The suits seeking to make investment firms pay for failed tech IPOs (initial public offerings) can’t be tried as a class action, the Second Circuit rules. John Carney at DealBreaker explains the title (Dec. 6). “The ruling was a devastating blow to the embattled securities class-action powerhouse Milberg Weiss Bershad & Schulman, which is a co-leader for the plaintiffs.” (Julie Creswell, “Court Rejects Class Action Against Banks”, New York Times, Dec. 6).
Posts Tagged ‘class actions’
By reader acclaim: guacamole labeling suit
As its label discloses, Kraft Guacamole Dip hardly deserves the name, containing less than 2 percent avocado. The strategy of “read the label” was one that Brenda Lifsey of Los Angeles elected not to follow, nor did she content herself with the backstop strategy of “ask for your purchase price back and don’t buy the product again”. Instead, she’s filed a lawsuit seeking class-action status against the giant food company. And speaking of artificial ways of making green: “Lifsey has been a plaintiff in other lawsuits against large corporations,” including Sears and Carfax, over alleged misrepresentations of their products. (Jerry Hirsch, “Lawsuit stirs up guacamole labeling controversy”, L.A. Times/Chicago Tribune, Nov. 30).
New Times column — “US capital markets must learn from London”
My new column in the Times (UK) Online is up this morning, and discusses yesterday’s issuance of the much anticipated Paulson Committee report on the need to revive flagging U.S. competitiveness in international capital markets by reforming the workings of our securities and class-action law. (Dec. 1). For more on the work of the Committee on Capital Markets Regulation, see PoL Oct. 19, Nov. 30, Dec. 1, etc.
Oz: but where are the clients’ bonuses?
Updating the Oct. 3 item from Australia: “Law firm Slater & Gordon was within its rights to pay a senior partner $1 million from the profits of a breast implant class action without informing clients, according to the Law Institute of Victoria. The bonus, which came to light this week, means senior partner Peter Gordon received at least eight times more from the class action than any one of the firm’s 3100 clients. Their payouts ranged from a few hundred dollars up to $120,000. However, law institute head Michael Brett Young said yesterday there had been no need to inform the women about the payment to Mr Gordon because the settlement in the action had been authorised by a judge.” (Chris Merritt and Tracy Ong, “Law firm ‘in rights’ on payout”, The Australian, Sept. 16). For allegations that the $1 million was improperly paid to Mr. Slater although earmarked as “post-settlement expenses”, see the Oct. 3 post.
Update: cosmetics class action settlement
We’re tardy in noticing this, but it’s too colorful to omit: in the settlement of what we called the “no-blush, high-gloss, invisible-foundation antitrust class action” against cosmetics makers over pricing (see Jan. 14 and Mar. 14, 2005, and earlier links) the fee phase continued to generate showy highlights:
A bitter legal brawl over attorneys’ fees has erupted in a national cosmetics pricing class action lawsuit, with feuding camps of plaintiffs’ lawyers slinging allegations of flagrant billing abuses and extortion.
Among the alleged abuses were bills of $195 an hour for work by paralegals who were paid just $30, claims that attorneys and paralegals worked 24-hour or even 72-hour days, and charges of $90 an hour or more for cleaning desks and filing….
Verizon Wireless class action settlement
Gas-dealer bonanza: middlemen unlawfully skimming the pot?
“Class members and class counsel Eugene Stearns are claiming that companies that process class action claims are illegally taking a large part of class members’ winnings in the $1.1 billion Exxon-Mobil breach-of-contract case. Stearns argues the recovery companies are engaging in the unlicensed practice of law and duplicating work already done by his law firm. Florida federal Judge Alan S. Gold has voided members’ contracts with one processing company and Stearns’ firm is challenging other contracts.” Stearns boasts (or is it complains?) that he is getting not “an additional dime” for his work protecting the gas station owners from the percentage-seeking middlemen, but he is probably not in too great need of dimes at the moment, his firm having been awarded an eye-popping $249 million in fees in the action itself. (Carl Jones, “Class Action Processors Accused of Illegally Pocketing Big Share of Awards in ExxonMobil Case”, Miami Daily Business Review, Nov. 16).
Mick Jagger’s sore throat
Following the cancellation of a Rolling Stones concert in Atlantic City, N.J., a would-be class-action lawsuit filed on behalf of a disappointed concertgoer (who is the wife of the attorney, Martin Druyan) demands $51 million for the cost of nonrefundable hotel tickets and the like. The baby-sitters were expensive, too. (Jose Martinez, “Brooklyn Stones fan seeks 51M of satisfaction”, New York Daily News, Oct. 31)(via Lat).
Honorable mention: attorney Curtis Kennedy
Who says we shrink from giving lawyers favorable publicity? From a report earlier this month in the Rocky Mountain News:
The California law firm Lerach Coughlin sought $96 million in legal fees when it engineered a $400 million shareholder class-action settlement with Qwest Communications over alleged securities fraud.
So how much did Denver attorney Curtis Kennedy seek when he prevailed in getting those legal fees slashed to $60 million – thus providing $36 million more for the shareholders?
Only $40,500. That’s the 90 hours Kennedy spent on the case times his hourly rate of $300 times 1.5, according to a federal court filing this week. …
Other attorneys might have tried to get a percentage of the $36 million.
“I just think that would be hypocritical after asking the judge to apply moderation” to the $96 million request by Lerach Coughlin, Kennedy said.
Kennedy was representing the Association of U S West Retirees in the case. (Jeff Smith, “Lawyer asks for $40,500 in legal fees”, Rocky Mountain News, Oct. 12)(via Securities Litigation Watch).
Coffee shop owner sues Starbucks
On antitrust grounds:
In her lawsuit, [Penny Stafford of Belvi Coffee & Tea Exchange] says that Starbucks employees would make frequent runs past the deli with free samples. She said that Starbucks also had non-competitive leases that blocked her from the most desirable locations in Bellevue and Seattle.
The suit claims that Starbucks, fueled by “insatiable and unchecked ambition,” wanted to squash all competition.
John Stott, who owns Johnika’s Deli, said that he advised Stafford not to open a business so near a Starbucks.
Representing Stafford in the suit is Overlawyered favorite Hagens Berman Sobol & Shapiro. (“Coffee shop owner sues Starbucks”, UPI/MonstersAndCritics, Sept. 27; Melissa Allison, “Starbucks sued over ‘unchecked ambition'”, Seattle Times, Sept. 26; Keith Sharfman, Truth on the Market, Sept. 25; Lattman, Sept. 27).