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?The Remoras Are Loose Again?: The Law Blog Judicial Order of the Day

By Ashby Jones

Sometimes it’s difficult, armed with little other than a delicately worded legal opinion, to discern whether and to what degree a judge is annoyed with one of the parties. But James M. Rosenbaum, a federal judge in Minneapolis, handed down a three-page decision on Friday in which it’s, um, just a tiny bit clearer.

The backstory, as laid out by Judge Rosenbaum:

Late last year, Judge Rosenbaum preliminarily approved a proposed settlement in a large shareholder class-action against UnitedHealth Group. Several weeks later, lawyers for two shareholders filed a late objection to the settlement, arguing that the fees for class counsel — $110 million — was excessive. Ultimately, last month, Judge Rosenbaum approved the settlement and awarded class counsel nearly $68.4 million in attorney’s fees, a reduction off the request of nearly $42 million.

Later last month, the lawyers for the objectors asked Judge Rosenbaum to award them some $225,000 in attorneys fees. The request was based largely on the assertion that the objectors’ lawyers helped Judge Rosenbaum see the light on the class-counsel’s fee request, and therefore helped save the class the $40+ million. “As a result of the issues asserted in the Objection,” wrote the lawyers, “the fee awarded was more than $45 million less than the Fee Request.” (We’re not sure what accounts for the additional $3 million the objectors’ lawyers claimed they saved.)

Judge Rosenbaum denied the request thusly:

The remoras* are loose again. The Court has received a motion from attorneys Edward Siegel, Edward Cochran, Stuart Yoes, and Scott Browne (styling themselves "Objectors' Counsel"), seeking an award of fees. Their motion is emphatically denied.

. . .

Those objecting to a class action settlement are not entitled to a fee award unless they confer a benefit on the class. . . . These objectors have contributed nothing. Instead, in a pleading which may charitably be described as disingenuous, Objectors' Counsel argue they assisted the Court in finding class counsel's fee request unreasonable. They claim their efforts convinced the Court to reduce class counsel's fee from $110 million to $64.8 million. They have the temerity to suggest they are the ones who saved the class $45 million in attorney fees, entitling them to a six-figure fee of their own.

Their suggestion is laughable. If the Court may be permitted an egregious paraphrase of Winston S. Churchill: Seldom in the field of securities litigation was so little owed by so many to so few. Objectors' Counsel make "outlandish fee requests in return for doing virtually nothing." In re Cardinal Health, 550 F. Supp. 2d at 753. And nothing is the quantity of assistance they have provided to the Court and the class. Their goal was, and is, to hijack as many dollars for themselves as they can wrest from a negotiated settlement. Objectors' eight-page-long, two-week-late pleading presented no facts, offered no law, and raised no argument upon which the Court relied in its deliberation or ruling concerning class counsel's motion for fees. Indeed, the Court expressly rejected the lion's share of objectors' arguments directed to the use of paralegals and contract attorneys.

Accordingly, the Court holds, as a matter of fact and law, objectors have conferred no benefit whatsoever on the class or on the Court. Objectors' Counsel are entitled to an award equal to their contribution . . . nothing.

Wow.

Calls to three of the objectors’ lawyers, Edward Siegel, Stuart Yoes and Scott Browne were not immediately returned. The fourth, Edward Cochran, declined to comment.

So what, exactly is a remora (pictured)? Good question. Merriam-Webster defines it as such: “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.

Full post as published by Law Blog - WSJ.com on September 04, 2009 (boomark / email).