City Council’s Fee Request May Impede Settlement over Audit Power Dispute.
City of Los Angeles and the City Controller have been locked in a lawsuit battle over whether the controller’s office can audit the City’s workers’ compensation program. Early on in the lawsuit, Los Angeles County Superior Court Judge Mark V. Mooney issued a preliminary injunction based on his view that the city charter did not give the controller the power to audit the program in the city attorney’s office.
The parties, especially with new personalities involved on both sides, seem like they want to settle the lawsuit. The stumbling block? City controller’s desire to recoup $100,000 in incurred legal fees, a demand that city does not want to accede to in dismissing the case. The matter is still in the talking stages and apparently not yet resolved.
For more information on this dispute, see Maeve Reston’s September 2, 2009 article “L.A. councilman wants to halt former officials’ legal fight and ask voters to set power of city controller,” available for reading on the latimes.com website.
Broadcom Backdating Settlement Proceeds May Be Eaten Up In Attorneys’ Fees By Both Sides.
We synopsize a report by Susan Beck in an article entitled “Broadcom Settles Backdating Case For $118 Million; Lawyers’ Fees Exceed Amount,” available for reading on the American Lawyer.com website.
Broadcom announced that it recently settled a stock option backdating derivative lawsuit for $118 million (to be funded by Broadcom’s D & O insurers). However, Ms. Beck makes the case that most of the moneys will go to lawyers–$11.5 million for the plaintiffs’ lawyers and $130 million-plus to the defense attorneys representing the 19 officers and directors.
David Siegel of Irell & Manella, which represents Broadcom, has a different take: the D & O insurers had said they owed nothing, but at least $43.3 million of the defense tab is included in the $118 million being shelled out by insurers. He also characterized the $118 million insurance payment as “a payment to Broadcom for its benefit.”
(Co-contributors Marc and Mike are alumni of Irell & Manella, and enjoyed their time with the firm and the lawyers they practiced with.)
Securities Settlement Objectors – “Remoras On The Loose Again” – Lose Their Request For A Fee Award of $225,000.
This last one is a story that we cannot resist sharing with you readers out there.
In our August 12, 2009 post, we reported on the status of the UnitedHealth Group securities lawsuit. We now have an update, but with a twist we think you will enjoy.
Late last year, U.S. District Judge James M. Rosenbaum approved a settlement in the securities class action lawsuit (which we believe was a stock option backdating case).
Several weeks later, four attorneys filed a late objection on behalf of objectors, arguing that the requested class counsel fees of $110 million was excessive in nature. Ultimately, Judge Rosenbaum approved the settlement and awarded class counsel nearly $68.4 million in fees (a reduction of nearly $42 million). Taking credit for this reduction, objectors then filed their own fee request for some $225,000.
Judge Rosenbaum was not amused, but emphatically denied the request in amusing language.
He started out by stating that “The remoras are loose again.” Judge Rosenbaum found that the objectors contributed nothing to his reduction decision, expressly rejecting the lion’s share of objectors’ arguments directed to the use of paralegals and contract attorneys. Not only was their eight-page-long objection two weeks late, it raised no argument upon which the Court relied in its deliberation or ruling concerning class counsel’s fees motion. He ended on this note: “Objectors’ Counsel are entitled to an award equal to their contribution … nothing.”
Judge Rosenbaum also defined “remora” based on a dictionary definition. A remora is “any of a family (Echeneidae) of marine bony fishes that have the anterior dorsal fin modified into a suctorial disk on the head by means of which they adhere especially to other fishes.” In other words, suckerfish, fish that attach themselves to bigger sea-dwellers, like sharks, in order to gain transportation and protection.