The law firm is attempting to halt settlement discussions in two Delaware derivative cases involving allegations of stock option backdating because it argues the discussions exclude Coughlin Stoia and undercut its federal cases against the same defendants.
Attorneys for the two defendants,and , state that Coughlin Stoia is trying to stop the state settlements to obtain attorney fees in the federal cases, which would not be available in the event of the settlement according to the National Law Journal.
Darren Robbins, a partner at San Diego’s Coughlin Stoia, says that the defendants are settling through the state actions in an effort to avoid dealing with the “big institutional plaintiff or bigger law firm,” such as his. He says that the Maxim defendants rushed to Delaware to settle claims in all cases after a California federal court upheld some of the plaintiffs’ claims against Maxim. “They try to settle everything, even the things that have now been said to be good claims that can’t be prosecuted in Delaware,” he said. Coughlin Stoia has sought an order from the federal court that Delaware has no jurisdiction over his clients’ ’34 Act claims.
The NLJ reports that Coughlin Stoia unsuccessfully filed a similar motion a few months ago in another federal suit against ACS as settlement negotiations were ongoing in two related state derivative actions in Texas and Delaware. On Sept. 18, Judge Reed O’Connor of the Northern District of Texas denied the motion.