2024 Supreme(US)(ca7) 375
COURT OF APPEALS FOR THE SEVENTH CIRCUIT
Robert Berg – Appellant
Versus
Akorn Inc. – Respondent
United States Court of Appeals For the Seventh Circuit ____________________ Nos. 18-2220, 18-2221, 18-2225, 18-3307, 19-2401, and 19-2408 JORGE ALCAREZ, et al., as representatives of a class, Plaintiffs-Appellees,
v. AKORN, INC., et al., Defendants-Appellees. Appeals of THEODORE H. FRANK, SHAUN A. HOUSE, and DEMETRIOS PULLOS ____________________
Appeals from the United States District Court for the Northern District of Illinois, Eastern Division. Nos. 17 C 5016, 5017, 5018, 5021 & 5026 — Thomas M. Durkin, Judge. ____________________
ARGUED NOVEMBER 6, 2018, and APRIL 14, 2020 — DECIDED APRIL 15, 2024 ____________________
Before EASTERBROOK and WOOD, Circuit Judges.*
* Circuit Judge Kanne, a member of the panel, died after the appeals were argued. They are being decided by a quorum. 28 U.S.C. §46(d). 2 Nos. 18-2220 et al.
EASTERBROOK, Circuit Judge. Six suits, filed under the fed-
eral securities laws, present questions about “mootness fees”
in federal litigation. Akorn, Inc., asked its investors to ap-
prove a merger (valued at more than $4 billion) with Frese-
nius Kabi AG. Plaintiffs assert that the proxy statement (82
pages long, with 144 pages of exhibits) should have contained
additional details, whose absence violated §14(a) of the Secu-
rities Exchange Act of 1934, 15 U.S.C. §78n(a). Within weeks
Akorn amended its proxy statement to add some disclosures,
though it insisted that none of these additions was required
by law.
All six plaintiffs then moved to dismiss their suits, assert-
ing that the additional disclosures mooted their complaints.
They did not notify the proposed classes (five of the six suits
had been filed as class actions) or seek judicial approval under
Fed. R. Civ. P. 23(e). Different district judges entered orders
of dismissal between July 17 and July 25, 2017.
Akorn’s shareholders overwhelmingly approved the mer-
ger, with only 0.1% of all votes cast against. Many of the prox-
ies had been voted before Akorn’s supplemental disclosures;
plaintiffs did not protest. On September 15 all six plaintiffs
told the district court that any claim to aiorneys’ fees and
costs had been resolved by a payment of $322,500, which
counsel would divide. Those are the mootness fees. The pro-
posed merger was abandoned for reasons unrelated to these
suits, but that does not affect the dispute about what to do
with this money.
Theodore Frank, one of Akorn’s shareholders, learned
through the press that Akorn had paid mootness fees and on
September 18, 2017, filed a motion to intervene. He asked the
court to require counsel to disgorge the money as unjust
Nos. 18-2220 et al. 3 enrichment (since they had not achieved any benefit for the
investors). He also asked the court to enjoin the lawyers who
represented the six plaintiffs to stop filing what Frank calls
strike suits, whose only goal is to extract money for counsel.
Frank contends that the suits amount to abuse of the legal pro-
cess. Indeed, this court has remarked that litigation “that
yields fees for class counsel and nothing for the class is no bet-
ter than a racket. It must end.” In re Walgreen Co. Stockholder
Litigation,