Linda Singer of Cohen Milstein, Shannon Liss-Riordan of Lichten & Liss-Riordan and Elizabeth Cabraser of Lieff Cabraser. ()
The plaintiffs bar can bid farewell to 2016 boasting some impressive achievements, including blockbuster settlements in auto emissions litigation and other cases. But there were also a few notable setbacks—sometimes delivered by opposing counsel, and sometimes involving lawyers on the plaintiffs’ own side.
January 2016 saw the first of six bellwether trials in private multidistrict litigation over defective ignition switches in General Motors Co. vehicles. But just days into the trial, the case quickly collapsed after the company’s defense lawyers at Kirkland & Ellis uncovered evidence that the plaintiff, Robert Scheuer, lacked credibility.
That sparked a new battle between the attorneys at the heart of the suits. Marietta, Georgia’s Lance Cooper sought to upend the leadership of the cases, accusing the lead plaintiffs lawyers, including Robert Hilliard of Corpus Christi, Texas-based Hilliard Muñoz Gonzales, of mismanaging the MDL.
In the end, U.S. District Judge Jesse Furman of the Southern District of New York in Manhattan, who’s overseeing the MDL, wasn’t persuaded. In February he called Cooper’s criticisms “Monday morning quarterbacking” and directed the lawyers to stop attacking each other and “return to focusing on their common adversary, New GM.”
A second bellwether trial ended in March with a defense verdict for GM, while four others were dismissed or settled as the year went on. A second slate of trials is scheduled for 2017.
Billions Forked Over in VW Settlement
GM wasn’t the only major automaker making litigation headlines in 2016. Volkswagen’s defense lawyers at Sullivan & Cromwell spent the year defending the company in the global emissions scandal over VW’s diesel-powered vehicles, culminating in a whopping $14.7 billion U.S. settlement that was approved before Halloween.
The litigation was notable for its size, and also for its speed. The plaintiffs team, led by Elizabeth Cabraser of Lieff Cabraser Heimann & Bernstein, managed to reach a settlement and get it approved less than a year after the case officially got off the ground.
U.S. District Judge Charles Breyer of the Northern District of California in San Francisco approved the $14.7 billion deal in October. The plaintiffs lawyers, who had earlier agreed to cap their fees at $324 million, ultimately submitted a fee and cost request for $175 million in November. Not bad for a year’s work.
Slow Grind for Household International
In contrast, it took 14 years, a trial, an appeal and a remand before a $1.58 billion settlement finally came together in 2016 in a securities fraud case related to the subprime lending business of Household International Inc.—now a unit of HSBC Holding plc.
“The mills of justice grind slowly,” James Glickenhaus of Glickenhaus & Co., one of three lead plaintiffs in the long running case, said in a June statement. “But sometimes they do grind exceedingly fine.”
Following news of the settlement, lawyers for Glickenhaus and other investor plaintiffs, led by Robbins Geller Rudman & Dowd name partner Mike Dowd and others, sought $388 million in fees. In November, U.S. District Judge Jorge Alonso of the Northern District of Illinois in Chicago signed off on the request, also awarding more than $33 million in expenses to Robbins Geller.
Exxon Mobil Fights Back on Climate Change
Plaintiffs lawyers challenging another corporate giant found themselves on the defensive this year, after Exxon Mobil Corp. turned to the First Amendment to derail a sprawling climate change probe involving 17 state attorneys general.
Exxon Mobil, represented by Paul, Weiss, Rifkind, Wharton & Garrison and Haynes and Boone, filed an unusual lawsuit in April that took aim at U.S. Virgin Islands AG Claude Walker and private plaintiffs lawyers he had hired from Cohen Milstein Sellers & Toll. The company accused Walker and Cohen Milstein of using a subpoena that sought documents from 1997 to 2007 to restrict the oil company’s free speech, due process and other rights.
The oil giant also accused Walker of improperly ceding investigative authority to Cohen Milstein and one of its partners, Linda Singer. It wasn’t the first time Cohen Milstein and Singer, a former attorney general for Washington, D.C., had been criticized for partnering with state AGs. Singer and her firm were prominently featured in a 2014 The New York Times expose about private plaintiffs firms looking to convince states to pursue certain suits.
The Exxon Mobil subpoena dispute quieted down when the U.S. Virgin Islands agreed to withdraw its demand. But the state AGs still haven’t closed their climate change investigations, and long-simmering disputes over public-private legal partnerships are likely to continue in the new year.
After the financial crisis decimated many of the country’s corporate credit unions, the National Credit Union Administration hired two outside law firms to take on big-name banks that peddled mortgage-backed securities before the recession.
The lawyers, led by David Frederick of Kellogg, Huber, Hansen, Todd, Evans & Figel and George Zelcs and Stephen Tillery of Korein Tillery, went on to secure a steady stream of settlements under their contingency fee arrangement with the NCUA. That arrangement came under fire from lawmakers who questioned the size of the payout to the outside lawyers, but the agency repeatedly defended itself, saying the litigation was so complex and risky that it wouldn’t have been possible any other way.
The government’s payments to the firms weren’t made public until October 2016, when the NCUA finally laid them out. The agency said it paid more than $506 million to Kellogg Huber and more than $504 million to Korein Tillery—a remarkable 23 percent of the government’s total recovery in the litigation.
Uber Drivers Fall Short in Try, Try-Again Settlement
A class action against Uber Technologies Inc. over the company’s treatment of drivers as independent contractors was one of 2016′s most closely-watched lawsuits, especially around the ride-sharing service’s headquarters in San Francisco.
The drivers’ lead lawyer, Shannon Liss-Riordan of Boston’s Lichten & Liss-Riordan, reached a deal with Uber’s defense lawyers at Gibson, Dunn & Crutcher in April to resolve employment claims from drivers in California and Massachusetts for at least $84 million.
But within a few weeks of the deal’s announcement, cracks began to show. Liss-Riordan was hit with accusations from settlement opponents who claimed she sold out the class’ interests for a chance to rake in more than $20 million in legal fees. And the plaintiffs lawyer was peppered with tough questions by U.S. District Judge Edward Chen of the Nothern District of California at a preliminary approval hearing in early June.Though Liss-Riordan fought hard to salvage the settlement—at one point, agreeing to slash her fee request by nearly half—she ultimately failed to win over Chen. The judge rejected the deal in August and then put the cases on hold in November, saying he would revisit them in February 2017.
Rooting out ‘Professional’ Objectors
In early December, Chicago-based plaintiffs lawyer Jay Edelson of Edelson PC mounted a challenge against what he and other critics see as a scourge of class action settlements. Edelson’s gripe is with so-called “professional objectors,” plaintiffs lawyers who object to the resolution of a lawsuit and often extract a side-deal payout from the lead plaintiffs counsel.
Edelson filed a proposed class action in Chicago federal court against three law firms—the Bandas Law Firm in Corpus Christi; the Law Offices of Darrell Palmer in Solana Beach, California; and Noonan Perillo & Thut Ltd. of Waukegan, Illinois. The suit, which makes claims of racketeering, describes the three firms as “extortionists” who seek to “profit from the labor of class counsel across the country who prosecute fair and court approved class action settlements.”
At least one of the defendant firms, Bandas Law, has lawyered up, hiring Freeborn & Peters, but they have not yet formally responded to Edelson’s complaint. Christopher Bandas, the leader of Bandas Law who’s named as an individual defendant, condemned Edelson’s claims in the press, telling The American Lawyer that the Racketeer Influenced and Corrupt Organization Act claims are “patently frivolous.”
Contact Scott Flaherty at email@example.com. On Twitter: @sflaherty18. Plaintiffs Bar Looks to a New Year After a Rocky, Lucrative 2016