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May 19, 1978

Aldo DelNOCE, Plaintiff,
DELYAR CORPORATION et al., Defendants

The opinion of the court was delivered by: BRIEANT


By a Memorandum Decision in this action, dated February 27, 1978, this Court found after a hearing that a proposed Stipulation of Settlement dated September 8, 1977, which if approved would dispose of the above entitled class action, was fair, reasonable and adequate. A final Judgment was filed March 9, 1978 dismissing the action with prejudice and reserving, Inter alia, Jurisdiction over the parties and the settlement fund to fix the allowance of counsel fees, expenses and disbursements. Familiarity with these documents and all prior proceedings herein is assumed.

 Paragraph 9 of the Stipulation of Settlement provides in relevant part:

"Plaintiff's attorneys will apply to the Court for an allowance of fees for their services and the services of their experts in this litigation not to exceed $ 800,000 in the aggregate. Defendants agree not to oppose any such application and defendant Amerada Hess agrees to promptly pay any such allowance ordered by the Court provided that the total amount thereof does not exceed $ 800,000. If the proposed settlement is approved by the Court, plaintiff's attorneys will also apply to the Court for reimbursement of expenses incurred in the prosecution of this litigation not to exceed $ 25,000, to be paid out of the fund, as well as for reimbursement of those expenses referred to in paragraph 8(a) hereof and paragraph 1 of Exhibit D annexed hereto to be paid out of the fund. Defendants may oppose any such applications by plaintiff's attorneys."

 Pursuant to the Stipulation, the fees of the attorneys and experts constitute in effect a separate payment to be made by the corporate defendant without regard to the $ 4,000,000 payable to members of the class. Allowance of the fees of the attorneys and experts within the amount contemplated by P 9 of the Stipulation will not reduce the Fund provided for in paragraph 2(a) of the Stipulation. The other expenses and disbursements, however, to the extent approved will be a direct charge on the Settlement Fund.

 Plaintiff's counsel have now made an application for their fees and disbursements. There are now before the Court affidavits in support of the applications, and affidavits in opposition. These affidavits have been considered by the Court. There is no necessity for an evidentiary hearing.

 While the attorneys are presenting a joint application for a single award of fees, it may be helpful to an understanding of the matter if the services of the various counsel be summarized separately.

 This action was commenced on April 25, 1972 in this Court, as class litigation in behalf of all shareholders of Amerada Petroleum Corporation ("Amerada") which merged on June 20, 1969 with Hess Oil & Chemical Corporation ("Hess Oil") to form Amerada Hess Corporation ("Amerada-Hess"). Class action status was declared initially December 23, 1974, and redefined on May 8, 1975. The case was tried before me without a jury on June 23, 24, 25, 26 and 30, 1975. By Findings of Fact and Conclusions of Law dated July 30, 1976, made after post-trial briefing, the Court found liability on the part of certain defendants, reopened the trial record to permit competent proof of the damages, and referred the matter to a Magistrate for the purpose generally of assisting counsel to the parties in resolving the amount of damages consistent with the Court's theory of liability, and with a view toward scheduling further proceedings. Thereafter, with the aid of the Magistrate and the Court, the litigation was settled.

 In addition to this lawsuit, plaintiff was attempting to maintain a Derivative action, in this District, arising out of the same facts (DelNoce v. Jomarco, Inc. et al., 70 Civ. 4414) and a separate suit of some sort in the Chancery Court of Delaware.

 As a result of the reassignment in the Spring of 1975 of old civil cases for immediate trial under what was euphemistically described as a "crash program" requiring all such cases to be tried or disposed of prior to June 30, 1975, this case was transferred to my docket. Compliance with the crash program necessitated employment by plaintiff of special trial counsel having the resources to analyse the complete factual circumstances of the litigation and accomplish the task of getting this case ready and trying it on schedule. To do so, plaintiff in about April 1975 retained the firm of Shea Gould Climenko & Casey, Esqs. to comply as an alternative to dismissal. Milton S. Gould, Esq. of that firm accepted responsibility for the litigation and acted as trial counsel to plaintiff. His initial efforts, and those of the Court, to work out a settlement were unsuccessful, although not for want of trying. His firm was required to and did, with the assistance of Irving Steinman, Esq., the attorney of record, try the merits as noted above. Only later, working in cooperation with the Magistrate and counsel for the defendants, were these attorneys ultimately successful in reaching what this Court has already found to be a fair and reasonable settlement, beneficial to the plaintiff class.

 The Shea firm shows that in this lawsuit, where compensation was contingent on success, services were rendered between April 1975 and October 31, 1977 amounting to a total of 1,769.75 hours, none of which were concerned with the fee application. The monetary value of these time charges, at rates varying from $ 200 per hour for a senior partner to $ 50 for certain associates amounts to $ 153,066.25 of which $ 3,013.75 represents services of paralegals at $ 35 per hour.

 Before proceeding further we advert to Grinnell I And Grinnell II, reported, respectively City of Detroit v. Grinnell Corporation at 495 F.2d 448 (2d Cir. 1974) and 560 F.2d 1093 (2d Cir. 1977). These cases are regarded as declaratory of existing law. Legal fees, before and after Grinnell I and Grinnell II were and are to be based on principles of Quantum meruit. In Grinnell I it was held (p. 470 of 495 F.2d):

"In its simplest terms, the purpose of the fee award is to "compensate the attorney for the reasonable value of services benefiting the . . . claimant.' Lindy Brothers Builders, Inc. v. American Radiator and Standard Sanitary Corporation, . . . 487 F.2d (161), at 167."

 This established principle was reiterated in Grinnell II (p. 1098 of 560 F.2d). It remains clear that the amount recovered is still "generally accepted factors to be weighed in determining a reasonable attorney's fee" (Grinnell I, p. 470, Supra ). The amount recovered cannot be excluded from ...

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