BOSTON (Legal Newsline) - The judge overseeing litigation against State Street Bank & Trust ordered Labaton Sucharow and two other plaintiff law firms to hand over more than $14 million in fees they were forced to surrender due to ethical violations in the long-running class action.
In a brief order responding to a request from lawyers representing pension plans that also sued State Street, U.S. District Judge Charles Wolf gave Labaton, Lieff Cabraser and the Thornton Law Firm until Jan. 11 to make the first payment into escrow of a total $14.4 million they were ordered to return after allegations surfaced of double-counting fees and a $4.1 million fee to a Texas lawyer who did no work on the case.
Labaton and Thornton, in a Dec. 30 filing, said they didn’t have to pay the money until the court decided the unrelated question of how much to award Hamilton Lincoln Law Institute, which is seeking $60,690 in fees as compensation for helping to uncover the overbilling by the other firms.
Keller Rohrback and Zuckerman Spaeder argued in a Dec. 31 filing that Hamilton Lincoln’s fee request didn’t change the deadlines in the judge’s previous orders. Judge Wolf agreed, stating in a Jan. 4 order that any amount he awards Hamilton Lincoln won’t reduce the amount Labaton and Thornton owe.
Plaintiff lawyers originally filed for a $75 million share of the $300 million settlement over State Street’s foreign exchange trading activities. After a lengthy investigation in which the lawyers had to pay millions of dollars in their own legal fees and fees to a court-appointed special master, Gerald Rosen, Judge Wolf trimmed the total fees awarded to all counsel to $60 million, with $14 million being steered to the ERISA class.
Labaton and Thornton aren’t the only lawyers fighting a court order to disgorge fees in class action litigation. Hagens Berman, a prominent West Coast firm, has been accused by Texas lawyers of unlawfully holding on to a $53 million fee award that a federal appeals court vacated after determining it was significantly higher than the amount the law firm bid to gain control of the litigation.
The lawsuit over antitrust allegations against the optical-disk industry ended in a settlement but the rival plaintiff lawyers are still fighting over whether Hagens Berman must return the fees, which belong to class members absent a court order directing money to their lawyers. Hagens Berman, in its most recent filing, called the arguments of Bandas Law Firm “frivolous” and said it is entitled to the fees because of the extensive work it did on the case as it settled in multiple phases.