PAST CASES

Elan Securities Litigation
(Southern District Court of New York)
(2005)

The was the settlement of a securities fraud class action. We objected to the amount of attorneys’ fees ($ 15 million) sought by the class attorneys. Our objections revealed several “clever” and misleading ways the class lawyers inflated their request. In response to our arguments the award was reduced to $ 9 million. That increased the amount available to pay the class from $ 60 million to $66 million. The Court said: “Chalmers’s written and oral presentations were helpful to the Court in assessing and improving the Settlement and Class Counsel’s Fee Application.”

Stainless Systems v. Nextel
(District Court, Western District of Missouri; Eighth Circuit Court of Appeals; U.S. Supreme Court)
(2003-2005)

This was a settlement involving Nextel. We objected primarily to a feature which said customers had to continue doing business with Nextel for an indefinite time to get compensation. The Missouri District Court approved the settlement, and the Eighth Circuit Court of Appeals denied our appeal. We petitioned the Supreme Court for review. The Supreme Court takes very few appeals, and it denied our petition. We sadly consider this a failure to stop a serious miscarriage of justice. The settlement, in a disguised way, gave no benefits to a significant portion of the class. For people who had stopped using Nextel before the settlement there was an opportunity for compensation. For those who were still with Nextel when the settlement was final, after all challenges and appeals, there was compensation. But for subscribers who quit between those two dates there was nothing. That was a long period. Nextel lost about 1.5% of its subscribers every month, and it had about 13,700,000. So it lost about 190,000 per month. There were eight objectors besides us, although we alone raised this point. When we appealed there were 6 other appeals. By the time we asked the Supreme Court to review the case more than 40% of the class had lost the right to any benefit.

DSL Service Litigation
(Superior Court San Diego)
(2003-2004)

This case was against Pacific Bell/SBC in California concerning abuses in their offering of DSL Service. We raised several objections, including a “Shrinking Benefits” objection against a feature very much like the one in Nextel. The parties chose to negotiate with us and agreed to eliminate that feature. It was impossible to tell specifically, but it appeared that thousands of class members, who had discontinued their DSL or never really gotten it, would benefit from the change, receiving a credit on their SBC phone bill. The parties also agreed that $200,000 that was to be returned to SBC would be given instead to charities.

Robbins v. Alibrandi
(Bank of America Litigation)
(Superior Court of San Francisco)
(2002-2006)

The directors of Bank of America, alleged to be liable for hundreds of millions of dollars for corporate mismanagement, settled for zero compensation and some tiny changes in BofA procedures. They (their insurance) agreed to pay the firm of Milberg Weiss $5 million and, over our objections, the Superior Court of San Francisco approved this. We appealed. In March 2005 the appellate court agreed with us, overturning the award, and sending it back to fix a proper fee. The following quotes show the Court of Appeals agreement with us.

There was scant evidentiary support for the court's use of multipliers. [multipliers are the factors which result in very large attorneys’ fees]

There also is little, if any, support for the court's conclusion that the skill and expertise of counsel justified a multiplier.

The contingent nature and risk of the litigation also does not justify a multiplier. … The record strongly suggests that the contingent nature and risk involved here resulted from the weakness of plaintiffs' case, as opposed to difficulties of proof or novelty of the legal theories.

Finally, we cannot ignore that there appears to have been very little real benefit conferred on the corporation and shareholders as a result of the litigation.

Ultimately the fee was reduced to $2.7 million, but in reality this was a reduction of the original $5 million to $2.1 million. The other $600,000 was for additional work they did to fight us. The best part of this case was that our appeal established new law in California which makes it a little harder for class action attorneys to get away with being “paid off” for getting nothing.

In re Providian Credit Card Litigation
(Superior Court of San Francisco)
(2001)

We objected to the attorneys’ fee in this class action settlement. The most important objection, which the Court accepted, reduced the attorneys’ fee by $4 million. The settlement had separate benefits for two distinct groups, A and B. The settlement was structured so that there was no way to charge an attorneys’ fee to the B group, so the class counsel structured it so that the A group would pay not only is own fee, but that of the B group as well. Not only is this unfair, but it violates established law. We were the only objector to raise this point.