Labaton asks State Street judge to step aside in $75 million fee inquiry

In a newly unsealed motion, the plaintiffs’ firm Labaton Sucharow has asked U.S. District Judge Mark Wolf of Boston to consider stepping aside from an inquiry into a $70 million fee award to Labaton and other firms that obtained a $300 million class action settlement with State Street Bank. Labaton’s motion, originally filed last week under seal, argues that Judge Wolf has injected unsupported allegations of misconduct and public corruption into the inquiry, calling his impartiality into doubt.

The new recusal motion, which describes a private sidebar at which Labaton’s counsel, Joan Lukey of Choate Hall & Stewart, confronted Judge Wolf for alleging misconduct, fleshes out the controversy Judge Wolf obliquely alluded to in his questions to Hopkins. According to the recusal brief, Labaton paid $4.1 million from its fee award in the State Street case to a Texas lawyer, Damon Chargois of Chargois & Herron, who first introduced the plaintiffs’ firm to the Arkansas teachers’ fund in 2008. Labaton contends the referral fee was consistent with Massachusetts ethics rules. It also contends it was not obligated to disclose the fee to Judge Wolf under state ethics rules or the Federal Rules of Civil Procedure.

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