The opinion of the court was delivered by: CHIN
In this consolidated derivative litigation against defendants Metropolitan Life Insurance Company ("MetLife") and certain of its former and current officers, directors and employees, the parties seek approval of a proposed settlement and compromise. In addition, counsel for plaintiffs seek an award of $ 2.9 million in attorneys' fees and costs.
I find that the proposed settlement is fair, reasonable, and adequate. Hence, it is approved. The application for fees and costs, however, is granted in part and denied in part, for I find that the requested amount of $ 2.9 million is excessive.
The concept of a "private attorney general" willing to take on injustices in our society is an important one. That concept, however, is abused when duplicative and superfluous litigation is brought for the sole purpose of generating legal fees. I will award fees and costs, but only to the extent of $ 1,971,886.93, as set forth below.
MetLife is a New York mutual insurance company. It is the second largest life insurance company in the United States and sells life insurance and other insurance products through a national network of agents and offices. MetLife does not have shareholders, but, as a mutual insurance company, it is operated for the benefit of its members, i.e., its policyholders, of which there are apparently more than ten million nationwide.
In August 1993, state insurance regulators in Florida commenced an administrative investigation into allegations that MetLife agents were using deceptive and fraudulent sales practices. In October 1993, the press reported that MetLife was also being investigated for fraudulent sales practices by state insurance regulators in Pennsylvania. Eventually, at least 19 state regulatory bodies commenced investigations into MetLife's sales practices. These administrative proceedings culminated in an agreement by MetLife to pay a total of approximately $ 24 million in fines. In addition, MetLife offered full refunds to tens of thousands of policyholders who purchased whole life insurance policies. The Complaint alleges that these refunds were expected to cost MetLife some $ 76 million.
On November 22, 1993, Morris and Morris, lead counsel for plaintiff Marie L. Sander, wrote a letter to MetLife advising of her intent to sue, transmitting a draft derivative complaint, and requesting information as to the residency of two directors. The letter did not make a demand on MetLife to prosecute the claims. On December 21, 1993, in response to the letter, the Board of Directors of MetLife created a Special Review Committee (the "SRC") to investigate the allegations.
Although Sander was advised of the creation of the SRC, she filed suit in this Court on December 30, 1993, Sander v. Athanassiades, No. 93 Civ. 9035. The same day, a similar derivative suit was filed in the Supreme Court of the State of New York, New York County, Grubin v. Athanassiades, No. 93-134557. Eventually, four more lawsuits were filed asserting the same derivative claims: Weiss v. Athanassiades, No. 94 Civ. 0066, in this Court on January 5, 1994; Roberts v. Metropolitan Life Insurance Company, No. 94-103651, in state court on February 1, 1994; Smith v. Kamen, No. 94-108491, in state court on March 22, 1994; and Donaldson v. Kamen, No. 94-123047, in state court on August 10, 1994. The Sander and Weiss actions were consolidated on February 18, 1994. The Complaint was filed on April 1, 1994.