A recent The Recorder story, “Judge Slashes Plaintiffs’ Fee Request in Derivative Suit,” reports that plaintiffs’ attorneys netted less than half of what they hoped for in fees and costs Monday after settling a shareholder derivative suit against a maker of blood analysis technology.  U.S. District Judge Yvonne Gonzalez Rogers awarded the attorneys with Kessler Topaz Meltzer & Check and Saxena White $543,000 in fees and $36,400 in costs, a far cry from the $1.6 million in fees and $51,200 in costs requested.

“The court finds that the results achieved by plaintiff upheld important principles of corporate governance.” Gonzalez Rogers wrote.  “On the other hand, the court does not find that the case involved extraordinary risk, complexity, or effort on the part of plaintiffs counsel.”  The judge arrived at her calculation by reducing the attorneys’ hourly billing rates to fall in line with average prices charged by Bay Area law firms of corresponding sizes.  Gonzalez Rogers then reduced the 2.83 lodestar multiplier proposed by plaintiffs attorneys, ruling the work they put in justified to no more than a 1.5 multiplier.

The 2012 complaint accused officers of Abaxis Inc., which provides medical and veterinary diagnostic services, of making millions in profits from ill-gotten stock options.  A 2005 shareholder-approved policy prohibited the board from granting more than 500,000 stock units to officers and other employees.  In violation of that policy, directors handed out 960,000 shares, according to the complaint.

In the settlement reached in January, Abaxis agreed to strengthen oversight of its equity compensation policy.  The company had also agreed to disclose additional information to shareholders before its 2012 annual meeting.

Gonzalez Rogers commended the Kessler Topaz and Saxena White attorneys for acting swiftly to get more information to shareholders before the company’s 2012 proxy vote.  However, most of the plaintiffs attorneys’ achievements were won at the preliminary injunction stage, she wrote.  And as the defense pointed out, plaintiffs took no discovery.