energy Corporation. O'Melveny represented Bloom Energy in its equity financing by Exelon Corporation, the largest US producer of nuclear
power, of a portfolio of base load fuel cell electricity generators with 2 1 megawatts of capacity to be located at 75 commerc ial facilities in the states of California, Connecticut, New Jersey, and New York.
This transaction represents a first-of-its-k ind, long-term
strategic partnership by Bloom Energy with Exelon to install Bloom Energy Servers to meet surging demand for distributed generation by buyers, such as AT&T.
Investors. O'Melveny represented Google and two major financial institutions in connection with their investment of long-term capital in the approximately 182 MW Panhandle 2 wind power
project developed by Pattern Energy Group in Texas.
Macquarie Infrastructure Company. O'Melveny represented Macquarie Infrastructure Company (MIC) in its acquisit ion of ownership interests in Idaho
Wind Partners 1, LLC (IWP), a project company that
owns a 183 MW portfolio comprised of eleven wind power projects in Idaho, and in MIC's acquisition of the Brahms wind power project in New Mexico from BayWa r.e. Wind , LLC.
Suntech Power Holdings Inc.
O'Melveny prevailed at trial in the first contested chapter 15 case in the Southern District of New York after a controversial Second Circuit decision substantially bolstered the requirements foreign companies had to
meet to be eligible to file a chapter 15 bankruptcy petition.
O'Melveny client Suntech , once one of the world's largest makers of photovoltaic cells, sought to proceed with its Chapter 15 case in New York and to have its Cayman Islands bankruptcy case recognized as the foreign main proceeding, over the objections of a residual trust for failed solar panel maker Solyndra. Solyndra argued that the Cayman Islands was not Suntech 's center of main interests and that venue and eligibility were not proper. Solyndra
also moved to transfer venue of the case to the Northern
District of California, where Solyndra had sued Suntech and its US subsidiaries for antitrust violations. Following a bench trial July 2014, the judge issued an opinion
completely vindicating Suntech and O'Melveny's theory of the case, granting recognition to the Cayman proceeding as a foreign main proceeding and denying Solyndra's motion to transfer venue. The landmark decision has been described by legal commentators as providing a "roadmap" for foreign companies seeking to avail themselves of the
US bankruptcy system and restores the US courts to a
central role in international restructurings.
Entertainment and Media
O'Melveny 's entertainment and media group was "top ranked" by Chambers USA and recognized as a Practice Group of the Year by Law360, with a client list described as "prestigious" by US Legal 500 . Our record in 2014 included successfully defending Hulu in one of the most closely watched privacy cases and helping Warner Bros. expand its overseas production operations through its acquisition of Eyeworks' businesses outside the United States.
O'Melveny secured a complete dismissal of a federal class action against the owners , producers, broadcaster, and sponsors of the long-running hit television show "American Idol." The suit was brought by 10 former contestants
who alleged they were disqualif ied from the show due to discrimination toward African -Amer ican males. In
November 2014, the Southern District of New York granted O'Melveny's motion to dismiss the case in its entirety, agreeing with O'Melveny that nine of the 10 plaintiffs' claims were untimely and that the remaining plaintiff failed to sufficiently allege a claim under 42 U.S.C. §1981.
British Sky Broadcasting Group
O'Melveny represented BSkyB, a leading British satellite broadcasting and communications company, in its acquisition of a majority stake in ZJ1V LLC, a recently
formed non-scripted television production company based
in Los Ange les.
O'Melveny represented Mr. Calemzuk on the launch of Rampante, a next-generation digital and television production and distribution company, in addition to a development and production deal with Time Inc.
Huayi Brothers Media Corp.
O'Melveny advised Huayi Brothers, China's leading private sector film conglomerate, on a potential investment
in a US-based motion picture company as well as the
licensing of certain intellectual property rights for a Chinese
language motion picture.
O'Melveny represents Hulu in one of the most closely watched privacy cases in the country. Plaintiffs seek class action status and an "annihilative" award of damages against Hulu for violat ions of the Video Privacy Protection Act
through alleged disclosures to Facebook, Nielsen, and others of personally identifiable information about millions of Hulu users. In April 2014, O'Melveny obtained summary judgment for Hulu on all but one of plaintiffs' disclosure theories and, in June 2014, defeated plaintiffs' motion for class certification.
Manny Pacquiao and Top Rank
O'Melveny represented Pacquiao and Top Rank in various disputes in 2014, including an arbitration against accounting company VisionOwest. Upset at being fired, VisionQwest lashed out against the superstar boxer and his promoter, going so far as to falsely accuse them of tax fraud . After an expedited proceeding and a full-day contested hearing, the JAMS arbitrator issued an award completely in our clients' favor.
Entertainment and Media (cont 'dJ
O'Melveny advised the studio on various deals and
disputes in 2014, including:
O'Melveny represented Warne r Bros. in its acquisit ion of Netherlands-based TV producer Eyeworks' businesses in 15 territories across
Europe, South America, Australia , and New Zealand. The purchase is an important part of WB Television Group's growth strategy as it aims to establish
a strong foothold in major TV production markets around the world. Eyeworks' US business remains independent.
Our extensive litigation portfolio for the company continued with a long list of successes in 2014: We brought the Shuster Superman litigation to end, with the Supreme Court refusing to revisit our Ninth Circuit win in that case. We won summary judgment in a high profile copyright case concerning the motion picture Trouble With the Curve, with the court dismissing
the case and agreeing that Warner's movie and
plaintiffs were not legally "similar" works. We continue to represent the studio in major litigation involving videogame and other rights connected to the Lord of the Rings franchise. And we represented the studio in a lawsuit brought by a famous novelist concerning
the Academy Award-winning motion picture Gravity;
the case raises important questions regarding agency and alter-ego law and the intersection of copyright law and idea submission claims.
O'Melveny represented 14-year-old Revolution Studios producer of films such as Black Hawk Down , Anger Managemen t, Mona Lisa Smile, and Daddy Day Care
in a US$250 million recapitalization and buyout by Fortress Invest ment Group. Fortress absorbed Revolution's debt and funded the acquisition with a loan from Sun Trust. O'Melveny has represented the company since its inception on various production and financing arrangeme nts.
O'Melveny "set up shop in LA before even Hollywood arrived on the scene. But with an entourage of offices around the globe, this international superstar
has truly put its name up in lights."
- Chambers Associate
Health Care and Life Sciences
O'Melveny's comprehensive health care and life sciences practice advised on both headline-grabbing litigation and groundbreaking transactions in 2014. Successes include securing dismissal of a class complaint alleging damages arising out of the Medicare Supplement insurance program and obtaining reversal of a record-setting US$1.4 billion award. On the transactional side, US Legal 500 notes O'Melveny "has a track record for handling first-of -a-kind deals and is highly regarded for its international expertise."
Former Pfizer Inc Executive
O'Melveny obtained dismissal of former Pfizer executive John LaMattina from a US$1 billion securities class action. Pfizer shareholder plaintiffs alleged that Pfizer, LaMattina , and other current and former Pfizer executives made material misrepresentations and omissions relating to
the cardiovascula r risks associated with Pfizer arthritis
drugs Celebrex and Bextra. The plaintiffs also alleged that LaMattina and two of his co-defendants engaged in insider trading. O'Melveny took over as LaMattina 's counsel after another law firm lost a motion for summary judgment. With a September 2014 trial date looming, O'Melveny mounted an aggressive litigation strategy, including motions in limine and for judgment on the pleadings, that led to plaintiffs' counsel voluntarily dismissing all claims against LaMattina with prejudice for no financial consideration.
MHR I Emisphere Technologies
O'Melveny represented MHR Fund Management and its managed funds in a US$20 million loan facility and
related royalty agreement with Emisphere Technologies,
Inc. to finance its launch of oral Eligen® 612.
Houlihan Lokey I Kimberly-Clark
O'Melveny represented Houlihan Lokey Capital, Inc. as financia l advisor to Kimberly-Clark Corporation in the US$1 .7 billion spin-off of its healthcare business,
Halyard Health , Inc. As a result of spin-off, Halyard is
now an independent, publicly traded company, focusing on preventing infection, eliminating pain and speeding recovery for healthcare providers and their patients. Kimberly-Clark will now focus on manufacturing and
marketing of a wide range of products mostly made
from synthetic f ibers using advanced technolog ies in
fibers, nonwovens and absorbency.
Major Pharmaceutical Company
O'Melveny represents a Fortune 50 pharmaceutical company in its defense of Attorneys General lawsuits in Arkansas, Louisiana, Texas, West Virginia, and other states over its marketing of an antipsychotic drug. In
2014, we helped secure a favorable settlement mid-trial in Texas and obtained reversals in the Arkansas Supreme Court of a record-setting US$1.4 billion award and in the Louisiana Supreme Court of a US$330 million judgment.
• • •
Health Care and Life Sciences (cont'd)
An O'Melveny team helped secure dismissal with prejudice of a California-wide class complaint against UnitedHealth arising out of the Medicare Supplement insurance program UnitedHealth offers to members of AA RP. The case was one of two coordinated putative class actions brought by a single plaintiffs' firm testing an unprecedented legal theory-t hat UnitedHealth,
in compensating AARP for the use of its marks in
order to market the Medigap program, is really paying commissio ns to an unlicensed insurance agent. The plaintiff alleged multiple violations of California unfair trade practices and insurance law and sought disgorgement of the royalties paid to AARP. A ll the defendants, in a motion briefed and argued by the O'Melveny team, sought dismissal on the ground that plaintiff's attempt to recast the royalty payment as an unlawful commission was implausible . The US District Court for the Central District of California agreed.
Piper .Jaffray I ArthroCare
O'Melveny represented Piper Jaffray as financ ial advisor to ArthroCare Corp. in its US$1.7 billion acquisit ion by Smith & Nephew pic.-a deal short listed as a finalist in The M&A Advisor's 2014 Healthcare/Life Sciences Deal of the Year contest. ArthroCare makes products used
in arthroscopic surgery on shoulders and knees that
enhance Smith & Nephew's medical devic e business.
O'Melveny represented Goldman, Sachs & Co. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representat ives of the underwriters, in a registered
public offering of US$2.7 billion of WeiiPoint, Inc. notes.
WeiiPoint (now Anthem, Inc.) is the largest managed
care company in the US.
O'Melveny represented Celsion, an oncology drug development company, in its US$44.4 million acquisition of EGEN, Inc., a biopharmaceutical company focused
on nanoparticle delivery technology. The acquisition
strengthens Celsion's ability to develop innovative, new therapies to treat cancer. Prior to the EGEN acquisition, O'Melveny had advised Celsion on multiple financings.
Investment Funds and Private Equity
O'Melveny's internationally renowned investment funds and private equity group represented investors and funds across the full spectrum of fund product types last year, from big buyout and middle-market funds to emerging markets products. Mergermarket's year-end league tables ranked us fourth in private-equity buyouts globally, third in US buyouts, and second in Asia-Pac ex -Japan buyouts. In recommending our US, Asia, and London offices for fund work , Chambers notes "there are many good practices out there but O'Melveny continually impresses."
O'Melveny served as fund counsel for Colony Distressed Credit and Special Situations Fund Ill, L.P., Colony's
third distressed real estate/real estate debt and special situat ions fund focused on the US, Europe, and Asia.
The fund utilizes a complex structure that is tailored
to the tax concerns faced by US tax-exe mpt and non
US investors through the use of a variety of blocker and feeder fund vehicles. Colony raised capital globally
including in jurisdictions that have very specif ic regulatory requirements , including South Korea and several member states of the EU. Colony's final closing was held in October 2014 and the fund raised US$1.2 billion in capital commitments.
Helios Investment Partners
O'Melveny represented Helios in the first closing
of its third pan-African, flagship private equity fund, Helios Investors Ill, L.P. The fund generated high levels of investor interest and exceeded its target size of US$1 billion, surpassing Helios' own record for the largest Af rica-focused fund ever raised.
O'Melveny represented Freeman Spogli and its affiliates in connect ion with raising their seventh private equity fund focused on buy-out and growth investments in consumer-related businesses including retailing, direct
marketing , restaurants, consumer products , e-commerce,
and distribution businesses primarily located in the US. O'Melveny is responsible for all aspects of the fund formation work and oversees all matters handled by local counsel in Delaware. Based on the success of its
predecessor funds, Freeman Spogli's seventh fund raised
over US$1 .3 billion in capital commitments.
O'Melveny represented GIG, Singapore's sovereign wealth fund, in its investment in NYSE-Iisted XPO Logistics. X PO joined PSP Investments and Ontario Teachers ' Pension Plan in a PIPE transaction that raised more than US$700 million. O'Melveny lawyers from the US and Asia provided round-the-clock coverage, allowing the transaction to proceed quickly, going from term sheet to definitive agreements in less than two weeks.
Real Estate and Homebuilding
In 2014, O'Melveny's real estate lawyers handled matters involving the finance, acquisition, management, construction, development, operation, and disposit ion of properties in the United States, Europe, and Asia. Our corporate real estate experience spanned commercial and residential developments, infrastructure assets, and trophy properties. Our litigators represented both publically listed and privately held real estate companies in high stakes, complex disputes.
Academy of Motion Picture Arts and Sciences
O'Melveny assisted the Academy of Motion Picture Art s and Sciences in acquiring site control rights for its new US$300 million Motion Picture Museum in Los Angeles, including negotiation of the 100-year ground lease, development agreements, parking agreements, and advising on development issues. We also represented the Academy in the sale of a city block in Hollywood to
Kilroy for US$45 million, including negotiation of purchase
and sale agreement, advising on bidding issues, and entitlement issues . The site is one of the premiere developme nt blocks in Hollywood.
O'Melveny represented the underwriters in three public offerings of debt by Prologis, raising aggregate gross proceeds of €2 billion. Prologis owns, operates, and develops industrial real estate across the Americas, Europe, and Asia .
Lehman Brothers Holdings
O'Melveny represented a subsidiary of Lehman Brothers Holdings in restructuring its ownership of the Culver Studios, the legendary television and film studios in Los Angeles,
and the ultimate sale of the studio property to an investor sponsored by private equity firm Hackman Capital Partners. Culver Studios' most recent owner, Lehman Brothers Holdings, sold it as part of its asset divestment program stemming from its 2008 bankruptcy.
ValueRock Realty Partners
O'Melveny represented ValueRock in its US$100 million plus acquisition of the Hawaii Kai Towne Center, one of the premiere retail properties on Oahu, Hawaii, and in
its purchase of a shopping center in Irvine, California.
O'Melveny also advised ValueRock in the establishment of
a REIT vehicle for purposes of new real estate investments.
Online Services and Commerce
O'Melveny has a long track record of advising the online industry's leading brands on their complex business and legal matters-from industry-specif ic corporate counseling to high-stakes litigation to the execution of strategically important initiatives . Successes in 2014 include representing Giant Interactive Group Inc., one of China's leading online game developers and operators, in its US$3 billion going-private transaction while simultaneously fending off a shareholder class action filed to quash the deal.
Dealertrack Technologies, Inc.
O'Melveny has represented Dealertrack in more than a dozen M&A transactions over the last three years. In 2014 , the deals included: the US$1 billion cash and stock acquisition of Dealer.com, a provider of marketing and operations software and services for the automotive industry; the cross-bor der acquisition
of incadea pic, a publicly traded Jersey, Channel Islands, company listed on the AIM Market of the London Stock Exchange that provides OMS software and services to the global automotive retail market; and the acquisition of substantially all of the assets of ASR Pro, LLC, a provider of web-based electronic multipoint-inspection
and fixed operations services for automotive dealerships.
Sequoia Capital and China Broadband Capital
O'Melveny represented Sequoia Capital and China Broadband Capital in forming a joint venture with Linkedln to launch Linkedln's China operations, bringing the
world's largest social media platform for professionals to
China. The transaction involved complex regulatory and intellectual property issues unique to foreign social media companies attempti ng to enter the China market.
O'Melveny won a defense verdict for eBay in Boston state court after stepping in as counsel only two weeks before trial. The plaintiffs' case arose from the acquisition by GSI Commerce, Inc. of internet flash sales company Rue La La (RLL). GSI paid US$180 million for RLL and contracted to pay a potential earn-out payment of up
to US$170 million if GSI Iater sold a controlling interest
in RLL at a valuation for RLL in excess of US$180 million. Eighteen months after the GSI-RLL merger, eBay acquired GSI for US$2.4 billion in a public stock deal. eBay also contracted to sell 70% of RLL to GSI's then CEO and founder Michael Rubin. That deal valued RLL at US$175 million. Soon after, former RLL shareholders filed suit alleging that defendants breached the GSI- RLL contract and tortuously interfered with their contractual rights by intentionally undervaluing RLL to deprive them of the US$170 million earn-out payment. The plaintiffs argued that eBay agreed to undervalue RLL to benefit Rubin in exchange for Rubin's agreement to back eBay's acquisit ion of GSI. But after a month- long trial, a jury returned a complete defense verdict .
Online Services and Commerce (cont 'd)
Giant Interactive Group Inc.
O'Melveny successfully defended Giant Interactive, one of China's leading online game developers and operators, in a shareholder class action seeking to enjoin Giant's proposed going-private transaction, which O'Melveny also successfully handled. Giant's chairman and two investment fund affiliates offered shareholders US$12 per share, amounting to approximately US$3 billion in consideration for the company, which 99.6% of Giant's shareholders voted to approve.
Four shareholders filed lawsuits in the Southern District of New York claiming that the process for the transaction was flawed , the disclosures were inadequate, and the purchase price was too low. After O'Melveny helped close the merger, O'Melveny moved to dismiss the plaintiffs' complaint on various grounds. Faced with a strong motion, the plaintiffs voluntarily dismissed the lawsuit. China Law & Practice recognized O'Melveny's work for Giant Interactive with
the Private Equity Deal of the Year award.
Berkeley Design Automation, Inc.
O'Melveny represented long-time venture-backed client Berkeley Design Automat ion, a nanometer-focused analog, mixed-signal (AMS), and RF circuit verification company,
in its acquisition by Mentor Graphics Corp., a supplier of electronic design automat ion tools. O'Melveny had
represented Berkeley Design Automation for many years leading up to the sale, advising on corporate matters, multiple venture capital financings, major litigation , and intellectual property matters. The acquisition of Berkeley Design Automation aligns with Mentor Graphic's goal
to deliver technologies with superior performance and
automation for the growing challenges of AMS verification.
O'Melveny represented GoGrid, a cloud infrastructure service, in its acquisition by Datapipe. GoGrid's proprietary orchestration and automation technologies are unique in the market, providing 1-Button deployme nt for Big Data solutions that speed creation and results
of new cloud projects. The GoGrid acquisition gives Datapipe leading edge orchestration and automation IP.
In 2014, O'Melveny provided business and legal advice to clients in nearly every area of online commerce, from social networking and gaming services to search giants to cloud computing firms to leading e-commerce sites to media providers.
Telecommunications and Technology
O'Melveny was active in the telecommunications and technology sectors in 2014. High profile transact ions included representing Youku Tudou's largest corporate shareholder in the company's US$1.22 billion financing by Alibaba Group Holding Ltd. and Yunfeng Capital. Our courtroom victories included a jury verdict in favor of Mentor Graphics in a patent case and a multi-million-dollar international arbitration award for Honeywell in a dispute with a former distributor of its commercial software products. A US News & World Report/Best Lawyers 2014 survey ranks O'Melveny in the top tier for technology law.
O'Melveny represented Core ogic, a global property information, analytics , and data-enabled services provider, in the largest strategic acquisition in its history-
the US$651 million acquisition of Marshall & Swift/Boeckh, OataOuick Information Systems and other assets from Decision Insight Information Group, a portfolio company owned by an investment fund of TPG Capital. The transaction involved a significant carve-out acquisition concurrent with numerous stock acquisitions. O'Melveny subsequently advised Corelogic in the sale of its collateral solutions
and field services business units to Mortgage Contracting
Services, LLC.The business units previously had been held for sale as part of Corelogic's restructuring of its asset management and processing solutions segment and involved a detailed asset carve-out concurrent with a stock sale.
O'Melveny won a multi-million-dollar international arbitration award for Honeywell in a long-running licensing dispute with Azbil Corporation, a former distributor of its commercial software products in Japan. After multiple rounds of briefing and a four-day arbitral hearing in Tokyo, the three-member tribunalawarded Honeywell virtually all of the damages it sought and more than 90% of the attorneys' fees and costs it incurred in prosecuting its claims.
Cisco Systems, Inc.
O'Melveny represented Cisco in the formation of a
joint venture wit h TCL Corporation (TCL) to bring
Cisco's WebEx conferencing applications to the Chinese market. Cisco will own a 20% minority stake in the jo int venture, in whic h the parties will initially invest an aggregate of US$80 million subjec t to certain milestones being met. The size of the joint venture may be expanded, based on market needs and the development of the company.
Skyworks Solutions, Inc.
O'Melveny acted as lead counsel to Skyworks in its US$148.5 million acquisition of a controlling interest in Panasonic Corporation's filter technology business for smart phones and other mobile applications. The complex transaction , which involved the spin-out of assets and employees in Japan and Singapore, is structured as a joint venture between Skyworks and Panasonic, with Skyworks having the right to acquire Panasonic's remaining joint venture interest for US$76 .5 million.
Telecommunicat ions and Technology (cont'd)
O'Melveny has represented Exar in more than a dozen acquisitions over the years, including the following in 2014:
O'Melveny represented Exar, a New York Stock Exchange-listed supplier of high-performance integrated circuits and system solutions, in its acquisition of Integrated Memory Logic Limited, a fabless semiconductor company organized as a Cayman Islands exempted company and listed on the Taiwan Stock Exchange. The transaction
is valued at NT$6.8 billion (approximately US$223 million). O'Melveny successfully navigated a complex interplay between Cayman Islands law and Taiwan law to ensure that Exar, as a publicly listed company, was afforded customary protections similar to a US two-step transaction.
O'Melveny also represented Exar in its acquisition of Stretch, Inc. The transact ion provided Exar with the technology to deliver an end-to-end,
high-definition solution for both the digital and
analog transmission of data from the camera to DVR or NVR in surveillance applications. O'Melveny was instrumental in meeting Exar's need to sign and close the transaction in less than three weeks.
1Verge Holdings Ltd.
O'Melveny represented 1Verge Holdings Ltd.-Youku Tudou's largest corporate shareholder-in connection with a US$1.22 billion investment in Youku Tudou by Alibaba Group Holding Ltd. and Yunfeng Capital. Youku Tudou, known as the YouTube of China, is the country's largest online video platform.
Mentor Graphics Corporation
O'Melveny won a ju ry verdict on behalf of Mentor Graphics, a maker of electronic design automation software and hardware, in a long-running patent dispute with Synopsys, Inc. The patent in question was invented by a former Mentor Graphics employee who left to found Emulation
and Verification Engineering S.A., whic h was later acquired by Synopsys. After a nine-day trial in Oregon federal court, it took the jury less than five hours of deliberation to find infringement of all asserted claims and award our client US$36 million in damages plus royalties.
Verizon Communications Inc.
O'Melveny convinced an appellate court to overrule a lower's court dismissal of a complaint by a Verizon
operating company in California seeking a US$3.5 billion
tax refund from nine local counties. The California Third District Court of Appeal said that, contrary to the trial court's finding, the California state tax code does not require Verizon to name as a defendant all 38 of the counties in that state in whic h it owns property unless
it is seeking a refund from each of those counties.
O'Melveny served as a trusted advisor to the transportation industry in 2014, counseling clients around the world on critical business and legal matters, ranging from executing billion-dollar-plus financings and innovative M&A deals to successfully advocating before courts across the United States.
O'Melveny advised Avenue Capital and its managed funds
in the following investments in 2014:
As an investor in Scorpio Bulkers Inc.'s private placement of US$150 million of its shares through a PIPE transaction. Avenue, which already was a shareholder in the company, acquired additional shares in the offering and increased its ownership in Scorpio Bulkers to 9.17%. Scorpio Bulkers is a
Marshall Islands-based owner and operator of a fleet
of mid to large-size dry bulk carriers.
As an investor in a US$97 million private placement
of shares in YRC Worldwide Inc. as part of a US$250 million financing to delever YRC Worldwide 's balance sheet. YRC Worldwide is an American transportation company that offers shipping of industrial, commercial, and retail goods.
O'Melveny represented Bristol, one of the few remaining independent manufacturers in the fastener segment of the aerospace industry, in its US$335 million acquisition by Consolidated Aerospace Manufacturing, LLC. O'Melveny counseled Bristolfrom the initial marketing phase through negotiation and closing of the ultimate sale.
American Honda Finance Corporation
O'Melveny represented AHFC in three public offerings of debt in 2014, raising aggregate gross proceeds in excess of US$4 billion. Each offering was issued pursuant to AHFC's public Medium-Term Notes program. O'Melveny represented A HFC in the establishment of its public MTN program and since then has represented A HFC in the issuance of approxi mately US$10 billion of notes. AHFC provides financing in the United States and Canada to purchasers and lessees of Honda and Acura products.
Brookfield Asset Management
O'Melveny represented Brookfield Asset Management
in its acquisition by Brookfield Infrastructure Fund II of a 49% interest in the operations of TraPac, an operator of marine container terminals in Los Angeles and Oakland, California, and Jacksonville , Florida, with customer service facilities located in Austin, Texas. TraPac previously was
wholly controlled by Mitsui O.S.K. Lines, a Japanese ocean shipping line. This deal is significant because, recently, there has been a spike in activity of port assets being transfer red from shipping lines to long-term investors and owners, who can more efficiently operate these properties and extract the underlying value in them.
California High Speed Rail Authority
O'Melveny represented the CHSRA in the negotiation of
the system-wide master agreements between CHSRA
and the Union Pacific Railroad that will enable development and operation of the California High Speed Rail Project over and adjacent to Union Pacific's rights-of-way at numerous locations in California. The high-speed rail agreeme nts were necessary for the US$68 billion project to move forward.
The O'Melveny team helped develop innovative solutions
for a number of unique issues that the parties had been unable to resolve. The set of agreements, the first of their kind in the United States, will serve as precedents for future negotiations between high-speed rail operators and freight railroads throughout the US.
eHi Car Services Ltd.
O'Melveny represented eHi, China's largest car services provider and second largest rental car provider, in its US$120 million initial public offering and US$50 million concurrent private placements. eHi plans to use the proceeds to expand its fleet and service network. Prior to the IPO, O'Melveny had represented eHi in multiple rounds of venture capital financing.
Ford Motor Co.
O'Melveny convinced an Ohio appeals court to reverse
a trial court's order and reinstate a jury's verdict in Ford's favor in a class action brought by Ford-authorized dealers of commercial trucks. The Ohio Court of Appeals, Eighth District ruled that the trial court erred in ignoring a prior appellate finding that the contract is ambiguous. This latest decision came two years after the same court, again on an appeal handled by O'Melveny, vacated a US$2 billion jury verdict against Ford-the largest judgment in the history of Ohio. The case , which involves a class of more than 3,000 franch isees, alleges that Ford offered different discounts
on wholesa le prices depending on the competition faced
by the dealer in making a particular retail sale. The plaintiffs claim Ford breached contract language requiring Ford to sell vehic les only at prices that were published in accordance with bulletins periodically furnished to all dealers.
Kia Motors America
In April 2014, O'Melveny secured dismissal of a proposed class action alleging that certain Kia vehicles were defective because the placement of the fuel tank under the rear passenger seat purportedly increases the likelihood of a catastrophic fire in a collision. The plaintiffs sought to certify a nationwide class action under California's consumer protection and warranty laws. But the federal court in the Central District of California granted O'Melveny's motion
to dismiss all the claims with prejudice.
US Airways/ American Airlines
In 2014, O'Melveny achieved a number of victories on behalf
of the newly merged airlines, including:
O'Melveny obtained dismissal of a US$100 million complaint brought by USAPA, the union for US Airways' pilots, regarding pilots' pay rates. USAPA initially submitted a grievance regarding pilots' pay rates, claiming that the parties' agreements provided that
pilot pay rates would "snap-back" to pre-bankruptcy
rates after a certain date. After losing twice before an arbitrator, USAPA filed a complaint in the Western District of Pennsylvania alleging that the arbitrator exceeded his jurisdiction and that the arbitrator failed to comply with the requirements of the Railway Labor Act. The court's decision adopted all of US Airways' arguments and dismissed the complaint without leave to amend.
O'Melveny obtained summary judgment in a putative class action brought on behalf of approximatel y 33 million current and former members of US Airways' Dividend Miles frequent flyer program. The plaintiff alleged that US Airways breached the terms of its
Dividend Miles Membership Guide by awarding members
a specific, fixed number of miles for flights rather
than the "actual miles" traveled by the aircraft during flights. O'Melveny first convinced the court to bifurcate discovery and delay class certification discovery given the size of the putative class. O'Melveny then moved for summary judgment, successfu lly arguing that the
extrinsic evidence confirmed that the parties could have only intended for the Membership Guide to provide for
a fixed, pre-determined number of miles for each flight.
O'Melveny also represents US Airways and American Airlines in labor arbitrations resulting from the recent merger between the two companies. In 2014 , O'Melveny won two arbitrations initiated by union grievances over new policies instituted by the combined company that unions claimed violated collective bargaining agreements. In both cases, an arbitration panel denied the claims in their entirety.
United Airlines, Inc.
O'Melveny obtained dismissal for United in a putative class action filed by a group of pilots on behalf of themselves and a proposed class of 490 United pilots. Plaintiffs alleged (1) that United breached the collective bargaining agreement ;
(2) that their union, the Air Line Pilots Association (ALPA),
breached its duty of fair representation; and (3) that United and ALPA had improperly colluded in agreeing to certain terms of the collective bargaining agreement regarding pilot longevity credit for time spent on furlough. The federaljudge granted United's Rule 12 motion in its entirety, agreeing that the court lacked jurisdiction over the pilots' claims because they raised "minor disputes" under the Railway Labor Act, and that the asserted grounds for federal court j urisdiction were not satisfied. The court also granted ALPA's motion to dismiss the claim that the union had breached its duty to fairly represent the pilots.
Investigations, Related Litigation, and White Collar Defense
US Lega/500 notes O'Melveny "handles the full breadth of white-collar matters," from internal, SEC, DOJ, attorney-genera l, and self-regulatory investigations to enforcement actions and criminal and civil litigation. The publication goes on to add
that "congressional hearings also feature prominently among the team's mandates." Our "notable presence" in Asia
benefits clients in the region, according to Chambers USA.
O'Melveny conducted an internal investigation of possible violations of the Iran and Sudan economic sanctions
and the US Foreign Corrupt Practices Act for a major
US engineering consultant and reported to the Board
on the results of that investigation.
Former Hewlett Packard Executive
O'Melveny is representing a former Hewlett Packard executive in government investigations related to alleged improprieties surrounding the company's multibillion-dollar acquisition of Autonomy, a software firm.
Public and Private Universities
O'Melveny is counseling several public and private universities in connection with their handling of student reports of sexual assault. The work involves everything from conducting internal investigations to advising on policy changes to defending the schools before federal regulators and in litigation. For example, the University of Virginia Board of Visitors retained O'Melveny as independent counsel to review the university 's response
to media reported sexual assault allegations including its
compliance with all relevant policies and procedures as well as state and federal law.
Major Investment Bank
O'Melveny is representing the investment firm in a Securities and Exchange Commission investigation into alleged FCPA violations related to the hiring of individuals involved in foreign state-owned businesses.
Managed Care Company
O'Melveny is defending a leading managed care company in a False Claims Act investigation by the US Department of Justice and Office of Inspector General for the US Department of Health and Human Services into whether the managed care plan received inflated premiums from the Medicare program and maintained inappropriate financial relationships wit h its contracted providers.
US Secret Service Panel
An O'Melveny partner served on an independent panel established by the Secretary of Homeland Security to review the operations of the Secret Service after a number of high-profile security breaches at the White House. The panel's report provided recommendations to strengthen the security of the White House, including installing a higher fence and other technological improvements on
the White House grounds, hiring more agents and officers, increasing training, and reforming the management
of the Secret Service.
Venture Capital and Emerging Technolog ies
0'Melveny has a strong record for helping emerging companies succeed -in 2014, we helped nearly 30 venture- backed companies achieve liquidity via trade sale or initial public offering, with an aggregate "exit" value of more than US$3.5 billion. Our VC practitioners worked hand-in-hand with some of the industry's most active technology investors and its most innovative companies. US Lega/500 refers to O'Melveny's "genuinely powerful Silicon Valley presence where, owing to its national
and international credibility, it is able to advise on matters ranging from seed funding and early stage investments through
to public offerings and sales ."
O'Melveny has represented Houzz, the leading platform for home renovation and design, in all of its outside financing rounds, including its US$165 million Series D financing in 2014 led by Sequoia. Other existing investors New Enterprise Associates, GGV Capital, Oren Zeev, and Kleiner Perkins Caufield & Byers participated, as well as new participants DST Global and T. Rowe Price. Houzz is an end-to-end solution for home remodeling and design, providing people wit h everything they need to improve their homes from start to finish. The company will use
the capital to accelerate its international expansion and to further build its technology platform and products for both consumers and home professionals.
O'Melveny has advised Kabam, the leader in free-to- play core gaming, in numerous transactions since its establishment in 2006, including all of its venture capital financings and all of its acquisitions. In 2014 , that
included the acquisition of Phoenix Age, a US$120 million
Series E financ ing by Alibaba, and an over US$40 million
secondary stock purchase.
O'Melveny represented client Lookout, a mobile security
company, in its US$150 million Series F financing.
T. Rowe Price led the round and was joined by new investors Morgan Stanley, Goldman Sachs , Bezos Expeditions and Wellington Management Company. More than 60 million people worldwide run Lookout's security app to retrieve lost devices and back up their data. O'Melveny has represented Lookout for years, advising on each of its private financ ings as well as corporate and intellectual property matters.
O'Melveny has represented private cloud provider Metacloud in multiple financings and in 2014 advised the company on its sale to Cisco. Metacloud deploys and operates private clouds for global organizations with a unique OpenStack-as-a-Service model that delivers and remotely operates production-ready private clouds in a customer's data center.
Venture Capital and Emerging Technologies (cont'd)
In 2014, O'Melveny represented Silevo , a solar photovoltaic cell technology innovator that manufactu res high-efficiency, high-performance solar modules, in its acquisition by
Elon Musk's SolarCity Corporation . SolarCity called Silevo's product "the best photovoltaic technology" and intends to mass produce it to "achieve a breakthrough in the cost of solar power." O'Melveny had represented Silevo since its formation, counseling the company on raising venture capital and growing the business prior to its sale.
O'Melveny has represented Strava , Inc., the creator of a popular fitness tracking application geared towards cycling, in multiple venture capital financings, including its most recent US$18.5 million Series 0 financing in 2014 led by Sequoia Capital. Existing investors Madrone Capital Partners and Sigma West contributed as well. The funding allows Strava to expand its service around the world and
strengthen its leadership in digital sports .
Mitsui & Co.
O'Melveny represented Mitsui and its affiliates in various deals in 2014, including investments in DocuSign, SCI Energy, and Synergis Education as well as a joint venture
with Lippo Group subsidiary PT Multipolar Technology Tbk to set up a data center in Indonesia.
O'Melveny represented GIC, Singapore's sovereign
wealth fund , in its investment into Square, Inc., a
San Francisco-based start-up that turns any smartphone into a credit card terminal through the use of Square Reader, a read head that connects into the mobile device's audio jack. GIC continues to invest in global technology companies as they led the Series E funding that included investors Goldman Sachs and Rizvi Traverse Management.
O'Melveny has closed VC/PE transactions at a one-per-day pace over the last six years.