Small law firm sees faith in class-action suit pay off

Back to TopCommentsE-mailPrintBookmark and Share

A federal judge appears likely to approve the largest class-action settlement ever to come out of a local court, and DeLaney & DeLaney, a small Indianapolis law firm that helped press the case, is poised to profit handsomely.

U.S. District Court Judge Tanya Walton Pratt in June granted preliminary approval to a deal under which WellPoint Inc. would pay $90 million to settle a lawsuit charging it undercompensated policyholders when it converted into a public company in 2001. The deal — submitted three days before a trial was set to begin — is up for final approval at an Oct. 25 hearing.

The plaintiffs have asked the judge to earmark one-third of the settlement, or $30 million, for attorney’s fees, though it isn’t clear how that would be divvied up among the six law firms representing plaintiffs.

It’s been quite an odyssey for all the plaintiffs’ attorneys. The case began seven years ago, and DeLaney & DeLaney jumped on board in 2008, when the case was transferred from Ohio.

The firm, which has just five attorneys, poured more than 2,400 hours into the case, working alongside some national heavyweights in class-action litigation.

“Every person who has worked here during the life of this case has worked on this case,” said Kathleen DeLaney, DeLaney & DeLaney’s managing partner. “It is that big a case. At certain times, we added personnel to work on this case. We had lots of weekends and late nights working on this case.”

Because it was a contingency-fee case, all that work would have been for naught had Indianapolis-based WellPoint prevailed at trial. But DeLaney said her firm thoroughly analyzed the risks and opportunities before jumping aboard.

At issue in the lawsuit were the terms of the 2001 conversion of WellPoint — then known as Anthem Inc. — from a policyholder-owned company to a publicly traded one. Plaintiffs had been planning to argue at trial that the insurer paid 700,000 policyholders in Indiana, Ohio, Kentucky and Connecticut $227 million to $448 million less than it should have.

While the $90 million settlement is just 40 percent of the low end of that range, WellPoint had contended it owed nothing. And even if plaintiffs had prevailed at trial, they faced the risk of having that verdict overturned on appeal after years of additional legal squabbling.

“These large risks strongly motivated class counsel to perform work of the highest quality and in appropriate quantity, in order to fulfill our fiduciary commitment to our clients and to lessen the chances of a disastrous loss,” plaintiffs’ attorneys said in their motion asking Pratt to approve the one-third contingency fee.

DeLaney believes the deal has strong support from class members. She noted that there were just three objections filed to the fee request, despite the hundreds of thousands of class members who could have done so.

“The bottom line is, this was the biggest case of my career so far,” said DeLaney, who graduated from law school in 1995 and entered private practice in 1997, after clerking two years for then-U.S. District Court Judge David Hamilton. “It was a very exciting case to be involved with. I am proud of the results we got for our class members.”

DeLaney started DeLaney & DeLaney in 2001 with her mother, Ann DeLaney, a former chairwoman of the Indiana Democratic Party. Her father, state Rep. Ed DeLaney, joined them after retiring as a partner at Barnes & Thornburg in 2003.

DeLaney & DeLaney, the only Indiana law firm representing the plaintiffs, was the primary point of contact for class members, “and, as the case progressed, had key roles in case strategy decisions,” according to a filing by attorneys for other firms representing plaintiffs. The filing noted that both Kathleen and Ed DeLaney were named to the team that was going to try the case before a jury.

Kathleen DeLaney isn’t saying what percentage of the spoils will go to her firm. The firm put in 6 percent of the nearly 41,000 hours that plaintiffs’ attorneys devoted to the case.

Had all the firms billed at their attorneys’ regular hourly rates, fees would have totaled $20 million, with more than $840,000 going to DeLaney & DeLaney. The Indianapolis firm bills at up to $450 an hour, a pittance compared with the more than $700 an hour billed by some out-of-state attorneys who represented plaintiffs.•


Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
Subscribe to Indiana Lawyer
  1. I have an open CHINS case I failed a urine screen I have since got clean completed IOP classes now in after care passed home inspection my x sister in law has my children I still don't even have unsupervised when I have been clean for over 4 months my x sister wants to keep the lids for good n has my case working with her I just discovered n have proof that at one of my hearing dcs case worker stated in court to the judge that a screen was dirty which caused me not to have unsupervised this was at the beginning two weeks after my initial screen I thought the weed could have still been in my system was upset because they were suppose to check levels n see if it was going down since this was only a few weeks after initial instead they said dirty I recently requested all of my screens from redwood because I take prescriptions that will show up n I was having my doctor look at levels to verify that matched what I was prescripted because dcs case worker accused me of abuseing when I got my screens I found out that screen I took that dcs case worker stated in court to judge that caused me to not get granted unsupervised was actually negative what can I do about this this is a serious issue saying a parent failed a screen in court to judge when they didn't please advise

  2. I have a degree at law, recent MS in regulatory studies. Licensed in KS, admitted b4 S& 7th circuit, but not to Indiana bar due to political correctness. Blacklisted, nearly unemployable due to hostile state action. Big Idea: Headwinds can overcome, esp for those not within the contours of the bell curve, the Lego Movie happiness set forth above. That said, even without the blacklisting for holding ideas unacceptable to the Glorious State, I think the idea presented above that a law degree open many vistas other than being a galley slave to elitist lawyers is pretty much laughable. (Did the law professors of Indiana pay for this to be published?)

  3. Paul Hartman of Burbank, Oh who is helping Sister Fuller with this Con Artist Kevin Bart McCarthy scares Sister Joseph Therese, Patricia Ann Fuller very much that McCarthy will try and hurt Patricia Ann Fuller and Paul Hartman of Burbank, Oh or any member of his family. Sister is very, very scared, (YES, I AM) This McCarthy guy is a real, real CON MAN and crook. I try to totall flatter Kevin Bart McCARTHY to keep him from hurting my best friends in this world which are Carolyn Rose and Paul Hartman. I Live in total fear of this man Kevin Bart McCarthy and try to praise him as a good man to keep us ALL from his bad deeds. This man could easy have some one cause us a very bad disability. You have to PRAISAE in order TO PROTECT yourself. He lies and makes up stories about people and then tries to steal if THEY OWN THRU THE COURTS A SPECIAL DEVOTION TO PROTECT, EX> Our Lady of America DEVOTION. EVERYONE who reads this, PLEASE BE CAREFUL of Kevin Bart McCarthy of Indianapolis, IN My Phone No. IS 419-435-3838.

  4. Joe, you might want to do some reading on the fate of Hoosier whistleblowers before you get your expectations raised up.

  5. I had a hospital and dcs caseworker falsify reports that my child was born with drugs in her system. I filed a complaint with the Indiana department of health....and they found that the hospital falsified drug screens in their investigation. Then I filed a complaint with human health services in Washington DC...dcs drug Testing is unregulated and is indicating false positives...they are currently being investigated by human health services. Then I located an attorney and signed contracts one month ago to sue dcs and Anderson community hospital. Once the suit is filed I am taking out a loan against the suit and paying a law firm to file a writ of mandamus challenging the courts jurisdiction to invoke chins case against me. I also forwarded evidence to a u.s. senator who contacted hhs to push an investigation faster. Once the lawsuit is filed local news stations will be running coverage on the situation. Easy day....people will be losing their jobs soon...and judge pancol...who has attempted to cover up what has happened will also be in trouble. The drug testing is a kids for cash and federal funding situation.