"There is a tide in the affairs of men. Which, taken at the flood, leads on to fortune. Omitted, all the voyage of their life is bound in shallows and miseries… We must take the current when it serves or lose our ventures.”

It isn’t very common when a quote from The Bard relates directly to legal issues, but the quote from Brutus in Shakespeare’s Julius Caesar is right on point here. What perhaps the most famous literary regicide is telling his co-conspirator is, effectively, timing is everything. In the play, they are debating whether they have the military strength to bring the battle to their enemy.

There are many parallels to their conversation with our recent decision to settle our case against Bernie Madoff’s banker, JPMorgan.

Like Brutus, we evaluated the risk of joining the battle. In litigation, as in war, there are many unknowns beyond the party’s control. In the legal realm, variables such as the court’s interpretation of a particular law, or how it might change in a way adverse or favorable to your position come into play.

A good rule of thumb is to time your settlement negotiations when significant uncertainty remains regarding the strength of each party’s position. And if the U.S. Supreme Court is reviewing an issue critical to your case, it’s best to negotiate before their ruling is issued. Hagens Berman recently made that decision correctly and successfully.

In January 2014, Hagens Berman settled a class-action lawsuit for $218 million against JPMorgan Chase & Co. on behalf of direct investors in the Bernard Madoff scandal. The settlement was part of a larger resolution of Madoff-related litigation against JPMorgan involving simultaneous, separately negotiated settlements, which will total $2.243 billion and will benefit all victims who have net losses from Madoff’s Ponzi scheme.

The suit alleged that JPMorgan — Madoff’s bank for 20 years — was complicit in hiding Madoff’s scheme because it ignored evidence showing that money was moving between Madoff and his investors and not to his purported investment schemes.

Hagens Berman stepped in when a federal judge dismissed claims by Madoff trustee Irving Picard against JPMorgan and UBS AG, saying that he could not sue for claims on behalf of customers of Bernard L. Madoff Investment Securities LLC.

To avoid the pleading standards of the federal securities laws, which would have required plaintiffs to plead facts showing that JPMorgan knew of the fraud or was grossly reckless in not knowing, Hagens Berman added state law claims which included breach of fiduciary duty and aiding and abetting breach of fiduciary duty.

Generally, defendants argue that such claims are precluded by the Securities Litigation Uniform Standards Act (SLUSA) since they are claims, “in connection with the purchase or sale of a security” traded on a U.S. stock exchange. Some district court judges had accepted this argument in other Madoff-related cases, but in another Ponzi scheme case, the U.S. Supreme Court was reviewing similar arguments that had been rejected by the Fifth Circuit.

Hagens Berman persuaded the district court to wait for the Supreme Court’s decision before ruling. At the same time the U.S. Supreme Court was reviewing the Second Circuit’s affirmation of the district court’s dismissal of the trustee’s standing to bring claims.

JPMorgan came to the negotiating table. It knew that there was a strong likelihood that either Hagens Berman or the trustee would prevail, and was faced with separate action by the Department of Justice over failing to comply with banking regulations, which could have uncovered the Madoff scheme. While negotiations were conducted separately, each party knew approximately the status of the other party’s negotiations and likely the total package. The settlements, concluded in January 2014, include the settlement for the class in the amount of $218 million, the SIPA Trustee’s Avoidance Action settlement in the amount of $325 million and a resolution with the U.S. Attorney’s Office for the Southern District of New York that includes a civil forfeiture in the amount of $1.7 billion. The payments by JPMorgan in connection with these agreements will total $2.243 billion.

Ultimately, the U.S. Supreme Court appeared to rule in Hagens Berman’s favor, under Chadbourne et. al. v. Troice, holding on Feb. 26, 2014, that SLUSA did not preclude plaintiffs’ state-law class actions contending that the defendants assisted in perpetrating a Ponzi scheme by falsely representing that uncovered securities purchased by plaintiffs were backed by covered securities.

But on May 28, 2014, the Second Circuit held in In re Herald Primeo and Thema that the Madoff Ponzi scheme was distinguishable from the Stanford Ponzi scheme in Chadbourne v. Troice.

The Second Circuit’s analysis is not without its critics. In Chadbourne v. Troice, investors thought they were purchasing certificates of deposits from Stanford Securities. In Herald Primeo, (the Madoff case) investors handed their money to feeder funds for investment purposes, sometimes not even knowing how their money was supposedly being invested. The uncontested fact is that there were no sales or purchases of “covered securities” by anyone in either case.

In fact, just prior to Herald Primeo, a district court judge found that under Chadbourne v. Troice the SLUSA did not preclude state law claims for the Madoff Ponzi scheme, reversing his earlier opinions. In Spectrum Select, L.P. v. Tremont Group Holdings, Inc., Judge Griesa stated that under the Supreme Court’s decision, “the only ‘connection’ that matters under SLUSA was whether the plaintiffs themselves bought or sold ‘an ownership interest’ covered securities.” The Tremont court reconsidered its prior order, observing that it had not “really analyzed” the “crucial issue” of whether the plaintiffs had “an ownership interest” in a “covered security.”

It is almost certain that a petition for further hearings will be filed, or that plaintiffs in that case will seek U.S. Supreme Court review. However, if Hagens Berman had not settled when it did, the district court would have been bound by this decision to dismiss their case. And then it would have likely been years to find out if the Second Circuit was correct.

Sometimes timing is everything!