Magnum Hunting

Hunting for fees, that is, in securities litigation against alleged fraudster Magnum Hunter Resources, wherein hyper-contested lead counsel motions were filed earlier this week.  Unfortunately, those motions are hyper-contested only by virtue of their number rather than their substance.  No fewer than eight (8; VIII; שםונח) counsel groups filed motions in each of two districts–all eight in the S.D.N.Y., three of whom filed in the S.D. Tex. as well.

Pomerantz Haudek was the busiest of the eight, filing a complaint by itself in Texas, which Saxena White followed with another complaint–filed by the same local counsel.  Pomerantz subsequently dismissed its Texas case, which evidently got Magnum’s attention.  Seeking to litigate on its own turf, and perhaps fearful that Saxena White might follow Pomerantz out of town, Magnum filed a 1404 motion in New York, seeking to consolidate cases pending there with the one remaining in Texas.

The dockets were then relatively quiet until this past Monday, when all heck* broke loose.  Pomerantz–armed with new clients and now aligned with Chimicles & Tikellis–filed lead counsel motions for those clients in both Houston and New York.  A Robbins Geller/Labaton tag team did the same, as did Morgan & Morgan.  The other contestants–Cohen Milstein, Kessler Topaz, Squitieri & Fearon, Finkelstein & Krinsk and Bernstein Liebhard–limited themselves to the blue state court.  And all parties limited themselves to submissions that are so bland that to call them “boilerplate” would be insulting to boilerplates.

So who’s likely to emerge from this with all the spoils?  As is often the case, Robbins Geller and Labaton claim the greatest losses–somewhere in the high six figures.  Cohen Milstein and Morgan are both in the low six figures.  The others all claim five-figure losses, which is a shame–not for those firms, but for imPaneled, as we would like to see nothing more than knockdown, smash-mouth, eight-way verbal sparring.  That is likely not forthcoming.  But there will hopefully be drama sufficient to justify a future post.  Stay tuned.

* – imPaneled is a family blog.

A truly modest proposal

Consistent with our moniker, imPaneled’s last several posts have addressed Panel issues.  But imPaneled’s mission statement requires us to report “[e]verything you need to know about the jockeying for lead counsel positions in MDL proceedings and other complex litigation”  (emphasis added).  Hence this post.

imPaneled previously pressed for reform of the means by which courts select lead counsel in a post entitled “A modest proposal.”  The spirit in which imPaneled made the proposal was in fact “modest” (as imPaneled bows to no one where modesty is concerned), but the scope of the proposal was anything but.  And imPaneled undertook to incite outright revolution in the Panel’s transferee court selection process in its most recent post.  Having failed to effect change–yet–in either instance, imPaneled now aims substantially lower.

Today’s proposal arises from the recent news that Judge Castel (S.D.N.Y.) denied Lowey Dannenberg’s and Lovell Stewart’s motion for appointment as interim lead counsel in what will hopefully be epic antitrust litigation regarding the manipulation of the European bank lending rate known as Euribor.  Hizzoner reasoned that the appointment was unnecessary in that “[t]here currently appear to be no overlapping, duplicative or competing suits that might be consolidated with this action. There appear to be no competing counsel whose roles might complicate the efficient management of this case or result in duplicative attorney work.”

“Kudos to him!,” thought imPaneled, on the premise that Lowey and Lovell were merely seeking to preclude any submissions by potential rivals for the positions, which, as the Court recognized, benefits neither the class nor anyone else.  But then imPaneled noted that it has been a four-month period during which no one else has filed a related case.  Cf.  Adv. Comm. Note, Fed. R. Civ. P. 23(g) (“The primary ground for deferring appointment would be that there is reason to anticipate competing applications to serve as class counsel.”).

And imPaneled recalled having itself filed at least one similar motion relatively early in an MDL proceeding (albeit after a large number of firms had reached agreement).  And imPaneled further recalled having repeatedly seen unscrupulous outsiders (e.g., claims processors, counsel soliciting opt-outs) compromising the rights of absent class members before class certification.

A stern warning letter to such miscreants from “interim class counsel” carries more weight than does such a letter from counsel for the “named plaintiffs” or the “proposed class.”  And when it is defendants who are tampering with absent class members (as they are wont to do in cases involving defendants’ employees), even a court is more likely to give weight to the objections of “interim class counsel.”

So what might Judge Castel and others in his position do instead of denying interim lead counsel motions as “premature” for a lack of competition?  How about appointing the Loweys and Lovells of the world as interim class counsel, explicitly without prejudice to the rights of unnamed others to ask the Court to revisit the issue if circumstances so dictate?  In most cases, circumstances will not so dictate, and everyone involved will live happily ever after.  To that end, it is hereby ORDERED that Lowey and Lovell shall move for reconsideration of Judge Castel’s Order of June 11, 2013 (Dkt. No. 72), citing imPaneled as supplemental and decisive authority.

We say we want a revolution

It’s always a treat when the Panel allows us commoners a peek behind the scenes by discussing how it goes about its centralizing and transferring business.  Their spokesperson is invariably His High and Exalted Honor, Chairman Heyburn, who has gone on the record at least three times in recent–or at least recentish–months.

The publicity blitz was evidently preceded by Judge Heyburn’s “personal interviews” with dozens of attorneys “who practice before the Panel and in MDL dockets.”  That is news to imPaneled, as imPaneled was not among those dozens.  Perhaps the Panel has heard that imPaneled is a mite opinionated and something other than shy about sharing those opinions publicly.  Well, if that’s how they feel, the remainder of this post will not disappoint them.

The Panel has evidently observed that “it seems like there are more plaintiffs who see under certain circumstances that they can benefit from the centralization if they can be named to the lead counsel.”  Do tell!  And “counsels’ own stated reasons for favoring a particular location were sometimes surrogates for their desire for a favored judge or circuit.”  imPaneled commends Judge Heyburn for avoiding words like “all” and “always,” which might have been appropriate.

Counsels’ other beefs were in large part the result of having been saddled with unmotivated transferee judges.  As always, His Honor has recently insisted that a number of sensible factors dictate the Panel’s choice of a transferee judge.  But imPaneled has always suspected that judiciary politics play something of a role–and perhaps a major role–in this context, i.e., senior and well-connected judges have more to say about where cases go than do junior and poorly-connected judges.

Not that there’s anything wrong with that–so long as the transferee judge is willing and able to do justice relatively promptly and efficiently.  But too often–perhaps in cases that are generally unattractive to the judiciary–MDL proceedings land in front of judges who come up short as to justice, promptness and/or efficiency.

One would think that is a problem only for the litigants in those cases, which is a substantial problem in itself.  But as early as December of 2015, it may result in problems for plaintiffs in all cases.  imPaneled hears the clicks of browsers moving to other pages, on the premise that imPaneled has taken leave of its senses.  Bear with us.

imPaneled recently had the pleasure of participating in a public discussion of proposed amendments to the Federal Rules of Civil Procedure, which might substantially narrow the scope of discovery.  See, e.g., Proposed Rule 26 Committee Note (“The scope of discovery is changed in several ways.”).  That change was prompted by the well-organized campaign of those who produce the most discovery–defendants in complex litigation.  In fact, the moderator of the event cited a study reflecting that discovery becomes unmanageable only in a small minority of the most complex cases.

That revelation prompted imPaneled to query Judge Gene Pratter (E.D. Pa.)–who generally favors the changes–to the following effect:  In light of that study, and in light of the fact (based on imPaneled’s own experience) that diligent judges can readily control discovery even in the most complex cases, why is it necessary to rewrite the rules for all cases?  Judge Pratter’s response was most telling.  She said in essence that most judges and lawyers are not willing and able to control discovery in complex cases, and the rules have to be amended for everyone to account for those relative slackers.

Here’s a better idea.  The Panel should transfer cases only to judges who have proven their ability as to both the relevant substantive law and case management, or to unproven judges who have made a credible commitment to prove themselves capable of managing complex litigation.  If no such judge has a related case pending on their docket, the Panel should select someone new to the proceeding.  And if he or she has to move smaller cases to other judges’ dockets to accommodate a complex MDL case, so be it.  But no one should be denied prompt and efficient justice just because the Panel is set in its ways.  And plaintiffs of the world should not be denied discovery just because–as Judge Pratter substantially admits–certain judges and lawyers are not up to doing their jobs properly.

Update: imPaneled erroneously suggested in this post that amendments to the FRCP are coming in December of this year, which is not in fact the case.  But there is a public comment period forthcoming this year.  imPaneled encourages all of its readers to comment publicly.

  • About the blogmaster

    Bart Cohen is the principal of the Law Office of Bart D. Cohen, where he represents his clients in class actions and other complex litigation, and Winning Briefs, where he polishes, edits and drafts written work product for overextended lawyers.

    His unnatural appetites for rules and research of all kinds have made him an expert on proceedings before the Judicial Panel on Multidistrict Litigation. He feeds those appetites and chronicles the battles to land lead counsel appointments that are fought in part before the Panel on imPaneled.

    You can contact Bart here or connect with him here.

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