What a year. No transatlantic flights – let alone 50 of them – with power suits yielding to momwear and a good jacket.
Somewhere in there, we learned that a lot of the frippery in which we wrap ourselves is just the wrapping. Not who we are.
Case in point: Jennifer Pafiti, head of client services at plaintiff securities litigation powerhouse Pomerantz. Qualified as a solicitor in the UK as well as an attorney in the U.S., Pafiti has built her reputation expanding the firm by helping clients turn obstacles into opportunities in tandem with managing partner Jeremy Lieberman as the younger generation of leaders expanding the venerable securities law firm, the oldest in the U.S.
Nowhere has that been truer than in developing business overseas, an accomplishment that has not only driven the firm’s growth but paid off handsomely when pandemic restrictions stalled the in-person meetings that tend to be table stakes for lawyers wooing prospective clients.
“My job, pre-Covid, involved traveling every week, long-haul, somewhere,” Pafiti says. “Now, working with people that we had already established great relationships with before Covid hit, we’ve been able to keep the momentum going.”
Late last year, European Pensions recognized the firm’s work in the region with its Thought Leadership Award, noting Pomerantz’s success in helping overseas retirement plans take advantage of robust U.S. securities laws despite limitations imposed by the Supreme Court’s 2010 ruling in Morrison v. National Australia Bank.
That 8-0 decision, written by the late Justice Antonin Scalia, barred investors who bought securities such as stocks and bonds on non-U.S. exchanges from pursuing claims through American courts.
In the aftermath of Morrison, some entrenched U.S. firms threw up their hands and moved away from such cases.
“There was a shift in the class action space as a result of that, a rupture, because of the way doing business changed with the decision,” Lieberman says. “We were in a competitively disadvantaged situation 10 years ago, so when the market experienced those changes, it was a little like when a lane opens up on the highway: OK, you have an opportunity.”
The New York-based firm’s attorneys responded with novel legal theories that could give their clients a fighting chance.
On behalf of a number of U.S. pension plans, for instance, they filed individual negligence and common-law fraud claims, rather than securities actions, against British oil giant BP in 2012, after the Deepwater Horizon oil spill lowered the value of their securities that had been purchased on the London Stock Exchange.
The cases survived BP’s motions to dismiss on a variety of grounds, and the firm later convinced the federal court to afford the same opportunities to foreign institutional investors. Over nine years of hard-fought litigation, Pomerantz earned a series of ground-breaking wins on behalf of the 125+ institutional investors who ultimately pursued such claims against BP.
Pomerantz’s foresight and perseverance paved the way, post-Morrison, for both foreign and domestic investors to pursue foreign law claims against a foreign company, seeking recovery for foreign-traded shares in U.S. courts.
Pomerantz also expanded global investor rights in late 2019 by obtaining class certifications for Perrigo Company plc stockholders who purchased shares on the Tel Aviv as well as the New York stock exchanges. And more recently, Pomerantz broke new ground when a district court agreed to exercise supplemental jurisdiction in a securities class action against Teva Pharmaceutical Industries, in which the firm represents several Israeli institutional investors who purchased Teva shares on the Tel Aviv Stock Exchange (“TASE”). This means, in effect, that the court recognizes that Israeli securities law expressly permits TASE stocks to be “dual-listed” in Israel and the U.S., and will apply U.S. securities law to any fraud-related claims regardless of where the shares were purchased. Had the court declined to do so, Pomerantz would have needed to hire separate Israeli counsel and institute a separate lawsuit in Israel – for hundreds of millions of dollars in losses suffered on the TASE – based on the same facts and misstatements being litigated in the U.S. case.
“Whenever there’s a ruling that goes against the plaintiffs’ bar, like the Morrison decision, we sit down and try to find other ways,” Pafiti explains. “Every now and again you reveal an avenue that you can take your clients down to achieve a recovery.”
While she and Lieberman have tag-teamed the firm’s effort to weave Morrison’s straw into gold, the process is never a simple one. It involves far more than one meeting or conversation with a client worried that the precedent will keep him or her from obtaining justice.
“This involves months, if not years, of trying different approaches,” Pafiti says. “It’s calls at 2 a.m. with an idea, e-mails back and forth, sitting down – sometimes virtually – to share an idea and build upon it. We know when we’re on the right path and just need to collaborate to strategize how to achieve our goal to enable our clients to recover.”
Development of Pomerantz’s overseas business began with the Comverse Technology case, in which the firm worked with lead plaintiff the Menorah Group, an Israeli insurer, to negotiate a $225M settlement in 2009, says Lieberman.
“Once we had a taste of success in Israel, it became clear that not only could we replicate that, but it was important to do so,” he says. “Next, we had success in England.”
The BP litigation, in particular, offered hard evidence of the strategy’s payoff potential.
“This has a lot to do with the story of the firm’s rise as we sought to distinguish ourselves,” Lieberman explains. “Rather than knocking on the doors of the same institutions in the U.S. – a route our competitors had already traversed 10 or 15 years prior – we felt that the international sphere presented less competition from our brethren in the bar, and was where we could make more of an imprint in the securities class action space.”
How does a law firm go boldly where none has gone before, to make new law? The firm’s strategy in a nutshell, Lieberman says, is devising common-sense solutions to problems created when jurists make case law that has unforeseen complications in the real world.
“When Morrison came out and held that ‘if you purchased your shares on a U.S. exchange, you’re covered by the federal securities laws, but if you buy the same securities of that same company on a non-U.S. exchange, you’re not,’ that’s just pure folly,” Lieberman says. “It makes no sense. You’re going to have certain investors that are hurt by the same actions, the same statements and the same issues, yet one gets a recovery and one doesn’t.”
Pomerantz’s success in devising a remedy for frustrated BP stockholders brought dozens of new clients and “gave us a real platform for exposure to larger institutional investors,” Lieberman says.
Ultimately, Pomerantz was able to negotiate a highly favorable settlement for its BP investor clients, who Lieberman says actually fared much better than they would have if they instead had purchased stock on the U.S. exchange.
“We did not look at this case as a big moneymaker,” Lieberman says. “We looked at it as an important point and a way to get traction in the international arena. Not only did we secure real financial benefits for damaged investors and secure precedents that expanded the rights of global investors, but the case really elevated the firm’s global profile.”
Pafiti’s connections and experience with European law, garnered in a pre-Brexit era when the United Kingdom was a full-fledged member of the European Union, opened even more doors that might otherwise have remained barred.
“There’s that European nexus: The European clients gravitated toward, I think, an attorney with a good understanding of European law and business practices,” she says. “They appreciated that there was somebody who had that background.”
In fact, one of the clients in the BP case – USS, or Universities Superannuation Scheme Ltd. – would later become the lead plaintiff in Pomerantz’s litigation against Petrobras, in which the firm achieved a record-breaking $3B settlement for damaged investors.
USS, notes Pafiti, is “a very conservative British pension fund without desire to pursue litigation unless absolutely necessary.”
One factor that proved important in the pension plan’s change of heart was “that they had somebody with an understanding of British perception of litigation on the team,” she says. “We held their hand and gave them weekly updates, sometimes biweekly updates, which can be very different from the frequency of updates required by an American plaintiff.”
Big picture, the case was “a UK company suing a Brazilian company in U.S. courts,” Lieberman says.
“Talk about international scope and how everyone internationally is connected to one another, and what Morrison did by restricting U.S. law so that no single international forum is available to handle all of those issues just makes very little sense,” he says.
“We’re doing the best that we can to address those kinds of problems.”
Both he and Pafiti see tremendous demand from the broad market of investors caught in Morrison’s limbo. Nonetheless, they both recognize that careful evaluation and selectivity in taking on cases is crucial to honoring the firm’s commitment to clients.
“I will never recommend a case in which I don’t believe to a client,” Pafiti says. “And when a client does engage in litigation, I’m fully involved from beginning to end – I’m not going to pass that on. The person that they speak to is me, the person that they trust and know is me; I am right beside them.”
What that mindset has enabled her to accomplish is impressive on its own.
While Pafiti left London for L.A. and took a prep course that billed itself as “everything you need to know to pass the bar,” it was premised on students having completed three years of law school in the U.S. Her background as a British civil litigator exempted her from that prerequisite, but she knew it wouldn’t be sufficient.
To make up for the gap, she spent nine months, 16 hours a day, “learning as much as I could before I sat the bar because I knew that the prep course wasn’t enough. I bought the law school books and taught myself as much as I could,” she says. She passed the California bar in 2012.
That work ethic carried over to Pomerantz, where she has balanced her professional responsibilities with the demands of being a single mother of three, a feat made possible in part by management’s willingness to accommodate her scheduling needs.
“Now that I’m more senior at the firm, I’ve been a big advocate of making sure that when I’m hiring somebody I let them know my story because I think it’s important that they know there is an option,” she says.
“We have some amazing attorneys, some of whom are mothers,” Pafiti adds. “We have to let them know it’s OK, that you have every opportunity to be both a mother and an attorney.”
In Pafiti’s own case, her dual roles meant that one son had racked up more than 200 flights by the time he was two years old because he was too young to leave at home.
Over the past year, though, that hasn’t been an issue.
Instead, she’s juggling her caseload with supervising remote schooling for two of her three children. While her 16-year-old daughter is self-sufficient, her 6-year-old has just started kindergarten.
“Every five minutes, it’s ‘Mommy, where’s this document? Oh, I need this. What am I supposed to be doing?’”
At this point, the pandemic and its related safety restrictions are obviously not short-term situations, she says, but conditions you have to accept and manage as best you can.
“Yes, I’m missing the planes, missing adult interaction, missing wearing a suit – or a full suit, at least – to work, and definitely missing whatever was normal before,” Pafiti says. “But we’ve just got to power through and trust that this year brings new hope and more freedom that we can safely enjoy.”