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Houston granted summary judgment to an investment advisor and ordered theplaintiff’s lawyers, lead by Bill Lerach, to pay attorney fees for a portionof the case she deemed was without merit. U.S. District Judge Melinda Harmon, of the Southern District of Texas, ruledNov. 30 that Alliance Capital Management was not liable for the actions ofan employee who had served on Enron’s board of directors, during which timethe energy giant issued $1.9 billion in notes alleged to be false andmisleading. Harmon sided with Alliance in noting that if a company could be held liablefor such a circumstance, the “effect would be to chill the willingness ofdistinguished and qualified individuals to serve on the boards of publiccompanies.” Mark Kirsch, a partner in the New York office of Clifford Chance and leaddefense lawyer in the case, said Harmon’s ruling is the “first decision thataddresses that liability question so clearly.” The judge also awarded an unspecified amount of attorney fees to Alliance,noting that much of the case was without merit. She also said the attorneyfees should be paid by the plaintiff’s lawyers because “non-attorney clientsmore likely than not would not have the ability to determine, at what point,based on what evidence an action becomes legally �frivolous,’ while itslicensed counsel should and is held to such a standard.” Lerach, partner at Lerach Coughlin Stoia Geller Rudman & Robbins, said, “We’re not paying the attorney fees to these guys,” adding that he would appeal to the 5th U.S. Circuit Court of Appeals. He said the judge’s granting of summary judgment to Alliance was “fact-specific” and “had no bearing at all in my mind on the potential liability of the banks and the lawyers and the like.”

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