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Comparing a Milberg Weiss Bershad Hynes & Lerach client to a fairy-tale frog, U.S. District Judge Vaughn Walker ripped into the firm for walking away from a case that ended one of his securities litigation experiments. Walker’s humor-laced order last week was the latest twist in a case that the 9th U.S. Circuit Court of Appeals used to bar lead counsel auctions, which Walker initiated in a couple of cases. The dispute began three years ago when Walker rejected Milberg Weiss’ bid to have a group of clients named as lead plaintiff in securities litigation against Copper Mountain Networks Inc. Walker said the firm’s fee agreement with its clients was too high compared with that of a competing firm. Milberg Weiss appealed to the 9th Circuit, which found that the only basis for comparison between the plaintiffs should be their financial stake in the litigation. That is how lead plaintiff designation is determined under the 1995 Private Securities Litigation Reform Act. But Walker got the last say, suggesting that Milberg Weiss’ actions had proved him right. “At the end of many fairy tales, Prince Charming vanquishes the villain, rescues the damsel in distress and all live ‘happily ever after,’” Walker wrote. “A class representative suing to rescue distressed plaintiffs may sometimes appear to be a prince. But, in reality, the heroic prince, perhaps, is actually a frog.” Walker said the factual and procedural background in In re Copper Mountain Securities Litigation, 00-3894, “tells just such a tale.” After winning its appeal, Walker wrote, one would think Milberg Weiss would return to court to fight “with vigor and passion” on behalf of its clients, the CMI group. “Alas,” he wrote, “the hero appears to have vanished — fled the scene — gone south — maybe vaporized.” According to Walker’s order, Milberg Weiss partner Patrick Coughlin informed the lawyers for the appointed lead plaintiff that Milberg’s client — CMI — no longer wanted to take the lead. That was in November. After Milberg skipped a December status conference, Walker asked the firm to notify the court if the firm wanted to pursue the lead counsel role. There has been no response. Coughlin didn’t return a phone call seeking comment on Walker’s order. University of Arizona law professor Elliott Weiss, who represented Walker in the hearing before the 9th Circuit, said if nothing else, Walker’s ruling “illustrates the flaws” in the appeals court opinion. Weiss said he told the 9th Circuit that Milberg’s clients weren’t good lead plaintiff candidates. “The 9th Circuit disregarded that argument and decided the case on the premise that Judge Walker conducted free-wheeling auctions and went on to say it would be improper for a judge to initiate inquiries.” Weiss — and Walker — suggested Milberg’s clients were more interested with Milberg’s interests than the interests of the class. What has happened in the case, Weiss said, “indicates the Milberg [plaintiffs] had no commitment to what happened to the litigation.” Or, as Walker wrote: “Parties and their lawyers who win in the court of appeals and secure a remand are generally quite hot to trot once back in the trial court.” Perhaps, he suggested, Milberg Weiss’ trip to the 9th Circuit was motivated by something “other than vindicating the interests of defrauded investors.” In his order, Walker gave lead plaintiff designation back to Quinn Barton, who held the title before Milberg went to the 9th Circuit three years ago. Signing off, Walker wrote: “And so concludes our tale. The moral of this story will be left to you, dear readers.”

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