In the

United States Court of Appeals 

For the Seventh Circuit ____________________ 

Nos. 18-2220, 18-2221, 18-2225, 18-3307, 19-2401, and 19-2408 

JORGE ALCAREZ, et al., as representatives of a class, 

Plaintiffs-Appellees, 

v.

AKORN, INC., et al., 

Defendants-Appellees. 

Appeals of THEODORE H. FRANK, SHAUN A. HOUSE, and

DEMETRIOS PULLOS

____________________ 

Appeals from the United States District Court for the

Northern District of Illinois, Eastern Division.

Nos. 17 C 5016, 5017, 5018, 5021 & 5026 — Thomas M. Durkin, Judge. 

____________________ 

ARGUED NOVEMBER 6, 2018, and APRIL 14, 2020 

— DECIDED APRIL 15, 2024 

____________________ 

Before EASTERBROOK and WOOD, Circuit Judges.

*

* Circuit Judge Kanne, a member of the panel, died after the appeals 

were argued. They are being decided by a quorum. 28 U.S.C. §46(d).
2 Nos. 18-2220 et al. 

EASTERBROOK, Circuit Judge. Six suits, filed under the federal securities laws, present questions about “mootness fees” 

in federal litigation. Akorn, Inc., asked its investors to approve a merger (valued at more than $4 billion) with Fresenius Kabi AG. Plaintiffs assert that the proxy statement (82 

pages long, with 144 pages of exhibits) should have contained 

additional details, whose absence violated §14(a) of the Securities Exchange Act of 1934, 15 U.S.C. §78n(a). Within weeks 

Akorn amended its proxy statement to add some disclosures, 

though it insisted that none of these additions was required 

by law. 

All six plaintiffs then moved to dismiss their suits, asserting that the additional disclosures mooted their complaints. 

They did not notify the proposed classes (five of the six suits 

had been filed as class actions) or seek judicial approval under 

Fed. R. Civ. P. 23(e). Different district judges entered orders 

of dismissal between July 17 and July 25, 2017. 

Akorn’s shareholders overwhelmingly approved the merger, with only 0.1% of all votes cast against. Many of the proxies had been voted before Akorn’s supplemental disclosures; 

plaintiffs did not protest. On September 15 all six plaintiffs 

told the district court that any claim to aiorneys’ fees and 

costs had been resolved by a payment of $322,500, which 

counsel would divide. Those are the mootness fees. The proposed merger was abandoned for reasons unrelated to these 

suits, but that does not affect the dispute about what to do 

with this money. 

Theodore Frank, one of Akorn’s shareholders, learned 

through the press that Akorn had paid mootness fees and on 

September 18, 2017, filed a motion to intervene. He asked the 

court to require counsel to disgorge the money as unjust 
Nos. 18-2220 et al. 3 

enrichment (since they had not achieved any benefit for the 

investors). He also asked the court to enjoin the lawyers who 

represented the six plaintiffs to stop filing what Frank calls 

strike suits, whose only goal is to extract money for counsel. 

Frank contends that the suits amount to abuse of the legal process. Indeed, this court has remarked that litigation “that 

yields fees for class counsel and nothing for the class is no better than a racket. It must end.” In re Walgreen Co. Stockholder 

Litigation, 832 F.3d 718, 724 (7th Cir. 2016) (cleaned up). But 

litigation of this kind has not ended since Walgreen. 

Delaware, where most suits seeking extra disclosure had 

been filed, decided that they would be subject to “disfavor in 

the future unless the supplemental disclosures address a 

plainly material misrepresentation or omission”. In re Trulia, 

Inc. Stockholder Litigation, 129 A.3d 884, 898 (Del. Ch. 2016). 

Delaware already had limited the payment of mootness fees 

unless the suit was meritorious. In re Sauer-Danfoss Inc. Shareholders Litigation, 65 A.3d 1116, 1123 (Del. Ch. 2011). The combination of Sauer-Danfoss with Trulia initially led to a decline 

in suits seeking more disclosure for mergers. In 2012 90% of 

deals worth more than $100 million were challenged in litigation. In 2013 that proportion rose to 96%. Trulia knocked it 

down to 74% in 2016. By 2017 and 2018 the proportion was 

back to 83%. And the location of the suits changed radically. 

In 2012 56% of these suits were in Delaware and 34% in federal court. By 2018 only 5% were in Delaware and 92% in federal court. These figures come from Maihew D. Cain, Jill E. 

Fisch, Steven Davidoff Solomon & Randall S. Thomas, Mootness Fees, 72 Vand. L. Rev. 1777, 1787 (2019). By filing in federal 

court plaintiffs avoid Trulia—for federal courts use their own 

procedures, whether the claim arises under state or federal 

law. See, e.g., Shady Grove Orthopedic Associates, P.A. v. Allstate 
4 Nos. 18-2220 et al. 

Insurance Co., 559 U.S. 393 (2010); Gasperini v. Center for Humanities, Inc., 518 U.S. 415 (1996); Mayer v. Gary Partners & Co., 

29 F.3d 330 (7th Cir. 1994). 

These six cases illustrate the federal practice. Suits are filed 

as class actions seeking more disclosure but not contending 

that any of the existing disclosures is false or materially misleading. Such a claim is problematic under federal securities 

law. See, e.g., Macquarie Infrastructure Corp. v. Moab Partners, 

L.P., No. 22–1165 (U.S. Apr. 12, 2024) (nondisclosure does not 

violate Rule 10b–5). Counsel for the plaintiffs and counsel for 

the firms involved agree on additional disclosures. The suits 

are then dismissed and mootness fees paid. Plaintiffs do not 

move for class certification, and Rule 23(e), which requires judicial approval only when a certified class action is seiled or 

dismissed, does not come into play. The class is not notified. 

Because plaintiffs and defendants agree on the fees, the 

judge is not asked to award anything. A statute providing that 

“[t]otal aiorneys’ fees and expenses awarded by the court to 

counsel for the plaintiff class shall not exceed a reasonable 

percentage of the amount of any damages and prejudgment 

interest actually paid to the class”, 15 U.S.C. §78u–4(a)(6) (part 

of the Private Securities Litigation Reform Act or PSLRA), 

does not apply, because the judge does not “award” fees. And 

if a class member finds out and objects, as Frank did, he is met 

with the response that the suit is moot and there is nothing to 

object to. The upshot: money moves from corporate treasuries 

to plaintiffs’ lawyers; the investors get nothing, yet the payment diminishes (though only a liile) the market price of each 

share. That’s why Walgreen called this “no beier than a 

racket.” But with the judiciary and investors cut out of the 
Nos. 18-2220 et al. 5 

process, they cannot do anything about it. Or so class counsel 

insists. 

Frank asked the judge to do something, such as ordering 

counsel to disgorge unearned money or issuing an injunction 

blocking mootness fees in future cases. Before the district 

judge could rule, counsel for three of the six plaintiffs disclaimed their portions of the $322,500. The district judge then 

denied Frank’s motion to intervene in those cases, stating that, 

because he did not anticipate awarding any of the remedies 

Frank requested, intervention would be “moot.” Frank’s appeals were orally argued in November 2018. 

We put those appeals on hold pending the disposition of 

the three remaining cases, in which the lawyers wanted some 

share of the fund (which one of them was holding for the 

group’s benefit). In these three cases, the district judge again 

denied Frank’s motion to intervene but permiied him to participate as amicus curiae. The judge took to heart the admonition in Walgreen that suits seeking extra disclosure should be 

reviewed immediately after being filed. Acknowledging that 

he had not done that, he reopened the suits, concluded that 

the complaints were frivolous, and found that the extra disclosures were worthless to investors. In light of that finding 

the judge ordered counsel to return Akorn’s money. House v. 

Akorn, Inc., 385 F. Supp. 3d 616 (N.D. Ill. 2019). One of the 

three lawyers accepted that outcome. Two did not and have 

appealed. (Technically, the would-be representative plaintiffs 

have appealed, seeking an order that will let their lawyers 

divvy up the $322,500 pot.) Frank also has appealed, because 

he is still not a party and wants additional relief. These three 

final appeals were argued in April 2020, and all six appeals 

are now ready for decision. 
6 Nos. 18-2220 et al. 

Shaun House and Demetrios Pullos, the two plaintiffs who 

have appealed, contend that the district court lacked jurisdiction to reopen a dismissed case. The complaints had been dismissed, none of the litigants was unhappy, and there was 

nothing more for the court to do, they maintain. Although 

Fed. R. Civ. P. 60(b) allows judges to reopen cases, that must 

be done “on motion”, according to the Rule, and none of the 

litigants had filed a motion. But this does not take Frank into 

account. If he should have been allowed to intervene, he will 

become a party and may file motions. 

Plaintiffs insist that Frank lacks standing—and if Frank 

lacks standing, then House and Pullos also lack standing, for 

they will not recover a penny or obtain any other relief 

whether or not the aiorneys collect fees. Their lack of interest 

in the outcome is so clear that we dismiss their appeals. 

Frank’s standing remains to be decided. 

Frank suffers some loss from diversion of corporate 

money, which affects the value of his shares. The diminution 

is minimal—$322,500 is small beer in a $4 billion transaction, 

something like 0.008% of the value of Frank’s shares. Still, that 

is a few cents. The Supreme Court tells us that an “identifiable 

trifle” suffices for standing. United States v. SCRAP, 412 U.S. 

669, 688–90 & n.14 (1973). 

A concrete loss, caused by the complained-of conduct and 

remediable by the judiciary, supplies standing. See, e.g., 

Spokeo, Inc. v. Robins, 578 U.S. 330 (2016); Lujan v. Defenders of 

Wildlife, 504 U.S. 555, 560–61 (1992). So we have held that a 

small loss caused by a brief inability to use a credit card after 

a data breach confers standing. See, e.g., Dieffenbach v. Barnes 

& Noble, Inc., 887 F.3d 826 (7th Cir. 2018); Lewert v. P.F. Chang’s 

China Bistro, Inc., 819 F.3d 963 (7th Cir. 2016); Remijas v. 
Nos. 18-2220 et al. 7 

Neiman Marcus Group, LLC, 794 F.3d 688 (7th Cir. 2015). We 

have held that even a few pennies’ loss of potential interest 

(on a small non-interest-bearing deposit), see Goldberg v. Frerichs, 912 F.3d 1009 (7th Cir. 2019), or a brief delay in receiving 

income, Brown v. CACH, LLC, 94 F.4th 665 (7th Cir. 2024), 

amounts to a concrete injury. Only a “de minimis loss” threshold for standing would throw out Frank’s contention, and the 

Supreme Court has not announced such a threshold. 

Plaintiffs are mistaken to think that Frank needs to make a 

demand on the board of directors, and pursue a derivative action, rather than intervene personally. True, the $322,500 is a 

loss to the corporate treasury, but Frank does not contend that 

Akorn’s directors violated their fiduciary duties. The mootness fees may well have cost Akorn less than what its own 

lawyers would have billed to defend the suits. This means 

that the directors did not violate either the duty of care or the 

duty of loyalty when paying to buy peace. Frank contends 

that class counsel violated their duties to him when they used 

the class allegations as leverage to obtain private benefits. The 

existence of duties to class members is clear after a judge certifies a class. See In re Bluetooth Headset Products Liability Litigation, 654 F.3d 935, 946–47 (9th Cir. 2011); Back Doctors Ltd. v. 

Metropolitan Property & Casualty Insurance Co., 637 F.3d 827, 

830–31 (7th Cir. 2011); Martens v. Thomann, 273 F.3d 159, 173 

n.10 (2d Cir. 2001) (Sotomayor, J.) (citing Deposit Guaranty National Bank v. Roper, 445 U.S. 326, 331 (1980)). There is no such 

duty if the judge has definitively ruled against certification. 

How things stand while certification is an open question is itself an open question. No maier how that question is resolved, however, Frank’s contention that the representative 

plaintiffs and their lawyers owed duties to him, personally, 
8 Nos. 18-2220 et al. 

need not be processed through the mechanism for derivative 

litigation. 

So was the district judge right to deny Frank’s motion to 

intervene? Certainly not for the reason he gave. “I’m planning 

to reject your proposed remedies, so your request is moot” is 

not a recognized legal doctrine. A case becomes moot only 

when it is impossible to grant effective relief. See, e.g., Mission 

Product Holdings, Inc. v. Tempnology, LLC, 139 S. Ct. 1652, 1660 

(2019). It was possible to grant the sort of relief Frank requested. A decision not to do so is one on the merits, not a 

conclusion that the case does not present a case or controversy 

under Article III (which is what it means to call it moot). If 

“you are going to lose, so your claim is moot” were a proper 

approach, unsuccessful suits would be dismissed as moot rather than on the merits. That’s not how things are supposed 

to work. See, e.g., Bell v. Hood, 327 U.S. 678 (1946). 

When the representative plaintiffs and the defendants 

strike a deal, intervention by a member of the class may be 

essential to protect the class’s interests. We have told judges 

to grant intervention freely when a class member contends 

that the representatives (or, more realistically, their lawyers) 

are misbehaving. See, e.g., Crawford v. Equifax Payment Services, Inc., 201 F.3d 877 (7th Cir. 2000); Robert F. Booth Trust v. 

Crowley, 687 F.3d 314, 318–19 (7th Cir. 2012). Indeed, under 

some circumstances, class members are entitled to appellate 

review without intervention. See Devlin v. ScardelleUi, 536 U.S. 

1 (2002). Just being in the class entitles a dissatisfied member 

to appellate review of a contention that the putative representative has acted against the class’s interests. 

Frank sought to intervene both as of right under Fed. R. 

Civ. P. 24(a) and permissively under Rule 24(b). The motion 
Nos. 18-2220 et al. 9 

is timely; Frank acted soon after learning of the mootness fees. 

See Cameron v. EMW Women’s Surgical Center, P.S.C., 595 U.S. 

267, 279–81 (2022). The district court addressed only his proposal to intervene as of right—and then only in three of the 

six cases. If the district judge had concluded that Frank lacks 

“a claim or defense that shares with the main action a common question of law or fact” (Rule 24(b)(1)(B)), appellate review would be deferential. But the district judge did not make 

any findings on this subject. It seems to us that, as an investor 

in Akorn whose shares’ value was affected by the merger and 

the mootness fees, Frank has a claim in common with the 

main action; how could it be otherwise? After all, Frank is a 

member of the proposed classes. And since class counsel and 

Akorn are looking out for their own interests rather than 

those of the class, intervention is appropriate. We hold that 

Frank is entitled to participate as a party. And that could solve 

any problem with reopening the judgments, because as a 

party Frank would be entitled to make the motion required 

for relief under Rule 60(b). He will have that opportunity on 

remand. 

But the remedies that Frank initially proposed, such as disgorgement or an injunction, are not satisfactory. Disgorgement would be appropriate only if the mootness fees had been 

retained by counsel, yet the district judge has ordered the 

money returned. An injunction against repetition might be 

appropriate with respect to the individual plaintiffs, but 

Frank wants relief against the lawyers, who are repeat players—and the lawyers are not parties, so they would not be 

proper objects of injunctive relief unless they were added as 

parties. And Frank recognizes that Rule 23(e) deals only with 

cases certified as class actions, which these were not. Perhaps 

the rules commiiees of the Judicial Conference should take a 
10 Nos. 18-2220 et al. 

look at the question whether judicial approval should be required to seile or dismiss cases brought as class actions, yet 

not so certified, but we must enforce the rule as it stands. 

As this case proceeded, however, Frank turned his aiention to the Private Securities Litigation Reform Act. Two of its 

provisions may affect the proper treatment of suits filed in 

quest of mootness fees. We have mentioned one—15 U.S.C. 

§78u–4(a)(6), which says that aiorneys’ fees “awarded” by a 

court “shall not exceed a reasonable percentage of the amount 

of any damages and prejudgment interest actually paid to the 

class.” This rule applies to all securities suits “brought” as 

class actions, whether or not they are so certified. See §78u–

4(a)(1) (“The provisions of this subsection shall apply in each 

private action arising under this chapter that is brought as a 

plaintiff class action pursuant to the Federal Rules of Civil 

Procedure.”). See also Higginbotham v. Baxter International Inc., 

495 F.3d 753, 756 (7th Cir. 2007). Yet §78u–4(a)(6) does not do 

any work when the defendant pays fees voluntarily rather 

than insisting on a judicial award. 

The other statute, 15 U.S.C. §78u–4(c)(1), tells us: 

Mandatory review by court[.] In any private action arising under 

this chapter, upon final adjudication of the action, the court shall 

include in the record specific findings regarding compliance by 

each party and each aVorney representing any party with each requirement of Rule 11(b) of the Federal Rules of Civil Procedure as 

to any complaint, responsive pleading, or dispositive motion.

“This chapter” means the whole Securities Exchange Act of 

1934 (which is Chapter 2B of Title 15), and the six suits invoked that statute. The caption calls this review “mandatory,” 

and the word “shall” tells us that the caption is accurate. The 

district court must make the required findings whether or not 
Nos. 18-2220 et al. 11 

a litigant asks. City of Livonia Employees’ Retirement System v. 

Boeing Co., 711 F.3d 754, 757, 761 (7th Cir. 2013). Accord, ATSI 

Communications, Inc. v. Shaar Fund, Ltd., 579 F.3d 143, 152 (2d 

Cir. 2009); Morris v. Wachovia Securities, Inc., 448 F.3d 268, 283–

84 (4th Cir. 2006). 

The dismissal of each suit was a “final adjudication of the 

action”; seilements were the reasons for the dismissals, but 

the statute applies to the judicial action, not to the reason for 

it. It obliges the judge to determine whether each suit was 

proper at the moment it was filed. The statute directs the court 

to the criteria of Fed. R. Civ. P. 11, which entails notice and 

an opportunity to be heard. Those steps have not been put in 

motion, given the denial of Frank’s motion to intervene, but 

they should occur on remand. 

Rule 11(b) provides: 

By presenting to the court a pleading, wriVen motion, or other paper—whether by signing, filing, submiVing, or later advocating 

it—an aVorney or unrepresented party certifies that to the best of 

the person’s knowledge, information, and belief, formed after an 

inquiry reasonable under the circumstances:

(1) it is not being presented for any improper purpose, such 

as to harass, cause unnecessary delay, or needlessly increase 

the cost of litigation;

(2) the claims, defenses, and other legal contentions are warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law;

(3) the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery; and
12 Nos. 18-2220 et al. 

(4) the denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on 

belief or a lack of information.

From Frank’s perspective, the very purpose of these suits was 

“needlessly [to] increase the cost of litigation” (Rule 11(b)(1)) 

in order to induce Akorn to pay the lawyers to go away. He 

contends that the suits violate the other three paragraphs as 

well. And that is essentially what the district judge found 

when he finally looked at the complaints. 

On the current record we are inclined to agree with the 

district judge’s analysis. He wrapped up: 

[T]he Court finds that the disclosures sought in the three complaints at issue [the three for which counsel declined to waive 

their share of the mootness fees] were not “plainly material” and 

were worthless to the shareholders. Yet, Plaintiffs’ aVorneys were 

rewarded for suggesting immaterial changes to the proxy statement. Akorn paid Plaintiffs’ aVorney’s fees to avoid the nuisance 

of ultimately frivolous lawsuits disrupting the transaction with 

[Fresenius]. The seVlements provided Akorn’s shareholders nothing of value, and instead caused the company in which they hold 

an interest to lose money. The quick seVlements obviously took 

place in an effort to avoid the judicial review this decision imposes. This is the “racket” described in Walgreen, which stands the 

purpose of Rule 23’s class mechanism on its head; this sharp practice “must end.” 832 F.3d at 724.

Plaintiffs’ cases should have been “dismissed out of hand.” See id. 

at 724. Since the Court failed to take that action, the Court exercises its inherent authority to rectify the injustice that occurred as 

a result. The seVlement agreements are abrogated and the Court 

orders Plaintiffs’ counsel to return to Akorn the aVorney’s fees 

provided by the seVlement agreements. Plaintiffs’ counsel should 

file a status report by July 8, 2019 certifying that the fees have been 

returned.
Nos. 18-2220 et al. 13 

385 F. Supp. 3d at 622–23 (one citation omiied). The district 

court’s reference to “inherent authority” should have been to 

§78u–4(c)(1) and Rule 11, but with that change the analysis 

holds. Still, our reference to “the current record” is important; 

a formal motion under Rule 60(b) is necessary, and counsel 

are entitled to be heard. 

Because Rule 11(c)(4) gives the district judge discretion 

over the choice of sanction, the court would be entitled to direct counsel who should not have sued at all to surrender the 

money they extracted from Akorn. But selecting an appropriate remedy (if any) should await resolution of the proceedings 

under §78u–4(c)(1) and, derivatively, Rule 11. 

The orders of the district court denying Frank’s motion to 

intervene are vacated, and the cases are remanded with instructions to treat him as an intervenor, permit him to make a 

motion under Rule 60(b), and decide what relief, if any, is appropriate in light of that motion should one be made. The appeals by House and Pullos are dismissed for lack of jurisdiction because they have not explained how, if at all, the district 

court’s orders adversely affect them, as opposed to counsel.