Saveri Wants to Prove Cartels Can’t Out-Muscle Small Antitrust Firm

(The Recorder)  Joseph Saveri approaches litigation the same way he approaches triathlons—he hates to lose.

That’s not to say he never does. Saveri was reminded of that in Milwaukee last August, while biking along the shore of Lake Michigan in the USA Triathlon national championships.  The course was picturesque, with a view of water on one side and the city’s skyscrapers on the other. But other riders started passing Saveri almost as soon as he hopped on his bike.

“I got crushed,” he said.

It was hot. He’d been traveling a lot that month, and hadn’t fully prepared. And the competition was fast.

The 52-year-old antitrust lawyer has his bad days in court, too.  In 2013, a year after leaving Lieff Cabraser Heimann & Bernstein and opening his own firm, Saveri lost out to a trio of more established firms in a bid to lead a price-fixing class action involving lithium ion batteries.

Now, things seem to be turning around.  In October, he was appointed to head another international cartel case over electrolytic capacitors—tiny components found in nearly every electronic device on the market.

It’s a big win for his five-lawyer firm. But it’s also a test of Saveri’s ability to steer a complex antitrust class action without the financial backing and personnel of the storied 60-lawyer firm he long called home.  And in some ways, Saveri’s decision to go out on his own is a test of whether, given the economics of antitrust litigation today, a small firm like his can succeed.

Saveri still has a family name that goes a long way in San Francisco’s lawyer community—his father, uncle, and cousin have all been prominent figures in the city’s antitrust bar—but he’s determined not to let that legacy define him.

“In a large measure my firm and what I was doing, opening my own business, was about me and my identity as a lawyer,” Saveri said.

THE OTHER SAVERI

On a Wednesday afternoon in April 2013, Saveri sat in Oakland federal court, ready to argue that his fledgling firm should lead a price-fixing case against an alleged cartel of lithium ion battery makers.  He was vying for the slot against Saveri & Saveri, the firm founded by his uncle and late father in 1959.

U.S. District Judge Yvonne Gonzalez Rogers called on him to address the court. “Next, Mr. …” the judge paused. “The other Saveri.”

“I don’t know if I’d put it that way exactly,” he told her.

Joseph Saveri was already the odd man out in the batteries litigation.  His uncle, Guido Saveri, and lawyers from two other firms had met before the hearing and agreed on how to divvy up the litigation.  The Joseph Saveri Law Firm hadn’t been invited.

Gonzalez Rogers ultimately denied the younger Saveri’s bid, instead appointing Saveri & Saveri; Pearson, Simon & Warshaw; and Berman DeValerio.

Looking back, Saveri acknowledged it was a disappointment.  But, he said, “I’m fine with putting myself out there. And if I lose or fail, I move onto the next case.”

Approaching the capacitors case, Saveri did everything differently.  He started digging into the cartel claims early, lined up a client, and filed the first complaint.  The proposed price-fixing class action targets dozens of companies, including Panasonic Corp. and Samsung Electro-Mechanics.

Unlike in some price-fixing cases, Saveri had no Department of Justice indictment to use as a blueprint for the suit.  He began investigating after reports that the DOJ had raided capacitor manufacturers in Japan, and developed a theory of the case by talking to people in the capacitor business, financial analysts, and journalists covering the industry.

When competing plaintiffs firms filed claims this summer, Saveri quickly enticed them to join his team—and to let him lead.  After a month of discussions, lawyers with Cohen Milstein Sellers & Toll agreed to work under Saveri out of deference to “his firm’s work in developing and initiating this litigation,” according to court filings.

A Philadelphia firm, Levin, Fishbein, Sedran & Berman, originally fought to argue the case in New Jersey, where defendant Panasonic runs its North American headquarters, but ultimately settled for a slot on Saveri’s proposed executive committee.

By mid-September, Saveri had everyone where he wanted.  He asked the court to appoint him head of the litigation.

Bruce Simon of Pearson, Simon & Warshaw introduced an opposing bid.  Simon had been among the lawyers selected over Saveri in the batteries suits.  The two also worked together on LCD screen antitrust litigation until Saveri left Lieff Cabraser.

Old tensions surfaced during an October hearing.  Simon’s filings in the capacitor case “literally borrowed” from the earlier complaints, Saveri said.  “We did not,” Simon countered. “We don’t do that.”

U.S. District Judge James Donato took just two days to rule.  He ultimately sided with Saveri, granting him sole lead counsel.

Brent Johnson of Cohen Milstein praised Donato’s choice.  “Leadership comes naturally to Joe,” he said in an email.

But Steve Berman of Hagens Berman Sobol Shapiro questioned whether Saveri’s young firm would have the resources to pay for the expensive expert work and document review the case will require.

“I was a bit surprised a judge would appoint a firm that small [without] a long history of financial success as sole lead,” Berman wrote in an email.  “These cases are expansive and the class needs a litigation firm that has real staying power.”

Donato expressed no concern over Saveri’s resources.  In his ruling, Donato said his choice was based on the time and effort Saveri put into investigating the capacitor claims.

Saveri and his team have a lot of work ahead.  The claims involve huge corporations in the U.S., Japan, and South Korea, and a web of complex economic and technological data.  Plaintiffs likely will shell out millions just to reach class certification, if they make it that far.

“There are still a lot of questions to be answered about the nature and scope of the alleged conspiracy,” said Gold Bennett Cera & Sidener partner Solomon Cera, who is working the case with Saveri.

Defendants also are sure to argue the conduct of capacitor manufacturers in Japan and South Korean is not covered under U.S. antitrust law. And that’s a tricky area to navigate, said Cotchett, Pitre & McCarthy partner Steven Williams, who is representing the indirect purchasers in the case.  Federal circuit courts are split over how to interpret the Foreign Trade Antitrust Improvements Act.

“We’re going to be doing it at a district level while it plays out at the Supreme Court level,” Williams said. “And neither side knows how it’s going to play out.”

GROWTH MODE

Saveri is digging into the cartel case from a small office nestled at the end of a sixth-floor hallway on Montgomery Street, in San Francisco’s financial district.  On a Thursday morning last month, Saveri bent over papers stacked on a large wooden table.

The space has become too small, said Saveri, who’s looking into finding a bigger office.  It would be his second expansion in two years, and he plans to hire at least two more full-time lawyers before the end of 2015.

Last year, Saveri brought on Andrew Purdy, a Morgan, Lewis & Bockius senior associate to be his No. 2.  Purdy’s move created some buzz in the antitrust bar.  Cohen Milstein’s Johnson, part of Saveri’s capacitors team, called Purdy an excellent lawyer who “has already served the class very well.”

Lieff Cabraser is just three blocks from Saveri’s new office, though it soars 23 floors higher.  Saveri is largely credited with starting Lieff’s antitrust practice, and no one seems to disagree his leadership was key in building the fledgling practice into a powerhouse.

Saveri says his former colleagues were “professional and gracious” when he decided to move on, and he and Lieff Cabraser continue to work as co-counsel in several large cases.  The breakup wasn’t entirely amicable, according to some lawyers with knowledge of the split, and the relationship between the two firms remains strained.

Saveri left Lieff Cabraser in May 2012, after 20 years.  He says he’d long considered opening his own firm, but had kept putting it off.

“And then I really figured out that there’s never a right time,” he said. “When I figured that out… it was the right time.”

Zelle Hofmann Voelbel & Mason partner Francis Scarpulla said he assumed Saveri would one day strike out on his own, following in his father and uncle’s footsteps.  “I always figured Joe was entrepreneurial and he would have his own firm eventually,” said Scarpulla, who for a time lived next door to Saveri’s parents in North Beach, and met newborn Joe the day he came home from the hospital.

Saveri left Lieff Cabraser with the agreement that his new firm would serve as co-counsel in three ongoing antitrust cases he’d helped lead for Lieff:  the Silicon Valley “no-poach” litigation, a class action against makers of antibiotic Cipro, and a price-fixing suit against makers of commercial pigment titanium dioxide.  Plaintiffs so far have reaped settlements in those matters topping $250 million.

Saveri says he got a good deal when he left Lieff, but it wasn’t everything he wanted. He spent several years litigating price-fixing claims against the makers of LCD screens, and would have liked to see the case through.  Plaintiffs lawyers tried a piece of the case against Toshiba Corp. winning an $87 million verdict, and ultimately settled all direct-purchaser claims for more than $400 million.

“At the end of the day there were a number of the cases that I was working on that I just kind of walked away from,” Saveri said. “But you know, OK. I understand that.”

TOUGH TALK

Some who know Saveri well say he can be tough to negotiate with.  They point to an ugly dispute over $1.2 million in attorney fees escalating between Saveri and Miami firm Criden & Love in the Northern District of California.  The suit centers on a referral fee arrangement the Miami firm struck with Lieff Cabraser in the titanium dioxide litigation.  Saveri insists he is not bound by the agreement since he is no longer a Lieff Cabraser partner.

“It feels like someone trying to get paid for something I don’t owe,” Saveri said last month. “It’s a lot of money, particularly to a firm that’s just starting up.”

Michael Criden and Kevin Love didn’t return calls or emails requesting comment.

Others who have litigated with and against Saveri paint a different picture. David Kiernan of Jones Day, an Adobe Systems Inc. lawyer who has been litigating opposite Saveri in the “no-poach” case for four years, said he hasn’t known Saveri to fight for the sake of fighting.

Saveri has a dry, sometimes self-deprecating humor that also comes out in court.  “He doesn’t take himself too seriously,” Kiernan said.

Judith Zahid, a partner at Zelle Hofmann who worked as an associate under Saveri at Lieff Cabraser in the early 2000s, said he required perfection.  Zahid remembers making dozens of trips back and forth from Saveri’s office, where he marked up her briefs with a blue felt-tip.

“Joe has a confidence,” Zahid said. “He’s certain of what he wants.”

THE FAMILY BUSINESS

Saveri’s father and uncle, Richard and Guido Saveri, were born to Italian immigrants and grew up speaking their parents’ native tongue.

As children in the Italian-American enclave of North Beach, the brothers befriended Joseph Alioto, the future mayor of San Francisco and another leader of the city’s antitrust bar.  The three remained close after law school, at times sharing office space and teaming up on
antitrust work.

Antitrust law was the backdrop to Joe’s childhood.  His father brought stories from his cases to the family dinner table, and when Saveri came downstairs late at night, he found his father up writing briefs.

While he never felt pressure to carry on the family profession, Saveri said it felt like a natural career path.  “Look, if I had been able to hit a curveball, I would have been a baseball player or something like that,” he said.

But if antitrust law brought the Saveris together, it would later tear them apart. Richard died in 1999 of abdominal cancer, leaving the rest of the family to fight over the $27 million Saveri & Saveri brought in that year.  Richard’s widow, Marlys Saveri, sued Guido and his son Rick in San Francisco Superior Court seeking half the earnings.  Joe Saveri says he sided with his mother, though he wasn’t a party in the suit.

The court dismissed the case in 2002, but the litigation left a lasting scar.

“I think when something like that happens in a family, it takes some time for people to get over it and through it,” Joe Saveri said. “It was a hard thing.”

Neither Guido nor Rick responded to calls and emails requesting comment.

Joe Saveri says he and his uncle speak cordially in court now, and Guido Saveri recently entered an appearance for several indirect-purchaser plaintiffs in the capacitors litigation.  The two sides of the family are bound to cross paths in court, but their practices remain distinct—something Saveri tried to make clear early on.

When Saveri first opened his firm in 2012, he called it simply, Saveri Law Firm. He added his first name less than a month later.

“At the end of the day,” Saveri said. “I want to succeed or fail on my own.”

(Reporting by Marisa Kendall)