benefit made available for claims by class members.
And last, as noted above, only one person has opposed the fee. One purported class member, Sal F. Laurenzano, has contended that attorney fees of 20% to 25% are sufficient and that courts should only award a higher percentage when the size of the common fund is relatively small. He provides no particular reasons why the percentage should not exceed 25% in this case.
This court sees no reason to adopt a per se rule limiting attorneys' fees to 25%. To do so would prevent the court from considering the full risk taken and the full benefit provided by class counsel. It would also prohibit the court from giving some weight to the prospect of further recovery by the class as a result of class counsel's efforts.
Even if this court were to apply the lodestar method, the requested fee is reasonable. In particular, class counsel's proposed multiplier of 1.72 is readily justified, given the risks taken by class counsel. Indeed, in a recent securities class action the United States District Court for the Southern District of New York observed that "'in recent years multipliers of between 3 and 4.5 have been common.'" Rabin v. Concord Assets Group, Inc., [1991-1992 Transfer Binder]Fed. Sec. L. Rep. (CCH) P 96,471 at 92,081 (S.D.N.Y. 1991) (quoting O'Brian v. National Property Analysts, No. 88 CV 4153 (S.D.N.Y. July 27, 1989)).
The court approves an award of $ 14.2 million in attorneys' fees (representing approximately 33.8% of the $ 42 million settlement fund) and $ 2 million in disbursements, to be paid from the $ 42 million fund to be created as a result of the proposed settlement. Pursuant to paragraph 14 of the Stipulation of Settlement, such fee shall be deposited into an escrow account within three business days of the date of this order, and class counsel shall be entitled to a proportional share of any accrued interest from the date of deposit.
The Firm of Harvey Greenfield, one of the twelve firms representing class plaintiffs, disputes a proposed allocation of fees and disbursements among the firms.
Prior to submitting a request for attorney's fees, the Executive Committee of class counsel sought and received affidavits from each of the class counsel. Presumably based upon these time records, the committee's familiarity with the tasks performed by each firm, and other relevant factors, the committee reportedly proposed an allocation of attorneys' fees and expenses which was circulated to the firms involved. All reportedly agreed to the allocation except the Greenfield firm.
Mr. Greenfield has submitted an affidavit indicating that his firm devoted 626.25 hours to this litigation for which it would customarily charge, if this were a non-contingency matter, $ 293,300. It has submitted time records, generally rounded to the nearest hour or half hour (some to the nearest quarter hour), showing that the firm charges $ 500 for an hour of Mr. Greenfield's time and $ 125 for an hour of paralegal time. Mr. Greenfield implies that, because class plaintiffs request compensation equal to approximately 1.72 times their lodestar, he should receive $ 504,476 as compensation.
Despite the resolute questioning by this court at oral argument, Mr. Greenfield has not been able to explain with any specificity what he did and how he benefitted the class. He insisted in general terms that he did everything assigned to him by the Executive Committee and "nothing that was inappropriate." He also said he kept his clients informed of developments in the case and defended two depositions.
At the hearing Howard Sirota, Chairman of the Executive Committee, reported that the Greenfield firm was assigned three minor tasks and estimated that the charge for the work should not have exceeded $ 25,000.
The court is unable to understand whether and how the Greenfield firm contributed to the settlement from which class members will benefit. It cannot resolve this dispute on the present papers.
The Executive Committee is directed to file with the court, within ten days of the date of this order, a proposed allocation of the $ 14.2 million in attorneys' fees and the $ 2 million for disbursements. Such proposal should include a allocation for the Greenfield firm insofar as the Executive Committee believes that that firm is entitled to compensation for time and expenses.
Within seven days of the filing of such proposed allocation, any firm representing plaintiffs (including the Greenfield firm) may file an objection together with an affidavit describing its material contribution to the case and detailing time devoted to such work. Such affidavit should distinguish the hours devoted to tasks assigned by the Executive Committee from the hours devoted to matters that objecting counsel independently determined to be appropriate.
Within three days of the filing of any such objection, the Executive Committee may submit a reply.
The court should advise Mr. Greenfield that it does not intend to parse through a substantially unjustified attorney's fee application as did our sister court in Kronfeld v. Transworld Airlines, Inc., 129 F.R.D. 598 (S.D.N.Y. 1990). There, Mr. Greenfield requested fees for a total of 860.75 hours, representing the time he allegedly spent discussing the case with clients, preparing for and attending depositions, and preparing his attorney fee application. After tediously analyzing his submission, that court reduced his lodestar from $ 271,665 to $ 112,948.50.
If Mr. Greenfield makes an application that is substantially unjustified in relation to the work he was required to perform for this lawsuit, the court will consider what steps to take to deter future such applications. By order signed on August 19, 1988, this court constituted an Executive Committee of class counsel and provided, so as to minimize waste and duplicative efforts, that all work by class counsel be performed under the direction and coordination of the Executive Committee. In determining the reasonableness of the fee, the court will place great weight on the recommendation of the committee.
The court finds the proposed settlement to be fair, reasonable, and adequate, and approves the payment of $ 14.2 million in attorneys' fees and $ 2 million for disbursements, to be allocated among class counsel pursuant to a subsequent order of this court.
Dated: Brooklyn, New York
June 11, 1993
Eugene H. Nickerson, U.S.D.J.
© 1992-2004 VersusLaw Inc.