Dewey v. Volkswagen, Water Ingress Settlement objection response briefing

Today we filed our response brief; plaintiffs largely ignored the arguments we made earlier and instead made ad hominem complaints about some quotes that I gave a legal newspaper—when they weren't simply lying about what relevant Third Circuit precedent said.

The Dewey case presents an excellent example of the misuse of economic expert testimony to falsely exaggerate class benefit.  Double-count a class benefit here, ignore an offsetting cost there, presume 100% class response, and before you know it, you can tell the court that an $8 million settlement fund is really worth over $140 million and that you're entitled to a $2900/hour fee award totaling over $23 million.  (And before you do the math and calculate the over-$5M/year the plaintiffs' lawyers seem to think they're entitled to, consider that they're also asking for over $1000/hour for their associates, whom they are most certainly not paying $2M/year.)

Robert Booth Trust v. William Crowley, Sears Holding Corporation shareholder derivative lawsuit

If you're a Sears Holding Corporation (SHLD) shareholder like me, there's a pretty big chance that you got a letter in the mail informing you of a derivative shareholder settlement where the attorneys got $925,000 and the shareholders got the privilege of paying the attorneys $925,000.  The deadline for objecting was June 25.

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. 

I was in Chicago yesterday to object to the problematic notice.  While there I met another shareholder who didn't object to the appalling settlement because she also got her notice after the deadline.

The parties initially argued that it was alright to structure notice so that half the shareholders would receive it only after the fact, but after they gauged the judge's reaction to my argument, the parties volunteered to send new notice.  The http://www.searsholdingsderivative.com/ website has not been updated as of Saturday morning, but the new deadline will be August 20, with a new fairness hearing August 27.

The law firm involved, Vianale & Vianale, brings zero-damages lawsuits against corporations alleging technical violations of Section 8 the Clayton Act antitrust law but seeking injunctive relief, and threatens to cost the defendants millions of dollars in litigation expenses if they don't settle.  This is of no benefit to shareholders, because the law in question, when it is enforced, results in the FTC politely requesting a corporation to correct the technical violation; there has not been a government fine issued for "interlocking directorates" in my adult lifetime, and for at least several years before.  The Center will be objecting to this settlement: how can attorneys claim to represent the shareholders when rational shareholders would never agree ex ante to bring a lawsuit that is guaranteed to make them worse off, win or lose?

It generally seems that the majority of my readers are plaintiffs' law firms checking up on me, but if you happen to stumble across this post and happen to own SHLD, you might get a postcard letting you know that you have another opportunity to object.  Of course, unless you own hundreds of thousands of dollars worth of stock, it might be economically irrational to spend two 44-cent stamps to object; and if you did own that much stock, the opportunity cost of the time you spend objecting is probably pretty high, even if it's just to say "My name is X, my address and phone is Y, I own Z shares of stock, and I join in the objection of Theodore H. Frank."  But unfortunately, plaintiffs' attorneys regularly ask courts to view the rational silence of class members or shareholders as acquiescence in their extortionate theft of shareholder money. 

Good reporting, bad reporting

Compare and contrast the excellent analysis of Forbes.com's Dan Fisher with the shallow softball St. Louis Business Journal on the A.G. Edwards case—though the latter coaxes from Robert Blitz of Blitz Bardgett and Deutsch an admission that his lawsuit would have been deemed meritless if it had been in federal court.

Ninth Circuit appeal in Bluetooth - reply brief

CCAF filed its reply brief in the Bluetooth case yesterday.

"Oddly enough, I admired one of the lawyers."

Bill McClellan of the St. Louis Post-Dispatch writes about the Bachman v. A.G. Edwards case and settlement in today's paper.

Bachman v. A.G. Edwards update

You may recall the $60 million settlement that wasn't to which CCAF objected. Judge Angela T. Quigless approved the settlement and approved the $21.6 million award of attorneys' fees and costs without addressing any of the objections.

And if you ever hear a class action attorney tell you that what they really care about is "access to justice," you have my permission to laugh sardonically. The Bachman attorneys have asked the court to require any objector-appellants (each of whom have about $20 at stake) to post a $325,000 appeal bond—despite the fact that Missouri law does not permit such a thing. CCAF filed an opposition to the request (citing Professor Fitzpatrick's recent article disapproving of excessive appeal bonds), and I was in St. Louis yesterday to argue at the hearing. We will see whether CCAF gets to appeal the judgment or has to appeal an illegal appeal bond order.

Ninth Circuit appeal in Bluetooth - opposition briefs

Earlier this month, plaintiffs and defendants each filed appellees' briefs defending the district court's approval of the Bluetooth settlement against our appeal. We'll be filing our reply brief later this week; stay tuned.