Karl Belgum is an experienced business litigator with a track record of successfully representing clients in complex, high-stakes lawsuits.
What do you focus on?
As a litigation veteran with over 30 years of experience, I have enjoyed working with business clients on a wide variety of matters including securities, corporate governance, false claims, antitrust and intellectual property, as plaintiff and defendant. More recently I have been involved in matters involving privacy and data security, including the Telephone Consumer Protection Act (TCPA).
For corporate entities and their boards, I focus on fiduciary duty issues as well as defending or prosecuting claims against corporate advisors. Recent matters include representing a shareholder in a dispute with the corporate issuer over share transfer restrictions and an ERISA claim brought by a retired executive who challenged the ESOP trustees’ valuation of the company.
I have also had extensive experience in matters relating to the insurance industry. I have represented conservators and funding entities in litigation arising from insurer insolvency. Representative matters include prosecuting litigation on behalf of self-insurance guarantee organizations against members who fail to pay their claims, and actions for breach of fiduciary duty and professional negligence against directors, officers, attorneys and actuaries who advise insurers or self-insurers. Clients have included the California Insurance Commissioner and the California Self-Insurers’ Security Fund. Another example in the insurance industry involved pursuing claims for restitution and unjust enrichment in connection with the sale of corporate bonds based on misrepresentations made to the Insurance Commissioner as conservator of an insolvent insurer. My work with the insurance industry has exposed me to legal and professional issues involving the management of insurers and self-insurers, regulatory issues, claims handling, underwriting, actuarial science and reinsurance.
I have also participated in patent litigation, focusing on the issue of patent damages and the issues that arise from multi-level patent licensing schemes.
What do you see on the horizon?
I see an increasing amount of litigation flowing from uncoordinated, overlapping and often poorly written privacy regulation, and an increased interest on the part of corporate clients in pursuing plaintiff-side litigation on a contingent fee basis with their chosen litigation counsel, so that both client and counsel have a similar stake in the outcome.
- Confidential JAMS Arbitration. Represented a private investment fund in prosecuting confidential arbitration claim against a large Bay Area tech company for breach of duties owed by company to the fund. The dispute arose out of the Company’s adoption of share transfer restrictions in the form of both bylaw amendments and amendments to stock purchase agreements and other closing documents related to venture capital fundraising. We prosecuted the case successfully and obtained a favorable settlement. 2017–2018.
- Confidential AAA Arbitration. Represented licensor of patented technology and related know-how in confidential arbitration to pursue royalties and other relief under licensing agreement. 2017–2018
- Liberty Mutual et al. v. Healthcare Industry Self-Insured Program of California, et al., No. 30-2013-00690574-CU-CO-CSC (Orange County Sup. Ct.) Represent Self-Insurers’ Security Fund in prosecution of claims against failed self-insured group and 300 group members for recoupment of liabilities paid and assumed by the Fund under Labor Code provisions relating to failed self-insurers. Case involves actuarial, reserve setting, claims handling and regulatory issues. Ongoing. 2013–2019
- Self-Insurers’ Security Fund v. Mainstay Business Solutions, et al., No. 34-2011-0011-3628 (Sacramento Sup. Ct.) Represent Self-Insurers’ Security Fund in prosecution of claims against staffing companies and jobsite employers for recoupment of liabilities paid and assumed by the Fund under Labor Code provisions relating to failed self-insurers. Case involves actuarial, reserve setting, claims handling and regulatory issues. Ongoing. 2011–2019
- ERISA litigation U.S.D.Ct., N.D. Cal. Represented construction company and its officer former president and CEO in action brought by retiring senior officer alleging manipulation of annual ESOP valuation and underpayment for shares under buy sell agreement upon plaintiff’s retirement. Issues included appropriate valuation methodologies, forecasting of revenues and profits, fiduciary duties of corporate officers and directors, contract interpretation and ERISA. Settled April 2017.
- Confidential matter, represented nursing school in dispute over loss of accreditation. 2019
- WiLan v. Apple, et al., No. 2:11-CV-68-JRG (E.D. Texas) Represented defendant product maker in patent litigation over alleged infringement of WiFi and cellular standards-essential patents. Responsible for damages case. Issues included working with damages expert, identification and analysis of comparable licenses, assessment of value added by patents to end-user technology, admissibility of end-customer “willingness to pay” surveys and FRAND. Settled. 2013
- In re TFT- LCD Antitrust Litigation, (ND Cal.) Represented Eastman Kodak Company as plaintiff prosecuting price fixing claim against manufacturers of LCD panels. Settled 2013.
Other notable matters
- Garamendi v. Altus Finance, et al., No. CV 99-02829 AHM (CWx) (C.D. Cal. (1999– 2006) Prosecuted fraud and unjust enrichment claims on behalf of the California Insurance Commissioner as statutory liquidator of Executive Life Insurance Company (“ELIC”), an insolvent California health insurer, against Credit Lyonnais SA, Francois Pinault, Artemis S.A. and a number of other French and U.S. defendants. Defendants were alleged to have made misrepresentations to the Commissioner in connection with the sale of ELIC’s $2 billion junk bond portfolio, and the licensing, ownership and control of a newly created California insurer. The case involved extensive foreign discovery. A five-month jury trial was conducted in federal court in Los Angles in 2005. The Commissioner obtained pre-trial settlements in excess of $700 million and an unjust enrichment judgment for $240 million after trial.
- In re Pacific Bancorp Securities Litigation, No. CV09-06501 RGK (PLAx) (C.D. Cal.) (and related cases) (2009–2010) Successful defense of investment bank in Rule 10b-5 class action brought by purchasers of shares in bank holding company. Allegations included misrepresentation in the issuance of analyst reports. Prevailed on motion to dismiss. Also represented investment bank in related shareholder derivative litigation, from which client was dismissed.
- Commissioner v. Rampino, et al. No. BC357691 (Super. Ct. Los Angeles County) (2006–2009) Prosecuted breach of fiduciary duty claims against seven former directors and officers of Fremont Indemnity Company, an insolvent California workers compensation insurer, on behalf of the California Insurance Commissioner as statutory liquidator. Allegations included breach of duty of good faith by directors, improper underwriting and breach of duty of utmost good faith to the company’s reinsurers, resulting in the commutation of three layers of treaty reinsurance at a substantial loss to Fremont. Tried case for six months to the court in 2008–2009. Case settled favorably after trial for $22 million.
- Tried multiple asbestos mesothelioma cases to verdict in 1990s to early 2000s.
- Bily v. Arthur Young & Co. (In re Osborne Computer Securities Cases), No. 536562 and 546814 (Super. Ct. Santa Clara County) (1987) Represented venture capital firms prosecuting fraud and negligent misrepresentation claims against the firm that audited Osborne Computer. Thirteen-week jury trial resulted in plaintiff’s verdict on negligent misrepresentation claim.
- Contractors Access Program of California litigation, No. 34-2011-0009379 and related cases (Sacramento Sup. Ct.) Represent conservator of workers compensation group self-insurer appointed by Director of the California Department of Industrial Relations in connection with conservation issues and dissolution of corporate entity. (2010–2016) Brought separate civil actions against directors and officers of the defaulted group and against reinsurers, actuaries and attorneys for the group. All settled 2011–2013.
- Tognazzini v. NBOR Corporation, et al., No. RG09-429378 (Super. Ct. Alameda County) (2009) Counsel to special litigation committee in shareholder’s derivative action against founder and principal shareholder of software company.
- Chen v. Knabb, No. RG07310978 (Super. Ct. Alameda County) (2007–2008) Defense of director in stockholder’s derivative action alleging breach of fiduciary duty and waste.
- Wunderlich v. United States of America, (N.D. Cal. and 9th Cir.), 281 F.3d 1078 (9th Cir. 2002) Represented taxpayer in $2 million tax refund action based on interpretation of provisions of tax code relating to generation skipping transfers by irrevocable trusts. Prevailed for taxpayer on appeal and obtained full refund, making new law in the Ninth Circuit.
- Multiple cases for foster parents seeking to adopt foster children in their custody contesting removal orders by county departments of social services.
- Confidential arbitration, JAMS. represented elderly widow pursuing claims for financial elder abuse against contractor for solar project financed through the California PACE program.
- Sloan v. Oakland Police Dept., (N.D. Cal.) (2007) Represented plaintiff in a Section 1983 action against two Oakland police officers for use of excessive force in making an arrest, resulting in serious injuries to the arrestee. Jury trial in January 2007.
- Garamendi v. Altus Finance SA, 136 F.Supp.2d 113 (C.D. Cal. 2001)
- Bachler (Estate of Murielle Wunderlich) v. United States of America, 281 F.3d 1078 (9th Cir. 2002)
- Rhone Poulenc Inc. v. International Insurance Company, 877 F.Supp. 1170 (N.D. III 1995)
- Bily v. Arthur Young, 3 Cal.4th 370 (Cal. 1992)
Publications and Presentations
- “High Court Hints At 3 Possible Outcomes In Deference Fight,” Law 360, March 26, 2019
- “Threats That Matter: Recent Developments in Privacy and Data Security,” Nixon Peabody Annual MCLE Seminar, San Francisco and Los Angeles, January 2019
- “The Next Battle over FRAND: The Definition of FRAND Terms and Multi-Level Licensing,” in New Matter (California Bar Association, Intellectual Property Section journal), summer 2014
- “SEC Whistleblower Rules: Internal Compliance, Governance, Employment Policies,” BNA Daily Report for Executives, June 15, 2011
- “SEC Adopts Final Whistleblower Rules: Implications For Internal Compliance, Governance and Employment Policies,” Securities Law Alert, May 27, 2011
- “U.S. Supreme Court Declines to Adopt Bright-Line Rule That Adverse Drug Reaction Reports Are Not Material Unless They Are Significant Statistically,” Securities Litigation Alert, March 28, 2011
- “Dodd-Frank Act Alters Preemption Rules for National Banks and Federal Thrifts,” Banking and Financial Services Litigation Alert, July 28, 2010
- “Senate Financial Reform Bill Increases Risk of Consumer Rights Litigation For Banks, Increases Regulation,” Banking and Financial Services Litigation Alert, June 2, 2010
- “Ninth Circuit Holds that Failure to Disclose Statistically Non-Significant Anecdotal Reports of Product Problems May Support Rule 10b-5 Liability,” Securities Litigation Alert, November 3, 2009
- “Ninth Circuit Refuses to Recognize an ‘Integrity of the Market’ Theory for Rule 10b-5 Class Actions,” Securities Litigation Alert, August 20, 2009
- “The Application of Business & Professions Code 17200 to Securities Transactions—Will Bowen v. Ziasun Technologies Survive?” Mealey’s California Section 17200 Report, Vol. 2, No. 10, 2004
- “Business & Professions Code 17200 Reform Proposals, Past, and Future,” Mealey’s California Section 17200 Report, Vol. 3, No. 2, 2004