|
 |
| 2001 News and Press Releases |
|
|
HEADLINE ARCHIVED:
Going Once, Going Twice Auctions For Class Counsel Could Be A Thing Of The Past
By: Jerry Jastrab
New Jersey Lawyer: The Weekly Newspaper, Volume 10, Number 36.
September 3, 2001
_________________________________________________________________________
Excerpt: A panel of the 3rd U.S. Circuit Court of Appeals may well have signaled the death knell of bidding auctions to determine who is chosen for the lucrative role of lead counsel in federal class actions. The panel in the celebrated case involving the financial woes of Cendant Corp. did not rule out such auctions by trial judges in the circuit, but made it clear a bidding process would be frowned upon in most circumstances. And in its ruling last week, the tough-talking circuit judges also knocked down at least $76 million of the $262 million fee U.S. District Judge William H. Walls had granted to the New York and Philadelphia firms named as lead counsel after the auction. But it was Walls' decision to take the auction route that drew their harshest objection. "We hold that the district court abused its discretion by conducting an auction because its decision to do so was grounded upon an erroneous understanding of the legal standards undergirding the propriety of conducting an auction" in accordance with federal law, said Chief Circuit Judge Edward R. Becker for the three-member panel. It may well be a sign of things to come. The entire circuit next month will conduct a conference on a number of issues, including auctions to select lead class-action counsel.
|
|
|
