Medidata Solutions, Inc. v. Federal Insurance Company

Orrick secured a victory for Medidata Solutions

Orrick appellate team secured an important ruling this week from the Second Circuit on behalf of client Medidata Solutions.

Medidata was defrauded of more than $4.7 million in a sophisticated “phishing” scam, where “spoofed” emails to company employees (with directions for a major financial transaction) appeared to be from the company’s president, when really they were from fraudsters.

Medidata submitted a claim for coverage under an insurance policy covering “computer fraud.” The insurance company, Chubb Ltd. unit Federal Insurance Co., denied Medidata’s claim, asserting that the computer fraud policy covered only hacking or insertion of a computer virus, and that here the false emails simply passed through the computer system.

Medidata, represented by an Orrick appellate team led by Bob Loeb (Picture), briefed and argued the case to the U.S. Court of Appeals for the Second Circuit. Bob explained that the computer was manipulated by the fraudsters to make the email look identical to an internal company email, and to cause reply email to be depicted as going to the company’s president, when it was really routed to the fraudsters. He argued that the computer was not merely incidental to the fraud, it was instrumental to its commission. In its ruling earlier this month, the Second Circuit agreed with our team’s arguments and held that the insurance company was required to pay Medidata in full.

In addition to Bob, the Orrick team included Jay Jurata, Russell Cohen, Evan Rose, Josh Rosenkranz and Daniel Rubens.

Involved fees earner: Robert Loeb – Orrick; Jay Jurata – Orrick; Russell Cohen – Orrick; Evan Rose – Orrick; Joshua Rosenkranz – Orrick;

Law Firms: Orrick;

Clients: Medidata ;


Author: Ambrogio Visconti