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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Fishkin Lucks Wins Summary Judgment in New York County

Fishkin Lucks obtained summary judgment for its client, National Union Fire Insurance Company of Pittsburgh, PA (“National Union”) in the Supreme Court of New York, New York County, dismissing a contribution action filed by Allied World Insurance Company (“Allied World”). Following Allied World’s payment of its $5M coverage limit to its insured, Sabra Dipping Company, the producer of the country’s top selling hummus, in connection with Sabra’s voluntary recall of certain hummus products, Allied World brought suit against National Union seeking contribution alleging that Sabra’s loss was also covered under a National Union policy issued to PepsiCo, Inc. Allied World contended that Sabra was an insured under the National Union policy and that the National Union policy should contribute to the loss, because Sabra was half-owned by a PepsiCo subsidiary, Frito-Lay. Following discovery, in which the Firm obtained a protective order barring Allied World from deposing National Union underwriting executives, which protective order was affirmed on appeal by the New York Appellate Division (First Department), the Firm moved for summary judgment, arguing that Sabra was not an insured under the National Union policy. Allied World cross-moved for summary judgment seeking a declaration that Sabra was covered under the National Union policy and thus, that Allied World was entitled to contribution from National Union. In granting the Firm’s motion and denying Allied World’s cross-motion, the Court agreed with the Firm’s arguments that the National Union policy was unambiguous, that Sabra was not an insured under it, and that the parties are highly sophisticated and entirely capable, had they wished, of drafting language to include Sabra as an insured.

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Fishkin Lucks Successfully Moves to Stay Proceedings and Compel Arbitration in the New Jersey Superior Court

The Firm successfully moved to stay proceedings and compel arbitration in an action brought in the Superior Court of New Jersey (Mercer County) by the former CEO of the Firm’s client, a publicly traded oil and gas exploration company. The Firm moved to stay the former CEO’s claims, which arose from his termination from the Company, arguing that he should be compelled to arbitrate them in London based on an arbitration clause in his employment agreement with the Company .The former CEO opposed the motion, arguing that his claims did not arise out of the employment agreement and were not otherwise arbitrable under English law. After extensive briefing, which included affidavits from English law experts, the Court agreed with the Firm’s arguments and stayed the claims in their entirety pending arbitration in London.

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Fishkin Lucks Wins Reconsideration and Dismissal in the Philadelphia Court of Common Pleas

The Philadelphia Court of Common Pleas granted the Firm’s motions for reconsideration of its February 2020 orders overruling the Firm’s clients’ Preliminary Objections (“POs”) and dismissed with prejudice, for lack of personal jurisdiction, the plaintiff’s complaint against Firm clients Texaco Inc. and Union Oil Company of California. Plaintiff, an out-of-state resident whose claims arose outside the Commonwealth, had initially defeated the Firm’s POs by arguing that the court had jurisdiction over Texaco and Union Oil based on their registration to do business in Pennsylvania. In overruling the POs, the court declined to credit the Firm’s arguments that “registration-based” personal jurisdiction is unconstitutional based on a series of decisions beginning with Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S.915, 919 (2011), where the United States Supreme Court held that the exercise of general jurisdiction based on a foreign corporation’s contacts with the forum state is constitutional only where the corporation’s “affiliations with the State” are “so ‘continuous and systematic’ as to render [it] essentially at home in the forum state,” and continuing with Daimler AG v. Bauman, 571 U.S. 117, 139 n. 19 (2014), where the Supreme Court reaffirmed and clarified Goodyear’s “essentially at home” test, explaining that where a corporation is neither incorporated nor has its principal place of business in the forum, jurisdiction should only be exercised in the most “exceptional” circumstances. However, in December 2021, in Mallory v. Norfolk Southern Railway Co., 266 A.3d 542 (Pa 2021) the Pennsylvania Supreme Court agreed with the Firm’s arguments that premising personal jurisdiction on a foreign corporation’s registration to do business in the Commonwealth is unconstitutional. The Firm successfully argued on reconsideration that, based on Mallory, Goodyear, and Daimler, there was never any basis for the Court of Common Pleas to exercise personal jurisdiction over Texaco or Union Oil, which were not and are not “essentially at home” in the Commonwealth.

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Fishkin Lucks Wins Motion to Dismiss in Western District of Pennsylvania

The Firm scored an early victory today in the United States District Court for the Western District of Pennsylvania, securing an order dismissing the Firm’s client, a publicly traded chemical distributor, from a third-party action for contractual indemnification and common law contribution. After a lengthy hearing, the Court found that a forum selection clause in the parties’ agreement mandated that the action be litigated in Virginia, notwithstanding the third-party plaintiff’s arguments that the clause was unreasonable and otherwise unenforceable.

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Fishkin Lucks Scores Voluntary Dismissal in Eastern District of Pennsylvania

The Firm secured a voluntary dismissal in the United States District Court for the Eastern District of Pennsylvania of all claims brought against our client, a leading manufacturer of protective paints and coatings. Plaintiff had alleged that our client’s floor stain product had caused a spontaneous combustion event leading to a fire that substantially damaged plaintiff’s investment property. Plaintiff alleged that the floor stain was defective for failing to adequately warn about the alleged dangers of spontaneous combustion.

Trying to avoid the consequence of an earlier judgment the Firm secured on its client’s behalf in the United States District Court for the Central District of California, holding that the stain product’s label met all requirements of the Federal Hazardous Substances Act (FHSA)insofar as warning about the risk of spontaneous combustion, plaintiff moved for partial summary judgment, arguing that her warning claims were not governed by the FHSA. We opposed plaintiff’s motion, arguing that the claims were both expressly and impliedly preempted by the FHSA and that plaintiff was collaterally estopped from contesting that fact. After considering the parties’ multiple rounds of briefing, and hearing from the parties at a lengthy argument, the Court (Hon. Edward G. Smith) telegraphed that it was likely to rule in our client’s favor. Rather than risk the precedential effect another adverse decision would have on other “spontaneous combustion claims” pending against our client, plaintiff voluntarily dismissed her claims with prejudice

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