CEI Challenges Frivolous Suit Paying Attorneys over $300,000 but Leaving Class members with $0
Yesterday, the Competitive Enterprise Institute’s Center for Class Action Fairness (CCAF) filed its opening brief in Alcarez v. Akorn, Inc., et al. CCAF is challenging an order denying CCAF’s intervention in three of six Akorn actions that were pending in the district court. CCAF hopes to discourage the filing of frivolous strike suits nationwide. CCAF’s motions to intervene in the three other Akorn actions remain pending in the district court.
CEI Senior Attorney Melissa Holyoak said the following about the case:
“The Seventh Circuit should reverse the district court’s order and affirm that shareholders like my client can challenge this new racket where attorneys are avoiding judicial scrutiny of their extortionate fee requests in class action strike suits.”
Last year, CCAF won an appellate victory over the self-serving Walgreen shareholder settlement, where the Seventh Circuit called merger strike suits a “racket” that “must end.”
The underlying cases concern the acquisition of Akorn, Inc. by pharmaceutical giant Fresenius Kabi AG. Plaintiffs in these suits have convinced Akorn to pay $322,500 in attorneys’ fees, although no benefit has accrued to the class—only immaterial supplemental disclosures. The award of attorneys’ fees constitutes an end-run around Walgreen precedent, which CCAF is seeking to protect.
Read more about this case here.