The opinion of the court was delivered by: BONSAL
Following a hearing on September 20, 1979, this Court, on October 29, 1979, approved the partial settlement of these actions
entered into between the class plaintiffs and three of the defendants, Merrill Lynch, Pierce, Fenner & Smith, Inc.; Peat, Marwick, Mitchell & Co.; and Harris, Kerr, Forster & Co. ("the settling defendants") and the Plan for Distribution. Pursuant to the stipulation of settlement, the settling defendants have deposited $ 10,525,000 ("the settlement fund") in escrow, where it is drawing interest in excess of ten percent, the interest to be added to the settlement fund.
Applications for attorneys' fees and disbursements and accountant's fees to be deducted from the settlement fund, notice of which was sent to the class, were considered at the September 20 hearing and reserved for later disposition. These applications are:
Close to 25,000 notices of these applications were sent to the class members at least 47 days prior to the September 20 hearing advising that the applications would be considered at the hearing.
See Rule 11B of the Local Rules of the Southern District of New York; City of Detroit v. Grinnell Corporation, 495 F.2d 448, 471-72 (2d Cir. 1974) (Grinnell I ). No objections to the applications have been asserted.
ATTORNEYS' FEES AND DISBURSEMENTS
In considering the applications for attorneys' fees, the Court will first determine the base fees by multiplying "the number of hours that each lawyer worked on the case by the hourly amount to which attorneys of like skill . . . would typically be entitled." Grinnell I, supra at 471. Since the services were rendered on a contingent basis, the base fees may be increased, if warranted. See City of Detroit v. Grinnell Corp., 560 F.2d 1093, 1098 (2d Cir. 1977) (Grinnell II ); Grinnell I, supra at 471. Here, the base fees of the applicants may be calculated by multiplying their normal or non-contingent billing rates by the number of hours spent performing services that benefitted the class. See Grinnell I, supra at 473. The applicants have provided detailed information as to the number of hours spent, the normal billing rates and the base fees they seek:
This litigation commenced on April 24, 1972, when Pomerantz Levy Haudek & Block ("Pomerantz Levy") filed the complaint in Jezarian v. Csapo 72 Civ. 1671. Pomerantz Levy represented the class plaintiffs throughout the litigation. Robert B. Block was the chairman of the committee of plaintiffs' counsel, a three-member committee formed on March 12, 1974 to coordinate pretrial discovery.
The activities performed by, and the normal billing rates of, the lawyers of Pomerantz Levy are set forth in detail in the affidavit sworn to on August 29, 1979 by Robert B. Block ("affidavit of Robert B. Block"), which states that Pomerantz Levy spent 6,212.50 hours on this action. Upon reviewing the joint application and the record herein, the Court finds that the services rendered by Pomerantz Levy, which include investigation, extensive discovery, motions, conferences, drafting and amending the complaint, identifying class members, communicating with class members and negotiating and drafting the settlement, were necessary for proper representation of their clients. Accordingly, the base fee of $ 846,768 is a reasonable starting point for determining the fee award for Pomerantz Levy. See Grinnell I, supra at 471.
The activities performed by, and the normal billing rates of, the other lawyers in the joint application are described in the affidavits of each of the joint applicants (which affidavits are included in the joint application) and in the affidavit of Robert B. Block. The number of hours spent by these lawyers breaks down as follows: Martin S. Handelman, 57 hours; Milberg Weiss Bershad & Specthrie, 439.50 hours; Richard D. Greenfield, 189.50 hours; and Gene Mesh Co., L.P.A., 52 hours. Upon reviewing the joint application and the record herein, the Court finds that the services rendered by the other lawyers in the joint application, which include discovery, motions and conferences, were necessary to the furtherance of the class action. Accordingly, the base fee of $ 104,587 for these lawyers is a reasonable starting point for determining their fee award.
The fee of $ 1,997,000 sought by the joint applicants is approximately 2.1 times their base fee. In determining whether this increase is warranted, the Court must consider the risk of litigation, the complexity of the litigation, including any benefit of a prior judgment or decree in a case brought by the Government, the responsibility undertaken, the amount recovered and the standing of counsel at bar. Grinnell I, supra at 470-71.
It was pointed out in the Court's opinion approving the partial settlement and Plan for Distribution that, if the partial settlement had not been approved, plaintiffs would have been confronted with significant obstacles in establishing the claims asserted against the settling defendants. In addition, this case was complex, as it involved a new industry, novel accounting concepts and numerous allegedly illegal transactions; plaintiffs did not have the benefit of a prior Government action until more than four years after these actions were instituted, so that plaintiffs were required to engage in substantial discovery;
the amount of the settlement fund is substantial; and the attorneys for both plaintiffs and the settling defendants are highly competent and zealously represented their clients. Therefore, in rendering their services on a contingent fee basis, plaintiffs' attorneys undertook a substantial risk. See Grinnell I, supra at 470-71.
The multipliers used by courts in this district to determine fee awards vary considerably. See, e.g., Weiss v. Drew National Corp., 465 F. Supp. 548 (S.D.N.Y.1979) (multiplier of 1.15 reflecting "the court's belief that the . . . case falls somewhere inbetween (a high risk case) and (a) minimized risks (case)"); Kane v. Martin Paint Stores, Inc., 439 F. Supp. 1054, 1058 (S.D.N.Y.1977) (no multiplier since case was not complicated and the probability of success was "exceptionally high"); City of New York v. Darling-Delaware, 440 F. Supp. 1132, 1136 (S.D.N.Y.1977) (no multiplier for lawyers not involved in litigating complex or novel aspects of case; multiplier of 2 for counsel with primary responsibility; multiplier of 1.6 for pre-settlement hours and 2 for hours spent on settlement negotiation for counsel with high "risk factor" but "not as extensively involved in litigating the difficult class issues (as counsel with primary responsibility)"); Blank v. Talley Industries, Inc., 390 F. Supp. 1 (S.D.N.Y.1975) (multiplier of 1.5); Barnett v. Pritzker, 73 F.R.D. 430, 434 (S.D.N.Y.1977) (multiplier of 1.33); Dorey Corp. v. E. I. duPont de Nemours and Co., 74 Civ. 3826 (S.D.N.Y. Jan. 24, 1977) (multiplier of approximately 1.63); Burger v. CPC International, 76 F.R.D. 183 (S.D.N.Y.1977) (multiplier of 1.3); City of Detroit v. Grinnell Corp., 68 Civ. 4026 (S.D.N.Y. April 21, 1976) (multiplier of 2). See also Valente v. Pepsico, Inc., 454 F. Supp. 1228 (D.Del.1979) ...