Wenderhold
Wenderhold v. Cylink Corp.
Opinion
lead Opinion
Walker, J.
This order addresses the issue of appointment of lead counsel in these consolidated securities class actions. On September 3, 1999, the court declined to designate as lead plaintiffs a group of Cylink shareholders and to appoint as lead counsel a consortium of law firms; instead, the court designated an individual investor, Jonny Alpern, as lead plaintiff and initiated a competitive bidding process for selection of class counsel. See Wenderhold v. Cylink Corp., 188 F.R.D. 577 (N.D.Cal.1999). Although seven law firms had sought to participate in the consortium, only one firm — Abbey, Gardy & Squitieri— submitted a bid. See Wenderhold v. Cylink Corp., 189 F.R.D. 570, 571 (N.D.Cal.1999).
The Abbey proposal, however, failed to comply with the court’s bid request in that its percentage-of-the-recovery fee schedule did not include litigation expenses. Id. at 572-73 . Expenses, according to the proposal, would be assessed separately against any recovery fund. Id. Because this arrangement eliminated the incentive for the firm to choose the optimal mix of attorney and non-attorney inputs, the court rejected the Abbey bid and extended the bidding period. Id. at 573 .