Proceeds from one of the largest attorney fee awards in South Florida history — $123 million — have been deposited in the bank accounts of South Florida law firms Podhurst Orseck, The Alters Law Firm and Grossman Roth.
The fee award, made two weeks ago, was for a $410 million class action settlement the plaintiff lawyers achieved against Bank of America. They named as defendants the bank and, ultimately, 29 other institutions, alleging they rigged consumer bank accounts in order to achieve excessive overdrafts.
While legal fees in a class action lawsuit brought by gas stations against ExxonMobil, awarded in 2007, was higher than the Bank of America case, the entire consolidated overdraft case, when completed, could surpass that, say the plaintiff lawyers. Legal fees in the ExxonMobil case were $249 million; almost all went to Miami-based Stearns Weaver Miller Weissler Alhadeff & Sitterson.
A bitter fight over legal fees erupted in the ExxonMobil case, when Stearns lawyers accused another Miami law firm, Pertnoy Solowsky & Allen, of misconduct and tampering with published court opinions.
Other than a side spat between Jeremy Alters and an Argentinian law firm that claims it originated the theory behind the suits, attorneys in the Bank of America case did not have a protracted fight over legal fees. According to lawyers involved in the case, any infighting over fee divisions was minor and smoothed over by co-lead counsel Aaron Podhurst of Podhurst Orseck.
“Aaron was instrumental in dealing with the fees, and smoothing things over, and in the end it all worked out amicably,” Alters said. “I am very, very happy with the outcome.”
Said Podhurst: “The lawyers worked it out themselves, and everyone agreed. It was a fair distribution and I’m very pleased.”
Some 30 law firms will get a cut of the $123 million, with the lead law firms — The Alters Law firm, Podhurst Orseck, Grossman Roth and Leif Cabraser Heimann & Bernstein of California — getting the largest pieces of the pie. Several lawyers interviewed refused to disclose the division, saying it’s confidential and will never be filed with the court. However, according to sources, the key lawyers in the case may have gotten more than $20 million.
Both Podhurst and Jeremy Alters of The Alters Law Firm said their paydays were the largest of their careers. Podhurst, who built his reputation as one of the nation’s leading plaintiff aviation lawyers, has practiced for more than 40 years. Alters is a 15-year practitioner.
The first overdraft case against a bank was brought by Leif Cabraser in California but was kicked into overdrive by Alters, who filed the Bank of America case. Alters, who lacked experience in massive multi-district litigation cases, brought in Fort Lauderdale trial attorney Bruce Rogow to help. They also joined forces with the Podhurst Orseck firm, which had a case of its own, and with Miami attorney Robert Gilbert. Eventually, some 30 firms from around the country pitched in. Grossman Roth got involved after Gilbert joined that firm.
The South Florida lawyers fought to consolidate the actions in the Southern District of Florida in order to maintain control and in June 2009 were successful.
Alters got thrown off the plaintiff executive committee after it became public that he was under investigation by The Florida Bar for financial irregularities at his firm. Alters was cleared of wrongdoing by The Bar. He is no longer working on the case on a hands-on basis.
“I made the difficult and risky decision to take on some of the biggest corporations in the world,” Alters said in a statement. “While there was turbulence on the ascent, I am proud of the rare altitude my firm has achieved. There is no doubt that once we have resolved all of the cases in MDL2036, this will be the largest class action result in South Florida history.”
Under the division of labor, Gilbert handles the bulk of the filings and paperwork, Rogow handles the court arguments and Podhurst handles the settlements and coordinates with the plaintiff executive committee.
“This is a mammoth job,” Rogow said. “The discovery was enormous, and everyone contributed to that and hiring experts. There were millions of pages worth of documentation and emails. Attorney fees were commensurate with the work done.”
Currently, 14 of the 30 bank overdraft cases have been settled, six were dismissed due to arbitration clauses and 10 are left to be settled or tried. Podhurst says one or more cases could conceivably go to trial.
Podhurst hopes the cases could be all wrapped up in 12 to 18 months. Total settlements could easily top $1 billion, he said.
When asked whether the lead lawyers celebrated in recent weeks, Podhurst replied, “We did not celebrate as a group.”