Judge Denies Milberg Fee Request, Raises Skadden Questions
A federal judge has refused to approve the $30 million settlement of a securities class action in a case brought by indicted law firm Milberg Weiss, saying attorney fees of 25 percent were too high.
Chief District Judge Vaughn Walker of San Francisco said that when the hours spent in the case are considered, the $7.5 million in requested fees represent a multiplier of eight to 10, the Recorder reports. The usual multiplier is between one and four, he said.
Walker also questioned whether the lead plaintiff, a union pension fund, was an adequate class representative since it approved the big fee.
The judge also wondered about possible conflicts by Skadden, Arps, Slate, Meagher & Flom, which is representing the defendant drug company in the litigation, the legal publication says. Skadden Arps also has represented some members of a law firm formed by former Milberg Weiss lawyer William Lerach, who has pleaded guilty to paying kickbacks to lead plaintiffs.
The indictment against Milberg Weiss also alleges kickbacks were paid, but Lerach’s firm, now known as Coughlin Stoia Geller Rudman & Robbins, has not been charged in the criminal probe.
“The court is troubled whether Skadden, Arps is able to probe the adequacy of lead plaintiff and/or lead counsel lest a rigorous challenge uncover problems that might be traced back to Lerach Coughlin,” Walker wrote.
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