Law360 covered the First Circuit’s decision upholding sanctions against Class Counsel Firm Lieff Cabraser in the State Street case.
The First Circuit on Wednesday left intact a Massachusetts federal judge’s sanctions against Lieff Cabraser Heimann & Bernstein LLP in a fees spat, finding that the lower court didn’t abuse its discretion in punishing the firm for misrepresenting a study regarding fee awards in similar cases.
A three-judge panel affirmed a decision from U.S. District Judge Mark L. Wolf, who sanctioned the firm for misrepresentations it made to the court while justifying a $75 million fee award for Lieff Cabraser and co-counsel at Labaton Sucharow LLP and Thornton Law LLP. The fees stemmed from their work securing a $300 million settlement with State Street Corp., and they were later slashed to $60 million following a lengthy investigation into allegations of overbilling and other improprieties.…Theodore Frank, an attorney with the Hamilton Lincoln Law Institute, told Law360 on Wednesday, “We’re gratified that our amicus helped the First Circuit write an excellent opinion.”
“The opinion establishes an important precedent that class counsel has a duty of candor in making fee requests,” Frank said. “The First Circuit is correct that Judge Wolf was generous to class counsel given the magnitude of the wrongdoing. And the pay-for-play and scheme to increase fees by millions of dollars at the expense of the class is not unique to this case; we have an appeal pending in the Seventh Circuit with similar issues.”
He added that “pension funds and state attorneys general should retain experienced objectors’ counsel to investigate more fee requests.”