Sixth Circuit Blog

Plaintiffs' Class Action Firm Ordered to Make Financial Disclosure

Plaintiffs' class-action law firm, Milberg Weiss Bershad & Schulman, already under fire and under indictment for allegedly paying millions of dollars in incentives to entice clients to become class-action plaintiffs, may have a new problem.  The firm may be compelled to disclose all of its financial records and information from 1998 to date pursuant to an order recently entered by a state judge in Indiana.

Four plaintiffs represented by Milberg Weiss filed a class-action suit in Indiana state court against American United Life Insurance Company, claiming that the defendant improperly sold tax-deferred annuities wrapped in other investments that were themselves already tax-deferred.  The insurance company sought discovery, in the wake of Milberg Weiss' California indictment, on whether the law firm made or promised to make illegal payments to the four plaintiffs.

The court's order requires the four plaintiffs to turn over their financial records since 1998.  The order then compels Milberg Weiss likewise to disclose its financial records since 1998 unless the court modifies the order following the initial disclosures by the plaintiffs because it finds there is no reason to pursue the issue further.

The New York Times article on the disclosure order can be found here.  The WSJ Law Blog has a post regarding the ruling here.

Should Law Firm Diversity Be a Criterion in the Appointment of Lead Class Counsel?

Adam Savett has a post in his blog Lies, Damn Lies & Forward-Looking Statements regarding a recent order from the District of Minnesota requiring counsel seeking appointment as lead class counsel to provide the Court with, inter alia, "information concerning the minority and gender membership in your respective law firms ..."  This begs the very interesting question whether the diversity characteristics of lawyers and law firms seeking appointment as lead class counsel under the PSLRA can properly be taken into account by district courts making such determinations.  The Volokh Conspiracy weighs into the debate with an initial reaction that race, gender and ethnicity may not lawfully be considered.