Posts belonging to Category Law Firms & Lawyers

Top 50 Plaintiff Securities Firms for 2011

Securities Class Action Services has released its annual list of the top 50 securities firms (the “SCAS 50”).  The top 10 firms for 2011 are as follows: 

1. Bernstein Litowitz Berger & Grossmann
2. Robbins Geller Rudman & Dowd
3. Labaton Sucharow
4. Kessler Topaz Meltzer & Check
5. Hagens Berman Sobol Shapiro
6. Grant & Eisenhofer
7. Cohen Milstein Sellers & Toll
8. Lovell Stewart Halebian Jacobson
9. Milberg
10. Wolf Haldenstein Adler Freeman & Herz

The full list is available here. The Bernstein Litowitz firm claimed the top spot with over $1.3 billion in total settlement proceeds from 13 settlements (the third-highest number overall), including a $208.5 million settlement with Washington Mutual. The firm’s average of nearly $106 million per settlement was one of only three per-settlement averages of $100 million or more, and is second only to Lovell Stewart’s nearly $119 million average (based on a single settlement with PIMCO). The three firms topping the SCAS 50 — Bernstein Litowitz, Robbins Geller and Labaton Sucharow — accounted for more than half of all securities settlements in 2011.

Dukes v. Wal-Mart: Creative Solutions for Plaintiffs

The Supreme Court’s Dukes v. Wal-Mart decision has garnered a great deal of attention in the popular press, likely due to the prominence of the defendant and the allegations that Wal-Mart systematically discriminated against female employees.  In addition to introducing a more onerous commonality standard, Dukes entailed at least two other issues bearing on the mechanics of class actions: (1) that individualized money damages cannot be awarded in Rule 23(b)(2) class actions; and (2) that affirmative defenses must be assessed in individualized hearings, seemingly precluding the sampling and survey methods that buttress class actions’ essential efficiencies.

Professor John C. Coffee, who holds the Adolf A. Berle Professorship at Columbia Law School, has suggested how these more complex Dukes issues might play out.  In a recent National Law Journal article, Professor Coffee suggested that the post-Dukes realities might not be as bleak as has been projected for plaintiffs, so long as plaintiffs’ lawyers advocate, and federal district court judges adopt, innovative procedural methods and intellectually cutting-edge approaches.

No Individualized Money Damages Under 23(b)(2).  With the Dukes holding that Rule 23(b)(2) injunctive actions can no longer commingle with Rule 23(b)(3) actions seeking monetary damages, class actions seeking monetary damages must be certified under Rule 23(b)(3).  However, the latter rule’s severe “predominance” requirement makes it ill-suited to the natural diversities that arise in cases against large defendants, such as violations occurring across multiple employment locations.  While Rule 23(b)(2) injunctive actions remain an option, the lack of certain methods for valuing such relief, and thus establishing fee awards, will continue to function as a disincentive.  Moreover, “claim splitting” prohibitions (exacerbated by the 23(b)(2) no-opt-out provision) and conflict arguments have typically been seen as insurmountable obstacles to bringing separate class actions for injunctive and monetary relief.  Not so, argues Professor Coffee.  First, federal courts can certify (and have certified) parallel (b)(2) and (b)(3) cases, each with their own class representatives.  Second, courts have ruled that the Due Process Clause trumps Rule 23(b)(2)’s mandatory provision proscribing opt outs, thereby obviating the claim splitting impediment.  Finally, Professor Coffee suggests that the pure muscle of legal argument may provide a solution: because Dukes prohibits monetary damages in (b)(2) classes, there is no overlap with (b)(3) classes.  Thus, the essence of claim splitting—failure to raise an argument in one case that could have been raised in the other case—is altogether avoided.

Rejection of Sampling Procedures.   Professor Coffee offers several possible solutions for dealing with Dukes holding permitting individualized hearings as to affirmative defenses.  First, he suggests challenging whether the affirmative defenses are pleaded with sufficient particularity, using the heightened pleading standards of Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009), and Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007).  While this tool is most often employed by defendants to challenge the particularity of complaints, it is equally applicable to Rule 12 challenges to affirmative defenses.  Second, plaintiffs can concede the necessity of individualized hearings and take the initiative to propose pragmatic ways for those hearings to take place, such as before a special master or magistrate judge.  Finally, Professor Coffee suggests decoupling the liability determination from affirmative defenses by using the much-neglected Federal Rule 23(c)(4).  This would permit plaintiffs to adjudicate only liability on a class-wide basis, and, thereafter, resolve affirmative defenses and determine damages in individual actions.  The “issue certification” authorized by Rule 23(c)(4) has so thin a record in reported caselaw that, perhaps fortunately for plaintiffs’ counsel contemplating this innovative use, there is little pre-existing guidance.

 At a minimum, Dukes implies that the trial plans long encouraged by federal courts and practical treatises such as the Manual for Complex Litigation must now become more detailed in addressing the requirements and challenges imposed by Dukes.  As such, some or all of Professor Coffee’s suggested innovations will perhaps turn up, first in trial plans, and later in reported cases.  Already, Dukes has been cited more than 50 times and distinguished in 23 of those cases, suggesting that the new strictures are just as navigable as Professor Coffee suggests.

Bernstein Litowitz Berger & Grossmann Tops Among Securities Firms

Securities Class Action Services (SCAS) has issued its annual ranking of the top firms that exclusively represent plaintiffs in securities class actions. The full SCAS rankings are available here. The top position, by some distance, is occupied by relative upstart Bernstein Litowitz Berger & Grossmann, with nearly $1 billion in settlements during 2010.

Bernstein Litowitz has been accumulating accolades in recent years. The 54-lawyer firm is reputed to be selective in it hiring. Moreover, Bernstein Litowitz devotes an entire page on its website to complimentary remarks from judges. One of the twelve quotations on the Bernstein Litowitz webpage, from an unspecified judge sitting in the Southern District of Texas, reads “A tremendous job . . . [N]ot only in the monetary result, but the substantial and very innovative programmatic relief obtained in this case . . . these lawyers did an outstanding job trying to make sure that’s the kind of thing that the case left behind.”

The second-place firm in the SCAS rankings, Robbins Geller Rudman & Dowd, has 190 lawyers to Bernstein Litowitz’s 54. And although Bernstein Litowitz settled only 16 cases in 2010 (to Robbins Geller’s 31), the average Bernstein Litowitz settlement of $62.4 million was nearly three times that of Robbins Geller, and more than any other firm with more than two settlements during 2010. The Milberg firm, which was once the perennial first-place securities firm, was ranked thirteenth in 2010, with $137 million in settlements.

Bernstein Litowitz’s most prominent and potentially lucrative, though also risky, representation is of the institutional investors that opted out of last year’s record $624-million settlement on behalf of Countrywide Financial Corp. shareholders. If Bernstein Litowitz can negotiate a comparable settlement on behalf of the Countrywide opt-outs and maintain its extraordinary relations with the judges who approve class action settlements, it is likely to not only retain its top SCAS position, but widen its lead.

Partner Feud Roils Lieff Cabraser

Consistently reputed to be a collegial work environment with high job satisfaction, the elite San Francisco-based plaintiffs’ firm, Lieff Cabraser Heimann & Bernstein, has recently experienced internal conflict that has found its way into discussions on blogs and legal-themed message boards. The conflict’s rough outlines are as follows: Barry Himmelstein, a partner at Lieff Cabraser, is attempting to dissolve the firm, while the firm’s other partners have petitioned to send the dispute into arbitration to avoid the public relations debacle that could result from internal conflicts being aired in public court proceedings. Thus far, the bulk of the dispute’s substantive legal content is unknown, and the papers supporting the motion to compel arbitration cryptically allude to the competing legal theories and evidence that will be in play.

In an interview with The Recorder, Himmelstein located the dispute’s genesis in a debt-card fee class action in which Wells Fargo was ordered to pay $203 million, Gutierrez v. Wells Fargo Bank, No. C 07-05923 (N.D. Cal. Aug. 10, 2010). Himmelstein told The Recorder that he had urged the pursuit of punitive damages, which could have substantially increased the already ample damages award, as well as Himmelstein’s bonus share. Himmelstein’s strategy was rebuffed; the dispute burgeoned, resulting in Himmelstein being stripped of his voting rights. (See Kate Moser, Ex-Lieff Partner Says Strategy Feud Is Behind Ouster, THE RECORDER, Mar. 4, 2011, available here.)

Himmelstein’s bonus share in the Wells Fargo litigation is in abeyance, likely to be determined in the parties’ litigation or arbitration, as is his potential bonus share of a $410 million award that resulted from a MDL case that had been pending in a Florida United States District Court. Himmelstein’s claims may extend to other bonus sources, as well. While the Wells Fargo strategy dispute appears to have incited the parties’ conflict, it is not clear what role it will play in the actual legal theories at issue when the parties either litigate or arbitrate their dispute.

Also as reported in The Recorder, in a February 15, 2011 email responding to the suggestion that the parties arbitrate, Himmelstein augmented an initial “LOLOLOLOLOLOLOL!” response by adding, in a second email, “That was a big, fat, f*****g, ‘No,’ in case you needed translation.” (Kate Moser, Lieff Cabraser Partners in Nasty Feud, THE RECORDER, Feb. 25, 2011, available here.) Accordingly, indications are that Himmelstein will formally oppose the arbitration petition.