Fees and Bloggers

A couple of notable recent decisions:

(1) In In re Cardinal Health Inc. Sec. Litig., 528 F. Supp. 2d 752 (S.D. Ohio 2007), the court considered a requested attorney fee award of $145 million (24% of the $600 million settlement). The court found that the absence of an ex-ante fee arrangement between the lead plaintiff group and lead counsel required it to “undertake an independent analysis to determine reasonable attorneys’ fees.” The court ultimately awarded an 18% fee award, with a high lodestar multiplier of 6, based on the “excellent recovery, considerable effort and time, and high quality of lawyering.”

Quote of note: “[T]his court would . . . recommend that courts, in addition to the established requirements, look favorably on the presence of an ex-ante fee arrangement in its [sic] decision to approve lead plaintiff and lead counsel. Alternatively, Congress could amend the PSLRA to mandate lead plaintiffs to enter into a fee arrangement with lead counsel before the court formally approves lead counsel. Under this approach, sophisticated parties would be encouraged to negotiate fee arrangements without the bias of hindsight, and they could reach presumptively reasonable results that the court can review.”

(2) In In re Pfizer, Inc. Sec. Litig., 2008 WL 540120 (S.D.N.Y. Feb. 28, 2008), the court considered whether an anonymous blog post could provide reliable factual allegations. The plaintiffs asserted that the blogger was actually a former Pfizer officer. The court found that there was insufficient information about the blogger’s identity and, even accepting that he had been employed at Pfizer, it was unclear whether the blogger “would have been likely to know the relevant facts.”

Quote of note: The blogger’s “allegation does not claim to be based on personal knowledge and lacks detail that might suggest personal knowledge. For example, the blog post does not describe when, how, on what basis, by whom, or to whom the alleged warning was communicated.”

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