Katherine Lubin Benson

Katherine Lubin Benson focuses on antitrust and securities fraud cases as a partner at Lieff Cabraser Heimann & Bernstein. Working from home during the pandemic, she said she misses the personal interactions and camaraderie of the office, but "it looks like things will continue this way for awhile."

As part of adapting to the new normal, she and more that 200 practitioners recently participated in a Zoom webinar with U.S. District Judge Yvonne Gonzalez Rogers of Oakland and Magistrate Judge Alex G. Tse of San Francisco on "Best Practices in the Covid-19 World." The judges provided positive feedback and advice, Benson said, including the suggestion that lawyers "make your oral argument as if you were in court--don't read it."

Benson and colleagues recently filed a new case seeking to hold accountable the current and former directors and officers of The Boeing Co. for their alleged failure to monitor the safety of the company's 737 Max airplanes, leading to what the complaint describes as "an epochal corporate governance catastrophe" that led to two major plane crashes.

The complaint asserts so-called Caremark breach of fiduciary duty claims, sometimes known as failure-of-oversight claims, widely considered to be the most difficult theory in corporate law upon which plaintiffs can win judgment. DiNapoli v. Duberstein, 2020-0465 (Del. Chancery Ct., filed June 12, 2020).

The named plaintiff, Thomas P. DiNapoli, is the New York State comptroller; the lead defendant is Kenneth M. Duberstein, a former White House chief of staff for President Ronald Reagan and a former lead director of Boeing. Caremark claims are named for a 1996 case regarding the duties of Delaware corporation directors. Benson's client, a co-lead plaintiff, is the Fire and Police Pension Association of Colorado.

"Caremark claims are difficult because you have to show not just negligence but conscious disregard," Benson said.

Though obstacles to prevailing on Caremark claims are large but they are not insurmountable, as Benson and the Lieff Cabraser team showed in April 2020 when it achieved a $320 million settlement with Wells Fargo & Co. after asserting similar claims arising from the bank's illicit sales practices scandal. In re Wells Fargo & Co. Shareholder Derivative Litigation, 3:16-cv-05541 (N.D. Cal., filed Sept. 29, 2016).

"Our investigation there showed Wells Fargo encouraged its sales people to open as many accounts as possible without customer knowledge or consent, and it turned out the CEO admitted that he had talked about it with the board," Benson said. "When the trial judge held that we had successfully pled our Caremark claim, and after we showed we were ready to take the case to trial, they settled."

Benson said her firm "focuses on what corporate scandals involve breaches of fiduciary duty, and Boeing and Wells Fargo are examples of boards of directors that look the other way when they should be nipping things in the bud as a matter of good corporate governance."

-- John Roemer