Special Master Says Coughlin Stoia Paid for Stolen Coke Documents
A special master has concluded that the securities class action law firm Coughlin Stoia Geller Rudman & Robbins paid for stolen documents in a shareholders suit against Coca-Cola.
Special Master Hunter Hughes III recommended that the firm be banned as class counsel because of the conduct, according to the Legal Pad blog published on CNN Money’s website. The ruling (PDF posted by Legal Pad) says the law firm agreed to pay two former Coke executives a minimum of $75,000 for the documents and other information as part of a “consulting agreement.”
One of the executives said he had taken more than 3,000 documents when he was fired and told to clean out his office. Many of the papers were stamped confidential.
“On a very practical level, for the court to give plaintiffs’ counsel a pass on this conduct, would simply invite terminated employees, particularly of public companies, to on a wholesale basis remove company documents following their termination in hopes they can sell them should the company be sued,” Hughes wrote in a footnote.
However, Hughes said the firm should not be disqualified as class counsel simply because of past involvement in the case by Coughlin Stoia founder William Lerach, who pleaded guilty to paying kickbacks to lead plaintiffs while at a former firm.
The ruling comes as Coughlin Stoia received positive press for its claims that business has been booming despite the loss of Lerach.
The class action contends Coca-Cola pressured bottlers to buy excess syrup to inflate revenues and hide failures to meet sales projections.
A hat tip to the Wall Street Journal Law Blog, which noted the Legal Pad story.