Richard D. Bernstein

RICHARD D. BERNSTEIN is a partner in the firm’s Washington, D.C., office. His practice focuses on securities litigation and other complex financial litigation. He has also litigated constitutional law, contract, and professional liability matters. Among other clients, Mr. Bernstein currently represents Time Warner in securities litigation, GE in government contract accounting litigation, and the Government of Canada in a challenge to the application of the Byrd Amendment to Canadian goods. In 1998, Washingtonian Magazine selected Mr. Bernstein as one of the top 40 lawyers under 40 in Washington.

Mr. Bernstein joined Sidley as an associate in 1988 and became a partner in 1994. Prior to joining the firm, he was a law clerk for Judge Amalya Kearse of the Second Circuit Court of Appeals and for United States Supreme Court Justice Antonin Scalia. He graduated first in his class from Columbia Law School in 1986.

Recent Securities Cases

• Dura Pharmaceuticals, Inc. v. Broudo, 544 U.S. 336 (2005): Sidley and Mr. Bernstein represented the Securities Industry Association and the Bond Market Association. The Court held that economic loss causation required a plaintiff to allege that disclosure of an earlier misrepresentation caused a stock price decline, and that loss causation could not be based on stock price reactions to bad economic news about the market, the industry, or the company.
• Merrill Lynch v. Dabit, 126 S. Ct. 1503 (2006): Sidley and Mr. Bernstein represented the Securities Industry Association and the Bond Market Association. The Court held that SLUSA preempted class action claims based on state law brought by holders of securities.
• Robbins v. Kroger Properties, Inc., 116 F.3d 1441 (11th Cir. 1997). After Deloitte lost an $81 million securities class action judgment, it hired Sidley to handle the appeal. Mr. Bernstein wrote the briefs. The Court reversed and dismissed the case. At the time, Robbins became the leading precedent that the “loss causation” requirement means that a securities defendant is not liable without proof that disclosure of its alleged misrepresentation caused a specific stock price decline. Dura later cited Robbins with approval.
• Arnlund v. Deloitte & Touche LLP, 199 F. Supp. 2d 461 (E.D. Va. 2002): The Court granted a partial Rule 12(b)(6) dismissal. The Court held that, as a matter of law, existing holders of a company’s securities at the time of an alleged misrepresentation could not allege the causation necessary for common law claim fraud because disclosure of the truth would have caused the stock price for their existing holdings to fall. After this ruling, the rest of the plaintiffs’ claims were favorably settled. Mr. Bernstein was co-lead counsel.

Other Recent Trial Level Cases

• The Glendale Litigation (Ct. Fed. Cl.): Sidley represented a California savings and loan, Glendale Federal Bank, in a lengthy trial before the Court of Federal Claims. (Glendale is now owned by Citigroup.) Glendale sued the United States for breach of a contract to honor goodwill as regulatory capital. Mr. Bernstein was co-lead trial counsel in a 20,000-page damages trial. The trial court awarded Glendale $381 million in 2002. That $381 million is the largest affirmed award by far in the over 100 goodwill contract breach cases filed in the Court of Federal Claims.
• Executive Life Litigation (C.D. Cal.): Sidley represented Aurora National Life Assurance Company in multi-party litigation based in Los Angeles alleging fraud in the bidding process in the rehabilitation of the largest failed American insurance company, Executive Life Insurance Company. Mr. Bernstein was Aurora’s lead counsel. Aurora was sued by the California Insurance Commissioner, a losing bidder, the California Attorney General, and two policyholder groups. The latter three cases were dismissed. There were also parallel criminal proceedings brought by the Department of Justice against defendants other than Aurora.
  Numerous other corporate defendants pled guilty and agreed to pay $935 million to the United States or the civil plaintiffs. Aurora was not indicted and did not plead guilty. In 2005, Aurora paid $91.95 million to settle the civil claims that were not dismissed. District Judge A. Howard Matz stated to Mr. Bernstein on the record: “I think you have been stellar in your representation.”
  
• PNC Litigation: In 2000-01, Sidley defended PNC against a derivative lawsuit and a complaint filed with the Federal Election Commission challenging PNC’s home mortgage loan to President and Senator Clinton. Mr. Bernstein was lead counsel. Both actions were dismissed.
• Deloitte Touche litigation: Sidley defended Deloitte Touche against a $200 million lawsuit filed in Denver by the RTC as receiver for Otero Savings. After a number of favorable pre-trial rulings, in 1994 the case was settled as part of Deloitte’s global settlement with the FDIC, RTC, and OTS.
  Sidley later defended Deloitte against two suits by the Florida Insurance Commissioner as receiver for two failed property and casualty insurers. Mr. Bernstein was co-lead counsel. The cases were mediated and settled in 2001.
  
• The Silverado Litigation: Sidley represented Denver law firm Sherman & Howard in a $200 million lawsuit by the FDIC as receiver for the failed Silverado Savings & Loan. Mr. Bernstein was co-lead counsel. Sherman & Howard settled favorably with both the FDIC and OTS in 1991. It was the first time a defendant in a savings and loan case settled civil and regulatory matters simultaneously, paving the way for other professional firms to make global settlements.

Other Recent Appellate Cases

• Glendale Federal Bank v. United States, 378 F.3d 1308 (Fed. Cir. 2004): Mr. Bernstein argued this appeal and the Court unanimously affirmed the $381 million judgment for Glendale, Sidley’s client, who had sued for breach of a contract to treat goodwill as regulatory capital.
• eBay Inc. v. MercExchange, Inc., 126 S. Ct. 1837 (2006): Mr. Bernstein was the principal brief writer. Overturning two decades of Federal Circuit precedent, the Court held that a permanent injunction could be awarded after a jury verdict of patent infringement only if the plaintiff satisfied the traditional four factor equitable test for injunctive relief.
• Mobil Oil Exploration & Producing Southeast, Inc. v. United States, 530 U.S. 604 (2000): Mr. Bernstein was the principal brief writer. The Court held generally that the same common law rules that apply to private contracts also apply to government contracts. Most important, the Court held that Mobil and Marathon Oil were entitled to recover restitution of payments made for offshore leases that the government breached, even though the Plaintiffs could not prove lost profits. On remand, the Federal Circuit awarded Mobil and Marathon the full $156 million they sought. Marathon Oil Co. v. United States, 236 F.3d 1313 (Fed. Cir. 2001).
• United States v. Winstar Corp., 518 U.S. 839 (1996): Mr. Bernstein was the principal brief writer. The Court ruled that the government was liable for breaching contracts even when it was directed by Congress to breach. The Court rejected a number of arguments that the government had a special status that absolved it from liability for breaching its contracts.
• Carmell v. Texas, 529 U.S. 513 (2000): Mr. Bernstein was appointed by the Supreme Court to argue for an indigent criminal defendant. By a 5-4 vote, the Court reversed all of the defendant’s convictions at issue based on a violation of the Ex Post Facto clause.