May 29, 2008

Opportunistic Objectors

The Cardinal Health securities class action is the case that keeps on giving, at least as far as this blog is concerned. Having previously posted about the lead plaintiff, discovery stay, motion to dismiss, settlement, and attorneys' fees decisions in the case, it seems appropriate to note the latest offering from the court.

In In re Cardinal Health, Inc. Sec. Litig., 2008 WL 1934162 (S.D. Ohio May 5, 2008), the court considered whether two of the several fees objectors should be paid for their efforts. Although lead counsel had requested 24% of the settlement (or $145 million), the court awarded only 18% of the settlement (or $108 million). Based on this $37 million savings, the two objectors requested that they, in turn, be paid between $3.7 million and $6.6 million. The court was not amused, finding that the objectors were making "outlandish fee requests in return for doing virtually nothing."

Holding: Motions for attorneys' fees denied.

Quote of note: "[C]lass actions also attract those in the legal profession who subsist primarily off of the skill and labor of, to say nothing of the risk borne by, more capable attorneys. These are the opportunistic objectors. Although they contribute nothing to the class, they object to the settlement, thereby obstructing payment to lead counsel or the class in the hope that lead plaintiff will pay them to go away. Unfortunately, the class-action kingdom has seen a Malthusian explosion of these opportunistic objectors, which now seem to accompany every major securities litigation. Such is the case here."

Posted by Lyle Roberts at May 29, 2008 11:48 PM | TrackBack
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