CCAF is now 4-1 in federal appeals, which is remarkable, given that CCAF-affiliated attorneys represent the appellant in each case and there are rarely as many as four reversals of class action settlement-related district court opinions in a single year from all objectors combined.
The fundamental point—shareholder derivative suits should not be permitted to be maintained when they are designed to benefit the attorneys, rather than the shareholders—remains valid, and we believe this is the first case to present this principle in the shareholder derivative context.
Unfortunately for the plaintiffs, not only did they sue in the Northern District of Illinois, they sued a corporation where I own shares.
All well and good, except that my particular notice letter arrived on June 28. That's because, though the settlement occurred on April 28, and the court approved notice on May 11, the parties didn't bother to ask brokers to provide a list of shareholders until June 1, and then, after receiving the list, didn't bother to mail the notice to tens of thousands of shareholders until June 22 or June 23.
The Center objected to this shareholder-derivative settlement offering no value to shareholders and $925,000 to plaintiffs’ lawyers. The district court denied the Center’s motion to intervene, then the Seventh Circuit reversed and dismissed the lawsuit.
