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M. Aileen Morningstar and Alice Slettedahl, Derivatively On Behalf of v. Zou Dejun
February 8, 2013
M. AILEEN MORNINGSTAR AND ALICE SLETTEDAHL, DERIVATIVELY ON BEHALF OF NOMINAL DEFENDANT RINO INTERNATIONAL CORPORATION, PLAINTIFF,
ZOU DEJUN, KENNITH C. JOHNSON, QUAN XIE, BEN WANG, LI YU, BRUCE RICHARDSON, YI LIU, ZHANG WEIGUO AND RINO INTERNATIONAL CORPORATION, DEFENDANTS.
The opinion of the court was delivered by: Dean D. Pregerson United States District Judge
ORDER DENYING PLAINTIFFS' MOTION FOR ATTORNEYS' FEES AND REIMBURSEMENT OF COSTS
Presently before the court is Plaintiffs' Motion for Attorneys' Fees and Reimbursement of Costs. Plaintiffs here bring a derivative action on behalf of nominal defendant RINO International Corporation. This court also presides over a related class action (the "shareholder class action" or "Stream Sicav"), in which shareholder plaintiffs asserted securities fraud claims against RINO and other defendants.*fn1 See Stream Sicav v. RINO Int'l Corp., No. CV 10-8695-DDP.
The court recently granted final approval of a settlement in the shareholder class action, including the creation and distribution of a $7 million common settlement fund. (Stream Sicav Dkt. No. 235.) Derivative Plaintiffs here were not parties to the shareholder class action, nor did Derivative Plaintiffs' counsel ("Counsel") represent any party to the shareholder class action. Nevertheless, Counsel sought attorneys' fees in the related shareholder class action, without success. (See Order Denying Derivative Plaintiffs' Ex Parte Application to Intervene, Stream Sicav Dkt. No. 232.)
Having failed to obtain the fees sought in the Stream Sicav case, Counsel now seeks the exact same relief, namely the payment of attorneys' fees and costs from the Stream Sicav settlement fund, in this case. The Stream Sicav settlement, however, has no bearing on this litigation, which remains in its early stages. To the extent Counsel seeks fees from the Stream Sicav settlement, Plaintiffs' motion is DENIED with prejudice.
In the alternative, Counsel seeks an award of fees from other sources, including proceeds of the sales of homes owned by certain individual defendants in this case. However, given that this case remains in its early stages, and in light of notice issues relating to certain individual defendants here, Plaintiff's fee motion is premature. Accordingly, insofar as Counsel seeks fees in this case from sources other than the Stream Sicav settlement, the Motion is DENIED, without prejudice.
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