Last year was a big one for high-dollar settlements in securities class actions—and for the plaintiffs lawyers representing investors, who took in nearly $1 billion in legal fees and expenses in connection with settlements finalized in 2016.
Settlements in 13 securities class actions that came to points of resolution in 2016 made it onto an annual list of the top 100 securities settlements of all time, according to a report released on June 14 by Securities Class Action Services, a division of Institutional Shareholder Services Inc. That’s a record, ISS said, “resulting in the largest approved settlement fund of any single year.”
In all, the 13 settlements that made the ISS top 100 list in 2016 add up to about $5.6 billion, with an average of $431.4 million. And according to an analysis by The American Lawyer based on court records, plaintiffs firms involved in those deals came away with fees and expenses totaling about $999.8 million, with an average fee and expense award of $76.9 million. (See the table for a full breakdown of the 2016 entrants onto the ISS list.)
Among the high-ranked settlements jumping onto the list in 2016 were the seventh-ranked $1.575 billion settlement in litigation involving Household International Inc., and the 11th-ranked $1.06 billion settlement in securities litigation against Merck & Co. Inc. Some of the deals on the ISS top 100 list are the product of multiple settlements in a particular litigation.
A pair of heavyweight plaintiffs firms in the securities class action realm led investors to those two highest-ranked settlements finalized in 2016—Robbins Geller Rudman & Dowd served as lead counsel in the Household International case, resulting in a fee and expense award totaling $33.6 million, while Bernstein Litowitz Berger & Grossmann led the Merck litigation and secured an award of $221.5 million in fees and expenses.
The Merck case, which dated back to 2003 in New Jersey federal court, resulted in the highest fee and expense award of the 13 settlements that made the top 100 list in 2016. The lead firm for investors in that case, Bernstein Litowitz, also came up the most often as lead plaintiffs counsel among the group of 13 settlements finalized in 2016, serving as lead or co-lead counsel in six of the 13.
“Since [ISS] began compiling and publishing data on securities litigation recoveries and the law firms prosecuting the cases over a decade ago, [Bernstein Litowitz] has been at or near the top of their rankings every year—often with the highest total recoveries, the highest settlement average, or both,” the firm said in an announcement noting its place on the ISS list.
Beyond the Merck settlement, two other cases also led to awards of more than $100 million to plaintiffs lawyers.
In connection with a $486 million settlement of litigation against Pfizer Inc., which ranked 29th on the ISS list, a federal judge in Manhattan awarded roughly $156.1 million in fees and expenses. Grant & Eisenhofer was lead counsel for the investor plaintiffs in that case.
And a $310 million settlement in litigation against Caremark Rx Inc. led an Alabama Circuit Court judge to award $126.6 million in fees and expenses. That case had lead counsel from three plaintiffs firms that are smaller than typically seen elsewhere in the ISS report: Hare Wynn Newell & Newton; Francis Law; and Somerville.
The ISS list follows a report released earlier this year by Cornerstone Research, which also tracks securities litigation, saying that a record number of new securities class actions were filed last year. The Cornerstone report, released in late January, showed that 270 new securities class actions were filed in 2016, with many of them lodged against biotechnology and health care companies.
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