THE REMORAS ARE LOOSE AGAIN
Sept. 5, 2009
Late last year, Judge Rosenbaum a federal judge in Minneapolis, 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. Judge Rosenbaum issued a final approval of the settlement, however, he reduced the attorney fee award to the class counsel by $42 million.
After Judge Rosenbaum gave his final approval for the settlement, the lawyers for the objectors asked him to award them some $225,000 in attorneys fees. The objector’s attorney’s claimed that they influenced the Judge and led him to reduce the class-counsel’s fee request, and therefore helped save the class the $40+ million.
Judge Rosenbaum denied awarding the objecting attorneys any fees at all, stating:
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.