Broker-Dealer Litigation - Greenberg Traurig LLP

court’s crucial finding for purposes of its sanctions award was that plaintiffs failed to conduct a
reasonable inquiry before filing suit. The Sixth Circuit determined that this finding went far
beyond the basis for the defendant’s sanctions motion, which was that the plaintiffs’ proposed
third amended complaint completely failed to address the fatal absence of personal jurisdiction.
The Sixth Circuit also held that the district court did not ensure that the plaintiffs had sufficient
notice of the basis for sanctions before making its sanctions finding.
In re United Health Gr. Shareholder Derivative Litig., 631 F.3d 913 (8th Cir. 2011).
The Eighth Circuit offered the district court’s award of online research costs. The district
court approved the settlement of a derivative action involving the granting of backdated stock
options and awarded $175,000 for online legal research costs. A shareholder appealed the
award, arguing that counsel was not entitled to recover such costs.
The Eighth Circuit affirmed the award, holding that online research costs may be
recovered as part of litigation expenses in a settlement proceeding. The court distinguished prior
cases that had denied recovery of such costs on the grounds that those cases involved fee shifting
statutes, not settlement.
Lynch v. Whitney, 419 F. App’x 826 (10th Cir. 2011).
The Tenth Circuit affirmed the district court’s affirmation of a FINRA arbitration panel’s
award of attorneys’ fees. The court noted that the defendant’s submission of an affidavit that
listed its attorneys’ fees, though not preferable to submitting detailed fee records, did not provide
a basis for reversal. The court further concluded that the appellants’ challenge to attorneys’ fees
was meritless and warranted sanctions.
Suess v. FDIC, 770 F. Supp. 2d 32 (D.D.C. 2011).
The court granted the FDIC’s summary judgment motion, finding that the plaintiff, a
shareholder of an insolvent thrift, was not entitled to recover the attorneys’ fees and costs that he
incurred unsuccessfully defending an appeal. The court held that absent an express agreement,
the fact that the FDIC reimbursed the plaintiff’s attorneys’ fees and costs for his efforts in the
trial court as a part of a settlement agreement did not mean that he had an automatic right to
claim fees and costs for the appeal. The court further found that the FDIC did not breach its
statutory responsibility to the shareholders of the thrift, including the plaintiff, as it did in fact
represent their interests on appeal.
The court held that none of the exceptions to the American Rule was applicable The court
also rejected the plaintiff’s argument that the FDIC’s payment of fees and costs pursuant to the
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