Description

Kathleen Herkenhoff is a complex litigation attorney, with a practice principally focused on securities and consumer class actions, as well as shareholder derivative actions. Kathleen’s experience includes employment litigation and data privacy matters. Over the course of her career, she has played a key role in obtaining more than $1 billion in settlement recoveries for victims of corporate fraud and misconduct. She joined Kaplan Fox & Kilsheimer LLP in 2021.

Kathleen’s law career started at the United States Securities and Exchange Commission, where she investigated and litigated securities fraud and insider trading actions. Her SEC victories include securing a $22 million judgment in a complex offering fraud.

Following her SEC career, she joined a national class action litigation firm. During her 12 years at the firm (at which she was a partner from 2002 to 2009), she practiced in all areas of securities class and derivative litigation on behalf of both institutional and individual shareholders. Kathleen’s work contributed to securing monetary recoveries exceeding $1 billion on litigation involving HealthSouth Corp. ($671 million in class action), AOL Time Warner, Inc. ($618 million in opt out litigation), Mattel, Inc. ($122 million in class action), Honeywell International, Inc. ($100 million in class action), Vesta Insurance Group, Inc. ($78 million combined settlement, with $17 million from auditor in class action), St. John Knits ($60 million settlement value in challenge to insider deal seeking to take company private), SmarTalk Teleservices, Inc. ($27.1 million, plus a separate $15 million auditor settlement in class action) and scores of other corporate entities, including large value recoveries exceeding $30 million in shareholder derivative actions. In addition to litigating these matters, Kathleen drafted and negotiated sweeping corporate governance improvements in connection with settlements for several of these actions.

In addition to the substantial class action practice Kathleen enjoyed at the national law firm, she also dedicated significant work toward achieving excellent results in numerous shareholder derivative cases:

• In re KB Home Shareholder Derivative Litig., No. 06-CV-05148 (C.D. Cal.) (served on co-lead counsel team recovering more than $31 million in financial benefits, including $21.5 million in cash, plus substantial corporate governance enhancements relating to KB Home’s stock option granting practices, director elections, and executive compensation practices).
• In re Coherent, Inc. Shareholder Derivative Litig., No. 507CV00955 (N.D. Cal.) (settlement including recovery to company of over $6 million in cash and cancelled stock options, and substantial governance reforms).
• In re Corinthian Colleges, Inc. Shareholder Derivative Litig., No. SACV-06-0777-AHS (ANx) (C.D. Cal.) (settlement including repricing of $2 million worth of misdated options, and enactment of corporate governance reforms).
• In re First American Corp. Shareholder Derivative Litig., No. SACV-06-1230-JVS (RNBx) (C.D. Cal.) (settlement including repayment by certain officers and directors of more than $700,000 to company, and corporate governance enhancements).
• In re Eclipsys Corp. Derivative Litigation, No. 07-80611-CIV-MIDDLEBROOKS (S.D. Fla.) (settlement of shareholder derivative action involving governance improvements).
• In re Rambus, Inc. Derivative Litig. No. 506CV03513 (N.D. Cal.) (settlement of shareholder derivative action for substantial governance reforms).

In 2010, Kathleen spearheaded the opening of a California office of a boutique firm with merger & acquisition and shareholder derivative practice groups. In her role, Kathleen continued to obtain significant victories, including obtaining cutting edge corporate governance reforms to be enacted by various corporate entities. A sampling of this work includes Kathleen’s role as co-lead counsel in successful shareholder derivative litigation on behalf of Nominal Defendant Diamond Foods, Inc., resulting in more than $10 million in financial consideration for the company, in addition to corporate governance enhancements. In re Diamond Foods, Inc. S’holder Derivative Litig., Lead Case No. CGC-11-515895 (Cal. Super. Ct. San Francisco Cnty).

Kathleen also helped to secure the boutique firm’s leadership position in a federal shareholder derivative litigation on behalf of Nominal Defendant Intuitive Surgical, Inc. (“Intuitive”). Berg v. Guthart, et al., Case Nos. 5:14-cv-00515-EJD (N.D. Cal.). The Intuitive shareholder derivative action was thereafter litigated in a combined effort with the state court lead counsel before the Honorable Gerald J. Buchwald of the Superior Court for the State of California, San Mateo County, reaching a pre-trial settlement including $15 million in value recovered for the Company. Public School Teachers’ Pension and Retirement Fund of Chicago v. Guthart, et al., Case No. CIV-526930 (Cal. Super. Ct San Mateo Cnty.).
Additional representative shareholder derivative actions include:

• In re Galena Biopharma, Inc. Derivative Litigation, Case No. 3:14-cv-00382-SI (Lead) (D. Or.) (settlement including $15 million payment, cancellation of $1.2 million worth of stock options allegedly granted improperly to certain of Galena’s directors, and the adoption of corporate governance reforms).
• Barovic v. Ballmer, et al., Lead Case No: 2:14-cv-00540-JCC (W.D. Wa.)
  (derivative action on behalf of Microsoft, with settlement involving significant corporate governance measures concerning the Company’s compliance with antitrust laws and regulations.).
• In re Art Tech. Group, Inc. Shareholders Litig., C.A. No. 5955-CC (Del. Ch.) (member of deposition team involved in obtaining factual record to support preliminary injunction against proposed $1 billion merger transaction for which partial fee was later awarded).
• In re Rentech, Inc. Derivative Litig., Lead Case No. BC 430553 (Cal. Super. Ct. Los Angeles Cnty.) (settlement approved with extensive governance reforms, including limits on employee directors serving on more than two public company boards).
• In re Cadence Design Systems, Inc. Securities and Derivative Litig., No. C-08-4966-SC (N.D. Cal.) (settlement resulting in corporate governance enhancements).
• Denham v. Yoseloff, et al., A-09-603275-C (Eighth Judicial District for Clark County, Nevada) (action on behalf of Shuffle Master, Inc., with governance improvements in settlement including separation of Chairman and CEO positions).

As indicated, each of the representative actions included governance improvements. In particular, the governance enhancements that Kathleen has pushed for in various actions have received praise from courts, such as the Honorable Marie S. Weiner of the San Mateo County Superior Court, who commented that the governance improvements in one settlement were “the most detailed and extensive corporate governance changes I’ve seen in a derivative settlement.” In re SciClone Pharms., Inc. S’holder Derivative Litig., No. CIV 499030 (Cal. Super. Ct., San Mateo Cnty.) (settlement included the adoption of cutting-edge corporate governance reforms including establishment of a Foreign Corrupt Practices Act (“FCPA”) compliance coordinator; the adoption of an FCPA compliance program; and the adoption of additional internal controls and compliance functions).

Kathleen’s work has also included protecting shareholders in appellate court matters. See e.g. Dennis v. Hart, et al., 724 F.3d 1249 (9th Cir. 2013) (rejecting defendants’ arguments in shareholder derivative action that, among other things, the doctrine of complete preemption conferred federal jurisdiction in the action in view of the inclusion of allegations that defendants’ conduct violated the Dodd-Frank Wall Street Reform and Consumer Protection Act). At the time of its issuance, Dennis was considered a significant victory for shareholders seeking more than one forum in which to pursue claims for conduct stemming from Dodd-Frank.

Other key victories include Rosenbloom v. Pyott, 765 F.3d 1137 (9th Cir. 2014). Kathleen was involved in the litigation of this shareholder derivative litigation against various Allergan, Inc. insiders for the alleged illegal marketing of “Botox”. In the district court, plaintiffs were initially dismissed following defendants’ motions to dismiss, but on September 2, 2014, the Ninth Circuit issued a significant reversal in plaintiffs’ favor. A three-judge Ninth Circuit panel unanimously concluded that the district court abused its discretion in dismissing the action for purported failure to show that a pre-lawsuit “demand” should be excused. Kathleen worked extensively as part of the team of co-lead counsel in the action on the pleadings and briefs before the district court and development of the factual record. In assessing the record from the district court, Judge Stephen Reinhardt wrote that plaintiffs presented “a battery of particularized factual allegations that strongly support an inference at this stage of the litigation that the Board knew of and did nothing about illegal activity.”
Immediately prior to joining Kaplan Fox, Kathleen served as a partner in a law firm specializing in employment litigation, as well as in class and shareholder derivative matters. This experience expanded her practice to include pursuing relief for employees victimized by illegal conduct in the workplace, whether for wage and hour claims, discrimination, harassment or a host of other improper practices.

Notably, since 2018, Kathleen has served on the Plaintiffs’ Executive Committee in In re: Apple Inc. Device Performance Litigation (N.D. Cal.), which is profiled on the firm’s webpage.

Education:
Bar of the State of California (1993)
J.D., Pepperdine University School of Law (1993)
B.A. in English Literature, University of California at Berkeley (1989)

Bar Affiliations and Court Admissions:
Bar of the State of California (1993)
U.S. District Courts for the Northern, Central, Southern and Eastern Districts of California
Ninth Circuit Court of Appeals