New ‘loser pays’ standard could curb abusive lawsuits

Published September 3, 2014 9:59pm ET



In 2009, the notorious securities litigation firm Robbins Geller brought a shareholder lawsuit against the Boeing Co., accusing its management of illegal misrepresentations based on the word of a confidential witness inside the company.

It was the sort of case that routinely costs companies millions of dollars in cash and stock value. Most companies settle such cases to make them go away, but Boeing did not. Its attorneys eventually deposed the confidential witness, only to discover that he was actually just a contractor in a job unrelated to the case who hadn’t even worked for Boeing until months after the period in question. The witness “repudiated each of the allegations” in the Robbins Geller complaint, according to court papers.

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