Quinn Emanuel Beats DQ Bid, Takes Lead in CDS Case
Quinn Emanuel Urquhart & Sullivan has won an appointment to lead a massive antitrust case against banks that sold credit default swaps, defeating attempts by the defendants and a group of rival plaintiffs lawyers to derail the firm's bid.
Last month, Simpson Thacher & Bartlett asked a judge in Manhattan to disqualify Quinn Emanuel because one of its partners, Daniel Cunningham, had previously represented defendant The International Swaps and Derivatives Association Inc. when he was a partner at Allen & Overy. ISDA and more than a dozen major banks face claims by institutional investors that they conspired to inflate the price of credit default swaps. The plaintiffs, including Quinn Emanuel client Salix Capital, are seeking tens of billions of dollars in damages.
At a Dec. 5 hearing, U.S. District Judge Denise Cote held that Quinn Emanuel had erected a sufficient ethical screen to protect ISDA from any conflict, according to a transcript. She noted that Cunningham's representation of ISDA had ended four years ago when he left Allen & Overy and that he had never assisted ISDA in related litigation, noting that he worked for ISDA as a corporate lawyer. The judge also found it unlikely that Cunningham possessed confidential information that would be material to the case.
Cote also rejected Simpson Thacher's argument that Quinn Emanuel must be disqualified because Cunningham had insight into ISDA's "playbook," commenting: "I expect most counsel here would be horrified if I adopted that test."
In selecting Quinn Emanuel as lead counsel, she noted the firm's "unique strengths," including its trial bench and "extraordinary strengths" in appellate litigation. It had also presented the most sophisticated damages model, she said. At the end of the hearing, she asked Quinn Emanuel to decide if it wants to choose a co-lead counsel, and if so, to recommend a firm within seven days.
Surprisingly, the firm said at the hearing that it might pick Robbins Geller Rudman & Dowd, even though that firm had tried to disqualify Quinn Emanuel. Robbins Geller, along with Scott + Scott and Korein Tillery, had argued that Quinn Emanuel had a conflict because it does work for defendant Morgan Stanley Bank.
Quinn Emanuel, represented by Gregory Joseph of Joseph Hage Aaronson, had accused the Robbins-Korein-Scott group of making specious attacks on Quinn Emanuel, including claims that it didn't get conflict waivers from Morgan Stanley and Salix. The firm stated that it did.
Quinn Emanuel's Daniel Brockett, who is heading the firm's effort in the CDS case, declined to comment. Matthew Reilly of Simpson Thacher, who led the defense-side disqualification attempt, also declined to comment.