2019 Annual Review Practices

2019 ANNUAL REVIEW PRACTICES

Accounting // Antitrust and Competition // Automotive and Related Industries Bankruptcy and Financial Distress Litigation // Consumer Finance // Consumer Fraud and Product Liability Corporate and Government Investigations // Corporate Governance // Corporate Transaction Litigation Data Analytics // Employee Retirement Income Security Act (ERISA) // Energy and Commodities Financial Institutions // Healthcare // Intellectual Property // International Arbitration and Litigation International Trade // Labor and Employment // Life Sciences // Real Estate // Securities // Valuation 1 TWENTY NINETEEN / annual review

Yesim Richardson Yesim President

Rahul Guha Officer Chief Executive

TWENTY NINETEEN TWENTY

dedication we bring to our clients and experts are unabated. We are here for you, now and in the future. now and in the future. you, for here are We unabated. bring to our clients and experts are we dedication and well. be safe Please we provide industry-leading analytical, artificial intelligence, and machine learning expertise and techniques. intelligence, industry-leading analytical, artificial provide we and the expertise, creativity, work, we to the way changes unprecedented 2020 has brought While industries, and offices. It is why we draw strategically from our international expertour international from strategically network we draw It is why industries, and offices. of academics, industry specialists, and former regulators. it is why analytics, large-scale data require And when matters objective testimony that is grounded in real-world data, academic research, and case precedent. and academic research, data, in real-world is grounded testimony that objective practices, build multidisciplinary case teams across is why we do. That we values underpin everything Our trust our clients and experts place in us by identifying and supporting the most qualified experts for each the most qualified experts in us by identifying and supporting trust our clients and experts place and supporting robust, challenges; complex analytical tools to address sophisticated employing matter; At Cornerstone Research, we have always been guided by our core values—commitment to our clients, our values—commitment core been guided by our always have we Research, Cornerstone At to maintain the continually strive We consistently high-quality service. experts, our staff, and to delivering worked on in 2019. While the world we live in today seems dramatically different from the state of affairs in the state from different seems dramatically today in live we the world While on in 2019. worked to face. continue the legal challenges we for relevant these cases remain from takeaways the key 2019, FROM OUR CEO AND PRESIDENT CEO OUR FROM cases we prominent highlights several This publication of our Annual Review. edition the latest to Welcome aspects of the litigation landscape in 2020 and beyond. beyond. in 2020 and landscape the litigation aspects of cornerstone.com 2019 our of summary a brief only While year. last on we worked the matters of a few highlights review This be important to continue will that and sectors issues into insight cases provides these each of work,

VOLKSWAGEN “CLEAN DIESEL” MARKETING, MARKETING, DIESEL” “CLEAN VOLKSWAGEN

Johannessohn et al. v. Polaris Industries Inc. Industries Polaris et al. v. Johannessohn Liability Litigation Airbags Product Takata General Motors LLC Ignition Switch Litigation Switch Ignition LLC General Motors Beaty v. Ford Motor Company Company Motor Ford v. Beaty Litigation EcoDiesel Chrysler-Dodge-Jeep • • • • • retained to address alleged product and safety defects as well as false advertising claims in cases involving major claims in cases involving as false advertising as well defects and safety alleged product to address retained expert analyses in provided have in automobile cases, we addition to our experience In automobile manufacturers. trucks. and heavy-duty vehicles, recreational vehicles, all-terrain involving multiple matters ADDITIONAL 2019 AUTOMOTIVE CASES 2019 AUTOMOTIVE ADDITIONAL been have We liability cases. product in major Research turn to Cornerstone automobile manufacturers for Counsel the plaintiffs. damages for the other plaintiffs. damages for of five damages for no economic damages numbers, including economic Bresnahan’s all of Professor The jury accepted testifying for three days before the jury. He used several methods for measuring the economic damages incurred by damages incurred the economic measuring methods for used several He the jury. before days three testifying for vehicles declined at-issue of the how much the prices compared analysis that regression each plaintiff, including a some plaintiffs and only small no damages for his analyses indicated opined that He to benchmark vehicles. relative claimed significant economic damages from Volkswagen’s failure to disclose the defeat devices installed in these devices to disclose the defeat failure Volkswagen’s damages from claimed significant economic the time of acquisition. at vehicles of the trial, damages phase in the compensatory Volkswagen as the sole witness for served Bresnahan Professor Defense counsel for Volkswagen retained Cornerstone Research to support economics professor Timothy Bresnahan Timothy Bresnahan professor to support economics Research Cornerstone retained Volkswagen for counsel Defense action settlement by a set of plaintiffs who had opted out of a class in a case brought University of Stanford plaintiffs These opt-out Audi diesel vehicles. and Volkswagen and owners and lessees of certain Volkswagen between economic analysis put forward by Volkswagen Group of America’s expert, finding small to no economic damages for damages finding small to no economic expert, of America’s Group by Volkswagen analysis put forward economic devices. containing defeat vehicles Volkswagen or Audi “clean diesel” ten plaintiffs who owned or leased SALES PRACTICES, AND PRODUCTS LIABILITY LITIGATION AND PRODUCTS PRACTICES, SALES with the agreed of California District Northern the for Court District trial in the U.S. in a bellwether jury A federal featured matters featured / LIABILITY PRODUCT

absent an alleged defect or misrepresentation. In the automotive and transportation sectors, analyzing analyzing sectors, and transportation the automotive In misrepresentation. or defect an alleged absent key. are and demand supply drive that factors the economic and identifying outcomes market AUTOMOTIVE be different would prices extent, to what or is whether, actions class in consumer question A central

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replicating plaintiffs’ conjoint study after correcting for these biases. It is also important to analyze real market data, data, real market It is also important to analyze for these biases. correcting conjoint study after plaintiffs’ replicating results. the validity of conjoint as an additional test for available, where particular fashion have also been found to result in biased evaluations by respondents. in biased evaluations to result also been found particular fashion have can involve estimates on willingness-to-pay design choices survey the impact of these inappropriate Demonstrating and conjoint analysis theory. and conjoint susceptible decisions are of purchase drivers important are that features exclude that surveys conjoint Furthermore, stand out in any not described clearly and those that are that Features results. unreliable can generate to biases that the survey is properly designed and executed; whether the relevant population of consumers is targeted; whether a of consumers population whether the relevant designed and executed; is properly the survey and statistical whether valid economic in the survey; participates target population that sample from representative with economic is consistent the results of and whether the interpretation data; collected used to analyze models are Reliability and Validity of Consumer Preference Data Should Be Carefully Assessed Be Carefully Should Data Preference of Consumer and Validity Reliability should include determining whether it generates and the data survey and validity of a conjoint Assessing the reliability Plaintiffs’ experts also use willingness-to-pay measures averaged across respondents when estimating damages. when estimating respondents across averaged measures experts also use willingness-to-pay Plaintiffs’ An analysis level. at the individual in changes differences obscure of willingness-to-pay measures Changes in aggregate impact. lack of common demonstrate can therefore estimates willingness-to-pay of individual-level analysis, it is crucial to explain properly the lack of foundation for these and other economically unsound assertions. these and other economically for the lack of foundation analysis, it is crucial to explain properly Impact Lack of Common Can Demonstrate Estimates Willingness-to-Pay Analysis of Individual-Level Some plaintiff experts claim that they can account for these limitations based on the assertion that the number of based on the assertion that for these limitations they can account Some plaintiff experts claim that (which already prices the use of actual market argued that Others have of history. matter as a sold is fixed products conjoint rebutting When for supply-side factors. accounts sufficiently considerations) and supply demand reflect equipped to account for supply-side factors (e.g., the manufacturer’s willingness to sell its products at a given price) or price) a given at willingness to sell its products the manufacturer’s factors (e.g., supply-side for equipped to account a product, for to pay willingness of consumers’ estimates can only generate It activity in the marketplace. competitive prices. to market is untethered that a measure overpayment or price premium claims). These damages are typically measured as the difference between the fair between as the difference typically measured These damages are claims). premium or price overpayment as sold. of the product price) value (or as warranted and the fair market of the product price) value (or market analysis is not Conjoint as supply. demand as well is determined by the interaction of factors impacting product Price Willingness-to-Pay Measures Cannot Approximate Fair Market Value or Market Price or Market Value Market Fair Cannot Approximate Measures Willingness-to-Pay damages (i.e., alleged benefit-of-the-bargain to estimate conjoint analysis as a method proffered have Plaintiffs to estimate classwide damages in a variety of consumer class actions, including product liability, false advertising, false advertising, liability, class actions, including product damages in a variety of consumer classwide to estimate this technique of limitations the underlying assumptions and However, breach. and data privacy, labeling, data product damages in a class action setting. calculating it suitable for do not render Conjoint analysis is a survey-based marketing research tool developed by academics to understand and estimate and estimate by academics to understand developed tool research marketing analysis is a survey-based Conjoint analysis as a method conjoint proposed increasingly plaintiffs have years, the last several Over preferences. consumer featured topic featured DAMAGES CLASSWIDE TO ESTIMATING RELATED CHALLENGES

as a method to estimate classwide damages. classwide to estimate as a method CONJOINT ANALYSIS CONJOINT analysis conjoint proposed increasingly have actions class of consumer experts in a variety Plaintiffs’

New York et al. v. Deutsche Telekom AG Telekom Deutsche et al. v. York New //

T-MOBILE/SPRINT

in which a group of states’ attorneys general sued to block the deal. Professor Asker submitted affirmative submitted affirmative Asker general sued to block the deal. Professor attorneys of states’ in which a group

expert’s coordinated effects opinions. The court ruled for the merging parties, refusing to enjoin the merger. for the merging parties, court ruled opinions. The effects coordinated expert’s et al., Consistent economics experts. rebutted analyses of plaintiffs’ of the merger and effects analyses of the competitive the plaintiffs’ economic judge partially excluded York of New the Southern District rebuttal, Asker’s with Professor California Public Utilities Commission evaluating the competitive effects of the transaction. The CPUC approved the The CPUC approved of the transaction. effects the competitive evaluating Commission Utilities Public California merger in April 2020. litigation, in the related Asker also supported Professor Research Cornerstone The merging parties announced the transaction in April 2018 and the DOJ and FCC granted approval with certain with certain granted approval in April 2018 and the DOJ and FCC the transaction The merging parties announced respectively. 2019, and November 2019 in July remedies the in his testimony before Bresnahan supported Professor Research Cornerstone proceeding, a concurrent In evaluating the competitive effects of the proposed merger and presented to the DOJ and the FCC as part of the the FCC to the DOJ and merger and presented of the proposed effects the competitive evaluating review. regulatory Cornerstone Research supported Professors Asker and Bresnahan and Dr. Hatzitaskos in analyzing how consumers how consumers in analyzing Hatzitaskos and Dr. and Bresnahan Asker supported Professors Research Cornerstone billions comprising This analysis used highly granular data carriers compete. carriers and how wireless choose wireless experts submitted white papers use their mobile phones. The and how consumers points on when, where, of data Counsel for SoftBank and Sprint Corporation retained antitrust experts John Asker of UCLA, Timothy Bresnahan of Bresnahan of UCLA, Timothy Asker antitrust experts John retained Corporation and Sprint SoftBank for Counsel of T-Mobile’s review to assist with the regulatory Research of Cornerstone Hatzitaskos and Kostis University, Stanford the merger. judge approved court federal York trial, a New a ten-day After $26 billion merger with Sprint. MERGER / MERGER complex matters. complex In addition, global events in 2020 have accelerated the application of online technologies. As the scope of the of online technologies. As the scope the application accelerated in 2020 have addition, global events In staff experts and consulting Our face. businesses and organizations that expands, so do the challenges digital world analytics capabilities to these fields and bring the highest quality insights and data of the relevant the frontier at are can lead to allegations of privacy and security breaches, anticompetitive behavior, discrimination, and market and market discrimination, behavior, anticompetitive of privacy and security breaches, can lead to allegations analyses—including new and specialized require issues that raises many digital economy The manipulation. techniques. or machine learning and artificial intelligence modeling, multidisciplinary expertise, sophisticated Data-driven businesses systematically use customer information to improve processes, deliver new products, new products, deliver processes, to improve use customer information systematically businesses Data-driven however, and use of such data, The collection consumers. for experience customized a more and provide featured matters featured ECONOMY DIGITAL TECH AND THE

in two-sided markets, such as commerce platforms or social networks, may require nontraditional nontraditional require may networks, social or platforms as commerce such markets, in two-sided effects. competitive and establish definition to assess market models economic TECHNOLOGY and services, phone mobile as such markets, in dynamic inherent environment changing The rapidly

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At Cornerstone Research, we use advanced analytical techniques, artificial intelligence, and machine machine and intelligence, artificial techniques, analytical advanced we use Research, Cornerstone At analytics. data large-scale of exacting challenges to meet the learning The explosion of big data continues to raise an array of complex and evolving legal issues. issues. legal and evolving complex of an array raise to continues data big of The explosion Cryptocurrency/Blockchain Ledger Data // High-Frequency Trading Data // Healthcare Claims Data // Claims Data // Healthcare Data // Trading High-Frequency Data // Ledger Cryptocurrency/Blockchain Data Visualization // Data Collection Web Geospatial Analytics // Data // Social Media capabilities and team of programming specialists ensure that we can conduct large-scale data analytics efficiently large-scale data can conduct we that specialists ensure capabilities and team of programming and effectively. Cryptocurrency/Blockchain Ledger Data Ledger Cryptocurrency/Blockchain and historical huge quantities of real-time technology often involve and blockchain to cryptocurrency related Disputes parallel processing in-house massively Our of billions of records. hundreds comprising with individual tables ledger data, and compile relevant databases of extracted information. Our capabilities also enable us to provide structured data data structured also enable us to provide capabilities Our of extracted information. databases relevant and compile sources. disparate from data and aggregate entity, distinct entries to a common linkage, resolve record through Text Analytics/Content Analyses Analytics/Content Text use staff and experts scalable analytical techniques. Our requires text a high-volume from useful insights Distilling content, important entries, characterize documents by topic, highlight AI methods to organize sophisticated create potentially contentious issues. In applying AI and machine learning to such complex issues as healthcare risk issues as healthcare applying AI and machine learning to such complex issues. In potentially contentious create of these has built a solid understanding Research Cornerstone recognition, adjustment or deep learning–based image and limitations. analytical techniques, including the benefits AI-based systems substitute human decisions with data-driven decisions, which can reduce subjectivity and error subjectivity and error decisions, which can reduce with data-driven AI-based systems substitute human decisions can abuse, and bias concerns privacy, the same time, data At information. of complex large volumes when processing of real-world data. Cornerstone Research is skilled in evaluating these distinctive data, including assessing the relative including assessing the relative data, these distinctive in evaluating is skilled Research Cornerstone data. of real-world time, and fraudulent reviews. sentiment over changes in customer features, of product importance Making Algorithmic Decision Online Consumer Reviews Consumer Online data. among the most intriguing—and demanding—social media are and services of products reviews consumer Online a valuable source also provide they can appropriately, if employed yet can be the subject of litigation; These reviews proprietary and third-party resources. Our experience on the cutting edge of machine learning and AI tools equips us on the cutting edge of machine learning and AI tools equips experience Our resources. and third-party proprietary and contributors. of content prominence and relative to assess the relevancy dizzying speed. In litigation contexts, knowing how to effectively navigate, collect, and characterize such huge volumes such huge collect, and characterize navigate, knowing how to effectively contexts, litigation dizzying speed. In and sources us deep familiarity with social media data has given in these matters experience is crucial. Our of data and other using both custom scraping techniques collection, and data targeted searches performed have analyses. We Social Media at multiply that of data rich sources offer media platforms eclipses traditional media, social that With a vast user base featured topic featured TECHNIQUES SCIENCE AND DATA ANALYSIS EMPIRICAL ADVANCED DATA ANALYTICS DATA

OSCAR INSURANCE COMPANY OF FLORIDA V. V. FLORIDA OF COMPANY OSCAR INSURANCE // IN THE MATTER OF OTTO BOCK HEALTHCARE NORTH AMERICA INC. AMERICA NORTH BOCK HEALTHCARE OTTO OF IN THE MATTER

Whether Freedom qualified as a “failing firm” as defined by the DOJ and FTC Horizontal Merger Guidelines. Merger Horizontal FTC by the DOJ and as defined “failing firm” qualified as a Freedom Whether cognizable under Freedom and be acquisition of from Otto Bock’s result to likely were efficiencies if any, What, Guidelines. the Merger burden of proving irreparable harm and a substantial likelihood of success of the merits.” The judge later dismissed the The judge later of the merits.” of success harm and a substantial likelihood irreparable of proving burden Act. the McCarran-Ferguson under covered were contracts exclusive Blue’s Florida that case on the grounds (Florida Blue) retained Cornerstone Research to support expert testimony by Laurence Baker of Stanford University. of Stanford Baker to support expert testimony by Laurence Research Cornerstone retained Blue) (Florida denying the plaintiff’s “failed to carry itsIn the plaintiff concluded that injunction, the judge for preliminary motion BLUE CROSS AND BLUE SHIELD OF FLORIDA INC. ET AL. INC. FLORIDA SHIELD OF AND BLUE CROSS BLUE the to monopolize attempted the defendant alleged that marketplace health insurance A new entrant in the Orlando Inc. of Florida Shield and Blue Cross Blue for counsel agents. Defense its use of exclusive sale of individual plans through ANTITRUST & COMPETITION / & COMPETITION ANTITRUST Acquisition, [Otto Bock] must divest Freedom’s entire business with the limited exceptions granted by the ALJ. We granted by the ALJ. We business with the limited exceptions entire Freedom’s Bock] must divest [Otto Acquisition, with this Opinion.” consistent enter an order report and testimony throughout his decision. throughout and testimony report the lost from the competition to fully restore hold that, “We issued its opinion, stating the FTC 2019, November In Guidelines. acquirer, to a FTC-approved Freedom Otto Bock to fully divest the ALJ ordered decision, as a remedy, an April 2019 In expert Hammer’s The ALJ cited Ms. of all of Freedom. divestiture to a complete with limited potential exceptions With regard to alleged merger-specific efficiencies, Ms. Hammer opined that Otto Bock had not presented any that Otto Bock had not Hammer opined Ms. efficiencies, merger-specific to alleged With regard presented ambiguous assertions, it was not possible to evaluate efficiency claims. Because Otto Bock only verifiable Merger cognizable under the not were therefore efficiencies as alleged the merger specificity of the claims. The She also determined that Freedom did not make “good faith” efforts to elicit reasonable alternative offers during the offers reasonable alternative elicit to efforts faith” “good did not make Freedom also determined that She sales process. Ms. Hammer concluded that Freedom did not meet any of the three circumstances to be considered a failing firm to be considered circumstances did not meet any of the three Freedom that concluded Hammer Ms. in the been able to meet its financial obligations have would Freedom that found She Guidelines. under the Merger a Chapter 11 reorganization. seriously considered or initiated Freedom that was no evidence and there near future • • a certified public accountant and senior advisor with Cornerstone Research. Cornerstone and senior advisor with public accountant a certified to: testimony related provided Hammer judge, Ms. law the chief administrative a hearing before In The FTC issued a complaint related to the acquisition of Freedom Innovations (Freedom) by Otto Bock HealthCare by Otto Bock HealthCare (Freedom) Innovations of Freedom to the acquisition related complaint issued a The FTC and Christine Hammer, Research Cornerstone retained The FTC Bock) in September 2017. (Otto America Inc. North featured matters featured / MERGER

the financing and provision of medical care, overlapping regulatory frameworks, and sophisticated and sophisticated frameworks, regulatory overlapping care, of medical and provision the financing models. and theoretical empirical economic HEALTHCARE in involved entities of network the complex expertise with require matters competition Healthcare

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INTUNIV ANTITRUST LITIGATION INTUNIV ANTITRUST HSU ET AL. V. PUMA BIOTECHNOLOGY INC. ET AL. ET INC. PUMA BIOTECHNOLOGY HSU ET AL. V. //

Those whose use of Shire’s coupon programs meant they would have paid more for the generic than the brand. for paid more have meant they would programs coupon Those whose use of Shire’s earlier generic entry. maximums with prescription their out-of-pocket reached still have Those who would Those who would have continued to pay for the brand drug after generic entry. for to pay continued have Those who would This case was the first federal securities class action to reach a jury verdict in eight years. in eight verdict reach a jury federal securities class action to This case was the first The jury found in Puma’s favor on three of the four alleged misrepresentations and awarded only $4.50 per share for for only $4.50 per share and awarded misrepresentations alleged of the four on three favor in Puma’s The jury found of the claimed damages per share. or 5 percent date, disclosure corrective the first damages experienced by class members were $87.20 per share. per share. $87.20 by class members were experienced damages and had the plaintiffs’ expert had not established loss causation, Gompers testified that Professor his response, In disclosures. the allegedly corrective quantify damages for failed to reliably The plaintiffs’ damages expert testified that these alleged misrepresentations were corrected when the clinical trial corrected were these alleged misrepresentations The plaintiffs’ damages expert testified that claims that presented to decline. He stock price caused Puma’s and dates separate on two released were results In a rare securities class action trial, plaintiffs claimed that Puma Biotechnology (Puma) and its CEO made misleading and its CEO (Puma) Biotechnology Puma that securities class action trial, plaintiffs claimed a rare In retained and its counsel drug. Puma cancer a breast of its phase III clinical trial for about the results statements to the plaintiffs’ damages expert. to respond University of Harvard Gompers and Paul Research Cornerstone SECURITIES / SECURITIES with similar choices between brand and generic drugs, their use of coupons, the timing of their purchases of Intuniv, of Intuniv, the timing of their purchases brand and generic drugs, their use of coupons, between with similar choices and potentially other factors.” the plaintiffs’ motion for class certification. In her decision, the judge stated, “Identifying uninjured consumers with “Identifying uninjured decision, the judge stated, In her certification. for class the plaintiffs’ motion insurance consumer’s an assessment of individual-specific facts such as the require would of confidence any degree habits when faced their consumption and generic Intuniv, of brand plan, any peculiar views about the equivalence Professor Hughes estimated that thousands of proposed class members would not have been injured. not have class members would thousands of proposed that estimated Hughes Professor judge denied district court a U.S. class members, of uninjured analysis of these categories Hughes’s Citing Professor • • He identified several categories of proposed class members who would not have suffered any apparent injury from injury any apparent suffered would not have members who class of proposed categories identified several He including: the alleged generic delay, • ADHD drug, which caused inflated prices for consumers. Defense counsel for the brand manufacturer, Shire, and the Shire, for the brand manufacturer, counsel Defense consumers. for prices caused inflated ADHD drug, which College. of Bates Hughes and James Research Cornerstone retained Actavis, generic manufacturer, at deposition. and testified in opposition to class certification expert reports submitted two Hughes Professor Indirect purchaser plaintiffs alleged that two pharmaceutical companies entered into an anticompetitive patent patent into an anticompetitive companies entered pharmaceutical two plaintiffs alleged that purchaser Indirect of a generic equivalent of a branded availability in the delayed resulted this They claimed that settlement agreement. featured matters featured / & COMPETITION ANTITRUST

companies continued to face more traditional litigation stemming from reverse payment antitrust antitrust payment reverse from stemming litigation traditional more to face continued companies filings. class action and securities claims LIFE SCIENCES LIFE sciences in 2019, life dominated matters price-fixing and generic lawsuits opioid-related While

I I

2014 2014 Anderson Monsanto

I I

Flash Memory Flash

I Optical Disk Drive I Comcast/Time Warner I Intuniv Antitrust Litigation Microsoft Corp. v. MotorolaMicrosoft Corp. v. I SEC v. BankAtlantic v. BancorpSEC I I 2013 2013 General Ignition Motors Switch LLC I Chrysler-Dodge-Jeep EcoDiesel Marketing, Google’s AcquisitionGoogle’s AdMob of I I Moody’s Corporation Securities Litigation Securities Corporation Moody’s

Beaty et al. v. Ford Motor CompanyBeaty Ford et al. v. 2012 2012 I Asbestos Merix Corp. Philadelphia v. Workers Pension Fund NeurontinOff-Label Marketing I I U.S. v. DowChemical U.S. and v. E.I. Dupont I Credit DefaultCredit Swaps Market I Whirlpool Loading Washer Products Front Liability Litigation BlackRock Advisory Mutual Funds Litigation Fee

Actiq Sales and Marketing Practices Litigation I BP p.l.c. SecuritiesLitigation I I I Beef Products American Inc. et al. v. Broadcasting Companies Inc. et al. I 2011 2011 AT&T/Time Warner AT&T/Time I Wholesale Grocery Products Antitrust Litigation I Air Cargo Shipping Services Litigation Antitrust Shipping Cargo Air

Cigna’s Acquisition Express of ScriptsCigna’s I

Facebook IPO SecuritiesFacebook and Derivatives Litigation 2010 2010 Fair Admissions Inc. v. Harvard Admissions Inc.Fair University v. Students for Proceedings I StudentsAdjustment Litigation I NPM I Essilor/Luxottica Antitrust CableMilk I Southeastern Inc. SalesPractices, and ProductsLiability Litigation New York v. Exxon Mobil v. Corp. New York EnergySolutionsU.S. v. Inc. et al. News LLC et al. v. American et al. v. News Media LLC Inc. et al. Litigation Antitrust Litigation I Online Rental DVD Antitrust Litigation Mobility I Barclays Bank plc Securities LitigationAetna/Humana I I U.S-Canada Softwood Lumber Dispute I T-Mobile/Sprint E.I. de Nemours du Pont v. Co. & Co.

the successful trials, regulatory investigations, and motions related to dismissal, class certification, class certification, to dismissal, related and motions investigations, regulatory trials, the successful past ten years. the during to be a part of been privileged we have judgment and summary DECADE REVIEW 2010–2019 REVIEW DECADE of some on back we look we begin a new decade, in 2019. As anniversary our thirtieth celebrated We

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I 2019 2019 Hsu et Boston Google’s Google’s I Selectica I I I USA v. CabellUSA v. Novack v. GSI Novack v. Comcast–NBC I I I General Electric’s I Sivolella et al. v. AXASivolella et al. v. I Sysco/US Foods Sysco/US I Sprint Corp. Buyout Clearwire of 2018 2018 I IBEW Local 90 et al. v. Pension Fund I Stragent LLC et al. v. Intel Corp. et al. v. Stragent LLC I Foreign Exchange InvestigationsForeign I LiborInvestigations and Civil Litigation Volkswagen Diesel Product Liability Litigation Firefighters’ Retirement System et al. v. Citco Firefighters’v. Citco GroupRetirementSystem et al. al.et I I I 2017 2017 Northfield Laboratories Securities Litigation I John Q. Hammons JohnQ. Hotels Inc. Shareholder Litigation I Mortgage-Backed Securities Litigation I Skelaxin (Metaxalone) Antitrust Litigation I FTC v. WilhelmsenFTC et al. v. Evonik/PeroxyChem I I Walt Disney Company’s Acquisition Disney 21st of Company’s Walt Century Film and TV Fox Studios and Shuffle Tech International LLC et al. v. Scientific Games Corp. et al. Corp. v. Scientific Games LLC et al. International Tech Shuffle 2016 2016 CoStar Group/LoopNet City of Pontiac Policemen’s and Firemen’s Retirement System et al. v. UBS AG et al. UBS AG Retirement System and et al. Firemen’s v. City Policemen’s Pontiac of I ISDAfix Investigations ISDAfix continued I I I OscarInsurance Blue Company CrossFlorida and of Blue Shield et al. v. Inc. Florida of Move Inc. et al. v. Zillow Inc. Inc. et al.Move et al. v. I I Axiom Deutsche Investment Advisors et al. v. Bank AG LLC I 2015 2015 Universal Joint Venture HuntingtonHospital Inc. and St. Mary’s Medical Center Inc. Corp. Equitable Life Insurance Company et al. Commerce Inc. etal. Software of ITA Acquisition Certain Cable Networks Inc. v. Versata EnterprisesInc. v. Inc. I Deutscheetal. Bank AG Acquisition of Alstom’s Thermal Power, Renewable and Grid Power ThermalAcquisition Businesses Alstom’s of Power, al. v. Puma Biotechnologyal. v. Inc. et al. FCA’s First Competition DecisionFCA’s Enforcement Antitrust Litigation Corp. Cordis v. ScientificCorp. et al. DECADE REVIEW REVIEW DECADE

STUDENTS FOR FAIR ADMISSIONS INC. V. V. INC. ADMISSIONS FAIR FOR STUDENTS //

there were large and significant differences in wages and promotion outcomes across individual employees and, individual employees across outcomes promotion in wages and large and significant differences were there proposed class. of the plaintiffs’ The judge denied certification stores. across on average, Professor McCrary provided expert analysis on the question of whether the class should be certified. He analyzed the He analyzed expert analysis on the question of whether the class should be certified. provided McCrary Professor in wages, job titles, and career to assess the differences in order data internal wage and promotion retailer’s analysis established that statistical McCrary’s Professor stores. and across individual employees across progression Defense counsel retained Justin McCrary of Columbia Law School and Cornerstone Research in a class action labor Research School and Cornerstone Law of Columbia McCrary Justin retained counsel Defense against a large retailer. case brought discrimination CLASS CERTIFICATION ANALYSIS IN EMPLOYMENT DISCRIMINATION LITIGATION DISCRIMINATION IN EMPLOYMENT ANALYSIS CERTIFICATION CLASS coordinated behavior not to hire or recruit. In addition, we have analyzed whether, on net, such an alleged conspiracy such an alleged conspiracy on net, whether, analyzed have addition, we In or recruit. not to hire behavior coordinated subject to the clauses. harm all employees would Cornerstone Research has been retained to analyze the alleged anticompetitive effects of no-poach clauses in effects the alleged anticompetitive to analyze has been retained Research Cornerstone the potential procompetitive analyzed staff and experts have Research these cases, Cornerstone In multiple matters. of was evidence whether there analyses to assess statistical conducted also We have benefits of such arrangements. anticompetitive effects of such clauses. At its most basic level, a no-poaching clause is an agreement between two or two between a no-poaching clause is an agreement At its most basic level, of such clauses. effects anticompetitive either during or after their employment. employees, each other’s not to solicit or recruit companies more Labor market monopsony and its potential effects on workers is a topic of increased scrutiny by antitrust regulators. regulators. scrutiny by antitrust is a topic of increased workers on monopsony and its potential effects Labor market industries—with a numerous clauses across challenging the use of “no-poach” of class action litigation A wave industry—has raised important questions about the potential on large franchises in the fast-food particular focus NO-POACH AGREEMENTS NO-POACH testimony and analyses extensively in her opinion, aligning with Professor Card on nearly all points of methodological on nearly all points of methodological Card aligning with Professor in her opinion, testimony and analyses extensively experts. the economic between disagreement Professor Card filed two rounds of reports and testified at a bench trial, presenting the federal district court with federal district presenting the at a bench trial, reports and testified rounds of filed two Card Professor admissions process. analyses of Harvard’s statistical extensive Card’s cited Professor She on all counts. of Harvard judge ruled in favor district court trial, the U.S. a three-week After its undergraduate admissions process. Cornerstone Research supported David Card of the University of California, of California, of the University Card supported David Research Cornerstone admissions process. its undergraduate expert. testifying economic as Harvard’s Berkeley, PRESIDENT AND FELLOWS OF HARVARD COLLEGE ET AL. COLLEGE HARVARD OF AND FELLOWS PRESIDENT in use of race College’s Harvard trial addressing in a high-profile Research Cornerstone retained counsel Defense featured matters featured / ACTION AFFIRMATIVE

involving a variety of issues, including class certification, monopsony power, and discrimination in in and discrimination power, monopsony certification, class including issues, of variety a involving education. market pre-labor or wages, promotion, LABOR & DISCRIMINATION LABOR in matters markets labor of economics unique the to explain on called often experts are Academic

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TRADING IN ETF SHARES BY AFFILIATED PARTIES AFFILIATED BY IN ETF SHARES TRADING TRADING IN ETF BASKET SECURITIES BY AN BY SECURITIES IN ETF BASKET TRADING //

We presented our findings to the ETF’s board. our findings to the ETF’s presented We For certain affiliated trades, we compared the relative economics of purchasing the ETF shares in the open market in the open market ETF shares the economics of purchasing relative the compared we trades, affiliated certain For the shares. participant create an authorized having versus exchanges and data vendors and studied the pricing of the affiliated trades relative to market quotes, as well as the quotes, as to market relative trades and studied the pricing of the affiliated vendors and data exchanges trades impacted the closing whether the affiliated analyzed the time of the trade. We values at indicative intraday value. to the net asset of the funds relative price trading in ETF shares by affiliated parties (affiliated trades). (affiliated parties by affiliated trading in ETF shares reported the manipulate to by the desire been motivated have may trades affiliated certain examined whether We rules of different reporting the closing price researched We dates. on certain the ETF shares for closing price FINANCIAL INSTITUTIONS / INSTITUTIONS FINANCIAL into to assist with an internal investigation a financial institution for by counsel was retained Research Cornerstone We presented our findings to the relevant parties, including the SEC and the ETF’s board. ETF’s and the relevant parties, including the SEC our findings to the presented We AP to examine whether there was a pattern of trades at abnormally high prices close to 3:00 PM in bonds included in abnormally high prices of trades at was a pattern AP to examine whether there damages. and the associated in the bond price the potential inflation calculated We basket. delivery the AP’s its weight in the fund’s portfolio. However, fund shareholders would be damaged as the delivery basket would be would basket the delivery be damaged as would fund shareholders However, portfolio. in the fund’s its weight to the AP. causing the fund to issue “too many” shares overvalued, the from quotes” data for and “request Bloomberg, from data FINRA, quotation from bond trading data analyzed We We examined whether manipulative trading occurred in certain bonds in the delivery basket of an authorized of an authorized basket bonds in the delivery in certain trading occurred manipulative examined whether We was calculated. NAV PM, when the fund’s close to 3:00 was inflated price the bond participant (AP) such that proportion than in a higher basket delivery the AP if the bond was included in the AP’s would benefit This inflation into whether the net asset value (NAV) of certain high-yield ETFs was manipulated through trading in the market for for trading in the market through was manipulated high-yield ETFs of certain asset value (NAV) into whether the net the underlying bonds. AUTHORIZED PARTICIPANT AUTHORIZED its internal investigation large financial institution to assist with a for by counsel was retained Research Cornerstone featured matters featured / INSTITUTIONS FINANCIAL

shares trade on securities exchanges, allowing investors to buy or sell shares at market-determined market-determined at shares sell or buy to investors allowing exchanges, securities on trade shares day. the trading throughout prices EXCHANGE-TRADED FUNDS EXCHANGE-TRADED whose funds, but to mutual similar vehicles investment pooled are funds (ETFs) Exchange-traded

// BLACKROCK MUTUAL FUNDS ADVISORY FEE LITIGATION FUNDS ADVISORY MUTUAL BLACKROCK FIREFIGHTERS’ RETIREMENT SYSTEM ET AL. V. CITCO GROUP ET AL GROUP CITCO AL. V. ET SYSTEM RETIREMENT FIREFIGHTERS’

of activities in which investment advisors such as BlackRock must engage to provide mutual funds. must engage to provide advisors such as BlackRock of activities in which investment of BlackRock. in favor bench trial, the judge found an eight-day Following At trial, Professor Sirri presented a comparative fee analysis showing that the fees BlackRock charges to Global charges to Global BlackRock the fees analysis showing that fee a comparative presented Sirri trial, Professor At also in line with those charged by peer mutual funds. He are fund shareholders Dividend and Equity Allocation complex range broad and context about the provided important analyses, and in the plaintiffs’ expert’s exposed flaws funds that insurance companies offer within their variable annuity products. Plaintiffs argued that BlackRock provides BlackRock Plaintiffs argued that within their variable annuity products. offer companies insurance funds that are its mutual fund fees as to these sub-advised funds, and that to its mutual funds essentially the same services excessive. therefore This is the first Section 36(b) case brought under a “sub-advisor” theory that has reached a trial decision. BlackRock is BlackRock a trial decision. reached has “sub-advisor” theory that under a case brought This is the first Section 36(b) same time (using the funds. At Dividend and Equity Allocation of the Global operations all day-to-day for responsible it sub-advises several fees), and charging lower limited services more but providing mandates, similar investment $1.5 billion. Defense counsel retained Erik Sirri of Babson College, supported by Cornerstone Research, to provide to provide Research, supported by Cornerstone of Babson College, Sirri Erik retained counsel $1.5 billion. Defense testimony. expert and rebuttal Plaintiffs sued BlackRock under Section 36(b) of the Investment Company Act, alleging that the firm charged excessive excessive the firm charged Act, alleging that Company Investment of the under Section 36(b) BlackRock sued Plaintiffs funds. Dividend and Equity Allocation of its largest mutual funds, the Global of two to shareholders advisory fees damages exceeded period, alleged $80 billion during the relevant to over the funds together grew that Given SECURITIES / SECURITIES Shortly before trial, our clients prevailed on summary judgment on all counts. trial, our clients prevailed before Shortly investment manager, or the plaintiffs’ own investment decisions. Finally, Professor Johnson explained that the expert’s the expert’s Johnson explained that Professor decisions. Finally, own investment or the plaintiffs’ manager, investment a as of the investment of the structure damages, due to a misinterpretation substantially overstated calculation investment. “guaranteed” alleged misrepresentations, omissions, and conflicts of interest and the plaintiffs’ losses. In particular, his analysis In particular, and the plaintiffs’ losses. of interest omissions, and conflicts alleged misrepresentations, of the financial crisis. factors on the fund, including that the impact of several plaintiffs’ expert ignored the that showed parties, including the consider the impact of the actions of other the plaintiffs’ expert did not that also showed He attributable to the allegations. attributable the between relationship the plaintiffs’ expert had failed to establish a causal that demonstrated Johnson Professor Shane Johnson of Texas A&M University to opine on loss causation and damages. to opine on loss causation A&M University of Texas Johnson Shane defendants of the administrator of interest conflicts omissions, and certain misrepresentations, alleged that Plaintiffs were whether any of the plaintiffs’ losses these factors and assessed analyzed Johnson caused their losses. Professor Following the failure of their investment in a hedge fund managed by Fletcher Asset Management, plaintiffs brought brought plaintiffs Asset Management, in a hedge fund managed by Fletcher of their investment failure the Following and Research Cornerstone retained counsel Defense administrator. the fund’s Citco, a $220 million suit against featured matters matters featured / SECURITIES

Recent decisions demonstrate the difficulties that plaintiffs have in establishing damages in damages have in establishing plaintiffs that the difficulties demonstrate decisions Recent these cases. INVESTMENT MANAGEMENT INVESTMENT charge. they fees that of the size the for or losses investor for sued frequently firms are Investment

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continued KENNIS V. METROPOLITAN WEST ASSET MANAGEMENT LLC MANAGEMENT WEST ASSET METROPOLITAN KENNIS V. // plaintiff’s experts’ estimation of economies of scale and opined that “Coates proffered convincing testimony as to convincing testimony plaintiff’s proffered “Coates of scale and opined that of economies experts’ estimation also He below $10 billion AUM.” well at dissipate of scale as to a non-index mutual bond fund would why economies industry as persuasive. in the mutual fund competition assessments regarding Coates’s cited Professor Following a bench trial, a federal judge found in favor of MetWest and called Professor Coates’s testimony convincing convincing testimony Coates’s and called Professor of MetWest in favor judge found a bench trial, a federal Following of the criticism” with Coates’s agrees “the Court his decision, the judge stated of topics. In a wide range across MetWest provides different services when playing its different roles, operates a different set of businesses, and incurs a different roles, operates its different when playing services different provides MetWest could not be used to fees on their own and thus sub-advisory risks as an advisor than it does as a sub-advisor, different reasonable. were fees determine if the Fund’s comparable mutual funds with fees he evaluated to be in line with peers. He also analyzed the Fund’s performance performance the Fund’s also analyzed to be in line with peers. He he evaluated funds with fees mutual comparable and share may not experience may or ways mutual funds Fund, the from the profitability MetWest’s and testified on He opined that by advisors and sub-advisors. and risks borne offered services and the differing of scale, economies sub-advisory services, MetWest would still have been sufficiently profitable while appropriately sharing economies of sharing profitable while appropriately been sufficiently still have would MetWest sub-advisory services, shareholders. scale with the Fund’s for was ample competition there that opined Coates Professor market, Based on his analyses of the mutual fund charged other funds for sub-advisory services should be used as a benchmark, given the purportedly similar services the purportedly similar services benchmark, given should be used as a sub-advisory services charged other funds for sub-advised funds. externally sponsored and as a sub-advisor to the as an advisor to the Fund by MetWest performed for fee it charged other funds Fund the same advisory had charged the to the plaintiff’sMetWest According if experts, The plaintiff’s peer mutual industry, competition in the mutual fund due to the purported lack of experts opined that, MetWest instead, the fees They argued that, fees. the Fund’s to evaluate yardstick inappropriate an funds were Defense counsel retained John Coates of Harvard Law School and Cornerstone Research to evaluate MetWest’s role role MetWest’s to evaluate Research School and Cornerstone Law of Harvard Coates John retained counsel Defense the plaintiff’s to rebut and experts’ arguments Fund) (the Bond Fund Return Total West as advisor to the Metropolitan on all fronts. The plaintiff alleged that Metropolitan West Asset Management LLC (MetWest) charged excessive fees, and that and that fees, charged excessive (MetWest) Management LLC West Asset Metropolitan that The plaintiff alleged Act. Company of the Investment 36(b) under Section bargaining” standard did not meet the “arm’s-length those fees featured matter featured / SECURITIES INVESTMENT MANAGEMENT MANAGEMENT INVESTMENT

All the reports featured in this Annual Review, as well as the most recent updates, are available at cornerstone.com. available at cornerstone.com. updates, are as well as the most recent in this Annual Review, featured All the reports increased significantly over the past decade. significantly over increased Antitrust Agencies the U.S. at and Enforcement Investigations in Merger Trends year. fiscal in the previous 1,772 up from 1,992 transactions in FY 2017, agencies reported government U.S. Trends in Merger Investigations and Enforcement at the European Commission the European at and Enforcement Investigations in Merger Trends has to merger enforcement the deal value of transactions subject shows that The inaugural edition of the report Shareholder Litigation Involving Acquisitions of Public Companies of Public Acquisitions Involving Litigation Shareholder deals valued over and acquisition of merger challenged 82 percent of public target companies Shareholders year. with the previous $100 million in 2018, consistent The total settlement value of securities class actions rose sharply to $5 billion in 2018, driven by five settlements of settlements of by five sharply to $5 billion in 2018, driven The total settlement value of securities class actions rose at least $100 million. The pace of federal securities class actions continued at near-record levels in 2018. levels near-record at securities class actions continued of federal The pace Settlements Securities Class Action than 30 percent over the previous fiscal year. fiscal the previous over than 30 percent Filings Securities Class Action less than $3.3 million. Subsidiaries and Company Public Activity: Enforcement SEC more rose 2019 year fiscal in and subsidiaries actions against public companies enforcement The number of new SEC Regulatory Actions Involving Accountants Involving Actions Regulatory Monetary settlements totaled in 2018. accountants actions involving 45 enforcement finalized and PCAOB The SEC Opt-Out Cases in Securities Class Action Settlements Cases in Securities Class Action Opt-Out 34 cases in which one or least at were 2014 and 2018, there between of 382 securities class action settlements Out against the defendant. litigation out to pursue separate plaintiffs opted more Characteristics of U.S. Natural Gas Transactions: FERC Form 552 Submissions Form FERC Gas Transactions: Natural Characteristics of U.S. highs in 2018. record reached production gas trading activity and marketed natural Both U.S. Appraisal Litigation in Delaware—Trends in Petitions and Opinions in Petitions in Delaware—Trends Appraisal Litigation continued to fall in 2018. Court of Chancery Delaware in the The number of appraisal petitions filed In 2018, he value of securities class action settlements involving accounting allegations reached the second-highest the second-highest reached allegations accounting involving value of securities class action settlements 2018, he In total in the last 10 years. featured reports featured and Settlements Filings Class Action Accounting

securities filings, settlements, and shareholder litigation. Our collaborations with institutions such as as such institutions with Our collaborations litigation. shareholder and settlements, filings, securities and analyses. data updated counsel with provide Center NYU Pollack School and Law Stanford INDUSTRY-LEADING RESEARCH INDUSTRY-LEADING in trends reporting of forefront at the been have and experts staff our years, than thirty more For

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Brown v. Madison Madison v. Brown BROWN ET AL. V. MADISON COUNTY, MISSISSIPPI COUNTY, MADISON ET AL. V. BROWN // , a first-of-its-kind consent decree on racial profiling by police, is widely recognized as one of one as recognized widely is by police, profiling on racial decree consent , a first-of-its-kind

RACIAL DIVERSITY IN HIRING PRACTICES IN HIRING DIVERSITY RACIAL communities yielded in Boston and firefighters police for hiring practices assessed whether Research Cornerstone communities. in the local workforce of the qualified match the racial makeup to sufficient racial diversity Civil Rights (LCCR) of the San Francisco Bay Area honored our firmwide team with the Robert G. Sproul Jr. Award, Award, Jr. Sproul Robert G. our firmwide team with the honored Area Bay of the San Francisco (LCCR) Civil Rights of legal provision exemplary for the award presents LCCR Dinner. annual MLK Awards the LCCR's at presented communities. to underrepresented services Cornerstone Research investigated differences in suspension rates based on gender, race, disability status, and and disability status, race, based on gender, in suspension rates differences investigated Research Cornerstone for Committee the Lawyers 2019, In Area. Bay the San Francisco public school districts across other factors for SUSPENSION RATE DISCREPANCIES IN SCHOOL DISTRICTS IN SCHOOL DISCREPANCIES RATE SUSPENSION implements new policies for non-biased policing, roadblocks, and pedestrian stops. It also establishes new data also establishes new data pedestrian stops. It and non-biased policing, roadblocks, implements new policies for to monitor compliance advisory board as a community as well requirements, and disclosure record-keeping, collection, and comments. complaints community for forum a and to provide In October 2019, a U.S. district judge for the Southern District of Mississippi approved a groundbreaking consent consent a groundbreaking approved of Mississippi Southern District the district judge for a U.S. 2019, October In The settlement practices. these kinds of policing Mississippi to address of first in the state one of the decree, Frontiera of the University of California, Berkeley, served as expert witnesses for the plaintiffs. The experts analyzed the plaintiffs. The experts analyzed as expert witnesses for served Berkeley, of California, of the University Frontiera were County Madison roadblocks in groups, and assessed whether racial different traffic stops across of the frequency African-American. predominantly are in neighborhoods that frequently implemented more against the county’s Sheriff’s Sheriff’s the Department. The plaintiffs alleged against the county’s unconstitutional used Department pedestrian stops. in traffic and tactics and racial profiling School, and Patricia Law of Columbia McCrary Justin Research, of Cornerstone Ricchetti and Bryan Rahul Guha Cornerstone Research worked with Simpson Thacher & Bartlett and the ACLU of Mississippi in this pro bono case pro in this of Mississippi & Bartlett and the ACLU Thacher with Simpson worked Research Cornerstone a class action brought Mississippi, County, of Madison The citizens decree. consent in a landmark resulted that featured matters featured / PROFILING RACIAL

County in 2019. decisions important the most PRO BONO PRO freedoms. and rights individual to support nonprofits firms and law partner with We Economic and FinancialConsulting and ExpertTestimony cornerstone.com