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Robbins Geller Seeks $4.5M in Fees in Investment Fraud Matter

December 17, 2021 | Posted in : Contingency Fees / POF, Fee Allocation / Fee Apportionment, Fee Award Factors, Fee Benchmark / Standard, Fee Dispute, Fee Request, Fees & Common Fund, Hours Billled, Practice Area: Class Action / Mass Tort / MDL, Settlement Data / Terms

A recent Law360 story by James Mills, “Robbins Geller Seeks $4.5M Fee in Investor Deal Intervention,” reports that saying it prevented what would have been a "grave injustice," Robbins Geller Rudman & Dowd LLP has asked a California federal judge for a $4.5 million share of fees in an investment fraud class action after it intervened in settlement negotiations to ensure class counsel wasn't shortchanging the firm's client.  In a motion, the firm said its extra work to ensure its clients received a higher payout entitled it to an almost 30% cut of the $15.5 million in attorney fees included in the settlement, which resolved claims from investors who alleged Granite Construction Inc. used deceptive accounting techniques to hide $338 million in cost overruns.

Robbins Geller represented investor Arash Nasseri in a similar class action in state court whose claims under the Securities Act of 1933 were ultimately subsumed as part of a separate federal lawsuit against Granite.  The federal suit, filed by Bleichmar Fonti & Auld LLP on behalf of a group of investors led by the Police Retirement System of St. Louis, leveled claims under the Exchange Act of 1934.  After Bleichmar Fonti struck a deal with Granite to end the class action, Robbins Geller said it stepped in to secure a more favorable award for investors pursuing claims under the Securities Act that were not included as part of the Bleichmar Fonti-backed suit.

"Put bluntly, class counsel and the class representative attempted to enrich themselves and other Exchange Act of 1934 claimants by at least $22.5 million, at the expense of Securities Act claimants," Robbins Geller said.  "The only thing that stopped them was the Securities Act plaintiff and Robbins Geller."  The firm argued an award of 29% of the total attorneys fees would not only compensate Robbins Geller for the extra effort it put into the case but also prevent class counsel from being rewarded for attempting to shortchange the claimants.

The Police Retirement System filed the suit in August 2019 alleging that Granite Construction had artificially inflated the value of the company's stock.  That suit contended the Wastonville, California-based company experienced significant cost overruns on four bridge or highway construction projects.  Since the projects were performed under fixed-price contracts, however, the complaint said that Granite could not ask for more money and that the company and its executives ultimately hid the overruns in its financial reports.

In spring 2021 when the Police Retirement System and Granite were working towards a settlement agreement, investor Nasseri fought the plan, saying the pension fund was improperly trying to resolve claims that were not part of its lawsuit.  That's when Robbins Geller moved to intervene in the settlement negotiations, court records say.

Through mediation sessions, Granite agreed to pay $129 million to investors.  But Robbins Geller contended that the company would not have agreed to that amount without the firm's "concerted effort to obtain the maximum recovery" for claimants included under the firm's lawsuit.  It contended that class counsel attempted to shortchange those claimants by $22.5 million.  Robins Geller said that a subsequent investigation by a special master into the firm's involvement in the settlement talks had confirmed that it had prevented a "grave injustice" being done to the Securities Act claimants.  Robbins Geller, which specializes in securities litigation and shareholder rights cases, reported it spent 2,127 hours of attorney and paraprofessional time dealing with this case.