In 'Reverse Auction' Fight, Plaintiffs Firm Goes After Skadden Arps and Robbins Umeda

It's probably best not to think too hard about this one: A group of plaintiffs lawyers is being sued in L.A. federal court for breaching their fiduciary duty -- to a company whose board they were suing.

"Suing the people suing the company for breach of fiduciary duty; I haven't seen that before," said Steven Williams, a partner at the Burlingame, Calif., firm Cotchett, Pitre, Simon & McCarthy who represents plaintiffs in securities and derivative suits.

The convoluted case -- possibly a first, several lawyers said -- grows out of long-running securities litigation against Tenet Healthcare, and the competing state and federal derivative suits against the Tenet board of directors that were filed on its heels.

Lawyers from the Arkansas plaintiff firm Cauley, Bowman, Carney & Williams filed a derivative suit in federal court around the same time a separate group of plaintiffs filed parallel state court claims.

That, Cauley lawyers argue, let Tenet's board, and its lawyers with Skadden, Arps, Slate, Meagher & Flom, engage in what plaintiffs lawyers call a reverse auction: a situation in which a defendant facing competing suits chooses to settle with the plaintiff asking for the smallest recovery, killing the costlier parallel claims.

Details here from Justin Scheck of The Recorder via