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Justin O. Reliford

Partner

D   484.270.1494
F   610.667.7056

Justin O. Reliford, a partner of the Firm, concentrates his practice on merger and acquisition litigation and shareholder derivative actions. Justin joined the firm in 2011, after several years practicing as a management-side labor, employment and ERISA litigator.  Justin has extensive experience counseling clients through complex litigation matters, including nationwide class, collective and representative actions. 

Since joining KTMC, Justin has worked on case teams that have secured considerable financial recoveries for public stockholders and other corporate constituents.  Justin has likewise helped achieve significant corporate governance reforms at publicly traded companies across the country.  Justin has a firm belief in the value of strong corporate governance and a passion for protecting the rights of public investors.  

Memberships

  • Pennsylvania Bar Association 

Community Involvement

  • Philadelphia Diversity Law Group
  • St. Rose of Lima School Advisory Board 

Speaking Engagements

Faculty Member – Pennsylvania Bar Institute’s “Best Practices in Pre-Trial Litigation in the Federal Courts II” (2013) 

Awards/Rankings

  • Lawdragon 500 Leading Plaintiff Financial Lawyer, 2019-2021
  • Super Lawyers Magazine (Pennsylvania) Rising Star 
Experience

Current Cases

  •   CASE CAPTION          In re Cardinal Health, Inc. Derivative Litigation
      COURT   United States District Court for the Southern District of Ohio
      CASE NUMBER   Case No. 2:19-cv-02491
      JUDGE   Honorable Sarah D. Morrison
      PLAINTIFF   Stanley Malone and Michael Splaine
      DEFENDANTS   Current and former members of Cardinal’s board of directors

    Plaintiff seeks to hold Cardinal Health’s directors and officers responsible for its role in the opioid crisis.  Plaintiff alleges that Cardinal’s board and certain officers ignored numerous “red flags” that should have alerted them to the company’s failure to abide by opioid distribution laws. 

    The action began in July 2019, when Cardinal Health shareholders represented by Kessler Topaz served a demand upon Cardinal Health’s board to access the Company’s records related to its opioid distribution practices. After reviewing thousands of pages of confidential, board-level documents, plaintiffs commenced their derivative action on December 13, 2019. Defendants moved to dismiss the complaint.  After briefing and oral argument, the Court denied defendants’ motion to dismiss on February 8, 2021. 

    Ohio law required plaintiff to plead that a majority of the board faced a substantial likelihood of liability that they “‘ignore[d] ‘red flags’” that Cardinal was not in compliance with laws and regulations requiring it to prevent the unlawful diversion of controlled substances.  In reaching its decision to allow the action to proceed, the court relied heavily on the board-level documents summarized in the complaint regarding the board’s reaction to mounting scrutiny by the Company’s principal regulators. Because of plaintiffs’ pre-suit investigation, the complaint described “no fewer than 53 specific instances in which the Board or one of its relevant committees met to discuss, or was otherwise notified of important information related to, compliance risks or issues in Cardinal Health’s distribution of prescription opioids.”  Even after the Company paid significant sums of money to settle multiple claims from regulators, the board members continued to sit on their hands, and essentially ignored the unlawful conduct. Crediting plaintiffs’ assertion that the board was more concerned with public relations than legal compliance, the court highlighted relatively recent board minutes that include “extensive discussion of a public relations strategy for ‘reorienting’ the narrative” without any discussion of the “track-record or effectiveness” of Cardinal Health’s internal controls.

    Since defeating the motion to dismiss, Plaintiff has been engaged in document discovery. After a mediation session, on December 9, 2021, plaintiffs agreed in principle to settle the case against all of the defendants. On May 26, 2022, Plaintiff filed a motion for preliminary approval.  

    Read Plaintiffs’ Consolidated Verified Shareholder Derivative Complaint Here

    Read Opinion and Order on the Motion to Dismiss Here

  •   CASE CAPTION   In re Tesla Motors, Inc. Stockholder Litigation
      COURT   Delaware Court of Chancery
      CASE NUMBER   Consol. C.A. No. 12711-VCS
      JUDGE   Honorable Joseph R. Slights
      PLAINTIFF   Arkansas Teacher Retirement System (“ATRS”)
      DEFENDANTS   Elon Musk

    Plaintiff challenges the $2.1 billion acquisition of SolarCity, Inc. by Tesla Motors, which closed on November 21, 2016 (the “Acquisition”).  Plaintiff alleges that the Acquisition was essentially a bailout of the financially struggling SolarCity, which was founded and run by Elon Musk’s cousins. At the time of the acquisition, Elon Musk was chairman of both boards of directors and the largest stockholder of both Tesla and SolarCity. Plaintiff alleges that Musk proposed the Acquisition in an effort to save SolarCity from going bankrupt, and the rest of Tesla’s board of directors approved the Acquisition despite knowing that it was not in Tesla’s best interests.

    On October 19, 2016, ATRS and KTMC were appointed co-lead plaintiffs and co-lead counsel.  On March 9, 2017, plaintiffs filed a consolidated complaint, naming Musk and the other Tesla directors as defendants.  On March 28, 2018, the Court denied defendants’ motion to dismiss the case. Plaintiffs then took discovery, including reviewing 3 million pages of documents and taking 22 fact and expert depositions.  Trial was originally set for March 16, 2020.  After two mediation sessions, on January 22, 2020 plaintiffs agreed to settle the case for $60 million against all of the defendants except Elon Musk.  On February 4, 2020, the Court denied motions for summary judgment.  On August 17, 2020, the Court approved the partial settlement and set the case for trial against Elon Musk alone.  On March 13, 2020, the Court adjourned the trial because of the COVID-19 pandemic.

    Plaintiffs tried the case as a bench trial before the Court from July 12 to July 23, 2021.  Plaintiffs called Elon Musk, his brother (Tesla board member) Kimbal Musk, and three expert witnesses in their case-in-chief.  Plaintiffs cross-examined Musk’s 13 fact and expert witnesses.  At trial, Plaintiffs sought to prove that Musk breached his fiduciary duties to Tesla by proposing the Acquisition and pushing it through, while knowing that SolarCity was worth nowhere close to the $2.1 billion Tesla paid for it.  Plaintiffs also sought to prove that Tesla stockholders who voted to approve the Acquisition were not given true information about Musk’s involvement in the Acquisition negotiations or SolarCity’s true financial condition, among other things.  After hearing witness testimony, the Court adjourned the trial for post-trial briefing.

    The parties conducted post-trial briefing between October 1, 2021 and December 17, 2021. Post-trial oral argument took place on January 18, 2022.  On April 27, 2022, the Delaware Court of Chancery ruled for Elon Musk, holding that Musk did not breach his fiduciary duties and that the price paid by Tesla for SolarCity was fair.  Plaintiffs are considering whether to appeal this ruling to the Delaware Supreme Court.  

    Read Second Amended Verified Class Action and Derivative Complaint Here

    Read Memorandum Opinion on the Motion to Dismiss Here

    Read Memorandum Opinion on the Motions for Summary Judgment Here 

    Read Plaintiffs’ Opening Post Trial Brief Here

    Memorandum Opinion, dated April 27, 2022

Landmark Results

  • Allergan stockholders alleged that in February 2014, Valeant tipped Pershing Square founder Bill Ackman about its plan to launch a hostile bid for Allergan. Armed with this nonpublic information, Pershing then bought 29 million shares of stock from unsuspecting investors, who were unaware of the takeover bid that Valeant was preparing in concert with the hedge fund. When Valeant publicized its bid in April 2014, Allergan stock shot up by $20 per share, earning Pershing $1 billion in profits in a single day.

    Valeant’s bid spawned a bidding war for Allergan. The company was eventually sold to Actavis PLC for approximately $66 billion.

    Stockholders filed suit in 2014 in federal court in the Central District of California, where Judge David O. Carter presided over the case. Judge Carter appointed the Iowa Public Employees Retirement System (“Iowa”) and the State Teachers Retirement System of Ohio (“Ohio”) as lead plaintiffs, and appointed Kessler Topaz Meltzer & Check, LLP and Bernstein Litowitz Berger & Grossmann, LLP as lead counsel.

    The court denied motions to dismiss the litigation in 2015 and 2016, and in 2017 certified a class of Allergan investors who sold common stock during the period when Pershing was buying.

    Earlier in December, the Court held a four-day hearing on dueling motions for summary judgment, with investors arguing that the Court should enter a liability judgment against Defendants, and Defendants arguing that the Court should throw out the case. A ruling was expected on those motions within coming days.

    The settlement reached resolves both the certified stockholder class action, which was set for trial on February 26, 2018, and the action brought on behalf of investors who traded in Allergan derivative instruments. Defendants are paying $250 million to resolve the certified common stock class action, and an additional $40 million to resolve the derivative case.

    Lee Rudy, a partner at Kessler Topaz and co-lead counsel for the common stock class, commented: “This settlement not only forces Valeant and Pershing to pay back hundreds of millions of dollars, it strikes a blow for the little guy who often believes, with good reason, that the stock market is rigged by more sophisticated players. Although we were fully prepared to present our case to a jury at trial, a pre-trial settlement guarantees significant relief to our class of investors who played by the rules.”

  • Plaintiff seeks to hold Cardinal Health’s directors and officers responsible for its role in the opioid crisis.  Plaintiff alleges that Cardinal’s board and certain officers ignored numerous “red flags” that should have alerted them to the company’s failure to abide by opioid distribution laws. 

    The action began in July 2019, when Cardinal Health shareholders represented by Kessler Topaz served a demand upon Cardinal Health’s board to access the Company’s records related to its opioid distribution practices. After reviewing thousands of pages of confidential, board-level documents, plaintiffs commenced their derivative action on December 13, 2019. Defendants moved to dismiss the complaint.  After briefing and oral argument, the Court denied defendants’ motion to dismiss on February 8, 2021. 

    Ohio law required plaintiff to plead that a majority of the board faced a substantial likelihood of liability that they “‘ignore[d] ‘red flags’” that Cardinal was not in compliance with laws and regulations requiring it to prevent the unlawful diversion of controlled substances.  In reaching its decision to allow the action to proceed, the court relied heavily on the board-level documents summarized in the complaint regarding the board’s reaction to mounting scrutiny by the Company’s principal regulators. Because of plaintiffs’ pre-suit investigation, the complaint described “no fewer than 53 specific instances in which the Board or one of its relevant committees met to discuss, or was otherwise notified of important information related to, compliance risks or issues in Cardinal Health’s distribution of prescription opioids.”  Even after the Company paid significant sums of money to settle multiple claims from regulators, the board members continued to sit on their hands, and essentially ignored the unlawful conduct. Crediting plaintiffs’ assertion that the board was more concerned with public relations than legal compliance, the court highlighted relatively recent board minutes that include “extensive discussion of a public relations strategy for ‘reorienting’ the narrative” without any discussion of the “track-record or effectiveness” of Cardinal Health’s internal controls.

    Since defeating the motion to dismiss, Plaintiff has been engaged in document discovery.

  • On August 27, 2015, Vice Chancellor J. Travis Laster issued his much-anticipated post-trial verdict in litigation by former stockholders of Dole Food Company against Dole’s chairman and controlling stockholder David Murdock.

    In a 106-page ruling, Vice Chancellor Laster found that Murdock and his longtime lieutenant, Dole’s former president and general counsel C. Michael Carter, unfairly manipulated Dole’s financial projections and misled the market as part of Murdock’s efforts to take the company private in a deal that closed in November 2013. Among other things, the Court concluded that Murdock and Carter “primed the market for the freeze-out by driving down Dole’s stock price” and provided the company’s outside directors with “knowingly false” information and intended to “mislead the board for Mr. Murdock’s benefit.”

    Vice Chancellor Laster found that the $13.50 per share going-private deal underpaid stockholders, and awarded class damages of $2.74 per share, totaling $148 million. That award represents the largest post-trial class recovery in the merger context. The largest post-trial derivative recovery in a merger case remains Kessler Topaz’s landmark 2011 $2 billion verdict in In re Southern Peru.

  • Kessler Topaz served as co-lead counsel in expedited merger litigation challenging Harleysville’s agreement to sell the company to Nationwide Insurance Company. Plaintiffs alleged that policyholders were entitled to receive cash in exchange for their ownership interests in the company, not just new Nationwide policies.

    Plaintiffs also alleged that the merger was “fundamentally unfair” under Pennsylvania law. The defendants contested the allegations and contended that the claims could not be prosecuted directly by policyholders (as opposed to derivatively on the company’s behalf). Following a two-day preliminary injunction hearing, we settled the case in exchange for a $26 million cash payment to policyholders.

  • Plaintiff challenges the $2.1 billion acquisition of SolarCity, Inc. by Tesla Motors, which closed on November 21, 2016 (the “Acquisition”).  Plaintiff alleges that the Acquisition was essentially a bailout of the financially struggling SolarCity, which was founded and run by Elon Musk’s cousins. At the time of the acquisition, Elon Musk was chairman of both boards of directors and the largest stockholder of both Tesla and SolarCity. Plaintiff alleges that Musk proposed the Acquisition in an effort to save SolarCity from going bankrupt, and the rest of Tesla’s board of directors approved the Acquisition despite knowing that it was not in Tesla’s best interests.

    On October 19, 2016, ATRS and KTMC were appointed co-lead plaintiffs and co-lead counsel.  On March 9, 2017, plaintiffs filed a consolidated complaint, naming Musk and the other Tesla directors as defendants.  On March 28, 2018, the Court denied defendants’ motion to dismiss the case. Plaintiffs then took discovery, including reviewing 3 million pages of documents and taking 22 fact and expert depositions.  Trial was originally set for March 16, 2020.  After two mediation sessions, on January 22, 2020 plaintiffs agreed to settle the case for $60 million against all of the defendants except Elon Musk.  On February 4, 2020, the Court denied motions for summary judgment.  On August 17, 2020, the Court approved the partial settlement and set the case for trial against Elon Musk alone.  On March 13, 2020, the Court adjourned the trial because of the COVID-19 pandemic.

    Plaintiffs tried the case as a bench trial before the Court from July 12 to July 23, 2021.  Plaintiffs called Elon Musk, his brother (Tesla board member) Kimbal Musk, and three expert witnesses in their case-in-chief.  Plaintiffs cross-examined Musk’s 13 fact and expert witnesses.  At trial, Plaintiffs sought to prove that Musk breached his fiduciary duties to Tesla by proposing the Acquisition and pushing it through, while knowing that SolarCity was worth nowhere close to the $2.1 billion Tesla paid for it.  Plaintiffs also sought to prove that Tesla stockholders who voted to approve the Acquisition were not given true information about Musk’s involvement in the Acquisition negotiations or SolarCity’s true financial condition, among other things.  After hearing witness testimony, the Court adjourned the trial for post-trial briefing.

    The parties filed opening post-trial briefs on October 1, 2021, and will file response and reply briefs on November 19 and December 17, 2021.  Post-trial oral argument will take place on January 18, 2022.  The Court will then likely take the matter under advisement, and typically will issue a written decision within 90 days.