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November 15, 1999


The opinion of the court was delivered by: Milton Pollack, Senior District Judge.


Plaintiffs' counsel have petitioned for an allowance of fees and reimbursement of their expenses incurred in this case in connection with four settlements considered and approved at a fairness hearing held on October 5, 1999. The fees and expenses requested herein by Counsel were set forth in the notice of said hearing and no objection thereto was made by any Class Member.

Petitioners have obtained for the Class a recovery of $134,600,000 through settlements, of which by agreement with the settling parties only $116,600,000 is fee compensable. (By reason of accrual of interest on the funds deposited on the settlements, they amount to in excess of $139,300,000.)

Petitioners' seek a fee of 27.5% of the $116,600,000 or $32,065,000, plus interest earned by the funds on deposit and reimbursement of their expenses incurred in connection with this litigation of $1,895,802.73.

The recovery is the largest class action recovery in the 75 plus year history of the Commodity Exchange Act ("CEA"), 7 U.S.C. § 1 et seq. Petitioners undertook this complex and difficult litigation on a contingent fee basis. Success and payment for Petitioners' efforts were extremely uncertain from the beginning, in circumstances of high risks and almost overwhelming magnitude and complexity. The case involves claims of commodity price manipulation in violation of the CEA. Such claims have been notoriously difficult to prove, and this case was initially greeted with widespread skepticism in the financial community. There was no governmental assist to ease the task with which Petitioners was confronted.

Pursuant to Pre-Trial Orders entered in this case, the firm of Lovell & Stewart was named lead Counsel and an executive committee was created, naming the Lovell firm as Chairman and Lowey Dannenberg Bemporad & Selinger, and Miller Faucher Cafferty and Wexler were designated as its other members. Additional counsel serving the interests of plaintiffs and members of the class numbered ten firms of attorneys.

The details of the immense task undertaken and the complexity thereof have been carefully followed by the Court. A limited indication of significant highlights thereof will suffice for present purposes. The extensive services required on behalf of the Class involved the inspection, digestion, review, and translation of a staggering quantity of data which was entered into document and trading databases and involved in excess of eleven million pages of documents (millions of pages were in Japanese and located in London, Hong Kong or Tokyo). All of the foregoing were then analyzed and sorted out to formulate the significant facts for the litigation. Additionally, Petitioners were required to inspect seven million pages of documents, again in Japanese, located in Asia. Dozens of extensive depositions were taken, private sworn interviews were conducted and other witness interviews and investigations were undertaken. Counsel necessarily consulted extensively with more than ten experts to winnow out the essentials for the lawsuit. The claims against the Settling Defendants were strongly resisted and were proceeded with over resistance in various forms right up to the very eve of trial.

Petitioners had to deal with the hired experts on literally hundreds of issues (and sub-issues) to marshal the facts and the issues into manageable form realistically suitable for a trial, including: an understanding of dealings in futures contracts and physical copper, copper merchants customs and standards, Comex trading, LME (London Metals Exchange) trading, accounting and internal control issues, banks and brokerage firm issues, financials and derivatives, the workings of the market in physical copper, isolation of essential Japanese documents; analyses of the injured business customers, the interpretation of commodity futures documents (many in the Japanese language) and mastery of numerous economic issues regarding price and theories of price artificiality.

As explained in the petition, the foregoing is but a skeleton indication of the vast scope of the services and problems confronted by Counsel over a period in excess of three years. Resistance was encountered from the defendants at every stage of the fact finding process and the essential legal steps needed to forge actionable and settleable issues.

As another indication of the immensity of the tasks confronted, approximately $324,000 was incurred in the copying costs of lead counsel's firm alone, and the other firms incurred significant additional copying costs. The magnitude of the document copying to corral the fundamental issues was unprecedented in lead Counsel's experience. Counsel report that in order to reasonably hold down the vast copying expenses, substantial document inspections were made in the Defendants' premises. Prosecuting the case and its myriad issues resulted in photocopying literally in excess of 1,000,000 pages of documents.

Postage expense, while a minor matter, together with newspaper advertisements and related expenses necessarily incurred involved in excess of $176,000. The remainder of the costs of lead counsel largely involved the essential and extensive foreign travel, domestic travel, document storage and legal research.

The unprecedented effort of Counsel exhibited in this case led to their successful settlement efforts and its vast results. Settlement posed a saga in and of itself and required enormous time, skill and persistence. Much of that phase of the case came within the direct knowledge and appreciation of the Court itself. Suffice it to say, the Plaintiffs' counsel did not have an easy path and their services in this regard are best measured in the enormous recoveries that were achieved under trying circumstances in the face of natural, virtually overwhelming, resistance. The negotiation of each settlement that was made was at arms length and exhibited skill and perseverance on the part of lead counsel and an evident attempt to gain for the Class the optimum settlement figures that could be reached.

Turning now to the recognized methods for establishing a suitable fee award in the circumstances of this case, two recognized methods exist for determining an appropriate award in a class action, namely, the "lodestar" method and the "percentage of the recovery" method.

No one expects a lawyer whose compensation is contingent on success of his services to charge, when successful, as little as he would charge a client who in advance has agreed to pay for his services, regardless of success. Nor, particularly in complicated cases producing large recoveries, is it just to make a fee depend solely on the reasonable amount of time expended. However, it is the Court's duty to avoid any sense of vicarious generosity or to permit the lodestar to be enhanced without restraint above a fair and reasonable amount under all the facts and circumstances, precluding any notion that there are no decent limits to compensation for services of an attorney serving another's interests.

It has long been recognized that a lawyer who recovers a "common fund" is entitled to a reasonable attorney's fee from the fund as a whole. See Boeing Co. v. Van Gemert, 444 U.S. ...

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