Duane Morris Class Action Review - 2023 - Report - Page 302
accordingly, sanctions under Rule 11 were warranted. The court ruled that each of the
amended complaints in the derivative cases were egregious shotgun pleadings and
found the plaintiffs’ counsel liable for the “excess costs, expenses, and attorneys’ fees
reasonably incurred” by the defendants from the amended complaints in the derivative
cases. Id. at *18. For these reasons, the court therefore granted in part Defendants’
motion for sanctions.
I.
Settlements In RICO Class Actions
The most substantial RICO class action settlement in 2022 is Smith, et al. v. FirstEnergy
Corp., Case No. 20-CV-3755 (S.D. Ohio Dec. 5, 2022). The plaintiffs, a group of
customers, filed a class action alleging that the defendants influenced the passage of a
law that raised the price of electricity for customers in violation of the RICO. The parties
ultimately settled the matter and filed a motion for preliminary settlement approval. The
court granted the motion. After notice to the class of some two million members, the
court subsequently granted final approval to the settlement on the grounds that it was
fair and reasonable. The plaintiffs asserted that Ohio legislators passed bailout
legislation in exchange for bribes, which created surcharges on electric bills to subsidize
two of the energy company's nuclear power plants. The parties settled the matter for
$49 million. The court noted that the average pay-out per class member totaled $16 on
average. It found that the settlements were the result of arm’s-length negotiations by
experienced counsel on behalf of the settlement class, and with the assistance of a
retired federal judge. The court further ruled that the settlement was fair, reasonable,
and adequate, and in the best interests of the class. For these reasons, the court thus
granted final settlement approval.
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Duane Morris Class Action Review – 2023
