In Re Unitedhealth Group Inc. Pslra Litigation
2009 U.S. Dist. LEXIS 81049, 2009 WL 2868399, 643 F.Supp.2d 1107 (2009)
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Rule of Law:
Attorneys who object to a class action settlement are not entitled to an award of fees unless their contribution confers a tangible benefit upon the class.
Facts:
- In a class action lawsuit, a settlement was proposed for the benefit of UnitedHealth shareholders.
- Attorneys representing shareholders Ernest J. Browne and Bruce Botchik decided to object to the proposed attorney's fees for the lead class counsel.
- These objecting attorneys submitted a one-page document on the objection deadline.
- Two weeks after the deadline, the attorneys submitted their full, eight-page objection, which also argued against reimbursement of expenses that class counsel was not seeking.
- The court ultimately awarded class counsel a fee that was $45 million less than what class counsel had originally requested.
- The objecting attorneys then claimed their actions were responsible for this reduction and sought payment for their work.
Procedural Posture:
- In a class action lawsuit in the U.S. District Court for the District of Minnesota, the court preliminarily approved a proposed settlement.
- Shareholders Ernest J. Browne and Bruce Botchik, through counsel, filed untimely objections to class counsel's request for attorney's fees.
- The court subsequently approved the class action settlement and awarded class counsel attorney's fees of nearly $64.8 million, a reduction from the initial $110 million request.
- Objectors' Counsel then filed a motion in the same district court, seeking an award of attorney's fees for themselves.
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Issue:
Are objectors to a class action settlement entitled to an award of attorney's fees when their untimely and meritless objections provided no benefit to the class or the court?
Opinions:
Majority - James M. Rosenbaum
No. Objectors to a class action settlement are not entitled to an award of attorney's fees unless they confer a benefit on the class. The court found that Objectors’ Counsel contributed nothing of value to the proceedings. Their pleading was submitted two weeks late, presented no facts, offered no relevant law, and raised no arguments upon which the Court relied in its deliberation or ruling. The court expressly rejected the majority of the objectors' arguments and concluded their goal was simply to 'hijack' money from the settlement for themselves. Because their contribution to the class was nothing, they are entitled to an award of nothing.
Analysis:
This decision strongly reinforces the 'benefit conferred' doctrine as the standard for awarding fees to objectors in class action settlements. It serves as a stark warning to 'professional objectors' who intervene in settlements primarily to extract a fee for themselves without adding any substantive value to the process. The court's memorable and harsh language signals a deep judicial intolerance for parasitic litigation tactics that can delay proceedings and siphon funds away from the class members. The case is frequently cited for its colorful and emphatic rebuke of objectors who provide no real service.
