Latham Again Earns Honors for Top Defense Verdict and Top Appellate Reversal in California

For the sixth consecutive year, Latham litigation victories were chosen among the top California wins of the year by the Daily Journal. The publication’s Top Verdicts list annually honors the “largest and most significant verdicts and appellate reversals” from the prior year.

Latham’s success securing a complete defense verdict defending against a “holder’s” claim on behalf of NextGen Healthcare, Inc., its founder and former chairman Sheldon Razin, and former CEO Steven Plochocki was chosen among the Top Defense Verdicts for 2021. The Latham team was led by partners Peter Wald, Michele Johnson, Nicholas Siciliano, and Andrew Gray, with associates Whitney Weber, Kathryn George, Mazamir Yousefi, Marissa Perry, Sonya Shaikh, Allie O'Hara, and Jordan Mundell, paralegals Karen Patterson, Everett Bulthuis, and LeeAnn Haller, and Legal Secretaries Tricia Bondoc and Jana Roach.

When this case went to trial, NextGen had endured three decades of repeated take-over attempts by the shareholder plaintiff, eight years of litigation in the trial and appellate courts, and a claim for US$400 million plus punitive damages. The Orange County Superior Court’s July 29, 2021 jury verdict for NextGen finally put this chapter of the dispute to rest.

Perhaps even more critical, a loss could have had catastrophic repercussions for all public companies. This sort of holder’s claim does not exist under federal law after the US Supreme Court’s 1975 decision in Blue Chip Stamps v. Manor Drugs. But holder’s claims are still viable in California state court following a 2003 state appellate ruling in Small v. Fritz. The contours of a Small v. Fritz holder’s claim in California had never been tried, until now. A loss could have prompted a cascade of shareholder lawsuits claiming that investors would have sold at the peak, but held through a drop – effectively seeking investment insurance from the public companies in which they invested. Instead, this precedent-setting case may help ensure that holder’s claims remain rare.

Discussing the case, Johnson noted, “There was very little precedent for us. Cases like this don’t proceed very far and usually don’t get tried, if they get brought at all.”

A tort litigation suit brought against legendary singer Johnny Mathis was also chosen by the Daily Journal as a Top Appellate Reversal for 2021.

In this significant case, a cross-office team of Latham litigators secured a unanimous victory in the California Supreme Court on behalf of the legendary singer Johnny Mathis, in a tort suit brought against him by Luis Gonzalez, an independent contractor injured while working at Mr. Mathis’s home. While Latham secured summary judgment in the trial court, the California Court of Appeal reversed, creating a new exception to the general rule under which hirers would be liable for the injuries of an independent contract’s employees. The California Supreme Court agreed to hear the case in the midst of a wave of legal reform sweeping California and the country regarding the proper classification of independent contractors. The decision in Gonzalez v. Mathis stabilizes the law in California governing hirers’ limited liability to independent contractors, an issue that affects millions of California transactions each year.

The team was led by partners Marvin Putnam, Rob Ellison, and Michael Bern, who argued at the California Supreme Court, as well as associate Blake Stafford, paralegal Andrea Setterholm, and former associates Lexi Schectel, and Graham Phillips. Jessica Stebbins-Bina also assisted on appeal and members of Latham’s Supreme Court and Appellate Practice assisted with moot courts, including partners Melissa Arbus Sherry, and Rick Bress, with associates Samir Deger-Sen, Caroline Flynn, Charlie Dameron, and Eric Konopka.

In the published profile, Ellison explained that, absent reversal of the Court of Appeal’s new exception to long-standing California precedent, “[i]t truly would have impacted millions of transactions.”