I Sued Somebody. Who Knew?
Thursday, November 16, 2006 at 12:53AM After expending a day manfully slogging through the vicissitudes of using medical arts to benefit my fellow human beings, I rumbled through my front door and into the kitchen, and confronted a counter leaden with the daily mail. Among the Christmas catalogs and offers of $25,000 credit limits to one Michelle Hubert, I found a legal document in a mass mailing envelope. I took and read.
"Honey," I called out to my wife after a moment of mental indigestion, "I'm suing Cisco Systems."
"What?" my dearest replied. "Don't play around with me, I've had a rough day. Your son has been baptizing himself in the toilet water again."
"No, I'm serious. I'm suing Cisco. It looks like I have been in litigation since 2001. I must have been really peeved."
Yes, it was true. A group of upstanding citizens from the law firm of Lerach, Coughlin, Stoia, Geller, Rudman, & Robbins, and the law firm of Levin, Papantonio, Thomas, Mitchell, Echsner, & Proctor filed a class-action suit against Cisco Systems of San Jose, California way back in 2001 on my behalf and then in 2006 belatedly thought of me. A judge was about to make a final ruling on the case, and they wanted to let me know that I was in for a sweet cut of the ultimate reward.
Did I want to sign up for the largesse, it inquired. It politely offered me the option of declining, saying, "IF YOU DO NOT WISH TO BE INCLUDED IN THE CLASS AND YOU DO NOT WISH TO PARTICIPATE IN THE PROPOSED SETTLEMENT DESCRIBED IN THIS NOTICE, YOU MAY REQUEST TO BE EXCLUDED." (The capitalization is theirs. I am not usually that annoying.) Well, THANK GOD, I said. I can opt out of a lawsuit that was filed in my name without my approval if I should have, well, you know, scruples.
Except, as lawyers like to say, don't neglect to read the next sentence. And the next, and the next, and the next, and the next. Somewhere in there is the gotcha. "TO DO SO, YOU MUST SUBMIT A WRITTEN REQUEST FOR EXCLUSION THAT MUST BE RECEIVED ON OR BEFORE OCTOBER 31, 2006."
All right, now. I got the letter on November 13, 2006. Admittedly the U.S. Post Office is slow, but I'll give them credit for getting a letter from the West Coast to Mississippi in less than 14 days. Unfortunately, the letter was mass mailed and thus bypassed the local post office. It bore no postmark. In other words, I got the letter two weeks too late to opt out of the lawsuit, and I had no postmark to prove it was intentionally mailed out late to prevent me from refusing to participate. The old expiration date trick. That was slick, Mssrs. Lerach, Coughlin, Stoia, Geller, Rudman, Robbins, Levin, Papantonio, Thomas, Mitchell, Echsner, & Proctor -- real slick. I'll remember to never buy a gallon of milk from you guys. The cows that made it could have died in the Falklands War.
I wondered aloud to my sweetie how I ever got involved in this. I don't remember signing anything or seeing any legal notices before. How did they get my name? How did they file a lawsuit for me without my permission? Then, like a Republican watching the election returns, the truth dawned on me. "Dammit!" I shrieked. "I have got to start reading those licensing agreements that pop up every time I update Windows. Here I am just clicking on 'I Agree -- Install Now' and God knows what Bill Gates is putting in there."
Now a little background. Back when I was doing my resident training, I went through a period when I fancied myself a budding savant of high finance. I read a few investment books and subscribed to an investment newsletter. Sometime in late 1999 the newsletter recommended Cisco Systems stock as a strong buy, and I bought. I was only playing around then, so I laid in a little over $500 for the stock at about $55 a share, which of course comes to a total of 10 shares. After soaring to $110 by late 2000, the stock crashed during the 2001 dot com bust and currently trades at 26.88. An object lesson I guess, the lesson being that investment newsletters are a waste of money.
Little did I know that small investment would drop me in the middle of a multi-million dollar legal imbroglio. The legal documents spelled everything out nicely.
This Notice has been sent to you pursuant to Rule 23 of the Federal Rules of Civli Procedure and an Order of the United States District Court of the Northern District of California (the "Court"). The purpose of this Notice is to inform you of the pendency and proposed settlement of this class action litigation and of the hearing to be held by the Court to consider the fairness, reasonableness, and adequacy of the settlement.
Of course. (As an aside, my spell checker gagged on the word "pendency" and so do I, but I am bent on telling it like it is.)
The proposed settlement creates a fund in the amount of $99,250,000 in cash . . . and will include interest that accrues on the fund prior to the distribution.
I understand completely. And how much of the $99 million comes to me?
Depending on the number of eligible shares purchased by Class Members who elect to participate [as well as other factors] . . . . the estimated average distribution per share will be approximately $0.09 before deduction of Court-approved fees and expenses.
Now, I am sure at this point most of my readers, at least the ones still awake, are thinking, "Blast it! Don't the rich always get richer? That crazy doctor is has hit the jackpot!"
Relax, folks. Thet 90¢ check I will get from my ten shares won't pay off as much of my yacht note as you may think. Taking out "court-approved fees and expenses" and income taxes, I'll be lucky to get away with 40¢ free and clear, and that's nothing to write home about. Come to think of it, if a first class stamp now costs 39¢ and I do write home about it, I will be only one penny in the black.
(Yet another aside: When I wrote the above paragraph I inadvertently discovered that the modern computer keyboard does not include the ¢ symbol any more, the way typewriters used to. I guess that says something about (1) my age, and (2) what a penny is worth these days.)
So how much do Lerach, Coughlin, Stoia, Geller, Rudman, Robbins, Levin, Papantonio, Thomas, Mitchell, Echsner, & Proctor get?
If the settlement is approved by the Court, counsel for the plaintiffs will apply to the Court for attorney's fees of $15 million or approximately 15.1% of the Settlement Fund and reimbursement of out-of-pocket expenses not to exceed $8.9 million.
I am gratified to see that lawyers have finally figured out how to bill. Why, just the other day I gave a patient a shot in the office (her "office" was "paining" her) and charged $2 for my medical knowledge and $8.9 million for the syringe. You've got to do it. Out-of-pocket expenses will kill you every time. I can imagine the extremity of out-of-pocket costs involved in a typical suit. You've got copier paper, and toner cartridges, and legal copier paper, and color-coordinated paper clips, and highlighters. Replacement ink barrels for a Mont Blanc pen can run $5.50 apiece. I know, my drug rep has one.
Then I wondered, what dastardly deed has Cisco perpetrated so as to deserve a $99 million clip? I searched it out in the fine, fine print.
Cisco securities were allegedly artificially inflated . . . during the Class Period . . . . Lead Plaintiffs [made statements that] were materially false or misleading [that] influenced . . . the trading price at Cisco securities at various times during the Class Period.
In other words, Cisco issued quarterly statements that inflated the stock prices, had to correct those statements later, and this sent the stock price down, thus shattering the lives of Cisco's 25 bejillion stock holders. Most of us who had read a few investment newsletters would have said that stocks go up, stocks go down, and that's how it is, but thanks to alert individuals like Lerach, Coughlin, Stoia, Geller, Rudman, Robbins, Levin, Papantonio, Thomas, Mitchell, Echsner, & Proctor we have the opportunity to try that time-worn idea out in court.
Speaking for myself, I know there is no way 90¢ can ever make up for the pain I have experienced over all this. The extra trips to the liquor store. The antidepressant samples I cribbed from my office sample closets. The weeks of missed work. The mounting gambling debts as I tried to conceal my losses with winnings on the roulette table.
Thinking about the injustice sent a rage shivering through my nervous system faster than a rumor about a secretary getting breast implants during her recent vacation spurts through a doctor's office staff. The bastards! They cheated me! I hope they hang. For a brief moment I was ever so grateful to Lerach, Coughlin, Stoia, Geller, Rudman, Robbins, Levin, Papantonio, Thomas, Mitchell, Echsner, & Proctor for stepping up so unselfishly on my behalf. After all, without Lerach, Coughlin, Stoia, Geller, Rudman, Robbins, Levin, Papantonio, Thomas, Mitchell, Echsner, & Proctor I would be 90 cents poorer. And it isn't just about the money.
In the old days, corporate fraud was handled by the Securities and Exchange Commission (SEC). But ever since George W. Bush took office as President, the SEC has done somewhat less to curb corporate corruption than the other SEC (the Southeastern Conference) has done. (I say somewhat less because in 2001 Ole Miss quarterback Eli Manning purportedly overthrew a receiver during the Tennessee game, beaning the dean of the UT business school in the head.) Without the SEC -- the U.S. government one, I mean -- to protect us miserable shareholders, we only have fine folks like Lerach, Coughlin, Stoia, Geller, Rudman, Robbins, Levin, Papantonio, Thomas, Mitchell, Echsner, & Proctor to keep our heads above water.
Allowing the flush of outrage to subside, I started to think things over. Who wins if this case is successful, I wondered. Why us, the 90¢ shareholders, I cried triumphantly! And who loses? Those souless rapscallions who own Cisco, that's who!
But wait, said a voice in my head. Who owns Cisco?
The villianous shareholders, I replied. Burn 'em all at the stake!
One moment, please, the voice persisted. Aren't you a shareholder?
That's right! I AM! I am a proud shareholder, a villianl, I, uh, um, waitaminute . . . .
Finally I got it. When Lerach, Coughlin, Stoia, Geller, Rudman, Robbins, Levin, Papantonio, Thomas, Mitchell, Echsner, & Proctor sued the owners of Cisco on behalf of the shareholders, they were suing the shareholders on behalf of the shareholders. The owners were suing the owners, and the lawyers were collecting $24 million ($15 million + $8.9 million) for the service. As a shareholder, I wasn't asked to pay anything directly, but on the other hand, a pending $100 million lawsuit might have had some influence on the 50% price drop over 4 years. Maybe if I subscribe to another financial newsletter I can find that out.
I get a 90¢ check, and I lose half of my investment. In the exchange, I also profitted from a fine object lesson in the vagaries of corporate law. And at a cost of only $8.9 million in "out-of-pocket" expenses, the lesson was a steal.
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Reader Comments (19)
You know ... I wouldn't be surprised if you get a bill for the fine services of "Lerach, Coughlin, Stoia, Geller, Rudman, Robbins, Levin, Papantonio, Thomas, Mitchell, Echsner, & Proctor" ... and I bet your .90 check won't quite cover it ... ;o)
Ole Miss participates in the Southeastern Conference in all college sports. The joke is that Eli Manning accidently threw a football into the stands duringa game and hit the dean of the University of Tennessee business school in the head. This act means that the SEC sports conference has done more to encourage good business practices than the governmnent SEC (Securtiy and Exchange commission) has. The punch line is that the gov't SEC has done nothing to improve business practices in the U.S., and that hitting business school professors in the head is a step in the right direction (business schools are no good).
Get it?
I found you from Salon letters, where I visit quite often. I live in Mississippi, near Memphis, and I got the Eli joke. (I'm going to the Ole Miss/MSU game on Saturday as a matter of fact.)
My uncle is an internist and my best friend a med/ped (A pediatrician/internist, right?). I will send this to both of them, as they possess the same disdain for the dreadful class action system as you and I.
Take care and Keep Blogging!
Long and short if it is, if you ever get excited enough to file a similar nuisance suit against Levin and Pals, I would be more than happy to hoof a nastygram over their office, run papers down to the court, get my friends at the Pensacola News Journal to write uncritical, unresearched stories to present only your side of the story, and all that kind of fun stuff. After all, if you leave them thinking that it's okay to fraudulently sign your name onto a lawsuit, who knows who you will end up suing next ...
Griffin3: Correct me if I am wrong, but I have heard that what is killing general aviation in America is a court precident that says the builder of an airplane is responsible for any structural or equipment failure FOREVER. No statute of limitiations. From what I understand, 20 year old planes crashing is what did Piper in. Doesn't seem fair that a manufacturer should be 100% responsible for a product they have not seen in two decades.
I don't know if this was the reason why, but the same year Congress passed the General Aviation Revitalization Act (GARA), which apparently immunized the manufacturers of airplanes from accidents happening 18 years after the initial sale of the aircraft (limited to airplanes carrying 19 passengers or less, not in commercial passenger carrying activities). "Apparently" because I don't know how well the law has stood up in the courts. Piper Aircraft re-incorporated in '95 (although, I did not do enough research to figure out if it is entirely owned by the lawyers now).
I am always mystified that the AAP (that my wife belongs to) wants $650 a year in dues, but doesn't seem to accomplish all that much ... While the AOPA (pilot's association) seems to accomplish a lot more politically, in getting laws passed like this, all for $39 dollars a year. And you get a pretty good magazine, and the same darn ball cap every year. I can't imagine that there are that many more private pilots than doctors, but they are doing something right. Think back to the huge stink, and how they badgered the guvment to open up all of the GA airports after 9/11. If there is a way to contain the lawyers, they seem to be on the right path.
The worst thing about these things is that it usually the company's employees who pay the most - in lost raises and in layoffs. Even if there really are some guilty parties, they are not the ones paying the price.
I particularly like the checks (and the bills) I get that are for less than the cost of postage. Those make my day.
The world is full of idiots, and only some of them work in lawfirms.