Feb. 2014 The Business Lawyer Article by Professor Grundfest Shows Fees Obtained By Class Counsel and Defense Counsel in Federal Securities Class Actions.
Joseph A. Grundfest has written an interesting article in the February 2014 edition of the ABA’s The Business Lawyer, calling for a reexamination of the basic presumption of reliance and damages elements in 10b-5 federal class action suits. Although the article is likely to be controversial on an overall basis, what caught our eye were statistics about the fees earned by plaintiff’s lawyer and defense counsel in securities class action settlements. Here you go: between 1997 and 2013, plaintiffs’ lawyers earned more than $14 billion in fees and expenses in securities class action settlements (somewhere around 32% of the settlement amounts per case), while defense expenditures were often 25-30% of the settlement amount.
Patent Troll Legislation Does Have Fee-Shifting Aspects.
Aaron Charfoos, an attorney in the intellectual property department of Dykema’s Chicago office, has written an April 24, 2014 post on The Metropolitan Corporate Counsel describing features of the pending legislation to curb perceived abuses relating to patent litigation brought by nonpracticing entities (NPEs, also known as “patent trolls”). First, the statistics: 28% of corporate general counsels express that i.p./patent litigation is a major concern for them according to a recent Norton Rose Fulbright study (up from just 19% in 2012). Second, the pending federal legislation would award attorney’s fees and costs to the prevailing party unless the nonprevailing party was either reasonably or substantially justified in its litigation conduct during the course of the particular case.
New York SLAPP Case Resulted in $10,000 Sanctions Against Losing Plaintiff’s Attorney Based On Filing Frivolous Suit.
An April 25, 2014 post on The Volokh Conspiracy blog discussed Bennett v. Towers, 2014 NY Slip Op. 24059 (N.Y. Supreme Court, Nassau County Mar. 13, 2014), where tortious interference/defamation claims were dismissed under New York’s SLAPP statute because defendant’s conduct was absolutely privileged in opposing a subdivision request in a public hearing. The court found the plaintiff’s suit was frivolous, and sanctioned plaintiff’s attorney $10,000, reserving the defense fees and costs which should be awarded to the prevailing defendant. Although Mr. Volokh was somewhat concerned that the sanctions were not higher, New York law is different than California’s SLAPP scheme and interpretative case law—with California, at the present, not allowing attorney’s fees or sanctions to be imposed against the losing plaintiff’s attorney. (See Moore v. Kaufman, 189 Cal.App.4th 604, 614 (2010); Lenk v. Nguyen, 2d Dist., Div. 4 unpublished case discussed in our November 13, 2010 post.)