Plaintiff lawyers fail clients in recent Silicon Valley lawsuits
Last month, federal judges rejected two fishy settlements negotiated by tech giants and attorneys representing shareholders and former employees.
In early August, U.S. District Judge Lucy Koh in San Jose refused to approve a $324.5 million class action settlement for former engineers at a group of tech firms - Apple, Google, Intel and Adobe - who say those companies conspired to depress their compensation.
A few weeks later, U.S. District Judge Charles Breyer in San Francisco declined to sign off on an agreement between Hewlett-Packard and investors angry about the company's bungled $11 billion acquisition of British software firm Autonomy.
[...] again, judges almost always approve class settlements negotiated in good faith as long as the terms fairly represent all relevant investors and employees, not just the people who directly participated in the lawsuit, said former U.S. Chief Magistrate Judge Arthur Boylan in Minneapolis.
From 2006 to 2007, federal district court judges approved class-action settlements worth $33 billion, according to a study published in the Journal of Empirical Legal Studies.
"The case signaled a possible expansion in the judge's role in reviewing consent judgments and also suggested a shift away from the deference afforded to administrative agencies" like the SEC, according to an article published in an Ohio State University law journal.
In the tech workers' case, a group of former employees accused the companies of agreeing not to poach each other's talent, a violation of antitrust law.
Strong evidenceDespite strong evidence, including e-mails from top executives like Steve Jobs and Eric Schmidt, the plaintiff lawyers struck a deal that, after deducting lawyer fees and other costs, would pay each former employee just $3,750.