A recent Law 360 story by Bonnie Eslinger, “UHS Investors Get $2.5M Fees After ‘Audacious’ $5.7M Bid,” reports that shareholders who accused Universal Health Services Inc. of misleading them about an overbilling scheme and agreed to a settlement secured a $2.5 million attorney fee award, less than half of the $5.7 million request called "audacious" by the Fortune 500 company.  In a single-page order, Judge Joel H. Slomsky of the U.S. District Court for the Eastern District of Pennsylvania granted the plaintiff's motion for the $2,500,000 fee award and closed the case.

The order, he said, derived from a letter the court received just days earlier from counsel for the shareholder plaintiffs and the defendants, saying "the parties are pleased to report" an agreement had been reached on the matter of fees and expenses to be awarded.  The $2.5 million sum resolves the dispute and brings an end to the litigation, according to the letter from Michael Barry of Grant & Eisenhofer PA, representing the plaintiffs, and Matthew Madden of Robbins Russell Englert Orseck & Untereiner LLP, a lawyer for Universal Health Services.

"We thank the court for its indulgence as the parties continued their discussions," the letter added.  The united tone was a far cry from arguments the parties had exchanged after the investor plaintiffs had urged the court in November to approve a $5.7 million award along with final approval for a settlement the shareholders had reached with UHS.

UHS and its officers and directors in a Nov. 29 memorandum to the court contended that the attorney fees request should be denied or reduced to a far lower amount.  "That audacious request should be rejected," UHS said at the time, adding that compliance measures touted by the plaintiffs as resulting from the settlement were "in most cases exceedingly minor" and in addition to corporate governance measures that UHS already had in place.

UHS also pointed out that the fee awards presented by the plaintiffs' lawyers for other cases were not comparable because none of the cases had been dismissed with prejudice, as had been in this matter.  They also involved "far more substantial" reforms, UHS said in their November memorandum of opposition.  Counsel for the shareholders fought back, telling the court in a Dec. 13 memo that UHS can't say in one breath that the settlement is strong and should be finally approved but then object to the fee award.

According to the court docket, settlement discussions were held on Dec. 20 before Judge Slomsky, who followed up with an order on Jan. 18 asking the parties for an update on their talks about the award for attorneys fees and expenses.  After telling the court that the parties had engaged in "extensive discussions" to resolve the issue, the two sides announced the $2.5 million fees agreement to the court on Jan. 21.