U S West retirees to
fight ruling on attorneys' fees
$16.3 million award in suit characterized as 'greed gone wild'
By Jeff Smith, Rocky Mountain News
September 22, 2005
U S West retirees have filed notice to appeal a Denver District Court decision last month awarding plaintiff attorneys $16.3 million of a $50 million class-action shareholder settlement.
"I just think these (awards) have gotten out of hand," Curtis Kennedy, attorney for the Association of U S West Retirees, said Wednesday. "It's an example of greed gone wild with these trial lawyers. Where does it end?"
Denver District Judge John Coughlin last month ruled that the class-action attorneys, led by the California law firm Lerach Coughlin, were entitled to their full request of $15 million, plus $1.3 million in out-of-pocket expenses.
Coughlin explained his decision by saying the lawyers had been the only ones to step up to the plate and take on the risky case on behalf of U S West shareholders.
The suit, filed in 2000, alleged that Qwest Communications had breached its fiduciary duty by failing to pay a 53-cents-a-share, second-quarter dividend after the merger with U S West in June 2000. The plaintiffs originally sought $273 million in damages, but lawyers settled the case for $50 million on the eve of the scheduled trial.
Although plaintiff attorneys typically get a contingency fee of around 30 percent, Kennedy questioned whether it should apply in a case where the final award is of such magnitude. An appeal would be heard by the Colorado Court of Appeals.
Kennedy said he particularly is troubled by the court not requiring Lerach to provide evidence of how it spent the $1.3 million, noting that it would be easy to slip in bar or expensive restaurant tabs, limousine services and the like.
"If we were in federal court, I think the judge would say that they have to show some supporting paperwork," Kennedy said.
Lerach attorneys could not immediately be reached for comment Wednesday. But Lerach attorney Michael Dowd defended the fee last month, arguing that the law firm took on a complex case without any financial guarantees.
"We were the ones at risk . . . all by ourselves," Dowd said.
smithje@RockyMountainNews.com or 303-892-5155