FIRM - YEAR END HIGHLIGHTS

William G. Passannante, Esq.
wpassannante@andersonkill.com
(212) 278-1328

We at Anderson Kill wish you a safe, healthy, and prosperous 2023.  We mark the New Year with an overview of emerging risks, along with highlights from battles in court, honors from legal industry watchers, and personal transitions – into the firm and up the ranks.

Insurance Coverage Trends

D&O risks evolve: Back in the fall of 2019, I noted in the New York Law Journal that the Business Roundtable’s update to its Statement of the Purpose of a Corporation, which broadened said purpose from a sole focus on shareholder returns to consideration of the corporation’s impact on multiple stakeholders and society at large, could mark a distinct  change in the nature of companies’ liability exposure. Three years later, companies are increasingly conducting ESG equity and civil rights audits and environmental audits at shareholders’ behest, as well as in response to pressure from the public and from regulatory agencies.  At the same time, companies in some cases must navigate a backlash against ESG initiatives, e.g., from shareholder objecting to diversity initiatives and state governments penalizing financial institutions that divest from fossil fuels or other industry-specific investments.

ESG scrutiny: Last year we noted that the SEC had formed a Climate and ESG Task Force “to proactively identify ESG-related misconduct. This year, my colleagues Dennis Artese and Bob Chesler noted that The ESG Police Have Arrived, as the SEC  fined the investment management arm of a major U.S. bank after finding that the investment advisor “did not always perform the ESG quality review that it disclosed using as part of its investment selection process for certain mutual funds it advised.”  In late September, the SEC announced that it had settled charges against a mining concern for misleading investors about a technology upgrade that it claimed would reduce costs, and for failing to properly assess whether to disclose the financial risks created by the company’s excessive discharge of mercury.

Era of enforcement: More broadly, the SEC announced this November that in FY 2022, it filed 760 enforcement actions, up 9% over the prior year, and recovered a record $6.4 billion in penalties and disgorgement, up from $3.8 billion in FY 2021.

Cyber perils rise, cyber insurance narrows: Insurance companies have had little success denying coverage for cyberattacks by invoking war risk exclusions against coverage for attacks by parties that may have state support – e.g., in a key December 2021 decision finding coverage for Merck.  This summer Lloyd’s responded by instructing syndicates to explicitly exclude coverage for any state-backed cyber-attack in a state affected by the attack. My colleagues Dylan LaMorte and Josh Gold explored the implications in Risk Management Magazine, where Josh and Bob Horkovich share a regular column. On the cyber front, Josh Gold, our Cyber Insurance Recovery Group co-chair, co-wrote the treatise Cyber Insurance Claims, Case Law, and Risk Management , published by the Practising Law Institute in February 2022.

Courting victory in 2022

Along with a number of favorable resolutions in high-stakes, complex insurance coverage matters, we had our share of court wins in 2022, including:

•  We filed an amicus for United Policyholders in support of a shipbuilder in whose favor the Vermont Supreme Court found that under state law, the company may have suffered “direct physical damage” from Covid-19 that would trigger business interruption coverage.  The court cited a similar finding in New Hampshire in a case in which Anderson Kill represented the policyholder.
• On behalf of a building materials manufacturer, we prevailed in an appeal to the 5th Circuit, which found coverage for damages stemming from a faulty roof. While failure of the roof resulted in damage to ceilings and walls, the insurance company denied coverage on grounds that the plaintiff in the underlying suit did not explicitly seek damages for covered property damage.
• On behalf of a religious institution seeking coverage for sexual abuse alleged to have occurred 30 years ago, we won a coverage decision that hinged on evidence that the perpetrator was an independent contractor, not an employee.
• On behalf of a policyholder in Puerto Rico, we successfully argued that where a policyholder seeks summary judgment on the duty to defend, the insurance company cannot rely on information that it did not have when it first denied coverage and, as such, cannot seek a stay of the motion for summary judgment to pursue discovery.  The Puerto Rico Supreme Court denied cert to the insurance company on this issue.

We’re honored to be honored

For the sixteenth consecutive year, Chambers USA ranked Anderson Kill among the nation’s top insurance recovery practice groups. The firm’s New York office was also recognized for insurance dispute resolution, and its New Jersey office for insurance litigation. Special congratulations to Pamela Hans, our managing Shareholder in Philadelphia, who was ranked in Chambers for the first time this year. Also individually ranked in Chambers USA 2022 were Bob Horkovich , myself, Finley Harckham , Josh Gold , Rhonda Orin , Robert Chesler , and Steven Pudell .

The Legal 500 ranked our insurance recovery group in Tier 1 nationally, also for the sixteenth year running, re-naming Bob and me to the Legal 500 Hall of Fame, recommending Marshall Gilinsky, Diana Shafter Gliedman, John Leonard and Bruce Strong for the first time, along with repeat honorees Finley Harckham, Rhonda Orin, Josh Gold , and  Raymond Mascia, Jr. , who was recognized as a Next Generation Partner.  

For the tenth year straight, Best Lawyers named us a National Tier 1 Best Law Firm in Insurance Law, also recognizing Bob, myself, Marshall Gilinsky, Rhonda Orin,  Michele Gallagher , Pamela Hans ,  Robert Chesler , and Steven Pudell as Best Lawyers. Finally, Benchmark Litigation ranked Anderson Kill a National Tier 1 firm in Insurance Litigation for the tenth year running, naming Bob Horkovich a national litigation star and Josh Gold a future star.

Publications also offered kudos: Law360 named our Insurance Recovery Group a Practice Group of the Year, and we were finalists for the National Law Journal’s Elite Trial Lawyers honors and Business Insurance’s Legal Team of the Year – the latter for the fifth year running (we’ve won three times). On the individual front, New York’s Legal Aid Society named Jeffrey Glen to its Board of Directors.

We’re also pleased to welcome into the ranks of our shareholders, effective January 1, 2023,   Ethan W. Middlebrooks in New York, who concentrates in insurance recovery and commercial litigation, and Christina Yousef in New York, who also practices in insurance recovery and commercial litigation. Ethan joined Anderson Kill in 2014, and Christina in 2015.

New Colleagues and New Initiatives

This year we welcomed as incoming shareholders Michael C. Levy, an Estates, Trusts and Taxes attorney practicing in New York; Neil C. Schur, a versatile commercial litigator with a concentration in antitrust, based in Philadelphia; Jeremy B. Shockett, formerly Deputy Secretary for Public Safety for the Office of the Governor of New York and a New York prosecutor with 25 years’ experience, focusing on white collar defense;   and Peter J. Toren, an experienced litigator who focuses on intellectual property, cyber law and criminal defense, practicing in New York. The firm also welcomed associate James Goodridge, focusing on insurance recovery in New York,  and associates Annalisa Martini, Amy Weiss, and Joshua Zelen, all based in New York and focusing on insurance recovery.

Looking Forward to 2023

We wish you peace and prosperity during this new year and look forward to helping you fulfill your business goals and protect your interests.

William G. Passannante
(212) 278-1328
wpassannante@andersonkill.com

Anderson Kill

1251 Avenue of the Americas
New York, NY 10020