More scrutiny of that request for a bodacious $258 million in fees for lawyers who sued Microsoft on behalf of California consumers (see Mar. 31) in what the company says was a piggyback action restating allegations from its federal antitrust case. In defending their request, the lawyers — prepare to shed a tear — say they had to work on the case over “the entire Thanksgiving holiday weekend” in 2001, among other things. Although Microsoft says it has allocated $1.1 billion to compensate California consumers, it “could end up spending much less. The deal enables anyone who bought a computer in California to get vouchers worth $5 to $29 per Microsoft product, but only a small fraction of the millions eligible have applied for the money.” (David Kravets, “California lawyers say they deserve $258 million for suing Microsoft”, AP/San Francisco Chronicle, May 12). Update Sept. 23: judge slashes fee to $112 million.
Posts Tagged ‘antitrust’
Great Tobacco Robbery developments
In March Moody’s lowered its rating of New York City’s tobacco settlement bonds (which securitize the future flow of booty to the city from the great 1998 robbery) in light of the Second Circuit’s highly significant decision in Freedom Holdings v. Spitzer (see Jan. 12) exposing the settlement to antitrust challenge (Reuters/Forbes, Mar. 23). The Second Circuit itself denied a petition for rehearing (opinion Mar. 25 in PDF format). The General Accounting Office published a report confirming that states are spending most of the proceeds on their general budgets rather than on anything related to the weed or its effects (March report in PDF format, via the University of Tennessee’s AgPolicy.org page on tobacco litigation, which has a number of useful resources), which in turn touched off a number of caustic commentaries (“States Spend Mega-Billion Tobacco Settlement On Budget Shortfalls”, Competitive Enterprise Institute, Mar. 23; Christine Hall, “States Spend Tobacco Settlement on Budget Shortfalls”, Heartland Institute, May 1; see Nancy Zuckerbrod, “States rely on tobacco settlement to fix budgets”, AP/Louisville Courier-Journal, Mar. 23). Also check out the debate between CEI’s Sam Kazman and ever-blustering Connecticut Attorney General Richard Blumenthal on CNNfN (Mar. 18). Vice Squad (Mar. 27) has further updates on the efforts of state governments to curtail small and independent cigarette producers by way of protecting the anticompetitive arrangements established in the 1998 settlement (see Feb. 28). And the Clinton-initiated federal racketeering lawsuit against the tobacco industry, the continued prosecution of which must surely count as among the low points of the Bush Administration’s domestic record, is apparently headed toward trial in September or thereabouts (“Federal suit against tobacco moves toward trial”, AP/Helena Independent Record, Mar. 22).
New batch of reader letters
We’ve posted four more entries from our still backed-up pipeline of reader letters, on our letters page. Among topics this time: the unsuccessful suit demanding that taller airline passengers get first dibs on roomy exit-row seating; big business’s enthusiasm (sometimes) for antitrust law; the now-defunct database which offered to track patients who sue doctors; and fear of volunteer plumbers.
Calif. anti-Microsoft lawyers want $294 million payday
Plaintiff’s lawyers who pressed and then settled a class action against Microsoft supposedly on behalf of 14 million California consumers now want fees and costs to a tune approaching $300 million, but Microsoft has been fighting the request as excessive. Lead counsel Townsend and Townsend and Crew “is requesting at least $97 million in fees and costs for itself and another $197 million for 34 other firms that worked on the case,” which resulted in an all-voucher settlement valued (or so it seems) at $1.1 billion. But lawyers for the software giant say the firm “piggybacked on the U.S. government’s antitrust case and other private litigation”. Microsoft says Townsend partner Eugene Crew would get $3,019 for each of the 6,198 hours he says he spent on the case; collectively, the lawyers are seeking high hourly fees for each of the 209,000 hours they claim to have spent on the case, many of which were in fact assigned to paralegals and other underlings. (Brenda Sandburg, “Microsoft Says Class Fee Request Doesn’t Compute”, The Recorder, Feb. 23). As usual in this sort of case, the lawyers have brought in a parade of law profs and other eminences to testify to the total reasonableness of their fee request –why, they were a bargain! But Larry Schonbrun, the Berkeley, Calif. sole practitioner who has made himself into a chief thorn in the side of the class action business (see Oct. 12)(more), is objecting: “In a filing on behalf of two class members, Schonbrun said a final fee award should not be decided until the court knows how many class members redeem their vouchers.” (Brenda Sandburg, “Show Me the Money”, The Recorder, Jan. 20). David Giacalone (Feb. 22) headlines his item on the story: “Putting the Piggy in Piggyback”. Instant update: hearing to review the settlement begins in San Francisco courtroom of Superior Court Judge Paul Alvarado (Brenda Sandburg, “Microsoft Settlement Getting Another Look”, The Recorder, Mar. 31). More coverage: see May 12. Update Sept. 23: judge slashes request to $112 million.
Campus taverns: sued if they do…
Pressured by University of Wisconsin officials and by a federal campaign against underage and binge drinking, 24 taverns near the university’s Madison campus agreed voluntarily a year and a half ago to stop cheap-drink promotions on weekends. Can you guess the sequel? A Minneapolis law firm has now swooped down with a class-action antitrust suit filed on behalf of three named UW-Madison students. The suit accuses the taverns of unlawful restraint of trade and demands what it says could be tens of millions of dollars in treble damages on behalf of “the victims of price fixing — basically anyone who patronized the downtown taverns on Friday or Saturday nights and paid full price”. It also names the university and the Madison-Dane County Tavern League. Not being sued, apparently, is the federal government, even though the bars’ agreement to limit weekend drink specials came about “as part of the federally funded PACE project. PACE, which stands for Policy, Alternatives, Community and Education, is in the seventh year of a comprehensive campus-community partnership designed to reduce the negative consequences of high-risk drinking.” (Mike Ivey and Aaron Nathans, “Students sue 24 campus bars”, Capital Times (Madison), Mar. 24). In other campus-drinking-related news, the Milwaukee paper reported last month that Seattle’s Hagens Berman and other law firms who are gearing up big courtroom campaigns against brewers and distillers (see Feb. 16, Dec. 1) were likely to try a demonization campaign against Budweiser’s talking frog and similar marketing devices akin to the successful campaign to demonize R.J. Reynolds’s Joe Camel mascot (Tom Daykin, “Beer may suffer the Joe Camel effect”, Feb. 21). Plus: Vice Squad has more (Mar. 29)(& welcome Reason “Hit & Run” readers). Update May 2, 2005: judge dismisses Madison tavern case after defendants spend $250,000.
Does business sabotage tort reform?
One of the more noteworthy contributions to the recent Business Insurance symposium on tort reform (Feb. 16, not online — see Mar. 15) came from Yale law prof George Priest, who wrote as follows: “The single worst development in modern tort law is that many businesses are now adopting the tactics of the trial lawyers — litigation, including class action litigation — to pursue competitive interests. The recent antitrust class action by Wal-Mart and hundreds of the nation’s retailers against Visa and MasterCard [see Aug. 22 — ed.] was only successful because Wal-Mart convinced the courts to expand class action availability. There are many other examples of businesses seeking an expansion of liability to promote their own interests. Some years ago, MetLife sought an unjustifiable expansion of insurance coverage law in its pursuit of recovery against Aetna. When business pursues a short-term advantage by joining the trial lawyers, the tort reform cause is truly lost.” (& letter to the editor, Apr. 2)
NFL draft age ruling
Gregg Easterbrook (Feb. 6) takes a dim view of U.S. District Judge Shira Schindlin’s ruling that it’s an antitrust violation for the National Football League to place limits on the age at which players can be drafted. See Andrew Bagnato, “NFL teams may alter way they do business”, Arizona Republic, Feb. 6.
Radio Shack receipt suit
A customer from the Long Island suburb Wyandanch had her address entered into a Radio Shack computer by a prankster under her town’s nickname “Crimedanch.” Tanisha Torres, who acknowledges that she’s heard other people use the nickname, was so “embarrassed, flustered and shamed” that, after having that address printed out on a Radio Shack receipt on several occasions, she ran to a lawyer, Andrew Siben, who has sued the retail chain. (Robin Topping, “No Writing Off This Receipt”, Newsday, Feb. 4) (via Obscure Store). We think Mr. Siben is suffering from a failure of imagination: if Radio Shack has such potency that it can force a customer to shop there again and again even as it was repeatedly causing her such emotional distress, then it must have a degree of market power that potentially violates the antitrust laws.
Siben was previously quoted by Newsday lamenting that a spate of good weather had reduced his office’s workload of slip-and-fall cases. (A.J. Carter, “A Weather-Related Slowdown”, Jul. 29, 2002). Siben made his first mark in this space for an $80,000 settlement in a $4 million suit against the Upper Room Tabernacle Church, explaining to the New York Post that the plaintiff “was caused to fall by the Holy Spirit but unfortunately there was no-one there to catch her when she fell.” (Feb. 11-12, 2002; “Worshipper’s Holy Spirit Fall Nets Her $80,000 From Church”, New York Post, Feb. 2, 2002). Siben also represented Edwin Devito in his $5 million suit against American Airlines; Devito claims he was “knocked to the floor” (but not hospitalized) and suffered nightmares when a jet engine from Flight 587 crashed near where he was working. (AP, Sep. 9, 2002).
Lockyer to sue grocery chains
Calif. Attorney General Bill Lockyer says he’s filing an antitrust suit against Southern California grocery chains alleging that their mutual-aid strike agreement violates the federal Sherman Act. His spokesmen deny (cue laughter) that he’s trying to lend a hand to the sagging fortunes of the United Food & Commercial Workers in its 3 1/2 month old labor dispute with the chains. (“State to file antitrust suit in grocery strike”, San Francisco Chronicle, Jan. 31). “It appears the attorney general’s office is seeking a legal precedent that would scotch strike-assistance agreements in general.” Meanwhile, the Los Angeles city council is expected to vote this month on a bill which would prevent Wal-Mart from opening its SuperCenters within city limits, thus excluding the main source of competition pressing grocery prices lower. We’re sure that isn’t meant as a favor to the UFCW, either. (Shirley Svorny, “Banning Wal-Mart May Prove Costly” (commentary), Los Angeles Times, Jan. 30)
Fee catfight in Microsoft case
Class-actioneers Michael Hausfeld and Stanley Chesley, already in line to collect $10.5 million in fees under Microsoft’s settlement of one of its antitrust cases filed in federal court, “say they are entitled to share in $50 million for helping lay the groundwork for the state claims [filed by other law firms].” Hausfeld and Chesley say many lawyers who filed state claims were happy to rely on the work they did in advancing the federal case, but “‘Memories are short and gratitude fleeting when attorneys’ fees are at issue.’ … In a reply brief, the law firms of Milberg, Weiss and Lieff, Cabraser, and Kirby, McInerney & Squire argue that assistance provided by Hausfeld and Chesley ‘was spotty and sometimes non-existent.’ ‘To put it most charitably, rather than being a resource to various state court counsel throughout these proceedings, Hausfeld-Chesley looked out for their own clients (and fees) in their own cases, which of course is completely proper,’ the lawyers in the state cases replied. ‘Such behavior, however, does not give rise to an entitlement for fees for other plaintiffs in other cases.'” (James Rowley, “Legal-fee fight erupts over Microsoft case”, Bloomberg/Seattle Times, Jan. 7)