Class-Action Status Granted in UnitedHealth Backdating Scandal

United In December, we posted on a story about former UnitedHealth CEO, Dr. William McGuire, who agreed to forfeit about $620 million in stock-option gains and retirement pay to settle claims related to stock-option backdating. (In addition to the $530 million McGuire made in compensation while running UnitedHealth, he was allowed to keep stock options valued at more than $800 million.)

At the time, we suspected the give-back might create a bit of goodwill for the company, vis-a-vis the impending shareholder lawsuit over backdating. Perhaps it will, but it apparantly wasn’t enough to sway a district judge in Minnesota, James Rosenbaum, who yesterday granted class-action status in the case. Here’s the report from the Duluth News Tribune.

The lead plaintiff in the case is the California Public Employees Retirement System (or CalPERS, for all of you well-versed in public-pension lingo), which hasn’t yet put a dollar amount on its claims for all shareholders, though CalPERS attorney Ramzi Abadou said it’s in the billions. Yesterday, UnitedHealth argued that CalPERS actually made $23 million on its UnitedHealth trades.

The class will include people who bought UnitedHealth shares between Jan. 20, 2005, and May 17, 2006, although those dates could change at later stages of the case.

Bonus News from the Law Blog’s Homestate: Yesterday, Minnesota Governor Tim Pawlenty named appellate lawyer Eric Magnuson the chief justice of Minnesota’s Supreme Court. Magnuson’s appointment marks the first time in decades that a court-outsider, rather than an associate justice, has been named to the top spot. We’re a bit envious of Magnuson, not so much because he gets to be the chief justice, but because he’ll be working side-by-side with Law Blog childhood hero Alan Page, the former Viking, NFL hall-of-famer, and Law Blog Football Hall of Fame Inductee, who, since his retirement from the NFL, has been practicing law and judging for nearly 30 years.