Law.com covers the fairness hearing of the Wells Fargo derivative settlement, where Center for Class Action Fairness director Theodore H. Frank filed an objection on behalf of a shareholder against excessive attorneys’ fees:
Tigar also set out to address another objection mentioned in Frank’s opposition over a 5% fee allocated to 12 law firms who brought similar cases in Delaware courts. “The gravy train is so heavy that co-lead counsel has agreed to pay law firms that brought other cases even where they provided no common benefit, who represent plaintiffs who lack any colorable claims,” Frank wrote.
Heimann confirmed the Delaware counsel did not work on the case, and Tigar said it sounded to him like the attorneys were paid to withdraw their litigation, so as not to obtain a ruling that could impact the outcome of this case.
“I can imagine a circumstance in which a class action lawsuit is filed and the claims are clearly unsupported by the law,” the judge said. “Most sensible judges could see the claims aren’t good, but say you have one case where the lawyers clearly have some momentum, and you just go pay them off. That’s not good for the development of the law and doesn’t lead to a just result. Why shouldn’t I be worried about that?”
Regardless of his ruling on motion for attorney fees, Tigar told Heimann that $240 million is a big settlement.
“I promise you won’t lose money on this case,” he said.