Location: Chicago, Illinois
Contact: Contact Me
Mike Karnuth has extensive experience litigating complex claims on behalf of investors and consumers, advocating for the recovery of losses and damages caused by deceptive and unfair practices.
In the Securities Fraud area Mike has prosecuted numerous claims under the federal securities laws, has actively litigated these cases at all levels, and has obtained significant recoveries for investors.
Representative cases and reported decisions include:
- In re DVI, Inc. Sec. Litig., 2:03-cv-5336 (E.D. Pa.). Mike was instrumental in representing equity and debt investors in case raising claims under sections 10b-5 and 20(a) of the Securities Exchange Act, involving a failed healthcare financing company which allegedly misrepresented financial statements for several years. Mike’s efforts included supervising and engaging in all phases of the case, from preparing the complaints against over twenty defendants, prevailing on motions to dismiss, obtaining class certification for both investor classes, prevailing on challenges to plaintiffs’ experts, prevailing on defendants’ summary judgment motions and preparing the case for trial. Mike was also heavily involved in coordinating the massive discovery effort consisting of millions of pages of documents and the taking of over 75 depositions of lay and expert witnesses, many of which were taken by Mike. In addition to recovering over $23.8 million for investors, which represents a large percentage of the investors’ losses, Mike’s efforts achieved important legal victories for plaintiffs and investors in general. See In re DVI Inc. Sec. Litig., 2005 WL 1307959 (E.D. Pa. May 31, 2005) (denying numerous motions to dismiss); 249 F.R.D. 196 (E.D. Pa. 2008) (granting class certification), aff’d, 639 F.3d 623 (3d Cir. 2011), petition for rehearing and en banc denied (June 24, 2011); 2010 WL 352086 (E.D. Pa. Sept. 3, 2010), and 2010 WL 3522090 (E.D. Pa. Sept. 3, 2010) (prevailing on defendants’ motions for summary judgment); and 2014 U.S. Dist. LEXIS 129136 (E.D. Pa. Sept. 16, 2014) (denying defendants’ motion to exclude plaintiffs’ loss causation and damages expert). Mike also presented oral argument to the Third Circuit Court of Appeals and prevailed on an auditor defendant’s challenges to market efficiency, loss causation and the adequacy of an institutional investor to be class representative based on its trading strategies and access to company management. Mike was preparing the case for trial at the time of the final settlements.
- DeNicolo v. Telular Corp., et al., No. 13 CH 13614 (Cir. Ct. Cook County, Ill., Chancery Division) Mike was significantly involved in the representation of shareholders in a May 2013 transaction involving management’s agreement with financial buyer to take company private; case resolved after defendants agreed to include material disclosures in public statements.
- In re Safety-Kleen Corp. Rollins Shareholder Litigation, No. 3:00-1343-17 (D.S.C.). Mike was also instrumental in the firm’s extensive representation of Rollins Environmental Services shareholders in a Section 14(a) proxy case, involving the reverse acquisition of Rollins by Laidlaw Environmental Services, Inc., predecessor of Safety Kleen Corp. The firm obtained a $3.15 million recovery for the class on the eve of trial, after overcoming numerous legal challenges. The class recovery represented a large percentage of the class’s estimated damages in the case.
- In re BankAmerica Corp. Sec. Litig., 228 F.Supp.2d 1061 (E.D. Mo. 2002). Mike assisted in the firm’s role as Executive Committee Member of the BankAmerica shareholder class, which challenged the 1998 merger of BankAmerica and Nationsbank. Mike’s involvement included reviewing discovery, taking depositions and drafting pleadings. The claims of the BankAmerica class settled for over $160 million.
Mike’s experience in consumer protection and other complex litigation includes the following representative cases and reported decisions:
- Empire Healthchoice Assur., Inc. v. McVeigh, 547 U.S. 677 (2006), where Mike filed an amicus brief in support of both respondents and the client’s pending certiorari petition on behalf of injured FEHBA-plan insureds who were damaged by Blue Cross’s excessive reimbursement liens, which prevailed in a 5 to 4 ruling that then led to the favorable Supreme Court decision in Cruz v. Blue Cross and Blue Shield of Illinois, 548 U.S. 901 (2006). On remand to the Seventh Circuit, Mike successfully argued that federal preemption and creation of federal common law should not trump state law, which ultimately resulted in the case settling for $1.5 million in the pending state court case and the class obtaining full recovery of their losses. See Blue Cross Blue Shield v. Cruz, 495 F.3d 510 (7th Cir. 2007). Other notable and reported decisions in this case that Mike was integral in achieving include Blue Cross Blue Shield of Illinois v. Cruz, 2003 WL 22715815 (N.D. Ill. Nov. 17, 2003) (dismissing Blue Cross’s federal action attacking plaintiff’s state court rights); Doyle v. Blue Cross Blue Shield of Illinois, 149 F.Supp.2d 427 (N.D. Ill. 2001) (remanding insured’s complaint to state court); and obtaining class certification and summary judgment for the named plaintiff in the state court class action, despite numerous challenges including a brief and oral argument submitted by the U.S. Department of Justice advocating for federal law trumping plaintiff’s state law claims. An illustration of Mike’s commitment and tenacity to class members’ interests is shown in his further representation of a Blue Cross FEHBA-plan class member, a member of the military, who was denied a right to participate in the settlement because her claim form was submitted late. After a rigorous briefing and oral argument process, Mike prevailed in having her claim allowed, which resulted in an individual payment to her of over $30,000.
- Doyle v. Blue Cross Blue Shield of Illinois, 00 CH 14182 (Cir. Ct. Cook County, Ill., Chancery Division) Mike was intricately involved along with co-counsel with claims on behalf of ERISA-plan insureds in case involving Blue Cross’s alleged practice of liening against third-party recoveries obtained by their insureds in excess of what Blue Cross was entitled to recover; case ultimately achieved a $6.95 million settlement and injunctive relief for the class, representing near full recovery of estimated losses.
- Primax Recoveries Inc. v. Sevilla, 324 F.3d 544 (7th Cir. 2003). Mike successfully argued to the Seventh Circuit that federal law did not preempt health insured’s state law claims seeking application of Illinois’ common fund doctrine to insurer’s reimbursement lien asserted against insured’s third-party recoveries, and that insurer’s strategic waiver in state court barred its claims in federal court. See also Primax Recoveries, Inc. v. Sevilla, 2002 WL 58816 (N.D. Ill. Jan. 15, 2002) (granting motion to dismiss Primax’s collateral case); Health Cost Controls v. Sevilla, 365 Ill.App.3d 795 (1st Dist. 2006) (reversing denial of class certification). In 2011, after 15 years of litigation, Mike was integral in the firm obtaining full recovery for the class, plus pre- and post-judgment interest, and attorneys’ fees from the insurer.
- Burrow v. Sybaris Clubs International, Inc., et al., No. 13-cv-02342 (N.D. Ill.) Mike has been lead attorney on this case against Sybaris Clubs International and their owners for violation of state and federal wiretapping laws, involving defendants’ recording of all reservation phone lines from mid-March 2012 through mid-April 2013, without the consent of Sybaris employees or customers. Mike has been integral in prosecuting the case, from filing the complaint, obtaining discovery, deposing witnesses and briefing numerous legal issues, which has resulted in the plaintiff prevailing on Defendants’ motion to dismiss and obtaining class certification.
- LVNV Funding, Inc. v. Trice, 2015 IL 116129 (Feb. 27, 2015) Mike argued to the Illinois Supreme Court on matters involving a debtor’s right to bar claims against an unlicensed debt collector. The Court favorably ruled on that issue, finding that Illinois’ Collection Agency Act required all debt collectors, including debt buyers, to be licensed prior to pursuing collection, including filing lawsuits.
- Dahnka et al. v. Wrigley Rooftops III, et al., Case No. 2012-CH-37196 (Cir. Ct. Cook Cnty., Ill., Ch. Div.) Mike was heavily involved in resolving claims brought on behalf of employees of rooftop entertainment venues for violation of Illinois’ wage and payment laws. A settlement was achieved which provided employees full recovery of their unpaid lunch break and overtime claims, and a portion of their alleged unpaid gratuity claims.
- Ambrose v. Security Guard College, Inc., et al., No. 2014-CH-10322 (Cir. Ct. Cook County, Ill., Ch. Div.) Mike was integral in bringing case and obtaining resolution against instructor and Bass Pro Shops for promoting concealed carry training classes which did not meet Illinois’ requirements. Class members obtained full recovery of their losses.
- Securities Fraud
- Shareholder Litigation and Corporate Governance
- Consumer Fraud & Protection
- Complex Litigation
State Bar Admissions:
Federal Court Admissions:
- U.S. Supreme Court
- U.S.C.A. 7th Circuit
- U.S.C.A. 3rd Circuit
- U.S.D.C. Northern District of Illinois
- U.S.D.C. District of South Carolina (pro hac vice)
- U.S.D.C. Eastern District of Pennsylvania (pro hac vice)
- U.S.D.C. Southern District of New York (Bankruptcy) (pro hac vice)
- September 2014 – article published in ISBA’s Business & Securities Law Forum Newsletter titled “Dodd-Frank provides incentives and enhanced protections to blow its new, shiny “whistle,” but Sarbanes-Oxley’s old whistleblower protections may have more luster in certain situations.”
- November 2013 – article published in ISBA’s Business & Securities Law Forum Newsletter titled “Amgen eases securities fraud plaintiffs’ burden at class certification, but the dissent invites challenges to the long-standing ‘fraud-on-the-market’ theory.”
- 2012 – Speaker at the 7th Annual Illinois Public Employee Retirement Systems Summit on the topic of Securities Litigation (Identifying and Pursuing Recoverable Losses).
- 2010 – Speaker and Panelist at Chicago Bar Association Seminar “Defending Federal Securities Class Actions” (May 12, 2010)
- 2009 and 2008 – selected as an Illinois Rising Star by Super Lawyer’s Magazine
- 2008 – Speaker and Panelist at Best Practices Forum regarding litigation against accounting firms (September 3, 2008)
- 2006 to Present – Pro bono attorney for the Center for Disability and Elder Law; volunteer attorney to low income, disabled and elderly individuals on various legal issues
- 2010 to Present – Pro bono attorney for Chicago Volunteer Legal Services; providing assistance to homeowners facing foreclosure
- Member of CBA, ISBA, AICPA and ICPAS; member of ISBA’s Business & Securities Law Section (June 2012 to present)
- J.D., Chicago-Kent College of Law, December 1998 (w/ Honors); Received Merit Scholarships, Deans List recipient and received CALI Award in Advanced Research – Securities
- Interned for United States District Court Judge Blanche Manning of the Northern District of Illinois, Spring 1998
- Certified Public Accountant – 1991 (passed entire exam on first attempt)
- Loyola University of Chicago (B.A. 1988 – Finance and Accounting concentrations)