Sunday, October 22, 2006

Judge Ponders PayDay

OK, the Nugget has been AWOL for a bit, but that’s nothing compared to how long the Cabletron securities class action has been pending. You see, as Judge William E. Smith (D. R.I.) explains, “the case, approaching its tenth year in the judicial system, has traveled from New Hampshire to Rhode Island, through various district judges' chambers, to the Court of Appeals and back, finally landing with this writer in late 2002."

And it looks like – it’s finally over, and if you’re looking for an extensive, academic, and real-world analysis of attorney fee awards in securities class actions, this is your opinion. Want a taste? How about, “the Court is persuaded, based on… the emerging trend in district courts nationwide, that the better approach to awarding attorneys' fees is the Percentage of Fund method.” That’s because “a lodestar cross-check may also be useful; however, it is unclear to this Court where the precise lines of "reasonableness" would be drawn if the lodestar cross-check was mandatory (Is .5 too low? Is 2.5 too high?).” “This Court is not required to decide whether the cross-check is an ethical imperative, nor to define the parameters of lodestar reasonableness; rather, it is sufficient to conclude that when the lodestar cross-check is applied to the fee award in this case, it raises no reasonableness concerns.”

Check out the opinion for more fee talk. You’ll likely be surprised at the conclusion.

You can read In re Cabletron, issued October 12, 2006, at 2006 U.S. Dist. LEXIS 76278.

Nugget: “The Court challenged numerous expenses contained in Plaintiffs' original submission. As a result, Plaintiffs modified their reimbursement request to reflect the removal of various questionable items such as multiple filing fees and premiums on administrative expenses. The amount described in this Order is the amended request.”

No comments: