News

Fishkin Lucks Wins Summary Judgment in District of Massachusetts

The Firm scored a summary judgment victory on behalf of its client, a leading manufacturer of premium consumer and industrial paint and coating products, in the United States District Court for the District of Massachusetts, against claims that the client failed to adequately warn about an alleged spontaneous combustion risk associated with one of its wood stains. 

Plaintiff, an insurance company, sought to recover money it paid to its insured in connection with a fire that plaintiff claimed was caused by the spontaneous combustion of rags used to apply the wood stain. Plaintiff claimed that the fire could have been avoided had better warnings been provided regarding how to avoid spontaneous combustion—even though the wood stain label bore a prominent and conspicuous warning to that effect.  

We argued that, even if the fire was caused by spontaneous combustion—for which the evidence was scant—plaintiff’s warning claims failed because: (i) the wood stain is governed by the Federal Hazardous Substances Act(FHSA); (ii) the FHSA preempts failure-to-warn claims based on standards inconsistent with it; (iii) the FHSA does not require that products governed by it bear a spontaneous combustion warning—even if they present a spontaneous combustion risk; and thus, (iv) the wood stain did not need to bear a spontaneous combustion warning, and our client went above and beyond by including one on its label.

The District Court adopted our arguments wholesale, dismissing plaintiff’s claims that the wood stain should have included more or different warnings concerning how to avoid spontaneous combustion. 

 

 

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Fishkin Lucks Secures Dismissal in Southern District of New York on Eve of Trial

On the eve of trial in the United States District Court for the Southern District of New York, Fishkin Lucks obtained dismissal of a lawsuit against its clients, several affiliated insurance companies, by successfully convincing the district court that it lacked subject matter jurisdiction over the dispute. The plaintiff, an insurance agency, had originally asserted claims seeking millions of dollars in connection with our clients' alleged breach of the parties' agreement, which had required the insurance agency to perform certain administrative services in exchange for commission payments. After we successfully moved for partial dismissal of the plaintiff's claims for breach of the implied covenant of good faith and fair dealing, violation of New York's General Business Law § 349, and for a declaration under the Declaratory Judgment Act related to certain intellectual property generated during the parties' relationship, the case was set to proceed to trial. 

Just days before trial, the plaintiff, which is an LLC, disclosed in a proposed joint pretrial order that its sole member was a trust.  Yet eighteen months earlier, in response to an order to show cause entered by the court after the lawsuit had been filed ordering it to disclose its members, the plaintiff alleged that it had four individual members, all of whom lived in Florida.  Because an LLC takes the citizenship of its members, and because subject matter jurisdiction was based on diversity of citizenship between the parties, the identity of the plaintiff’s members was critical in establishing whether the court had jurisdiction.

Based on the pre-trial disclosure of the trust as sole member, we argued that there was no longer true diversity between the parties because a traditional trust takes the citizenship of its trustees, and one of the two trustees shared a state of residence with our clients. Plaintiff opposed our arguments, claiming that the at-issue trustee had no true authority and that his citizenship should therefore be disregarded when assessing diversity jurisdiction. After extensive briefing and argument, including analysis of recent Second Circuit jurisprudence and the underlying trust documents, the court issued an order dismissing the action for lack of subject matter jurisdiction.

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Fishkin Lucks Wins Summary Judgment in the New Jersey Chancery Court

The Firm was awarded summary judgment today in the New Jersey Superior Court, Chancery Division (Essex County) on behalf of one its life insurance company clients, ending a nearly seven-year litigation in which the Firm’s client was alleged to have improperly administered ownership and beneficiary changes to over forty life insurance policies. The claims were brought by several warring factions of a family whose patriarch purchased the life policies and proceeded to manipulate their ownership and beneficiary designations through trusts that he improperly controlled, over the course of several decades. The warring factions brought claims against the Firm’s client sounding in negligence and breach of contract, alleging that it purportedly permitted the ownership and beneficiary changes, which they claimed were improper. After extensive discovery, the Chancery Court agreed with the Firm’s arguments that (i) the tort claims failed because they were based solely on allegations that the Firm’s client breached duties created in the relevant contracts (i.e., the life policies) and (ii) the contract claims were time-barred, because they were brought long after the challenged ownership and beneficiary designations and the parties bringing them were not entitled to the benefit of the discovery rule, because they were either parties to the contracts (i.e., the life policies) on which they were suing, or they were suing on the contracting parties’ behalves.

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Fishkin Lucks Wins Jury Trial in Southern District of New York

Fishkin Lucks prevailed at trial when a jury in the United States District Court for the Southern District of New York returned a unanimous verdict today in favor of its client, a leading full-service developer of commercial, industrial, and office buildings, on claims against a former employee, his co-conspirator and each of their companies, arising from a civil theft and embezzlement scheme. The jury found for the Firm’s client on its claims for violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), conspiracy to violate RICO, fraud, conversion, and unjust enrichment, and against the client’s former employee on his remaining counterclaim, after the Court had dismissed the former employee’s other counterclaims on summary judgment. The jury verdict represented a complete victory for the client, and included an award of treble damages, attorney’s fees, and punitive damages.

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Fishkin Lucks Wins Motion to Dismiss in Southern District of New York

Fishkin Lucks obtained dismissal of claims against its clients, several affiliated insurance companies, brought in the United States District Court for the Southern District of New York. The plaintiff, an insurance agency, asserted claims seeking more than $2 million in connection with our clients' alleged breach of the parties' agreement, which had required the insurance agency to perform certain administrative services in exchange for commission payments. The Firm moved to dismiss the plaintiff's claims for breach of the implied covenant of good faith and fair dealing, violation of New York's General Business Law § 349, and for a declaration under the Declaratory Judgment Act related to certain intellectual property generated during the parties' relationship.  In a comprehensive opinion, the District Court (Vyskocil, J.) dismissed all three claims, adopting in full the Firm's arguments. The Court agreed that the claim for breach of the implied covenant of good faith and fair dealing was duplicative of the plaintiff's breach of contract claim, as it arose from the same operative alleged facts and sought the same damages. The Court dismissed the General Business Law § 349claim because the plaintiff failed to allege that the purported misconduct was directed to the public at large.  As for the claim for a declaratory judgment, the Court echoed the Firm's argument that a declaration would serve no useful purpose because resolution of the plaintiff's breach of contract claim necessarily would settle the issues for declaration was sought.

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Fishkin Lucks Prevails at Trial in New York County

Fishkin Lucks won a bench trial in the Supreme Court of New York, New York County, Commercial Division (Ostrager, J.), securing two judgments for its client, investors in a series of energy transactions, totaling more than $5 million.  The lawsuit arose from a transaction to purchase oil and gas assets in the Permian Basis. The parties’ operating agreement, together with a board resolution, provided that if the transaction failed to close by a specified date, our client would be repaid nearly $4 million as a return of capital it had contributed towards the transaction.  This capital return was personally guaranteed by the company’s managing member.  The energy deal did not close by the specified date, and in August 2020, we brought suit on our client’s behalf to enforce the contractually owed capital return and the managing member’s personal guarantee.  In addition, the Firm sought to recover on an unjust enrichment theory $1 million in capital contributions that, at the direction of the company’s managing member, had been paid directly to his wife.  At trial, the defendants disputed the authenticity of the pertinent transaction documents and contended that the transaction’s expenses (twenty percent of which were our client’s responsibility) exceeded the amount of the capital return sought.  The Firm successfully opposed both arguments.  The Court agreed that the operating agreement and board resolution had been properly authenticated, and that defendants failed to establish that the transaction’s expenses, which were confined to a narrow timeframe, had meaningfully reduced our client’s right to recovery. The Court also agreed that bank records introduced at trial established our client’s independent$1 million unjust enrichment claim.

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